Exhibit 10.83
 
SALE AND CONTRIBUTION AGREEMENT
by and between
CAPITALSOURCE REAL ESTATE LOAN LLC, 2007-A,
as the Buyer
and
CSE MORTGAGE LLC,
as the Seller
Dated as of September 10, 2007
 

 

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TABLE OF CONTENTS

              Page  
ARTICLE I. GENERAL
    1  
 
       
Section 1.1 Defined Terms
    1  
Section 1.2 Other Terms
    3  
Section 1.3 Computation of Time Periods
    3  
Section 1.4 Interpretation
    3  
 
       
ARTICLE II. SALE, TRANSFER AND ASSIGNMENT
    4  
 
       
Section 2.1 Sale, Transfer and Assignment
    4  
Section 2.2 Purchase Price
    6  
Section 2.3 Payment of Purchase Price
    6  
 
       
ARTICLE III. CONDITIONS PRECEDENT
    7  
 
       
Section 3.1 Conditions Precedent to Closing and Initial Purchase
    7  
Section 3.2 Conditions Precedent to all Purchases
    7  
 
       
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
    8  
 
       
Section 4.1 Seller’s Representations and Warranties
    8  
Section 4.2 Representations and Warranties of the Seller Relating to the
Agreement and the Purchased Collateral
    15  
Section 4.3 Representations and Warranties of the Buyer
    17  
 
       
ARTICLE V. COVENANTS
    18  
 
       
Section 5.1 Affirmative Covenants of the Seller
    18  
Section 5.2 Negative Covenants of Seller
    23  
 
       
ARTICLE VI. REPURCHASE OBLIGATION
    25  
 
       
Section 6.1 Retransfer of Purchased Collateral
    25  
Section 6.2 Substitution of Assets
    25  
Section 6.3 Deemed Collections
    26  
 
       
ARTICLE VII. ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF THE PURCHASED
COLLATERAL
    27  
 
       
Section 7.1 Rights of the Buyer
    27  
Section 7.2 Responsibilities of Seller
    27  
Section 7.3 Rights With Respect to Loan Files
    28  
Section 7.4 Notice to Administrative Agent
    28  
 
       
ARTICLE VIII. TERM AND TERMINATION
    28  
 
       
Section 8.1 Purchase Termination Events
    28  
Section 8.2 Remedies
    30  
Section 8.3 Survival of Certain Provisions
    31  

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TABLE OF CONTENTS

              Page  
ARTICLE IX. INDEMNIFICATION
    31  
 
       
Section 9.1 Indemnification by the Seller
    31  
Section 9.2 Assignment of Indemnities
    34  
 
       
ARTICLE X. MISCELLANEOUS
    34  
 
       
Section 10.1 Amendments and Waivers
    34  
Section 10.2 Notices, Etc.
    34  
Section 10.3 Limitation of Liability
    34  
Section 10.4 Binding Effect; Benefit of Agreement
    35  
Section 10.5 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF OBJECTION TO
VENUE
    35  
Section 10.6 WAIVER OF JURY TRIAL
    35  
Section 10.7 Costs, Expenses and Taxes
    35  
Section 10.8 No Proceedings
    36  
Section 10.9 Recourse Against Certain Parties
    36  
Section 10.10 Protection of Right, Title and Interest in the Purchased
Collateral; Further Action Evidencing Purchases
    37  
Section 10.11 Execution in Counterparts; Severability; Integration
    38  
Section 10.12 Waiver of Set-off
    39  
Section 10.13 Heading and Exhibits
    39  
Section 10.14 Rights of Inspection
    39  
Section 10.15 Assignment
    40  
Section 10.16 No Waiver; Cumulative Remedies
    40  
Section 10.17 Intentionally Omitted
    40  
Section 10.18 Revolving Loan Payments
    40  

SCHEDULES

     
SCHEDULE I
  Purchased Collateral List
SCHEDULE II
  Lock-Box Banks and Lock-Box Accounts

EXHIBITS

     
EXHIBIT A
  Form of Sale Assignment
EXHIBIT B
  Form of Officer’s Certificate

APPENDICES

     
APPENDIX A
  Condition Precedent Documents

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SALE AND CONTRIBUTION AGREEMENT
     THIS SALE AND CONTRIBUTION AGREEMENT (such agreement as amended, modified,
supplemented or restated from time to time, this “Agreement”) is dated as of
September 10, 2007, by and between CSE MORTGAGE LLC, a Delaware limited
liability company, as the seller (in such capacity, the “Seller”) and
CAPITALSOURCE REAL ESTATE LOAN LLC, 2007-A, a Delaware limited liability
company, as the buyer (in such capacity, the “Buyer”).
W I T N E S S E T H:
     WHEREAS, the Buyer desires to purchase from the Seller and the Seller
desires to sell to the Buyer certain assets originated or acquired by the Seller
in the ordinary course of its business, together with, among other things,
certain related security and rights of payment thereunder; and
     WHEREAS, the Seller and the Buyer acknowledge that a lien and security
interest in the assets and related security sold or otherwise conveyed by the
Seller to the Buyer hereunder will be granted and assigned by the Buyer pursuant
to the Sale and Servicing Agreement (as defined herein) and the related
Transaction Documents, to the Administrative Agent, as agent for the Secured
Parties under the Sale and Servicing Agreement.
     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
ARTICLE I.
GENERAL
          Section 1.1 Defined Terms.
     Capitalized terms used but not defined herein have the meanings provided in
the Sale and Servicing Agreement (as defined below).
     Applicable Insolvency Laws: Defined in Section 8.1(d).
     Agreement: Defined in the Preamble.
     Assets: The Assets listed on Schedule I hereto, as such Schedule I may be
amended, supplemented, restated or replaced from time to time.
     Buyer: Defined in the Preamble.
     Deemed Collection: Defined in Section 6.3.
     Early Termination: Defined in Section 8.1.

 

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     Faxed Documents: Defined in Section 2.1(f).
     Indemnified Amounts: Defined in Section 9.1.
     Indemnified Party: Defined in Section 9.1.
     Other Costs: Defined in Section 10.7(c).
     Pension Plans: Defined in Section 4.1(y).
     Purchase: A purchase by the Buyer of Purchased Collateral from the Seller
pursuant to Section 2.1.
     Purchase Date: The second Business Day immediately following the Closing
Date and any subsequent day on which any Purchased Collateral is acquired by the
Buyer pursuant to the terms of this Agreement including any Substitution Date,
as set forth in the related Sale Assignment.
     Purchase Price: Defined in Section 2.2.
     Purchase Termination Events: Defined in Section 8.1.
     Purchased Collateral: Defined in Section 2.1(a).
     Replaced Asset: Defined in Section 6.2(a).
     Retransfer Date: Defined in Section 6.1.
     Sale Assignment: Defined in Section 2.1(b).
     Sale and Servicing Agreement: The Sale and Servicing Agreement, dated as of
September 10, 2007 among CapitalSource Real Estate Loan LLC, 2007-A, as the
seller, CSE Mortgage LLC, as the originator and as the servicer, each of the
purchasers from time to time party thereto, Citicorp North America, Inc., as the
administrative agent, and Wells Fargo Bank, National Association, as the backup
servicer and as the collateral custodian, as the same may be amended,
supplemented, restated or replaced from time to time.
     Schedule I: The schedule of all Purchased Collateral that is sold,
transferred and assigned by the Seller to the Buyer on a Purchase Date, which
schedule as to the Purchased Collateral identified as of the initial Purchase
Date is attached hereto and as to any Purchased Collateral identified on any
subsequent Purchase Date is supplemented by the “Schedule I” attached to the
applicable Sale Assignment, and incorporated herein by reference, as such
schedule may be supplemented and amended from time to time pursuant to the terms
hereof.
     SEC: Defined in Section 5.1(q)(i).
     Seller: Defined in the Preamble.
     Substitute Asset: Defined in Section 6.2.

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     Substitution Date: Any date on which the Seller transfers a Substitute
Asset to the Buyer.
     Term Transactions: The Rule 144A/Regulation S private placements of Notes
issued by issuers in connection with securitizations in existence on and after
the date hereof involving CapitalSource Inc. or its Affiliates.
     Warehouse Facilities. Repurchase agreements, trust preferred transactions,
warehouse facilities or other similar types of transactions in existence on and
after the date hereof involving CapitalSource Inc. or its Affiliates.
          Section 1.2 Other Terms.
     All accounting terms used but not specifically defined herein shall be
construed in accordance with GAAP. All terms used in Article 9 of the UCC in the
State of New York, and used but not specifically defined herein, are used herein
as defined in such Article 9.
          Section 1.3 Computation of Time Periods.
     Unless otherwise stated in this Agreement, in the computation of a period
of time from a specified date to a later specified date, the word “from” means
“from and including” and the words “to” and “until” each mean “to but
excluding.”
          Section 1.4 Interpretation.
     In each Transaction Document, unless a contrary intention appears:
     (a) the singular number includes the plural number and vice versa;
     (b) reference to any Person includes such Person’s successors and assigns
but, if applicable, only if such successors and assigns are permitted by the
Transaction Documents;
     (c) reference to any gender includes each other gender;
     (d) reference to day or days without further qualification means calendar
days;
     (e) reference to any time of day means New York City time;
     (f) reference to any agreement (including any Transaction Document),
document or instrument means such agreement, document or instrument as amended,
supplemented or modified and in effect from time to time in accordance with the
terms thereof and, if applicable, the terms of the other Transaction Documents,
and reference to any promissory note includes any promissory note that is an
extension or renewal thereof or a substitute or replacement therefor; and
     (g) reference to any Applicable Law means such Applicable Law as amended,
modified, codified, replaced or reenacted, in whole or in part, and in effect
from time to time, including rules and regulations promulgated thereunder, and
reference to any Section or other provision of any Applicable Law means that
provision of such Applicable Law from time to time

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in effect and constituting the substantive amendment, modification,
codification, replacement or reenactment of such Section or other provision.
ARTICLE II.
SALE, TRANSFER AND ASSIGNMENT
          Section 2.1 Sale, Transfer and Assignment.
     (a) On the terms and subject to the conditions set forth in this Agreement
(including the conditions to Purchase set forth in Article III), on each
Purchase Date, the Seller hereby sells, transfers, assigns, sets over and
otherwise conveys to the Buyer, and the Buyer hereby purchases and takes from
the Seller all right, title and interest (whether now owned or hereafter
acquired or arising and wherever located) of the Seller in, to and under all
accounts, general intangibles, instruments, chattel paper, documents, money,
letters of credit, advices of credit, deposit accounts, certificates of deposit,
investment property, goods and other property consisting of, arising from or
related to any of the following property (collectively, the “Purchased
Collateral”):
               (i) the Assets identified by the Seller as of the initial Cut–Off
Date which are listed on Schedule I hereto, and the Assets identified by the
Seller as of any additional Cut–Off Date which are listed on Schedule I to the
Sale Assignment, together with all monies due in payment of such Loans on and
after the related Cut–Off Date, but excluding any Excluded Amounts and any
Retained Interest;
               (ii) all Related Security with respect to the Loans referred to
in clause (i) above; and
               (iii) all income and Proceeds of the foregoing.
     (b) The Seller shall on or prior to any Purchase Date after the Closing
Date execute and deliver to the Buyer a certificate of assignment (the “Sale
Assignment”) from the Seller to the Buyer in the form of Exhibit A hereto. From
and after such Purchase Date, the Purchased Collateral listed on such assignment
shall be deemed to be Purchased Collateral hereunder.
     (c) On or before any Purchase Date with respect to the Purchased Collateral
to be acquired by the Buyer on that date, the Seller shall provide the Buyer
with an Officer’s Certificate, in the form of Exhibit B hereto, signed by a duly
authorized Responsible Officer certifying, as of such Purchase Date, to each of
the items in Section 4.2, in the form of Exhibit B hereto.
     (d) Except as specifically provided in this Agreement, the sale and
purchase of Purchased Collateral under this Agreement shall be without recourse
to the Seller; it being understood that Seller shall be liable to the Buyer for
all representations, warranties, covenants and indemnities made by Seller
pursuant to the terms of this Agreement, all of which obligations are limited so
as not to constitute recourse to the Seller for the credit risk of the Obligors.

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     (e) The Buyer, the Administrative Agent, each Purchaser, the other Secured
Parties, the Backup Servicer and the Collateral Custodian shall not have any
obligation or liability to any Obligor or client of Seller (including any
obligation to perform any of the obligations of Seller (including any obligation
with respect to any other related agreements)). No such obligation or liability
is intended to be assumed by the Buyer, the Administrative Agent, the
Purchasers, the Secured Parties, the Backup Servicer, or the Collateral
Custodian, and any such assumption is expressly disclaimed.
     (f) In connection with each Purchase of Purchased Collateral hereunder, the
Seller shall deliver to the Collateral Custodian (A) the Required Asset
Documents with respect thereto on or prior to the initial Purchase Date (except
for any UCCs, which shall be in the possession of the Collateral Custodian
within two Business Days of the initial Purchase Date) as to any Existing
Assets, and (B) the duly executed original promissory note, if any, and the duly
executed faxed copies of the other documents included in the Required Asset
Documents (the “Faxed Documents”) on or prior to the related Purchase Date (and
if prior to the related Purchase Date, any such promissory note and Faxed
Documents shall be held by the Collateral Custodian on behalf of the Purchasers
in escrow until such Purchase shall occur on the related Purchase Date), and the
duly executed original copies of the Faxed Documents (including any UCCs) within
two Business Days of the related Purchase Date as to any Additional Assets. In
connection with such transfer, the Seller hereby grants to each of the Buyer,
the Administrative Agent and the Servicer an irrevocable, non–exclusive license
to use, without royalty or payment of any kind, all software used by the Seller
to account for the Purchased Collateral, to the extent necessary to administer
the Purchased Collateral, whether such software is owned by the Seller or is
owned by others and used by the Seller under license agreements with respect
thereto; provided that should the consent of any licensor of such software be
required for the grant of the license described herein to be effective, the
Seller hereby agrees that upon the request of the Buyer or the Administrative
Agent, the Seller will use its reasonable efforts to obtain the consent of such
third–party licensor. The license granted hereby shall be irrevocable until the
Collection Date and shall terminate on the date this Agreement terminates in
accordance with its terms. The Seller (i) shall take such action requested by
the Buyer, the Administrative Agent, from time to time hereafter, that may be
necessary or appropriate to ensure that the Buyer and its assigns under the Sale
and Servicing Agreement have an enforceable ownership interest in the Asset
Files purchased from the Seller hereunder, and (ii) shall use its reasonable
efforts to ensure that each of the Buyer, the Administrative Agent, and the
Servicer has an enforceable right (whether by license or sublicense or
otherwise) to use all of the computer software used to account for the Purchased
Collateral and/or to recreate such Asset Files.
     (g) In connection with the sale of the Purchased Collateral, the Seller
further agrees that it will, at its own expense, indicate clearly and
unambiguously in its computer files and its financial statements, on or prior to
each Purchase Date, that such Purchased Collateral has been sold to the Buyer
pursuant to this Agreement.
     (h) The Seller further agrees to deliver to the Buyer on or before each
Purchase Date a computer file containing a true, complete and correct list of
all Assets, identified by account number and Outstanding Asset Balance as of the
related Cut–Off Date. Such file or list shall be marked as Schedule I to this
Agreement, shall be delivered to the Buyer as confidential and

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proprietary, and is hereby incorporated into and made a part of this Agreement
as such Schedule I may be supplemented and amended from time to time.
     (i) It is the intention of the parties hereto that the conveyance of the
Seller’s right, title and interest in and to the Purchased Collateral by the
Seller to the Buyer as provided in Section 2.1 shall constitute an absolute
transfer conveying good title, free and clear of any Lien (other than Permitted
Liens) and that the Purchased Collateral shall not be part of the Seller’s
bankruptcy estate in the event of an Insolvency Event with respect to the
Seller. Furthermore, it is not intended that such conveyance be deemed a pledge
of the Assets and the other Purchased Collateral by the Seller to the Buyer to
secure a debt or other obligation of the Seller. If, however, notwithstanding
the intention of the parties, the conveyance provided for in this Section 2.1 is
determined to be a transfer for security, then this Agreement shall also be
deemed to be, and hereby is, a “security agreement” within the meaning of
Article 9 of the UCC and the Seller hereby grants to the Buyer a duly perfected,
first priority “security interest” within the meaning of Article 9 of the UCC in
all of the Seller’s right, title and interest in and to the Purchased
Collateral, now existing and hereafter created, to secure the prompt and
complete payment of a loan deemed to have been made in an amount equal to the
aggregate Purchase Price of the Purchased Collateral together with all of the
other obligations of the Seller hereunder. The Buyer shall have, in addition to
the rights and remedies which it may have under this Agreement, all other rights
and remedies provided to a secured creditor under the UCC and other Applicable
Law, which rights and remedies shall be cumulative.
          Section 2.2 Purchase Price.
     The purchase price for each item of Purchased Collateral sold to the Buyer
by the Seller under this Agreement (the “Purchase Price”) shall be a dollar
amount equal to the Outstanding Asset Balance thereof determined as of the
related Cut–Off Date.
          Section 2.3 Payment of Purchase Price.
     (a) The Purchase Price for any Purchased Collateral sold by the Seller to
the Buyer on any Purchase Date shall be paid in a combination of (i) immediately
available funds and (ii) if the Buyer does not have sufficient funds to pay the
full amount of the Purchase Price, by means of a capital contribution by the
Seller to the Buyer.
     (b) Notwithstanding any provision herein to the contrary, the Seller may on
any Purchase Date elect to designate all or a portion of the Purchased
Collateral proposed to be transferred to the Buyer on such date as a capital
contribution to the Buyer. In such event, the Purchase Price payable with
respect to such transfer shall be reduced by the Outstanding Asset Balance of
the Purchased Collateral or portions thereof that were so contributed; provided
however that Purchased Collateral contributed to the Buyer as capital shall
constitute Purchased Collateral for all purposes of this Agreement.
     (c) The Seller, by accepting the Purchase Price paid for each purchase of
Purchased Collateral, shall be deemed to have certified, with respect to the
Purchased Collateral to be sold by it on such day, that its representations and
warranties contained in Article IV are true and

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correct on and as of such day, with the same effect as though made on and as of
such day and that no Termination Event or Unmatured Termination Event has
occurred.
     (d) Upon the payment of the Purchase Price for any Purchase, title to the
Purchased Collateral included in such Purchase shall rest in Buyer, whether or
not the conditions precedent to such Purchase and the other covenants and
agreements contained herein were in fact satisfied; provided however that Buyer
shall not be deemed to have waived any claim it may have under this Agreement
for the failure by the Seller in fact to satisfy any such condition precedent,
covenant or agreement.
ARTICLE III.
CONDITIONS PRECEDENT
          Section 3.1 Conditions Precedent to Closing and Initial Purchase.
     The closing and initial Purchase hereunder are subject to the conditions
precedent that (i) each of the conditions precedent to the execution, delivery
and effectiveness of each other Transaction Document (other than a condition
precedent in any such other Transaction Document relating to the effectiveness
of this Agreement) shall have been fulfilled, and (ii) on or prior to the
Closing Date, the Seller shall have delivered to the Buyer each of the items
specified on Appendix A hereto in form and substance satisfactory to the Buyer.
          Section 3.2 Conditions Precedent to all Purchases.
     The obligations of the Buyer to Purchase the Purchased Collateral from the
Seller on any Purchase Date (including the initial Purchase Date) shall be
subject to the satisfaction of the following conditions precedent that:
     (a) all representations and warranties of the Seller contained in
Sections 4.1 and 4.2 shall be true and correct on and as of such date as though
made on and as of such date and shall be deemed to have been made on and as of
such day;
     (b) (i) in the case of the initial Purchase Date, the Seller shall have
delivered to the Buyer, prior to the initial Purchase Date, a Schedule I that is
true, accurate and complete in all respects as of the initial Cut–Off Date, and
(ii) in the case of any subsequent Purchase Date, the Seller shall have
delivered to the Buyer, prior to the applicable subsequent Purchase Date, a duly
executed and completed Sale Assignment along with a Schedule I that is true,
accurate and complete in all respects as of the related Cut–Off Date;
     (c) on and as of such Purchase Date, the Seller shall have performed all of
the covenants and agreements required to be performed by it on or prior to such
date pursuant to the provisions of this Agreement;
     (d) no event has occurred and is continuing, or would result from such
Purchase, that constitutes a Termination Event or Unmatured Termination Event;
     (e) the Termination Date shall not have occurred;

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     (f) Intentionally Omitted;
     (g) no Applicable Law shall prohibit or enjoin, and no order, judgment or
decree of any federal, state or local court or governmental body, agency or
instrumentality shall prohibit or enjoin, the making of any such Purchase by the
Buyer in accordance with the provisions hereof;
     (h) prior to the Closing Date, the Buyer and the Administrative Agent shall
be in receipt of UCC, tax and judgment lien searches of Seller;
     (i) prior to the Closing Date, the Buyer and the Administrative Agent shall
be in receipt of UCC financing statements per paragraph (d) of Appendix A;
     (j) prior to the Closing Date, the Buyer and the Administrative Agent shall
be in receipt of opinions of counsel satisfactory to such Persons;
     (k) prior to the Closing Date, all limited liability company and legal
proceedings and all instruments in connection with the transactions contemplated
by this Agreement shall be satisfactory in form and substance to the Buyer, and
the Buyer shall have received from the Seller copies of all documents
(including, without limitation, records of limited liability company
proceedings, approvals and opinions) relevant to the transactions herein
contemplated as the Buyer may reasonably have requested;
     (l) the Seller shall have paid all fees required to be paid by it on the
Closing Date, and shall have reimbursed the Buyer and its assignees for all
fees, costs and expenses of closing the transactions contemplated hereunder and
under the other Transaction Documents;
     (m) [intentionally omitted]; and
     (n) with respect to an Acquired Loan intended to be included as a part of
the Purchased Collateral, the Buyer and the Administrative Agent shall have
received a satisfactory opinion of counsel.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
          Section 4.1 Seller’s Representations and Warranties.
     As of each Purchase Date, the Seller represents and warrants to the Buyer
for the benefit of the Buyer and each of its successors and assigns that:
     (a) Organization and Good Standing. The Seller has been duly organized, and
is validly existing as a limited liability company in good standing, under the
laws of the State of Delaware, with all requisite company power and authority to
own or lease its properties and conduct its business as such business is
presently conducted, and had at all relevant times, and now has, all necessary
power, authority and legal right to acquire, own and sell the Purchased
Collateral.

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     (b) Due Qualification. The Seller is duly qualified to do business and is
in good standing as a limited liability company, and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or lease of
property or the conduct of its business requires such qualification, licenses or
approvals.
     (c) Power and Authority; Due Authorization; Execution and Delivery. The
Seller (i) has all necessary power, authority and legal right to (a) execute and
deliver this Agreement and the other Transaction Documents to which it is a
party, (b) carry out the terms of the Transaction Documents to which it is a
party, and (c) sell and assign an ownership interest in the Purchased Collateral
on the terms and conditions provided herein and (ii) has duly authorized by all
necessary company action the execution, delivery and performance of this
Agreement and the other Transaction Documents to which it is a party and the
sale and assignment of an ownership interest in the Purchased Collateral on the
terms and conditions herein provided. This Agreement and each other Transaction
Document to which the Seller is a party have been duly executed and delivered by
the Seller.
     (d) Binding Obligation. This Agreement and each other Transaction Document
to which the Seller is a party constitutes a legal, valid and binding obligation
of the Seller enforceable against the Seller in accordance with its respective
terms, except as such enforceability may be limited by Insolvency Laws and by
general principals of equity (whether considered in a suit at law or in equity).
     (e) No Violation. The consummation of the transactions contemplated by this
Agreement and the other Transaction Documents to which it is a party and the
fulfillment of the terms hereof and thereof will not (i) conflict with, result
in any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time or both) a default under, the Seller’s
certificate of formation, operating agreement or any Contractual Obligation of
the Seller, (ii) result in the creation or imposition of any Lien (other than
Permitted Liens) upon any of the Seller’s properties pursuant to the terms of
any such Contractual Obligation, other than this Agreement, or (iii) violate any
Applicable Law.
     (f) No Proceedings. There is no litigation, proceedings or investigations
pending or, to the best knowledge of the Seller, threatened against the Seller,
before any Governmental Authority (i) asserting the legality, invalidity or
enforceability of this Agreement or any other Transaction Document to which the
Seller is a party, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any other Transaction Document to
which the Seller is a party or (iii) seeking any determination or ruling that
could reasonably be expected to have Material Adverse Effect.
     (g) All Consents Required. All approvals, authorizations, consents, orders
or other actions of any Person or of any Governmental Authority (if any)
required for the due execution, delivery and performance by the Seller of this
Agreement and any other Transaction Document to which the Seller is a party have
been obtained.
     (h) Bulk Sales. The execution, delivery and performance of this Agreement
and the transactions contemplated hereby do not require compliance with any
“bulk sales” act or similar law by Seller.

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     (i) Solvency. The Seller is not the subject of any Insolvency Proceedings
or Insolvency Event. The transactions under this Agreement and any other
Transaction Document to which the Seller is a party do not and will not render
the Seller not Solvent.
     (j) Selection Procedures. No procedures believed by the Seller to be
adverse to the interests of the Buyers were utilized by the Seller in
identifying and/or selecting the Assets included in the Purchased Collateral. In
addition, each Asset shall have been underwritten in accordance with and satisfy
the standards of any Credit and Collection Policy that has been established by
the Seller and is then in effect.
     (k) Taxes. The Seller has filed or caused to be filed all tax returns that
are required to be filed by it. The Seller has paid or made adequate provisions
for the payment of all Taxes and all assessments made against it or any of its
properties (other than any amount of Tax the validity of which is currently
being contested in good faith by appropriate proceedings and with respect to
which reserves in accordance with GAAP have been provided on the books of the
Seller), and no tax lien has been filed and, to the Seller’s knowledge, no claim
is being asserted by an applicable Governmental Authority, with respect to any
such Tax, fee or other charge.
     (l) Exchange Act Compliance; Regulations T, U and X. None of the
transactions contemplated herein (including, without limitation, the use of the
proceeds from the sale of the Purchased Collateral) will violate or result in a
violation of Section 7 of the Securities Exchange Act, or any regulations issued
pursuant thereto, including, without limitation, Regulations T, U and X of the
Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II. The
Seller does not own or intend to carry or purchase, and no proceeds from the
sale of the Purchased Collateral will be used to carry or purchase, any “margin
stock” within the meaning of Regulation U or to extend “purpose credit” within
the meaning of Regulation U.
     (m) Intentionally Omitted.
     (n) Security Interest.
               (i) This Agreement creates a valid and continuing security
interest (as defined in the applicable UCC) in the Purchased Collateral in favor
of the Buyer and the Administrative Agent as assignee on behalf of the Secured
Parties, which security interest is prior to all other Liens (except for
Permitted Liens), and is enforceable as such against creditors of and purchasers
from the Seller;
               (ii) each of the Assets, along with the related Asset Files,
constitutes a “general intangible,” an “instrument,” an “account,” or “chattel
paper,” within the meaning of Article 9 of the UCC of all applicable
jurisdictions;
               (iii) the Seller owns and has good and marketable title to the
Purchased Collateral free and clear of any Lien (other than Permitted Liens),
claim or encumbrance of any Person;
               (iv) the Seller has received all consents and approvals required
by the terms of any Asset to the sale and granting of a security interest in the
Assets hereunder to the Buyer and the Administrative Agent as assignee on behalf
of the Secured Parties;

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               (v) the Seller has caused the filing of all appropriate financing
statements in the proper filing office in the appropriate jurisdictions under
Applicable Law in order to perfect the security interest in the Purchased
Collateral granted hereunder to the Buyer and the Administrative Agent as
assignee on behalf of the Secured Parties;
               (vi) other than the security interest granted to the Buyer and
the Administrative Agent as assignee on behalf of the Secured Parties, the
Seller has not pledged, assigned, sold, granted a security interest in or
otherwise conveyed any of the Purchased Collateral. The Seller has not
authorized the filing of and is not aware of any financing statements against
the Seller that include a description of collateral covering the Purchased
Collateral other than any financing statement (A) relating to the security
interest granted to the Purchasers under the Sale and Servicing Agreement, or
(B) that has been terminated. The Seller is not aware of the filing of any
judgment or tax lien filings against the Seller;
               (vii) all original executed copies of each underlying promissory
note or copies of each Loan Register, as applicable, that constitute or evidence
each Asset has been, or subject to the delivery requirements contained herein,
will be delivered to the Collateral Custodian;
               (viii) the Seller has received a written acknowledgment from the
Collateral Custodian that the Collateral Custodian or its bailee is holding the
underlying promissory notes (if any) and the copies of the Loan Registers that
constitute or evidence the Assets solely on behalf of and for the benefit of the
Secured Parties;
               (ix) none of the underlying promissory notes or Loan Registers,
as applicable, that constitute or evidence the Assets has any marks or notations
indicating that they have been pledged, assigned or otherwise conveyed to any
Person other than the Administrative Agent, on behalf of the Secured Parties;
               (x) none of the Collateral has been pledged or otherwise made
subject to a Lien; and
               (xi) with respect to (1) any Asset comprising “financial assets”
within the meaning of the UCC, such Assets have been delivered to and are being
held in a “securities account” within the meaning of the UCC that is maintained
in the name of, and under the control and direction of the Collateral Custodian
or another institution that for the purposes of the UCC is a “securities
intermediary” whose “jurisdiction” with respect to the Collateral is the State
of New York, the terms of which account treat the Collateral Custodian as
entitled to exercise the rights that comprise any financial assets credited to
such account solely on behalf of and for the benefit of the Secured Parties and
(2) any Asset comprising certificated securities within the meaning of the UCC,
such Assets have been delivered to the Collateral Custodian and indorsed in
blank to the Collateral Custodian solely on behalf of and for the benefit of the
Secured Parties.
     (o) Reports Accurate. All Monthly Reports (if prepared by the Seller in its
capacity as Servicer or otherwise, or to the extent that information contained
therein is supplied by the Seller), information, exhibits, schedules, financial
statements, documents, books, records or

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reports furnished or to be furnished by the Seller to the Buyer in connection
with this Agreement are true, complete and correct.
     (p) Location of Offices. The principal place of business and chief
executive office of the Seller and the office where the Seller keeps all the
Records are located at the address of the Seller referred to in Section 9.2
hereof (or at such other locations as to which the notice and other requirements
specified in Section 5.2(f) shall have been satisfied).
     (q) Lock–Boxes. The names and addresses of all the Lock–Box Banks, together
with the account numbers of the Lock–Box Accounts at such Lock–Box Banks and the
names, addresses and account numbers of all accounts to which Collections on the
Purchased Collateral outstanding before the initial Purchase hereunder have been
sent, are specified in Schedule II (which shall be deemed to be amended in
respect of terminating or adding any Lock–Box Account or Lock–Box Bank upon
satisfaction of the notice and other requirements specified in Section 5.2(j)).
The Seller has not granted or agreed to grant to any Person other than the Buyer
and Collateral Custodian an interest in any Lock–Box Account except as disclosed
to the Administrative Agent and in a manner consistent with the Intercreditor
Agreement.
     (r) Tradenames. The Seller has no trade names, fictitious names, assumed
names or “doing business as” names or other names under which it has done or is
doing business.
     (s) Sale Agreement. This Agreement is the only agreement or arrangement
pursuant to which the Seller sells the Purchased Collateral that is the subject
of this Agreement.
     (t) Value Given. The Buyer has given reasonably equivalent value to the
Seller in consideration for the transfer to the Buyer of the Purchased
Collateral, no such transfer shall have been made for or on account of an
antecedent debt owed by the Seller to the Buyer, and no such transfer is or may
be voidable or subject to avoidance under any section of the Bankruptcy Code.
     (u) Accounting. The Seller accounts for the transfers from it to the Buyer
of interests in Purchased Collateral as financings of such Purchased Collateral
for consolidated accounting purposes (with a notation that it is treating the
transfers as a sale for legal and all other purposes on its books, records and
financial statements, in each case consistent with GAAP and with the
requirements set forth herein).
     (v) Special Purpose Entity. The Buyer is an entity with assets and
liabilities separate and distinct from those of the Seller and any Affiliates
thereof, and the Seller hereby acknowledges that the Administrative Agent, the
Purchasers and the other Secured Parties are entering into the transactions
contemplated by the Sale and Servicing Agreement in reliance upon the Buyer’s
identity as a separate legal entity separate from the Seller and from each
Affiliate of the Seller. Therefore, from and after the date of execution and
delivery of this Agreement, the Seller shall take all steps, including, without
limitation, all steps that the Administrative Agent, any Purchaser, or any other
Secured Party may from time to time reasonably request, to maintain the Buyer’s
identity as a separate legal entity and to make it manifest to third parties
that the Buyer is an entity with assets and liabilities distinct from those of
the Seller and any Affiliate thereof and not just a division of the Seller or
any such Affiliate.

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Without limiting the generality of the foregoing and in addition to the other
covenants set forth herein, Seller shall take all reasonable steps to ensure
that the Buyer (i) will take or refrain from taking, as applicable, each of the
activities specified in the non-consolidation opinion of Patton Boggs LLP, dated
as of the date hereof, necessary or reasonably appropriate to maintain Buyer’s
identity as a separate legal entity separate from the Seller and from each
Affiliate of the Seller, and (ii) will not take, refrain from taking, or fail to
take (as applicable) any other action described in Section 4.1(u) of the Sale
and Servicing Agreement.
     (w) Intentionally Omitted.
     (x) Investment Company Act. The Seller is not, and is not controlled by, an
“investment company” within the meaning of, or is exempt from the registration
requirement of, the Investment Company Act of 1940, as amended.
     (y) ERISA. The present value of all benefits vested under all “employee
pension benefit plans,” as such term is defined in Section 3 of ERISA,
maintained by the Seller, or in which employees of the Seller are entitled to
participate, as from time to time in effect (herein called the “Pension Plans”),
does not exceed the value of the assets of the Pension Plan allocable to such
vested benefits (based on the value of such assets as of the last annual
valuation date). No prohibited transactions, accumulated funding deficiencies,
withdrawals or reportable events have occurred with respect to any Pension Plans
that, in the aggregate, could subject the Seller to any material tax, penalty or
other liability. No notice of intent to terminate a Pension Plan has been
billed, nor has any Pension Plan been terminated under Section 4041(f) of ERISA,
nor has the Pension Benefit Guaranty Corporation instituted proceedings to
terminate, or appoint a trustee to administer a Pension Plan and no event has
occurred or condition exists that might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Pension Plan.
     (z) Compliance with Law. The Seller has complied in all respects with all
Applicable Laws to which it may be subject, and no Purchased Collateral
contravenes any Applicable Laws (including, without limitation, all applicable
predatory and abusive lending laws and all laws, rules and regulations relating
to licensing, truth in lending, fair credit billing, fair credit reporting,
equal credit opportunity, fair debt collection practices, and privacy).
     (aa) Credit and Collection Policy. The Seller has complied in all material
respects with the Credit and Collection Policy with respect to all of the
Purchased Collateral.
     (bb) Collections. The Seller acknowledges that all Collections received by
it or its Affiliates with respect to the Purchased Collateral sold hereunder are
held and shall be held in trust for the benefit of the Buyer (or its assignees)
until deposited into the Lock–Box Account as required by the Sale and Servicing
Agreement.
     (cc) Set–Off, etc. Other than B-Note Loans and Mezzanine Loans, no
Purchased Collateral has been compromised, adjusted, extended, satisfied,
subordinated, rescinded, set–off or modified by the Seller or the Obligor
thereof, and no Purchased Collateral is subject to compromise, adjustment,
extension, satisfaction, subordination, rescission, set–off, counterclaim,
defense, abatement, suspension, deferment, deduction, reduction, termination or
modification,

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whether arising out of transactions concerning the Purchased Collateral or
otherwise, by the Seller or the Obligor with respect thereto, except for
amendments to such Purchased Collateral otherwise permitted under the
Transaction Documents and in accordance with the Credit and Collection Policy.
     (dd) Full Payment. The Seller has no knowledge of any fact which should
lead it to expect that any Purchased Collateral will not be paid in full.
     (ee) Accuracy of Representations and Warranties. Each representation or
warranty by the Seller contained herein or in any certificate or other document
furnished by the Seller pursuant hereto or in connection herewith is true and
correct in all material respects.
     (ff) Representations and Warranties for Benefit of Buyer’s Assignees. Each
of the representations and warranties of the Seller contained in this Agreement
and the other Transaction Documents to which it is a party and that have been
executed and delivered on or prior to such Purchase Date is true and correct in
all material respects on the date it was made, and the Seller hereby makes each
such representation and warranty to, and for the benefit of the Administrative
Agent, the Purchasers and the other Secured Parties as if the same were set
forth in full herein.
     (gg) Ownership of Buyer. The Seller owns, directly or indirectly, 100% of
the membership interests of the Buyer, free and clear of any Lien. Such
membership interests are validly issued, fully paid and non–assessable, and
there are no options, warrants or other rights to acquire membership interests
of the Buyer.
     (hh) Participation, Acquired and Assigned Loans. The participations created
with respect to the Participation Loans and the sale to the Buyer with respect
to the Acquired and Assigned Loans do not violate any provisions of the
underlying Required Asset Documents and such documents do not contain any
express or implied prohibitions on participations or sales of such Loans, other
than those that have been complied with.
     (ii) Environmental.
               (i) Each item of the Related Property is in compliance with all
applicable Environmental Laws, and there is no violation of any Environmental
Law with respect to such Related Property and there are no conditions relating
to such Related Property that could give rise to liability under any applicable
Environmental Laws.
               (ii) None of the Related Property contains, or has previously
contained, any Materials of Environmental Concern at, on or under the Related
Property in amounts or concentrations that constitute or constituted a violation
of, or could give rise to liability under, Environmental Laws.
               (iii) The Seller has not received any written or verbal notice
of, or inquiry from any Governmental Authority regarding, any violation, alleged
violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard to any
of the Related Property, nor does Seller have knowledge or reason to believe
that any such notice will be received or is being threatened.

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               (iv) Materials of Environmental Concern have not been transported
or disposed of from the Related Property, or generated, treated, stored or
disposed of at, on or under any of the Related Property or any other location,
in each case by or on behalf of the Seller in violation of, or in a manner that
would be reasonably likely to give rise to liability under, any applicable
Environmental Law.
               (v) No judicial proceeding or governmental or administrative
action is pending or, to the best knowledge of the Seller, threatened, under any
Environmental Law to which any of the Seller is or will be named as a party, nor
are there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial requirements,
outstanding under any Environmental Law with respect to the Seller or the
Related Property.
               (vi) There has been no release or threat of release of Materials
of Environmental Concern at or from any of the Related Property, or arising from
or related to the operations (including, without limitation, disposal) of the
Seller in connection with the Related Property in violation of or in amounts or
in a manner that could give rise to liability under Environmental Laws.
     (jj) USA PATRIOT Act. Neither the Seller nor any Affiliate of the Seller is
(i) a country, territory, organization, person or entity named on an Office of
Foreign Asset Control (OFAC) list, (ii) a Person that resides or has a place of
business in a country or territory named on such lists or which is designated as
a “Non-Cooperative Jurisdiction” by the Financial Action Task Force on Money
Laundering, or whose subscription funds are transferred from or through such a
jurisdiction; (iii) a “Foreign Shell Bank” within the meaning of the USA PATRIOT
Act, i.e., a foreign bank that does not have a physical presence in any country
and that is not affiliated with a bank that has a physical presence and an
acceptable level of regulation and supervision; or (iv) a person or entity that
resides in or is organized under the laws of a jurisdiction designated by the
United States Secretary of the Treasury under Sections 311 or 312 of the USA
PATRIOT Act as warranting special measures due to money laundering concerns.
     (kk) Material Adverse Effect. The Seller represents and warrants that
(i) since June 30, 2007 and (ii) as of the most recent Purchase Date there has
been no Material Adverse Effect.
     It is understood and agreed that the representations and warranties
provided in this Section 4.1 shall survive (x) the sale and assignment or
contribution of the Purchased Collateral to the Buyer and (y) any subsequent
transfer of the Purchased Collateral by the Buyer (including its grant of a
first priority perfected security interest in, to and under the Purchased
Collateral pursuant to the Sale and Servicing Agreement). Upon discovery by the
Seller or the Buyer of a breach of any of the foregoing representations and
warranties, the party discovering such breach shall give prompt written notice
thereof to the other and to the Administrative Agent immediately upon obtaining
knowledge of such breach.
          Section 4.2 Representations and Warranties of the Seller Relating to
the Agreement and the Purchased Collateral.

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     The Seller hereby represents and warrants to the Buyer, (i) with respect to
clauses (a) through (c) below, as of the Closing Date and as of each Purchase
Date and (ii) with respect to clause (d) below, since June 30, 2007 and as of
the most recent Purchase Date:
     (a) Binding Obligation, Valid Transfer and Security Interest.
               (i) This Agreement and each other Transaction Document to which
the Seller is a party each constitutes a legal, valid and binding obligation of
the Seller, enforceable against the Seller in accordance with its terms, except
as such enforceability may be limited by Insolvency Laws and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
               (ii) This Agreement constitutes a valid transfer to the Buyer of
all right, title and interest of the Seller in, to and under all Purchased
Collateral, free and clear of any Lien of any Person claiming through or under
the Seller or its Affiliates, except for Permitted Liens. If the conveyances
contemplated by this Agreement are determined to be a transfer for security,
then this Agreement constitutes a grant of a security interest in all Purchased
Collateral to the Buyer which upon the delivery of the Required Asset Documents
to the Collateral Custodian and the filing of the financing statements described
in Section 4.1(n) and, in the case of Additional Assets on the applicable
Purchase Date, shall be a first priority perfected security interest in all
Purchased Collateral, subject only to Permitted Liens. Neither the Seller nor
any Person claiming through or under Seller shall have any claim to or interest
in the Collection Account or the Excess Spread Account and, if this Agreement
constitutes the grant of a security interest in such property, except for the
interest of Seller in such property as a debtor for purposes of the UCC.
     (b) Eligibility of Purchased Collateral. As of the Closing Date and each
Purchase Date, (i) the Schedule I (the Purchased Collateral List) is an accurate
and complete listing in all respects of all the Purchased Collateral as of the
Cut–Off Date and the information contained therein with respect to the identity
of such Purchased Collateral and the amounts owing thereunder is true and
correct in all respects as of the related Cut–Off Date, (ii) each item of
Purchased Collateral included in the Borrowing Base is an Eligible Asset as of
such date, (iii) each item of Purchased Collateral 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 item of Purchased Collateral, all consents,
licenses, approvals or authorizations of or registrations or declarations of any
Governmental Authority required to be obtained, effected or given by the Seller
in connection with the transfer of an ownership interest in item of Purchased
Collateral to the Buyer have been duly obtained, effected or given and are in
full force and effect, and (v) the representations and warranties set forth in
Section 4.2(a) are true and correct with respect to each item of Purchased
Collateral.
     (c) No Fraud. Each Asset was originated without any fraud or material
misrepresentation by the Originator or, to the best of the Seller’s knowledge,
on the part of the Obligor.
     (d) Material Adverse Effect. There has been no Material Adverse Effect.

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     It is understood and agreed that the representations and warranties
provided in this Section 4.2 shall survive (x) the sale and assignment or
contribution of the Purchased Collateral to the Buyer, (y) any subsequent
transfer of the Purchased Collateral by the Buyer (including its grant of a
perfected security interest in, to and under the Purchased Collateral pursuant
to the Sale and Servicing Agreement which, shall be of first priority security
interest) and (z) the termination of this Agreement and the Sale and Servicing
Agreement. Upon discovery by the Seller or the Buyer of a breach of any of the
foregoing representations and warranties, the party discovering such breach
shall give prompt written notice thereof to the other and to the Administrative
Agent immediately upon obtaining knowledge of such breach.
          Section 4.3 Representations and Warranties of the Buyer.
     The Buyer hereby represents and warrants to the Seller, as of the Closing
Date and each Purchase Date, that:
     (a) Organization and Good Standing. The Buyer has been duly organized, and
is validly existing as a limited liability company in good standing under the
laws of the State of Delaware, with all requisite company power and authority to
own or lease its properties and conduct its business as such business is
presently conducted, and had at all relevant times, and now has, all necessary
power, authority and legal right to acquire and own the Purchased Collateral.
     (b) Due Qualification. The Buyer is duly qualified to do business and is in
good standing as a limited liability company, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease of
property or the conduct of its business requires such qualification, licenses or
approvals.
     (c) Power and Authority; Due Authorization; Execution and Delivery. The
Buyer (i) has all necessary power, authority and legal right to (a) execute and
deliver this Agreement and the other Transaction Documents to which it is a
party, (b) carry out the terms of the Transaction Documents to which it is a
party, and (ii) has duly authorized by all necessary company action the
execution, delivery and performance of this Agreement and the other Transaction
Documents to which it is a party and the purchase of the Purchased Collateral on
the terms and conditions herein provided. This Agreement and each other
Transaction Document to which the Buyer is a party have been duly executed and
delivered by the Buyer.
     (d) Binding Obligation. This Agreement and each other Transaction Document
to which the Buyer is a party constitutes a legal, valid and binding obligation
of the Buyer enforceable against the Buyer in accordance with its respective
terms, except as such enforceability may be limited by Insolvency Laws and by
general principles of equity (whether considered in a suit at law or in equity).
     (e) No Violation. The consummation of the transactions contemplated by this
Agreement and the other Transaction Documents to which it is a party and the
fulfillment of the terms hereof and thereof will not (i) conflict with, result
in any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time or both) a default under, the Buyer’s
certificate of formation, operating agreement or any Contractual Obligation of
the

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Buyer, (ii) result in the creation or imposition of any Lien (other than
Permitted Liens) upon any of the Buyer’s properties pursuant to the terms of any
such Contractual Obligation, other than this Agreement, or (iii) violate any
Applicable Law.
     (f) No Proceedings. There is no litigation, proceedings or investigations
pending or, to the best knowledge of the Buyer, threatened against the Buyer,
before any Governmental Authority (i) asserting the legality, invalidity or
enforceability of this Agreement or any other Transaction Document to which the
Buyer is a party, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any other Transaction Document to
which the Buyer is a party or (iii) seeking any determination or ruling that
could reasonably be expected to have Material Adverse Effect.
     (g) All Consents Required. All approvals, authorizations, consents, orders,
licenses or other actions of any Person or of any Governmental Authority (if
any) required for the due execution, delivery and performance by the Buyer of
this Agreement and any other Transaction Document to which the Buyer is a party
have been obtained.
     (h) Material Adverse Effect. The Buyer represents and warrants that
(i) since August 9, 2007 there has been no Material Adverse Effect.
ARTICLE V.
COVENANTS
          Section 5.1 Affirmative Covenants of the Seller.
     From the date hereof until the Collection Date:
     (a) Compliance with Laws. The Seller will comply in all material respects
with all Applicable Laws, including those with respect to the Purchased
Collateral or any part thereof.
     (b) Preservation of Limited Liability Company Existence. The Seller will
preserve and maintain its limited liability company existence, rights,
franchises and privileges in the jurisdiction of its formation, and qualify and
remain qualified in good standing as a foreign limited liability company in each
jurisdiction where the failure to preserve and maintain such existence, rights,
franchises, privileges and qualification has had, or could reasonably be
expected to have, a Material Adverse Effect.
     (c) Performance and Compliance with Assets. The Seller will, at its
expense, timely and fully perform and comply with all provisions, covenants and
other promises required to be observed by it under the Purchased Collateral and
all other agreements related to such Purchased Collateral.
     (d) Keeping of Records and Books of Account. The Seller will maintain and
implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing the Purchased Collateral
in the event of the destruction of the originals thereof), and keep and maintain
all documents, books, records and other information

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reasonably necessary or advisable for the collection of all or any portion of
the Purchased Collateral.
     (e) Buyer’s Assets. With respect to the Purchased Collateral sold to the
Buyer, the Seller will (i) sell such Purchased Collateral solely pursuant to and
in accordance with the terms of this Agreement, (ii) (at the Seller’s expense)
take all action necessary to perfect, protect and more fully evidence the
Buyer’s or its assignee’s ownership or security interest in such Purchased
Collateral free and clear of any Lien other than the Lien created hereunder and
Permitted Liens, including, without limitation, (a) filing and maintaining (at
the Seller’s expense), effective financing statements against the Seller in all
necessary or appropriate filing offices, and filing continuation statements,
amendments or assignments with respect thereto in such filing offices, and
(b) executing or causing to be executed such other instruments or notices as may
be necessary or appropriate, (iii) permit the Buyer, the Administrative Agent or
their respective agents or representatives to visit the offices of the Seller
during normal office hours and upon reasonable notice examine and make copies of
all documents, books, records and other information concerning the Purchased
Collateral and discuss matters related thereto with any of the officers or
employees of the Seller having knowledge of such matters, and (iv) take all
additional action that the Buyer or the Administrative Agent may reasonably
request to perfect, protect and more fully evidence the respective interests of
the parties to this Agreement in the Purchased Collateral.
     (f) Delivery of Collections. The Seller will cause (1) all proceeds from
all Lock–Boxes to be directly deposited by a Lock–Box Bank into a Lock–Box
Account and (2) each Lock–Box and Lock–Box Account to be subject at all times to
a Lock–Box Agreement and Intercreditor Agreement. In the event any payments
relating to any Purchased Collateral are remitted directly to the Seller or any
Affiliate of the Seller, the Seller will remit (or will cause all such payments
to be remitted) directly to a Lock–Box Bank and deposited into a Lock–Box
Account within two Business Days following receipt thereof, and, at all times
prior to such remittance, the Seller will itself hold or, if applicable, will
cause such payments to be held in trust for the exclusive benefit of the Buyer,
the Administrative Agent and the Purchasers. Until so deposited, all such
Collections shall be held in trust for the Buyer or its assignees by the Seller.
     (g) Credit and Collection Policy. The Seller will (a) comply in all
material respects with the Credit and Collection Policy in regard to the
Purchased Collateral, and (b) furnish to the Buyer and the Administrative Agent,
prior to its effective date, prompt notice of any material changes in the Credit
and Collection Policy. The Seller may agree to or otherwise permit to occur
changes in the Credit and Collection Policy that would not impair the
collectibility of any of the Purchased Collateral or otherwise adversely affect
the interests or remedies of the Buyer, the Administrative Agent or the Secured
Parties under this Agreement or any other Transaction Document. The Seller may
not agree to or otherwise permit to occur changes in the Credit and Collection
Policy which would impair the collectibility of any of the Purchased Collateral
or otherwise adversely affect the interests or remedies of the Buyer, the
Administrative Agent or the Secured Parties under this Agreement or any other
Transaction Document, without the prior written consent of the Buyer and the
Administrative Agent.

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     (h) Termination Events. The Seller will provide the Buyer and the
Administrative Agent with immediate written notice of the occurrence of each
Termination Event and each Unmatured Termination Event of which the Seller has
knowledge or has received notice. In addition, no later than two Business Days
following the Seller’s knowledge or notice of the occurrence of any Termination
Event or Unmatured Termination Event, the Seller will provide to the Buyer and
the Administrative Agent a written statement of the chief financial officer or
chief accounting officer of Seller setting forth the details of such event and
the action that the Seller proposes to take with respect thereto.
     (i) Taxes. The Seller will file and pay any and all Taxes required to meet
the obligations of the Transaction Documents.
     (j) Obligor Notification Forms. The Seller shall furnish the Buyer and the
Administrative Agent with an appropriate power of attorney to send (at the
Buyer’s or the Administrative Agent’s discretion after the occurrence of a
Termination Event or an Unmatured Termination Event) Obligor notification forms
to give notice to the Obligors of the Secured Parties’ interest in the Purchased
Collateral and the obligation to make payments as directed by the Buyer or the
Administrative Agent.
     (k) Adverse Claims. The Seller will not create, or participate in the
creation of, or permit to exist, any Liens in relation to each Lock–Box Account
other than as disclosed on or prior to the Closing Date to the Buyer and the
Administrative Agent and in a manner consistent with the Intercreditor
Agreement.
     (l) Notices. The Seller will furnish to the Buyer and the Administrative
Agent:
               (i) Income Tax Liability. Within ten Business Days after the
receipt of revenue agent reports or other written proposals, determinations or
assessments of the Internal Revenue Service or any other taxing authority which
propose, determine or otherwise set forth positive adjustments to the Tax
liability of any Affiliated group (within the meaning of Section 1504(a)(l) of
the Internal Revenue Code of 1986 (as amended from time to time)) which equal or
exceed $1,000,000 in the aggregate, telephonic or facsimile notice (confirmed in
writing within five Business Days) specifying the nature of the items giving
rise to such adjustments and the amounts thereof;
               (ii) Auditors’ Management Letters. Promptly after the receipt
thereof, any auditors’ management letters that are received by the Seller or by
its accountants;
               (iii) Representations. Forthwith upon receiving knowledge of
same, the Seller shall notify the Buyer and the Administrative Agent if any
representation or warranty set forth in Section 4.1 was incorrect at the time it
was given or deemed to have been given and at the same time deliver to the Buyer
and the Administrative Agent a written notice setting forth in reasonable detail
the nature of such facts and circumstances. In particular, but without limiting
the foregoing, the Seller shall notify the Buyer and the Administrative Agent in
the manner set forth in the preceding sentence before any Purchase Date of any
facts or circumstances within the knowledge of the Seller which would render any
of the said

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representations and warranties untrue at the date when such representations and
warranties were made or deemed to have been made;
               (iv) ERISA. Promptly after receiving notice of any “reportable
event” (as defined in Title IV of ERISA) with respect to the Seller (or any
ERISA Affiliate thereof), a copy of such notice;
               (v) 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 labor controversy (of a material nature), 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 Purchased Collateral, the
Transaction Documents, the Buyer’s or the Secured Parties’ interest in the
Purchased Collateral, or the Seller, or any other Subsidiary of CapitalSource
Inc.; and
               (vi) Notice of Material Events. Promptly upon becoming aware
thereof, notice of any other event or circumstances that, in the reasonable
judgment of the Seller, is likely to have a Material Adverse Effect.
     (m) Other. The Seller will furnish to the Buyer and the Administrative
Agent promptly, from time to time, such other information, documents, records or
reports respecting the Purchased Collateral or the condition or operations,
financial or otherwise, of Seller as the Buyer and the Administrative Agent may
from time to time reasonably request in order to protect the interests of the
Buyer, the Administrative Agent and the Secured Parties under or as contemplated
by this Agreement and the Sale and Servicing Agreement.
     (n) Separate Identity. The Seller acknowledges that the Administrative
Agent, the Purchasers and the other Secured Parties are entering into the
transactions contemplated by the Sale and Servicing Agreement in reliance upon
the Buyer’s identity as a legal entity that is separate from the Seller and any
Affiliates thereof. Therefore, from and after the date of execution and delivery
of this Agreement, the Seller will take all reasonable steps including, without
limitation, all steps that the Administrative Agent, the Purchasers and the
other Secured Parties may from time to time reasonably request to maintain the
Buyer’s identity as a separate legal entity and to make it manifest to third
parties that the Buyer is an entity with assets and liabilities distinct from
those of the Seller and any Affiliates thereof and not just a division of the
Seller or any such Affiliate. Without limiting the generality of the foregoing
and in addition to the other covenants set forth herein, the Seller agrees that:
               (i) the Seller will take all other actions necessary on its part
to ensure that the Buyer is at all times in compliance with Section 4.1(u) of
the Sale and Servicing Agreement;
               (ii) the Seller shall maintain limited liability company records
and books of account separate from those of the Buyer;

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               (iii) the annual financial statements of the Seller shall
disclose the effects of the Seller’s transactions in accordance with GAAP and
the annual financial statements of the Seller shall not reflect in any way that
the assets of the Buyer, including, without limitation, the Purchased
Collateral, could be available to pay creditors of the Seller or any other
Affiliate of the Seller;
               (iv) the resolutions, agreements and other instruments underlying
the transactions described in this Agreement shall be continuously maintained by
the Seller as official records;
               (v) the Seller shall maintain an arm’s–length relationship with
the Buyer and will not hold itself out as being liable for the debts of the
Buyer;
               (vi) the Seller shall keep its assets and its liabilities wholly
separate from those of the Buyer;
               (vii) the Seller will avoid the appearance, and promptly correct
any known misperception of any of the Seller’s creditors, that the assets of the
Buyer are available to pay the obligations and debts of the Seller; and
               (viii) to the extent that the Seller services the Assets and
performs other services on the Buyer’s behalf, the Seller will clearly identify
itself as an agent for the Buyer in the performance of such duties; provided,
however, that the Seller will not be required to so identify itself when
communicating with the Obligors.
     (o) Cooperation with Requests for Information or Documents. The Seller will
cooperate fully with all reasonable requests of the Buyer regarding the
provision of any information or documents, necessary or desirable, including the
provision of such information or documents in electronic or machine–readable
format, to allow each of the Buyer and its assignees to carry out their
responsibilities under the Transaction Documents.
     (p) Payment Performance and Discharge of Obligations. The Seller will pay,
perform and discharge all of its obligations and liabilities, including, without
limitation, all taxes, assessments and governmental charges upon its income and
properties, when due, the non–payment, performance or discharge of which would
reasonably be expected to have a Material Adverse Effect, unless and only to the
extent that such obligations, liabilities, taxes, assessments and governmental
charges shall be contested in good faith and by appropriate proceedings and
that, to the extent required by GAAP, proper and adequate book reserves relating
thereto are established by the Seller and then only to the extent that a bond is
filed in cases where the filing of a bond is necessary to avoid the creation of
a Lien against any of its properties.
     (q) Copies of Other Information. The Seller will deliver to the Buyer and
the Administrative Agent:
               (i) promptly, but in any event within ten Business Days after the
filing thereof, a copy of (a) each report or other filing made by the Seller or
any other Subsidiary of CapitalSource Inc. with the Securities and Exchange
Commission (the “SEC”) and required by the SEC to be delivered to the
shareholders of the Seller or any of its Affiliates, and (b) each

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report and final registration statement of the Seller or any other Subsidiary of
CapitalSource Inc. filed with the SEC; and
               (ii) promptly, from time to time, such other information,
documents, records or reports respecting the Purchased Collateral or the
conditions or operations, financial or otherwise, of the Seller (including,
without limitation, reports and notices relating to the Seller’s actions under
and compliance with ERISA and the Investment Company Act of 1940, as amended) as
the Buyer, the Administrative Agent may from time to time request in order to
perform their obligations hereunder or under any other Transaction Document or
to protect the interests of the Buyer under or as contemplated by this Agreement
and the other Transaction Documents.
          Section 5.2 Negative Covenants of Seller.
     From the date hereof until the Collection Date:
     (a) Purchased Collateral Not to be Evidenced by Instruments. The Seller
will take no action to cause any Purchased Collateral that is not, as of the
related Purchase Date, as the case may be, evidenced by an instrument, to be so
evidenced except in connection with the enforcement or collection of such
Purchased Collateral.
     (b) Security Interests. Except as otherwise permitted herein and in respect
of any Optional Sale or Discretionary Sale, the Seller will not sell, pledge,
assign or transfer to any other Person, or grant, create, incur, assume or
suffer to exist any Lien on any Purchased Collateral, whether now existing or
hereafter transferred hereunder, or any interest, therein, and the Seller will
not sell, pledge, assign or suffer to exist any Lien on its interest, if any,
hereunder. The Seller will promptly notify the Buyer and the Administrative
Agent of the existence of any Lien on any Purchased Collateral and the Seller
shall defend the right, title and interest of the Buyer and the Administrative
Agent in, to and under the Purchased Collateral against all claims of third
parties; provided however that nothing in this Section 5.2(b) shall prevent or
be deemed to prohibit the Seller from suffering to exist Permitted Liens upon
any of the Purchased Collateral.
     (c) Mergers, Acquisitions, Sales, etc. The Seller will not be a party to
any merger or consolidation, or purchase or otherwise acquire any of the assets
or any stock of any class of, or any partnership or joint venture interest in,
any other Person, or sell, transfer, convey or lease any of its assets, or sell
or assign with or without recourse any Purchased Collateral or any interest
therein (other than pursuant hereto or to the Sale and Servicing Agreement).
     (d) Deposits to Special Accounts. Except as otherwise provided in the
Lock–Box Agreement, the Seller will not deposit or otherwise credit, or cause or
permit to be so deposited or credited, to any Lock–Box Account cash or cash
proceeds other than Collections in respect of Purchased Collateral.
     (e) Restricted Payments. The Seller shall not make any Restricted Junior
Payment, except that, so long as no Termination Event or Unmatured Termination
Event has occurred and is continuing or would result therefrom, the Seller may
declare and make distributions to its members on their membership interests.

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     (f) Change of Name or Location of Loan Files. The Seller shall not
(x) change its name, move the location of its principal place of business and
chief executive office, change the offices where it keeps the records from the
location referred to in Section 10.2 or change the jurisdiction of its
formation, or (y) move, or consent to the Collateral Custodian or Servicer
moving, the Required Asset Documents and Asset Files from the location thereof
on the Closing Date, unless the Seller has given at least 30 days’ written
notice to the Buyer and the Administrative Agent and has taken all actions
required under the UCC of each relevant jurisdiction in order to continue the
first priority perfected security interest of the Buyer and the Administrative
Agent in the Purchased Collateral.
     (g) Accounting of Purchases. Other than for tax and consolidated accounting
purposes, the Seller will not account for or treat (whether in financial
statements or otherwise) the transactions contemplated hereby in any manner
other than as a sale of the Purchased Collateral by the Seller to the Buyer.
Other than for consolidated tax and accounting purposes, the Seller will not
account for or treat (whether in financial statements or otherwise) the
transactions contemplated by this Agreement in any manner other than as a sale
of the Purchased Collateral by the Seller to the Buyer.
     (h) ERISA Matters. The Seller will not (a) engage or permit any ERISA
Affiliate to engage in any prohibited transaction for which an exemption is not
available or has not previously been obtained from the United States Department
of Labor, (b) permit to exist any accumulated funding deficiency, as defined in
Section 302(a) of ERISA and Section 412(a) of the Code, or funding deficiency
with respect to any Benefit Plan other than a Multiemployer Plan, (c) fail to
make any payments to a Multiemployer Plan that the Seller or any ERISA Affiliate
may be required to make under the agreement relating to such Multiemployer Plan
or any law pertaining thereto, (d) terminate any Benefit Plan so as to result in
any liability, or (e) permit to exist any occurrence of any reportable event
described in Title IV of ERISA.
     (i) Organizational Documents. The Seller will not amend, modify, waive or
terminate any provision of its certificate of formation or operating agreement
without the prior written consent of the Buyer and the Administrative Agent.
     (j) Changes in Payment Instructions to Obligors. The Seller will not add or
terminate any bank as a Lock–Box Bank or any Lock–Box Account from those listed
in Schedule II or make any change, or permit the Buyer or Servicer to make any
change, in its instructions to Obligors regarding payments to be made to the
Seller or Servicer or payments to be made to any Lock–Box Bank, unless the Buyer
and the Administrative Agent have consented to such addition, termination or
change (which consent shall not be unreasonably withheld) and has received duly
executed copies of Lock–Box Agreements with each new Lock–Box Bank or with
respect to each new Lock–Box Account, as the case may be.
     (k) Extension or Amendment of Assets. The Seller will not, except as
otherwise permitted herein or in the other Transaction Documents, extend, amend
or otherwise modify, or permit the Servicer to extend, amend or otherwise
modify, the terms of any Purchased Collateral (including the Related Security).

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     (l) Credit and Collection Policy. The Seller may amend, modify, restate or
replace, in whole or in part, the Credit and Collection Policy, if such
amendment, modification, restatement or replacement would not impair the
collectibility of any of the Purchased Collateral or otherwise adversely affect
the interests or remedies of the Buyer, the Administrative Agent or the Secured
Parties under this Agreement or any other Transaction Document. The Seller may
not amend, modify, restate or replace, in whole or in part, the Credit and
Collection Policy, if such amendment, modification, restatement or replacement
would impair the collectibility of any of the Purchased Collateral or otherwise
adversely affect the interests or remedies of the Buyer, the Administrative
Agent or the Secured Parties under this Agreement or any Transaction Document
without the prior written consent of the Buyer and the Administrative Agent.
ARTICLE VI.
REPURCHASE OBLIGATION
          Section 6.1 Retransfer of Purchased Collateral.
     If on any day an Asset is (or becomes) a Warranty Asset, no later than two
Business Days following the earlier of knowledge by the Seller of such Asset
becoming a Warranty Asset or receipt by the Seller from the Buyer,
Administrative Agent or the Servicer of written notice thereof, the Seller shall
either: (a) make a deposit to the Collection Account (for allocation pursuant to
Sections 2.9 or 2.10, as applicable, of the Sale and Servicing Agreement) in
immediately available funds in an amount equal to the Retransfer Price; or
(b) subject to the satisfaction of the conditions in Section 6.2, substitute for
such Warranty Asset, a Substitute Asset. In either of the foregoing instances,
the Seller may (in its discretion) accept retransfer of each such Warranty Asset
and any Related Security. Upon confirmation of the occurrence of the Retransfer
Date for each for each Warranty Asset, the Buyer shall (if and when the Seller
elects to accept the retransfer of such Warranty Asset) automatically and
without further action be deemed to transfer, assign and set–over to the Seller,
without recourse, representation or warranty, all the right, title and interest
of the Buyer in, to and under such Warranty Asset and all future monies due or
to become due with respect thereto, the Related Security, all Proceeds of such
Warranty Asset and Recoveries and Insurance Proceeds relating thereto, all
rights to security for any such Warranty Asset and all Proceeds and products of
the foregoing. The Buyer shall (if and when the Seller elects to accept the
retransfer of such Warranty Asset), at the sole expense of the Seller, execute
such documents and instruments of transfer as may be prepared by the Seller and
take other such actions as shall reasonably be requested by the Seller to effect
the transfer of such Warranty Asset pursuant to this Section 6.1.
          Section 6.2 Substitution of Assets.
     On any day prior to the occurrence of a Termination Event (and after the
Termination Date at the discretion of the Buyer), the Seller may, subject to the
conditions set forth in this Section 6.2 and subject to the other restrictions
contained herein, replace any Asset with one or more Eligible Assets (each, a
“Substitute Asset”); provided that no such replacement shall occur unless each
of the following conditions is satisfied as of the date of such replacement and
substitution:

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     (a) the Seller has recommended to the Buyer (with a copy to the Collateral
Custodian) in writing that the Asset to be replaced should be replaced (each, a
“Replaced Asset”);
     (b) each Substitute Asset is an Eligible Asset on the date of substitution;
     (c) after giving effect to any such substitution, the Advances Outstanding
do not exceed the lesser of (i) the Facility Amount and (ii) the Maximum
Availability;
     (d) for purposes only of substitutions pursuant to Section 6.1 undertaken
because an Asset has become a Warranty Asset, the aggregate Outstanding Asset
Balance of such Substitute Assets shall be equal to or greater than the
aggregate Outstanding Asset Balance of the Replaced Asset;
     (e) for purposes only of substitutions pursuant to Section 6.1 undertaken
because an Asset has become a Warranty Asset, such Substitute Assets, at the
time of substitution by the Seller, shall have no greater weighted average life
than the Replaced Assets;
     (f) all representations and warranties of the Seller contained in
Sections 4.1 and 4.2 shall be true and correct as of the date of substitution of
any such Substitute Asset;
     (g) the substitution of any Substitute Asset does not cause a Termination
Event or Unmatured Termination Event to occur;
     (h) the sum of the Outstanding Asset Balance of all Substitute Assets does
not exceed 20% of the Facility Amount;
     (i) the sum of the Outstanding Asset Balance of all Substitute Assets
substituted for Delinquent Assets, Charged–Off Asset and Warranty Assets does
not exceed 10% of the Facility Amount, calculated on an annualized basis
commencing on the Closing Date;
     (j) the Seller shall deliver to the Buyer on the date of such substitution
a certificate of a Responsible Officer certifying that each of the foregoing is
true and correct as of such date; and
     (k) each Asset that is replaced pursuant to the terms of this Section 6.2
shall be substituted only with another Asset that meets the foregoing
conditions.
     (l) In addition, the Seller shall in connection with such substitution
deliver to the Collateral Custodian the related Required Asset Documents. In
connection with any such substitution, the Buyer shall, automatically and
without further action, be deemed to transfer to the Seller, free and clear of
any Lien created pursuant to this Agreement, all of the right, title and
interest of the Buyer in, to and under such Replaced Asset, and the Buyer shall
be deemed to represent and warrant that it has the company authority and has
taken all necessary company action to accomplish such transfer, but without any
other representation and warranty, express or implied.
          Section 6.3 Deemed Collections.

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     If on any day (i) the Buyer does not own or alternatively have a valid and
perfected first priority security interest in each item of Purchased Collateral
or (ii) any Loan which has been represented by the Seller to be an Eligible
Asset is later determined not to have been an Eligible Asset as of the related
Cut-Off Date, upon the earlier of the Seller’s receipt of notice from the Buyer
or the Seller becoming aware thereof and the Seller’s failure to cure such
breach within 30 days, the Seller shall be deemed to have received on such day a
collection (a “Deemed Collection”) of such Asset in full and shall on such day
pay to the Buyer an amount equal to the Outstanding Asset Balance of such Asset.
In connection with any such Deemed Collection, the Buyer shall automatically and
without further action, be deemed to transfer to the Seller, free and clear of
any Lien created pursuant to this Agreement, all of the right, title and
interest of the Buyer in, to, and under the Asset with respect to which the
Buyer has received such Deemed Collection, but without any representation and
warranty of any kind, express or implied.
ARTICLE VII.
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE PURCHASED COLLATERAL
          Section 7.1 Rights of the Buyer.
     (a) The Seller hereby authorizes the Buyer and the Administrative Agent
and/or their respective designees or assignees to take any and all steps in
Seller’s name and on behalf of Seller that the Buyer and the Administrative
Agent and/or their respective designees or assignees determine are reasonably
necessary or appropriate to collect all amounts due under any and all Purchased
Collateral and enforcing or protecting their rights under this Agreement,
including endorsing the name of Seller on checks and other instruments
representing Collections and enforcing such Purchased Collateral.
     (b) Except as set forth in Sections 6.1, 6.2 and 6.3 with respect the
retransfer, substitution or the deemed collection of certain Assets, the Buyer
shall have no obligation to account for, replace, substitute or return any
Purchased Collateral to Seller. The Buyer shall have no obligation to account
for or to return Collections, or any interest or other finance charge collected
pursuant thereto, to Seller, irrespective of whether such Collections and
charges are in excess of the Purchase Price for such Purchased Collateral.
     (c) The Buyer shall have the unrestricted right to further assign,
transfer, deliver, hypothecate, subdivide or otherwise deal with the Purchased
Collateral and all of the Buyer’s right, title and interest in, to and under
this Agreement, on whatever terms the Buyer shall determine, pursuant to Sale
and Servicing Agreement or otherwise.
     (d) The Buyer shall have the sole right to retain any gains or profits
created by buying, selling or holding the Purchased Collateral and shall have
the sole risk of and responsibility for losses or damages created by such
buying, selling or holding.
          Section 7.2 Responsibilities of Seller.
     Notwithstanding anything to the contrary contained herein:

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     (a) Seller agrees to deliver directly to the Administrative Agent (for the
Buyer’s account), within two Business Days after receipt thereof, any
Collections that it receives, in the form so received, and agrees that all such
Collections shall be deemed to be received in trust for the Buyer and shall be
maintained and segregated separate and apart from all other funds and moneys of
Seller until delivery of such Collections to the Collection Account.
     (b) Seller shall perform all of its obligations hereunder and under the
Purchased Collateral to the same extent as if such Purchased Collateral had not
been sold hereunder, and the exercise by the Buyer or its designee or assignee
of the Buyer’s rights hereunder or in connection herewith shall not relieve
Seller from any of its obligations under the Purchased Collateral.
          Section 7.3 Rights With Respect to Loan Files.
     At any time when a Servicer other than CSE Mortgage LLC has been designated
pursuant to Section 6.16 of the Sale and Servicing Agreement, the Seller shall,
at the Buyer’s or the Administrative Agent’s request, assemble all of the Asset
Files which evidence the Purchased Collateral originated by the Seller, or which
are otherwise necessary or desirable to collect such Purchased Collateral, and
make the same available to the Buyer and the Administrative Agent at a place
selected by the Administrative Agent or its designee.
          Section 7.4 Notice to Administrative Agent.
     Seller agrees that, concurrently with its delivery to the Buyer, copies of
all notices, reports, documents and other information shall be delivered by the
Seller to the Administrative Agent.
ARTICLE VIII.
TERM AND TERMINATION
          Section 8.1 Purchase Termination Events.
     If any of the following events (each a “Purchase Termination Event”) shall
have occurred and be continuing:
     (a) the Seller shall fail (i) to pay any amount due pursuant to
Sections 6.1 or 6.3 in accordance with the provisions thereof and such failure
shall continue unremedied for a period of five Business Days from the earlier of
(A) the date any Responsible Officer of the Seller obtains knowledge of such
failure and (B) the date the Seller receives notice of such failure from the
Buyer, the Servicer or the Administrative Agent or (ii) to pay any other amount
required to be paid by the Seller hereunder within two Business Days of the date
when due; or
     (b) the Seller shall fail to observe or perform any covenant or agreement
applicable to it contained herein (other than as specified in paragraph (a) of
this Section 8.1), and the same continues unremedied for a period of 10 days
after the earlier to occur of (i) the date on which written notice of such
failure requiring the same to be remedied shall have been given to the Sellerand
(ii) the date on which the Seller becomes aware thereof;

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     (c) any representation, warranty, certification or statement made or deemed
made by the Seller in this Agreement or in any statement, record, certificate,
financial statement or other document delivered pursuant to this Agreement shall
prove to have been incorrect when made or deemed made, provided that a Purchase
Termination Event shall not be deemed to have occurred under this paragraph
(iii) based upon a breach of any representation or warranty set forth in
Sections 6.1 or 6.3 if the Seller shall have complied with the provisions of
Sections 6.1 or 6.3, as applicable, in respect thereof; or
     (d) (A) a court having jurisdiction in the premises shall enter a decree or
order for relief in respect of the Seller in an involuntary case under the
Bankruptcy Code or any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect (the Bankruptcy Code and all other such applicable
laws being collectively, “Applicable Insolvency Laws”), which decree or order is
not stayed or any other similar relief shall be granted under any applicable
federal or state law no now or hereafter in effect and shall not be stayed; (B)
(I) any involuntary case is commenced against the Seller under any Applicable
Insolvency Law now or hereafter in effect, a decree or order of a court having
jurisdiction in the premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers over the
Seller, or over all or a substantial part of the property of the Seller, shall
have been entered, an interim receiver, trustee or other custodian of the Seller
for all or a substantial part of the property of the Seller is involuntarily
appointed, a warrant of attachment, execution or similar process is issued
against any substantial part of the property of the Seller, and (II) any event
referred to in clause (B)(I) above continues for 60 days unless dismissed,
bonded or disclosed; (C) the Seller shall at its request have a decree or an
order for relief entered with respect to it or commence a voluntary case under
any Applicable Insolvency Law now or hereafter in effect, or shall consent to
the entry of a decree or an order for relief in an involuntary case, or to the
conversion of an involuntary case to a voluntary case, under any such Applicable
Insolvency Law, consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial part of its
property; (D) the making by the Seller of any general assignment for the benefit
of creditors; (E) the inability or failure of the Seller generally to pay its
debts as such debts become due; or (F) manager of the Seller authorizes action
to approve any of the foregoing; or
     (e) there shall have occurred (A) a Termination Event set forth in
Section 10.1 of the Sale and Servicing Agreement or (B) the Amortization Period
shall have commenced and be continuing; or
     (f) the Seller has been terminated as Servicer following a Servicer
Termination Event with respect to such Seller under Section 6.15 of the Sale and
Servicing Agreement; or
     (g) a notice of Lien shall have been filed by the Pension Benefit Guaranty
Corporation against the Seller under Section 412(n) of the Code or Section
302(f) of ERISA for a failure to make a required installment or other payment to
a plan to which Section 412(n) of the Code or Section 302(f) of ERISA applies
unless there shall have been delivered to the Administrative Agent proof of
release of such Lien; or
     (h) any Lien in an amount equal to or greater than $1,000,000 has been
asserted against or imposed on, any real or personal property of the Seller
pursuant to the Comprehensive

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Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9607(1), or
any equivalent or comparable state law, relating to or arising from the costs
of, response to, or investigation, remediation or monitoring of, any
environmental contamination resulting from the current or past operations of the
Seller; or
     (i) a Federal tax notice of Lien, in an amount equal to or greater than
$1,000,000, shall have been filed against the Seller unless there shall have
been delivered to the Administrative Agent proof of release of such Lien,
     then, (A) in the case of any Purchase Termination Event described in
paragraph (c), (d)(A), (e), (f), (g) or (h) above the obligation of the Buyer to
purchase Purchased Collateral from the Seller shall thereupon automatically
terminate without further notice of any kind, which is hereby waived by such
Seller, (B) in the case of any Purchase Termination Event described in paragraph
(d)(B) above, the obligation of the Buyer to purchase Purchased Collateral from
the Seller shall thereupon terminate without notice of any kind, which is hereby
waived by the Seller unless both the Buyer and the Seller agree in writing that
such event shall not trigger an Early Termination hereunder and (C) in the case
of any other Purchase Termination Event, so long as such Purchase Termination
Event shall be continuing, the Buyer and the Administrative Agent may terminate
its obligation to purchase Purchased Collateral from the Seller by written
notice to the Seller (any termination pursuant to clause (A), (B) or (C) of this
Article VIII is herein called an “Early Termination”); provided however that in
the event of any involuntary petition or proceeding as described in paragraphs
(d)(A) and (d)(B) above, the Buyer shall not purchase Purchased Collateral from
the Seller unless such involuntary petition or proceeding is dismissed, bonded
or discharged within 60 days of the filing of such petition or the commencement
of such proceeding.
          Section 8.2 Remedies.
     (a) If a Purchase Termination Event has occurred and is continuing, the
Buyer (and its assignee) shall have all of the rights and remedies provided to a
secured creditor under the UCC of each applicable jurisdiction and other
Applicable Laws in respect thereto, which rights shall be cumulative.
     (b) The Seller agrees that, upon the occurrence and during the continuation
of a Purchased Termination Event under Section 8.1(a) or Section 8.1(d)(A) the
Buyer or the Administrative Agent shall have the right to:
               (i) require the Seller to, and the Seller hereby agrees that it
will at the Seller’s expense and upon request of the Buyer or the Administrative
Agent forthwith, assemble all or any part of the Purchased Collateral as
directed by the Buyer or the Administrative Agent and make the same available at
a place to be designated by the Buyer or the Administrative Agent; and
               (ii) without notice except as specified below, sell the Purchased
Collateral or any part thereof in one or more parcels at a public or private
sale, at any of the Buyer’s or the Administrative Agent’s offices or elsewhere,
for cash, or credit or for future delivery, and upon such other terms as the
Buyer or the Administrative Agent may deem

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commercially reasonable. The Seller agrees that, to the extent notice of sale
shall be required by law, at least ten days’ notice to the Seller of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Buyer or the Administrative
Agent shall not be obligated to make any sale of Purchased Collateral regardless
of notice of sale having been given. The Buyer or the Administrative Agent may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned.
          Section 8.3 Survival of Certain Provisions.
     Notwithstanding any provision contained herein to the contrary, the
Seller’s representations, covenants and obligations set forth in Articles IV, V,
VI, and VII create and constitute the continuing obligation of the parties
hereto in accordance with its terms, and shall remain in full force and effect
until the Collection Date; provided however that the rights and remedies with
respect to any breach of any representation and warranty made or deemed made by
the Seller pursuant to Articles III and IV and the provisions of Sections 6.1,
6.2 and 6.3, the rights and obligations under Article VII, the indemnification
provisions of Article IX and the provisions of Sections 10.3, 10.4, 10.5, 10.6,
10.7, 10.8, 10.9, 10.10, 10.12, 10.15 and 10.17 shall be continuing and shall
survive any termination of this Agreement.
ARTICLE IX.
INDEMNIFICATION
          Section 9.1 Indemnification by the Seller.
     Without limiting any other rights that the Buyer, any assignee of the Buyer
or any of such Persons’ respective shareholders, officers, employees, agents, or
Affiliates (each an “Indemnified Party”) may have hereunder or under Applicable
Law, the Seller hereby agrees to indemnify each Indemnified Party from and
against any and all damages, losses, claims, liabilities and related costs and
expenses, including attorneys’ fees and disbursements (all of the foregoing
being collectively referred to as “Indemnified Amounts”), awarded against or
incurred by such Indemnified Party or other non–monetary damages of any such
Indemnified Party or any of them arising out of or as a result of this Agreement
or the ownership of an interest in the Purchased Collateral or in respect of any
Purchased Collateral excluding, however, (a) Indemnified Amounts to the extent
resulting from the gross negligence or willful misconduct on the part of the
applicable Indemnified Party, and (b) Indemnified Amounts that have the effect
of recourse for non–payment of the Purchased Collateral due to the insolvency of
any Obligor. Without limiting the foregoing, the Seller shall indemnify each
Indemnified Party for Indemnified Amounts relating to or resulting from:
               (i) any representation or warranty made or deemed made by the
Seller, or any of its officers relating to the eligibility or qualification of
any Asset, which shall have been false or incorrect in any respect when made or
deemed made or delivered;

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               (ii) any other representation or warranty made or deemed made by
the Seller, or any of its officers under or in connection with this Agreement or
any other Transaction Document, which shall have been false or incorrect in any
material respect when made or deemed made or delivered;
               (iii) the failure by the Seller to comply with any term,
provision or covenant contained in this Agreement or any agreement executed in
connection with this Agreement, or with any Applicable Law, with respect to any
Purchased Collateral or the nonconformity of any Purchased Collateral with any
such Applicable Law;
               (iv) the failure to vest and maintain vested in the Buyer, an
undivided ownership interest in the Purchased Collateral, together with all
Collections, free and clear of any Lien (other than Permitted Liens) whether
existing at the time of any Purchase or at any time thereafter;
               (v) the failure to file, or any delay in filing, financing
statements, continuation statements or other similar instruments or documents
under the UCC of any applicable jurisdiction or other Applicable Laws with
respect to any Purchased Collateral, whether at the time of any Purchase or at
any subsequent time;
               (vi) any dispute, claim, offset or defense (other than the
discharge in bankruptcy of the Obligor) of the Obligor to the payment with
respect to any Purchased Collateral (including, without limitation, a defense
based on the Purchased Collateral not being a legal, valid and binding
obligation of such Obligor enforceable against it in accordance with its terms),
or any other claim resulting from the sale of the merchandise or services
related to such Purchased Collateral or the furnishing or failure to furnish
such merchandise or services;
               (vii) any failure of the Seller to perform its duties or
obligations in accordance with the provisions of this Agreement or any of the
other Transaction Documents to which it is a party or any failure by the Seller
or any Affiliate thereof to perform its respective duties under any Purchased
Collateral;
               (viii) the failure of any Lock–Box Bank to remit any amounts held
in a Lock–Box Account pursuant to the instructions of the Collateral Custodian
or the Administrative Agent (to the extent such Person is entitled to give such
instructions in accordance with the terms hereof, the Sale and Servicing
Agreement and of any applicable Lock–Box Agreement) whether by reason of the
exercise of set–off rights or otherwise;
               (ix) any inability to obtain any judgment in, or utilize the
court or other adjudication system of, any state in which an Obligor may be
located as a result of the failure of the Seller to qualify to do business or
file any notice or business activity report or any similar report;
               (x) any action taken by the Seller in the enforcement or
collection of any Purchased Collateral;

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               (xi) any products liability claim or personal injury or property
damage suit or other similar or related claim or action of whatever sort arising
out of or in connection with any Related Property or services that are the
subject of any Purchased Collateral;
               (xii) any claim, suit or action of any kind arising out of or in
connection with Environmental Laws including any vicarious liability;
               (xiii) the failure by Seller to pay when due any Taxes for which
the Seller is liable, including without limitation, sales, excise or personal
property taxes payable in connection with the Purchased Collateral;
               (xiv) any repayment by the Indemnified Party of any amount
previously distributed hereunder or under any Transaction Document to the
Seller, in each case which amount the Indemnified Party believes in good faith
is required to be repaid;
               (xv) the commingling of Collections on the Purchased Collateral
at any time with other funds of the Seller unless permitted under any
Transaction Document;
               (xvi) any investigation, litigation or proceeding related to this
Agreement or the use of proceeds of Purchases by the Seller or the security
interest in the Purchased Collateral;
               (xvii) any failure by the Buyer to give reasonably equivalent
value to the Seller in consideration for the transfer by the Seller to the Buyer
of any item of the Purchased Collateral or any attempt by any Person to void or
otherwise avoid any such transfer under any statutory provision or common law or
equitable action, including, without limitation, any provision of the Bankruptcy
Code;
               (xviii) the failure of the Seller or any of its agents or
representatives to remit to the Buyer Collections on the Purchased Collateral
remitted to the Seller or any such agent or representative; or
               (xix) the failure of any of the hedge requirements to be properly
performed in connection with the Transaction Documents.
     (b) Any amounts subject to the indemnification provisions of this
Section 9.1 shall be paid by the Seller to the Indemnified Party within five
Business Days following such Person’s demand therefor.
     (c) If for any reason the indemnification provided above in this
Section 9.1 is unavailable to the Indemnified Party or is insufficient to hold
an Indemnified Party harmless, then the Seller shall contribute to the amount
paid or payable by such Indemnified Party as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect not only the
relative benefits received by such Indemnified Party on the one hand and the
Seller, on the other hand, but also the relative fault of such Indemnified Party
as well as any other relevant equitable considerations.

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     (d) The obligations of the Seller under this Section 9.1 shall survive the
termination of this Agreement.
     (e) Indemnification under Section 9.1 shall be in an amount necessary to
make the Indemnified Party whole after taking into account any tax consequences
to the Indemnified Party of the receipt of the indemnity provided hereunder,
including the effect of such tax or refund on the amount of tax measured by net
income or profits that is or was payable by the Indemnified Party.
          Section 9.2 Assignment of Indemnities.
     The Seller acknowledges that, pursuant to the Sale and Servicing Agreement,
the Buyer is assigning its rights of indemnity granted hereunder to the
Administrative Agent, the Purchasers, the other Secured Parties, the Backup
Servicer and the Collateral Custodian. Effective as of the Closing Date, (i) the
Administrative Agent, the Purchasers, the other Secured Parties, the Backup
Servicer and the Collateral Custodian as applicable, shall have all rights of
the Buyer hereunder and may in turn assign such rights, and (ii) the obligations
of the Seller under this Article IX shall inure to the Administrative Agent, the
Backup Servicer or the Collateral Custodian. The Seller agrees that, upon such
assignment, the Administrative Agent, the Purchasers, the other Secured Parties,
the Backup Servicer and the Collateral Custodian or the assignee of any such
Person, as applicable, may enforce directly, without joinder of the Buyer, the
indemnities set forth in this Article IX.
ARTICLE X.
MISCELLANEOUS
          Section 10.1 Amendments and Waivers.
     Except as provided in this Section 10.1, no amendment, waiver or other
modification of any provision of this Agreement shall be effective unless signed
by the Buyer and Seller and consented to in writing by the Administrative Agent.
The Buyer shall provide not less than ten Business Days’ prior written notice of
any such amendment to the Administrative Agent.
          Section 10.2 Notices, Etc.
     All notices and other communications provided for hereunder shall, unless
otherwise stated herein, be in writing (including telex communication and
communication by facsimile copy) and mailed, telexed, transmitted or delivered,
as to each party hereto, at its address set forth under its name on the
signature pages hereof or at such other address as shall be designated by such
party in a written notice to the other parties hereto. All such notices and
communications shall be effective, upon receipt, or in the case of (a) notice by
mail, five days after being deposited in the United States mail, first class
postage prepaid, or (b) notice by facsimile copy, when confirmation of receipt
is obtained.
          Section 10.3 Limitation of Liability.

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     Except with respect to any claim arising out of the willful misconduct or
gross negligence of the Purchasers, the Administrative Agent or any other
Secured Party, no claim may be made by the Seller or any other Person against
the Purchasers, the Administrative Agent or any other Secured Party or their
respective Affiliates, directors, managers, officers, employees, attorneys or
agents for any special, indirect, consequential or punitive damages in respect
of any claim for breach of contract or any other theory of liability arising out
of or related to the transactions contemplated by this Agreement, or any act,
omission or event occurring in connection therewith; and the Seller hereby
waives, releases and agrees not to sue upon any claim for any such damages,
whether or not accrued and whether or not known or suspected to exist in its
favor.
          Section 10.4 Binding Effect; Benefit of Agreement.
     This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. The
Administrative Agent, the Purchasers, the other Secured Parties, the Collateral
Custodian and the Backup Servicer shall be third–party beneficiaries of this
Agreement.
          Section 10.5 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF
OBJECTION TO VENUE.
     THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW
PROVISIONS THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK). EACH OF THE PARTIES HERETO HEREBY
AGREES TO THE NON–EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR FEDERAL COURT
LOCATED IN NEW YORK CITY. EACH OF THE PARTIES HERETO HEREBY WAIVES ANY OBJECTION
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.
          Section 10.6 WAIVER OF JURY TRIAL.
     TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO
HEREBY 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.
          Section 10.7 Costs, Expenses and Taxes.
     (a) In addition to the rights of indemnification granted under Article IX
hereof, the Seller agrees to pay on demand all reasonable out of pocket costs
and expenses of the Buyer or

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its assignees incurred in connection with the preparation, execution, delivery,
administration (including periodic auditing), renewal, amendment or modification
of, or any waiver or consent issued in connection with, this Agreement and the
other documents to be delivered hereunder or in connection herewith, including,
without limitation, the reasonable fees and out–of–pocket expenses of counsel
with respect thereto and with respect to advising the Buyer or its assignees as
to its rights and remedies under this Agreement and the other documents to be
delivered hereunder or in connection herewith, and all costs and expenses, if
any (including reasonable counsel fees and expenses), incurred by the Buyer or
its assignees in connection with the enforcement of this Agreement and the other
documents to be delivered hereunder or in connection herewith.
     (b) The Seller shall pay on demand any and all stamp, sales, excise and
other taxes and fees payable or determined to be payable in connection with the
execution, delivery, filing and recording of this Agreement and the other
documents to be delivered hereunder.
     (c) The Seller shall pay on demand all other reasonable out of pocket
costs, expenses and Taxes (excluding income taxes) incurred by the Buyer or its
assignees in connection with the execution, delivery, filing and recording of
this Agreement and the other documents to be delivered hereunder (“Other
Costs”), including, without limitation, all costs and expenses incurred by the
Buyer or its assignees in connection with periodic audits of the Seller’s books
and records.
          Section 10.8 No Proceedings.
     (a) Each of the parties hereto hereby agrees that it will not institute
against, or join any other Person in instituting against, any Issuer any
Insolvency Proceeding so long as any commercial paper or other senior
indebtedness issued by any Issuer shall be outstanding and there shall not have
elapsed one year and one day since the last day on which any such commercial
paper or other senior indebtedness shall have been outstanding.
     (b) The Seller hereby agrees that it will not institute against, or join
any other Person in instituting against, the Buyer any Insolvency Proceeding so
long as there shall not have elapsed one year and one day since the Collection
Date.
          Section 10.9 Recourse Against Certain Parties.
     (a) No recourse under or with respect to any obligation, covenant or
agreement (including, without limitation, the payment of any fees or any other
obligations) of the Seller as contained in this Agreement or any other
agreement, instrument or document entered into by it pursuant hereto or in
connection herewith shall be had against any administrator of the Seller or any
incorporator, manager, officer, employee or director of the Seller or of any
such administrator, as such, by the enforcement of any assessment or by any
legal or equitable proceeding, by virtue of any statute or otherwise it being
expressly agreed and understood that the agreements of the Seller contained in
this Agreement and all of the other agreements, instruments and documents
entered into by it pursuant hereto or in connection herewith are, in each case,
solely the limited liability company obligations of the Seller, and that no
personal liability whatsoever shall attach to or be incurred by any
administrator of the Seller or any

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incorporator, manager, officer, employee or director of the Seller or of any
such administrator, as such, or any of them, under or by reason of any of the
obligations, covenants or agreements of the Seller contained in this Agreement
or in any other such instruments, documents or agreements, or which are implied
therefrom, and that any and all personal liability of every such administrator
of the Seller and each incorporator, manager, officer, employee or director of
the Seller or of any such administrator, or any of them, for breaches by the
Seller of any such obligations, covenants or agreements, which liability may
arise either at common law or at equity, by statute or constitution, or
otherwise, is hereby expressly waived as a condition of and in consideration for
the execution of this Agreement. The provisions of this Section 10.9(a) shall
survive the termination of this Agreement.
     (b) No recourse under or with respect to any obligation, covenant or
agreement (including, without limitation, the payment of any fees or any other
obligations) of the Buyer as contained in this Agreement or any other agreement,
instrument or document entered into by it pursuant hereto or in connection
herewith shall be had against any administrator of the Buyer or any
incorporator, manager, officer, employee or director of the Buyer or of any such
administrator, as such, by the enforcement of any assessment or by any legal or
equitable proceeding, by virtue of any statute or otherwise it being expressly
agreed and understood that the agreements of the Buyer contained in this
Agreement and all of the other agreements, instruments and documents entered
into by it pursuant hereto or in connection herewith are, in each case, solely
the limited liability company obligations of the Buyer, and that no personal
liability whatsoever shall attach to or be incurred by any administrator of the
Buyer or any incorporator, manager, officer, employee or director of the Buyer
or of any such administrator, as such, or any of them, under or by reason of any
of the obligations, covenants or agreements of the Buyer contained in this
Agreement or in any other such instruments, documents or agreements, or which
are implied therefrom, and that any and all personal liability of every such
administrator of the Buyer and each incorporator, manager, officer, employee or
director of the Buyer or of any such administrator, or any of them, for breaches
by the Buyer of any such obligations, covenants or agreements, which liability
may arise either at common law or at equity, by statute or constitution, or
otherwise, is hereby expressly waived as a condition of and in consideration for
the execution of this Agreement. The provisions of this Section 10.9 (b) shall
survive the termination of this Agreement.
          Section 10.10 Protection of Right, Title and Interest in the Purchased
Collateral; Further Action Evidencing Purchases.
     (a) The Seller shall cause this Agreement, all amendments hereto and/or all
financing statements and continuation statements and any other necessary
documents covering the Buyer’s right, title and interest to the Purchased
Collateral to be promptly recorded, registered and filed, and at all times to be
kept recorded, registered and filed, all in such manner and in such places as
may be required by law fully to preserve and protect the right, title and
interest of the Buyer hereunder to all property comprising the Purchased
Collateral. The Seller shall deliver to the Buyer the file–stamped copies of, or
filing receipts for, any document recorded, registered or filed as provided
above, as soon as available following such recording, registration or filing.
The Seller shall cooperate fully with the Buyer in connection with the
obligations set forth above and will execute any and all documents reasonably
required to fulfill the intent of this Section 10.10(a).

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     (b) The Seller agrees that from time to time, at its expense, it will
promptly execute and deliver all instruments and documents, and take all
actions, that the Buyer or the Administrative Agent may reasonably request in
order to perfect, protect or more fully evidence the Purchases hereunder and the
security and/or interest granted in the Purchased Collateral, or to enable the
Buyer or the Administrative Agent to exercise and enforce its rights and
remedies hereunder or under any Transaction Document. At any time the Buyer or
the Administrative Agent may direct the Seller or any Servicer to notify the
Obligors, at Seller’s expense, of the Buyer’s or the Administrative Agent’s
interest in the Purchased Collateral under this Agreement and may direct that
payments of all amounts due or that become due under any or all of the Purchased
Collateral be made directly to the Buyer or the Administrative Agent.
     (c) If the Seller fails to perform any of its obligations hereunder, the
Buyer or the Administrative Agent may (but shall not be required to) perform, or
cause performance of, such obligation; and the Buyer’s or the Administrative
Agent’s costs and expenses incurred in connection therewith shall be payable by
the Seller as provided in Article IX, as applicable. The Seller irrevocably
authorizes the Buyer or the Administrative Agent at any time and from time to
time at the Buyer’s or the Administrative Agent’s sole discretion and appoints
the Buyer and the Administrative Agent as its attorney–in–fact to act on behalf
of the Seller (i) to execute on behalf of the Seller as debtor and to file
financing statements necessary or desirable in the Buyer’s or the Administrative
Agent’s sole discretion to perfect and to maintain the perfection and priority
of the interest of the Buyer or the Administrative Agent in the Purchased
Collateral and (ii) to file a carbon, photographic or other reproduction of this
Agreement or any financing statement with respect to the Purchased Collateral as
a financing statement in such offices as the Buyer or the Administrative Agent
in their sole discretion deem necessary or desirable to perfect and to maintain
the perfection and priority of the interests of the Buyer and the Administrative
Agent in the Purchased Collateral. This appointment is coupled with an interest
and is irrevocable.
     (d) Without limiting the generality of the foregoing, Seller will, not
earlier than six (6) months and not later than three months prior to the fifth
anniversary of the date of filing of the financing statement referred to in
Sections 3.1 or 3.2 or any other financing statement filed pursuant to this
Agreement or in connection with any Purchase hereunder, unless the Collection
Date shall have occurred:
               (i) execute and deliver and file or cause to be filed an
appropriate continuation statement with respect to such financing statement; and
               (ii) deliver or cause to be delivered to the Buyer and the
Administrative Agent an opinion of the counsel for Seller, in form and substance
reasonably satisfactory to the Buyer and the Administrative Agent, confirming
and updating the opinion delivered pursuant to Sections 3.1 or 3.2 with respect
to perfection and otherwise to the effect that the security interest hereunder
continues to be an enforceable and perfected security interest, subject to no
other Liens of record except as provided herein or otherwise permitted
hereunder, which opinion may contain usual and customary assumptions,
limitations and exceptions.
          Section 10.11 Execution in Counterparts; Severability; Integration.

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     This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts (including by facsimile), each
of which when so executed shall be deemed to be an original and all of which
when taken together shall constitute one and the same agreement. In case any
provision in or obligation under this Agreement shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
This Agreement and the Transaction Documents contains the final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof, superseding all prior
oral or written understandings.
          Section 10.12 Waiver of Set-off.
     (a) The Seller’s obligations under this Agreement shall not be affected by
any right of set-off, counterclaim, recoupment, defense or other right the
Seller might have against the Buyer, the Administrative Agent, the Purchasers,
the other Secured Parties, the Backup Servicer, the Collateral Custodian or any
assignee of such Persons, all of which rights are hereby waived by the Seller.
     (b) The Buyer shall have the right to set–off against the Seller any
amounts to which the Seller may be entitled and to apply such amounts to any
claims the Buyer may have against the Seller from time to time under this
Agreement. Upon any such set–off, the Buyer shall give notice of the amount
thereof and the reasons therefor to the Seller.
          Section 10.13 Heading and Exhibits.
     The headings herein are for purposes of references only and shall not
otherwise affect the meaning or interpretation of any provision hereof. The
schedules and exhibits attached hereto and referred to herein shall constitute a
part of this Agreement and are incorporated into this Agreement for all
purposes.
          Section 10.14 Rights of Inspection.
     The Buyer and its representatives and assigns may conduct at any reasonable
time, with reasonable notice, and from time to time, and the Seller will fully
cooperate with, a reasonable number of field examinations and audits of the
inventory, the Loans and business affairs of the Seller each calendar year. Each
such inspection shall be at the sole expense of the Seller. The Buyer and its
representatives and successors and assigns acknowledge that in exercising the
rights and privileges conferred in this Section 10.14, it or its representatives
or assigns may, from time to time, obtain knowledge of information, practices,
books, correspondence and records of a confidential nature and in which the
Seller has a proprietary interest. The Buyer and its representatives and
successors and assigns agree that (i) they shall retain in strict confidence and
shall use their best efforts to ensure that their representatives retain in
strict confidence and will not disclose without the prior written consent of the
Seller any or all of such information, practices, books, correspondence and
records furnished to them and (ii) that they will not, and will use their best
efforts to ensure that their representatives and assigns will not, make any use

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whatsoever (other than for the purposes contemplated by this Agreement) of any
of such information, practices, books, correspondence and records without the
prior written consent of the Seller, unless such information is generally
available to the public or is required by law to be disclosed.
          Section 10.15 Assignment.
     Notwithstanding anything to the contrary contained herein, this Agreement
may not be assigned by the Buyer or the Seller except as permitted by this
Section 10.15 or by the Sale and Servicing Agreement. Simultaneously with the
execution and delivery of this Agreement, the Buyer shall assign all of its
right, title and interest herein to the Administrative Agent as agent for the
Secured Parties under the Sale and Servicing Agreement, to which assignment the
Seller hereby expressly consents. Upon assignment, the Seller agrees to perform
its obligations hereunder for the benefit of the Administrative Agent as agent
for the Secured Parties and the Administrative Agent, in such capacity, shall be
a third party beneficiary hereof. The Administrative Agent as agent for the
Secured Parties upon such assignment may enforce the provisions of this
Agreement, exercise the rights of the Buyer and enforce the obligations of the
Seller hereunder without joinder of the Buyer.
          Section 10.16 No Waiver; Cumulative Remedies.
     No failure to exercise and no delay in exercising, on the part of the Buyer
or the Seller, any right, remedy, power or privilege hereunder, shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exhaustive of any rights, remedies, powers and privileges provided by law. Any
waiver of this Agreement shall be effective only in the specific instance and
for the specific purpose for which given.
          Section 10.17 Intentionally Omitted.
          Section 10.18 Revolving Loan Payments.
     (a) With respect to each Revolving Loan included as part of the Purchased
Collateral, the Buyer will own only the principal portion of such Loans
outstanding as of the applicable Cut–Off Date that is included in the Purchased
Collateral. Collections from the Obligor on such Revolving Loan will be
allocated first to the portion of such Loan owned by the Seller, its Affiliate
special purpose entities under the Warehouse Facilities, any co-lenders under
such facility and portions owned by the issuers in a Term Transaction (or any
similar future transactions entered into after the date hereof); provided that
if (i) a payment default occurs, or an event of default occurs (without waiver)
with respect to any of the related Loans, or an Insolvency Event with respect to
the related Obligor , (ii) the Servicer has determined that the creditworthiness
of the Obligor under such related Loan has deteriorated such that it materially
and adversely affects the value of such related Loan or has reduced in a
material manner the likelihood of repayment in full thereunder, (iii) the Seller
has determined in its sole discretion to reduce or terminate its commitment to
an Obligor, or (iv) a Termination Event or Unmatured Termination Event occurs,
then at such time and all times thereafter, Collections received on

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(A) the applicable Loan (in the case of clause (i), (ii) or (iii) above) or
(B) all the Revolving Loans (in the case of clause (iv) above) will be allocated
between the portion owned by the Seller, its Affiliate special purpose entities
under the Warehouse Facilities (or any similar facilities entered into after the
date hereof) and any co-lenders under the facility, portions owned by issuers in
a Term Transaction (or any similar future transactions entered into after the
date hereof) and the portion owned by the Buyer, pro rata based upon the
outstanding principal amount of each such portion.
     (b) Notwithstanding the foregoing or anything to the contrary contained
herein or any Transaction Document, any payments made by any Hedge Counterparty
pursuant to the terms of the Hedge Agreements shall be solely for the benefit of
the Administrative Agent, and the Secured Parties, and shall not be subject to
the pro rata sharing provisions of this Section 10.18. In furtherance of the
foregoing clause of this paragraph, the Seller hereby releases any right, title,
or interest it may have in or to any payment made or to be made at any time by
any Hedge Counterparty pursuant to the terms of any Hedge Agreement.
[Remainder of Page Intentionally Left Blank.]

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     IN WITNESS WHEREOF, the Buyer and the Seller have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized, as of
the day and year first above written.

                  CAPITALSOURCE REAL ESTATE
LOAN LLC, 2007-A    
 
           
 
  By:   /s/ Jeffrey A. Lipson    
 
     
 
Name: Jeffrey A. Lipson
Title: Vice President & Treasurer    
 
                 4445 Willard Avenue          12th Floor         Chevy Chase,
Maryland 20815         Attention: Treasurer         Facsimile No.: (301)
841–2375         Confirmation No.: (301) 841–2731    

[Signature Continued on Following Page]
Sale and Contribution Agreement

 

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                  CSE MORTGAGE LLC    
 
           
 
  By:   /s/ Jeffrey A. Lipson    
 
     
 
Name: Jeffrey A. Lipson
Title: Vice President & Treasurer    
 
                 4445 Willard Avenue          12th Floor         Chevy Chase,
Maryland 20815         Attention: Treasurer         Facsimile No.:
(301) 841–2371         Confirmation No.: (301) 841–2735    

Sale and Contribution Agreement

 

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SCHEDULE I
PURCHASED COLLATERAL LIST
CAPITALSOURCE REAL ESTATE LOAN LLC, 2007-A
Purchased Collateral List
(See Attached)

 

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SCHEDULE II
LOCK–BOX BANKS AND LOCK–BOX ACCOUNTS

          Bank Name   Account Name   Account Number
Bank of America, NA
  CapitalSource Funding LLC   003930559738
Bank of America, NA
  CapitalSource Funding LLC   003938703751
Bank of America, NA
  CapitalSource Funding LLC   003939396662

 

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EXHIBIT A
FORM OF SALE ASSIGNMENT
     SALE ASSIGNMENT NO. ___, dated as of                     , from CSE
MORTGAGE LLC (the “Seller”) to CAPITALSOURCE REAL ESTATE LOAN LLC, 2007-A (the
“Buyer”).
          (a) We refer to the Sale and Contribution Agreement, dated as of
September 10, 2007 (the “Agreement”), by and between the Seller and the Buyer.
          (b) Defined Terms. All capitalized terms used herein shall have the
meanings ascribed to them in the Agreement unless otherwise defined herein.
     “Addition Date” shall mean, with respect to the Additional Assets
designated hereby,                     , ___.
     “Cut–Off Date” shall mean, with respect to the Additional Assets designated
hereby,                     , ___.
          (c) Designation of Additional Assets. Seller delivers herewith a
computer file or microfiche list containing a true and complete list of the
Additional Assets, identified by account number, Obligor and Outstanding Asset
Balance as of the Cut–Off Date. Such computer file, microfiche list or other
documentation shall be as of the date of this Sale Assignment incorporated into
and made part of this Sale Assignment and is marked as Schedule I hereto.
The Seller does hereby sell, transfer, assign, set over and otherwise convey to
the Buyer, and the Buyer hereby purchases and takes from the Seller, all right,
title and interest of the Seller in, to and under all accounts, general
intangibles, instruments, chattel paper, documents, money, letters of credit,
advices of credit, deposit accounts, certificates of deposit, investment
property, goods and other property consisting of, arising from or related to any
of the following property, whether now owned or existing or hereafter created,
arising or acquired and wherever located (collectively, the “Purchased
Collateral”):
the Additional Assets that are identified by the Seller as of the Cut–Off Date,
which are listed on Schedule I, together with all monies due in payment of such
Assets on and after the Cut–Off Date, but excluding any Excluded Amounts and any
Retained Interest;
all Related Security with respect to the Additional Assets referred to in clause
(i) above; and
all income and Proceeds of the foregoing.
          (d) This Sale Assignment is made without recourse but on the terms and
subject to the conditions set forth in the Transaction Documents to which the
Seller is a party. The Seller acknowledges and agrees that the Buyer is
accepting this Sale Assignment in reliance or the representations, warranties
and covenants of the Seller contained in the Transaction Documents to which the
Seller is a party.

 

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          (e) Ratification of the Agreement. The Agreement is hereby ratified,
and all references to the “Sale and Contribution Agreement,” to “this Agreement”
and “herein” shall be deemed from and after the Addition Date to be a reference
to the Agreement as supplemented by this Sale Assignment. Except as expressly
amended hereby, all the representations, warranties, terms covenants and
conditions of the Agreement shall remain unamended and shall continue to be, and
shall, remain, in full force and effect in accordance with its terms and except
as expressly provided herein shall not constitute or be deemed to constitute a
waiver of compliance with or consent to non–compliance with any term or
provision of the Agreement.
          (f) THIS SALE ASSIGNMENT NO. ___ SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO THE
CHOICE OF LAW PROVISIONS.
[Remainder of Page Intentionally Left Blank]

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     IN WITNESS WHEREOF, the Seller has caused this Sale Assignment to be
executed by its duly authorized officer as of the date first above written.

                  CSE MORTGAGE LLC    
 
           
 
  By:        
 
     
 
Name:
Title:    
 
                CSE Mortgage LLC          4445 Willard Avenue          12th
Floor         Chevy Chase, Maryland 20815         Attention: Treasurer        
Facsimile No.: (301) 841–2375         Confirmation No.: (301) 841–2731    

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EXHIBIT B
FORM OF OFFICER’S PURCHASE DATE CERTIFICATE
     This Officer’s Purchase Date Certificate is delivered pursuant to the
provisions of Section 2.1(c) of the Sale and Contribution Agreement (such
agreement as amended, supplemented, modified or restated from time to time, the
“Agreement”), dated as of September 10, 2007, between CSE Mortgage LLC, as the
Seller, and CAPITALSOURCE REAL ESTATE LOAN LLC, 2007-A, as the Buyer. This
Officer’s certificate relates to the Purchase Date on                     ,
20___.
     (a) Capitalized terms used and not otherwise defined herein have the
meanings assigned to them in the Agreement. References herein to certain
sections are referenced to the respective sections of the Agreement.
     (b) The undersigned is a Responsible Officer of the Seller.
     (c) The undersigned hereby certifies to the Administrative Agent and the
Secured Parties that all of the representations and warranties in Section 4.2 of
the Agreement are true, accurate and complete as of the Purchase Date referenced
above.
     IN WITNESS WHEREOF, the undersigned has executed this certificate this
___day of                     , 200[_].

             
 
  By:        
 
     
 
Name:
Title:    

Sale and Contribution Agreement

 

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APPENDIX A
CONDITION PRECEDENT DOCUMENTS
     (a) Copies of resolutions of the manager of the Seller approving the
execution, delivery and performance of the Agreement and the transactions
contemplated thereby, certified by the Secretary or an Assistant Secretary of
the Seller.
     (b) A copy of an officially certified document dated reasonably close to
the Closing Date evidencing the due organization and good standing of the Seller
in each applicable jurisdiction.
     (c) Copies of the certificate or articles of formation and operating
agreement of the Seller certified by the Secretary or an Assistant Secretary of
the Seller.
     (d) Filed UCC–1 financing statement executed by the Seller as debtor,
naming the Buyer as secured party and the Administrative Agent as assignee,
describing the Purchased Collateral, meeting the requirements of the laws of
each jurisdiction in which it is necessary or reasonably desirable, or in which
the Seller is required by Applicable Law, and in such manner as is necessary or
reasonably desirable, to perfect the conveyance of the Purchased Collateral and
the Related Security to the Buyer.
     (e) Opinions of counsel to the Seller, dated the Closing Date, in form and
substance satisfactory to the Buyer.
     (f) Executed counterparts of this Agreement executed on behalf of the
Seller.
     (g) A duly completed, executed and delivered initial Purchased Collateral
List (Schedule I).
     (h) UCC, tax and judgment lien searches of the Seller.
     (i) Parent Undertaking — Originator.
     (j) Parent Undertaking — Servicer.
     (k) Confirmation and Undertaking Letter.