exv10w14






Exhibit
10.14




EXECUTION COPY




 

 






CREDIT AGREEMENT




Dated as of July 20, 2007




Among




CAPITALSOURCE FUNDING VIII LLC

as the Borrower




CAPITALSOURCE FINANCE LLC

as the Servicer




THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO

as Lenders




THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO

as Managing Agents




DEUTSCHE BANK AG, NEW YORK BRANCH

as the Administrative Agent




and




WELLS FARGO BANK, NATIONAL ASSOCIATION

as Collateral Custodian and Backup Servicer




 

 






 









 














	 	 	 	 	 	 	 
	ARTICLE I DEFINITIONS	 	 	1	 
	 
	Section 1.1

	 	Certain Defined Terms
	 	 	1	 
	Section 1.2

	 	Other Terms
	 	 	27	 
	Section 1.3

	 	Computation of Time Periods
	 	 	27	 
	Section 1.4

	 	Interpretation
	 	 	27	 
	 
	 	 	 	 	 	 
	ARTICLE II ADVANCES	 	 	28	 
	 
	Section 2.1

	 	Initial Advances
	 	 	28	 
	Section 2.2

	 	Additional Advances
	 	 	28	 
	Section 2.3

	 	Prepayments
	 	 	28	 
	Section 2.4

	 	Principal Repayments
	 	 	29	 
	Section 2.5

	 	The Notes
	 	 	29	 
	Section 2.6

	 	Interest Payments
	 	 	30	 
	Section 2.7

	 	Settlement Procedures
	 	 	31	 
	Section 2.8

	 	Collections and Allocations
	 	 	32	 
	Section 2.9

	 	Payments, Computations, Etc
	 	 	33	 
	Section 2.10

	 	Lien Release Dividend
	 	 	34	 
	Section 2.11

	 	Increased Costs; Capital Adequacy; Illegality.
	 	 	36	 
	Section 2.12

	 	Taxes
	 	 	37	 
	Section 2.13

	 	Release of Released Amounts
	 	 	40	 
	Section 2.14

	 	Optional Repurchase of Collateral Debt Obligations
	 	 	40	 
	 
	 	 	 	 	 	 
	ARTICLE III CONDITIONS OF EFFECTIVENESS AND ADVANCES	 	 	41	 
	 
	Section 3.1

	 	Conditions to Effectiveness and Advances
	 	 	41	 
	Section 3.2

	 	Reserve Account Required Amount
	 	 	42	 
	 
	 	 	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES	 	 	42	 
	Section 4.1

	 	Representations and Warranties of the Borrower
	 	 	42	 
	 
	 	 	 	 	 	 
	ARTICLE V GENERAL COVENANTS OF THE BORROWER	 	 	45	 
	 
	Section 5.1

	 	Affirmative Covenants
	 	 	45	 
	Section 5.2

	 	Negative Covenants
	 	 	49	 
	Section 5.3

	 	Hedging Transactions
	 	 	50	 
	Section 5.4

	 	Accounts
	 	 	51	 
	Section 5.5

	 	Delivery of Collateral Debt Obligation Files
	 	 	54	 
	 
	 	 	 	 	 	 
	ARTICLE VI SECURITY INTEREST	 	 	54	 
	 
	Section 6.1

	 	Security Interest
	 	 	54	 
	Section 6.2

	 	Remedies
	 	 	55	 
	Section 6.3

	 	Release of Liens
	 	 	56	 
	Section 6.4

	 	Assignment of the Purchase Agreement
	 	 	56	 






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	ARTICLE VII ADMINISTRATION, SERVICING AND MANAGEMENT OF COLLATERAL DEBT OBLIGATIONS	 	 	57	 
	 
	Section 7.1

	 	Appointment of the Servicer
	 	 	57	 
	Section 7.2

	 	Duties and Responsibilities of the Servicer
	 	 	57	 
	Section 7.3

	 	Authorization of the Servicer
	 	 	59	 
	Section 7.4

	 	Collection of Payments
	 	 	60	 
	Section 7.5

	 	Representations and Warranties of the Originator and Servicer
	 	 	60	 
	Section 7.6

	 	Covenants of the Servicer
	 	 	63	 
	Section 7.7

	 	Payment of Certain Expenses by Servicer
	 	 	64	 
	Section 7.8

	 	Reports
	 	 	64	 
	Section 7.9

	 	Investment and Disposition
	 	 	64	 
	Section 7.10

	 	The Servicer Not to Resign
	 	 	65	 
	Section 7.11

	 	Access to Certain Documentation and Information Regarding the
Collateral Debt Obligations
	 	 	65	 
	Section 7.12

	 	Servicer Termination Events
	 	 	66	 
	Section 7.13

	 	Appointment of Successor Servicer
	 	 	67	 
	Section 7.14

	 	Market Servicing Fee
	 	 	68	 
	Section 7.15

	 	The Collateral Custodian
	 	 	68	 
	Section 7.16

	 	Representations and Warranties of the Collateral Custodian
	 	 	74	 
	Section 7.17

	 	Covenants of the Collateral Custodian
	 	 	75	 
	Section 7.18

	 	The Backup Servicer
	 	 	75	 
	Section 7.19

	 	Representations and Warranties of the Backup Servicer
	 	 	79	 
	Section 7.20

	 	Covenants of the Backup Servicer
	 	 	80	 
	Section 7.21

	 	Statements and Reports
	 	 	80	 
	Section 7.22

	 	Credit and Collection Policy; Modifications
	 	 	81	 
	 
	 	 	 	 	 	 
	ARTICLE VIII EVENTS OF DEFAULT	 	 	82	 
	 
	 	 	 	 	 	 
	Section 8.1

	 	Events of Default
	 	 	82	 
	Section 8.2

	 	Remedies
	 	 	83	 
	 
	 	 	 	 	 	 
	ARTICLE IX INDEMNIFICATION	 	 	84	 
	 
	Section 9.1

	 	Indemnities by the Borrower
	 	 	84	 
	Section 9.2

	 	Indemnities by the Servicer
	 	 	86	 
	Section 9.3

	 	Notification of Indemnification
	 	 	87	 
	Section 9.4

	 	Cooperation in Defense of Suit
	 	 	88	 
	 
	 	 	 	 	 	 
	ARTICLE X THE ADMINISTRATIVE AGENT AND THE MANAGING AGENTS	 	 	88	 
	 
	Section 10.1

	 	Authorization and Action
	 	 	88	 
	Section 10.2

	 	Delegation of Duties
	 	 	89	 
	Section 10.3

	 	Exculpatory Provisions
	 	 	89	 
	Section 10.4

	 	Reliance
	 	 	90	 
	Section 10.5

	 	Non-Reliance on Administrative Agent, Managing Agents and Other Lenders
	 	 	91	 
	Section 10.6

	 	Reimbursement and Indemnification
	 	 	91	 






iii









 






	 	 	 	 	 	 	 
	Section 10.7

	 	Administrative Agent and Managing Agents in their Individual Capacities
	 	 	91	 
	Section 10.8

	 	Successor Administrative Agent or Managing Agent
	 	 	92	 
	 
	 	 	 	 	 	 
	ARTICLE XI ASSIGNMENTS; PARTICIPATIONS; SUBSERVICING	 	 	92	 
	 
	Section 11.1

	 	Assignments and Participations
	 	 	92	 
	Section 11.2

	 	Subservicing
	 	 	93	 
	 
	 	 	 	 	 	 
	ARTICLE XII MISCELLANEOUS	 	 	93	 
	 
	Section 12.1

	 	Amendments and Waivers
	 	 	93	 
	Section 12.2

	 	Notices, Etc
	 	 	94	 
	Section 12.3

	 	No Waiver, Rights and Remedies
	 	 	94	 
	Section 12.4

	 	Binding Effect
	 	 	94	 
	Section 12.5

	 	Term of this Agreement
	 	 	95	 
	Section 12.6

	 	GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF OBJECTION TO VENUE
	 	 	95	 
	Section 12.7

	 	WAIVER OF JURY TRIAL
	 	 	95	 
	Section 12.8

	 	Costs, Expenses and Taxes
	 	 	95	 
	Section 12.9

	 	No Proceedings
	 	 	96	 
	Section 12.10

	 	Recourse Against Certain Parties
	 	 	96	 
	Section 12.11

	 	Limitation on Liability of the Servicer and the Backup Servicer
	 	 	97	 
	Section 12.12

	 	Protection of Security Interest; Appointment of Administrative Agent
as Attorney-in-Fact
	 	 	98	 
	Section 12.13

	 	Confidentiality
	 	 	99	 
	Section 12.14

	 	Execution in Counterparts; Severability; Integration
	 	 	100	 
	Section 12.15

	 	Allocation of Payments on Collateral Debt Obligations Subject to the
Retained Interest Provisions
	 	 	101	 







iv











 





     THIS CREDIT AGREEMENT is made as of July 20, 2007, among:



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



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



     (3) Each financial institution from time to time party hereto as a “Lender” and their
respective successors and assigns (collectively, the “Lenders”);



     (4) Each financial institution from time to time party hereto as a “Managing Agent” and their
respective successors and assigns (collectively, the “Managing Agents”);



     (5) DEUTSCHE BANK AG, NEW YORK BRANCH, as the administrative agent (together with its
successors and assigns, in such capacity, the “Administrative Agent”); and



     (6) WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association (“Wells
Fargo”), not in its individual capacity, but solely as the collateral custodian (together with
its successors and assigns, in such capacity, the “Collateral Custodian”) and as backup
servicer (together with its successors and assigns, in such capacity, the “Backup
Servicer”).



     IT IS AGREED as follows:



ARTICLE I

DEFINITIONS




     Section 1.1 Certain Defined Terms.



     (a) Certain capitalized terms used throughout this Agreement are defined above or in this
Section 1.1.



     (b) As used in this Agreement and its exhibits, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural forms of the terms
defined).



     “1940 Act” means the Investment Company Act of 1940, as amended.



     “Account Control Agreement” means the Securities Account Control Agreement, dated as
of July 20, 2007, by and among Wells Fargo as Collateral Custodian and Securities Intermediary, the
Borrower, the Servicer and the Administrative Agent, substantially in the form of Exhibit L.



     “Accreted Interest” means the accrued interest on a PIK Obligation that is added to
the principal amount of such PIK Obligation instead of being paid as it accrues.













 





     “Additional Advance” is defined in Section 2.2.



     “Additional Amount” is defined in Section 2.12(a).



     “Additional Collateral Debt Obligation” means any Collateral Debt Obligation conveyed
to the Borrower on a Transfer Date occurring after the initial Transfer Date.



     “Additional Funding Date” means any Business Day on which an Additional Advance is
made.



     “Adjusted Eurodollar Rate” means for any Settlement Period, an interest rate per annum
equal to the quotient, expressed as a percentage and rounded upwards (if necessary), to the nearest
1/100 of 1%, (i) the numerator of which is equal to the LIBO Rate for such Settlement Period and
(ii) the denominator of which is equal to 100% minus the Eurodollar Reserve Percentage for
such Settlement Period.



     “Adjusted Market Value” means, with respect to each Collateral Debt Obligation as of
any date of determination, (a) the Market Value of such Collateral Debt Obligation as determined on
the applicable Cut-Off Date coinciding with, or last preceding, such date of determination
minus (b) the sum of the Principal Collections received in the Collection Account on such
Collateral Debt Obligation since the last such Cut-Off Date.



     “Administrative Agent” is defined in the Preamble.



     “Advance” means each Initial Advance and each Additional Advance made pursuant to the
terms hereof.



     “Advance Rate” means (i) with respect to the Initial Advance, 63.93% and (ii) with
respect to Additional Advances, the percentage determined by the Administrative Agent with the
consent of the Borrower.



     “Advances Outstanding” means on any day, the aggregate principal amount of the
Advances outstanding on such day, after giving effect to all repayments in respect of all such
Advances prior to or on such day.



     “Adverse Claim” means a lien, security interest, pledge, charge, encumbrance or other
right or claim of any Person.



     “Affected Party” is defined in Section 2.11(a).



     “Affiliate” with respect to a Person, means any other Person controlling, controlled
by or under common control with such Person. For purposes of this definition, “control” when used
with respect to any specified Person means the power to direct the management and policies of such
Person, directly or indirectly, through the ownership of voting securities; and the terms
“controlling” or “controlled” have meanings correlative to the foregoing.



     “Agent’s Account” means account number 10-598524-0008 at Deutsche Bank AG, New York
Branch.



2









 





     “Aggregate Outstanding Principal Balance” means, on any day, the sum of the
Outstanding Principal Balances of all Collateral Debt Obligations included as part of the
Collateral on such date.



     “Agreement” or “Credit Agreement” means this Credit Agreement, dated as of
July 20, 2007, as hereafter amended, modified, supplemented or restated from time to time.



     “Applicable Law” means, for any Person, all existing and future applicable laws,
rules, regulations (including proposed, temporary and final income tax regulations), statutes,
treaties, codes, ordinances, permits, certificates, orders and licenses of and interpretations by
any Governmental Authority (including usury laws, the Federal Truth in Lending Act, and Regulation
Z, Regulation W, Regulation U and Regulation B of the Federal Reserve Board), and applicable
judgments, decrees, injunctions, writs, orders of any court, arbitrator or other administrative,
judicial, or quasi-judicial tribunal or agency of competent jurisdiction.



     “Applicable Margin” means a margin separately agreed between the Administrative Agent
and the Borrower in the Servicing Fee Letter.



     “Asset Based Revolver” means any Revolving Obligation secured by accounts receivable
and/or inventory and with respect to which borrowings are based on the value of such accounts
received or inventory.



     “Asset-to-Debt Ratio” means, as of any date of determination, the quotient (expressed
as a percentage) of (a) the aggregate Adjusted Market Value of all Collateral Debt Obligations
included in the Collateral on such date that are not Modified Collateral Debt Obligations (except
for loans to International Legware Group, Inc. and HealthStar Communications, Inc. modified prior
to the Closing Date), Delinquent Obligations or Charged-Off Obligations over (b) the
Advances Outstanding on such date.



     “Assignment and Acceptance” means the Assignment and Acceptance substantially in the
form of Exhibit C hereto.



     “Assignment of Mortgage” means as to each Collateral Debt Obligation secured by an
interest in real property, one or more assignments, notices of transfer or equivalent instruments,
each in recordable form and sufficient under the laws of the relevant jurisdiction to reflect the
transfer of the related mortgage, deed of trust, security deed or similar security instrument and
all other documents related to such Collateral Debt Obligation and to the Borrower, each such
Assignment of Mortgage to be substantially in the form of Exhibit I hereto.



     “Backup Servicer” means Wells Fargo, in its capacity as Backup Servicer hereunder,
together with its successors and assigns.



     “Backup Servicer and Custodian Fee Letter” means the Backup Servicer and Custodian Fee
Letter, dated as of the date hereof, among the Borrower, the Servicer, the Collateral Custodian,
the Administrative Agent and the Backup Servicer, as the same may from time to time be amended,
waived or modified.



3









 





     “Backup Servicer Expenses” means the out-of-pocket expenses to be paid to the Backup
Servicer under the Backup Servicer and Custodian Fee Letter.



     “Backup Servicer Fee” means the fee to be paid to the Backup Servicer as set forth in
the Backup Servicer and Custodian Fee Letter.



     “Bankruptcy Code” means The United States Bankruptcy Reform Act of 1978 (11 U.S.C. §§
101, et seq.), as amended from time to time.



     “Base Rate” means on any date, a fluctuating rate of interest per annum equal to the
higher of (a) the Prime Rate or (b) the Federal Funds Rate plus 0.5%.



     “Borrower” is defined in the Preamble.



     “Business Day” means any day of the year other than a Saturday or a Sunday on which
(a) (i) banks are not required or authorized to be closed in New York, New York and Minneapolis,
Minnesota or (ii) which is not a day on which the Securities Industry and Financial Markets
Association recommends a closed day for the U.S. Bond Market, and (b) if the term “Business Day” is
used in connection with the Adjusted Eurodollar Rate, means the foregoing only if such day is also
a day of year on which dealings in United States dollar deposits are carried on in the London
interbank market.



     “CapitalSource” is defined in the Preamble.



     “Charged-Off Obligation” means a Collateral Debt Obligation included in the Collateral
with respect to which there has occurred one or more of the following:



     (a) the occurrence of both (i) subsequent to its Cut-Off Date, any portion of a payment of
interest on or principal of such Collateral Debt Obligation is not paid when due (without giving
effect to any grace period otherwise applicable thereto) and (ii) within 180 days of when such
delinquent payment was first due, any delinquencies have not been cured;



     (b) a Material Modification; or



     (c) an Insolvency Event has occurred with respect to the related Obligor;



     provided that, notwithstanding anything to the contrary contained herein, any Collateral Debt
Obligation as to which the event specified in clause (c) above is applicable shall be
deemed a Charged-Off Obligation only with respect to 50% of its Outstanding Principal Balance for a
period of 89 days following the occurrence of such event, and thereafter shall be deemed a
Charged-Off Obligation with respect to 100% of its Outstanding Principal Balance.



     “Closing Date” means July 20, 2007.



     “Code” means the Internal Revenue Code of 1986, as amended.



     “Collateral” means all right, title and interest of the Borrower in, to and under the
securities, loans, investment property, general intangibles, financial assets and other personal



4









 







property of the Borrower, whether now owned or hereafter acquired or arising, and wherever
located, including the following:




     (i) the Collateral Debt Obligations, and all monies due or to become due in payment of
such Collateral Debt Obligations on and after the related Cut-Off Date;




     (ii) any Related Property securing the Collateral Debt Obligations including all
Proceeds from any sale or other disposition of such Related Property;




     (iii) the Collateral Debt Obligation Documents relating to the Collateral Debt
Obligations;




     (iv) the Collection Account, the Reserve Account, the Lock-Box Accounts, the Committed
Funding Account, all funds held in such accounts, and all certificates and instruments, if
any, from time to time representing or evidencing such accounts or such funds;




     (v) all Collections and all other payments made or to be made in the future with
respect to the Collateral Debt Obligations, including such payments under any guarantee or
similar credit enhancement with respect to such Collateral Debt Obligations;




     (vi) all Hedge Collateral;




     (vii) all right, title and interest (but none of the obligations) in, to and under the
Purchase Agreement;




     (viii) all Equity Interests acquired in connection with a Modified Collateral Debt
Obligation or a Material Modification, unless such Equity Interests are owned by a special
purpose entity, all of the ownership and other equity interests in which are pledged to the
Administrative Agent on behalf of the Secured Parties pursuant to terms reasonably
acceptable to the Administrative Agent (provided that the initial inclusion of Equity
Interests in such special purpose entity may be effected up to 45 days following the day on
which such Equity Interests are first acquired in connection with such Modified Collateral
Debt Obligation or a Material Modification); and




     (ix) all income and Proceeds of the foregoing.


In no event shall Collateral include the Retained Interests.




     “Collateral Custodian” is defined in the Preamble.



     “Collateral Debt Obligation” means on any date of determination, a security or loan
which satisfies each of the following requirements:




     (i) such security or loan is denominated in Dollars and does not permit the currency in
which, or the country in which, such security or loan is payable to be changed;



5









 






     (ii) such security or loan is not an equity security;




     (iii) since its Cut-Off Date, such security or loan has not been amended to (A) reduce
the amount (other than by reason of the repayment thereof) or extend the time for payment of
principal or (B) reduce the rate or extend the time of payment of interest (or any component
thereof), in each case (x) unless done in accordance with the Servicing Standards or (y)
otherwise with the consent of the Required Lenders;




     (iv) such security or loan will not cause the Borrower to be deemed to own 5.0% or more
of the voting securities of any publicly registered issuer or any securities that are
immediately convertible into or immediately exercisable or exchangeable for 5.0% or more of
the voting securities of any publicly registered issuer, as determined by the Servicer;




     (v) the Obligor with respect to such security or loan is an Eligible Obligor;




     (vi) such security or loan does not contain a confidentiality provision that restricts
the ability of the Administrative Agent, on behalf of the Secured Parties, to exercise its
rights under the Transaction Documents, including its rights to review the Collateral Debt
Obligation and related Collateral Debt Obligation File; provided that a provision which
requires the Administrative Agent or other prospective recipient of confidential information
to maintain the confidentiality of such information shall not be deemed to restrict the
exercise of such rights;




     (vii) such security or loan has an original term to maturity of no more than 85 months;




     (viii) if such security or loan is a Revolving Obligation or a Delayed Draw Term
Obligation, the related Obligor expressly and unconditionally agrees to make all payments
thereunder without deduction for any counterclaim, defense, recoupment or set-off;




     (ix) such security or loan is not a Real Estate Obligation (excepting, for purposes of
this clause, loans outstanding as of the Closing Date to Scripps GSB I, LLC, Fulton Capitol
and Ashmont Hill, LLC);




     (x) the proceeds of such security or loan are not used to finance construction projects
or activities, other than refurbishments of existing structures with regard to loans
outstanding to Fulton Capitol and Ashmont Hill, LLC;




     (xi) with respect to which the Collateral Custodian has received the related Collateral
Debt Obligation File;




     (xii) the Obligor of such security or loan has executed all appropriate documentation
required by the Originator or the Borrower, as applicable;




     (xiii) such security or loan is (i) a “general intangible”, an “instrument”, an
“account”, or “chattel paper” within the meaning of the Article 9 of the UCC or (ii) a



6









 







“financial asset”, “security” or “security entitlement” within the meaning of Article 8
of the UCC, in each case, in all jurisdictions that govern the perfection of the security
interest granted therein;




     (xiv) all material consents, licenses, approvals or authorizations of, or registrations
or declarations with, any Governmental Authority required to be obtained, effected or given
in connection with the making of such security or loan have been duly obtained, effected or
given and are in full force and effect;




     (xv) such security or loan, together with the Collateral Debt Obligation Documents
related thereto, does not contravene in any material respect any Applicable Laws (including
laws, rules and regulations relating to usury, truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection practices and privacy);




     (xvi) such security or loan, together with the related Collateral Debt Obligation
Documents, is fully assignable and does not require the consent of or notice to the Obligor
to consummate the transactions contemplated by the Transaction Documents or contain any
other restriction on the transfer or assignment of the Collateral Debt Obligation or the
Collateral Debt Obligation Documents for the purpose of consummating the transactions
contemplated by the Transaction Documents other than a consent or waiver of such restriction
that has been obtained prior to the date on which the security or loan was sold to the
Borrower;




     (xvii) the Borrower’s interest in such security or loan and all Related Property is
owned by the Borrower free and clear of any Liens except for Permitted Liens, and all
filings and other actions required to perfect the security interest of the Administrative
Agent on behalf of the Secured Parties in such security or loan have been made or taken;




     (xviii) no right of rescission, set off, counterclaim, defense or other material
dispute has been asserted with respect to such security or loan;




     (xix) neither such security or loan, nor any portion of the Related Property,
constitutes Margin Stock, and the financing of such security or loan by the Lenders does not
contravene in any material respect Regulation U of the Federal Reserve Board, nor require
the Lenders to undertake reporting thereunder which it would not otherwise have cause to
make;




     (xx) such security or loan will not cause the Borrower or the Originator to be deemed
an Insider or an Affiliate of the related Obligor;




     (xxii) no claim has been asserted or proceeding commenced in respect of such security
or loan challenging the enforceability or validity of any of the related Collateral Debt
Obligation Documents;




     (xxiii) such security or loan does not by its terms permit the payment obligation of
the Obligor thereunder to be converted into or exchanged for equity capital of such Obligor;



7









 






     (xxiv) the Obligor of such security or loan is legally responsible for all taxes
relating to the Related Property, and all payments in respect of the security or loan are
required to be made free and clear of, and without deduction or withholding for or on
account of, any taxes, unless such withholding or deduction is required by Applicable Law in
which case the Obligor thereof is required to make “gross-up” payments that cover the full
amount of any such withholding taxes on an after-tax basis (taking into account all
available credits or deductions attributable to the payment or accrual of such taxes);




     (xxv) as of its Cut-Off Date and Transfer Date, such security or loan is not a
Charged-Off Obligation, a Delinquent Obligation or in arrears on any payment of interest or
principal (other than with respect to certain borrowing base over-advances outstanding as of
the Cut-Off Date and certain loans outstanding to Fulton Capital);




     (xxvi) as of and from its Transfer Date, such security or loan is listed on the
Schedule of Collateral Debt Obligations; and




     (xxvii) there is no restriction on the Originator’s ability to direct the Obligors to
make all payments to one of the Lock-Boxes or directly to one of the Lock-Box Accounts.



     “Collateral Debt Obligation Checklist” means, with respect to any Collateral Debt
Obligation, the index prepared by the Servicer identifying the type of Collateral Debt Obligation
(including whether such Collateral Debt Obligation is a Noteless Collateral Debt Obligation) and
each of the Collateral Debt Obligation Documents related thereto which are included in the related
Collateral Debt Obligation File.



     “Collateral Debt Obligation Documents” means with respect to any Collateral Debt
Obligation, the related documentation that has been delivered or should, consistent with the
Servicing Standards, have been delivered to the Borrower or Servicer, including any related
instrument, promissory note, loan agreement, security agreement, mortgage, assignment of Collateral
Debt Obligations, all guarantees, and UCC financing statements and continuation statements
(including amendments or modifications thereof) executed by the Obligor thereof or by another
Person on the Obligor’s behalf in respect of such Collateral Debt Obligation and related
instrument, including general or limited guaranties and, for each Collateral Debt Obligation
secured by real property, an Assignment of Mortgage (so long as an Assignment of Mortgage has not
been previously delivered to the Collateral Custodian in respect of such Collateral Debt
Obligation).



     “Collateral Debt Obligation File” means with respect to any Collateral Debt
Obligation, each of the Collateral Debt Obligation Documents related thereto.



     “Collection Account” is defined in Section 5.4(a).



     “Collection Date” means the date on which all Advances Outstanding have been reduced
to zero, the Lenders have received all accrued Interest, fees, and all other amounts owing to them
under this Agreement and the Hedge Transaction, the Hedge Counterparties have received all amounts
due and owing hereunder and under the Hedge Transactions, and each of the Backup



8









 







Servicer, the Collateral Custodian, the Administrative Agent and the Managing Agents have each
received all amounts due to them in connection with the Transaction Documents.



     “Collections” means (a) all cash collections or other cash proceeds of a Collateral
Debt Obligation received by or on behalf of the Borrower by the Servicer or Originator from or on
behalf of any Obligor in payment of any amounts owed in respect of such Collateral Debt Obligation,
including fees, interest, principal, Insurance Proceeds and all Recoveries, (b) all amounts or
Proceeds received in the Collection Account in connection with (i) a repurchase of Ineligible
Collateral Debt Obligations pursuant to Section 2.4(c), (ii) a Lien Release Dividend
pursuant to Section 2.10 or (iii) an Optional Repurchase pursuant to Section 2.14,
(c) all payments received pursuant to any Hedge Transaction, (d) interest earnings in the
Collection Account and (e) all Proceeds of Equity Interests, and (f) any cash payments on PIK
Obligations, but excluding, in each case, the Retained Interest and any Released Amounts.



     “Commercial Paper Notes” means on any day, any short-term promissory notes issued by
any Lender with respect to financing any Advance hereunder that are allocated, in whole or in part,
by such Lender to fund or maintain the Advances Outstanding.



     “Committed Funding Account” means an account established in accordance with
Section 5.4(d).



     “Contractual Obligation” means with respect to any Person, any provision of any
securities issued by such Person or any indenture, mortgage, deed of trust, contract, undertaking,
agreement, instrument or other document to which such Person is a party or by which it or any of
its property is bound or is subject.



     “CP Rate” means for any Settlement Period for any Advances made by a Lender, a per
annum rate equal to the sum of (i)(A) the weighted daily averaged interest rate payable in respect
of the related Lender’s commercial paper, or (B) the per annum rate equivalent to the weighted
average of the per annum rates paid or payable by the related Lender from time to time as interest
on or otherwise in respect of those commercial paper notes issued by the related Lender that are
allocated, in whole or in part, to fund the purchase or maintenance of the Advances made by such
Lender, in each case, during such Settlement Period (determined in the case of discount commercial
paper notes by converting the discount to an interest bearing equivalent rate per annum), plus (ii)
0.05% per annum in respect of dealer fees and commissions (to the extent not included in the
preceding clause (i)), and (iii) (without duplication) the commissions and charges not
constituting dealer fees or commissions charged by the applicable placement agent or commercial
paper dealer with respect to such commercial paper expressed as a percentage of the face amount
thereof and converted to an interest-bearing equivalent rate per annum.



     “Credit and Collection Policy” means the written credit and collection policies and
procedures manual of the Originator and the initial Servicer in effect on the Closing Date and
attached hereto as Exhibit K, as amended or supplemented from time to time in accordance
with this Agreement; and with respect to any Successor Servicer, the written collection policies
and procedures of such Person at the time such Person becomes Successor Servicer, as amended or
supplemented from time to time.



9









 





     “Custodial Expenses” means the out-of-pocket expenses to be paid to the Collateral
Custodian under the Backup Servicer and Custodian Fee Letter.



     “Custodial Fee” means the fee to be paid to the Collateral Custodian as set forth in
the Backup Servicer and Custodian Fee Letter.



     “Cut-Off Date” means, with respect to each Collateral Debt Obligation acquired by the
Borrower under the Purchase Agreement, the date on and after which Collections on such Collateral
Debt Obligation become included as part of the Collateral, which shall be: (a) with respect to any
Initial Collateral Debt Obligation with an Obligation Rating of 4, June 15, 2007, (b) with respect
to any Initial Collateral Debt Obligation with an Obligation Rating of 5 or 6, March 14, 2007, and
(c) with respect to any Additional Collateral Debt Obligation, the Transfer Date applicable to such
Collateral Debt Obligation.



     “DB” means Deutsche Bank AG, New York Branch, in its individual capacity, and its
successors or assigns.



     “Default” means an event that, with the giving of notice or lapse of time, or both,
would become an Event of Default (including, for the avoidance of doubt, a Servicer Potential
Termination Event).



     “Delayed Draw Term Obligation” means a loan that is fully committed on the initial
funding date thereof and is required by its terms to be fully funded in one or more installments on
draw dates to occur within three years after the closing date thereof, but which, once fully
funded, has the characteristics of a Term Obligation. Once fully funded, such loan will cease to be
a Delayed Draw Term Obligation.



     “Delinquent Obligation” means a Collateral Debt Obligation (other than a Charged-Off
Obligation) in the Collateral as to which both of the following have occurred and are continuing:



     (i) for all Collateral Debt Obligations except Fulton Capital, any portion of a payment of
interest on or principal of such Collateral Debt Obligation is not paid in cash on a current basis
(without giving effect to any grace period otherwise applicable thereto) and, in the case of Fulton
Capital, any payment of interest on or principal of such Collateral Debt Obligation (by reference
to the Outstanding Principal Balance of such Collateral Debt Obligation as reflected on the
Originator’s balance sheet as of the applicable Cut-Off Date) is not paid in cash on a current
basis; and



     (ii) any delinquencies specified in clause (i) above have not been cured (A) with
respect to Asset Based Revolvers, within five calendar days of the date on which such delinquent
payment was first due and (B) with respect to all other Collateral Debt Obligations, within 90 days
of the date on which such delinquent payment was first due.



     “Derivatives” means any exchange-traded or over-the-counter (i) forward, future,
option, swap, cap, collar, floor, foreign exchange contract, any combination thereof, whether for
physical delivery or cash settlement, relating to any interest rate, interest rate index, currency,
currency exchange rate, currency exchange rate index, debt instrument, debt price, debt index,
depository instrument, depository price, depository index, equity instrument, equity price, equity



10









 







index, commodity, commodity price or commodity index, (ii) any similar transaction, contract,
instrument, undertaking or security, or (iii) any transaction, contract, instrument, undertaking or
security containing any of the foregoing.



     “Determination Date” means the last day of each Settlement Period.



     “Dollars” or “$” means the lawful currency of the United States of America.



     “Eligible Assignee” means a Person (a) whose short-term rating is at least “A-1” from
S&P and “P-1” from Moody’s, or whose obligations under this Agreement are guaranteed by a Person
whose short-term rating is at least “A-1” from S&P and “P-1” from Moody’s and (b) who is approved
by the Borrower (such approval not to be unreasonably withheld).



     “Eligible Collateral Debt Obligation” means on any date of determination, an
Originator Collateral Debt Obligation which satisfies the representations set forth in Section
4.1(r).



     “Eligible Obligor” means on any day, any Obligor that satisfies each of the following
requirements:




     (i) such Obligor is a business organization that is duly organized, validly existing
and in good standing under the laws of, and has its principal place of business and
substantially all of its assets in, the United States or Canada, or any political
subdivision thereof (unless otherwise consented to in writing by the Administrative Agent);




     (ii) such Obligor is not a Governmental Authority; and




     (iii) such Obligor is not (A) an Affiliate of the Borrower or the Originator or (B) an
entity to which the Borrower or the Originator would be deemed an Insider, unless such
Obligor has been approved by the Administrative Agent.



     “Equity Interests” means with respect to any Collateral Debt Obligation, any warrants,
equity or other equity interests or interests convertible into or exchangeable for any such
interests received from any Obligor in connection with an amendment, modification or waiver of, or
other similar undertaking with respect to, the terms of a Collateral Debt Obligation.



     “ERISA” means the U.S. Employee Retirement Income Security Act of 1974, as amended.



     “ERISA Affiliate” means a member of a controlled group of corporations or a controlled
group of trades or businesses, as described in Section 414 of the Code or Section 4001 of ERISA.



     “Eurodollar Disruption Event” means with respect to any Advance as to which Interest
accrues or is to accrue at a rate based upon the Adjusted Eurodollar Rate, any of the following:
(a) a determination by a Lender that it would be contrary to law or to the directive of any central
bank or other governmental authority (whether or not having the force of law) to obtain United
States dollars in the London interbank market to make, fund or maintain any Advance; (b) the



11









 







inability of any Lender to obtain timely information for purposes of determining the Adjusted
Eurodollar Rate; (c) a determination by a Lender that the rate at which deposits of United States
dollars are being offered to such Lender in the London interbank market does not accurately reflect
the cost to such Lender of making, funding or maintaining any Advance; or (d) the inability of a
Lender to obtain United States dollars in the London interbank market to make, fund or maintain any
Advance.



     “Eurodollar Reserve Percentage” means on any day, the then applicable percentage
(expressed as a decimal) prescribed by the Federal Reserve Board (or any successor) for determining
reserve requirements applicable to “Eurocurrency Liabilities” pursuant to Regulation D or any other
then applicable regulation of the Federal Reserve Board (or any successor) that prescribes reserve
requirements applicable to “Eurocurrency Liabilities” as presently defined in Regulation D.



     “Event of Default” is defined in Section 8.1.



     “Expense Claims” is defined in Section 12.10(b).



     “Facility Obligations” means all loans, advances, debts, liabilities and obligations,
for monetary amounts owing by the Borrower to the Lenders, the Administrative Agent, the Managing
Agents and the other Secured Parties or any of their assigns, as the case may be, whether due or to
become due, matured or unmatured, liquidated or unliquidated, contingent or non-contingent, and all
covenants and duties regarding such amounts, of any kind or nature, present or future, arising
under or in respect of any of this Agreement, the Fee Letters, any other Transaction Document
delivered in connection with the transactions contemplated by this Agreement, as amended or
supplemented from time to time, whether or not evidenced by any separate note, agreement or other
instrument, or any Hedge Transaction. This term includes all principal, interest (including
interest that accrues after the commencement against the Borrower of any action under the
Bankruptcy Code), fees, including any and all arrangement fees, loan fees, facility fees, and any
and all other fees, expenses, costs or other sums (including attorney costs) chargeable to the
Borrower under any of the Transaction Documents or under any Hedge Transaction.



     “Federal Funds Rate” means for any period, a fluctuating interest rate per annum for
each day during such period equal to (a) the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the preceding Business Day) by
the Federal Reserve Bank of New York; or (b) if such rate is not so published for any day which is
a Business Day, the average of the quotations at approximately 10:30 a.m. (New York City time) for
such day on such transactions received by DB from three federal funds brokers of recognized
standing selected by it.



     “Federal Reserve Board” means the Board of Governors of the Federal Reserve System.



     “Fee Letters” means the Structuring Fee Letter and the Servicing Fee Letter.



     “Fixed Rate Collateral Debt Obligation” means a Collateral Debt Obligation that bears
interest at a fixed rate.



12









 





     “Foreign Lender” is defined in Section 2.12(d).



     “Funded Amount” means, for each Lender, the aggregate amount of Advances such Lender
has actually funded pursuant to the terms hereof, or, with respect to the Initial Advance to be
made by such Lender, the amount of the Advance such Lender has agreed to fund on the Closing Date,
in each case calculated as such Lender’s pro rata share of an amount equal to the sum of (a) the
product of (i) on the Closing Date, the aggregate Market Value of the Initial Collateral Debt
Obligations as of such date and (ii) the applicable Advance Rate plus (b) the product of
(i) on any Additional Funding Date, the aggregate Market Value of the Additional Collateral Debt
Obligations becoming part of the Collateral as of such date and (ii) the applicable Advance Rate.



     “GAAP” means generally accepted accounting principles as in effect from time to time
in the United States.



     “Governmental Authority” means with respect to any Person, any nation or government,
any state or other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government and any court or arbitrator having
jurisdiction over such Person.



     “Hedge Collateral” is defined in Section 5.3(b).



     “Hedge Counterparty” means DB or any entity that (a) on the date of entering into any
Hedge Transaction (i) is an interest rate swap dealer that is either a Lender or an Affiliate of a
Lender, or has been approved in writing by the Administrative Agent (which approval shall not be
unreasonably withheld), and (ii) has a short-term unsecured debt rating of not less than “A-1” by
S&P and not less than “P-1” by Moody’s, and (b) (i) consents to the assignment of the Borrower’s
rights under the Hedge Transaction to the Administrative Agent pursuant to Section 5.3(b)
and (ii) agrees that in the event that S&P or Moody’s reduces its short-term unsecured debt rating
below “A-1” or “P-1”, respectively, it shall transfer its rights and obligations under each Hedging
Transaction to another entity that meets the requirements of clause (a) and (b)
hereof or make other arrangements acceptable to the Administrative Agent.



     “Hedge Transaction” means each interest rate cap transaction between the Borrower and
a Hedge Counterparty that is entered into pursuant to Section 5.3(a).



     “Increased Costs” is defined in Section 2.11(a).



     “Indebtedness” means with respect to the Borrower or the initial Servicer at any date,
(a) all indebtedness of such Person for borrowed money or for the deferred purchase price of
property or services (other than current liabilities incurred in the ordinary course of business
and payable in accordance with customary trade practices) or that is evidenced by a note, bond,
debenture or similar instrument, (b) all obligations of such Person under capital leases, (c) all
obligations of such Person in respect of acceptances issued or created for the account of such
Person, (d) all liabilities secured by any Adverse Claims on any property owned by such Person even
though such Person has not assumed or otherwise become liable for the payment thereof, and (e) all
indebtedness, obligations or liabilities of that Person in respect of Derivatives, and (f)



13









 







obligations under direct or indirect guaranties in respect of obligations (contingent or
otherwise) to purchase or otherwise acquire, or to otherwise assure a creditor against loss in
respect of, clauses (a) through (e) above.



     “Indemnified Amounts” is defined in Section 9.1.



     “Indemnified Party” is defined in Section 9.1.



     “Indemnifying Party” is defined in Section 9.3.



     “Independent Accountants” means, as to any Person, any firm or nationally recognized
certified public accountants (including any member thereof or an investment bank and any member
thereof) who (i) does not have and is not committed to acquire any material direct or any material
indirect financial interest in such Person or in any Affiliate of such Person, (ii) is not
connected with such Person as an officer, employee, promoter, underwriter, voting trustee, partner,
director or Person performing similar functions and (iii) is independent with respect to such
Person within the meaning of Rule 101 of the Code of Ethics of the American Institute of Certified
Public Accountants.



     “Ineligible Collateral Debt Obligation” means (a) a Collateral Debt Obligation that is
not an Eligible Collateral Debt Obligation and (b) the loan outstanding to Scripps GSB I, LLC if,
within 15 Business Days after the Closing Date, CEIS Review Inc. does not confirm such loan as
having an Obligation Rating of 4.



     “Initial Advance” is defined in Section 2.1(a).



     “Initial Collateral Debt Obligation” means any Collateral Debt Obligation which is
acquired by the Borrower on the initial Transfer Date.



     “Insider” is defined in Section 101(31) of the Bankruptcy Code.



     “Insolvency Event” means with respect to a specified Person, (a) the filing of a
decree or order for relief by a court having jurisdiction in the premises in respect of such Person
or any substantial part of its property in an involuntary case under any applicable Insolvency Law
now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person’s affairs, and such decree or order shall
remain unstayed and in effect for a period of 30 consecutive days; or (b) the commencement by such
Person of a voluntary case under any applicable Insolvency Law now or hereafter in effect, or the
consent by such Person to the entry of an order for relief in an involuntary case under any such
law, or the consent by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for
any substantial part of its property, or the making by such Person of any general assignment for
the benefit of creditors, or the failure by such Person generally to pay its debts as such debts
become due, or the taking of action by such Person in furtherance of any of the foregoing.



     “Insolvency Laws” means the Bankruptcy Code and all other applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency,



14









 







reorganization, suspension of payments, or similar debtor relief laws from time to time in
effect affecting the rights of creditors generally.



     “Insolvency Proceeding” means any case, action or proceeding before any court or
Governmental Authority relating to an Insolvency Event.



     “Insurance Policy” means with respect to any Collateral Debt Obligation included in
the Collateral, an insurance policy covering physical damage to or loss to any assets or Related
Property of the Obligor securing such Collateral Debt Obligation.



     “Insurance Proceeds” means any amounts payable or any payments made, to the Borrower
or to the Servicer on its behalf under any Insurance Policy.



     “Interest” means, for each Settlement Period and each Advance outstanding during such
Settlement Period, an amount equal to:








	 	 	 	 	 	 	 
	Where
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	N
	 	=
	 	the number of days in such Settlement Period;
	 
	 	 	 	 	 	 
	 

	 	IR
	 	=
	 	the Interest Rate applicable to such Advance;
	 
	 	 	 	 	 	 
	 

	 	AP
	 	=
	 	the Applicable Margin;
	 
	 	 	 	 	 	 
	 

	 	Pi
	 	=
	 	the principal amount of such Advance on day i of such Settlement Period (after giving effect to all distributions made on such day).






     “Interest Collections” means any and all Collections deposited into the Collection
Account in respect of any payments received on or after the Cut-Off Date on account of (a) interest
on Collateral Debt Obligations, (b) any payments received pursuant to any Hedge Transaction and (c)
any interest payments on PIK Obligations, in each case whether in the form of cash, checks, wire
transfers, electronic transfers or any other form of cash payment, but excluding any Retained
Interest and Released Amounts.



     “Interest Rate” means, for each Settlement Period and for each Advance outstanding for
each day during such Settlement Period:



     (a) to the extent the applicable Lender has funded the Advance through the issuance of
Commercial Paper Notes, a rate equal to the applicable CP Rate; or



     (b) to the extent the applicable Lender did not fund the Advance through the issuance of
Commercial Paper Notes, a rate equal to the Adjusted Eurodollar Rate; provided that: (i) the
Interest Rate shall be the Base Rate if such Lender shall have notified the Administrative Agent
that a Eurodollar Disruption Event has occurred and is continuing; and (ii) the Interest Rate shall



15









 







be the applicable Prime Rate for each day during any Settlement Period following the
occurrence of an Event of Default that is continuing.



     “Lender Group” means any Lender and its related Managing Agent.



     “Lenders” is defined in the Preamble.



     “LIBO Rate” means for any Settlement Period and any Advance, an interest rate per
annum equal to:




	 	(i)	 	the posted rate for 30 day deposits in United States dollars appearing on
Reuters Screen LIBOR01 Page as of 11:00 a.m. (London time) on the Business Day that is
the second Business Day immediately preceding the date on which such Advance was funded
(with respect to the initial Settlement Period for such Advance) and as of the second
Business Day immediately preceding the first day of the applicable Settlement Period
(with respect to all subsequent Settlement Periods for such Advance); or
	 
	 	(ii)	 	if no rate appears on Reuters Screen LIBOR01 Page at such time and day, then
the LIBO Rate shall be determined by the Administrative Agent at its principal office
in New York, New York as its rate at which 30 day deposits in United States dollars are
being, have been, or would be offered or quoted by the Administrative Agent to major
banks in the applicable interbank market for Eurodollar deposits at or about 11:00 a.m.
(New York City time) on such day.





     “Lien” means, with respect to any Collateral, (a) any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such Collateral, or (b) the interest of
a vendor or lessor under any conditional sale agreement, financing loan or other title retention
agreement relating to such Collateral.



     “Lien Release Dividend” is defined in Section 2.10(a).



     “Lien Release Dividend Date” means the date specified by the Borrower, which date may
be any Business Day, provided written notice is given in accordance with Section 2.10(a).



     “Liquidation Expenses” means with respect to any Collateral Debt Obligation, the
aggregate amount of out-of-pocket expenses reasonably incurred by the Borrower or on behalf of the
Borrower by the Servicer (including amounts paid to any subservicer) in connection with the
repossession, refurbishing and disposition of any related assets securing such Collateral Debt
Obligation including the attempted collection of any amount owing pursuant to such Collateral Debt
Obligation.



     “Lock-Box” means the post office box to which Collections are remitted for retrieval
by the Lock-Box Bank and deposited by such Lock-Box Bank into the Lock-Box Accounts, the details of
which are contained in Schedule II, as such schedule may be amended from time to time.



16









 





     “Lock-Box Accounts” means one or more accounts maintained at Bank of America, N.A. in
the name of CapitalSource Funding Inc. for the purpose of receiving Collections, the details of
which are contained in Schedule II, as such schedule may be amended from time to time.



     “Lock-Box Agreement” means the Fourth Amended and Restated Intercreditor and Lockbox
Administration Agreement, dated as of June 30, 2005, among Bank of America, N.A., as the Lock-box
Bank, each of the Financing Agents (as defined therein) party thereto, as financing agents,
CapitalSource, as the originator, as the original servicer and as the lockbox servicer, and
CapitalSource Funding Inc., as the owner of the Lock-Box Accounts and as the owner of the lockbox,
as amended, modified, waived, supplemented or restated from time to time.



     “Lock-Box Bank” means Bank of America, N.A.



     “Managing Agent” means as to any Lender, the financial institution identified as such
on the signature pages hereof or in the applicable Assignment and Acceptance Agreement.



     “Mandatory Prepayment” is defined in Section 2.4(a).



     “Margin Stock” means “Margin Stock” as defined in Regulation U issued by the Federal
Reserve Board.



     “Market Servicing Fee” is defined in Section 7.14.



     “Market Servicing Fee Differential” means on any date of determination, an amount
equal to the positive difference between the Market Servicing Fee and Servicing Fee.



     “Market Value” means with respect to each Collateral Debt Obligation, the lower of (a)
(i) with respect to any Collateral Debt Obligation with an Obligation Rating of 4, the remaining
outstanding principal amount of such Collateral Debt Obligation, or (ii) with respect to any
Collateral Debt Obligation with an Obligation Rating of 5 or 6, the value of such Collateral Debt
Obligation as determined by CEIS Review Inc., and (b) the value of such Collateral Debt Obligation
on the books of the Originator (net of any specific reserve) as determined by the authorized
financial officer of the Originator.



     “Material Adverse Effect” means with respect to any event or circumstance, a material
adverse effect on (a) the business, condition (financial or otherwise), operations, performance,
properties of the Servicer or the Borrower, (b) the validity, enforceability or collectibility of
this Agreement or any other Transaction Document or the validity, enforceability or collectibility
of the Collateral Debt Obligations, (c) the rights and remedies of the Administrative Agent, on
behalf of the Secured Parties, the Collateral Custodian or any Secured Party under this Agreement
or any Transaction Document or (d) the ability of the Borrower or the Servicer to perform its
obligations under this Agreement or any other Transaction Document, or (e) the status, existence,
perfection, priority, or enforceability of the Administrative Agent’s, Collateral Custodian’s or
Secured Parties’ interest in the Collateral.



     “Material Modification” means a termination or release, or an amendment, modification
or waiver, or equivalent similar undertaking or agreement, by the Servicer with respect to a



17









 







Collateral Debt Obligation (other than a Modified Collateral Debt Obligation) that is entered
into for reasons related to the inability of the applicable Obligor to make payments of principal
or interest under such Collateral Debt Obligation, as determined in accordance with the Credit and
Collection Policy.



     “Maturity Date” means the earliest to occur of (a) the date declared by the
Administrative Agent or occurring automatically, in each case in respect of the occurrence of an
Event of Default and (b) a date selected by the Borrower upon at least 30 days’ prior written
notice to the Administrative Agent and each Managing Agent.



     “Maximum Lawful Rate” is defined in Section 2.6(d).



     “Modified Collateral Debt Obligation” means a Collateral Debt Obligation with respect
to which, after the Cut-Off Date, (i) a termination or release, or an amendment, modification or
waiver, or equivalent similar undertaking or agreement by the Servicer (collectively, for purposes
of this definition, the “modification”) is entered into for reasons related to the
inability of the applicable Obligor to make payments of principal or interest under such Collateral
Debt Obligation, as determined in accordance with the Credit and Collection Policy, and (ii) the
following conditions have been satisfied:



     (a) the modification does not (x) reduce the total amount of principal due on such Collateral
Debt Obligation or (y) extend a principal payment on such Collateral Debt Obligation by more than
one year past the due date for such payment (as in effect on the applicable Cut-Off Date);



     (b) the Servicer represents that the modification is not expected to adversely affect the
collectibility or the value of such Collateral Debt Obligation;



     (c) immediately before and immediately after giving effect to such modification, the aggregate
amount of Advances Outstanding is less than or equal to the amount indicated in the Required
Principal Amortization Schedule; and



     (d) immediately before and immediately after giving effect to such modification, no Default or
Event of Default shall have occurred and be continuing.



     “Moody’s” means Moody’s Investors Service, Inc., and any successor thereto.



     “Noteless Collateral Debt Obligation” means a Collateral Debt Obligation with respect
to which the underlying Collateral Debt Obligation Documents (i) do not require the Obligor to
execute and deliver a promissory note to evidence the indebtedness created under such Collateral
Debt Obligation and (ii) do not require any holder of the indebtedness created under such
Collateral Debt Obligation to affirmatively request a promissory note from the related Obligor.



     “Notes” is defined in Section 2.5(a).



     “Notice of Exclusive Control” is defined in the Account Control Agreement.



18









 





     “Obligation Rating” means, for each Collateral Debt Obligation in the Collateral, the
rating assigned to such Collateral Debt Obligation by CapitalSource by applying its comprehensive
loan rating matrix to characterize the risk and level of each loan. The loan rating matrix is
customized for the different array of products offered by each lending unit, but without exception
evaluates the same three areas, which are (i) credit factors, (ii) collateral factor, and (iii)
financial reporting. The following is a description of the conditions associated with each
Obligation Rating, which must be affirmed by CapitalSource’s credit operations and services group
and is then used to determine the level of servicing required:



	 	 	 	 	 
	Obligation	 	 
	Rating	 	Summary Description
	 	 	 	 	 

	 	1	 	 	“Investment Grade” (based on structure, collateral or credit)

	 	 	 	 	 

	 	2	 	 	Very high quality credit in all respects, supported by a
combination of strong collateral and cash flow

	 	 	 	 	 

	 	3	 	 	Strong credit or collateral position

	 	 	 	 	 

	 	4	 	 	Acceptable collateral or credit position with enhanced
monitoring

	 	 	 	 	 

	 	5	 	 	Problem loan, with limited credit risk

	 	 	 	 	 

	 	6	 	 	Active work-out; expectation of credit loss







     “Obligor” means with respect to any Collateral Debt Obligation, the Person or Persons
obligated to make payments pursuant to such Collateral Debt Obligation, including any guarantor
thereof.



     “Officer’s Certificate” means a certificate signed by any officer of the Borrower or
the Servicer, as the case may be, and delivered to the Administrative Agent, the Collateral
Custodian and the Backup Servicer.



     “Opinion of Counsel” means a written opinion of counsel, who may be counsel for the
Borrower or the Servicer, as the case may be, and who shall be reasonably acceptable to the
Administrative Agent.



     “Optional Repurchase” is defined in Section 2.14.



     “Optional Repurchase Settlement Date” means the Business Day specified by the Borrower
to the Administrative Agent and the Collateral Custodian as the proposed settlement date of an
Optional Repurchase.



     “Originator” means CapitalSource.



     “Other Costs” is defined in Section 12.8.



     “Outstanding Principal Balance” means, on any date of determination with respect to
any Collateral Debt Obligation, the outstanding principal amount of such Collateral Debt
Obligation.



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     “Payment Allocation Condition” means, on any date of determination, a condition that
is satisfied if and for so long as no Default or Event of Default has occurred and is continuing
and the amount of Advances Outstanding is less than or equal to the Target Principal Balance for
such date.



     “Payment Date” means the tenth Business Day following the end of a Settlement Period.



     “Periodic Report” is defined in Section 7.21(a).



     “Permitted Investments” means any one or more of the following types of investments:



     (a) marketable obligations of the United States, the full and timely payment of which are
backed by the full faith and credit of the United States and that have a maturity of not more than
270 days from the date of acquisition;



     (b) marketable obligations, the full and timely payment of which are directly and fully
guaranteed by the full faith and credit of the United States and that have a maturity of not more
than 270 days from the date of acquisition;



     (c) bankers’ acceptances and certificates of deposit and other interest-bearing obligations
(in each case having a maturity of not more than 270 days from the date of acquisition) denominated
in dollars and issued by any bank with capital, surplus and undivided profits aggregating at least
$100,000,000, the short-term obligations of which are rated “A-1” by S&P and “P-1” by Moody’s;



     (d) repurchase obligations with a term of not more than ten days for underlying securities of
the types described in clauses (a), (b) and (c) above entered into with any
bank of the type described in clause (c) above;



     (e) commercial paper rated at least “A-1” by S&P and “P-1” by Moody’s; and



     (f) demand deposits, time deposits, money market funds or certificates of deposit (having
original maturities of no more than 365 days) of depository institutions or trust companies
incorporated under the laws of the United States or any state thereof (or domestic branches of any
foreign bank) and subject to supervision and examination by federal or state banking or depository
institution authorities; provided that at the time such investment, or the commitment to make such
investment, is entered into, the short-term debt rating of such depository institution or trust
company shall be at least “A-1” by S&P and “P-1” by Moody’s.



     Permitted Investments shall not include any instrument, security or investment (a) which is
purchased at a price (excluding accrued interest) in excess of 100% of par, (b) which is subject to
substantial non-credit risk as determined by the Servicer in its reasonable business judgment, (c)
the S&P rating of which includes a “p”, “pi”, “q”, “r” or “t” subscript or (d) if the income from
such obligation or security is or will be subject to deduction or withholding for or on account of
any withholding or similar tax, unless the issuer is required to make gross up payments equal to
the full amount of any such withholding tax, or the acquisition (including the manner of
acquisition), ownership, enforcement or disposition of such obligation or security will subject the
Borrower to net income tax in any jurisdiction other than its jurisdiction of



20









 







incorporation. Permitted Investments may not include obligations secured by real property,
including mortgage-backed securities. The Collateral Custodian may purchase or sell to itself or an
Affiliate, as principal or agent, the Permitted Investments described above.



     “Permitted Liens” means liens created pursuant to the Transaction Documents in favor
of the Administrative Agent, for the benefit of the Secured Parties.



     “Permitted Liquidation Balance” means the Aggregate Outstanding Principal Balance of
the Collateral Debt Obligations on the Closing Date, which amount is to be reset on January 1 of
each year thereafter.



     “Permitted Securitization Transaction” means any financing transaction undertaken by
the Issuer or an Affiliate of the Issuer or the Originator (with the Administrative Agent’s prior
written consent) that is secured, directly or indirectly, by the Related Property or any portion
thereof or interest therein, including any sale, lease, whole loan sale, asset securitization,
secured loan or other transfer.



     “Person” means an individual, partnership, corporation (including a statutory trust),
limited liability company, joint stock company, trust, unincorporated association, sole
proprietorship, joint venture, government (or any agency or political subdivision thereof) or other
entity.



     “PIK Obligation” means a Collateral Debt Obligation which provides for a portion of
the interest that accrues thereon to be added to the principal amount of such Collateral Debt
Obligation for some period of the time prior to such Collateral Debt Obligation requiring such
interest to be paid in cash, which cash payment shall be treated as Interest Collections at the
time it is received.



     “Plan Asset Regulation” means the U.S. Department of Labor regulation located at 29
C.F.R. Section 2510.3-101, or any successor regulation thereto, as in effect at the time of
reference, as modified by Section 3(42) of ERISA.



     “Plan Assets” means “plan assets” as defined in the Plan Asset Regulation.



     “Prepayment Notice” means a written notice, in the form of Exhibit E hereto,
delivered by the Borrower pursuant to Section 2.3 in connection with a prepayment (other
than a Mandatory Prepayment).



     “Prime Rate” means the rate publicly announced by Administrative Agent from time to
time as its prime rate in the United States, such rate to change as and when such designated rate
changes. The Prime Rate is not intended to be the lowest rate of interest charged by Administrative
Agent in connection with extensions of credit to debtors.



     “Principal Collections” means any and all Collections deposited into the Collection
Account which do not constitute Interest Collections, in each case received on or after the Cut-Off
Date, whether in the form of cash, checks, wire transfers, electronic transfers or any other form
of cash payment.



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     “Proceeds” means with respect to any Collateral, whatever is receivable or received
when such Collateral is sold, collected, liquidated, foreclosed, exchanged, or otherwise disposed
of, whether such disposition is voluntary or involuntary, including all rights to payment with
respect to any insurance relating to such Collateral.



     “Purchase Agreement” means that certain Purchase and Sale Agreement dated as of July
20, 2007 between the Borrower, as buyer and the Originator, as seller, as amended, modified,
supplemented or restated from time to time.



     “Purchased Amount” means, at any time, with respect to any Collateral Debt Obligation
in the Collateral that is a Revolving Obligation, the principal amount of the funded portion of
such Revolving Obligation sold to the Borrower pursuant to the Purchase Agreement, less the
cumulative Revolver Paydown Amounts received with respect to such Revolving Obligation since its
Cut-Off Date.



     “Qualified Institution” is defined in Section 5.4(a).



     “Rating Agency” means any rating agency that has been requested to issue a rating with
respect to the Commercial Paper Notes issued by a Lender.



     “Real Estate Obligation” means a Collateral Debt Obligation that is (a)(i)
underwritten primarily by a mortgage, deed of trust or similar lien on commercial real estate
(other than hotels, restaurants and casinos) or residential real estate and (ii) primary repayment
of the payment obligations thereof is through rental or other real estate related income or (b) a
loan or debt obligation which falls within the Moody’s industry classification “Buildings and Real
Estate”.



     “Records” means with respect to any Collateral Debt Obligations, all documents, books,
records and other information (including tapes, disks, punch cards and related property and rights)
maintained with respect to any item of Collateral and the related Obligors, other than the
Collateral Debt Obligation Documents, that the Originator or the Servicer have generated.



     “Recoveries” means with respect to any Collateral Debt Obligation, Proceeds of the
sale of any Related Property, Insurance Proceeds, and any other recoveries with respect to such
Collateral Debt Obligation and Related Property, and amounts representing late fees and penalties,
net of Liquidation Expenses and amounts, if any, received that are required to be refunded to the
Obligor on such Collateral Debt Obligation.



     “Reduced Interest Collections” means, in regard to Modified Collateral Debt
Obligations, as of any date of determination, the difference between (i) the cumulative amount of
interest due on such Modified Collateral Debt Obligations, from their respective Cut-Off Dates to
the applicable date of determination, calculated pursuant to the terms thereof in effect as of
their respective Cut-Off Dates, and (ii) the cumulative amount of interest due on such Modified
Collateral Debt Obligations, from their respective Cut-Off Dates to the applicable date of
determination, calculated pursuant to the terms thereof in effect immediately following the
applicable modification.



     “Regulatory Change” is defined in Section 2.11(a).



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     “Related Property” means with respect to a Collateral Debt Obligation, any property or
other assets of the Obligor thereunder pledged as collateral to secure the repayment of such
Collateral Debt Obligation.



     “Released Amounts” means, with respect to any payment or Collection received with
respect to any Collateral Debt Obligation on any Business Day (whether such payment or Collection
is received by the Servicer, the Originator or the Borrower), an amount equal to that portion of
such payment or collection constituting Retained Interest.



     “Reporting Date” means the date that is two Business Days prior to each Payment Date.



     “Repurchase Price” means, with respect to any Collateral Debt Obligation, as of any
date of determination, the greater of (a) the Outstanding Principal Balance of such Collateral Debt
Obligation, together with any accrued interest and Accreted Interest thereon, and (b) the Market
Value of such Collateral Debt Obligation, together with any accrued interest and Accreted Interest
thereon, as determined on such date.



     “Required Lenders” means at a particular time, Lenders with Funded Amounts in excess
of 50% of the aggregate Funded Amounts; provided that at any time there are not more than three
Lender Groups party hereto, “Required Lenders” shall mean all Lenders.



     “Required Principal Amortization Schedule” means the schedule attached as Schedule
VI hereto, as such schedule may be modified in accordance with the terms hereof.



     “Reserve Account” means an account established in accordance with Section
5.4(c) for the purpose of receiving deposits with respect to, and maintaining therein, the
Reserve Account Required Amount (including any amounts in excess of the Reserve Account Required
Amount, to the extent not distributed to the parties entitled thereto pursuant to Section
2.7) and, to the extent required pursuant to Section 2.7, to fund payments thereunder.



     “Reserve Account Required Amount” means, as of any date of determination, an amount
equal to the sum of (a) $1,000,000 and (b) the greater of (i) $1,000,000 and (ii) the sum of (A)
the aggregate Outstanding Principal Balance of all Delinquent Obligations included in the
Collateral on such date and (B) the equivalent amount of the Reduced Interest Collections in
regards to Modified Collateral Debt Obligations.



     “Responsible Officer” means as to the Borrower, the President, any Vice President or
the Treasurer of the Borrower, and as to any other Person, any officer of such Person with direct
responsibility for the administration of this Agreement and also, with respect to a particular
matter, any other officer to whom such matter is referred because of such officer’s knowledge of
and familiarity with the particular subject. The Borrower may designate other Responsible Officers
from time to time by notice to the Administrative Agent.



     “Retained Interest” means, with respect to each Collateral Debt Obligation, the
following interests, rights and obligations in such Collateral Debt Obligation and under the
associated Collateral Debt Obligation Documents, which are being retained by the Originator: (a)
all of the rights and obligations, if any, of the agent(s) solely in such capacity under the
documentation evidencing such Collateral Debt Obligation, (b) the applicable portion of the
interests, rights and



23









 







obligations under the documentation evidencing such Collateral Debt Obligation that relate to
such portion(s) of the indebtedness that is owned by a lender other than the Originator, and (c)
with respect to Revolving Obligations and Delayed Draw Term Obligations, the commitment, if any, to
make future advances.



     “Reuters Screen LIBOR01 Page” means the display page currently so designated on the
Moneyline Telerate Service or such other page as may be nominated as the information vendor (or
such other page as may replace that page on that service for the purpose of displaying comparable
rates or prices).



     “Revolver Paydown Amount” means each amount of Principal Collections received by the
Borrower on Revolving Obligations in the Collateral that is deposited in the Collection Account
pursuant to Sections 5.4(d)(ii) — (iv).



     “Revolving Obligation” means any loan with respect to which there is a commitment that
is fixed pursuant to the terms of the related Collateral Debt Obligation Documents and pursuant to
which amounts borrowed may be repaid and subsequently re-borrowed.



     “Revolving Obligation Payment Allocation Condition” means, with respect to any
Revolving Obligation in the Collateral, a condition that is satisfied if and for so long as such
Revolving Obligation is not a Delinquent Obligation, a Charged-Off Obligation or a Modified
Collateral Debt Obligation.



     “Revolving Period” means the period commencing on the Closing Date and ending on the
earlier of (a) the Maturity Date and (b) the third anniversary of the Closing Date.



     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., and any successor thereto.



     “Schedule of Collateral Debt Obligations” means, the Collateral Debt Obligations
listed on Schedule III hereto, and the information included therewith, as such schedule
shall be updated in connection with each Periodic Report, and may be further amended from time to
time to reflect the release of Collateral Debt Obligations or the inclusion of Collateral Debt
Obligations as provided in this Agreement.



     “Scheduled Payment” means, as of any Determination Date and with respect to any
Collateral Debt Obligation, each periodic payment (whether of principal, interest or both)
scheduled to be made by the Obligor thereof after such Determination Date under the terms of such
Collateral Debt Obligation.



     “Secured Party” means (i) the Administrative Agent, (ii) each Lender, (iii) each
Managing Agent and (iv) each Hedge Counterparty that is either a Lender or an Affiliate of a Lender
if that Affiliate executes a counterpart of this Agreement agreeing to be bound by the terms of
this Agreement applicable to a Secured Party.



     “Servicer” is defined in the Preamble.



     “Servicer’s Certificate” is defined in Section 7.21(c).



24









 





     “Servicer Potential Termination Event” means an event that, with lapse of time or
notice or both would become a Servicer Termination Event.



     “Servicer Termination Event” is defined in Section 7.12.



     “Servicing Fee” means for each Settlement Period or portion thereof, an amount equal
to the sum, for all Collateral Debt Obligations and all days in the Settlement Period, of the
product of (i) the Adjusted Market Value of each Collateral Debt Obligation as set forth in the
books and records of the Borrower for each date in the Settlement Period and (ii) the applicable
Servicing Fee Rate, computed on a 30/360 basis. For any Successor Servicer, the Servicing Fee shall
be determined in accordance with Section 7.14.



     “Servicing Fee Letter” means the letter agreement, dated as of the date hereof, in
respect of the Applicable Margin and the Servicing Fee Rate, among the Borrower, the Originator,
Deutsche Bank Securities Inc., as Arranger, and the Administrative Agent.



     “Servicing Fee Rate” is defined in the Servicing Fee Letter.



     “Servicing Records” means all documents, books, records and other information
(including tapes, disks and related property rights) prepared and maintained by the Servicer with
respect to the Collateral Debt Obligations and the related Obligors.



     “Servicing Standards” means the collection and servicing policies and procedures the
Servicer follows with respect to assets comparable to the Collateral Debt Obligations that it
services for itself, its Affiliates or others, which shall be policies and procedures that are
consistent with those policies and procedures as are customarily used by reasonable and prudent
servicers of national repute in connection with servicing of assets of the nature and of the
character of the Collateral Debt Obligations, giving due consideration to the Lenders’ and Hedge
Counterparties’ reliance on the Servicer, and are consistent with the Credit and Collection Policy.



     “Settlement Period” means each three month period ending on the last day of each
March, June, September and December or, with respect to the initial Settlement Period, the period
from the Closing Date to September 30, 2007, or with respect to the final Payment Date hereunder,
the period from the last day of the most recently ended Settlement Period to such Payment Date.



     “Solvent” means as to any Person at any time, having a state of affairs such that all
of the following conditions are met: (a) the fair value of the property owned by such Person is
greater than the amount of such Person’s liabilities (including disputed, contingent and
unliquidated liabilities) as such value is established and liabilities evaluated for purposes of
Section 101(32) of the Bankruptcy Code; (b) the present fair salable value of the property owned by
such Person in an orderly liquidation of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they become absolute and
matured; (c) such Person is able to realize upon its property and pay its debts and other
liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the
normal course of business; (d) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities
mature; and (e) such Person is



25









 







not engaged in business or a transaction, and is not about to engage in a business or a
transaction, for which such Person’s property would constitute unreasonably small capital.



     “Stated Maturity” means, with respect to any Collateral Debt Obligation, the maturity
date specified with respect to such Collateral Debt Obligation (subject to any business day
convention specified under the applicable Collateral Debt Obligation Documents).



     “Structuring Fee Letter” means the letter agreement, dated as of the date hereof, in
respect of the structuring fee and certain expenses, among the Borrower, the Originator, Deutsche
Bank Securities Inc., as Arranger, and the Administrative Agent.



     “Successor Servicer” is defined in Section 7.13(a).



     “Tape” is defined in Section 7.18(b)(ii).



     “Target Principal Balance” means the amount corresponding to each Payment Date
specified in the Required Principal Amortization Schedule.



     “Taxes” means any present or future taxes, levies, imposts, duties, charges,
assessments or fees of any nature (including interest, penalties, and additions thereto) that are
imposed by any Government Authority.



     “Termination Notice” is defined in Section 7.12.



     “Term Obligation” means a loan that is a closed-end extension of credit by the
Originator to an Obligor which may be fully funded or partially funded at the closing thereof, and
which provides for full amortization of the principal thereof prior to or upon maturity.



     “Third Party Claim” is defined in Section 9.3.



     “Transaction Documents” means this Agreement, the Purchase Agreement, the Account
Control Agreement, the Lock-Box Agreement, any UCC financing statements filed pursuant to the terms
of this Agreement, and any additional document, letter, fee letter, certificate, opinion, agreement
or writing the execution of which is necessary or incidental to carrying out the terms of the
foregoing documents.



     “Transfer Date” is defined in the Purchase Agreement.



     “Transition Costs” means the reasonable costs and expenses incurred by the Backup
Servicer in transitioning to Servicer; provided that the Administrative Agent’s consent shall be
required if such Transition Costs exceed $50,000 in the aggregate.



     “UCC” means the Uniform Commercial Code as from time to time in effect in the
specified jurisdiction or, if no jurisdiction is specified, the State of New York.



     “Underlying Note” means the promissory note of an Obligor evidencing a Collateral Debt
Obligation.



26









 





     “United States” means The United States of America.



     “Violation” is defined in Section 4.1(q).



     “Wells Fargo” means Wells Fargo Bank, National Association, or any permitted successor
thereto.



     Section 1.2 Other Terms.



     All accounting terms 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 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:



          (i) the singular number includes the plural number and vice versa;




          (ii) 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 Document;




          (iii) reference to any gender includes each other gender;




          (iv) “including” means “including without limitation”;




          (v) 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




          (vi) 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 in effect and
constituting the substantive amendment, modification, codification, replacement or reenactment of
such section or other provision.




27









 








ARTICLE II

ADVANCES




     Section 2.1 Initial Advances.



     (a) Initial Advances. Subject to the terms and conditions hereof, each Lender will
make, on the Closing Date, an advance (each, an “Initial Advance” and collectively, the
“Initial Advances”) to the Borrower in an amount not to exceed such Lender’s Funded Amount.
Except as set forth in Section 2.2, any amount borrowed under this Section 2.1 and
subsequently repaid or prepaid may not be reborrowed. Subject to Sections 2.3 and
2.4, all amounts owed hereunder with respect to the Advances shall be paid in full no later
than the Maturity Date. Except as set forth in Section 2.2, no Lender shall have any
further obligation to fund any Advances hereunder after giving effect to the funding of such
Lender’s Initial Advance on the Closing Date. Notwithstanding the foregoing, each Lender’s
obligation to fund the Initial Advances shall automatically terminate at 5:00 p.m., New York City
time, on the date that is three Business Days after the effective date of this Agreement, if the
Closing Date shall not have occurred by such time.



     (b) Borrowing Mechanics for the Initial Advances. In order to borrow the Initial
Advances, the Borrower (or the Servicer on its behalf) shall deliver to the Administrative Agent
and the Collateral Custodian a Periodic Report and Servicer’s Certificate no later than 12:00 noon
(New York City time) one Business Day prior to the Closing Date. On or before the Closing Date,
each Managing Agent shall request the Lender in its Lender Group to make the Initial Advance, and
such Lender shall make the Initial Advance. Each Lender making an Initial Advance hereunder shall
make such Advance available to the Administrative Agent not later than 12:00 p.m. (New York City
time) on the Closing Date, by wire transfer of same day funds in Dollars, at the Administrative
Agent’s principal office. Upon satisfaction or waiver of the conditions precedent specified in
Article III, the Administrative Agent shall make the proceeds of the Initial Advances
available to the Borrower on the Closing Date by causing an amount of same day funds in Dollars
equal to the proceeds of all such Initial Advances received by the Administrative Agent from the
applicable Lenders to be credited to the account of the Borrower at the Administrative Agent’s
principal office or to such other account as may be designated in writing to the Administrative
Agent by the Borrower.



     Section 2.2 Additional Advances.



     During the Revolving Period, the Borrower may, at its option, request the Lenders to make
advances of funds in addition to the Initial Advances made pursuant to Section 2.1 (each,
an “Additional Advance” and collectively, the “Additional Advances”). No Lender
shall be obligated to fund an Additional Advance.



     Section 2.3 Prepayments.



     From time to time, the Borrower may prepay any portion or all of the Advances Outstanding
(from amounts on deposit in the Collection Account or otherwise available to the Borrower), by
delivering to the Administrative Agent, the Collateral Custodian and each Managing Agent a
Prepayment Notice and a Periodic Report by not later than 3:00 p.m. on the



28









 







day that is at least one Business Day prior to the date of such Prepayment. If any Prepayment
Notice is given, the amount specified in such Prepayment Notice shall be due and payable on the
date specified therein. Any partial prepayment by the Borrower of Advances pursuant to this
Section 2.3 shall be in a minimum amount of $1,000,000.



     Section 2.4 Principal Repayments.



     (a) The Advances Outstanding shall be due and payable on the Maturity Date. In addition, and
without limiting the effect of Section 2.3, Advances Outstanding shall be repaid on each
Payment Date by the amount of all Principal Collections received during the related Settlement
Period that are not applied pursuant to Section 2.7(b)(i) or Section 2.3 (each such
payment, a “Mandatory Prepayment”).



     (b) All repayments of any Advance or any portion thereof shall be made together with payment
of (i) all Interest accrued and unpaid on the amount repaid to (but excluding) the date of such
repayment and (ii) any other amounts payable by the Borrower under or with respect to any Hedge
Transaction.



     (c) In the event that a Collateral Debt Obligation in the Collateral becomes or is discovered
to be an Ineligible Collateral Debt Obligation, no later than 15 Business Days after the earlier of
(A) knowledge thereof on the part of the Borrower and (B) receipt by the Borrower of written notice
thereof given by the Administrative Agent, the Servicer or any Managing Agent, the Borrower shall
repay Advances Outstanding by depositing in the Collection Account an amount equal to the
Repurchase Price of such Ineligible Collateral Debt Obligation; provided that no such repayment
shall be required to be made with respect to such Ineligible Collateral Debt Obligation (and such
Collateral Debt Obligation shall cease to be an Ineligible Collateral Debt Obligation) if, on or
before the expiration of such 15 Business Day period, the representations and warranties in
Section 4.1(r) with respect to such Ineligible Collateral Debt Obligation shall be made
true and correct in all material respects with respect to such Ineligible Collateral Debt
Obligation as if such Ineligible Collateral Debt Obligation had been transferred to the Borrower on
such day.



     Section 2.5 The Notes.



     (a) Upon the request of any Managing Agent, the Advances made by the Lenders in the related
Lender Group hereunder shall be evidenced by a duly executed promissory note of the Borrower
payable to each Managing Agent, on behalf of the applicable Lenders in the related Lender Group, in
substantially the form of Exhibit B hereto (collectively, the “Notes”). The Notes
shall be dated the Closing Date and shall be in a maximum principal amount equal to the sum of the
Funded Amounts of the Lenders in each Lender Group and shall otherwise be duly completed.



     (b) Each Managing Agent is hereby authorized to enter on a schedule attached to its Notes the
following notations (which may be computer generated) with respect to each Advance made by each
Lender in the applicable Lender Group: (i) the date and principal amount thereof and (ii) each
payment and repayment of principal thereof, and any such recordation shall constitute prima facie
evidence of the accuracy of the information so recorded. The failure of a



29









 







Managing Agent to make any such notation on the schedule attached to the applicable Note shall
not limit or otherwise affect the obligation of the Borrower to repay the Advances in accordance
with their respective terms as set forth herein.



     Section 2.6 Interest Payments.



     (a) Interest shall accrue on each Advance at the applicable Interest Rate plus the Applicable
Margin. The Borrower shall pay Interest on the unpaid principal amount of each Advance for the
period commencing on and including the date such Advance is funded to the Borrower until but
excluding the date that such Advance shall be repaid in full by the Borrower to the Administrative
Agent. Interest shall accrue during each Settlement Period on the Advances Outstanding during such
Settlement Period and shall be payable on each Payment Date, unless earlier paid.



     (b) Each Managing Agent shall determine (in accordance with information provided by the
relevant Lender in the related Lender Group, as applicable) its estimate of the Interest (including
unpaid Interest, if any due and payable on a prior Payment Date) to be paid to the Lenders in the
applicable Lender Group on each Payment Date for the related Settlement Period and shall advise the
Administrative Agent and the Servicer, on behalf of the Borrower, and the Collateral Custodian,
thereof five Business Days prior to each Payment Date. In the event that any Managing Agent’s or
Lender’s, as applicable, estimate of the Interest payable for a related Settlement Period is
different from the actual amount of Interest for such Settlement Period, the Managing Agent shall
increase or decrease its estimate of Interest for the next succeeding Settlement Period by the
amount of such difference, plus interest thereon at such rate.



     (c) The Administrative Agent shall notify the Borrower if any Managing Agent, on behalf of the
applicable Lenders, shall notify the Administrative Agent that a Eurodollar Disruption Event as
described in clause (a) of the definition of “Eurodollar Disruption Event” has occurred.



     (d) Anything in this Agreement or the other Transaction Documents to the contrary
notwithstanding, if at any time the rate of interest payable by any Person under this Agreement and
the Transaction Documents exceeds the highest rate of interest permissible under Applicable Law
(the “Maximum Lawful Rate”), then, so long as the Maximum Lawful Rate would be exceeded,
the rate of interest under this Agreement and the Transaction Documents shall be equal to the
Maximum Lawful Rate. If at any time thereafter the rate of interest payable under this Agreement
and the Transaction Documents is less than the Maximum Lawful Rate, such Person shall continue to
pay interest under this Agreement and the Transaction Documents at the Maximum Lawful Rate until
such time as the total interest received from such Person is equal to the total interest that would
have been received had Applicable Law not limited the interest rate payable under this Agreement
and the Transaction Documents. In no event shall the total interest received by a Lender under this
Agreement and the Transaction Documents exceed the amount that such Lender could lawfully have
received, had the interest due under this Agreement and the Transaction Documents been calculated
since the Closing Date at the Maximum Lawful Rate.



     (e) The Borrower shall pay the fees specified hereunder and in the other Transaction Documents
in accordance with Section 2.7.



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     Section 2.7 Settlement Procedures.



     On each Payment Date the Servicer on behalf of the Borrower shall pay to the following
Persons, for receipt by no later than 3:00 p.m. (New York City time) from the Collection Account,
to the extent of available funds, the following amounts in the following order of priority:



     (a) To the extent of Interest Collections plus, with respect to clauses First through
Sixth below, any amounts on deposit in the Reserve Account:




     (i) First, to the Backup Servicer (including in its capacity as Successor Servicer, if
applicable), in an amount equal to any accrued and unpaid currently due Backup Servicer Fee,
all unpaid Backup Servicer Fees due from a prior Payment Date, any unpaid Backup Servicer
Expenses and amounts due to the Backup Servicer as an Indemnified Party, and any Transition
Costs, for the payment thereof; provided that the amount of expenses other than Transition
Costs payable under this clause First shall not exceed $20,000 in the aggregate with
respect to such Payment Date;




     (ii) Second, to the Collateral Custodian in an amount equal to any accrued and unpaid
currently due Custodial Fee, all unpaid Custodial Fees due from a prior Payment Date, all
unpaid Custodial Expenses, and any other amounts due to the Collateral Custodian as an
Indemnified Party, for the payment thereof; provided that the amount of Custodial Fees and
Custodial Expenses payable under this clause Second shall not exceed $10,000 in the
aggregate with respect to such Payment Date;




     (iii) Third, (A) to the initial Servicer, in an amount equal to its accrued and unpaid
Servicing Fee and (B) to any Successor Servicer, the accrued and unpaid Servicing Fee and
Market Servicing Fee Differential to the end of the preceding Settlement Period, for the
payment thereof; provided that the amount of Market Servicing Fee Differential payable in
any 12-month period under this clause Third shall not exceed 0.25% of the weighted
average aggregate Adjusted Market Value of all Collateral Debt Obligations in the Collateral
as of the first day of each month in such period;




     (iv) Fourth, pro rata to each Lender in an amount equal to any accrued and unpaid
Interest, for the payment thereof;




     (v) Fifth, pro rata to each Lender in an amount necessary to reduce the Advances
Outstanding by the Outstanding Principal Balance of all Charged-Off Obligations in the
Collateral, less any amounts previously paid with respect to such Charged-Off
Obligations pursuant to this clause Fifth;




     (vi) Sixth, to the Reserve Account, an amount, if necessary, required for the amount on
deposit in the Reserve Account to equal the Reserve Account Required Amount;




     (vii) Seventh, to each Lender in an amount necessary to reduce the Advances Outstanding
by the excess (if any) of (A) the Advances Outstanding on such Payment



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Date after giving effect to the application of Principal Collections pursuant to
Section 2.7(b), over (B) the Target Principal Balance for such Payment Date;




     (viii) Eighth, pro rata, (x) to the extent not previously paid pursuant to clause
First above, any amounts due to the Backup Servicer, and (y) to the extent not
previously paid pursuant to clause Second above, any amounts due to the Collateral
Custodian, in each case together with accrued interest thereon;




     (ix) Ninth, to the Servicer, (x) all Indemnified Amounts and (y) reimbursement of all
expenses payable to it pursuant to Section 7.7 and any other amounts then due to it
under this Agreement, for the payment thereof; and




     (x) Tenth, all remaining amounts shall be distributed to the Borrower.



     (b) To the extent of available Principal Collections:




     (i) First, to the parties listed above, any amount remaining unpaid pursuant to clauses
First through Fourth under clause (a) above, in accordance with the
priority set forth thereunder;




     (ii) Second, pro rata to the Lenders, in an amount equal to the lesser of (x) the
Mandatory Prepayment for such Payment Date and (y) such amount as is necessary to reduce the
Advances Outstanding to zero, for the payment thereof;




     (iii) Third, to the Administrative Agent, the Lenders, the Affected Parties and the
Indemnified Parties (other than the Servicer, if the Servicer is an Affiliate of the
Borrower), pro rata in accordance with the amount owed to such Person under this clause
Third, all other amounts then due under this Agreement, for the payment thereof;




     (iv) Fourth, to the extent not paid by the Servicer, to the Backup Servicer, to the
Collateral Custodian, and to any Successor Servicer, as applicable, pro rata in accordance
with the amount owed to such Person under this clause Fourth, in an amount equal to
any accrued and unpaid Backup Servicer Expenses, Custodial Expenses, Market Servicing Fee
Differential, Servicing Fee, Transition Costs and Indemnified Amounts, for the payment
thereof;




     (v) Fifth, to the Servicer (if an Affiliate of the Borrower), (x) all Indemnified
Amounts and (y) reimbursement of all expenses payable to it pursuant to Section 7.7
and any other amounts then due to it under this Agreement, for the payment thereof; and




     (vi) Sixth, all remaining amounts shall be distributed to the Borrower.



     Section 2.8 Collections and Allocations.



     (a) The Borrower or the Servicer on behalf of the Borrower shall promptly (but in no event
later than two Business Days after the receipt thereof) identify any Collections received by the
Borrower or the Servicer in respect of the Collateral Debt Obligations other than in accordance
with Section 7.4(b) as being on account of Interest Collections or Principal



32









 







Collections and deposit all such Interest Collections or Principal Collections received
directly by it into the Collection Account. The Servicer on behalf of the Borrower shall make such
deposits or payments on the date indicated by wire transfer, in immediately available funds.



     (b) Until the occurrence of an Event of Default, to the extent there are uninvested amounts
deposited in the Collection Account or the Reserve Account, all such amounts shall be invested in
Permitted Investments selected by the Servicer on behalf of the Borrower that mature no later than
the Business Day immediately preceding the next Payment Date; and from and after (i) the earlier of
knowledge by, or notice having been delivered to, the Servicer of the occurrence of an Event of
Default or (ii) the appointment of a Successor Servicer, to the extent there are uninvested amounts
deposited in the Collection Account or the Reserve Account, all such amounts may be invested in
Permitted Investments selected by the Administrative Agent that mature no later than the next
Business Day. Absent direction from the Servicer or the Administrative Agent, as applicable, such
amounts shall be invested in Permitted Investments described in clause (f) of the
definition thereof. Any earnings (and losses) thereon shall be for the account of the Borrower.



     (c) Notwithstanding anything to the contrary contained herein or in any other Transaction
Document, all payments required to be made by the Borrower hereunder shall be made by the Borrower,
or the Servicer acting on its behalf, directing the Collateral Custodian to make such payments. The
Collateral Custodian shall make such payments to the Secured Parties and any other Persons pursuant
to this Agreement based solely on the information set forth in instructions, including the Periodic
Report, furnished by the Borrower or the Servicer acting on behalf of the Borrower, and shall be
entitled to conclusively rely on such information and reports, and on the calculations contained
therein when making such payments.



     Section 2.9 Payments, Computations, Etc.



     (a) Unless otherwise expressly provided herein, all amounts to be paid or deposited by the
Borrower or the Servicer on behalf of the Borrower hereunder shall be paid or deposited in
accordance with the terms hereof no later than 3:00 p.m. (New York City time) on the day when due
in lawful money of the United States in immediately available funds to the Agent’s Account. The
Borrower shall, to the extent permitted by law, pay to the Secured Parties interest on all amounts
not paid or deposited when due hereunder at 2.0% per annum above the Base Rate, payable on demand;
provided that such interest rate shall not at any time exceed the Maximum Lawful Rate. All
computations of interest and all computations of the Interest Rate (other than Base Rate
calculations) shall be made on the basis of a year of 360 days for the actual number of days
(including the first but excluding the last day) elapsed. All computations of interest calculated
with reference to the Base Rate and calculations of fees hereunder (other than the Servicing Fee)
shall be made on the basis of a year of 365/366 days for the actual number of days (including the
first but excluding the last day) elapsed.



     (b) Whenever any payment hereunder shall be stated to be due on a day other than a Business
Day, such payment shall be made on the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of payment of Interest, other interest or any fee
payable hereunder, as the case may be.



33









 





     (c) All payments hereunder shall be made without set-off or counterclaim and in such amounts
as may be necessary in order that all such payments shall not be less than the amounts otherwise
specified to be paid under this Agreement (after withholding for or on account of any Taxes).



     Section 2.10 Lien Release Dividend.



     (a) Notwithstanding any provision contained in this Agreement to the contrary, provided there
is not then existing a Default or an Event of Default, on a Lien Release Dividend Date, the
Borrower may dividend to the Originator all or a portion of the Collateral Debt Obligations in the
Collateral (the “Lien Release Dividend”), subject to the following terms and conditions:




     (i) the Borrower shall have given the Administrative Agent (with a copy to the
Collateral Custodian) at least one Business Day’s prior written notice of their intent to
effectuate a Lien Release Dividend, unless such notice is waived by the Administrative
Agent;




     (ii) any Lien Release Dividend shall only be in connection with a Permitted
Securitization Transaction;




     (iii) after giving effect to the Lien Release Dividend and the transfer to the
Originator of the applicable Collateral Debt Obligations or portions thereof on the Lien
Release Dividend Date, (A) the representations and warranties contained in Section
4.1 shall continue to be true and correct, except to the extent relating to an earlier
date and (B) neither a Default nor Event of Default shall have resulted;




     (iv) such Lien Release Dividend must be in compliance with Applicable Law and may not
(i) be made with the intent to hinder, delay or defraud any creditor of the Borrower or (ii)
leave the Borrower, immediately after giving effect to the Lien Release Dividend, (x) not
Solvent, (y) with insufficient funds to pay its obligations as and when they become due or
(z) with inadequate capital for its present and anticipated business and transactions;




     (v) on or prior to the Lien Release Dividend Date, the Borrower shall have (A)
delivered to the Administrative Agent a list specifying all Collateral Debt Obligations or
portions thereof to be transferred pursuant to such Lien Release Dividend and (B) obtained
all authorizations, consents and approvals required to effectuate the Lien Release Dividend;




     (vi) a portion of a Collateral Debt Obligation may be transferred pursuant to a Lien
Release Dividend; provided that (A) such transfer does not have an adverse effect on the
portion of the Collateral Debt Obligation remaining as a part of the Collateral, any other
Related Property or the Secured Parties, (B) the Collateral Debt Obligation File for such
portion of the Collateral Debt Obligation remaining as a part of the Collateral has been
amended to contain customary pro rata sharing, intercreditor and, if applicable,
subordination provisions, to the extent such provisions were not previously included
therein, and (C) other than in the case of a Noteless Collateral Debt Obligation, a new



34









 







promissory note for the portion of the Collateral Debt Obligation remaining as a part
of the Collateral has been executed by the Obligor, and the original thereof has been
endorsed in blank or to the Administrative Agent on behalf of the Secured Parties and
delivered to the Collateral Custodian; and




     (vii) on the related Lien Release Dividend Date, the Collateral Custodian, on behalf of
the Administrative Agent, shall have received into the Collection Account, in immediately
available funds, an amount equal to (A) the Repurchase Price of the Collateral Debt
Obligations, or portions thereof, subject to the Lien Release Dividend, plus (B) an
aggregate amount equal to the sum of all other amounts due and owing to the Administrative
Agent, the Collateral Custodian and the Indemnified Parties, as applicable, under this
Agreement and the other Transaction Documents, to the extent accrued to such date and to
accrue to the next Payment Date, in each case, to the extent attributable to the Collateral
to be transferred by the Borrower pursuant to this Section 2.10.



     (b) In connection with the Lien Release Dividend, there shall be sold and assigned to the
Borrower, without recourse, representation or warranty, all of the right, title and interest of the
Administrative Agent on behalf of the Secured Parties in, to and under the Collateral Debt
Obligations or portions thereof so transferred (together with, in the case of the transfer of the
Collateral Debt Obligations but not portions thereof, any Related Property) and such Collateral
Debt Obligations or portions thereof so transferred (together with, in the case of the transfer of
the but not portions thereof, any Related Property) shall be released from the Lien of this
Agreement (subject to the requirements of Section 2.10(a)(vii) above).



     (c) The Borrower hereby agrees to pay the reasonable legal fees and expenses of the
Administrative Agent, the Collateral Custodian and the other Secured Parties in connection with any
Lien Release Dividend (including, but not limited to, expenses incurred in connection with the
release of the Lien of the Administrative Agent on behalf of the Secured Parties and any other
party having an interest in the Collateral Debt Obligations in connection with such Lien Release
Dividend).



     (d) In connection with any Lien Release Dividend, on the related Lien Release Dividend Date,
the Collateral Custodian at the written direction of the Administrative Agent shall, upon all
conditions precedent to such Lien Release Dividend having been met, and at the expense of the
Borrower (A) execute such instruments of release with respect to the Collateral Debt Obligations or
portions thereof to be transferred to the Borrower (together with, in the case of the transfer of
the Collateral Debt Obligations, any Related Property, and in the case of a portion of a Collateral
Debt Obligations, the Related Property with respect to such portion), in recordable form if
necessary, in favor of the Borrower as the Borrower may reasonably request, (B) deliver any
Collateral Debt Obligations or portions thereof to be transferred to the Borrower (together with,
in the case of the transfer of the Collateral Debt Obligations, any Related Property, and in the
case of a portion of a Collateral Debt Obligation, the Related Property with respect to such
portion) in its possession to the Borrower and (C) otherwise, at and in accordance with the written
direction of the Borrower (to the extent not inconsistent with the aforementioned direction of the
Secured Parties) take such actions, as are necessary and appropriate to release the Lien of the
Administrative Agent on behalf of the Secured Parties on the Collateral Debt



35









 







Obligations or portions thereof to be transferred to the Borrower (together with, in the case
of the transfer of the Collateral Debt Obligations or portions thereof, any Related Property) and
release and deliver to the Borrower such Collateral Debt Obligations or portions thereof to be
transferred to the Borrower (together with, in the case of the transfer of the Collateral Debt
Obligations, any Related Property, and in the case of a portion of a Collateral Debt Obligation,
the Related Property with respect to such portion).



     Section 2.11 Increased Costs; Capital Adequacy; Illegality.



     (a) If after the date hereof, any Managing Agent, Lender or any Affiliate thereof (each of
which, an “Affected Party”) shall be charged any fee, expense or increased cost
(“Increased Costs”) on account of the adoption of any applicable law, rule or regulation
(including any applicable law, rule or regulation regarding capital adequacy), any accounting
principles or any change in any of the foregoing, or any change in the interpretation or
administration thereof by any governmental authority, the Financial Accounting Standards Board, any
central bank or any comparable agency charged with the interpretation or administration thereof, or
compliance with any request or directive (whether or not having the force of law) of any such
authority or agency (a “Regulatory Change”): (i) that subjects any Affected Party to any
charge or withholding on or with respect to any Transaction Document or an Affected Party’s
obligations under a Transaction Document, or on or with respect to the Advances, or changes the
basis of taxation of payments to any Affected Party of any amounts payable under any Transaction
Document (except for changes in the rate of tax on the overall net income of an Affected Party or
taxes excluded by Section 2.12); (ii) that imposes, modifies or deems applicable any
reserve, assessment, insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of an Affected Party, or credit extended by an Affected Party
pursuant to a Transaction Document; or (iii) that imposes any other condition the result of which
is to increase the cost to an Affected Party of performing its obligations under a Transaction
Document, or to reduce the amount of any sum received or receivable by an Affected Party under a
Transaction Document or to require any payment calculated by reference to the amount of interests
or loans held or interest received by it, then, upon demand by the applicable Managing Agent, the
Borrower shall pay to the Administrative Agent, for payment to the applicable Managing Agent for
the benefit of the relevant Affected Party, such amounts charged to such Affected Party or such
amounts to otherwise compensate such Affected Party for such Increased Costs.



     (b) In determining any amount provided for in Section 2.11(a), the Affected Party may
use any reasonable averaging and attribution methods. Any Affected Party making a claim under this
section shall submit to the Borrower a certificate as to such additional or increased cost or
reduction, which certificate shall calculate in reasonable detail any such charges and shall be
conclusive absent demonstrable error.



     (c) If any Lender, or any Managing Agent on its behalf, notifies the Borrower that it requests
compensation in connection with the incurrence of Increased Costs pursuant to Section
2.11(a), then such Lender shall use reasonable efforts to designate a different lending office
for funding or booking its Advances hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section
2.11(a) in the



36









 







future and (ii) would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such designation or assignment.



     Section 2.12 Taxes.



     (a) All payments made by the Borrower in respect of any Advance and all payments made by the
Borrower under this Agreement will be made free and clear of and without deduction or withholding
for or on account of any Taxes, unless such withholding or deduction is required by law. In such
event, the Borrower shall pay to the appropriate taxing authority any such Taxes required to be
deducted or withheld and the amount payable to each Lender or the Administrative Agent (as the case
may be) will be increased (such increase, the “Additional Amount”) such that every net
payment made under this Agreement after deduction or withholding for or on account of any Taxes
(including any Taxes on such increase) is not less than the amount that would have been paid had no
such deduction or withholding been deducted or withheld. The foregoing obligation to pay Additional
Amounts, however, will not apply with respect to, and the term “Additional Amount” shall be deemed
not to include (i) net income, franchise Taxes or any other Taxes imposed on or measured in whole
or in part by net income, net assets, capital or net worth of any Lender, any Managing Agent or the
Administrative Agent, respectively, with respect to payments (including, without limitation,
principal, interest and fees) required to be made by the Borrower or Servicer on behalf of the
Borrower under this Agreement or otherwise, by a taxing jurisdiction in which such Lender, such
Managing Agent or the Administrative Agent is organized or incorporated, has its principal or an
applicable lending office, conducts business, has a present or former connection, which is the
basis for such taxation, or as of the Closing Date pays Taxes (as the case may be), (ii) any branch
profits taxes imposed by the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located and (iii) in the case of a Foreign Lender, any
withholding tax, other Tax or other amount that is imposed on amounts payable (including, without
limitation, principal, interest or fees) to such Foreign Lender, at the time such Foreign Lender
becomes a party, attributable to such Foreign Lender’s failure or inability for whatever reason to
comply with Section 2.12(d) (including the inability to comply with such Section under
Applicable Law). If a Lender, any Managing Agent or the Administrative Agent pays any Taxes in
respect of which the Borrower is obligated to pay Additional Amounts under this Section
2.12(a), the Borrower shall promptly reimburse such Lender or Administrative Agent in full.



     (b) The Borrower will indemnify each Lender, each Managing Agent and the Administrative Agent
for the full amount of Taxes in respect of which the Borrower is required to pay Additional Amounts
(including any Taxes imposed by any jurisdiction on such Additional Amounts) actually paid by such
Lender, Managing Agent or the Administrative Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with respect thereto (other than
such liabilities (x) for which the relevant party shall have already been indemnified or repaid or
(y) that are attributable to the applicable Lender’s, Managing Agent’s or the Administrative
Agent’s gross negligence or willful misconduct or failure to comply with the terms of this
Agreement, including, without limitation, the failure to deliver the documents required by
Sections 2.12(d) and (h)); provided that such Lender, Managing Agent or the
Administrative Agent, as appropriate, making a demand for indemnity payment, shall



37









 







provide the Borrower, at its address set forth under its name on the signature pages hereof,
with a certificate from the relevant taxing authority or, to the extent such certificate is not
available after reasonably diligent inquiry, from a Responsible Officer of such Lender, Managing
Agent or the Administrative Agent stating or otherwise evidencing that such Lender, Managing Agent
or the Administrative Agent has made payment of such Taxes and will provide a copy of or extract
from documentation, if available after reasonably diligent inquiry, furnished by such taxing
authority evidencing assertion or payment of such Taxes. This indemnification shall be made within
20 days from the date such Lender, Managing Agent or the Administrative Agent (as the case may be)
makes written demand therefor and provides the documentation set forth in this Section
2.12(b).



     (c) Within 30 days after the date of any payment by the Borrower of any Taxes, the Borrower
will furnish to the Administrative Agent, the Managing Agent or the Lender, as applicable, at its
address set forth under its name on the signature pages hereof, appropriate evidence of payment
thereof.



     (d) If a Lender (including any participant) is not a United States Person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. federal income tax purposes (each such Lender
being sometimes referred to as a “Foreign Lender”), such Lender shall, to the extent that
it may then do so under Applicable Law, deliver to the Borrower with a copy to each of the
Collateral Custodian and the Administrative Agent (i) on or prior to the Closing Date, or, if
later, the date on which such Lender becomes a Lender hereof, and thereafter at the reasonable
request by the Borrower, two (or such other number as may from time to time be prescribed by
Applicable Laws) duly completed copies of IRS Form W-8ECI, Form W-8IMY (with the appropriate
attachments) or Form W-8BEN or any successor forms or other certificates or statements that may be
required from time to time by the relevant United States taxing authorities or Applicable Laws, as
appropriate, to permit the Borrower to make any and all payments (including, without limitation,
principal, interest and fees) hereunder for the account of such Lender, as the case may be, without
deduction or withholding of United States federal income or similar Taxes and (ii) upon the
obsolescence of or after the occurrence of any event requiring a change in, any form or certificate
previously delivered pursuant to this Section 2.12(d), two copies (or such other number as
may from time to time be prescribed by Applicable Laws) of such additional, amended or successor
forms, certificates or statements as may be required under Applicable Laws to permit the Borrower
to make payments (including, without limitation, principal, interest and fees) hereunder for the
account of such Lender, without deduction or withholding of United States federal income or similar
Taxes. If such Lender fails to deliver such forms in accordance with the requirements of this
Section 2.12(d), then the Borrower or the Servicer may withhold from any payment to such
Lender an amount equivalent to the applicable withholding tax or other Tax imposed with respect to
such payment and the Borrower shall not be liable to pay (or indemnify such Lender with respect to)
any Taxes in respect to such withholding.



     (e) Within 30 days of the written request of the Borrower therefor, the Administrative Agent,
the Managing Agent or the Lender, as appropriate, shall execute and deliver to the Borrower such
certificates, forms or other documents that can be furnished after reasonably diligent inquiry
consistent with the facts and that are reasonably necessary to assist the Borrower in applying for
refunds of Taxes remitted hereunder; provided that the Administrative Agent, the



38









 







Managing Agent and the Lender shall not be required to deliver such certificates forms or
other documents if in their respective reasonable discretion it is determined in good faith that
the delivery of such certificate, form or other document would have a material adverse effect on
the Administrative Agent, the Managing Agent or the Lender and provided further that the Borrower
shall reimburse the Administrative Agent, the Managing Agent or the Lender for any reasonable
expenses incurred in the delivery of such certificate, form or other document.



     (f) In the event that the Borrower is obligated to make an indemnification payment pursuant to
this Section 2.12 and the recipient receives a refund of, or credit to, Taxes with respect
to which the Borrower made an indemnification payment, the recipient promptly shall remit the
amount of such refund or credit to the Borrower.



     (g) In the event that the Borrower becomes obligated to make an indemnification payment
pursuant to this Section 2.12 to any Lender, or becomes obligated to pay Additional Amounts
or increased Additional Amounts to any Lender as a result of changes in the tax laws after the date
hereof or as a result of changes in the tax law after the date of an assignment pursuant to
Article XI, the Borrower may request that such Lender designate an alternative applicable
lending office in order to avoid the need for any such indemnification or Additional Amount payment
which may thereafter accrue. Such Lender shall use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its lending office, if
such change would not, in the reasonable determination of such Lender, cause such Lender to be in
violation of any applicable law, regulation, treaty or guideline, cause such Lender to incur any
additional material costs or expenses, or otherwise, in the reasonable determination of such
Lender, be materially disadvantageous to such Lender.



     (h) Each Lender (including each participant) that is not a Foreign Lender shall deliver to the
Borrower with a copy to each of the Collateral Custodian and the Administrative Agent (i) on or
prior to the Closing Date, or, if later, the date on which such Lender becomes a Lender hereof, and
thereafter at the reasonable request by the Borrower, two (or such other number as may from time to
time be prescribed by Applicable Laws) duly completed copies of Internal Revenue Service form W-9
or any successor forms or other certificates or statements that may be required from time to time
by the relevant United States taxing authorities or Applicable Laws, as appropriate, to permit the
Borrower to make any and all payments (including, without limitation, principal, interest and fees)
hereunder for the account of such Lender, as the case may be, without deduction or withholding of
United States federal backup withholding tax or similar Taxes and (ii) upon the obsolescence of or
after the occurrence of any event requiring a change in, any form or certificate previously
delivered pursuant to this Section 2.12(h), two copies (or such other number as may from
time to time be prescribed by Applicable Laws) of such additional, amended or successor forms,
certificates or statements as may be required under Applicable Laws to permit the Borrower to make
payments (including, without limitation, principal, interest and fees) hereunder for the account of
such Lender, without deduction or withholding of United States federal backup withholding tax or
similar Taxes. If such Lender fails to deliver such forms, then the Borrower or the Servicer may
withhold from any payment to such Lender an amount equivalent to the applicable backup withholding
tax imposed with respect to such payment under the Code and the Borrower shall not be liable to pay
(or indemnify such Lender with respect to) any Taxes in respect of such backup withholding.



39









 





     Section 2.13 Release of Released Amounts.



     The parties hereto acknowledge and agree that the Borrower has no interest in the Retained
Interest and Released Amounts. The Administrative Agent and the Collateral Custodian hereby agree
to release to the Borrower from the Collateral, and the Borrower hereby agrees to release to the
Originator, an amount equal to the Released Amounts within one Business Day following receipt of
written notice from the Servicer identifying any amounts as Released Amounts, which release shall
be automatic and shall require no further act by the Administrative Agent, the Collateral Custodian
or the Borrower; provided that the Administrative Agent and the Collateral Custodian shall execute
and deliver such instruments of release and assignment or other documents, or otherwise confirm the
foregoing release, as may reasonably be requested by the Originator in writing. For the avoidance
of doubt, such Released Amounts shall not constitute and shall not be included in the Collateral.



     Section 2.14 Optional Repurchase of Collateral Debt Obligations.



     On any Optional Repurchase Settlement Date, the Borrower shall have the right, upon not less
than two Business Days’ prior written notice to the Administrative Agent and each Managing Agent,
to prepay all or a portion of the Advances Outstanding in connection with the sale and assignment
by the Borrower to the Originator of, and the release of the Lien by the Administrative Agent over,
one or more Collateral Debt Obligations, in whole but not in part (an “Optional
Repurchase”), subject to the following terms and conditions and subject to the other
restrictions contained herein:



     (a) the Borrower makes no representations, warranties or covenants and provides no
indemnification for the benefit of the Originator (other than any representations, warranties or
covenants relating to the Borrower’s ownership of or title to the Collateral Debt Obligation that
is the subject of the Optional Repurchase that are standard and customary in connection with such
sale and assignment);



     (b) after giving effect to the Optional Repurchase on the related Optional Repurchase
Settlement Date and the payment into the Collection Account required under Section 2.14(d),
(i) neither a Default nor an Event of Default shall have occurred and be continuing and (ii) all
representations and warranties of the Borrower contained in Section 4.1 shall be true and
correct as of the Optional Repurchase Settlement Date;



     (c) on the Optional Repurchase Settlement Date, the Borrower and the Servicer shall be deemed
to have represented and warranted that the requirements of Section 2.14(b) shall have been
satisfied as of the related Optional Repurchase Settlement Date after giving effect to the
contemplated Optional Repurchase;



     (d) on the related Optional Repurchase Settlement Date, the Administrative Agent shall have
received into the Collection Account, in immediately available funds, an amount equal to the
proceeds of such Optional Repurchase;



     (e) the aggregate Outstanding Principal Balance of all Collateral Debt Obligations in the
Collateral which are repurchased by the Originator in any calendar year pursuant to an



40









 







Optional Repurchase shall not exceed an amount equal to, as of any date of determination, 20%
of the then applicable Permitted Liquidation Balance; and



     (f) the price at which a Collateral Debt Obligation may be repurchased pursuant to this
Section 2.14 shall be not less than the Repurchase Price of such Collateral Debt
Obligation.



ARTICLE III

CONDITIONS OF EFFECTIVENESS AND ADVANCES




     Section 3.1 Conditions to Effectiveness and Advances.



     No Lender shall be obligated to make any Advance hereunder from and after the Closing Date,
nor shall any Lender, the Collateral Custodian, the Administrative Agent or the Managing Agents be
obligated to take, fulfill or perform any other action hereunder, until the following conditions
have been satisfied, in the sole discretion of, or waived in writing by, the Managing Agents:



     (a) This Agreement and all other Transaction Documents or counterparts hereof or thereof shall
have been duly executed by, and delivered to, the parties hereto and thereto and the Administrative
Agent shall have received such other documents, instruments, agreements and legal opinions as any
Managing Agent shall reasonably request in connection with the transactions contemplated by this
Agreement, on or prior to the Closing Date, each in form and substance satisfactory to the
Administrative Agent;



     (b) The Borrower shall have paid all fees required to be paid by it on the Closing Date,
including all fees required hereunder and under the Fee Letters to be paid as of such date, and
shall have reimbursed each Lender and the Administrative Agent for all fees, costs and expenses
related to the transactions contemplated hereunder and under the other Transaction Documents,
including the legal and other document preparation costs incurred by any Lender and/or the
Administrative Agent; and



     (c) Each Lender whose commercial paper is being rated by one or more Rating Agency shall have
received, to the extent required under the terms of such Lender’s program documents, the written
confirmation of each such Rating Agency that the execution and delivery of this Agreement will not
result in a withdrawal or downgrading of the then-current rating of such commercial paper by such
Rating Agency.



     (d) The Administrative Agent shall have received from the Collateral Custodian a custodial
receipt in form of Exhibit G hereto in respect of the Collateral Debt Obligation File
delivered to the Collateral Custodian pursuant to Section 5.5.



     (e) The Borrower shall have certified to the Administrative Agent that the Borrower has
deposited into the Collection Account all Collections received on the Collateral Debt Obligations
since their respective Cut-Off Dates.



41









 





     Section 3.2 Reserve Account Required Amount.



     On the Closing Date, the Borrower, or the Servicer on its behalf, shall deposit into the
Reserve Account an amount equal to not less than $2,000,000.



ARTICLE IV

REPRESENTATIONS AND WARRANTIES




     Section 4.1 Representations and Warranties of the Borrower.



     The Borrower represents and warrants to the other parties hereto that, as of the Closing Date,
as of each Transfer Date, as of each Additional Funding Date, as of each Optional Repurchase
Settlement Date and as of each Lien Release Dividend Date (or, where the representation or warranty
is given as of a particular date, such date):



     (a) Organization and Qualification. The Borrower has been duly organized and is
validly existing and in good standing as a limited liability company under the laws of the State of
Delaware, with requisite limited liability company power and authority to own its properties and to
transact the business in which it is now engaged, including to enter into and perform its
obligations under each Transaction Document to which it is a party, and is duly qualified to do
business and is in good standing (or is exempt from such requirements) in each State of the United
States where the nature of its business requires it to be so qualified and the failure to be so
qualified and in good standing could reasonably be expected to have a Material Adverse Effect.
Without limiting the generality of the foregoing, the Borrower (i) is duly qualified, in good
standing and licensed to carry on its business in each state where any Related Property related to
a Collateral Debt Obligation is located to the extent necessary to ensure the enforceability of
each Collateral Debt Obligation and the servicing of the Collateral Debt Obligation by the Servicer
in accordance with the Servicing Standards and (ii) is in compliance with the laws of any such
jurisdiction, in both cases, to the extent necessary to ensure the enforceability of such
Collateral Debt Obligation in accordance with the terms thereof.



     (b) No Conflict. The execution, delivery and performance by the Borrower of its
obligations under each Transaction Document to which it is a party and the consummation of the
transactions therein contemplated will not conflict with or result in a breach of any of the terms
or provisions of, or constitute a default under, or result in the creation or imposition of any
Lien (other than any Lien created by the Transaction Documents), charge or encumbrance upon any of
the property or assets of the Borrower or any of its Affiliates pursuant to the terms of, any of
its organizational documents or any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it or any of its Affiliates is bound or to which any of its
property or assets is subject, nor will such action result in any violation of the provisions of
its organizational documents or any Applicable Law applicable to the Borrower or any of its
properties.



     (c) Authorization and Enforceability. Each of the Transaction Documents to which the
Borrower is a party has been duly authorized, executed and delivered by the Borrower and (assuming
due authorization, execution and delivery by each other party thereto) is a valid and legally
binding obligation of the Borrower, enforceable against the Borrower in accordance with



42









 







its terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws relating to or affecting the rights
of creditors generally, and by general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law).



     (d) No Violation. The Borrower is not in violation of its organizational documents or
in default under any agreement, indenture, mortgage, deed of trust or instrument the effect of
which violation or default could reasonably be expected to have a Material Adverse Effect. The
Borrower is not in violation of any Applicable Law promulgated by any Governmental Authority having
jurisdiction over it or any of its assets (including the Collateral), which violation could
reasonably be expected to have a Material Adverse Effect.



     (e) Governmental Action. No approvals, authorizations, consents, orders or other
actions of any Person or of any Governmental Authority is required for (i) the execution, delivery
and performance by the Borrower of, or compliance by the Borrower with, any of the Transaction
Documents to which the Borrower is a party, (ii) the purchase or acceptance as a contribution of
Collateral Debt Obligations from the Originator, or (iii) the consummation of the transactions
required of the Borrower by any Transaction Document to which the Borrower is a party, except such
as shall have been obtained before the date hereof (other than the filing or recording of financing
statements, instruments of assignment and other similar documents in connection with the
contribution of Collateral Debt Obligations to the Borrower).



     (f) Licenses. The Borrower possesses all material licenses, certificates, authorities
or permits issued by the appropriate Governmental Authority necessary to conduct the business now
operated by it, and has not received any notice of proceedings relating to the revocation or
modification of any such license, certificate, authority or permit which, singly or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.



     (g) Litigation. There are no actions or proceedings against, or investigations of, the
Borrower currently pending with regard to which the Borrower has received service of process and no
action or proceeding against, or investigation of, the Borrower is, to the knowledge of the
Borrower, threatened or otherwise pending before any Governmental Authority that (i) would prohibit
its entering into any of the Transaction Documents to which it is a party or render the Advances
invalid, (ii) seeks to prevent the making of the Advances or the consummation of any of the
transactions contemplated by any of the Transaction Documents to which it is a party, (iii) would
prohibit or materially and adversely affect the performance by the Borrower of its obligations
under, or the validity or enforceability of, any of the Transaction Documents to which it is a
party, (iv) that could reasonably be expected to have a Material Adverse Effect or (v) seeking to
affect adversely the income tax treatment of the Advances.



     (h) Investment Company Act. Neither the Borrower nor the Collateral is, and neither
the making of the Advances nor the activities of the Borrower pursuant to the Transaction
Documents, shall require the Borrower or the Collateral to register as, an “investment company” or
cause the Borrower or the Collateral to be under the “control” of an “investment company” as such
terms are defined in the 1940 Act.



43









 





     (i) Solvency. The Borrower is Solvent, is able to pay its debts as they become due and
has capital sufficient to carry on its business and its obligations hereunder; it will not be
rendered not Solvent by the execution and delivery of any of the Transaction Documents to which it
is a party or the assumption of any of its obligations thereunder; and no petition of bankruptcy
(or similar insolvency proceeding) has been filed by or against the Borrower.



     (j) Title. The Borrower has good and valid title to, and the Borrower is the sole
owner of, each Collateral Debt Obligation transferred by the Originator to the Borrower, and the
Administrative Agent has a first priority perfected Lien in each such Collateral Debt Obligation,
in each case free and clear of any other Lien. The Borrower acquired title to each of such
Collateral Debt Obligations in good faith, without notice of any adverse claim.



     (k) Brokers. The Borrower has not dealt with any broker or agent or other Person who
might be entitled to a broker, agent or similar fee, commission or compensation in connection with
the transaction contemplated by this Agreement or any of the other Transaction Documents except as
expressly contemplated herein or therein.



     (l) Chief Executive Offices. The principal place of business and chief executive
offices of the Borrower are located at 4445 Willard Avenue, 12th Floor, Chevy Chase,
Maryland 20815, or, with the consent of the Administrative Agent, such other address as shall be
designated by the Borrower in a written notice to the other parties hereto.



     (m) Use of Proceeds. No proceeds of an Advance made hereunder will be used (i) for a
purpose that violates or would be inconsistent with Regulations T, U or X promulgated by the
Federal Reserve Board from time to time or (ii) to acquire any security in any transaction in
violation of Section 13 or 14 of the Securities Exchange Act of 1934, as amended.



     (n) Taxes, etc. Any taxes, fees and other charges of Governmental Authorities
applicable to the Borrower, except for franchise or income taxes, in connection with the execution,
delivery and performance by the Borrower of each Transaction Document to which it is a party, the
making of the Advances or otherwise applicable to the Borrower have been paid or will be paid by
the Borrower at or prior to the Closing Date or the date of each Advance, as applicable, to the
extent then due.



     (o) Financial Condition. On the date hereof and on the date of each Advance, the
Borrower is not subject to an Insolvency Event or has reason to believe that its insolvency is
imminent.



     (p) ERISA. During the twelve-consecutive-month period prior to the Closing Date and
prior to each Transfer Date, Additional Funding Date, Optional Repurchase Settlement Date, and Lien
Release Dividend Date, no steps have been taken to terminate any Pension Plan (as defined below),
and no contribution failure has occurred with respect to any Pension Plan sufficient to give rise
to a lien under section 302(f) of ERISA. No condition exists or event or transaction has occurred
with respect to any Pension Plan which could reasonably be expected to result in the Borrower or
any ERISA Affiliate incurring any material liability, fine or penalty. For purposes of this
Agreement, “Pension Plan” means a “pension plan” as such term is defined in section 3(2) of ERISA,
which is subject to title IV of ERISA (other than any “multiemployer



44









 







plan” as such term is defined in section 4001(a)(3) of ERISA), and to which the Borrower or
any ERISA Affiliate may have any liability.



     (q) No Plan Assets. The Borrower is not, and is not acting on behalf of, an “employee
benefit plan” as defined in Section 3(3) of ERISA that is subject to Title I of ERISA, a “plan” as
defined in Section 4975 of the Code or an entity deemed to hold the Plan Assets of any of the
foregoing under the Plan Asset Regulation. The Borrower is not, and is not acting on behalf of, a
“governmental plan” as defined in Section 3(32) of ERISA, and the Borrower does not hold or manage
the investment of assets of any governmental plan.



     The Borrower shall deliver to the Administrative Agent such certifications and/or other
evidence periodically requested by the Administrative Agent, in its reasonable discretion, to
verify this representation and warranty. Failure to deliver these certifications or evidence,
breach of this representation and warranty, or consummation of any transaction which would cause
the Transaction Documents or any exercise of any Lender’s rights under the Transaction Documents to
(i) constitute a non-exempt prohibited transaction under ERISA or (ii) violate ERISA or any state
or local statute regulating governmental plans (collectively, a “Violation”), which failure
continues for thirty (30) days after written notice, shall be an Event of Default. Notwithstanding
anything in the Transaction Documents to the contrary, no sale, assignment, or transfer of any
direct or indirect right, title, or interest in the Borrower shall be permitted which would negate
the Borrower’s representations in this subparagraph or cause a Violation. At least fifteen (15)
days before consummation of any of the foregoing, the Borrower shall obtain from the proposed
transferee or lienholder (1) a certification to the Lenders that the representations and warranties
of this subparagraph will be true after consummation and (2) an agreement to comply with this
subparagraph.



     (r) Eligible Collateral Debt Obligation. As of its Transfer Date and each date on
which a Periodic Report is delivered hereunder, (A) the information contained in the Schedule of
Collateral Debt Obligations (in the case of the Transfer Date) or the information contained in the
Periodic Report, as applicable, with respect to the identity of such Originator Collateral Debt
Obligations and the amount owing thereunder is true and correct in all material respects as of the
applicable date and (B) each security or loan listed thereon as a Collateral Debt Obligation is an
Eligible Collateral Debt Obligation as of the applicable date.



ARTICLE V

GENERAL COVENANTS OF THE BORROWER




     Section 5.1 Affirmative Covenants.



     The Borrower hereby covenants and agrees with the Lenders that:



     (a) Annual Statement as to Compliance. The Borrower will deliver to the Administrative
Agent, within 120 days after the end of each fiscal year of the Borrower (commencing with the first
fiscal year ending after the date hereof), an Officer’s Certificate stating, as to the Responsible
Officer signing such Officer’s Certificate, that:



45









 






     (i) a review of the activities of the Borrower during such year and of its performance
under this Agreement and each of the other Transaction documents has been made under such
Authorized Officer’s supervision; and




     (ii) to the best of such Responsible Officer’s knowledge, based on such review, the
Borrower have complied in all material respects with all conditions and covenants under this
Agreement and the other Transaction Documents throughout such year and that no Default has
occurred and is continuing, or, if there has been a default in its compliance with any such
condition or covenant, or the occurrence of any Default specifying each such default known
to such Responsible Officer and the nature and status thereof.



     (b) Notices of Certain Events; Information. The Borrower will furnish to the
Administrative Agent, the Collateral Custodian, the Backup Servicer and each Lender prompt written
notice of the following:




     (i) Defaults. As soon as possible and in any event within five Business Days
after a Responsible Officer obtains knowledge of the occurrence thereof, notice of each
Default and Event of Default.




     (ii) Changes in Address. Promptly, and in any event within thirty days after
the occurrence thereof, written notice of a change in address of the chief executive office
or place of organization of the Borrower or the Originator.




     (iii) Other Information. Such information (including financial information),
documents, records or reports with respect to the Collateral, including the Collateral Debt
Obligations, the Borrower, the Originator or the Servicer as the Collateral Custodian, the
Backup Servicer or the Administrative Agent on behalf of any Lender may from time to time
reasonably request (it being understood that CapitalSource shall not be required to furnish
or cause to be furnished hereunder any financial information relating to any subsidiary
financing entity other than the Borrower).



     (c) Existence. The Borrower will keep in full effect its existence, rights and
franchises as a limited liability company under the laws of the State of Delaware (unless it
becomes organized under the laws of any other State or of the United States, in which case the
Borrower will keep in full effect its existence, rights and franchises under the laws of such other
jurisdiction) and will obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and enforceability of
this Agreement, the other Transaction Documents to which it is a party and the Collateral. The
Borrower shall comply in all respects with the covenants contained its organizational documents,
including without limitation, the “separateness” covenants set forth therein.



     (d) Access to Information. The Borrower shall, on reasonable request no more than
twice per calendar year (or at any time if an Event of Default has occurred and is continuing)
during regular business hours, permit the Collateral Custodian, the Backup Servicer, the
Administrative Agent or any Lender, or their agents or representatives to:



46









 






     (i) examine all books, records and other documents (including computer tapes and disks)
in the possession or under the control of the Borrower relating to the Collateral Debt
Obligations or the Transaction Documents as may be requested (it being understood that the
scope of such examination may include a review of the procedures in which loans and other
assets are allocated by the Originator to the Borrower and, consequently, may involve the
review of books, records and other documents relating to such procedures and other
allocations through which the Originator obtains financing for its business operations), and




     (ii) visit the offices and property of the Borrower for the purpose of examining such
materials described in clause (i) above.



     (e) Ownership and Security Interests; Further Assurance. (i) The Borrower will, and
will take all action necessary to, maintain the Administrative Agent’s security interest in the
Collateral and the other items pledged to the Administrative Agent pursuant to any Transaction
Document.




     (iii) The Borrower agrees to take any and all acts and to execute any and all further
instruments reasonably necessary or requested by the Administrative Agent or any Lender to more
fully effect the purposes of this Agreement.



     (f) Covenants. The Borrower shall duly observe and perform the covenants set forth in
each of the Transaction Documents to which it is a party.



     (g) Amendments. Except as otherwise expressly permitted therein, the Borrower shall
not make, or permit any Person to make, any amendment, modification or change to, or provide any
waiver under, or terminate or supplement, any Transaction Document to which the Borrower is a party
without the prior written consent of the Administrative Agent and the Required Lenders; provided
that (i) without the written consent of each Lender, no such agreement shall release the Borrower
from its obligations under the Transaction Documents and (ii) without the written consent of each
Lender, no such agreement shall release all or substantially all of the Collateral or otherwise
terminate all or substantially all of the Liens under the Transaction Documents, alter the relative
priorities of the obligations entitled to the Liens created under the Transaction Documents with
respect to all or substantially all of the Collateral provided thereby, except that no such consent
shall be required, and the Administrative Agent is hereby authorized (and so agrees with the
Borrower) to release any Lien covering property that is the subject of either a disposition of
property permitted hereunder or a disposition to which the Administrative Agent and the Required
Lenders have consented.



     (h) Performance of Obligations; Servicing of Collateral Debt Obligations.




     (i) No Adverse Actions. The Borrower shall not take any action and will use its
commercially reasonable efforts not to permit any action to be taken by others that would
release any Person from any of such Person’s material covenants or obligations under any
instrument or agreement included in the Collateral or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the



47









 







validity or effectiveness of, any such instrument or agreement, except as expressly
provided in the Transaction Documents or such other instrument or agreement.




     (ii) Performance by Servicers, Etc. The Borrower may contract with or otherwise
obtain the assistance of other Persons to assist it in performing its duties under this
Agreement, and any performance of such duties by a Person identified to the Administrative
Agent in an Officer’s Certificate of the Borrower shall be deemed to be action taken by the
Borrower. Initially, the Borrower has contracted with the Servicer to assist the Borrower in
performing its duties under this Agreement.




     (iii) Amendments of Collateral Debt Obligation Documents. Other than as
permitted herein, the Borrower agrees that it will not, without the prior written consent of
the Administrative Agent (which consent (I) shall not be unreasonably withheld or delayed,
and that, if no response is given by the Administrative Agent within three Business Days,
shall be deemed to have been received, and (II) in the case of clause (B) below, may be in
the form of standing instructions related to a general course of action or plan with respect
to a particular Collateral Debt Obligation as opposed to a specific consent for each
contemplated amendment or related release), amend, modify, waive, supplement, terminate or
surrender, or agree to any amendment, modification, supplement, termination, waiver or
surrender of, the terms of any Collateral Debt Obligation Documents with an Obligation
Rating of 5 or 6 as of the date of such amendment if (A) such amendment, modification,
waiver, supplement, termination or surrender would, directly or indirectly, result in (x)
except as otherwise permitted by clause (y) below, a reduction in any installment of
principal payable on the applicable Collateral Debt Obligation, or (y) any extension of the
due date for the payment of any installment of principal payable on the applicable
Collateral Debt Obligation by more than one year past the due date specified therefor on the
applicable Cut-Off Date, (B) such amendment, modification, waiver, supplement, termination
or surrender would, directly or indirectly, effect a release of the Lien of the Secured
Parties over any Related Property securing such Collateral Debt Obligation or (C)
immediately after such amendment, modification, waiver, supplement, termination or
surrender, the Asset-to-Debt Ratio shall be less than 135%. If any such amendment,
modification, supplement or waiver shall have been consented to by the Administrative Agent,
the Borrower shall promptly deliver to the Administrative Agent, at the Borrower’s expense,
such agreements, instruments, consents and other documents as the Administrative Agent may
deem necessary or appropriate evidencing such amendment, modification, supplement or waiver.



     (i) Treatment of Advances as Debt for All Purposes. The Borrower shall treat the
Advances as Indebtedness for all purposes.



     (j) Use of Proceeds. The Borrower shall use the proceeds of the Advances solely to
finance the purchase of the Collateral Debt Obligations and to pay costs and expenses associated
with the Transaction Documents.



     (k) Further Assurances. The Borrower will take such action from time to time as shall
reasonably be requested by the Administrative Agent to more fully effectuate the purposes and



48









 







objectives of this Agreement. Without limiting the generality of the foregoing, the Borrower
will from time to time execute and deliver all such reasonable supplements and amendments hereto
and all such financing statements, continuation statements, instruments of further assurance and
other instruments, and will take such other action necessary or advisable to:




     (i) provide further assurance with respect to the grant of all or any portion of the
Collateral for the benefit of the Secured Parties;




     (ii) maintain or preserve the Lien and security interest (and the priority thereof) of
this Agreement or carry out more effectively the purposes hereof;




     (iii) perfect, publish notice of or protect the validity of any grant made or to be
made by under any of the Transaction Documents;




     (iv) enforce any rights with respect to the Collateral; and




     (v) preserve and defend title to the Collateral and the rights of the Administrative
Agent and the Lenders in such Collateral against the claims of all Persons and parties.



     (l) The Borrower, throughout the period in which any portion of any Advance is outstanding,
will not be and will not be acting on behalf of an “employee benefit plan” as defined in Section
3(3) of ERISA that is subject to Title I of ERISA, a “plan” as defined in Section 4975 of the Code
or an entity deemed to hold the Plan Assets of any of the foregoing under the Plan Asset
Regulation. The Borrower, throughout the period in which any portion of any Advance is
outstanding, will not be and will not be acting on behalf of a “governmental plan” as defined in
Section 3(32) of ERISA and will not hold or manage the investment of assets of any governmental
plan.



     Section 5.2 Negative Covenants.



     The Borrower hereby covenants and agrees with the Lenders that it will not:



     (a) except as expressly permitted by the Transaction Documents, sell, transfer, exchange or
otherwise dispose of any of its properties or assets, including those included in any part of the
Collateral, unless directed to do so by the Administrative Agent on behalf of the Lenders as
permitted herein; provided that the Borrower may sell or transfer Equity Interests acquired in
connection with a Modified Collateral Debt Obligation or a Material Modification to a special
purpose entity, if and to the extent that all of the ownership and other equity interests in such
special purpose entity are pledged to the Administrative Agent on behalf of the Secured Parties
pursuant to terms reasonably acceptable to the Administrative Agent.



     (b) claim any credit on, or make any deduction from the principal or interest payable in
respect of, the Advances (other than amounts properly withheld from such payments under the Code)
or assert any claim against any present or former Lender by reason of the payment of the taxes
levied or assessed upon any part of the Collateral;



49









 





     (c) engage in any business or activity other than as expressly permitted by this Agreement and
the other Transaction Documents, other than in connection with, or relating to, the Advances
pursuant to this Agreement, or amend this Agreement as in effect on the Closing Date other than in
accordance with Article XII;



     (d) incur or assume any Indebtedness, or guaranty any indebtedness of any Person, except for
such Indebtedness as may be incurred by the Borrower in connection with the Advances pursuant to
this Agreement and the other Transaction Documents;



     (e) dissolve or liquidate in whole or in part or merge or consolidate with any other Person;



     (f) (i) permit the validity or effectiveness of this Agreement to be impaired, or permit the
Liens granted pursuant to any of the Transaction Documents to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released from any covenants or
obligations hereunder or under any other Transaction Document except as may expressly be permitted
hereby, (ii) except as provided in the Transaction Documents, permit any Lien to be created on or
extend to or otherwise arise upon or burden the Collateral or any part thereof or any interest
therein or the proceeds thereof or (iii) except as provided in the Transaction Documents, permit
any Person other than itself, the Administrative Agent and the Lenders to have any right, title or
interest in the Collateral;



     (g) terminate, or allow any ERISA Affiliate to terminate, any Pension Plan; will not permit a
contribution failure to occur with respect to any Pension Plan sufficient to give rise to a lien
under section 302(f) of ERISA; and will not permit any condition to exist or event or transaction
to occur with respect to any Pension Plan which could reasonably be expected to result in the
Borrower or any ERISA Affiliate incurring any material liability, fine or penalty; or



     (h) (i) except as permitted by Sections 2.3, 2.4, 2.10 and 2.14, pay any
dividend or make any distribution (by reduction of capital or otherwise), whether in cash,
property, securities or a combination thereof or otherwise with respect to any ownership or equity
interest or security in or of the Borrower, (ii) redeem, purchase, retire or otherwise acquire for
value any such ownership or equity interest or security or (iii) set aside or otherwise segregate
any amounts for any such purpose; provided that the Borrower may make, or cause to be made
distributions to the Servicer, the Administrative Agent, the Collateral Custodian and the Lenders
and the holders of the Notes as contemplated by, and to the extent funds are available for such
purpose under, this Agreement. The Borrower will not, directly or indirectly, make or cause to be
made payments to or distributions except in accordance with this Agreement and the Transaction
Documents.



     Section 5.3 Hedging Transactions.



     (a) The Borrower shall, within 14 days following the Closing Date and on each date on which an
Additional Collateral Debt Obligation shall become part of the Collateral hereunder, with regard to
each Fixed Rate Collateral Debt Obligation and PIK Loan outstanding at such time, enter into and
maintain one or more Hedge Transactions, which Hedge Transactions shall:




     (i) be entered into with a Hedge Counterparty;



50









 






     (ii) have a notional amount and amortization schedule as shall be agreed upon by the
Borrower and the Administrative Agent, it being understood that such schedule shall be based
on the weighted average life of the applicable Fixed Rate Collateral Debt Obligations and
PIK Loan; and




     (iii) provide for payments to the Borrower to the extent that the LIBO Rate shall
exceed 7.0%.



     (b) As additional security hereunder, the Borrower hereby pledges to the Administrative Agent,
for the benefit of the Secured Parties, all right, title and interest of the Borrower in, but none
of the obligations of the Borrower under, any and all Hedge Transactions, and any and all present
and future amounts payable by a Hedge Counterparty to the Borrower under or in connection with its
respective Hedge Transaction(s) (collectively, the “Hedge Collateral”), and grants a
security interest to the Administrative Agent, for the benefit of the Secured Parties, in the Hedge
Collateral. Nothing herein shall have the effect of releasing the Borrower from any of its
obligations under any Hedge Transaction, nor be construed as requiring the consent of the
Administrative Agent, the Collateral Custodian or any Secured Party for the performance by the
Borrower of any such obligations.



     Section 5.4 Accounts.



     (a) Establishment of the Collection Account. The Borrower or the Servicer on its
behalf shall cause to be established, on or before the Closing Date, and maintained in the name of
the Borrower but subject to the Lien of the Administrative Agent on behalf of the Secured Parties,
with an office or branch of a depository institution or trust company organized under the laws of
the United States or any one of the States thereof or the District of Columbia (or any domestic
branch of a foreign bank) a segregated corporate trust account, which may be a securities account
or a deposit account (the “Collection Account”) for the purpose of receiving Collections
from the Collateral; provided that at all times such depository institution or trust company shall
be a depository institution organized under the laws of the United States or any one of the States
thereof or the District of Columbia (or any domestic branch of a foreign bank), (i) (A) that has
either (1) a long-term unsecured debt rating of “A-” or better by S&P and “A-3” or better by
Moody’s or (2) a short-term unsecured debt rating or certificate of deposit rating of “A-1” or
better by S&P or “P-1” or better by Moody’s, (B) the parent corporation of which has either (1) a
long-term unsecured debt rating of “A-” or better by S&P and “A-3” or better by Moody’s or (2) a
short-term unsecured debt rating or certificate of deposit rating of “A-1” or better by S&P and
“P-1” or better by Moody’s or (C) is otherwise acceptable to the Administrative Agent and (ii)
whose deposits are insured by the Federal Deposit Insurance Corporation (any such depository
institution or trust company, a “Qualified Institution”) which Qualified Institution has
agreed with the Borrower, the Servicer, the Administrative Agent and the Collateral Custodian to
comply with any and all orders, notices, requests and other instructions originated by the
Administrative Agent or the Collateral Custodian acting on the instructions of the Administrative
Agent directing disposition of the funds in the Collection Account and any and all entitlement
orders originated by the Administrative Agent with respect to financial assets credited to the
Collection Account, without any further consent from the Borrower or the Servicer in each case
after a Notice of Exclusive Control (as defined in the Account Control Agreement) has been issued.
In order to provide the Administrative Agent with



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control over the Collection Account within the meaning of Section 9-104(a) or Section 9-106(c)
of the UCC and any other Applicable Law, the Borrower and the Servicer hereby agree that the
Administrative Agent may at any time following an Event of Default, provide Wells Fargo or any
successor Person that maintains the Collection Account with instructions as to the disposition of
funds in the Collection Account, entitlement orders with respect to financial assets in the
Collection Account or instructions as to any other matters relating to the Collection Account
without any further consent from the Borrower or the Servicer. Wells Fargo, to the extent and for
so long as the Collection Account is maintained with it, agrees with the Borrower, the Servicer and
the Administrative Agent to comply with any and all orders, entitlement orders, notices, requests
and other instructions so originated by the Administrative Agent, directing disposition of the
funds or financial assets in the Collection Account without any further consent from the Borrower
or the Servicer. Subject in every respect to the foregoing, Wells Fargo and any successor Person
that maintains the Collection Account shall only comply with such orders, notices, requests,
entitlement orders and other instructions originated by the Borrower or the Servicer as the
Borrower or the Servicer shall expressly deliver and cause Wells Fargo to effectuate pursuant to
the terms of the Transaction Documents, it being understood and acknowledged that neither the
Borrower nor the Servicer shall give any orders, notices, requests, entitlement orders or
instructions not authorized or permitted by the Transaction Documents. The Administrative Agent and
the other Secured Parties shall not issue a Notice of Exclusive Control or any entitlement orders
or other instructions to Wells Fargo (or any successor Person that then maintains the Collection
Account) unless a Default or an Event of Default has occurred and is continuing; provided that none
of the Originator, the Servicer or the Borrower shall have any right of withdrawal over the
Collection Account (including any subaccounts thereof) except in accordance with Sections
2.3 and 2.7.



     (b) Adjustments. If (i) the Servicer makes a deposit into the Collection Account in
respect of a Collection of a Collateral Debt Obligation in the Collateral and such Collection was
received by the Servicer in the form of a check that is not honored for any reason or (ii) the
Servicer makes a mistake with respect to the amount of any Collection and deposits an amount that
is less than or more than the actual amount of such Collection, the Servicer shall appropriately
adjust the amount subsequently deposited into the Collection Account to reflect such dishonored
check or mistake. Any Scheduled Payment in respect of which a dishonored check is received shall be
deemed not to have been paid.



     (c) Establishment of Reserve Account. The Borrower or the Servicer on its behalf shall
cause to be established, on or before the Closing Date, and maintained in the name of the Borrower
but under the control of the Administrative Agent for the benefit of the Secured Parties with an
office or branch of a Qualified Institution a segregated corporate trust account, which may be a
securities account or a deposit account (the “Reserve Account”). If the amounts on deposit
in the Collection Amount are insufficient, as of any Reporting Date, to make the payments required
by Sections 2.7(a)(i) through (v) on the immediately following Payment Date, the
Servicer or the Administrative Agent, as applicable, shall direct a deposit of the lesser of (i)
the additional amount necessary to make such payments or (ii) the amount on deposit in the Reserve
Account, to be applied as Interest Collections. Upon the occurrence and during the continuation of
an Event of Default, the Administrative Agent may, and shall, at the direction of the Required
Lenders, direct the Collateral Custodian or the Servicer, as applicable, to withdraw



52









 







all remaining amounts on deposit in the Reserve Account and apply them in accordance with
Section 2.7.



     (d) Establishment of Committed Funding Account. (i) The Borrower or the Servicer on
its behalf shall cause to be established with an office or branch of a Qualified Institution, on or
before the Closing Date, and maintained in the name of the Borrower but under the control of the
Administrative Agent for the benefit of the Secured Parties, a segregated corporate trust account,
which may be a securities account or a deposit account (the “Committed Funding Account”),
for the purpose of receiving Principal Collections on Revolving Obligations in the Collateral,
except as set forth in clause (iii) below. The Servicer will maintain accurate records of
all Collections and advances in respect of each Revolving Obligation in the Collateral.




     (ii) Subject to, and following the application of funds as set forth in, Section
12.15(b), (I) for so long as (A) the Payment Allocation Condition is satisfied and (B)
the Revolving Obligation Payment Allocation Condition is satisfied with respect to each
Revolving Obligation in the Collateral, all Principal Collections on Revolving Obligations
in the Collateral will be deposited either in the Committed Funding Account or the
Collection Account as directed by the Servicer or (II) otherwise shall be deposited in the
Collection Account, but in each case in accordance with Section 7.4(b).




     (iii) For so long as (A) the Payment Allocation Condition is satisfied and (B) the
Revolving Obligation Payment Allocation Condition is satisfied with respect to each
Revolving Obligation in the Collateral, the Borrower shall be permitted to withdraw amounts
from the Committed Funding Account either at any time (I) for the purpose of satisfying
funding obligations under the portion or portions of the Revolving Obligations owned by it,
up to the Purchased Amount as of the immediately preceding Determination Date (or, if during
the initial Settlement Period, the Closing Date) or (II) to transfer any or all such amounts
to the Collection Account; provided that any amounts remaining on deposit in the Committed
Funding Account as of any Determination Date shall be transferred by the Servicer (or, if a
Servicer Potential Termination Event or Servicer Termination Event has occurred and is
continuing, by the Administrative Agent in its reasonable discretion) in same day funds by 3
p.m. on the following Payment Date to the Collection Account, and, immediately thereafter,
the Purchased Amount shall be decreased by the sum of the amounts so transferred.




     (iv) Subject to, and following the application of funds as set forth in, Section
12.15(b), for so long as (A) the Payment Allocation Condition is not satisfied or (B)
the Revolving Obligation Payment Allocation Condition is not satisfied with respect to any
Revolving Obligation in the Collateral, all Principal Collections on such Revolving
Obligation (or all of the Revolving Obligations in the Collateral, in the case of a breach
of the Payment Allocation Condition), together with any Principal Collections with respect
to such Revolving Obligation (or with respect to all of the Revolving Obligations in the
Collateral, in the case of a breach of the Payment Allocation Condition) on deposit in the
Committed Funding Account, will be deposited by the Servicer (or, if a Servicer Potential
Termination Event or Servicer Termination Event has occurred and is continuing, by the
Administrative Agent in its reasonable discretion) in the Collection Account promptly upon
written notice to the Servicer (as long as no Servicer Potential



53









 







Termination Event or Servicer Termination Event has occurred and is continuing) by the
Administrative Agent that the Payment Allocation Condition or the Revolving Obligation
Payment Allocation Condition is not satisfied, and any such future Principal Collections
shall be paid from the Lock-Box Accounts to the Collection Account in accordance with
Section 7.4(b) for so long as such conditions are not satisfied.



     Section 5.5 Delivery of Collateral Debt Obligation Files.



     (a) The Borrower, or the Servicer on its behalf, shall deliver possession of all “instruments”
(within the meaning of Article 9 of the UCC) not constituting part of “chattel paper” (within the
meaning of Article 9 of the UCC) that evidence any Collateral Debt Obligation being transferred and
set forth on a Schedule of Collateral Debt Obligations, including all Underlying Notes (other than
in the case of Noteless Collateral Debt Obligations), and all portions of the Collateral Debt
Obligation Files to the Collateral Custodian on behalf of the Secured Parties not later than two
Business Days prior to each Transfer Date, in each case endorsed in blank or to the Administrative
Agent, without recourse. Pursuant to Section 7.15, the Borrower is required to deliver such
instruments and Collateral Debt Obligation Files to the Collateral Custodian for the benefit of the
Secured Parties. Accordingly, the Borrower hereby authorizes and directs the Servicer to deliver
possession of all such instruments and Collateral Debt Obligation Files to the Collateral Custodian
on behalf of the Secured Parties, and agrees that such delivery shall satisfy the condition set
forth in the first sentence of this Section 5.5(a). The Servicer shall also identify on the
Collateral Debt Obligation List (including any amendment thereof), whether by attached schedule or
marking or other effective identifying designation, all Collateral Debt Obligations being
transferred that are not evidenced by such instruments.



     (b) Prior to the occurrence of an Event of Default, the Collateral Custodian shall not record
the Assignments of Mortgage delivered pursuant to Section 5.5(a) and the definition of
Collateral Debt Obligation Documents. Upon the occurrence of an Event of Default, the Collateral
Custodian shall, if so directed by the Administrative Agent, cause to be recorded in the
appropriate offices each Assignment of Mortgage delivered to it with respect to all Collateral Debt
Obligations being transferred. Each such recording shall be at the expense of the Borrower;
provided that to the extent the Borrower does not pay such expenses, the Collateral Custodian shall
be reimbursed pursuant to the provisions of Section 2.7.



ARTICLE VI

SECURITY INTEREST




     Section 6.1 Security Interest.



     As collateral security for the prompt, complete and indefeasible payment and performance in
full when due, whether by lapse of time, acceleration or otherwise, of the Facility Obligations,
the Borrower hereby assigns, pledges and grants to the Administrative Agent, for the benefit of the
Secured Parties, a lien on and security interest in all of the Borrower’s right, title and interest
in, to and under (but none of its obligations under) the Collateral, whether now existing or owned
or hereafter arising or acquired by the Borrower, and wherever located. The grant under this
Section 6.1 does not constitute and is not intended to result in a creation or an
assumption by the Administrative Agent, the Collateral Custodian, the Managing Agents or any



54









 







of the Secured Parties of any obligation of the Borrower or any other Person in connection
with any or all of the Collateral or under any agreement or instrument relating thereto. Anything
herein to the contrary notwithstanding, (a) the Borrower shall remain liable under the Collateral
Debt Obligations to the extent set forth therein to perform all of its duties and obligations
thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by the
Administrative Agent, for the benefit of the Secured Parties, of any of its rights in the
Collateral shall not release the Borrower from any of its duties or obligations under the
Collateral, and (c) none of the Administrative Agent, the Collateral Custodian, the Managing Agents
or any Secured Party shall have any obligations or liability under the Collateral by reason of this
Agreement, nor shall the Administrative Agent, the Managing Agents or any Secured Party be
obligated to perform any of the obligations or duties of the Borrower thereunder or to take any
action to collect or enforce any claim for payment assigned hereunder. The Borrower hereby
authorizes the Collateral Custodian or the Administrative Agent, on its behalf, to file an “all
assets” financing statement against it which covers all of its personal property; provided that the
Collateral Custodian shall not be obligated to execute, authorize or file such financing statement
except upon written instruction from the Administrative Agent.



     Section 6.2 Remedies.



     The Administrative Agent, for the benefit of the Secured Parties, shall have all of the rights
and remedies of a secured party under the UCC and other Applicable Law. Upon the occurrence and
during the continuance of an Event of Default, the Administrative Agent or its designees may (i)
deliver a Notice of Exclusive Control to the Collateral Custodian; (ii) instruct the Collateral
Custodian to deliver any or all of the Collateral to the Administrative Agent or its designees and
otherwise give all instructions and entitlement orders to the Collateral Custodian regarding the
Collateral; (iii) require that the Borrower or the Collateral Custodian immediately take action to
liquidate the Collateral to pay amounts due and payable in respect of the Facility Obligations;
(iv) sell or otherwise dispose of, or direct the Collateral Custodian to sell or otherwise dispose
of, the Collateral in a commercially reasonable manner, all without judicial process or
proceedings; (v) take control of the Proceeds of any such Collateral; (vi) exercise or direct the
Collateral Custodian to exercise any consensual or voting rights in respect of the Collateral;
(vii) direct the Collateral Custodian to release, make extensions, discharges, exchanges or
substitutions for, or surrender all or any part of the Collateral; (viii) enforce the Borrower’s
rights and remedies with respect to the Collateral; (ix) institute and prosecute legal and
equitable proceedings to enforce collection of, or realize upon, any of the Collateral; (x) remove
from the Borrower’s, the Servicer’s, the Collateral Custodian’s and their respective agents’ place
of business copies of all Records relating to the Collateral and, in the case of the Collateral
Debt Obligation Documents themselves, the originals of any such Collateral Debt Obligation
Documents not held by the Collateral Custodian on behalf of the Administrative Agent; and/or (xi)
direct the Collateral Custodian to endorse the name of the Borrower upon any items of payment
relating to the Collateral or upon any proof of claim in bankruptcy against an account debtor. For
purposes of taking the actions described in clauses (i) through (xi) above, the
Borrower hereby irrevocably appoints the Administrative Agent as its attorney-in-fact (which
appointment being coupled with an interest is irrevocable while any of the Facility Obligations
remain unpaid), with power of substitution, in the name of the Administrative Agent or in the name
of the Borrower or otherwise, for the use and benefit of the Administrative Agent, but at the cost
and expense of the Borrower and without notice to the Borrower; provided that the



55









 







Administrative Agent hereby agrees to exercise such power only so long as an Event of Default
shall be continuing.



     Section 6.3 Release of Liens.



     (a) At the same time as any Collateral Debt Obligation that is part of the Collateral matures
or expires by its terms or is otherwise paid in full by the related Obligor, and all amounts due in
payment thereof have been deposited in the Collection Account, the Administrative Agent, on behalf
of the Secured Parties, shall be deemed to have automatically released its interest in such
Collateral Debt Obligation without any further action on its part. In connection with any such
release on or after the occurrence of the above, the Administrative Agent, on behalf of the Secured
Parties, will execute and deliver, and will permit the Collateral Custodian to execute and deliver,
to the Borrower or the Servicer on behalf of the Borrower any termination statements and any other
releases and instruments as the Borrower or the Servicer on behalf of the Borrower may reasonably
request in order to effect the release of such Collateral Debt Obligation.



     (b) Upon any request for a release of certain Collateral Debt Obligations in connection with
an Optional Repurchase, if, upon application of the proceeds of such transaction in accordance with
this Agreement, the requirements of Section 2.14(b) shall be satisfied, the Administrative
Agent, on behalf of the Secured Parties will, to the extent requested by the Borrower or the
Servicer on behalf of the Borrower, release its interest in such Collateral Debt Obligation. In
connection with any such release on or after the occurrence of the above, the Administrative Agent,
on behalf of the Secured Parties, will execute and deliver, and will permit the Collateral
Custodian to execute and deliver, to the Borrower or the Servicer on behalf of the Borrower any
termination statements and any other releases and instruments, in recordable form if necessary, as
the Borrower or the Servicer on behalf of the Borrower may reasonably request in order to effect
the release of such Collateral Debt Obligation; provided that the Collateral Custodian and the
Administrative Agent, on behalf of the Secured Parties, will make no representation or warranty,
express or implied, with respect to any such Collateral Debt Obligation in connection with such
liquidation.



     (c) Upon deposit by the Borrower into the Collection Account of the Proceeds of a repayment in
respect of an Ineligible Collateral Debt Obligation pursuant to Section 2.4(c), the
Administrative Agent, on behalf of the Secured Parties, shall be deemed to have automatically
released its interest in such Ineligible Collateral Debt Obligation without any further action on
its part. In connection with any such release on or after the occurrence of such repurchase, the
Administrative Agent, on behalf of the Secured Parties, will execute and deliver, and will permit
the Collateral Custodian to execute and deliver, to the Borrower or the Servicer on behalf of the
Borrower any releases and instruments as the Borrower or the Servicer on behalf of the Borrower may
reasonably request in order to effect the release of such Ineligible Collateral Debt Obligation.



     Section 6.4 Assignment of the Purchase Agreement.



     The Borrower hereby represents, warrants and confirms to the Administrative Agent that the
Borrower has assigned to the Administrative Agent, for the ratable benefit of the Secured



56









 







Parties hereunder, all of the Borrower’s right and title to and interest in the Purchase
Agreement. The Borrower confirms that following an Event of Default the Administrative Agent shall
have the sole right to enforce the Borrower’s rights and remedies under the Purchase Agreement for
the benefit of the Secured Parties, but without any obligation on the part of the Administrative
Agent, the Collateral Custodian, the Secured Parties or any of their respective Affiliates to
perform any of the obligations of the Borrower under the Purchase Agreement. The Borrower further
confirms and agrees that such assignment to the Administrative Agent shall terminate upon the
Collection Date; provided that the rights of the Administrative Agent and the Secured Parties
pursuant to such assignment with respect to rights and remedies in connection with any indemnities
and any breach of any representation, warranty or covenants made by the Originator pursuant to the
Purchase Agreement, which rights and remedies survive the termination of the Purchase Agreement,
shall be continuing and shall survive any termination of such assignment.



ARTICLE VII

ADMINISTRATION, SERVICING AND MANAGEMENT OF COLLATERAL DEBT OBLIGATIONS




     Section 7.1 Appointment of the Servicer.



     The Borrower hereby appoints the Servicer to service the Collateral Debt Obligations and
enforce its respective rights and interests in and under each Collateral Debt Obligation in
accordance with the terms and conditions of this Article VII and to serve in such capacity
until the termination of its responsibilities pursuant to Section 7.12. The Servicer hereby
agrees to perform the duties and obligations with respect thereto as set forth herein.



     Section 7.2 Duties and Responsibilities of the Servicer.



     (a) The Servicer shall conduct the servicing, administration and collection of the Collateral
Debt Obligations and shall take, or cause to be taken, all such actions as may be necessary or
advisable to service, administer and collect Collateral Debt Obligations from time to time on
behalf of the Borrower and as the Borrower’s agent.



     (b) The duties of the Servicer, as the Borrower’s agent, shall include, without limitation:




     (i) preparing and submitting of claims to, and post-billing liaison with, Obligors on
Collateral Debt Obligations;




     (ii) maintaining all necessary Servicing Records with respect to the Collateral Debt
Obligations and providing such reports to the Borrower, the Managing Agents and the
Administrative Agent in respect of the servicing of the Collateral Debt Obligations
(including information relating to its performance under this Agreement) as may be required
hereunder or as the Borrower, any Managing Agent or the Administrative Agent may reasonably
request;




     (iii) maintaining and implementing administrative and operating procedures (including
an ability to recreate Servicing Records evidencing the Collateral Debt Obligations in the
event of the destruction of the originals thereof) and keeping and



57









 







maintaining all Records reasonably necessary or advisable for the collection of the
Collateral Debt Obligations (including records adequate to permit the identification of each
new Collateral Debt Obligation and all Collections of and adjustments to each existing
Collateral Debt Obligation); provided that any Successor Servicer shall only be required to
recreate the Servicing Records of each prior Servicer to the extent such records have been
delivered to it in a format reasonably acceptable to such Successor Servicer;




     (iv) promptly delivering to the Borrower, any Managing Agent, the Collateral Custodian
or the Administrative Agent, from time to time, such information and Servicing Records
(including information relating to its performance under this Agreement) as the Borrower,
such Managing Agent, the Collateral Custodian or the Administrative Agent from time to time
reasonably request;




     (v) identifying each Collateral Debt Obligation clearly and unambiguously in its
Servicing Records to reflect that such Collateral Debt Obligation is owned by the Borrower
and pledged to the Administrative Agent for the benefit of the Secured Parties;




     (vi) complying in all material respects with the Servicing Standards in regard to each
Collateral Debt Obligation;




     (vii) complying with all Applicable Laws with respect to it, its business and
properties and all Collateral, except where failure to do so, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect;




     (viii) preserving and maintaining its existence, rights, licenses, franchises and
privileges as a corporation in the jurisdiction of its organization, and qualifying and
remaining qualified in good standing as a foreign corporation and qualifying to and
remaining authorized and licensed to perform obligations as Servicer (including enforcement
of collection of Collateral Debt Obligations on behalf of the Borrower, Lenders, each Hedge
Counterparty and the Collateral Custodian) in each jurisdiction where the failure to
preserve and maintain such existence, rights, franchises, privileges and qualification would
materially adversely affect (A) the rights or interests of the Borrower, Lenders, each Hedge
Counterparty and the Collateral Custodian in the Collateral Debt Obligations, (B) the
collectibility of any Collateral Debt Obligation, or (C) the ability of the Servicer to
perform its obligations hereunder; and




     (ix) notifying the Borrower, each Managing Agent and the Administrative Agent of any
material action, suit, proceeding, dispute, offset deduction, defense or counterclaim that
is or is threatened to be (A) asserted by an Obligor with respect to any Collateral Debt
Obligation; or (B) reasonably expected to have a Material Adverse Effect; and



     (c) The Borrower and Servicer hereby acknowledge that the Secured Parties, the Administrative
Agent, the Backup Servicer and the Collateral Custodian shall not have any obligation or liability
with respect to any Collateral Debt Obligations, nor shall any of them be obligated to perform any
of the obligations of the Servicer hereunder, except, solely with respect



58









 







to the performance of the obligations of the Servicer hereunder, to the extent that the Backup
Servicer shall become the Successor Servicer pursuant to the terms hereof, it shall perform the
duties of the Servicer in accordance with the provisions of this Agreement.



     (d) The relationship of the Servicer (and of any successor to the Servicer as servicer under
this Agreement) to the Borrower and the Administrative Agent under this Agreement is intended by
the parties hereto to be that of an independent contractor and not of a joint venturer, agent or
partner of the Borrower or the Administrative Agent.



     Section 7.3 Authorization of the Servicer.



     (a) Each of the Borrower, each Managing Agent, on behalf of itself and the related Lenders,
the Administrative Agent, the Collateral Custodian and each Hedge Counterparty hereby authorizes
the Servicer (including any successor thereto) to take any and all reasonable steps in its name and
on its behalf necessary or desirable and not inconsistent with the pledge of the Collateral to the
Administrative Agent, on behalf of the Secured Parties, to collect all amounts due under any and
all Collateral Debt Obligations, including endorsing any of their names on checks and other
instruments representing Collections, executing and delivering any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, and all other comparable
instruments, with respect to the Collateral Debt Obligations and, after the delinquency of any
Collateral Debt Obligation and to the extent permitted under and in compliance with Applicable Law,
to commence proceedings with respect to enforcing payment thereof, to the same extent as the
Borrower could have done if it had continued to own such Collateral free of any Liens. The Borrower
shall furnish the Servicer (and any successors thereto) with any powers of attorney and other
documents necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder, and shall cooperate with the Servicer to the fullest extent in
order to ensure the collectibility of the Collateral Debt Obligations. In no event shall the
Servicer be entitled to make the Borrower, any Lender, any Managing Agent, any Hedge Counterparty,
the Collateral Custodian or the Administrative Agent a party to any litigation without such party’s
express prior written consent, or to make the Borrower a party to any litigation (other than any
routine foreclosure or similar collection procedure) without such Person’s and the Administrative
Agent’s consent.



     (b) After an Event of Default has occurred and is continuing, at the Administrative Agent’s
direction, the Servicer shall take such action as the Administrative Agent may deem necessary or
advisable to enforce collection of the Collateral Debt Obligations; provided that the
Administrative Agent may, at any time that an Event of Default has occurred and is continuing,
notify any Obligor with respect to any Collateral Debt Obligations of the assignment of such
Collateral Debt Obligations to the Administrative Agent and direct that payments of all amounts due
or to become due to the Borrower thereunder be made directly to the Administrative Agent or any
servicer, collection agent or lock-box or other account designated by the Administrative Agent and,
upon such notification and at the expense of the Borrower, the Administrative Agent may enforce
collection of any such Collateral Debt Obligations and adjust, settle or compromise the amount or
payment thereof. The Administrative Agent shall give written notice to any Successor Servicer of
the Administrative Agent’s actions or directions pursuant to this Section 7.3(b).



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     Section 7.4 Collection of Payments.



     (a) Collection Efforts, Modification of Collateral Debt Obligations. The Servicer will
make reasonable efforts to collect all payments called for under the terms and provisions of the
Collateral Debt Obligations as and when the same become due, and will follow its Servicing
Standards. The Servicer will use reasonable efforts to maximize collections with respect to
Charged-Off Obligations and Delinquent Obligations. The Servicer may not waive, modify or otherwise
vary any provision of a Collateral Debt Obligation, except as may be done in accordance with the
Servicing Standards.



     (b) Lock-Box Accounts. The Servicer and the Originator have established, or caused to
be established, and will maintain, or caused to be maintained, the Lock-Box and the Lock-Box
Accounts, for the deposit of the amounts representing payments sent by the Obligors with respect to
Collateral Debt Obligations pledged to the Administrative Agent for the benefit of the Secured
Parties, as well as with respect to other securities and loans not so pledged. On or before the
Cut-Off Date with respect to each Collateral Debt Obligation included or to be included in the
Collateral, the Servicer, as agent for the Borrower, shall have instructed the applicable Obligor
or Obligors to make all payments sent to the Lock-Box Bank in respect of such Collateral Debt
Obligation to the Lock-Box Account Bank for deposit in the Lock-Box Accounts. All proceeds in the
Lock-Box Accounts shall be distributed into the Collection Account, or, if applicable, the
Committed Funding Account, within two Business Days of receipt as provided in the Lock-Box
Agreement.



     (c) Acceleration. The Servicer may, and shall at the direction of the Administrative
Agent following an Event of Default, accelerate the maturity of all or any Scheduled Payments under
any Collateral Debt Obligation under which a default under the terms thereof has occurred and is
continuing (after the lapse of any applicable grace period), in each case, (to the extent it is
permitted to do so under the related Collateral Debt Obligation Documents) and is consistent with
its Servicing Standards.



     Section 7.5 Representations and Warranties of the Originator and Servicer.



     The Servicer hereby represents and warrants to the other parties hereto that, as of the
Closing Date, as of each Transfer Date and as of each Additional Funding Date:



     (a) Organization and Qualification. The Servicer has been duly organized and is
validly existing and in good standing as a limited liability company or other corporate entity or
national banking association under the laws of its jurisdiction of organization, with requisite
power and authority to own its properties and to transact the business in which it is now engaged,
including to enter into and perform its obligations under each Transaction Document to which it is
a party, and is duly qualified to do business and is in good standing (or is exempt from such
requirements) in each State of the United States where the nature of its business requires it to be
so qualified and the failure to be so qualified and in good standing could reasonably be expected
to have a Material Adverse Effect. Without limiting the generality of the foregoing, the Servicer
(A) is duly qualified, in good standing and licensed to carry on its business in each state where
any Related Property related to a Collateral Debt Obligation is located to the extent necessary to
ensure the enforceability of each Collateral Debt Obligation and the servicing of the



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Collateral Debt Obligation by the Servicer in accordance with the Servicing Standards and (B)
is in compliance with the laws of any such jurisdiction, in both cases, to the extent necessary to
ensure the enforceability of such Collateral Debt Obligation in accordance with the terms thereof.



     (b) No Conflict. The execution, delivery and performance by the Servicer of its
obligations under each Transaction Document to which it is a party and the consummation of the
transactions therein contemplated will not conflict with or result in a breach of any of the terms
or provisions of, or constitute a default under, or result in the creation or imposition of any
Lien (other than any Lien created by the Transaction Documents), charge or encumbrance upon any of
the property or assets of the Servicer or any of its Affiliates pursuant to the terms of any of
their organizational documents or any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Servicer or any of its Affiliates is bound or to which any of
its property or assets is subject, nor will such action result in any violation of the provisions
of its organizational documents or any Applicable Law applicable to the Servicer or any of its
properties.



     (c) Authorization and Enforceability. Each of the Transaction Documents to which the
Servicer is a party has been duly authorized, executed and delivered by the Servicer and (assuming
due authorization, execution and delivery by each other party thereto) is a valid and legally
binding obligation of the Servicer, enforceable against the Servicer, in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency, reorganization, receivership,
moratorium or other similar laws relating to or affecting the rights of creditors generally, and by
general equity principles (regardless of whether such enforcement is considered in a proceeding in
equity or at law).



     (d) No Violation. The Servicer is not in violation of its organizational documents or
in default under any agreement, indenture, mortgage, deed of trust or instrument the effect of
which violation or default could reasonably be expected to have a Material Adverse Effect. The
Servicer is not in violation of any Applicable Law promulgated by any Governmental Authority having
jurisdiction over it or any of its assets, which violation could reasonably be expected to have a
Material Adverse Effect.



     (e) Governmental Action. No approvals, authorizations, consents, orders or other
actions of any Person or of any Governmental Authority is required for (A) the execution, delivery
and performance by the Servicer of, or compliance by the Servicer with, any of the Transaction
Documents to which the Servicer is a party or (B) the consummation of the transactions required of
the Servicer by any Transaction Document to which the Servicer is a party, except such as shall
have been obtained before the date hereof.



     (f) Licenses. The Servicer possesses all material licenses, certificates, authorities
or permits issued by the appropriate Governmental Authority necessary to conduct the business now
operated by it, and has not received any notice of proceedings relating to the revocation or
modification of any such license, certificate, authority or permit which, singly or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.



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     (g) Litigation. There are no actions or proceedings against, or investigations of, the
Servicer currently pending with regard to which the Servicer has received service of process and no
action or proceeding against, or investigation of, the Borrower is, to the knowledge of the
Servicer, threatened or otherwise pending before any Governmental Authority that (A) would prohibit
its entering into any of the Transaction Documents to which it is a party or render the Advances
invalid, (B) seeks to prevent the making of the Advances or the consummation of any of the
transactions contemplated by any of the Transaction Documents to which it is a party, (C) would
prohibit or materially and adversely affect the performance by the Servicer of its obligations
under, or the validity or enforceability of, any of the Transaction Documents to which it is a
party, (D) that could reasonably be expected to have a Material Adverse Effect or (E) seeking to
affect adversely the income tax treatment of the Advances.



     (h) Solvency. The Servicer is Solvent, is able to pay its debts as they become due and
has capital sufficient to carry on its business and its obligations hereunder; it will not be
rendered not Solvent by the execution and delivery of any of the Transaction Documents to which it
is a party or the assumption of any of its obligations thereunder; no petition of bankruptcy (or
similar insolvency proceeding) has been filed by or against the Servicer.



     (i) Taxes. The Servicer has filed or caused to be filed all tax returns which, to its
knowledge, are required to be filed and has put all taxes shown to be due and payable on such
returns or on any assessments made against it or any of its property and all other taxes, fees or
other charges imposed on it or any of its property by any Governmental Authority (other than any
amount of tax due, the validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which reserves in accordance with generally accepted accounting
principles have been provided on the books of the Servicer); and no tax Lien has been filed and, to
the Servicer’s knowledge, no claim is being asserted, with respect to any such tax, fee or other
charge; provided that the representations and warranties in this clause shall not be applicable to
the Backup Servicer in its capacity as Successor Servicer (if so appointed pursuant to this
Agreement).



     (j) No Defaults. The Servicer is not in default with respect to any order or decree of
any court or any order, regulation or demand of any federal, state, municipal or governmental
agency, which default might have consequences that would materially and adversely affect the
condition (financial or otherwise) or operations of the Servicer or its properties or might have
consequences that would materially and adversely affect its performance hereunder.



     (k) Accuracy of Information. All written factual information heretofore furnished by
the Servicer for purposes of or in connection with this Agreement or the other Transaction
Documents to which the Servicer is a party, or any transaction contemplated hereby or thereby is,
and all such written factual information hereafter furnished by the Servicer to any party to the
Transaction Documents will be, true and accurate in every material respect, on the date such
information is stated or certified; provided that that any written factual information shall not
include any information or report provided by CEIS, but shall include any information given by the
Servicer to CEIS; and provided further that no Successor Servicer shall be responsible for
ascertaining the truthfulness or accuracy of any information (i) received by it from any
predecessor Servicer or (ii) provided by it based on any incorrect information received by it from
any predecessor Servicer.



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     Section 7.6 Covenants of the Servicer.



     The Servicer hereby covenants that:



     (a) Compliance with Law. It will comply with all Applicable Laws with respect to it,
its business and properties and all Collateral, except where the failure to do so, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse Effect.



     (b) Preservation of Corporate Existence. It will preserve and maintain its corporate
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 or other corporate entity
in each jurisdiction where the failure to maintain such existence, rights, franchises, privileges
and qualification has had, or could reasonably be expected to have, a Material Adverse Effect.



     (c) Obligations with Respect to Collateral Debt Obligations. It will take any
actions, consistent with its Servicing Standards, which are required to ensure that the Borrower
shall duly fulfill and comply with all material obligations on the part of the Borrower to be
fulfilled or complied with under or in connection with each Collateral Debt Obligation and will do
nothing to impair the rights of the Borrower or the Administrative Agent, for the benefit of the
Secured Parties, or of the Collateral Custodian or the Secured Parties in, to and under the
Collateral.



     (d) Preservation of Security Interest. It will, on behalf of the Borrower, execute and
file (or cause the execution and filing of) such financing and continuation statements and any
other documents that may be required by any law or regulation of any Governmental Authority to
preserve and protect fully the interest of the Administrative Agent, for the benefit of the Secured
Parties in, to and under the Collateral.



     (e) Change of Name or Jurisdiction; Records. It shall not move, or consent to the
Collateral Custodian moving, the Collateral Debt Obligation Documents relating to the Collateral
Debt Obligations without 30 days’ prior written notice to the Borrower, the Collateral Custodian
and the Administrative Agent and, in either case, will promptly take all actions required of each
relevant jurisdiction in order to continue the first priority perfected security interest of the
Administrative Agent, for the benefit of the Secured Parties, on all collateral, and such other
actions as the Collateral Custodian or the Administrative Agent may reasonably request, including
but not limited to delivery of an Opinion of Counsel.



     (f) Servicing Standards. It will comply in all material respects with the Servicing
Standards in regard to each Collateral Debt Obligation.



     (g) Event of Defaults. It will furnish to each Managing Agent and the Administrative
Agent, as soon as possible and in any event within three Business Days after knowledge by a
Responsible Officer of the Servicer of the occurrence of each Default or Event of Default, a
written statement setting forth the details of such event and the action that the Servicer proposes
to take with respect thereto.



     (h) Extension or Amendment of Collateral Debt Obligations. It will not, except as
otherwise permitted hereunder, agree, on behalf of the Borrower, to extend, amend or otherwise
modify the terms of any Collateral Debt Obligation in a manner inconsistent with the Servicing



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Standards, and in any case will not amend or otherwise modify any Collateral Debt Obligation
to extend the maturity date thereof without the consent of the Administrative Agent.



     (i) Other. It will furnish to the Borrower, any Managing Agent, the Collateral
Custodian and the Administrative Agent such other information, documents, records or reports
respecting the Collateral Debt Obligations or the condition or operations, financial or otherwise,
of the Servicer that are in the Servicer’s possession, as the Borrower, the Collateral Custodian,
such Managing Agent or the Administrative Agent may from time to time reasonably request in order
to protect the respective interests of the Borrower, such Managing Agent, the Collateral Custodian,
the Administrative Agent or the Secured Parties under or as contemplated by this Agreement.



     (j) Compliance With Collateral Debt Obligation Documents. It will, on behalf of the
Borrower, act in conformity with the Servicing Standards.



     Section 7.7 Payment of Certain Expenses by Servicer.



     The Servicer, so long as it shall be an Affiliate of the Borrower, will be required to pay all
expenses incurred by it in connection with its activities under this Agreement, including fees and
disbursements of legal counsel and independent accountants, Taxes imposed on the Servicer, expenses
incurred in connection with payments and reports pursuant to this Agreement, and all other fees and
expenses not expressly stated under this Agreement for the account of the Borrower.



     Section 7.8 Reports.



     The initial Servicer will provide all reports, certificates and other documentation required
to enable the Borrower to satisfy its reporting obligations hereunder and under the other
Transaction Documents, including the applicable requirements of Section 7.21, as and when
such reports, certificates or other documentation are required hereunder or thereunder. Any
Successor Servicer’s responsibilities shall be limited to the delivery of the Periodic Report, and
such other reports, certificates or other documentation as may be agreed between such Successor
Servicer and the Administrative Agent at the time of the appointment of such Successor Servicer.



     Section 7.9 Investment and Disposition.



     The initial Servicer may, as agent of the Borrower, take the following actions with respect to
any Collateral Debt Obligations (in each case subject to and in accordance with the provisions of
this Agreement and the Servicing Standards):



     (a) waive any default with respect to any Collateral Debt Obligation (provided that, for the
avoidance of doubt, no such waiver by the Servicer, on behalf of the Borrower, shall, in and of
itself, affect the classification of such Collateral Debt Obligation as a Charged-Off Obligation or
Delinquent Obligation under this Agreement); or



     (b) vote to accelerate (or rescind the acceleration of) the maturity of any Collateral Debt
Obligation; or



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     (c) participate on behalf of the Borrower in a committee or group formed by creditors of an
Obligor under a Collateral Debt Obligation and agree on behalf of the Borrower to any restructuring
of any Collateral Debt Obligation (including the acceptance of any security or other property in
exchange for or in satisfaction of such Collateral Debt Obligation) and/or the reorganization of
any Person obligated on or with respect to any Collateral Debt Obligation; or



     (d) exercise any other rights or remedies with respect to such Collateral Debt Obligations as
provided in the related underlying instruments, including any exercise of creditor rights, or take
any other action consistent with the terms of this Agreement which it believes to be in the best
interests of the Borrower and the Lenders and consistent with the Servicing Standard.



     provided that if a Successor Servicer shall be appointed, the Borrower shall perform each of
these functions with the consent of the Administrative Agent or such designee as the Administrative
Agent may appoint; and provided further that the initial Servicer shall not utilize any selection
procedures reasonably believed by it to be adverse to the Secured Parties in selecting the
Collateral Debt Obligations to be acquired or disposed of from time to time in accordance herewith.



     Section 7.10 The Servicer Not to Resign.



     The Servicer, so long as it shall be an Affiliate of the Borrower, shall not resign from the
obligations and duties hereby imposed on it except upon its determination that (i) the performance
of its duties hereunder is or becomes impermissible under Applicable Law and (ii) there is no
reasonable action that it could take to make the performance of its duties hereunder permissible
under Applicable Law. Any such determination permitting the resignation of the Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Borrower and the Administrative
Agent. Subject to Applicable Law, no such resignation shall become effective until a Successor
Servicer shall have assumed the responsibilities and obligations of the Servicer in according with
the terms of this Agreement.



     Section 7.11 Access to Certain Documentation and Information Regarding the Collateral Debt
Obligations.



     The Borrower, or the Servicer on its behalf, as applicable, shall provide to the
Administrative Agent, the Collateral Custodian, the Backup Servicer and each Managing Agent:



     (a) access to the Collateral Debt Obligation Documents and all other documentation regarding
the Collateral Debt Obligations included as part of the Collateral and the Related Property, such
access being afforded without charge but only (i) upon reasonable prior notice, (ii) during normal
business hours and (iii) subject to the Servicer’s normal security and confidentiality procedures.
From and after (x) the Closing Date and annually thereafter at the discretion of the Administrative
Agent, the Administrative Agent, on behalf of and with the input of each Managing Agent, may review
the Borrower’s and the Servicer’s collection and administration of the Collateral Debt Obligations
in order to assess compliance by the Servicer with the Servicer’s written policies and procedures,
as well as with this Agreement and may conduct an audit of the Collateral Debt Obligations,
Collateral Debt Obligation Documents and



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Records in conjunction with such a review, which audit shall be reasonable in scope and shall
be completed in a reasonable period of time and (y) the occurrence, and during the continuation of
a Default or an Event of Default, the Administrative Agent and each Managing Agent may review the
Borrower’s and the Servicer’s collection and administration of the Collateral Debt Obligations in
order to assess compliance by the Servicer with the Servicer’s written policies and procedures, as
well as with this Agreement, which review shall not be limited in scope or frequency, nor
restricted in period. The Administrative Agent may also conduct an audit (as such term is used in
clause (x) above) of the Collateral Debt Obligations, Collateral Debt Obligation Documents
and Records in conjunction with such a review. The Borrower shall bear the cost of such reviews and
audits; and



     (b) promptly upon request, such other information, documents, records or reports respecting
the Collateral Debt Obligations or the condition or operations, financial or otherwise, of the
Borrower or Originator as the Administrative Agent, the Collateral Custodian or the Backup Servicer
may from time to time reasonably request in order to protect the interests of the Collateral
Custodian, the Administrative Agent or the Secured Parties under or as contemplated by this
Agreement.



     Section 7.12 Servicer Termination Events.



     (a) If any one of the following events (a “Servicer Termination Event”) shall occur
and be continuing on any day:




     (i) any failure by Servicer to deposit or cause to be deposited amounts into the
Collection Account, the Reserve Account or the Committed Funding Account when required, or
any failure by Servicer to make any of the required payments therefrom, which continues
unremedied for two Business Days; or




     (ii) any failure on the part of the Servicer duly to observe or perform in any material
respect any other of the covenants or agreements on the part of the Servicer, contained in
any Transaction Document to which it is a party, which failure continues unremedied for a
period of 30 days after the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Servicer by any other party hereto or to the
Servicer (with copy to each other party hereto), by the Administrative Agent; or




     (iii) any breach on the part of the Servicer of any representation or warranty
contained in any Transaction Document to which it is a party that has a Material Adverse
Effect on the interests of any of the parties hereto and which continues unremedied for a
period of 30 days after the date on which notice of such breach, requiring the same to be
remedied, shall have been given to the Servicer by any other party hereto or to the Servicer
(with a copy to each other party hereto) by the Administrative Agent; or




     (iv) an Insolvency Event shall occur with respect to the Servicer; or




     (v) so long as the Servicer or the Originator is an Affiliate of the Borrower, any
“event of default” by any such party occurs under any of the Transaction Documents,



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then, notwithstanding anything herein to the contrary, so long as any such Servicer Termination
Events shall not have been remedied at the expiration of any applicable cure period, the
Administrative Agent may, or at the direction of the Required Lenders shall, by written notice to
the Servicer and the Backup Servicer (a “Termination Notice”), subject to the provisions of
Section 7.13, terminate all of the rights and obligations of the Servicer as Servicer under
this Agreement. The Borrower shall pay all reasonable set-up and conversion costs associated with
the transfer of servicing rights to the Successor Servicer.



     Section 7.13 Appointment of Successor Servicer.



     (a) On and after the receipt by the Servicer of a Termination Notice pursuant to Section
7.12, the Servicer shall continue to perform all servicing functions under this Agreement until
the date specified in the Termination Notice or otherwise specified by the Administrative Agent, to
the Servicer and the Backup Servicer in writing. The Administrative Agent may at the time described
in the immediately preceding sentence in its sole discretion, appoint the Backup Servicer as the
Servicer hereunder, and the Backup Servicer shall within seven days assume all obligations of the
Servicer hereunder, and all authority and power of the Servicer under this Agreement shall pass to
and be vested in the Backup Servicer unless the Backup Servicer is unwilling to accept such
appointment; provided that any Successor Servicer (including the Backup Servicer) shall not (i) be
responsible or liable for any past actions or omissions of the outgoing Servicer, (ii) be obligated
to make servicer advances, (iii) be obligated to pay any fees and expenses of any other party to
this transaction, (iv) be liable or obligated with respect to any Servicer indemnification
obligation of any prior Servicer or (v) be obligated to pay any taxes required to be paid by the
Servicer. The Administrative Agent may appoint (i) the Backup Servicer as successor servicer, or
(ii) if the Administrative Agent does not so appoint the Backup Servicer, there is no Backup
Servicer or the Backup Servicer is unwilling or unable to assume such obligations on such date, the
Administrative Agent shall as promptly as possible appoint an alternate successor servicer to act
as Servicer (in each such case, the “Successor Servicer”), and such Successor Servicer
shall accept its appointment by a written assumption in a form acceptable to the Administrative
Agent.



     (b) Upon its appointment as Successor Servicer, the Backup Servicer (subject to Section
7.13(a)) or the alternate successor servicer, as applicable, shall be the successor in all
respects to the Servicer with respect to servicing functions under this Agreement, shall assume all
servicing duties hereunder and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions hereof, and all references in
this Agreement to the Servicer shall be deemed to refer to the Backup Servicer or the Successor
Servicer, as applicable. Any Successor Servicer shall be entitled, with the prior consent of the
Administrative Agent, to appoint agents to provide some or all of its duties hereunder, provided
that no such appointment shall relieve such Successor Servicer of the duties and obligations of the
Successor Servicer pursuant to the terms hereof and that any such subcontract may be terminated
upon the occurrence of a Servicer Termination Event.



     (c) All authority and power granted to the Servicer under this Agreement shall automatically
cease and terminate upon termination of the Servicer under this Agreement and shall pass to and be
vested in the Successor Servicer, and, without limitation, the Successor Servicer is hereby
authorized and empowered to execute and deliver, on behalf of the Servicer,



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as attorney-in-fact or otherwise, all documents and other instruments, and to do and
accomplish all other acts or things necessary or appropriate to effect the purposes of such
transfer of servicing rights. The Servicer agrees to cooperate with the Successor Servicer in
effecting the termination of the responsibilities and rights of the Servicer to conduct servicing
on the Collateral.



     (d) Upon the Backup Servicer receiving notice that it is required to serve as the Successor
Servicer hereunder pursuant to the foregoing provisions of this Section 7.13, the Backup
Servicer will promptly begin the transition to its role as Successor Servicer, unless the Backup
Servicer is unwilling to accept such appointment.



     (e) To the extent of funds available therefor pursuant to the provisions of Section
2.7, the Backup Servicer shall be entitled to receive its Transition Costs incurred in
transitioning to Servicer.



     Section 7.14 Market Servicing Fee.



     Notwithstanding anything to the contrary herein, in the event that a Successor Servicer is
appointed Servicer, the Servicing Fee shall equal a fee calculated at the Servicing Fee Rate, plus
any additional amount required to achieve a rate equal to the market rate for comparable servicing
duties, any such additional amount to be fixed upon the date of such appointment by such Successor
Servicer with the consent of the Administrative Agent (such amount, the “Market Servicing
Fee”).



     Section 7.15 The Collateral Custodian.



     (a) Appointment. The Borrower and the Administrative Agent each hereby appoints Wells
Fargo to act as Collateral Custodian hereunder, for the benefit of the Administrative Agent and the
Secured Parties, as provided herein. Wells Fargo hereby accepts such appointment and agrees to
perform the duties and responsibilities with respect thereto set forth herein. The Borrower
acknowledges and agrees that the Collateral Custodian is agent solely for the Secured Parties and
shall have no obligation to the Borrower.



     (b) Custodial Duties. The Collateral Custodian shall act as collateral agent for the
Secured Parties and as custodian for, and take and retain custody of the Collateral Debt Obligation
Files delivered by, the Borrower or on its behalf pursuant to Section 5.5 in accordance
with the terms and conditions of this Agreement, all for the benefit of the Secured Parties and
subject to the Lien thereon in favor of the Administrative Agent for the benefit of the Secured
Parties. Within one Business Day of receipt of any such Collateral Debt Obligation File, the
Collateral Custodian shall deliver to the Administrative Agent a custodial receipt in form of
Exhibit G hereto. Within five Business Days of its receipt of any Collateral Debt
Obligation File and the related Collateral Debt Obligation Checklist, the Collateral Custodian
shall review the related Collateral Debt Obligation Documents to verify that each Collateral Debt
Obligation Document listed on the Collateral Debt Obligation Checklist has been received, is
executed (where applicable) and has no missing or mutilated pages and that each Underlying Note
with respect to each Collateral Debt Obligation (other than a Noteless Collateral Debt Obligation)
is an original note, and to confirm (in reliance on the Obligor name and other identifying



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information listed on the Schedule of Collateral Debt Obligations) that such Collateral Debt
Obligation is referenced on the related Schedule of Collateral Debt Obligations and shall deliver
to the Administrative Agent a certification in the form of Exhibit H hereto. Except as
described in the preceding sentence with respect to Underlying Notes, the Collateral Custodian may
fulfill its obligations hereunder by accepting and reviewing copies of all Collateral Debt
Obligation Documents in a Collateral Debt Obligation File. The Collateral Custodian further agrees
to deliver to the Administrative Agent within ten days after the end of each calendar month (other
than any month in which the certification in the form of Exhibit H hereto is delivered), an
electronic report as of the end of such month, which lists all of the Collateral Debt Obligation
Files in Collateral Custodian’s custody and any outstanding exceptions as of the end of such month.
In order to facilitate the foregoing review by the Collateral Custodian, in connection with each
delivery of Collateral Debt Obligation Files hereunder to the Collateral Custodian, the Servicer
shall provide to the Collateral Custodian an electronic file in a mutually acceptable electronic
format that contains the related Schedule of Collateral Debt Obligations. If, at the conclusion of
such review, the Collateral Custodian shall determine that any such Collateral Debt Obligation
Document is not executed (where applicable), is missing pages or has mutilated pages, that any
Underlying Note is not an original as required, that any Collateral Debt Obligation Document listed
on the Collateral Debt Obligation Checklist is missing from the Collateral Debt Obligation File or
that any such Collateral Debt Obligation Document received in the Collateral Debt Obligation File
is not listed on the related Collateral Debt Obligation Checklist, the Collateral Custodian shall
promptly notify the Borrower and the Administrative Agent of such determination by providing an
exception report to such Persons setting forth, with particularity, such of the foregoing defects
as may exist. In addition, unless instructed otherwise in writing by the Borrower and the
Administrative Agent within ten days of the Collateral Custodian’s delivery of such report, the
Collateral Custodian shall return any Collateral Debt Obligation File not referenced on such
Schedule of Collateral Debt Obligations to the Borrower. Other than as set forth above, the
Collateral Custodian shall not have any responsibility for reviewing any Collateral Debt Obligation
File. In taking and retaining custody of the Collateral Debt Obligation Files, the Collateral
Custodian shall be acting as the agent of the Administrative Agent and the other Secured Parties;
provided that the Collateral Custodian makes no representations as to the existence, perfection or
priority of any Lien on the Collateral Debt Obligation Files or the instruments therein; provided
further that the Collateral Custodian’s duties as the agent of the Administrative Agent shall be
limited to those expressly contemplated herein. All Collateral Debt Obligation Files shall be kept
in fire-resistant vaults or cabinets at the locations specified on Schedule V attached
hereto, or at such other office as shall be specified to the Administrative Agent and the Borrower
by the Collateral Custodian in a written notice delivered at least 45 days prior to such change.
All Collateral Debt Obligation Files shall be segregated with an appropriate identifying label and
maintained in such a manner so as to permit retrieval and access. All Collateral Debt Obligation
Files shall be clearly segregated from any other documents or instruments maintained by the
Collateral Custodian. The Collateral Custodian shall clearly indicate that such Collateral Debt
Obligation Files are the sole property of Borrower, subject to the security interest of the
Administrative Agent on behalf of the Secured Parties. In performing its duties, the Collateral
Custodian shall use the same degree of care and attention as it employs with respect to similar
files that it holds as custodian for others. Except as otherwise provided herein, the Collateral
Custodian shall have no power or authority to assign, hypothecate or otherwise dispose of
Collateral Debt Obligation Files.



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     (c) Concerning the Collateral Custodian.




     (i) Other than in the case of its willful misconduct, gross negligence or bad faith,
the Collateral Custodian may conclusively rely on and shall be fully protected in acting
upon any certificate, instrument, opinion, notice, letter, telegram or other document
delivered to it and that it reasonably believes in good faith to be genuine and that has
been signed by the proper party or parties. Other than in the case of its willful
misconduct, gross negligence or bad faith, the Collateral Custodian may rely conclusively on
and shall be fully protected in acting upon the written instructions of any designated
officer of the Administrative Agent.




     (ii) The Collateral Custodian may consult counsel satisfactory to it and the advice or
opinion of such counsel shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and in accordance
with the advice or opinion of such counsel.




     (iii) The Collateral Custodian shall not be liable for any error of judgment, or for
any act done or step taken or omitted by it, in good faith, or for any mistakes of fact or
law, or for anything that it may do or refrain from doing in connection herewith except in
the case of its willful misconduct, gross negligence or bad faith.




     (iv) The Collateral Custodian makes no warranty or representation and shall have no
responsibility (except as expressly set forth in this Agreement) as to the content,
enforceability, completeness, validity, sufficiency, value, genuineness, ownership or
transferability of the Collateral Debt Obligations or the Collateral Debt Obligation
Documents, and will not be required to and will not make any representations as to the
validity, collectibility, sufficiency or value of any of the Collateral Debt Obligations.
The Collateral Custodian shall not be obligated to take any legal action hereunder that
might in its judgment involve any expense or liability unless it has been furnished with an
indemnity reasonably satisfactory to it.




     (v) The Collateral Custodian shall have no duties or responsibilities except such
duties and responsibilities as are specifically set forth in this Agreement and no covenants
or obligations shall be implied in this Agreement against the Collateral Custodian.




     (vi) The Collateral Custodian shall not be required to expend or risk its own funds in
the performance of its duties hereunder.




     (vii) It is expressly agreed and acknowledged that the Collateral Custodian is not
guaranteeing performance of or assuming any liability for the obligations of the other
parties hereto or any parties to the Collateral Debt Obligations.




     (viii) In case any reasonable question arises as to its duties hereunder, the
Collateral Custodian may request instructions from the Administrative Agent, and shall be
entitled at all times to refrain from taking any action unless it has received instructions
from the Administrative Agent. Notwithstanding the preceding sentence, and subject to
Section 7.15(d), the Administrative Agent hereby instructs the Collateral Custodian,
prior



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to the occurrence of the Maturity Date, to take any action in respect of the Collateral
Debt Obligations and the Collateral Debt Obligation Documents solely in accordance with
instructions of the Servicer unless and until a notice of exclusive control has been
delivered and is in effect pursuant to the terms of the Account Control Agreement, and
thereafter to take any action in respect of the Collateral Debt Obligations and the
Collateral Debt Obligation Documents solely in accordance with instructions of the parties
specified in such notice of exclusive control. The Collateral Custodian shall in all events
have no liability, risk or cost for any action taken pursuant to and in compliance with the
instruction of the Administrative Agent or, prior to the occurrence of the Maturity Date,
the Servicer.



     (d) Release for Servicing. From time to time and as appropriate for the enforcement or
servicing of any of the Collateral Debt Obligations, the Collateral Custodian is hereby authorized,
upon receipt from the Servicer on behalf of the Borrower, of a written request for release of
Collateral Debt Obligation Files substantially in the form annexed hereto as Exhibit J, to
release to the Servicer the related Collateral Debt Obligation File set forth in such request and
receipt to the Servicer; provided that notwithstanding the foregoing or any other provision of this
Agreement, at any time following the occurrence of an Event of Default and upon its receipt of
written instructions from the Administrative Agent, the Collateral Custodian shall cease releasing
Collateral Debt Obligation Files to the Servicer without the prior consent of the Administrative
Agent. All Collateral Debt Obligation Files so released to the Servicer on behalf of the Borrower
shall be held by the Servicer in trust for the benefit of the Borrower, the Administrative Agent,
the Collateral Custodian and the other Secured Parties, with respect to their respective interests,
in accordance with the terms of this Agreement. The Servicer, on behalf of the Borrower, shall
return to the Collateral Custodian the Collateral Debt Obligation File when the Servicer’s need
therefor in connection with such foreclosure or servicing no longer exists, unless the Collateral
Debt Obligation shall be liquidated, in which case, upon receipt of an additional request for
release of Collateral Debt Obligation Files and certification as to such liquidation from the
Servicer to the Collateral Custodian substantially in the form annexed hereto as Exhibit J,
such Collateral Debt Obligation File shall be released by the Collateral Custodian to the Servicer.



     (e) Release for Payment. Upon receipt by the Collateral Custodian (with a copy to the
Administrative Agent) of the Servicer’s request for release of Collateral Debt Obligation Files and
receipt in the form annexed hereto as Exhibit J (which certification shall include a
statement to the effect that all amounts received in connection with such payment, repurchase or
sale have been credited to the Collection Account as provided in this Agreement), the Collateral
Custodian shall promptly release the related Collateral Debt Obligation File to the Servicer, on
behalf of the Borrower.



     (f) Collateral Custodian Compensation. As compensation for its activities hereunder,
the Collateral Custodian shall be entitled to a Custodial Fee and any unpaid Custodial Expenses to
the extent of funds available therefor pursuant to the provision of Section 2.7. The
Collateral Custodian’s entitlement to receive the Custodial Fee (other than due and unpaid
Custodial Fees owed through such date) shall cease on the earlier to occur of: (i) its removal as
Collateral Custodian or (ii) the termination of this Agreement.



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     (g) Replacement of the Collateral Custodian. The Collateral Custodian may be replaced
by the Borrower with the prior consent of the Administrative Agent; provided that no such
replacement shall be effective until a successor Collateral Custodian has been appointed, has
agreed to act as Collateral Custodian hereunder and has received all Collateral Debt Obligation
Files held by the previous Collateral Custodian. The Collateral Custodian may resign upon ten
Business Days notice to the Administrative Agent and the Borrower, provided that any such
resignation shall not be effective until the date on which a successor Collateral Custodian has
been appointed, has agreed to act as Collateral Custodian hereunder and has received all Collateral
Debt Obligation Files held by the previous Collateral Custodian.



     (h) Release of Collateral Debt Obligation Documents Following an Optional Repurchase.
Subject to Section 6.3, to the extent that portions of Collateral Debt Obligations are
transferred pursuant to (i) a repayment of Advances Outstanding in connection with a sale of
Ineligible Collateral Debt Obligation pursuant to Section 2.4(c), (ii) a Lien Release
Dividend or (iii) an Optional Repurchase, the Collateral Custodian shall release the original
Collateral Debt Obligation Documents.



     (i) Notices; Consents. The Collateral Custodian shall provide to the Administrative
Agent, the Servicer and the Backup Servicer (if the Backup Servicer is not the Collateral
Custodian) a copy of all written notices and communications identified as being sent to it in
connection with the Collateral Debt Obligations and the other Collateral held hereunder which it
receives from the related Obligor, participating bank and/or agent bank. In no instance shall the
Collateral Custodian be under any duty or obligation to take any action on behalf of the Servicer
or the Borrower in respect of the exercise of any voting or consent rights, or similar actions,
unless it receives specific and timely written instructions from the Administrative Agent, in which
event the Collateral Custodian shall vote, consent or take such other action in accordance with
such instructions. The Administrative Agent hereby instructs the Collateral Custodian to take any
such action solely in accordance with the written instructions of the Servicer unless and until a
notice of exclusive control has been delivered to the Collateral Custodian and is in effect
pursuant to the terms of the Account Control Agreement, and thereafter to take any such action
solely in accordance with the written instructions of the parties specified in such notice of
exclusive control.



     (j) Perfection of Security Interests. The Administrative Agent and the Lenders hereby
appoint Wells Fargo, in its capacity as Collateral Custodian hereunder, as their agent for the
purposes of perfection of a security interest in the Collateral Debt Obligations. Wells Fargo, in
its capacity as Collateral Custodian hereunder, hereby accepts such appointment and agrees to
perform the express duties set forth in this Section 7.15 and subject to the provisions
hereof.




     (i) Each of the Administrative Agent and each other Secured Party further authorizes
the Collateral Custodian to take such action as agent on its behalf and to exercise such
powers under this Agreement and the other Transaction Documents as are expressly delegated
to the Collateral Custodian by the terms hereof and thereof, together with such powers as
are reasonably incidental thereto. In furtherance, and without limiting the generality of
the foregoing, each Secured Party hereby appoints the Collateral Custodian as its agent to
execute and deliver all further instruments and documents, and take all further action that
the Administrative Agent deems necessary or



72









 







desirable in order to perfect, protect or more fully evidence the security interests
granted by the Borrower hereunder, or to enable any of them to exercise or enforce any of
their respective rights hereunder, including the execution by the Collateral Custodian, on
behalf of the Administrative Agent, as secured party/assignee, of such financing or
continuation statements, or amendments thereto or assignments thereof, relative to all or
any of the Collateral Debt Obligations now existing or hereafter arising, and such other
instruments or notices, as may be necessary or appropriate for the purposes stated
hereinabove. Nothing in this Section 7.15(j) shall be deemed to relieve the Borrower
of its obligation to protect the interest of the Collateral Custodian or the Administrative
Agent (for the benefit of the Secured Parties) in the Collateral, including to file
financing and continuation statements in respect of the Collateral in accordance with this
Agreement.




     (ii) With respect to other actions which are incidental to the actions specifically
delegated to the Collateral Custodian hereunder, the Collateral Custodian shall not be
required to take any such incidental action hereunder, but shall be required to act or to
refrain from acting (and shall be fully protected in acting or refraining from acting) upon
the direction of the Administrative Agent; provided that the Collateral Custodian shall not
be required to take any action hereunder at the request of the Administrative Agent, any
Secured Parties or otherwise if the taking of such action, in the reasonable determination
of the Collateral Custodian, (x) shall be in violation of any Applicable Law or contrary to
any provisions of this Agreement or (y) shall expose the Collateral Custodian to liability
hereunder or otherwise (unless it has received indemnity which it reasonably deems to be
satisfactory with respect thereto). In the event the Collateral Custodian requests the
consent of the Administrative Agent and the Collateral Custodian does not receive a consent
(either positive or negative) from the Administrative Agent within 10 Business Days of its
receipt of such request, then the Administrative Agent shall be deemed to have declined to
consent to the relevant action.




     (iii) Except as expressly provided herein, the Collateral Custodian shall not be under
any duty or obligation to take any affirmative action to exercise or enforce any power,
right or remedy available to it under this Agreement or any of the Collateral Debt
Obligation Documents (i) unless and until (and to the extent) expressly so directed by the
Administrative Agent or (ii) prior to the occurrence of the Maturity Date, the Servicer (and
upon such occurrence, the Collateral Custodian shall act in accordance with the written
instructions of the Administrative Agent pursuant to Section 7.15(j)(i)). The
Collateral Custodian shall not be liable for any action taken, suffered or omitted by it in
accordance with the request or direction of any Secured Party, to the extent that this
Agreement provides such Secured Party the right to so direct the Collateral Custodian or the
Administrative Agent. The Collateral Custodian shall not be deemed to have notice or
knowledge of any matter hereunder, including an Event of Default, unless a Responsible
Officer of the Collateral Custodian has actual knowledge of such matter or written notice
thereof is received by the Collateral Custodian.



     (k) Any Person (i) into which the Collateral Custodian may be merged or consolidated, (ii)
that may result from any merger or consolidation to which the Collateral Custodian shall be a party
or (iii) that may succeed to the properties and assets of the Collateral



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Custodian substantially as a whole, shall be the successor to the Collateral Custodian under
this Agreement without further act of any of the parties to this Agreement.



     Section 7.16 Representations and Warranties of the Collateral Custodian.



     The Collateral Custodian represents and warrants as follows:



     (a) Organization and Good Standing. It is a national banking association duly
organized, validly existing and in good standing under the laws of the United States with all
requisite power and authority to own its properties and to conduct its business as presently
conducted and to enter into and perform its obligations pursuant to this Agreement.



     (b) Due Qualification. It is duly qualified to do business as a national banking
association and is in good standing, has obtained all necessary licenses and approvals in all
jurisdictions in which the ownership or lease of its property or the conduct of its business
requires such qualification, licenses or approval except where the failure to so qualify or have
such licenses or approvals has not had, and would not be reasonably expected to have, a Material
Adverse Effect.



     (c) Power and Authority. It has the power and authority to execute and deliver this
Agreement and each other Transaction Document to which it is a party and to carry out their
respective terms. It has duly authorized the execution, delivery and performance of this Agreement
and each other Transaction Document to which it is a party by all requisite action.



     (d) No Violation. The consummation of the transactions contemplated by, and the
fulfillment of the terms of, this Agreement and each other Transaction Document to which it is a
party by it will not (i) conflict with, result in any breach of any of the terms or provisions of,
or constitute a default under, its articles of association, or any Contractual Obligation to which
it is a party or by which it or any of its property is bound, (ii) result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of any Contractual
Obligation, or (iii) violate any Applicable Law.



     (e) No Consents. No consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any Governmental Authority having jurisdiction over it
or any of its respective properties is required to be obtained in order for it to enter into this
Agreement or perform its obligations hereunder.



     (f) Binding Obligation. This Agreement constitutes its legal, valid and binding
obligation, enforceable in accordance with its terms, except as such enforceability may be limited
by (i) applicable Insolvency Laws and (ii) general principles of equity (whether considered in a
suit at law or in equity).



     (g) No Proceedings. There are no proceedings or investigations pending or, to the best
of its knowledge, threatened, against it before any Governmental Authority (i) asserting the
invalidity of this Agreement, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or (iii) seeking any determination or ruling that might (in its
reasonable judgment) have a Material Adverse Effect.



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     (h) Non-Affiliation. The Collateral Custodian is not affiliated, as that term is
defined in Rule 405 under the Securities Act, with the Borrower or the Servicer or with any Person
involved in the organization or operation of the Borrower and does not provide credit or credit
enhancement to the Borrower.



     Section 7.17 Covenants of the Collateral Custodian.



     The Collateral Custodian hereby covenants that:



     (a) Compliance with Law. It will comply in all material respects with all Applicable
Laws.



     (b) Preservation of Existence. It will preserve and maintain its existence, rights,
franchises and privileges as a national banking association in good standing under the laws of the
United States.



     (c) No Bankruptcy Petition. With respect to each Lender, prior to the date that is one
year and one day (or such longer preference period as shall then be in effect) after the payment in
full of all amounts owing in respect of all outstanding commercial paper issued by such Lender and,
with respect to the Borrower, prior to the date that is one year and one day (or such longer
preference period as shall then be in effect) after the Collection Date, it will not institute
against the Borrower or such Lender, or join any other Person in instituting against the Borrower
or such Lender, any Insolvency Proceedings or other similar proceedings under the laws of the
United States or any state of the United States. This Section 7.17(c) will survive the
termination of this Agreement.



     (d) Collateral Debt Obligation Files. It will not dispose of any documents
constituting the Collateral Debt Obligation Files in any manner that is inconsistent with the
performance of its obligations as the Collateral Custodian pursuant to this Agreement and will not
dispose of any Collateral Debt Obligation except as contemplated by this Agreement.



     (e) Location of Collateral Debt Obligation Files. The Collateral Debt Obligation Files
shall remain at all times in the possession of the Collateral Custodian at the address set forth on
Schedule VI.



     (f) No Changes in Custodial Fee. It will not make any changes to the Custodial Fee set
forth in the Backup Servicer and Custodian Fee Letter without the prior written approval of the
Administrative Agent.



     Section 7.18 The Backup Servicer.



     (a) Appointment. The Borrower and the Administrative Agent hereby appoint Wells Fargo
to act as Backup Servicer for the benefit of the Borrower, the Administrative Agent and the other
Secured Parties in accordance with the terms of this Agreement. Wells Fargo hereby accepts such
appointment and agrees to perform the duties and responsibilities with respect thereto set forth
herein.



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     (b) Duties. On or before the Closing Date, and until such time (if applicable) as it
shall become the Successor Servicer, the Backup Servicer shall perform, on behalf of the Borrower
and the Administrative Agent and the other Secured Parties, the following duties and obligations:




     (i) On or before the Closing Date, the Backup Servicer shall accept from the Servicer
delivery of the information required to be set forth in the Periodic Reports in hard copy
and in an agreed upon electronic format.




     (ii) Not later than 1:00 p.m. (New York City time) on each Reporting Date, the Servicer
shall provide to the Backup Servicer and the Backup Servicer shall accept delivery of an
electronic file in an agreed upon electronic format (the “Tape”) from the Servicer,
which shall include but not be limited to the following information: (x) for each Collateral
Debt Obligation in the Collateral, the name and number of the related Obligor, the
collection status, the Collateral Debt Obligation status, the date of each Scheduled
Payment, and the Outstanding Principal Balance, and (y) the Aggregate Outstanding Principal
Balance.




     (iii) Prior to the related Payment Date, the Backup Servicer shall review the Periodic
Report to ensure that it is complete on its face and that all items in such Periodic Report
have been accurately calculated, if applicable, and reported based upon the Tape or such
other information provided to the Backup Servicer by the Servicer which is required by the
Backup Servicer to perform its obligations hereunder. The Backup Servicer shall notify the
Administrative Agent, the Borrower and the Servicer of any disagreements with the Periodic
Report based on such review not later than the Business Day preceding such Payment Date to
such Persons.




     (iv) If the Borrower or the Servicer disagrees with the report provided under
Section 7.18(b)(iii) by the Backup Servicer or if the Borrower or the Servicer or
any subservicer has not reconciled such discrepancy, the Backup Servicer agrees to confer
with the Borrower or the Servicer to resolve such disagreement on or prior to the next
succeeding Determination Date and shall settle such discrepancy with the Borrower or the
Servicer if possible, and notify the Administrative Agent of the resolution thereof. The
Borrower or the Servicer hereby agree to cooperate at their own expense, with the Backup
Servicer in reconciling any discrepancies herein. If within 20 days after the delivery of
the report provided under Section 7.18(b)(iii) by the Backup Servicer, such
discrepancy is not resolved, the Backup Servicer shall promptly notify the Borrower and the
Administrative Agent of the continued existence of such discrepancy. Following receipt of
such notice by the Administrative Agent, the Servicer shall deliver to the Borrower, the
Administrative Agent, the Secured Parties and the Backup Servicer no later than the related
Payment Date a certificate describing the nature and amount of such discrepancies and the
actions the Servicer proposes to take with respect thereto.




     (v) With respect to the duties described in this Section 7.18(b), in the
absence of bad faith or gross negligence, the Backup Servicer, in the performance of its
duties and obligations hereunder, is entitled to rely conclusively, and shall be fully
protected in so relying, on the contents of each Tape, including, but not limited to, the
completeness and



76









 







accuracy thereof, provided by the Servicer. The parties acknowledge that the Backup
Servicer’s ability to perform hereunder is subject to its timely receipt of the Tape and
Periodic Report, if applicable.



     (c) Transition to Servicer Role. After the receipt by the Servicer of an effective
Termination Notice, all authority, power, rights and responsibilities of the Servicer, under this
Agreement, whether with respect to the Collateral Debt Obligations or otherwise, shall pass to and
be vested in the Backup Servicer, subject to and in accordance with the provisions of Section
7.13, as long as the Backup Servicer is not prohibited by Applicable Law from fulfilling the
same, as evidenced by an Opinion of Counsel, or is not unwilling to accept such appointment.



     (d) Merger or Consolidation. Any Person (i) into which the Backup Servicer may be
merged or consolidated, (ii) that may result from any merger or consolidation to which the Backup
Servicer shall be a party, or (iii) that may succeed to the properties and assets of the Backup
Servicer substantially as a whole, shall be the successor to the Backup Servicer under this
Agreement without further act on the part of any of the parties to this Agreement.



     (e) Backup Servicing Compensation. As compensation for its backup servicing activities
hereunder, the Backup Servicer shall be entitled to receive the Backup Servicer Fee and any unpaid
Backup Servicer Expenses to the extent of funds available therefor pursuant to the provisions of
Section 2.7. The Backup Servicer’s entitlement to receive the Backup Servicer Fee (other
than due and unpaid Backup Servicer Fees owed through such date) shall cease on the earliest to
occur of: (i) it becoming the Successor Servicer, (ii) its removal as Backup Servicer, or (iii) the
termination of this Agreement.



     (f) Backup Servicer Removal. The Backup Servicer may be removed with or without cause
by the Administrative Agent, or by the Borrower with the prior written approval of the
Administrative Agent, by notice given in writing to the Backup Servicer. In the event of any such
removal, a replacement Backup Servicer may be appointed by (i) the Borrower, acting with the
written consent of the Administrative Agent or (ii) if no such replacement is appointed within 30
days following such removal, by the Administrative Agent. The Backup Servicer may resign upon ten
Business Days notice to the Administrative Agent and the Borrower, provided that any such
resignation shall not be effective until the earlier of (i) the date on which a replacement Backup
Servicer has been appointed, has agreed to act as Backup Servicer hereunder and has received copies
of all Tapes submitted by the Borrower or the Servicer hereunder or (ii) 45 days following the date
of such notice.



     (g) Scope of Backup Servicing Duties. The Backup Servicer undertakes to perform only
such duties and obligations as are specifically set forth in this Agreement, it being expressly
understood by all parties hereto that there are no implied duties or obligations of the Backup
Servicer hereunder. Without limiting the generality of the foregoing, the Backup Servicer, except
as expressly set forth herein, shall have no obligation to supervise, verify, monitor or administer
the performance of the Servicer or the Collateral Custodian. The Backup Servicer may act through
its Administrative Agents,
attorneys and custodians in performing any of its duties and obligations
under this Agreement, it being understood by the parties hereto that the Backup Servicer will be
responsible for any misconduct or negligence on the part of such agents,



77









 







attorneys or custodians
acting on the routine and ordinary day-to-day operations for and on
behalf of the Backup Servicer. Neither the Backup Servicer nor any of its officers, directors,
employees or agents shall be liable, directly or indirectly, for any damages or expenses arising
out of the services performed under this Agreement other than damages or expenses that result from
the gross negligence or bad faith of it or them or the failure to perform materially in accordance
with this Agreement.



     (h) Limitation on Liability. Except for its willful misconduct, gross negligence or
bad faith, the Backup Servicer shall not be liable for any obligation of the Servicer contained in
this Agreement or for any errors of the Servicer contained in any computer tape, certificate or
other data or document delivered to the Backup Servicer hereunder or on which the Backup Servicer
must rely in order to perform its obligations hereunder, and the Borrower, the Administrative
Agent, the Collateral Custodian, the Backup Servicer and the other Secured Parties each agree to
look only to the Servicer to perform such obligations. Except for its willful misconduct, gross
negligence or bad faith, the Backup Servicer shall have no responsibility and shall not be in
default hereunder or incur any liability for any failure, error, malfunction or any delay in
carrying out any of their respective duties under this Agreement if such failure or delay results
from the Backup Servicer acting in accordance with information prepared or supplied by a Person
other than the Backup Servicer or the failure of any such other Person to prepare or provide such
information. Except for its gross negligence or bad faith, the Backup Servicer shall have no
responsibility, shall not be in default and shall incur no liability for (i) any act or failure to
act of any third party, including the Servicer or the Borrower, (ii) any inaccuracy or omission in
a notice or communication received by the Backup Servicer from any third party, (iii) the
invalidity or unenforceability of any Collateral Debt Obligation or Collateral Debt Obligation
Document under Applicable Law, (iv) the breach or inaccuracy of any representation or warranty made
with respect to any Collateral Debt Obligation, or (v) the acts or omissions of any successor
Backup Servicer. No provision of this Agreement shall require the Backup Servicer to expend or risk
its own funds or otherwise incur any financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights and powers, if, in its sole judgment, it shall
believe that repayment of such funds or adequate indemnity against such risk or liability is not
assured to it. In the absence of bad faith, gross negligence or willful misfeasance on the part of
the Backup Servicer, the Backup Servicer may conclusively rely, as to the truth of the statements
and correctness of the opinions expressed therein upon any request, instructions, certificate,
opinion or other document furnished to the Backup Servicer, reasonably believed by it to be genuine
and to have been signed or presented by the proper party or parties and conforming to the
requirements of this Agreement.



     (i) Possible Dual Capacity. The parties expressly acknowledge and consent to Wells
Fargo acting in the possible dual capacity of Backup Servicer or Successor Servicer and in the
capacity of Collateral Custodian. Wells Fargo may, in such dual capacity, discharge its separate
functions fully, without hindrance or regard to conflict of interest principles, duty of loyalty
principles or other breach of fiduciary duties to the extent that any such conflict or breach
arises from the performance by Wells Fargo of express duties set forth in this Agreement in any of
such capacities, all of which defenses, claims or assertions are hereby expressly waived by the
other parties hereto except in the case of negligence, acts of bad faith and willful misconduct by
Wells Fargo.



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     (j) Subservicers. The Backup Servicer may, with the prior written consent of the
Administrative Agent, subservice any and all of its duties and responsibilities hereunder,
including but not limited to its duties as Successor Servicer hereunder should the Backup Servicer
become the Successor Servicer pursuant to Section 7.13. Notwithstanding any subservicing
agreement or other delegation of duties to a subservicer, so long as this Agreement shall remain
effective, the Backup Servicer (solely in its capacity as Successor Servicer, if applicable) shall
remain obligated and primarily liable to the Collateral Custodian and the other Secured Parties,
for the servicing and administering of the Collateral Debt Obligations in accordance with the
provisions of this Agreement, without diminution of such obligation or liability by virtue of such
subservicing agreement or other arrangements with third parties pursuant to this clause (j)
or by virtue of indemnification from any subservicer and to the same extent and under the same
terms and conditions as if the Backup Servicer alone were, as applicable, servicing and
administering the Collateral Debt Obligations.



     Section 7.19 Representations and Warranties of the Backup Servicer.



     The Backup Servicer hereby represents and warrants as follows:



     (a) Organization and Good Standing. It is a national banking association duly
organized, validly existing and in good standing under the laws of the United States with all
requisite power and authority to own its properties and to conduct its business as presently
conducted and to enter into and perform its obligations pursuant to this Agreement.



     (b) Due Qualification. It is duly qualified to do business as a national banking
association and is in good standing, and has obtained all necessary licenses and approvals in all
jurisdictions in which the ownership or lease of its property and the conduct of its business
requires such qualification, licenses or approvals except where the failure to so qualify or have
such licenses or approvals has not had, and would not be reasonably expected to have, a Material
Adverse Effect.



     (c) Power and Authority. It has the power and authority to execute and deliver this
Agreement and each other Transaction Document to which it is a party and to carry out their
respective terms. It has duly authorized the execution, delivery and performance of this Agreement
by all requisite action.



     (d) No Violation. The consummation of the transactions contemplated by, and the
fulfillment of the terms of, this Agreement and each other Transaction Document to which it is a
party by it will not (i) conflict with, result in any breach of any of the terms or provisions of,
or constitute a default under, its articles of association or any Contractual Obligation by which
it is a party or by which it or any of its property is bound, (ii) result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of any Contractual
Obligation, or (iii) violate any Applicable Law.



     (e) No Consents. No consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any Governmental Authority having jurisdiction over it
or any of its respective properties is required to be obtained in order for it to enter into this
Agreement or perform its obligations hereunder.



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     (f) Binding Obligation. This Agreement constitutes its legal, valid and binding
obligation, enforceable in accordance with its terms, except as such enforceability may be limited
by (i) applicable Insolvency Laws and (ii) general principles of equity (whether considered in a
suit at law or in equity).



     (g) No Proceedings. There are no proceedings or investigations pending or, to the best
of its knowledge, threatened, against it before any Governmental Authority (i) asserting the
invalidity of this Agreement, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement, or (iii) seeking any determination or ruling that might (in its
reasonable judgment) have a Material Adverse Effect.



     Section 7.20 Covenants of the Backup Servicer.



     The Backup Servicer hereby covenants that:



     (a) Compliance with Law. The Backup Servicer will comply in all material respects with
all Applicable Laws.



     (b) Preservation of Existence. The Backup Servicer will preserve and maintain its
existence, rights, franchises and privileges as a national banking association in good standing
under the laws of the United States.



     (c) No Bankruptcy Petition. With respect to each Lender, prior to the date that is one
year and one day (or such longer preference period as shall then be in effect) after the payment in
full of all amounts owing in respect of all outstanding commercial paper issued by such Lender and,
with respect to the Borrower, prior to the date that is one year and one day (or such longer
preference period as shall then be in effect) after the Collection Date, it will not institute
against the Borrower or such Lender, or join any other Person in instituting against the Borrower
or such Lender, any Insolvency Proceedings or other similar proceedings under the laws of the
United States or any state of the United States. This Section 7.20(c) will survive the
termination of this Agreement.



     (d) No Changes in Backup Servicer Fee. The Backup Servicer will not make any changes
to Backup Servicer Fee set forth in the Backup Servicer and Custodian Fee Letter without the prior
written approval of the Administrative Agent.



     Section 7.21 Statements and Reports.



     (a) Periodic Reports. No later than 5:00 p.m. (New York City time) on each Reporting
Date, the Servicer shall deliver to the Administrative Agent, the Backup Servicer, the Collateral
Custodian and each Hedge Counterparty, by electronic transmission, a report (the “Periodic
Report”), setting forth the date of such report (day, month and year), the name of the Borrower
and the date of this Agreement, all in substantially the form set out in Exhibit A hereto.
The Periodic Report shall set forth the aggregate Revolver Paydown Amount to be transferred to the
Collection Account on the following Payment Date. In addition, the Servicer shall provide to the
Lenders and the Administrative Agent such additional reports and information regarding the
Collateral Debt Obligations and the Related Property as the Required Lenders or the Administrative
Agent may reasonably request from time to time.



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     (b) Additional Reporting After Servicer Potential Termination Event or Servicer
Termination Event. Upon the occurrence of a Servicer Potential Termination Event or a Servicer
Termination Event, the Servicer promptly shall notify the Administrative Agent, the Backup Servicer
and each Hedge Counterparty thereof. After the occurrence and during the continuance of a Servicer
Potential Termination Event or a Servicer Termination Event, the Servicer shall provide to the
Administrative Agent, promptly following the Administrative Agent’s request therefor, such
documents, reports and other information relating to the Collateral (and in such form, scope and
detail) as the Administrative Agent may request.



     (c) Servicer’s Certificate. Each Periodic Report delivered pursuant to Section
7.21(a) shall be accompanied by a certificate of a Responsible Officer of the Servicer (a
“Servicer’s Certificate”) certifying the accuracy of the Periodic Report and that no
Servicer Potential Termination Event or Servicer Termination Event has occurred, or if such event
has occurred and is continuing, specifying the event and its status.



     (d) Other Data; Servicer Financial Information. The Servicer shall:




     (i) upon the request of the Collateral Custodian, any Hedge Counterparty or the Backup
Servicer, furnish such Collateral Custodian, Hedge Counterparty or Backup Servicer, as the
case may be, such underlying data used to generate a Periodic Report as may be reasonably
requested; and




     (ii) forward to the Collateral Custodian, each Hedge Counterparty and the
Administrative Agent (a) within 60 days after each calendar quarter (except the fourth
calendar quarter), commencing with the quarter beginning September 30, 2007, the unaudited
quarterly financial statements of the Servicer and (b) within 90 days after each fiscal year
of the Servicer, commencing with the fiscal year ending December 31, 2007, the audited
annual financial statements of the Servicer, together with the related report of the
independent accountants to the Servicer. On the Payment Date following the receipt of each
such financial statements and report, the Administrative Agent will forward to each Lender a
copy of such financial statements and report.



     Section 7.22 Credit and Collection Policy; Modifications.



     The Borrower shall give the Administrative Agent prompt written notification of any material
modification or material change to the Credit and Collection Policy. If the Administrative Agent
objects in writing to such modification or change to the Credit and Collection Policy within 15
days after receipt of such notice, no Collateral Debt Obligations may be conveyed to the Borrower
pursuant to the Purchase Agreement unless such Collateral Debt Obligations have been originated
pursuant to the Credit and Collection Policy without giving effect to such modification or change.
Notwithstanding anything contained in this Agreement or the other Transaction Documents to the
contrary, any Collateral Debt Obligation conveyed to the Borrower pursuant to the Purchase
Agreement pursuant to a modification or change to the Credit and Collection Policy that has been
rejected by the Administrative Agent, or which the Administrative Agent did not receive notice of,
shall be deemed an Ineligible Collateral Debt Obligation for all purposes hereunder.



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ARTICLE VIII

EVENTS OF DEFAULT




     Section 8.1 Events of Default.



     If any of the following events (each, an “Event of Default”) shall occur and be
continuing:



     (a) notwithstanding any insufficiency of Collections for payment thereof on the related
Payment Date, default in the payment of any interest on any Advance within two Business Days after
notice that payment was not timely made; or



     (b) notwithstanding any insufficiency of Collections, (i) default in the payment of any
installment of the principal of any Advance on any Payment Date or (ii) default in the repayment in
full of all outstanding Advances by the Payment Date immediately following the latest date
specified on the Required Principal Amortization Schedule; or



     (c) the occurrence of a Servicer Termination Event; or



     (d) default in the observance or performance of any covenant or agreement of the Borrower in
any Transaction Document to which it is a party (other than a covenant or agreement, a default in
the observance or performance of which is specifically dealt with elsewhere in this Section
8.1), or any representation or warranty of the Borrower made in any Transaction Document to
which it is a party or in any certificate or other writing delivered pursuant thereto or in
connection therewith proving to have been incorrect in any material respect as of the time when the
same shall have been made, and such default shall continue or not be cured, or the circumstance or
condition in respect of which such misrepresentation or warranty was incorrect shall not have been
eliminated or otherwise cured, for a period of 30 days after there shall have been given to the
Borrower by the Administrative Agent or any Lender a written notice specifying such default or
incorrect representation or warranty and requiring it to be remedied and stating that such notice
is a notice of Default hereunder; or



     (e) default in the observance or performance of any covenant or agreement of the Originator
made in any repurchase agreement, loan and security agreement or other similar credit facility
agreement entered into by the Originator or any subsidiary of the Originator (other than any
special purpose entity subsidiary created to facilitate a structured finance transaction) for
borrowed funds in excess of $17,500,000, it being understood that a default under another agreement
shall constitute an Event of Default hereunder only when and if the lender or counterparty under
the other agreement is presently entitled to exercise default remedies under the terms of that
other agreement; or



     (f) an Insolvency Event shall occur with respect to the Borrower, the Originator or the
Servicer (if an Affiliate of the Borrower or the Originator); or



     (g) as of any day, and for a period of 5 Business Days thereafter, the Asset-to-Debt Ratio is
less than 125%; or



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     (h) a final non-appealable judgment for the payment of money shall have been rendered in an
amount in excess of (A) $20,000,000 against the Originator or any of its material subsidiaries
(which, for avoidance of doubt, shall include any special purpose entity subsidiary created to
facilitate a structured finance transaction) or (B) $500,000 against the Borrower by a court of
competent jurisdiction and, if such judgment relates to the Originator or any of its material
subsidiaries, such judgment, decree or order shall continue unsatisfied and in effect for any
period of 30 consecutive days without a stay of execution, or (ii) the Originator, the Originator’s
material subsidiaries or the Borrower, as the case may be, shall have made payments of amounts in
excess of $20,000,000 or $500,000, respectively, in settlement of any litigation; or



     (i) the Borrower or the Collateral shall become an “investment company” subject to
registration under the 1940 Act or the business and other activities of the Borrower or the
Originator, including but not limited to, the acceptance by the Borrower of the Advances made by
the Lenders, the application and use of the proceeds thereof by the Borrower and the consummation
and conduct of the transactions contemplated by the Transaction Documents to which the Borrower or
the Originator is a party result in a violation by the Originator, the Borrower, or any other party
to the Transaction Documents of the 1940 Act or the rules and regulations promulgated thereunder;



     (j) the Borrower fails to enter into or maintain Hedge Transactions as required by Section
5.3, and such failure is not cured for a period of 30 days after there shall have been given to
the Borrower by the Administrative Agent or any Lender a written notice thereof; or



     (k) the Originator fails to fund an advance pursuant to its commitment under a Revolving
Obligation or a Delayed Draw Term Obligation which it was obligated to fund pursuant to the terms
of the documentation related to such Collateral Debt Obligation.



     Section 8.2 Remedies.



     (a) Upon the occurrence of an Event of Default, the Administrative Agent shall, at the
request, or may with the consent, of the Required Lenders, by notice to the Borrower (with a copy
to the Servicer) declare the Maturity Date to have occurred, without demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower, and all Advances
Outstanding and all other amounts owing by the Borrower under this Agreement shall be accelerated
and become immediately due and payable; provided that in the event that the Event of Default
described in Section 8.1(f) herein has occurred, the Maturity Date shall automatically
occur, without demand, protest or any notice of any kind, all of which are hereby expressly waived
by the Borrower.



     (b) Upon any such declaration or automatic occurrence of the Maturity Date as specified under
Section 8.2(a), the Administrative Agent and the other Secured Parties shall have, in
addition to all other rights and remedies under this Agreement or otherwise, all rights and
remedies provided under the UCC of each applicable jurisdiction and other Applicable Laws,
including the right to sell the Collateral, which rights and remedies shall be cumulative.



     (c) At any time on and after the Maturity Date, the Borrower and the Servicer hereby agree
that they will, at the expense of Borrower or, if such Maturity Date occurred solely as a



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result of a Servicer Termination Event, at the expense of the initial Servicer or any
Affiliate of the initial Servicer if appointed as Successor Servicer hereunder, and upon request of
the Administrative Agent, forthwith, (i) assemble all or any part of the Collateral as directed by
the Administrative Agent, and make the same available to the Administrative Agent, at a place to be
designated by the Administrative Agent, and (ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at a public or private sale, at any of the
Administrative Agent’s offices or elsewhere, for cash, on credit or for future delivery, and upon
such other terms as the Administrative Agent may deem commercially reasonable. The Borrower agrees
that, to the extent notice of sale shall be required by law, at least ten days’ notice to the
Borrower 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 Administrative Agent shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given. 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. All cash Proceeds received by the Administrative Agent in respect of any
sale of, collection from, or other realization upon, all or any part of the Collateral (after
payment of any amounts incurred by the Administrative Agent or any of the Secured Parties in
connection with such sale) shall be deposited into the Collection Account and be applied against
all or any part of the Obligations pursuant to Section 2.7.



     If the Administrative Agent proposes to sell the Collateral or any part thereof in one or more
parcels at a public or private sale, the Borrower shall have the right of first refusal to
repurchase the Collateral, in whole but not in part, prior to such sale at a price not less than
the Obligations as of the date of such proposed repurchase. The aforementioned rights and remedies
shall be without limitation, and shall be in addition to all other rights and remedies of the
Administrative Agent and the Secured Parties otherwise available under any provision of this
Agreement by operation of law, at equity or otherwise, each of which are expressly preserved.



ARTICLE IX

INDEMNIFICATION




     Section 9.1 Indemnities by the Borrower.



     (a) Without limiting any other rights that any such Person may have hereunder or under
Applicable Law, the Borrower hereby agrees to indemnify the Backup Servicer, any Successor
Servicer, the Collateral Custodian, any Affected Party, any Secured Party or any of its respective
assignees and each of their respective Affiliates and officers, directors, employees, members and
agents thereof (collectively, the “Indemnified Parties”), forthwith on demand, from and
against any and all damages, losses, claims, liabilities and related costs and expenses, including
reasonable attorneys’ fees and disbursements (all of the foregoing being collectively referred to
as “Indemnified Amounts”) awarded against or incurred by, any such Indemnified Party or
other non-monetary damages of any such Indemnified Party any of them arising out of or as a result
of this Agreement, excluding, however, Indemnified Amounts to the extent (i) resulting from gross
negligence or willful misconduct on the part of any Indemnified Party or (ii) arising in respect of
Taxes excluded from the definition of Additional Amount pursuant to Section 2.12(a).
Notwithstanding anything in this Agreement to the contrary, Indemnified Amounts owed to the initial
Servicer shall be paid in accordance with Section 2.7. Without



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limiting the foregoing, the Borrower shall indemnify the Indemnified Parties for Indemnified
Amounts relating to or resulting from:




     (i) any security or loan treated as or represented by the Borrower to be an Eligible
Collateral Debt Obligation that is not at the applicable time an Eligible Collateral Debt
Obligation;




     (ii) reliance on any representation or warranty made or deemed made by the Borrower or
the Servicer (or one of their respective Affiliates) or any of their respective officers
under or in connection with this Agreement, which shall have been false or incorrect in any
material respect when made or deemed made or delivered;




     (iii) the failure by the Borrower or the Servicer (or one of their respective
Affiliates) 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 Collateral Debt Obligation comprising a portion of the Collateral, or the
nonconformity of any Collateral Debt Obligation, the Related Property with any such
Applicable Law or any failure by the Originator, the Borrower or any Affiliate thereof to
perform its respective duties under the Collateral Debt Obligations included as a part of
the Collateral;




     (iv) the failure to vest and maintain vested in the Administrative Agent a first
priority perfected security interest in the Collateral;




     (v) the failure to file, or any delay in filing, financing statements or other similar
instruments or documents under the UCC of any applicable jurisdiction or other Applicable
Laws with respect to any Collateral whether at the time of any Advance or at any subsequent
time and as required by the Transaction Documents;




     (vi) any dispute, claim, offset or defense (other than the discharge in bankruptcy of
the Obligor) of the Obligor to the payment of any security or loan included as part of the
Collateral that is, or is purported to be, an Eligible Collateral Debt Obligation (including
a defense based on such Collateral Debt Obligation not being a legal, valid and binding
obligation of such Obligor enforceable against it in accordance with its terms);




     (vii) any failure of the Borrower or the Servicer (if the Originator or one of its
Affiliates) to perform its duties or obligations in accordance with the provisions of this
Agreement or any failure by the Originator, the Borrower or any Affiliate thereof to perform
its respective duties under the Collateral Debt Obligations;




     (viii) 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
merchandise or services that are the subject of any Collateral Debt Obligation included as
part of the Collateral or the Related Property included as part of the Collateral;



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     (ix) the failure by Borrower to pay when due any Taxes for which the Borrower is
liable, including sales, excise or personal property taxes payable in connection with the
Collateral;




     (x) any repayment by the Administrative Agent, any Managing Agent or a Secured Party of
any amount previously distributed in reduction of Advances Outstanding or payment of
Interest or any other amount due hereunder or under any Hedge Transaction, in each case
which amount the Administrative Agent, such Managing Agent or a Secured Party believes in
good faith is required to be repaid;




     (xi) any investigation, litigation or proceeding related to this Agreement or the use
of proceeds of Advances or in respect of any Collateral Debt Obligation included as part of
the Collateral or the Related Property included as part of the Collateral;




     (xii) any failure by the Borrower to give reasonably equivalent value to the Originator
in consideration for the transfer by the Originator to the Borrower of any Collateral Debt
Obligation or the Related Property 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
any provision of the Bankruptcy Code; or




     (xiii) the failure of the Borrower, the Originator or any of their respective agents or
representatives to remit to the Servicer or the Administrative Agent, Collections on the
Collateral remitted to the Borrower or any such agent or representative in accordance with
the terms hereof or the commingling by the Borrower or any Affiliate of any collections.



     (b) Any amounts subject to the indemnification provisions of this Section 9.1 shall be
paid by the Borrower to the applicable Indemnified Party pursuant to the terms of Section
2.7.



     (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 Borrower 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 Borrower, on the
other hand but also the relative fault of such Indemnified Party as well as any other relevant
equitable considerations.



     (d) The obligations of the Borrower under this Section 9.1 shall survive the removal
of the Administrative Agent or any Managing Agent and the termination of this Agreement.



     (e) The parties hereto agree that the provisions of Section 9.1 shall not be
interpreted to provide recourse to the Borrower against loss by reason of the bankruptcy or
insolvency (or other credit condition) of, or default by, an Obligor on, any Collateral Debt
Obligation.



     Section 9.2 Indemnities by the Servicer.



     (a) Without limiting any other rights that any such Person may have hereunder or under
Applicable Law, the Servicer (if an Affiliate of the Borrower or the Originator) hereby



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agrees to indemnify each Indemnified Party, forthwith on demand, from and against any and all
Indemnified Amounts (calculated without duplication of Indemnified Amounts paid by the Borrower
pursuant to Section 9.1 above) awarded against or incurred by any such Indemnified Party by
reason of any acts, omissions or alleged acts or omissions of the Servicer, including, but not
limited to (i) any representation or warranty made by the Servicer under or in connection with any
Transaction Documents to which it is a party, any Periodic Report, Servicer’s Certificate or any
other information or report delivered by or on behalf of the Servicer pursuant hereto, which shall
have been false, incorrect or misleading in any material respect when made or deemed made, (ii) the
failure by the Servicer to comply with any Applicable Law, (iii) the failure of the Servicer to
comply with its duties or obligations in accordance with this Agreement, or (iv) any litigation,
proceedings or investigation against the Servicer, excluding, however, Indemnified
Amounts to the extent (i) resulting from gross negligence or willful misconduct on the part of the
applicable Indemnified Party or (ii) arising in respect of Taxes excluded from the definition of
Additional Amount pursuant to Section 2.12(a). The provisions of this indemnity shall run
directly to and be enforceable by an injured party subject to the limitations hereof. If the
Servicer has made any indemnity payment pursuant to this Section 9.2 and such payment fully
indemnified the recipient thereof and the recipient thereafter collects any payments from others in
respect of such Indemnified Amounts, the recipient shall repay to the Servicer an amount equal to
the amount it has collected from others in respect of such indemnified amounts.



     (b) If for any reason the indemnification provided above in this Section 9.2 is
unavailable to the Indemnified Party or is insufficient to hold an Indemnified Party harmless, then
the Servicer shall contribute to the amount paid or payable to 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 Servicer on the
other hand but also the relative fault of such Indemnified Party as well as any other relevant
equitable considerations.



     (c) The obligations of the Servicer under this Section 9.2 shall survive the
resignation or removal of the Administrative Agent or any Managing Agents and the termination of
this Agreement.



     (d) The parties hereto agree that the provisions of this Section 9.2 shall not be
interpreted to provide recourse to the Servicer against loss by reason of the bankruptcy or
insolvency (or other credit condition) of, or default by, any related Obligor on, any Collateral
Debt Obligation.



     (e) Any indemnification pursuant to this Section 9.2 shall not be payable from the
Collateral.



     Section 9.3 Notification of Indemnification.



     With respect to a claim subject to indemnity hereunder made by any Person against an
Indemnified Party (a “Third Party Claim”), such Indemnified Party shall notify the related
indemnifying parties (each an “Indemnifying Party”) in writing of the Third Party Claim
within a reasonable time after receipt by such Indemnified Party of written notice of the Third
Party



87









 







Claim unless the Indemnifying Parties shall have previously obtained actual knowledge thereof.
Thereafter, the Indemnified Party shall deliver to the Indemnifying Parties, within a reasonable
time after the Indemnified Party’s receipt thereof, copies of all notices and documents (including
court papers) received by the Indemnified Party relating to the Third Party Claim. No failure to
give such notice or deliver such documents shall effect the rights to indemnity hereunder. Each
Indemnifying Party shall promptly notify the Administrative Agent and the Indemnified Party (if
other than the Administrative Agent) of any claim of which it has been notified and shall promptly
notify the Administrative Agent and the Indemnified Party (if applicable) of its intended course of
action with respect to any claim.



     Section 9.4 Cooperation in Defense of Suit.



     If a Third Party Claim is made against an Indemnified Party, while maintaining control over
its own defense, the Indemnified Party shall cooperate and consult fully with the Indemnifying
Party in preparing such defense, and the Indemnified Party may defend the same in such manner as it
may deem appropriate, including settling such claim or litigation after giving notice to the
Indemnifying Party of such terms and the Indemnifying Party will promptly reimburse the Indemnified
Party upon written request; provided that the Indemnified Party may not settle any claim or
litigation without the consent of the Indemnifying Party; provided further that the Indemnifying
Party shall have the right to reject the selection of counsel by the Indemnified Party if the
Indemnifying Party reasonably determines that such counsel is inappropriate in light of the nature
of the claim or litigation and shall have the right to assume the defense of such claim or
litigation if the Indemnifying Party determines that the manner of defense of such claim or
litigation is unreasonable.



ARTICLE X

THE ADMINISTRATIVE AGENT AND THE MANAGING AGENTS




     Section 10.1 Authorization and Action.



     (a) Each Secured Party hereby designates and appoints DB as Administrative Agent hereunder,
and authorizes DB to take such actions as agent on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms of this Agreement together with such powers as
are reasonably incidental thereto. The Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary relationship with any
Secured Party, and no implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Administrative Agent shall be read into this Agreement or otherwise
exist for the Administrative Agent. In performing its functions and duties hereunder, the
Administrative Agent shall act solely as agent for the Secured Parties and does not assume nor
shall be deemed to have assumed any obligation or relationship of trust or agency with or for the
Borrower or any of its successors or assigns. The Administrative Agent shall not be required to
take any action that exposes the Administrative Agent to personal liability or that is contrary to
this Agreement or Applicable Law. The appointment and authority of the Administrative Agent
hereunder shall terminate at the indefeasible payment in full of the Facility Obligations.



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     (b) Each Lender hereby designates and appoints the Managing Agent for such Lender’s Lender
Group as its Managing Agent hereunder, and authorizes such Managing Agent to take such actions as
agent on its behalf and to exercise such powers as are delegated to the Managing Agents by the
terms of this Agreement together with such powers as are reasonably incidental thereto. No Managing
Agent shall have any duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities on the part of the applicable Managing Agent shall be read into
this Agreement or otherwise exist for the applicable Managing Agent. In performing its functions
and duties hereunder, each Managing Agent shall act solely as agent for the Lenders in the related
Lender Group and does not assume nor shall be deemed to have assumed any obligation or relationship
of trust or agency with or for the Borrower or any of its successors or assigns. No Managing Agent
shall be required to take any action that exposes it to personal liability or that is contrary to
this Agreement or Applicable Law. The appointment and authority of each Managing Agent hereunder
shall terminate at the indefeasible payment in full of the Facility Obligations.



     Section 10.2 Delegation of Duties.



     (a) The Administrative Agent may execute any of its duties under this Agreement by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters
pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable care.



     (b) Each Managing Agent may execute any of its duties under this Agreement by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters
pertaining to such duties. No Managing Agent shall be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care.



     Section 10.3 Exculpatory Provisions.



     (a) Neither the Administrative Agent nor any of its directors, officers, agents or employees
shall be (i) liable for any action lawfully taken or omitted to be taken by it or them under or in
connection with this Agreement (except for its, their or such Person’s own gross negligence or
willful misconduct or, in the case of the Administrative Agent, the breach of its obligations
expressly set forth in this Agreement), or (ii) responsible in any manner to any of the Secured
Parties for any recitals, statements, representations or warranties made by the Borrower contained
in this Agreement or in any certificate, report, statement or other document referred to or
provided for in, or received under or in connection with, this Agreement for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other document
furnished in connection herewith, or for any failure of the Borrower to perform its obligations
hereunder, or for the satisfaction of any condition specified in Article III. The
Administrative Agent shall not be under any obligation to any Secured Party to ascertain or to
inquire as to the observance or performance of any of the agreements or covenants contained in, or
conditions of, this Agreement, or to inspect the properties, books or records of the Borrower. The
Administrative Agent shall not be deemed to have knowledge of any Event of Default unless the
Administrative Agent has received notice of such Event of Default, in a document or other



89









 







written communication titled “Notice of Event of Default” from the Borrower or a Secured
Party.



     (b) Neither any Managing Agent nor any of its respective directors, officers, agents or
employees shall be (i) liable for any action lawfully taken or omitted to be taken by it or them
under or in connection with this Agreement (except for its, their or such Person’s own gross
negligence or willful misconduct or, in the case of a Managing Agent, the breach of its obligations
expressly set forth in this Agreement), or (ii) responsible in any manner to the Administrative
Agent or any of the Secured Parties for any recitals, statements, representations or warranties
made by the Borrower contained in this Agreement or in any certificate, report, statement or other
document referred to or provided for in, or received under or in connection with, this Agreement or
for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other document furnished in connection herewith, or for any failure of the
Borrower to perform its obligations hereunder, or for the satisfaction of any condition specified
in Article III. No Managing Agent shall be under any obligation to the Administrative Agent
or any Secured Party to ascertain or to inquire as to the observance or performance of any of the
agreements or covenants contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Borrower. No Managing Agent shall be deemed to have knowledge
of any Event of Default unless such Managing Agent has received notice of such Event of Default, in
a document or other written communication titled “Notice of Event of Default” from the Borrower,
the Administrative Agent or a Secured Party.



     Section 10.4 Reliance.



     (a) The Administrative Agent shall in all cases be entitled to rely, and shall be fully
protected in relying, upon any document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including counsel to the Borrower), independent accountants and other
experts selected by the Administrative Agent. The Administrative Agent shall in all cases be fully
justified in failing or refusing to take any action under this Agreement or any other document
furnished in connection herewith unless it shall first receive such advice or concurrence of the
Required Lenders or all of the Secured Parties, as applicable, as it deems appropriate or it shall
first be indemnified to its satisfaction by the Lenders; provided that, unless and until the
Administrative Agent shall have received such advice, the Administrative Agent may take or refrain
from taking any action, as the Administrative Agent shall deem advisable and in the best interests
of the Secured Parties. The Administrative Agent shall in all cases be fully protected in acting,
or in refraining from acting, in accordance with a request of the Required Lenders or all of the
Secured Parties, as applicable, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Secured Parties.



     (b) Each Managing Agent shall in all cases be entitled to rely, and shall be fully protected
in relying, upon any document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and statements of legal
counsel (including counsel to the Borrower), independent accountants and other experts selected by
such Managing Agent. Each Managing Agent shall in all cases be fully justified in failing or
refusing to take any action under this Agreement or any other document furnished in connection
herewith unless it shall first receive such advice or concurrence of the



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Lenders in its related Lender Group as it deems appropriate or it shall first be indemnified
to its satisfaction by the Lenders in its related Lender Group; provided that unless and until such
Managing Agent shall have received such advice, the Managing Agent may take or refrain from taking
any action, as the Managing Agent shall deem advisable and in the best interests of the Lenders in
its Lender Group. Each Managing Agent shall in all cases be fully protected in acting, or in
refraining from acting, in accordance with a request of the Lenders in such Managing Agent’s Lender
Group and such request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders in such Managing Agent’s Lender Group.



     Section 10.5 Non-Reliance on Administrative Agent, Managing Agents and Other Lenders.



     Each Secured Party expressly acknowledges that neither the Administrative Agent, any other
Secured Party nor any of their respective officers, directors, employees, agents, attorneys-in-fact
or affiliates has made any representations or warranties to it and that no act by the
Administrative Agent or any other Secured Party hereafter taken, including any review of the
affairs of the Borrower, shall be deemed to constitute any representation or warranty by the
Administrative Agent or any other Secured Party. Each Secured Party represents and warrants to the
Administrative Agent and to each other Secured Party that it has and will, independently and
without reliance upon the Administrative Agent or any other Secured Party and based on such
documents and information as it has deemed appropriate, made its own appraisal of and investigation
into the business, operations, property, prospects, financial and other conditions and
creditworthiness of the Borrower and made its own decision to enter into this Agreement



     Section 10.6 Reimbursement and Indemnification.



     The Lenders agree to reimburse and indemnify the Administrative Agent, and the Lenders in each
Lender Group agree to reimburse the Managing Agent for such Lender Group, and their respective
officers, directors, employees, representatives and agents to the extent not paid or reimbursed by
the Borrower (i) for any amounts for which the Administrative Agent, acting in its capacity as
Administrative Agent, or any Managing Agent, acting in its capacity as a Managing Agent, is
entitled to reimbursement by the Borrower hereunder and (ii) for any other expenses incurred by the
Administrative Agent, in its capacity as Administrative Agent, or any Managing Agent, acting in its
capacity as a Managing Agent, and acting on behalf of the related Lenders, in connection with the
administration and enforcement of this Agreement and the other Transaction Documents.



     Section 10.7 Administrative Agent and Managing Agents in their Individual Capacities.



     The Administrative Agent, each Managing Agent and each of their respective Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with the Borrower or
any Affiliate of the Borrower as though the Administrative Agent or such Managing Agent, as the
case may be, were not the Administrative Agent or a Managing Agent, as the case may be, hereunder.
With respect to the funding of Advances pursuant to this Agreement, the Administrative Agent, each
Managing Agent and each of their respective Affiliates shall have the same rights and powers under
this Agreement as any Lender and may exercise the same as



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though it were not the Administrative Agent or a Managing Agent, as the case may be, and the
terms “Lender” and “Lenders” shall include the Administrative Agent or a Managing Agent, as the
case may be, in its individual capacity.



     Section 10.8 Successor Administrative Agent or Managing Agent.



     (a) The Administrative Agent may, upon five days’ notice to the Borrower and the Secured
Parties, and the Administrative Agent will, upon the direction of all of the Lenders resign as
Administrative Agent. If the Administrative Agent shall resign, then the Required Lenders during
such five day period shall appoint from among the Secured Parties a successor agent. If for any
reason no successor Administrative Agent is appointed by the Required Lenders during such five day
period, then effective upon the expiration of such five day period, the Secured Parties shall
perform all of the duties of the Administrative Agent hereunder and the Borrower shall make all
payments in respect of the Facility Obligations or under the Fee Letters delivered by the Borrower
to the Administrative Agent and the Secured Parties directly to the applicable Managing Agents, on
behalf of the Lenders in the applicable Lender Group and for all purposes shall deal directly with
the Secured Parties. After any retiring Administrative Agent’s resignation hereunder as
Administrative Agent, the provisions of Article IX and Article X shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent
under this Agreement.



     (b) Any Managing Agent may, upon five days’ notice to the Borrower, the Administrative Agent
and the related Lenders, and any Managing Agent will, upon the direction of all of the related
Lenders resign as a Managing Agent. If a Managing Agent shall resign, then the related Lenders
during such five day period shall appoint from among the related Lenders a successor Managing
Agent. If for any reason no successor Managing Agent is appointed by such Lenders during such five
day period, then effective upon the expiration of such five day period, such Lenders shall perform
all of the duties of the related Managing Agent hereunder. After any retiring Managing Agent’s
resignation hereunder as a Managing Agent, the provisions of Article IX and Article
X shall inure to its benefit as to any actions taken or omitted to be taken by it while it was
a Managing Agent under this Agreement.



ARTICLE XI

ASSIGNMENTS; PARTICIPATIONS; SUBSERVICING




     Section 11.1 Assignments and Participations.



     The Borrower and each Lender hereby agree and consent to the complete or partial assignment by
each Lender of all or any portion of its rights under, interest in, title to and obligations under
this Agreement (i) (A) to any other issuer of commercial paper notes sponsored or administered by
the Managing Agent of such Lender’s Lender Group or (B) to any Lender or any Affiliate of a Lender
hereunder, or (ii) if an Event of Default has occurred and is continuing, or, at any other time,
with the consent of the Borrower (such consent not to be unreasonably withheld), to any other
Person. Upon such assignment, such Lender shall be released from its obligations so assigned.
Further, Borrower and each Lender hereby agree that any assignee of any Lender of this Agreement or
all or any of the outstanding Advances of such Lender shall have all of the rights and benefits
under this Agreement as if the term “Lender” explicitly



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referred to such party, and no such assignment shall in any way impair the rights and benefits
of such Lender hereunder. None of the Borrower or the Servicer shall have the right to assign its
rights or obligations under this Agreement.



     Section 11.2 Subservicing.



     The Servicer may, with the prior written consent of the Administrative Agent, subservice any
and all of its duties and responsibilities hereunder. Notwithstanding any subservicing agreement or
other delegation of duties to a subservicer, so long as this Agreement shall remain effective, the
Servicer shall remain obligated and primarily liable to the Collateral Custodian and the Secured
Parties, for the servicing and administering of the Collateral Debt Obligations in accordance with
the provisions of this Agreement, without diminution of such obligation or liability by virtue of
such subservicing agreement or other arrangements with third parties pursuant to this Section
11.2 or by virtue of indemnification from any subservicer and to the same extent and under the
same terms and conditions as if the Servicer alone were, as applicable, servicing and administering
the Collateral Debt Obligations.



ARTICLE XII

MISCELLANEOUS




     Section 12.1 Amendments and Waivers.



     Except as provided in this Section 12.1, no amendment, waiver or other modification of
any provision of this Agreement shall be effective without the written agreement of the Borrower,
the Servicer, the Administrative Agent, the Managing Agents and the Required Lenders; provided that
(i) without the consent of the Lenders in any Lender Group (other than the Lender Group to which
such Lenders are being added), the Administrative Agent and the applicable Managing Agent may, with
the consent of the Borrower, amend this Agreement solely to add additional Persons as Lenders
hereunder to the extent expressly authorized to do so pursuant to Section 11.1, (ii) any
amendment, waiver or other modification, the effect of which is to create a commitment by any
Lender to fund Advances hereunder, shall not be effective without the consent of such Lender, (iii)
the consent of each affected Lender shall be required to: (A) extend the date of any payment or
deposit of Collections by the Borrower or the Servicer, (B) reduce the amount (other than by reason
of the repayment thereof) or extend the time of payment of Advances Outstanding or reduce the rate
or extend the time of payment of Interest (or any component thereof), (C) reduce any fee payable to
the Administrative Agent or any Managing Agent for the benefit of the Lenders, (D) amend, modify or
waive any provision of the definition of Required Lenders or Sections 11, 12.1,
12.9, or 12.10, (E) consent to or permit the assignment or transfer by the Borrower
of any of its rights and obligations under this Agreement, (F) amend or waive any Event of Default,
(G) change the definition of “Collateral Debt Obligation,” or (H) amend or modify any defined term
(or any defined term used directly or indirectly in such defined term) used in clauses (A)
through (G) above in a manner that would circumvent the intention of the restrictions set
forth in such clauses, and (iv) no consent of the Servicer shall be required to permit the Borrower
to sell and assign Collateral Debt Obligations to any Person other than the Originator pursuant to
Section 2.14. Any waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.



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     No amendment, waiver or other modification (i) affecting the rights or obligations of any
Hedge Counterparty or (ii) having a material affect on the rights or obligations of the Collateral
Custodian or the Backup Servicer (including any duties of the Servicer that the Backup Servicer
would have to assume as Successor Servicer) shall be effective against such Person without the
written agreement of such Person. The Borrower or the Servicer on its behalf will deliver a copy of
all waivers and amendments to the Collateral Custodian and the Backup Servicer.



     Section 12.2 Notices, Etc.



     (a) 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 hand delivered, as to each party hereto, at its address set forth
under its name on the signature pages hereof or specified in such party’s Assignment and Acceptance
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 notice by facsimile copy, when verbal communication of receipt is obtained.



     (b) Notwithstanding anything to the contrary contained herein, with respect to any of the
Originator, the Servicer, the Borrower and other Affiliates of CapitalSource Inc., and their
respective obligations hereunder, any such party’s obligation to provide any notice, deliverable or
communication to another such party hereunder shall be deemed to be satisfied as long as (i) the
party obligated to provide such notice, deliverable or communication shall have notified the party
entitled to receive it of the availability of the information or materials which are the subject
matter thereof and (ii) the other such party has access to the information or materials that would
be the subject of such notice, delivery or communication, and if the notice described in clause
(i) has been delivered, to the extent otherwise required to be done as among such parties,
either such party’s failure to provide separate copies, make physical or electronic delivery or
give specific notice in respect of any such materials shall not be a default hereunder. Nothing
contained in the foregoing shall alter or diminish any such party’s obligations to provide delivery
of materials, notice or other information to any of the other parties to this Agreement.



     Section 12.3 No Waiver, Rights and Remedies.



     No failure on the part of the Administrative Agent or any Secured Party or any assignee of any
Secured Party to exercise, and no delay in exercising, any right or remedy hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right or remedy hereunder
preclude any other or further exercise thereof or the exercise of any other right. The rights and
remedies herein provided are cumulative and not exclusive of any rights and remedies provided by
law.



     Section 12.4 Binding Effect.



     This Agreement shall be binding upon and inure to the benefit of the Borrower, the Servicer,
the Secured Parties, the Collateral Custodian and their respective successors and permitted assigns
and, in addition, the provisions of Section 2.7 shall inure to the benefit of each Hedge
Counterparty, whether or not that Hedge Counterparty is a Secured Party, and the



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provisions relating to the Backup Servicer, including Sections 2.7, 7.4,
9.1 and 9.2 shall inure to the benefit of the Backup Servicer.



     Section 12.5 Term of this Agreement.



     This Agreement, including the Borrower’s obligation to observe its covenants set forth in
Article V and the Servicer’s obligation to observe its covenants set forth in Article
VII, shall remain in full force and effect until the Collection Date; provided that the rights
and remedies with respect to any breach of any representation and warranty made or deemed made by
the Borrower pursuant to Articles III and IV and the indemnification and payment
provisions of Article IX and Article X and the provisions of Section 12.9
and Section 12.10 shall be continuing and shall survive any termination of this Agreement.



     Section 12.6 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. EACH OF THE SECURED PARTIES, THE BORROWER AND THE ADMINISTRATIVE AGENT HEREBY AGREES
TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK. EACH
OF THE PARTIES HERETO AND EACH SECURED PARTY HEREBY WAIVES ANY OBJECTION 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 12.7 WAIVER OF JURY TRIAL.



     TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE SECURED PARTIES, THE BORROWER AND THE
ADMINISTRATIVE AGENT 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 12.8 Costs, Expenses and Taxes.



     (a) In addition to the rights of indemnification granted to the Administrative Agent, the
Managing Agents, the other Secured Parties and its or their Affiliates and officers, directors,
employees and agents thereof under Article IX hereof, the Borrower agrees to pay on demand
all reasonable costs and expenses of the Collateral Custodian, the Backup Servicer, the
Administrative Agent, the Managing Agents and the other Secured Parties incurred in connection with
the preparation, execution, delivery, administration (including periodic auditing), amendment or
modification of, or any waiver or consent issued in connection with, this



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Agreement and the other documents to be delivered hereunder or in connection herewith,
including the reasonable fees and out-of-pocket expenses of counsel for the Collateral Custodian,
the Backup Servicer, the Administrative Agent, the Managing Agents and the other Secured Parties
with respect thereto and with respect to advising the Collateral Custodian, the Backup Servicer,
the Administrative Agent, the Managing Agents and the other Secured Parties as to their respective
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 Collateral Custodian, the Backup Servicer, the Administrative Agent, the
Managing Agents or the other Secured Parties in connection with the enforcement of this Agreement
and the other documents to be delivered hereunder or in connection herewith (including any Hedge
Transaction).



     (b) The Borrower 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, the other Transaction Documents or any other agreement or other
document executed, delivered, filed or recorded in connection with the Transaction Documents or the
funding or maintenance of Advances hereunder.



     (c) The Borrower shall pay on demand all other costs, expenses and taxes (excluding income
taxes) (“Other Costs”), including all reasonable costs and expenses incurred by the
Administrative Agent or any Managing Agent in connection with periodic audits of the Borrower’s or
the Servicer’s books and records, which are incurred as a result of the execution of this
Agreement.



     Section 12.9 No Proceedings.



     Each party hereto (other than the applicable Lender) hereby covenants and agrees that on
behalf of itself and each of its affiliates, that prior to the date which is one year and one day
after the payment in full of all indebtedness for borrowed money of a Lender, such party will not
institute against, or join any other Person in instituting against, such Lender any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding
under the laws of the United States or any state of the United States. The provisions of this
Section 12.9 shall survive the termination of this Agreement.



     Each of the parties hereto (other than the Administrative Agent) hereby agrees that it will
not institute against, or join any other Person in instituting against the Borrower any Insolvency
Proceeding so long as there shall not have elapsed one year and one day since the Collection Date.



     Section 12.10 Recourse Against Certain Parties.



     (a) No recourse under or with respect to any obligation, covenant or agreement (including the
payment of any fees or any other obligations) of the Administrative Agent, any Secured Party 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 Person or any manager or
administrator of such Person or any incorporator, affiliate, stockholder, officer, employee or
director of such Person or of the Borrower or of any such manager or administrator,



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as such, by the enforcement of any assessment or by any legal or equitable proceeding, by
virtue of any statute or otherwise.



     (b) Each of parties hereto hereby acknowledges and agrees that any other transactions with a
Lender hereunder shall be without recourse of any kind to such Lender. A Lender shall have no
obligation to pay any amounts owing hereunder in excess of any amount available to such Lender
after paying or making provision for the payment of any commercial paper notes of such Lender. In
addition, each party hereto agrees that a Lender shall have no obligation to pay any other party,
any amounts constituting fees, a reimbursement for expenses or indemnities (collectively,
“Expense Claims”), and such Expense Claims shall not constitute a claim against such Lender
(as defined in Section 101 of Title 11 of the United States Bankruptcy Code), unless or until such
Lender has received amounts sufficient to pay such Expense Claims and such amounts are not required
to pay the commercial paper of such Lender.



     (c) Each of the parties hereto hereby agrees and acknowledges that each other party’s
obligations hereunder will be solely the corporate obligations of such party, and that none of the
such parties will have any recourse to any of the members, managers, shareholders, partners,
directors, officers, employees, shareholders or Affiliates of such parties with respect to any
claims, losses, damages, liabilities, indemnities or other obligations in connection with any
transaction contemplated hereby.



     (d) The provisions of this Section 12.10 shall survive the termination of this
Agreement.



     Section 12.11 Limitation on Liability of the Servicer and the Backup Servicer.



     (a) Reliance on Documents; No Obligation with Respect to Legal Actions. The Servicer
and any director, officer, employee or agent of the Servicer may rely on any document of any kind
which it in good faith reasonably believes to be genuine and to have been adopted or signed by the
proper authorities respecting any matters arising hereunder. Subject to the terms of Section
9.2, the Servicer shall have no obligation to appear with respect to, or prosecute or defend,
any legal action which is not incidental to the Servicer’s duty to service the Collateral in
accordance with this Agreement.



     (b) Limited Duties of Backup Servicer. The Backup Servicer undertakes to perform only
such duties and obligations as are specifically set forth in this Agreement, it being expressly
understood by all parties hereto that there are no implied duties or obligations of the Backup
Servicer hereunder. Without limiting the generality of the foregoing, the Backup Servicer, except
as expressly set forth herein, shall have no obligation to supervise, verify, monitor or administer
the performance of the Servicer. The Backup Servicer may act through its agents, nominees,
attorneys and custodians in performing any of its duties and obligations under this Agreement, it
being understood by the parties hereto that the Backup Servicer will be responsible for any
misconduct or negligence on the part of such agents, attorneys or custodians acting on the routine
and ordinary day-to-day operations for and on behalf of the Backup Servicer. Neither the Backup
Servicer nor any of its officers, directors, employees or agents shall be liable, directly or
indirectly, for any damages or expenses arising out of the services performed under this



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Agreement other than damages or expenses that result from the negligence or willful misconduct
of it or them or the failure to perform materially in accordance with this Agreement.



     (c) Backup Servicer not Liable for Servicer Actions. The Backup Servicer shall not be
liable for any obligation of the Servicer contained in this Agreement or for any errors of the
Servicer contained in any computer tape, certificate or other data or document delivered to the
Backup Servicer hereunder or on which the Backup Servicer must rely in order to perform its
obligations hereunder, and the Administrative Agent, the Lenders and the Collateral Custodian each
agree to look only to the Servicer to perform such obligations. The Backup Servicer shall have no
responsibility and shall not be in default hereunder or incur any liability for any failure, error,
malfunction or any delay in carrying out any of its duties under this Agreement if such failure or
delay results from the Backup Servicer acting in accordance with information prepared or supplied
by a Person other than the Backup Servicer or the failure of any such other Person to prepare or
provide such information. The Backup Servicer shall have no responsibility, shall not be in default
and shall incur no liability for (i) any act or failure to act of any third party, including the
Servicer, (ii) any inaccuracy or omission in a notice or communication received by the Backup
Servicer from any third party, (iii) the invalidity or unenforceability of any Collateral under
applicable law, (iv) the breach or inaccuracy of any representation or warranty made with respect
to any Collateral, or (v) the acts or omissions of any successor Backup Servicer.



     Section 12.12 Protection of Security Interest; Appointment of Administrative Agent as
Attorney-in-Fact.



     (a) The Borrower shall, or shall cause the Servicer to, cause this Agreement, all amendments
hereto and/or all financing statements and continuation statements and any other necessary
documents covering the right, title and interest of the Administrative Agent, for the benefit of
the Secured Parties, and of the Secured Parties to the Collateral to be promptly recorded,
registered and filed, and at all time 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 Administrative Agent, for the benefit of the Secured Parties hereunder to all
property comprising the Collateral. The Borrower shall deliver or, shall cause the Servicer to
deliver, to the Collateral Custodian and the Administrative Agent 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 Borrower and the Servicer shall cooperate
fully in connection with the obligations set forth above and will execute any and all documents
reasonably required to fulfill the intent of this Section 12.12.



     (b) The Borrower agrees that from time to time, at its expense, it will promptly execute and
deliver all instruments and documents, and take all actions, that may reasonably be necessary or
desirable, or that the Collateral Custodian or the Administrative Agent may reasonably request, to
perfect, protect or more fully evidence the security interest granted to the Administrative Agent,
for the benefit of the Secured Parties, in the Collateral, or to enable the Collateral Custodian,
the Administrative Agent or the Secured Parties to exercise and enforce their rights and remedies
hereunder.



     (c) If the Borrower or the Servicer fails to perform any of its obligations hereunder after
five Business Days’ notice from the Collateral Custodian or the Administrative Agent, the



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Administrative Agent, on behalf of the Lenders, may (but shall not be required to) perform, or
cause performance of, such obligation; and the Administrative Agent’s reasonable costs and expenses
incurred in connection therewith shall be payable by the Borrower (if the Servicer that fails to so
perform is the Borrower or an Affiliate thereof) as provided in Article IX, as applicable.
The Borrower irrevocably authorizes the Administrative Agent and appoints the Administrative Agent
as its attorney-in-fact to act on behalf of the Borrower, (i) to authorize on behalf of the
Borrower as debtor and to file financing statements necessary or desirable in the Collateral
Custodian’s or the Administrative Agent’s discretion to perfect and to maintain the perfection and
priority of the interest of the Secured Parties in the Collateral and (ii) to file a carbon,
photographic or other reproduction of this Agreement or any financing statement with respect to the
Collateral as a financing statement in such offices as the Collateral Custodian or the
Administrative Agent in its discretion deems necessary or desirable to perfect and to maintain the
perfection and priority of the interests of the Lenders in the Collateral. This appointment is
coupled with an interest and is irrevocable.



     (d) Without limiting the generality of the foregoing, Borrower will, not earlier than six
months and not later than three months prior to the fifth anniversary of the date of filing of the
financing statement referred to in Section 3.1 or any other financing statement filed
pursuant to this Agreement or in connection with any Advance 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 Collateral Custodian and the
Administrative Agent an opinion of the counsel for Borrower, in form and substance
reasonably satisfactory to the Collateral Custodian and the Administrative Agent, confirming
and updating the opinion delivered pursuant to Section 3.1 with respect to
perfection and otherwise to the effect that the Collateral hereunder continues to be subject
to a perfected security interest in favor of the Administrative Agent, for the benefit of
the Secured Parties, 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 12.13 Confidentiality.



     (a) Each of the Administrative Agent, the Managing Agents, the other Secured Parties and the
Borrower shall maintain and shall cause each of its employees and officers to maintain the
confidentiality of the Agreement and the other confidential proprietary information with respect to
the other parties hereto and their respective businesses obtained by it or them in connection with
the structuring, negotiating and execution of the transactions contemplated herein, except that
each such party and its officers and employees may (i) disclose such information to its external
accountants and attorneys and as required by an Applicable Law, as required to be publicly filed
with SEC, or as required by an order of any judicial or administrative proceeding, (ii) disclose
the existence of this Agreement, but not the financial terms thereof and (iii) disclose this
Agreement and such information in any suit, action, proceeding or investigation (whether in law or
in equity or pursuant to arbitration) involving and



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of the Collateral Debt Obligation Documents or any Hedge Transaction for the purpose of
defending itself, reducing itself, reducing its liability, or protecting or exercising any of its
claims, rights, remedies, or interests under or in connection with any of the Collateral Debt
Obligation Documents or any Hedge Transaction. Notwithstanding anything to the contrary in this
Agreement, the parties to this Agreement (and each employee, representative or other agent of such
parties) may disclose to any and all persons, without limitations of any kind, the tax treatment
and tax structure of the Agreement and any transactions described herein and all materials of any
kind (including opinions or other tax analyses) that are provided to the parties relating to such
tax treatment and tax structure.



     (b) Anything herein to the contrary notwithstanding, the Borrower hereby consents to the
disclosure of any nonpublic information with respect to it for use in connection with the
transactions contemplated herein and in the Transaction Documents (i) to the Administrative Agent
or the Secured Parties by each other, (ii) by the Administrative Agent or the Secured Parties to
any prospective or actual Eligible Assignee or participant of any of them, (iii) (except with
respect to the actual names of Obligors, which shall not be disclosed except to a Secured Party or
with the Borrower’s consent) by the Administrative Agent or the Secured Parties to any Rating
Agency, commercial paper dealer or provider of a surety, guaranty or credit or liquidity
enhancement to a Secured Party and to any officers, directors, members, employees, outside
accountants and attorneys of any of the foregoing, or (iv) to any Affiliate of the Collateral
Custodian or Backup Servicer, independent or internal auditor, agent, employee or attorney of the
Collateral Custodian or Backup Servicer having a need to know the same or to any prospective
subservicer of the Backup Servicer in its capacity as Successor Servicer; provided that each such
Person is informed of the confidential nature of such information and agree to be bound hereby. In
addition, the Secured Parties and the Administrative Agent may disclose any such nonpublic
information pursuant to any law, rule, regulation, direction, request or order of any judicial,
administrative or regulatory authority or proceedings.



     (c) The Borrower and the Servicer each agrees that it shall not (and shall not permit any of
its Affiliates to) issue any news release or make any public announcement pertaining to the
transactions contemplated by this Agreement and the Transaction Documents without the prior written
consent of the Administrative Agent (which consent shall not be unreasonably withheld) unless such
news release or public announcement is required by law or filed with a Governmental Authority, in
which case the Borrower or the Servicer shall consult with the Administrative Agent and each
Managing Agent prior to the issuance of such news release or public announcement. The Borrower and
the Servicer each may, however, disclose the general terms of the transactions contemplated by this
Agreement and the Transaction Documents to trade creditors, suppliers and other similarly-situated
Persons so long as such disclosure is not in the form of a news release or public announcement.



     Section 12.14 Execution in Counterparts; Severability; Integration.



     This Agreement may be executed in any number of counterparts and by different parties hereto
in separate counterparts, 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



100









 







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 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 other than the Fee
Letters.



     Section 12.15 Allocation of Payments on Collateral Debt Obligations Subject to the
Retained Interest Provisions.



     (a) With respect to any Collateral Debt Obligation in the Collateral that is a Term Collateral
Debt Obligation or a Delayed Draw Term Obligation and where the Originator retains a Retained
Interest, the Borrower will own only the principal portion of such Collateral Debt Obligation
outstanding as of the applicable Cut-Off Date, in an amount sold to the Borrower under the Purchase
Agreement. Principal Collections will be allocated pro rata among the portion of such Collateral
Debt Obligation owned by the Borrower and the portion not owned by the Borrower; and



     (b) With respect to any Revolving Obligation in the Collateral where the Originator retains a
Retained Interest, the Borrower will own only the principal portion of such Collateral Debt
Obligation outstanding as of the applicable Cut-Off Date in an amount sold to the Borrower under
the Purchase Agreement. Collections received by the Servicer on any such Revolving Obligation will
be allocated as follows:




     (i) For so long as (A) the Payment Allocation Condition is satisfied and (B) the
Revolving Obligation Payment Allocation Condition is satisfied with respect to each
Revolving Obligation in the Collateral, Principal Collections will be allocated first to the
portion of each such Revolving Obligation not owned by the Borrower, until the principal
amount of such portion is reduced to zero, and then to the portion owned by the Borrower;
and




     (ii) For so long as (A) the Payment Allocation Condition is not satisfied or (B) the
Revolving Obligation Payment Allocation Condition is not satisfied with respect to any
Revolving Obligation in the Collateral, Principal Collections on all of the Revolving
Obligations in the Collateral (in the case of a breach of the Payment Allocation Condition)
or the affected Revolving Obligation (in the case of a breach of the Revolving Obligation
Payment Allocation Condition only) will be allocated first to the portion of such Revolving
Obligation owned by the Borrower and/or the Borrower and Persons other than the Borrower or
the Originator (or any Affiliates of the Originator that are not securitization, warehousing
or other financing special purpose entities), to be shared by the Borrower and such other
Person pro rata (provided that if, at the time of such allocation in the Servicer’s
judgment, (x) any such other Person would be expressly permitted pursuant to its applicable
securitization, financing or other documents to have its portion of such payment reduced and
instead allocated to the Borrower and (y) the Originator, in its capacity as servicer or
manager under such applicable documents is permitted to effectuate such an allocation, then
the applicable portion of such other Person’s payment, in addition to the pro rata amount
that is otherwise required to be allocated to the Borrower, shall also be allocated to the
Borrower), until the principal



101









 







amount of such portion owned by the Borrower is reduced to zero, and then to the
remaining portions.



     (c) With respect to any Collateral Debt Obligation in the Collateral where the Originator
retains a Retained Interest, Interest Collections received by the Servicer will be allocated
between the portion owned by the Borrower and the portion not owned by the Borrower (if any) on a
pro rata basis according to the outstanding principal amount of such portion.



[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




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



	 	 	 	 	 
	BORROWER: 	CAPITALSOURCE FUNDING VIII LLC

 	 
	 	By  	/S/ JEFFREY LIPSON
 	 
	 	 	Name:  	Jeffrey Lipson 	 
	 	 	Title:  	Treasurer 	 
	 
	 	CapitalSource Funding VIII LLC

4445 Willard Avenue, 12th Floor

Chevy Chase, Maryland 20815

Attention: Controller

Facsimile No.: (301) 841-2307

Confirmation No.: (301) 841-2700



with copies to:



CapitalSource Finance LLC

4445 Willard Avenue, 12th Floor

Chevy Chase, Maryland 20815

Attention: Controller

Facsimile No.: (301) 841-2307

Confirmation No. (301) 841-2700



Patton Boggs LLP

2001 Ross Avenue, Suite 3000

Dallas, Texas 75201

Attention: James L. Baker, Esq.

Facsimile: (214) 758-1550

Telephone: (214) 758-1500

 	 
	 	 	 
	 	 	 
	 	 	 













 






	 	 	 	 	 




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



	 	 	 	 	 
	SERVICER: 	CAPITALSOURCE FINANCE LLC

 	 
	 	By  	/S/ JEFFREY LIPSON
 	 
	 	 	Name:  	Jeffrey Lipson 	 
	 	 	Title:  	Treasurer 	 
	 
	 	CapitalSource Finance LLC

4445 Willard Avenue, 12th Floor

Chevy Chase, Maryland 20815

Attention: Controller

Facsimile No.: (301) 841-2307

Confirmation No.: (301) 841-2700



with copies to:



Patton Boggs LLP

2001 Ross Avenue, Suite 3000

Dallas, Texas 75201

Attention: James L. Baker, Esq.

Facsimile: (214) 758-1550

Telephone: (214) 758-1500

 	 
	 	 	 
	 	 	 
	 	 	 













 






	 	 	 	 	 




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



	 	 	 	 	 
	LENDER: 	NANTUCKET FUNDING CORP., LLC

 	 
	 	By  	/S/ PHILIP A. MARTONE
 	 
	 	 	Name:  	Philip A. Martone 	 
	 	 	Title:  	Vice President 	 
	 
	 	c/o Lord Securities Corporation

48 Wall Street, 27th Floor

New York, New York 10005

Attention: President

Phone: (212) 346-9000

Facsimile: (212) 346-9012



with copies to:



DEUTSCHE BANK AG, NEW YORK BRANCH

60 Wall Street, 18th Floor

Mail Stop: NYC60-1850

New York, New York 10005

Attention: Mary Conners

Phone: (212) 250-4731

Facsimile: (212) 797-5150

 	 
	 	 	 
	 	 	 
	 	 	 













 






	 	 	 	 	 




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



	 	 	 	 	 
	MANAGING AGENT
 for Nantucket Funding Corp., LLC:
 	DEUTSCHE BANK AG, NEW YORK BRANCH

 	 
	 	By  	/S/ DANIEL PIETRZAK 	 
	 	 	Name:  	Daniel Pietrzak 	 
	 	 	Title:  	Director 	 
	 	 	 
	 	By  	/S/ PETER KIM 	 
	 	 	Name:  	Peter Kim 	 
	 	 	Title:  	Vice President 	 
	 
	 	60 Wall Street, 18th Floor

Mail Stop: NYC60-1850

New York, New York 10005

Attention: Mary Conners

Phone: (212) 250-4731

Facsimile: (212) 797-5150

 	 
	 
	ADMINISTRATIVE AGENT: 	DEUTSCHE BANK AG, NEW YORK BRANCH

 	 
	 	By  	/S/ DANIEL PIETRZAK
 	 
	 	 	Name:  	Daniel Pietrzak 	 
	 	 	Title:  	Director 	 
	 
	 	By  	/S/ PETER KIM 	 
	 	 	Name:  	Peter Kim 	 
	 	 	Title:  	Vice President 	 
	 
	 	60 Wall Street, 18th Floor

Mail Stop: NYC60-1850

New York, New York 10005

Attention: Mary Conners

Phone: (212) 250-4731

Facsimile: (212) 797-5150

 	 













 






	 	 	 	 	 




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



	 	 	 	 	 
	COLLATERAL CUSTODIAN AND BACKUP SERVICER: 	WELLS FARGO BANK, NATIONAL ASSOCIATION
 	 
	 	By  	/S/ JOE NARDI 	 
	 	 	Name:  	Joe Nardi 	 
	 	 	Title:  	Vice President 	 
	 
	 	Sixth Street and Marquette Avenue

MAC N9311-161

Minneapolis, Minnesota 55479

Attention: Corporate Trust Services/Asset

Backed Administration

Phone: (612) 667-8058

Facsimile: (612) 667-3464