exv10w54



 






Exhibit 10.54




EXECUTION COPY




 





CREDIT AGREEMENT




among




CAPITALSOURCE INC.

as the Borrower




THE GUARANTORS LISTED HEREIN,




THE LENDERS LISTED HEREIN,




WACHOVIA BANK, NATIONAL ASSOCIATION,

as the Administrative Agent, Swingline Lender, and Issuing Lender




and




BANK OF AMERICA, N.A.,

as Issuing Lender






WACHOVIA CAPITAL MARKETS, LLC,

as Sole Bookrunner and as Lead Arranger




BANK OF MONTREAL,




BARCLAYS BANK PLC,




and




SUNTRUST BANK,

as Co-Documentation Agents





 





March 14, 2006




 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE I DEFINITIONS	 	 	1	 
	Section 1.1.
	 	Defined Terms	 	 	1	 
	Section 1.2.
	 	Other Definitional Provisions	 	 	24	 
	Section 1.3.
	 	Accounting Terms	 	 	24	 
	Section 1.4.
	 	Computation of Time Periods	 	 	24	 
	ARTICLE II THE LOANS; AMOUNT AND TERMS	 	 	25	 
	Section 2.1.
	 	Revolving Loans	 	 	25	 
	Section 2.2.
	 	Increase of the Commitments	 	 	26	 
	Section 2.3.
	 	Letter of Credit Subfacility	 	 	28	 
	Section 2.4.
	 	Swingline Loan Subfacility	 	 	32	 
	Section 2.5.
	 	Fees	 	 	34	 
	Section 2.6.
	 	Commitment Reductions	 	 	35	 
	Section 2.7.
	 	Prepayments	 	 	35	 
	Section 2.8.
	 	Minimum Principal Amounts	 	 	36	 
	Section 2.9.
	 	Default Rate and Payment Dates	 	 	36	 
	Section 2.10.
	 	Conversion Options	 	 	37	 
	Section 2.11.
	 	Computation of Interest and Fees	 	 	37	 
	Section 2.12.
	 	Pro Rata Treatment and Payments	 	 	38	 
	Section 2.13.
	 	Non-Receipt of Funds by the Administrative Agent	 	 	40	 
	Section 2.14.
	 	Inability to Determine Interest Rate	 	 	41	 
	Section 2.15.
	 	Illegality	 	 	41	 
	Section 2.16.
	 	Requirements of Law	 	 	42	 
	Section 2.17.
	 	Indemnity	 	 	43	 
	Section 2.18.
	 	Taxes	 	 	43	 
	Section 2.19.
	 	Indemnification; Nature of Issuing
Lender’s Duties	 	 	46	 
	Section 2.20.
	 	Extension of Commitment Termination Date	 	 	47	 
	Section 2.21.
	 	Replacement of Lenders	 	 	47	 
	ARTICLE III CONDITIONS PRECEDENT	 	 	48	 
	Section 3.1.
	 	Conditions to Closing	 	 	48	 
	Section 3.2.
	 	Conditions to All Extensions of Credit	 	 	50	 






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TABLE OF CONTENTS

(continued)




	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES	 	 	51	 
	Section 4.1.
	 	Existence and Power	 	 	51	 
	Section 4.2.
	 	Organizational and Governmental Authorization; No Contravention	 	 	51	 
	Section 4.3.
	 	Binding Effect	 	 	52	 
	Section 4.4.
	 	Financial Information	 	 	52	 
	Section 4.5.
	 	Litigation	 	 	52	 
	Section 4.6.
	 	Compliance with ERISA	 	 	52	 
	Section 4.7.
	 	Taxes	 	 	53	 
	Section 4.8.
	 	Subsidiaries	 	 	53	 
	Section 4.9.
	 	Investment Company Act	 	 	53	 
	Section 4.10.
	 	Public Utility Holding Company Act	 	 	53	 
	Section 4.11.
	 	Ownership of Property	 	 	53	 
	Section 4.12.
	 	No Default	 	 	53	 
	Section 4.13.
	 	Full Disclosure	 	 	54	 
	Section 4.14.
	 	Environmental Matters	 	 	54	 
	Section 4.15.
	 	Compliance with Laws	 	 	54	 
	Section 4.16.
	 	Capital Stock	 	 	55	 
	Section 4.17.
	 	Margin Stock	 	 	55	 
	Section 4.18.
	 	Insolvency	 	 	55	 
	Section 4.19.
	 	Available Unpledged Assets	 	 	55	 
	Section 4.20.
	 	Labor Matters	 	 	55	 
	Section 4.21.
	 	Patents, Trademarks, Etc	 	 	56	 
	Section 4.22.
	 	Tax Shelter Regulations	 	 	56	 
	Section 4.23.
	 	All Consents Required	 	 	56	 
	Section 4.24.
	 	Selection Procedures	 	 	56	 
	Section 4.25.
	 	[Reserved]	 	 	56	 
	Section 4.26.
	 	Credit and Collection Policy; Residential Mortgage Policies and Procedures	 	 	56	 
	Section 4.27.
	 	Compliance with OFAC Rules and Regulations	 	 	57	 
	Section 4.28.
	 	REIT Status	 	 	57	 






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TABLE OF CONTENTS

(continued)





	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE V COVENANTS	 	 	57	 
	Section 5.1.
	 	Financial Statements	 	 	57	 
	Section 5.2.
	 	Certificates; Other Information	 	 	58	 
	Section 5.3.
	 	Payment of Taxes and Other Obligations	 	 	59	 
	Section 5.4.
	 	Notices	 	 	59	 
	Section 5.5.
	 	Inspection of Property, Books and Records	 	 	60	 
	Section 5.6.
	 	Acquisitions	 	 	60	 
	Section 5.7.
	 	Restricted Payments	 	 	61	 
	Section 5.8.
	 	Capital Expenditures	 	 	61	 
	Section 5.9.
	 	Additional Guarantors	 	 	61	 
	Section 5.10.
	 	Maintenance of Unsecured Debt Rating	 	 	61	 
	Section 5.11.
	 	Ownership of Credit Parties; Restrictions	 	 	61	 
	Section 5.12.
	 	Maintenance of Existence	 	 	61	 
	Section 5.13.
	 	Dissolution	 	 	62	 
	Section 5.14.
	 	Consolidations, Mergers and Sales of Assets	 	 	62	 
	Section 5.15.
	 	Use of Proceeds	 	 	62	 
	Section 5.16.
	 	Compliance with Laws	 	 	62	 
	Section 5.17.
	 	Insurance	 	 	63	 
	Section 5.18.
	 	Change in Fiscal Year	 	 	63	 
	Section 5.19.
	 	Maintenance of Property	 	 	63	 
	Section 5.20.
	 	Environmental Laws	 	 	63	 
	Section 5.21.
	 	[Reserved]	 	 	64	 
	Section 5.22.
	 	[Reserved]	 	 	64	 
	Section 5.23.
	 	Compliance with Material Contracts	 	 	64	 
	Section 5.24.
	 	Transactions with Affiliates	 	 	64	 
	Section 5.25.
	 	[Reserved]	 	 	64	 
	Section 5.26.
	 	No Restrictive Agreement	 	 	64	 
	Section 5.27.
	 	Costs and Expenses	 	 	64	 
	Section 5.28.
	 	Additional Debt	 	 	64	 
	Section 5.29.
	 	[Reserved]	 	 	65	 






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TABLE OF CONTENTS

(continued)





	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	Section 5.30.
	 	Credit and Collection Policy	 	 	65	 
	Section 5.31.
	 	REIT Status	 	 	65	 
	Section 5.32.
	 	Financial Covenants	 	 	65	 
	Section 5.33.
	 	Other	 	 	66	 
	ARTICLE VI [RESERVED]	 	 	66	 
	ARTICLE VII EVENTS OF DEFAULT	 	 	66	 
	Section 7.1.
	 	Events of Default	 	 	66	 
	Section 7.2.
	 	Acceleration; Remedies	 	 	69	 
	ARTICLE VIII THE ADMINISTRATIVE AGENT	 	 	69	 
	Section 8.1.
	 	Appointment	 	 	69	 
	Section 8.2.
	 	Delegation of Duties	 	 	70	 
	Section 8.3.
	 	Exculpatory Provisions	 	 	70	 
	Section 8.4.
	 	Reliance by Administrative Agent	 	 	70	 
	Section 8.5.
	 	Notice of Default	 	 	71	 
	Section 8.6.
	 	Non-Reliance on Administrative Agent and Other Lenders	 	 	71	 
	Section 8.7.
	 	Indemnification	 	 	72	 
	Section 8.8.
	 	The Administrative Agent in Its Individual Capacity	 	 	72	 
	Section 8.9.
	 	Successor Administrative Agent	 	 	73	 
	Section 8.10.
	 	Other Agents	 	 	73	 
	ARTICLE IX MISCELLANEOUS	 	 	74	 
	Section 9.1.
	 	Amendments, Waivers and Release of Collateral	 	 	74	 
	Section 9.2.
	 	Notices	 	 	76	 
	Section 9.3.
	 	No Waiver; Cumulative Remedies	 	 	78	 
	Section 9.4.
	 	[Reserved]	 	 	78	 
	Section 9.5.
	 	Payment of Expenses and Taxes; Indemnification	 	 	78	 
	Section 9.6.
	 	Successors and Assigns; Participations; Purchasing Lenders	 	 	79	 
	Section 9.7.
	 	Set-off	 	 	82	 
	Section 9.8.
	 	Table of Contents and Section Headings	 	 	83	 
	Section 9.9.
	 	Counterparts	 	 	83	 
	Section 9.10.
	 	Effectiveness	 	 	83	 






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TABLE OF CONTENTS

(continued)





	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	Section 9.11.
	 	Severability	 	 	83	 
	Section 9.12.
	 	Integration	 	 	84	 
	Section 9.13.
	 	Governing Law	 	 	84	 
	Section 9.14.
	 	Consent to Jurisdiction and Service of Process	 	 	84	 
	Section 9.15.
	 	Confidentiality	 	 	84	 
	Section 9.16.
	 	Acknowledgments	 	 	85	 
	Section 9.17.
	 	Waivers of Jury Trial; Waiver of Consequential Damages	 	 	85	 
	Section 9.18.
	 	Patriot Act Notice	 	 	86	 
	ARTICLE X GUARANTY	 	 	86	 
	Section 10.1.
	 	The Guaranty	 	 	86	 
	Section 10.2.
	 	Bankruptcy	 	 	87	 
	Section 10.3.
	 	Nature of Liability	 	 	87	 
	Section 10.4.
	 	Independent Obligation	 	 	87	 
	Section 10.5.
	 	Authorization	 	 	88	 
	Section 10.6.
	 	Reliance	 	 	88	 
	Section 10.7.
	 	Waiver	 	 	88	 
	Section 10.8.
	 	Limitation on Enforcement	 	 	89	 
	Section 10.9.
	 	Confirmation of Payment	 	 	89	 






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SCHEDULES




	 	 	 
	Schedule 1.1(a)
	 	Residential Mortgage Policies and Procedures
	Schedule 1.1(b)
	 	Risk Rating Levels
	Schedule 2.1(a)
	 	Commitment Percentage
	Schedule 2.3(i)
	 	Existing Letters of Credit
	Schedule 4.8
	 	List of Subsidiaries
	Schedule 4.16
	 	List of Liens
	Schedule 4.26
	 	Credit and Collection Policy
	Schedule 5.26
	 	Permitted Transaction
	Schedule 5.28
	 	Existing Debt on Closing Date
	Schedule 9.2
	 	Lenders’ Lending Offices






EXHIBITS




	 	 	 
	Exhibit A
	 	Form of Notice of Borrowing
	Exhibit B
	 	Form of Revolving Note
	Exhibit C
	 	Form of Notice of Conversion
	Exhibit D
	 	Form of Secretary’s Certificate
	Exhibit E
	 	Form of Notice of Swingline Borrowing
	Exhibit F
	 	Form of Swingline Note
	Exhibit G
	 	Form of Solvency Certificate
	Exhibit H
	 	Form of Officer’s Compliance Certificate
	Exhibit I
	 	Form of Monthly Report
	Exhibit J
	 	Form of Commitment Transfer Supplement
	Exhibit K
	 	Form of Borrower Information Certificate
	Exhibit L
	 	Form of 2.18 Certificate
	Exhibit M
	 	Form of Facility Extension Request
	Exhibit N
	 	Form of Joinder Agreement






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     CREDIT AGREEMENT, dated as of March 14, 2006 (this “Credit Agreement”), among
CAPITALSOURCE INC., a Delaware corporation (the “Borrower”), CAPITALSOURCE TRS INC., a
Delaware corporation (“TRS”), CAPITALSOURCE FINANCE LLC, a Delaware limited liability
company (“CSF”), CSE MORTGAGE LLC, a Delaware limited liability company (“CSM” and
together with TRS and CSF, and any other Subsidiary of the Borrower that becomes a party to this
Credit Agreement, collectively the “Guarantors” and individually a “Guarantor”),
the several banks and other financial institutions from time to time parties to this Credit
Agreement (collectively the “Lenders” and individually a “Lender”), WACHOVIA BANK,
NATIONAL ASSOCIATION, a national banking association, as administrative agent for the Lenders
hereunder (in such capacity, the “Administrative Agent” or the “Agent”), Swingline
Lender, and Issuing Lender, and BANK OF AMERICA, N.A., as Issuing Lender.



W I T N E S S E T H:




     WHEREAS, the Borrower has requested, and the Lenders have agreed, to extend certain credit
facilities to the Borrower on the terms and conditions set forth herein;



     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties hereto, such parties hereby agree as follows:



ARTICLE I




DEFINITIONS




     Section 1.1. Defined Terms.



     As used in this Credit Agreement, terms defined in the preamble to this Credit Agreement have
the meanings therein indicated, and the following terms have the following meanings:



     “ABR Default Rate” shall have the meaning set forth in Section 2.9.



     “Acquisition” means the acquisition of (i) a controlling equity interest in another
Person (including the purchase of an option, warrant or convertible or similar type security to
acquire such a controlling interest at the time it becomes exercisable by the holder thereof),
whether by purchase of such equity interest or upon exercise of an option or warrant for, or
conversion of securities into, such equity interest, or (ii) assets of another Person which
constitute all or any material part of the assets of such Person or of a line or lines of business
conducted by such Person; provided, however, the term “Acquisition” shall exclude a
Portfolio Investment.



     “Additional Credit Party” shall mean each Person that becomes a Guarantor by execution
of a Joinder Agreement in accordance with Section 5.9.



     “Advances Outstanding” means on any day, the aggregate outstanding principal amount of
all Revolving Loans, Swingline Loans and LOC Obligations.



     “Affiliate” of any Person means (i) any other Person which directly, or indirectly
through one or more intermediaries, controls such Person, (ii) any other Person which directly, or
indirectly through one or more intermediaries, is controlled by or is under common control with
such Person, or (iii) any other Person of which such Person owns, directly or



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indirectly, 20% or
more of the common stock or equivalent equity interests. As used herein, the term “control” means
possession, directly or indirectly, of the power to direct or cause the direction of the management
or policies of a Person, whether through the ownership of voting securities, by contract or
otherwise; provided, however, the term “Affiliate” shall not include any Person
that constitutes Investments in Equity Instruments.



     “Agreement” or “Credit Agreement” shall mean this Credit Agreement, as
amended, modified or supplemented from time to time in accordance with its terms.



     “Alternate Base Rate” shall mean, for any day, a rate per annum equal to the greater
of (a) the Prime Rate in effect on such day, and (b) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. For purposes hereof: “Prime Rate” shall mean, at any time, the
rate of interest per annum publicly announced or otherwise identified from time to time by Wachovia
at its principal office in Charlotte, North Carolina as its prime rate. The parties hereto
acknowledge that the rate announced publicly by Wachovia as its Prime Rate is an index or base rate
and shall not necessarily be its lowest or best rate charged to its customers or other banks; and
“Federal Funds Effective Rate” shall mean, for any day, 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 on the next succeeding Business Day by the Federal Reserve Bank
of New York, or, if such rate is not so published on the next succeeding Business Day, the average
of the quotations for the day of such transactions received by the Administrative Agent from three
(3) federal funds brokers of recognized standing selected by it. If for any reason the
Administrative Agent shall have determined (which determination shall be conclusive in the absence
of manifest error) that it is unable to ascertain the Federal Funds Effective Rate, for any reason,
including the inability or failure of the Administrative Agent to obtain sufficient quotations in
accordance with the terms thereof, the Alternate Base Rate shall be determined without regard to
clause (b) of the first sentence of this definition, as appropriate, until the circumstances giving
rise to such inability no longer exist. Any change in the Alternate Base Rate due to a change in
the Prime Rate or the Federal Funds Effective Rate shall be effective on the opening of business on
the date of such change.



     “Alternate Base Rate Loans” shall mean Loans that bear interest at an interest rate
based on the Alternate Base Rate.



     “Applicable Law” shall mean for any Person or property of such Person, the
organization and governing documents of such Person, all existing and future applicable laws,
rules, regulations (including temporary and final income tax regulations), statutes, treaties,
codes,
ordinances, permits, certificates, executive orders, orders and licenses of and
interpretations by any Governmental Authority (including, without limitation, usury laws, predatory
lending laws, the Federal Truth in Lending Act, and Regulation Z and Regulation B of the Federal
Reserve Board), and applicable judgments, decrees, injunctions, writs, orders, or line action of
any court, arbitrator or other administrative, judicial, or quasi-judicial tribunal or agency of
competent jurisdiction.



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     “Applicable Percentage” shall mean, for LIBOR Rate Loans, LMIR Loans and for the
Commitment Fee, the percentage set forth below opposite the Borrower’s applicable senior unsecured
debt rating in the column labeled “LIBOR Rate Loans,” “LMIR Loans” and “Commitment Fee,” as
applicable; provided that if the senior unsecured debt ratings from S&P, Moody’s and Fitch
are different, and (a) two ratings are equal and higher than the third, the higher rating will
apply, (b) two ratings are equal and lower than the third, the lower rating will apply, or (c) no
ratings are equal, the intermediate rating will apply. In the event that the Borrower shall
maintain ratings from only two of Moody’s, Fitch and S&P and the Borrower is split-rated and (i)
the ratings differential is one level, the higher rating will apply, or (ii) the ratings
differential is two levels or more, the rating immediately below the highest rating will apply. In
the event that the Borrower shall maintain ratings from only one of Moody’s, Fitch and S&P, the one
rating shall apply.



	 	 	 	 	 	 	 	 	 
	 	 	Applicable	 	 
	 	 	Percentage for	 	Applicable
	 	 	LIBOR Rate Loans	 	Percentage for
	Rating
(S&P/Moody’s/Fitch)	 	and LMIR Loans	 	Commitment Fee
	A-/A3/A-
	 	 	0.75	%	 	 	0.10	%
	BBB+/Baa1/BBB+
	 	 	0.875	%	 	 	0.125	%
	BBB/Baa2/BBB
	 	 	1.00	%	 	 	0.15	%
	BBB-/Baa3/BBB–
	 	 	1.125	%	 	 	0.20	%
	BB+/Ba1/BB+
	 	 	1.25	%	 	 	0.25	%
	BB/Ba2/BB
	 	 	1.50	%	 	 	0.30	%
	< BB/Ba2/BB
	 	 	1.75	%	 	 	0.35	%





The Applicable Percentage for LIBOR Rate Loans, LMIR Loans and the Commitment Fee shall be
adjusted within three (3) Business Days of (A) Borrower’s receipt of senior unsecured debt ratings
from S&P and Moody’s (in addition to Borrower’s current senior unsecured debt rating from Fitch),
and (B) a change in such senior unsecured debt ratings.




     “Asset Based Loans” shall mean any revolving loan that is secured by a first priority
security interest in the related Obligor’s accounts receivable, inventory or equipment, and
provides the related Obligor with the option to receive additional borrowings thereunder based on
the value of its eligible accounts receivable, inventory or equipment.



     “Assuming Lender” shall have the meaning set forth in Section 2.2(a).



     “Available Asset Coverage Ratio” shall mean the ratio of (a) the sum of the Borrower’s
and its Consolidated Subsidiaries (i) unencumbered and unrestricted cash and Cash Equivalents, and
(ii) Qualified Available Unpledged Assets to (b) Senior Unsecured Debt of the Borrower and its
Consolidated Subsidiaries.



     “Available Unpledged Assets” means an amount equal to (without duplication) the sum of
the Book Value (or in the case of Real Property Owned the Fair Market Value) of each of the
following unencumbered assets:




     (a) 100% of Investment Loans that are a Risk Rated 1 Investment Loan to a Risk
Rated 5 Investment Loan; plus



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     (b) 50% of Investment Loans which are Real Estate Loans or Asset Based Loans
that are a Risk Rated 6 Investment Loan; plus




     (c) 100% of CapitalSource Securitization Notes; plus




     (d) 70% of Investment Grade rated debt securities excluding securities issued
by the Borrower, any Subsidiary or any Unrestricted Subsidiary; plus




     (e) 80% of Real Property Owned; plus




     (f) 50% of OREO Property; plus




     (g) 50% of Investments in Equity Instruments; plus




     (h) 50% of the Fannie Mae Servicing Strips.



     “Average Portfolio Charged-Off Ratio” means the percentage equivalent of a fraction
(a) the numerator of which is equal to the sum of the portion of the outstanding balance of all
Investment Loans of the Borrower and its Consolidated Subsidiaries that became Charged-Off
Investment Loans (net of recoveries) during the preceding 12 months, and (b) the denominator of
which is equal to a fraction the numerator of which is the sum of the outstanding balance of all
Investment Loans at the beginning of each of the preceding 12 months, and the denominator of which
is twelve; provided, that, Liquid Real Estate Assets shall not be included in the
calculation of the Average Portfolio Charged-Off Ratio.



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



     “Bank Subsidiary” means a Subsidiary that is a regulated depository institution and is
so designated by the Borrower in writing to the Administrative Agent.



     “Big 4 Accounting Firm” shall mean any of the following: PriceWaterhouseCoopers LLP;
Deloitte & Touche LLP; Ernst & Young LLP; or KPMG LLP.



     “Book Value” means with respect to any asset, the value thereof as the same would be
reflected on a consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as at
such time in accordance with GAAP; provided, that, the Book Value of the Fannie Mae
Servicing Strips shall in no event exceed 5.0 times the gross expected servicing strip over the
next twelve-month period.



     “Borrowing Date” shall mean, in respect of any Loan, the date such Loan is made.



     “Business Day” shall mean a day other than a Saturday, Sunday or other day on which
commercial banks in Charlotte, North Carolina or New York, New York are authorized or required by
law to close; provided, however, that when used in connection with a rate
determination, borrowing or payment in respect of a LIBOR Rate Loan or LMIR Loan, the term
“Business Day” shall also exclude any day on which banks in London, England are not open for
dealings in Dollar deposits in the London interbank market.



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     “Capital Expenditures” means for any period the sum of all capital expenditures
incurred during such period by the Borrower and its Consolidated Subsidiaries, as determined in
accordance with GAAP.



     “Capital Lease” shall mean any lease of property, real or personal, the obligations
with respect to which are required to be capitalized on a balance sheet of the lessee in accordance
with GAAP.



     “CapitalSource Securitization Notes” shall mean any security or note rated at least
“BB-” by S&P and “Ba3” by Moody’s and/or “BB-” by Fitch issued by CapitalSource Finance LLC, CSE
Mortgage LLC or any subsidiary thereof, pursuant to a Securitization Transaction and which has been
retained by such issuer or affiliate thereof.



     “Capital Stock” means any capital stock or membership interests (in the case of a
limited liability company) or equivalent equity interests of the Borrower or any Consolidated
Subsidiary (to the extent issued to a Person other than the Borrower), whether common or preferred.



     “Cash Equivalents” means: (i) marketable securities (A) issued or directly and
unconditionally guaranteed as to interest and principal by the United States government or (B)
issued by any agency of the United States government the obligations of which are backed by the
full faith and credit of the United States, in each case maturing within one (1) year after
acquisition thereof; (ii) marketable direct obligations issued by any state of the United States or
any political subdivision of any such state or any public instrumentality thereof, in each case
maturing within one year after acquisition thereof and having, at the time of acquisition, a rating
of at least A-1 from S&P or at least P-1 from Moody’s; (iii) commercial paper maturing no more than
one year from the date of acquisition and, at the time of acquisition, having a rating of at least
A-1 from S&P or at least P-1 from Moody’s; (iv) certificates of deposit or bankers’ acceptances
issued or accepted by any Lender or by any commercial bank organized under the laws of the United
States or any state thereof or the District of Columbia that is (A) “adequately
capitalized” (as defined in the regulations of its primary Federal banking regulator) and (B)
has Tier 1 capital (as defined in such regulations) of not less than $250,000,000, in each case
maturing within one year after issuance or acceptance thereof; and (v) shares of any money market
mutual or similar funds that (A) has substantially all of its assets invested continuously in the
types of investments referred to in clauses (i) through (iv) above, (B) has net assets of not less
than $500,000,000 and (C) has the highest rating obtainable from either S&P or Moody’s.



     “CERCLA” means the Comprehensive Environmental Response Compensation and Liability
Act, 42 U.S.C. §9601 et seq. and its implementing regulations and amendments.



     “CERCLIS” means the Comprehensive Environmental Response Compensation and Liability
Information System established pursuant to CERCLA.



     “Change of Control” shall mean (a) any Person or two or more Persons acting in concert
shall have acquired “beneficial ownership,” directly or indirectly, of, or shall have acquired by
contract or otherwise, or shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of, or control over, Voting Stock of any
Credit Party (or other securities convertible into such Voting Stock) representing 33-1/3% or more
of the combined voting



-5-









 







power of all Voting Stock of such Credit Party, (b) the replacement of
greater than 50% of the Board of Directors of any Credit Party over a two year period from the
directors who constituted the Board of Directors at the beginning of such period, and such
replacements shall not have been approved or nominated by a vote of at least a majority of the
Board of Directors of such Credit Party then still in office who were either members of such Board
of Directors at the beginning of such period or whose election as a member of such Board of
Directors was previously so approved, (c) the sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of any Credit Party and its Subsidiaries
taken as a whole to any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Act of 1934), or (d) the adoption by the stockholders of a Credit Party of a plan or
proposal for the liquidation or dissolution of such Credit Party. Notwithstanding the foregoing,
solely for the purpose of determining whether there has been a Change of Control pursuant to clause
(a) above, any purchase by one or more Excluded Persons which increases any of such Excluded
Persons’ direct or indirect ownership interest (whether individually or in the aggregate) in the
Voting Stock of the Borrower shall not constitute a Change of Control even if the amount of Voting
Stock acquired or controlled by such Excluded Person(s) exceeds (whether individually or in the
aggregate) 33-1/3% of the combined voting power of all Voting Stock of the Borrower;
provided, however, that for so long as any of such Excluded Persons’ direct or
indirect ownership interest in the Voting Stock of the Borrower exceeds (individually or in the
aggregate) 33-1/3% of the combined voting power of all Voting Stock of the Borrower, the initiation
by the Borrower of any action intended to terminate or having the effect of terminating the
registration of its securities under Section 12(g) of the U.S. Securities Exchange Act of 1934 (the
“Exchange Act”) or intended to suspend or having the effect of suspending its obligation to
file reports with the U.S. Securities and Exchange Commission under Sections 13 and 15(d) of the
Exchange Act, shall constitute a Change of Control. “Excluded 
Person” shall mean each of John Delaney, Jason Fish, Farallon Capital Management, LLC,
and Madison Dearborn Partners, LLC. As used herein, “beneficial ownership” shall have the meaning
provided in Rule 13d-3 of the Securities and Exchange Commission under the Securities Act of 1934.



     “Charged-Off Investment Loan” means any Investment Loan of the Borrower and its
Consolidated Subsidiaries (or portion thereof deemed to be “charged-off”) as to which any of the
following first occurs: (a) the Borrower has determined in accordance with its Credit and
Collection Policy that such asset is not collectible, or adequate collateral or other source of
payment does not exist to repay the principal due, (b) (i) any principal or interest payments
remain unpaid for at least ninety (90) days from the original due date for such payment, in which
case 50% of the asset balance shall be deemed to be “charged-off”, and (ii) any principal or
interest payments (other than in respect of default rate interest) remain unpaid for at least 180
days from the original due date for such payment, in which case 100% of the asset balance shall be
deemed to be “charged-off”, or (c) the Obligor is subject to an Insolvency Event, in which case not
less than 50% of the asset balance shall be deemed to be “charged-off”.



     “Closing Date” shall mean the date of this Credit Agreement.



     “Code” means the Internal Revenue Code of 1986, as amended, or any successor Federal
tax code. Any reference to any provision of the Code shall also be deemed to be a reference to any
successor provision or provisions thereof.



-6-









 





     “Commitment” shall mean, with respect to each Lender, the commitment of such Lender to
make Revolving Loans in an aggregate principal amount at any time outstanding up to an amount equal
to such Lender’s Commitment Percentage of the Committed Amount as specified in Schedule
2.1(a) or in the Register, as such amount may be reduced or increased from time to time in
accordance with the provisions hereof.



     “Commitment Fee” shall have the meaning set forth in Section 2.5(a).



     “Commitment Increase” shall have the meaning set forth in Section 2.2(a).



     “Commitment Increase Date” shall have the meaning set forth in Section 2.2(a).



     “Commitment Percentage” shall mean, for each Lender, the percentage identified as its
Commitment Percentage on Schedule 2.1(a) or in the Register, as such percentage may be
modified in connection with any assignment made in accordance with the provisions of Section
9.6(c), or any Commitment Increase made in accordance with the provisions of Section
2.2.



     “Commitment Termination Date” shall mean March 13, 2009, as it may be extended
pursuant to Section 2.20 hereto.



     “Commitment Transfer Supplement” shall mean a Commitment Transfer Supplement, in
substantially the form of Exhibit J.



     “Committed Amount” shall have the meaning set forth in Section 2.1(a).



     “Commonly Controlled Entity” shall mean an entity, whether or not incorporated, which
is under common control with the Borrower within the meaning of Section 4001 of ERISA or is part of
a group which includes the Borrower and which is treated as a single employer under Section 414 of
the Code.



     “Compliance Certificate” shall have the meaning set forth in Section 5.2(a).



     “Consolidated Debt” shall mean as of the date of any determination thereof, the
aggregate unpaid amount of all Debt of Borrower and its Consolidated Subsidiaries determined on a
consolidated basis in accordance with GAAP.



     “Consolidated EBIT” means for a given period of the Borrower and its Consolidated
Subsidiaries determined on a consolidated basis in accordance with GAAP, (a) Net Income,
plus (b) Interest Expense, plus (c) income tax payments minus (d) gains
(and plus the losses) from discontinued operations.



     “Consolidated Subsidiary” means at any date any Subsidiary the accounts of which, in
accordance with GAAP, would be consolidated with those of the Borrower in its consolidated and
consolidating financial statements as of such date.



     “Consolidated Tangible Net Worth” means, as of any date of determination, the assets
less the liabilities of the Borrower and its Consolidated Subsidiaries, less intangible assets



-7-









 







(including goodwill), less loans or advances to stockholders, directors, officers or employees, all
determined in accordance with GAAP.



     “Contractual Obligation” shall mean, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or undertaking to which such Person is a
party or by which it or any of its property is bound.



     “Controlled Group” means all members of a controlled group of corporations and all
trades or businesses (whether or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414 of the Code.



     “Credit and Collection Policy” means the written credit policies and procedures manual
of the Borrower (which policies shall include without limitation policies on loss reserves, due
diligence format, underwriting parameters and credit approval procedures) in the form provided to
the Lenders prior to the Closing Date and attached hereto as Schedule 4.26, as it may be
amended or supplemented from time to time in accordance with Section 5.30.



     “Credit Documents” shall mean this Credit Agreement, each of the Notes, the Letters of
Credit, the LOC Documents, and all other agreements, documents, certificates and instruments
delivered to the Administrative Agent or any Lender by any Credit Party in connection therewith
(other than any agreement, document, certificate or instrument related to a Hedging Agreement).



     “Credit Party” shall mean any of the Borrower or Guarantors and “Credit
Parties” shall mean the Borrower and Guarantors collectively.



     “Credit Party Obligations” means all loans, advances, debts, liabilities and
obligations, for monetary amounts owing by any Credit Party to the Lenders (including the Issuing
Lender) and Administrative Agent, whenever arising, 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 Letters of Credit, the Notes,
any fee letter (including, without limitation, any commitment letter) delivered in connection with
this Agreement or any Credit Document, as amended or supplemented from time to time, whether or not
evidenced by any separate note, agreement or other instrument. The term Credit Party Obligations
includes, without limitation, all Advances Outstanding, interest (including interest that accrues
after the commencement against any Credit Party of any action under the Bankruptcy Code), breakage
costs, fees, including, without limitation, any and all arrangement fees, loan fees, facility fees,
and any and all other fees, expenses, costs, indemnities, or other sums (including reasonable
attorney costs) chargeable to a Credit Party under any of the Credit Documents.



     “Customary Non-Recourse Exclusions” shall mean usual and customary exceptions and
non-recourse carve-outs in non-recourse secured debt financings of real property including, without
limitation, exceptions by reason of (i) any fraudulent misrepresentation made by the obligor in or
pursuant to any document evidencing any Debt, (ii) any unlawful act on the part of the obligor in
respect of the Debt, (iii) any waste or misappropriation of funds by the obligor in contravention
of the provisions of the Debt, (iv) customary environmental indemnities associated



-8-









 







with the Real
Property securing the non-recourse debt financing, (v) voluntary bankruptcy of the obligor under
the non-recourse debt financing or (vi) failure of the obligor to comply with applicable special
purpose entity covenants, but excluding in each case exceptions by reason of (a) non-payment of the
Debt incurred in such non-recourse financing, (b) non-payment of such Debt arising out of the
voluntary bankruptcy of the relevant obligor or (c) the failure of the relevant obligor to comply
with financial covenants or similar financial requirements. For the avoidance of doubt, in the
event the Borrower or any of its Subsidiaries shall become liable for one of the Customary
Non-Recourse Exclusions, the guaranty will be included in Senior Unsecured Debt.



     “Debt” of any Person means at any date, without duplication (a) all obligations of
such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments, (c) all obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable arising in the ordinary course of
business, (d) all obligations of such Person as lessee under Capital Leases, (e) all
obligations of such Person to reimburse any bank or other Person in respect of amounts payable
under a banker’s acceptance, (f) all obligations of such Person to redeem preferred stock of such
Person (in the event such Person is a corporation), (g) all obligations (absolute or contingent) of
such Person to reimburse any bank or other Person in respect of amounts which are available to be
drawn or have been drawn under a letter of credit or similar instrument, (h) all Debt of others
secured by a Lien on any asset of such Person, whether or not such Debt is assumed by such Person,
(i) all Debt of others guaranteed by such Person, (j) all obligations, direct or indirect (absolute
or contingent) of such Person to repurchase property or assets sold or otherwise transferred by
such Persons, (k) all indebtedness, obligations or liabilities of that Person in respect of
derivatives, determined as of such date on a net mark-to-market basis in accordance with customary
market practice, and (l) the principal portion of all obligations of such Person under any
synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet
financing product where such transaction in each case (i) is considered borrowed money indebtedness
for tax purposes, and (ii) is classified as an operating lease under GAAP.



     “Default” shall mean any of the events specified in Section 7.1, whether or
not any requirement for the giving of notice or the lapse of time, or both, or any other condition,
has been satisfied.



     “Defaulting Lender” shall mean, at any time, any Lender that, at such time (a) has
failed to make a Loan required pursuant to the term of this Credit Agreement, including the funding
of a Participation Interest in accordance with the terms hereof and such default remains uncured,
(b) has failed to pay to the Administrative Agent or any Lender an amount owed by such Lender
pursuant to the terms of this Credit Agreement and such default remains uncured, or (c) has been
deemed insolvent or has become subject to a bankruptcy or insolvency proceeding or to a receiver,
trustee or similar official.



     “Dollars” and “$” shall mean dollars in lawful currency of the United States
of America.



     “Domestic Lending Office” shall mean, initially, the office of each Lender designated
as such Lender’s Domestic Lending Office shown on Schedule 9.2; and thereafter, such other
office of such Lender as such Lender may from time to time specify to the Administrative Agent and



-9-









 







the Borrower as the office of such Lender at which Alternate Base Rate Loans of such Lender are to
be made.



     “Domestic Subsidiary” shall mean any Subsidiary that is organized and existing under
the laws of the United States or any state or commonwealth thereof or under the laws of the
District of Columbia.



     “Environmental Authorizations” means all licenses, permits, orders, approvals,
notices, registrations or other legal prerequisites for conducting the business of the Credit
Parties or their Subsidiaries required by any Environmental Requirement.



     “Environmental Laws” shall mean any and all applicable foreign, federal, state, local
or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, requirements
of any Governmental Authority or other requirement of Applicable Law (including common law)
regulating, relating to or imposing liability or standards of conduct concerning protection of
human health or the environment, as now or may at any time be in effect during the term of this
Credit Agreement.



     “Environmental Liability” means any liability, whether accrued, contingent or
otherwise, arising from and in any way associated with any Environmental Requirements.



     “Environmental Requirements” means any legal requirement relating to health, safety or
the environment and applicable to the Credit Parties, any Subsidiary of the Credit Parties or the
Properties, including but not limited to any such requirement under CERCLA or similar state
legislation and all federal, state and local laws, ordinances, regulations, orders, writs, decrees
and common law.



     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time, or any successor law. Any reference to any provision of ERISA shall also be deemed
to be a reference to any successor provision or provisions thereof.



     “Eurocurrency Reserve Percentage” shall mean for any day, the percentage (expressed as
a decimal and rounded upwards, if necessary, to the next higher 1/100th of 1%) which is in effect
for such day as prescribed by the Federal Reserve Board (or any successor) for determining the
maximum reserve requirement (including without limitation any basic, supplemental or emergency
reserves) in respect of Eurocurrency liabilities, as defined in Regulation D of such Board as in
effect from time to time, or any similar category of liabilities for a member bank of the Federal
Reserve System in New York City.



     “Event of Default” shall mean any of the events specified in Section 7.1;
provided, however, that any requirement for the giving of notice or the lapse of
time, or both, or any other condition, has been satisfied.



     “Existing Letters of Credit” shall have the meaning set forth in Section
2.3(i).



     “Extension of Credit” shall mean, as to any Lender, the making of a Loan by such
Lender or the issuance of, or participation in, a Letter of Credit by such Lender.



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     “Facility Extension Request” shall have the meaning set forth in Section 2.20.



     “Fair Market Value” shall mean with respect to Real Property Owned the “as is”
appraised value of the Real Property Owned, provided that in no event shall the
Fair Market Value of Real Property Owned be greater than 1.2 times the purchase price of the Real
Property Owned.



     “Fannie Mae DUS Program” shall mean the Fannie Mae Delegated Underwriting and
Servicing Program for the servicing of multifamily mortgage loans which back mortgage-backed
securities.



     “Fannie Mae Servicing Strips” shall mean the unencumbered servicing strips of loans
(excluding loans where the payment of principal or interest is more than sixty (60) days past due)
originated and serviced by the Borrower or any Consolidated Subsidiary under the Fannie Mae DUS
Program.



     “Federal Funds Effective Rate” shall have the meaning set forth in the definition of
“Alternate Base Rate”.



     “First Tier Domestic Subsidiary” shall mean a Domestic Subsidiary whose Capital Stock
is directly owned by the Borrower.



     “First Tier Foreign Subsidiary” shall mean a Subsidiary that is not a Domestic
Subsidiary and whose Capital Stock is directly owned by the Borrower.



     “Fiscal Month” means any fiscal month of the Borrower.



     “Fiscal Quarter” means any fiscal quarter of the Borrower.



     “Fiscal Year” means the fiscal year of the Borrower for accounting purposes ending on
December 31 of each calendar year and when preceded or followed by the designation of a calendar
year (e.g. 2006 Fiscal Year means the Fiscal Year of the Borrower ending on December 31 of such
designated calendar year).



     “Fitch” means Fitch, Inc. or any successor thereto.



     “Fronting Fee” shall have the meaning set forth in Section 2.5(b).



     “GAAP” shall mean, except as provided in Section 1.3, generally accepted
accounting principles in effect as of any date of determination in the United States of America
applied on a consistent basis.



     “Government Acts” shall have the meaning set forth in Section 2.19.




     “Governmental Authority” means 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, any court or arbitrator and any accounting board or authority (whether



-11-









 







or
not a part of the government) which is responsible for the establishment or interpretation of
national or international accounting principles.



     “Guarantor” shall have the meaning set forth in the first paragraph of this Credit
Agreement.



     “Guaranty” shall mean the guaranty of the Guarantors set forth in Article X.



     “Guaranty Obligations” shall mean, with respect to any Person, without duplication,
any obligations of such Person (other than endorsements in the ordinary course of business of
negotiable instruments for deposit or collection) guaranteeing or intended to guarantee any Debt of
any other Person in any manner, whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (a) to purchase any such Debt or any property constituting
security therefor, (b) to advance or provide funds or other support for the payment or purchase of
any such Debt or to maintain working capital, solvency or other balance sheet condition of such
other Person (including without limitation keep well agreements, maintenance agreements, comfort
letters or similar agreements or arrangements) for the benefit of any holder of Debt of such other
Person, (c) to lease or purchase Property, securities or services primarily for the purpose of
assuring the holder of such Debt, or (d) to otherwise assure or hold harmless the holder of such
Debt against loss in respect thereof. The amount of any Guaranty Obligation hereunder shall
(subject to any limitations set forth therein) be deemed to be an amount equal to the outstanding
principal amount (or maximum principal amount, if larger) of the Debt in respect of which such
Guaranty Obligation is made.



     “Hazardous Materials” includes, without limitation, (a) solid or hazardous waste, as
defined in the Resource Conservation and Recovery Act of 1980, 42 U.S.C. §6901 et seq. and its
implementing regulations and amendments, or in any applicable state or local law or regulation, (b)
any “hazardous substance”, “pollutant” or “contaminant”, as defined in CERCLA, or in any applicable
state or local law or regulation, (c) gasoline, or any other petroleum product or by-product,
including crude oil or any fraction thereof, (d) toxic substances, as defined in the Toxic
Substances Control Act of 1976, or in any applicable state or local law or regulation, and (e)
insecticides, fungicides, or rodenticides, as defined in the Federal Insecticide, Fungicide, and
Rodenticide Act of 1975, or in any applicable state or local law or regulation, as each such act,
statute or regulation may be amended from time to time.



     “Hedging Agreement” shall mean, with respect to any Person, any agreement entered into
to protect such Person against fluctuations in interest rates, or currency or raw materials values,
including, without limitation, any interest rate swap, cap or collar agreement or similar
arrangement between such Person and one or more counterparties, commodity purchase or option
agreements or other interest or exchange rate hedging agreements.



     “Increasing Lender” shall have the meaning set forth in Section 2.2(a).



     “Insolvency” shall mean, with respect to any Multiemployer Plan, the condition that
such Plan is insolvent within the meaning of such term as used in Section 4245 of ERISA.



     “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



-12-









 







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 sixty (60) 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, 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.



     “Interest Expense” means, with respect to a Person and for any period, the total
consolidated interest expense (including, without limitation, capitalized interest expense and
interest expense attributable to Capitalized Lease Obligations) of such Person.



     “Interest Payment Date” shall mean (a) as to any Alternate Base Rate Loan or LMIR
Loan, the first day of each April, July, October and January and on the Commitment Termination
Date, (b) as to any LIBOR Rate Loan having an Interest Period of three (3) months or less, the last
day of such Interest Period, and (c) as to any LIBOR Rate Loan having an Interest Period longer
than three (3) months, (i) each three (3) month anniversary following the first day of such
Interest Period, and (ii) the last day of such Interest Period.



      “Interest Period” shall mean, with respect to any LIBOR Rate Loan,




     (a) initially, the period commencing on the Borrowing Date or conversion date, as the
case may be, with respect to such LIBOR Rate Loan and ending one (1), two (2), three (3) or
six (6) months thereafter, as selected by the Borrower in the Notice of Borrowing or Notice
of Conversion given with respect thereto; and




     (b) thereafter, each period commencing on the last day of the immediately preceding
Interest Period applicable to such LIBOR Rate Loan and ending one (1), two
(2), three (3) or six (6) months thereafter, as selected by the Borrower by irrevocable
notice to the Administrative Agent not less than three (3) Business Days prior to the last
day of the then current Interest Period with respect thereto; provided that the
foregoing provisions are subject to the following:



-13-









 






          (i) if any Interest Period pertaining to a LIBOR Rate Loan would otherwise end on a day
that is not a Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period shall end on the immediately
preceding Business Day;




          (ii) any Interest Period pertaining to a LIBOR Rate Loan that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period) shall end on the
last Business Day of the relevant calendar month;




          (iii) if the Borrower shall fail to give notice as provided above, the Borrower shall
be deemed to have selected an Alternate Base Rate Loan to replace the affected LIBOR Rate
Loan;




          (iv) any Interest Period in respect of any Loan that would otherwise extend beyond the
Commitment Termination Date shall end on the Commitment Termination Date; and




          (v) no more than seven LIBOR Rate Loans may be in effect at any time. For purposes
hereof, LIBOR Rate Loans with different Interest Periods shall be considered as separate
LIBOR Rate Loans, even if they shall begin on the same date, although borrowings, extensions
and conversions may, in accordance with the provisions hereof, be combined at the end of
existing Interest Periods to constitute a new LIBOR Rate Loan with a single Interest Period.



     “Investment” means any investment in any Person, whether by means of purchase or
acquisition of obligations or securities of such Person, capital contribution to such Person, loan
or advance to such Person, making of a time deposit with such Person, guarantee or assumption of
any obligation of such Person or otherwise.



     “Investment Company Act” means the Investment Company Act of 1940, as amended, and all
rules and regulations promulgated thereunder.



     “Investment Grade” shall mean an S&P rating of “BBB-” or better, a Fitch rating of
“BBB-” or better, or a Moody’s rating of “Baa3” or better.



     “Investment Loan” means any senior or subordinated loan (including letters of credit
issued under such loan) or lease (a) arising from the extension of credit to an Obligor by the
Borrower or a Consolidated Subsidiary (excluding an Unrestricted Subsidiary) in the ordinary
course of business, (b) originated in accordance with the policies and procedures set forth in the
Credit and Collection Policy, and (c) good and marketable title to which is owned by Borrower or a
Consolidated Subsidiary.



     “Investments in Equity Instruments” means each Investment, that is made in accordance
with the policies and procedures set forth in the Credit and Collection Policy, owned by the
Borrower or any Consolidated Subsidiary (excluding an Unrestricted Subsidiary) in (a) common stock,
partnership interests or membership interests of any Person and that is classified as



-14-









 







“Common
Stock,” “Partnership Units” or “Membership Units” on the consolidated schedule of investments of
the Borrower for the then most recently ended Fiscal Quarter, (b) preferred stock (other than
redeemable preferred stock) of any Person and that is classified as “Preferred Stock’ on the
consolidated schedule of investments of the Borrower for the then most recently ended Fiscal
Quarter, (c) redeemable preferred stock of any Person and that is classified as “Redeemable
Preferred Stock” on the consolidated schedule of investments of the Borrower for the then most
recently ended Fiscal Quarter, and (d) warrants to purchase common stock, partnership interests or
membership interests of any Person and that is classified as “Common Stock Warrants,” “Partnership
Unit Warrants” or “Membership Unit Warrants” on the consolidated schedule of investments of the
Borrower for the then most recently ended Fiscal Quarter.



     “Issuing Lender” shall mean Bank of America, N.A., Wachovia and any other consenting
Lender in their capacity as such designated by the Borrower with the consent of the Administrative
Agent.



     “Issuing Lender Fees” shall have the meaning set forth in Section 2.5(c).



     “Joinder Agreement’ shall mean a Joinder Agreement in substantially the form of
Exhibit N executed and delivered by an Additional Credit Party in accordance with the
provisions of Section 5.9.



     “Lender” shall have the meaning set forth in the first paragraph of this Credit
Agreement.



     “Letters of Credit” shall mean any letter of credit issued by the Issuing Lender
pursuant to the terms hereof as such letter of credit may be amended, modified, extended, renewed
or replaced from time to time.



     “Letter of Credit Fee” shall have the meaning set forth in Section 2.5(b).



     “LIBOR” shall mean, for any LIBOR Rate Loan for any Interest Period therefor, the rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page
3750 (or such successor page) as the London interbank offered rate for deposits in Dollars at
approximately 11:00 A.M. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If, for any reason, such rate is not
available, then “LIBOR” shall mean the rate per annum at which deposits in Dollars in an
amount comparable to the Loans then requested are being offered to leading banks at approximately
11:00 A.M. London time, two Business Days prior to the commencement of the applicable Interest
Period for settlement in immediately available funds by leading banks in the London interbank
market for a period equal to the Interest Period selected, as determined by the Administrative
Agent.



     “LIBOR Lending Office” shall mean, initially, the office of each Lender designated as
such Lender’s LIBOR Lending Office shown on Schedule 9.2; and thereafter, such other office
of such Lender as such Lender may from time to time specify to the Administrative Agent and the
Borrower as the office of such Lender at which the LIBOR Rate Loans of such Lender are to be made.



-15-









 





     “LIBOR Market Index Rate” means, for any day, the one-month LIBOR Rate for Dollar
deposits as reported on the Telerate Service, Telerate Page 3750 as of 11:00 A.M., London time, on
such day, or if such day is not a Business Day, then the immediately preceding Business Day (or if
not so reported, then as determined by the Swingline Lender from another recognized source for
interbank quotation).



     “LIBOR Rate” shall mean a rate per annum (rounded upwards, if necessary, to the next
higher 1/100th of 1%) determined by the Administrative Agent pursuant to the following formula:



	 	 	 
	LIBOR Rate =

	 	LIBOR
	 

	 	 
	 

	 	1.00 — Eurocurrency Reserve Percentage






     “LIBOR Rate Loan” shall mean Loans the rate of interest applicable to which is based
on the LIBOR Rate.



     “Lien” means, with respect to any asset, any mortgage, deed to secure debt, deed of
trust, lien, pledge, charge, security interest, security title, preferential arrangement
constituting a security interest or encumbrance or encumbrance of any kind in respect of such asset
to secure or assure payment of a Debt or a Guarantee, whether by consensual agreement or by
operation of statute or other law, or by any agreement, contingent or otherwise, to provide any of
the foregoing. An asset shall be deemed to be subject to a Lien if such asset is held by a special
purpose entity (including any SPE Subsidiary) and the equity interests of such entity are
themselves subject to a Lien. For the purposes of this Agreement, a Person shall be deemed to own
subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title retention agreement
relating to such asset.



     “LMIR Loan” means a Swingline Loan, or portion thereof, during any period in which it
bears interest at a rate based upon the LIBOR Market Index Rate.



     “Liquid Real Estate Assets” means (a) residential mortgage-backed securities that (i)
have a rating of not less than “AA” by S&P/Fitch and “Aa2” by Moody’s, (ii) are purchased by
Borrower or its Consolidated Subsidiaries solely to meet REIT asset and income tests, and (iii) are
leveraged through debt facilities utilizing leverage greater than 12 times the amount of equity
investment in such Liquid Real Estate Assets and (b) residential mortgage whole loan purchases made
by the Borrower or its Consolidated Subsidiaries solely to meet REIT asset and income tests, all in
accordance with the Residential Mortgage Policies and Procedures.



     “Loan” shall mean a Revolving Loan or a Swingline Loan, as appropriate.



     “LOC Commitment” shall mean the commitment of the Issuing Lender to issue Letters of
Credit and with respect to each Lender that has a Commitment, the commitment of such Lender to
purchase participation interests in the Letters of Credit in an amount equal to such Lender’s
Commitment Percentage of LOC Committed Amount, as such amount may be reduced from time to time in
accordance with the provisions hereof.



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     “LOC Committed Amount” shall have the meaning set forth in Section 2.3(a).



     “LOC Documents” shall mean, with respect to any Letter of Credit, such Letter of
Credit, any amendments thereto, any documents delivered in connection therewith, any application
therefor, and any agreements, instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or providing for (a) the rights
and obligations of the parties concerned, or (b) any collateral security for such obligations.



     “LOC Obligations” shall mean, at any time, the sum of (a) the maximum amount which is,
or at any time thereafter may become, available to be drawn under Letters of Credit then
outstanding, assuming compliance with all requirements for drawings referred to in such Letters of
Credit, plus (b) the aggregate amount of all drawings under Letters of Credit honored by
the Issuing Lender but not theretofore reimbursed.



     “Mandatory LOC Borrowing” shall have the meaning set forth in Section 2.3(e).



     “Mandatory Swingline Borrowing” shall have the meaning set forth in Section
2.4(b)(ii).



     “Margin Stock” means “margin stock” as defined in Regulations T, U or X of the Board
of Governors of the Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.



     “Material Adverse Change” means the occurrence of a Material Adverse Effect.



     “Material Adverse Effect” means with respect to any event or circumstance, a material
adverse effect on (a) the business, financial condition, operations, performance or properties of
the Borrower and its Subsidiaries, taken as a whole, (b) the validity, enforceability or
collectibility of this Agreement or any other Credit Document, (c) the rights and remedies of the
Administrative Agent or any Lender under this Agreement or any Credit Document, or (d) the
ability of the Borrower and its Subsidiaries, taken as a whole, to perform its obligations under
this Agreement or any other Credit Document.



     “Material Contract” shall mean (a) any contract or other agreement of the Borrower or
any of its Subsidiaries listed by the Borrower as a “material contract” in its public filings with
the SEC, and (b) any other written contract, agreement, permit or license, of the Borrower or any
of its Subsidiaries the failure to comply with which could reasonably be expected to have a
Material Adverse Effect.



     “Monthly Report” has the meaning set forth in Section 5.2(b).



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



     “Multiemployer Plan” shall have the meaning set forth in Section 4001(a)(3) of ERISA.



     “Net Income” means, as applied to any Person for any period, the aggregate amount of
net income of such Person, after taxes, for such period, as determined in accordance with GAAP.



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     “Net Proceeds of Capital Stock/Conversion of Debt” means any and all proceeds (whether
cash or non-cash) or other consideration received by the Borrower and its Consolidated
Subsidiaries, on a consolidated basis, in respect of the issuance of Capital Stock (including,
without limitation, the aggregate amount of any and all Debt converted into Capital Stock), after
deducting therefrom all reasonable and customary costs and expenses incurred by the Borrower and
such Consolidated Subsidiary in connection with the issuance of such Capital Stock in each case to
the extent classified as equity on the consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries.



     “Note” or “Notes” shall mean the Revolving Notes, and/or the Swingline Note,
collectively, separately or individually, as appropriate.



     “Notice of Borrowing” shall mean a request for a Revolving Loan borrowing pursuant to
Section 2.1(b)(i).



     “Notice of Conversion” shall mean the written notice of extension or conversion as
referenced and defined in Section 2.10(a).



     “Notice of Swingline Borrowing” shall mean a request for a Swingline Loan borrowing
pursuant to Section 2.4(b)(i).



     “Obligor” means with respect to any Investment, the Person or Persons obligated to
make payments pursuant to such Investment or in the case of Investments in Equity, the issuer of
such equity, including any guarantor thereof.



     “OFAC” shall mean the U.S. Department of the Treasury’s Office of Foreign Assets
Control.



     “OREO Property” shall mean real property, securing an Investment, that has been
acquired by the Borrower or an Affiliate of the Borrower through foreclosure or a deed in lieu of
foreclosure.



     “Other Parties” shall have the meaning set forth in Section 10.7(c).



     “Participant” shall have the meaning set forth in Section 9.6(b).



     “Participation Interest” shall mean a participation interest purchased by (a) a Lender
in LOC Obligations as provided in Section 2.3(c), or (b) a participation interest purchased
by a Lender in Swingline Loans as provided in Section 2.4.



     “PATRIOT Act” shall have the meaning set forth in Section 9.18.



     “PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any
or all of its functions under ERISA.



     “Permitted Lien” means with respect to the Borrower’s interest in the collateral
related to any Investment, any of the following as to which no enforcement, collection, execution,
levy or foreclosure proceedings shall have been commenced: (a) materialmen’s, warehousemen’s,



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mechanics’ and other liens arising by operation of law in the ordinary course of business for sums
not due or sums that are being contested in good faith; (b) Liens for federal, state, municipal and
other local taxes if such taxes are not at the time due and payable or if the Obligor shall
currently be contesting the validity thereof in good faith by appropriate proceedings; (c) Liens
held by senior lenders with respect to Investments in subordinated debt; and (d) Liens in favor of
a collateral agent on behalf of all noteholders of the related Obligor.



     “Permitted Lines of Business” shall mean the line or lines of business conducted by
the Borrower and its Subsidiaries on the Closing Date (including, among other things, the lines of
business contemplated for a Bank Subsidiary, investment management business, financial services
business, the loan servicing business, commercial lending business, real estate investment business
and mortgage lending business).



     “Person” means an individual, a corporation, a limited liability company, a
partnership (including without limitation, a joint venture), an unincorporated association, a trust
or any other entity or organization, including, but not limited to, a government or political
subdivision or an agency or instrumentality thereof.



     “Plan” means at any time an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the Code and is either
(a) maintained by a member of the Controlled Group for employees of any member of the
Controlled Group, or (b) maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which a member of the
Controlled Group is then making or accruing an obligation to make contributions or has within the
preceding five (5) plan years made contributions.



     “Portfolio Investments” means Investments made by the Borrower or a Consolidated
Subsidiary in the ordinary course of business and consistently with practices existing on the date
hereof in a Person that is accounted for under GAAP as a portfolio investment of the Borrower.



     “Prime Rate” shall have the meaning set forth in the definition of Alternate Base
Rate.



     “Properties” means all real property owned, leased or otherwise used or occupied by
any Credit Party or any Subsidiary of a Credit Party, wherever located.



     “Purchasing Lender” shall have the meaning set forth in Section 9.6(c).



     “Qualified Available Unpledged Assets” shall mean Available Unpledged Assets (a) good
and marketable title to which is 100% owned by the Borrower or a Consolidated Subsidiary, (b) free
and clear of any Lien or encumbrance of any Person (other than Permitted Liens), (c) that are not
the subject of a contractual or other prohibition or restraint that, directly or indirectly,
prohibits or restrains or has the effect of prohibiting or restraining (i) any Consolidated
Subsidiary (that is not a Credit Party) from transferring the Available Unpledged Assets to any
Credit Party, or (ii) the Borrower or any Consolidated Subsidiary from granting the Administrative
Agent and Lenders a Lien on such Available Unpledged Assets, (d) originated or acquired without any
fraud or material misrepresentation, and (e) in material compliance with all Applicable Laws.



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     “Real Estate Loans” shall mean any loan that is an extension of credit fully secured
by and underwritten to the value of the related Obligor’s interest in real property.



     “Real Property Owned” shall mean any real property owned in fee simple by the Borrower
or a Consolidated Subsidiary of the Borrower; provided, however, that such term
shall not include OREO Properties.



     “Register” shall have the meaning set forth in Section 9.6(d).



     “Reimbursement Obligation” shall mean the obligation of the Borrower to reimburse the
Issuing Lender pursuant to Section 2.3(d) for amounts drawn under Letters of Credit.



     “REIT” shall mean a “real estate investment trust” as defined in Section 856(c)(5)(B)
of the Code.



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



     “Reorganization” shall mean, with respect to any Multiemployer Plan, the condition
that such Plan is in reorganization within the meaning of such term as used in Section 4241 of
ERISA.



     “Reportable Event” shall mean any of the events set forth in Section 4043(c) of ERISA,
other than those events as to which the thirty (30) day notice period is waived under PBGC Reg.
§4043.



     “Required Lenders” shall mean Lenders holding in the aggregate more than 50% of the
sum of all Loans and LOC Obligations then outstanding at such time plus the aggregate unused
Commitments at such time (treating for purposes hereof in the case of LOC Obligations, in the case
of the Issuing Lender and the Swingline Loans, in the case of the Swingline Lender, only the
portion of the LOC Obligations of the Issuing Lender and Swingline Loans of the Swingline Lender
which are not subject to the Participation Interests of the other Lenders and, in the case of the
Lenders other than the Issuing Lender and the Swingline Lender, the Participation Interests of such
Lenders in LOC Obligations and Swingline Loans hereunder as direct obligations); provided,
however, that if any Lender shall be a Defaulting Lender at such time, then there shall be
excluded from the determination of Required Lenders, Loans and LOC Obligations (including
Participation Interests) owing to such Defaulting Lender and such Defaulting Lender’s Commitments,
or after termination of the Commitments, the principal balance of the Loans and LOC Obligations
owing to such Defaulting Lender.



     “Residential Mortgage Policies and Procedures” shall mean the written residential
mortgage policies and procedures manual of the Borrower in the form provided to the Lenders prior
to the Closing Date and attached hereto as Schedule 1.1(a) as it may be amended or
supplemented from time to time.



     “Responsible Officer” shall mean, as to (a) the Borrower, the Chief Executive Officer,
the President or the Chief Financial Officer, and (b) any other Credit Party, any duly authorized
officer thereof.



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     “Restricted Payment” means (a) any dividend or other distribution on any shares of the
Borrower’s capital stock (except dividends payable solely in shares of its capital stock) or (b)
any payment on account of the purchase, redemption, retirement or acquisition of (i) any shares of
the Borrower’s capital stock (except shares acquired upon the conversion thereof into other shares
of its capital stock) or (ii) any option, warrant or other right to acquire shares of the
Borrower’s capital stock.



     “Revolving Loans” shall have the meaning set forth in Section 2.1.



     “Revolving Note” shall have the meaning set forth in Section 2.1(e).



     “Risk Rating Level” means risk rating levels of 1 through 6, each as determined by the
Borrower in accordance with the risk rating scale as denoted on Schedule 1.1(b), as of any
date of determination, and pertaining to any Investment Loan.




	1.	 	“Risk Rated 1 Investment Loan” means any Investment Loan with a Risk Rating Level of
	 
	2.	 	“Risk Rated 2 Investment Loan” means any Investment Loan with a Risk Rating Level of
	 
	3.	 	“Risk Rated 3 Investment Loan” means any Investment Loan with a Risk Rating Level of
	 
	4.	 	“Risk Rated 4 Investment Loan” means any Investment Loan with a Risk Rating Level of
	 
	5.	 	“Risk Rated 5 Investment Loan” means any Investment Loan with a Risk Rating Level of
	 
	6.	 	“Risk Rated 6 Investment Loan” means any Investment Loan with a Risk Rating Level of





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



     “Sanctioned Entity” shall mean (i) an agency of the government of, (ii) an
organization directly or indirectly controlled by, or (iii) a person resident in a country that is
subject to a sanctions program identified on the list maintained by OFAC and available at
http://www.treas.gov/offices/eotffc/ofac/sanctions/index.html, or as otherwise published
from time to time as such program may be applicable to such agency, organization or person.



     “Sanctioned Person” shall mean a person named on the list of Specially Designated
Nationals or Blocked Persons maintained by OFAC available at
http://www.treas.gov/offices/eotffc/ofac/sdn/index.html, or as otherwise published from
time to time.



     “SEC” shall mean the United States Securities and Exchange Commission.



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     “Securitization Transaction” means any financing transaction undertaken by the
Borrower or an Affiliate of the Borrower that is secured, directly or indirectly, by an Investment
Loan or Real Property Owned or any portion thereof or interest therein, including any sale, lease,
whole loan sale, asset securitization, secured loan or other transfer of one or more Investment
Loans or Real Property Owned or any portion thereof.



     “Senior Unsecured Debt” shall mean any Debt that is not secured by a Lien and is not
junior in right to payment with respect to any other Debt. For clarity, (i) the amount of Senior
Unsecured Debt attributable to a revolving loan facility shall be the amount of Debt outstanding as
of the date of determination, (ii) guaranties in respect of non-recourse secured real property
financings that are limited to Customary Non-Recourse Exclusions shall not constitute Senior
Unsecured Debt, and (iii) redemption obligations in respect of preferred stock (unless expressly
senior in accordance with its terms) are deemed junior in right of payment to other Debt.



     “SPE Subsidiary” means a bankruptcy remote, special purpose entity that is a Wholly
Owned Subsidiary of the Borrower, created for the sole purpose of, and whose only business shall
be, acquisition of Investment Loans or Real Property Owned pursuant to a Securitization Transaction
and those activities incidental to the Securitization Transaction.



     “Stockholders Equity” means, at any time, the stockholders’ equity of the Borrower and
its Consolidated Subsidiaries, as set forth or reflected on the most recent consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries prepared in accordance with GAAP.



     “Subsidiary” shall mean, as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the time owned, or the management
of which is otherwise controlled, directly or indirectly through one or more intermediaries, or
both, by such Person. Unless otherwise qualified, all references to a “Subsidiary” or to
“Subsidiaries” in this Credit Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower
or the Guarantors; provided, however, that, the term “Subsidiary” shall not include
any Person that constitutes an Investment in Equity Instruments; provided, further
that the term “Subsidiary” shall not include an Unrestricted Subsidiary unless as noted otherwise.



     “Swingline Commitment” shall mean the commitment of the Swingline Lender to make
Swingline Loans in an aggregate principal amount at any time outstanding up to the Swingline
Committed Amount, and the commitment of the Lenders to purchase participation interests in the
Swingline Loans as provided in Section 2.4(b)(ii), as such amounts may be reduced from time
to time in accordance with the provisions hereof.



     “Swingline Committed Amount” shall mean the amount of the Swingline Lender’s Swingline
Commitment as specified in Section 2.4(a).



     “Swingline Lender” shall mean Wachovia and any successor swingline lender in their
capacity as such.



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     “Swingline Loan” shall have the meaning set forth in Section 2.4(a).



     “Swingline Note” shall mean the promissory note of the Borrower in favor of the
Swingline Lender evidencing the Swingline Loans provided pursuant to Section 2.4(d), as
such promissory note may be amended, modified, supplemented, extended, renewed or replaced from
time to time.



     “Taxes” shall have the meaning set forth in Section 2.18(a).



     “Transferee” shall have the meaning assigned in Section 9.6(f).



     “Transfer Effective Date” shall have the meaning set forth in each Commitment Transfer
Supplement.



     “UCC” means the Uniform Commercial Code as from time to time in effect in the
applicable jurisdiction or jurisdictions.



     “United States” means the United States of America.



     “Unrestricted Subsidiary” means (a) any Bank Subsidiary, and (b) any other Subsidiary
designated as an “Unrestricted Subsidiary” in writing by the Borrower to the Administrative Agent
from time to time and consented to by the Required Lenders.



     “Unsecured Debt” means, at any time, the aggregate unpaid principal amount of all Debt
of the Borrower and its Consolidated Subsidiaries other than Debt of the Borrower or a Consolidated
Subsidiary secured by any Lien.



     “Voting Stock” shall mean, with respect to any Person, capital stock issued by such
Person the holders of which are ordinarily, in the absence of contingencies, entitled to vote for
the election of directors (or persons performing similar functions) of such Person, even though the
right so to vote has been suspended by the happening of such contingency.



     “Wachovia” shall mean Wachovia Bank, National Association, a national banking
association.



     “WCM” shall mean Wachovia Capital Markets, LLC.



     “Wholly Owned Subsidiary” means any Subsidiary all of the shares of capital stock or
other ownership interests of which (except directors’ qualifying shares) are at the time directly
or indirectly owned by the Borrower.



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     Section 1.2. Other Definitional Provisions.




     (a) Unless otherwise specified therein, all terms defined in this Credit Agreement
shall have the defined meanings when used in the Notes or other Credit Documents or any
certificate or other document made or delivered pursuant hereto.




     (b) The meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.




     (c) The words “hereof”, “herein” and “hereunder” and words of similar import when used
in this Credit Agreement shall refer to this Credit Agreement as a whole and not to any
particular provision of this Credit Agreement, and Section, subsection, Schedule and Exhibit
references are to this Credit Agreement unless otherwise specified.




     (d) The words “include”, “includes” and “including” shall be deemed to be followed by
“without limitation” whether or not they are in fact followed by such words or words of like
import.




     (e) The words “writing”, “written” and comparable terms shall refer to printing,
typing, computer disk, e-mail, facsimile and other means of reproducing words in a visible
form.




     (f) References to any agreement or contract are to such agreement or contract as
amended, restated, supplemented or otherwise modified from time to time in accordance with
the terms hereof and thereof. References to any Person include the successors and permitted
assigns of such Person.



     Section 1.3. Accounting Terms.



     Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements required to be
delivered hereunder shall be prepared in accordance with GAAP applied on a basis consistent with
the most recent audited consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Lenders; provided that, if the Borrower notifies the
Administrative Agent that it wishes to amend any covenant in Section 5.32 to eliminate the
effect of any change in GAAP on the operation of such covenant (or if the Administrative Agent
notifies the Borrower that the Required Lenders wish to amend Section 5.32 for such
purpose), then the Borrower’s compliance with such covenant shall be determined on the basis of
GAAP in effect immediately before the relevant change in GAAP became effective, until either such
notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrower and the
Required Lenders.



     Section 1.4. Computation of Time Periods.



     All time references in this Credit Agreement and the other Credit Documents shall be to
Charlotte, North Carolina time unless otherwise indicated. For purposes of computation of



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periods
of time hereunder, the word “from” means “from and including” and the words “to” and “until” each
mean “to but excluding.”



ARTICLE II




THE LOANS; AMOUNT AND TERMS




     Section 2.1. Revolving Loans.




     (a) Revolving Commitment. Prior to the Commitment Termination Date, subject to
the terms and conditions hereof, each Lender severally agrees to make revolving credit loans
in Dollars (“Revolving Loans”) to the Borrower from time to time for the purposes
hereinafter set forth; provided, however, that (i) with regard to each
Lender individually, the sum of such Lender’s share of outstanding Revolving Loans,
plus such Lender’s Commitment Percentage of outstanding Swingline Loans,
plus such Lender’s Commitment Percentage of LOC Obligations shall not exceed such
Lender’s Commitment Percentage of the aggregate Committed Amount, and (ii) with regard to
the Lenders collectively, the Advances Outstanding shall not exceed the aggregate Committed
Amount then in effect. For purposes hereof, the aggregate amount available hereunder shall
be FIVE HUNDRED FORTY-FIVE MILLION DOLLARS ($545,000,000.00) (as such aggregate maximum
amount may be (A) increased from time to time as provided in Section 2.2, and (B)
reduced from time to time as provided in Section 2.6, the “Committed
Amount”). Revolving Loans may consist of Alternate Base Rate Loans or LIBOR Rate Loans,
or a combination thereof, as the Borrower may request, and may be repaid and reborrowed in
accordance with the provisions hereof; provided, however, the Revolving
Loans made on the Closing Date or on either of the two Business Days immediately following
the Closing Date may only consist of Alternate Base Rate Loans. LIBOR Rate Loans shall be
made by each Lender at its LIBOR Lending Office and Alternate Base Rate Loans at its
Domestic Lending Office.




     (b) Revolving Loan Borrowings.




          (i) Notice of Borrowing. The Borrower shall request a Revolving Loan borrowing
by written notice (or telephone notice promptly confirmed in writing which confirmation may
be by fax) to the Administrative Agent not later than 11:00 A.M. on the same Business Day of
the requested borrowing in the case of Alternate Base Rate Loans, and on the third Business
Day prior to the date of the requested borrowing in the case of LIBOR Rate Loans. Each such
request for borrowing shall be irrevocable and shall specify (A) that a Revolving Loan is
requested, (B) the date of the requested borrowing (which shall be a Business Day), (C) the
aggregate principal amount to be
borrowed, and (D) whether the borrowing shall be comprised of Alternate Base Rate
Loans, LIBOR Rate Loans or a combination thereof, and if LIBOR Rate Loans are requested, the
Interest Period(s) therefor. A form of Notice of Borrowing (a “Notice of
Borrowing”) is attached as Exhibit A. If the Borrower shall fail to specify in
any such Notice of Borrowing (1) an applicable Interest Period in the case of a LIBOR Rate
Loan, then such notice shall be deemed to be a



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request for an Interest Period of one month
or (2) the type of Revolving Loan requested, then such notice shall be deemed to be a
request for an Alternate Base Rate Loan hereunder. The Administrative Agent shall give
notice to each Lender promptly upon receipt of each Notice of Borrowing, the contents
thereof and each such Lender’s share thereof.




          (ii) Minimum Amounts. Each Revolving Loan shall be in a minimum aggregate
amount of $5,000,000 and integral multiples of $100,000 in excess thereof (or the remaining
amount of the Committed Amount, if less).




          (iii) Advances. Each Lender will make its Commitment Percentage of each
Revolving Loan borrowing available to the Administrative Agent for the account of the
Borrower at the office of the Administrative Agent specified in Section 9.2, or at
such other office as the Administrative Agent may designate in writing, upon reasonable
advance notice by 1:00 P.M. on the date specified in the applicable Notice of Borrowing, in
Dollars and in funds immediately available to the Administrative Agent. Such borrowing will
then be made available to the Borrower by the Administrative Agent by crediting the account
of the Borrower on the books of such office with the aggregate of the amounts made available
to the Administrative Agent by the Lenders and in like funds as received by the
Administrative Agent.




     (c) Repayment. The principal amount of all Revolving Loans shall be due and
payable in full on the Commitment Termination Date.




     (d) Interest. Subject to the provisions of Section 2.9, Revolving
Loans shall bear interest as follows:




          (i) Alternate Base Rate Loans. During such periods as any Revolving Loans
shall be comprised of Alternate Base Rate Loans, each such Alternate Base Rate Loan shall
bear interest at a per annum rate equal to the Alternate Base Rate; and




          (ii) LIBOR Rate Loans. During such periods as any Revolving Loans shall be
comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear interest at a per annum
rate equal to the sum of the LIBOR Rate plus the Applicable Percentage.
Interest on Revolving Loans shall be payable in arrears on each Interest Payment Date.




     (e) Revolving Notes. The Borrower’s obligation to pay each Lender’s Revolving
Loans shall be evidenced by a revolving note made payable to such Lender in substantially
the form of Exhibit B, if requested by such Lender (“Revolving Note”).



       Section 2.2. Increase of the Commitments.




     (a) Requests for Increase by Borrower. The Borrower may, at any time, propose
that the Commitments hereunder be increased (each such proposed increase being a
“Commitment Increase”) by notice to the Administrative Agent, specifying each
existing Lender (each an “Increasing Lender”) and/or each additional lender (each an
“Assuming Lender”) that shall have agreed to an additional Commitment and the date
on which such increase is to be effective (the “Commitment Increase Date”), which
shall be



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a Business Day at least five (5) Business Days after delivery of such notice and
thirty (30) days prior to the Commitment Termination Date; provided that:




          (i) the minimum amount of the Commitment of any Assuming Lender, and the minimum amount
of the increase of the Commitment of any Increasing Lender, as part of such Commitment
Increase shall be $20,000,000 or a larger multiple of $5,000,000 in excess thereof;




          (ii) immediately after giving effect to such Commitment Increase, the total Commitments
of all of the Lenders hereunder shall not exceed $745,000,000 less the amount of any
permanent reductions in the aggregate Committed Amount pursuant to Section 2.6(a);




          (iii) each Increasing Lender and Assuming Lender shall be consented to by the
Administrative Agent (which consent shall not be unreasonably withheld or delayed);




          (iv) each Assuming Lender shall be consented to by the Issuing Lender (which consent
shall not be unreasonably withheld or delayed), provided, that, consent from
the Issuing Lender shall not be required if the Assuming Lender has a senior unsecured debt
rating from any two of S&P, Moody’s and Fitch equal to or higher than A- (or A3 with respect
to Moody’s);




          (v) no Default shall have occurred and be continuing on such Commitment Increase Date
or shall result from the proposed Commitment Increase;




          (vi) the representations and warranties contained in this Agreement shall be true and
correct on and as of the Commitment Increase Date as if made on and as of such date (or, if
any such representation and warranty is expressly stated to have been made as of a specific
date, such representations and warranties shall be true and correct as of such specific
date);




          (vii) the conditions set forth in Section 3.2 shall be satisfied; and




          (viii) the Borrower shall, if requested, execute such Notes as are necessary to reflect
the increase in the Commitments.




     (b) Effectiveness of Commitment Increase by Borrower. The Assuming Lender, if
any, shall become a Lender hereunder as of such Commitment Increase Date and the Commitment
of any Increasing Lender and such Assuming Lender shall be increased as of such Commitment
Increase Date; provided, that:




          (i) the Administrative Agent shall have received on or prior to 11:00 A.M., Charlotte,
North Carolina time, on such Commitment Increase Date, a certificate of a duly authorized
officer of the Borrower stating that each of the applicable conditions to such Commitment
Increase set forth in the foregoing paragraph (a) has been satisfied; and



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          (ii) each Assuming Lender or Increasing Lender shall have delivered to the
Administrative Agent, on or prior to 11:00 A.M., Charlotte, North Carolina time, on such
Commitment Increase Date, an agreement, in form and substance satisfactory to the Borrower
and the Administrative Agent, pursuant to which such Lender shall, effective as of such
Commitment Increase Date, undertake a Commitment or an increase of Commitment, duly executed
by such Assuming Lender or Increasing Lender and the Borrower and acknowledged by the
Administrative Agent.




     (c) Recordation into Register. Upon its receipt of an agreement referred to in
clause (b)(ii) above executed by an Assuming Lender or any Increasing Lender,
together with the certificate referred to in clause (b)(i) above, the Administrative
Agent shall, if such agreement has been completed, (i) accept such agreement, (ii) record
the information contained therein in the Register, and (iii) give prompt notice thereof to
the Borrower.




     (d) Adjustments of Borrowings upon Effectiveness of Increase. In the event
that the Administrative Agent shall have received notice from the Borrower as to any
agreement with respect to a Commitment Increase on or prior to the relevant Commitment
Increase Date and the actions provided for in clauses (b)(i) and (b)(ii)
above shall have occurred by 11:00 A.M., Charlotte, North Carolina time, on such Commitment
Increase Date, the Administrative Agent shall notify the Lenders (including any Assuming
Lenders) of the occurrence of such Commitment Increase Date promptly on such date by
facsimile transmission or e-mail. On the date of such Commitment Increase, the Borrower
shall (i) prepay the outstanding Revolving Loans (if any) in full, (ii) simultaneously
borrow new Revolving Loans (which Revolving Loans shall be Alternate Base Rate Loans)
hereunder in an amount equal to such prepayment; provided that with respect to
subclauses (i) and (ii), (A) the prepayment to, and borrowing from, any
existing Lender shall be effected by book entry to the extent that any portion of the
amount prepaid to such Lender will be subsequently borrowed from such Lender, and (B)
the existing Lenders, the Increasing Lenders and the Assuming Lenders shall make and receive
payments among themselves, in a manner acceptable to the Administrative Agent, so that,
after giving effect thereto, the Loans are held ratably by the Lenders in accordance with
the respective Commitments of such Lenders (after giving effect to such Commitment
Increase), and (iii) pay to the Lenders the amounts, if any, payable under Section
2.17 as a result of any such prepayment. Concurrently therewith, the Lenders shall be
deemed to have adjusted their participation interests in any outstanding LOC Obligations so
that such interests are held ratably in accordance with their Commitments as so increased.



        Section 2.3. Letter of Credit Subfacility.




     (a) Issuance. Subject to the terms and conditions hereof and of the LOC
Documents, if any, and any other terms and conditions which the Issuing Lender may
reasonably require, prior to the Commitment Termination Date the Issuing Lender shall issue,
and the Lenders shall participate in, Letters of Credit for the account of the Borrower from
time to time upon request in a form acceptable to the Issuing Lender; provided,
however, that (i) the aggregate amount of LOC Obligations shall not at any



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time
exceed TWO HUNDRED FIFTY MILLION DOLLARS ($250,000,000) (the “LOC Committed
Amount”), (ii) the Advances Outstanding shall not at any time exceed the aggregate
Committed Amount then in effect, (iii) all Letters of Credit shall be issued in Dollars, and
(iv) Letters of Credit shall be issued for any lawful corporate purposes and may be issued
as standby letters of credit, and trade letters of credit. Except for the Existing Letters
of Credit or as otherwise expressly agreed upon by all the Lenders, no Letter of Credit
shall have an original expiry date more than twelve (12) months from the date of issuance;
provided, however, so long as no Default or Event of Default has occurred
and is continuing and subject to the other terms and conditions to the issuance of Letters
of Credit hereunder, the expiry dates of Letters of Credit may be extended annually or
periodically from time to time at the request of the Borrower or by operation of the terms
of the applicable Letter of Credit to a date not more than twelve (12) months from the then
current date of expiry; provided, further, that no Letter of Credit, as
originally issued or as extended, shall have an expiry date extending beyond the date that
is one month prior to the Commitment Termination Date. Furthermore, unless otherwise agreed
to by the Issuing Lender, no trade Letter of Credit shall have an expiry date more than 180
days from the date of issuance. Notwithstanding the foregoing, with the consent of the
Administrative Agent and the Issuing Lender, Letters of Credit may have an expiry date
extending beyond the date that is one month prior to the Commitment Termination Date
provided that the Borrower deposits cash collateral (30 days prior to the Commitment
Termination Date) with the Issuing Lender in an amount equal to 103% of the stated and
undrawn amount of the Letter of Credit. Each Letter of Credit shall comply with the related
LOC Documents. The issuance date and expiry date of each Letter of Credit shall be a
Business Day. Except for the Existing Letters of Credit, any
Letters of Credit issued hereunder shall be in a minimum original face amount of
$100,000.




     (b) Notice and Reports. Unless otherwise agreed to by the Issuing Lender and
Borrower, the request for the issuance of a standby Letter of Credit shall be submitted to
the Issuing Lender at least three (3) Business Days prior to the requested date of issuance,
and the request for the issuance of a trade Letter of Credit shall be submitted to the
Issuing Lender at least one (1) Business Day prior to the requested date of issuance. The
Issuing Lender will on the date of issuance of each Letter of Credit and promptly upon
request provide to the Administrative Agent a detailed report specifying the Letters of
Credit which are then issued and outstanding and any activity with respect thereto which may
have occurred since the date of any prior report, and including therein, among other things,
the account party, the beneficiary, the face amount, expiry date as well as any payments or
expirations which may have occurred. The Issuing Lender will further provide to the
Administrative Agent promptly upon request copies of the Letters of Credit. The Issuing
Lender will provide to the Administrative Agent, and any requesting Lender, promptly upon
request a summary report of the nature and extent of LOC Obligations then outstanding.




     (c) Participations. Each Lender (other than the Issuing Lender of such Letter
of Credit), upon issuance of any Letter of Credit (or upon such Person becoming a Lender
hereunder), shall be deemed to have purchased without recourse a risk participation from the
Issuing Lender in such Letter of Credit and the obligations arising thereunder and any



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collateral relating thereto, in each case in an amount equal to its Commitment Percentage of
the obligations under such Letter of Credit and shall absolutely, unconditionally and
irrevocably assume, as primary obligor and not as surety, and be obligated to pay to the
Issuing Lender therefor and discharge when due, its Commitment Percentage of the obligations
arising under such Letter of Credit. Without limiting the scope and nature of each Lender’s
participation in any Letter of Credit, to the extent that the Issuing Lender has not been
reimbursed as required hereunder or under any LOC Document, each such Lender shall pay to
the Issuing Lender its Commitment Percentage of such unreimbursed drawing in same day funds
on the day of notification by the Issuing Lender of an unreimbursed drawing pursuant to the
provisions of subsection (d) below. The obligation of each Lender to so reimburse
the Issuing Lender shall be absolute and unconditional and shall not be affected by the
occurrence of a Default, an Event of Default or any other occurrence or event. Any such
reimbursement shall not relieve or otherwise impair the obligation of the Borrower to
reimburse the Issuing Lender under any Letter of Credit, together with interest as
hereinafter provided.




     (d) Reimbursement. In the event of any drawing under any Letter of Credit, the
Issuing Lender will promptly notify the Borrower and the Administrative Agent. The Borrower
shall reimburse the Issuing Lender on the day of drawing under any Letter of Credit (either
with the proceeds of a Revolving Loan obtained hereunder or otherwise) in
same day funds as provided herein or in the LOC Documents. If the Borrower shall fail
to reimburse the Issuing Lender as provided herein, the unreimbursed amount of such drawing
shall bear interest at a per annum rate equal to the ABR Default Rate. Unless the Borrower
shall immediately notify the Issuing Lender and the Administrative Agent of its intent to
otherwise reimburse the Issuing Lender, the Borrower shall be deemed to have requested a
Revolving Loan in the amount of the drawing as provided in subsection (e) below, the
proceeds of which will be used to satisfy the reimbursement obligations. The Borrower’s
reimbursement obligations hereunder shall be absolute and unconditional under all
circumstances irrespective of any rights of set-off, counterclaim or defense to payment the
Borrower may claim or have against the Issuing Lender, the Administrative Agent, the
Lenders, the beneficiary of the Letter of Credit drawn upon or any other Person, including
without limitation any defense based on any failure of the Borrower to receive consideration
or the legality, validity, regularity or unenforceability of the Letter of Credit. The
Issuing Lender will promptly notify the other Lenders of the amount of any unreimbursed
drawing and each Lender shall promptly pay to the Administrative Agent for the account of
the Issuing Lender, in Dollars and in immediately available funds, the amount of such
Lender’s Commitment Percentage of such unreimbursed drawing. Such payment shall be made on
the day such notice is received by such Lender from the Issuing Lender if such notice is
received at or before 2:00 P.M., otherwise such payment shall be made at or before 12:00
Noon on the Business Day next succeeding the day such notice is received. If such Lender
does not pay such amount to the Issuing Lender in full upon such request, such Lender shall,
on demand, pay to the Administrative Agent for the account of the Issuing Lender interest on
the unpaid amount during the period from the date of such drawing until such Lender pays
such amount to the Issuing Lender in full at a rate per annum equal to, if paid within two
Business Days of the date of drawing, the Federal Funds Effective Rate and thereafter at a
rate equal to the Alternate Base Rate. Each Lender’s obligation to make such payment to the
Issuing



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Lender, and the right of the Issuing Lender to receive the same, shall be absolute
and unconditional, shall not be affected by any circumstance whatsoever and without regard
to the termination of this Credit Agreement or the Commitments hereunder, the existence of a
Default or Event of Default or the acceleration of the Credit Party Obligations hereunder
and shall be made without any offset, abatement, withholding or reduction whatsoever.




     (e) Repayment with Revolving Loans. On any day on which the Borrower shall
have requested, or been deemed to have requested, a Revolving Loan to reimburse a drawing
under a Letter of Credit, the Administrative Agent shall give notice to the Lenders that a
Revolving Loan has been requested or deemed requested in connection with a drawing under a
Letter of Credit, in which case a Revolving Loan borrowing shall be immediately made
comprised entirely of Alternate Base Rate Loans (each such borrowing, a “Mandatory LOC
Borrowing”) pro rata based on each Lender’s respective Commitment
Percentage (determined before giving effect to any termination of the Commitments pursuant
to Section 7.2) and the proceeds thereof shall be paid directly to
the Issuing Lender for application to the respective LOC Obligations. Each Lender
hereby irrevocably agrees to make such Revolving Loans immediately upon any such request or
deemed request on account of each Mandatory LOC Borrowing in the amount and in the manner
specified in the preceding sentence and on the same such date notwithstanding that
(i) the amount of Mandatory LOC Borrowing may not comply with the minimum amount for
borrowings of Revolving Loans otherwise required hereunder, (ii) whether any conditions
specified in Section 3.2 are then satisfied, (iii) whether a Default or an Event of
Default then exists, (iv) failure for any such request or deemed request for Revolving Loan
to be made by the time otherwise required in Section 2.1(b), (v) the date of such
Mandatory LOC Borrowing, or (vi) any reduction in the Committed Amount after any such Letter
of Credit may have been drawn upon. In the event that any Mandatory LOC Borrowing cannot
for any reason be made on the date otherwise required above (including, without limitation,
as a result of the commencement of a proceeding under the Bankruptcy Code with respect to
the Borrower), then each such Lender hereby agrees that it shall forthwith fund (as of the
date the Mandatory LOC Borrowing would otherwise have occurred, but adjusted for any
payments received from the Borrower on or after such date and prior to such purchase) its
Participation Interests in the outstanding LOC Obligations; provided,
further, that in the event any Lender shall fail to fund its Participation Interest
on the day the Mandatory LOC Borrowing would otherwise have occurred, then the amount of
such Lender’s unfunded Participation Interest therein shall bear interest payable by such
Lender to the Issuing Lender upon demand, at the rate equal to, if paid within two Business
Days of such date, the Federal Funds Effective Rate, and thereafter at a rate equal to the
Alternate Base Rate.




     (f) Modification, Extension. The issuance of any supplement, modification,
amendment, renewal, or extension to any Letter of Credit shall, for purposes hereof, be
treated in all respects the same as the issuance of a new Letter of Credit hereunder;
provided that such supplement, modification, amendment, renewal or extension shall
not cause the Borrower to pay an additional Fronting Fee on such Letter of Credit except for
any Fronting Fees due with respect to any increase in the stated amount of such Letter of
Credit.



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     (g) Letter of Credit Governing Law. Unless otherwise expressly agreed by the
Issuing Lender and the Borrower, when a Letter of Credit is issued, (i) the rules of the
“International Standby Practices 1998” published by the Institute of International Banking
Law & Practice (or such later version thereof as may be in effect at the time of issuance)
shall apply to each standby Letter of Credit, and (ii) the rules of the Uniform Customs and
Practice for Documentary Credits, as most recently published by the International Chamber of
Commerce at the time of issuance, shall apply to each trade Letter of Credit.




     (h) Designation of Subsidiaries as Account Parties. Notwithstanding anything
to the contrary set forth in this Agreement, including without limitation Section
2.3(a), a
Letter of Credit issued hereunder may contain a statement to the effect that such
Letter of Credit is issued for the account of a Subsidiary of the Borrower; provided
that, notwithstanding such statement, the Borrower shall be the actual account party for all
purposes of this Agreement for such Letter of Credit and such statement shall not affect the
Borrower’s reimbursement obligations hereunder with respect to such Letter of Credit. In no
event shall a Letter of Credit be issued for the account of an SPE Subsidiary in connection
with a Securitization Transaction or for the account of a Bank Subsidiary. Nothing in this
Section 2.3(h) shall be construed to require the Issuing Lender to issue Letters of
Credit for the account of a Subsidiary of the Borrower.




     (i) Existing Letters of Credit. The letters of credit previously issued by
Bank of America, N.A. and identified on Schedule 2.3(i) (the “Existing Letters
of Credit”) shall be deemed to be Letters of Credit issued by the Issuing Lender
pursuant to the Credit Agreement and shall be expressly subject to all of the terms and
conditions of this Section 2.3. Notwithstanding anything to the contrary set forth
in the Existing Letters of Credit, the Borrower shall be deemed to be the account party for
all purposes of this Credit Agreement. The Letter of Credit Fee shall be payable with
respect to the Existing Letters of Credit pursuant to Section 2.5(b) for the period
commencing on the date of this Credit Agreement to the expiry date of the applicable
Existing Letters of Credit.



        Section 2.4. Swingline Loan Subfacility.




     (a) Swingline Commitment. Prior to the Commitment Termination Date, subject to
the terms and conditions hereof, the Swingline Lender, in its individual capacity, agrees to
make certain revolving credit loans to the Borrower (each a “Swingline Loan” and,
collectively, the “Swingline Loans”) for the purposes hereinafter set forth;
provided, however, that (i) the aggregate amount of Swingline Loans
outstanding at any time shall not exceed FIFTY MILLION DOLLARS ($50,000,000) (the
“Swingline Committed Amount”), and (ii) the sum of the Advances Outstanding shall
not exceed the Committed Amount. Swingline Loans hereunder may be repaid and reborrowed in
accordance with the provisions hereof. Swingline Loans shall be made only in Dollars.




     (b) Swingline Loan Borrowings.



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          (i) Notice of Borrowing and Disbursement. The Swingline Lender will make
Swingline Loans available to the Borrower on any Business Day upon delivery of a Notice of
Swingline Borrowing by the Borrower to the Administrative Agent not later than 2:00 P.M. on
such Business Day. A form of Notice of Swingline Borrowing (a “Notice of Swingline
Borrowing”) is attached as Exhibit E. Swingline Loan borrowings hereunder shall
be made in minimum amounts of $100,000 and in integral amounts of $100,000 in excess
thereof.




          (ii) Repayment of Swingline Loans. Each Swingline Loan borrowing shall be due
and payable upon the earlier of (a) thirty (30) days after the Swingline Loan advance and
(b) the Commitment Termination Date. The Swingline Lender may, at any time, in its sole
discretion, by written notice to the Borrower and the Administrative Agent, demand repayment
of its Swingline Loans by way of a Revolving Loan borrowing, in which case the Borrower
shall be deemed to have requested a Revolving Loan borrowing comprised entirely of Alternate
Base Rate Loans in the amount of such Swingline Loans; provided, however
that, in the following circumstances, any such demand shall also be deemed to have been
given one Business Day prior to each of (A) the Commitment Termination Date, (B) the
occurrence of any Event of Default described in Section 7.1(f), (C) acceleration of
the Credit Party Obligations hereunder, whether on account of an Event of Default described
in Section 7.1(f) or any other Event of Default, and (D) the exercise of remedies in
accordance with the provisions of Section 7.2 hereof (each such Revolving Loan
borrowing made on account of any such deemed request therefor as provided herein being
hereinafter referred to as “Mandatory Swingline Borrowing”). Each Lender hereby
irrevocably agrees to make such Revolving Loans promptly upon any such request or deemed
request on account of each Mandatory Swingline Borrowing in the amount and in the manner
specified in the preceding sentence and on the same such date notwithstanding (1) the amount
of Mandatory Swingline Borrowing may not comply with the minimum amount for borrowings of
Revolving Loans otherwise required hereunder, (2) whether any conditions specified in
Section 3.2 are then satisfied, (3) whether a Default or an Event of Default then
exists, (4) failure of any such request or deemed request for Revolving Loans to be made by
the time otherwise required in Section 2.1(b)(i), (5) the date of such Mandatory
Swingline Borrowing, or (6) any reduction in the Committed Amount or termination of the
Commitments immediately prior to such Mandatory Swingline Borrowing or contemporaneously
therewith. In the event that any Mandatory Swingline Borrowing cannot for any reason be
made on the date otherwise required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code), then each Lender hereby agrees that
it shall forthwith purchase (as of the date the Mandatory Swingline Borrowing would
otherwise have occurred, but adjusted for any payments received from the Borrower on or
after such date and prior to such purchase) from the Swingline Lender such participations in
the outstanding Swingline Loans as shall be necessary to cause each such Lender to share in
such Swingline Loans ratably based upon its respective Commitment Percentage (determined
before giving effect to any termination of the Commitments pursuant to Section 7.2);
provided that (x) all interest payable on the Swingline Loans shall be for the account of
the Swingline Lender until the date as of which the respective participation is purchased,
and (y) at the time any purchase of participations pursuant to this sentence is actually
made, the purchasing



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Lender shall be required to pay to the Swingline Lender interest on the
principal amount of such participation purchased for each day from and including the day
upon which the Mandatory Swingline Borrowing would otherwise have occurred to but excluding
the date of payment for such participation, at the rate equal to, if paid within two
Business
Days of the date of the Mandatory Swingline Borrowing, the Federal Funds Effective
Rate, and thereafter at a rate equal to the Alternate Base Rate.




     (c) Interest on Swingline Loans. Subject to the provisions of Section
2.9(b), Swingline Loans shall bear interest at a per annum rate equal to the LIBOR
Market Index Rate plus the Applicable Percentage. Interest on Swingline Loans shall
be payable in arrears on each Interest Payment Date.




     (d) Swingline Note. The Swingline Loans shall be evidenced by a duly executed
promissory note of the Borrower to the Swingline Lender in the original amount of the
Swingline Committed Amount and substantially in the form of Exhibit F.



        Section 2.5. Fees.




     (a) Commitment Fee. In consideration of the Commitment, the Borrower agrees to
pay to the Administrative Agent, for the ratable benefit of the Lenders, a commitment fee
(the “Commitment Fee”) in an amount equal to the Applicable Percentage per annum on
the average daily unused amount of the Committed Amount during the calendar quarter for
which such fee is payable. For purposes of computation of the Commitment Fee, LOC
Obligations shall be considered usage, but Swingline Loans shall not be considered usage, of
the Committed Amount. The Commitment Fee shall be payable quarterly in arrears not later
than five (5) Business Days following the last day of each calendar quarter for the prior
calendar quarter.




     (b) Letter of Credit Fees. In consideration of the LOC Commitments, the
Borrower agrees to pay to the Administrative Agent for the ratable benefit of the Lenders
(including the Issuing Lender) a fee (the “Letter of Credit Fee”) equal to the
Applicable Percentage for LIBOR Rate Loans per annum on the average daily maximum amount
available to be drawn under each Letter of Credit from the date of issuance to the date of
expiration. The Letter of Credit Fee shall be payable quarterly in arrears not later than
five (5) Business Days following the last day of each calendar quarter for the prior
calendar quarter. In addition to the Letter of Credit Fee, the Borrower agrees to pay to
the Issuing Lender, for its own account, a fronting fee (the “Fronting Fee”) equal
to the greater of (i) one-eighth of one percent (0.125%) of the face amount of each Letter
of Credit when issued, or (ii) $250. The Fronting Fee shall be payable quarterly in arrears
not later than five (5) Business Days following the last day of each calendar quarter for
the prior calendar quarter.




     (c) Issuing Lender Fees. In addition to the Letter of Credit Fees and Fronting
Fee payable pursuant to subsection (b) above, the Borrower shall pay to the Issuing
Lender for its own account the reasonable and customary charges from time to time of the
Issuing Lender with respect to the amendment, transfer, administration, cancellation



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and
conversion of, and drawings under, such Letters of Credit (collectively, the “Issuing
Lender Fees”).




     (d) Administrative Fee. The Borrower agrees to pay to the Administrative
Agent, for its own account, an annual administrative fee of $35,000, due and payable
quarterly, in advance, commencing on the Closing Date until the Commitments have been
terminated and the Credit Party Obligations have been paid in full.



        Section 2.6. Commitment Reductions.




     (a) Voluntary Reductions. The Borrower shall have the right to terminate or
permanently reduce the unused portion of the Committed Amount at any time or from time to
time upon not less than three (3) Business Days’ prior written notice to the Administrative
Agent (which shall notify the Lenders thereof as soon as practicable) of such termination or
reduction, which notice shall specify the effective date thereof and the amount of any such
reduction which shall be in a minimum amount of $1,000,000 or a whole multiple of $1,000,000
in excess thereof and shall be irrevocable and effective upon receipt by the Administrative
Agent; provided that no such reduction or termination shall be permitted if after
giving effect thereto, and to any prepayments of the Revolving Loans made on the effective
date thereof, the Advances Outstanding would exceed the aggregate Committed Amount then in
effect.




     (b) Commitment Termination Date. The Commitment, the Swingline Commitment and
the LOC Commitment shall automatically terminate on the Commitment Termination Date.



        Section 2.7. Prepayments.




     (a) Optional Prepayments. The Borrower shall have the right to prepay Loans in
whole or in part from time to time; provided, however, that each partial
prepayment of Revolving Loans shall be in a minimum principal amount of $1,000,000 and
integral multiples of $100,000 in excess thereof, and each partial prepayment of a Swingline
Loan shall be in a minimum principal amount of $100,000 and integral multiples of $100,000
in excess thereof. The Borrower shall give three (3) Business Days’ irrevocable notice in
the case of LIBOR Rate Loans and one Business Day’s irrevocable notice in the case of
Alternate Base Rate Loans, to the Administrative Agent (which shall notify the Lenders
thereof as soon as practicable). Amounts prepaid under this Section 2.7(a) shall be
applied to the outstanding Loans as the Borrower may elect; provided, that each
Lender shall receive its pro rata share of any such prepayment based on its
Commitment Percentage. All prepayments under this Section 2.7(a) shall be subject
to Section 2.17, but otherwise without premium or penalty. Interest on the
principal amount prepaid shall be payable on the next occurring Interest Payment Date that
would have occurred had such Loan not been prepaid or, at the request of the Administrative
Agent, interest on the principal amount prepaid shall be due and payable on any date that a
prepayment is made hereunder through the date of prepayment. Amounts prepaid on the
Revolving Loans and Swingline Loans may be reborrowed in accordance with the terms hereof.



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     (b) Mandatory Prepayments.




          (i) Committed Amount. If at any time after the Closing Date, the Advances
Outstanding shall exceed the aggregate Committed Amount then in effect, the Borrower
immediately shall prepay the Revolving Loans and Swingline Loans and (after all Revolving
Loans and Swingline Loans have been repaid) cash collateralize the LOC Obligations, in an
amount sufficient to eliminate such excess.




          (ii) Application of Mandatory Prepayments. All amounts required to be paid
pursuant to this Section 2.7(b) shall be paid in and applied as follows: (A)
first to the payment of outstanding Swingline Loans, (B) second to the
outstanding Revolving Loans, and (C) third to a cash collateral account in respect
of LOC Obligations. All prepayments under this Section 2.7(b) shall be subject to
Section 2.17 and be accompanied by interest on the principal amount prepaid through
the date of prepayment.



        Section 2.8. Minimum Principal Amounts.



     All borrowings, payments and prepayments in respect of Revolving Loans shall be in such
amounts and be made pursuant to such elections so that after giving effect thereto the aggregate
principal amount of the Revolving Loans comprising any borrowing shall be $1,000,000 or a whole
multiple of $100,000 in excess thereof.



        Section 2.9. Default Rate and Payment Dates.




     (a) If all or a portion of the principal amount of any Loan which is a LIBOR Rate Loan
shall not be paid when due or continued as a LIBOR Rate Loan in accordance with the
provisions of Section 2.10 (whether at the stated maturity, by acceleration or
otherwise), such overdue principal amount of such Loan shall be converted to an Alternate
Base Rate Loan at the end of the Interest Period applicable thereto and become subject to
the interest rate provisions set forth in Section 2.9(b) below.




     (b) (i) If all or a portion of the principal amount of any LIBOR Rate Loan shall not be
paid when due, such overdue amount shall bear interest at a rate per annum which is equal to
the rate that would otherwise be applicable thereto plus 2%, until the end of the
Interest Period applicable thereto, and thereafter at a rate per annum which is equal to the
Alternate Base Rate plus 2% (the “ABR Default Rate”), or (ii) if any
interest payable on the principal amount of any Loan or any fee or other amount, including
the principal amount of any Alternate Base Rate Loan, payable hereunder shall not be paid
when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount
shall bear interest at a rate per annum which is equal to the ABR Default Rate, in each case
from the date of such non-payment until such amount is paid in full (after as well as before
judgment). Upon the occurrence, and during the continuance, of any other Event of Default
hereunder, the principal of and, to the extent permitted by law, interest on the Loans and
any other amounts owing hereunder shall bear interest, payable on
demand, at a per annum rate which is (A) in the case of principal, the rate that would
otherwise be applicable thereto, plus 2%, or (B) in the case of interest, fees or
other amounts, the ABR Default Rate (after as well as before judgment). The Required



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Lenders shall have the right to revoke the imposition of any default interest imposed under
this Section 2.9(b).




     (c) Interest on each Loan shall be payable in arrears on each Interest Payment Date;
provided that interest accruing pursuant to subsection (b) of this
Section 2.9 shall be payable from time to time on demand.



        Section 2.10. Conversion Options.




     (a) The Borrower may, in the case of Revolving Loans elect from time to time to convert
Alternate Base Rate Loans to LIBOR Rate Loans by giving the Administrative Agent at least
three (3) Business Days’ prior irrevocable written notice of such election. In addition,
the Borrower may elect from time to time to convert LIBOR Rate Loans to Alternate Base Rate
Loans by giving the Administrative Agent irrevocable written notice by 11:00 A.M. one
Business Day prior to the proposed date of conversion. A form of Notice of Conversion is
attached as Exhibit C (the “Notice of Conversion”). If the date upon which
an Alternate Base Rate Loan is to be converted to a LIBOR Rate Loan is not a Business Day,
then such conversion shall be made on the next succeeding Business Day. All or any part of
outstanding Alternate Base Rate Loans may be converted as provided herein; provided
that (i) no Loan may be converted into a LIBOR Rate Loan when any Default or Event of
Default has occurred and is continuing, and (ii) partial conversions shall be in an
aggregate principal amount of $1,000,000 or a whole multiple of $100,000 in excess thereof.
LIBOR Rate Loans may only be converted to Alternate Base Rate Loans on the last day of the
applicable Interest Period. If the date upon which a LIBOR Rate Loan is to be converted to
an Alternate Base Rate Loan is not a Business Day, then such conversion shall be made on the
next succeeding Business Day and during the period from such last day of an Interest Period
to such succeeding Business Day such Loan shall bear interest as if it were an Alternate
Base Rate Loan.




     (b) Any LIBOR Rate Loans may be continued as such upon the expiration of an Interest
Period with respect thereto by compliance by the Borrower with the notice provisions
contained in Section 2.10(a); provided, that no LIBOR Rate Loan may be
continued as such when any Default or Event of Default has occurred and is continuing, in
which case such Loan shall be automatically converted to an Alternate Base Rate Loan at the
end of the applicable Interest Period with respect thereto. If the Borrower shall fail to
give timely notice of an election to continue a LIBOR Rate Loan, or the continuation of
LIBOR Rate Loans is not permitted hereunder, such LIBOR Rate Loans shall be automatically
converted to Alternate Base Rate Loans at the end of the applicable Interest Period with
respect thereto.



        Section 2.11. Computation of Interest and Fees.




     (a) Interest payable hereunder with respect to any Alternate Base Rate Loan based on
the Prime Rate shall be calculated on the basis of a year of 365 days (or 366 days, as
applicable) for the actual days elapsed. All fees, interest and all other amounts payable
hereunder shall be calculated on the basis of a 360 day year for the actual days elapsed.
The Administrative Agent shall as soon as practicable notify the Borrower and



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the Lenders of
each determination of a LIBOR Rate on the Business Day of the determination thereof. Any
change in the interest rate on a Loan resulting from a change in the Alternate Base Rate
shall become effective as of the opening of business on the day on which such change in the
Alternate Base Rate shall become effective. The Administrative Agent shall as soon as
practicable notify the Borrower and the Lenders of the effective date and the amount of each
such change.




     (b) Each determination of an interest rate by the Administrative Agent pursuant to any
provision of this Credit Agreement shall be conclusive and binding on the Borrower and the
Lenders in the absence of manifest error. The Administrative Agent shall, at the request of
the Borrower, deliver to the Borrower a statement showing the computations used by the
Administrative Agent in determining any interest rate.




     (c) It is the intent of the Lenders and the Credit Parties to conform to and contract
in strict compliance with applicable usury law from time to time in effect. All agreements
between the Lenders and the Credit Parties are hereby limited by the provisions of this
paragraph which shall override and control all such agreements, whether now existing or
hereafter arising and whether written or oral. In no way, nor in any event or contingency
(including but not limited to prepayment or acceleration of the maturity of any Loan), shall
the interest taken, reserved, contracted for, charged, or received under this Credit
Agreement, under the Notes or otherwise, exceed the maximum nonusurious amount permissible
under Applicable Law. If, from any possible construction of this Credit Agreement or any
other document, interest would otherwise be payable in excess of the maximum nonusurious
amount, any such construction shall be subject to the provisions of this paragraph and such
interest shall be automatically reduced to the maximum nonusurious amount permitted under
Applicable Law, without the necessity of execution of any amendment or new document. If any
Lender shall ever receive anything of value which is characterized as interest on the Loans
under Applicable Law and which would, apart from this provision, be in excess of the maximum
nonusurious amount, an amount equal to the amount which would have been excessive interest
shall, without penalty, be applied to the reduction of the principal amount owing on the
Loans and not to the payment of interest, or refunded to the Borrower or the other payor
thereof if and to the extent such amount which would have been excessive exceeds such unpaid
principal amount of the Loans. The right to demand payment of the Loans or any other amount
required to be paid hereunder does not include the right to receive any interest which has
not otherwise accrued on the date of such demand, and the Lenders do not intend to charge or
receive any unearned interest in the event of such demand. All interest paid or agreed to
be paid to the Lenders with respect
to the Loans shall, to the extent permitted by Applicable Law, be amortized, prorated,
allocated, and spread throughout the full stated term (including any renewal or extension)
of the Loans so that the amount of interest on account of such indebtedness does not exceed
the maximum nonusurious amount permitted by Applicable Law.



        Section 2.12. Pro Rata Treatment and Payments.




     (a) Allocation of Payments Before Event of Default. Each borrowing of
Revolving Loans and any reduction of the Commitments shall be made pro rata



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according to the respective Commitment Percentages of the Lenders. Each payment under this
Credit Agreement or any Note shall be applied, first, to any fees then due and owing
by the Borrower pursuant to Section 2.5, second, to interest then due and
owing hereunder and under the Notes and, third, to principal then due and owing
hereunder and under the Notes. Each payment on account of any fees pursuant to Section
2.5 shall be made pro rata in accordance with the respective amounts due
and owing (except as to the Fronting Fees and the Issuing Lender Fees). Each optional
prepayment on account of principal of the Loans shall be applied in accordance with
Section 2.7(a); provided, that prepayments made pursuant to Section
2.15 shall be applied in accordance with such Section. Each mandatory prepayment on
account of principal of the Loans shall be applied in accordance with Section
2.7(b). All payments (including prepayments) to be made by the Borrower on account of
principal, interest and fees shall be made without defense, set-off or counterclaim (except
as provided in Section 2.18(b)) and shall be made to the Administrative Agent for
the account of the Lenders at the Administrative Agent’s office specified on Section
9.2 in immediately available funds not later than 1:00 P.M. on the date when due. The
Administrative Agent shall distribute such payments to the Lenders entitled thereto promptly
upon receipt in like funds as received. If any payment hereunder (other than payments on
the LIBOR Rate Loans) becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day, and, with respect to payments
of principal, interest thereon shall be payable at the then applicable rate during such
extension. If any payment on a LIBOR Rate Loan becomes due and payable on a day other than
a Business Day, the maturity thereof shall be extended to the next succeeding Business Day
unless the result of such extension would be to extend such payment into another calendar
month, in which event such payment shall be made on the immediately preceding Business Day.




     (b) Allocation of Payments After Exercise of Remedies. Notwithstanding any
other provisions of this Credit Agreement to the contrary, after the Commitments shall have
been terminated and the Loans and all other amounts under this Credit Agreement shall have
become due and payable in accordance with the terms of Section 7.2 hereof, all
amounts collected or received by the Administrative Agent or any Lender on account of the
Credit Party Obligations or any other amounts outstanding hereunder shall be paid over or
delivered as follows:




     FIRST, to the payment of all reasonable out-of-pocket costs and expenses (including,
without limitation, reasonable attorneys’ and consultants’ fees) of the Administrative Agent
in connection with enforcing the rights of the Lenders hereunder;




     SECOND, to payment of any fees owed to the Administrative Agent;




     THIRD, to the payment of all reasonable out-of-pocket costs and expenses (including
without limitation, reasonable attorneys’ and consultants’ fees) of each of the Lenders in
connection with enforcing its rights under the Credit Documents or otherwise with respect to
the Credit Party Obligations owing to such Lender;




     FOURTH, to the payment of all accrued fees and interest;



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     FIFTH, to the payment of the outstanding principal amount of the Loans and the payment
or cash collateralization of the outstanding LOC Obligations;




     SIXTH, to all other Credit Party Obligations and other obligations due and payable
hereunder or otherwise and not repaid pursuant to clauses “FIRST” through “FIFTH” above; and




     SEVENTH, to the payment of the surplus, if any, to whoever may be lawfully entitled to
receive such surplus.


In carrying out the foregoing: (i) amounts received shall be applied in the numerical order
provided until exhausted prior to application to the next succeeding category; (ii) each of the
Lenders shall receive an amount equal to its pro rata share (based on the
proportion of the then outstanding Loans and LOC Obligations held by such Lender) of amounts
available to be applied pursuant to clauses “THIRD,” “FOURTH,” “FIFTH” and “SIXTH” above; and (iii)
to the extent that any amounts available for distribution pursuant to clause “FIFTH” above are
attributable to the issued but undrawn amount of outstanding Letters of Credit, such amounts shall
be held by the Administrative Agent in a cash collateral account and applied (A) first, to
reimburse the Issuing Lender from time to time for any drawings under such Letters of Credit, and
(B) then, following the expiration of all Letters of Credit, to all other obligations of the types
described in clauses “FIFTH” and “SIXTH” above in the manner provided in this Section
2.12(b).




        Section 2.13. Non-Receipt of Funds by the Administrative Agent.




     (a) Unless the Administrative Agent shall have been notified in writing by a Lender
prior to the date a Loan is to be made by such Lender (which notice shall be effective upon
receipt) that such Lender does not intend to make the proceeds of such Loan available to the
Administrative Agent, the Administrative Agent may assume that such Lender has made such
proceeds available to the Administrative Agent on such date, and the Administrative Agent
may in reliance upon such assumption (but shall not be required to) make available to the
Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Administrative Agent, the
Administrative Agent shall be able to recover such corresponding amount from such Lender.
If such Lender does not pay such corresponding amount forthwith upon the Administrative
Agent’s demand therefor, the Administrative Agent will promptly notify the Borrower, and the
Borrower shall immediately pay such corresponding amount to the Administrative Agent. The
Administrative Agent shall also be entitled to recover from such Lender or the Borrower, as
the case may be, interest on such corresponding amount in respect of each day from the date
such corresponding amount was made available by the Administrative Agent to the Borrower to
the date such corresponding amount is recovered by the Administrative Agent at a per annum
rate equal to (i) from the Borrower at the applicable rate for the applicable borrowing
pursuant to the Notice of Borrowing, and (ii) from a Lender at the Federal Funds Effective
Rate.




     (b) Unless the Administrative Agent shall have been notified in writing by the
Borrower, prior to the date on which any payment is due from it hereunder (which notice
shall be effective upon receipt) that the Borrower does not intend to make such payment,



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the
Administrative Agent may assume that such Borrower has made such payment when due, and the
Administrative Agent may in reliance upon such assumption (but shall not be required to)
make available to each Lender on such payment date an amount equal to the portion of such
assumed payment to which such Lender is entitled hereunder, and if the Borrower has not in
fact made such payment to the Administrative Agent, such Lender shall, on demand, repay to
the Administrative Agent the amount made available to such Lender. If such amount is repaid
to the Administrative Agent on a date after the date such amount was made available to such
Lender, such Lender shall pay to the Administrative Agent on demand interest on such amount
in respect of each day from the date such amount was made available by the Administrative
Agent to such Lender to the date such amount is recovered by the Administrative Agent at a
per annum rate equal to the Federal Funds Effective Rate.




     (c) A certificate of the Administrative Agent submitted to the Borrower or any Lender
with respect to any amount owing under this Section 2.13 shall be conclusive in the
absence of manifest error.



     Section 2.14. Inability to Determine Interest Rate.



     Notwithstanding any other provision of this Credit Agreement, if (a) the Administrative Agent
shall reasonably determine (which determination shall be conclusive and binding absent manifest
error) that, by reason of circumstances affecting the relevant market, reasonable and adequate
means do not exist for ascertaining LIBOR for any Interest Period, or (b) the Required Lenders
shall reasonably determine (which determination shall be conclusive and binding absent manifest
error) that the LIBOR Rate does not adequately and fairly reflect the cost to such Lenders of
funding LIBOR Rate Loans that the Borrower has requested during such Interest Period, the
Administrative Agent shall forthwith give telephone notice of such determination, confirmed in
writing, to the Borrower, and the Lenders at least two Business Days prior to the
first day of such Interest Period. Unless the Borrower shall have notified the Administrative
Agent upon receipt of such telephone notice that it wishes to rescind or modify its request
regarding such LIBOR Rate Loans, any Loans that were requested to be made as LIBOR Rate Loans shall
be made as Alternate Base Rate Loans and any Loans that were requested to be converted into or
continued as LIBOR Rate Loans shall remain as or be converted into Alternate Base Rate Loans.
Until any such notice has been withdrawn by the Administrative Agent, no further Loans shall be
made as, continued as, or converted into, LIBOR Rate Loans for the Interest Periods so affected.



     Section 2.15. Illegality.



     Notwithstanding any other provision of this Credit Agreement, if the adoption of or any change
in any requirement of Applicable Law or in the interpretation or application thereof by the
relevant Governmental Authority to any Lender shall make it unlawful for such Lender or its LIBOR
Lending Office to make or maintain LIBOR Rate Loans as contemplated by this Credit Agreement or to
obtain in the interbank eurodollar market through its LIBOR Lending Office the funds with which to
make such Loans, (a) such Lender shall promptly notify the Administrative Agent and the Borrower
thereof, (b) the commitment of such Lender hereunder to make LIBOR Rate Loans or continue LIBOR
Rate Loans as such shall forthwith be suspended until the



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Administrative Agent shall give notice
that the condition or situation which gave rise to the suspension shall no longer exist, and (c)
such Lender’s Loans then outstanding as LIBOR Rate Loans, if any, shall be converted on the last
day of the Interest Period for such Loans or within such earlier period as required by law as
Alternate Base Rate Loans. The Borrower hereby agrees promptly to pay any Lender, upon its demand,
any additional amounts necessary to compensate such Lender for actual and direct costs (but not
including anticipated profits) reasonably incurred by such Lender in making any repayment in
accordance with this Section 2.15 including, but not limited to, any interest or fees
payable by such Lender to lenders of funds obtained by it in order to make or maintain its LIBOR
Rate Loans hereunder. A certificate as to any additional amounts payable pursuant to this
Section 2.15 submitted by such Lender, through the Administrative Agent, to the Borrower
shall be conclusive in the absence of manifest error. Each Lender agrees to use reasonable efforts
(including reasonable efforts to change its LIBOR Lending Office) to avoid or to minimize any
amounts which may otherwise be payable pursuant to this Section 2.15; provided,
however, that such efforts shall not cause the imposition on such Lender of any additional
costs or legal or regulatory burdens deemed by such Lender to be material.



     Section 2.16. Requirements of Law.




     (a) If the adoption of or any change in any requirement of Applicable Law or in the
interpretation or application thereof or compliance by any Lender with any request or
directive (whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:




          (i) shall subject such Lender to any tax of any kind whatsoever with respect to any
Letter of Credit, any participation therein or any application relating thereto, any LIBOR
Rate Loan made by it, or change the basis of taxation of payments to such Lender in respect
thereof (except for changes in the rate of tax on the overall net income of such Lender);




          (ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory
loan or similar requirement against assets held by, deposits or other liabilities in or for
the account of, advances, loans or other extensions of credit by, or any other acquisition
of funds by, any office of such Lender which is not otherwise included in the determination
of the LIBOR Rate hereunder; or




          (iii) shall impose on such Lender any other condition;


and the result of any of the foregoing is to increase the cost to such Lender of making or
maintaining LIBOR Rate Loans or the Letters of Credit or the participations therein or to reduce
any amount receivable hereunder or under any Note, then, in any such case, the Borrower shall
promptly pay such Lender, upon its demand, any additional amounts necessary to compensate such
Lender for such additional cost or reduced amount receivable which such Lender reasonably deems to
be material as determined by such Lender with respect to its LIBOR Rate Loans or Letters of Credit.
A certificate as to any additional amounts payable pursuant to this Section 2.16 submitted
by such Lender, through the Administrative Agent, to the Borrower shall be conclusive in the
absence of manifest error. Each Lender agrees to use reasonable efforts


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(including reasonable
efforts to change its Domestic Lending Office or LIBOR Lending Office, as the case may be) to avoid
or to minimize any amounts which might otherwise be payable pursuant to this paragraph of this
Section 2.16; provided, however, that such efforts shall not cause the
imposition on such Lender of any additional costs or legal or regulatory burdens deemed by such
Lender to be material.





     (b) If any Lender shall have reasonably determined that the adoption of or any change
in any requirement of Applicable Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Lender or any corporation controlling such Lender
with any request or directive regarding capital adequacy (whether or not having the force of
law) from any central bank or Governmental Authority made subsequent to the date hereof does
or shall have the effect of reducing the rate of return on such Lender’s or such
corporation’s capital as a consequence of its obligations hereunder to a level below that
which such Lender or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender’s or such corporation’s policies with
respect to capital adequacy) by an amount reasonably deemed by such Lender to be material,
then from time to time, within fifteen (15) days after demand by such Lender, the Borrower
shall pay to such Lender such additional amount as shall be certified by such Lender as
being required to compensate it for such reduction. Such a certificate as to any additional
amounts payable under this Section 2.16 submitted by a Lender (which certificate
shall include a
description of the basis for the computation), through the Administrative Agent, to the
Borrower shall be conclusive absent manifest error.




     (c) The agreements in this Section 2.16 shall survive the termination of this
Credit Agreement and payment of the Notes and all other amounts payable hereunder.



     Section 2.17. Indemnity.



     The Borrower hereby agrees to indemnify each Lender and to hold such Lender harmless from any
funding loss or expense which such Lender may sustain or incur as a consequence of (a) the failure
by the Borrower to pay the principal amount of or interest on any Loan by such Lender in accordance
with the terms hereof, (b) the failure of the Borrower to accept a borrowing after the Borrower has
given a notice in accordance with the terms hereof, (c) the failure of the Borrower to make any
prepayment after the Borrower has given a notice in accordance with the terms hereof, and/or (d)
the making by the Borrower of a prepayment of a Loan, or the conversion thereof, on a day which is
not the last day of the Interest Period with respect thereto, in each case including, but not
limited to, any such loss or expense arising from interest or fees payable by such Lender to
lenders of funds obtained by it in order to maintain its Loans hereunder. A certificate as to any
additional amounts payable pursuant to this Section 2.17 submitted by any Lender, through
the Administrative Agent, to the Borrower (which certificate must be delivered to the
Administrative Agent within thirty (30) days following such default, prepayment or conversion)
shall be conclusive in the absence of manifest error. The agreements in this Section 2.17
shall survive termination of this Credit Agreement and payment of the Notes and all other amounts
payable hereunder.



     Section 2.18. Taxes.



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     (a) All payments made by the Borrower hereunder or under any Note will be, except as
provided in Section 2.18(b), made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees, assessments or
other charges of whatever nature now or hereafter imposed by any Governmental Authority or
by any political subdivision or taxing authority thereof or therein with respect to such
payments (but excluding any tax imposed on or measured by the net income or profits of a
Lender pursuant to the laws of the jurisdiction in which it is organized or the jurisdiction
in which the principal office or applicable lending office of such Lender is located or any
subdivision thereof or therein) and all interest, penalties or similar liabilities with
respect thereto (all such non-excluded taxes, levies, imposts, duties, fees, assessments or
other charges being referred to collectively as “Taxes”). If any Taxes are so
levied or imposed, the Borrower agrees to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all amounts due under this
Credit Agreement or under any Note, after withholding or deduction for or on account of any
Taxes, will not be less than the amount provided for herein or in such Note. The Borrower
will furnish to the Administrative Agent as soon as practicable after the date the payment
of any Taxes is due pursuant to Applicable Law
certified copies (to the extent reasonably available and required by law) of tax
receipts evidencing such payment by the Borrower. The Borrower agrees to indemnify and hold
harmless each Lender, and reimburse such Lender upon its written request, for the amount of
any Taxes so levied or imposed and paid by such Lender.




     (b) Each Lender that is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) agrees to deliver to the Borrower and the Administrative Agent on
or prior to the Closing Date, or in the case of a Lender that is an assignee or transferee
of an interest under this Credit Agreement pursuant to Section 9.6(c) (unless the
respective Lender was already a Lender hereunder immediately prior to such assignment or
transfer), on the date of such assignment or transfer to such Lender, (i) if the Lender is a
“bank” within the meaning of Section 881(c)(3)(A) of the Code, two accurate and complete
original signed copies of Internal Revenue Service Form W-8BEN, W-8ECI or W-8IMY (or
successor forms) certifying such Lender’s entitlement to a complete exemption from United
States withholding tax with respect to payments to be made under this Credit Agreement and
under any Note, or (ii) if the Lender is not a “bank” within the meaning of Section
881(c)(3)(A) of the Code, Internal Revenue Service Form W-8BEN, W-8ECI or W-8IMY as set
forth in clause (i) above, or (A) a certificate substantially in the form of
Exhibit L (any such certificate, a “2.18 Certificate”), and (B) two accurate
and complete original signed copies of Internal Revenue Service Form W-8BEN (or successor
form) certifying such Lender’s entitlement to an exemption from United States withholding
tax with respect to payments of interest to be made under this Credit Agreement and under
any Note. In addition, each Lender agrees that it will deliver upon the Borrower’s request
updated versions of the foregoing, as applicable, whenever the previous certification has
become obsolete or inaccurate in any material respect, together with such other forms as may
be required in order to confirm or establish the entitlement of such Lender to a continued
exemption from or reduction in United States withholding tax with respect to payments under
this Credit Agreement and any Note. Notwithstanding anything to the contrary contained in
Section 2.18(a), but subject to the immediately succeeding sentence, (1) the
Borrower shall be



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entitled, to the extent it is required to do so by law, to deduct or
withhold Taxes imposed by the United States (or any political subdivision or taxing
authority thereof or therein) from interest, fees or other amounts payable hereunder for the
account of any Lender which 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 to the extent that
such Lender has not provided to the Borrower U.S. Internal Revenue Service Forms that
establish a complete exemption from such deduction or withholding, and (2) the Borrower
shall not be obligated pursuant to Section 2.18(a) hereof to gross-up payments to be
made to a Lender in respect of Taxes imposed by the United States if (I) such Lender has not
provided to the Borrower the Internal Revenue Service Forms required to be provided to the
Borrower pursuant to this Section 2.18(b), or (II) in the case of a payment, other
than interest, to a Lender described in clause (ii) above, to the extent that such
Forms do not establish a complete exemption from withholding of such Taxes. Notwithstanding
anything to the contrary contained in the preceding sentence or elsewhere in this
Section 2.18, the Borrower agrees to pay additional amounts and to indemnify each
Lender in the manner set forth in Section 2.18(a) (without regard to the identity of
the jurisdiction requiring the deduction or withholding) in respect of any amounts deducted
or withheld by it as described in the immediately preceding sentence as a result of any
changes after the Closing Date in any Applicable Law, treaty, governmental rule, regulation,
guideline or order, or in the interpretation thereof, relating to the deducting or
withholding of Taxes.




     (c) Each Lender agrees to use reasonable efforts (including reasonable efforts to
change its Domestic Lending Office or LIBOR Lending Office, as the case may be) to avoid or
to minimize any amounts which might otherwise be payable pursuant to this Section
2.18; provided, however, that such efforts shall not cause the
imposition on such Lender of any additional costs or legal or regulatory burdens deemed by
such Lender in its sole discretion to be material.




     (d) If the Borrower pays any additional amount pursuant to this Section 2.18
with respect to a Lender, such Lender shall use reasonable efforts to obtain a refund of tax
or credit against its tax liabilities on account of such payment; provided that such
Lender shall have no obligation to use such reasonable efforts if either (i) it is in an
excess foreign tax credit position, or (ii) it believes in good faith, in its sole
discretion, that claiming a refund or credit would cause adverse tax consequences to it. In
the event that such Lender receives such a refund or credit, such Lender shall pay to the
Borrower an amount that such Lender reasonably determines is equal to the net tax benefit
obtained by such Lender as a result of such payment by the Borrower. In the event that no
refund or credit is obtained with respect to the Borrower’s payments to such Lender pursuant
to this Section 2.18, then such Lender shall upon request provide a certification
that such Lender has not received a refund or credit for such payments. Nothing contained
in this Section 2.18 shall require a Lender to disclose or detail the basis of its
calculation of the amount of any tax benefit or any other amount or the basis of its
determination referred to in the proviso to the first sentence of this Section 2.18
to the Borrower or any other party.




     (e) The agreements in this Section 2.18 shall survive the termination of this
Credit Agreement and the payment of the Notes and all other amounts payable hereunder.



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        Section 2.19. Indemnification; Nature of Issuing Lender’s Duties.




     (a) In addition to its other obligations under Section 2.3, the Borrower hereby
agrees to protect, indemnify, pay and save the Issuing Lender and each Lender harmless from
and against any and all claims, demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable attorneys’ fees) that the Issuing Lender or such Lender may
incur or be subject to as a consequence, direct or indirect, of (i) the issuance of any
Letter of Credit, or (ii) the failure of the Issuing Lender to honor a drawing under a
Letter of Credit as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or governmental authority (all such
acts or omissions, herein called “Government Acts”).




     (b) As between the Borrower and the Issuing Lender and each Lender, the Borrower shall
assume all risks of the acts, omissions or misuse of any Letter of Credit by the beneficiary
thereof. Neither the Issuing Lender nor any Lender shall be responsible: (i) for the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for and issuance of any Letter of Credit, even
if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (iii) for failure of the beneficiary of a Letter of Credit to
comply fully with conditions required in order to draw upon a Letter of Credit; (iv) for
errors, omissions, interruptions or delays in transmission or delivery of any messages, by
mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) for errors
in interpretation of technical terms; (vi) for any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under a Letter of Credit or of
the proceeds thereof; and (vii) for any consequences arising from causes beyond the control
of the Issuing Lender or any Lender, including, without limitation, any Government Acts.
None of the above shall affect, impair, or prevent the vesting of the Issuing Lender’s
rights or powers hereunder.




     (c) In furtherance and extension and not in limitation of the specific provisions
hereinabove set forth, any action taken or omitted by the Issuing Lender or any Lender,
under or in connection with any Letter of Credit or the related certificates, if taken or
omitted in the absence of gross negligence or willful misconduct, shall not put such Issuing
Lender or such Lender under any resulting liability to the Borrower. It is the intention of
the parties that this Credit Agreement shall be construed and applied to protect and
indemnify the Issuing Lender and each Lender against any and all risks involved in the
issuance of the Letters of Credit, all of which risks are hereby assumed by the Borrower,
including, without limitation, any and all risks of the acts or omissions, whether rightful
or wrongful, of any Government Authority. The Issuing Lender and the Lenders shall not, in
any way, be liable for any failure by the Issuing Lender or anyone else to pay any drawing
under any Letter of Credit as a result of any Government Acts or any other cause beyond the
control of the Issuing Lender and the Lenders.



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     (d) Nothing in this Section 2.19 is intended to limit the reimbursement
obligation of the Borrower contained in Section 2.3(d) hereof. The obligations of
the Borrower under this Section 2.19 shall survive the termination of this Credit
Agreement. No act or omissions of any current or prior beneficiary of a Letter of Credit
shall in any way affect or impair the rights of the Issuing Lender and the Lenders to
enforce any right, power or benefit under this Credit Agreement.




     (e) Notwithstanding anything to the contrary contained in this Section 2.19,
the Borrower shall have no obligation to indemnify the Issuing Lender or any Lenders in
respect of any liability incurred by the Issuing Lender or such Lender arising out of the
gross negligence or willful misconduct of the Issuing Lender (including action not taken by
the Issuing Lender or such Lender), as determined by a court of competent jurisdiction or
pursuant to arbitration.



     Section 2.20. Extension of Commitment Termination Date.



     Prior to the two year anniversary of the Closing Date, Borrower may extend the Commitment
Termination Date to a date that is not later than twelve (12) months after the then-effective
Commitment Termination Date, no more than one time, upon: (a) delivery of a Facility Extension
Request in the form attached hereto as Exhibit M (the “Facility Extension Request”)
to Administrative Agent; (b) payment to Administrative Agent for the benefit of the Lenders of a
facility extension fee equal to twenty basis points (0.20%) on the then-existing Committed Amount
(i.e., 0.20% times the Committed Amount); and (c) payment by Borrower of all fees and expenses to
Administrative Agent and the Lenders to the extent then due. Such extension shall be evidenced by
delivery of written confirmation of the same by Administrative Agent to Borrower; provided,
that:




          (i) no Default or Event of Default shall have occurred and be continuing; and




          (ii) the representations and warranties contained in this Agreement shall be true and
correct on and as of the Facility Extension Request as if made on and as of such date (or,
if any such representation and warranty is expressly stated to have been made as of a
specific date, such representations and warranties shall be true and correct as of such
specific date).



     Section 2.21. Replacement of Lenders.



     If Borrower becomes obligated to pay additional amounts to any Lender pursuant to Section
2.16 or Section 2.18, then Borrower may within sixty (60) days thereafter designate
another bank or financial institution which is acceptable to Agent in its reasonable discretion
(such other bank or financial institution being called a “Replacement Lender”) to purchase
the Loans of such Lender and such Lender’s rights hereunder, without recourse to or warranty by, or
expense to, such Lender, for a purchase price equal to the outstanding principal amount of the
Loans payable to such Lender plus any accrued but unpaid interest on such Loans and all accrued but
unpaid fees owed to such Lender and any other amounts payable to such Lender under this Agreement,
and to assume all the obligations of such Lender hereunder, and, upon such purchase



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and assumption
(pursuant to a Commitment Transfer Supplement), such Lender shall no longer be a party hereto or
have any rights hereunder (other than rights with respect to indemnities and similar rights
applicable to such Lender prior to the date of such purchase and assumption) and shall be relieved
from all obligations to Borrower hereunder, and the Replacement Lender shall
succeed to the rights and obligations of such Lender hereunder. Nothing in this Section
2.21 shall be deemed to relieve Borrower of its obligation to pay additional amounts to any
Lender pursuant to Section 2.16 or Section 2.18.



ARTICLE III




CONDITIONS PRECEDENT




     Section 3.1. Conditions to Closing.



     This Credit Agreement shall become effective upon, and the obligation of each Lender to make
the initial Loans, and the Issuing Lender to issue Letters of Credit on the Closing Date is subject
to, the satisfaction of the following conditions precedent:




     (a) Execution of Credit Agreement and Credit Documents. The Administrative
Agent shall have received (i) counterparts of this Credit Agreement, executed by a duly
authorized officer of each party hereto, (ii) a Note, for the account of each Lender that
requests a Note, (iii) for the account of the Swingline Lender, the Swingline Note, and (iv)
counterparts of any other Credit Document, executed by the duly authorized officers of the
parties thereto.




     (b) Authority Documents. The Administrative Agent shall have received the
following:




          (i) Certificate of Incorporation, Etc. Copies of the certificate of
incorporation or other charter or formation documents of each Credit Party certified to be
true and complete as of a recent date by the appropriate governmental authority of the state
of its incorporation or formation, as the case may be.




          (ii) Resolutions. Copies of resolutions of the board of directors or other
comparable managing body of each Credit Party approving and adopting the Credit Documents,
the transactions contemplated therein and authorizing execution and delivery thereof,
certified by an officer or the managing member of such Credit Party as of the Closing Date
to be true and correct and in force and effect as of such date.




          (iii) Bylaws. A copy of the bylaws and/or operating agreement of each Credit
Party certified by an officer or managing member of such Credit Party as of the Closing Date
to be true and correct and in force and effect as of such date.




          (iv) Good Standing. Copies of certificates of good standing, existence or its
equivalent with respect to each Credit Party certified as of a recent date by the
appropriate governmental authorities of the state of incorporation or formation, as the case
may be, and each other state in which such Credit Party is qualified to do business.



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          (v) Incumbency. An incumbency certificate of each Credit Party certified by a
secretary or assistant secretary pursuant to the Secretary Certificate substantially in the
form of Exhibit D (“Secretary’s Certificate”) to be true and correct as of
the Closing Date, in form and substance satisfactory to Administrative Agent.




     (c) Personal Property Collateral. The Administrative Agent shall have
received, in form and substance satisfactory to the Administrative Agent: (i) searches of
UCC filings in the jurisdiction of the chief executive office and state of incorporation of
each Credit Party and each jurisdiction where Credit Party’s personal property is located;
and (ii) copies of the financing statements on file in such jurisdictions.




     (d) Legal Opinions of Counsel. The Administrative Agent shall have received an
opinion of counsel for each Credit Party from Hogan and Hartson LLP dated the Closing Date
and addressed to the Administrative Agent and the Lenders in form and substance satisfactory
to Administrative Agent.




     (e) Fees. The Administrative Agent and the Lenders shall have received all
fees, if any, owing pursuant to Section 2.5 and any fee or commitment letter.




     (f) Litigation. There shall not exist any pending or threatened litigation,
investigation, bankruptcy or insolvency, injunction, order or claim affecting or relating to
any Credit Party or any of their Subsidiaries, this Agreement and the other Credit
Documents, that has not been settled, dismissed, vacated, discharged or terminated prior to
the Closing Date which could reasonably be expected to result in a Material Adverse Effect.




     (g) Government Consent. The Administrative Agent shall have received evidence
that all governmental, shareholder and material third party consents and approvals necessary
in connection with the financings and other transactions contemplated hereby have been
obtained.




     (h) Compliance with Laws. The Loans and other transactions contemplated hereby
shall be in compliance with all Applicable Laws and regulations (including all applicable
securities and banking laws, rules and regulations).




     (i) Bankruptcy. There shall be no Insolvency Proceedings with respect to any
Credit Party or any of their Subsidiaries.




     (j) Financial Statements. The Administrative Agent and the Lenders shall have
received copies of the financial statements referred to in Section 5.1 hereof, each
in form and substance satisfactory to it.




     (k) No Material Adverse Change. Since December 31, 2005, there has been no
Material Adverse Change with respect to the Borrower and its Subsidiaries taken as a whole.




     (l) Financial Condition Certificate. The Administrative Agent shall have
received a certificate, substantially in the form of Exhibit G (“Solvency
Certificate”) and



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certified as accurate by a Responsible Officer, demonstrating
compliance by the Borrower and its Subsidiaries as of the Closing Date with the financial
covenants contained in Section 5.32 hereof.




     (m) Officer’s Certificate. The Administrative Agent shall have received a
certificate executed by a Responsible Officer of each Credit Party as of the Closing Date
stating that (i) no action, suit, investigation or proceeding is pending or, to the
knowledge of each such Credit Party, threatened in any court or before any arbitrator or
governmental instrumentality that purports to affect the Credit Parties or the transactions
contemplated by the Credit Documents, if such action, suit, investigation or proceeding
could reasonably be expected to have a Material Adverse Effect, and (ii) immediately after
giving effect to this Credit Agreement (including the initial Loans hereunder), the other
Credit Documents, and all the transactions contemplated therein or thereby to occur on such
date, (A) no Default or Event of Default exists, and (B) all representations and warranties
contained herein and in the other Credit Documents are true and correct in all material
respects.




     (n) Borrower Information Certificate. The Administrative Agent shall have
received a certificate substantially in the form of Exhibit K (“Borrower
Information Certificate”), for benefit of itself and the Lenders, provided by each
Credit Party that sets forth information required by the PATRIOT Act including, without
limitation, the identity of each Credit Party, the name and address of each Credit Party and
other information that will allow the Administrative Agent or any Lender, as applicable, to
identify each Credit Party in accordance with the PATRIOT Act.




     (o) Additional Matters. All other documents and legal matters in connection
with the transactions contemplated by this Credit Agreement shall be reasonably satisfactory
in form and substance to the Administrative Agent and its counsel.



     Section 3.2. Conditions to All Extensions of Credit.



     The obligation of each Lender to make any Extension of Credit hereunder is subject to the
satisfaction of the following conditions precedent on the date of making such Extension of Credit:




     (a) Representations and Warranties. The representations and warranties made by
the Credit Parties herein or which are contained in any certificate furnished at any time
under or in connection herewith shall be true and correct on and as of the date of
such Extension of Credit as if made on and as of such date (except for those which
expressly relate to an earlier date, in which case, such representations and warranties
shall be true and correct as of such earlier date).




     (b) No Default or Event of Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the Extension of Credit to
be made on such date unless such Default or Event of Default shall have been waived in
accordance with this Credit Agreement.



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     (c) Compliance with Covenants. Immediately after giving effect to the making
of any such Extension of Credit, each Credit Party is in compliance with each of the
covenants set forth herein.




     (d) Compliance with Commitments. Immediately after giving effect to the making
of any such Extension of Credit (and the application of the proceeds thereof), (i) the sum
of the aggregate principal amount of outstanding Revolving Loans, plus outstanding Swingline
Loans, plus LOC Obligations shall not exceed the Committed Amount then in effect, (ii) the
LOC Obligations shall not exceed the LOC Committed Amount, and (iii) the Swingline Loans
shall not exceed the Swingline Committed Amount.




     (e) Additional Conditions to Revolving Loans. If such Loan is made pursuant to
Section 2.1, all applicable conditions set forth in such Section shall have been
satisfied.




     (f) Additional Conditions to Letters of Credit. If such Extension of Credit is
made pursuant to Section 2.3, all applicable conditions set forth in such Section
shall have been satisfied.




     (g) Material Adverse Change. There shall have been no Material Adverse Change
to the Credit Parties and their Subsidiaries taken as whole.



     Each request for an Extension of Credit and each acceptance by the Borrower of any such
Extension of Credit shall be deemed to constitute a representation and warranty by each Credit
Party as of the date of such Extension of Credit that the applicable conditions in paragraphs (a)
through (g) of this Section 3.2 have been satisfied.



ARTICLE IV




REPRESENTATIONS AND WARRANTIES




     To induce the Lenders to enter into this Credit Agreement and to make the Extension of Credit
herein provided for, each of the Credit Parties hereby represents and warrants to the
Administrative Agent and to each Lender that:



     Section 4.1. Existence and Power. Each of the Credit Parties (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its organization, (b)
is duly qualified to transact business in every jurisdiction where, by the nature of its business,
such qualification is necessary, except for such jurisdictions where the failure to so qualify
could not reasonably be expected to have a Material Adverse Effect, and (c) has all organizational
powers and all governmental licenses, authorizations, consents and approvals required to carry on
its business as now conducted, except for those licenses, permits or other approvals, the absence
of which could not reasonably be expected to have a Material Adverse Effect.



     Section 4.2. Organizational and Governmental Authorization; No Contravention. The
execution, delivery and performance by each Credit Party of the Credit Documents to which each such
Credit Party is a party (a) are within each such Credit Party’s organizational powers, (b) have
been duly authorized by all necessary organizational action, (c) require no action by or



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in respect
of, or filing with, any governmental body, agency or official, (d) do not contravene any provision
of any Applicable Law or regulation or of the organizational documents of each Credit Party or of
any judgment, injunction, order, decree, or constitute a default under any material agreement
binding upon the Credit Parties or any of their Subsidiaries, and (e) do not result in the creation
or imposition of any Lien on any asset of the Credit Parties or any of their Subsidiaries.



     Section 4.3. Binding Effect. This Agreement constitutes a valid and binding agreement
of each Credit Party enforceable in accordance with its terms, and the Notes and the other Credit
Documents, when executed and delivered in accordance with this Agreement, will constitute valid and
binding obligations of the Credit Parties enforceable in accordance with their respective terms,
provided that the enforceability hereof and thereof is subject in each case to general principles
of equity and to Insolvency Laws.



     Section 4.4. Financial Information. (a) The consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries (including Unrestricted Subsidiaries) as of December 31,
2005 and the related consolidated statements of income, shareholders’ equity and cash flows for the
Fiscal Year then ended, reported on by a Big 4 Accounting Firm, copies of which have been delivered
to each of the Lenders, fairly present, in conformity with GAAP, the consolidated financial
position of the Borrower and its Consolidated Subsidiaries (including Unrestricted Subsidiaries) as
of such dates and their consolidated results of operations and cash flows for such periods stated.




     (b) Since December 31, 2005 there has been no event, act, condition or occurrence which
has had or could reasonably be expected to have a Material Adverse Effect.



     Section 4.5. Litigation. There is no investigation, action, suit or proceeding
pending, or to the knowledge of the Credit Parties threatened, against or affecting any Credit
Party or any Subsidiary (including Unrestricted Subsidiaries) of a Credit Party before any court or
arbitrator or any governmental body, agency or official which could reasonably be expected to have
a
Material Adverse Effect or which purports to affect the validity or enforceability of the
Credit Documents.



     Section 4.6. Compliance with ERISA. (a) The Borrower and each member of the
Controlled Group have fulfilled their obligations under the minimum funding standards of ERISA and
the Code with respect to each Plan and are in compliance in all material respects with the
presently applicable provisions of ERISA and the Code, and have not incurred any liability to the
PBGC or a Plan under Title IV of ERISA.




     (b) Neither the Borrower nor any member of the Controlled Group is or ever has been
obligated to contribute to any Multiemployer Plan.




     (c) The assets of Borrower or any Subsidiary do not and will not constitute “plan
assets,” within the meaning of ERISA, the Code and the respective regulations promulgated
thereunder. The execution, delivery and performance of this Agreement,



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and the borrowing
and repayment of amounts hereunder, do not and will not constitute “prohibited transactions”
under ERISA or the Code.



     Section 4.7. Taxes. There have been filed on behalf of the Borrower and its
Subsidiaries all Federal tax returns and, to the Borrower’s knowledge all state and local income,
excise, property and other tax returns which are required to be filed by them and all taxes due
pursuant to such returns or pursuant to any assessment received by or on behalf of the Borrower or
any Subsidiary have been paid prior to becoming delinquent (other than taxes currently being
contested in good faith by appropriate proceedings and with respect to which reserves in accordance
with GAAP have been provided on the books of the Borrower). The charges, accruals and reserves on
the books of the Borrower and its Subsidiaries in respect of taxes or other governmental charges
are, in the opinion of the Borrower, adequate.



     Section 4.8. Subsidiaries. Each of the Borrower’s Subsidiaries (including
Unrestricted Subsidiaries) (a) is an entity duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation or organization, except as could not reasonably
be expected to have a Material Adverse Effect, (b) is duly qualified to transact business in every
jurisdiction where, by the nature of its business, such qualification is necessary, except for such
jurisdictions where the failure to qualify could not reasonably be expected to have a Material
Adverse Effect, and (c) has all organizational powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now conducted except
those licenses, permits or other approvals, the absence of which could not reasonably be expected
to have a Material Adverse Effect. As of the date hereof, the Borrower has no Subsidiaries except
those Subsidiaries listed on Schedule 4.8, which accurately sets forth each such
Subsidiary’s complete name and jurisdiction of incorporation.



     Section 4.9. Investment Company Act. None of the Credit Parties is (i) an “investment
company” or a company controlled by an “investment company” that has elected to be regulated
as a “business development company” within the meaning of the Investment Company Act, or (ii)
a person qualifying for treatment as a “regulated investment company” under the Code.



     Section 4.10. Public Utility Holding Company Act. None of the Credit Parties nor any
of their Subsidiaries is a “holding company”, or a “subsidiary company” of a “holding company”, or
an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding company”, as such
terms are defined in the Public Utility Holding Company Act of 1935, as amended.



     Section 4.11. Ownership of Property. Each Credit Party and each of their Subsidiaries
has title to its properties sufficient for the conduct of its business.



     Section 4.12. No Default. None of the Credit Parties nor any of their respective
Subsidiaries is in default under or with respect to any agreement, instrument or undertaking to
which it is a party or by which it or any of its property is bound which could reasonably be
expected to have a Material Adverse Effect. No event has occurred and is continuing and no
condition exists, or would result from the Extension of Credit or from the application of the
proceeds therefrom, which constitutes a Default or Event of Default.




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     Section 4.13. Full Disclosure. (a) None of the factual information (other than
projections) heretofore furnished (including any information furnished in public filings) in
writing by any Credit Party for purposes of or in connection with this Credit Agreement contains
any untrue statement of a material fact, or when taken together with all other written information
so furnished omits to state any material fact necessary to make any information not materially
misleading.




     (b) Any projections heretofore furnished by the Borrower to the Administrative Agent
for purposes of or in connection with the Credit Agreement were prepared in good faith on
the basis of the assumptions stated therein, which assumptions were fair in light of the
conditions existing at the time of delivery of such forecasts, and represented, at the time
of the delivery, the Borrower’s best estimate of its future financial performance.




     (c) Each Credit Party has disclosed to the Lenders in writing any and all facts which
are reasonably likely to have a Material Adverse Effect.



        Section 4.14. Environmental Matters. Except as could not reasonably be expected to
have a Material Adverse Effect:




     (a) None of the Credit Parties nor any of their Subsidiaries (including Unrestricted
Subsidiaries) is subject to any Environmental Liability and none of the Credit Parties or
any their Subsidiaries (including Unrestricted Subsidiaries) has been designated as a
potentially responsible party under CERCLA. None of the Properties has been identified on
any current or proposed (i) National Priorities List under 40 C.F.R. § 300, (ii) CERCLIS
list, or (iii) any list arising from a state statute similar to CERCLA.




     (b) No Hazardous Materials have been or are being used, produced, manufactured,
processed, treated, recycled, generated, stored, disposed of, managed or otherwise handled
at, or shipped or transported to or from the Properties or are otherwise present at, on, in
or under the Properties, or, to the best of the knowledge of any Credit Party, at or from
any adjacent site or facility, except for Hazardous Materials, such as cleaning solvents,
pesticides and other materials used, produced, manufactured, processed, treated, recycled,
generated, stored, disposed of, and managed or otherwise handled in minimal amounts in the
ordinary course of business in compliance with all applicable Environmental Requirements.




     (c) Each Credit Party and each of their Subsidiaries (including Unrestricted
Subsidiaries) and Affiliates, has procured all Environmental Authorizations necessary for
the conduct of its business, and is in compliance with all Environmental Requirements in
connection with the operation of the Properties and the Credit Parties, and each of their
respective Subsidiary’s (including Unrestricted Subsidiaries) and Affiliate’s, respective
businesses.



        Section 4.15. Compliance with Laws. Each Credit Party and each Subsidiary (including
Unrestricted Subsidiaries) of the Credit Parties is in compliance with all Applicable Laws, including, without limitation, all Environmental Laws except in such instances in which
failure


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to comply therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.




     Section 4.16. Capital Stock. All Capital Stock, debentures, bonds, notes and all
other securities of the Credit Parties and their Subsidiaries presently issued and outstanding are
validly issued in accordance with all Applicable Laws, including, but not limited to, the “Blue
Sky” laws of all applicable states and the federal securities laws. As of the Closing Date the
issued shares of Capital Stock of each Credit Party’s respective Wholly Owned Subsidiaries are
owned by the Credit Parties free and clear of any Lien or adverse claim except for Liens described
on Schedule 4.16.



     Section 4.17. Margin Stock. None of the Credit Parties or any of their Subsidiaries
is engaged in the business of extending credit for the purpose of “purchasing” or “carrying” any
Margin Stock. The Credit Parties do not own any Margin Stock, and no portion of the proceeds of
any Loan hereunder will be used, directly or indirectly, for the purpose of purchasing or carrying
any Margin Stock, for the purpose of reducing or retiring any Debt that was originally incurred to
purchase or carry any Margin Stock or for any other purpose that might cause any portion of such
proceeds to be considered a “purpose credit” within the meaning of Regulation T, U or X of the
Board of Governors of the Federal Reserve System. The Credit Parties will not take or permit to be
taken any action that might cause any Credit Document to violate any regulation of the Board of
Governors of the Federal Reserve System.



     Section 4.18. Insolvency. After giving effect to the execution and delivery of the
Credit Documents and the Extension of Credit under this Agreement, none of the Credit Parties will
be “insolvent,” within the meaning of such term as defined in the Bankruptcy Code or Section 2 of
the Uniform Fraudulent Transfer Act, or any other applicable state law pertaining to fraudulent
transfers, as each may be amended from time to time, or be unable to pay its debts generally as
such debts become due, or have an unreasonably small capital to engage in any business or
transaction, whether current or contemplated.



     Section 4.19. Available Unpledged Assets. The information contained in the Monthly
Report delivered pursuant to Section 5.2(b) is an accurate and complete listing in all
material respects of all Qualified Available Unpledged Assets, and the information contained
therein with respect to the identity of such Qualified Available Unpledged Assets and the amounts
owing thereunder is true and correct in all material respects. The Borrower owns and has good and
marketable title to the Qualified Available Unpledged Assets and each such Qualified Available
Unpledged Asset and the Related Property is free and clear of any Lien of any Person (other than
Permitted Liens).



     Section 4.20. Labor Matters. There are no significant strikes, lockouts, slowdowns or
other labor disputes against the Credit Parties pending or, to the knowledge of the Credit Parties,
threatened. The hours worked by and payment made to employees of the Credit Parties and each
Subsidiary of the Credit Parties have not been in violation of the Fair Labor Standards Act or any
other applicable federal, state or foreign law dealing with such matters, except in such instances
in which the failure to comply therewith, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.



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     Section 4.21. Patents, Trademarks, Etc. To the best of their knowledge, the Credit
Parties and each Subsidiary of the Credit Parties owns, or is licensed to use, all patents,
trademarks, trade names, copyrights, technology, know-how and processes, service marks and rights
with respect to the foregoing that are (a) necessary for the conduct of their respective businesses
as currently conducted, and (b) material to the businesses, financial condition, operations, or
properties, of the Credit Parties and their Subsidiaries taken as a whole. To the Credit Parties
knowledge, the use of such patents, trademarks, trade names, copyrights, technology, know-how,
processes and rights with respect to the Credit Parties and their Subsidiaries, does not infringe
on the rights of any Person in any manner which could reasonably be expected to cause a Material
Adverse Effect.



     Section 4.22. Tax Shelter Regulations. Borrower does not intend to treat the Loans
and advances and related transactions as being a “reportable transaction” (within the meaning of
Treasury Regulation Section 1.6011-4). In the event Borrower determines to take any action
inconsistent with such intention, it will promptly notify Administrative Agent thereof. If
Borrower so notifies Administrative Agent, Borrower acknowledges that one or more of the Lenders
may treat its Revolving Loans and/or its interest in Swingline Loans as part of a transaction that
is subject to Treasury Regulation 301.6112-1, and that such Lender or Lenders, as applicable, will
maintain the lists and other records required by such Treasury Regulation.



     Section 4.23. All Consents Required. All approvals, authorizations, consents, orders
or other actions of any Person or of any Governmental Authority (if any) required in connection
with the due execution, delivery and performance by the Credit Parties of this Agreement and any
Credit Document to which the Credit Parties are a party, have been obtained.



     Section 4.24. Selection Procedures. No procedures believed by the Credit Parties to
be adverse to the interests of the Administrative Agent and the Lenders were utilized by the Credit
Parties in identifying and/or selecting the Investments that are part of the Available Unpledged
Assets and Qualified Available Unpledged Assets; it being understood that the selection procedures
used by the Credit Parties for the inclusion of Investments in one or more of its Securitization
Transactions or other financing facilities and which are solely intended to obtain the most
beneficial advance rates thereunder and/or otherwise maximize the efficiency of such facilities
shall not be deemed to be adverse procedures for the purposes of this Section.



     Section 4.25. [Reserved].



     Section 4.26. Credit and Collection Policy; Residential Mortgage Policies and
Procedures. The copy of the Residential Mortgage Policies and Procedures and the Credit and
Collection Policy, attached hereto as Schedule 1.1(a) and Schedule 4.26,
respectively, are true, complete and accurate as of the Closing Date. Since the date hereof, there
have been no material changes in any Credit and Collection Policy or the Residential Mortgage
Policies and Procedures other than in accordance with this Agreement. Since December 31, 2005, no
Material Adverse Change has occurred in the overall rate of collection of the Investment Loans and
Investments in Equity Instruments, and Borrower has at all times complied in all material respects
and to the extent applicable with the Credit and Collection Policy with respect to each Investment
Loan and each Investment in Equity Instruments.



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     Section 4.27. Compliance with OFAC Rules and Regulations. None of the Borrower, any
Subsidiary (including Unrestricted Subsidiaries) of the Borrower, any Guarantor, or, to the
Borrower’s knowledge, any Affiliate of the Borrower or any Guarantor (i) is a Sanctioned Person, or
(ii) derives any of its operating income from investments in, or transactions with, Sanctioned
Persons or Sanctioned Entities. The proceeds of any Loan will not be used and have not been used
to fund any operations in, finance any investments or activities in or make any payments to, a
Sanctioned Person or a Sanctioned Entity.



     Section 4.28. REIT Status. The Borrower (a) operates its business so as to satisfy
all requirements necessary to qualify as a REIT, and will not intentionally take any action that
will cause Borrower to fail to so qualify; (b) maintains adequate records so as to comply with all
record-keeping requirements relating to its qualification as a REIT as required by the Code and
applicable regulations of the Department of Treasury promulgated thereunder and will properly
prepare and timely file with the Internal Revenue Service all returns and reports required thereby
to qualify as a REIT; and (c) requested or will timely request from its shareholders all
information required by the Code and applicable regulations of the Department of Treasury
promulgated thereunder to qualify as a REIT.



ARTICLE V



COVENANTS



     Each Credit Party hereby covenants and agrees that, on the Closing Date, and thereafter for so
long as this Credit Agreement is in effect and until the Commitments have terminated, no Note
remains outstanding and unpaid and the Credit Party Obligations under the Credit Documents,
together with interest, Commitment Fees and all other amounts owing to the Agent or any Lender
hereunder, are paid in full:



     Section 5.1. Financial Statements.



     Borrower shall furnish to the Administrative Agent and each of the Lenders:




     (a) Annual Financial Statements. As soon as available, but in any event within
ten (10) days of the date the Borrower is required to file its Form 10-K with the SEC
(without giving effect to any extension of such due date, whether obtained by filing the
notification permitted by Rule 12b-25 or any successor provision thereto or otherwise), a
copy of the consolidated and consolidating balance sheet of the Borrower and its
Consolidated Subsidiaries (including Unrestricted Subsidiaries) as at the end of such Fiscal
Year and the related consolidated and consolidating statements of income, cash flows and
retained earnings of the Borrower and its Consolidated Subsidiaries (including Unrestricted
Subsidiaries) for such year, audited by a Big 4 Accounting Firm, setting forth in each case
in comparative form the figures for the preceding Fiscal Year, reported on without a “going
concern” or like qualification, exception or assumption, or qualification or assumption
indicating that the scope of the audit was inadequate to permit such independent certified
public accountants to certify such financial statements without such qualification;



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     (b) Quarterly Financial Statements. As soon as available and in any event
within ten (10) days of the date the Borrower is required to file its Form 10-Q with the SEC
(without giving effect to any extension of such due date, whether obtained by filing the
notification permitted by Rule 12b-25 or any successor provision thereto or otherwise), a
company-prepared consolidated and consolidating balance sheet of the Borrower and its
Consolidated Subsidiaries (including Unrestricted Subsidiaries) as at the end of such period
and related company-prepared consolidated and consolidating statements of income, cash flows
and retained earnings for the Borrower and its Consolidated Subsidiaries (including
Unrestricted Subsidiaries) for such quarterly period and for the portion of the Fiscal Year
ending with such period, in each case setting forth in comparative form the figures for the
corresponding period or periods of the preceding Fiscal Year (subject to normal recurring
year-end audit adjustments) certified as to fairness of presentation, GAAP and consistency
by the Chief Financial Officer of the Borrower; and


all such financial statements to fairly present in all material respects the financial condition
and results from operations of the entities and for the periods specified and to be prepared in
reasonable detail and in accordance with GAAP (subject, in the case of interim statements, to
normal year-end audit adjustments) applied consistently throughout the periods reflected therein
and, if applicable, accompanied by a description of, and an estimation of the effect on the
financial statements on account of, a change in the application of accounting principles as
provided in Section 1.3.




        Section 5.2. Certificates; Other Information.



        Borrower shall furnish to the Administrative Agent and each of the Lenders:




     (a) concurrently with the delivery of the financial statements referred to in
Sections 5.1(a) and 5.1(b) above, a certificate of a Responsible Officer
substantially in the form of Exhibit H (“Compliance Certificate”) stating
that (i) such financial statements present fairly the financial position of the Borrower and
its Consolidated Subsidiaries (including Unrestricted Subsidiaries) for the periods
indicated in conformity with GAAP applied on a consistent basis, (ii) each Credit Party
during such period observed or performed in all material respects all of its covenants and
other agreements, and satisfied in all material respects every condition, contained in this
Credit Agreement to be observed, performed or satisfied by it, and (iii) such Responsible
Officer has obtained no knowledge of any Default or Event of Default except as specified in
such certificate and if any Default then exists, setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect thereto, and including
calculations in reasonable detail required to indicate compliance with Sections 5.8,
5.28 and 5.32 as of the last day of such period;




     (b) within fifteen (15) Business Days after the end of each calendar month, a monthly
report (the “Monthly Report”) signed by a Responsible Officer of the Borrower and
substantially in the form of Exhibit I; and



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     (c) promptly, such additional financial and other information as the Administrative
Agent, on behalf of any Lender, may from time to time reasonably request.



     Section 5.3. Payment of Taxes and Other Obligations.



     The Credit Parties will, and will cause each of their Subsidiaries (including Unrestricted
Subsidiaries) to pay, discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, (subject, where applicable, to specified grace periods) all (a)
Federal taxes, and (b) promptly upon obtaining knowledge thereof, all state and local taxes,
assessments and governmental charges the nonpayment of which could reasonably be expected to result
in a material liability or asset impairment, and any additional costs that are imposed as a result
of any failure to so pay, discharge or otherwise satisfy such taxes, obligations and liabilities,
except when the amount or validity of any such taxes, obligations and liabilities is currently
being contested in good faith by appropriate proceedings and reserves, if applicable, in conformity
with GAAP with respect thereto have been provided on the books of the Credit Parties.



     Section 5.4. Notices.



     Immediately after any Credit Party becomes aware thereof give written notice to the
Administrative Agent (which shall promptly transmit such notice to each Lender) of the occurrence
of any Default or Event of Default, and promptly (but in no event later than three (3) Business
Days after a Responsible Officer of any Credit Party obtains actual knowledge thereof) give written
notice of the following to the Administrative Agent (which shall promptly transmit such notice to
each Lender):




     (a) the occurrence of any default or event of default under any Contractual Obligation
of any of the Credit Parties or any Subsidiary which could reasonably be expected to have a
Material Adverse Effect or result in monetary liability in excess of $10,000,000;




     (b) any litigation, or any investigation or proceeding affecting any of the Credit
Parties which, could reasonably be expected to have a Material Adverse Effect;




     (c) any order, judgment or decree exceeding $10,000,000 having been entered against any
of the Credit Parties or any Subsidiary;




     (d) (i) the occurrence or expected occurrence of any Reportable Event with respect to
any Plan, a failure to make any required contribution to a Plan, the creation of any Lien in
favor of the PBGC (other than a Permitted Lien) or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan, or (ii) the
institution of proceedings or the taking of any other action by the PBGC or any Credit Party
or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal
from, or the terminating, Reorganization or Insolvency of, any Plan;




     (e) any notice of any material violation received by any Credit Party from any
Governmental Authority; and



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     (f) any other development or event which could reasonably be expected to have a
Material Adverse Effect.


Each notice pursuant to this Section 5.4 shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein and stating what
action the Credit Party proposes to take with respect thereto. In the case of any notice of a
Default or Event of Default, such Credit Party shall specify that such notice is a Default or Event
of Default notice on the face thereof.




     Section 5.5. Inspection of Property, Books and Records.



     Each Credit Party will: (a) keep, and will cause each Subsidiary (including Unrestricted
Subsidiaries) to keep, proper books of record and account in which full, true and correct entries
in conformity with GAAP shall be made of all dealings and transactions in relation to its business
and activities; (b) permit, and will cause each Subsidiary (including Unrestricted Subsidiaries) of
the Credit Parties to permit, during regular business hours, upon not less than five (5) days prior
notice which notice shall not be required in the case of a Default or an Event of Default having
occurred, the Administrative Agent or its designee, at the expense of the Borrower, to perform
periodic field audits and investigations of the Borrower and the Qualified Available Unpledged
Assets, from time to time, provided that the field audits and investigations at the Borrower’s
headquarters in Chevy Chase, Maryland shall be no more frequent than once each Fiscal Year (in the
absence of an Event of Default); and (c) permit, and will cause each Subsidiary (including
Unrestricted Subsidiaries) to permit, representatives of the Administrative Agent and any Lender at
the expense of the Administrative Agent or such Lender, as applicable, prior to the occurrence of
an Event of Default and at the Borrower’s expense after the occurrence of an Event of Default to
visit and inspect, during regular business hours, any of their respective properties, to examine
and make abstracts from any of their respective books and records (including computer tapes and
disks) and to discuss their respective affairs, finances and accounts with their respective
officers, employees and independent public accountants. Each Credit Party agrees to cooperate and
assist in such visits and inspections; provided that such visits and inspections shall be
no more frequent than once each Fiscal Year so long as no Event of Default shall have occurred and
be continuing, and as often as may reasonably be desired in the event that an Event of Default
shall have occurred and be continuing.



     Section 5.6. Acquisitions.



     Neither the Borrower nor any Subsidiary of the Borrower shall consummate any Acquisition,
unless (a) the line or lines of business of the Person to be acquired are substantially the same as
or related to one or more Permitted Lines of Business, (b) no Default or Event of Default shall
have occurred and be continuing either immediately prior to or immediately after giving effect to
such Acquisition and no less than three (3) Business Days after the date such Acquisition is
effective the Borrower provides to the Administrative Agent and Lenders pro forma financial
statements confirming the Borrower will be in pro forma compliance with Section 5.32, and
(c) the Person acquired shall be (i) a Subsidiary or merged into a Subsidiary or (ii) be merged
into the Borrower immediately upon consummation of the Acquisition (or if assets are being
acquired, the acquiror shall be the Borrower or a Subsidiary of the Borrower).



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     Section 5.7. Restricted Payments.



     If a Default or Event of Default specified in Section 7.1(a) or Section 7.1(f)
shall have occurred and be continuing, or if as a result of the occurrence of any other Event of
Default the Credit Party Obligations have been accelerated pursuant to Section 7.2, the
Credit Parties shall not make any Restricted Payment.



     Section 5.8. Capital Expenditures.



     Capital Expenditures will not exceed in the aggregate in any Fiscal Year the sum of
$25,000,000; provided, however, to the extent Capital Expenditures in any fiscal
year are less than the amount permitted by this Section 5.8, such unused amounts may be
carried forward to a subsequent period.



     Section 5.9. Additional Guarantors.



     Borrower will cause each of its First Tier Domestic Subsidiaries and each of its First Tier
Foreign Subsidiaries, whether newly formed, after acquired or otherwise existing, to promptly (and
in any event within thirty (30) days after such Subsidiary is formed or acquired (or such longer
period of time as agreed to by the Administrative Agent in its reasonable discretion)) become a
Guarantor hereunder by way of execution of a Joinder Agreement; provided that,
First Tier Foreign Subsidiaries shall not be required to become a Guarantor if it would be unlawful
or would cause any material adverse tax consequences to the Borrower or such First Tier Foreign
Subsidiary.



     Section 5.10. Maintenance of Unsecured Debt Rating.



     Borrower shall at all times maintain a senior unsecured debt rating by one of (a) Fitch, (b)
S&P, or (c) Moody’s. In the event Borrower shall maintain one senior unsecured debt rating such
rating shall at all times be equal to or greater than (i) in the case of Fitch “BB-”, (ii) in the
case of S&P “BB-”, and (iii) in the case of Moody’s “Ba3”. In the event Borrower shall maintain
two or more senior unsecured debt ratings, two of such ratings shall at all times be equal to or
greater than (i) in the case of Fitch “BB-”, (ii) in the case of S&P “BB-”, and (iii) in the case
of Moody’s “Ba3”.



     Section 5.11. Ownership of Credit Parties; Restrictions.



     The Borrower will not sell, transfer, pledge or otherwise dispose of any Capital Stock or
other equity interest in any of the Credit Parties, except that such Capital Stock or other equity
interest may be transferred to another Credit Party.



     Section 5.12. Maintenance of Existence.



     Each Credit Party will and will cause each Subsidiary of a Credit Party, except as otherwise
permitted by Section 5.13 and 5.14, to continue to engage in business of the same
general type as any of the Permitted Lines of Business, preserve and maintain its existence,
rights, franchises and privileges in the jurisdiction of its formation, and qualify and remain
qualified in good standing in each jurisdiction where the failure to maintain such existence,



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rights, franchises, privileges and qualification has had, or could reasonably be expected to
have, a Material Adverse Effect.




     Section 5.13. Dissolution.



     None of the Credit Parties or any Subsidiary of a Credit Party shall suffer or permit
dissolution or liquidation, except (a) through corporate reorganization, merger, asset sale or
similar transaction to the extent permitted by Section 5.14; (b) the dissolution or
liquidation of Subsidiaries which are not Credit Parties, provided that: (i) if such Subsidiary is
a Wholly Owned Subsidiary, it transfers all of its assets to a Credit Party or a Wholly Owned
Subsidiary prior to such liquidation or dissolution; (ii) such Subsidiary has no assets at the time
of such liquidation or dissolution; and (iii) immediately after giving effect thereto no Default or
Event of Default would exist.



     Section 5.14. Consolidations, Mergers and Sales of Assets. (a) None of the Credit
Parties will, nor will they permit any Subsidiary of a Credit Party to, consolidate or merge with
or into any other Person; provided that (i) any Credit Party may merge with another Person
if (A) such Person is organized under the laws of the United States of America or one of its
states, (B) a Credit Party is the entity surviving such merger or the surviving entity becomes a
Credit Party hereunder upon the effectiveness of such merger, and in any consolidation or merger
involving the Borrower, the Borrower shall be the surviving entity, and (C) immediately after
giving effect to such merger, no Default or Event of Default shall have occurred and be continuing,
(ii) Subsidiaries of the Borrower (which are not Credit Parties) may merge with one another or may
merge into the Borrower or any Credit Party.




     (b) None of the Credit Parties will sell or otherwise dispose of assets except (i) any
Credit Party may sell Portfolio Investments (including, but not limited to, Investment Loans
and Investments in Equity Instruments) in the ordinary course of business, or (ii) any
Credit Party may make any other disposition so long as prior to such sale no Default or
Event of Default exists and immediately after giving effect to such sale, no Default or
Event of Default shall exist; provided that the Credit Parties shall at all times be in
compliance with Section 5.32.



     Section 5.15. Use of Proceeds.



     No Letter of Credit nor any portion of the proceeds of any Revolving Loan or any Swingline
Loan will be used by the Borrower or any Subsidiary (a) directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of purchasing or carrying any Margin Stock, (b) for any
purpose in violation of any Applicable Law or regulation. The proceeds of the Revolving Loans and
Swingline Loans shall be used to fund Portfolio Investments made in the ordinary course of the
Borrower’s business and for general corporate purposes. Each Letter of Credit will be used by the
Borrower and its Subsidiaries for the benefit of Obligors under Investment Loans and for general
corporate purposes in the ordinary course of the Borrower’s business.



     Section 5.16. Compliance with Laws.



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     (a) Compliance with Laws. Each Credit Party will, and will cause each
Subsidiary (including Unrestricted Subsidiaries) and each member of the Controlled Group to,
comply with all Applicable Laws (including but not limited to those with respect to the
Investment Loans and any Related Property), regulations and similar requirements of
governmental authorities (including but not limited to PBGC), except where the necessity of
such compliance is being contested in good faith through appropriate proceedings diligently
pursued or where failure to comply could not be expected to cause a Material Adverse Effect.




     (b) ERISA Exemptions. No Credit Party shall permit any of its respective
assets to become or be deemed to be “plan assets” within the meaning of ERISA, the Code and
the respective regulations promulgated thereunder.



     Section 5.17. Insurance.



     Each Credit Party will maintain, and will cause each Subsidiary of a Credit Party to maintain
(either in the name of such Credit Party or in such Subsidiary’s own name), insurance with
financially sound and reputable insurance companies, in such amounts and against such risks as are
customarily maintained by companies of established repute engaged in the same or similar business.



     Section 5.18. Change in Fiscal Year.



     The Borrower will not change its Fiscal Year without the consent of the Administrative Agent.



     Section 5.19. Maintenance of Property.



     Each Credit Party shall, and shall cause each Subsidiary of a Credit Party to, maintain all of
its Properties and assets necessary for the conduct of its business in good condition, repair and
working order, ordinary wear and tear excepted and subject to damage and destruction due to
casualty events.



     Section 5.20. Environmental Laws.



     Each Credit Party shall, and shall cause each Subsidiary (including Unrestricted Subsidiaries)
to:




     (a) Comply in all material respects with all applicable Environmental Laws and obtain
and comply in all material respects with and maintain any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental Laws except, in
each case, to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect.




     (b) Conduct and complete all investigations, studies, sampling and testing, and all
remedial, removal and other actions required under Environmental Laws and promptly comply in
all material respects with all lawful orders and directives of all Governmental Authorities
regarding Environmental Laws except to the extent that the



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same are being contested in good faith by appropriate proceedings or could not
reasonably be expected to have a Material Adverse Effect.



     Section 5.21. [Reserved]



     Section 5.22. [Reserved]



     Section 5.23. Compliance with Material Contracts.



     Each Credit Party will, and will cause each Subsidiary to comply with all Material Contracts
except, in each case, to the extent failure to do so could not reasonably be expected to have a
Material Adverse Effect.



     Section 5.24. Transactions with Affiliates.



     None of the Credit Parties nor any Subsidiary of the Credit Parties shall enter into, or be a
party to, any transaction with any Affiliate of any Credit Party or such Subsidiary (which
Affiliate is not a Credit Party or a Subsidiary of a Credit Party), except as permitted by law and
in the ordinary course of business and pursuant to terms which are no less favorable to such Credit
Party or such Subsidiary than would be obtained in a comparable arm’s length transaction with a
Person which is not an Affiliate; provided that this Section 5.24 shall not apply
to: (a) the origination, administration or modification of an Investment Loan or an Investment in
Equity Instruments; (b) the exercise of any right or remedy in connection with an Investment Loan
or an Investment in Equity Instruments; or (c) the making of any Restricted Payment permitted
pursuant to Section 5.7.



     Section 5.25. [Reserved].



     Section 5.26. No Restrictive Agreement.



     None of the Credit Parties will, and will not permit or cause any of their Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist or become effective any
restriction or encumbrance on (a) the ability of any Credit Party and its Subsidiaries to perform
and comply with their respective obligations under the Credit Documents, (b) the ability of any
Subsidiary of any Credit Party (other than SPE Subsidiaries) to make any dividend payments or other
distributions in respect of its Capital Stock, to repay Debt owed to any Credit Party or any other
Subsidiary or to repay the Credit Party Obligations, except with respect to transactions described
in Schedule 5.26, or (c) the ability of any Subsidiary of any Credit Party (other than SPE
Subsidiaries) to transfer any of its unencumbered assets or properties to any Credit Party or any
other Subsidiary; provided, however, that the restriction in clause (c)
above shall be limited to unencumbered assets or properties in an amount sufficient to satisfy the
Available Asset Coverage Ratio set forth in Section 5.32(e).



     Section 5.27. Costs and Expenses.



     The Borrower shall satisfy all payment obligations under Section 9.5.



     Section 5.28. Additional Debt.



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     The Borrower shall not issue, assume, create, incur or suffer to exist any Debt, except for:
(a) the Debt owed to the Lenders, the Issuing Lender and Swingline Lender under this Agreement and
the Credit Documents; (b) the Debt existing and outstanding on the Closing Date described on
Schedule 5.28; and (c) any additional Debt, provided that after giving effect to the
incurrence of any such Debt, the Borrower will be in compliance with the provisions of Section
5.32.



     Section 5.29. [Reserved].



     Section 5.30. Credit and Collection Policy.



     The Borrower will and will cause each Subsidiary of the Borrower to (a) comply in all material
respects with the Credit and Collection Policy in regard to each Investment Loan and each
Investment in Equity Instruments, and (b) furnish to the Administrative Agent and the Lenders,
prior to its effective date, prompt notice of any material changes in the Credit and Collection
Policy.



     Section 5.31. REIT Status.



     The Borrower will satisfy all requirements necessary to qualify as a REIT.



     Section 5.32. Financial Covenants.



     For so long as this Agreement is in effect and thereafter until the payment in full of the
Credit Party Obligations, Borrower shall not, directly or indirectly permit:




     (a) Consolidated Debt to Stockholders Equity Less Liquid Real Estate Assets.
The ratio of the Consolidated Debt to Stockholders Equity, determined as of the last day of
each Fiscal Quarter, to exceed 6.00 to 1.00; provided, however, such
calculation shall exclude the effects of any Liquid Real Estate Assets that are acquired and
levered by the Borrower to enable the Borrower to satisfy REIT asset and income tests.




     (b) Consolidated Debt to Stockholders Equity. The ratio of the Consolidated
Debt to Stockholders Equity, determined as of the last day of each Fiscal Quarter, to exceed
(i) 11.00 to 1.00 at the end of each Fiscal Quarter from the Closing Date until and
including the Fiscal Quarter ending December 31, 2006, and (ii) 10.0 to 1.00 at the end of
each Fiscal Quarter thereafter.




     (c) Minimum Consolidated Tangible Net Worth. Consolidated Tangible Net Worth
to be less than (i) $1,015,000,000, plus (ii) 70% of the cumulative Net Proceeds of
Capital Stock/Conversion of Debt received at any time after December 31, 2005.




     (d) Asset Quality. The Average Portfolio Charged-Off Ratio shall not exceed
4.00%, as determined on the last day of each Fiscal Quarter.




     (e) Available Asset Coverage Ratio. The Available Asset Coverage Ratio on the
last day of any calendar month shall not be less than 1.1 to 1.0; provided,
however, that if the Borrower receives a senior unsecured debt rating of “BBB-”
(“Baa3” with



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respect to Moody’s) from any two of Fitch, S&P or Moody’s, the Available Asset Coverage
Ratio shall be reduced to 1.0 to 1.0; provided, further, that the Borrower
shall not be required to satisfy the Available Asset Coverage Ratio with respect to any
calendar month in which the Borrower shall have a senior unsecured debt rating at the end of
such month of “BBB” (“Baa2” with respect to Moody’s) or higher from any two of
Fitch, S&P or Moody’s; provided, further, that if the Available Asset
Coverage Ratio is not required to be calculated due to an upgrade in the Borrower’s senior
unsecured debt rating, then any subsequent Portfolio Investments contributed to the Bank
Subsidiary shall not exceed $25,000,000 in the aggregate during each Fiscal Year in which
such Available Asset Coverage Ratio is not required to be tested as of the end of such
Fiscal Year. For the avoidance of doubt, if the Borrower should at any time fail to
maintain a senior unsecured debt rating of “BBB” (“Baa2” with respect to Moody’s) or
higher from any two of Fitch, S&P or Moody’s, the Borrower shall be required to meet the
Available Asset Coverage Ratio.




     (f) Consolidated EBIT to Interest Expense. The ratio of Consolidated EBIT, for
the preceding four quarter period, to Interest Expense of Borrower and its Consolidated
Subsidiaries for the preceding four quarter period, determined as of the last day of each
Fiscal Quarter to be less than 1.35 to 1.0.



     Section 5.33. Other.



     Each Credit Party will furnish to the Administrative Agent such other information, documents,
records or reports respecting the Portfolio Investments or the condition or operations, financial
or otherwise, of the Credit Parties as the Administrative Agent, at the request of any Lender, may
from time to time reasonably request in order to protect the interests of the Administrative Agent
or the Lender under or as contemplated by this Agreement.



ARTICLE VI



[RESERVED]


ARTICLE VII


EVENTS OF DEFAULT



     Section 7.1. Events of Default.



     An Event of Default shall exist upon the occurrence of any of the following specified events
(each an “Event of Default”):




     (a) Payment Default. The Borrower shall fail to pay any principal on any Loan
or Note when due (whether at maturity, by reason of acceleration or otherwise) in accordance
with the terms thereof or hereof; or the Borrower shall fail to reimburse the Issuing Lender
for any LOC Obligations when due (whether at maturity, by reason of acceleration or
otherwise) in accordance with the terms hereof; or the Borrower shall fail to pay any
interest on any Loan or Note or any fee or other amount payable hereunder when due (whether
at maturity, by reason of acceleration or otherwise) in accordance



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with the terms thereof or hereof and such failure to pay any interest or any fee shall
continue unremedied for three (3) Business Days.




     (b) Representations and Warranties. Any representation or warranty made or
deemed made herein, or in any of the other Credit Documents or which is contained in any
certificate, document or financial or other statement furnished at any time under or in
connection with this Credit Agreement shall prove to have been incorrect, false or
misleading in any material respect on or as of the date made or deemed made.




     (c) Covenant Default. (i) Any Credit Party shall fail to perform, comply with
or observe any term, covenant or agreement applicable to it contained in Sections
5.1, 5.2, 5.4, 5.6, 5.7 through 5.15,
5.24, 5.28, 5.31 or 5.32 hereof; or (ii) any Credit Party
shall fail to comply with any other covenant contained in this Credit Agreement or the other
Credit Documents (other than as described in Sections 7.1(a) or 7.1(c)(i)
above), and such breach or failure to comply remains uncured for thirty (30) calendar days
after the earlier of (A) receipt by such Credit Party of written notice of such violation,
breach, or failure to comply, and (B) the time at which such Credit Party knew or became
aware, or should reasonably have known or been aware, of such violation, breach, or failure
to comply.




     (d) Debt Payment Default. Any Credit Party or any Subsidiary of a Credit Party
shall default in any payment of principal of or interest on any Debt (other than the Loans
and Reimbursement Obligations) in an aggregate principal amount equal to or greater than
$17,500,000 for Borrower and any of its Subsidiaries in the aggregate beyond any applicable
grace period or cure period (not to exceed thirty (30) days), if any, provided in the
instrument or agreement under which such Debt was created.




     (e) Debt Acceleration. Any event or condition shall occur which results in the
acceleration of the maturity of Debt outstanding in an aggregate principal amount equal to
or greater than $17,500,000 of the Borrower and its Subsidiaries or the mandatory prepayment
(other than a mandatory prepayment required under the applicable Debt instrument or
agreement as a result of an equity or debt issuance, disposition of assets, or casualty or
condemnation event) or purchase of such Debt by the Borrower (or its designee) or such
Subsidiary of the Borrower (or its designee) prior to the scheduled maturity thereof.




     (f) Bankruptcy Default. (i) Any Credit Party or any of their Subsidiaries
shall commence any case, proceeding or other action (A) under any existing or future law of
any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or
relief of debtors, seeking to have an order for relief entered with respect to it, or
seeking to have it judged bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial part of its
assets, or any Credit Party or any of its Subsidiaries shall make a general assignment for
the benefit of its creditors; or (ii) there shall be commenced against any Credit Party or
any of its Subsidiaries any case, proceeding or other action of a nature referred to in
clause (i)



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above which (A) results in the entry of an order for relief or any such adjudication or
appointment, or (B) remains undismissed, undischarged or unbonded for a period of sixty (60)
days; or (iii) there shall be commenced against any Credit Party or any of its Subsidiaries
any case, proceeding or other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its assets which results
in the entry of an order for any such relief which shall not have been vacated, discharged,
or stayed or bonded pending appeal within sixty (60) days from the entry thereof; or (iv)
any Credit Party or any of its Subsidiaries shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set forth in
clause (i), (ii) or (iii) above; or (v) any Credit Party or any of
its Subsidiaries shall generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; provided, however, that the
provisions of this clause (f) shall not apply to any special purpose entity
established solely to finance real estate assets that has an aggregate fair market value of
less than $15,000,000 at the time of any such bankruptcy, insolvency or reorganization, and
there is no Material Adverse Effect as a result of any such bankruptcy, insolvency or
reorganization.




     (g) Judgment Default. One or more judgments, orders, decrees or arbitration
awards shall be entered against a Credit Party or any of its Subsidiaries involving in the
aggregate a liability (to the extent not paid when due or covered by insurance) of
$17,500,000 or more and all such judgments, orders, decrees or arbitration awards shall not
have been paid and satisfied, vacated, discharged, stayed or bonded pending appeal within
thirty (30) days from the entry thereof.




     (h) ERISA Default. The Borrower or any member of the Controlled Group shall
fail to pay when due any material amount which it shall have become liable to pay to the
PBGC or to a Plan under Title IV of ERISA; or notice of intent to terminate a Plan or Plans
shall be filed under Title IV of ERISA by the Borrower, any member of the Controlled Group,
any plan administrator or any combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate or to cause a trustee to be appointed to
administer any such Plan or Plans or a proceeding shall be instituted by a fiduciary of any
such Plan or Plans to enforce Section 515 or 4219(c)(5) of ERISA and such proceeding shall
not have been dismissed within thirty (30) days thereafter; or a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree adjudicating that any such
Plan or Plans must be terminated.




     (i) Tax Lien. A federal tax lien shall be filed against the Borrower or any
Subsidiary of the Borrower under Section 6323 of the Code or a lien of the PBGC shall be
filed against the Borrower or any Subsidiary of the Borrower under Section 4068 of ERISA and
in either case such lien shall remain undischarged for a period of twenty-five (25) days
after the date of filing except when the amount or validity of such lien is currently being
contested in good faith by appropriate proceedings and reserves in conformity with GAAP with
respect thereto have been provided on the books of the Borrower.




     (j) Change of Control. A Change of Control shall have occurred.



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     (k) [Reserved].




     (l) [Reserved].




     (m) Failure of Credit Documents. This Credit Agreement or any other Credit
Document shall for any reason cease to be valid and binding obligations of the Borrower and
each Credit Party thereto or any Person acting by or on behalf of any Credit Party shall
deny or disaffirm such Person’s obligations under this Credit Agreement or any other Credit
Document.




     (n) The Borrower is not in compliance with the senior unsecured debt ratings set forth
in Section 5.10.



     Section 7.2. Acceleration; Remedies.



     Upon the occurrence and during the continuation of an Event of Default, then, and in any such
event, (a) if such event is an Event of Default specified in Section 7.1(f) above with
respect to any Credit Party, automatically the Commitments shall immediately terminate and the
Loans (with accrued interest thereon), and all other amounts under the Credit Documents (including
without limitation the maximum amount of all contingent liabilities under Letters of Credit) shall
immediately become due and payable, and the Borrower shall immediately pay to the Administrative
Agent cash collateral as security for the LOC Obligations for subsequent drawings under then
outstanding Letters of Credit in an amount equal to the maximum amount which may be drawn under
Letters of Credit then outstanding, and (b) if such event is any other Event of Default, subject to
the terms of Section 8.5, with the written consent of the Required Lenders, the
Administrative Agent may, or upon the written request of the Required Lenders, the Administrative
Agent shall, take any or all of the following actions: (i) by notice to the Borrower declare the
Commitments to be terminated forthwith, whereupon the Commitments shall immediately terminate; (ii)
by notice of default to the Borrower declare the Loans (with accrued interest thereon) and all
other amounts owing under this Credit Agreement and the Notes to be due and payable forthwith and
direct the Borrower to pay to the Administrative Agent cash collateral as security for the LOC
Obligations for subsequent drawings under then outstanding Letters of Credit in an amount equal to
the maximum amount of which may be drawn under Letters of Credit then outstanding, whereupon the
same shall immediately become due and payable; and/or (iii) exercise on behalf of the Lenders all
of its other rights and remedies under this Credit Agreement, the other Credit Documents and
Applicable Law. Except as expressly provided above in this Section 7.2, presentment,
demand, protest and all other notices of any kind are hereby expressly waived by the Credit
Parties.



ARTICLE VIII



THE ADMINISTRATIVE AGENT



     Section 8.1. Appointment.



     Each Lender hereby irrevocably designates and appoints Wachovia as the Administrative Agent of
such Lender under this Credit Agreement, and each such Lender irrevocably authorizes Wachovia, as
the Administrative Agent for such Lender, to take such action on its behalf under



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the provisions of this Credit Agreement and to exercise such powers and perform such duties as
are expressly delegated to the Administrative Agent by the terms of this Credit Agreement, together
with such other powers as are reasonably incidental thereto. Each Lender acknowledges that the
Credit Parties may rely upon action taken by the Administrative Agent on behalf of the Lenders
hereunder. Notwithstanding any provision to the contrary elsewhere in this Credit Agreement, the
Administrative Agent shall not 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 shall be read into this Credit Agreement or
otherwise exist against the Administrative Agent.




     Section 8.2. Delegation of Duties.



     The Administrative Agent may execute any of its duties under this Credit 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.
Without limiting the foregoing, the Administrative Agent may appoint one of its affiliates as its
agent to perform the functions of the Administrative Agent hereunder relating to the advancing of
funds to the Borrower and distribution of funds to the Lenders and to perform such other related
functions of the Administrative Agent hereunder as are reasonably incidental to such functions.



     Section 8.3. Exculpatory Provisions.



     Neither the Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact, Subsidiaries or Affiliates shall be (a) liable for any action lawfully taken or
omitted to be taken by it or such Person under or in connection with this Credit Agreement (except
for its or such Person’s own gross negligence, fraud or willful misconduct), or (b) responsible in
any manner to any of the Lenders for any recitals, statements, representations or warranties made
by any Credit Party or any officer thereof contained in this Credit Agreement or in any
certificate, report, statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Credit Agreement or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of any of the Credit Documents or for any
failure of any Credit Party to perform its obligations hereunder or thereunder. The Administrative
Agent shall not be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance by any Credit Party of any of the agreements contained in, or conditions
of, this Credit Agreement, or to inspect the properties, books or records of the any Credit Party.



        Section 8.4. Reliance by Administrative Agent.




     (a) The Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, statement, order or other document or conversation believed by it in good
faith 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, without limitation,
counsel to the Borrower), independent accountants and other experts



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selected by the Administrative Agent. The Administrative Agent may deem and treat the
payee of any Note as the owner thereof for all purposes unless an executed Commitment
Transfer Supplement has been filed with the Administrative Agent pursuant to Section
9.6(c) with respect to the Loans evidenced by such Note. The Administrative Agent shall
be fully justified in failing or refusing to take any action under this Credit Agreement
unless it shall first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders against any
and all liability and expense which may be incurred by it by reason of taking or continuing
to take any such action. The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under any of the Credit Documents in accordance with a
request of the Required Lenders or all of the Lenders, as may be required under this Credit
Agreement, and such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and all future holders of the Notes.




     (b) For purposes of determining compliance with the conditions specified in Section
3.1, each Lender that has signed this Credit Agreement shall be deemed to have consented
to, approved or accepted or to be satisfied with, each document or other matter required
thereunder to be consented to or approved by or acceptable or satisfactory to a Lender.



     Section 8.5. Notice of Default.



     The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of
any Default or Event of Default hereunder unless the Administrative Agent has received notice from
a Lender or the Borrower referring to this Credit Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default”. In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give prompt notice
thereof to the Lenders. The Administrative Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required Lenders;
provided, however, that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or Event of Default as it
shall deem advisable in the best interests of the Lenders except to the extent that this Credit
Agreement expressly requires that such action be taken, or not taken, only with the consent or upon
the authorization of the Required Lenders, or all of the Lenders, as the case may be.



     Section 8.6. Non-Reliance on Administrative Agent and Other Lenders.



     Each Lender expressly acknowledges that neither the Administrative Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates has made any representation
or warranty to it and that no act by the Administrative Agent hereinafter taken, including any
review of the affairs of any Credit Party, shall be deemed to constitute any representation or
warranty by the Administrative Agent to any Lender. Each Lender represents to the Administrative
Agent that it has, independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,



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financial and other condition and creditworthiness of the Borrower or any other Credit Party
and made its own decision to make its Loans hereunder and enter into this Credit Agreement. Each
Lender also represents that it will, independently and without reliance upon the Administrative
Agent or any other Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions in taking or not
taking action under this Credit Agreement, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Administrative Agent hereunder, the Administrative
Agent shall not have any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial or otherwise),
prospects or creditworthiness of the Borrower or any other Credit Party which may come into the
possession of the Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.




     Section 8.7. Indemnification.



     The Lenders agree to indemnify the Administrative Agent in its capacity as such, the Issuing
Lender in its capacity as such and the Swingline Lender in its capacity as such (to the extent not
reimbursed by the Borrower and without limiting the obligation of the Borrower to do so), ratably
according to their respective Commitment Percentages in effect on the date on which indemnification
is sought under this Section 8.7, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time following the payment
of the Notes or any Reimbursement Obligation) be imposed on, incurred by or asserted against the
Administrative Agent, the Issuing Lender or the Swingline Lender in any way relating to or arising
out of any Credit Document or any documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or omitted by the Administrative
Agent, the Issuing Lender or the Swingline Lender under or in connection with any of the foregoing;
provided, however, that no Lender shall be liable for the payment of any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent resulting from the gross negligence or willful misconduct
of the Administrative Agent, the Issuing Lender or the Swingline Lender, as applicable, as
determined by a court of competent jurisdiction. The agreements in this Section 8.7 shall
survive the termination of this Credit Agreement and payment of the Notes, any Reimbursement
Obligation and all other amounts payable hereunder.



     Section 8.8. The Administrative Agent in Its Individual Capacity.



     The Administrative Agent and its affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrower as though the Administrative Agent were
not the Administrative Agent hereunder. With respect to the Loans made or renewed by it and any
Note issued to it, the Administrative Agent shall have the same rights and powers under this Credit
Agreement as any Lender and may exercise the same as though it were not the Administrative Agent,
and the terms “Lender” and “Lenders” shall include the Administrative Agent in its individual
capacity.



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     Section 8.9. Successor Administrative Agent.



     The Administrative Agent may resign as Administrative Agent upon thirty (30) days’ prior
written notice to the Borrower and the Lenders. If the Administrative Agent shall resign as
Administrative Agent under this Credit Agreement and the other Credit Documents or if the
Administrative Agent enters or becomes subject to receivership, then the Required Lenders shall
appoint from among the Lenders a successor administrative agent for the Lenders, which successor
agent shall be approved by the Borrower (such approval not to be unreasonably withheld) so long as
no Default or Event of Default has occurred and is continuing, whereupon such successor
administrative agent shall succeed to the rights, powers and duties of the Administrative Agent,
and the term “Administrative Agent” shall mean such successor administrative agent effective upon
such appointment and approval, and the former Administrative Agent’s rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any of the parties to this Credit Agreement or any holders of
the Notes. If no successor Administrative Agent has accepted appointment as Administrative Agent
within thirty (30) days after the retiring Administrative Agent’s giving notice of resignation, the
retiring Administrative Agent shall have the right, on behalf of the Lenders, to appoint a
successor administrative agent, which successor shall be approved by the Borrower (such approval
not to be unreasonably withheld) so long as no Default or Event of Default has occurred and is
continuing; provided, that, such successor administrative agent has minimum capital
and surplus of at least $500,000,000. If no successor administrative agent has accepted
appointment as Administrative Agent within sixty (60) days after the retiring Administrative
Agent’s giving notice of resignation, the retiring Administrative Agent’s resignation shall
nevertheless become effective and the Lenders shall perform all duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor administrative agent
as provided for above. After any retiring Administrative Agent’s resignation as Administrative
Agent, the indemnification provisions of this Credit Agreement and the other Credit Documents and
the provisions of this Article VIII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this Credit Agreement.



     Section 8.10. Other Agents.



     None of the Lenders or other Persons identified on the facing page or signature pages of this
Agreement as a “syndication agent,” “documentation agent,” “co–agent,” “book manager,” “book
runner,” “lead manager,” “arranger,” “lead arranger” or “co–arranger” shall have any right (except
as expressly set forth herein), power, obligation, liability, responsibility or duty under this
Agreement other than, in the case of such Lenders, those applicable to all Lenders as such.
Without limiting the foregoing, none of the Lenders or other Persons so identified shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender acknowledges that it has
not relied, and will not rely, on any of the Lenders or other Persons so identified in deciding to
enter into this Credit Agreement or in taking or not taking action hereunder.



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ARTICLE IX



MISCELLANEOUS



     Section 9.1. Amendments, Waivers and Release of Collateral.



     Neither this Credit Agreement, nor any of the Notes, nor any of the other Credit Documents,
nor any terms hereof or thereof may be amended, supplemented, waived or modified except in
accordance with the provisions of this Section 9.1 nor may the Borrower or any Guarantor be
released except in accordance with the provisions of this Section 9.1. The Required
Lenders may, or, with the written consent of the Required Lenders, the Administrative Agent may,
from time to time, (a) enter into with the Borrower or any other Credit Party written amendments,
supplements or modifications hereto and to the other Credit Documents for the purpose of adding any
provisions to this Credit Agreement or the other Credit Documents or changing in any manner the
rights of the Lenders or of the Borrower or any other Credit Party hereunder or thereunder, or (b)
waive, on such terms and conditions as the Required Lenders may specify in such instrument, any of
the requirements of this Credit Agreement or the other Credit Documents or any Default or Event of
Default and its consequences; provided, however, that no such waiver and no such
amendment, waiver, supplement, modification or release shall:




          (i) reduce the amount or extend the scheduled date of maturity of any Loan or Note or
any installment thereon, or reduce the stated rate of any interest or fee payable hereunder
(except in connection with a waiver of interest at the increased post-default rate set forth
in Section 2.9(b) which shall be determined by a vote of the Required Lenders) or
extend the scheduled date of any payment thereof or increase the amount or extend the
expiration date of any Lender’s Commitment (except for the extension of the Commitment
Termination Date pursuant to Section 2.20), in each case without the written consent
of each Lender directly affected thereby; or




          (ii) amend, modify or waive any provision of this Section 9.1 or reduce the
percentage specified in the definition of Required Lenders, without the written consent of
all the Lenders; or




          (iii) amend, modify or waive any provision of Article VIII, without the written
consent of the Administrative Agent; or




          (iv) release any Guarantor from the Guaranty hereunder (except as otherwise permitted
by Sections 5.13 or 5.14), without the written consent of all the Lenders;
or




          (v) cancel or forgive any amounts owing hereunder, without the written consent of all
of the Lenders affected thereby; or




          (vi) subordinate the Loans to any other Debt without the written consent of all of the
Lenders; or



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          (vii) permit the Borrower to assign or transfer any of its rights or obligations under
this Credit Agreement or other Credit Documents without the written consent of all of the
Lenders; or




          (viii) amend, modify or waive any provision of the Credit Documents requiring consent,
approval or request of the Required Lenders or all Lenders without the written consent of
all of the Required Lenders or Lenders as appropriate; or




          (ix) amend, modify or waive the order in which Credit Party Obligations are paid in
Section 2.12(b) without the written consent of each Lender directly affected
thereby; or




          (x) amend or modify the provisions to the Credit Documents to permit the Borrower to
obtain borrowings in currencies other than Dollars, without the written consent of all the
Lenders affected thereby; or




          (xi) amend or modify the definition of Credit Party Obligations to delete or exclude
any obligation or liability described therein without the written consent of each Lender
directly affected thereby;


provided, further, that no amendment, waiver or consent affecting the rights or
duties of the Administrative Agent, or the Issuing Lender or the Swingline Lender under any Credit
Document shall in any event be effective, unless in writing and signed by the Administrative Agent,
or the Issuing Lender and/or the Swingline Lender, as applicable, in addition to the Lenders
required hereinabove to take such action.




     Any such waiver, any such amendment, supplement or modification and any such release shall
apply equally to each of the Lenders and shall be binding upon the Borrower, the Lenders, the
Administrative Agent and all future holders of the Notes. In the case of any waiver, the Borrower,
the other Credit Parties, the Lenders and the Administrative Agent shall be restored to their
former position and rights hereunder and under the outstanding Loans and Notes and other Credit
Documents, and any Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default,
or impair any right consequent thereon.



     Notwithstanding any of the foregoing to the contrary, the consent of the Borrower shall not be
required for any amendment, modification or waiver of the provisions of Article VIII (other
than the provisions of Section 8.9); provided, however, that the
Administrative Agent will provide written notice to the Borrower of any such amendment,
modification or waiver. In addition, the Borrower and the Lenders hereby authorize the
Administrative Agent to modify this Credit Agreement by unilaterally amending or supplementing
Schedule 2.1(a) from time to time in the manner requested by the Borrower, the
Administrative Agent or any Lender in order to reflect any assignments or transfers of the Loans as
provided for hereunder; provided, however, that the Administrative Agent shall
promptly deliver a copy of any such modification to the Borrower and each Lender.



     Notwithstanding the fact that the consent of all the Lenders is required in certain
circumstances as set forth above, (A) each Lender is entitled to vote as such Lender sees fit on



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any bankruptcy reorganization plan that affects the Loans, and each Lender acknowledges that
the provisions of Section 1126(c) of the Bankruptcy Code supersede the unanimous consent provisions
set forth herein, and (B) the Required Lenders may consent to allow a Credit Party to use cash
collateral (excluding cash collateral securing LOC Obligations) in the context of a bankruptcy or
insolvency proceeding.




     If, in connection with any proposed amendment, modification, supplement, waiver or release (a
“Proposed Change”) requiring the consent of all Lenders or all affected Lenders, the
consent of Required Lenders is obtained, but the consent of other Lenders whose consent is required
is not obtained (any such Lender whose consent is not obtained being referred to as a
“Non-Consenting Lender”), then, so long as Agent is not a Non-Consenting Lender, at
Borrower’s request, Agent may within sixty (60) days thereafter designate another bank or financial
institution which is acceptable to Agent in its reasonable discretion (such other bank or financial
institution being called a “Replacement Lender”) to purchase the Loans of such
Non-Consenting Lender and such Non-Consenting Lender’s rights hereunder, without recourse to or
warranty by, or expense to, such Non-Consenting Lender, for a purchase price equal to the
outstanding principal amount of the Loans payable to such Non-Consenting Lender plus any accrued
but unpaid interest on such Loans and all accrued but unpaid fees owed to such Non-Consenting
Lender and any other amounts payable to such Non-Consenting Lender under this Agreement, and to
assume all the obligations of such Non-Consenting Lender hereunder, and, upon such purchase and
assumption (pursuant to a Commitment Transfer Supplement), such Non-Consenting Lender shall no
longer be a party hereto or have any rights hereunder (other than rights with respect to
indemnities and similar rights applicable to such Non-Consenting Lender prior to the date of such
purchase and assumption) and shall be relieved from all obligations to Borrower hereunder, and the
Replacement Lender shall succeed to the rights and obligations of such Non-Consenting Lender
hereunder.



     Section 9.2. Notices.




     (a) Except as otherwise provided in Article II, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in writing
(including by telecopy or other electronic communications as provided below), and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or made (i)
when delivered by hand, (ii) when transmitted via telecopy (or other facsimile device) to
the number set out herein, (iii) the day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or (iv) the third
Business Day following the day on which the same is sent by certified or registered mail,
postage prepaid and return receipt requested, in each case, addressed as follows in the case
of the Borrower, the other Credit Parties and the Administrative Agent, and the Domestic
Lending Offices set forth on Schedule 9.2 in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto and any future
holders of the Notes:



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	The Borrower:

	 	CapitalSource Inc.
	 

	 	4445 Willard Avenue
	 

	 	Chevy Chase, MD 20815
	 

	 	Attention: Chief Financial Officer
	 

	 	Telecopier: (301) 841-2307
	 
	 	 
	with a copy to:

	 	CapitalSource Inc.
	 

	 	4445 Willard Avenue
	 

	 	Chevy Chase, MD 20815
	 

	 	Attention: Chief Legal Officer
	 

	 	Telecopier: (301) 841-2380
	 
	 	 
	The Guarantors:

	 	c/o CapitalSource Inc.
	 

	 	4445 Willard Avenue
	 

	 	Chevy Chase, MD 20815
	 

	 	Attention: Chief Financial Officer
	 

	 	Telecopier: (301) 841-2307
	 
	 	 
	with a copy to:

	 	c/o CapitalSource Inc.
	 

	 	4445 Willard Avenue
	 

	 	Chevy Chase, MD 20815
	 

	 	Attention: Chief Legal Officer
	 

	 	Telecopier: (301) 841-2380
	 
	 	 
	The Administrative Agent:

	 	Wachovia Bank, National Association
	 

	 	201 South College Street
	 

	 	NC0680/CP8
	 

	 	Charlotte, North Carolina 28288-0608
	 

	 	Attention: Syndication Agency Services
	 

	 	Telecopier: (704) 383-0288
	 

	 	Telephone: (704) 374-2698
	 
	 	 
	with a copy to:

	 	Wachovia Bank, National Association
	 

	 	One Wachovia Center, Mail Code: NC0600
	 

	 	Charlotte, North Carolina 28288-0608
	 

	 	Attention: Paul Burkhart
	 

	 	Telecopier: (704) 715-0067





provided, that, notices given by the Borrower pursuant to Section 2.1 or
Section 2.10 hereof shall be effective only upon receipt thereof by the Administrative
Agent.





     (b) Notices and other communications to the Lenders or the Administrative Agent
hereunder may be delivered or furnished by electronic communication (including e-mail and
Internet or intranet websites) pursuant to procedures approved by the Administrative Agent;
provided, that, the foregoing shall not apply to notices to any Lender
pursuant to Article II if such Lender, as applicable, has notified the
Administrative Agent that it is incapable of receiving notices under such Section by



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electronic communication. The Administrative Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided further,
that, approval of such procedures may be limited to particular notices or
communications.



     Unless the Administrative Agent otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement
from the intended recipient (such as by the “return receipt requested” function, as available,
return e-mail or other written acknowledgement); provided that if such notice or other
communication is not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on the next business day
for the recipient, and (ii) notices or communications posted to an Internet or intranet website
shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as
described in the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.



     Section 9.3. No Waiver; Cumulative Remedies.



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



     Section 9.4. [Reserved].



     Section 9.5. Payment of Expenses and Taxes; Indemnification.



          The Borrower agrees (a) to pay or reimburse the Administrative Agent and WCM for all
reasonable out-of-pocket costs and expenses incurred in connection with the development,
preparation, negotiation, printing and execution of, and any amendment, supplement or modification
to, this Credit Agreement and the other Credit Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, together with the reasonable fees and disbursements of counsel to
the Administrative Agent, (b) to pay or reimburse each Lender and the Administrative Agent for all
its costs and expenses incurred in connection with the enforcement or preservation of any rights
under this Credit Agreement, the Notes and any other Credit Document, including, without
limitation, the reasonable fees and disbursements of counsel to the Administrative Agent and to the
Lenders (including reasonable allocated costs of in-house legal counsel of Administrative Agent),
(c) on demand, to pay, indemnify, and hold each Lender, the Administrative Agent and WCM harmless
from, any and all recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying stamp, excise and other similar taxes, if any, which may be
payable or determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of, the Credit
Documents and any such other documents, (d)





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defend, indemnify and hold harmless the Administrative Agent and the Lenders, and their
respective Affiliates and their respective employees, agents, officers and directors, from and
against any and all claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or otherwise, arising out of, or
in any way relating to the violation of, noncompliance with or liability under, any Environmental
Law applicable to the operations of the Credit Parties or the Properties, or any orders,
requirements or demands of Governmental Authorities related thereto, including, without limitation,
reasonable attorney’s and consultant’s fees, investigation and laboratory fees, response costs,
court costs and litigation expenses, except to the extent that any of the foregoing arise out of
the gross negligence or willful misconduct of the party seeking indemnification therefor, and (e)
to pay, indemnify, and hold each Lender, the Administrative Agent and WCM and their Affiliates,
employees, officers and directors harmless from and against, any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the use, or proposed use, of
proceeds of the Loans or Letters of Credit, and (f) to pay, indemnify, and hold each Lender, the
Administrative Agent and WCM and their Affiliates, employees, officers and directors harmless from
and against, any and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever to the extent
arising from third party claims with respect to the execution, delivery, enforcement, performance
and administration of the Credit Documents and any such other documents (all of the foregoing,
collectively, the “indemnified liabilities”); provided, however, that the Borrower
shall not have any obligation hereunder to the Administrative Agent, WCM or any Lender with respect
to indemnified liabilities arising from the gross negligence or willful misconduct of the
Administrative Agent, WCM or such Lender, as determined by a court of competent jurisdiction. The
agreements in this Section 9.5 shall survive repayment of the Loans, Notes, LOC Obligations
and all other amounts payable hereunder.




        Section 9.6. Successors and Assigns; Participations; Purchasing Lenders.




     (a) This Credit Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Administrative Agent, all future holders of the Notes and their
respective successors and assigns, except that the Borrower may not assign or transfer any
of its rights or obligations under this Credit Agreement or the other Credit Documents
without the prior written consent of each Lender.




     (b) Any Lender may, in the ordinary course of its business and in accordance with
Applicable Law, at any time sell to one or more banks or other entities (each, a
“Participant”) participating interests in any Loan owing to such Lender, any Note
held by such Lender, any Commitment of such Lender, or any other interest of such Lender
hereunder, in each case in minimum amounts of $10,000,000 (or, if less, the entire amount of
such Lender’s obligations, Commitments or other interests). In the event of any such sale
by a Lender of participating interests to a Participant, such Lender’s obligations under
this Credit Agreement to the other parties to this Credit Agreement shall remain unchanged,
such Lender shall remain solely responsible for the performance thereof, such Lender shall
remain the holder of any such Note for all purposes under this Credit Agreement, and the
Borrower and the Administrative Agent shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and



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obligations under this Credit Agreement. No Lender shall transfer or grant any
participation under which the Participant shall have rights to approve any amendment to or
waiver of this Credit Agreement or any other Credit Document except to the extent such
amendment or waiver would (i) extend the scheduled maturity of any Loan or Note or any
installment thereon in which such Participant is participating (except in connection with
the extension of the Commitment Termination Date pursuant to Section 2.20), or
reduce the stated rate or extend the time of payment of interest or fees thereon (except in
connection with a waiver of interest at the increased post-default rate) or reduce the
principal amount thereof, or increase the amount of the Participant’s participation over the
amount thereof then in effect (it being understood that a waiver of any Default or Event of
Default shall not constitute a change in the terms of such participation, and that an
increase in any Commitment or Loan shall be permitted without consent of a Participant if
such Participant’s participation is not increased as a result thereof), or (ii) consent to
the assignment or transfer by the Borrower of any of its rights and obligations under this
Credit Agreement. In the case of any such participation, the Participant shall not have any
rights under this Credit Agreement or any of the other Credit Documents (the Participant’s
rights against such Lender in respect of such participation to be those set forth in the
agreement executed by such Lender in favor of the Participant relating thereto) and all
amounts payable by the Borrower hereunder shall be determined as if such Lender had not sold
such participation; provided, that, each Participant shall be entitled to
the benefits of Sections 2.16, 2.17, 2.18, 2.19 and
9.5 with respect to its participation in the Commitments and the Loans outstanding
from time to time; provided, further, that, no Participant shall be
entitled to receive any greater amount pursuant to such Sections than the transferor Lender
would have been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer occurred.




     (c) Any Lender may, in the ordinary course of its business and in accordance with
Applicable Law, at any time, sell or assign with the consent of the Administrative Agent and
the Issuing Lender and, so long as no Default or Event of Default has occurred and is
continuing, the Borrower (in each case, which consent shall not be unreasonably withheld),
to one or more additional banks, insurance companies or other financial institutions or any
funds investing in bank loans (each, a “Purchasing Lender”), all or any part of its
rights and obligations under this Credit Agreement and the Notes in minimum amounts of
$10,000,000 (or, if less, the entire amount of such Lender’s Commitment), pursuant to a
Commitment Transfer Supplement, executed by such Purchasing Lender, such transferor Lender,
the Administrative Agent and, so long as no Default or Event of Default has occurred and is
continuing, the Borrower, and delivered to the Administrative Agent for its acceptance and
recording in the Register; provided, however, that consent from the Issuing
Lender shall not be required if the Purchasing Lender has a senior unsecured debt rating
from any two of S&P, Moody’s and Fitch equal to or higher than A- (or A3 with respect to
Moody’s); provided, further, that any sale or assignment to another Lender
or to an Affiliate of an existing Lender shall not require the consent of the Administrative
Agent, the Issuing Lender or the Borrower. Upon such execution, delivery, acceptance and
recording, from and after the Transfer Effective Date specified in such Commitment Transfer
Supplement, (i) the Purchasing Lender thereunder shall be a party hereto and, to the extent
provided in such Commitment Transfer Supplement,



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have the rights and obligations of a Lender hereunder with a Commitment as set forth
therein, and (ii) the transferor Lender thereunder shall, to the extent provided in such
Commitment Transfer Supplement, be released from its obligations under this Credit Agreement
(and, in the case of a Commitment Transfer Supplement covering all or the remaining portion
of a transferor Lender’s rights and obligations under this Credit Agreement, such transferor
Lender shall cease to be a party hereto). Such Commitment Transfer Supplement shall be
deemed to amend this Credit Agreement to the extent, and only to the extent, necessary to
reflect the addition of such Purchasing Lender and the resulting adjustment of Commitment
Percentages arising from the purchase by such Purchasing Lender of all or a portion of the
rights and obligations of such transferor Lender under this Credit Agreement and the Notes.
On or prior to the Transfer Effective Date specified in such Commitment Transfer Supplement,
the Borrower, at its own expense, shall execute and deliver to the Administrative Agent in
exchange for the Notes delivered to the Administrative Agent pursuant to such Commitment
Transfer Supplement new Notes to the order of such Purchasing Lender in an amount equal to
the Commitment assumed by it pursuant to such Commitment Transfer Supplement and, unless the
transferor Lender has not retained a Commitment hereunder, new Notes to the order of the
transferor Lender in an amount equal to the Commitment retained by it hereunder. Such new
Notes shall be dated the Closing Date and shall otherwise be in the form of the Notes
replaced thereby. The Notes surrendered by the transferor Lender shall be returned by the
Administrative Agent to the Borrower marked “cancelled”.




     (d) The Administrative Agent shall maintain at its address referred to in Section
9.2 a copy of each Commitment Transfer Supplement delivered to it and a register (the
“Register”) for the recordation of the names and addresses of the Lenders and the
Commitment of, and principal amount of the Loans owing to, each Lender from time to time.
The entries in the Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register as the owner of the Loan recorded therein for all purposes of this
Credit Agreement. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior notice.




     (e) Upon its receipt of a duly executed Commitment Transfer Supplement, together with
payment to the Administrative Agent by the transferor Lender or the Purchasing Lender
(except for any assignment by a Lender to an Affiliate of such Lender), as agreed between
them, of a registration and processing fee of $3,500 for each Purchasing Lender listed in
such Commitment Transfer Supplement and the Notes, if any, subject to such Commitment
Transfer Supplement, the Administrative Agent shall (i) accept such Commitment Transfer
Supplement, (ii) record the information contained therein in the Register, and (iii) unless
Borrower’s consent to such assignment is not required give prompt notice of such acceptance
and recordation to the Borrower.




     (f) Each Credit Party authorizes each Lender to disclose to any Participant or
Purchasing Lender (each, a “Transferee”) and any prospective Transferee any and all
financial information in such Lender’s possession concerning the Borrower and its Affiliates
which has been delivered to such Lender by or on behalf of a Credit Party



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pursuant to this Credit Agreement or which has been delivered to such Lender by or on
behalf of a Credit Party in connection with such Lender’s credit evaluation of the Borrower
and its Affiliates prior to becoming a party to this Credit Agreement, in each case subject
to Section 9.15.




     (g) At the time of each assignment pursuant to this Section 9.6 to a Person
which is not already a Lender hereunder and which is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) for federal income tax purposes, the
respective assignee Lender shall provide to the Borrower and the Administrative Agent the
appropriate Internal Revenue Service Forms (and, if applicable, a 2.18 Certificate)
described in Section 2.18.




     (h) Nothing herein shall prohibit any Lender from pledging or assigning any of its
rights under this Credit Agreement (including, without limitation, any right to payment of
principal and interest under any Note) to any Federal Reserve Bank in accordance with
Applicable Laws.



        Section 9.7. Set-off.




     (a) Each Lender agrees that if any Lender (a “benefited Lender”) shall at any
time receive any payment of all or part of its Loans, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to
an Insolvency Event or otherwise) in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such other Lender’s Loans, or
interest thereon, such benefited Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender’s Loan, or shall provide
such other Lenders with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such benefited Lender to share the excess payment or benefits of
such collateral or proceeds ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits is thereafter
recovered from such benefited Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without interest. The
Borrowers and each other Credit Party agrees that each Lender so purchasing a portion of
another Lender’s Loans may exercise all rights of payment (including, without limitation,
rights of set-off) with respect to such portion as fully as if such Lender were the direct
holder of such portion.




     (b) In addition to any rights and remedies of the Lenders provided by law (including,
without limitation, other rights of set-off), each Lender and its Affiliates shall have the
right, without prior notice to the Borrower or the applicable Credit Party, any such notice
being expressly waived by the Credit Parties to the extent permitted by Applicable Law, upon
the occurrence of any Event of Default, to setoff and appropriate and apply any and all
deposits (general or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held by or owing to such
Lender or any branch or agency thereof to or for the credit or the account of the Borrower
or any other Credit Party, or any part thereof in such



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amounts as such Lender may elect, against and on account of the Loans and other Credit
Party Obligations of the Borrower and the other Credit Parties to such Lender hereunder and
claims of every nature and description of such Lender against the Borrower and the other
Credit Parties, in any currency, whether arising hereunder or, under any other Credit
Document provided by such Lender pursuant to the terms of this Agreement, as such Lender may
elect, whether or not such Lender has made any demand for payment and although such
obligations, liabilities and claims may be contingent or unmatured. The aforesaid right of
set-off may be exercised by such Lender against the Borrower, any other Credit Party or
against any trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver or execution, judgment or attachment creditor of the Borrower or any
other Credit Party, or against anyone else claiming through or against the Borrower or any
other Credit Party, or any such trustee in bankruptcy, debtor in possession, assignee for
the benefit of creditors, receiver, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have been exercised by such
Lender prior to the occurrence of any Default or Event of Default. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such set-off and
application made by such Lender; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application.



     Section 9.8. Table of Contents and Section Headings.



     The table of contents and the Section and subsection headings herein are intended for
convenience only and shall be ignored in construing this Credit Agreement.



     Section 9.9. Counterparts.



     This Credit Agreement may be executed by one or more of the parties to this Credit Agreement
on any number of separate counterparts, and all of said counterparts taken together shall be deemed
to constitute one and the same instrument. A set of the copies of this Credit Agreement signed by
all the parties shall be lodged with the Borrower and the Administrative Agent.



     Section 9.10. Effectiveness.



     This Credit Agreement shall become effective on the date on which all of the parties have
signed a copy hereof (whether the same or different copies) and shall have delivered the same to
the Administrative Agent or, in the case of the Lenders, shall have given to the Administrative
Agent written, telecopied or telex notice (actually received) at such office that the same has been
signed and mailed to it.



     Section 9.11. Severability.



     Any provision of this Credit Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.



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     Section 9.12. Integration.



     This Credit Agreement and the Notes, if any, represent the agreement of the Borrower, the
Administrative Agent and the Lenders with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by the Administrative Agent, the Borrower, or
any Lender relative to the subject matter hereof not expressly set forth or referred to herein or
in the Notes, if any.



     Section 9.13. Governing Law.



     This Credit Agreement and the Notes and the rights and obligations of the parties under this
Credit Agreement and the Notes shall be governed by, and construed and interpreted in accordance
with, the law of the State of New York with regard to conflict of laws principles thereof (other
than Sections 5-1401 and 5-1402 of the New York General Obligations Law).



     Section 9.14. Consent to Jurisdiction and Service of Process.



     Any legal action or proceeding with respect to this Credit Agreement or any other Credit
Document shall be brought in the courts of the State of New York in New York County or of the
United States for the Southern District of New York, and, by execution and delivery of this Credit
Agreement, each Credit Party, the Administrative Agent and each Lender accepts, for itself and in
connection with its Properties, generally and unconditionally, the non-exclusive jurisdiction of
the aforesaid courts and irrevocably agrees to be bound by any final judgment rendered thereby in
connection with this Credit Agreement from which no appeal has been taken or is available. Each
Credit Party, the Administrative Agent and each Lender irrevocably agrees that all service of
process in any such proceedings in any such court may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail), postage prepaid and
return receipt requested, to it at its address set forth in Section 9.2 or at such other
address of which the Administrative Agent shall have been notified pursuant thereto, such service
being hereby acknowledged by the each of the Borrower and the other Credit Parties to be effective
and binding service in every respect. Each Credit Party, the Administrative Agent and the Lenders
irrevocably waives any objection, including, without limitation, any objection to the laying of
venue or based on the grounds of forum non conveniens, which it may now or hereafter have to the
bringing of any such action or proceeding in any such jurisdiction. Nothing herein shall affect
the right to serve process in any other manner permitted by law or shall limit the right of any
Lender to bring proceedings against the Borrower in the court of any other jurisdiction.



     Section 9.15. Confidentiality.



     Each of the Administrative Agent, the Lenders and the Issuing Lender agrees to maintain the
confidentiality of the Information (as defined below), except that Information may be disclosed (a)
to its Affiliates and to its and its Affiliates’ respective partners, directors, officers,
employees, agents, advisors and other representatives (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any self-regulatory



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authority, such as the National Association of Insurance Commissioners), (c) to the extent
required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any
other party hereto, (e) in connection with the exercise of any remedies hereunder or under any
other Credit Document or any action or proceeding relating to this Agreement or any other Credit
Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap
or derivative transaction relating to the Borrower and its obligations, (g) with the written
consent of the Borrower or (h) to the extent such Information (x) becomes publicly available other
than as a result of a breach of this Section or (y) becomes available to the Administrative Agent,
any Lender, the Issuing Lender or any of their respective Affiliates on a nonconfidential basis
from a source other than the Borrower.




     For purposes of this Section, “Information” means all information received from the
Borrower or any of its Subsidiaries relating to the Borrower or any of its Subsidiaries or any of
their respective businesses, other than any such information that is available to the
Administrative Agent, any Lender or the Issuing Lender on a nonconfidential basis prior to
disclosure by the Borrower or any of its Subsidiaries. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own confidential
information.



     Section 9.16. Acknowledgments.



     The Borrower hereby acknowledges that:




     (a) it has been advised by counsel in the negotiation, execution and delivery of each
Credit Document;




     (b) neither the Administrative Agent nor any Lender has any fiduciary relationship with
or duty to the Borrower or any other Credit Party arising out of or in connection with this
Credit Agreement and the relationship between Administrative Agent and Lenders, on one hand,
and the Borrower, on the other hand, in connection herewith is solely that of debtor and
creditor; and




     (c) no joint venture exists among the Lenders or among the Borrower and the Lenders.



     Section 9.17. Waivers of Jury Trial; Waiver of Consequential Damages.



     THE BORROWER, THE OTHER CREDIT PARTIES, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS CREDIT AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN. The Borrower, the other Credit Parties, the Administrative Agent and
the Lenders agree not to



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assert any claim against any other party to this Credit Agreement or any of their respective
directors, officers, employees, attorneys, Affiliates or agents, on any theory of liability, for
special, indirect, consequential or punitive damages arising out of or otherwise relating to any of
the transactions contemplated herein.




     Section 9.18. PATRIOT Act Notice.



     Each Lender and the Administrative Agent (for itself and not on behalf of any other party)
hereby notifies each Credit Party that, pursuant to the requirements of the USA PATRIOT Act, Title
III of Pub. L. 107-56, signed into law October 26, 2001 (the “PATRIOT Act”), it is required
to obtain, verify and record information that identifies each Credit Party, which information
includes the name and address of each Credit Party and other information that will allow such
Lender or the Administrative Agent, as applicable, to identify each Credit Party in accordance with
the PATRIOT Act.



ARTICLE X



GUARANTY



     Section 10.1. The Guaranty.



     In order to induce the Lenders to enter into this Credit Agreement and to extend credit
hereunder and thereunder and in recognition of the direct benefits to be received by the Guarantors
from the Extensions of Credit hereunder, each of the Guarantors hereby agrees with the
Administrative Agent and the Lenders to unconditionally and irrevocably jointly and severally
guarantee as primary obligor and not merely as surety the full and prompt payment when due, whether
upon maturity, by acceleration or otherwise, of any and all indebtedness of the Borrower to the
Administrative Agent and the Lenders. If any or all of the indebtedness becomes due and payable
hereunder, each Guarantor unconditionally promises to pay such indebtedness to the Administrative
Agent, the Lenders, or their respective order, or demand, together with any and all reasonable
expenses which may be incurred by the Administrative Agent or the Lenders in collecting any of the
Credit Party Obligations. The word “indebtedness” is used in this Article X in its most
comprehensive sense and includes any and all advances, debts, obligations and liabilities of the
Borrower, including specifically all Credit Party Obligations, arising in connection with this
Credit Agreement or the other Credit Documents, in each case, heretofore, now, or hereafter made,
incurred or created, whether voluntarily or involuntarily, absolute or contingent, liquidated or
unliquidated, determined or undetermined, whether or not such indebtedness is from time to time
reduced, or extinguished and thereafter increased or incurred, whether the Borrower may be liable
individually or jointly with others, whether or not recovery upon such indebtedness may be or
hereafter become barred by any statute of limitations, and whether or not such indebtedness may be
or hereafter become otherwise unenforceable.



     Notwithstanding any provision to the contrary contained herein or in any other of the Credit
Documents, to the extent the obligations of a Guarantor shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of any applicable state or
federal law relating to fraudulent conveyances or transfers) then the obligations of each such



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Guarantor hereunder shall be limited to the maximum amount that is permissible under
Applicable Law (whether federal or state and including, without limitation, the Bankruptcy Code).




     Section 10.2. Bankruptcy.



     Additionally, each of the Guarantors unconditionally and irrevocably guarantees jointly and
severally the payment of any and all Credit Party Obligations of the Borrower to the Lenders
whether or not due or payable by the Borrower upon the occurrence of any of the events specified in
Section 7.1(f), and unconditionally promises to pay such Credit Party Obligations to the
Administrative Agent for the account of the Lenders, or order, on demand, in lawful money of the
United States. Each of the Guarantors further agrees that to the extent that the Borrower or a
Guarantor shall make a payment or a transfer of an interest in any property to the Administrative
Agent or any Lender, which payment or transfer or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, or otherwise is avoided, and/or required to be repaid to
the Borrower or a Guarantor, the estate of the Borrower or a Guarantor, a trustee, receiver or any
other party under any bankruptcy law, state or federal law, common law or equitable cause, then to
the extent of such avoidance or repayment, the obligation or part thereof intended to be satisfied
shall be revived and continued in full force and effect as if said payment had not been made.



     Section 10.3. Nature of Liability.



     The liability of each Guarantor hereunder is exclusive and independent of any security for or
other guaranty of the Credit Party Obligations of the Borrower whether executed by any such
Guarantor, any other guarantor or by any other party, and no Guarantor’s liability hereunder shall
be affected or impaired by (a) any direction as to application of payment by the Borrower or by any
other party, or (b) any other continuing or other guaranty, undertaking or maximum liability of a
guarantor or of any other party as to the Credit Party Obligations of the Borrower, or (c) any
payment on or in reduction of any such other guaranty or undertaking, or (d) any dissolution,
termination or increase, decrease or change in personnel by the Borrower, or (e) any payment made
to the Administrative Agent or the Lenders on the Credit Party Obligations which the Administrative
Agent or such Lenders repay the Borrower pursuant to court order in any bankruptcy, reorganization,
arrangement, moratorium or other debtor relief proceeding, and each of the Guarantors waives any
right to the deferral or modification of its obligations hereunder by reason of any such
proceeding.



     Section 10.4. Independent Obligation.



     The obligations of each Guarantor hereunder are independent of the obligations of any other
Guarantor or the Borrower, and a separate action or actions may be brought and prosecuted against
each Guarantor whether or not action is brought against any other Guarantor or the Borrower and
whether or not any other Guarantor or the Borrower is joined in any such action or actions.
Subject to the provisions of Section 10.2 regarding revival of Credit Party Obligations,
the Guarantors’ joint and several liability with respect to the Credit Party Obligations shall not
obligate them to pay any Credit Party Obligations which have already been fully satisfied.



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     Section 10.5. Authorization.



     Each of the Guarantors authorizes the Administrative Agent and each Lender, without notice or
demand (except as shall be required by applicable statute and cannot be waived), and without
affecting or impairing its liability hereunder, from time to time to (a) renew, compromise, extend,
increase, accelerate or otherwise change the time for payment of, or otherwise change the terms of
the Credit Party Obligations or any part thereof in accordance with this Agreement, including any
increase or decrease of the rate of interest thereon, (b) take and hold security from any Guarantor
or any other party for the payment of this Guaranty or the Credit Party Obligations and exchange,
enforce waive and release any such security, (c) apply such security and direct the order or manner
of sale thereof as the Administrative Agent and the Lenders in their discretion may determine, and
(d) release or substitute any one or more endorsers, Guarantors, the Borrower or other obligors.



     Section 10.6. Reliance.



     It is not necessary for the Administrative Agent or the Lenders to inquire into the capacity
or powers of the Borrower or the officers, directors, members, partners or agents acting or
purporting to act on its behalf, and any Credit Party Obligations made or created in reliance upon
the professed exercise of such powers shall be guaranteed hereunder.



     Section 10.7. Waiver.




     (a) Each of the Guarantors waives any right (except as shall be required by applicable
statute and cannot be waived) to require the Administrative Agent or any Lender to (i)
proceed against the Borrower, any other guarantor or any other party, (ii) proceed against
or exhaust any security held from the Borrower, any other guarantor or any other party, or
(iii) pursue any other remedy in the Administrative Agent’s or any Lender’s power
whatsoever. Each of the Guarantors waives any defense based on or arising out of any
defense of the Borrower, any other guarantor or any other party other than payment in full
of the Credit Party Obligations (other than contingent indemnity obligations), including
without limitation any defense based on or arising out of the disability of the Borrower,
any other guarantor or any other party, or the unenforceability of the Credit Party
Obligations or any part thereof from any cause, or the cessation from any cause of the
liability of the Borrower other than payment in full of the Credit Party Obligations. The
Administrative Agent may, at its election, foreclose on any security held by the
Administrative Agent by one or more judicial or nonjudicial sales (to the extent such sale
is permitted by Applicable Law), or exercise any other right or remedy the Administrative
Agent or any Lender may have against the Borrower or any other party, or any security,
without affecting or impairing in any way the liability of any Guarantor hereunder except to
the extent the Credit Party Obligations have been paid in full and the Commitments have been
terminated. Each of the Guarantors waives any defense arising out of any such election by
the Administrative Agent or any of the Lenders, even though such election operates to impair
or extinguish any right of



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reimbursement or subrogation or other right or remedy of the Guarantors against the
Borrower or any other party or any security.




     (b) Each of the Guarantors waives all presentments, demands for performance, protests
and notices, including without limitation notices of nonperformance, notice of protest,
notices of dishonor, notices of acceptance of this Guaranty, and notices of the existence,
creation or incurring of new or additional Credit Party Obligations. Each Guarantor assumes
all responsibility for being and keeping itself informed of the Borrower’s financial
condition and assets, and of all other circumstances bearing upon the risk of nonpayment of
the Credit Party Obligations and the nature, scope and extent of the risks which such
Guarantor assumes and incurs hereunder, and agrees that neither the Administrative Agent nor
any Lender shall have any duty to advise such Guarantor of information known to it regarding
such circumstances or risks.




     (c) Each of the Guarantors hereby agrees it will not exercise any rights of subrogation
which it may at any time otherwise have as a result of this Guaranty (whether contractual,
under Section 509 of the U.S. Bankruptcy Code, or otherwise) to the claims of the Lenders
against the Borrower or any other guarantor of the Credit Party Obligations of the Borrower
owing to the Lenders (collectively, the “Other Parties”) and all contractual,
statutory or common law rights of reimbursement, contribution or indemnity from any Other
Party which it may at any time otherwise have as a result of this Guaranty until such time
as the Credit Party Obligations shall have been paid in full and the Commitments have been
terminated. Each of the Guarantors hereby further agrees not to exercise any right to
enforce any other remedy which the Administrative Agent or the Lenders now have or may
hereafter have against any Other Party, any endorser or any other guarantor of all or any
part of the Credit Party Obligations of the Borrower and any benefit of, and any right to
participate in, any security or collateral given to or for the benefit of the Lenders to
secure payment of the Credit Party Obligations of the Borrower until such time as the Credit
Party Obligations (other than contingent indemnity obligations) shall have been paid in full
and the Commitments have been terminated.



     Section 10.8. Limitation on Enforcement.



     The Lenders agree that this Guaranty may be enforced only by the action of the Administrative
Agent acting upon the instructions of the Required Lenders and that no Lender shall have any right
individually to seek to enforce or to enforce this Guaranty, it being understood and agreed that
such rights and remedies may be exercised by the Administrative Agent for the benefit of the
Lenders under the terms of this Credit Agreement. The Lenders further agree that this Guaranty may
not be enforced against any director, officer, employee or stockholder of the Guarantors.



     Section 10.9. Confirmation of Payment.



     The Administrative Agent and the Lenders will, upon request after payment of the indebtedness
and obligations which are the subject of this Guaranty and termination of the Commitments relating
thereto, confirm to the Borrower, the Guarantors or any other Person that



-89-









 




such indebtedness and obligations have been paid and the Commitments relating thereto
terminated, subject to the provisions of Section 10.2.




Remainder of Page Intentionally Left Blank.

Signature Pages Follow.




-90-









 





     IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be duly executed
and delivered by its proper and duly authorized officers as of the day and year first above
written.



	 	 	 	 	 	 	 
	BORROWER:	 	CAPITALSOURCE INC.,
	 	 	a Delaware corporation
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Steven A. Museles	 	 
	 	 	 	 	 	 	 
	 	 	Name: Steven A. Museles
	 	 	Title: Executive Vice President
	 
	 	 	 	 	 	 
	GUARANTORS:	 	CAPITALSOURCE TRS INC.,
	 	 	a Delaware corporation
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Steven A. Museles	 	 
	 	 	 	 	 	 	 
	 	 	Name: Steven A. Museles
	 	 	Title: Executive Vice President
	 
	 	 	 	 	 	 
	 	 	CAPITALSOURCE FINANCE LLC,
	 	 	a Delaware limited liability company
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Steven A. Museles	 	 
	 	 	 	 	 	 	 
	 	 	Name: Steven A. Museles
	 	 	Title: Executive Vice President
	 
	 	 	 	 	 	 
	 	 	CSE MORTGAGE LLC,
	 	 	a Delaware limited liability company
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Steven A. Museles	 	 
	 	 	 	 	 	 	 
	 	 	Name: Steven A. Museles
	 	 	Title: Executive Vice President






Signatures Continued on Following Page




CapitalSource-Credit Agreement





 









 








	 	 	 	 	 	 	 
	ADMINISTRATIVE AGENT	 	WACHOVIA BANK, NATIONAL ASSOCIATION, as
	 	 	Administrative Agent, as Issuing Lender, and as a
	 	 	Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Paul A. Burkhart	 	 
	 	 	 	 	 	 	 
	 	 	Name: Paul A. Burkhart
	 	 	Title: Director






Signatures Continued on Following Page




CapitalSource-Credit Agreement






 









 








	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A., as Issuing
	 	 	Lender and as a Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Elizabeth Kunlecz	 	 
	 	 	 	 	 	 	 
	 	 	Name: Elizabeth Kunlecz
	 	 	Title: Senior Vice President






Signatures Continued on Following Page




CapitalSource-Credit Agreement





 









 








	 	 	 	 	 	 	 
	 	 	MORGAN STANLEY BANK, as a Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Eugene F. Martin	 	 
	 	 	 	 	 	 	 
	 	 	Name: Eugene F. Martin
	 	 	Title: Vice President






Signatures Continued on Following Page




CapitalSource-Credit Agreement





 









 








	 	 	 	 	 	 	 
	 	 	DRESDNER BANK AG, NEW YORK AND
	 	 	GRAND CAYMAN BRANCHES, as a Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Brian M. Smith	 	 
	 	 	 	 	 	 	 
	 	 	Name: Brian M. Smith
	 	 	Title: Managing Director
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Stephen Kovach	 	 
	 	 	 	 	 	 	 
	 	 	Name: Stephen Kovach
	 	 	Title: Director






Signatures Continued on Following Page




CapitalSource-Credit Agreement






 









 








	 	 	 	 	 	 	 
	 	 	SUNTRUST BANK, as a Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Randy M. Boone	 	 
	 	 	 	 	 	 	 
	 	 	Name: Randy M. Boone
	 	 	Title: Vice President






Signatures Continued on Following Page




CapitalSource-Credit Agreement






 









 








	 	 	 	 	 	 	 
	 	 	CREDIT SUISSE, CAYMAN ISLANDS
	 	 	BRANCH, as a Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jay Chall	 	 
	 	 	 	 	 	 	 
	 	 	Name: Jay Chall
	 	 	Title: Director
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ James Neira	 	 
	 	 	 	 	 	 	 
	 	 	Name: James Neira
	 	 	Title: Associate






Signatures Continued on Following Page




CapitalSource-Credit Agreement





 









 








	 	 	 	 	 	 	 
	 	 	HARRIS NESBITT FINANCING, INC., as
	 	 	a Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Amy K. Dumser	 	 
	 	 	 	 	 	 	 
	 	 	Name: Amy K. Dumser
	 	 	Title: Director






Signatures Continued on Following Page




CapitalSource-Credit Agreement






 









 








	 	 	 	 	 	 	 
	 	 	BEAR STEARNS CORPORATE
	 	 	LENDING INC., as a Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Victor Bulzacchelli	 	 
	 	 	 	 	 	 	 
	 	 	Name: Victor Bulzacchelli
	 	 	Title: Vice President






Signatures Continued on Following Page




CapitalSource-Credit Agreement






 









 








	 	 	 	 	 	 	 
	 	 	BARCLAYS BANK PLC, as a Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Alison McGuigan	 	 
	 	 	 	 	 	 	 
	 	 	Name: Alison McGuigan
	 	 	Title: Associate Director






Signatures Continued on Following Page




CapitalSource-Credit Agreement






 









 








	 	 	 	 	 	 	 
	 	 	DEUTSCHE BANK AG NEW YORK
	 	 	BRANCH, as a Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Richard Herder	 	 
	 	 	 	 	 	 	 
	 	 	Name: Richard Herder
	 	 	Title: Managing Director
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Brett Hanmer	 	 
	 	 	 	 	 	 	 
	 	 	Name: Brett Hanmer
	 	 	Title: Vice President






Signatures Continued on Following Page




CapitalSource-Credit Agreement






 









 








	 	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A., as a
	 	 	Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Christine Herrick	 	 
	 	 	 	 	 	 	 
	 	 	Name: Christine Herrick
	 	 	Title: Vice President






Signatures Continued on Following Page




CapitalSource-Credit Agreement





 









 








	 	 	 	 	 	 	 
	 	 	SOCIÉTÉ GÉNÉRALE, as a Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Barry Groveman	 	 
	 	 	 	 	 	 	 
	 	 	Name: Barry Groveman
	 	 	Title: Vice President






CapitalSource-Credit Agreement





 










 






EXECUTION COPY




EXHIBITS AND SCHEDULES TO



CREDIT AGREEMENT


Dated as of March 14, 2006



	 	 	 
	Schedule 1.1(a)

	 	Residential Mortgage Policies and Procedures
	Schedule 1.1(b)

	 	Risk Rating Scale
	Schedule 2.1(a)

	 	Commitment Percentage
	Schedule 2.3(i)

	 	Existing Letters of Credit
	Schedule 4.8

	 	List of Subsidiaries
	Schedule 4.16

	 	List of Liens
	Schedule 4.26

	 	Credit and Collection Policy
	Schedule 5.26

	 	Permitted Transaction
	Schedule 5.28

	 	Existing Debt on Closing Date
	Schedule 9.2

	 	Lenders’ Lending Offices
	 
	 	 
	Exhibit A

	 	Form of Notice of Borrowing
	Exhibit B

	 	Form of Revolving Note
	Exhibit C

	 	Form of Notice of Conversion
	Exhibit D

	 	Form of Secretary’s Certificate
	Exhibit E

	 	Form of Notice of Swingline Borrowing
	Exhibit F

	 	Form of Swingline Note
	Exhibit G

	 	Form of Solvency Certificate
	Exhibit H

	 	Form of Officer’s Compliance Certificate
	Exhibit I

	 	Form of Monthly Report
	Exhibit J

	 	Form of Commitment Transfer Supplement
	Exhibit K

	 	Form of Borrower Information Certificate
	Exhibit L

	 	Form of 2.18 Certificate
	Exhibit M

	 	Form of Facility Extension Request
	Exhibit N

	 	Form of Joinder Agreement







 









 








SCHEDULE 1.1(a)



RESIDENTIAL MORTGAGE POLICIES AND PROCEDURES OF CAPITALSOURCE


Dated as of March 14, 2006


CEO Delegations

Residential Mortgage Investment Portfolio



Residential Mortgage Business



The Residential Mortgage Business, organized within the Structured Finance Business, is hereby
created.




Risk Management Policies



The risk management policies outlined in Attachment 1 are hereby adopted, subject to review and
modification by the Credit Committee (“CC”).




Strategy and Goals



The strategy, goals and operational framework outlined in Appendix A are hereby adopted, subject to
review and modification by the CC.




CEO Delegations to the MD



The Chief Executive Officer of CapitalSource (“CEO”) delegates to the Managing Director with
responsibility for the Residential Mortgage Investment Portfolio (“MD”) the responsibility and
authority to transact on behalf of CapitalSource, to build and to manage a Residential Mortgage
Investment Portfolio. This delegation, subject to the limitations and guidance outlined below,
authorizes the MD to commit to purchase, to acquire and to enter into asset acquisitions, asset
sales, financing arrangements and hedging/derivatives contracts as necessary. This delegation also
imposes on the MD the responsibility and accountability for the performance of that portfolio.



This delegation is governed by the goals, strategy and operational framework outlined in Appendix A
and the risk management policies specified in Attachment 1.



The transactional delegation is subject to the following limitations:





	 	—	 	General transaction authority (where such a transaction creates an exposure of CSE
Mortgage LLC to a counterparty) is limited to counterparties authorized by the Chief Credit
Officer (“CCO”)





Schedule 1.1(a)









 









 












	 	—	 	Authority to enter into liabilities and derivatives is limited to master agreements
approved by the Chief Financial Official (“CFO”) and to counterparties approved by the CCO
	 
	 	—	 	Authority to acquire assets is subject to






	 	o	 	a target size as of a specified date for the total portfolio, pro forma
for the proposed acquisition and adjusted for anticipated liquidations between the
date of the proposed acquisition and the date of the target, established and
adjusted from time to time by the CFO
	 
	 	o	 	a limit of no more than $1 billion in any rolling 10 business day period
	 
	 	o	 	maximum asset duration of the portfolio as a whole of 4 years




The MD has the authority and responsibility to manage the portfolio and its risks (including credit
and interest rate risks) consistent with the risk management policies and subject to the following
explicit limitations:





	 	—	 	The critical risk measures as defined in Attachment 1 are within the desired target
range
	 
	 	—	 	In certain areas, to achieve an appropriate segregation of duties, the MD lacks the
independent authority to transact without the approval and direction of another group and
that segregation of duties is hereby affirmed; specifically, the following responsibilities
are reserved to the CFO:






	 	o	 	Cash management
	 
	 	o	 	Accounting policy, tax policy
	 
	 	o	 	Financial reporting for GAAP and tax




In addition, this delegation imposes a reporting responsibility on the MD as follows:





	 	—	 	Performance and risk reporting (including but not limited to the critical risk
measures) will be provided to the CC plus the CFO no less than weekly plus reporting as
soon as practicable if the portfolio exceeds a target level on one of the critical risk
measures
	 
	 	—	 	Performance and risk reporting (including but not limited to the critical risk
measures) to the Board or a committee of the Board quarterly or as otherwise requested and
scheduled by the CEO or the Board.




The MD has the authority to delegate his authority to other CapitalSource employees and/or to
vendors. The MD currently anticipates delegating certain authorities to BlackRock as investment
manager (BlackRock has been previously approved as investment manager by the CC). A draft set of
guidelines is included as Attachment 2. The MD has the authority to modify his delegations so long
as the resulting delegations stay within his authority levels.




CEO Delegation to the Chief Financial Officer



The CEO delegates to the CFO, consistent with his existing authorities, the authority and
responsibility to establish master financing agreements and master derivative agreements to provide
the funding and risk management capacity to meet the needs of the portfolio. In addition, the CFO
will be responsible for all cash management functions associated with the portfolio, since the
liquidity of the portfolio will be managed as part of the corporate liquidity management strategy.
The CFO shall establish from time to time target portfolio sizes. Finally, the CFO will be
responsible for reviewing, validating and where necessary creating financial performance reporting
with respect to the portfolio.




Schedule 1.1(a)





 









 








CEO Delegation to the Chief Credit Officer



The CEO delegates to the CCO the authority to review and approve proposed counterparties for
transactions related to the portfolio, and to set exposure limits if he deems them necessary and
appropriate. In addition, the CCO will be responsible for reviewing and approving all loan/asset
credit risk policies and transaction guidance. Through the risk policies (Attachment 1), certain
counterparties are deemed approved by the CCO.




CEO Delegation to the CC



Unless directly exercised by the CEO individually, the CEO delegates to the CC the authority to:





	 	—	 	Review periodic reporting by the MD, the CCO and the CFO.
	 
	 	—	 	Approve any transaction not approvable by, or otherwise referred to the CC by, the MD
	 
	 	—	 	Adopt changes to risk management policies in Attachment 1.
	 
	 	—	 	Evaluate and approve remediation plans with respect to any violation by the portfolio
of a threshold level for a critical risk metric.





     Approved:



	 	 	 
	 

John Delaney, CEO

	 	 






	 	 	 
	List of Attachments	 	 
	Attachment 1:
	 	Risk Management Policies
	Appendix A:
	 	Strategy and Operational Overview
	Appendix B:
	 	Identification of Sources of Risk and Return
	Appendix C:
	 	Duration, Convexity and Dollar Loss
	Appendix D:
	 	Rationale for 97.5% Trigger
	 
	Attachment 2:
	 	Draft Investment Manager Guidelines





Attachments are on file at the Company’s Offices at 4445 Willard Avenue, Chevy Chase, MD 20815 and
are available for inspection with 5 business days prior written notice. Attention: Chief Legal
Officer.




Schedule 1.1(a)





 









 








SCHEDULE 1.1(b)



RISK RATING SCALE



	 	 	 
	Level 1

	 	“Investment Grade” (Based on Structure, Collateral or Credit)
	 
	 	 
	Level 2

	 	Very High Quality Credit in All Respects, Supported by a
Combination of Strong Collateral and Cash Flow
	 
	 	 
	Level 3

	 	Strong Credit or Collateral Position
	 
	 	 
	Level 4

	 	Acceptable Collateral or Credit Position with Enhanced Monitoring
	 
	 	 
	Level 5

	 	Problem Loan with a Limited Credit Risk; Actively Out-Placing the
Credit
	 
	 	 
	Level 6

	 	Active Work Out; Expectation of Credit Loss






Schedule 1.1(b)




 









 








SCHEDULE 2.1(a)



COMMITMENT PERCENTAGE


Lender’s Commitments as of the Closing Date:




	 	 	 	 	 	 	 	 	 
	Lender	 	Commitment	 	 	Commitment Percentage	 
	Wachovia Bank, National Association
	 	$	60,000,000	 	 	 	11.01	%
	Bank of America, N.A.
	 	$	25,000,000	 	 	 	4.59	%
	Harris Nesbitt Financing, Inc.
	 	$	50,000,000	 	 	 	9.17	%
	Credit Suisse, Cayman Islands Branch
	 	$	50,000,000	 	 	 	9.17	%
	Deutsche Bank AG New York Branch
	 	$	50,000,000	 	 	 	9.17	%
	JPMorgan Chase Bank, N.A.
	 	$	50,000,000	 	 	 	9.17	%
	Morgan Stanley Bank
	 	$	50,000,000	 	 	 	9.17	%
	Société Générale
	 	$	30,000,000	 	 	 	5.51	%
	SunTrust Bank
	 	$	50,000,000	 	 	 	9.17	%
	Barclays Bank PLC
	 	$	50,000,000	 	 	 	9.17	%
	Bear Stearns Corporate Lending Inc.
	 	$	50,000,000	 	 	 	9.17	%
	Dresdner Bank AG New York and Grand
Cayman Branches
	 	$	30,000,000	 	 	 	5.51	%
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Total
	 	$	545,000,000	 	 	 	100.00	%






Schedule 2.1(a)




 









 








SCHEDULE 2.3(i)



EXISTING LETTERS OF CREDIT


See Attached



Schedule 2.3(i)





 









 








SCHEDULE 4.8



LIST OF SUBSIDIARIES



	 	 	 
	Name	 	Jurisdiction of Incorporation
	CapitalSource TRS Inc.
	 	Delaware corporation
	CSE Mortgage LLC
	 	Delaware limited liability company






LIST OF UNRESTRICTED SUBSIDIARIES




	 	 	 
	Name	 	Jurisdiction of Incorporation
	CapitalSource Bank (TRS)

	 	Utah corporation






Schedule 4.8




 









 








SCHEDULE 4.16



LIST OF LIENS


None.



Schedule 4.16




 









 








SCHEDULE 4.26




CREDIT AND COLLECTION POLICY




See Attached




Schedule 4.26





 









 






SCHEDULE 5.26




PERMITTED TRANSACTION



As of the Closing Date, the Borrower is negotiating an asset purchase in an aggregate amount of
approximately $200,000,000 that would include, among other things, the acquisition of Fannie Mae
Servicing Strips. As a part of such transaction, seller financing will be provided to a Subsidiary
of a Credit Party (the “Acquisition Subsidiary”) in the amount of approximately
$100,000,000, with such financing secured by a lien on the equity interests of such Acquisition
Subsidiary (the “Seller Financing”). The Acquisition Subsidiary’s primary business shall
be the servicing of multifamily mortgage loans pursuant to the Fannie Mae DUS Program. So long as
the Seller Financing remains outstanding and the assets held by the Acquisition Subsidiary are
substantially limited to the assets acquired in such acquisition, then Section 5.26(b) of the
Credit Agreement shall not be applicable to the Acquisition Subsidiary.




Schedule 5.26




 









 








SCHEDULE 5.28




EXISTING DEBT ON CLOSING DATE




	 	 	 	 	 
	As Issuer of:
	 	 	 	 
	 
	 	 	 	 
	Senior Convertible Debentures Due 2034
	 	$	225,000,000	 
	 
	 	 	 	 
	3.5% Senior Convertible Debentures Due 2034
	 	$	330,000,000	 
	 
	 	 	 	 
	As Guarantor of:
	 	 	 	 
	 
	 	 	 	 
	Junior Subordinated Note Due 2035 between

CapitalSource Finance LLC and CapitalSource Trust

Preferred Securities 2005-1, dated November 21, 2005
	 	$	103,093,000	 
	 
	 	 	 	 
	Junior Subordinated Note Due 2035 between

CapitalSource Finance LLC and CapitalSource Trust

Preferred Securities 2005-2, dated December 14, 2005
	 	$	128,866,000	 
	 
	 	 	 	 
	Junior Subordinated Note Due 2036 between

CapitalSource Finance LLC and CapitalSource Trust

Preferred Securities 2006-1, dated February 22, 2006
	 	$	51,545,000	 






Schedule 5.28




 









 








SCHEDULE 9.2




LENDERS’ LENDING OFFICES




	 	 	 	 	 
	Lender	 	Domestic Lending Office	 	LIBOR Lending Office
	 
	 	 	 	 
	Bank of America, N.A.

	 	901 Main Street

14th Floor

Dallas, TX 75202

Attention: Stacey Smith
	 	901 Main Street

14th Floor

Dallas, TX 75202

Attention: Stacey Smith
	 
	Barclays Bank PLC

	 	200 Park Avenue

New York, NY 10166

Attention: Alison McGuigan
	 	200 Park Avenue

New York, NY 10166

Attention: Alison McGuigan
	 
	Bear Stearns Corporate
Lending Inc.

	 	383 Madison Avenue

8th Floor

New York, NY 10179

Attention: Evan Kaufman
	 	383 Madison Avenue

8th Floor

New York, NY 10179

Attention: Evan Kaufman
	 
	Credit Suisse, Cayman Islands

Branch

	 	One Madison Avenue

New York, NY 10010

Attention: Ed Markowski
	 	One Madison Avenue

New York, NY 10010

Attention: Ed Markowski
	 
	Deutsche Bank AG New York

Branch

	 	90 Hudson Street

Mail Stop JCY05-0511

Jersey City, NJ 07302

Attention: Linda Hill
	 	90 Hudson Street

Mail Stop JCY05-0511

Jersey City, NJ 07302

Attention: Linda Hill
	 
	Dresdner Bank AG, New York
and Grand Cayman Branches

	 	1301 Avenue of the Americas
New York, NY 10019


Attention: Lora Lam
	 	1301 Avenue of the Americas

New York, NY 10019

Attention: Lora Lam
	 
	Harris Nesbitt Financing, Inc.

	 	115 S. LaSalle Street

Floor 12W
Chicago, IL 60603

Attention: Denise M. Jirak Dulllum
	 	115 S. LaSalle Street

Floor 12W

Chicago, IL 60603

Attention: Denise M. Jirak
Dulllum
	 
	JPMorgan Chase Bank, N.A.

	 	1111 Fannin Street

10th Floor

Houston, TX 77002

Attention: Eleanor Fiore
	 	1111 Fannin Street

10th Floor

Houston, TX 77002

Attention: Eleanor Fiore
	 
	Morgan Stanley Bank

	 	One Pierrepont Plaza

7th Floor

300 Cadman Plaza West

Brooklyn, NY 11201

Attention: Larry Benison
	 	One Pierrepont Plaza

7th Floor

300 Cadman Plaza West

Brooklyn, NY 11201

Attention: Larry Benison
	 
	Société Générale

	 	1221 Avenue of the Americas


New York, NY 10020


Attention: Yvonne Lin, Portfolio
Manager
	 	1221 Avenue of the Americas


New York, NY 10020


Attention: Yvonne Lin,
Portfolio Manager
	 
	SunTrust Bank

	 	303 Peachtree Street

3rd Floor

Atlanta, GA 30308

Attention: Cheryl Smith
	 	303 Peachtree Street

3rd Floor

Atlanta, GA 30308

Attention: Cheryl Smith
	 
	Wachovia Bank, National

Association

	 	201 South College Street

Mail Code: NC0680/CP8

Charlotte, NC28288-0608

Attention : Syndication Agency

Services
	 	201 South College Street

Mail Code: NC0680/CP8

Charlotte, NC28288-0608

Attention : Syndication

Agency Services






Schedule 9.2





 









 








Schedule 9.2




 









 








EXHIBIT A



FORM OF NOTICE OF BORROWING




NOTICE OF BORROWING



[___], 200[_]




Wachovia Bank, National Association,

   as Administrative Agent

201 S. College Street

NC0680/CP8

Charlotte, NC 28288-0608

Attention: Syndication Agency Services



Re: Credit Agreement dated as of March 14, 2006




Ladies and Gentlemen:




     This Borrowing Notice is delivered to you under Section 2.1(b)(i) of that certain
Credit Agreement, dated as of March 14, 2006 (as amended, modified, waived, supplemented or
restated from time to time, the “Credit Agreement”), by and among CAPITALSOURCE INC., a
Delaware corporation (the “Borrower”), CAPITALSOURCE TRS INC., a Delaware corporation
(“TRS”), CAPITALSOURCE FINANCE LLC, a Delaware limited liability company (“CSF”),
CSE MORTGAGE LLC, a Delaware limited liability company (“CSM” and together with TRS and
CSF, and any other Subsidiary directly owned by the Borrower that becomes a party to the Credit
Agreement, collectively the “Guarantors” and individually a “Guarantor”), the
several banks and other financial institutions from time to time parties to the Credit Agreement
(collectively the “Lenders” and individually a “Lender”), WACHOVIA BANK, NATIONAL
ASSOCIATION, a national banking association, as administrative agent for the Lenders hereunder (in
such capacity, the “Administrative Agent” or the “Agent”), the Swingline Lender,
and Issuing Lender, and BANK OF AMERICA, N.A., as Issuing Lender. All capitalized terms used but
not otherwise defined herein have the meanings given to them in the Credit Agreement.



     The undersigned, being a duly elected officer of the Borrower, holding the office set forth
below such officer’s name, hereby gives you irrevocable notice pursuant to Section
2.1(b)(i) of the Credit Agreement, that the Borrower hereby requests a Revolving Loan under the
Credit Agreement, and in connection with such request sets forth below the information relating to
such Revolving Loan as required by the Credit Agreement and certifies as follows:



     1. The date of the requested Revolving Loan is ___, ___.



     2. The aggregate principal amount of the requested Revolving Loan is $___.



Exhibit A




 









 








     3. The requested Revolving Loan is [an Alternate Base Rate Loan] [a LIBOR Rate Loan with an
Interest Period of ___] [an Alternate Base Rate Loan in the amount of ___and a LIBOR
Rate Loan in the amount of ___with an Interest Period of ___].



     4. The requested Revolving Loan is to be sent to:


[Name of Bank]



[City of Bank]



Account No.:            [Number]



ABA No.:                 [Number]



Attn:                            [Name]




     5. The aggregate principal amount of all Advances Outstanding as of the date hereof prior to
giving effect to the requested Revolving Loan is $___.



     6. All of the conditions applicable to the Extension of Credit requested herein as set forth
in the Credit Agreement have been satisfied as of the date hereof and will remain satisfied to the
date of such Extension of Credit, including those set forth in Article III of the Credit Agreement,
and the following:



          (i) The representations and warranties of the Borrower set forth in the Credit Agreement are
true and correct on and as of such date, before and after giving effect to such Extension of Credit
and to the application of the proceeds therefrom, as though made on and as of such date (except for
those which expressly relate to an earlier date, in which case, such representations and warranties
shall be true and correct as of such earlier date);




          (ii) No event has occurred and is continuing, or would result from such Extension of Credit or
from the application of proceeds therefrom, which constitutes a Default or Event of Default; and




          (iii) The Borrower is in compliance with each of its covenants set forth in the Credit
Agreement.




Remainder of Page Intentionally Left Blank.



Signature Page(S) Follow(S).




Exhibit A




 









 








     IN WITNESS WHEREOF, the undersigned has executed the Borrowing Notice this ______day of
___, ___.



	 	 	 	 	 
	CAPITALSOURCE INC.,	 	 
	a Delaware corporation	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 





Exhibit A




 









 








EXHIBIT B




FORM OF REVOLVING NOTE




REVOLVING NOTE




$____________




     FOR VALUE RECEIVED, the undersigned, CAPITALSOURCE INC., a Delaware corporation
(“Borrower”), HEREBY PROMISES TO PAY to the order of                                          (“Lender”),
at the offices of Wachovia Bank, National Association as Administrative Agent for Lenders
(“Administrative Agent”), at its address at 201 South College Street, Charlotte, North
Carolina 28288-0608, or at such other place as Administrative Agent may designate from time to time
in writing, in lawful money of the United States of America and in immediately available funds, the
amount of                      and NO/100 DOLLARS ($                    ) or, if less, the aggregate unpaid amount
of all Revolving Loans made to the undersigned under the “Credit Agreement” (as hereinafter
defined). All capitalized terms used but not otherwise defined herein have the meanings given to
them in the Credit Agreement.



     This Revolving Note is one of the Revolving Notes issued pursuant to that certain Credit
Agreement dated as of March 14, 2006, by and among Borrower, Guarantors, Administrative Agent,
Issuing Lenders, Lenders and the other Persons signatory thereto from time to time as Lenders
(including all annexes, exhibits and schedules thereto, and as from time to time amended, restated,
supplemented or otherwise modified, the “Credit Agreement”), and is entitled to the benefit
and security of the Credit Agreement and all of the other Credit Documents referred to therein.
Reference is hereby made to the Credit Agreement for a statement of all of the terms and conditions
under which the Revolving Loan evidenced hereby is made and is to be repaid. The date and amount
of each Revolving Loan made by Lenders to Borrower, the rates of interest applicable thereto and
each payment made on account of the principal thereof, shall be recorded by Administrative Agent on
its books; provided that the failure of Administrative Agent to make any such recordation shall not
affect the obligations of Borrower to make a payment when due of any amount owing under the Credit
Agreement or this Revolving Note in respect of the Revolving Loans made by Lender to Borrower.



     The principal amount of the indebtedness evidenced hereby shall be payable in the amounts and
on the dates specified in the Credit Agreement, the terms of which are hereby incorporated herein
by reference. Interest thereon shall be paid until such principal amount is paid in full at such
interest rates and at such times, and pursuant to such calculations, as are specified in the Credit
Agreement. The terms of the Credit Agreement are hereby incorporated herein by reference.



     Upon the occurrence and during the continuance of any Event of Default, this Revolving Note
may, as provided in the Credit Agreement, and without presentment, demand, protest, notice of
intent to accelerate, notice of acceleration or other legal requirement of any kind (all of which
are hereby expressly waived by Borrower to the extent permitted by applicable law), be declared and
immediately shall become, due and payable.



Exhibit B



 









 





     The Borrower agrees, in the event this Revolving Note or any portion hereof is collected by
law or through an attorney at law, to pay all reasonable costs of collection, including, without
limitation, reasonable attorneys’ fees.



     Except as provided in the Credit Agreement, this Revolving Note may not be assigned by Lender
to any Person.



     THIS REVOLVING NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.



Remainder of Page Intentionally Left Blank.




Signature Page(S) Follow(S).




Exhibit B




 









 








     IN WITNESS WHEREOF, Borrower has executed this Revolving Note on the day and year first
written above.



	 	 	 	 	 
	CAPITALSOURCE INC.,	 	 
	a Delaware corporation	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 





Exhibit B




 









 








EXHIBIT C



FORM OF NOTICE OF CONVERSION




NOTICE OF CONVERSION




     Reference is made to that certain Credit Agreement (such agreement as amended, modified,
supplemented or restated from time to time, the “Credit Agreement”), dated as of March 14,
2006, by and among CAPITALSOURCE INC., a Delaware corporation (the “Borrower”),
CAPITALSOURCE TRS INC., a Delaware corporation (“TRS”), CAPITALSOURCE FINANCE LLC, a
Delaware limited liability company (“CSF”), CSE MORTGAGE LLC, a Delaware limited liability
company (“CSM” and together with TRS and CSF, and any other Subsidiary directly owned by
the Borrower that becomes a party to the Credit Agreement, collectively the “Guarantors”
and individually a “Guarantor”), the several banks and other financial institutions from
time to time parties to the Credit Agreement (collectively the “Lenders” and individually a
“Lender”), WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as
administrative agent for the Lenders hereunder (in such capacity, the “Administrative
Agent” or the “Agent”), the Swingline Lender, and Issuing Lender, and BANK OF AMERICA,
N.A., as Issuing Lender. All capitalized terms used but not otherwise defined herein have the
meanings given to them in the Credit Agreement.



     Borrower hereby gives irrevocable notice, pursuant to Section 2.10 of the Credit
Agreement, of its request to:



     [(a) on [ date ] convert $[insert amount of loan to be converted] of the
aggregate outstanding principal amount of the Revolving Loan, bearing interest at the [___]
Rate, into a(n) [___] Loan [and, in the case of a LIBOR Loan, having a LIBOR Period of [___]
month(s)];]



     [(b) on [ date ] continue $[insert amount of loan to be converted] of
the aggregate outstanding principal amount of the Revolving Loan, bearing interest at the LIBOR
Rate, as a LIBOR Loan having an Interest Period of [___] month(s).]



     The undersigned hereby further certifies, in his/her capacity as ___and not as an
individual, that on the date of the requested conversion and/or continuation, immediately before
and after giving effect thereto:



     (a) the representations and warranties made by the Borrower contained in the Credit Agreement
or in any other Credit Documents are true and correct in all material respects; and



     (b) no Default or Event of Default has occurred and is continuing.



Remainder of Page Intentionally Left Blank.



Signature Page(S) Follow(S).




Exhibit C




 









 








	 	 	 	 	 
	CAPITALSOURCE INC.,	 	 
	a Delaware corporation	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 





Exhibit C




 









 








EXHIBIT D



FORM OF SECRETARY’S CERTIFICATE




SECRETARY’S CERTIFICATE




[______], 200_




     Reference is made to that certain Credit Agreement (such agreement as amended, modified,
supplemented or restated from time to time, the “Credit Agreement”), dated as of March 14,
2006, by and among CAPITALSOURCE INC., a Delaware corporation (the “Borrower”),
CAPITALSOURCE TRS INC., a Delaware corporation (“TRS”), CAPITALSOURCE FINANCE LLC, a
Delaware limited liability company (“CSF”), CSE MORTGAGE LLC, a Delaware limited liability
company (“CSM” and together with TRS and CSF, and any other Subsidiary directly owned by
the Borrower that becomes a party to the Credit Agreement, collectively the “Guarantors”
and individually a “Guarantor”), the several banks and other financial institutions from
time to time parties to the Credit Agreement (collectively the “Lenders” and individually a
“Lender”), WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as
administrative agent for the Lenders hereunder (in such capacity, the “Administrative
Agent” or the “Agent”), the Swingline Lender, and Issuing Lender, and BANK OF AMERICA,
N.A., as Issuing Lender. All capitalized terms used but not otherwise defined herein have the
meanings given to them in the Credit Agreement.



     This Certificate is being delivered pursuant to Section 3.1(b) of the Credit
Agreement. The undersigned Secretary of Credit Party (the “Company”) hereby certifies on
behalf of the Company, and not individually, as follows:



          1. Attached hereto as Annex I is a true and complete copy of resolutions duly adopted
by the board of directors of the Company which (i) approve and adopt the Credit Documents to which
the Company is a party and the transactions contemplated therein and (ii) authorize the execution
and delivery of such Credit Documents. Such resolutions have not in any way been rescinded or
modified and have been in full force and effect since their adoption to and including the date
hereof; and such resolutions are the only proceedings now in force relating to or affecting the
matters referred to therein.




          2. Attached hereto as Annex II is a true and complete copy of the Certificate of
Incorporation of the Company and all amendments thereto as in effect on the date hereof.




          3. Attached hereto as Annex III is a true and complete copy of the bylaws of the
Company and all amendments thereto as in effect on the date hereof.




          4. Attached hereto as Annex IV is a true and complete copy of the certificate of good
standing of the Company issued by the Secretary of State of Delaware.




          5. The following persons are now the duly elected and qualified officers of the Company,
holding the offices indicated next to the names below, and the signatures




Exhibit D





 









 







appearing opposite the names below are their true and genuine signatures, and each of such
officers is duly authorized to execute and deliver on behalf of the Company the Credit Documents to
which the Company is a party and to act as a Responsible Officer on behalf of the Company under the
Credit Documents:




	 	 	 	 	 
	Name	 	Office	 	Signature
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 





Remainder of Page Intentionally Left Blank.




Signature Page(S) Follow(S).




Exhibit D




 









 








     IN WITNESS WHEREOF, the undersigned has hereunto set her/his name as of the date
first-above-written.



	 	 	 
	 

Name:

	 	 
	Title:
	 	 






     I, [_____], [___________________] of the Company, hereby certify, as of the date
first-above written, that [___] was validly appointed to the office of and is the
[___] of the Company and that the signature set forth above is her/his authentic
signature.



	 	 	 
	 

Name:

	 	 
	Title:
	 	 






Exhibit D




 









 








ANNEX I




Exhibit D




 









 








ANNEX II




Exhibit D




 









 








ANNEX III




Exhibit D




 









 








ANNEX IV




Exhibit D




 









 








EXHIBIT E



FORM OF NOTICE OF SWINGLINE BORROWING




NOTICE OF SWINGLINE BORROWING




[__________], 200[_]




Wachovia Bank, National Association,

  as Swingline Lender

201 S. College Street

NC0680/CP8

Charlotte, NC 28288-0608

Attention: Syndication Agency Services

Re: Credit Agreement dated as of March 14, 2006




Ladies and Gentlemen:




     This Swingline Borrowing Notice is delivered to you under Section 2.4(b)(i) of that
certain Credit Agreement, dated as of March 14, 2006 (as amended, modified, waived, supplemented or
restated from time to time, the “Credit Agreement”), by and among CAPITALSOURCE INC., a
Delaware corporation (the “Borrower”), CAPITALSOURCE TRS INC., a Delaware corporation
(“TRS”), CAPITALSOURCE FINANCE LLC, a Delaware limited liability company (“CSF”),
CSE MORTGAGE LLC, a Delaware limited liability company (“CSM” and together with TRS and
CSF, and any other Subsidiary directly owned by the Borrower that becomes a party to the Credit
Agreement, collectively the “Guarantors” and individually a “Guarantor”), the
several banks and other financial institutions from time to time parties to the Credit Agreement
(collectively the “Lenders” and individually a “Lender”), WACHOVIA BANK, NATIONAL
ASSOCIATION, a national banking association, as administrative agent for the Lenders hereunder (in
such capacity, the “Administrative Agent” or the “Agent”), the Swingline Lender,
and Issuing Lender, and BANK OF AMERICA, N.A., as Issuing Lender. All capitalized terms used but
not otherwise defined herein have the meanings given to them in the Credit Agreement.



     The undersigned, being a duly elected officer of the Borrower, holding the office set forth
below such officer’s name, hereby gives irrevocable notice pursuant to Section 2.4(b)(i) of
the Credit Agreement, that the Borrower hereby requests a Swingline Loan under the Credit
Agreement, and in connection with such request sets forth below the information relating to the
Swingline Loan required by the Credit Agreement and certifies as follows:



     1. The date of the requested Swingline Loan is ___, 20[ ].



     2. The aggregate principal amount of the requested Swingline Loan is $___, ___.



Exhibit E




 









 








     3. The aggregate principal amount of all Swingline Loans outstanding as of the date hereof
prior to giving effect to the requested Swingline Loan is $___.



     4. The aggregate amount of all Advances Outstanding as of the date hereof prior to giving
effect to the requested Swingline Loan is $___.



     5. All of the conditions applicable to the Extension of Credit requested herein as set forth
in the Credit Agreement have been satisfied as of the date hereof and will remain satisfied to the
date of such Extension of Credit, including those set forth in Article III of the Credit Agreement,
and the following:



          (i) The representations and warranties of the Borrower set forth in the Credit Agreement are
true and correct on and as of such date, before and after giving effect to such Extension of Credit
and to the application of the proceeds therefrom, as though made on and as of such date (except for
those which expressly relate to an earlier date, in which case, such representations and warranties
shall be true and correct as of such earlier date);




          (ii) No event has occurred and is continuing, or would result from such Extension of Credit or
from the application of proceeds therefrom, which constitutes a Default or Event of Default; and




          (iii) The Borrower is in compliance with each of its covenants set forth in the Credit
Agreement.




Remainder of Page Intentionally Left Blank.




Signature Page(S) Follow(S).




Exhibit E




 









 








     IN WITNESS WHEREOF, the undersigned has executed the Notice of Swingline Borrowing Notice this
___day of ___, 20[ ].



	 	 	 	 	 
	CAPITALSOURCE INC.,	 	 
	a Delaware corporation	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 





Exhibit E




 









 








EXHIBIT F



FORM OF SWINGLINE NOTE




SWINGLINE NOTE




			
	$___
	 	___, 200_






     FOR VALUE RECEIVED, the undersigned CAPITALSOURCE INC., a Delaware corporation
(“Borrower”) HEREBY PROMISES TO PAY to the order of WACHOVIA BANK, NATIONAL ASSOCIATION
(“Swingline Lender”) at the offices of WACHOVIA BANK, NATIONAL ASSOCIATION, as
Administrative Agent (in such capacity, the “Administrative Agent”) at the Administrative
Agent’s address at 201 South College Street, Charlotte, North Carolina 28288-0608, or at such other
place as Administrative Agent may designate from time to time in writing, in lawful money of the
United States of America and in immediately available funds, the amount of FIFTY MILLION DOLLARS
($50,000,000) or, if less, the aggregate unpaid amount of all Swingline Loans made to the
undersigned under the “Credit Agreement” (as hereinafter defined). All capitalized terms used but
not otherwise defined herein have the meanings given to them in the Credit Agreement.



     This Swingline Note is issued pursuant to that certain Credit Agreement dated as of March 14,
2006 by and among Borrower, Guarantors, Administrative Agent, Swingline Lender, Issuing Lenders and
the other Persons signatory thereto from time to time as Lenders (including all annexes, exhibits
and schedules thereto and as from time to time amended, restated, supplemented or otherwise
modified, the “Credit Agreement”), and is entitled to the benefit and security of the
Credit Agreement and all of the other Credit Documents. Reference is hereby made to the Credit
Agreement for a statement of all of the terms and conditions under which the Swingline Loan
evidenced hereby is made and is to be repaid. The date and amount of each Swingline Loan made by
Swingline Lender to Borrower, the rate of interest applicable thereto and each payment made on
account of the principal thereof, shall be recorded by Administrative Agent on its books; provided
that the failure of Administrative Agent to make any such recordation shall not affect the
obligations of Borrower to make a payment when due of any amount owing under the Credit Agreement
or this Swingline Note in respect of the Swingline Loans made by Swingline Lender to Borrower.



     The principal amount of the indebtedness evidenced hereby shall be payable in the amounts and
on the dates specified in the Credit Agreement, the terms of which are hereby incorporated herein
by reference. Interest thereon shall be paid until such principal amount is paid in full at such
interest rates and at such times, and pursuant to such calculations, as are specified in the Credit
Agreement. The terms of the Credit Agreement are hereby incorporated herein by reference.



     Upon the occurrence and during the continuation of any Event of Default, this Swingline Note
may, as provided in the Credit Agreement, and without presentment, demand, protest, notice of
intent to accelerate, notice of acceleration or other legal requirement of any kind (all of



Exhibit F




 









 







which are hereby expressly waived by Borrower to the extent permitted by applicable law), be
declared, and immediately shall become, due and payable.




     The Borrower agrees, in the event this Note or any portion hereof is collected by law or
through an attorney at law, to pay all reasonable costs of collection, including, without
limitation, reasonable attorneys’ fees.



     Except as provided in the Credit Agreement, this Swingline Note may not be assigned by Lender
to any Person.



     THIS SWINGLINE NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.



Remainder of Page Intentionally Left Blank.



Signature Page(S) Follow(S).




Exhibit F




 









 








     IN WITNESS WHEREOF, the Borrower has executed this Swingline Note on the day and year first
written above.



	 	 	 	 	 
	CAPITALSOURCE INC.,	 	 
	a Delaware corporation	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 





Exhibit F




 









 








EXHIBIT G



FORM OF SOLVENCY CERTIFICATE



SOLVENCY CERTIFICATE




     The undersigned chief financial officer of CAPITALSOURCE INC., a Delaware corporation (the
“Company” or the “Borrower”), is familiar with the properties, businesses, assets
and liabilities of the Company and is duly authorized to execute this certificate on behalf of the
Company, and not individually.



     1. This Certificate is delivered pursuant to Section 3.1(l) of that certain Credit
Agreement dated as of March 14, 2006 (as modified and supplemented and in effect from time to time,
the “Credit Agreement”), by and among the Borrower, CAPITALSOURCE TRS INC., a Delaware
corporation (“TRS”), CAPITALSOURCE FINANCE LLC, a Delaware limited liability company
(“CSF”), CSE MORTGAGE LLC, a Delaware limited liability company (“CSM” and together
with TRS and CSF, and any other Subsidiary directly owned by the Borrower that becomes a party to
the Credit Agreement, collectively the “Guarantors” and individually a
“Guarantor”), the several banks and other financial institutions from time to time parties
to the Credit Agreement (collectively the “Lenders” and individually a “Lender”),
WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as administrative agent for
the Lenders hereunder (in such capacity, the “Administrative Agent” or the
“Agent”), the Swingline Lender, and Issuing Lender, and BANK OF AMERICA, N.A., as Issuing
Lender. All capitalized terms used but not otherwise defined herein have the meanings given to
them in the Credit Agreement.



     2. The undersigned certifies on behalf of the Company, and not individually, that he/she has
made such investigation and inquiries as to the financial condition of the Company and its
Subsidiaries as he/she deems necessary and prudent for the purpose of providing this certificate.
The undersigned acknowledges that the Administrative Agent and the Lenders are relying on the truth
and accuracy of this certificate in connection with making of the Loans under the Credit Agreement.



     3. The financial information, projections and assumptions which underlie and form the basis
for the representations made in this Certificate were reasonable when made and were made in good
faith and continue to be reasonable as of the date hereof.



     4. BASED ON THE FOREGOING, both before and after giving effect to the Loans:




	 	A.	 	The Company is able to pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the normal
course of business.
	 
	 	B.	 	The Company does not intend to, or believes that it will, incur
debts or liabilities beyond its ability to pay as such debts and liabilities
mature in their ordinary course.





Exhibit G




 









 









	 	C.	 	The Company is not engaged in any business or transaction, nor
is it about to engage in any business or transaction, for which the assets of
the Company would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which the Company
is engaged or is to engage.





Remainder of Page Intentionally Left Blank.



Signature Page(S) Follow(S).




Exhibit G




 









 








     IN WITNESS WHEREOF, the undersigned has executed this Certificate on behalf of the Company
this ___day of ___, 200_, in her/his capacity as the chief financial officer of the
Company.



	 	 	 	 
	By:
	 	 	 
	 

	 	 	 
	Name:
	 	 
	 

	 	 
	Title:
	 	 
	 

	 	 





Exhibit G




 









 








EXHIBIT H



FORM OF COMPLIANCE CERTIFICATE




COMPLIANCE CERTIFICATE




     Reference is made to the Credit Agreement, dated as of March 14, 2006 (as modified and
supplemented and in effect from time to time, the “Credit Agreement”), by and among
CAPITALSOURCE INC., a Delaware corporation (the “Borrower”), CAPITALSOURCE TRS INC., a
Delaware corporation (“TRS”), CAPITALSOURCE FINANCE LLC, a Delaware limited liability
company (“CSF”), CSE MORTGAGE LLC, a Delaware limited liability company (“CSM” and
together with TRS and CSF, and any other Subsidiary directly owned by the Borrower that becomes a
party to the Credit Agreement, collectively the “Guarantors” and individually a
“Guarantor”), the several banks and other financial institutions from time to time parties
to the Credit Agreement (collectively the “Lenders” and individually a “Lender”),
WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as administrative agent for
the Lenders hereunder (in such capacity, the “Administrative Agent” or the
“Agent”), the Swingline Lender, and Issuing Lender, and BANK OF AMERICA, N.A., as Issuing
Lender. All capitalized terms used but not otherwise defined herein have the meanings given to
them in the Credit Agreement.



     Pursuant to Section 5.2(a) of the Credit agreement, the undersigned hereby certifies,
on behalf of the Borrower and not individually, to the Administrative Agent and the Lenders at such
time party to the Credit Agreement, as follows:



     1. I have reviewed the financial statements of the Borrower and its Subsidiaries dated as of
___and for the ___period[s] then ended and such statements present fairly
the financial position of the Borrower and its Consolidated Subsidiaries (including Unrestricted
Subsidiaries) as of the dates indicated and the results of their operations and cash flows for the
period[s] indicated in conformity with GAAP applied on a consistent basis.



     2. I have reviewed the compliance calculations attached hereto as Annex I dated as of
___and such calculations present fairly and accurately the financial position of the
Borrower and its Subsidiaries.



     3. I have reviewed Section 5.32 of the Credit Agreement and the related Credit
Documents and have made, or caused to be made under my supervision, a review in reasonable detail
of the transactions and the condition of the Borrower and its Subsidiaries during the accounting
period covered by the financial statements. Based on such review, the Borrower during such
accounting period observed or performed in all material respects all of its covenants and other
agreements, and satisfied in all material respects every condition, contained in the Credit
Agreement to be observed, performed or satisfied by it. Such review has not disclosed the
existence during or at the end of such accounting period of any condition or event that constitutes
a Default or an Event of Default, nor do I have any knowledge of the existence of any such



Exhibit H




 









 







condition or event as at the date of this Certificate except as provided on Annex II
attached hereto.




Remainder of Page Intentionally Left Blank.



Signature Page(S) Follow(S).




Exhibit H




 









 








     IN WITNESS WHEREOF, the undersigned has executed this Officer’s Compliance Certificate on
behalf of the Borrower this ___day of ___, 20___, in her/his capacity as a Responsible
Officer of the Borrower, and not in her/his personal capacity.



	 	 	 	 
	By:
	 	 	 
	 

	 	 
	Name:
	 	 
	 

	 	 
	Title:
	 	 
	 

	 	 





Exhibit H





 









 








ANNEX I



CAPITALSOURCE INC.



$545MM SENIOR UNSECURED CREDIT FACILITY



COVENANT COMPLIANCE



Quarterly Report



Determination Date:                 3/31/2006




	 	 	 	 	 
	 	 	 
	 	Has an Event of Default occurred?
	 	 	 
	 	 

	 	No	 
	 	 	 





	 	 	 	 	 	 	 	 	 
	(1)	 	Consolidated Debt to Stockholders Equity (Less Liquid Real Estate Assets)	 	Limit	 	Actual	 	Compliance
	 	 	 
	 
	 	 	 	6.00x	 	0.00x	 	Yes






	 	 	 	 	 	 	 
	 	 	(i - ii) / [iv- (iii-ii)]	 	Amount	 
	 
	 	(i) Consolidated Debt	 	$	0.00	 
	 
	 	(ii) Liquid Real Estate Asset Financing	 	 	0.00	 
	 
	 	(iii) Liquid Real Estate Assets	 	 	0.00	 
	 
	 	(iv) Stockholders’ Equity	 	 	0.00	 






	 	 	 	 	 	 	 	 	 
	(2)	 	Consolidated Debt to Stockholders Equity	 	Limit	 	Actual	 	Compliance
	 	 	 
	 
	 	 	 	11.00x	 	0.00x	 	Yes






	 	 	 	 	 	 	 
	 	 	(i) / (ii)	 	Amount	 
	 
	 	(i) Consolidated Debt	 	$	0.00	 
	 
	 	(ii) Stockholders’ Equity	 	 	0.00	 






	 	 	 	 	 	 	 	 	 
	(3)	 	Minimum Consolidated Tangible Net Worth	 	Limit	 	Actual	 	Compliance
	 	 	 
	 
	 	 	 	$0.00	 	$0.00	 	Yes






	 	 	 	 	 	 	 
	 	 	Description	 	Amount	 
	 
	 	$975,000,000	 	$	0.00	 
	 
	 	70% of Cumulative Net Proceeds of	 	 	 	 
	 
	 	Capital Stock/Conversion of Debt from 9/30/2005	 	 	0.00	 
	 
	 	 	 	 	 
	 
	 	 	 	$	—	 
	 
	 	 	 	 	 






Exhibit H




 









 









	 	 	 	 	 	 	 	 	 
	(4)	 	Asset Quality	 	Limit	 	Actual	 	Compliance
	 	 	 
	 
	 	 	 	4.00%	 	0.00%	 	Yes





Average Portfolio Charged-Off Ratio




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Outstanding Balance of	 	 	Outstanding Balance of	 
	 	 	 	 	 	 	Investment Loans that	 	 	Investment Loans at the	 
	 	 	Date	 	Month	 	became Charged-Off	 	 	beginning of the month	 
	 
	 	March-06	 	Current Month	 	 	 	 	 	$	0.00	 
	 
	 	February-06	 	1 Month Prior	 	 	 	 	 	 	0.00	 
	 
	 	January-06	 	2 Months Prior	 	 	 	 	 	 	0.00	 
	 
	 	December-05	 	3 Months Prior	 	 	 	 	 	 	0.00	 
	 
	 	November-05	 	4 Months Prior	 	 	 	 	 	 	0.00	 
	 
	 	October-05	 	5 Months Prior	 	 	 	 	 	 	0.00	 
	 
	 	September-05	 	6 Months Prior	 	 	 	 	 	 	0.00	 
	 
	 	August-05	 	7 Months Prior	 	 	 	 	 	 	0.00	 
	 
	 	July-05	 	8 Months Prior	 	 	 	 	 	 	0.00	 
	 
	 	June-05	 	9 Months Prior	 	 	 	 	 	 	0.00	 
	 
	 	May-05	 	10 Months Prior	 	 	 	 	 	 	0.00	 
	 
	 	April-05	 	11 Months Prior	 	 	 	 	 	 	0.00	 
	 	 	 	 	 	 	 
	 
	 	 	 	   Total Charged-off	 	$	0.00	 	 	 	 	 
	 
	 	 	 	   Average OLB	 	$	0.00	 	 	 	 	 






	 	 	 	 	 	 	 	 	 
	(5)	 	Available Asset Coverage Ratio	 	Limit	 	Actual	 	Compliance
	 	 	 
	 
	 	 	 	1.10x	 	0.00x	 	Yes






	 	 	 	 	 
	 	 	Rating Agency	 	Unsecured Debt Rating
	 
	 	Fitch	 	BBB —
	 
	 	S&P	 	n.a.
	 
	 	Moody’s	 	n.a.






	 	 	 	 	 	 	 
	 	 	Available Asset Coverage Ratio	 	Amount	 
	 
	 	Unrestricted Cash and Cash Equivalents	 	$	0.00	 
	 
	 	Qualified Available Unpledged Assets	 	 	0.00	 
	 
	 	 	 	 	 
	 
	 	 	 	$	0.00	 
	 
	 	Senior Unsecured Debt	 	$	—	 
	 
	 	 	 	 	 





Exhibit H




 









 





	 	 	 	 	 	 	 	 	 
	(6)	 	Consolidated EBIT to Interest Expense	 	Limit	 	Actual	 	Compliance
	 	 	 
	 
	 	 	 	1.35	 	0.00	 	Yes






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Quarter	 	EBIT	 	 	Interest Expense	 	 	Ratio	 
	 
	 	Most Recent Quarter	 	$	0.00	 	 	$	0.00	 	 	 	0.00x	 
	 
	 	One Prior Quarter	 	 	0.00	 	 	 	0.00	 	 	 	0.00x	 
	 
	 	Two Prior Quarters	 	 	0.00	 	 	 	0.00	 	 	 	0.00x	 
	 
	 	Three Prior Quarters	 	 	0.00	 	 	 	0.00	 	 	 	0.00x	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	0.00x	 






	 	 	 	 	 	 	 	 	 
	(7)	 	Maximum Capital Expenditures	 	Limit	 	Actual	 	Compliance
	 	 	 
	 
	 	 	 	$25,000,000.00	 	$0.00	 	Yes






	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	(8)
	 	 	Other Events of Default?	 	No	 
	 	 	 	 	 





Exhibit H









 






CAPITALSOURCE INC.

$545MM SENIOR UNSECURED CREDIT FACILITY

SUPPORTING CALCULATIONS




Quarterly Report

Determination Date 3/31/2006




Available Unpledged Assets




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Applicable	 	 	 	 
	Asset Type	 	Amount	 	 	Percentage	 	 	Available Amount	 
	Investment Loans — Grade 1-5
	 	$	0.00	 	 	 	100	%	 	$	0.00	 
	Real Estate Loans & Asset Based Loans — Grade 6
	 	 	0.00	 	 	 	50	%	 	 	0.00	 
	CapitalSource Securitization Notes
	 	 	0.00	 	 	 	100	%	 	 	0.00	 
	Investment Grade rated debt securities
(excluding securities issued by the
Borrower or any subsidiary)
	 	 	0.00	 	 	 	70	%	 	 	0.00	 
	Real Property Owned
	 	 	0.00	 	 	 	80	%	 	 	0.00	 
	OREO Property
	 	 	0.00	 	 	 	50	%	 	 	0.00	 
	Investments in Equity Instruments
	 	 	0.00	 	 	 	50	%	 	 	0.00	 
	Fannie Mae Servicing Strips
	 	 	0.00	 	 	 	50	%	 	 	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 	 	 	 






70% of Cumulative Net Proceeds of Capital

Stock/Conversion of Debt from 9/30/2005




	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date	 	Net Proceeds	 	 	70%	 	 	 	 
	[Insert date]
	 	$	0.00	 	 	 	70	%	 	$	0.00	 
	[Insert date]
	 	 	0.00	 	 	 	70	%	 	 	0.00	 
	[Insert date]
	 	 	0.00	 	 	 	70	%	 	 	0.00	 
	[Insert date]
	 	 	0.00	 	 	 	70	%	 	 	0.00	 
	[Insert date]
	 	 	0.00	 	 	 	70	%	 	 	0.00	 
	[Insert date]
	 	 	0.00	 	 	 	70	%	 	 	0.00	 
	[Insert date]
	 	 	0.00	 	 	 	70	%	 	 	0.00	 
	[Insert date]
	 	 	0.00	 	 	 	70	%	 	 	0.00	 
	[Insert date]
	 	 	0.00	 	 	 	70	%	 	 	0.00	 
	[Insert date]
	 	 	0.00	 	 	 	70	%	 	 	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	$	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 






Senior Unsecured Debt




	 	 	 	 	 
	Facility	 	Balance Outstanding	 
	Unsecured Revolving Credit Facility
	 	 	0.00	 
	Convertible Debt
	 	 	0.00	 
	[Unsecured 1]
	 	 	0.00	 





Exhibit H





 









 






	 	 	 	 	 
	Facility	 	Balance Outstanding	 
	[Unsecured 2]
	 	 	0.00	 
	 
	 	 	 
	 
	 	$	0.00	 
	 
	 	 	 





Exhibit H




 









 






ANNEX II




[TO BE PROVIDED BY BORROWER]




Exhibit H





 









 








EXHIBIT I




FORM OF MONTHLY REPORT




CAPITALSOURCE INC.




$545MM SENIOR UNSECURED CREDIT FACILITY




AVAILABILITY




Monthly Report




Determination Date:           3/31/2006



The undersigned, as a duly authorized officer of the Borrower, delivers this Monthly Report (as defined
in the Agreement) in connection with that certain Credit Agreement dated as of March 14, 2006 (the
“Agreement”), among CAPITALSOURCE INC., (the “Borrower”), CAPITALSOURCE TRS INC., CAPITALSOURCE FINANCE LLC
and CSE MORTGAGE LLC (the “Guarantors”), the banks party thereto, the Issuing Lender, and WACHOVIA BANK,
N.A., as Administrative Agent and Swingline Lender. The undersigned hereby certifies that: (i) the
information provided in this Monthly Report is true and accurate, (ii) the Borrower is in compliance with
each of the terms, conditions and provisions set forth in the Agreement and in all instruments, documents
and agreements executed and/or delivered by the Borrower in connection therewith, and (iii) no Default (as
defined in the Agreement) is in existence on the date hereof.




	 	 	 	 	 	 	 	 	 	 	 	 	 
	Facility Information	 	Commitment/Sub-Limit	 	 	Outstanding	 	 	Availability	 
	 
	US$ Revolver:
	 	$	545,000,000.00	 	 	 	 	 	 	$	545,000,000.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	Swingline:
	 	$	50,000,000.00	 	 	$	0.00	 	 	$	50,000,000.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	Total Letters of Credit:
	 	$	250,000,000.00	 	 	$	0.00	 	 	$	250,000,000.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	Total Facility:
	 	$	545,000,000.00	 	 	$	0.00	 	 	$	545,000,000.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 





This Monthly Report is executed and delivered pursuant to the Agreement and is made subject to and is
governed by each and all of the representations, warranties and covenants in the Agreement, in the same
manner, and with the same force as if they were all set forth herein in full, all of which representations,
warranties and covenants are hereby deemed made on the date hereof.




	 	 	 	 	 	 	 
	 	 	CAPITALSOURCE INC., as Borrower	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 





Exhibit I





 









 






CAPITALSOURCE INC.





$545MM SENIOR UNSECURED CREDIT FACILITY



COVENANT COMPLIANCE




Monthly Report




Determination Date: 3/31/2006









			
	Has an Event of Default occurred?
	 	No










	 	 	 	 	 	 	 	 	 	 	 	 	 
	Available Asset Coverage Ratio	 	Limit	 	 	Actual	 	 	Compliance	 
	 
	 
	 	 	1.10x	 	 	 	0.00x	 	 	Yes






	 	 	 	 	 
	 	 	Unsecured Debt	 
	Rating Agency	 	Rating	 
	   
	Fitch
	 	BBB-
	S&P
	 	 	n.a.-	 
	Moody’s
	 	 	n.a.-	 






	 	 	 	 	 
	Available Asset Coverage Ratio	 	Amount	 
	   
	Unrestricted Cash and Cash Equivalents
	 	$	0.00	 
	Qualified Available Unpledged Assets
	 	 	0.00	 
	 
	 	 	 
	 
	 	$	0.00	 
	 
	 	 	 
	Senior Unsecured Debt
	 	$	—	 
	 
	 	 	 






Supporting Calculations




	 	 	 	 	 	 	 	 	 	 	 	 	 
	Asset Type	 	Amount	 	 	Applicable Percentage	 	 	Available Amount	 
	       
	Investment Loans — Grade 1-5
	 	$	0.00	 	 	 	100	%	 	$	0.00	 
	Real Estate Loans & Asset Based Loans
- Grade 6
	 	 	0.00	 	 	 	50	%	 	 	0.00	 
	CapitalSource Securitization Notes
	 	 	0.00	 	 	 	100	%	 	 	0.00	 
	Investment Grade rated debt securities
(excluding securities issued by the
Borrower or any subsidiary)
	 	 	0.00	 	 	 	70	%	 	 	0.00	 
	Real Property Owned
	 	 	0.00	 	 	 	80	%	 	 	0.00	 
	OREO Property
	 	 	0.00	 	 	 	50	%	 	 	0.00	 
	Investments in Equity Instruments
	 	 	0.00	 	 	 	50	%	 	 	0.00	 
	Fannie Mae Servicing Strips
	 	 	0.00	 	 	 	50	%	 	 	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	Available Unpledged Assets
	 	 	 	 	 	 	 	 	 	$	—	 
	 
	 	 	 	 	 	 	 	 	 	 	 






	 	 	 	 	 
	Facility	 	Balance Outstanding	 
	   
	Unsecured Revolving Credit Facility
	 	$	0.00	 
	Convertible Debt
	 	 	0.00	 
	[Unsecured 1]
	 	 	0.00	 
	[Unsecured 2]
	 	 	0.00	 
	 
	 	 	 
	Senior Unsecured Debt
	 	$	0.00	 
	 
	 	 	 











			
	Other Events of Default?
	 	No










Exhibit I




 









 






CAPITALSOURCE INC.




$545MM SENIOR UNSECURED CREDIT FACILITY



LETTERS OF CREDIT




Monthly Report

Determination Date: 3/31/2006




Letter of Credit Issuers:




	 	 	 	 	 	 	 	 	 
	 	 	Letter of Credit	 	 	Letter of Credit	 
	 	 	Commitment	 	 	Availability	 
	       
	 
	 	$	250,000,000	 	 	$	250,000,000	 
	     





Letters of Credit Issued:



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Outstanding	 	 	Original Term to	 	 	 	 
	Entity	 	Type of LOC	 	 	Date Issued	 	 	Expiration Date	 	 	Commitment	 	 	Principal	 	 	Maturity (days)	 	 	OTM Test	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	—	 	 	PASS
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	—	 	 	PASS
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	—	 	 	PASS
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	—	 	 	PASS
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	—	 	 	PASS
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	—	 	 	PASS
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	—	 	 	PASS
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	—	 	 	PASS
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	—	 	 	PASS
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	—	 	 	PASS
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	—	 	 	PASS
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Totals
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	0.00	 	 	$	0.00	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	   	 	 	 	 	 	 	 	 






Exhibit I





 









 








EXHIBIT J




FORM OF

COMMITMENT TRANSFER SUPPLEMENT




COMMITMENT TRANSFER SUPPLEMENT




     Reference is made to the Credit Agreement, dated as of March 14, 2006 (as amended, restated or
otherwise modified, the “Credit Agreement”), by and among CAPITALSOURCE INC., a Delaware
corporation (the “Borrower”), CAPITALSOURCE TRS INC., a Delaware corporation
(“TRS”), CAPITALSOURCE FINANCE LLC, a Delaware limited liability company (“CSF”),
CSE MORTGAGE LLC, a Delaware limited liability company (“CSM” and together with TRS and
CSF, and any other Subsidiary directly owned by the Borrower that becomes a party to the Credit
Agreement, collectively the “Guarantors” and individually a “Guarantor”), the
several banks and other financial institutions from time to time parties to the Credit Agreement
(collectively the “Lenders” and individually a “Lender”), WACHOVIA BANK, NATIONAL
ASSOCIATION, a national banking association, as administrative agent for the Lenders hereunder (in
such capacity, the “Administrative Agent” or the “Agent”), the Swingline Lender,
and Issuing Lender, and BANK OF AMERICA, N.A., as Issuing Lender. All capitalized terms used but
not otherwise defined herein have the meanings given to them in the Credit Agreement.



                                                                  (the “Transferor      Lender”) and
                                         (the “Purchasing Lender”) agree as follows:



     1. For an agreed consideration, the Transferor Lender hereby irrevocably sells and assigns to
the Purchasing Lender, and the Purchasing Lender hereby irrevocably purchases and assumes from the
Transferor Lender, as of the Transfer Funding Date (as defined below), (a) all of the Transferor
Lender’s rights and obligations under the Credit Agreement with respect to those credit facilities
contained in the Credit Agreement as set forth on Schedule 1, and all instruments delivered
pursuant thereto to the extent related to the principal amount and Commitment Percentage set forth
on Schedule 1 attached hereto of all of such outstanding rights and obligations of the
Transferor Lender under the respective facilities set forth on Schedule 1 (including any
Letters of Credit, guarantees, and Swingline Loans included in such facilities) and (b) to the
extent permitted to be assigned under Applicable Law, all claims, suits, causes of action and any
other right of the Transferor Lender (in its capacity as a Lender) against any Person, whether
known or unknown, arising under or in connection with the Credit Agreement, any other documents or
instruments delivered pursuant thereto or the loan transactions governed thereby or in any way
based on or related to any of the foregoing, including, but not limited to, contract claims, tort
claims, malpractice claims, statutory claims and all other claims at law or in equity related to
the rights and obligations sold and assigned pursuant to clause (a) above (the rights and
obligations sold and assigned pursuant to clauses (a) and (b) above being referred to herein
collectively as, the “Assigned Interest”). Such sale and assignment is without recourse to
the Transferor Lender and, except as expressly provided in this Commitment Transfer Supplement,
without representation or warranty by the Transferor Lender.



Exhibit J




 









 





     2. The Transferor Lender (a) represents and warrants that (i) it is the legal and beneficial
owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien,
encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all
action necessary, to execute and deliver this Commitment Transfer Supplement and to consummate the
transactions contemplated hereby; (b) assumes no responsibility with respect to (i) any statements,
warranties or representations made in or in connection with the Credit Agreement or any other
Credit Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Documents or any collateral thereunder, (iii) the financial condition of the
Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any
Credit Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or
Affiliates or any other Person of any of their respective obligations under the Credit Documents;
and (c) in the case of an assignment of the entire remaining amount of the Transferor Lender’s
Commitments, attaches any Note(s) held by it evidencing the Assigned Interest and requests that the
Administrative Agent exchange the attached Note(s) for a new Note(s) payable to the Purchasing
Lender.



     3. The Purchasing Lender (a) represents and warrants that (i) it has full power and authority,
and has taken all action necessary, to execute and deliver this Commitment Transfer Supplement and
to consummate the transactions contemplated hereby and to become a Lender under the Credit
Agreement, (ii) from and after the Effective Date (as defined below), it shall be bound by the
provisions of the Credit Documents as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder and (iii) it has received a copy of the
Credit Agreement, together with copies of the financial statements delivered pursuant to
Section 5.1 thereof, if any, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this Commitment Transfer
Supplement and to purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on the Administrative Agent or any other Lender;
(b) agrees that it will (i) independently and without reliance upon the Transferor Lender, the
Administrative Agent or any other Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement, the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto and (ii) perform in accordance with its terms all the
obligations which by the terms of the Credit Documents are required to be performed by it as a
Lender including, if it is organized under the laws of a jurisdiction outside the United States,
its obligations pursuant to Section 2.18 of the Credit Agreement; and (c) appoints and
authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such
powers and discretion under the Credit Agreement, the other Credit Documents or any other
instrument or document furnished pursuant hereto or thereto as are delegated to the Administrative
Agent by the terms thereof, together with such powers as are incidental thereto.



     4. The effective date of this Commitment Transfer Supplement shall be ___, 20___(the
“Effective Date”). Following the execution of this Commitment Transfer Supplement, it will
be delivered to the Administrative Agent for acceptance by it and recording by the Administrative
Agent pursuant to the Credit Agreement, effective as of the Effective Date.



     5. The funding date for this Commitment Transfer Supplement shall be ___, 20___(the
“Transfer Funding Date”). On the Transfer Funding Date, any registration and



Exhibit J




 









 




processing fee shall be due and payable to the Administrative Agent pursuant to Section
9.6 of the Credit Agreement.




     6. Upon such acceptance, recording and payment of applicable registration and processing fees,
from and after the Transfer Funding Date, the Administrative Agent shall make all payments in
respect of the Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Purchasing Lender whether such amounts have accrued prior to the Transfer Funding
Date or accrue subsequent to the Transfer Funding Date. The Transferor Lender and the Purchasing
Lender shall make all appropriate adjustments in payments by the Administrative Agent for periods
prior to the Transfer Funding Date or, with respect to the making of this assignment, directly
between themselves.



     7. From and after the Transfer Funding Date, (a) the Purchasing Lender shall be a party to the
Credit Agreement and, to the extent provided in this Commitment Transfer Supplement, have the
rights and obligations of a Lender thereunder and under the other Credit Documents and shall be
bound by the provisions thereof and (b) the Transferor Lender shall, to the extent provided in this
Commitment Transfer Supplement, relinquish its rights and be released from its obligations under
the Credit Agreement.



     8. This Commitment Transfer supplement shall be governed by and construed in accordance with
the laws of the State of New York.



     IN WITNESS WHEREOF, the parties hereto have caused this Commitment Transfer Supplement to be
executed as of the date first above written by their respective duly authorized officers on
Schedule 1 hereto.



Exhibit J




 









 





SCHEDULE 1

TO COMMITMENT TRANSFER SUPPLEMENT




Effective Date: ________, 20__




Name of Transferor Lender: ________________




Name of Purchasing Lender: ________________




Transfer Funding Date of Assignment: ________________




     Assigned Interest:



	 	 	 	 	 	 	 	 	 
	 	 	Principal Amount of	 	 	 	 
	 	 	Commitment/Loans	 	 	Commitment Percentage	 
	Facility Assigned	 	Assigned	 	 	Assigned1	 
	     
	Revolving Loan
	 	$	 	 	 	 	%	 
	     
	 
	 	 	 	 	 	 	 	 
	     
	 
	 	 	 	 	 	 	 	 
	     





	 	 	 	 	 	 	 	 	 	 	 
	[NAME OF PURCHASING LENDER]	 	 	 	[NAME OR TRANSFEROR LENDER]	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 	 	Name:	 	 
	 

	 	Title:
	 	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Accepted:	 	 	 	Consented to (if required)2:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	WACHOVIA BANK,	 	 	 	 	 	 	 	 
	NATIONAL ASSOCIATION	 	 	 	 	 	 	 	 
	as the Administrative Agent,	 	 	 	CAPITALSOURCE INC.,	 	 
	Swingline Lender and Issuing Lender	 	 	 	a Delaware corporation, as the Borrower	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 	 	Name:	 	 
	 

	 	Title:
	 	 	 	 	 	Title:	 	 








 




			
	1	 	Calculate the Commitment Percentage that is
assigned to at least 9 decimal places and show as a percentage of the aggregate
commitments of all Lenders.
	 
	2	 	Required so long as no Default or Event of
Default has occurred and is continuing.





Exhibit J




 









 





EXHIBIT K




FORM OF

BORROWER INFORMATION CERTIFICATE




     The undersigned ___, the ___of CAPTIALSOURCE INC., a Delaware
corporation (“Borrower”), hereby certifies on behalf of the Borrower (and not individually)
the information set forth below with reference to the Credit Agreement dated as of March 14, 2006
(such agreement as amended, modified, supplemented or restated from time to time, the “Credit
Agreement”), by and among CAPITALSOURCE INC., a Delaware corporation (the “Borrower”),
CAPITALSOURCE TRS INC., a Delaware corporation (“TRS”), CAPITALSOURCE FINANCE LLC, a
Delaware limited liability company (“CSF”), CSE MORTGAGE LLC, a Delaware limited liability
company (“CSM” and together with TRS and CSF, and any other Subsidiary directly owned by
the Borrower that becomes a party to the Credit Agreement, collectively the “Guarantors”
and individually a “Guarantor”), the several banks and other financial institutions from
time to time parties to the Credit Agreement (collectively the “Lenders” and individually a
“Lender”), WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as
administrative agent for the Lenders hereunder (in such capacity, the “Administrative
Agent” or the “Agent”), the Swingline Lender, and Issuing Lender, and BANK OF AMERICA,
N.A., as Issuing Lender. All capitalized terms used but not otherwise defined herein have the
meanings given to them in the Credit Agreement.


1. Names, Form, Jurisdiction of Organization and Tax I.D. Number.




     A. The exact name of Borrower as it appears in its certificate of incorporation or formation,
as amended to date, is as follows:



     B. Set forth below is each other name Borrower has had since its organization, together with
the date of the relevant change:



     C. The following is a list of all other names (including trade names or similar appellations)
used by Borrower or any of its divisions or other business units at any time during the past five
years:



     D. Except as set forth in Schedule 1 to this Certificate, Borrower has not changed its
identity or structure or the jurisdiction of its organization in any way within the past five
years.



     E. Borrower is organized as a ___under the laws of the state of
___.



     F. Borrower’s tax i.d. number is: ___.



     G. Please provide the information in 1. A — F for each additional Credit Party.


2. Current Locations.



Exhibit K





 









 





     A. The chief executive office of Borrower is located at the following address:



	 	 	 	 	 
	Street Address
	 	County
	 	State






     B. The following are all the places of business of Borrower and its Subsidiaries not
identified above:



	 	 	 	 	 
	Street Address
	 	County
	 	State






Remainder of Page Intentionally Left Blank.




Signature Page(S) Follow(S).




Exhibit K




 









 







IN WITNESS WHEREOF, we have hereunto set our hands this ___day of ___, 200_.




	 	 	 	 	 	 	 
	 	 	CAPITALSOURCE INC.	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 





Exhibit K





 









 








EXHIBIT L




SECTION 2.18 CERTIFICATE




___________, 20__




     Reference is made to that certain Credit Agreement, dated as of March 14, 2006 (as amended,
modified, waived, supplemented or restated from time to time, the “Credit Agreement”), by
and among CAPITALSOURCE INC., a Delaware corporation (the “Borrower”), CAPITALSOURCE TRS
INC., a Delaware corporation (“TRS”), CAPITALSOURCE FINANCE LLC, a Delaware limited
liability company (“CSF”), CSE MORTGAGE LLC, a Delaware limited liability company
(“CSM” and together with TRS and CSF, and any other Subsidiary directly owned by the
Borrower that becomes a party to the Credit Agreement, collectively the “Guarantors” and
individually a “Guarantor”), the several banks and other financial institutions from time
to time parties to the Credit Agreement (collectively the “Lenders” and individually a
“Lender”), WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as
administrative agent for the Lenders hereunder (in such capacity, the “Administrative
Agent” or the “Agent”), the Swingline Lender, and Issuing Lender, and BANK OF AMERICA,
N.A., as Issuing Lender. All capitalized terms used but not otherwise defined herein have the
meanings given to them in the Credit Agreement.



     The undersigned hereby certifies to Administrative Agent and Borrower that the undersigned is
not (i) a bank (as such term is used in Section 881(c)(3)(A) of the Internal Revenue Code of 1986,
as amended (the “Code”)), (ii) a “10 percent shareholder” of the Borrower within the
meaning of section 881(c)(3)(B) of the Code, or (iii) a “controlled foreign corporation” described
in section 881(c)(3)(C) of the Code.



	 	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	By:
	 	 
	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 





Exhibit L





 









 








EXHIBIT M




FORM OF FACILITY EXTENSION REQUEST




FACILITY EXTENSION REQUEST




[DATE]




Wachovia Bank, National Association.

                    

                    




Attn:                     

(___)                      (telecopier)

(___)                      (e-mail)




Ladies and Gentlemen:



     This Facility Extension Request (as defined below) is executed and delivered pursuant to that
certain Credit Agreement (as amended, modified, supplemented, or restated from time to time, the
“Credit Agreement”) dated as of March 14, 2006, by and among CAPITALSOURCE INC., a
Delaware corporation (the “Borrower”), CAPITALSOURCE TRS INC., a Delaware corporation
(“TRS”), CAPITALSOURCE FINANCE LLC, a Delaware limited liability company (“CSF”),
CSE MORTGAGE LLC, a Delaware limited liability company (“CSM” and together with TRS and
CSF, and any other Subsidiary directly owned by the Borrower that becomes a party to the Credit
Agreement, collectively the “Guarantors” and individually a “Guarantor”), the
several banks and other financial institutions from time to time parties to the Credit Agreement
(collectively the “Lenders” and individually a “Lender”), WACHOVIA BANK, NATIONAL
ASSOCIATION, a national banking association, as administrative agent for the Lenders hereunder (in
such capacity, the “Administrative Agent” or the “Agent”), the Swingline Lender,
and Issuing Lender, and BANK OF AMERICA, N.A., as Issuing Lender. All capitalized terms used but
not otherwise defined herein have the meanings given to them in the Credit Agreement.



     Borrower hereby requests a [ ] month extension of the Commitment Termination Date pursuant
to Section 2.20 of the Credit Agreement (the “Facility Extension Request”).



     In connection with the Facility Extension Request, Borrower hereby represents, warrants, and
certifies to Administrative Agent for the benefit of Lenders that:



     (i) as of the date of the Facility Extension Request, each representation and warranty made by
Borrower in Article IV of the Credit Agreement is true and correct in all material
respects, with the same force and effect as if made on and as of such date (except to the extent of
changes in facts or circumstances that have been disclosed to Administrative Agent and do not
constitute a Default or Event of Default under Sections 7.1(a) or (f) of the Credit
Agreement); provided, that, any representation and warranty that is made with
respect to facts or circumstances as of a specific date shall be true and correct as of such date;



Exhibit M




 









 





     (ii) to the Borrower’s knowledge, no Default or Event of Default under Article VII of
the Credit Agreement has occurred and is continuing or would result from the Facility Extension
Request;



     (iii) as of the date of the Facility Extension Request, no event has occurred which could
reasonably be expected to have a Material Adverse Effect; and



     (iv) after giving effect to the Facility Extension Request, the Commitment Termination Date
shall be [insert date that does not exceed 12 months past the then effective Commitment Termination
Date].



Remainder of Page Intentionally Left Blank.




Signature Page(S) Follow(S).




Exhibit M





 









 








     This Facility Extension Request is executed on [DATE]. The undersigned hereby certifies
each and every matter contained herein to be true and correct.



	 	 	 	 	 	 	 
	 	 	CAPITALSOURCE INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 
	 	 
	 

	 	 	 	Name:
	 	 
	 

	 	 	 	Title:
	 	 






This Facility Extension Request is Consented to and Accepted:




WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent




	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 






Exhibit M





 









 








EXHIBIT N




FORM OF JOINDER AGREEMENT




JOINDER AGREEMENT




___________ __, 200_




     As required by Section 5.9 of the Credit Agreement, dated as of March 14, 2006 (such
agreement as amended, modified, supplemented or restated from time to time, the “Credit
Agreement”), by and among CAPITALSOURCE INC., a Delaware corporation (the “Borrower”),
CAPITALSOURCE TRS INC., a Delaware corporation (“TRS”), CAPITALSOURCE FINANCE LLC, a
Delaware limited liability company (“CSF”), CSE MORTGAGE LLC, a Delaware limited liability
company (“CSM” and together with TRS and CSF, and any other Subsidiary directly owned by
the Borrower that becomes a party to the Credit Agreement, collectively the “Guarantors”
and individually a “Guarantor”), the several banks and other financial institutions from
time to time parties to the Credit Agreement (collectively the “Lenders” and individually a
“Lender”), WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as
administrative agent for the Lenders hereunder (in such capacity, the “Administrative
Agent” or the “Agent”), the Swingline Lender, and Issuing Lender, and BANK OF AMERICA,
N.A., as Issuing Lender. All capitalized terms used but not otherwise defined herein have the
meanings given to them in the Credit Agreement.



     [___], as Guarantor, hereby agrees to be bound by all the terms and provisions
of the Credit Agreement and all other applicable Credit Documents (as defined therein).



     IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement on the day and year
first written above.



	 	 	 	 	 	 	 
	 	 	[___________________________]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 





Exhibit N