exv10w1






Exhibit 10.1




 


CREDIT AGREEMENT




among




CAPITALSOURCE INC.

as the Initial Borrower




THE GUARANTORS LISTED HEREIN,




THE LENDERS LISTED HEREIN,




WACHOVIA BANK, NATIONAL ASSOCIATION,

as the Administrative Agent, Swingline Lender, and Issuing Lender




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




(Composite Version; Reflects All Amendments through June 26, 2008)





 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	Section 1.1. Defined Terms
	 	 	1	 
	Section 1.2. Other Definitional Provisions
	 	 	29	 
	Section 1.3. Accounting Terms
	 	 	29	 
	Section 1.4. Computation of Time Periods
	 	 	30	 
	Section 1.5. Currencies Generally
	 	 	30	 
	ARTICLE II THE LOANS; AMOUNT AND TERMS
	 	 	31	 
	Section 2.1. Revolving Loans
	 	 	31	 
	Section 2.2. Increase of the Commitments
	 	 	33	 
	Section 2.3. Letter of Credit Subfacility
	 	 	35	 
	Section 2.4. Swingline Loan Subfacility
	 	 	40	 
	Section 2.5. Fees
	 	 	41	 
	Section 2.6. Commitment Reductions
	 	 	42	 
	Section 2.7. Prepayments
	 	 	43	 
	Section 2.8. Minimum Principal Amounts
	 	 	44	 
	Section 2.9. Default Rate and Payment Dates
	 	 	44	 
	Section 2.10. Conversion Options
	 	 	45	 
	Section 2.11. Computation of Interest and Fees
	 	 	46	 
	Section 2.12. Pro Rata Treatment and Payments
	 	 	47	 
	Section 2.13. Non-Receipt of Funds by the Administrative Agent
	 	 	49	 
	Section 2.14. Inability to Determine Interest Rate
	 	 	50	 
	Section 2.15. Illegality
	 	 	51	 
	Section 2.16. Requirements of Law
	 	 	51	 
	Section 2.17. Indemnity
	 	 	53	 
	Section 2.18. Taxes
	 	 	53	 
	Section 2.19. Indemnification; Nature of Issuing Lender’s Duties
	 	 	56	 
	Section 2.20. Extension of Commitment Termination Date
	 	 	57	 
	Section 2.21. Replacement of Lenders
	 	 	57	 
	Section 2.22. Additional Limitations on CSF as Borrower
	 	 	58	 
	Section 2.23. Several Liability of the Borrower
	 	 	58	 






-i-









 






TABLE OF CONTENTS

(continued)




	 	 	 	 	 
	 	 	Page
	 
	Section 2.24. Currency Conversion of Loans
	 	 	58	 
	ARTICLE III CONDITIONS PRECEDENT
	 	 	58	 
	Section 3.1. Conditions to Closing
	 	 	58	 
	Section 3.2. Conditions to All Extensions of Credit
	 	 	61	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES
	 	 	62	 
	Section 4.1. Existence and Power
	 	 	62	 
	Section 4.2. Organizational and Governmental Authorization; No Contravention
	 	 	62	 
	Section 4.3. Binding Effect
	 	 	62	 
	Section 4.4. Financial Information
	 	 	62	 
	Section 4.5. Litigation
	 	 	63	 
	Section 4.6. Compliance with ERISA
	 	 	63	 
	Section 4.7. Taxes
	 	 	63	 
	Section 4.8. Subsidiaries
	 	 	63	 
	Section 4.9. Investment Company Act
	 	 	64	 
	Section 4.10. [Reserved]
	 	 	64	 
	Section 4.11. Ownership of Property
	 	 	64	 
	Section 4.12. No Default
	 	 	64	 
	Section 4.13. Full Disclosure
	 	 	64	 
	Section 4.14. Environmental Matters
	 	 	64	 
	Section 4.15. Compliance with Laws
	 	 	65	 
	Section 4.16. Capital Stock
	 	 	65	 
	Section 4.17. Margin Stock
	 	 	65	 
	Section 4.18. Insolvency
	 	 	66	 
	Section 4.19. Available Unpledged Assets
	 	 	66	 
	Section 4.20. Labor Matters
	 	 	66	 
	Section 4.21. Patents, Trademarks, Etc
	 	 	66	 
	Section 4.22. Tax Shelter Regulations
	 	 	66	 
	Section 4.23. All Consents Required
	 	 	66	 
	Section 4.24. Selection Procedures
	 	 	67	 






-ii-









 






TABLE OF CONTENTS

(continued)




	 	 	 	 	 
	 	 	Page
	 
	Section 4.25. [Reserved]
	 	 	67	 
	Section 4.26. Credit and Collection Policy; Residential Mortgage Policies and
Procedures
	 	 	67	 
	Section 4.27. Compliance with OFAC Rules and Regulations
	 	 	67	 
	Section 4.28. REIT Status
	 	 	67	 
	ARTICLE V COVENANTS
	 	 	68	 
	Section 5.1. Financial Statements
	 	 	68	 
	Section 5.2. Certificates; Other Information
	 	 	69	 
	Section 5.3. Payment of Taxes and Other Obligations
	 	 	69	 
	Section 5.4. Notices
	 	 	70	 
	Section 5.5. Inspection of Property, Books and Records
	 	 	71	 
	Section 5.6. Acquisitions
	 	 	71	 
	Section 5.7. Restricted Payments
	 	 	72	 
	Section 5.8. Capital Expenditures
	 	 	72	 
	Section 5.9. Additional Guarantors
	 	 	72	 
	Section 5.10. Maintenance of Unsecured Debt Rating
	 	 	72	 
	Section 5.11. Ownership of Credit Parties; Restrictions
	 	 	73	 
	Section 5.12. Maintenance of Existence
	 	 	73	 
	Section 5.13. Dissolution
	 	 	73	 
	Section 5.14. Consolidations, Mergers and Sales of Assets
	 	 	73	 
	Section 5.15. Use of Proceeds
	 	 	74	 
	Section 5.16. Compliance with Laws
	 	 	74	 
	Section 5.17. Insurance
	 	 	75	 
	Section 5.18. Change in Fiscal Year
	 	 	75	 
	Section 5.19. Maintenance of Property
	 	 	75	 
	Section 5.20. Environmental Laws
	 	 	75	 
	Section 5.21. CapitalSource Bank Backstop Obligation
	 	 	75	 
	Section 5.22. [Reserved]
	 	 	75	 
	Section 5.23. Compliance with Material Contracts
	 	 	75	 
	Section 5.24. Transactions with Affiliates
	 	 	76	 






-iii-









 






TABLE OF CONTENTS

(continued)




	 	 	 	 	 
	 	 	Page
	 
	Section 5.25. REIT Revocation
	 	 	76	 
	Section 5.26. No Restrictive Agreement
	 	 	76	 
	Section 5.27. Costs and Expenses
	 	 	77	 
	Section 5.28. Additional Debt
	 	 	77	 
	Section 5.29. [Reserved]
	 	 	77	 
	Section 5.30. Credit and Collection Policy
	 	 	77	 
	Section 5.31. REIT Status
	 	 	77	 
	Section 5.32. Financial Covenants
	 	 	77	 
	Section 5.33. Other
	 	 	78	 
	ARTICLE VI [RESERVED]
	 	 	79	 
	ARTICLE VII EVENTS OF DEFAULT
	 	 	79	 
	Section 7.1. Events of Default
	 	 	79	 
	Section 7.2. Acceleration; Remedies
	 	 	81	 
	ARTICLE VIII THE ADMINISTRATIVE AGENT
	 	 	82	 
	Section 8.1. Appointment
	 	 	82	 
	Section 8.2. Delegation of Duties
	 	 	82	 
	Section 8.3. Exculpatory Provisions
	 	 	83	 
	Section 8.4. Reliance by Administrative Agent
	 	 	83	 
	Section 8.5. Notice of Default
	 	 	84	 
	Section 8.6. Non-Reliance on Administrative Agent and Other Lenders
	 	 	84	 
	Section 8.7. Indemnification
	 	 	84	 
	Section 8.8. The Administrative Agent in Its Individual Capacity
	 	 	85	 
	Section 8.9. Successor Administrative Agent
	 	 	85	 
	Section 8.10. Other Agents
	 	 	86	 
	ARTICLE IX MISCELLANEOUS
	 	 	86	 
	Section 9.1. Amendments, Waivers and Release of Collateral
	 	 	86	 
	Section 9.2. Notices
	 	 	89	 
	Section 9.3. No Waiver; Cumulative Remedies
	 	 	91	 
	Section 9.4. [Reserved]
	 	 	91	 
	Section 9.5. Payment of Expenses and Taxes; Indemnification
	 	 	91	 






-iv-









 






TABLE OF CONTENTS

(continued)




	 	 	 	 	 
	 	 	Page
	 
	Section 9.6. Successors and Assigns; Participations; Purchasing Lenders
	 	 	92	 
	Section 9.7. Set-off
	 	 	95	 
	Section 9.8. Table of Contents and Section Headings
	 	 	96	 
	Section 9.9. Counterparts
	 	 	96	 
	Section 9.10. Effectiveness
	 	 	96	 
	Section 9.11. Severability
	 	 	96	 
	Section 9.12. Integration
	 	 	96	 
	Section 9.13. Governing Law
	 	 	97	 
	Section 9.14. Consent to Jurisdiction and Service of Process
	 	 	97	 
	Section 9.15. Confidentiality
	 	 	97	 
	Section 9.16. Acknowledgments
	 	 	98	 
	Section 9.17. Waivers of Jury Trial; Waiver of Consequential Damages
	 	 	99	 
	Section 9.18. Patriot Act Notice
	 	 	99	 
	Section 9.19. Judgment Shortfall
	 	 	99	 
	ARTICLE X GUARANTY
	 	 	100	 
	Section 10.1. The Guaranty
	 	 	100	 
	Section 10.2. Bankruptcy
	 	 	101	 
	Section 10.3. Nature of Liability
	 	 	101	 
	Section 10.4. Independent Obligation
	 	 	101	 
	Section 10.5. Authorization
	 	 	102	 
	Section 10.6. Reliance
	 	 	102	 
	Section 10.7. Waiver
	 	 	102	 
	Section 10.8. Limitation on Enforcement
	 	 	103	 
	Section 10.9. Confirmation of Payment
	 	 	104	 
	Section 10.10. Limitation of Guaranty of CSF
	 	 	104	 






-v-









 






SCHEDULES




	 	 	 	 	 
	 	 	 	 	Page
	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	 	 
	Exhibit O
	 	Mandatory Cost Rate Formula	 	 






-i-









 





     CREDIT AGREEMENT, dated as of March 14, 2006 and as amended through December 19, 2007 (this
“Credit Agreement”), among CAPITALSOURCE INC., a Delaware corporation, 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 CAPITALSOURCE SF TRS INC., a Delaware corporation (“SFTRS” and,
together with TRS, CSF and CSM, 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.



-1-









 





     “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 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 or an Investment Loan Subsidiary.



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



     “Agreement Currency” shall have the meaning set forth in Section 9.19(b).



     “Alternate Base Rate” shall mean, for any day, a rate per annum equal to (a) in the
case of amounts denominated in Dollars, the greater of (i) the Prime Rate in effect on such day
plus 1.5%, and (ii) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%, (b) in
the case of amounts denominated in Euro, the “main refinancing rate” as set by the European Central
Bank in effect on such day plus 1/2 of 1% plus the Applicable Percentage, (c) in
the case of amounts denominated in Pounds Sterling, the base rate as set by the Monetary Policy
Committee of the Bank of England in effect on such day plus 1/2 of 1% plus the
Applicable Percentage and (d) in the case of amounts denominated in any other Alternative Currency,
the rate determined by the Administrative Agent, according to comparable financial benchmarks, in
its reasonable discretion on such day. 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 (a)(ii) 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, the Federal Funds Effective Rate, the
“main refinancing rate” as set by the European Central Bank or the base rate as set by the Monetary
Policy Committee of the Bank of England shall be effective on the opening of business on the date
of such change.



-2-









 





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



     “Alternative Currency” shall mean, at any time, any of Pounds Sterling, Euro and, with
the agreement of each Lender, any other Foreign Currency, so long as, in respect of any such
Foreign Currency, at such time, (a) such Foreign Currency is dealt with in the London interbank
deposit market, (b) such Foreign Currency is freely transferable and convertible into Dollars in
the London foreign exchange market and (c) no central bank or other governmental authorization in
the country of issue of such Foreign Currency (including, in the case of Euro, any authorization by
the European Central Bank) is required to permit use of such Foreign Currency by any Lender for
making a Loan hereunder or to permit the Borrower to borrow and repay the principal thereof and to
pay the interest thereon, unless such authorization has been obtained and is in full force and
effect.



     “Alternative Currency Sub-Limit” shall have the meaning set forth in Section
2.1(a).



     “Applicable Creditor” shall have the meaning set forth in Section 9.19(b).



     “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.



     “Applicable Percentage” shall mean, for Alternate Base Rate Loans denominated in any
Alternative Currency, EURIBOR/LIBOR Rate Loans and LMIR Loans, the percentage set forth below
opposite the Initial Borrower’s applicable senior unsecured debt rating in the column labeled
“Alternative Currency Alternate Base Rate Loans, EURIBOR/LIBOR Rate Loans and LMIR Loans” and for
the Commitment Fee, the percentage set forth below opposite the Initial Borrower’s applicable
senior unsecured debt rating in the column labeled “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 Initial Borrower shall
maintain ratings from only two of Moody’s, Fitch and S&P and the Initial 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 Initial Borrower shall maintain ratings from only one of Moody’s, Fitch and S&P,
the one rating shall apply.



-3-









 





	 	 	 	 	 	 	 	 	 
	 	 	Alternative Currency	 	 
	 	 	Alternate Base Rate Loans,	 	 
	 	 	EURIBOR/LIBOR Rate Loans	 	 
	Rating (S&P/Moody’s/Fitch)	 	and LMIR Loans	 	Commitment Fee
	A-/A3/A-
	 	 	1.75	%	 	 	0.35	%
	BBB+/Baa1/BBB+
	 	 	2.25	%	 	 	0.40	%
	BBB/Baa2/BBB
	 	 	2.65	%	 	 	0.45	%
	BBB-/Baa3/BBB-
	 	 	3.00	%	 	 	0.50	%
	BB+/Ba1/BB+
	 	 	3.50	%	 	 	0.625	%
	BB/Ba2/BB
	 	 	4.50	%	 	 	0.75	%
	< BB/Ba2/BB
	 	 	6.00	%	 	 	0.90	%





The Applicable Percentage for Alternate Base Rate Loans denominated in any Alternative Currency,
EURIBOR/LIBOR Rate Loans, LMIR Loans and the Commitment Fee shall be adjusted within three (3)
Business Days of (A) Initial Borrower’s receipt of senior unsecured debt ratings from S&P and
Moody’s (in addition to Initial 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 Initial
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
Initial Borrower and its Consolidated Subsidiaries.



     “Available Unpledged Assets” means an amount equal to (without duplication) the sum of
each of the following unencumbered assets:




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




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




     (c) 50% of the Book Value of the CapitalSource Securitization Notes;
plus




     (d) 70% of the lower of the fair market value or the Book Value of Investment
Grade rated debt securities excluding securities issued by the Borrower, any
Subsidiary or any Unrestricted Subsidiary and excluding any securities backed by
pools of residential mortgages; plus




     (e) 80% of the Fair Market Value of Real Property Owned; plus




-4-











 






     (f) 50% of the fair market value of Investments in Equity Instruments (other
than any of the Healthcare REIT Entities) to entities that are not Subsidiaries of
any Credit Party and which Investments in Equity Instruments consist of common
equity that is listed on a U.S. national securities exchange or the NASDAQ Stock
Market; plus




     (g) if, as of any date of determination, the Healthcare REIT is a Healthcare
REIT Consolidated Subsidiary and at least 20% of the outstanding Common Equity
(determined on a fully-diluted basis) is listed on a U.S. national securities
exchange or the NASDAQ Stock Market, then 35% of the fair market value of the Common
Equity of the Healthcare REIT held by the Credit Parties or their Subsidiaries;
plus




     (h) if, as of any date of determination, the Healthcare REIT is not a
Healthcare REIT Consolidated Subsidiary and more than 50% of the outstanding Common
Equity (determined on a fully-diluted basis) is listed on a U.S. national securities
exchange or the NASDAQ Stock Market, then 50% of the fair market value of the Common
Equity of the Healthcare REIT held by the Credit Parties or their Subsidiaries.



     “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 Initial 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 of the Initial Borrower and its Consolidated Subsidiaries 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.



     “Average Portfolio Charged-Off Ratio with CSB” 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 Initial Borrower, its Consolidated Subsidiaries and of each
CapitalSource Bank Entity that became Charged-Off Investment Loans CSB (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 of the Initial Borrower, its
Consolidated Subsidiaries and of each CapitalSource Bank Entity 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 with
CSB.



     “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 Initial Borrower in writing to the Administrative Agent. Upon the



-5-









 




consummation of the CapitalSource Bank Transaction, each of the CapitalSource Bank Entities that is
a regulated depository institution shall automatically become a Bank Subsidiary.




     “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 Initial Borrower and its Consolidated Subsidiaries
as at such time in accordance with GAAP.



     “Borrower” means each of the Initial Borrower and CSF. If at any time there are
Advances Outstanding from both the Initial Borrower and CSF, then the term “Borrower” shall mean
the singular and the collective reference to each or all entities constituting or comprising
Borrower, as the context may require.



     “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 (a) when used in connection with a rate
determination, borrowing or payment in respect of any EURIBOR/LIBOR Rate Loan, LMIR Loan or
Alternate Base Rate Loan denominated in an Alternative Currency, the term “Business Day” shall also
exclude any day on which banks in London, England are not open for dealings in deposits of Dollars
or Alternative Currencies, as applicable, in the London interbank market; and (b) when used in
connection with a rate determination, borrowing or payment in any Alternative Currency, the term
“Business Day” shall also exclude any day on which banks are not open for
foreign exchange dealings between banks in the exchange of the home country of such
Alternative Currency.



     “Capital Expenditures” means for any period the sum of all capital expenditures
incurred during such period by the Initial Borrower, its Consolidated Subsidiaries and the
CapitalSource Bank Entities, 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 Bank Acquisition Agreement” shall mean that certain Purchase and
Assumption Agreement dated as of April 13, 2008, by and among the Initial Borrower, CapitalSource
TRS Inc., Fremont General Corporation, Fremont General Credit Corporation and Fremont Investment &
Loan.



     “CapitalSource Bank Backstop Obligation” shall mean a conditional obligation of the
Initial Borrower incurred in connection with the consummation of the CapitalSource Bank Transaction
to repurchase from the CapitalSource Bank Entities loans contributed by the Initial Borrower to the
CapitalSource Bank Entities.



-6-









 





     “CapitalSource Bank Entities” shall mean, collectively, (i) the Wholly Owned
Subsidiary formed by the Initial Borrower or one of its Wholly Owned Subsidiaries for the purpose
of holding the assets acquired in the CapitalSource Bank Transaction and (ii) any Subsidiaries
thereof.



     “CapitalSource Bank Transaction” shall mean the acquisition by the Initial Borrower of
the assets of Fremont Investment & Loan pursuant to the terms of the CapitalSource Bank Acquisition
Agreement.



     “CapitalSource Securitization Notes” shall mean any security or note rated at least
“BB-” by S&P, “Ba3” by Moody’s and “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, with respect to any Person, shares of capital stock of (or
other ownership or profit interests in) such Person, warrants, options or other rights for the
purchase or other acquisition from such Person of shares of capital stock of (or other ownership or
profit interests in) such Person, securities convertible into or exchangeable for shares of capital
stock of (or other ownership or profit interests in) such Person or warrants, rights or options for
the purchase or other acquisition from such Person of such shares (or such other interests), and
other ownership or profit interests in such Person (including, without limitation, partnership,
member or trust interests therein), whether voting or nonvoting, and whether or not such shares,
warrants,
options, rights or other interests are authorized or otherwise existing on any date of
determination.



     “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.



-7-









 





     “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 the
Initial Borrower (or other securities convertible into such Voting Stock) representing 33-1/3% or
more of the combined voting power of all Voting Stock of the Initial Borrower, (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 greater than 50% of the value of the assets of the Initial Borrower and its
Subsidiaries taken as a whole to any “person” (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act), (d) the adoption
by the stockholders of a Credit Party of a plan or proposal for the liquidation or dissolution
of such Credit Party, or (e) at any time prior to the satisfaction of the Release Condition, the
Initial Borrower shall fail to own, directly or indirectly, all of the issued and outstanding
Capital Stock of CSF. 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 Initial 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 Initial Borrower; provided,
however, that for so long as any of such Excluded Persons’ direct or indirect ownership
interest in the Voting Stock of the Initial Borrower exceeds (individually or in the aggregate)
33-1/3% of the combined voting power of all Voting Stock of the Initial Borrower, the initiation by
the Initial Borrower of any action intended to terminate or having the effect of terminating the
registration of its securities under Section 12(g) of 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, 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 Exchange Act.



     “Charged-Off Investment Loan” means any Investment Loan of the Initial Borrower or any
of its Consolidated Subsidiaries (or portion thereof deemed to be “charged-off”) as to which any of
the following first occurs: (a) the Initial 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)



-8-









 




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”.




     “Charged-Off Investment Loan CSB” means any Investment Loan of the Initial Borrower,
its Consolidated Subsidiaries or any CapitalSource Bank Entity (or portion thereof deemed to be
“charged-off”) as to which any of the following first occurs: (a) (i) in the case of an Investment
Loan not held by a CapitalSource Bank Entity, the Initial 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, or (ii) in the case of an
Investment Loan held by a CapitalSource Bank Entity, any CapitalSource Bank Entity has determined
in accordance with its credit and collection policy (or would have determined had such
CapitalSource Bank Entity’s credit collection policy been substantially similar to the 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.



     “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.



-9-









 





     “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).



     “Common Equity” means (a) the common equity of the Healthcare REIT and (b) the common
equity of the Healthcare REIT that is issuable upon the conversion, exchange, redemption or
surrender of the equity interest of any other Healthcare REIT Entity; provided that, at all times,
such equity interest of any other Healthcare REIT Entity (i) is immediately, without any condition,
restriction, obligation or limitation (other than reasonable notice to the
Healthcare REIT), convertible, exchangeable, redeemable or able to be surrendered for common
equity of the Healthcare REIT or cash in an amount equal to the fair market value of such common
equity, (ii) for the sake of clarity, complies with the requirements specified in the definition
of Qualified Available Unpledged Assets, and (iii) is not subject to impairment in any respect,
including, without limitation, in respect of exchange or redemption rights, as a result of a
transfer or Lien grant contemplated by the definition of Qualified Available Unpledged Assets.



     “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 sum of
the aggregate unpaid amount of all Debt of the Initial Borrower, its Consolidated Subsidiaries and
the CapitalSource Bank Entities determined on a consolidated basis in accordance with GAAP.



     “Consolidated EBITDA” means for a given period of the Initial Borrower, its
Consolidated Subsidiaries and the CapitalSource Bank Entities determined on a consolidated basis in
accordance with GAAP, Net Income plus (a) the sum of the following amounts of the Initial
Borrower, its Consolidated Subsidiaries and the CapitalSource Bank Entities for such period
determined in conformity with GAAP to the extent included in the determination of Net Income
(without duplication): (i) Interest Expense; (ii) income tax payments made; (iii) depreciation
expense with respect Real Property Owned and depreciation expense with respect to any real property
owned by any of the CapitalSource Bank Entities; (iv) non-cash expenses with respect to any equity
compensation expense of the Initial Borrower; (v) losses from discontinued operations; (vi) losses
with respect to Liquid Real Estate Assets; and (vii) unrealized losses from hedging obligations
entered into for the purposes of hedging interest rate risk and hedging duration risk, less (b) the
sum of the following amounts of the Initial Borrower, its Consolidated Subsidiaries and the
CapitalSource Bank Entities for such period determined in conformity with GAAP to the extent
included in the determination of Net Income (without duplication): (i) gains from discontinued
operations; (ii) gains with respect to Liquid Real Estate Assets; and (iii)



-10-









 




unrealized gains from
hedging obligations entered into for the purposes of hedging interest rate risk and hedging
duration risk.




     “Consolidated Subsidiary” means at any date any Subsidiary the accounts of which, in
accordance with GAAP, would be consolidated with those of the Initial 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 Initial Borrower, its Consolidated Subsidiaries, the CapitalSource Bank
Entities and each Healthcare REIT Consolidated Subsidiary, less intangible assets (including
goodwill), less loans or advances to stockholders, directors, officers or employees, all determined
in accordance with GAAP; provided, however, that if the Initial Borrower’s
financial statements as of such date include goodwill created as a result the CapitalSource Bank
Transaction, then all such goodwill in an amount not to exceed $200,000,000 shall be treated as a
tangible asset for the purpose of this definition; provided, further,
however, that with respect to any Consolidated Subsidiary, CapitalSource Bank Entity or
Healthcare REIT Consolidated Subsidiary that all of the shares of Capital Stock are not, directly
or indirectly, owned by the Initial Borrower, then, with respect to any such Person, the
Consolidated Tangible Net Worth of such Person shall be calculated by multiplying the Consolidated
Tangible Net Worth of such Person by the percentage of the aggregate proceeds that would be
distributed to Initial Borrower, directly or indirectly, upon the dissolution of such Person.



     “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 Initial 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, the Guaranty Agreement 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)



-11-









 




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 Credit Agreement, the Letters of Credit, the
Notes, any fee letter (including, without limitation, any commitment letter) delivered in
connection with this Credit 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.




     “CSI” CapitalSource International Inc., a Delaware corporation.



     “Currency” shall mean Dollars or any Foreign Currency.



     “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 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 (other than the first debt service payment thereon) incurred in such non-recourse financing,
or (b) 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



-12-









 




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.



     “Dollar Equivalent” shall mean, on any day, the spot selling rate at which the
Administrative Agent offers to sell such Foreign Currency for Dollars in the London foreign
exchange market at approximately 11:00 a.m., London time for delivery two (2) Business Days later.



     “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
the Initial 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.



-13-









 





     “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.



     “EURIBOR” means, in relation to any Loan to be advanced to, or owing by, any Borrower
hereunder in Euro and any Interest Period relating thereto:



     (a) The percentage rate per annum equal to the offered quotation which appears on the
Screen for a duration equal to or comparable to the duration of such Interest Period at or about
11.00 a.m. (Brussels time) two Business Days prior to such Interest Period; or



     (b) If no quotation for Euro for the relevant Interest Period is displayed and the Agent has
not selected an alternative service on which a quotation is displayed, the rate offered by the
principal London office of the Administrative Agent to leading banks in immediately available funds
in the European interbank market at approximately 11:00 a.m., Brussels time two Business Days prior
to such Interest Period.



     “EURIBOR/LIBOR Lending Office” shall mean, initially, the office of each Lender
designated as such Lender’s EURIBOR/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 Initial Borrower as the office of such Lender at which the
EURIBOR/LIBOR Rate Loans of such Lender are to be made.



     “EURIBOR/LIBOR Rate Loan” shall mean: (a) in the case of Loans denominated in any
Currency (other than Euro), any such Loan during any period in which it bears interest at a rate
based upon the LIBOR Rate; and (b) in the case of Loans denominated in Euro, any such Loan during
any period in which it bears interest at a rate based upon the EURIBOR.



     “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.



     “Euro” shall mean the lawful currency of the Participating Member States.



-14-









 





     “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.



     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.



     “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.



     “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 the purchase price of the Real Property
Owned.



     “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 Initial Borrower.



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



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



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



     “Fiscal Year” means the fiscal year of the Initial 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 Initial Borrower ending on
December 31 of such designated calendar year).



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



     “Foreign Currency” shall mean Euro, Pound Sterling and any other currency of a
Permitted Country other than Dollars.



     “Foreign Currency Equivalent” shall mean, on any day, with respect to any amount in
Dollars, the amount of Foreign Currency that would be required to purchase such amount of
Dollars on such day, based on the rate appearing on the relevant display on the Reuters
Monitor Money Rate Service for the sale of Dollars for such Foreign Currency in the London foreign
exchange market at approximately 11:00 a.m. London time for delivery two (2) Business Days later,
or, if not available, the spot selling rate at which the Administrative Agent offers to sell
Dollars for such Foreign Currency in the London foreign exchange market at approximately 11:00
a.m., London time for delivery two (2) Business Days later.



-15-









 





     “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 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, and shall also include CSI so long as the Guaranty Agreement is in effect;
provided, however, that for purposes of Article X the term “Guarantor”
shall not include CSI.



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



     “Guaranty Agreement” shall mean that certain Guaranty Agreement, dated as of December
20, 2006, made by and among the Initial Borrower, CSI and the Agent for the benefit each of the
Lenders.



     “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.



     “Healthcare REIT” shall mean the REIT resulting from the consummation of a spin-off or
initial public offering of the healthcare net-lease business of the Initial Borrower and its
Subsidiaries after which the shares of such REIT are listed on a U.S. national securities exchange
or the NASDAQ Stock Market.



     “HealthCare REIT Consolidated Subsidiary” means at any date any Healthcare REIT
Entity, if such Healthcare REIT Entity’s accounts, in accordance with GAAP, would be consolidated
with those of the Initial Borrower in its consolidated and consolidating financial statements as of
such date.



-16-









 





     “Healthcare REIT Entities” shall mean the Healthcare REIT and its Subsidiaries, as
well as any direct or indirect Subsidiaries of the Initial Borrower that are formed for the sole
purpose of establishing, structuring or capitalizing the Healthcare REIT.



     “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).



     “Initial Borrower” means CapitalSource Inc., a Delaware corporation.



     “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 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; provided, however,
that the term “Interest Expense” shall not include any non-cash interest expense of the Initial
Borrower attributable to any convertible debt securities issued by the Initial Borrower.



-17-









 





     “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 EURIBOR/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 EURIBOR/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 EURIBOR/LIBOR Rate Loan,




     (a) initially, the period commencing on the Borrowing Date or conversion date, as the
case may be, with respect to such EURIBOR/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 EURIBOR/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:




          (i) if any Interest Period pertaining to a EURIBOR/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 EURIBOR/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 EURIBOR/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 ten EURIBOR/LIBOR Rate Loans may be in effect at any time. For
purposes hereof, EURIBOR/LIBOR Rate Loans with different Interest Periods shall be
considered as separate EURIBOR/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
EURIBOR/LIBOR Rate Loan with a single Interest Period.



-18-









 





     “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
Initial 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
Initial Borrower or a Consolidated Subsidiary. Solely for purposes of the definition of the term
“Average Portfolio Charged-Off Ratio with CSB”, the term “Consolidated Subsidiaries” used in this
definition shall also include the Bank Subsidiaries and the term “Credit and Collection Policy”
shall include, in the case of any Investment Loan held by a Bank Subsidiary, the credit and
collection policy of any Bank Subsidiary. For the avoidance of doubt, the term “Investment Loan”
for the purpose of the definition of “Average Portfolio Charged-Off Ratio with CSB” shall include
the “A” Participation Interest (which receive payments from a pool of commercial real estate loans)
acquired by the Initial Borrower in connection with the CapitalSource Bank Transaction.



     “Investment Loan Subsidiary” shall mean any Person that becomes a Subsidiary as a
result of the exercise of remedies by the Initial Borrower or any Consolidated Subsidiary under
any Investment Loan.



     “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
Initial 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
“Common Stock,” “Partnership Units” or “Membership Units” on the consolidated schedule of
investments of the Initial 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 Initial 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 Initial 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 Initial Borrower for the then most recently ended Fiscal Quarter.



-19-









 





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



     “Judgment Currency” shall have the meaning set forth in Section 9.19(b).



     “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” means, in relation to any Loan other than an Alternate Base Rate Loan, to be
advanced to, or owing by, any Borrower hereunder in any Currency (other than Euro) and any Interest
Period relating thereto the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) appearing on the Screen as the London interbank offered rate for deposits in such
Currency at approximately 11:00 A.M. (London time) two (2) 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 with respect to amounts denominated in such Currency on the Screen, then
“LIBOR” shall mean (with respect to amounts denominated in such Currency) the rate per annum at
which deposits in such Currency in an amount comparable to the Loans then requested are being
offered to leading banks at approximately 11:00 A.M. London time, two (2) 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 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” for any Loan other than an Alternate Base Rate Loan, in any Currency
(other than Euro), 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	 	 






-20-









 






     “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 Credit 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
Initial 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 Initial 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.



     “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 Cost Rate” shall mean the percentage rate per annum calculated in
accordance with and in the manner set forth in Exhibit O.



-21-









 





     “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 Credit Agreement or any other Credit Document, (c) the rights and remedies
of the Administrative Agent or any Lender under this Credit 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 Credit Agreement or any other Credit Document.



     “Material Contract” shall mean (a) any contract or other agreement of the Initial
Borrower or any of its Subsidiaries listed by the Initial 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.



     “National Currency” shall mean the currency, other than Euro, of a member state of the
European Union.



     “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.



     “Net Proceeds of Capital Stock/Conversion of Debt” means any and all
proceeds (whether cash or non-cash) or other consideration received by the Initial
Borrower, its Consolidated Subsidiaries or the CapitalSource Bank Entities, on a
consolidated basis, in respect of the issuance of Capital Stock to a Person other
than the Initial Borrower or its Consolidated Subsidiaries (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 Initial Borrower, such Consolidated Subsidiary and CapitalSource Bank Entity
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 Initial Borrower, its
Consolidated Subsidiaries and the CapitalSource Bank Entities; provided, however,
that such proceeds shall exclude any consideration received in connection with an
initial public offering of the Healthcare REIT.




-22-












 





     “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 Initial Borrower or an Affiliate of the Initial 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).



     “Participating Member State” shall mean any member state of the European Union that
adopts or has adopted Euro as its lawful currency in accordance with legislation of the European
Union relating to the European Economic and Monetary Union.



     “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 Country” means each of Australia, Austria, Belgium, Canada, China, Denmark,
Finland, France, Germany, Hong Kong, Ireland, Israel, Japan, Luxembourg, Portugal, Spain, Sweden,
Switzerland, The Netherlands, The United Kingdom or the United States of America.



     “Permitted Lien” means with respect to the interest of the Borrower or any Subsidiary
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)



-23-









 




materialmen’s, warehousemen’s, 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 Initial 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 Initial 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
Initial Borrower or a Consolidated Subsidiary.



     “Pounds Sterling” shall mean the lawful currency of the United Kingdom.



     “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 Initial Borrower or a Consolidated Subsidiary;
provided, however, that Investment Loans to Obligors that are organized outside of the United
States, Investments in Equity Instruments or debt securities of any Person located
outside of the United States or any other Available Unpledged Assets located outside of the
United States must be directly owned by any Credit Party to be deemed Qualified Available



-24-









 




Unpledged
Assets; (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 Initial 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.




     “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 Initial
Borrower or a Consolidated Subsidiary of the Initial 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.



     “REIT Revocation Date” shall mean the date on which the Initial Borrower’s REIT status
has been terminated in accordance with Section 5.25.



     “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.



     “Release Condition” means the satisfaction of each of the following conditions: (a)
all indebtedness (as defined in Section 10.1) that CSF owes to the Administrative Agent
and/or the Lenders in its capacity as a Borrower has been indefeasibly paid in full in cash (or, in
the case of Letters of Credit of which CSF is the actual account party, each such Letter of Credit
has been cash collateralized in an amount equal to 103% of the stated and undrawn amount of such
Letter of Credit and in the Currency in which such Letter of Credit was issued and otherwise on
terms and conditions satisfactory to the applicable Issuing Lender) and there remains no commitment
to make Revolving Loans to CSF; (b) the Administrative Agent shall have received written notice
from CSF of its desire to terminate its rights as a Borrower with respect to the Commitment and LOC
Commitment in accordance with Section 2.6(a)(ii); and (c) no Default or
Event of Default shall have occurred and be continuing at the time of such termination
pursuant to Section 2.6(a)(ii) or would result from such termination or the termination of
the Guaranty Agreement.



     “Relevant Time” shall have the meaning set forth in Section 2.22(c).



-25-









 





     “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 Initial 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, the Chief Financial Officer or the Treasurer, and (b) any other Credit Party, any
duly authorized officer thereof.



     “Restricted Payment” means (a) any dividend or other distribution on any shares of the
Initial 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 Initial 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 Initial 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
Initial 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.



-26-









 





     “Risk Rated 1 Investment Loan” means any Investment Loan with a Risk Rating Level of
1.



     “Risk Rated 2 Investment Loan” means any Investment Loan with a Risk Rating Level of
2.



     “Risk Rated 3 Investment Loan” means any Investment Loan with a Risk Rating Level of
3.



     “Risk Rated 4 Investment Loan” means any Investment Loan with a Risk Rating Level of
4.



     “Risk Rated 5 Investment Loan” means any Investment Loan with a Risk Rating Level of
5.



     “Risk Rated 6 Investment Loan” means any Investment Loan with a Risk Rating Level of
6.



     “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.



     “Screen” shall mean, for:



     (a) any Currency (other than Euro), the relevant display page for LIBOR for such Currency (as
determined by the Administrative Agent) on the Telerate Service; provided that, if the
Administrative Agent determines in its reasonable judgment that there is no such relevant display
page for LIBOR for such Currency, “Screen” means the relevant display page for LIBOR for such
Currency (as determined by the Administrative Agent) on the Reuters Monitor Money Rates Service;
and



     (b) the Euro, the relevant display page for EURIBOR on the Telerate Screen (as determined by
the Administrative Agent), which page shall display an average rate of the Banking Federation of
the European Union for Euro; provided that, if such page or such service shall cease to be
available, such other page or such other service for the purpose of displaying an average rate of
the Banking Federation of the European Union as the Agent shall select.



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



-27-









 





     “Securitization Transaction” means any financing transaction undertaken by the Initial
Borrower or a Subsidiary of the Initial 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, determined on a consolidated basis in
accordance with GAAP. 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 Initial 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 Initial
Borrower, its Consolidated Subsidiaries and the CapitalSource Bank Entities, as set forth or
reflected on the most recent consolidated balance sheet of the Initial Borrower, its Consolidated
Subsidiaries and the CapitalSource Bank Entities 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 or an Investment Loan Subsidiary;
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).



-28-









 





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



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



     “Swingline Note” shall mean the promissory note of the Initial 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 any Person otherwise constituting a Subsidiary that is
(a) a Bank Subsidiary, (b) Healthcare REIT Entities or (c) a Subsidiary designated as an
“Unrestricted Subsidiary” in writing by the Initial Borrower to the Administrative Agent from time
to time and consented to by the Required Lenders. Any direct or indirect Subsidiary of an
Unrestricted Subsidiary shall automatically constitute an Unrestricted Subsidiary.



     “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 Initial Borrower.



-29-









 





     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 Initial Borrower and its
Consolidated Subsidiaries delivered to the Lenders; provided that, if the Initial 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 Initial Borrower that the Required Lenders wish to amend
Section 5.32 for such purpose), then the Initial 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 Initial 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



-30-









 




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




     Section 1.5. Currencies Generally.




     (a) At any time, any reference in the definition of the term “Alternative Currency” or
in any other provision of this Credit Agreement to the Currency of any particular nation
means the lawful currency of such nation at such time whether or not the name of such
Currency is the same as it was on the date hereof. For purposes of determining (i) whether
the amount of any Revolving Loan, together with all other Revolving Loans, Swingline Loans
and LOC Obligations outstanding or to be borrowed or issued at the same time as such
Revolving Loan, would exceed the Committed Amount then in effect, (ii) whether the LOC
Obligations exceed the LOC Committed Amount, and (iii) whether any Lender’s Commitment
Percentage of any Revolving Loan
(together with its Commitment Percentage of all other Revolving Loans, Swingline Loans
and LOC Obligations then outstanding or to be borrowed or issued at the same time as such
Revolving Loan) would exceed the amount of such Lender’s Commitment, the outstanding
principal amount of any Revolving Loan or LOC Obligation that is denominated in any
Alternative Currency shall be deemed to be the Dollar Equivalent of such amount of
Alternative Currency determined as of the date of such Revolving Loan or LOC Obligation.
Wherever in this Credit Agreement in connection with a Revolving Loan or LOC Obligation an
amount, such as a required minimum or multiple amount, is expressed in Dollars, but such
Revolving Loan or LOC Obligation is denominated in any Alternative Currency, such amount
shall be the relevant Foreign Currency Equivalent of such Dollar amount (rounded to the
nearest one thousandth). In addition, for purposes of complying with any requirement of
this Credit Agreement stated in Dollars or calculating any ratio or other test set forth in
this Credit Agreement, the amount of any Revolving Loan and LOC Obligation that is
denominated in any Alternative Currency shall be deemed to be the Dollar Equivalent of such
amount of Alternative Currency determined as of the date of such calculation.




     (b) Each obligation hereunder of any party hereto that is denominated in the National
Currency of a state that is not a Participating Member State on the date hereof shall,
effective from the date on which such state becomes a Participating Member State, be
redenominated in Euro in accordance with the legislation of the European Union applicable to
the European Monetary Union; provided that, if and to the extent that any such legislation
provides that any such obligation of any such party payable within such Participating Member
State by crediting an account of the creditor can be paid by the debtor either in Euro or
such National Currency, such party shall be entitled to pay or repay such amount either in
Euro or in such National Currency. If the basis of accrual of interest or fees expressed in
this Credit Agreement with respect to any Alternative Currency of any country that becomes a
Participating Member State after the date on which such currency becomes an Alternative
Currency shall be inconsistent with any convention or practice in the interbank market for
the basis of accrual of interest or fees in respect of Euro, such convention or practice
shall replace such expressed basis effective as of and from the date on which such state
becomes a Participating Member



-31-









 






State; provided that, with respect to any Revolving Loan
denominated in such currency that is outstanding immediately prior to such date, such
replacement shall take effect at the end of the Interest Period therefor.




     (c) Without prejudice to the respective liabilities of the Borrower to the Lenders and
the Lenders to the Borrower under or pursuant to this Agreement, each provision of this
Credit Agreement shall be subject to such reasonable changes of construction as the
Administrative Agent may from time to time, in consultation with the Initial Borrower,
reasonably specify to be necessary or appropriate to reflect the
introduction or changeover to Euro in any country that becomes a Participating Member
State after the date hereof; provided that the Administrative Agent shall provide
the Initial Borrower and each Lender with prior notice of the proposed change with an
explanation of such change in sufficient time to permit the Initial Borrower and the Lenders
an opportunity to respond to such proposed change.



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 or in any Alternative Currency to the Borrower (“Revolving Loans”) 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”); provided, however, that the aggregate principal
amount of all outstanding Revolving Loans and LOC Obligations in Alternative Currencies
shall not exceed thirty percent (30%) of the Committed Amount (“Alternative Currency Sub
Limit”). Revolving Loans denominated in Dollars may consist of Alternate Base Rate
Loans or EURIBOR/LIBOR Rate Loans, or a combination thereof, as the Initial Borrower may
request, and may be repaid and reborrowed in accordance with the provisions hereof.
Revolving Loans denominated in any Alternative Currency may consist of Alternate Base Rate
Loans or EURIBOR/LIBOR Rate Loans, or a combination thereof, as the Borrower may request,
and may be repaid and reborrowed in accordance with the provisions hereof. Notwithstanding
the foregoing, any 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
denominated in Dollars. Any Loans denominated



-32-









 






in Dollars shall be made by each Lender at
its Domestic Lending Office and any Loans denominated in any Alternative Currency shall be
made by each Lender at its EURIBOR/LIBOR 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 denominated in Dollars, and
on the third Business Day prior to the date of the requested borrowing in the case of
EURIBOR/LIBOR Rate Loans denominated in Dollars, and on the fourth Business Day prior to the
date of the requested borrowing in the case of Alternate Base Rate Loans or EURIBOR/LIBOR
Rate Loans denominated in any Alternative Currency. 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,
EURIBOR/LIBOR Rate Loans or a combination thereof, the Currency therefor, and if
EURIBOR/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 EURIBOR/LIBOR Rate Loan, then such notice shall be deemed to be a
request for an Interest Period of one month, (2) the type of Revolving Loan requested, then
such notice shall be deemed to be a request for an Alternate Base Rate Loan hereunder or (3)
the Currency of the Revolving Loan requested, then such notice shall be deemed to be a
request by the Initial Borrower for an Alternate Base Rate Loan denominated in Dollars
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
applicable 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 the Currency of such Revolving Loan and in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to the applicable Borrower
by the Administrative Agent by crediting the account of the applicable 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.



-33-









 






     (c) Repayment. The principal amount of all Revolving Loans shall be due and
payable in full in the Currency of such Revolving Loan 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) EURIBOR/LIBOR Rate Loans. During such periods as any Revolving Loans
shall be comprised of EURIBOR/LIBOR Rate Loans, each such Loan denominated in (a) any
Currency (other than Euro) shall bear interest at a per annum rate equal to the sum of the
applicable LIBOR Rate plus the Applicable Percentage, and (b) Euro shall bear interest at a
per annum rate equal to the sum of the applicable EURIBOR 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 Initial Borrower. The Initial 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 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 $5,000,000 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 $1,250,000,000 less the amount of any
permanent reductions in the aggregate Committed Amount pursuant to Section 2.6(a);



-34-









 






          (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 Credit 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 Initial 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 Initial Borrower stating that each of the applicable conditions to such
Commitment Increase set forth in the foregoing paragraph (a) has been satisfied; and




          (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 Initial 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 Initial
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



-35-









 






information contained therein in the Register, and (iii) give prompt notice thereof to
the Initial Borrower.




     (d) Adjustments of Borrowings upon Effectiveness of Increase. In the event
that the Administrative Agent shall have received notice from the Initial 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 new Revolving Loans shall be Alternate Base Rate Loans
denominated in the same Currency as the Revolving Loans prepaid) 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 Section 2.3(h) and the other 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 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) the Advances Outstanding in Alternative
Currencies shall not exceed the Alternative Currency Sub Limit, (iv) all Letters of Credit
shall be issued in Dollars or in an Alternative Currency (without limiting the provisions of
Section 2.3(h), Letters of Credit issued in Dollars shall only be issued for the
account of the Initial Borrower and Letters of Credit issued in Alternative Currencies shall
be issued for the account of any Borrower) and (v) 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



-36-









 






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
applicable 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 and in
the Currency in which such Letter of Credit was issued. 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 $25,000.




     (b) Notice and Reports. Unless otherwise agreed to by the Issuing Lender and
the applicable 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
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



-37-









 






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 the Currency of
such unreimbursed drawing and 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 Initial 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 the
Currency of such drawing and 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
Alternate Base Rate applicable to the Currency of such drawing plus 2%. 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 Currency and 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 Currency and amount of any unreimbursed drawing and each Lender shall
promptly pay to the Administrative Agent for the account of the Issuing Lender, in such
Currency 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 (i), if such unpaid amount is owed in
Dollars and paid within two Business Days of such date, the Federal Funds Effective Rate,
and thereafter at a rate equal to the Alternate Base Rate or (ii) if such unpaid



-38-









 






amount is
owed in any Alternative Currency, the Alternate Base Rate. Each Lender’s obligation to make
such payment to the Issuing 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 Revolving Loans in the Currency of such drawing and bearing interest
at the Alternate Base Rate applicable to the Currency of such drawing (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 (or,
in the case of Mandatory LOC Borrowings in Alternative Currency, on the next Business Day)
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 (i), if such unfunded Participation Interest is owed in Dollars and paid within two
Business Days of such date, the Federal Funds Effective Rate, and thereafter at a rate equal
to the Alternate Base Rate or (ii) if such unfunded Participation Interest is owed in any
Alternative Currency, the Alternate Base Rate.



-39-









 






     (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.




     (g) Letter of Credit Governing Law. Unless otherwise expressly agreed by the
Issuing Lender and the Initial 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 Credit 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 Initial Borrower;
provided that, notwithstanding such statement, the Initial Borrower shall be the
actual account party for all purposes of this Credit Agreement for such Letter of Credit and
such statement shall not affect the Initial 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
Initial Borrower where the Subsidiary is the actual account party.




     (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 Initial 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 Initial Borrower (each a “Swingline Loan”
and, collectively, the “Swingline Loans”) for the purposes hereinafter



-40-









 






set forth;
provided, however, that (i) the aggregate amount of Swingline Loans
outstanding at any time shall not exceed ONE HUNDRED MILLION DOLLARS ($100,000,000) (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.




          (i) Notice of Borrowing and Disbursement. The Swingline Lender will make
Swingline Loans available to the Initial Borrower on any Business Day upon delivery of a
Notice of Swingline Borrowing by the Initial 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 Initial Borrower and the Administrative Agent, demand
repayment of its Swingline Loans by way of a Revolving Loan borrowing, in which case the
Initial Borrower shall be deemed to have requested a Revolving Loan borrowing denominated in
Dollars 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



-41-









 






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 Initial 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 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 Initial 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 EURIBOR/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



-42-









 






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 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.




     (e) No Duplication. The fees payable under this Section 2.5 shall be
owed and payable by the Initial Borrower; provided that if there is more than one Borrower
hereunder and each has any LOC Obligations outstanding, the fees payable in subsections
(b) and (c) above shall be payable by the Borrower that is the actual account
party.



     Section 2.6. Commitment Reductions.




     (a) Voluntary Reductions.




          (i) The Initial Borrower shall have the right to terminate or permanently reduce the
unused portion of the Committed Amount or the Alternative Currency Sub Limit at any time or
from time to time upon not less than three (3) Business Days’ (or four (4) Business Days in
the case of the Alternative Currency Sub Limit) 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 and/or
the Alternative Currency Sub Limit then in effect; provided, further that,
in the case of the
proposed reduction or termination of the Alternative Currency Sub Limit, no Default or
Event of Default shall have occurred and be continuing at the time of such proposed
reduction or termination or would result from such reduction or termination.




          (ii) CSF shall have the right to terminate its rights as a Borrower with respect to the
Commitment and LOC Commitment hereunder at any time or from time to time upon not less than
three (3) Business Days’ (or four (4) Business Days’ in the case of the Alternative Currency
Sub Limit) prior written notice to the Administrative Agent




-43-












 






(which shall notify the Lenders thereof as soon as practicable) of such termination,
which notice shall specify the effective date thereof and shall be irrevocable and effective
upon receipt by the Administrative Agent; provided that (1) all indebtedness (as
defined in Section 10.1) that CSF owes to the Administrative Agent and/or the
Lenders in its capacity as a Borrower has been indefeasibly paid in full in cash (or, in the
case of Letters of Credit of which CSF is the actual account party, each such Letter of
Credit has been cash collateralized in an amount equal to 103% of the stated and undrawn
amount of such Letter of Credit and in the Currency in which such Letter of Credit was
issued and otherwise on terms and conditions satisfactory to the applicable Issuing Lender),
and (2) no Default or Event of Default shall have occurred and be continuing at the time
of such termination pursuant to this Section 2.6(a) or would result from such
termination or the termination of the Guaranty Agreement.




     (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 irrevocable notice of such prepayment in writing
to the Administrative Agent (which shall notify the Lenders thereof as soon as practicable),
which notice shall be at least: (i) three (3) Business Days prior to the proposed date of
prepayment in the case of EURIBOR/LIBOR Rate Loans denominated in Dollars, (ii) one (1)
Business Day prior to the proposed date of prepayment of Alternate Base Rate Loans
denominated in Dollars, and (iii) four (4) Business Days prior to the proposed date of
prepayment of Alternate Base Rate Loans and/or EURIBOR/LIBOR Rate Loans denominated in any
Alternative Currency. 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.




     (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



-44-









 







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




     (ii) If at any time after the Closing Date, the aggregate principal amount of all
outstanding Revolving Loans denominated in any Alternative Currency plus all
outstanding LOC Obligations denominated in any Alternative Currency shall exceed 105% of the
aggregate Alternative Currency Sub-Limit, the Borrower immediately shall prepay such
Alternative Currency Revolving Loans and (after all such Revolving Loans have been repaid)
cash collateralize such LOC Obligations in an amount sufficient to eliminate such excess.
All amounts required to be paid pursuant to this Section 2.7(b)(ii) shall be paid
and applied as follows: (A) first, to the payment of outstanding Revolving Loans in
the Currency in which such loans are owed; and (B) second, to a cash collateral
account in respect of LOC Obligations in the Currency in which such LOC Obligations were
issued. All prepayments under this Section 2.7(b)(ii) shall be subject to
Section 2.17 and be accompanied by interest on the principal amount prepaid through
the date of prepayment. For purposes of the calculations set forth in this Section
2.7(b)(ii), Revolving Loans and LOC Obligations denominated in Alternative Currencies
shall be redenominated in Dollars in an amount equal to the Dollar Equivalent thereof.



     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 (i) all or a portion of the principal amount of any EURIBOR/LIBOR Rate Loan
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 rate that
would otherwise be applicable thereto plus 2%, until the end of the Interest Period
applicable thereto and thereafter the unpaid portion of such Revolving Loan shall, if such
Revolving Loan is not denominated in Dollars, automatically be redenominated in Dollars on
the last day of such Interest Period in an amount equal to the Dollar Equivalent thereof on
the date of such redenomination and such overdue amount shall bear interest at a rate per
annum which is equal to the Alternate Base Rate applicable to Dollars plus 2% (the
“ABR Default Rate”), (ii) all or a portion of the principal amount of



-45-









 







any Alternate Base Rate Loan 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, (iii) if any interest payable on the
principal amount of any Loan shall not be paid when due (after the applicable grace period),
such overdue amount, if such Loan is not denominated in Dollars, shall automatically be
redenominated in Dollars on the due date therefor in an amount equal to the Dollar
Equivalent thereof on the date of such redenomination and such overdue amount shall bear
interest at a rate per annum which is equal to the ABR Default Rate, and (iv) if any fee or
other amount shall not be paid when due, such overdue amount shall bear interest at a rate
per annum which is equal to the ABR Default Rate, in each case noted above from the date of
such non-payment until such amount is paid in full (after as well as before judgment).




     (b) 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
Alternate Base Rate applicable to the Currency of such Loan plus 2% (after as well
as before judgment). The Required 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 EURIBOR/LIBOR Rate Loans by giving the Administrative Agent at
least: (i) three (3) Business Days’ prior irrevocable written notice of such election in the
case of Loans denominated in Dollars and (ii) at least four (4) Business Days’ prior
irrevocable written notice of such election in the case of Loans denominated in any
Alternative Currency. In addition, the Borrower may elect from time to time to convert
EURIBOR/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 EURIBOR/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 EURIBOR/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. EURIBOR/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 EURIBOR/LIBOR Rate Loan is to be converted to an Alternate
Base Rate Loan is not a



-46-









 







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 EURIBOR/LIBOR Rate Loan may be continued as such upon the expiration of an
Interest Period with respect thereto by the Borrower giving the Administrative Agent at
least four (4) Business Days prior irrevocable notice of such election (or the Initial
Borrower giving the Administrative Agent at least three (3) Business Days’ prior irrevocable
written notice of such election in the case of EURIBOR/LIBOR Rate Loans denominated in
Dollars); provided, that no EURIBOR/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 any EURIBOR/LIBOR Rate Loan, or the continuation of any
EURIBOR/LIBOR Rate Loan is not permitted hereunder, such EURIBOR/LIBOR Rate Loan shall be
automatically converted to an Alternate Base Rate Loan 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 or any Alternative Currency borrowing denominated in Pounds Sterling shall be
calculated on the basis of a year of 365 days (or 366 days, as applicable) for the actual
days elapsed. Subject to the foregoing, 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 Initial Borrower and the
Lenders of each determination of EURIBOR and 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 Initial 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 Initial Borrower, deliver to the Initial 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



-47-









 







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
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. All
amounts owing under this Credit Agreement are payable in Dollars; provided,
however, that the principal of, and interest on, any Revolving Loan denominated in
any Alternative Currency (except as otherwise provided in Section 2.9),



-48-









 







breakage costs relating to, and participations in, and reimbursements of drawings under
Letters of Credit denominated in, any Alternative Currency, shall only be payable in such
Alternative Currency. In addition, the cash collateralization of outstanding Letters of
Credit denominated in any Alternative Currency (when required under this Credit Agreement)
shall be in such Alternative Currency. 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 EURIBOR/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
EURIBOR/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;




     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.



-49-









 




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) Except as provided in Section 2.13(d), 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 Initial 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 with respect to Loans denominated in Dollars and at the Alternative Base Rate
with respect to Loans denominated in any Alternative Currency.




     (b) Except as provided in Section 2.13(d), 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, 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



-50-









 







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 with
respect to Loans denominated in Dollars and at the Alternative Base Rate with respect to
Loans denominated in any Alternative Currency.




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




     (d) On the date of any borrowing of a Revolving Loan in any Alternative Currency, the
Administrative Agent shall make available to the applicable Borrower the proceeds of such
borrowing only upon actual receipt by the Administrative Agent from each Lender of such
Lender’s pro rata portion of such borrowing in such Alternative Currency.
On the date that any payment of the principal of or interest on any Revolving Loan
denominated in any Alternative Currency is due, the Administrative Agent shall make
available to each Lender such Lender’s pro rata portion of such payment only
upon actual receipt by the Administrative Agent from the Borrower of such payment.



     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 EURIBOR and/or LIBOR for any Currency for any Interest Period,
or (b) the Required Lenders shall reasonably determine (which determination shall be conclusive and
binding absent manifest error) that EURIBOR and/or the LIBOR Rate does not adequately and fairly
reflect the cost to such Lenders of funding EURIBOR/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 Initial Borrower, and the Lenders at
least two Business Days prior to the first day of such Interest Period. Unless the Initial
Borrower shall have notified the Administrative Agent upon receipt of such telephone notice that it
wishes to rescind or modify the request regarding such EURIBOR/LIBOR Rate Loans, any Loans that
were requested to be made as EURIBOR/LIBOR Rate Loans shall be made as Alternate Base Rate Loans in
the applicable Currency and any Loans that were requested to be converted into or continued as
EURIBOR/LIBOR Rate Loans shall remain as or be converted into Alternate Base Rate Loans in the
applicable Currency. Until any such notice has been withdrawn by the Administrative Agent, no
further Loans shall be made as, continued as, or converted into, EURIBOR/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



-51-









 







the relevant Governmental Authority to any Lender shall make it unlawful for such Lender or
its EURIBOR/LIBOR Lending Office to make or maintain EURIBOR/LIBOR Rate Loans in any Currency as
contemplated by this Credit Agreement or to obtain in the interbank eurodollar market through its
EURIBOR/LIBOR Lending Office the funds with which to make such Loans, (a) such Lender shall
promptly notify the Administrative Agent and the Initial Borrower thereof, (b) the commitment of
such Lender hereunder to make or continue EURIBOR/LIBOR Rate Loans in such Currency shall forthwith
be suspended until the 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
EURIBOR/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 EURIBOR/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 Initial Borrower shall
be conclusive in the absence of manifest error. Each Lender agrees to use reasonable efforts
(including reasonable efforts to change its EURIBOR/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
EURIBOR/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 EURIBOR or 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 EURIBOR/LIBOR Rate Loans or the Letters of Credit or the participations therein


-52-









 






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 EURIBOR/LIBOR Rate
Loans or Letters of Credit.





     (b) Without prejudice to paragraph (a) (but without double-counting), if and so long as
any Lender is required by (i) the Bank of England or any other monetary or other authority
of the United Kingdom or (ii) the European Central Bank to make special deposits, to
maintain reserve asset ratios or to pay fees, in each case in respect of such Lender’s
EURIBOR/LIBOR Rate Loans, such Lender may require the Borrower to pay, contemporaneously
with each payment of interest on each of such Loans, additional interest on such Loan at a
rate per annum equal to the Mandatory Cost Rate.




     (c) A certificate as to any additional amounts payable pursuant to this Section
2.16 submitted by such Lender, through the Administrative Agent, to the Initial Borrower
shall be conclusive in the absence of manifest error. Each Lender agrees to use reasonable
efforts (including reasonable efforts to change its Domestic Lending Office or EURIBOR/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.




     (d) 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 Initial Borrower shall be conclusive absent manifest error.




     (e) 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.



-53-









 





     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. In addition, the Borrower
agrees to indemnify and hold each Lender harmless from any loss, cost or expense which such Lender
may sustain or incur as a result or consequence of (a) the payment of any LOC Obligation
denominated in Alternative Currency on a date other than the due date thereof or (b) the payment of
any Credit Party Obligation denominated in Alternative Currency in a different Currency. A
certificate as to any additional amounts payable pursuant to this Section 2.17 submitted by
any Lender, through the Administrative Agent, to the Initial 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.




     (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.



-54-









 






     (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 Initial 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 Initial 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 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 Initial 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 Initial Borrower the Internal Revenue Service Forms required to be provided
to the Initial 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.



-55-









 






     (c) Each Lender agrees to use reasonable efforts (including reasonable efforts to
change its Domestic Lending Office or EURIBOR/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
Initial 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.



     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



-56-









 







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.




     (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, Initial 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



-57-









 







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 Initial
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 Credit 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 Initial 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 Credit Agreement (all such amounts shall only be payable in the Currency in which they are
owed under this Agreement), and to assume all the obligations of such Lender hereunder, and, upon
such purchase 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.



     Section 2.22. Additional Limitations on CSF as Borrower. Notwithstanding anything to
the contrary contained in this Agreement (but subject to Section 2.3(h)), in no event shall
any Revolving Loan or Letter of Credit be issued to, or for the account of, CSF if the Guaranty
Agreement is not in full force and effect with respect to the Initial Borrower and CSI.



     Section 2.23. Several Liability of the Borrower. Without limiting the obligations of
the Initial Borrower or CSI as a guarantor under the Guaranty Agreement or of CSF as a Guarantor
under the Guaranty in Article X hereof, each Borrower shall be severally (and not jointly) liable
for any and all of the Revolving Loans made directly to it as a Borrower, and Letters of Credit
issued for the actual account of it as a Borrower.



-58-









 





     Section 2.24. Currency Conversion of Loans. Except as otherwise provided in
Section 2.9, in no event shall the Currency in which any outstanding Alternate Base Rate
Loan or EURIBOR/LIBOR Rate Loan is denominated be changed or converted into another Currency
(including, without limitation, if any such Loan is converted to an Alternate Base Rate Loan or
LIBOR Rate Loan pursuant to Section 2.10).



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.



-59-









 






          (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 Credit 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.



-60-









 






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



-61-









 







to be made on such date unless such Default or Event of Default shall have been waived
in accordance with this Credit Agreement.




     (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, (iii) the Swingline Loans shall
not exceed the Swingline Committed Amount, and (iv) the aggregate principal amount of
outstanding Revolving Loans denominated in any Alternative Currency plus LOC Obligations
denominated in any Alternative Currency shall not exceed the Alternative Currency Sub-Limit.
For purposes of completing the calculations set forth in this Section 3.2(d),
Revolving Loans and LOC Obligations denominated in Alternative Currencies shall be
redenominated in Dollars in an amount equal to the Dollar Equivalent thereof.




     (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



-62-









 







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 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 Credit 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 Credit 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
Initial 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 Initial 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



-63-









 







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 Credit Agreement, 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
(including 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. [Reserved]



     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



-64-









 







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.



     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) has procured all Environmental Authorizations necessary for the conduct of its
business, and is in compliance with all Environmental Requirements in connection



-65-









 







with the operation of the Properties and the Credit Parties, and each of their
respective Subsidiary’s (including Unrestricted Subsidiaries) 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 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 Credit 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,



-66-









 







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.



     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 Credit 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



-67-









 







other than in accordance with this Credit 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.



     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. Until the REIT Revocation Date, the Initial Borrower will:
(a) operate its business so as to satisfy all requirements necessary to qualify as a REIT, and will
not intentionally take any action that will cause Initial Borrower to fail to so qualify; (b)
maintain 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) will timely request
(has requested) 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.



     Initial 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 Initial 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 Initial Borrower and its
Consolidated Subsidiaries (including Unrestricted Subsidiaries to the extent such
Unrestricted Subsidiaries are consolidated with the Initial Borrower in accordance with
GAAP) as at the end of such Fiscal Year and the related consolidated and consolidating
statements of income, cash flows and retained earnings of the Initial



-68-









 







Borrower and its Consolidated Subsidiaries (including Unrestricted Subsidiaries to the
extent such Unrestricted Subsidiaries are consolidated with the Initial Borrower in
accordance with GAAP) 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; provided, however, that, notwithstanding the foregoing, in no event shall
such consolidating balance sheet or consolidating statements of income, cash flows and
retained earnings be required to be delivered prior to March 31st of the
applicable calendar year;




     (b) Quarterly Financial Statements. As soon as available and in any event
within ten (10) days of the date the Initial 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 Initial Borrower and
its Consolidated Subsidiaries (including Unrestricted Subsidiaries to the extent such
Unrestricted Subsidiaries are consolidated with the Initial Borrower in accordance with
GAAP) as at the end of such period and related company-prepared consolidated and
consolidating statements of income, cash flows and retained earnings for the Initial
Borrower and its Consolidated Subsidiaries (including Unrestricted Subsidiaries to the
extent such Unrestricted Subsidiaries are consolidated with the Initial Borrower in
accordance with GAAP) 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 Initial 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.



     Initial 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 Initial
Borrower and its Consolidated Subsidiaries (including Unrestricted Subsidiaries to the
extent such Unrestricted Subsidiaries are consolidated with the Initial Borrower in
accordance with



-69-









 







GAAP) 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 Initial 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 Initial
Borrower and substantially in the form of Exhibit I; and




     (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, other than the Healthcare REIT Entities to the extent that any related non-payment or
non-discharge or non-satisfaction by such Healthcare REIT Entity would not reasonably be expected
to result in or have a Material Adverse Effect) 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;



-70-









 






     (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




     (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, other than the Healthcare REIT Entities to the extent such matters would not
reasonably be expected to result in or have a Material Adverse Effect) 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) to the extent
permitted by law or regulation (but excluding for such purpose any law or regulation with respect
to the enforcement of a contractual obligation), 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) to the extent permitted by law or
regulation (but excluding for such purpose any law or regulation with respect to the enforcement of
a contractual obligation), 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



-71-









 







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. Notwithstanding anything to the
contrary contained herein, all Customer Information reviewed pursuant to this Section 5.5
shall be subject to Section 9.15.



     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 Initial Borrower provides to the Administrative Agent and Lenders pro forma financial
statements confirming the Initial 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, (ii)
any CapitalSource Bank Entity as contemplated by the CapitalSource Bank Acquisition Agreement or
(iii) 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).



     Section 5.7. Restricted Payments.



     The Credit Parties shall not make any Restricted Payment if (a) prior to the REIT Revocation
Date, 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, or (b) on or after the REIT
Revocation Date, a Default or an Event of Default shall have occurred and be continuing.



     Section 5.8. Capital Expenditures.



     Capital Expenditures will not exceed in the aggregate in any Fiscal Year the sum of
$50,000,000.



     Section 5.9. Additional Guarantors.



     Initial 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



-72-









 







would cause any material adverse tax consequences to the Initial Borrower or such First Tier
Foreign Subsidiary. The Initial Borrower may also at any time voluntarily cause any of its Wholly
Owned Subsidiaries (other than First Tier Domestic Subsidiaries or First Tier Foreign Subsidiaries)
to become a Guarantor hereunder by way of execution of a Joinder Agreement. In addition, Initial
Borrower shall, and shall cause CSI to, enter into the Guaranty Agreement prior to or simultaneous
with CSF becoming a Borrower hereunder and shall maintain, and shall cause CSI to maintain, the
Guaranty Agreement in full force and effect and shall perform and observe all of the terms and
provisions of the Guaranty Agreement to be performed or observed by it, and cause CSI to do the
same, until such time as the Release Condition has been satisfied. Upon satisfaction of the
Release Condition, the Guaranty Agreement shall be terminated and the Administrative Agent shall
promptly (and in any event within five (5) Business Days after the written request of the Initial
Borrower) execute such documents as may reasonably be requested by the Initial Borrower to
evidence such termination.



     Section 5.10. Maintenance of Unsecured Debt Rating.



     Initial 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 Initial 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 Initial
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.



     No Credit Party shall sell, transfer, pledge or otherwise dispose of any Capital Stock or
other equity interest in any other Credit Party that is a Subsidiary of the Initial Borrower and no
Credit Party that is a Subsidiary of the Initial Borrower may issue or sell its Capital Stock,
except that such Capital Stock or other equity interest may be transferred or issued 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,
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



-73-









 







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) in the case of any Credit Party that is organized under the laws of the United States of
America or one of its states, 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, and (ii) Subsidiaries of the Initial Borrower (which are not Credit Parties) may
merge with (1) one another or into the Initial Borrower or any Credit Party, or (2) another Person
in connection with a transaction permitted by, and subject to the satisfaction of the conditions
set forth in, Section 5.6.



     (a) 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,
in each case, that the Credit Parties shall at all times be in pro forma 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 any Borrower or any Subsidiary (as applicable) (a) directly or indirectly, for
the purpose, whether immediate, incidental or ultimate, of purchasing or carrying any Margin Stock,
or (b) for any purpose in violation of any Applicable Law or regulation. The proceeds of the
Revolving Loans shall be used to fund Portfolio Investments made in the ordinary course of business
of any Borrower or any Subsidiary and for general corporate purposes and proceeds of the Swingline
Loans shall be used to fund Portfolio Investments made in the ordinary course of business of any
Borrower or any Subsidiary and for general corporate purposes. Each Letter of Credit will be used
by any Borrower or any Subsidiary for the benefit of Obligors under Investment Loans and for
general corporate purposes in the ordinary course of business of the Borrower and its Subsidiaries.
The proceeds of the Revolving Loans in any Alternative Currency shall be used by any Borrower or
any Subsidiary (as applicable) solely to: (a) satisfy obligations, denominated in such Alternative
Currency, in the ordinary course of such Person’s business; or (b) acquire Portfolio Investments;
provided, that (i) such Portfolio Investments are in the same Alternative Currency and (ii)
the issuer, in the case of equity interests, or the obligor, in the case of debt interests, is
organized or incorporated under the laws of a jurisdiction of a Permitted Country.




-74-












 





     Section 5.16. Compliance with Laws.




     (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.




     (c) Minimum Capital Ratios and Guidelines. Each Credit Party and Subsidiary
(including, without limitation, each Bank Subsidiary) shall: (i) comply with all minimum
capital ratios and guidelines, including, without limitation, risk-based capital guidelines
and capital leverage regulations applicable to it or its Subsidiaries (including, without
limitation, each Bank Subsidiary), as may from time to time be prescribed, by regulation or
enforceable order of (including, without limitation, that certain order dated June 17,
2008), or agreement or arrangement with, the Federal Deposit Insurance Corporation or other
federal or state regulatory authorities having jurisdiction over such Credit Party and/or
Subsidiary; and (ii), within such ratios and guidelines, to the extent the same may be
applicable to it, be “adequately capitalized.”



     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.



-75-









 





     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 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. CapitalSource Bank Backstop Obligation. In no event shall the amount of
the CapitalSource Bank Backstop Obligation exceed $2,500,000,000.



     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) or any Healthcare REIT Entity
(so long as such Healthcare REIT Entity is an Affiliate), except as permitted by law and in the
ordinary course of business and pursuant to terms which are not materially 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 (other than an
Investment Loan to any Healthcare REIT Entity) or an Investment in Equity Instruments (other than
any Investment in Equity Instruments in any Healthcare REIT Entity); (b) the exercise of any right
or remedy in connection with an Investment Loan (other than an Investment Loan to any Healthcare
REIT Entity) or an Investment in Equity Instruments (other than any Investment in Equity
Instruments in any Healthcare REIT Entity); (c) the making of any Restricted Payment permitted
pursuant to Section 5.7; (d) transactions with any CapitalSource Bank Entity entered into
solely for the purpose of complying with Section 5.16(c) and the CapitalSource Bank
Acquisition Agreement; (e) any transaction with any CapitalSource Bank Entity solely to the extent
that the



-76-









 




Credit Party or Subsidiary of a Credit Party that participates in such transaction (x) is
required or mandated by the Federal Deposit Insurance Corporation or any other bank regulatory
authority having jurisdiction over the Credit Party or Subsidiary under applicable bank regulatory
law, regulation or guideline to participate in such transaction in order for such Credit Party or
Subsidiary to comply with its obligations under applicable bank regulatory law, regulation or
guideline and (y) cannot otherwise consummate such transaction in compliance with such requirements
or mandates on arm’s length terms; and (f) any transaction with the Healthcare REIT that is not
material and does not involve, together with all other transactions involving any Credit Party or
any of its Subsidiaries (including Unrestricted Subsidiaries) and any Healthcare REIT Entity that
were on terms materially 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, amounts,
consideration and/or value in excess of $15,000,000 per calendar year.




     Section 5.25. REIT Revocation. The Initial Borrower shall not take any act (or fail
to take any act) that would cause the Initial Borrower to fail to qualify as a REIT if (a) the
Initial Borrower made a Restricted Payment during such year and would have been prohibited from
making such Restricted Payment had the Initial Borrower terminated its REIT status as of January
1st of such year; (b) an Event of Default has occurred and continuing; or (c) the Credit
Parties are not in pro forma compliance with Section 5.32, both before and
after giving effect to any income taxes, withholding taxes, estimated or other taxes, and any
associated interest and penalties, attributable to such REIT status termination that are reasonably
projected in good faith by the Initial Borrower to be payable in respect of the tax year with
respect to which such termination occurs.



     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 the Initial Borrower that is not a Credit Party (other than the SPE Subsidiaries) or
any of the CapitalSource Bank Entities (except as required by bank regulatory authorities or laws,
regulations or guidelines applicable to the CapitalSource Bank Entities) 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 the
Initial Borrower that is not a 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 .



-77-









 





     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 Credit
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 Initial 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 and Notice of REIT Termination.



     (a) Until the REIT Revocation Date, the Initial Borrower will satisfy all requirements
necessary to qualify as a REIT.



     (b) In the event that the Initial Borrower’s Board of Directors or any Committee thereof (or
any Person designated by the Board of Directors or any Committee thereof) determines to revoke the
Initial Borrower’s REIT status, then within five Business Days of such event the Initial Borrower
shall provide written notice of such event to the Administrative Agent (it being the understanding
that a copy of any press release or any report that the Initial Borrower files with the SEC in
connection with such event shall constitute notice pursuant to this Section 5.31(b)).



     Section 5.32. Financial Covenants.



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




     (a) Reserved.




     (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
6.00 to 1.00.




     (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 (other than
the period commencing on January 1, 2008 and ending on September 30, 2008), plus
(iii) 30% of the cumulative Net Proceeds of Capital Stock/Conversion of Debt received at



-78-









 






any time during the period commencing on January 1, 2008 and ending on September 30,
2008.




     (d) Asset Quality.




          (i) The Average Portfolio Charged-Off Ratio to exceed 4.00%, as determined on the last
day of each Fiscal Quarter.




          (ii) The Average Portfolio Charged-Off Ratio with CSB to exceed 4.00%, as determined on
the last day of each Fiscal Quarter




     (e) Available Asset Coverage Ratio. The Available Asset Coverage Ratio to be
less than 1.1 to 1.0 on the last day of any calendar month.




     (f) Consolidated EBITDA to Interest Expense. The ratio of Consolidated EBITDA,
for the preceding four quarter period, to Interest Expense of Initial 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 1.3 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 portfolio investments of any
Unrestricted Subsidiary (other than the Healthcare REIT) 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 Credit 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



-79-









 






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,
5.16(c), 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
(including a Bank Subsidiary) 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
(including the Bank 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 (including the Bank
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 (including a Bank 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
(including the Bank 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 (including
the Bank Subsidiaries) shall make a general assignment for the benefit of its creditors; or
(ii)



-80-









 






there shall be commenced against any Credit Party or any of its Subsidiaries (including
the Bank Subsidiaries) any case, proceeding or other action of a nature referred to in
clause (i) 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 (including the Bank 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 (including the Bank 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 (including the Bank 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 (including the
Bank 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 (including a Bank 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 (including a Bank
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



-81-









 






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.




     (k) Pro Forma Compliance. If any Credit Party or any Subsidiary of any Credit
Party (a) takes any action to cause it to comply with Section 5.16(c), or (b) enters
into any transaction requiring reliance on the provisions of Section 5.24(d) or
Section 5.24(e), and, in any such case, the Credit Parties are not in pro
forma compliance with Section 5.32 both before and after giving effect to
such action or transaction.




     (l) REIT Termination. If the income taxes, withholding taxes, estimated taxes
and other taxes (as well as any associated interest and penalties) attributable to the
termination of the Initial Borrower’s REIT status (and payable in respect of the tax year
with respect to which such termination occurs) would result in the Credit Parties not being
in pro forma compliance with Section 5.32.




     (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 Initial 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 Initial Borrower
declare the Commitments to be terminated forthwith, whereupon the Commitments shall immediately
terminate; (ii) by notice of default to the Initial 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, to be paid in the Alternative Currency in which



-82-









 




such Letters of Credit were issued, 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 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



-83-









 




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 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



-84-









 




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, 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



-85-









 




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.



     Section 8.9. Successor Administrative Agent.



     The Administrative Agent may resign as Administrative Agent upon thirty (30) days’ prior
written notice to the Initial 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 Initial 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 Initial 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.



-86-









 





     None of the Lenders or other Persons identified on the facing page or signature pages of this
Credit 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 Credit 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.



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 Initial 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



-87-









 






          (iv) release any Guarantor from the Guaranty hereunder or any guarantor under the
Guaranty Agreement (except as otherwise permitted by Sections 5.9, 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




          (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, Pounds Sterling or Euro, 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



-88-









 




(other than the provisions of Section 8.9); provided, however, that
the Administrative Agent will provide written notice to the Initial 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 Initial 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 Initial 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
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 Initial
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 Credit 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



-89-









 






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,
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:



	 	 	 	 	 
	 
	 	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.




-90-









 









     (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
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




-91-









 







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) 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, any Investment Loan Subsidiary 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, (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; and (g) 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 or related to any Investment Loan Subsidiary (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.



-92-









 






     (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 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 Initial 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




-93-












 




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 Initial 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, 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 Initial 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
Initial Borrower or any Lender at any reasonable time and from time to time upon reasonable
prior notice.



-94-









 






     (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
Initial Borrower’s consent to such assignment is not required give prompt notice of such
acceptance and recordation to the Initial 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 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 Initial 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



-95-









 






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 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 Credit 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 Initial 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.



-96-









 





     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.



     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 without 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 Borrower and the other Credit Parties to be effective
and binding service in every respect. Each Credit Party, the Administrative Agent and the



-97-









 




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 agents,
advisors and other representatives 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 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
Credit 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 Credit 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 Initial 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.



     Notwithstanding the foregoing provisions in this Section 9.15, with respect to that
Information which constitutes customer or consumer information with the meaning of the
Gramm-Leach-Bliley Act (“GLBA”), 15 USC Section 6801 et seq. and which is marked
conspicuously “Customer Information” (“Customer Information”), the parties acknowledge each
Bank Subsidiary has a responsibility as a financial institution to keep Customer Information
strictly confidential. Notwithstanding any provision in this Credit Agreement to the contrary,
Customer Information shall be kept confidential during the term of this Credit Agreement and after
its termination. Each of the Administrative Agent, the Lenders, and the Issuing Lender



-98-









 




agree to use
Customer Information only for the purposes for which it was shared to them by Initial Borrower
and/or, as applicable, its Subsidiaries (including Unrestricted Subsidiaries), and not to disclose
Customer Information or make it available to any Person for any reason whatsoever other than as
required by law, subpoena, regulation or by any regulatory authority or as otherwise permitted
under the GLBA or the implementing regulations. Any Person required to maintain the
confidentiality of Customer 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 Customer 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 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



-99-









 




allow such
Lender or the Administrative Agent, as applicable, to identify each Credit Party in accordance with
the PATRIOT Act.




     Section 9.19. Judgment Shortfall.




     (a) If, for the purpose of obtaining judgment in any court, it is necessary to convert
a sum owing hereunder in one Currency into another Currency, each party hereto agrees, to
the fullest extent that it may effectively do so, that the rate of exchange used shall be
that at which in accordance with normal banking procedures in the relevant jurisdiction the
first Currency could be purchased with such other Currency on the Business Day immediately
preceding the day on which final judgment is given.




     (b) The obligations of the Borrower in respect of any sum due to any party hereto or
any holder of the obligations owing hereunder (the “Applicable Creditor”) shall,
notwithstanding any judgment in a Currency (the “Judgment Currency”) other than the
Currency in which such sum is stated to be due hereunder (the “Agreement Currency”),
be discharged only to the extent that, on the Business Day following receipt by the
Applicable Creditor of any sum adjudged to be so due in the Judgment Currency, the
Applicable Creditor may in accordance with normal banking procedures in the relevant
jurisdiction purchase the Agreement Currency with the Judgment Currency; if the amount of
the Agreement Currency so purchased is less than the sum due in accordance with this
Agreement to the Applicable Creditor in the Agreement Currency, the Borrower agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify the Applicable
Creditor against such loss and if the amount of the Agreement Currency so purchased exceeds
the sum due in accordance with this Agreement to the Applicable Creditor in the Agreement
Currency, the Applicable Creditor agrees to remit such excess to the Borrower. The
obligations of the Borrower and Applicable Creditor contained in this Section 9.19
shall survive the termination of this Agreement and the payment of all other amounts owing
hereunder.



     Section 9.20. Return of Notes.



     In the event of (i) any termination in full by the Initial Borrower or CSF of all rights
with respect to the Commitment in accordance Section 2.6(a)(i) or 2.6(a)(ii), as applicable or (ii)
the delivery of any new Note in replacement of a previously issued Note, the applicable Lender
shall return to the Borrower any Notes previously issued to it relating to such terminated
Commitment or replaced Note, as applicable and such Notes shall be marked “cancelled.” In the
event that any Lender does not return its applicable Note or Notes as described in this
Section 9.20 within forty-five (45) days after the written request of Borrower, Borrower shall be
entitled to receive a lost note affidavit from such Lender including customary indemnifications
reasonably satisfactory to Borrower with respect to the applicable unreturned Note or Notes.



-100-









 





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 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. The guaranty set forth in this Article X is
continuing guaranty and is a guaranty of payment and is not merely a guaranty of collection.



     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
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.



-101-









 





     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.



     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 Credit 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.



-102-









 





     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 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



-103-









 






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



     Section 10.10. Limitation of Guaranty of CSF. Notwithstanding anything to contrary
contained herein, CSF shall not be deemed a Guarantor with respect to any and all indebtedness that
it owes to the Administrative Agent and the Lenders as a Borrower hereunder (but shall continue to
be a Guarantor with respect to all other indebtedness).



Remainder of Page Intentionally Left Blank.

Signature Pages Follow.




-104-









 








     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:

Name:
	 	/s/ Jeffrey A. Lipson
 

Jeffrey A. Lipson
	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	CAPITALSOURCE FINANCE
LLC	 	 
	 	 	a Delaware limited
liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Jeffrey A. Lipson
 

Jeffrey A. Lipson
	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	GUARANTORS:	 	CAPITALSOURCE TRS INC.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Jeffrey A. Lipson
 

Jeffrey A. Lipson
	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	CAPITALSOURCE FINANCE LLC,	 	 
	 	 	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Jeffrey A. Lipson
 

Jeffrey A. Lipson
	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	CSE MORTGAGE LLC,	 	 
	 	 	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Jeffrey A. Lipson
 

Jeffrey A. Lipson
	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	CAPITALSOURCE
INTERNATIONAL INC.	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Jeffrey A. Lipson
 

Jeffrey A. Lipson
	 	 
	 

	 	Title:
	 	Vice President and Treasurer	 	 






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:

Name:
	 	/s/ Raj Shah
 

Raj Shah
	 	 
	 

	 	Title:
	 	Managing Director	 	 






Signatures Continued on Following Page




CapitalSource-Credit Agreement




 









 








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

	 	By:

Name:
	 	/s/ Stefanie Brown
 

Stefanie Brown
	 	 
	 

	 	Title:
	 	Vice President	 	 






Signatures Continued on Following Page




CapitalSource-Credit Agreement




 









 








	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	MORGAN STANLEY BANK, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Daniel Twenge
 

Daniel Twenge
	 	 
	 

	 	Title:
	 	Authorized Signatory	 	 






Signatures Continued on Following Page




CapitalSource-Credit Agreement





 












 





DRESDNER BANK AG, NEW YORK AND

GRAND CAYMAN BRANCHES, as a Lender




By:      
     
     
     
     
     

Name: Mark van der Griend

Title: Managing Director




By:      
     
     
     
     
          
   


Name: Brian Smith

Title: Managing Director




Signatures Continued on Following Page




CapitalSource-Credit Agreement




 









 








SUNTRUST BANK, as a Lender




By: /s/ Timothy M. O’Leary     
     
     
     
     
     

Name: Timothy M. O’Leary

Title: Managing Director




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/ Markus Frenzen     
     
     
     
     
     

Name: Markus Frenzen

Title: Assistant Vice President




Signatures Continued on Following Page


CapitalSource-Credit Agreement





 









 








BMO CAPITAL MARKETS FINANCING, 

INC., as a Lender




By:
/s/ Amy K. Dumser     
     
     
     
     
     

Name: Amy K. Dumser

Title: Director




Signatures Continued on Following Page


CapitalSource-Credit Agreement





 









 








BARCLAYS BANK PLC, as a Lender




By:
/s/ Mark Manski     
     
     
     
     
     

Name: Mark Manski

Title: Director




Signatures Continued on Following Page


CapitalSource-Credit Agreement





 









 








BEAR STEARNS CORPORATE LENDING INC.,

as a Lender




By:
/s/ Richard J. Poworoznek     
     
     
     
     
     

Name: Richard J. Poworoznek

Title: Executive Director




Signatures Continued on Following Page


CapitalSource-Credit Agreement





 









 








BAYERISCHE HYPO-UND VEREINSBANK 

AG, as a Lender




By:
/s/ Thomas Lee     
     
     
     
     
     

Name: Thomas Lee

Title: Vice President




By: /s/ Craig M. Pinsly     
             
     
     
     
     

Name: Craig M. Pinsly, CFA

Title: Director




CapitalSource-Credit Agreement




 









 





DEUTSCHE BANK AG NEW YORK

BRANCH, as a Lender




By: /s/ Melissa Curry     
     
           
     
     
     

Name: Melissa Curry

Title: Vice President




By:
/s/ Val Shapiro     
     
     
     
     
     

Name: Val Shapiro

Title: Vice President




Signatures Continued on Following Page


CapitalSource-Credit Agreement





 









 








JPMORGAN CHASE BANK, N.A., 

as a Lender




By: /s/ Richard J. Poworoznek     
     
     
     
     
     


Name: Richard J. Poworoznek

Title: Executive Director


Signatures Continued on Following Page




CapitalSource-Credit Agreement




 









 








SOCIÉTÉ GÉNÉRALE, as a Lender




By: /s/ Shelley Yu     
     
     
     
     
     

Name: Shelley Yu

Title: Vice President




Signatures Continued on Following Page



CapitalSource-Credit Agreement





 











 





	 	 	 	 	 	 	 
	 	 	FORTIS CAPITAL GROUP, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Diran Cholakian
 

Diran Cholakian
	 	 
	 

	 	Title:
	 	Director	 	 






	 	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Jack Au
 

Jack Au
	 	 
	 

	 	Title:
	 	Director	 	 






Signatures Continued on Following Page



CapitalSource-Credit Agreement



 









 








	 	 	 	 	 	 	 
	 	 	FIRST COMMERCIAL BANK NEW YORK AGENCY,

as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ May Hsaio
 

May Hsaio
	 	 
	 

	 	Title:
	 	Assistant General Manager	 	 






Signatures Continued on Following Page


CapitalSource-Credit Agreement



 









 








	 	 	 	 	 	 	 
	 	 	STATE BANK OF INDIA, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Prabodh Parikh
 

Prabodh Parikh
	 	 
	 

	 	Title:
	 	Vice President and Head (Credit)	 	 






Signatures Continued on Following Page



 CapitalSource-Credit Agreement


 









 








	 	 	 	 	 	 	 
	 	 	BANK OF COMMUNICATIONS CO., LTD., 

NEW YORK BRANCH, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Shelley He
 

Shelley He
	 	 
	 

	 	Title:
	 	Deputy General Manager	 	 






Signatures Continued on Following Page



CapitalSource-Credit Agreement



 









 








	 	 	 	 	 	 	 
	 	 	MEGA INTERNATIONAL COMMERCIAL BANK CO., LTD.,
LOS ANGELES BRANCH, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 

	 	 
	 

	 	Name:
	 	Chia Jang Liu	 	 
	 

	 	Title:
	 	SVP & General Manager	 	 






Signatures Continued on Following Page


CapitalSource-Credit Agreement



 









 








	 	 	 	 	 	 	 
	 	 	TAIWAN BUSINESS BANK, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	 
 

Ben Chou
	 	 
	 

	 	Title:
	 	VP & General Manager	 	 






Signatures Continued on Following Page


CapitalSource-Credit Agreement



 









 








	 	 	 	 	 	 	 
	 	 	CHANG HWA COMMERCIAL BANK, LTD., 

NEW YORK BRANCH, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Jim C.Y. Chen
 

Jim C.Y. Chen
	 	 
	 

	 	Title:
	 	V.P. & General Manager	 	 






Signatures Continued on Following Page



CapitalSource-Credit Agreement



 









 








	 	 	 	 	 	 	 
	 	 	THE BANK OF EAST ASIA, LTD.,
NEW YORK BRANCH, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	 
 

Stanley H. Kung
	 	 
	 

	 	Title:
	 	Senior Vice President,
Head of Business Development	 	 






	 	 	 	 	 	 	 
	 

	 	By:

Name:
	 	 
 

Peng-Wah Tang
	 	 
	 

	 	Title:
	 	General Manager	 	 






Signatures Continued on Following Page



 CapitalSource-Credit Agreement


 









 








	 	 	 	 	 	 	 
	 	 	CITIBANK, N.A., as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Catherine Mollow
 

Catherine Mollow
	 	 
	 

	 	Title:
	 	Vice President	 	 





CapitalSource-Credit Agreement