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Exhibit 10.23.1
 
 
  CapitalSource Inc.  th
   Letter Agreement JPMorgan Counterparty Original Confirmation
 Transaction
 Equity Definitions Offering Memorandum Convertible Notes Convertible Note Indenture )
  JPMorgan Chase Bank, National Association
Organised under the laws of the United States as a National Banking Association.
Main Office 1111 Polaris Parkway, Columbus, Ohio 43271
Registered as a branch in England & Wales branch No. BR000746. Registered
Branch Office 125 London Wall, London EC2Y 5AJ
Authorised and regulated by the Financial Services Authority




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Agreement
  General Terms:Trade Date:
    
    March 16, 2004Option Style:
    
    Modified American, as set forth under Exercise and Valuation below.Option Type:
    
    CallBuyer:
    
    CounterpartySeller:
    
    JPMorganShares:
    
    The common stock of Counterparty, par value USD 0.01 per Share  (Exchange symbol CSE).Number of Options:
    
    As of any date, a number equal to the  Conversion  Rate (as defined in the Offering  Memorandum,
as adjusted but without  regard to any  provision in the  Indenture  allowing the
Counterparty  to unilaterally  increase the Conversion  Rate,  without the occurrence of a Potential  Adjustment  Event),  multiplied by
47,620 (which is the number of Convertible Notes in  denominations  of USD 1,000 issued by the  Counterparty  and  outstanding,  if any after the Exchange Offer Closing Date (as defined in the Letter  Agreement)).
 For the avoidance  of doubt,  the Number of Options  shall be reduced by (i) any Options  exercised by the  Counterparty  upon an Early  Exercise  (as defined  below)
 and (ii) any Options exercised by the Counterparty in respect of an Exercise Period (as defined below) relating to the Convertible Notes.  In no event shall the Number of
Options be less than zero.Option Entitlement:
    
    One Share per OptionStrike Price:
    
    USD 30.3996 (which represents the Strike Price as of the Trade Date; the Strike Price has been subsequently adjusted since the Trade Date and is as of April 4, 2007 USD 24.6136)
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Premium:
    
    A portion of the USD 49,797,160.37 (which Premium was paid to JPMorgan on the Premium Payment Date pursuant to the terms of the Original Confirmation).Premium Payment Date:
    
    March 19, 2004Exchange:
    
    The New York Stock ExchangeRelated Exchange(s):
    
    The principal exchange(s) for options contracts or futures contracts, if any, with respect to the Shares.Exercise and Valuation:Exercise Period:
    
    Notwithstanding  the Equity  Definitions,  the Exercise Period shall be, in respect of the Exercise
Options (as defined below),  each period  commencing from the date a notice of conversion is submitted to the Counterparty by a holder of Convertible  Notes to and including the fifth Exchange  Business Day following the Conversion
Date for such Convertible Notes.Exercise Options:
    
    The  lesser of (i) the  Number of Options  and (ii) a number of  Options  equal to the  Conversion
Rate (but  without  regard to any  provision  in the  Indenture  allowing  the Counterparty  to  unilaterally  increase the Conversion  Rate,  without the occurrence of a Potential  Adjustment  Event) of Convertible  Notes  surrendered to
Counterparty  for conversion times the number of such Convertible Notes.Expiration Time:
    
    The Valuation TimeExpiration Date:
    
    In respect of any Exercise  Options,  the earlier of (i) March 15, 2009,  (ii) the final day of
the Exercise  Period in respect of such Exercise  Options,  and (iii) the day the Number of Options is zero.Multiple Exercise:
    
    Applicable, as described herein.Automatic Exercise:
    
    Applicable;  and means that in respect of any  Exercise  Period a number of Options  not  previously
 exercised  hereunder  equal to the  Exercise  Options  shall be deemed to be exercised on the Expiration  Date for the Exercise  Period  relating to such Exercise  Options;  provided that  Counterparty  has notified  JPMorgan
(in writing or orally) of the Conversion Date and the number of such Exercise Options one Exchange Business Day prior to such Expiration Date.Valuation Time:
    
    At the close of trading of the regular trading session on the ExchangeEarly Exercise:
    
    The  Counterparty  may at any time, and from time to time, from the Trade Date to and including  February 14, 2009,  exercise all or any portion of the unexercised
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Options as set forth in its notice of exercise to JPMorgan.Settlement Terms:Physical Settlement:
    
    Applicable;  provided that if and to the extent  Counterparty is required to deliver cash in lieu
of fractional Shares (or any fractional Shares) with respect to the settlement of Convertible  Notes, the Calculation  Agent shall adjust the settlement terms hereunder to account for delivery by JPMorgan to Counterparty of such cash or fractional
 Shares in the amount of such required delivery obligation.Settlement Date:
    
    For any Exercise  Options  relating to the conversion of Convertible  Notes,
the settlement  date for Shares to be delivered under such  Convertible  Notes under the terms of the Indenture.  For any Early Exercise, the Settlement Date shall be third Exchange Business Day following the delivery of a notice of exercise to
JPMorgan.Failure to Deliver:
    
    Applicable3. Additional Terms applicable to the Transaction:Adjustments applicable to the Transaction:Potential Adjustment Events:
    
    Notwithstanding  Section 9.1(e) of the Equity  Definitions,  a Potential  Adjustment  Event
 means any occurrence of any event or condition,  as set forth in Section 14.06(a) to Section  14.06(g) of the Indenture that would result in an adjustment to the Conversion  Rate of the  Convertible  Notes;  provided that in no event shall there be

any adjustment hereunder as a result of an adjustment to the Conversion Rate pursuant to any provision in the Indenture  allowing the Counterparty to unilaterally  increase
the Conversion Rate, without the occurrence of a Potential Adjustment Event.Method of Adjustment:
    
    Calculation  Agent  Adjustment,  and means that,  notwithstanding  Section 9.1(c) of the Equity
Definitions,  upon any adjustment to the Conversion Rate of the Convertible  Notes pursuant to the Indenture (other than any provision in
the Indenture allowing the Counterparty to unilaterally increase the Conversion Rate, without the occurrence of a
Potential Adjustment Event), the Calculation Agent will make a corresponding  adjustment to any one or more of the Strike Price,
Number of Options, the Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction.Extraordinary Events applicable to the Transaction:
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Merger Events:
    
    Notwithstanding Section 9.2(a) of the Equity Definitions, a Merger Event means the occurrence of any event or condition set forth in Section 14.07 of the Indenture.Consequence of Merger Events:
    
    Notwithstanding  Section 9.3 of the Equity  Definitions,  upon the occurrence of a Merger Event,
the Calculation  Agent shall make a  corresponding  adjustment in respect of any adjustment under the Indenture to any one or more of the nature of the Shares,  Strike Price,  Number of Options,  the Option  Entitlement and any other variable
relevant
to the exercise, settlement or payment for the Transaction.Additional Termination Events:
    
    If an event of default with respect to Counterparty  shall occur under the terms of the Convertible
Notes as set forth in Section 6.01 of the Indenture,  then such event shall  constitute an Additional  Termination  Event applicable to this  Transaction  and, with respect to such event (i) Counterparty  shall be deemed to be Affected Party and
JPMorgan shall
 be deemed to be the party that is not the Affected Party and (ii) JPMorgan shall be the party entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement.4. Calculation Agent:
    
    JPMorgan,  whose calculations and determinations  shall be made in good faith and in a
commercially  reasonable manner,  including with respect to calculations and determinations  that are made in its sole discretion.
  (a)
    
    Account for payments to Counterparty:
 
   (b)
    
    Account for payments to JPMorgan:
 
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(a)
    
    Address for notices or communications to Counterparty:
 th
  th
  (a)
    
    The Counterparty hereby represents and warrants to JPMorgan that the
Counterparty has been duly incorporated and is an existing corporation in good
standing under the laws of the State of Delaware, with corporate power and authority
to own its properties and conduct its business as set forth or incorporated by
reference in or contemplated by the Counterpartys Form S-4 Registration Statement
(file number 333-140650) filed February 13, 2007, as the same may be amended (the
Form S-4), related to the Exchange Offer (as defined in the Letter Agreement); and
the Counterparty is duly authorized, qualified or registered, as the case may be, to
do business as a foreign corporation in all other jurisdictions in which its ownership
or lease of property or the conduct of its business requires such authorization,
qualification or registration, except where the failure to obtain such authorization,
qualification or registration would not, individually or in the aggregate, have a
material adverse effect on the business, financial condition, management or results of
operations of the Counterparty and its subsidiaries, taken as a whole (Material
Adverse Effect).(b)
    
    The Counterparty hereby represents and warrants to JPMorgan that the
Counterparty has all necessary corporate power and authority to execute, deliver and
perform its obligations in respect of this Transaction; such execution, delivery and
performance have been duly authorized by all necessary corporate action on the
Counterpartys part; and this Confirmation has been duly and validly executed and
delivered by the Counterparty
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and constitutes its valid and binding obligation, enforceable against the
Counterparty in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether enforcement is
sought in a proceeding at law or in equity) and except that rights to
indemnification and contribution thereunder may be limited by federal or state
securities laws or public policy relating thereto.(c)
    
    The Counterparty hereby represents and warrants to JPMorgan that neither the
execution and delivery of this Confirmation nor the incurrence or performance of
obligations of the Counterparty hereunder will conflict with or result in a breach of
the Delaware General Corporation Law, the Counterpartys Second Amended and Restated
Certificate of Incorporation, as amended from time to time (the Charter), or by-laws
(or any equivalent documents) of the Counterparty, or any applicable law or
regulation, or any order, writ, injunction or decree of any court or governmental
authority or agency, or any agreement or instrument to which the Counterparty or any
of its subsidiaries is a party or by which the Counterparty or any of its subsidiaries
is bound or to which the Counterparty or any of its subsidiaries is subject, or
constitute a default under, or result in the creation of any lien under, any such
agreement or instrument, or breach or constitute a default under any agreements and
contracts of the Counterparty and its subsidiaries filed as exhibits to the
Counterpartys annual, quarterly and current reports filed and other filings made
under the Securities Exchange Act of 1934, as amended (the Exchange Act), which are
incorporated by reference in the Form S-4 (such reports and filings, collectively, the
Incorporated Documents).(d)
    
    The Counterparty hereby represents and warrants to JPMorgan that no consent,
approval, authorization, or order of, or filing with, any governmental agency or body
or any court is required in connection with the execution, delivery or performance by
the Counterparty of this Confirmation, except such as have been obtained or made and
such as may be required under the Securities Act of 1933 or state securities laws.(e)
    
    The Counterparty hereby represents and warrants to JPMorgan that except as
set forth or incorporated by reference in the Form S-4, there are no pending actions,
suits or proceedings against or affecting the Counterparty, any of its subsidiaries or
any of their respective properties that, if determined adversely to the Counterparty
or any of its subsidiaries, would individually or in the aggregate have, or reasonably
be expected to have, a Material Adverse Effect, or would materially and adversely
affect the ability of the Counterparty to perform its obligations under this
Confirmation; and no such actions, suits or proceedings are, to the Counterpartys
knowledge, threatened or contemplated.(f)
    
    The Counterparty hereby represents and warrants to JPMorgan that the Form S-4
and the documents incorporated by reference therein do not contain an untrue statement
of a material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading.(g)
    
    The Counterparty hereby represents and warrants to JPMorgan that the
Counterparty is an eligible contract participant (as such term is defined in Section
1(a)(12) of the Commodity Exchange Act, as amended).(h)
    
    The Counterparty hereby represents and warrants to JPMorgan that the
Counterparty is not an investment company or a company controlled by an
investment company, in each case within the meaning of the Investment Company Act of
1940, as amended.(i)
    
    Counterparty has all necessary corporate power and authority to execute,
deliver and perform its obligations in respect of the letter agreement (the Waiver)
dated as of
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February 13, 2007 delivered by Counterparty to JPMorgan and entitled Waiver of
Ownership Limit; such execution, delivery and performance have been duly
authorized by all necessary corporate action on Counterpartys part; and the Waiver
has been duly and validly executed and delivered by Counterparty and constitutes
its valid and binding obligation, enforceable against Counterparty in accordance
with its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors rights
and remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or in
equity).(j)
    
    Assuming the accuracy of the representations made by JPMorgan in the certain
letter to the Counterparty dated February 13, 2007, neither the execution and delivery
of the Waiver nor the incurrence or performance of obligations of Counterparty
thereunder will conflict with or result in a breach of the Charter or by-laws (or any
equivalent documents) of Counterparty, or any applicable law or regulation, or any
order, writ, injunction or decree of any court or governmental authority or agency, or
any agreement or instrument to which Counterparty or any of its subsidiaries is a
party or by which Counterparty or any of its subsidiaries is bound or to which
Counterparty or any of its subsidiaries is subject, or constitute a default under, or
result in the creation of any lien under, any such agreement or instrument, or breach
or constitute a default under any agreements and contracts of Counterparty or any of
its subsidiaries filed as exhibits to the Incorporated Documents.
  (a)
    
    No Reliance, etc. Each party represents that (i) it is entering
into the Transaction evidenced hereby as principal (and not as agent or in any other
capacity); (ii) neither the other party nor any of its agents is acting as a fiduciary
for it; (iii) it is not relying upon any representations except those expressly set
forth in the Agreement or this Confirmation; (iv) it has not relied on the other party
for any legal, regulatory, tax, business, investment, financial, and accounting
advice, and it has made its own investment, hedging, and trading decisions based upon
its own judgment and not upon any view expressed by the other party or any of its
agents; and (v) it is entering into this Transaction with a full understanding of the
terms, conditions and risks thereof and it is capable of and willing to assume those
risks.(b)
    
    Share De-listing Event. If at any time during the period from and
including the Trade Date, to and including March 15, 2009, the Shares cease to be
listed or quoted on the Exchange for any reason (other than a Merger Event as a result
of which the shares of common stock underlying the Options are listed or quoted on The
New York Stock Exchange, The American Stock Exchange, The NASDAQ Global Market or The
NASDAQ Global Select Market (or their respective successors) (the Successor
Exchange)) and are not immediately re-listed or quoted as of the date of such
de-listing on the Successor Exchange, then Cancellation and Payment (as defined in
Section 9.6 of the Equity Definitions treating the Announcement Date as the date of
first public announcement that the Share De-Listing will occur and the Merger Date
as the date of the Share De-Listing) shall apply, and the date of the de-listing shall
be deemed the date of termination for purposes of calculating any payment due from one
party to the other in connection with the cancellation of this Transaction. If the
Shares are immediately re-listed on a Successor Exchange upon their de-listing from
the Exchange, this Transaction shall continue in full force and effect, provided that
the Successor Exchange shall be deemed to be the Exchange for all purposes hereunder.
In addition, the Calculation Agent shall make any adjustments it deems necessary to
the terms of the Transaction in
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accordance with Calculation Agent Adjustment method as defined under Section 9.1(c)
of the Equity Definitions.(c)
    
    Repurchase Notices. Counterparty shall give JPMorgan written notice
of any repurchase of Shares (a Repurchase Notice) at least ten Exchange Business
Days prior to effecting such repurchase if, after giving effect to such repurchase,
the fraction (x) the numerator of which is the sum of (A) the product of (a) the
Number of Options multiplied by(b) the Option Entitlement; plus(B) the product of
(a) the Number of Options for the Call Option Transaction between Counterparty and
JPMorgan relating to the Counterpartys Senior Subordinated Convertible Debentures due
2034 issued in accordance with the exchange offer pursuant to the Form S-4 (the Other
Call Option Transaction) multiplied by(b) the Option Entitlement for the Other Call
Option Transaction; plus(C) the product of (a) the Number of Warrants for the Warrant
Transaction Reference Number 2480428 between Counterparty and JPMorgan (the Warrant
Transaction) multiplied by(b) the Warrant Entitlement for the Warrant Transaction
and (y) the denominator of which is the number of Counterpartys Shares outstanding on
such day (such fraction expressed as a percentage, the Option Equity Percentage)
would be greater than 10.14%. Such Repurchase Notice shall set forth the number of
Shares to be outstanding after giving effect to the relevant Share repurchase. In
connection with any delivery of any Repurchase Notice to JPMorgan, Counterparty shall
(x) concurrently with or prior to such delivery, publicly announce and disclose the
relevant repurchase or (y) represent and warrant in such Repurchase Notice that the
information set forth in such Repurchase Notice does not constitute material
non-public information with respect to Counterparty or the Shares.(d)
    
    Conversion Rate Adjustments. Counterparty shall provide to JPMorgan
written notice (such notice, a Conversion Rate Adjustment Notice) at least ten
Exchange Business Days prior to consummating or otherwise executing or engaging in any
transaction or event, other than a publicly announced cash dividend payment (a
Conversion Rate Adjustment Event), that would lead to an increase in the Conversion
Rate (as such term is defined in the Indenture), other than an increase pursuant to
Section 14.06(a) of the Indenture, which Conversion Rate Adjustment Notice shall set
forth the new, adjusted Conversion Rate after giving effect to such Conversion Rate
Adjustment Event (the New Conversion Rate); providedthat no such Conversion Rate
Adjustment Notice needs to be provided unless, after giving effect to such Conversion
Rate Adjustment Event, the Option Equity Percentage would be greater than 10.14%. In
connection with the delivery of any Conversion Rate Adjustment Notice to JPMorgan,
Counterparty shall (x) concurrently with or prior to such delivery, publicly announce
and disclose the Conversion Rate Adjustment Event or (y) concurrently with such
delivery, represent and warrant that the information set forth in such Conversion Rate
Adjustment Notice does not constitute material non-public information with respect to
Counterparty or the Shares.(e)
    
    Regulation M. The Counterparty was not on the Trade Date engaged in
a distribution, as such term is used in Regulation M under the Exchange Act, of any
securities of Counterparty, other than a distribution meeting the requirements of the
exception set forth in sections 101(b)(10) and 102(b)(7) of Regulation M. The
Counterparty shall not, until the fifth Exchange Business Day immediately following
the Trade Date, engage in any such distribution.(f)
    
    No Manipulation. The Counterparty is not entering into this
Transaction for the purpose of (i) creating actual or apparent trading activity in the
Shares (or any security convertible into or exchangeable for the Shares) or (ii)
raising or depressing or otherwise manipulating the price of the Shares (or any
security convertible into or exchangeable for the Shares), in either case in violation
of Section 9 of the Exchange Act.
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(g)
    
    Board Authorization. Each of this Transaction and the issuance of
the Convertible Notes was approved by its board of directors and publicly announced,
solely for the purposes stated in such board resolution and public disclosure and,
prior to any exercise of Options hereunder, Counterpartys board of directors will
have duly authorized any repurchase of Shares pursuant to this Transaction.
Counterparty further represents that there is no internal policy, whether written or
oral, of Counterparty that would prohibit Counterparty from entering into any aspect
of this Transaction, including, but not limited to, the purchases of Shares to be made
pursuant hereto.(h)
    
    Transfer or Assignment. Neither party may transfer any of its rights
or obligations under this Transaction without the prior written consent of the
non-transferring party; providedthat if, as determined at JPMorgans sole discretion,
(i) its beneficial ownership (within the meaning of Section 13 of the Exchange Act
and rules promulgated thereunder) exceeds 8.0% of Counterpartys outstanding Shares,
(ii) the Option Equity Percentage exceeds 10.14% or (iii) J.P. Morgan Chase & Cos
(Bank) Beneficial Ownership (as such term is defined in the Charter) of Shares (as
such term is defined in the Charter) exceeds 18% JPMorgan may transfer or assign a
number of Options sufficient to reduce (i) such beneficial ownership to 8.0% or
less, (ii) the Option Equity Percentage to 10.14% or less or (iii) the Banks
Beneficial Ownership (as such term is defined in the Charter) of Shares (as such term
is defined in the Charter) to 18% or less to any third party with a rating for its
long term, unsecured and unsubordinated indebtedness of A+ or better by Standard and
Poors Rating Group, Inc. or its successor (S&P), or A1 or better by Moodys
Investor Service, Inc. (Moodys) or, if either S&P or Moodys ceases to rate such
debt, at least an equivalent rating or better by a substitute agency rating mutually
agreed by Counterparty and JPMorgan. If after JPMorgans commercially reasonable
efforts, JPMorgan is unable to effect such a transfer or assignment on pricing terms
reasonably acceptable to JPMorgan and within a time period reasonably acceptable to
JPMorgan of a sufficient number of Options to reduce (i) JPMorgans beneficial
ownership (within the meaning of Section 13 of the Exchange Act and rules promulgated
thereunder) to 8.0% of Counterpartys outstanding Shares or less, (ii) the Option
Equity Percentage to 10.14% or less or (iii) Banks Beneficial Ownership (as such term
is defined in the Charter) of Shares (as such term is defined in the Charter) to 18%
or less, JPMorgan may designate any Exchange Business Day as an Early Termination Date
with respect to a portion (the Terminated Portion) of this Transaction, such that
(i) its beneficial ownership following such partial termination will be equal to or
less than 8.0%, (ii) the Option Equity Percentage following such partial termination
will be equal to or less than 10.14% or (iii) Banks Beneficial Ownership (as such
term is defined in the Charter) of Shares (as such term is defined in the Charter)
following such partial termination will be equal to or less than 18%. Solely for
purposes of this subsection, following receipt of any Repurchase Notice or Conversion
Rate Adjustment Notice, (i) JPMorgans beneficial ownership (within the meaning of
Section 13 of the Exchange Act and rules promulgated thereunder) with respect to
Shares, (ii) the Options Equity Percentage and (iii) Banks Beneficial Ownership (as
such term is defined in the Charter) with respect to the Shares (as such term is
defined in the Charter), as the case may be, shall incorporate the deemed effect of
the relevant Share repurchase (in the case of a Repurchase Notice) or New Conversion
Rate (in the case of a Conversion Rate Adjustment Notice). In the event that JPMorgan
so designates an Early Termination Date with respect to a portion of this Transaction,
a payment shall be made pursuant to Section 6 of the Agreement as if (i) an Early
Termination Date had been designated in respect of a Transaction having terms
identical to this Transaction and a Number of Options equal to the Terminated Portion,
(ii) Counterparty shall be the sole Affected Party with respect to such partial
termination and (iii) such Transaction shall be the only Terminated Transaction (and,
for the avoidance of doubt, the provisions of Section 9(n) shall apply to any amount
that is payable by JPMorgan to Counterparty pursuant to this sentence as if
Counterparty was not the Affected Party).
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Notwithstanding any other provision in this Confirmation to the contrary requiring
or allowing JPMorgan to purchase, sell, receive or deliver any shares or other
securities to or from Counterparty, JPMorgan may designate any of its affiliates to
purchase, sell, receive or deliver such shares or other securities and otherwise to
perform JPMorgans obligations in respect of this Transaction and any such designee
may assume such obligations. JPMorgan shall be discharged of its obligations to
Counterparty to the extent of any such performance.(i)
    
    Amendment. Paragraph (i) of Section 9.7(b) of the Equity Definitions
is hereby amended for purposes of this Transaction by replacing two-year with 90
calendar day.(j)
    
    Damages. Neither party shall be liable under Section 6.10 of the
Equity Definitions for special, indirect or consequential damages, even if informed of
the possibility thereof.(k)
    
    Role of Agent. Each party agrees and acknowledges that (i) J.P.
Morgan Securities Inc., an affiliate of JPMorgan (JPMSI), has acted solely as agent
and not as principal with respect to this Transaction and (ii) JPMSI has no obligation
or liability, by way of guaranty, endorsement or otherwise, in any manner in respect
of this Transaction (including, if applicable, in respect of the settlement thereof).
Each party agrees it will look solely to the other party (or any guarantor in respect
thereof) for performance of such other partys obligations under this Transaction.(l)
    
    Additional Provisions.(i) Section 9.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting
from the third line thereof the word or after the word official and inserting a
comma therefor, and (2) deleting the period at the end of subsection (ii) thereof
and inserting the following words therefor  or (C) at JPMorgans option, the
occurrence of any of the events specified in Section 5(a)(vii) (1) through (9) of
the ISDA Master Agreement with respect to that Issuer.(ii) Notwithstanding Section 9.7 of the Equity Definitions, everything in the first
paragraph of Section 9.7(b) of the Equity Definitions after the words Calculation
Agent in the third line through the remainder of such Section 9.7 shall be deleted
and replaced with the following:and based on an amount representing the Calculation Agents commercially
reasonable, good faith determination of the fair value to Buyer of an option with
terms that would preserve for Buyer the economic equivalent of any payment or
delivery (assuming satisfaction of each applicable condition precedent) by the
parties in respect of the relevant Transaction that would have been required after
that date but for the occurrence of the Nationalization or De-Listing Event, as the
case may be.(m)
    
    No Collateral or Setoff. Notwithstanding any provision of the
Agreement or any other agreement between the parties to the contrary, the obligations
of Counterparty hereunder are not secured by any collateral. Obligations under this
Transaction shall not be set off against any other obligations of the parties, whether
arising under the Agreement, this Confirmation, under any other agreement between the
parties hereto, by operation of law or otherwise, and no other obligations of the
parties shall be set off against obligations under this Transaction, whether arising
under the Agreement, this Confirmation, under any other agreement between the parties
hereto, by operation of law or otherwise, and each party hereby waives any such right
of setoff. In calculating any amounts under Section 6(e) of the Agreement,
notwithstanding anything to the contrary in the Agreement, (1) separate amounts shall
be calculated as set forth in such Section 6(e) with respect to (i) this Transaction
and (ii) all other Transactions, and (2) such separate amounts shall be payable
pursuant to Section 6(d)(ii) of the Agreement.
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(n)
    
    Alternative Calculations and Payment on Early Termination and on Certain
Extraordinary Events. If in respect of this Transaction, an amount is payable by
JPMorgan to Counterparty (i) pursuant to Section 9.7 of the Equity Definitions or (ii)
pursuant to Section 6(d)(ii) of the Agreement (a Payment Obligation), JPMorgan may,
in its sole discretion, satisfy any such Payment Obligation by the Share Termination
Alternative (as defined below) by giving irrevocable telephonic notice to
Counterparty, confirmed in writing within one Currency Business Day, between the hours
of 9:00 a.m. and 4:00 p.m. New York local time on the Merger Date or Early Termination
Date, as applicable (Notice of Share Termination). Upon Notice of Share Termination
no later than 8:00 a.m. on the Exchange Business Day immediately following the Merger
Date or Early Termination Date, as applicable, the following provisions shall apply:
 Share Termination Alternative:
    
    Applicable and means that JPMorgan
shall deliver to Counterparty the Share Termination Delivery Property on the
date when the Payment Obligation would otherwise be due pursuant to Section
9.7 of the Equity Definitions or Section 6(d)(ii) of the Agreement, as
applicable (the Share Termination Payment Date), in satisfaction of the
Payment Obligation in the manner reasonably requested by Counterparty free of
payment.Share Termination Delivery Property:
    
    A number of Share Termination
Delivery Units, as calculated by the Calculation Agent, equal to the Payment
Obligation divided by the Share Termination Unit Price. The Calculation Agent
shall adjust the Share Termination Delivery Property by replacing any
fractional portion of a security therein with an amount of cash equal to the
value of such fractional security based on the values used to calculate the
Share Termination Unit Price.Share Termination Unit Price:
    
    The value to JPMorgan of property
contained in one Share Termination Delivery Unit on the date such Share
Termination Delivery Units are to be delivered as Share Termination Delivery
Property, as determined by the Calculation Agent in its discretion by
commercially reasonable means and notified by the Calculation Agent to
JPMorgan at the time of notification of the Payment Obligation.Share Termination Delivery Unit:
    
    One Share or, if a Merger Event
has occurred and a corresponding adjustment to this Transaction has been made,
a unit consisting of the number or amount of each type of property received by
a holder of one Share (without consideration of any requirement to pay cash or
other consideration in lieu of fractional amounts
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of any securities) in such Merger Event,
as determined by the Calculation Agent.Other applicable provisions:
    
    If this Transaction is to be Share
Termination Settled, the provisions of Sections 6.6, 6.7, 6.8, 6.9 and 6.10
(as modified above) of the Equity Definitions will be applicable, except that
all references in such provisions to Physically-Settled shall be read as
references to Share Termination Settled and all references to Shares shall
be read as references to Share Termination Delivery Units. Share
Termination Settled in relation to this Transaction means that Share
Termination Settlement is applicable to this Transaction.
 (o)
    
    Indemnification. Counterparty agrees to indemnify and hold harmless
JPMorgan and its affiliates and their respective officers, directors, employees,
affiliates, advisors, agents and controlling persons (each, an Indemnified Person)
from and against any and all losses (including, without limitation, losses relating to
JPMorgans hedging or trading activities, losses relating to JPMorgans hedging
activities as a consequence of becoming, or of the risk of becoming, a Section 16
insider, any losses resulting from the operation of any ownership limitations
contained in the Charter and any losses in connection therewith with respect to this
Transaction), claims, damages, judgments, liabilities and expenses (including
reasonable attorneys fees), joint or several, which an Indemnified Person may become
subject to, as a result of (i) Counterpartys failure to publicly announce and
disclose the contents of any Repurchase Notice or Conversion Rate Adjustment Notice,
as the case may be, or (ii) Counterpartys failure to provide JPMorgan with a
Repurchase Notice on the day and in the manner specified in Section 9(c); and to
reimburse, within 30 days, upon written request, each of such Indemnified Persons for
any reasonable legal or other expenses incurred in connection with investigating,
preparing for, providing testimony or other evidence in connection with or defending
any of the foregoing. If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against the
Indemnified Person as a result of Counterpartys failure to publicly announce and
disclose the contents of any Repurchase Notice or Conversion Rate Adjustment Notice,
as the case may be, such Indemnified Person shall promptly notify Counterparty in
writing, and Counterparty, upon request of the Indemnified Person, shall retain
counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified
Person and any others Counterparty may designate in such proceeding and shall pay the
fees and expenses of such counsel related to such proceeding. Counterparty shall not
be liable for any settlement of any proceeding contemplated by this subsection that is
effected without its written consent, but if settled with such consent or if there be
a final judgment for the plaintiff, Counterparty agrees to indemnify any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Counterparty shall not, without the prior written consent of the
Indemnified Person, effect any settlement of any pending or threatened proceeding
contemplated by this subsection that is in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of such
Indemnified Person from all liability on claims that are the subject matter of such
proceeding on terms reasonably satisfactory to such Indemnified Person. If the
indemnification provided for in this subsection is unavailable to an Indemnified
Person or insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then Counterparty hereunder, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by such
Indemnified Person as a result of
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such losses, claims, damages or liabilities. The remedies provided for in this
subsection are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any Indemnified Party at law or in equity. The indemnity
and contribution agreements contained in this subsection shall remain operative and
in full force and effect regardless of the termination of this Transaction.(p)
    
    Tax Disclosure. Effective from the date of commencement of
discussions concerning the Transaction, Counterparty and each of its employees,
representatives, or other agents may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure of the Transaction and all
materials of any kind (including opinions or other tax analyses) that are provided to
Counterparty relating to such tax treatment and tax structure.(q)
    
    Right to Extend. JPMorgan may delay any Settlement Date or any other
date of delivery by JPMorgan, with respect to some or all of the Options hereunder, if
JPMorgan reasonably determines, in its discretion, that such extension is reasonably
necessary to enable JPMorgan to effect purchases of Shares in connection with its
hedging activity or settlement activity hereunder in a manner that would, if JPMorgan
were Counterparty or an affiliated purchaser of Counterparty, be in compliance with
applicable legal and regulatory requirements.(r)
    
    Securities Contract; Swap Agreement. The parties hereto intend for:
(a) the Transaction to be a securities contract and a swap agreement as defined in
the Bankruptcy Code (Title 11 of the United States Code) (the Bankruptcy Code), and
the parties hereto to be entitled to the protections afforded by, among other
Sections, Sections 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the
Bankruptcy Code; (b) a partys right to liquidate the Transaction and to exercise any
other remedies upon the occurrence of any Event of Default under the Agreement with
respect to the other party to constitute a contractual right as described in the
Bankruptcy Code; and (c) each payment and delivery of cash, securities or other
property hereunder to constitute a margin payment or settlement payment and a
transfer as defined in the Bankruptcy Code.(s)
    
    Waiver of Jury Trial. Each party waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by jury in respect of
any suit, action or proceeding relating to this Transaction. Each party (i) certifies
that no representative, agent or attorney of the other party has represented,
expressly or otherwise, that such other party would not, in the event of such a suit,
action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that
it and the other party have been induced to enter into this Transaction, as
applicable, by, among other things, the mutual waivers and certifications provided
herein.
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(212) 622 8519
  J.P. Morgan Securities Inc., as agent forJPMorgan Chase Bank, National AssociationBy:
    
    /s/ JEFF ZAJKOWSKIAuthorized SignatoryName: Jeff Zajkowski
 Accepted and confirmedas of the Trade Date:CapitalSource Inc.By:
    
    /s/ JEFFREY LIPSONAuthorized SignatoryName: Jeffrey Lipson
            Vice
President & Treasurer
 JPMorgan Chase Bank, National Association
Organised under the laws of the United States as a National Banking Association.
Main Office 1111 Polaris Parkway, Columbus, Ohio 43271
Registered as a branch in England & Wales branch No. BR000746. Registered
Branch Office 125 London Wall, London EC2Y 5AJ
Authorised and regulated by the Financial Services Authority