Exhibit 10.4
 
 
 SECOND AMENDED AND RESTATED
SALE AND SERVICING AGREEMENT
 by and among
 CS FUNDING VII DEPOSITOR LLC,  as the Seller
 CAPITALSOURCE FINANCE LLC,  as the Originator and as the Servicer
 EACH OF THE ISSUERS
FROM TIME TO TIME PARTY HERETO,
 EACH OF THE LIQUIDITY BANKS
FROM TIME TO TIME PARTY HERETO
 CITICORP NORTH AMERICA, INC.,  as the Administrative Agent
  WELLS FARGO BANK, NATIONAL ASSOCIATION,  as the Backup Servicer and as the Collateral Custodian
  Amended and Restated
  Amended and Restated
   COMMERCIAL LOAN-BACKED VARIABLE FUNDING CERTIFICATES




---



##### 



SECOND AMENDED AND RESTATED SALE AND SERVICING AGREEMENT
 SECOND AMENDED AND RESTATED SALE AND SERVICING AGREEMENT Agreement
 CS FUNDING VII DEPOSITOR LLC Seller
 CAPITALSOURCE FINANCE LLC CSF Originator Servicer
 EACH OF THE ISSUERS FROM TIME TO TIME PARTY HERETO Issuer
 EACH OF THE LIQUIDITY BANKS FROM TIME TO TIME PARTY HERETO Liquidity Bank
 CITICORP NORTH AMERICA, INC., CNAI ARTICLE XII Administrative
Agent
 WELLS FARGO BANK, NATIONAL ASSOCIATION Wells Fargo Backup
Servicer Collateral Custodian
 R E C I T A L S
 WHEREAS
 WHEREAS
 WHEREAS
 WHEREAS AMEND AND RESTATE
 1




---



##### 



NOW, THEREFORE, AMEND
AND RESTATE
 ARTICLE I
 DEFINITION
 Section 1.1 Certain Defined Terms
 Section 1.1
 1940 Act
 2007-A/LLC
 2007-A Eligible Asset
 2007-A Facility
 2007-A Pledge Agreement Exhibit 09-C
 2007-A Aggregate Outstanding Asset Balance
 2007-A Special Reduction Amount
 2009 CS Secured Note Issuance
 2009 Restructuring Exhibit 09-A
 2009 Restructuring Documents Exhibit 09-B
 2




---



##### 



A&R Effective Date Section 3.5
 Account Control Agreement
 Accrual Period
 Acquired Loan provided
 Addition Date
 Additional Amount
 Additional Assets
 Additional Commitment Amount
 Additional Commitment Success Date
 Adjusted Eurodollar Rate per annum
 3




---



##### 



minus
 Administrative Agent Preamble
 Advance Section 2.1(b)
 Advance Rate
 (a)
    
    with respect to all Senior Secured Loans assigned Loan
Rating 1, Loan Rating 2, Loan Rating 3 or Loan Rating 4, 85%;(b)
    
    with respect to all Subordinated Loans assigned Loan Rating 1,
Loan Rating 2, Loan Rating 3 or Loan Rating 4, 65%;(c)
    
    with respect to all Senior Secured Loans assigned Loan
Rating 5, 50%;(d)
    
    with respect to all Subordinated Loans assigned Loan Rating 5,
25%;(e)
    
    with respect to all Loans assigned Loan Rating 6, 0%; and(f)
    
    with respect to any Rated Retained Security that is an Eligible
Loan, 75%.
 provided, however
  Advances Outstanding
 Affected Party
 Affiliate
 Agents Account
 Agented Loans
 4




---



##### 



pro rata
 Aggregate Existing Loan Balance
 Aggregate Outstanding Asset Balance
 Aggregate Unpaids Article XI Section 2.9 Section 2.10 Section 2.14 Section 2.15 Section 2.16
 Alarm Service Loan
 Allocation Adjustment Event
 Alternative Rate per annum provided
 Amortization Period
 Amortization Period Fee
 5




---



##### 



Applicable Law
 Appraisal
 Appraisal Institute
 Approved Dealers Schedule VIII provided however Schedule VIII Schedule VIII
 Approved Pricing Service Schedule VIII provided however
 Approved Valuation Agent
 Asset Checklist
 Asset Files
 Asset List Schedule IV
 6




---



##### 



Asset Valuation Date
  provided
 Assets
 Assignment and Acceptance
 Assignment of Leases and Rents
 Assignment of Mortgage Exhibit I
 Availability over provided
 Available Funds
 7




---



##### 



Average Pool Charged-Off Ratio
 Average Portfolio Charged-Off Ratio provided ,
that
 Average Portfolio Delinquency Ratio
 Backup Servicer Section 7.3 Section 7.5
 Backup Servicer and Collateral Custodian Fee Letter
 Backup Servicer Fee Rate per annum
 Backup Servicer Termination Notice Section 7.5
 Backup Servicing Fee
 Banded Floating Rate Loan
 Bankruptcy Code et seq
 8




---



##### 



Base Rate per annum plus
 Benefit Plan Section 3(3) Section 3(5)
 Borrowing Base minus
 Borrowing Base Certificate Exhibit A-3
 Borrowing Notice Exhibit A-1 A-2 Section 2.9(b)
 Breakage Costs
 Business Day
 AFCO
 Capital Contribution Agreement Exhibit 09-D
 Capital Stock
 CapitalSource Bank Entities
 CapitalSource Bank Transaction
 9




---



##### 



CD Rate
 Change-in-Control
      provided, however
  10




---



##### 



provided however
 Charged-Off Asset
 Charged-Off Investment Loan
 Charged-Off Portfolio Asset
 CHARTA
 Citibank
 Citibank Facilities 2007-A Facility
 Clearing Agency
 Closing Date
 Code
 11




---



##### 



Collateral
 Collateral Custodian Section 8.3 Section 8.5
 Collateral Custodian Fee
 Collateral Custodian Termination Notice Section 8.5
 Collection Account Section 6.4(f)
 Collection Date
 Collection Period
 Collections
 Combined Advances Outstanding
 Commercial Paper Notes
 Commitment plus minus plus
 12




---



##### 



Commitment Fee
 Confirmation and Undertaking Letter
 Consolidated Funded Indebtedness
 Consolidated Subsidiary
 Consolidated Tangible Net Worth
 Continuing Directors
 Contractual Obligation
 Core Transaction Terms Section 4.3(v)
 Corporate Trust Office
 CP Rate per annum per annum provided per annum
 13




---



##### 



Credit Agreement
 Credit Agreement Advances Outstanding
 Credit Agreement Mandatory Reduction Amount provided that:
    Credit Agreement Optional Reduction Amount provided
 Credit Agreement Reduction Amount
 Credit Agreement Reduction Amount Exempted Amount
 14




---



##### 



provided that
 Credit and Collection Policy Section 5.1(h) Section 5.4(f)
 CSF LIBOR Rate
 CSF Prime Rate provided
 CS VII Issuer Financing Indenture
 CS VII Issuer Financing SSA
 Cut-Off Date
 Dealer
 Deemed Collection Section 2.4(c)
 15




---



##### 



Delayed-Draw Term Loan
 Delinquent Asset
 Delinquent Portfolio Asset
 Derivatives
 Determination Date
 DIP Loan
 Dollars $
 Eligible Asset Exhibit L provided provided
 16




---



##### 



provided
 i.e.
  provided however
   17




---



##### 



18




---



##### 



Section 6.4(a)
          19




---



##### 



20




---



##### 



21




---



##### 



pro rata
           22




---



##### 



clauses (1) (2)
 (i)
    
    the Dealer is a Person with a place of business
in the United States or, with respect to two (2) of the Alarm Service
Loans, Canada;(ii)
    
    the Dealer has all necessary licenses, permits
and other authorizations to conduct security alarm sales, installation,
monitoring and maintenance services in the jurisdiction in which it
conducts business;(iii)
    
    the Loan Originator has disclosed on or prior
to the Closing Date (for such Loans constituting Existing Assets) or on
or prior to the related Addition Date (for such Loans constituting
Additional Assets) a calculation of the notional minimum amount of
recurring monthly revenue to be received from each security alarm
monitoring or security alarm monitoring and maintenance contract;(iv)
    
    the criteria set forth in clauses (a) through
(pp) in Section 3.04 of the CS VII Issuer Financing SSA are met with
respect to (x) the accounts receivable or accounts (as defined in the
UCC) payable pursuant to a security alarm monitoring or a security
alarm monitoring and maintenance contract, (y) each security alarm
monitoring or security alarm monitoring and maintenance contract and
(z) each Dealer; and(v)
    
    the scheduled payments under each security
alarm monitoring or security alarm monitoring and maintenance contract
as set forth in the related Alarm Service Loan are true and correct and
accurately represent the recurring monthly revenue to be received from
each security alarm monitoring or security alarm monitoring and
maintenance contract;
 clause (1)
  Eligible Assignee
 23




---



##### 



Eligible Obligor
          Eligible Repurchase Obligations clauses (c)(ii) (c)(iv)
 Environmental Laws et seq et seq et seq et seq et seq et seq et seq et seq
 24




---



##### 



Equity Shortfall minus minus
 ERISA
 ERISA Affiliate
 Eurocurrency Liabilities
 Eurodollar Disruption Event
 Eurodollar Reserve Percentage
 Excepted Person Section 13.13(a)
 Exchange Act
 Excluded Amounts
 25




---



##### 



Excluded Loan Schedule IX Schedule IX
 Existing Assets
 Existing Credit Agreement
 Existing Loan Balances
 Face Amount
 Facility Amount provided plus minus plus provided further
 FDIC
 Federal Funds Rate per annum
 Final Maturity Date
 Finance Charges
 Financial Sponsor
 Fitch
 26




---



##### 



Fixed Rate Asset
 Fixed Rate Asset Percentage
 Floating Rate Asset plus
 Funding Date Section 2.3
 GAAP
 Governmental Authority
 H.15
 Healthcare REIT Consolidated Subsidiary
 Hedge Amount
 Hedge Collateral Section 5.3(b)
 Hedge Breakage Costs
 Hedge Counterparty
 Hedge Guaranty
 Hedge Notional Amount Section 5.3(a)
 Hedge Percentage
 27




---



##### 



Hedge Transaction Section 5.3(a)
 Hedged Rate
 Hedging Agreement Section 5.3(a)
 Highest Required Investment Category
 Increased Costs Section 2.15
 Indebtedness clauses (a) (e)
 28




---



##### 



Indemnified Amounts Section 11.1
 Indemnified Parties Section 11.1
 Indenture
 Independent
 Independent Director Section 4.1(u)
 Industry
 Initial Advance
 Initial Credit Agreement Mandatory Reduction Amount
 Insolvency Event
 Insolvency Laws
 29




---



##### 



Insolvency Proceeding
 Instrument
 Insurance Policy
 Insurance Proceeds
 Intercreditor Agreement
 Interest
 IR x P x
    
    1

360
  IR
    
    =
    
    the Interest Rate applicable on such day; andP
    
    =
    
    the principal amount of such Advance on such day;
 provided
 Interest Collections
 Interests in Real Property
 Interest Rate
  30




---



##### 



provided
 Investment Loan
 Investors
 ISDA Definitions
 Issuer
 Issuer Purchase Limit plus minus plus
 LIBOR Rate per annum
 Lien
 Liquid Real Estate Assets
 Liquidation Expenses
 31




---



##### 



Liquidity Agreement
 Liquidity Bank
 Liquidity Factor Reduction Event
 Loan
 Loan Interest Rate
 Loan Margin
 Loan Rating
 Loan Rating 1
 Loan Rating 2
 Loan Rating 3
 Loan Rating 4
 Loan Rating 5
 Loan Rating 6
 Loan Register Section 5.4(n)
 32




---



##### 



Loan Threshold Amount Schedule V
 Loan-to-Liquidation Value LLV
 Loan-to-Value Ratio LTV plus pari passu
 Lock-Box Schedule II
 Lock-Box Account Schedule II
 Lock-Box Agreement
 Lock-Box Bank
 Margin Stock
 Market Value
 lesser of
  33




---



##### 



provided clause (2) clause (3)
 provided
 lesser of
 Material Adverse Effect
 Materials of Environmental Concern
 Maximum Advance Rate
 Maximum Availability
  plus minus plus
 34




---



##### 



plus
 Memorandum of Understanding Exhibit 09-F
 Minimum Equity Amount minus
 Minimum Overcollateralization Amount
 Minimum Pool Yield
 Monthly Report Section 6.10(b)
 Moodys
 Mortgage
 Mortgaged Property
 Multiemployer Plan
 NAICS Code
 Net Proceeds of Capital Stock/Conversion of Debt
 35




---



##### 



New Advances
 New Effective Date Section 3.3
 New Loan Balances
 New Loan Advance Rate provided that
 New Parent
 Noteless Loan
 Obligor for example
 Officers Certificate
 Omnibus Payoff and Restructuring Agreement
 Opinion of Counsel
 Optional Sale Section 2.19
 Optional Sale Date Section 2.19
 Optional Sale Proceeds
 Originator Preamble
 36




---



##### 



Other CapitalSource Facilities Section 6.15(k)
 Other Costs Section 13.9(c)
 Outstanding Asset Balance plus provided provided further
 Parent Undertaking  Originator
 Parent Undertaking  Servicer
 Participation Loan provided
 Payment Date
 Payment Duties Section 8.2(b)
 Permitted Hedge Counterparty
 37




---



##### 



Long-term Rating
Requirement Short-term
Rating Requirement Section 5.3(b)
 Permitted Investments
  provided
   clause (ii)
  38




---



##### 



Permitted Liens provided
 Permitted Securitization Transaction
 Person
 39




---



##### 



Placement Agent Section 2.22
 Pool Charged-Off Ratio
 Pool Concentration Criteria
 provided however
        40




---



##### 



provided, however
        Pool Rate
 Pool Yield over
 Pool Yield Applicable Advance Rate
 Portfolio Aggregate Outstanding Asset Balance
 41




---



##### 



Portfolio Asset provided
 Portfolio Delinquency Ratio
 Portfolio Outstanding Asset Balance plus
 Prepaid Asset
 Prepayment Amount Section 6.4(b)
 Prepayments Section 6.4(b)
 Prime Rate
 Prime Rate Asset
 Principal Collections
 Principal Collections Account Section 6.4(f)
 Pro Rata CS VII Reduction Amount multiplied by divided by
 42




---



##### 



Pro Rata Percentage divided by
 Pro Rata Reduction Amount
 Proceeds
 Program Fee
 Program Fee Rate
 Purchaser Purchasers
 Purchaser Affiliate
 Purchaser Fee Letter
 Qualified Institution Section 6.4(f)
 Qualified Transferee
      43




---



##### 



Qualified Utilization Section 2.21(b)
 Quarterly Determination Date
 Rated Retained Securities
 Rating Agency
 Records
 Recoveries
 Refinancing Section 2.22
 44




---



##### 



Register Section 13.16(c)
 Regulation U
 Related Property
 Related Security
         REO Asset
 REO Asset Owner
 REO Contribution Agreement
 REO Pledge Agreement Exhibit 09-I
 REO Servicing Standard
 Replaced Asset Section 2.18(a)
 45




---



##### 



Reporting Date
 Required Advance Reduction Amount minus Section 2.19 plus minus Section 2.8
 Required Asset Documents provided
 Required Reports Section 6.10(c) Section 6.10(d) Section 6.11 Section 6.12
 Reserve Funding Date Section 2.21
 Responsible Officer
 46




---



##### 



Restricted Junior Payment
 Retained Interest clause (A)
 Retransfer Date Section 4.6
 Retransfer Price Section 4.6
 Review Criteria Section 8.2(b)(i)
 Revolving Loan provided
 Revolving Period
 Revolving Period Fail Date
 S&P
 47




---



##### 



Sale Agreement
 Scheduled Payments
 Secured Party
 Securities Account Section 6.4(h)
 Securities Intermediary Section 8.11(a)
 Seller Preamble
 Senior Loan
 Senior B-Note Loan
 Senior Secured Loan
 Servicer Section 6.16(a)
 Servicer Advance Section 6.5
 Servicer Default Section 6.15
 Servicer Termination Notice Section 6.15
 Servicers Certificate Section 6.10(c)
 Servicing Fee provided
 48




---



##### 



Servicing Fee Rate per annum per annum
 Solvent
 Special Funding Account Section 2.21(a)
 Special Reduction Amount
 Special Reduction Amount Date
 Structuring and Agency Fee
 Structuring and Agency Fee Rate
 Subordinated Loan
 Subsidiary provided
 49




---



##### 



Substitute Asset Section 2.18
 Successor Servicer Section 6.16(a)
 Swap Breakage Costs
 TALF Program Section 2.22
 Tape Section 7.2(b)(ii)
 Taxes
 Termination Date Section 2.4 Section 3.4 Section 10.2
 Termination Extension Date
 Termination Event Section 10.1
 Term Loan
 Term Loan Reduction Amounts Section 2.9(a)(6) Section 2.10(a)(6)
 TNW Test Level plus
 Transaction Section 3.2
 Transaction Documents
 50




---



##### 



Transition Expenses
 UCC
 Underlying Instruments
 United States
 Unmatured Termination Event
 Unrestricted Subsidiary
 Variable Funding Certificate or VFC Section 2.1(a)
 Voting Stock
 Wachovia Amendment Date
 Wachovia Facilities
 51




---



##### 



Warranty Asset provided clauses (1)(c) (1)(d) 1(l)(i) 1(s) clause 1(s) 1(w) 1(x) (1)(y) clauses (2)(e) 2(f) clauses 2(e) 2(f) clause (3)(i) clauses (viii) (x) clause 2(ee)
 Warranty Event
 Weighted Average Advance Rate provided that
 Weighted Average Advance Reduction Amount divided
by plus
 Workout Asset
 Zero-Coupon Bond
 Section 1.2 Other Terms
  52




---



##### 



Section 1.3 Computation of Time Periods
  Section 1.4 Interpretation
         ARTICLE II
 PURCHASE OF THE VARIABLE FUNDING CERTIFICATES
 Section 2.1 The Variable Funding Certificates
 Variable Funding Certificate VFC Exhibit B
 53




---



##### 



provided
 Advance provided Section 2.1 Section
2.9(a)(1) Section 2.10(a)(1)
    Section 2.2 [Intentionally Omitted]
 Section 2.3 Procedures for Advances
 provided
 54




---



##### 



Article III
  Article III Section 2.3
 Section 2.3
  Section 2.4 Reduction of the Facility Amount; Mandatory and Optional Repayments;
Increase of Commitment
 provided Section
2.4(a)
  55




---



##### 



provided first pro rata second third provided however Section 2.10 Section 2.4(b)
 Deemed Collection pro rata plus Section 2.4(c)
 Section 2.5 Determination of Interest
  Section 2.6 Percentage Evidenced by each Variable Funding Certificate
 Section 2.1(a) Section 2.1(a)
 56




---



##### 



Section 2.7 Notations on Variable Funding Certificates
  Section 2.8 Settlement Procedures for Special Reduction Amounts and Optional
Sales
 first second third fourth Section
2.9 Section 2.10
 Section 2.9 Settlement Procedures During the Revolving Period
  pro rata
   pro rata
 57




---



##### 



pro
rata
 pro
rata
 pro rata
 pro rata clause
(8)
  clause
(6) subsection (a)
 Section 3.2(b)
  Exhibit A-2
   58




---



##### 



Section 2.10 Settlement Procedures During the Amortization Period
  pro rata
   pro rata
 pro
rata
 pro
rata
 pro rata clause (1)
 pro rata clause
(8)
  Section 2.11 Collections and Allocations
 Collections
 59




---



##### 



Section 6.10(b)
 Initial Deposits
 Excluded Amounts
 Investment of Funds Section 2.9 Section 2.10
 Section 2.12 Payments, Computations, Etc
 per annum provided
 Section
2.9(a)(8)
 60




---



##### 



Section 2.10(a)(8)
 Section 2.3
 Section 2.13 Mandatory Repurchase
 Section 2.10
 Section 2.14 Fees
 Section
2.9(a)(5) Section 2.10(a)(5)
 Servicing Fee Section 2.9(a)(3) Section 2.10(a)(3)
 Section 2.9(a)(4) Section 2.10(a)(4)
 Section 2.9(a)(4) Section 2.10(a)(4)
  61




---



##### 



Section 2.15 Increased Costs; Capital Adequacy; Illegality
   clause
(a) (b) Section 2.15
 Section 2.15 Section 2.15
 62




---



##### 



clause (a)
 Consolidation Event Section 2.15
 Section 2.16 Taxes
 Additional Amount
    63




---



##### 



Section
2.16(d)
 Section 2.16
 Section 13.16(d)
 Section 2.16
 Section 2.17 Assignment of the Sale Agreement
 Article VIII
 Section 2.18 Substitution of Assets
 Section 2.18 Substitute Asset provided
 Replaced Asset
  64




---



##### 



Section 4.6
 Section 4.6
 Section 4.1 Section 4.2
      Section 2.19 Optional Sales
 Optional Sale
 65




---



##### 



Section 2.20 [Intentionally Omitted]
 Section 2.21 Special Funding Account
 Establishment of Special Funding Account Special Funding Account
 Purpose Qualified Utilization
 Held in Trust
 Permitted Withdrawal Section 3.2(b)
 Final Withdrawal
 Investments
 Monthly Statements
 Section 2.22 Appointment of the Placement Agent
 Placement Agent TALF Program
 66




---



##### 



including Section 2.22 provided
 67




---



##### 



Section 2.22
 ARTICLE III
 CONDITIONS TO ADVANCES
 Section 3.1 Conditions to Closing and Initial Advance
  Schedule I
  Exhibits F-1 F-2
 Exhibits G-1 G-2
 Exhibits E-1 E-2
  68




---



##### 



Section 3.2 Conditions Precedent to All Advances
 Transaction
 Exhibit A-1 Exhibit A-3 Exhibit A Schedule I Section 2.4(b) Section 2.9(b) Exhibit
A-2 Exhibit A-3
  Section 4.1 Section
4.2 Section 4.3
     69




---



##### 



Exhibit L provided
  provided
       Section 2.3
  70




---



##### 



Section 3.3 Conditions Precedent to The New Effective Date
  Exhibit 09-A
     Schedule I-C
 71




---



##### 



Section 4.1 Section
4.2 Section 4.3 Section 4.2(b)
      Section 3.4 Conditions Precedent to Occurrence of the Termination Extension
Date
    Section 4.1 Section
4.2 Section 4.3
 72




---



##### 



Section 4.2(b)
     Section 3.5 Conditions Precedent to The A&R Effective Date
    Section 4.1 Section
4.2 Section 4.3 Section 4.2(b)
    73




---



##### 



ARTICLE IV
 REPRESENTATIONS AND WARRANTIES
 Section 4.1 Representations and Warranties of the Seller
  Organization and Good Standing
 The 2009 Restructuring Section 4.1(c)
 Amendments to Operating Agreement Exhibit 09-E
 Due Qualification
 Power and Authority; Due Authorization; Execution and Delivery
 Binding Obligation
 74




---



##### 



No Violation
 No Proceedings
 All Consents Required
 Bulk Sales
 Solvency Exhibit
E-1
 Selection Procedures
 Taxes
 Exchange Act Compliance; Regulations T, U and X
 75




---



##### 



Security Interest
           76




---



##### 



Reports Accurate
 Location of Offices Section 13.2 Section 5.2(g)
 Lock-Boxes Schedule II Section 5.2(k)
 Tradenames
 Sale Agreement
 Value Given
 Accounting
 77




---



##### 



Special Purpose Entity
       provided
    78




---



##### 



79




---



##### 



Independent Director provided
    Investment Company Act
 ERISA Section 3 Pension Plans
 80




---



##### 



Compliance with Law
 Credit and Collection Policy
 Collections
 Set-Off, etc Section
6.4(a)
 Full Payment
 Accuracy of Representations and Warranties
 Representations and Warranties in Sale Agreement Section 4.1(gg) mutatis mutandis
 Reaffirmation of Representations and Warranties by the Seller Section 4.1
 Participation and Acquired Loans
 81




---



##### 



Environmental
       USA PATRIOT Act
 82




---



##### 



Material Adverse Effect
 Section 4.1(o)
 Section 4.2 Representations and Warranties of the Seller Relating to the Agreement
and the Collateral
 clauses (a) (c) clause (d)
 Binding Obligation, Valid Transfer and Security Interest
  Section
4.1(o)
 Eligibility of Collateral Section
2.3 Section 4.2(a)
 No Fraud
 83




---



##### 



Material Adverse Effect
 Section 4.3 Representations and Warranties of the Servicer
  Organization and Good Standing
 The 2009 Restructuring Section 4.3(c)
 Amendments to Operating Agreement Exhibit 09-E
 Due Qualification
 Power and Authority; Due Authorization; Execution and Delivery
 Binding Obligation
 No Violation
 No Proceedings
 84




---



##### 



All Consents Required
 Reports Accurate
 Credit and Collection Policy
 Collections
 Bulk Sales
 Solvency Exhibit E-2
 Taxes
 Exchange Act Compliance; Regulations T, U and X
 Security Interest
 85




---



##### 



ERISA Section 3 Pension Plans Section 4042
 Investment Company Act
 USA PATRIOT Act
 Material Adverse Effect
 Other Agreements Core Transaction Terms
 Section 4.4 Representations and Warranties of the Backup Servicer
  86




---



##### 



Organization and Corporate Power
 Due Authorization
 No Conflict
 No Violation
 All Consents Required
 Validity, Etc
 Section 4.5 Representations and Warranties of the Collateral Custodian
  Organization and Corporate Power
 Due Authorization
 No Conflict
 87




---



##### 



No Violation
 All Consents Required
 Validity, Etc
 Section 4.6 Breach of Certain Representations and Warranties
 Section
2.9 Section 2.10 Retransfer Price Section 2.18 Retransfer Date
 88




---



##### 



Section 4.6
 ARTICLE V
 GENERAL COVENANTS
 Section 5.1 Affirmative Covenants of the Seller
  Compliance with Laws
 Preservation of Company Existence
 Performance and Compliance with Collateral
 Keeping of Records and Books of Account
 Originators Collateral
 Delivery of Collections Section 5.4(k)
 89




---



##### 



Separate Limited Liability Company Existence Section 4.1(w)
 Credit and Collection Policy
 Termination Events
 Taxes
 Use of Proceeds
 Obligor Notification Forms
 Adverse Claims
 Sellers Collateral
 90




---



##### 



Notices
 Income Tax Liability
 Auditors Management Letters
 Representations Section 4.1
 ERISA
 Proceedings provided Section 5.1(o)
 Notice of Material Events
 Reporting Requirements
 91




---



##### 



Other
 Modifications to the Wachovia Facilities
 Section 5.2 Negative Covenants of the Seller
  Other Business Section 5.3(a)
 Collateral Not to be Evidenced by Instruments
 Security Interests
 92




---



##### 



provided Section 5.2(c)
 Mergers, Acquisitions, Sales, etc
 Deposits to Special Accounts
 Restricted Payments
 Change of Name or Location of Loan Files Section
13.2
 Accounting of Purchases
 ERISA Matters
 93




---



##### 



Operating Agreement; Sale Agreement
 Changes in Payment Instructions to Obligors Schedule II
 Extension or Amendment of Collateral Section 6.4(a) provided Section 6.4(a)
 Credit and Collection Policy
 Tax provided,
 Other Indebtedness pari passu
 Section 5.3 Covenants of the Seller Relating to the Hedging of Assets
 provided
 94




---



##### 



Section 2.9(a)(1) Section 2.10(a)(1)
 Hedge Collateral Section 5.3(a)
 Section 5.4 Affirmative Covenants of the Servicer
  Compliance with Law
 Preservation of Company Existence
 Obligations and Compliance with Collateral
 95




---



##### 



Keeping of Records and Books of Account
    Preservation of Security Interest
 Credit and Collection Policy
 Termination Events
 Taxes
 96




---



##### 



Other
 Proceedings provided Section 5.4(j)
 Deposit of Collections
 Servicing of Participation and Acquired Loans
 Change-in-Control
 Loan Register
 Loan Register Section 5.04(n) provided
  97




---



##### 



Modifications to the Wachovia Facilities
 Section 5.5 Negative Covenants of the Servicer
  Deposits to Special Accounts
 Mergers, Acquisition, Sales, etc
 Section 5.5
    Change of Name or Location of Loan Files Section 13.2
 Change in Payment Instructions to Obligors Schedule
II
 98




---



##### 



Extension or Amendment of Assets Section 6.4(a) provided Section 6.4(a)
 Tax provided,
 Section 5.6 Affirmative Covenants of the Backup Servicer
  Compliance with Law
 Preservation of Existence
 Section 5.7 Negative Covenants of the Backup Servicer
  No Changes in Backup Servicer Fee
 Section 5.8 Affirmative Covenants of the Collateral Custodian
  Compliance with Law
 Preservation of Existence
 99




---



##### 



Location of Required Asset Documents
 Section 5.9 Negative Covenants of the Collateral Custodian
  Required Asset Documents
 No Changes in Collateral Custodian Fee
 Section 5.10 Covenant of the Seller, the Servicer and the Originator
  ARTICLE VI
 ADMINISTRATION AND SERVICING OF ASSETS
 Section 6.1 Designation of the Servicer
 Initial Servicer Section 6.1
 100




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Successor Servicer Section 6.15
 Subcontracts provided
 Servicing Programs
 Section 6.2 Duties of the Servicer
 Appointment Section 6.1
 Duties
     101




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Section 2.9 Section 2.10
   Section 6.3 Authorization of the Servicer
  102




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provided
 Section 6.4 Collection of Payments
 Collection Efforts, Modification of Collateral
 Prepaid Asset Section 2.18 over Prepayment Amount plus
 103




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Acceleration
 Taxes and other Amounts
 Payments to Lock-Box Account
 Continuation of the Collection Account Collection Account Principal Collections Account provided Qualified Institution
  Establishment of the Securities Account Securities Account Section 8.11
 104




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Adjustments
 Transfer of Collection Account to Citibank
 Section 6.5 Servicer Advances
  Section 6.6Realization Upon Charged-Off Assets.
  105




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Section 6.7 Maintenance of Insurance Policies
  Section 6.8 Servicing Compensation
 Section 2.9(a)(3) Section 2.10(a)(3)
 Section 6.9 Payment of Certain Expenses by Servicer
 Section 6.6 provided pro rata
 106




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Section 6.10 Reports
 Borrowing Notice Section 2.4(b) Section 2.9(b)
 Monthly Report Exhibit C Monthly Report
 Servicers Certificate Servicers
Certificate Exhibit J
 Financial Statements
 Tax Returns
 Financial Statements of Obligors
 Other Reports
 Obligor Financial Statements; Valuation Reports; Other Reports
 107




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Section 6.11 Annual Statement as to Compliance
  Section 6.12 Annual Independent Public Accountants Servicing Reports
 Article VI
 Section 6.13 Limitation on Liability of the Servicer and Others
 provided
 Section 6.14 The Servicer Not to Resign
 Section 6.2
 108




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Section 6.15 Servicer Defaults
 Servicer Default
   Section 5.4(o) Section 6.4(j)
   Section 6.1
      109




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provided that
    Servicer Termination Notice
 Section 6.16 Appointment of Successor Servicer
 Section 6.15 Successor Servicer
 110




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Section 6.16(a) provided provided Article IV Section 2.15 Section 2.16(b) Section 2.16(e)
  Section 6.16 Section 6.16(a)
 111




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##### 



Section 6.17 Servicing of REO Assets
 Section 6.6 REO
Asset Owner Exhibit 09-G REO Contribution Agreement Section 9.1 Exhibit 09-H REO Servicing Standard
  112




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Section 6.17(c)
 ARTICLE VII
 THE BACKUP SERVICER
 Section 7.1 Designation of the Backup Servicer
 Initial Backup Servicer Section 7.1
 113




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Successor Backup Servicer Section 7.5
 Section 7.2 Duties of the Backup Servicer
 Appointment Section 7.1
 Duties Section 7.5
 provided
 Tape
   114




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Reliance on Tape Section 7.2(b)
 Section 7.3 Merger or Consolidation
  Section 7.4 Backup Servicing Compensation
 Section 2.9(a)(4) Section 2.10(a)(4) Section 7.5 Section 6.16
 Section 7.5 Backup Servicer Removal
 Backup Servicer Termination Notice
 Section 7.6 Limitation on Liability
  115




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Section 7.7 The Backup Servicer Not to Resign
  ARTICLE VIII
 THE COLLATERAL CUSTODIAN
 Section 8.1 Designation of Collateral Custodian
 Initial Collateral Custodian Section 8.1
 Successor Collateral Custodian Section 8.5
 116




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Section 8.2 Duties of Collateral Custodian
 Appointment
 Duties Section 8.5
 Section 3.2 Review Criteria
 provided provided further
 117




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Schedule III
 Section 2.9 Section 2.10 Payment
Duties
   Section 8.3 Merger or Consolidation
  Section 8.4 Collateral Custodian Compensation
 Collateral Custodian Fee Section 2.9(a)(4) Section 2.10(a)(4) Section 8.5
 Section 8.5 Collateral Custodian Removal
 Collateral Custodian Termination
Notice provided
 118




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Section 8.6 Limitation on Liability
        Section 8.7 The Collateral Custodian Not to Resign
 clause (i)
 119




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##### 



Section 8.8 Release of Documents
 Release for Servicing Exhibit H Exhibit H
 Limitation on Release
 Release for Payment Exhibit H provided, that
 Section 8.9 Return of Required Asset Documents
 Section 2.18 Section 9.2 Section 4.6 Exhibit H
 120




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Section 8.10 Access to Certain Documentation and Information Regarding the
Collateral; Audits
 Section 8.10
 Section 8.11 Securities Intermediary
 Securities
Intermediary
   121




---



##### 



provided however
 ARTICLE IX
 SECURITY INTEREST
 Section 9.1 Grant of Security Interest
 Section 13.19 Section 9.1
 122




---



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Section 9.2 Release of Lien on Collateral
 Section 2.18 Section 2.19 Section 2.22 Section 13.6 provided Section 6.6
 Section 9.3 Further Assurances
 Section 13.12 Section 9.1
 Section 9.4 Remedies
 Section 9.1 Section 10.2
 Section 9.5 Waiver of Certain Laws
  123




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Section 9.6 Power of Attorney
  ARTICLE X
 TERMINATION EVENTS
 Section 10.1 Termination Events
 Termination Events
    provided Section 2.10
  124




---



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Section 6323
      125




---



##### 



Section 10.1(f) 10.1(g) 10.1(o) 10.1(r) Section 10.1(p)
         Section 5.1(r) 5.4(o)
 126




---



##### 



Section 10.2 Remedies
 provided Section 10.1(h) Section 2.10
 ARTICLE XI
 INDEMNIFICATION
 Section 11.1 Indemnities by the Seller
 Indemnified Parties Indemnified Amounts
 127




---



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Section 11.1
         128




---



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129




---



##### 



Section 11.1
 Section 11.1
 Section 11.1
 Section 11.2 Indemnities by the Servicer
  Section 11.2
  Section 11.2
 Section 11.2
 Section 11.3 After-Tax Basis
 Section 11.1 Section 11.2
 130




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ARTICLE XII
 THE ADMINISTRATIVE AGENT
 Section 12.1 The Administrative Agent
 provided
  131




---



##### 



Administrative Agents Reliance, Etc.
 Credit Decision with Respect to the Administrative Agent
 Indemnification of the Administrative Agent provided
 132




---



##### 



Successor Administrative Agent Article XII
 Payments by the Administrative Agent
 Delegation of Duties
 Non-Reliance on the Administrative Agent
 Administrative Agent and its Affiliates
 133




---



##### 



ARTICLE XIII
 MISCELLANEOUS
 Section 13.1 Amendments and Waivers
 Section 13.1 provided provided further
 provided
 Section 13.2 Notices, Etc.
  Section 13.3 Ratable Payments
 Section 11.1 provided
 Section 13.4 No Waiver; Remedies
  134




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##### 



Section 13.5 Binding Effect; Benefit of Agreement
 Section 2.9(a)(1) Section 2.10(a)(1)
 Section 13.6 Term of this Agreement
 Articles IV V Articles VI VII VIII Section 9.2 provided however Articles III IV Article XI Section 13.9 Section 13.10 Section 13.11
 Section 13.7 Governing Law; Consent to Jurisdiction; Waiver of Objection to
Venue
  Section 13.8 Waiver of Jury Trial
  135




---



##### 



Section 13.9 Costs, Expenses and Taxes
   Other Costs
 Section 13.10 No Proceedings
  provided Section 13.10
 Section 13.11 Recourse Against Certain Parties
  136




---



##### 



it being expressly agreed and understood Section 13.11(a)
    Section 13.12 Protection of Right, Title and Interest in the Collateral; Further
Action Evidencing Advances
  137




---



##### 



Section 13.12(a)
  Article
XI
 Section 3.1
  Section 3.1
 Section 13.13 Confidentiality
  138




---



##### 



Excepted Persons Section 13.13(a)
  provided
  Section 13.14 Execution in Counterparts; Severability; Integration
  139




---



##### 



Section 13.15 Waiver of Set-off
   Section 13.16 Assignments
 provided
 provided, however
    140




---



##### 



Section 13.2 Register
 Section 13.16 provided provided, further
 141




---



##### 



provided however
      provided however
      qualified institutional buyer accredited investor
 142




---



##### 



Section 13.17 Heading and Exhibits
  Section 13.18 Loans Subject to Retained Interest Provisions
 provided pro rata
 pro rata
 Section 13.19 Tax Treatment of Advances
  143




---



##### 



Section 13.20 Acknowledgement
  Section 13.21 Appointment of Successor Agent
 Section 12.1(f) Section 12.1(f)
 Section 13.20(a) Section 13.20(a)
 144




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##### 



THE SELLER:
    
    CS FUNDING VII DEPOSITOR LLCBy:
    
    /S/ JEFFREY A. LIPSON

Name: Jeffrey A. LipsonTitle: Senior Vice President and TreasurerTHE LOAN ORIGINATOR 
AND SERVICER:
    
    CAPITALSOURCE FINANCE LLCBy:
    
    /S/ JEFFREY A. LIPSON

Name: Jeffrey A. LipsonTitle: Senior Vice President and Treasurer
 [Signatures Continued on the Following Page]




---



##### 



ISSUER:
    
    CHARTA, LLC,
in its capacity as an IssuerBy:
    
    Citibank, N.A.,
as Attorney-in-FactBy:
    
    /S/ GERALD F. KEEFE

Name: Gerald F. KeefeTitle: Authorized SignatoryISSUER:
    
    CAFCO, LLC,
in its capacity as an IssuerBy:
    
    Citibank, N.A.,
as Attorney-in-FactBy:
    
    /S/ GERALD F. KEEFE

Name: Gerald F. KeefeTitle: Authorized Signatory
 [Signatures Continued on the Following Page]




---



##### 



LIQUIDITY BANK:
    
    CITIBANK, N.A.,
in its capacity as a Liquidity BankBy:
    
    /S/ GERALD F. KEEFE

Name: Gerald F. KeefeTitle: Authorized SignatoryTHE ADMINISTRATIVE AGENT:
    
    CITICORP NORTH AMERICA, INC.By:
    
    /S/ GERALD F. KEEFE

Name: Gerald F. KeefeTitle: Authorized Signatory