not be Rated Retained Securities at any time that a “Principal DistributableShortfall” (as defined in the offering memorandum documentation for such notes) shall haveoccurred and is continuing; and (ii) such other securities as agreed upon by theAdministrative Agent.                 **Section 2. Waiver.**            The parties hereto acknowledge and agree that, pursuant to Section2.8 of the Agreement, Borrower was obligated to pay to the Administrative Agent a Special ReductionAmount equal to $**15,672,086.00**on the Special Reduction Amount Date that occurred on July 27, 2009(the “*Applicable Special Reduction Amount*”). Pursuant to that certain Waiver dated as of July 27,2009, that certain Waiver Extension dated as of July 31, 2009, that certain Second Waiver Extensiondated as of July 31, 2009 and that certain Third Waiver Extension dated as of August 7, 2009, thedue date for payment of the Applicable Special Reduction Amount was extended to August 28, 2009.The parties hereto hereby agree that notwithstanding the provisions of Section 2.8, the ApplicableSpecial Reduction Amount shall be paid in installments as follows:     (i) prior to the date hereof, a payment of $**6,302,044.70**which is hereby acknowledgedas received by Administrative Agent;     (ii) a payment of $**4,685,020.65**concurrently with execution hereof;     (iii) a payment of $**2,342,510.33**on the earliest to occur of (A) October 15, 2009, (B)the date which is two Business Days after the date on which the aggregate amount of“Collateral Proceeds” (as defined in the Credit Agreement as in effect on the date hereof)generated after the date hereof pursuant to clause (c)(ii) of the definition of “CollateralProceeds” in the Credit Agreement (as in effect on the date hereof), equals or exceeds$50,000,000, or (C) the date which is two Business Days after the earlier to occur of (1)the date, if any, on which the aggregate outstanding loan amount under the “Specified Loans”set forth on Exhibit A hereto exceeds for the two previous Business Days the sum of (a) the“Maximum Aggregate Outstanding Amount” set forth on Exhibit A hereto on any “Testing Date”set forth on Exhibit A hereto, *plus*(b) 5% of the CSE Cash & Cash Equivalent Amount (asdefined below), and (2) the date, if any, on which the aggregate outstanding loan amountunder the “Specified Loans” set forth on Exhibit A hereto exceeds an amount equal to sum of(a) the “Maximum Aggregate Outstanding Amount” set forth on Exhibit A hereto on any “TestingDate” set forth on Exhibit A hereto *plus*(b) 10% of the CSE Cash & Cash Equivalent Amount(as defined below) (any such occurrence of the events set forth in this clause (iii)(C), the“*Accelerated Payment Trigger*”); and     (iv) a payment of $**2,342,510.32**on the earliest to occur of (A) December 1, 2009, (B)the date which is two Business Days after the date on which the aggregate amount of“Collateral Proceeds” (as defined in the Credit Agreement as in effect on the date hereof)generated after the date hereof pursuant to clause (c)(ii) of the definition of “CollateralProceeds” in the Credit Agreement (as in effect on the date hereof), equals or exceeds$100,000,000, or (C) the date which is two Business Days after the date on which anyAccelerated Payment Trigger occurs.In connection with clauses (iii)(C) and (iv)(C) above and the determination of whether anAccelerated Payment Trigger has occurred, Seller and Servicer hereby agree to deliver toAdministrative Agent, on the first Business Day of each week during August 2009, September 2009,October 2009 and November 2009 (and in any event, no later than three Business Days after suchdates), documentation reasonably satisfactory to the Administrative Agent evidencing the aggregateoutstanding loan amount of the “Specified Loans” set forth on Exhibit A as of such date and the CSECash & Cash Equivalent Amount for such date.Upon receipt by the Administrative Agent of the amounts set forth in clauses (i), (ii), (iii) and(iv) above in accordance with such clauses, Borrower shall be deemed to have complied in full withits obligation to pay the Applicable Special Reduction Amount in accordance with Section 2.8 of theAgreement.
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For the purposes hereof, “CSE Cash & Cash Equivalent Amount” for any “Testing Date” set forth onExhibit A means CapitalSource Inc.’s cash and cash equivalents on such Testing Date (as would bereported as “Unrestricted Cash and Cash Equivalents” in CapitalSource Inc.’s Credit Agreementcovenant compliance report if such report were prepared as of such Testing Date).               **Section 3. Representations and Warranties of the Seller and the Servicer.**          Each of the Seller and the Servicer, jointly and severally, hereby represents and warrants asof the date hereof as follows (which representations and warranties shall survive the execution anddelivery of this Amendment):     (i) The representations and warranties of each of the Seller and the Servicer set forthin the Agreement are true and correct on and as of such date, after giving effect to thisAmendment, as though made on and as of such date;     (ii) Following the effectiveness of this Amendment, no event has occurred and iscontinuing which constitutes a Termination Event or Unmatured Termination Event;     (iii) Each of the Seller and the Servicer is in compliance with each of its covenantsand agreements set forth in the Transaction Documents; and     (iv) This Amendment has been duly executed and delivered by the Seller and the Servicerand constitutes the legal, valid and binding obligation of the Seller and Servicer, and isenforceable in accordance with its terms subject (x) as to enforcement of remedies, toapplicable bankruptcy, insolvency, reorganization, moratorium and other similar lawsaffecting the enforcement of creditors’ rights generally, from time to time in effect, and(y) to general principles of equity.               **Section 4. Effective Date; Continued Effectiveness; Governing Law; Counterparts.**(a) This Amendment shall become effective as of the time and date (the “*Effective Date*”) when:     (i) the Administrative Agent shall have received a counterpart of this Amendment, dulyexecuted and delivered on behalf of each of the parties hereto;     (ii) the Administrative Agent shall have received the amounts payable on the EffectiveDate pursuant to clause (i) of Section 2 hereof; and     (iii) the Originator shall have paid all outstanding fees and expenses of counsel tothe Administrative Agent.     (b) Nothing herein shall be deemed to be a waiver of any covenant, or agreement contained in,or any Termination Event or Unmatured Termination Event under the Agreement and each of the partieshereto agrees that all other covenants and agreements and other provisions contained in theAgreement and the other Transaction Documents as modified by this Amendment shall remain in fullforce and effect from and after the date of this Amendment.     (c) THIS AMENDMENT, AND THE AGREEMENT AS AMENDED BY THE AMENDMENT, SHALL BE GOVERNED BY, ANDCONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY CHOICEOF LAW PROVISIONS THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OFTHE STATE OF NEW YORK).
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     (d) This Amendment may be executed in any number of counterparts and by different partieshereto in separate counterparts (including by facsimile or by electronic mail in portable documentformat (pdf)), each of which when so executed shall be deemed to be an original and all of whichwhen taken together shall constitute one and the same agreement.[Remainder of Page Intentionally Left Blank.]
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     IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respectiveofficers thereunto duly authorized, as of the date first above written.     **THE SELLER:****CS FUNDING VII DEPOSITOR LLC**