exv4w2



 





Exhibit 4.2


[Form
of Global Note]




UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE “DEPOSITARY,” WHICH TERM INCLUDES ANY
SUCCESSOR DEPOSITARY FOR THE CERTIFICATES) TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY
PAYMENT HEREIN IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.



THE NOTES ARE BEING ISSUED WITH “ORIGINAL ISSUE DISCOUNT” FOR PURPOSES OF SECTIONS 1273 AND 1275 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. A HOLDER OF NOTES MAY OBTAIN THE ISSUE PRICE,
AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY ON THE NOTES, DETERMINED BY
CAPITALSOURCE INC., BY REGISTERED OR CERTIFIED MAIL IN A POST OFFICE LETTER BOX OR SENT BY
TELECOPIER TRANSMISSION ADDRESSED AS FOLLOWS: TO CAPITALSOURCE INC., 4445 WILLARD AVENUE, 12TH
FLOOR, CHEVY CHASE, MARYLAND 20815, TELECOPIER NO.: 301-841-2307, ATTENTION: CHIEF FINANCIAL
OFFICER.



1









 





CAPITALSOURCE INC.




7.250% SENIOR SUBORDINATED CONVERTIBLE NOTE DUE 2037




CUSIP: 14055X AG7

ISIN: US14055XAG79




 



			
	No. 1
	 	$250,000,000






CapitalSource Inc., a corporation duly organized and validly existing under the laws of the State
of Delaware (herein called the “Company,” which term includes any successor corporation
under the Indenture referred to on the reverse hereof), for value received hereby promises to pay
to CEDE & CO. or its registered assigns, the principal sum set forth on Schedule I hereto on July
15, 2037 at the office or agency of the Company maintained for that purpose in accordance with the
terms of the Indenture, dated as of July 30, 2007 (the “Original Indenture”) and the First
Supplemental Indenture thereto, dated as of July 30, 2007 (the “First Supplemental
Indenture” and together with the Original Indenture, the “Indenture”), in such coin or
currency of the United States of America as at the time of payment shall be legal tender for the
payment of public and private debts, and to pay interest, semiannually on January 15 and July 15 of
each year, commencing January 15, 2008, on said principal sum at said office or agency, in like
coin or currency, at the rate per annum of 7.250%. On January 15, 2008, the Company promises to
pay to the Person entitled thereto as it appears in the Note Register on the Regular Record Date,
which shall be January 1, 2008 (whether or not a Business Day), as provided in the Indenture,
interest accruing from July 15, 2007 at 7.250% per annum from, and including, the date of this
7.250% Senior Subordinated Convertible Note Due 2037 (“Note”). Except as otherwise
provided in the Indenture, the interest payable on the Note pursuant to the Indenture on any
January 15 or July 15 will be paid to the Person entitled thereto as it appears in the Note
Register on the Regular Record Date, which shall be the January 1 or July 1 (whether or not a
Business Day) next preceding such January 15 or July 15, as provided in the Indenture; provided,
that any such interest not punctually paid or duly provided for shall be payable as provided in the
Indenture. The Company shall pay interest (i) on any Notes in certificated form by check mailed to
the address of the Person entitled thereto as it appears in the Note Register (or, upon written
notice, by wire transfer in immediately available funds, if such Person is entitled to interest on
Notes with an aggregate principal amount in excess of $2,000,000) or (ii) on any Global Note by
wire transfer of immediately available funds to the account of the Depositary or its nominee.



Reference is made to the further provisions of this Note set forth on the reverse hereof,
including, without limitation, provisions giving the holder of this Note the right to convert this
Note into Common Stock of the Company on the terms and subject to the limitations referred to on
the reverse hereof and as more fully specified in the Indenture. Such further provisions shall for
all purposes have the same effect as though fully set forth at this place.



This Note shall be deemed to be a contract made under the laws of the State of New York, and for
all purposes shall be construed in accordance with and governed by the laws of the State of New
York (including Section 5-1401 of the New York General Obligations Law or any successor to such
statute).



This Note shall not be valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been manually signed by the Trustee or a duly authorized
authenticating agent under the Indenture.



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GUARANTEE




For value received, the undersigned hereby unconditionally guarantees to the holder of this Note
the payment of principal of, and Interest on this Note in the amounts and at the time when due and
Interest on the overdue principal and Interest, if any, of this Note, if lawful, and the payment of
all other obligations of the Company under the Indenture or the Notes, to the holder of this Note
and the Trustee, all in accordance with and subject to the terms and limitations of this Note and
the Indenture. This Guarantee will not become effective until the Trustee duly executes the
certificate of authentication on this Note.



	 	 	 	 	 
	 	CAPITALSOURCE FINANCE LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.



	 	 	 	 	 
	 	CAPITALSOURCE INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



July 30, 2007




TRUSTEE’S CERTIFICATE OF AUTHENTICATION





THIS IS ONE OF THE NOTES DESCRIBED IN THE WITHIN-NAMED INDENTURE.



	 	 	 	 	 
	 	WELLS FARGO BANK, N.A., as Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



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[REVERSE OF NOTE]




CAPITALSOURCE INC.




7.250% SENIOR SUBORDINATED CONVERTIBLE NOTE DUE 2037





This Note is one of a duly authorized issue of Notes of the Company, designated as its Senior
Subordinated Convertible Notes due 2037 (herein called the “Notes”), initially limited in
aggregate principal amount to $287,500,000, issued and to be issued under and pursuant to an
Indenture, dated as of July 30, 2007 (the “Original Indenture”) and the First Supplemental
Indenture thereto, dated as of July 30, 2007 (the “First Supplemental Indenture” and,
together with the Original Indenture, the “Indenture”), among the Company and CapitalSource
Finance LLC, as guarantor (herein called the “Guarantor”), and Wells Fargo Bank, N.A., as
trustee (herein called the “Trustee”), to which Indenture and all indentures supplemental
thereto reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company, the Guarantor and the
holders of the Notes.



In case an Event of Default shall have occurred and be continuing, the principal of and accrued
Interest on all Notes may be declared by either the Trustee or the holders of not less than 25% in
aggregate principal amount of the Notes then outstanding, and upon said declaration shall become
due and payable in the manner, with the effect and subject to the conditions provided in the
Indenture.



The Indenture contains provisions permitting the Company and the Trustee, with the consent of the
holders of at least a majority in aggregate principal amount of the Notes at the time outstanding,
to execute supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in
any manner the rights of the holders of the Notes; provided, that no such supplemental indenture
shall (A) extend the Stated Maturity of any Note, or (B) reduce the rate or extend the time for
payment of Interest thereon, or (C) reduce the principal amount thereof, or (D) reduce any amount
payable on redemption or repurchase thereof, or (E) impair the right of any holder to institute
suit for the payment thereof, or (F) make the principal thereof or Interest thereon payable in any
coin or currency other than that provided in the Notes, or (G) affect the obligation of the Company
to redeem any Note on a Redemption Date in a manner adverse to the holders of Notes, or (H) affect
the obligation of the Company to repurchase any Note upon the happening of a Fundamental Change in
a manner adverse to the holders of Notes, or (I) affect the obligation of the Company to repurchase
any Note on a Company Repurchase Date in a manner adverse to the holders of Notes, or (J) impair
the right to convert the Notes into Common Stock subject to the terms set forth in the First
Supplemental Indenture, including Section 9.07 thereof, or (K) reduce the number of shares of
Common Stock, the amount of cash or the amount of other property receivable upon conversion, in
each case, without the consent of the holder of each Note so affected, or (L) modify any of the
provisions of Sections 512 and 1013 of the Original Indenture or Sections 5.03 and 6.03 of the
First Supplemental Indenture, except to increase any such percentage or to provide that certain
other provisions of this First Supplemental Indenture cannot be modified or waived without the
consent of the holder of each Note so affected, or (M) reduce the quorum or voting requirements set
forth in Article XV of the Original Indenture or (N) reduce the aforesaid percentage of Notes, the
holders of which are required to consent to any such supplemental indenture, without the consent of
the holders of all Notes then outstanding. Subject to the provisions of the Indenture, the holders
of a majority in aggregate principal amount of the Notes at the time outstanding may on behalf of
the holders of all of the Notes waive any past default or Event of Default under the Indenture and
its consequences except (A) a default in the payment of Interest on or the principal of any of the
Notes, (B) a failure by the Company to convert any Notes into Common Stock, cash or a combination
of cash and Common Stock of the Company, (C) a default in the payment of the Redemption Price
pursuant to Article III of the First Supplemental



5









 







Indenture, (D) a default in the payment of the
Company Repurchase Price or Fundamental Change Repurchase Price pursuant to Article III of the
First Supplemental Indenture, or (E) a default in respect of a covenant or provision of the
Indenture which under Article VI of the First Supplemental Indenture cannot be modified or amended
without the consent of the holders of each or all Notes then outstanding or affected thereby. Any
such consent or waiver by the holder of this Note (unless revoked as provided in the Indenture)
shall be conclusive and binding upon such holder and upon all future holders and owners of this
Note and any Notes which may be issued in exchange or substitution hereof, irrespective of whether
or not any notation thereof is made upon this Note or such other Notes.



No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter
or impair the obligation of the Company, which is absolute and unconditional, to pay the principal
of and Interest on this Note at the place, at the respective times, at the rate and in the coin or
currency herein prescribed.



Interest on the Notes shall be computed on the basis of a 360-day year of twelve 30-day months.



The Notes are issuable in fully registered form, without interest coupons, in denominations of
$1,000 principal amount and any multiple of $1,000. At the office or agency of the Company
referred to on the face hereof, and in the manner and subject to the limitations provided in the
Indenture, without payment of any service charge but with payment of a sum sufficient to cover any
tax, assessment or other governmental charge that may be imposed in connection with any
registration or exchange of Notes, Notes may be exchanged for a like aggregate principal amount of
Notes of any other authorized denominations.



At any time on or after July 20, 2012 and prior to maturity, the Notes may be redeemed at the
option of the Company, in whole or in part, in cash, or a combination of cash and shares of Common
Stock, upon mailing a notice of such redemption not less than 30 days but not more than 60 days
before the Redemption Date to the holders of Notes at their last registered addresses, all as
provided in the Indenture, at a Redemption Price equal to 100% of the principal amount of Notes
being redeemed plus accrued and unpaid Interest to, but excluding, the Redemption Date; provided,
that if the applicable Redemption Date is an Interest Payment Date, the Interest payable on such
Interest Payment Date shall be paid on such Interest Payment Date to the holders of record of such
Notes on the applicable Record Date instead of the holders surrendering such Notes for redemption
on such date.



In no event will any Note be redeemable at the option of the Company before July 20, 2012.



The Company may not give notice of any redemption of the Notes if a default in the payment of
Interest on the Notes has occurred and is continuing.



The Notes are not subject to redemption through the operation of any sinking fund.



If a Fundamental Change occurs at any time prior to maturity of the Notes, each holder shall have
the right, at such holder’s option, to require the Company to repurchase this Note for cash, or
subject to certain conditions, Common Stock, on a Fundamental Change Repurchase Date, specified by
the Company, which shall be no later than 30 Business Days after notice thereof, at a Fundamental
Change Repurchase Price equal to at least 100% of the principal amount thereof, together with
accrued Interest to, but excluding, the Fundamental Change Repurchase Date. The Company shall mail
to all holders of record of the Notes a notice of the occurrence of a Fundamental Change and of the
repurchase right arising as a result thereof on or before the 30th day after the occurrence of such
Fundamental Change. For a Note to be so repurchased at the option of the holder, the Company must
receive at the office or agency of the Company maintained for that purpose in accordance with the
terms of the Indenture, such Note with the form entitled “Form of Fundamental Change Repurchase
Notice” on the reverse thereof



6









 







duly completed, together with such Note, duly endorsed for transfer
at any time prior to the close of business on the Business Day immediately preceding the
Fundamental Change Repurchase Date.



Subject to the terms and conditions of the Indenture, the Company shall become obligated to
repurchase, at the option of the holder, all or any portion of the Notes held by such holder on
July 15, 2012, July 15, 2017, July 15, 2022, July 15, 2027, and July 15, 2032 in integral multiples
of $1,000 at a Company Repurchase Price of 100% of the principal amount, plus any accrued and
unpaid Interest on such Note to but excluding the Company Repurchase Date. To exercise such right,
a holder shall deliver to the Company such Note with the form entitled “Form of Company Repurchase
Election” on the reverse thereof duly completed, together with the Note, duly endorsed for
transfer, at any time from the opening of business on the 20th Business Day prior to such Company
Repurchase Date until the close of business on the Business Day immediately preceding the Company
Repurchase Date, and shall deliver, or arrange for book-entry transfer of, the Notes to the Trustee
(or other Paying Agent appointed by the Company) as set forth in the Indenture.



The Company Repurchase Price to be paid on any of July 15, 2012, July 15, 2017, July 15, 2022, July
15, 2027, and July 15, 2032 shall be paid in cash and the Fundamental Change Repurchase Price to be
paid on any Fundamental Change Repurchase Date shall be paid in cash or Common Stock, subject to
the terms and conditions of the Indenture.



Holders have the right to withdraw any Repurchase Election by delivering to the Trustee (or other
Paying Agent appointed by the Company) a written notice of withdrawal up to the close of business
on the Business Day immediately preceding the Repurchase Date, all as provided in the Indenture.



If money or Common Stock, if allowed under the Indenture, sufficient to pay the Repurchase Price
with respect to all Notes or portions thereof to be repurchased as of any Repurchase Date is
deposited with the Trustee (or other Paying Agent appointed by the Company), then on and after such
Repurchase Date, such Notes will cease to be outstanding, Interest will cease to accrue on such
Notes (or portions thereof), and the holder thereof shall have no other rights as such other than
the right to receive the Repurchase Price upon surrender of such Note.



Subject to the occurrence of certain events and in compliance with the provisions of the Indenture,
prior to the Stated Maturity of the Notes, the holder hereof has the right, at its option, to
convert each $1,000 principal amount of the Notes into 36.9079 shares of the Common Stock (a
Conversion Price of approximately $27.09 per share), as such shares shall be constituted at the
date of conversion and subject to adjustment from time to time as provided in the Indenture, upon
surrender of this Note with the form entitled “Form of Notice of Conversion” on the reverse hereof
duly completed, to the Company at the office or agency of the Company maintained for that purpose
in accordance with the terms of the Indenture, or at the option of such holder, the Corporate Trust
Office, and, unless the shares issuable on conversion are to be issued in the same name as this
Note, duly endorsed by, or accompanied by instruments of transfer in form satisfactory to the
Company duly executed by, the holder or by his duly authorized attorney. The Company will notify
the holder thereof of any event triggering the right to convert the Notes as specified above in
accordance with the Indenture.



If the Company (i) is a party to a consolidation, merger, statutory share exchange or combination,
(ii) reclassifies the Common Stock, or (iii) sells or conveys its properties and assets
substantially as an entirety to any Person, the right to convert a Note into shares of Common Stock
will be changed into a right to convert it into the kind or amount of cash, securities or other
property receivable upon such event, in each case in accordance with the Indenture.



7









 





No adjustment in respect of Interest on any Note converted or dividends on any shares issued upon
conversion of such Note will be made upon any conversion except as set forth in the next sentence.
If this Note (or portion hereof) is surrendered for conversion during the period from the close of
business on any Record Date for the payment of Interest to the opening of business on the
immediately following Interest Payment Date, this Note (or portion hereof being converted) must be
accompanied by payment, in immediately available funds or other funds acceptable to the Company, of
an amount equal to the Interest otherwise payable on such Interest Payment Date on the principal
amount being converted; provided, that no such payment shall be required (1) if the Company has
specified a Redemption Date that is after a Record Date and prior to the next Interest Payment
Date, (2) if the Company has specified a Repurchase Date following a Fundamental Change that is
after a Record Date and on or prior to the next Interest Payment Date or (3) to the extent of any
Defaulted Interest, if any Defaulted Interest exists at the time of conversion with respect to such
Note.



No fractional shares of Common Stock will be issued upon any conversion, but an adjustment and
payment in cash will be made, as provided in the Indenture, in respect of any fraction of a share
of Common Stock which would otherwise be issuable upon the surrender of any Note or Notes for
conversion.



A Note in respect of which a holder is exercising its right to require repurchase upon a
Fundamental Change or repurchase on a Repurchase Date may be converted only if such holder
withdraws its election to exercise such right in accordance with the terms of the Indenture.



Upon due presentment for registration of transfer of this Note at the office or agency of the
Company maintained for that purpose in accordance with the terms of the Indenture, a Note or Notes
of authorized denominations for an equal aggregate principal amount will be issued to the
transferee in exchange thereof, subject to the limitations provided in the Indenture, without
charge except for any tax, assessment or other governmental charge imposed in connection therewith.



The Company, the Guarantor, the Trustee, any authenticating agent, any Paying Agent, any Conversion
Agent and any Note Registrar may deem and treat the registered holder hereof as the absolute owner
of this Note (whether or not this Note shall be overdue and notwithstanding any notation of
ownership or other writing hereon made by anyone other than the Company or any Note Registrar) for
the purpose of receiving payment on or account of the principal hereof and the Interest hereon, for
the conversion hereof and for all other purposes, and neither the Company nor the Trustee nor any
other authenticating agent nor any Paying Agent nor other Conversion Agent nor any Note Registrar
shall be affected by any notice to the contrary. All payments made to or upon the order of such
registered holder shall, to the extent of the sum or sums paid, satisfy and discharge liability for
monies payable on this Note.



No recourse for the payment of the principal of or Interest on this Note, or for any claim based
hereon or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or
agreement of the Company or the Guarantor in the Indenture or any supplemental indenture or in any
Note, or because of the creation of any Indebtedness represented thereby, or for any of the
obligations of the Guarantor under the Guarantee shall be had against any incorporator,
shareholder, member, employee, agent, officer or director or subsidiary, as such, past, present or
future, of the Company, the Guarantor, or of any successor corporation or limited liability
company, either directly or through the Company, or the Guarantor, or any successor corporation or
limited liability company, whether by virtue of any constitution, statute or rule of law or by the
enforcement of any assessment or penalty or otherwise, all such liability being, by acceptance
hereof and as part of the consideration for the issue hereof, expressly waived and released.



Terms used in this Note and defined in the Indenture are used herein as therein defined.



8









 





ABBREVIATIONS




The following abbreviations, when used in the inscription of the face of this Note, shall be
construed as though they were written out in full according to applicable laws or regulations.



	 	 	 	 	 
	TEN COM —

	 	as tenants in common
	 	UNIF GIFT MIN ACT—______Custodian______
	TEN ENT —

	 	as tenant by the entireties
	 	(Cust) (Minor)
	JT TEN —

	 	as joint tenants with right of
survivorship and not as tenants in
common
	 	under Uniform Gifts to Minors Act
	 

	 	 	 	(State)
	 	 	Additional abbreviations may also be used though not in the above list.







9










 





FORM OF

NOTICE OF CONVERSION





			
	TO:	 	CAPITALSOURCE INC.

WELLS FARGO BANK, N.A.




The undersigned registered owner of this Note hereby irrevocably exercises the option to convert
this Note, or the portion thereof (which is $1,000 or a multiple thereof) below designated, into
shares of Common Stock of CapitalSource Inc. and/or cash in accordance with the terms of the
Indenture referred to in this Note, and directs that the shares issuable and deliverable and/or
cash payable upon such conversion, together with any check in payment for fractional shares and any
Notes representing any unconverted principal amount hereof, be issued and delivered to the
registered holder hereof unless a different name has been indicated below. Capitalized terms used
herein but not defined shall have the meanings ascribed to such terms in the Indenture. If shares,
any portion of this Note not converted or a check for cash payable are to be issued in the name of
a person other than the undersigned, the undersigned will provide the appropriate information below
and pay all transfer taxes payable with respect thereto. Any amount required to be paid by the
undersigned on account of Interest accompanies this Note.




Dated: _______________




	 	 	 
	 

	 	                                        
	 
	 	 
	 

	 	Signature(s)
	 
	 	 
	 

	 	Signature(s) must be guaranteed by an “eligible
guarantor institution” meeting the requirements of
the Note Registrar, which requirements include
membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such
other “signature guarantee program” as may be
determined by the Note Registrar in addition to, or
in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
	 
	 	 
	 

	 	Signature Guarantee





NOTICE: The above signatures of the holder(s) hereof must correspond with the name as written upon
the face of the Note in every particular without alteration or enlargement or any change whatever.




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Fill in the registration of shares of Common Stock if to be issued, and Notes if to be delivered,
other than to and in the name of the registered holder:




	 	 	 
	 

	 	(Name)                                         
	 
	 	 
	 

	 	(Street Address)                                         
	 
	 	 
	 

	 	(City, State and Zip Code)                                         
	 
	 	 
	 

	 	Please print name and address
	 
	 	 
	 

	 	Principal amount to be converted
(if less than all): $                    
	 
	 	 
	 

	 	Social Security or Other Taxpayer Identification Number:                                         






11









 





FORM OF

FUNDAMENTAL CHANGE REPURCHASE NOTICE





			
	TO:	 	CAPITALSOURCE INC.

WELLS FARGO BANK, N.A.




The undersigned registered owner of this Note hereby irrevocably acknowledges receipt of a notice
from CapitalSource Inc. (the “Company”) as to the occurrence of a Fundamental Change with
respect to the Company and requests and instructs the Company to repurchase the entire principal
amount of this Note, or the portion thereof (which is $1,000 or a multiple thereof) below
designated, in accordance with the terms of the Indenture referred to in this Note at the price
equal to at least 100% of such entire principal amount or portion thereof, together with accrued
Interest to, but excluding, the Fundamental Change Repurchase Date, to the registered holder
hereof. Capitalized terms used herein but not defined shall have the meanings ascribed to such
terms in the Indenture.




Dated:                     




                                        



Signature(s)



NOTICE: The above signatures of the holder(s) hereof must correspond with the name as written upon
the face of the Note in every particular without alteration or enlargement or any change whatever.





Note Certificate Number (if applicable):                                         




Principal amount to be repurchased (if less than all):                                         




Social Security or Other Taxpayer Identification Number:                                         



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FORM OF

COMPANY REPURCHASE ELECTION





			
	TO:	 	CAPITALSOURCE INC.

WELLS FARGO BANK, N.A.




The undersigned registered owner of this Note hereby irrevocably acknowledges receipt of a notice
from CapitalSource Inc. (the “Company”) regarding the right of holders to elect to require
the Company to repurchase the Notes and requests and instructs the Company to repay the entire
principal amount of this Note, or the portion thereof (which is $1,000 or an integral multiple
thereof) below designated, in accordance with the terms of the Indenture at the price of 100% of
such entire principal amount or portion thereof, together with accrued Interest to, but excluding,
the Company Repurchase Date, to the registered holder hereof. Capitalized terms used herein but
not defined shall have the meanings ascribed to such terms in the Indenture. The Notes shall be
repurchased by the Company as of the Company Repurchase Date pursuant to the terms and conditions
specified in the Indenture.




Dated:                                         




                                        



Signature(s)



NOTICE: The above signatures of the holder(s) hereof must correspond with the name as written upon
the face of the Note in every particular without alteration or enlargement or any change whatever.





Note Certificate Number (if applicable):                                         




Principal amount to be repurchased (if less than all):                                         




Social Security or Other Taxpayer Identification Number:                                         



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ASSIGNMENT



For value
received ___ hereby sell(s) assign(s) and transfer(s)
unto ___ (please insert
social security or other Taxpayer Identification Number of assignee) the within Note, and hereby
irrevocably constitutes and appoints ___ attorney to transfer said Note on the books of the
Company, with full power of substitution in the premises.




Dated:                     




	 	 	 
	 

	 	                                        
	 
	 	 
	 

	 	Signature(s)
	 
	 	 
	 

	 	Signature(s) must be guaranteed by an “eligible
guarantor institution” meeting the requirements of
the Note Registrar, which requirements include
membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such
other “signature guarantee program” as may be
determined by the Note Registrar in addition to, or
in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
	 
	 	 
	 

	 	Signature Guarantee





NOTICE: The above signatures of the holder(s) hereof must correspond with the name as written upon
the face of the Note in every particular without alteration or enlargement or any change whatever.




14









 





Schedule I




CAPITALSOURCE INC.




7.250% Senior Subordinated Convertible Notes due 2037




No. 1




	 	 	 	 	 	 	 
	 	 	 	 	Notation Explaining	 	Authorized Signature
	 	 	 	 	Principal Amount	 	of Trustee or
	Date	 	Principal Amount	 	Recorded	 	Custodian