exv4w1







Exhibit 4.1




 





CAPITALSOURCE INC.




 






12.75% FIRST PRIORITY SENIOR SECURED NOTES DUE 2014

 






INDENTURE




Dated as of July 27, 2009




 






THE GUARANTORS FROM TIME TO TIME PARTIES HERETO




 






U.S. BANK NATIONAL ASSOCIATION




as Trustee




 






 






 









 








CROSS-REFERENCE TABLE*




	 	 	 
	TRUST INDENTURE	 	INDENTURE
	ACT SECTION	 	SECTION
	310(a)(1)
	 	7.10
	(a)(2)
	 	7.10
	(a)(3)
	 	N.A.
	(a)(4)
	 	N.A.
	(a)(5)
	 	7.10
	(b)
	 	7.03; 7.10
	(c)
	 	N.A.
	311(a)
	 	7.11
	(b)
	 	7.11
	(c)
	 	N.A.
	312(a)
	 	2.06
	(b)
	 	14.03
	(c)
	 	14.03
	313(a)
	 	7.06
	(b)(1)
	 	7.06
	(b)(2)
	 	7.06; 7.07
	(c)
	 	7.06; 14.02
	(d)
	 	7.06
	314(a)
	 	4.03; 4.04; 14.05
	(b)
	 	10.02, 10.05
	(c)(1)
	 	14.04
	(c)(2)
	 	14.04
	(c)(3)
	 	N.A.
	(d)
	 	10.05
	(e)
	 	14.05
	(f)
	 	N.A.
	315(a)
	 	7.01
	(b)
	 	7.05; 14.02
	(c)
	 	7.01
	(d)
	 	7.01
	(e)
	 	6.11
	316(a)(last sentence)
	 	2.09
	(a)(1)(A)
	 	6.05
	(a)(1)(B)
	 	6.04
	(a)(2)
	 	N.A.
	(b)
	 	6.07
	(c)
	 	2.13
	317(a)(1)
	 	6.08
	(a)(2)
	 	6.09
	(b)
	 	2.05
	318(a)
	 	14.01
	(b)
	 	N.A.
	(c)
	 	14.01








 




			
	N.A. means not applicable.
	 
	*	 	This Cross-Reference Table is not part of the Indenture.










 









 











TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE
	 	 	1	 
	Section 1.01. Definitions
	 	 	1	 
	Section 1.02. Other Definitions
	 	 	25	 
	Section 1.03. Incorporation by Reference of Trust Indenture Act
	 	 	25	 
	Section 1.04. Rules of Construction
	 	 	26	 
	 
	 	 	 	 
	ARTICLE 2 THE NOTES
	 	 	26	 
	Section 2.01. Amount of Notes; Issuable in Series
	 	 	26	 
	Section 2.02. Form and Dating
	 	 	27	 
	Section 2.03. Execution and Authentication
	 	 	28	 
	Section 2.04. Registrar and Paying Agent
	 	 	28	 
	Section 2.05. Paying Agent to Hold Money in Trust
	 	 	28	 
	Section 2.06. Holders Lists
	 	 	29	 
	Section 2.07. Transfer and Exchange
	 	 	29	 
	Section 2.08. Replacement Notes
	 	 	41	 
	Section 2.09. Outstanding Notes
	 	 	41	 
	Section 2.10. Treasury Notes
	 	 	42	 
	Section 2.11. Temporary Notes
	 	 	42	 
	Section 2.12. Cancellation
	 	 	42	 
	Section 2.13. Record Date
	 	 	42	 
	Section 2.14. Defaulted Interest
	 	 	42	 
	Section 2.15. Computation of Interest
	 	 	43	 
	Section 2.16. CUSIP and ISIN Number
	 	 	43	 
	 
	 	 	 	 
	ARTICLE 3 REDEMPTION AND PREPAYMENT
	 	 	43	 
	Section 3.01. Notices to Trustee
	 	 	43	 
	Section 3.02. Selection of Notes to be Purchased or Redeemed
	 	 	43	 
	Section 3.03. Notice of Redemption
	 	 	44	 
	Section 3.04. Effect of Notice of Redemption
	 	 	44	 
	Section 3.05. Deposit of Redemption or Purchase Price
	 	 	44	 
	Section 3.06. Notes Redeemed or Purchased in Part
	 	 	45	 
	Section 3.07. Optional Redemption
	 	 	45	 
	Section 3.08. Mandatory Redemption
	 	 	46	 
	Section 3.09. Offer to Purchase
	 	 	46	 
	 
	 	 	 	 
	ARTICLE 4 COVENANTS
	 	 	49	 
	Section 4.01. Payment of Notes
	 	 	49	 






- i -









 






TABLE OF CONTENTS
(continued)






	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	Section 4.02. Maintenance of Office or Agency
	 	 	49	 
	Section 4.03. Reports
	 	 	50	 
	Section 4.04. Compliance Certificate
	 	 	51	 
	Section 4.05. Taxes
	 	 	51	 
	Section 4.06. Stay, Extension and Usury Laws
	 	 	51	 
	Section 4.07. Limitation on Restricted Payments
	 	 	52	 
	Section 4.08. Limitation on Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries
	 	 	55	 
	Section 4.09. Limitation on Incurrence of Additional Indebtedness and Issuance of
Preferred Stock
	 	 	56	 
	Section 4.10. Limitation on Asset Sales
	 	 	60	 
	Section 4.11. Limitations of Business Activities
	 	 	62	 
	Section 4.12. Limitations on Transactions with Affiliates
	 	 	62	 
	Section 4.13. Limitation on Liens
	 	 	63	 
	Section 4.14. Loan Collateral Repayments
	 	 	63	 
	Section 4.15. Change of Control
	 	 	63	 
	Section 4.16. Capacity to Repay Subordinated Convertible Notes
	 	 	64	 
	Section 4.17. Corporate Existence
	 	 	64	 
	Section 4.18. Additional Guarantors or I/C Notes Issuers
	 	 	64	 
	Section 4.19. Limitation on Investment Company Status
	 	 	65	 
	Section 4.20. Impairment of Security Interest
	 	 	65	 
	Section 4.21. Limitation on the Issuances and Sales of Capital Stock
of Wholly Owned
Restricted Subsidiaries
	 	 	65	 
	Section 4.22. Maintenance of Insurance, Properties, Books and Records
	 	 	66	 
	 
	 	 	 	 
	ARTICLE 5 SUCCESSORS
	 	 	66	 
	Section 5.01. Merger, Consolidation or Sale of Assets
	 	 	66	 
	Section 5.02. Successor Corporation Substituted
	 	 	68	 
	 
	 	 	 	 
	ARTICLE 6 DEFAULTS AND REMEDIES
	 	 	68	 
	Section 6.01. Events of Default
	 	 	68	 
	Section 6.02. Acceleration
	 	 	70	 
	Section 6.03. Other Remedies
	 	 	71	 
	Section 6.04. Waiver of Past Defaults
	 	 	71	 
	Section 6.05. Control by Majority
	 	 	72	 
	Section 6.06. Limitation on Suits
	 	 	72	 
	Section 6.07. Rights of Holders to Receive Payment
	 	 	72	 






- ii - 









 






TABLE OF CONTENTS
(continued)






	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	Section 6.08. Collection Suit by Trustee
	 	 	72	 
	Section 6.09. Trustee May File Proofs of Claim
	 	 	72	 
	Section 6.10. Priorities
	 	 	73	 
	Section 6.11. Undertaking for Costs
	 	 	73	 
	 
	 	 	 	 
	ARTICLE 7 TRUSTEE
	 	 	73	 
	Section 7.01. Duties of Trustee
	 	 	73	 
	Section 7.02. Rights of Trustee
	 	 	74	 
	Section 7.03. Individual Rights of Trustee
	 	 	75	 
	Section 7.04. Trustee’s Disclaimer
	 	 	75	 
	Section 7.05. Notice of Defaults
	 	 	75	 
	Section 7.06. Reports by Trustee to Holders
	 	 	75	 
	Section 7.07. Compensation and Indemnity
	 	 	76	 
	Section 7.08. Replacement of Trustee
	 	 	77	 
	Section 7.09. Successor Trustee by Merger, Etc
	 	 	77	 
	Section 7.10. Eligibility; Disqualification
	 	 	77	 
	Section 7.11. Preferential Collection of Claims Against the Company
	 	 	78	 
	 
	 	 	 	 
	ARTICLE 8 DISCHARGE OF INDENTURE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE
	 	 	78	 
	Section 8.01. Satisfaction and Discharge
	 	 	78	 
	Section 8.02. Option to Effect Legal Defeasance or Covenant Defeasance
	 	 	79	 
	Section 8.03. Legal Defeasance and Discharge
	 	 	79	 
	Section 8.04. Covenant Defeasance
	 	 	79	 
	Section 8.05. Conditions to Legal or Covenant Defeasance
	 	 	80	 
	Section 8.06. Deposited Money and U.S. Government Obligations to be Held in
Trust; Other Miscellaneous Provisions
	 	 	81	 
	Section 8.07. Repayment to the Company
	 	 	82	 
	Section 8.08. Reinstatement
	 	 	82	 
	 
	 	 	 	 
	ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER
	 	 	82	 
	Section 9.01. Without Consent of Holders
	 	 	82	 
	Section 9.02. With Consent of Holders
	 	 	83	 
	Section 9.03. Compliance with Trust Indenture Act
	 	 	85	 
	Section 9.04. Revocation and Effect of Consents
	 	 	85	 
	Section 9.05. Notation on or Exchange of Notes
	 	 	85	 
	Section 9.06. Trustee to Sign Amendments, Etc
	 	 	85	 






- iii - 









 






TABLE OF CONTENTS
(continued)






	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	Section 9.07. Information Regarding Holder Consents, Etc
	 	 	85	 
	ARTICLE 10 COLLATERAL AND SECURITY DOCUMENTS
	 	 	85	 
	Section 10.01. Security Documents and Intercreditor Agreement;
Additional Collateral
	 	 	85	 
	Section 10.02. Recording, Etc
	 	 	86	 
	Section 10.03. Possession, Use and Release of Collateral
	 	 	86	 
	Section 10.04. Reserved
	 	 	87	 
	Section 10.05. Trust Indenture Act Requirements
	 	 	87	 
	Section 10.06. Suits to Protect the Collateral
	 	 	87	 
	Section 10.07. Purchaser Protected
	 	 	88	 
	Section 10.08. Powers Exercisable by Receiver or Trustee
	 	 	88	 
	Section 10.09. Determinations Relating to Collateral
	 	 	88	 
	Section 10.10. Release Upon Termination of the Company’s Obligations
	 	 	89	 
	 
	 	 	 	 
	ARTICLE 11 GUARANTEES
	 	 	89	 
	Section 11.01. Guarantees
	 	 	89	 
	Section 11.02. Limitation on Guarantor Liability
	 	 	90	 
	Section 11.03. Execution and Delivery of Guarantee
	 	 	90	 
	Section 11.04. Release of Guarantor
	 	 	90	 
	 
	 	 	 	 
	ARTICLE 12 I/C Notes Issuers
	 	 	91	 
	Section 12.01. Intercompany Note; Contribution Agreement
	 	 	91	 
	Section 12.02. Releases of Obligations Under Intercompany Notes
	 	 	91	 
	 
	 	 	 	 
	ARTICLE 13 APPLICATION OF TRUST MONIES
	 	 	92	 
	Section 13.01. Trust Monies
	 	 	92	 
	Section 13.02. Retirement of Notes
	 	 	92	 
	Section 13.03. Withdrawal of Trust Monies for Reinvestment
	 	 	93	 
	Section 13.04. Withdrawal of Trust Monies Constituting Net Insurance
Proceeds
	 	 	94	 
	Section 13.05. Powers Exercisable by Trustee or Receiver
	 	 	94	 
	Section 13.06. Disposition of Notes Retired
	 	 	94	 
	Section 13.07. Investment of Trust Monies
	 	 	94	 
	 
	 	 	 	 
	ARTICLE 14 MISCELLANEOUS
	 	 	95	 
	Section 14.01. Trust Indenture Act Controls
	 	 	95	 
	Section 14.02. Notices
	 	 	95	 
	Section 14.03. Communication by Holders with Other Holders
	 	 	96	 
	Section 14.04. Certificate and Opinion as to Conditions Precedent
	 	 	96	 
	Section 14.05. Statements Required in Certificate or Opinion
	 	 	96	 






- iv - 









 





TABLE OF CONTENTS
(continued)







	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	Section 14.06. Rules By Trustee and Agents
	 	 	97	 
	Section 14.07. No Personal Liability of Directors, Officers, Employees
and Stockholders
	 	 	97	 
	Section 14.08. GOVERNING LAW
	 	 	97	 
	Section 14.09. No Adverse Interpretation of Other Agreements
	 	 	97	 
	Section 14.10. Intercreditor Agreement
	 	 	97	 
	Section 14.11. Successors
	 	 	97	 
	Section 14.12. Severability
	 	 	97	 
	Section 14.13. Counterpart Originals
	 	 	97	 
	Section 14.14. Table of Contents, Headings, Etc
	 	 	97	 
	Section 14.15. Acts of Holders
	 	 	97	 







- v - 











 





     INDENTURE dated as of July 27, 2009 between CAPITALSOURCE INC. (the “Company”), the
guarantors of the Notes (as defined below) from time to time parties to this Indenture and U.S.
BANK NATIONAL ASSOCIATION, as trustee.



     The Company, the Guarantors and the Trustee agree as follows for the benefit of each other and
for the equal and ratable benefit of the holders of the Notes (as defined below):



ARTICLE 1




DEFINITIONS AND INCORPORATION BY REFERENCE




     Section 1.01. Definitions.



     “144A Global Note” means a Restricted Global Note issued in a denomination equal to
the outstanding aggregate principal amount at maturity of the Notes sold in reliance on Rule 144A.



     “Acquired Debt” means, with respect to any specified Person, (a) Indebtedness of any
other Person existing at the time such other Person is merged with or into or became a Subsidiary
of such specified Person, including, without limitation, Indebtedness incurred in connection with,
or in contemplation of, such other Person merging with or into or becoming a Subsidiary of such
specified Person, and (b) Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.



     “Additional Interest” means all additional interest then owing on the Notes pursuant
to Section 6(a) of the Registration Rights Agreement.



     “Additional Notes” means up to $600,000,000 million aggregate principal amount of
12.75% First Priority Senior Secured Notes due 2014 that may be issued pursuant to Article 2 and in
compliance with Section 4.09 of this Indenture subsequent to the Issue Date and having identical
terms as the $300,000,000 aggregate principal amount of Notes issued on the Issue Date.



     “Administrative Agent” means Wachovia Bank, National Association (and any of its
successors), in its capacity as administrative agent for the Credit Facility Secured Creditors
under the Credit Agreement.



     “Affiliate” of any Person means (a) any other Person which directly, or indirectly
through one or more intermediaries, controls such Person, (b) any other Person which directly, or
indirectly through one or more intermediaries, is controlled by or is under common control with
such Person, or (c) any other Person of which such Person owns, directly or indirectly, 20% or more
of the common stock or equivalent Equity Interests. As used herein, the term “control”
means possession, directly or indirectly, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ownership of voting securities, by contract
or otherwise; provided, however, the term “Affiliate” will not include any Person that constitutes
an “Investment in Equity Instruments” or an Investment Loan Subsidiary.



     “After-Acquired Property” means (a) in the case of the Company, any Guarantor or any
I/C Notes Issuer, any and all assets or property of the type constituting Collateral acquired after
the Issue Date, including any assets or property of the type constituting Collateral acquired by
the Company, any Guarantor or any I/C Notes Issuer from a transfer from the Company, a Guarantor or
an I/C Notes Issuer and (b) in the case of any Restricted Subsidiary that is neither a Guarantor
nor an I/C Notes Issuer, any and all assets or property of the type constituting Collateral
acquired after the Issue Date, including any assets or property of the type constituting Collateral
acquired by such Restricted Subsidiary from a transfer from the Company, any Guarantor or any I/C
Notes Issuer.



 









 





     “Agent” means the Registrar, any Paying Agent or co-registrar.



     “Applicable Premium” means, with respect to any Note on any Redemption Date, the
greater of:




     (a) 1.0% of the principal amount of such Note; and




     (b) the excess, if any, of (i) the present value at such Redemption Date of (A) 100% of
the principal amount of such Note, plus (B) all required interest payments due on such Note
through July 15, 2014 (excluding accrued but unpaid interest to the Redemption Date),
computed using a discount rate equal to the Treasury Rate as of such Redemption Date plus
100 basis points; over (ii) the principal amount of such Note.



     “Applicable Procedures” means, with respect to any transfer or exchange of or for
beneficial interest in a Global Note, the rules and procedures of the Depositary, Euroclear and
Clearstream, Luxembourg that apply to such transfer or exchange.



     “April 2007 Guarantee” means the guarantee of the April 2007 Notes by CapitalSource
Finance LLC, pursuant to the April 2007 Indenture.



     “April 2007 Indenture” means the indenture, dated as of April 4, 2007, between the
Company, CapitalSource Finance LLC, as guarantor, and Wells Fargo Bank, N.A., as trustee, and with
respect to the April 2007 Notes and the April 2007 Guarantee.



     “April 2007 Notes” means the Company’s 4% Senior Subordinated Convertible Debentures
due 2034, issued pursuant to the April 2007 Indenture.



     “Asset Sale” means (i) the sale, lease, conveyance or other disposition of any assets
or rights (including, without limitation, by way of a sale and leaseback) by the Company or any
Restricted Subsidiary to any Person other than the Company or any of its Restricted Subsidiaries
other than in the ordinary course of business; provided that the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company and its Restricted
Subsidiaries taken as a whole will be governed by Sections 4.15 and/or 5.01 of this Indenture and
not Section 4.10, and (ii) the issue or sale by the Company or any of its Restricted Subsidiaries
to any Person other than the Company or any of its Restricted Subsidiaries of Equity Interests of
any of the Company’s Subsidiaries, in the case of either clause (i) or (ii) above, whether in a
single transaction or a series of related transactions (a) that have a fair market value in excess
of $10.0 million or (b) for net proceeds in excess of $10.0 million. Notwithstanding the
foregoing, the term “Asset Sale” will not include: (i) a Restricted Payment that is permitted by
Section 4.07, (ii) the sale by the Company or any Restricted Subsidiary of any distressed Portfolio
Investments (including, but not limited to, Investment Loans and Investments in Equity Instruments
or proceeds thereof as a result of foreclosure, bankruptcy, insolvency, receivership or any similar
proceeding), (iii) the sale, lease, conveyance or other disposition of any assets or rights
(including, without limitation, by way of a sale and leaseback) by the Company or any Restricted
Subsidiary to a Bank Subsidiary to the extent mandated or required by the Federal Deposit Insurance
Corporation or another bank regulatory authority in order for the Company or such Restricted
Subsidiary to comply with its obligations under applicable laws or any agreements mandated by such
bank regulatory authority, (iv) dispositions of any Investment Loan to an Investment Loan
Subsidiary in connection with the exercise of remedies under such Investment Loan, provided that
any cash proceeds realized upon such exercise of remedies are transferred promptly to a Restricted
Subsidiary following such realization or (v) the consummation of any transaction resulting in the
existence of the Healthcare REIT and the resulting designation of the same as an Unrestricted
Subsidiary.



- 2 -









 





     “Bankruptcy Code” means Title 11 of the United States Code, as amended, or any similar
federal or state law for the relief of debtors.



     “Bank Subsidiary” means CapitalSource Bank and its Subsidiaries.



     “Board of Directors” means the Board of Directors or other governing body charged with
the ultimate management of any Person, or any duly authorized committee thereof.



     “Board Resolution” means, with respect to any Person, a copy of a resolution certified
by the Secretary or an Assistant Secretary of such Person to have been duly adopted by the Board of
Directors of such Person and to be in full force and effect on the date of such certification, and
delivered to the Trustee.



     “Business Day” means any day other than a Legal Holiday.



     “Capital Lease Obligation” means, at the time any determination thereof is to be made,
the amount of the liability in respect of a capital lease that would at such time be required to be
capitalized on a balance sheet in accordance with GAAP.



     “CapitalSource Bank Acquisition Agreement” will mean that certain Purchase and
Assumption Agreement dated as of April 13, 2008, by and among the Company, CapitalSource TRS Inc.,
Fremont General Corporation, Fremont General Credit Corporation and Fremont Investment & Loan.



     “CapitalSource Bank Entities” will mean, collectively, (a) the Wholly Owned Subsidiary
formed by the Company or one of its Wholly Owned Subsidiaries for the purpose of holding the assets
acquired in the CapitalSource Bank Transaction and (b) any Subsidiaries thereof.



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



     “Capital Stock” means (a) in the case of a corporation, corporate stock, (b) in the
case of an association or business entity, any and all shares, interests, participations, rights or
other equivalents (however designated) of corporate stock, (c) in the case of a partnership or
limited liability company, partnership or membership interests (whether general or limited) and (d)
any other interest or participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.



     “Cash Equivalents” means: (a) marketable securities (i) issued or directly and
unconditionally guaranteed as to interest and principal by the United States government or (ii)
issued by any agency of the United States government, the obligations of which are backed by the
full faith and credit of the United States, in each case maturing within one (1) year after
acquisition thereof; (b) marketable direct obligations issued by any state of the United States or
any political subdivision of any such state or any public instrumentality thereof, in each case
maturing within one year after acquisition thereof, and having, at the time of acquisition, a
rating of at least A-1 from S&P or at least P-1 from Moody’s; (c) commercial paper maturing no more
than one year from the date of acquisition and, at the time of acquisition, having a rating of at
least A-1 from S&P or at least P-1 from Moody’s; (d) certificates of deposit or bankers’
acceptances issued or accepted by any commercial bank organized under the laws of the United States
or any state thereof or the District of Columbia that is (i) “adequately capitalized” (as defined
in the regulations of its primary Federal banking regulator) and (ii) has Tier 1 capital (as
defined in such regulations) of not less than $250,000,000, in each case maturing within one year
after issuance or acceptance thereof; and (e) shares of any money market mutual or similar funds
that (i) has substantially



- 3 -









 







all of its assets invested continuously in the types of investments referred to in clauses (a)
through (d) above, (ii) has net assets of not less than $500,000,000 and (iii) has the highest
rating obtainable from either S&P or Moody’s.



     “Change of Control” means the occurrence of any of the following:




     (i) the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Restricted Subsidiaries taken as a
whole to any “person” (as such term is used in Section 13(d)(3) of the Exchange Act) other
than in the ordinary course of business;




     (ii) the adoption of a plan relating to the liquidation or dissolution of the Company;




     (iii) the consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any “person” (as defined above), becomes the
“beneficial owner” (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange
Act, except that a person will be deemed to have “beneficial ownership” of all securities
that such person has the right to acquire, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition), directly or indirectly, of
more than 50% of the Voting Stock of the Company (measured by voting power rather than
number of shares); or




     (iv) the Company consolidates with, or merges with or into, any Person, or any Person
consolidates with, or merges with or into, the Company, in any such event pursuant to a
transaction in which any of the outstanding Voting Stock of the Company is converted into or
exchanged for cash, securities or other property, other than any such transaction where the
Voting Stock of the Company outstanding immediately prior to such transaction is converted
into or exchanged for Voting Stock (other than Disqualified Stock) of the surviving or
transferee Person constituting a majority of the outstanding shares of such Voting Stock of
such surviving or transferee Person (immediately after giving effect to such issuance).



     “Clearstream, Luxembourg” means Clearstream Banking, société anonyme.



     “Code” means the Internal Revenue Code of 1986, as amended.



     “Collateral” means, collectively, all of the Direct Collateral and all of the Shared
I/C Notes Collateral.



     “Collateral Account” means the collateral account established pursuant to this
Indenture and the I/C Notes Security Documents.



     “Collateral Agent” means the Collateral Agent under the Intercreditor Agreement.



     “Commission” or “SEC” means the U.S. Securities and Exchange Commission.



     “Common Stock” of any Person means any and all shares, interests or other
participations in and other equivalents (however designated and whether voting or non-voting) of
such Person’s common stock, whether outstanding on the Issue Date or issued after the Issue Date,
and includes, without limitation, all series and classes of such common stock.



     “Company” means CapitalSource Inc., as obligor under the Notes.



- 4 -









 





     “Concurrent Equity Offering” means the public offering by the Company of up to
20,125,000 shares of common stock announced July 10, 2009.



     “Consolidated Indebtedness” means, with respect to any Person as of any date of
determination, the sum, without duplication, of (a) the total amount of Indebtedness of such Person
and its Restricted Subsidiaries, plus (b) the total amount of Indebtedness of any other Person, to
the extent that such Indebtedness has been Guaranteed by the referent Person or one or more of its
Restricted Subsidiaries, plus (c) the aggregate liquidation value of all Disqualified Stock of such
Person and all preferred stock of Restricted Subsidiaries of such Person, in each case, determined
on a consolidated basis in accordance with GAAP.



     “Consolidated Leverage Ratio” means, with respect to any Person as of any date of
determination, the ratio of (a) the Consolidated Indebtedness of such Person as of such date,
excluding, however, all Hedging Obligations that constitute Permitted Debt to (b) the Consolidated
Net Worth of such Person as of such date.



     “Consolidated Net Income” means, with respect to any Person for any period, the
aggregate of the Net Income of such Person and its Restricted Subsidiaries (for such period, on a
consolidated basis, determined in accordance with GAAP) provided that (a) the Net Income (but not
loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity
method of accounting will be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Wholly Owned Restricted Subsidiary thereof;
(b) the Net Income of any Restricted Subsidiary will be excluded to the extent that the declaration
or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income
is not at the date of determination permitted without any prior governmental approval (that has not
been obtained) or, directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable
to that Restricted Subsidiary or its stockholders; (c) the Net Income of any Person acquired in a
pooling of interests transaction for any period prior to the date of such acquisition will be
excluded, and (d) the cumulative effect of a change in accounting principles will be excluded.



     “Consolidated Net Worth” means, with respect to any Person as of any date, the sum of
(a) the consolidated equity of the common stockholders of such Person and its Consolidated
Restricted Subsidiaries as of such date plus (b) the respective amounts reported on such Person’s
balance sheet as of such date with respect to any series of preferred stock (other than
Disqualified Stock) that by its terms is not entitled to the payment of dividends, unless such
dividends may be declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such Person upon issuance
of such preferred stock, less (i) all write ups (other than write ups resulting from foreign
currency translations, write ups of tangible assets of a going concern business, made within 12
months after the acquisition of such business, and write ups of residual interests in
Securitization Trusts) subsequent to the date of the Indenture in the book value of any asset owned
by such Person or a Consolidated Restricted Subsidiary of such Person, or (ii) all investments as
of such date in unconsolidated Subsidiaries and in Persons that are not Subsidiaries (except, in
each case, Permitted Investments).



     “Consolidated Subsidiary” means at any date any Subsidiary the accounts of which, in
accordance with GAAP, would be consolidated with those of the Company in its consolidated and
consolidating financial statements as of such date.



     “Convertible Notes” means the April 2007 Notes, the July 2004 Notes and the July 2007
Notes.



- 5 -









 





     “Convertible Notes Amount” means, at any time, the aggregate principal amount of
Convertible Notes then outstanding, plus the aggregate principal amount of any Permitted
Refinancing Indebtedness then outstanding and maturing 91 days after the maturity date of the
Notes, which Indebtedness was incurred to Refinance the Convertible Notes.



     “Convertible Notes Indentures” means the April 2007 Indenture, the July 2004
Indenture, the July 2007 Indenture and any other indenture delivered in connection with the
issuance of Convertible Notes by the Company after the Issue Date.



     “Corporate Trust Office of the Trustee” will be at the address of the Trustee
specified in Section 13.02 hereof or such other address as to which the Trustee may give notice to
the Company.



     “Credit and Collection Policy” means the written credit policies and procedures manual
of the Company (which policies will include without limitation policies on loss reserves, due
diligence format, underwriting parameters and credit approval procedures), as it may be amended or
supplemented from time to time.



     “Credit Enhancement Agreements” means, collectively, any documents, instruments,
guarantees or agreements entered into by the Company, any of its Restricted Subsidiaries, any of
the Securitization Trusts for the purpose of providing credit support for the Securitization Trusts
or any of their respective Indebtedness or asset-backed securities, including any Standard
Securitization Undertakings therein.



     “Credit Facility” means the Credit Agreement dated March 14, 2006 among the Company,
the guarantors party thereto, the Lenders listed therein and Wachovia Bank, National Association,
as administrative agent, as amended, together with the related documents thereto (including,
without limitation, any guarantee agreements and security documents), in each case as such
agreements may be amended, supplemented, replaced or otherwise modified from time to time in
accordance with the terms of the Intercreditor Agreement applicable thereto, including any
agreement Refinancing (including increasing the amount of available borrowings or other extensions
of credit thereunder or adding Restricted Subsidiaries of the Company as additional borrowers or
guarantors thereunder) all or any portion of the Indebtedness under such agreement or any successor
or replacement agreement and whether by the same or any other agent, lender or group of lenders or
investors and whether such Refinancing is under one or more debt facilities, indentures or other
agreements, in each case with banks, other institutional lenders, other investors or trustees
providing for revolving credit loans, term loans, notes, letters of credit or other extensions of
credit, together with related documents thereto (including, without limitation, any guaranty
agreements and security documents).



     “Credit Facility Guarantor” means each of the Company’s Subsidiaries that has
guaranteed the obligations under the Credit Facility from time to time.



     “Credit Facility Secured Creditors” means the “Lenders” as defined in the Credit
Facility Security Documents and the Administrative Agent.



     “Credit Facility Security Documents” means (a) the Pledge Agreement entered into as of
December 23, 2008, by and among (i) the Company, (ii) the direct and indirect Subsidiaries of the
Company listed on Schedule 1(a) attached thereto and any other Subsidiary of the Company that
becomes a Credit Facility Guarantor under the Credit Facility, (iii) the Administrative Agent, (iv)
Wells Fargo Bank, National Association, in its capacity as collateral custodian for the
administrative agent and (v) CapitalSource Finance LLC in its capacity as servicer, (b) the
Security Agreement entered into as of December 23, 2008, by and among (i) the Company, (ii) the
direct and indirect Subsidiaries of the Company listed on Schedule 1 attached thereto and any other
Subsidiary of the Company that becomes a



- 6 -









 







Credit Facility Guarantor under the Credit Facility and (iii) the Administrative Agent and (c)
all security agreements, control agreements, mortgages, deeds of trust, deeds to secure debt,
pledges, collateral assignments and other agreements or instruments evidencing or creating any
security interest or Lien in favor of the Collateral Agent in any or all of the Shared Collateral,
in each case as such documents may be amended in connection with this offering, and thereafter as
amended, modified, supplemented or replaced from time to time in accordance with their terms and
the Intercreditor Agreement.



     “Credit Party” will mean any of the Company, any Guarantor and any I/C Notes Issuer,
and “Credit Parties” will mean two or more of such entities, collectively.



     “Default” means any event that is or with the passage of time or the giving of notice
or both would be an Event of Default.



     “Definitive Note” means a certificated Note registered in the name of the Holder
thereof in the form of Exhibit A hereto, except that such Note will not bear the Global
Note Legend and will not have the “Schedule of Exchanges of Interests in the Global Note” attached
thereto.



     “Depositary” means, with respect to the Notes issuable or issued in whole or in part
in global form, the Person specified in Section 2.04 hereof as the Depositary with respect to the
Notes and any and all successors thereto appointed as depositary hereunder and having become such
pursuant to the applicable provision of this Indenture.



     “Destruction” means any damage to, loss or destruction of all or any portion of the
Collateral. “Destroyed” will have a correlative meaning.



     “Direct Collateral” means all of the Company’s and each Guarantor’s right, title and
interest in, to and under the Shared Direct Collateral and the Primary Direct Collateral, in each
case, whether now owned or hereafter acquired.



     “Disqualified Stock” means any Capital Stock that, by its terms (or by the terms of
any security into which it is convertible or for which it is exchangeable) or upon the happening of
any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or redeemable at the option of the Holder thereof, in whole or in part, on or prior to
the date that is 91 days after the date on which the Notes mature (other than as a result of an
Asset Sale or a Change of Control so long as the Company and its Restricted Subsidiaries, as the
case may be, first comply with the relevant provisions of Sections 4.10 and 4.15).



     “Eligible Receivables” means, at any time, all Receivables owned by the Company or any
of its Restricted Subsidiaries that meet the sale or loan eligibility criteria set forth in a
Warehouse Facility or Securitization Trust pursuant to which the applicable Receivables were
financed; excluding, however, any Receivables that are pledged to secure borrowings under a Credit
Facility.



     “Equity Interests” means Capital Stock and all warrants, options or other rights to
acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable
for, Capital Stock).



     “Equity Offering” means any offering of Common Stock of the Company other than the
Concurrent Equity Offering.



     “Euroclear” means Euroclear Bank S.A./N.V., as operator of the Euroclear system.



- 7 -









 





     “Excess Refinancing Indebtedness” means, in connection with any Refinancing of secured
Indebtedness, Indebtedness (a) in excess of the aggregate principal amount of Permitted Refinancing
Indebtedness permitted by the definition thereof to be incurred in connection with such
Refinancing, (b) incurred substantially contemporaneously with such Refinancing, and (c) secured
by, and only by the same assets as the Indebtedness being Refinanced; provided that the proceeds of
such Excess Refinancing Indebtedness (net of the pro rata portion of expenses allocable thereto)
will be deemed to be Net Proceeds as if such Net Proceeds were received in respect of an Asset Sale
not involving the sale or transfer of Shared Collateral at the time of such Refinancing and will be
applied as provided in Section 4.10; and provided further that such Net Proceeds may not be used to
make an investment in Replacement Assets pursuant to clause (a)(iv)(C)(2) or (a)(iv)(C)(3) of
Section 4.10.



     “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor
statute or statutes thereto.



     “Exchange Offer” has the meaning set forth in the Registration Rights Agreement.



     “Exchange Offer Registration Statement” has the meaning set forth in the Registration
Rights Agreement.



     “Existing Credit Agreement” means the Credit Agreement dated March 14, 2006, among the
Company, the guarantors party thereto, the lenders party thereto and the Administrative Agent as
amended through July 10, 2009, together with the related documents thereto (including, without
limitation, any guarantee agreements and security documents), in each case as in effect on the
Issue Date, as such documents may be amended, modified, supplemented or replaced from time to time,
other than any amendment, modification or supplement, or any waiver granted by the required lenders
thereunder, which eliminates the requirement to apply any Loan Collateral Net Proceeds to reduce
commitments of the lenders thereunder.



     “Existing Indebtedness” means the Indebtedness of the Company and its Restricted
Subsidiaries (other than Indebtedness under the Credit Facility) either in existence or committed
to be funded on and as of the Issue Date, until such amounts are repaid.



     “fair market value” means, with respect to any asset or property, the price which
could be negotiated in an arm’s-length, free market transaction, for cash, between a willing seller
and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the
transaction. Fair market value will be determined (a) in the case of any transaction involving
aggregate payments or other property with a fair market value of $10.0 million or less, by the
management of the Company acting reasonably and in good faith and will be evidenced by an Officer’s
Certificate of the Company delivered to the Trustee or (b) in all other cases, by the Board of
Directors of the Company acting reasonably and in good faith and will be evidenced by a Board
Resolution of the Board of Directors of the Company delivered to the Trustee.



     “GAAP” means generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as have been approved by a significant segment of the
accounting profession, which are in effect from time to time and consistently applied.



     “Global Note Legend” means the legend set forth in Section 2.07(g)(ii), which is
required to be placed on all Global Notes issued under this Indenture.



- 8 -









 





     “Global Notes” means the Restricted Global Notes and the Unrestricted Global Notes, in
the form of Exhibit A hereto, issued in accordance with Sections 2.02, 2.07(b)(iv),
2.07(d)(ii), 2.07(f) or 2.07(j) hereof.



     “Guarantee” means a guarantee (other than by endorsement of negotiable instruments for
collection in the ordinary course of business), direct or indirect, in any manner (including,
without limitation, letters of credit and reimbursement agreements in respect thereof), of all or
any part of any Indebtedness.



     “Guarantors” means each of (a) CapitalSource Finance LLC and (b) any other Subsidiary
that executes a Notes Guarantee in accordance with the provisions of this Indenture, and their
respective successors and assigns.



     “Healthcare REIT” means the REIT resulting from the spin-off, initial public offering,
merger or other corporate transaction of the healthcare net-lease business of the Company and its
Subsidiaries after which the shares of such REIT (or its successor) are listed on a U.S. national
securities exchange or the NASDAQ Stock Market. The Company will promptly notify the Trustee and
the Holders of a transaction that results in the creation of the Healthcare REIT; provided that
such notification will be deemed to have been satisfied if the Company files a Form 8-K with the
Commission or otherwise provides a comparable report to Holders pursuant to Section 4.03 hereof.



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



     “Hedging Obligations” means, with respect to any Person, the obligations of such
Person under (a) interest rate swap agreements, interest rate cap agreements and interest rate
collar agreements and (b) other agreements or arrangements designed to protect such Person against
fluctuations in interest or currency exchange rates.



     “Holder” means any registered holder, from time to time, of the Notes.



     “HUD Debt” means Non-Recourse Debt secured by real property of the Company or any of
its Restricted Subsidiaries, guaranteed by the United States Department of Housing and Urban
Development.



     “IAI Global Note” means a Restricted Global Note that, if issued, will be issued in a
denomination equal to the outstanding principal amount at maturity of the Notes held by
Institutional Accredited Investors.



     “I/C Notes Issuers” means, collectively, each Credit Facility Guarantor that is not a
Guarantor.



     “I/C Notes Security Documents” means (a) each Credit Facility Security Document (other
than the obligations of the Company and the Guarantors thereunder), and (b) all security
agreements, control agreements, mortgages, deeds of trust, deeds to secure debt, pledges,
collateral assignments and other agreements or instruments evidencing or creating any security
interest or Lien in favor of the Collateral Agent in any or all of the Shared I/C Notes Collateral;
in each case as amended modified, supplemented or replaced from time to time in accordance with
their terms and the Intercreditor Agreement.



     “Indebtedness” means, with respect to any Person, any indebtedness of such Person,
whether or not contingent, in respect of borrowed money, or evidenced by bonds, notes, debentures
or similar instruments or letters of credit (or reimbursement agreements in respect thereof), or
banker’s acceptances



- 9 -









 







or representing Capital Lease Obligations or the balance deferred and unpaid of the purchase
price of any property, or representing any Hedging Obligations, except any such balance that
constitutes an accrued expense or trade payable, as well as all indebtedness of others secured by a
Lien on any asset of such Person (whether or not such indebtedness is assumed by such Person) and,
to the extent not otherwise included, the Guarantee by such Person of any indebtedness of any other
Person. The amount of any Indebtedness outstanding as of any date will be (a) the accreted value
thereof, in the case of any Indebtedness that does not require current payments of interest, and
(b) the principal amount thereof, together with any interest thereon that is more than 30 days past
due, in the case of any other Indebtedness.



     “Indenture” means this Indenture, as amended or supplemented from time to time.



     “independent financial advisor” means a firm: (a) which does not, and whose
directors, officers and employees or Affiliates do not, have a direct or indirect financial
interest in the Company; and (b) which, in the judgment of the Board of Directors of the Company,
is otherwise independent and qualified to perform the task for which it is to be engaged.



     “Indirect Participant” means a Person who holds a beneficial interest in a Global Note
through a Participant.



     “Initial Purchasers” means Credit Suisse Securities (USA) LLC, Citigroup Global
Markets Inc., J.P. Morgan Securities Inc., Wells Fargo Securities, LLC, BMO Capital Markets Corp.
and Morgan Stanley & Co. Incorporated.



     “Institutional Accredited Investor” means an institution that is an “accredited
investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is not also a
QIB.



     “Intercompany Note” means a senior secured note issued by an I/C Notes Issuer to the
Company maturing 18 months following the final maturity date of the Notes, which will be secured by
all of the assets of such I/C Notes Issuer that secure the obligations under the Credit Facility.



     “Intercreditor Agreement” means the intercreditor agreement dated as of the Issue
Date, by and among the Administrative Agent, the Collateral Agent and the Trustee, as consented to
by the Company and the Credit Facility Guarantors, substantially in the form attached hereto as
Exhibit I, as amended, modified, supplemented or replaced from time to time in accordance
with the terms thereof or this Indenture.



     “Investment Loan” means any senior or subordinated loan (including letters of credit
issued under such loan) or lease (a) arising from the extension of credit to an Obligor by the
Company or a Consolidated Subsidiary (excluding an Unrestricted Subsidiary) in the ordinary course
of business, (b) originated in accordance with the policies and procedures set forth in the Credit
and Collection Policy, and (c) good and marketable title to which is owned by the Company or a
Consolidated Subsidiary.



     “Investment Loan Subsidiary” means any Person that becomes a subsidiary as a result of
the exercise of remedies by the Company or any Consolidated Subsidiary under any Investment Loan.



     “Investments” means, with respect to any Person, all investments by such Person in
other Persons (including Affiliates) in the forms of direct or indirect loans (including Guarantees
of Indebtedness or other obligations), advances or capital contributions (excluding commission,
travel and similar advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or



- 10 -









 







would be classified as investments on a balance sheet prepared in accordance with GAAP;
provided, however, that, notwithstanding the foregoing, the Company and its Subsidiaries will not
be deemed to have made any Investment in conducting any Permitted Business in the ordinary course
of business in accordance with the Credit and Collection Policy. If the Company or any Restricted
Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or
indirect Subsidiary of the Company such that, after giving effect to any such sale or disposition,
such Person is no longer a Subsidiary of the Company, the Company will be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market value of the Equity
Interests of such Subsidiary not sold or disposed of in an amount determined as provided in clause
(c) of Section 4.07.



     “Investments in Equity Instruments” means each Investment that is made in accordance
with the policies and procedures set forth in the Credit and Collection Policy, owned by the
Company or any Consolidated Subsidiary (excluding an Unrestricted Subsidiary) in (a) common stock,
partnership interests or membership interests of any Person and that is classified as “Common
Stock,” “Partnership Units” or “Membership Units” on the consolidated schedule of investments of
the Company for the then-most-recently-ended fiscal quarter, (b) preferred stock (other than
redeemable preferred stock) of any Person and that is classified as “Preferred Stock” on the
consolidated schedule of investments of the Company for the then-most-recently-ended fiscal
quarter, (c) redeemable preferred stock of any Person and that is classified as “Redeemable
Preferred Stock” on the consolidated schedule of investments of the Company for the
then-most-recently-ended fiscal quarter, and (d) warrants to purchase common stock, partnership
interests or membership interests of any Person and that is classified as “Common Stock Warrants,”
“Partnership Unit Warrants” or “Membership Unit Warrants” on the consolidated schedule of
investments of the Company for the then-most-recently-ended fiscal quarter.



     “Issue Date” means July 27, 2009, the date of the original issuance of the Notes.



     “July 2004 Guarantee” means the guarantee of the July 2004 Notes by CapitalSource
Finance LLC, pursuant to the July 2004 Indenture.



     “July 2004 Indenture” means the indenture dated as of July 7, 2004 among the Company,
CapitalSource Finance LLC, as guarantors, and U.S. Bank National Association, as trustee, with
respect to the July 2004 Notes and the July 2004 Guarantee.



     “July 2004 Notes” means the Company’s 3.5% Senior Convertible Debentures due 2034,
issued pursuant to the July 2004 Indenture.



     “July 2007 Guarantee” means the guarantee of the July 2007 Notes by CapitalSource
Finance LLC, pursuant to the July 2007 Indenture.



     “July 2007 Indenture” means the indenture dated as of July 30, 2007 between the
Company, and Wells Fargo Bank, N.A., as trustee, with respect to the July 2007 Notes and the July
2007 Guarantees, and the supplemental indenture dated as of July 30, 2007 among the Company,
CapitalSource Finance LLC, as guarantor, and Wells Fargo Bank, N.A., as trustee, with respect to
the July 2007 Notes and the July 2007 Guarantees.



     “July 2007 Notes” means the Company’s 7.25% Senior Subordinated Convertible Notes due
2037, issued pursuant to the July 2007 Indenture.



     “Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in
the City of New York or at a place of payment are authorized by law, regulation or executive order
to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made
at that place on the



- 11 -









 







next succeeding day that is not a Legal Holiday, and no interest will accrue on such payment
for the intervening period.



     “Letter of Transmittal” means any letter of transmittal prepared by the Company and
sent to all Holders for use by such Holders in connection with the Exchange Offer.



     “Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or
otherwise perfected under applicable law (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing statement under the
Uniform Commercial Code (or equivalent statutes) of any jurisdiction).



     “Loan Collateral” means any loan (including letters of credit) arising from the
extension of credit to an Obligor (a) by any Credit Party and constituting Collateral owned or held
directly by any such Credit Party and (b) at all times during which the Convertible Notes Amount is
$100 million or more, by any other Restricted Subsidiary (including, without limitation, any
Securitization Trust or Warehouse Trust) to the extent that Loan Collateral Net Proceeds thereof
are not required to be applied to the permanent repayment of, or other good faith reserve securing,
any Indebtedness secured by a Permitted Lien thereon. For the avoidance of doubt, Loan Collateral
described in clause (b) above is not Collateral and is not subject to the Security Documents or any
Lien on Collateral securing the Notes.



     “Loan Collateral Calculation Period” means the period commencing on each Loan
Collateral Measurement Date and continuing through the day immediately preceding the next Loan
Collateral Measurement Date.



     “Loan Collateral Measurement Date” means the 60th day prior to each interest payment
date.



     “Loan Collateral Net Proceeds” means the aggregate cash proceeds received by any
Credit Party in respect of any Loan Collateral (including, without limitation, any cash proceeds
received from scheduled principal collections, prepayments or terminated commitments of any Loan
Collateral, but specifically excluding proceeds applicable to fees, interest, reimbursements,
indemnities and similar proceeds), net of the direct costs relating thereto and any taxes paid or
payable as a result thereof (after taking into account any available tax credits or deductions and
any tax sharing arrangements); provided, however, that the term Loan Collateral Net Proceeds will
not include any payments of principal received on account of any revolving loan held by any Credit
Party without a reduction of the commitment of such Credit Party with respect to such revolving
loan.



     “Loan Collateral Repurchase Amount” means, as of each Loan Collateral Measurement
Date, the aggregate amount of Loan Collateral Net Proceeds received by all Credit Parties during
the immediately preceding Loan Collateral Collection Period, less the aggregate principal amount of
Notes repurchased by the Company during such Loan Collateral Collection Period, less any Loan
Collateral Repurchase Carryforward measured as of the immediately preceding Loan Collateral
Measurement Date.



     “Loan Collateral Repurchase Carryforward” means, with respect to the calculation of
the Loan Collateral Repurchase Amount as of a particular Loan Collateral Measurement Date, to the
extent the Loan Collateral Repurchase Amount calculated as of the immediately preceding Loan
Collateral Measurement Date was a negative number, the positive amount of such number.



- 12 -









 





     “Loan Collateral Trigger Date” means any interest payment date next following a Loan
Collateral Measurement Date as of which the Loan Collateral Repurchase Amount is equal to or
greater than $25.0 million.



     “Moody’s” means Moody’s Investors Service, Inc., or any successor thereto.



     “Net Income” means, with respect to any Person, the net income (loss) of such Person,
determined in accordance with GAAP and before any reduction in respect of preferred stock
dividends, excluding, however, (a) any gain (but not loss), together with any related provision for
taxes on such gain (but not loss), realized in connection with (i) any Asset Sale (including,
without limitation, dispositions pursuant to sale and leaseback transactions) or (ii) the
disposition of any securities by such Person or any of its Restricted Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries and (b) any
extraordinary or nonrecurring gain (but not loss), together with any related provision for taxes on
such extraordinary or nonrecurring gain (but not loss).



     “Net Insurance Proceeds” means the insurance proceeds (excluding liability insurance
proceeds payable to the Trustee for any loss, liability or expense incurred by it) actually
received by the Company or any Restricted Subsidiary as a result of damage to, or the loss,
destruction of, all or any portion of the Collateral, less collection costs, including fees and
expenses of attorneys and insurance adjusters paid by the Company or any Restricted Subsidiary.



     “Net Proceeds” means the aggregate cash proceeds received by the Company or any of its
Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash
received upon the sale or other disposition of any non-cash consideration received in any Asset
Sale), net of the direct costs relating to such Asset Sale (including, without limitation, legal,
accounting and investment banking fees, and sales commissions) and any relocation expenses incurred
as a result thereof, taxes paid or payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements), amounts required to be
applied to the repayment of Indebtedness secured by a Lien on the asset or assets that were the
subject of such Asset Sale and any reserve for adjustment in respect of the sale price of such
asset or assets established in accordance with GAAP.



     “Non-Recourse Debt” means Indebtedness (a) as to which neither the Company nor any of
its Restricted Subsidiaries, subject to Standard Securitization Undertakings and Standard Mortgage
Undertakings, as applicable, (i) provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness), (ii) is directly or indirectly liable
(as a guarantor or otherwise), or (iii) constitutes the lender; and (b) no default with respect to
which (including any rights that the holders thereof may have to take enforcement action against an
Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) any holder of any other
Indebtedness (other than the Notes being offered hereby) of the Company or any of its Restricted
Subsidiaries to declare a default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its Stated Maturity; and (c) as to which the lenders have been
notified in writing that they will not have any recourse to the stock or assets of the Company or
any of its Restricted Subsidiaries.



     “Non-Recourse Mortgage Debt” means Non-Recourse Debt of the Company or any of its
Restricted Subsidiaries which is secured by real property of the Company or of any such Restricted
Subsidiary.



     “Non-U.S. Person” means a Person who is not a U.S. Person.



     “Note Custodian” means the Trustee, as custodian for the Depositary with respect to
the Notes in global form, or any successor entity thereto.



- 13 -









 





     “Notes” means the Company’s 12.75% First Priority Senior Secured Notes due 2014.



     “Notes Guarantee” means the Guarantee on the terms set forth in the Indenture by a
Guarantor of the Company’s obligations under the Notes.



     “Notes Secured Creditors” means, collectively, the Trustee, the Company, the Holders
and the holders of any Intercompany Notes.



     “Notes Security Documents” means, collectively, (a) the Pledge and Assignment
Agreement, (b) each Credit Facility Security Document (other than the obligations of the I/C Notes
Issuers thereunder) and (c) all other agreements or instruments evidencing or creating any security
interest or Lien in favor of the Trustee, for its benefit and for the benefit of the Holders, in
any or all of the Direct Collateral; in each case, as amended from time to time in accordance with
their respective terms.



     “Obligations” means any principal, interest, penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the documentation governing any
Indebtedness.



     “Obligor” means, with respect to any Investment, the Person or Persons obligated to
make payments pursuant to such Investment or, in the case of “Investments in Equity Interests,” the
issuer of such equity, including any guarantor thereof.



     “Officer” means, with respect to any Person, the Chairman of the Board, the Chief
Executive Officer, the President, the Chief Operating Officer, the Chief Legal Officer, the Chief
Financial Officer, the Chief Accounting Officer, the Treasurer or any Executive Vice-President (or
any such other officer that performs similar duties) of such Person.



     “Officer’s Certificate” of the Company means a certificate signed on behalf of the
Company by two Persons, one of which will be any of the following: the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief Legal Officer, the
Chief Financial Officer, the Chief Accounting Officer, the Treasurer or any Executive Vice
President (or any such other officer that performs similar duties) of the Company, and the other
will be any of the following: the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Operating Officer, the Chief Legal Officer, the Chief Financial Officer, the
Chief Accounting Officer, the Treasurer, the Assistant Treasurer, Controller, the Secretary, any
Assistant Secretary or any Executive Vice President (or any such other officer that performs
similar duties) of the Company.



     “OID Legend” means the legend set forth in Section 2.07(g)(iii), which is required to
be placed on all Notes issued under this Indenture.



     “Opinion of Counsel” means a written opinion from legal counsel that meets the
requirements of Section 14.05 hereof who is reasonably acceptable to the Trustee. Such counsel may
be an employee of or counsel to the Company.



     “Participant” means, with respect to DTC, Euroclear or Clearstream, Luxembourg, a
Person who has an account with DTC, Euroclear or Clearstream, Luxembourg, respectively (and, with
respect to DTC, will include Euroclear and Clearstream, Luxembourg).



     “Participating Broker-Dealer” has the meaning set forth in the Registration Rights
Agreement.



     “Permitted Business” means the business of commercial lending and banking business
activities, loan portfolio management, residential mortgage business activities, direct real estate
investment business



- 14 -









 







activities and entering into agreements and engaging in transactions involving commercial
lending or otherwise incidental to the foregoing.



     “Permitted Collateral Liens” means any Lien on the Collateral:




     (a) to secure:




     (i) Indebtedness of the Company or a Restricted Subsidiary under the Credit
Facility (or any Guarantees thereof) incurred pursuant to clause (i) of the
definition of “Permitted Debt”;




     (ii) the Notes (or any Guarantees thereof) incurred pursuant to clause (v) of
the definition of “Permitted Debt”;




     (iii) Indebtedness incurred pursuant to clause (a) of Section 4.09 so long as
(A) no Event of Default has occurred and is continuing and (B) as of the date of any
such incurrence of Indebtedness, the book value of the Collateral securing such
Indebtedness incurred is greater than 6 times the aggregate principal amount of
Indebtedness secured by the Collateral; or




     (iv) any Permitted Refinancing Indebtedness thereof;




     in each case on an equal or ratable basis; or




     (b) that is a statutory Lien arising by operation of law, provided that such Lien
either ranks:




     (i) equal to all other Liens on such Collateral securing unsubordinated
Indebtedness of the Issuer or the relevant Restricted Subsidiary, if the Lien
secures unsubordinated Indebtedness; or




     (ii) junior to the Liens securing the Notes.



     “Permitted Investments” means:




     (a) any Investment in the Company or in a Wholly Owned Restricted Subsidiary of the
Company that is a Credit Party;




     (b) any Investment in Cash Equivalents;




     (c) any Investment by the Company or any Subsidiary of the Company in a Person, if as a
result of such Investment (i) such Person becomes a Wholly Owned Restricted Subsidiary of
the Company and a Guarantor that is engaged in a Permitted Business or (ii) such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys substantially all
of its assets to, or is liquidated into, the Company or a Wholly Owned Restricted Subsidiary
of the Company that is a Credit Party and that is engaged in a Permitted Business;




     (d) any Restricted Investment made as a result of the receipt of non-cash consideration
from an Asset Sale that was made pursuant to and in compliance with Section 4.10;




     (e) any acquisition of assets solely in exchange for the issuance of Equity Interests
(other than Disqualified Stock) of the Company;



- 15 -









 






     (f) any Investments by the Company or any of its Restricted Subsidiaries in a Bank
Subsidiary (i) that are mandated or required by the Federal Deposit Insurance Corporation or
another bank regulatory authority in order for the Company or such Restricted Subsidiary to
comply with its obligations under applicable laws or any agreements mandated by such bank
regulatory authority, or (ii) that, calculated separately from any Investments made pursuant
to clause (f)(i), do not exceed $25.0 million in the aggregate at any one time outstanding
(measured as of the date made and without giving effect to subsequent changes in value); and




     (g) other Investments by the Company or any of its Subsidiaries in any Person (other
than an Affiliate of the Company that is not also a Subsidiary of the Company) that do not
exceed $25.0 million in the aggregate at any one time outstanding (measured as of the date
made and without giving effect to subsequent changes in value).



     “Permitted Liens” means:




     (i) Liens existing on the date of the Indenture;




     (ii) Liens on Eligible Receivables and the proceeds thereof to secure Permitted
Warehouse Debt or permitted Guarantees thereof;




     (iii) Liens to secure borrowings under a Residual Funding Facility or permitted
Guarantees thereof;




     (iv) Liens on Receivables and the proceeds thereof incurred in connection with
Securitizations or permitted Guarantees thereof;




     (v) Liens on spread accounts and credit enhancement assets, Liens on the Capital Stock
of Restricted Subsidiaries of the Company, substantially all of the assets of which are
spread accounts and credit enhancement assets and Liens on interests in Securitization
Trusts;




     (vi) Liens for taxes, assessments, charges or other governmental levies not yet due or
as to which the period of grace, if any, related thereto has not expired or which are being
contested in good faith by appropriate proceedings; provided that adequate reserves with
respect thereto are maintained on the books of the applicable Credit Party in conformity
with GAAP;




     (vii) statutory Liens such as carriers’, warehousemen’s, mechanics’, materialmen’s,
landlords’, repairmen’s or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than 30 days or which are being contested in good faith
by appropriate proceedings;




     (viii) pledges or deposits in connection with workers’ compensation, unemployment
insurance and other social security legislation and deposits securing liability to insurance
carriers under insurance or self-insurance arrangements;




     (ix) easements, rights of way, restrictions and other similar encumbrances affecting
real property which do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the business of the
applicable Person;




     (x) rights of setoff or bankers’ liens upon deposits of cash in favor of banks or other
depository institutions, solely to the extent permitted under the Credit Facility;



- 16 -









 






     (xi) deposits to secure (A) the performance of tenders, bids, trade contracts, licenses
and leases, statutory obligations, and other obligations of a like nature incurred in the
ordinary course of business and consistent with past practices and not in connection with
the borrowing of money, or (B) indemnification obligations entered into in the ordinary
course of business consistent with past practice relating to any disposition permitted
hereunder;




     (xii) Liens securing judgments, awards or orders for the payment of money that do not
constitute an Event of Default pursuant to clause (viii) of the definition thereof;




     (xiii) ground leases with respect to real property owned or leased by the Company or
any Restricted Subsidiary not interfering in any material respect with the business of the
Company or any Restricted Subsidiary;




     (xiv) Permitted Collateral Liens;




     (xv) non-exclusive licenses of patents, trademarks, copyrights, and other intellectual
property rights in the ordinary course of business;




     (xvi) Liens deemed to exist in connection with investments in repurchase agreements
entered into in the ordinary course of business consistent with past practice;




     (xvii) earn-out or similar obligations issued in connection with an acquisition
otherwise permitted hereunder (to the extent such earn-out or similar obligation is
unsecured but deemed a Lien);




     (xviii) other Liens so long as (A) any Indebtedness secured thereby does not constitute
Indebtedness for borrowed money and (B) does not exceed $250,000 in the aggregate at any
time outstanding;




     (xix) Liens in favor of the Company or any Restricted Subsidiary;




     (xx) Liens securing HUD Debt incurred pursuant to clause (xiii) of the definition of
Permitted Debt;




     (xxi) Liens on any assets contributed to a Securitization Trust or Warehouse Trust
existing on the Issue Date; provided that (A) the Company receives Proceeds in connection
with such asset contribution in an aggregate principal amount equal to or in excess of the
greater of 75% (or, in the case of assets contributed to the CS Funding VII Depositor LLC
Warehouse Facility, 50%) of (1) the book value of such assets as of June 30, 2009 or (2) the
fair market value of such assets as of the date on which such Liens are created; (B) no
Event of Default has occurred and is continuing; (C) the Company treats any Proceeds
received in connection with such transaction as Proceeds from an Asset Sale and applies such
Proceeds in accordance with clause (a)(iv) of Section 4.10 including, if applicable, to make
a Net Proceeds Offer; and (D) the Company has delivered an Officer’s Certificate to the
Trustee certifying compliance with the foregoing requirements;




     (xxii) Liens securing any Permitted Refinancing Indebtedness which is incurred to
Refinance any Indebtedness which has been secured by a Lien permitted under the Indenture
and which has been incurred in accordance with the provisions of the Indenture; provided,
however, that such Liens (A) taken as a whole are no less favorable to the Holders than the
Liens in respect of the Indebtedness being Refinanced as determined by the management of the
Company in their




- 17 -











 






reasonable and good faith judgment; and (B) do not extend to or cover any property or
assets of the Company or any of its Restricted Subsidiaries not securing the Indebtedness so
Refinanced other than in connection with Excess Refinancing Indebtedness in accordance with
the definition thereof;




     (xxiii) Liens securing any Non-Recourse Debt incurred in compliance with clauses (xiv)
or (xv) of the definition of “Permitted Debt”; or




     (xxiv) Liens securing Acquired Debt incurred in accordance with Section 4.09; provided
that: (A) such Liens secured such Acquired Debt at the time of and prior to the incurrence
of such Acquired Debt by the Company or a Restricted Subsidiary of the Company and were not
granted in connection with, or in anticipation of, the incurrence of such Acquired Debt by
the Company or a Restricted Subsidiary of the Company; and (B) such Liens do not extend to
or cover any property or assets of the Company or of any of its Restricted Subsidiaries
other than the property or assets that secured the Acquired Debt prior to the time such
Indebtedness became Acquired Debt of the Company or a Restricted Subsidiary of the Company
and are no more favorable to the lienholders than those securing the Acquired Debt prior to
the incurrence of such Acquired Debt by the Company or a Restricted Subsidiary of the
Company as determined by the management of the Company in their reasonable and good faith
judgment.



     “Permitted Refinancing Indebtedness” means any Indebtedness of the Company or any of
its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to,
Refinance other Indebtedness of the Company or any of its Restricted Subsidiaries (other than
intercompany Indebtedness); provided that:




     (i) the principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount of (or accreted value, if
applicable), plus accrued interest on, the Indebtedness so Refinanced (plus the amount of
reasonable expenses incurred in connection therewith);




     (ii) such Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than
the Weighted Average Life to Maturity of, the Indebtedness being Refinanced;




     (iii) if the Indebtedness being Refinanced is subordinated in right of payment to the
Notes, such Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and is subordinated in right of payment to, the Notes on terms at
least as favorable to the Holders of Notes as those contained in the documentation governing
the Indebtedness being Refinanced; and




     (iv) such Indebtedness is incurred either by the Company or by the Restricted
Subsidiary who is the Obligor on the Indebtedness being Refinanced.



     “Permitted Warehouse Debt” means Indebtedness of the Company or a Restricted
Subsidiary of the Company outstanding under one or more Warehouse Facilities.



     “Person” means an individual, partnership, corporation, limited liability company,
unincorporated organization, trust, joint venture, or a governmental agency or political
subdivision thereof.



- 18 -









 





     “Pledge and Assignment Agreement” means the pledge and collateral assignment agreement
to be entered into on or before the Issue Date between the Company and the Trustee, for its benefit
and for the benefit of the Holders.



     “Portfolio Investments” means Investments made by the Company or a consolidated
Restricted Subsidiary in the ordinary course of business and consistently with practices existing
on the date hereof in a Person that is accounted for under GAAP as a portfolio investment of the
Company or a consolidated Restricted Subsidiary.



     “Preferred Stock” of any Person means any Capital Stock of such Person that has
preferential rights to any other Capital Stock of such Person with respect to dividends or
redemptions or upon liquidation.



     “Primary Direct Collateral” means all Intercompany Notes from time to time issued and
outstanding; all security interests and Liens securing any and all Intercompany Notes, which will
secure such Intercompany Notes to substantially the same extent as the Collateral securing
obligations of the I/C Notes Issuers under the Credit Facility, and all right, title and interest
of the Company in, to and under the I/C Notes Security Documents; and all general intangibles,
books and records, and proceeds and products of any and all of the foregoing.



     “Private Placement Legend” means the legend set forth in Section 2.07(g)(i) to be
placed on all Notes issued under this Indenture, except where otherwise permitted by the provisions
of this Indenture.



     “Proceeds” means the aggregate cash proceeds received by the Company or any of its
Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash
received upon the sale or other disposition of any non-cash consideration received in any Asset
Sale).



     “QIB” means a “qualified institutional buyer” as defined in Rule 144A under the
Securities Act.



     “Realization” means any enforcement by the Collateral Agent of any Security Document
relating to the Shared Collateral, or receipt of any payment or any “secured status” in a
bankruptcy proceeding as a result of or attributable to the Shared Collateral; provided that a
“Realization” will not include any prepayment of Indebtedness under the Credit Facility with the
Net Cash Proceeds received in an Asset Sale in accordance with Section 4.10.



     “real property” means any interest in any real property or any portion thereof whether
owned in fee or leased or otherwise owned.



     “Receivables” means loans that are purchased or originated in the ordinary course of
business by the Company or any Restricted Subsidiary of the Company.



     “Redemption Date” means the applicable redemption date of the Notes.



     “Refinance” means, in respect of any security or Indebtedness, to amend, increase,
modify, supplement, replace, refinance, restructure, extend, renew, refund, repay, prepay, redeem,
defease or retire, or to issue a security or Indebtedness or enter alternative financing
arrangements, in exchange or replacement for, such security or Indebtedness in whole or in part,
including by adding or replacing lenders, creditors, agents, borrowers and/or guarantors, and
including in each case, but not limited to, after the original instrument giving rise to such
indebtedness has been terminated and including, in each case, through any credit agreement,
indenture or other agreement. “Refinanced” and “Refinancing” will have correlative
meanings.



- 19 -









 





     “Registration Rights Agreement” means the registration rights agreement, dated as of
the Issue Date, by and among the Company, the Guarantor and the Initial Purchasers.



     “Regulation S” means Regulation S promulgated under the Securities Act.



     “Regulation S Global Note” means a Restricted Global Note issued in a denomination
equal to the outstanding principal amount at maturity of the Notes offered and sold in an offshore
transaction in reliance on Rule 904 of Regulation S.



     “REIT” means an entity that meets the requirements for qualification as a real estate
investment trust under Sections 856 through 859 of the Internal Revenue Code of 1986, as amended.



     “Replacement Assets” means, in connection with an Assets Sale, properties and assets
that replace the properties and assets that were the subject of such Asset Sale, or properties and
assets that will be used in the business of the Company and its Restricted Subsidiaries as existing
on the Issue Date or in a Permitted Business, including Capital Stock of a Person primarily engaged
in a Permitted Business that becomes a Restricted Subsidiary.



     “Residual Funding Facility” means any funding arrangement with a financial institution
or other lender or purchaser under which advances are made to the Company or any Subsidiary based
upon residual or subordinated interests in Securitization Trusts and/or Warehouse Trusts.



     “Responsible Officer,” when used with respect to the Trustee, means any officer within
the Corporate Trust Administration of the Trustee (or any successor group of the Trustee) or any
other officer of the Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his or her knowledge of and
familiarity with the particular subject.



     “Restricted Definitive Note” means a Definitive Note bearing the Private Placement
Legend.



     “Restricted Global Note” means a permanent Global Note in the form of Exhibit
A attached hereto that bears the Global Note Legend and the OID Legend and that has the
“Schedule of Exchanges of Interests in the Global Note” attached thereto and that is deposited with
or on behalf of and registered in the name of the Depositary, representing a series of Notes that
bears the Private Placement Legend and the OID Legend.



     “Restricted Investment” means an Investment other than a Permitted Investment.



     “Restricted Subsidiary” of a Person means any Subsidiary of such Person that is not an
Unrestricted Subsidiary.



     “Rule 144” means Rule 144 promulgated under the Securities Act.



     “Rule 144A” means Rule 144A promulgated under the Securities Act.



     “Rule 144A Global Note” means a Restricted Global Note issued in a denomination equal
to the outstanding aggregate principal amount at maturity of the Notes offered and sold to
qualified institutional buyers in reliance on Rule 144A.



     “Rule 405” means Rule 405 promulgated under the Securities Act.



- 20 -









 





     “Rule 903” means Rule 903 promulgated under the Securities Act.



     “Rule 904” means Rule 904 promulgated under the Securities Act.



     “S&P” will mean Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., and
any successor thereto.



     “Securities Act” means the Securities Act of 1933, as amended, or any successor
statute or statutes thereto.



     “Securitization” means a public or private transfer of Receivables in the ordinary
course of business and by which the Company or any of its Restricted Subsidiaries directly or
indirectly securitizes a pool of specified Receivables including any such transaction involving the
sale of specified Receivables to a Securitization Trust.



     “Securitization Trust” means (a) any Person (whether or not a Subsidiary of the
Company) established for the purpose of issuing asset-backed securities and (b) any special purpose
Subsidiary of the Company formed exclusively for the purpose of satisfying the requirements of
Credit Enhancement Agreements and regardless of whether such Subsidiary is an issuer of securities;
provided that such Person is not an obligor with respect to any Indebtedness of the Company or any
Guarantor other than under Credit Enhancement Agreements.



     “Security Documents” means the I/C Notes Security Documents and the Notes Security
Documents.



     “Security Interests” means the Liens on the Collateral created by the Security Documents in
favor of the Collateral Agent or the Trustee for the benefit of the Notes Secured Creditors, or, in
the case of the I/C Notes Issuers, in favor of the Collateral Agent for the benefit of the Company.



     “Shared Collateral” means, collectively, the Shared I/C Notes Collateral and the
Shared Direct Collateral.



     “Shared Direct Collateral” means all Collateral securing obligations under the Credit
Facility owned by the Company or any Guarantor; all claims, rights, remedies, options and powers of
the Company or any Guarantor in respect of the foregoing and all other property received,
receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing;
and all proceeds and products of any and all of the foregoing.



     “Shared I/C Notes Collateral” means all of the same assets that from time to time
secure the Obligations of the Credit Facility Guarantors that are not Guarantors under the Notes
whether now owned or hereafter acquired.



     “Shelf Registration Statement” means the Shelf Registration Statement as defined in
the Registration Rights Agreement.



     “Significant Subsidiary” means any Subsidiary that would be a “significant subsidiary”
as defined in Article 1, Rule 1-02 of
Regulation S-X, promulgated pursuant to the Securities Act,
as such Regulation is in effect from time to time.



- 21 -









 





     “Standard Mortgage Undertakings” means representations, warranties, covenants and
indemnities entered into by the Company, or any of its Restricted Subsidiaries, which are
reasonably customary in real property mortgage transactions.



     “Standard Securitization Undertakings” means representations, warranties, covenants,
indemnities and guarantees of performance entered into by the Company, or any Subsidiary of the
Company, which the Company has determined in good faith to be customary in a Securitization
including, without limitation, those relating to the servicing of the assets of a Receivables
Subsidiary.



     “Stated Maturity” means, with respect to any installment of interest or principal on
any series of Indebtedness, the date on which such payment of interest or principal was scheduled
to be paid in the original documentation governing such Indebtedness, including any date upon which
a repurchase at the option of holders of such Indebtedness is required to be consummated, but
excluding any contingent obligations to repay, redeem or repurchase any such interest or principal
prior to the date originally scheduled for the payment thereof, so long as such obligations remain
contingent.



     “Subsidiary” means, with respect to any Person, (a) any corporation, association or
other business entity of which more than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly,
by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof)
and (b) any partnership (i) the sole general partner or the managing general partner of which is
such Person or a Subsidiary of such Person or (ii) the only general partners of which are such
Person or of one or more Subsidiaries of such Person (or any combination thereof). Unless
otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in the Indenture will
refer to a Subsidiary or Subsidiaries of the Borrower or the Guarantors; provided, however, that,
the term “Subsidiary” will not include any Person that constitutes an “Investment in Equity
Instruments” or an Investment Loan Subsidiary.



     “Taking” means any taking of all or any portion of the Collateral by condemnation or
other eminent domain proceedings, pursuant to any law, general or special, or by reason of the
temporary requisition of the use or occupancy of all or any portion of the Collateral by any
governmental authority, civil or military, or any sale pursuant to the exercise by any such
governmental authority of any right which it may then have to purchase or designate a purchaser or
to order a sale of all or any portion of the Collateral. “Taken” will have a correlative
meaning.



     “Taxes” means any tax, duty, levy, impost, assessment or other governmental charge
(including penalties, interest, expenses and other liabilities related thereto), levied, imposed or
assessed by or on behalf of any taxing authority.



     “TIA” means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in
effect on the date on which this Indenture is qualified under the TIA.



     “Treasury Rate” means, as of any Redemption Date, the yield to maturity as of such
Redemption Date of United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15 (519) that has become
publicly available at least two Business Days prior to the Redemption Date (or, if such Statistical
Release is no longer published, any publicly available source of similar market data)) most nearly
equal to the period from the Redemption Date to July 15, 2014; provided, however, that if the
period from the Redemption Date to July 15, 2014 is less than one year, the weekly average yield on
actually traded United States Treasury securities, adjusted to a constant maturity of one year,
will be used.



- 22 -









 





     “Trustee” means the party named as such above until a successor replaces it in
accordance with the applicable provisions of this Indenture and thereafter means the successor
serving hereunder.



     “Trust Monies” means all cash and Cash Equivalents received by the Trustee:




     (a) upon the release of Collateral, whether pursuant to an Asset Sale or otherwise;




     (b) as compensation for, or proceeds of, the sale of all or any part of the Collateral
taken by eminent domain or purchased by or sold pursuant to any order of a governmental
authority or otherwise disposed of;




     (c) as Net Insurance Proceeds; and




     (d) pursuant to the Security Documents and the Intercreditor Agreement.



     “Unrestricted Definitive Note” means a Definitive Note that does not bear and is not
required to bear the Private Placement Legend.



     “Unrestricted Global Note” means a permanent Global Note in the form of Exhibit
A attached hereto that bears the Global Note Legend and the OID Legend and that has the
“Schedule of Exchanges of Interests in the Global Note” attached thereto, and that is deposited
with or on behalf of and registered in the name of the Depositary, representing a series of Notes
that bear the OID Legend and do not bear the Private Placement Legend.



     “Unrestricted Subsidiary” means (a) CapitalSource Bank and its Subsidiaries, (b) the
Healthcare REIT or (c) any Restricted Subsidiary designated in writing by the Company to the
Trustee from time to time in accordance with the procedures set forth below as an “Unrestricted
Subsidiary” at any time following the Issue Date. Any direct or indirect Subsidiary of an
Unrestricted Subsidiary will automatically constitute an Unrestricted Subsidiary.



     The Company may designate any Restricted Subsidiary (including any newly acquired or newly
formed Subsidiary) of the Company to be an Unrestricted Subsidiary unless such Subsidiary owns any
of the Capital Stock of the Company or owns or holds any Indebtedness of or Lien on any property of
the Company or any Restricted Subsidiary of the Company; provided, however, that




     (i) any Guarantee or other credit support by the Company or any Restricted Subsidiary
of any Indebtedness of the Subsidiary being so designated will be deemed an incurrence of
such Indebtedness and an “Investment” by the Company or such Restricted Subsidiary at the
time of such designation;




     (ii) either (A) the Restricted Subsidiary to be so designated has total assets of
$1,000 or less or (B) if such Subsidiary has assets greater than $1,000, such designation
would be permitted under Section 4.07;




     (iii) after giving pro forma effect to the incurrence of Indebtedness and the
Investment referred to in clause (i) of this provision (A) such incurrence of Indebtedness
would be permitted under the Consolidated Leverage Ratio test set forth in clause (a) of
Section 4.09, (B) such Investment would be in compliance with Section 4.07, and (C) no
Default or Event of Default has occurred and is continuing.



- 23 -









 






     The Company may designate any Unrestricted Subsidiary of the Company to be a Restricted
Subsidiary; provided, however, that




     (1) no Default or Event of Default has occurred and is continuing at the time
of or after giving effect to such designation; and




     (2) all Liens and Indebtedness of such Unrestricted Subsidiary outstanding
immediately after such designation would, if Incurred at such time, have been
permitted to be Incurred (and is deemed to have been Incurred) for all purposes of
the Indenture.




     Any such designation by the Company shall be evidenced to the Trustee by promptly
filing with the Trustee an Officers’ Certificate certifying that such designation complied
with the foregoing provisions.



     “U.S. Dollar Equivalent” means, with respect to any monetary amount in a currency
other than U.S. dollars, at any time for determination thereof, the amount of U.S. dollars obtained
by converting such foreign currency involved in such computation into U.S. dollars at the spot rate
for the purchase of U.S. dollars with the applicable foreign currency as published in The Wall
Street Journal in the “Exchange Rates” column under the heading “Currency Trading” on the date two
(2) Business Days prior to such determination.



     “U.S. Government Obligations” means direct obligations of, or obligations guaranteed
by, the United States of America for the payment of which guarantee or obligations the full faith
and credit of the United States is pledged.



     “U.S. Person” means a U.S. person as defined in Rule 902 under the Securities Act.



     “Voting Stock” of any Person as of any date means the Capital Stock of such Person
that is at the time entitled to vote in the election of the Board of Directors of such Person.



     “Warehouse Facility” means any funding arrangement, other than a Credit Facility, a
Securitization or a Residual Funding Facility, with a financial institution or other lender or
purchaser under which advances are made to a Warehouse Trust to the extent (and only to the extent)
funding thereunder is used exclusively by the Warehouse Trust to purchase Receivables from the
Company or a Restricted Subsidiary and to pay the related expenses with respect to the Warehouse
Trust.



     “Warehouse Trust” means any Person (whether or not a Subsidiary of the Company)
established for the purpose of issuing notes or other securities in connection with a Warehouse
Facility, which notes and securities are backed by specified Receivables purchased by such Person
from the Company or any other Restricted Subsidiary.



     “Weighted Average Life to Maturity” means, when applied to any Indebtedness at any
date, the number of years obtained by dividing (a) the sum of the products obtained by multiplying
(i) the amount of each then-remaining installment, sinking fund, serial maturity or other required
payments of principal, including payment at final maturity, in respect thereof, by (ii) the number
of years (calculated to the nearest one-twelfth) that will elapse between such date and the making
of such payment, by (b) the then-outstanding principal amount of such Indebtedness.



     “Wholly Owned Restricted Subsidiary” of any Person means a Restricted Subsidiary of
such Person all of the outstanding Capital Stock or other ownership interests of which (other than
directors’



- 24 -









 







qualifying shares) will at the time be owned by such Person or by one or more Wholly Owned
Restricted Subsidiaries of such Person.



     “Wholly Owned Subsidiary” of any Person means any Subsidiary of such Person of which
all the outstanding voting securities (other than, in the case of a foreign Subsidiary, directors’
qualifying shares or an immaterial amount of shares required to be owned by other Persons pursuant
to applicable law) are owned by such Person or any Wholly Owned Subsidiary of such Person.



     Section 1.02. Other Definitions.



	 	 	 	 	 
	 	 	Defined in
	Term	 	Section
	“Affiliate Transaction”
	 	 	4.12	 
	“Arm’s Length Terms”
	 	 	4.12	 
	“Authentication Order”
	 	 	2.03	 
	“Change of Control Offer”
	 	 	4.15	 
	“Change of Control Offer Period”
	 	 	3.09	 
	“Change of Control Payment”
	 	 	4.15	 
	“Change of Control Payment Date”
	 	 	4.15	 
	“Contribution Agreement”
	 	 	12.01	 
	“Covenant Defeasance”
	 	 	8.04	 
	“DTC”
	 	 	2.04	 
	“Event of Default”
	 	 	6.01	 
	“incur”
	 	 	4.09	 
	“Legal Defeasance”
	 	 	8.03	 
	“Loan Collateral Repayments Amount”
	 	 	4.14	 
	“Loan Collateral Repayments Payment Date”
	 	 	4.14	 
	“Loan Collateral Repayments Offer”
	 	 	4.14	 
	“Make-Whole Redemption”
	 	 	3.07	 
	“Net Proceeds Offer”
	 	 	4.10	 
	“Net Proceeds Offer Amount”
	 	 	4.10	 
	“Net Proceeds Offer Payment Date”
	 	 	4.10	 
	“Net Proceeds Offer Trigger Date”
	 	 	4.10	 
	“Paying Agent”
	 	 	2.04	 
	“Permitted Debt”
	 	 	4.09	 
	“Proceeds Offer to Purchase”
	 	 	3.09	 
	“Proceeds Offer to Purchase Amount”
	 	 	3.09	 
	“Proceeds Offer to Purchase Offer Period”
	 	 	3.09	 
	“Proceeds Offer to Purchase Payment Date”
	 	 	3.09	 
	“Registrar”
	 	 	2.04	 
	“Restricted Payment”
	 	 	4.07	 






     Section 1.03. Incorporation by Reference of Trust Indenture Act. Whenever this
Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made
a part of this Indenture.



     The following TIA terms used in this Indenture have the following meanings:



     “indenture securities” means the Notes;



     “indenture security holder” means a Holder;



- 25 -









 





     “indenture to be qualified” means this Indenture;



     “indenture trustee” or “institutional trustee” means the Trustee; and
“obligor” on the Notes means the Company and any successor obligor upon the Notes.



     All other terms used in this Indenture that are defined by the TIA, defined by TIA reference
to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.



     Section 1.04. Rules of Construction. Unless the context otherwise requires:



     (a) a term has the meaning assigned to it;



     (b) an accounting term not otherwise defined has the meaning assigned to it in accordance with
GAAP;



     (c) “or” is not exclusive;



     (d) words in the singular include the plural, and in the plural include the singular;



     (e) provisions apply to successive events and transactions;



     (f) references to sections of or rules under the Securities Act will be deemed to include
substitute, replacement of successor sections or rules adopted by the Commission from time to time;
and



     (g) for purposes of making any determination of any amount under any single definition set
forth in Section 1.01 hereof, such determination will be made without double counting of any item.



ARTICLE 2




THE NOTES




     Section 2.01. Amount of Notes; Issuable in Series. The initial aggregate principal
amount of Notes which may be authenticated and delivered under this Indenture is $300,000,000.
Additional Notes of up to $600,000,000 in aggregate principal amount may be issued from time to
time, subject to the limitations set forth in Section 4.09; provided that the net proceeds from any
such issuances are applied to permanently reduce secured Indebtedness under the Credit Facility in
accordance with the terms thereof (including the permanent reduction of any related commitments
thereunder). The Notes may be issued in one or more series. All Notes of any one series will be
substantially identical except as to denomination. The Notes issued on the Issue Date and any
Additional Notes will be treated as a single class for all purposes under this Indenture,
including, without limitation, waivers, amendments, redemptions and offers to purchase. For
purposes of this Indenture, except for Section 4.09, references to the Notes include Additional
Notes, if any.



     With respect to any Additional Notes (except for Notes authenticated and delivered upon
registration of, transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section
2.07, 2.08, 2.11 or 3.06 hereof, which will not constitute Additional Notes), there will be
(a) established in or pursuant to a resolution of the Board of Directors and (b) (i) set forth or
determined in the manner provided in an Officers’ Certificate or (ii) established in one or more
indentures supplemental hereto, prior to the issuance of such Additional Notes:




     (A) the aggregate principal amount of such Additional Notes;



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     (B) the issue price and issuance date of such Additional Notes, including the date from
which interest on such Additional Notes will accrue; and




     (C) if applicable, that such Additional Notes will be issuable in whole or in part in
the form of one or more Global Notes and, in such case, the respective depositaries for such
Global Notes, the form of any legend or legends which will be borne by such Global Notes in
addition to or in lieu of those set forth in Section 2.07 hereto and any circumstances in
addition to or in lieu of those set forth in Section 2.07 in which any such Global Note may
be exchanged in whole or in part for Additional Notes registered, or any transfer of such
Global Note in whole or in part may be registered, in the name or names of Persons other
than the depositary for such Global Note or a nominee thereof.



     If any of the terms of any Additional Notes are established by action taken pursuant to a
Board Resolution, a copy of such Board Resolution will be delivered to the Trustee at or prior to
the delivery of the Officers’ Certificate or the supplemental indenture hereto setting forth the
terms of the Additional Notes.



     Section 2.02. Form and Dating.



     (a) General. The Notes and the Trustee’s certificate of authentication shall be
substantially in the form of Exhibit A hereto. The Notes may have notations, legends or
endorsements required by law, stock exchange rule or usage. Each Note will be dated the date of
its authentication. The Notes will be in denominations of $1,000 and integral multiples thereof.



     The terms and provisions contained in the Notes shall constitute, and are hereby expressly
made, a part of this Indenture, and the Company and the Trustee, by their execution and delivery of
this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to
the extent any provisions of any Note conflicts with the express provisions of this Indenture, the
provisions of this Indenture will govern and be controlling.



     (b) Global Notes. Notes issued in global form will be substantially in the form of
Exhibit A attached hereto (including the Global Note Legend thereon and the “Schedule of
Exchanges of Interests in the Global Note” attached thereto). Notes issued in the form of
Definitive Notes will be substantially in the form of Exhibit A attached hereto (but
without the Global Note Legend thereon and without the “Schedule of Exchanges of Interests in the
Global Note” attached thereto). Each Global Note will represent such of the outstanding Notes as
will be specified therein and each will provide that it will represent the aggregate principal
amount at maturity of outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount at maturity of outstanding Notes represented thereby may from time to time be
reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a
Global Note to reflect the amount of any increase or decrease in the aggregate principal amount at
maturity of outstanding Notes represented thereby will be made by the Trustee or the Note
Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.07 hereof. Notes offered and sold to QIBs in reliance on Rule
144A will be issued initially in the form of one or more Rule 144A Global Notes, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. Notes offered and sold in
reliance on Regulation S will be issued initially in the form of one or more Regulation S Global
Notes, duly executed by the Company and authenticated by the Trustee as hereinafter provided.
Unrestricted Global Notes will be issued initially in accordance with Sections 2.07(b)(iv),
2.07(d)(ii), 2.07(f) and 2.07(j) duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of each of the Global Notes may from time to
time be increased or decreased by adjustments made on the records of the Trustee as hereinafter
provided.



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     (c) Euroclear and Clearstream, Luxembourg Procedures Applicable. The provisions of
the “Operating Procedures of the Euroclear System” and “Terms and Conditions Governing Use of
Euroclear” and the “General Terms and Conditions of Clearstream Bank” and “Customer Handbook” of
Clearstream, Luxembourg will be applicable to interests in the Regulation S Global Note that are
held by the Participants through Euroclear or Clearstream, Luxembourg.



     Section 2.03. Execution and Authentication. Two Officers will sign the Notes for the
Company by manual or facsimile signature.



     If an Officer whose signature is on a Note no longer holds that office at the time a Note is
authenticated, the Note will nevertheless be valid.



     A Note will not be valid until authenticated by the manual signature of the Trustee. The
signature will be conclusive evidence that the Note has been authenticated under this Indenture.



     The Trustee will, upon receipt of a written order of the Company signed by two Officers
(the “Authentication Order”), authenticate (a) the Notes for original issuance on the Issue
Date in the aggregate principal amount not to exceed $300.0 million and (b) subject to Section
4.09(b)(v), Additional Notes in the aggregate principal amount not to exceed $600.0 million. The
aggregate principal amount of the Notes outstanding at any time may not exceed $900.0 million
except as provided in Section 2.08 hereof.



     The Trustee may appoint an authenticating agent acceptable to the Company to authenticate
Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes authentication by such agent.
An authenticating agent has the same rights as an Agent to deal with the Holders or an Affiliate
of the Holders.



     Section 2.04. Registrar and Paying Agent. The Company will maintain (a) an office or
agency where Notes may be presented for registration of transfer or for exchange
(“Registrar”) and (b) an office or agency where Notes may be presented for payment
(“Paying Agent”). The Registrar will keep a register of the Notes and of their transfer
and exchange. The Company may appoint one or more co-registrars and one or more additional paying
agents. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any
additional paying agent. The Company may change any Paying Agent or Registrar without notice to
any Holder. The Company will notify the Trustee in writing of the name and address of any Agent
not a party to this Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee will act as such. The Company or any of its Subsidiaries
may act as Paying Agent or Registrar.



     The Company initially appoints The Depository Trust Company (“DTC”) to act as
Depositary with respect to the Global Notes. The Company initially appoints the Trustee to act as
the Registrar and Paying Agent and to act as Note Custodian with respect to the Global Notes.



     Section 2.05. Paying Agent to Hold Money in Trust. The Company will require each
Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust
for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Additional Interest, if any, or interest on the Notes, and will notify the
Trustee of any default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The
Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon
payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary) will have
no further liability for the money. If the Company or a



- 28 -









 







Subsidiary acts as Paying Agent, it will segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee will serve as Paying Agent for the Notes.



     Section 2.06. Holders Lists. The Trustee will preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and addresses of all
Holders and will otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar,
the Company will furnish to the Trustee, at least seven Business Days before each interest payment
date and at such other times as the Trustee may request in writing, a list in such form and as of
such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes,
and the Company will otherwise comply with TIA Section 312(a).



     Section 2.07. Transfer and Exchange.



     (a) Transfer and Exchange of Global Notes. A Global Note may not be transferred as a
whole except by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to
the Depositary or to another nominee of the Depositary, or by any such nominee to a successor
Depositary or a nominee of such successor Depositary. All Global Notes will be exchanged by the
Company for Definitive Notes if (i) the Company delivers to the Trustee notice from the Depositary
that it is unwilling or unable to continue to act as Depositary, or that it is no longer a clearing
agency registered under the Exchange Act and, in either case, a successor Depositary is not
appointed by the Company within 120 days after the date of such notice from the Depositary; or
(ii) the Company in its sole discretion determines that the Global Notes (in whole but not in part)
should be exchanged for Definitive Notes and delivers a written notice to such effect to the
Trustee; or (iii) the Depositary so requests after there has occurred and is continuing an Event of
Default with respect to the relevant series of Notes. Upon the occurrence of either of the
preceding events in (i) or (ii) above, Definitive Notes will be issued in such names as the
Depositary will instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or
in part, as provided in Sections 2.08 and 2.11 hereof. Every Note authenticated and delivered in
exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.07 or
Section 2.08 or 2.11 hereof, will be authenticated and delivered in the form of, and will be, a
Global Note. A Global Note may not be exchanged for another Note other than as provided in this
Section 2.07(a); however, beneficial interests in a Global Note may be transferred and exchanged as
provided in Section 2.07(b), (c) or (d) hereof.



     (b) Transfer and Exchange of Beneficial Interests in Global Notes. The transfer and
exchange of beneficial interests in a Global Note will be effected through the Depositary, in
accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial
interests in the Restricted Global Notes will be subject to restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act. Transfers of beneficial
interests in the Global Notes also will require compliance with either subparagraph (i) or (ii)
below, as applicable, as well as one or more of the other following subparagraphs, as applicable:




     (i) Transfer of Beneficial Interests in the Same Global Note. Beneficial
interests in any Restricted Global Note may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in the same Restricted Global Note in
accordance with the transfer restrictions set forth in the Private Placement Legend.
Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No
written orders or instructions will be required to be delivered to the Registrar to effect
the transfers described in this Section 2.07(b)(i).



- 29 -









 






     (ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes.
In connection with all transfers and exchanges of beneficial interests that are not subject
to Section 2.07(b)(i) above, the transferor of such beneficial interest must deliver to the
Registrar either (A) (1) a written order from a Participant or an Indirect Participant given
to the Depositary in accordance with the Applicable Procedures directing the Depositary to
credit or cause to be credited a beneficial interest in another Global Note in an amount
equal to the beneficial interest to be transferred or exchanged and (2) instructions given
in accordance with the Applicable Procedures containing information regarding the
Participant account to be credited with such increase or (B) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an
amount equal to the beneficial interest to be transferred or exchanged and (2) instructions
given by the Depositary to the Registrar containing information regarding the Person in
whose name such Definitive Note will be registered to effect the transfer or exchange
referred to in (B)(1) above. Upon consummation of an Exchange Offer by the Company in
accordance with Section 2.07(f) hereof, the requirements of this Section 2.07(b)(ii) will be
deemed to have been satisfied upon receipt by the Registrar of the instructions contained in
the Letter of Transmittal delivered by the Holder of such beneficial interests in the
Restricted Global Notes. Upon satisfaction of all of the requirements for transfer or
exchange of beneficial interests in Global Notes contained in this Indenture and the Notes
or otherwise applicable under the Securities Act, the Trustee will adjust the principal
amount of the relevant Global Note(s) pursuant to Section 2.07(h) hereof.




     (iii) Transfer of Beneficial Interests to Another Restricted Global Note. A
beneficial interest in any Restricted Global Note may be transferred to a Person who takes
delivery thereof in the form of a beneficial interest in another Restricted Global Note if
the transfer complies with the requirements of Section 2.07(b)(ii) above and the Registrar
receives the following:




     (A) if the transferee will take delivery in the form of a beneficial interest
in the Rule 144A Global Note, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item (1) thereof;




     (B) if the transferee will take delivery in the form of a beneficial interest
in the Regulation S Global Note, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications in item (2)
thereof; and




     (C) if the transferee will take delivery in the form of a beneficial interest
in the IAI Global Note, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications and certificates and
Opinion of Counsel required by item (3)(d) thereof, if applicable.




     (iv) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for
Beneficial Interests in the Unrestricted Global Note. A beneficial interest in any
Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in
an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer
complies with the requirements of Section 2.07(b)(ii) above and:




     (A) such exchange or transfer is effected pursuant to the Exchange Offer in
accordance with the Registration Rights Agreement, and the holder of the beneficial
interest to be transferred, in the case of an exchange, or the transferee, in the
case of a



- 30 -









 







transfer, certifies in the applicable Letter of Transmittal that it is not
(1) a broker-dealer, or (2) a Person who is an affiliate (as defined in Rule 405) of
the Company;




     (B) such transfer is effected pursuant to the Shelf Registration Statement in
accordance with the Registration Rights Agreement;




     (C) such transfer is effected by a Participating Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the Registration Rights
Agreement; or




     (D) the Registrar receives the following




     (1) if the holder of such beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for a beneficial interest
in an Unrestricted Global Note, a certificate from such holder in the form
of Exhibit C hereto, including the certifications in item (1)(a)
thereof; or




     (2) if the holder of such beneficial interest in a Restricted Global
Note proposes to transfer such beneficial interest to a Person who will take
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note, a certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;




and, in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel addressed
to the Company and the Registrar, upon which the Registrar may conclusively rely, to
the effect that such exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the Securities
Act.



     If any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an
Unrestricted Global Note has not yet been issued, the Company will issue and, upon receipt of an
Authentication Order in accordance with Section 2.03 hereof, the Trustee will authenticate one or
more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant to subparagraph (B) or (D) above.



     Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to
Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global
Note.



     (c) Transfer and Exchange of Beneficial Interests in Global Notes for Definitive
Notes.




     (i) Beneficial Interests in Restricted Global Notes to Restricted Definitive
Notes. If any holder of a beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Restricted Definitive Note or to transfer such
beneficial interest to a Person who takes delivery thereof in the form of a Restricted
Definitive Note, then, upon receipt by the Registrar of the following documentation:




     (A) if the holder of such beneficial interest in a Restricted Global Note
proposes to exchange such beneficial interest for a Restricted Definitive Note, a
certificate from such holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;



- 31 -









 






     (B) if such beneficial interest is being transferred to a QIB in accordance
with Rule 144A under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (1) thereof;




     (C) if such beneficial interest is being transferred to a Non-U.S. Person in an
offshore transaction in accordance with Rule 903 or Rule 904 under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (2) thereof;




     (D) if such beneficial interest is being transferred pursuant to an exemption
from the registration requirements of the Securities Act in accordance with Rule 144
under the Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(a) thereof;




     (E) if such beneficial interest is being transferred to an Institutional
Accredited Investor in reliance on an exemption from the registration requirements
of the Securities Act other than those listed in subparagraphs (B) through (D)
above, a certificate to the effect set forth in Exhibit B hereto, including
the certifications, certificates and Opinion of Counsel required by item (3)(d)
thereof, if applicable;




     (F) if such beneficial interest is being transferred to the Company or any of
its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or




     (G) if such beneficial interest is being transferred pursuant to an effective
registration statement under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(c)
thereof,




the Trustee will cause the aggregate principal amount of the applicable Global Note to be
reduced accordingly pursuant to Section 2.07(h) hereof, and the Company will execute and the
Trustee will authenticate and deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange
for a beneficial interest in a Restricted Global Note pursuant to this Section 2.07(c) will
be registered in such name or names and in such authorized denomination or denominations as
the holder of such beneficial interest will instruct the Registrar through instructions from
the Depositary and the Participant or Indirect Participant. The Trustee will deliver such
Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive
Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section 2.07(c)(i) will bear the Private Placement Legend and will be subject to all
restrictions on transfer contained therein.




     (ii) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive
Notes. A holder of a beneficial interest in a Restricted Global Note may exchange such
beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial
interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive
Note only if:




     (A) such exchange or transfer is effected pursuant to the Exchange Offer in
accordance with the Registration Rights Agreement, and the holder of such beneficial
interest, in the case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1) a
broker-dealer, or (2) a Person who is an affiliate (as defined in Rule 405) of the
Company;



- 32 -









 






     (B) such transfer is effected pursuant to the Shelf Registration Statement in
accordance with the Registration Rights Agreement;




     (C) such transfer is effected by a Participating Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the Registration Rights
Agreement; or




     (D) the Registrar receives the following




     (1) if the holder of such beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for a Definitive Note
that does not bear the Private Placement Legend, a certificate from such
holder in the form of Exhibit C hereto, including the certifications
in item (1)(b) thereof; or




     (2) if the holder of such beneficial interest in a Restricted Global
Note proposes to transfer such beneficial interest to a Person who will take
delivery thereof in the form of a Definitive Note that does not bear the
Private Placement Legend, a certificate from such holder in the form of
Exhibit B hereto, including the certifications in item (4) thereof;




and, in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel addressed
to the Company and the Registrar, upon which the Registrar may conclusively rely, to
the effect that such exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the Securities
Act.




     (iii) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive
Notes. If any holder of a beneficial interest in an Unrestricted Global Note proposes
to exchange such beneficial interest for a Definitive Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon
satisfaction of the conditions set forth in Section 2.07(c)(ii) hereof, the Trustee will
cause the aggregate principal amount of the applicable Global Note to be reduced accordingly
pursuant to Section 2.07(h) hereof, and the Company will execute and the Trustee will
authenticate and deliver to the Person designated in the instructions a Definitive Note in
the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.07(c)(iii) will be registered in such name or names and
in such authorized denomination or denominations as the holder of such beneficial interest
will instruct the Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee will deliver such Definitive Notes to the Persons in
whose names such Notes are so registered. Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.07(c)(iii) will not bear the Private
Placement Legend.



- 33 -









 





     (d) Transfer and Exchange of Definitive Notes for Beneficial Interests in Global
Notes.




     (i) Restricted Definitive Notes to Beneficial Interests in Restricted Global
Notes. If any Holder of a Restricted Definitive Note proposes to exchange such Note for
a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive
Notes to a Person who takes delivery thereof in the form of a beneficial interest in a
Restricted Global Note, then, upon receipt by the Registrar of the following documentation:




     (A) if the Holder of such Restricted Definitive Note proposes to exchange such
Note for a beneficial interest in a Restricted Global Note, a certificate from such
Holder in the form of Exhibit C hereto, including the certifications in item
(2)(b) thereof;




     (B) if such Restricted Definitive Note is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (1) thereof;




     (C) if such Restricted Definitive Note is being transferred to a Non-U.S.
Person in an offshore transaction in accordance with Rule 903 or Rule 904 under the
Securities Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2) thereof;




     (D) if such Restricted Definitive Note is being transferred pursuant to an
exemption from the registration requirements of the Securities Act in accordance
with Rule 144 under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(a) thereof;




     (E) if such Restricted Definitive Note is being transferred to an Institutional
Accredited Investor in reliance on an exemption from the registration requirements
of the Securities Act other than those listed in subparagraphs (B) through (D)
above, a certificate to the effect set forth in Exhibit B hereto, including
the certifications, certificates and Opinion of Counsel required by item (3)(d)
thereof, if applicable;




     (F) if such Restricted Definitive Note is being transferred to the Company or
any of its Subsidiaries, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(b) thereof; or




     (G) if such Restricted Definitive Note is being transferred pursuant to an
effective registration statement under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(3)(c) thereof,




the Trustee will cancel the Restricted Definitive Note, increase or cause to be increased
the aggregate principal amount of, in the case of clause (A) above, the appropriate
Restricted Global Note, in the case of clause (B) above, the Rule 144A Global Note, in the
case of clause (C) above, the Regulation S Global Note, and in all other cases, the IAI
Global Note.




     (ii) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global
Notes. A Holder of a Restricted Definitive Note may exchange such Note for a beneficial
interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a
Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note only if:



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     (A) such exchange or transfer is effected pursuant to the Exchange Offer in
accordance with the Registration Rights Agreement and the Holder, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in the applicable
Letter of Transmittal that it is not (1) a broker-dealer or (2) a Person who is an
affiliate (as defined in Rule 405) of the Company;




     (B) such transfer is effected pursuant to the Shelf Registration Statement in
accordance with the Registration Rights Agreement;




     (C) such transfer is effected by a Participating Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the Registration Rights
Agreement; or




     (D) the Registrar receives the following




     (1) if the Holder of such Definitive Notes proposes to exchange such
Notes for a beneficial interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(c) thereof; or




     (2) if the Holder of such Definitive Notes proposes to transfer such
Notes to a Person who will take delivery thereof in the form of a beneficial
interest in the Unrestricted Global Note, a certificate from such Holder in
the form of Exhibit B hereto, including the certifications in
item (4) thereof;




and, in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel addressed
to the Company and the Registrar, upon which the Registrar may conclusively rely, to
the effect that such exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the Securities
Act.




     Upon satisfaction of the conditions of any of the subparagraphs in this Section
2.07(d)(ii), the Trustee will cancel the Definitive Notes and increase or cause to be
increased the aggregate principal amount of the Unrestricted Global Note.




     (iii) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global
Notes. A Holder of an Unrestricted Definitive Note may exchange such Note for a
beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a
Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note at any time. Upon receipt of a request for such an exchange or transfer, the
Trustee will cancel the applicable Unrestricted Definitive Note and increase or cause to be
increased the aggregate principal amount of one of the Unrestricted Global Notes.



     If any such exchange or transfer from a Definitive Note to a beneficial interest is effected
pursuant to subparagraph (ii)(B), (ii)(D) or (iii) above at a time when an Unrestricted Global Note
has not yet been issued, the Company will issue and, upon receipt of an Authentication Order in
accordance with Section 2.03 hereof, the Trustee will authenticate one or more Unrestricted Global
Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so
transferred.



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     (e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a
Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section
2.07(e), the Registrar will register the transfer or exchange of Definitive Notes. Prior to such
registration of transfer or exchange, the requesting Holder will present or surrender to the
Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in
form satisfactory to the Registrar duly executed by such Holder or by his attorney, duly authorized
in writing. In addition, the requesting Holder will provide any additional certifications,
documents and information, as applicable, required pursuant to the following provisions of this
Section 2.07(e).




     (i) Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted
Definitive Note may be transferred to and registered in the name of Persons who take
delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the
following:




     (A) if the transfer will be made pursuant to Rule 144A under the Securities
Act, then the transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof;




     (B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof; and




     (C) if the transfer will be made pursuant to any other exemption from the
registration requirements of the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)(d) thereof, if applicable.




     (ii) Restricted Definitive Notes to Unrestricted Definitive Notes. Any
Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted
Definitive Note or transferred to a Person or Persons who take delivery thereof in the form
of an Unrestricted Definitive Note if:




     (A) such exchange or transfer is effected pursuant to the Exchange Offer in
accordance with the Registration Rights Agreement and the Holder, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in the applicable
Letter of Transmittal that it is not (1) a broker-dealer or (2) a Person who is an
affiliate (as defined in Rule 405) of the Company;




     (B) any such transfer is effected pursuant to the Shelf Registration Statement
in accordance with the Registration Rights Agreement;




     (C) any such transfer is effected by a Participating Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the Registration Rights
Agreement; or




     (D) the Registrar receives the following




     (1) if the Holder of such Restricted Definitive Notes proposes to
exchange such Notes for an Unrestricted Definitive Note, a certificate from
such Holder in the form of Exhibit C hereto, including the
certifications in item (1)(d) thereof; or



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     (2) if the Holder of such Restricted Definitive Notes proposes to
transfer such Notes to a Person who will take delivery thereof in the form
of an Unrestricted Definitive Note, a certificate from such Holder in the
form of Exhibit B hereto, including the certifications in item (4)
thereof;




and, in each such case set forth in this subparagraph (D), if the Registrar so
requests, an Opinion of Counsel addressed to the Company and the Registrar, upon
which the Registrar may conclusively rely, to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer required
in order to maintain compliance with the Securities Act.




     (iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder
of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery
thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to
register such a transfer, the Registrar will register the Unrestricted Definitive Notes
pursuant to the instructions from the Holder thereof.



     (f) Exchange Offer. Upon the occurrence of the Exchange Offer in accordance with the
Registration Rights Agreement, the Company will issue and, upon receipt of an Authentication Order
in accordance with Section 2.03, the Trustee will authenticate (i) one or more Unrestricted Global
Notes in an aggregate principal amount equal to the principal amount of the beneficial interests in
the Restricted Global Notes tendered for acceptance by Persons that certify in the applicable
Letters of Transmittal that (A) they are not broker-dealers, and (B) they are not affiliates (as
defined in Rule 405) of the Company, and accepted for exchange in the Exchange Offer and
(ii) Unrestricted Definitive Notes in an aggregate principal amount equal to the principal amount
of the Restricted Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with
the issuance of such Notes, the Trustee will cause the aggregate principal amount of the applicable
Restricted Global Notes to be reduced accordingly, and the Company will execute and the Trustee
will authenticate and deliver to the Persons designated by the Holders of Definitive Notes so
accepted Unrestricted Definitive Notes in the appropriate principal amount.



     (g) Legends. The following legends will appear on the face of all Global Notes and
Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable
provisions of this Indenture.




     (i) Private Placement Legend.




     (A) Except as permitted by subparagraph (B) below, each Global Note and each
Definitive Note (and all Notes issued in exchange therefor or substitution thereof)
will bear the legend in substantially the following form:




THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES
LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS
SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF



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THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS ONE
YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST
DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE
OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE) (THE
“RESALE RESTRICTION TERMINATION DATE”) ONLY (A) TO THE
COMPANY OR ANY SUBSIDIARY THEREOF AND NOT SUBSEQUENTLY RESOLD, (B)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT
TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A
PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER”
AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D)
PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE
THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT) THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE REGISTRATION OF TRANSFER OF THIS NOTE
(THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND, IF
SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF
NOTES AT THE TIME OF TRANSFER OF LESS THAN $250,000, AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D)
PRIOR TO THE END OF THE 40 DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN
THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR PURSUANT TO
CLAUSE (F) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/ OR
OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (ii) IN EACH OF
THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN
THE FORM APPEARING ON THIS NOTE IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE
REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.



- 38 -









 






     (B) Notwithstanding the foregoing, any Global Note or Definitive Note issued
pursuant to subparagraphs (b)(iv), (c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii),
(e)(iii) or (f) to this Section 2.07 (and all Notes issued in exchange therefor or
substitution thereof) will not bear the Private Placement Legend.




     (ii) Global Note Legend. Each Global Note will bear a legend in substantially
the following form:




“UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION (“DTC”), TO CAPITALSOURCE INC. (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 IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), 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.




THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO
ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY
MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION
9.05 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN
WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.12 OF THE INDENTURE AND (IV) THIS
GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE
PRIOR WRITTEN CONSENT OF THE COMPANY.”




     (iii) OID Legend. Each Note shall bear a legend in substantially the following
form:




FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, THIS NOTE WAS ISSUED WITH “ORIGINAL ISSUE
DISCOUNT.” FOR EACH $1,000 PRINCIPAL AMOUNT AT STATED MATURITY OF
THIS NOTE, THE ISSUE PRICE IS $939.66, THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT IS $60.34, THE ISSUE DATE IS JULY 27, 2009 AND THE YIELD TO
MATURITY IS 14.50% PER ANNUM. CAPITALSOURCE INC. WILL PROMPTLY MAKE
AVAILABLE TO THE HOLDER PURSUANT TO U.S. TREASURY REGULATIONS UPON
THE WRITTEN REQUEST OF SUCH HOLDER DIRECTED TO CAPITALSOURCE INC,
4445 WILLARD
AVENUE, 12TH FLOOR, CHEVY CHASE, MARYLAND 20815,
ATTENTION: CHIEF FINANCIAL OFFICER.



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     (h) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial
interests in a particular Global Note have been exchanged for Definitive Notes or a particular
Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global
Note will be returned to or retained and canceled by the Trustee in accordance with Section 2.12
hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is
exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial
interest in another Global Note or for Definitive Notes, the principal amount of Notes represented
by such Global Note will be reduced accordingly and an endorsement will be made on such Global Note
by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and
if the beneficial interest is being exchanged for or transferred to a Person who will take delivery
thereof in the form of a beneficial interest in another Global Note, such other Global Note will be
increased accordingly and an endorsement will be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.



     (i) General Provisions Relating to All Transfers and Exchanges:




     (i) To permit registrations of transfers and exchanges, the Company will execute and
the Trustee will authenticate Global Notes and Definitive Notes upon the Company’s order or
at the Registrar’s request.




     (ii) No service charge will be made to a Holder of a beneficial interest in a Global
Note or a Holder of a Definitive Note for any registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or transfer pursuant to Sections 2.11,
3.06, 3.09, 4.10, 4.15 and 9.05 hereof).




     (iii) The Registrar will not be required to register the transfer of or exchange of any
Note selected for redemption in whole or in part, except the unredeemed portion of any Note
being redeemed in part.




     (iv) All Global Notes and Definitive Notes issued upon any registration of transfer or
exchange of Global Notes or Definitive Notes will be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this Indenture, as the
Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.




     (v) The Company will not be required (A) to issue, to register the transfer of or to
exchange any Notes during a period beginning at the opening of business 15 days before the
day of any selection of Notes for redemption under Section 3.02 hereof and ending at the
close of business on the day of selection, (B) to register the transfer of or to exchange
any Note so selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part or (C) to register the transfer of or to exchange a Note
between a record date and the next succeeding interest payment date.




     (vi) Prior to due presentment for the registration of a transfer of any Note, the
Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is
registered as the absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes, and none of the Trustee,
any Agent or the Company will be affected by notice to the contrary.



- 40 -









 






     (vii) The Trustee will authenticate Global Notes and Definitive Notes in accordance
with the provisions of Section 2.03 hereof.




     (viii) All certifications, certificates and Opinions of Counsel required to be
submitted to the Registrar pursuant to this Section 2.07 to effect a registration of
transfer or exchange may be submitted by facsimile.



     (j) Automatic Exchange from Restricted Global Note to Unrestricted Global Note. At
the option of the Company and upon compliance with the following procedures, beneficial interests
in a Restricted Global Note shall be automatically, without further action on the part of any
holder of a beneficial interest in such Restricted Global Note, exchanged for beneficial interests
in an Unrestricted Global Note. In order to effect such exchange, the Company shall provide
written notice to the Trustee instructing the Trustee to (i) direct the Depositary to transfer the
specified amount of the outstanding beneficial interests in a particular Restricted Global Note to
an Unrestricted Global Note and provide the Depositary with all such information as is necessary
for the Depositary to appropriately credit and debit the relevant Holder accounts and (ii) provide
prompt written notice to all Holders of such exchange, which notice must include the date such
exchange is proposed to occur, the CUSIP number of the relevant Restricted Global Note and the
CUSIP number of the Unrestricted Global Note into which such Holders’ beneficial interests will be
exchanged. As a condition to any such exchange pursuant to this Section 2.07(j), the Trustee shall
be entitled to receive from the Issuer, and rely upon conclusively without any liability, an
Officer’s Certificate and an Opinion of Counsel to the Issuer, in form and in substance reasonably
satisfactory to the Trustee, to the effect that such transfer of beneficial interests to the
Unrestricted Global Note shall be effected in compliance with the Securities Act. The Issuer may
request from Holders such information it reasonably determines is required in order to be able to
deliver such Officer’s Certificate and Opinion of Counsel. Upon such exchange of beneficial
interests pursuant to this Section 2.07(j), the Registrar shall reflect on its books and records
the date of such transfer and a decrease and increase, respectively, in the principal amount of the
applicable Restricted Global Note and the Unrestricted Global Note, respectively, equal to the
principal amount of beneficial interests transferred. Following any such transfer pursuant to this
Section 2.07(j) of all of the beneficial interests in a Restricted Global Note, such Restricted
Global Note shall be cancelled.



     Section 2.08. Replacement Notes. If any mutilated Note is surrendered to the Trustee
or the Company, and the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Company will issue and the Trustee, upon receipt of an Authentication Order,
will authenticate a replacement Note if the Trustee’s requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that is sufficient in the
judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is replaced. The Company
may charge for its expenses in replacing a Note.



     Every replacement Note is an additional obligation of the Company and will be entitled to all
of the benefits of this Indenture equally and proportionately with all other Notes duly issued
hereunder.



     Section 2.09. Outstanding Notes. The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section 2.09 as not outstanding.
Except as set forth in Section 2.10 hereof, a Note does not cease to be outstanding because the
Company or an Affiliate of the Company holds the Note.



- 41 -









 





     If a Note is replaced pursuant to Section 2.08 hereof, it ceases to be outstanding unless the
Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser.



     If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to
be outstanding and interest on it ceases to accrue.



     If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof)
holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date,
then on and after that date such Notes will be deemed to be no longer outstanding and will cease to
accrue interest.



     Section 2.10. Treasury Notes. In determining whether the Holders of the required
principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the
Company or any of its Subsidiaries, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any of its
Subsidiaries, will be considered as though not outstanding, except that for the purposes of
determining whether the Trustee will be protected in relying on any such direction, waiver or
consent, only Notes that the Trustee knows are so owned will be disregarded.



     Section 2.11. Temporary Notes. Until certificates representing Notes are ready for
delivery, the Company may prepare and the Trustee upon receipt of an Authentication Order will
authenticate temporary Notes. Temporary Notes will be substantially in the form of certificated
Notes but may have variations that the Company considers appropriate for temporary Notes and as
will be reasonably acceptable to the Trustee. Without unreasonable delay, the Company will prepare
and the Trustee will upon receipt of a written order of the Company signed by two Officers
authenticate definitive Notes in exchange for temporary Notes.



     Holders of temporary Notes will be entitled to all of the benefits of this Indenture.



     Section 2.12. Cancellation. The Company at any time may deliver Notes to the Trustee
for cancellation. The Registrar and Paying Agent will forward to the Trustee any Notes surrendered
to it for registration of transfer, exchange or payment. The Trustee and no one else will cancel
all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation
and will destroy canceled Notes (subject to the record retention requirement of the Exchange Act).
Certification of the destruction of all canceled Notes will be delivered to the Company. The
Company may not issue new Notes to replace Notes that it has paid or that have been delivered to
the Trustee for cancellation.



     Section 2.13. Record Date. The record date for purposes of determining the identity
of Holders entitled to vote or consent to any action by vote or consent authorized or permitted
under this Indenture shall be determined as provided for in TIA Section 316(c).



     Section 2.14. Defaulted Interest. If the Company defaults in a payment of interest on
the Notes, it will pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special
record date, in each case at the rate provided in the Notes and in Section 4.01 hereof. The
Company will notify the Trustee in writing of the amount of defaulted interest proposed to be paid
on each Note and the date of the proposed payment. The Company will fix or cause to be fixed each
such special record date and payment date, provided that no such special record date will be less
than 10 days prior to the related payment date for such defaulted interest. At least 15 days
before the special record date, the Company (or upon the written request of the Company, the
Trustee, in the name and at the expense of the Company) will mail or cause to be mailed to Holders
a notice that states the special record date, the related payment date and the amount of such
interest to be paid.



- 42 -









 





     Section 2.15. Computation of Interest. Interest on the Notes will be computed on the
basis of a 360-day year comprised of twelve 30-day months.



     Section 2.16. CUSIP and ISIN Number. The Company in issuing the Notes may use CUSIP
and ISIN numbers (if then generally in use) and, if so, the Trustee will use CUSIP and ISIN numbers
in notices of redemption or exchange as a convenience to Holders; provided, however, that any such
notice may state that no representation is made as to the correctness of such numbers either as
printed on the Notes or as contained in any notice of a redemption and that reliance may be placed
only on the other identification numbers printed on the Notes, and any such redemption will not be
affected by any defect in or omission of such numbers. The Company will promptly notify the
Trustee of any change in the CUSIP and ISIN numbers.



ARTICLE 3




REDEMPTION AND PREPAYMENT




     Section 3.01. Notices to Trustee. (a) If the Company elects to redeem Notes pursuant
to the optional redemption provisions of Section 3.07 hereof, it will furnish to the Trustee, at
least 45 days but not more than 60 days before a redemption date, unless a shorter period is
acceptable to the Trustee, an Officers’ Certificate setting forth (i) the clause of this Indenture
pursuant to which the redemption will occur, (ii) the redemption date, (iii) the principal amount
of Notes to be redeemed, (iv) the amount of any interest, and (v) the redemption price.



     (a) If the Company is required to make an offer to purchase Notes pursuant to the provisions
of Section 3.09, 4.10, 4.14 or 4.15 hereof, it will furnish to the Trustee, at least 45 days before
the scheduled purchase date, unless a shorter period is acceptable to the Trustee, an Officers’
Certificate setting forth (i) the Section of this Indenture pursuant to which the offer to purchase
will occur, (ii) the terms of the offer, (iii) the purchase price, (iv) the principal amount of the
Notes to be purchased and (v) the purchase date.



     Section 3.02. Selection of Notes to be Purchased or Redeemed. Except as set forth
below, if less than all of the Notes are to be redeemed or purchased in an offer to purchase at any
time, the Trustee will select the Notes to be redeemed or purchased among the Holders in compliance
with the requirements of the principal national securities exchange, if any, on which the Notes are
listed or, if the Notes are not so listed, on a pro rata basis, by lot or in accordance with any
other method the Trustee considers fair and appropriate. If a partial redemption is made with the
net cash proceeds of an Equity Offering, the Trustee will select the Notes on a pro rata basis or
on as nearly a pro rata basis as is practicable (subject to DTC procedures). In the event of
partial redemption by lot, the particular Notes to be redeemed will be selected, unless otherwise
provided herein, not less than 30 nor more than 60 days prior to the redemption date by the Trustee
from the outstanding Notes not previously called for redemption.



     The Trustee will promptly notify the Company in writing of the Notes selected for redemption
and, in the case of any Note selected for partial redemption, the principal amount thereof to be
redeemed. Notes and portions of Notes selected will be in principal amounts at maturity of $1,000
or whole multiples of $1,000, except that if all of the Notes of a Holder are to be redeemed, the
entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000, will be
redeemed. Except as provided in the preceding sentence, provisions of this Indenture that apply to
Notes called for redemption also apply to portions of Notes called for redemption.




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     Section 3.03. Notice of Redemption. At least 30 days but not more than 60 days before
a redemption date, the Company will mail or cause to be mailed, by first class mail, a notice of
redemption to each Holder whose Notes are to be redeemed at its registered address. If any Note is
to be redeemed in part only, the notice of redemption that relates to such Note will state the
portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to
the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation
of the original Note. On and after the redemption date, interest will cease to accrue on Notes or
portions thereof called for redemption.



     The notice will identify the Notes to be redeemed and will state:



     (a) the redemption date;



     (b) the redemption price and accrued interest and Additional Interest, if any;



     (c) if any Note is being redeemed in part, the portion of the principal amount of such Note to
be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion will be issued upon cancellation of the original
Note;



     (d) the name and address of the Paying Agent;



     (e) that Notes called for redemption must be surrendered to the Paying Agent to collect the
redemption price;



     (f) that, unless the Company defaults in making such redemption payment, interest and
Additional Interest, if any, on Notes called for redemption cease to accrue on and after the
redemption date;



     (g) the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes
called for redemption are being redeemed; and



     (h) that no representation is made as to the correctness or accuracy of the CUSIP number, if
any, listed in such notice or printed on the Notes.



     At the Company’s request, the Trustee will give the notice of redemption in the Company’s name
and at its expense; provided, however, that the Company will have delivered to the Trustee, at
least 45 days prior to the redemption date (or such shorter period as will be acceptable to the
Trustee), an Officers’ Certificate requesting that the Trustee give such notice and setting forth
the information to be stated in such notice as provided in this Section 3.03. The notice mailed in
the manner herein provided will be conclusively presumed to have been duly given whether or not the
Holder receives such notice. In any case, failure to give such notice by mail or any defect in the
notice to the Holder of any Note will not affect the validity of the proceeding for the redemption
of any other Note.



     Section 3.04. Effect of Notice of Redemption. Once notice of redemption is mailed in
accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable
on the redemption date at the redemption price, plus accrued and unpaid interest and Additional
Interest, if any, to such date. A notice of redemption may not be conditional.



     Section 3.05. Deposit of Redemption or Purchase Price. On or before 12:00 p.m. (New
York City time) on each redemption date or the date on which Notes must be accepted for purchase
pursuant to Section 3.09, 4.14 or 4.15, the Company will deposit with the Trustee or with the
Paying Agent, in immediately available funds, money sufficient to pay the redemption price of and
accrued and unpaid



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interest and Additional Interest, if any, on all Notes to be redeemed or purchased on that
date. The Trustee or the Paying Agent will promptly return to the Company upon its written request
any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts
necessary to pay the redemption price of (including any applicable premium) and accrued interest
and Additional Interest, if any, on all Notes to be redeemed or purchased.



     If Notes called for redemption or tendered in a Net Proceeds Offer, Loan Collateral Repayments
Offer or Change of Control Offer are paid or if the Company has deposited with the Trustee or
Paying Agent money sufficient to pay the redemption or purchase price of, unpaid and accrued
interest and Additional Interest, if any, on all Notes to be redeemed or purchased, on and after
the redemption or purchase date, as applicable, interest and Additional Interest, if any, will
cease to accrue on the Notes or the portions of Notes called for redemption or tendered and not
withdrawn in a Net Proceeds Offer, Loan Collateral Repayments Offer or Change of Control Offer
(regardless of whether certificates for such securities are actually surrendered).



     If a Note is redeemed or purchased on or after an interest record date but on or prior to the
related interest payment date, then any accrued and unpaid interest and Additional Interest, if
any, will be paid to the Person in whose name such Note was registered at the close of business on
such record date. If any Note called for redemption will not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding paragraph, interest
will be paid on the unpaid principal, and Additional Interest, if any, from the redemption or
purchase date until such principal is paid, and to the extent lawful on any interest not paid on
such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.



     Section 3.06. Notes Redeemed or Purchased in Part. Upon surrender of a Note that is
redeemed or purchased in part, the Company will issue and, upon the Company’s written request, the
Trustee will authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed or unpurchased portion of the Note surrendered.



     Section 3.07. Optional Redemption. Except as set forth below, the Notes will not be
redeemable at the Company’s option prior to maturity.



     (a) Prior to July 15, 2014, the Company may, at its option, at any time or from time to time,
on not less than 30 nor more than 60 days’ notice, redeem all or a portion of the outstanding Notes
at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid
interest and Additional Interest, if any, on the Notes to, but excluding, the applicable redemption
date, plus the Applicable Premium (a “Make Whole Redemption”).



     (b) At any time, or from time to time, on or prior to July 15, 2012, the Company may, at its
option, use the net cash proceeds of one or more Equity Offerings to redeem up to 35% of the
principal amount of the Notes issued under the Indenture at a redemption price of 112.75% of the
principal amount thereof plus accrued and unpaid interest and Additional Interest thereon, if any,
to but excluding the date of redemption; provided that:




     (i) at least 65% of the aggregate principal amount of Notes issued under the Indenture
remains outstanding immediately after any such redemption; and




     (ii) the Company makes such redemption not more than 90 days after the consummation of
any such Equity Offering.



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     Section 3.08. Mandatory Redemption. Except as set forth under Sections 3.09, 4.10,
4.14 and 4.15 hereof, the Company will not be required to make mandatory redemption or sinking fund
payments with respect to the Notes.



     Section 3.09. Offer to Purchase. In the event that, pursuant to Section 4.10, Section
4.14 or Section 4.15 hereof, the Company will be required to commence a Net Proceeds Offer, Loan
Collateral Payment Offer (each a “Proceeds Offer to Purchase”) or a Change of Control
Offer, as applicable, it will follow the procedures specified below:



     (a) Proceeds Offer to Purchase. The Proceeds Offer to Purchase will remain open for a
period of at least twenty (20) Business Days after the commencement date relating to such Proceeds
Offer to Purchase, except to the extent that a longer period is required by applicable law (as so
extended, the “Proceeds Offer to Purchase Offer Period”). On the Net Proceeds Offer
Payment Date or the Loan Collateral Repayments Payment Date (each a “Proceeds Offer to Purchase
Payment Date”), as applicable, the Company will purchase the principal amount of Notes equal to
the Net Proceeds Offer Amount or the Loan Collateral Repayments Amount (each a “Proceeds Offer
to Purchase Amount”), as applicable, or, if less than the Proceeds Offer to Purchase Amount has
been tendered, all Notes tendered and not validly withdrawn in response to the Proceeds Offer to
Purchase.



     If the Proceeds Offer to Purchase Payment Date is on or after an interest record date and on
or before the related interest payment date, any accrued and unpaid interest and Additional
Interest, if any, will be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest, if any, will be payable to Holders who
tender Notes pursuant to the Proceeds Offer to Purchase.



     With respect to any Proceeds Offer to Purchase, the Company will send or cause to be sent, by
first class mail, a notice to the record Holders as shown on the register of Holders within 30 days
following the Net Proceeds Offer Trigger Date or the Loan Collateral Trigger Date, as applicable,
with a copy to the Trustee. Such notice, which will govern the terms of the Proceeds Offer to
Purchase, will contain all instructions and materials necessary to enable such Holders to tender
Notes pursuant to the Proceeds Offer to Purchase and will state:




     (i) that the Proceeds Offer to Purchase is being made pursuant to this Section 3.09 and
any of Sections 4.10, 4.14 or 4.15 hereof, as applicable, and the length of time the
Proceeds Offer to Purchase will remain open;




     (ii) the Proceeds Offer to Purchase Amount, the purchase price and the Proceeds Offer
to Purchase Payment Date;




     (iii) that any Note not tendered or accepted for payment will continue to accrue
interest;




     (iv) that, unless the Company defaults in the payment of the purchase price, any Note
accepted for payment pursuant to the Proceeds Offer to Purchase will cease to accrue
interest and Additional Interest, if any, after the Proceeds Offer to Purchase Payment Date;




     (v) that Holders electing to have a Note purchased pursuant to any Proceeds Offer to
Purchase will be required to surrender the Note, with the form entitled “Option of Holder to
Elect Purchase” on the reverse of the Note completed, or transfer by book-entry transfer, to
the Company, a depositary, if appointed by the Company, or a Paying Agent at the address
specified



- 46 -









 







in the notice not later than the close of business on the last day of the Proceeds
Offer to Purchase Offer Period;




     (vi) that Holders will be entitled to withdraw their election if the Company, the
Depositary or the Paying Agent, as the case may be, receives, not later than the close of
business on the last day of the Proceeds Offer to Purchase Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the principal amount
of the Note the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased;




     (vii) that Holders may elect to tender their Notes in whole or in part in integral
multiples of $1,000 in exchange for cash;




     (viii) that, if the aggregate principal amount of Notes surrendered by Holders exceeds
the Proceeds Offer to Purchase Amount, the Company will select the Notes to be purchased on
a pro rata basis (with such adjustments as may be deemed appropriate by the Company so that
only Notes in denominations of $1,000, or integral multiples thereof, will be purchased);
and




     (ix) that Holders whose Notes were purchased only in part will be issued new Notes
equal in principal amount to the unpurchased portion of the Notes surrendered (or
transferred by book-entry transfer).



     On or before 12:00 p.m. (New York City time) on each Proceeds Offer to Purchase Payment Date,
the Company will irrevocably deposit with the Trustee or Paying Agent in immediately available
funds the aggregate purchase price with respect to a principal amount of Notes equal to the
Proceeds Offer to Purchase Amount, together with accrued and unpaid interest thereon, to be held
for payment in accordance with the terms of this Section 3.09(a). On the Proceeds Offer to
Purchase Payment Date, the Company will, to the extent lawful, (A) accept for payment, on a pro
rata basis to the extent necessary, the Proceeds Offer to Purchase Amount of Notes or portions
thereof properly tendered pursuant to the Proceeds Offer to Purchase, or if less than the Proceeds
Offer to Purchase Amount has been tendered, all Notes tendered, (B) deliver or cause the Paying
Agent or Depositary, as the case may be, to deliver to the Trustee Notes so accepted and (C)
deliver to the Trustee an Officers’ Certificate stating that such Notes or portions thereof were
accepted for payment by the Company in accordance with the terms of this Section 3.09(a). The
Company, the Depositary or the Paying Agent, as the case may be, will promptly (but in any case not
later than three (3) Business Days after the Net Proceeds Offer Payment Date) mail or deliver to
each tendering Holder an amount equal to the purchase price of the Notes tendered and not validly
withdrawn by such Holder and accepted by the Company for purchase, plus any accrued and unpaid
interest thereon, and the Company will promptly issue a new Note, and the Trustee will authenticate
and mail or deliver such new Note, to such Holder, equal in principal amount to any unpurchased
portion of such Holder’s Notes surrendered. Any Note not so accepted will be promptly mailed or
delivered by the Company to the Holder thereof. The Company will publicly announce in a newspaper
of general circulation or in a press release provided to a nationally recognized financial wire
service the results of the Proceeds Offer to Purchase on the Proceeds Offer to Purchase Payment
Date.



     (b) Change of Control Offer. The Change of Control Offer will remain open for a
period of twenty (20) Business Days after the commencement date relating to such Change of Control
Offer, except to the extent that a longer period is required by applicable law (as so extended, the
“Change of Control Offer Period”).



     If the Change of Control Payment Date is on or after an interest record date and on or before
the related interest payment date, any accrued and unpaid interest and Additional Interest, if any,
will be paid



- 47 -









 







to the Person in whose name a Note is registered at the close of business on such record date,
and no additional interest, if any, will be payable to Holders who tender Notes pursuant to the
Change of Control Offer.



     With respect to any Change of Control Offer, the Company will send or cause to be sent, by
first class mail, a notice to the record Holders as shown on the register of Holders within 30 days
following the Change of Control with a copy to the Trustee. Such notice, which will govern the
terms of the Change of Control Offer, will contain all instructions and materials necessary to
enable such Holders to tender Notes pursuant to the Change of Control Offer and will state:




     (i) that the Change of Control Offer is being made pursuant to this Section 3.09 and
Section 4.15 hereof and that all Notes properly tendered will be accepted for payment;




     (ii) the purchase price and the Change of Control Payment Date;




     (iii) that any Note not tendered or accepted for payment will continue to accrue
interest;




     (iv) that, unless the Company defaults in the payment of the purchase price, any Note
accepted for payment pursuant to the Change of Control Offer will cease to accrue interest
and Additional Interest, if any, after the Change of Control Payment Date;




     (v) that Holders electing to have a Note purchased pursuant to any Change of Control
Offer will be required to surrender the Note, with the form entitled “Option of Holder to
Elect Purchase” on the reverse of the Note completed, or transfer by book-entry transfer, to
the Company, a depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice not later than the close of business on the last day of the Change
of Control Offer Period;




     (vi) that Holders will be entitled to withdraw their election if the Company, the
Depositary or the Paying Agent, as the case may be, receives, not later than the close of
business on the last day of the Change of Control Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal amount of the
Note the Holder delivered for purchase and a statement that such Holder is withdrawing his
election to have such Note purchased;




     (vii) that Holders whose Notes were purchased only in part will be issued new Notes
equal in principal amount to the unpurchased portion of the Notes surrendered (or
transferred by book-entry transfer), which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof; and




     (viii) the circumstances and material facts regarding such Change of Control
(including, but not limited to, information with respect to pro forma and historical
financial information after giving effect to such Change of Control, and information
regarding the Person or Persons acquiring control).



     On or before 12:00 p.m. (New York City time) on each Change of Control Payment Date, the
Company will irrevocably deposit with the Trustee or Paying Agent in immediately available funds
the aggregate purchase price with respect to a principal amount of Notes equal to the Change of
Control Payment, together with accrued and unpaid interest thereon, to be held for payment in
accordance with the terms of this Section 3.09(b). On the Change of Control Payment Date, the
Company will, to the



- 48 -









 







extent lawful, (A) accept for payment all Notes or portions thereof property tendered pursuant
to the Change of Control Offer, (B) deliver or cause the Paying Agent or Depositary, as the case
may be, to deliver to the Trustee Notes so accepted and (C) deliver to the Trustee an Officers’
Certificate stating that such Notes or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 3.09(b). The Company, the Depositary or the Paying
Agent, as the case may be, will promptly (but in any case not later than three (3) Business Days
after the Change of Control Payment Date) mail or deliver to each tendering Holder an amount equal
to the purchase price of the Notes tendered and not validly withdrawn by such Holder and accepted
by the Company for purchase, plus any accrued and unpaid interest thereon, and the Company will
promptly issue a new Note, and the Trustee will authenticate and mail or deliver such new Note, to
such Holder, equal in principal amount to any unpurchased portion of such Holder’s Notes
surrendered. Any Note not so accepted will be promptly mailed or delivered by the Company to the
Holder thereof. The Company will publicly announce in a newspaper of general circulation or in a
press release provided to a nationally recognized financial wire service the results of the Change
of Control Offer on the Change of Control Payment Date.



     (c) Compliance with the Exchange Act. The Company will comply with the requirements of
Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant
to a Proceeds Offer to Purchase or Change of Control Offer. To the extent that the provisions of
any securities laws or regulations conflict with this Section 3.09, the Company will comply with
the applicable securities laws and regulations and will not be deemed to have breached its
obligations under this Section 3.09 by virtue thereof.



     (d) Offer to Purchase Procedures. Other than as specifically provided in this Section
3.09, any purchase pursuant to this Section 3.09 will be made pursuant to the provisions of
Sections 3.01, 3.02, 3.05 and 3.06 hereof.



ARTICLE 4




COVENANTS




     Section 4.01. Payment of Notes. The Company will pay or cause to be paid the
principal of, premium, if any, and interest on the Notes on the dates and in the manner provided in
the Notes. Principal, premium, if any, interest and Additional Interest, if any, will be
considered paid for all purposes hereunder on the date the Paying Agent, if other than the Company
or a Subsidiary thereof, holds as of 10:00 a.m. (New York City time) money deposited by the Company
in immediately available funds and designated for and sufficient to pay all such principal,
premium, if any, interest and Additional Interest, if any, then due. The Company will pay all
Additional Interest, if any, in the same manner on the dates and in the amounts set forth in the
Registration Rights Agreement.



     The Company will pay interest (including post-petition interest in any proceeding under any
Bankruptcy Code) on overdue principal at the rate equal to 1% per annum in excess of the
then-applicable interest rate on the Notes to the extent lawful; it will pay interest (including
post-petition interest in any proceeding under any Bankruptcy Code) on overdue installments of
interest and Additional Interest (without regard to any applicable grace periods) from time to time
on demand at the same rate to the extent lawful.



     Section 4.02. Maintenance of Office or Agency. The Company will maintain in the
Borough of Manhattan, the City of New York, an office or agency (which may be an office of the
Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered
for registration of transfer or for exchange and where notices and demands to or upon the Company
in respect of the Notes



- 49 -









 







and this Indenture may be served. The Company will give prompt written notice to the Trustee
of the location, and any change in the location, of such office or agency. If at any time the
Company will fail to maintain any such required office or agency or will fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee.



     The Company may also from time to time designate one or more other offices or agencies where
the Notes may be presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or rescission will in any
manner relieve the Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company will give prompt written notice to
the Trustee of any such designation or rescission and of any change in the location of any such
other office or agency.



     The Company hereby designates the Corporate Trust Office of the Trustee as one such office or
agency of the Company in accordance with Section 2.04 hereof.



     Section 4.03. Reports. Whether or not required by the rules and regulations of the
Commission, so long as any Notes are outstanding the Company will furnish to the Holders the
following:




     (a) all quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if the Company were
required to file such Forms, including a “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” that describes the financial condition and results of
operations of the Company and its Consolidated Subsidiaries (showing in reasonable detail,
either on the face of the financial statements or in the footnotes thereto and in
Management’s Discussion and Analysis of Financial Condition and Results of Operations, the
financial condition and results of operations of the Company and its Restricted Subsidiaries
separately from the financial condition and results of operations of the Unrestricted
Subsidiaries of the Company (it being agreed and acknowledged that the reporting of the
results of one or more Unrestricted Subsidiaries as separate business segments will be
deemed to satisfy such requirement)) and, with respect to the annual information only, a
report thereon by the Company’s certified independent accountants; and




     (b) all current reports that would be required to be filed with the Commission on Form
8-K if the Company were required to file such reports,


in each case, within the time periods specified in the Commission’s rules and regulations.




     In addition, whether or not required by the rules and regulations of the Commission, the
Company will file a copy of all such information and reports with the Commission for public
availability within the time periods specified in the Commission’s rules and regulations (unless
the Commission will not accept such a filing) and make such information available to securities
analysts and prospective investors upon request. In addition, the Company and the Guarantors have
agreed that, for so long as any Notes remain outstanding, they will furnish to the Holders and
prospective investors, upon their request, the information required to be delivered pursuant to
Rule 144A(d)(4) under the Securities Act. Further, the Company and the Guarantors have agreed
that, for so long as any Notes remain outstanding, they will furnish to the Holders, upon their
request, the monthly or quarterly term debt securitization reports required by the following
Securitization Trusts: Commercial Loan Trust 2007-1, Commercial Loan Trust 2007-2, Commercial Loan
Trust 2006-1, Commercial Loan Trust 2006-2, and Real Estate Loan Trust 2006-A. The Company will
also comply with the other provisions of TIA Section 314(a).



- 50 -









 





     For so long as the Company files the foregoing reports and other information with the
Commission, the Company will be deemed to have furnished all of the foregoing such reports and
other information if the Company has filed or furnished such reports and other information with the
Commission via the EDGAR filing system or any successor electronic filing system and such reports
are publicly available.



     The Company represents that as of the date of this Indenture the Company is a “large
accelerated filer” as defined in Rule 12b-2 of the Securities Act.



     Section 4.04. Compliance Certificate.



     (a) Within 90 days after the end of each fiscal year, the Company will deliver to the Trustee
an Officers’ Certificate stating that a review of the activities of the Company and its
Subsidiaries during the preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed, performed and fulfilled
its obligations under this Indenture (including with respect to any Restricted Payments made during
such year, the basis upon which the calculations required by Section 4.07 hereof were computed,
which calculations may be based on the Company’s latest available financial statements) and the
Security Documents, and further stating, as to each such Officer signing such certificate, that to
the best of his or her knowledge the Company and the Guarantors have kept, observed, performed and
fulfilled each and every covenant contained in this Indenture and the Security Documents to the
extent a party thereto and are not in default in the performance or observance of any of the terms,
provisions and conditions of this Indenture and the Security Documents (or, if a Default or Event
of Default has occurred, describing all such Defaults or Events of Default of which he or she may
have knowledge and what action the Company is taking or proposes to take with respect thereto) and
that to the best of his or her knowledge no event has occurred and remains in existence by reason
of which payments on account of the principal of, interest or Additional Interest, if any, on the
Notes is prohibited or if such event has occurred, a description of the event and what action the
Company is taking or proposes to take with respect thereto.



     (b) The Company will, so long as any of the Notes are outstanding, deliver to the Trustee,
forthwith upon any Officer becoming aware of any Default or Event of Default, an Officers’
Certificate specifying such Default or Event of Default and what action the Company is taking or
proposes to take with respect thereto.



     Section 4.05. Taxes. The Company will pay, and will cause each of its Restricted
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and governmental
levies, except such as are contested in good faith and by appropriate proceedings or where the
failure to effect such payment is not adverse in any material respect to the Holders.



     Section 4.06. Stay, Extension and Usury Laws. The Company covenants (to the extent
that it may lawfully do so) that it will not, and will not permit its Restricted Subsidiaries to,
at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that
may affect the covenants or the performance of this Indenture; and the Company (to the extent that
it may lawfully do so) hereby expressly waives, and will cause each Restricted Subsidiary to waive,
all benefit or advantage of any such law, and covenants that it will not, by resort to any such
law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law has been enacted.



- 51 -









 





     Section 4.07. Limitation on Restricted Payments. (a) The Company will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly:




     (i) declare or pay any dividend or make any other payment or distribution on account of
the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without
limitation, any payment in connection with any merger or consolidation involving the
Company) or to the direct or indirect holders of the Company’s or any of its Restricted
Subsidiaries’ Equity Interests in their capacity as such (other than dividends or
distributions payable in Equity Interests (other than Disqualified Stock) of the Company);




     (ii) purchase, redeem or otherwise acquire or retire for value (including, without
limitation, in connection with any merger or consolidation involving the Company) any Equity
Interests of the Company or other Affiliate of the Company (other than any such Equity
Interests owned by the Company or any Wholly Owned Restricted Subsidiary of the Company);




     (iii) make any payment on or with respect to, or purchase, redeem, defease or otherwise
acquire or retire for value any Indebtedness that is contractually subordinated to the
Notes, except a payment of scheduled interest; or




     (iv) make any Restricted Investment,


(all such payments and other actions set forth in clauses (i) through (iv) above being collectively
referred to as “Restricted Payments”), unless, at the time of and after giving effect to
such Restricted Payment:





     (A) no Default or Event of Default has occurred and is continuing or would
occur as a consequence thereof; and




     (B) the Company would, at the time of such Restricted Payment and after giving
pro forma effect thereto, have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Consolidated Leverage Ratio test set forth in clause
(a) of Section 4.09; and




     (C) such Restricted Payment, together with the aggregate amount of all other
Restricted Payments made by the Company and its Restricted Subsidiaries after June
30, 2009 (excluding Restricted Payments permitted by clauses (b)(ii), (b)(iii),
(b)(iv) and (b)(vii) of this Section 4.07 below, is less than the sum, without
duplication, of (1) 50% of the aggregate cumulative Consolidated Net Income of the
Company for the period (taken as one accounting period) from and after June 30, 2009
to the end of the Company’s most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted Payment (or, if
such Consolidated Net Income for such period is a deficit, less 100% of such
deficit), plus (2) 100% of the aggregate net cash proceeds received by the Company
from the issue or sale since June 30, 2009 of Equity Interests of the Company (other
than Disqualified Stock and net proceeds received from the Concurrent Equity
Offering) or of Disqualified Stock or debt securities of the Company that have been
converted into such Equity Interests (other than Equity Interests (or Disqualified
Stock or convertible debt securities) sold to a Restricted Subsidiary of the Company
and other than Disqualified Stock or convertible debt securities that have been
converted into Disqualified Stock), plus (3) to the extent that any Restricted
Investment that was made after June 30, 2009 is sold for cash or otherwise
liquidated or repaid for cash, the lesser of (a) the cash return of capital with
respect to such Restricted Investment (less the cost of disposition, if any) and (b)
the initial amount of such



- 52 -









 







Restricted Investment, plus (4) the fair market value of the assets (net of
liabilities (other than liabilities to the Company or any Restricted Subsidiary)) of
any Unrestricted Subsidiary (other than the Healthcare REIT) which is designated as
an Unrestricted Subsidiary after the Issue Date, at the time that such Unrestricted
Subsidiary is redesignated a Restricted Subsidiary, plus (5) to the extent that any
Restricted Investment that was made after the Issue Date is sold for cash or
otherwise liquidated, repaid, repurchased or redeemed for cash, the lesser of (a)
the cash return of capital with respect to such Restricted Investment (less cost of
disposition, if any), and (b) the initial amount of such Restricted Investment.



     (b) The foregoing provisions will not prohibit:




     (i) the payment of any dividend (other than as set forth in clause (v) below) within 60
days after the date of declaration thereof, if at said date of declaration such payment
would have complied with the provisions of the Indenture;




     (ii) the redemption, repurchase, retirement, defeasance or other acquisition of any
subordinated Indebtedness or Equity Interests of the Company in exchange for, or out of the
net cash proceeds of the substantially concurrent sale (other than to a Restricted
Subsidiary of the Company) of, other Equity Interests of the Company (other than any
Disqualified Stock); provided that the amount of any such net cash proceeds that are
utilized for any such redemption, repurchase, retirement, defeasance or other acquisition
will be excluded from clause (a)(iv)(C)(2) above;




     (iii) the defeasance, redemption, repurchase or other acquisition of subordinated
Indebtedness with the net cash proceeds from an incurrence of Permitted Refinancing
Indebtedness;




     (iv) the payment of any dividend by a Restricted Subsidiary of the Company to the
holders of its Equity Interests on a pro rata basis;




     (v) the payment of a regular quarterly dividend on the Company’s common stock not to
exceed $0.01 per share, as adjusted from time to time for any stock splits, combinations,
reclassifications, in-kind dividends or similar transactions;




     (vi) repurchases by the Company of shares of its common stock or options to purchase
such common stock from existing or former directors or employees of the Company or any of
its Subsidiaries or their authorized representatives upon the death, disability or
termination of employment of such directors or employees, in an aggregate amount not to
exceed $10 million in any calendar year;




     (vii) repurchases by the Company of shares of its common stock which are deemed to
occur upon the exercise of stock options, to the extent such shares represent a portion of
the exercise price thereof;




     (viii) repurchases by the Company of shares of its common stock in connection with the
payment by directors or employees of the Company or any of its Subsidiaries of taxes
incurred by such directors or employees upon the vesting of shares of restricted stock or
other compensatory awards made to such directors or employees under the Company’s equity
incentive plans;



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     (ix) payments or distributions to dissenting stockholders pursuant to applicable law,
pursuant to or in connection with a merger, consolidation or transfer of assets that
complies with the applicable provisions of the Indenture;




     (x) payments of cash in lieu of fractional shares of the Company’s common stock in an
aggregate amount not to exceed $500,000 in any calendar year;




     (xi) so long as no Default or Event of Default has occurred or is continuing, purchases
of Convertible Notes, in aggregate amount not to exceed $50.0 million less all payments
pursuant to clause (xii), below, with respect to Convertible Notes;




     (xii) the payment, purchase, redemption, defeasance, or other acquisition or retirement
for value of principal of any subordinated Indebtedness at its Stated Maturity (other than
by means of a transaction meeting the requirements of clause (b)(ii) or clause (b)(iii),
above); or




     (xiii) so long as no Default or Event of Default has occurred or is continuing
(including, as a consequence thereof) Restricted Payments in an aggregate amount of less
than the sum of (A)(x) if the Convertible Notes Amount is less than $100.0 million, $35.0
million or (y) if the Convertible Notes Amount is greater than $100.0 million, the lesser of
(p) $35.0 million and (q) the aggregate principal amount of Restricted Payments applied to
the payment, purchase, redemption, defeasance or other acquisition or retirement for value
of the Convertible Notes resulting in a reduction to the amount generally available for
Restricted Payments under clause (a)(iv)(C) of Section 4.07, plus (B) plus 100% of the net
cash proceeds received by the Company in connection with the Concurrent Equity Offering.



     (c) The Company may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if
such designation would not cause a Default. For purposes of making such determination, all
outstanding Investments by the Company and its Restricted Subsidiaries (except to the extent repaid
in cash) in the Subsidiary so designated will be deemed to be Restricted Payments at the time of
such designation and will reduce the amount available for Restricted Payments under the first
paragraph of this covenant. All such outstanding Investments will be deemed to constitute
Investments in an amount equal to the greater of (i) the net book value of such Investments at the
time of such designation or (ii) the fair market value of such Investments at the time of such
designation. Such designation will only be permitted if such Restricted Payment would be permitted
at such time and if such Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. Notwithstanding the foregoing sentences of this paragraph, neither the Company nor any
Restricted Subsidiary will be deemed to have made any Restricted Payment in connection with the
consummation of any transaction resulting in the existence of the Healthcare REIT and the resulting
designation of the same as an Unrestricted Subsidiary.



     (d) The amount of all Restricted Payments (other than cash) will be the fair market value on
the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or
issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted
Payment. The fair market value of any noncash Restricted Payment will be determined by the Company
and such determination will be delivered to the Trustee, such determination to be based upon an
opinion or appraisal issued by an accounting, appraisal or investment banking firm of national
standing if such fair market value exceeds $50.0 million. Not later than 15 days after the end of
any fiscal quarter during which any Restricted Payment is made, the Company will deliver to the
Trustee an Officers’ Certificate stating that all Restricted Payments made during such fiscal
quarter were permitted and setting forth the basis upon which the calculations required by this
Section 4.07 were computed, together with a copy of any fairness opinion or appraisal required by
this Indenture.



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     Section 4.08. Limitation on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries. The Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any Restricted Subsidiary to:



     (a) (i) pay dividends or make any other distributions to the Company or any of its Restricted
Subsidiaries (A) on its Capital Stock or (B) with respect to any other interest or participation
in, or measured by, its profits, or




     (i) pay any Indebtedness owed to the Company or any of its Restricted Subsidiaries,



     (b) make loans or advances to the Company or any of its Restricted Subsidiaries or



     (c) transfer any of its properties or assets to the Company or any of its Restricted
Subsidiaries, except for such encumbrances or restrictions existing under or by reason of:




     (i) the Indenture, the Notes and the Security Documents,




     (ii) the Credit Facility and the Credit Facility Security Documents,




     (iii) applicable law,




     (iv) any instrument governing Acquired Debt or Capital Stock of a Person acquired by
the Company or any of its Restricted Subsidiaries as in effect at the time of such
acquisition (except to the extent such Indebtedness was incurred in connection with or in
contemplation of such acquisition), which encumbrance or restriction is not applicable to
any Person, or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, provided that, in the case of Indebtedness,
such Indebtedness was permitted by the terms of the Indenture to be incurred,




     (v) by reason of customary non-assignment provisions in leases entered into in the
ordinary course of business and consistent with past practices,




     (vi) purchase money obligations for property acquired in the ordinary course of
business that impose restrictions of the nature described in clause (iii) above on the
property so acquired,




     (vii) Permitted Refinancing Indebtedness, provided that the restrictions contained in
the agreements governing such Permitted Refinancing Indebtedness are no more restrictive
than those contained in the agreements governing the Indebtedness being refinanced,




     (viii) the requirements of any Securitization, Warehouse Facility or Residual Funding
Facility that are exclusively applicable to any bankruptcy remote Securitization Trust,
Warehouse Trust or special purpose Subsidiary of the Company formed in connection therewith,




     (ix) the requirements of any Credit Enhancement Agreement,




     (x) in the case of clause (iii) above, restrictions contained in security agreements or
mortgages securing Indebtedness of a Restricted Subsidiary to the extent such restrictions
restrict the transfer of the property subject to the Liens created thereby or to the extent
not constituting Collateral, the Capital Stock of the Person whose assets consist, directly
or indirectly, primarily of



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the real property securing such Indebtedness, provided that such Liens were otherwise
permitted to be incurred under the Indenture,




     (xi) any restriction with respect to a Restricted Subsidiary imposed pursuant to an
agreement entered into for the sale or disposition of all or substantially all of the
Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or
disposition,




     (xii) agreements existing on the Issue Date to the extent and in the manner such
agreements are in effect on the Issue Date,




     (xiii) assignment provisions and provisions with respect to the distribution of assets
or property or joint venture or partnership interests in joint venture or partnership
agreements and other similar agreements entered into in the ordinary course of business that
are customary for such agreements; provided that such provisions in the aggregate, in the
opinion of the management of the Company, do not materially and adversely affect the ability
of the Company to make principal or interest payments on the Notes, or




     (xiv) restrictions imposed in connection with any Investment not prohibited by Section
4.07 or in connection with any Permitted Investment made pursuant to clauses (d), (e), (f)
or (g) of the definition thereof.



     Section 4.09. Limitation on Incurrence of Additional Indebtedness and Issuance of
Preferred Stock. (a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to (collectively,
“incur”) any Indebtedness (including Acquired Debt) and that the Company will not issue any
Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of
preferred stock; provided, however, that the Company and the Restricted Subsidiaries may incur
Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock or preferred stock if
the Consolidated Leverage Ratio of the Company, calculated on a pro forma basis after giving effect
to the incurrence or issuance of the additional Indebtedness to be incurred or the Disqualified
Stock or preferred stock to be issued, would have been less than 4.5 to 1.0.



     (a) The provisions of clause (a) above will not apply to the incurrence of any of the
following items of Indebtedness (collectively “Permitted Debt”):




     (i) the existence of the Credit Facility and the Guarantees thereof by the Credit
Facility Guarantors and the incurrence by the Company and/or any of the Credit Facility
Guarantors of Indebtedness pursuant to the Credit Facility; provided that the aggregate
principal amount of all Indebtedness outstanding under the Credit Facility after giving
effect to such incurrence, with letters of credit being deemed to have a principal amount
equal to the maximum potential liability of the Company and its Restricted Subsidiaries
thereunder, does not at any time exceed the greater of (A) $600 million aggregate principal
amount outstanding less the sum of (without duplication) (1) the aggregate amount of any
mandatory reduction in commitments made following the Issue Date pursuant to the terms of
the Credit Facility plus (2) the aggregate amount of any permanent repayments or permanent
prepayments of such Debt with (a) the proceeds of Asset Sales made in accordance with
Section 4.10 hereof and (b) the net proceeds of any Additional Notes issued pursuant to
clause (v) below, and (B) $200 million aggregate principal amount, provided that this clause
(B) shall be deemed to be $0 and unavailable if the Convertible Notes Amount is $100 million
or more;



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     (ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing
Indebtedness other than existing HUD Debt;




     (iii) the Indebtedness represented by the July 2004 Notes, the April 2007 Notes, the
July 2007 Notes and the Notes and the July 2004 Guarantees, the April 2007 Guarantee, the
July 2007 Guarantee;




     (iv) the Intercompany Notes;




     (v) the Notes (including any Guarantees thereof and any Additional Notes) up to a
maximum aggregate principal amount of $900 million; provided that the net proceeds from any
such incurrences are applied to permanently reduce secured Indebtedness incurred pursuant to
clause (i) above (including the permanent reduction of any related commitments thereunder);




     (vi) obligations of the Company and its Restricted Subsidiaries and the Securitization
Trusts under Credit Enhancement Agreements in aggregate principal amount not to exceed the
total amount of existing and committed obligations of the Company and its Restricted
Subsidiaries and the Securitization Trusts under Credit Enhancement Agreements outstanding
as of the Issue Date;




     (vii) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted
Refinancing Indebtedness in exchange for, or the net proceeds of which are used to Refinance
any Indebtedness (other than intercompany Indebtedness) that was permitted to be incurred
pursuant to clause (a) of this Section 4.09 or clauses (ii), (iii), (v) or (vi) above;




     (viii) the incurrence by the Company or any of its Restricted Subsidiaries as
applicable of intercompany Indebtedness between or among the Company and any Restricted
Subsidiary; provided, however, that (A) if the Company, any Guarantor or any I/C Notes
Issuer is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to
the prior payment in full in cash of all Obligations with respect to the Notes and (B)(1)
any subsequent issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than the Company or a Restricted Subsidiary and
(2) any sale or other transfer of any such Indebtedness to a Person that is not either the
Company or a Restricted Subsidiary will be deemed, in each case, to constitute an incurrence
of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that
was not permitted by this clause (b)(viii);




     (ix) the issuance by a Restricted Subsidiary of preferred stock to the Company or to
any of the Guarantors or I/C Notes Issuers; provided, however, that any subsequent event or
issuance or transfer of any Capital Stock that results in the owner of such preferred stock
ceasing to be a Guarantor or I/C Notes Issuer or any subsequent transfer of such preferred
stock to a Person other than the Company or any of the Guarantors or I/C Notes Issuers, will
be deemed to be an issuance of preferred stock by such Restricted Subsidiary that was not
permitted by this clause (ix);




     (x) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging
Obligations that are incurred (A) for the purpose of fixing or hedging interest rate risk
with respect to any Indebtedness that is permitted by the terms of this Indenture to be
outstanding or (B) for the purpose of hedging, fixing or capping interest rate risk in
connection with any completed or pending Securitization, Warehouse Facility or Residual
Funding Facility;



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     (xi) Indebtedness of the Company and Guarantees thereof, to the extent the net proceeds
thereof are promptly:




     (A) used to purchase Notes tendered in an offer to purchase made as a result of
a Change of Control; or




     (B) deposited to defease the Notes as described in Section 8.03;




     (xii) Guarantees of the Notes and Guarantees by the Company or any Restricted
Subsidiary of Indebtedness of the Company or another Restricted Subsidiary that was Incurred
pursuant to clause (a) of this Section 4.09 (or Refinancing Indebtedness in respect thereof
or pursuant to clauses (i), (ii), (x) and (xv) above; provided that if the Indebtedness
being Guaranteed is subordinated in right of payment to the Notes or a Notes Guarantee, then
such Guarantee will be subordinated in right of payment to the Notes or such Notes Guarantee
to the same extent as the Indebtedness Guaranteed;




     (xiii) the incurrence of HUD Debt by Restricted Subsidiaries, not to exceed $180.0
million in aggregate principal amount at any time outstanding;




     (xiv) the incurrence by the Company or any Restricted Subsidiary of Non-Recourse
Mortgage Debt (other than HUD Debt permitted under clause (xiii) above) established or
completed after the Issue Date; provided that (A) the Company receives Proceeds in
connection with the incurrence of such Non-Recourse Mortgage Debt in an aggregate principal
amount equal to or in excess of 60% of the fair market value of such assets as of the date
on which such Non-Recourse Mortgage Debt is incurred, (B) no Event of Default has occurred
and is continuing, (C) the Company will treat any Proceeds received in connection with such
transaction as Proceeds from an Asset Sale and will apply such Proceeds in accordance with
clause (a)(iv) of Section 4.10 including, if applicable, to make a Net Proceeds Offer, and
(D) the Company will have delivered an Officer’s Certificate to the Trustee certifying
compliance with the foregoing requirements;




     (xv) the incurrence by the Company or any Restricted Subsidiary of Non-Recourse Debt
(other than HUD Debt permitted under clause (xiii) above and Non-Recourse Mortgage Debt
permitted under clause (xiv) above) established or completed after the Issue Date; provided
that (A) the Company receives Proceeds in connection with the incurrence of such
Non-Recourse Debt in an aggregate principal amount equal to or in excess of 75% of the fair
market value of such assets as of the date on which such Non-Recourse Debt is incurred, (B)
no Event of Default has occurred and is continuing, (C) the Company will treat any Proceeds
received in connection with such transaction as Proceeds from an Asset Sale and will apply
such Proceeds in accordance with clause (a)(iv) of Section 4.10 including, if applicable, to
make a Net Proceeds Offer, and (D) the Company will have delivered an Officer’s Certificate
to the Trustee certifying compliance with the foregoing requirements; and




     (xvi) the incurrence by the Company of additional Indebtedness in an aggregate
principal amount (or accreted value, as applicable) at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to Refinance or replace any other Indebtedness
incurred pursuant to this clause (xvi), not to exceed $50.0 million.



     (b) The Company will not, and will not permit any Restricted Subsidiary of the Company to,
incur any Indebtedness that is contractually subordinated to any Indebtedness of the Company or any
such Restricted Subsidiary unless such Indebtedness is also contractually subordinated to the
Notes, or the



- 58 -









 







Subsidiary Guarantee of such Restricted Subsidiary (as applicable), on substantially identical
terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated to
any other Indebtedness solely by virtue of being unsecured.



     (c) The Company may not agree to any Refinancing of Indebtedness under the Credit Facility
unless, on or prior thereto, the lenders and/or a collateral agent on behalf of such lenders under
the Credit Facility (after giving effect to such refinancing) execute either a joinder to the
Intercreditor Agreement or a new intercreditor agreement with the Trustee on terms substantially
similar to those of the Intercreditor Agreement; provided that the Company need not comply with
this Section 4.09(d) to the extent that any new Indebtedness incurred in connection with such
Refinancing is either (i) unsecured or (ii) additional Notes.



     (d) For purposes of determining compliance with this Section 4.09, in the event that an item
of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described
in clauses (b)(i) through (b)(xvi) above or is entitled to be incurred pursuant clause (a) above,
the Company will, in its sole discretion, classify such item of Indebtedness in any manner that
complies with this covenant and such item of Indebtedness will be treated as having been incurred
pursuant to only one of such clauses or pursuant to clause (a) above; provided, however, that (x)
all Indebtedness outstanding under (A) the Credit Facility on the Issue Date will be deemed to have
been incurred pursuant to clause (b)(i) above and (B) the Notes on the Issue Date will be deemed to
have been incurred pursuant to clause (b)(v) above, and in each of (A) and (B), the Company will
not be permitted to reclassify all or any portion of such Indebtedness outstanding on the Issue
Date and (y) the Company will be entitled to divide and classify an item of Indebtedness in more
than one of the types of Indebtedness described in clauses (a) and (b) above, and in that
connection will be entitled to treat a portion of such Indebtedness as having been incurred under
clause (a) above, and thereafter the remainder of such Indebtedness having been incurred under
clause (b) above.



     (e) Accrual of interest, the accretion of accreted value, the payment of interest or dividends
in the form of additional Indebtedness, Disqualified Stock or preferred stock, as applicable,
accretion of original issue discount or liquidation preference and increases in the amount of
Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies will
not be deemed to be an incurrence of Indebtedness, Disqualified Stock or preferred stock for
purposes of this Section 4.09. Guarantees of, or obligations in respect of letters of credit
relating to, Indebtedness that is otherwise included in the determination of a particular amount of
Indebtedness will not be included in the determination of such amount of Indebtedness; provided
that the incurrence of the Indebtedness underlying such Guarantee or letter of credit, as the case
may be, was subject to and in compliance with this Section 4.09.



     (f) For purposes of determining compliance with any U.S. dollar restriction on the incurrence
of Indebtedness where the Indebtedness incurred is denominated in a different currency, the amount
of such Indebtedness will be the U.S. Dollar Equivalent determined on the date of the incurrence of
such Indebtedness; provided, however, that if any such Indebtedness denominated in a different
currency is subject to a currency agreement with respect to U.S. dollars covering all principal,
premium, if any, and interest payable on such Indebtedness, the amount of such Indebtedness
expressed in U.S. dollars will be as provided in such currency agreement. The maximum amount of
Indebtedness that the Company and its Restricted Subsidiaries may incur pursuant to this Section
4.09 will not be deemed to be exceeded, with respect to any outstanding Indebtedness, solely as a
result of fluctuations in the exchange rate of currencies.



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     Section 4.10. Limitation on Asset Sales.



     (a) The Company will not, and will not permit any of its Restricted Subsidiaries to,
consummate an Asset Sale unless:




     (i) the Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair market value
(evidenced by an Officers’ Certificate delivered to the Trustee) of the assets or Equity
Interests issued or sold or otherwise disposed of;




     (ii) at least 75% of the consideration therefor received by the Company or such
Restricted Subsidiary is in the form of cash or Cash Equivalents; provided that the amount
of (A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most
recent balance sheet) of the Company or any Restricted Subsidiary (other than contingent
liabilities and liabilities that are by their terms subordinated to the Notes or any
Guarantee thereof) that are (1) secured by such assets on a basis that is prior to or
ratable with the Notes or (2) that are unsecured so long as the subject assets do not
constitute Collateral, that are, in either case assumed by the transferee of any such assets
pursuant to a customary novation agreement that releases the Company or such Restricted
Subsidiary from further liability and (B) any securities, notes or other obligations
received by the Company or any such Restricted Subsidiary from such transferee that are
converted by the Company or such Restricted Subsidiary into cash within 180 days of receipt
or effectiveness, as the case may be, to the extent of the cash received, will be deemed to
be cash for purposes of this provision;




     (iii) no Event of Default has occurred and is continuing and the Company will have
delivered an Officer’s Certificate to the Trustee stating that no Event of Default has
occurred and is continuing;




     (iv) Upon receipt of any Proceeds from an Asset Sale:




     (A) the Company may use the lesser of (1) 75% of the aggregate amount of such
Proceeds from such Asset Sale and (2) the amount of Indebtedness then outstanding
under the Credit Facility, to prepay any Indebtedness (and permanently reduce any
corresponding commitment) under the Credit Facility in accordance with the terms
thereof;




     (B) if, after the application of clause (a) above, Net Proceeds remain
unapplied and such Asset Sale involves the sale or transfer of Shared Collateral,
(1) such unapplied Net Proceeds will be delivered to the Trustee for application in
accordance with the succeeding clause (2) and (2) a Net Proceeds Offer Trigger Date
will be deemed to have occurred and the Company will be required to make a Net
Proceeds Offer in accordance with the provisions set forth below;




     (C) if, after the application of clause (a) above, Net Proceeds remain
unapplied and such Asset Sale does not involve the sale or transfer of Shared
Collateral, the Company will apply, or cause such Restricted Subsidiary to apply,
such unapplied Net Proceeds within 365 days (or 90 days in the case of Excess
Refinancing Indebtedness or Non-Recourse Debt incurred after the Issue Date) of
receipt thereof as follows:



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     (1) to prepay any Indebtedness under the Credit Facility or prepay or purchase other
secured Indebtedness of the Company or any of its Restricted Subsidiaries in accordance with
the terms thereof (and permanently reduce any corresponding commitment);




     (2) to make an investment in Replacement Assets; or




     (3) a combination of prepayment and investment permitted by the foregoing clauses
(iv)(C)(1) and (iv)(C)(2).



     (b) On (i) in the case of an Asset Sale not involving Shared Collateral, the 366th day after
an Asset Sale (or the 91st day in the case of Excess Refinancing Indebtedness) or such earlier
date, if any, as the Company or such Restricted Subsidiary determines not to apply the Net Proceeds
relating to such Asset Sale as set forth in clause (a)(iv)(C) above, or (ii) in the case of clause
(a)(iv)(B) above, the date on which a Net Proceeds Offer Trigger Date is deemed to have occurred
(each, a “Net Proceeds Offer Trigger Date”), such aggregate amount of Net Proceeds
which have not been applied on or before such Net Proceeds Offer Trigger Date as permitted or as
required by the preceding paragraph (each, a “Net Proceeds Offer Amount”), will be applied
by the Company or such Restricted Subsidiary to make an offer to purchase (the “Net Proceeds
Offer”) to all Holders on a date (the “Net Proceeds Offer Payment Date”) not less than
30 nor more than 60 days following the applicable Net Proceeds Offer Trigger Date, from all Holders
on a pro rata basis, that amount of Notes equal to the Net Proceeds Offer Amount at a price equal
to 100% of the principal amount of the Notes to be purchased, plus accrued and unpaid interest
thereon, if any, to but excluding the date of purchase; provided, however, that if at any time any
non-cash consideration received by the Company or any Restricted Subsidiary of the Company, as the
case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of
for cash (other than interest received with respect to any such non-cash consideration), then such
conversion or disposition will be deemed to constitute an Asset Sale hereunder and the Net Proceeds
thereof will be applied in accordance with this Section 4.10. If holders of Notes do not tender
Notes in aggregate principal amount equal to the Net Proceeds Offer Amount for purchase in
connection with any Net Proceeds Offer, the Company may use the portion of the Net Proceeds Offer
Amount not used to purchase Notes for any purpose not otherwise prohibited by the Indenture. Upon
completion of each Net Proceeds Offer, the Net Proceeds Offer Amount will be reset at zero. Any
Net Proceeds Offer shall be conducted in accordance with Section 3.09 hereof.



     (c) The Company may defer the Net Proceeds Offer until there is an aggregate unutilized Net
Proceeds Offer Amount equal to or in excess of $30.0 million resulting from one or more Asset Sales
(at which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess
of $30.0 million, will be applied as required pursuant to this clause (c)).



     (d) In the event of the transfer of substantially all (but not all) of the property and assets
of the Company and its Restricted Subsidiaries as an entirety to a Person in a transaction
permitted under Section 5.01 which transaction does not constitute a Change of Control, the
successor corporation will be deemed to have sold the properties and assets of the Company and its
Restricted Subsidiaries not so transferred for purposes of this Section 4.10, and will comply with
the provisions of this Section 4.10 with respect to such deemed sale as if it were an Asset Sale.
In addition, the fair market value of such properties and assets of the Company or its Restricted
Subsidiaries deemed to be sold will be deemed to be Net Proceeds for purposes of this Section 4.10.



     The Company will not, and will not permit any of its Restricted Subsidiaries to, sell, convey,
transfer, lease, assign or otherwise transfer for value any of the Primary Direct Collateral other
than to the Trustee in accordance with the I/C Notes Security Documents.



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     Section 4.11. Limitations of Business Activities. The Company will not permit any
Restricted Subsidiary to, engage in any business other than Permitted Businesses, except to such
extent as would not be material to the Company and its Subsidiaries taken as a whole.



     Section 4.12. Limitations on Transactions with Affiliates. The Company will not, and
will not permit any of its Restricted Subsidiaries to, enter into, or be a party to, any
transaction or series of related transactions with any Affiliate of the Company or such Restricted
Subsidiary (which Affiliate is not the Company or a Restricted Subsidiary) or any Healthcare REIT
Entity (so long as such Healthcare REIT Entity is an Affiliate) (each, an “Affiliate
Transaction”), except for Affiliated Transactions:



     (a) in the ordinary course of business and pursuant to terms which are not materially less
favorable to the Company or such Restricted Subsidiary than would be obtained in a comparable and
arm’s length transaction with a Person which is not an Affiliate (“Arm’s Length Terms”); or



     (b) (i) involving aggregate consideration less than or equal to $25.0 million and on Arm’s
Length Terms,




     (i) involving aggregate consideration in an amount greater than $25.0 million but less
than $50.0 million and determined by at least two disinterested officers of the Company to
be on Arm’s Length Terms, or




     (ii) with respect to which an opinion as to the fairness to the Company of such
Affiliate Transaction, from a financial point of view, has been issued to the Trustee on
behalf of the Holders, by an accounting, appraisal or investment banking firm of national
standing;




     provided that the following will not be deemed Affiliate Transactions:




     (A) the origination, administration or modification of an Investment Loan
(other than an Investment Loan to any Healthcare REIT Entity) or an Investment in
Equity Instruments (other than any Investment in Equity Instruments in any
Healthcare REIT Entity);




     (B) the exercise of any right or remedy in connection with an Investment Loan
(other than an Investment Loan to any Healthcare REIT Entity) or an Investment in
Equity Instruments (other than any Investment in Equity Instruments in any
Healthcare REIT Entity);




     (C) the making of any Restricted Payment permitted pursuant to the terms of
Section 4.07;




     (D) transactions with any CapitalSource Bank Entity entered into solely for the
purpose of complying with applicable laws and the CapitalSource Bank Acquisition
Agreement;




     (E) any transaction with any CapitalSource Bank Entity solely to the extent
that the Company or Restricted Subsidiary that participates in such transaction (1)
is required or mandated by the Federal Deposit Insurance Corporation or any other
bank regulatory authority having jurisdiction over such Person under applicable bank
regulatory law, regulation or guideline to participate in such transaction in order
for such Person to comply with its obligations under applicable bank regulatory law,
regulation or guideline, (2) cannot otherwise consummate such transaction in
compliance with such



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requirements or mandates on arm’s length terms or (3) is otherwise determined
by at least two disinterested officers of the Company to be on Arm’s Length Terms;
and




     (F) any transaction with the Healthcare REIT that is not material and does not
involve, together with all other transactions involving the Company or any
Restricted Subsidiary and any Healthcare REIT Entity that were on terms materially
less favorable to such Person than would be obtained in a comparable arm’s length
transaction with a Person which is not an Affiliate, amounts, consideration and/or
value in excess of $15.0 million per calendar year.



     Section 4.13. Limitation on Liens. The Company will not, and will not permit any of
its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or otherwise cause or
suffer to exist or become effective any Lien of any kind upon any of their assets, now owned or
acquired, other than:




     (a) in the case of any asset that does not constitute Collateral, Permitted Liens;
provided that any Lien on such asset will be permitted notwithstanding that it is not a
Permitted Lien if all payments due under the Indenture and the Notes are so secured on an
equal and ratable basis with the obligations so secured until such time as such obligations
are no longer secured by a Lien; and




     (b) in the case of any asset that constitutes Collateral, Permitted Collateral Liens.



     In the case of clause (a) above, if the obligations so secured are expressly subordinated by
their terms to the Notes, the Lien securing such obligations will also be so subordinated by its
terms at least to the same extent.



     Section 4.14. Loan Collateral Repayments. At any time that the Existing Credit
Agreement is no longer in existence, upon the occurrence of any Loan Collateral Trigger Date, the
Company will make an offer to purchase (the “Loan Collateral Repayments Offer”) from all
Holders on a date (the “Loan Collateral Repayments Payment Date”) not less than 30 nor more
than 60 days prior to the applicable interest payment date, from all Holders on a pro rata basis
(equal to $1,000 or an integral multiple thereof), that amount of Notes equal to 75% of the Loan
Collateral Repurchase Amount at a price equal to 100% of the principal amount of the Notes to be
purchased, plus accrued and unpaid interest thereon, if any, to but excluding the date of purchase
(the “Loan Collateral Repayments Amount”). If Holders do not tender Notes in aggregate
principal amount equal to the Loan Collateral Repayments Amount for purchase in connection with any
offer to purchase pursuant to this Section 4.14 or Loan Collateral Net Proceeds otherwise remain
unapplied following any offer to purchase pursuant to this Section 4.14, the Company may use the
portion of the Loan Collateral Net Proceeds not used to purchase Notes for any purpose not
otherwise prohibited by this Indenture. Any Loan Collateral Repayments Offer shall be conducted in
accordance with Section 3.09 hereof.



     Section 4.15. Change of Control. Upon the occurrence of a Change of Control, each
Holder will have the right to require the Company to repurchase all or any part (equal to $1,000 or
an integral multiple thereof) of such Holder’s Notes, pursuant to the offer described below (the
“Change of Control Offer”), at an offer price in cash equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest and Additional Interest, if any, thereon
to, but excluding, the date of purchase (the “Change of Control Payment”). Within 30 days
following any Change of Control, the Company will mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering to repurchase Notes
on the date specified in such notice, which date shall be no earlier than 30 days and no later than
60 days from the date such notice is mailed (the “Change of Control Payment Date”). Any
Change of Control Offer shall be conducted in accordance with Section 3.09 hereof.



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     Notwithstanding the foregoing, the Company will not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in this Indenture applicable
to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not
withdrawn under such Change of Control Offer.



     Section 4.16. Capacity to Repay Subordinated Convertible Notes. The Company will not
at any time have less capacity to make Restricted Payments pursuant to clause (a)(iv)(C) of Section
4.07 (taken together with any other baskets available for the purchase of subordinated
Indebtedness) than the aggregate principal amount of Restricted Payment capacity required to repay
all Convertible Notes (or Permitted Refinancing Indebtedness in respect thereof) with a Stated
Maturity of principal coming due within 30 days; provided that this covenant shall not apply to any
Convertible Notes (or Permitted Refinancing Indebtedness in respect thereof) with all Stated
Maturities of principal occurring not less than 91 days following the final Stated Maturity of the
Notes. For the purposes of this Section 4.16, the refinancing of subordinated Indebtedness with
Equity Interests contemplated by clause (b)(ii) of Section 4.07 be deemed to be “substantially
concurrent” if such refinancing occurs within 60 days of the issuance of such Equity Interests.



     Section 4.17. Corporate Existence. Subject to Section 4.15 and Article 5 hereof, as
the case may be, the Company will do or cause to be done all things necessary to preserve and keep
in full force and effect (a) its corporate existence and the corporate, partnership or other
existence of each of its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Company or any such Subsidiary and (b) the
rights (charter and statutory), licenses and franchises of the Company and its Subsidiaries;
provided, however, that the Company will not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any of its Subsidiaries, if the
Board of Directors determines that the preservation thereof is no longer desirable in the conduct
of the business of the Company and its Subsidiaries, taken as a whole, and that the loss thereof is
not adverse in any material respect to the Holders.



     Section 4.18. Additional Guarantors or I/C Notes Issuers. If any of the Company’s
Restricted Subsidiaries that is not a Credit Facility Guarantor issues a guarantee of the
obligations under the Credit Facility, then the Company will cause such Restricted Subsidiary to:




     (a) (i) execute a Notes Guarantee and a supplemental indenture in a form reasonably
satisfactory to the Trustee or (ii) execute and deliver to the Company an Intercompany Note
(which Intercompany Note will be pledged to the Trustee as Primary Direct Collateral); and
in each such case, execute and deliver such documentation mutatis mutandis with respect to
collateral as will be necessary to provide for the Liens securing the Notes described in the
Security Documents; and




     (b) deliver to the Trustee an Opinion of Counsel, upon which the Trustee may
conclusively rely, that such Notes Guarantee or such Intercompany Note, as applicable, has
been duly authorized, executed and delivered by such Restricted Subsidiary and constitutes a
legal, valid, binding and enforceable obligation of such Restricted Subsidiary, and that
such obligations have the benefit of a valid, perfected, first priority security interest in
the Collateral, in each case subject to customary qualifications.



     Thereafter, such Restricted Subsidiary will be a Guarantor or an I/C Notes Issuer, as
applicable, for all purposes of the Indenture.



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     Section 4.19. Limitation on Investment Company Status. The Company and its
Subsidiaries will not take any action, or otherwise permit to exist any circumstances, that would
require the Company to register as an “investment company” under the Investment Company Act of
1940, as amended.



     Section 4.20. Impairment of Security Interest. The Company will not, and will not
permit any Restricted Subsidiary to, take, or knowingly or grossly negligently omit to take, any
action, which action or omission would have the effect of causing a Lien to be created in favor of
the Collateral Agent or the Credit Facility Secured Creditors on any property or assets of the type
that would constitute Collateral unless a Lien is created in favor of the Collateral Agent for the
benefit of the Notes Secured Creditors (either directly or, in the case of any Lien on assets of an
I/C Notes Issuer, as assignee of the Company) with respect to such property or assets. Such Lien
in favor of the Collateral Agent for the benefit of the Notes Secured Creditors will at all times
be in accordance with the provisions of the Indenture and the Security Documents.



     The Company will not, and the Company will not permit any Restricted Subsidiary to, take, or
knowingly omit to take, any action that would have the result of materially impairing the security
interest with respect to the Collateral (it being understood that the incurrence of Permitted
Collateral Liens will, under no circumstances, be deemed to materially impair the security with
respect to the Collateral) for the benefit of the Trustee and the Holders of the Notes, and the
Company will not, and the Company will not permit any Restricted Subsidiary to, grant to any person
other than the Trustee, for the benefit of the Holders, with respect to the Primary Direct
Collateral, and the Collateral Agent, for the benefit of the holders of the Intercompany Notes with
respect to the Shared I/C Notes Collateral and the Notes Secured Parties with respect to the Shared
Direct Collateral, any interest whatsoever in any of the Collateral, except that the Company may
incur Permitted Collateral Liens and the Collateral may be discharged and released in accordance
with the Indenture, the Security Documents and the Intercreditor Agreement; provided that the
Intercompany Notes may not be amended, extended, renewed, restated, supplemented, replaced or
otherwise modified or replaced in a manner that would materially adversely affect the holders of
the Notes, (a) except to allow for the discharge or release of the Intercompany Notes in accordance
with the provisions of the Indenture and the Intercreditor Agreement or the incurrence of Permitted
Collateral Liens, or (b) unless contemporaneously with such amendment, extension, renewal,
restatement, supplement, modification or renewal, the Company delivers to the Trustee, either:




     (i) a solvency opinion from an independent financial advisor, the choice of such
financial advisor to be subject to the prior written approval of the Trustee (such approval
not to be unreasonably withheld), confirming the solvency of the Company and its
Subsidiaries, taken as a whole, after giving effect to any transactions related to such
amendment, extension, renewal, restatement, supplement, modification or replacement; or




     (ii) an Opinion of Counsel, upon which the Trustee may conclusively rely, opining that,
after giving effect to any transactions related to such amendment, extension, renewal,
restatement, supplement, modification or replacement, the Lien or Liens created under the
Intercompany Notes so amended, extended, renewed, restated, supplemented, modified or
replaced are valid and perfected Liens.



     Section 4.21. Limitation on the Issuances and Sales of Capital Stock of Wholly Owned
Restricted Subsidiaries. The Company will not, and will not permit any Wholly Owned Restricted
Subsidiary of the Company to, transfer, convey, sell, lease or otherwise dispose of any Capital
Stock of any Wholly Owned Restricted Subsidiary of the Company to any Person (other than the
Company or a Wholly Owned Restricted Subsidiary of the Company), unless:



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     (a) such transfer, conveyance, sale, lease or other disposition is of all the Capital
Stock of such Wholly Owned Restricted Subsidiary, and




     (b) the cash Net Proceeds from such transfer, conveyance, sale, lease or other
disposition are applied in accordance with Section 4.10.



     The Company will not permit any Wholly Owned Restricted Subsidiary of the Company to issue any
of its Equity Interests (other than, if necessary, shares of its Capital Stock constituting
directors’ qualifying shares) to any Person other than to the Company or a Wholly Owned Restricted
Subsidiary of the Company.



     Section 4.22. Maintenance of Insurance, Properties, Books and Records. The Company
will, and will cause each of its Restricted Subsidiaries to (a) keep all property useful and
necessary in its business in good working order and condition, ordinary wear and tear excepted in
accordance with industry standards and (b) maintain with financially sound and reputable insurance
companies insurance on all its property in at least such amounts, with such deductibles, and
against at least such risks (but including in any event public liability, casualty product
liability and business interruption expense coverage) as are usually insured against in the same
general area by companies engaged in the same or a similar business.



ARTICLE 5




SUCCESSORS




     Section 5.01. Merger, Consolidation or Sale of Assets.



     (a) The Company may not, in a single transaction or series of related transactions,
consolidate or merge with or into any person (whether or not the Company is the surviving
corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially
all of its properties or assets in one or more related transactions, to another corporation, Person
or entity unless:




     (i) the Company is the surviving corporation or the entity or the Person formed by or
surviving any such consolidation or merger (if other than the Company) or to which such
sale, assignment, transfer, lease, conveyance or other disposition shall have been made is
organized or existing under the laws of the United States, any state thereof or the District
of Columbia;




     (ii) the entity or Person formed by or surviving any such consolidation or merger (if
other than the Company) or the entity or Person to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made assumes all the obligations of
the Company under the Notes and the Indenture pursuant to a supplemental indenture in a form
reasonably satisfactory to the Trustee;




     (iii) immediately before and after such transaction no Default or Event of Default
exists; and




     (iv) except in the case of a merger of the Company with or into a Wholly Owned
Restricted Subsidiary of the Company, the Company or the entity or Person formed by or
surviving any such consolidation or merger (if other than the Company), or to which such
sale, assignment, transfer, lease, conveyance or other disposition shall have been made
will, at the time of such transaction and after giving pro forma effect thereto as if such
transaction had occurred at the end of the applicable fiscal quarter, be permitted to incur
at least $1.00 of additional



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Indebtedness pursuant to the Consolidated Leverage Ratio test set forth in clause (a)
of Section 4.09.



     (b) Each Guarantor and I/C Notes Issuer (other than any Guarantor or I/C Notes Issuer whose
Notes Guarantee or Intercompany Note, as the case may be, is to be released in accordance with the
terms of the Notes Guarantee or Intercompany Note, as applicable, and the Indenture in connection
with any transaction complying with Section 4.10) will not, and the Company will not cause or
permit any Guarantor or I/C Notes Issuer to, consolidate with or merge with or into any Person
other than the Company or another Credit Party unless:




     (i) the entity or Person the I/C Notes Issuer or entity formed by or surviving any such
consolidation or merger or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is organized and existing under the laws of the
United States or any State thereof or the District of Columbia;




     (ii) the entity or Person formed by or surviving any such consolidation or merger or to
which such sale, assignment, transfer, lease, conveyance or other disposition will have been
made assumes all of the obligations of the applicable Guarantor under its Notes Guarantee or
the applicable I/C Notes Issuer under its Intercompany Note;




     (iii) immediately before and after giving effect to such transaction, no Default or
Event of Default exists; and




     (iv) except in the case of a merger of a Guarantor or I/C Notes Issuer with or into a
Wholly Owned Restricted Subsidiary of the Company, immediately after giving effect to such
transaction and the use of any net proceeds therefrom on a pro forma basis, the Company
could satisfy the provisions of clause (a)(iv) above.



     (c) The following additional conditions will apply to each transaction described in clauses
(a) and (b) above:




     (i) the Company, such Guarantors, such I/C Notes Issuer or the relevant surviving
entity, as applicable, will cause such amendments or other instruments to be filed and
recorded in such jurisdictions as may be required by applicable law to preserve and protect
the Lien of the Security Documents on the Collateral owned by or transferred to such Person,
together with such financing statements as may be required to perfect any Security Interests
in such Collateral which may be perfected by the filing of a financing statement under the
Uniform Commercial Code of the relevant states;




     (ii) the Collateral owned by or transferred to the Company, such Guarantor, such Credit
Facility Guarantor or the relevant surviving entity, as applicable, will:




     (A) continue to constitute Collateral under the Indenture and the Security
Documents;




     (B) (1) in the case of Direct Collateral, be subject to the Lien in favor of
the Trustee for the benefit of the Holders and (2) in the case of Shared I/C Notes
Collateral, be subject to the Lien in favor of the Collateral Agent on behalf of
Company; and




     (C) not be subject to any Lien other than Liens permitted by the Security
Documents;




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     (iii) the assets of the Person which is merged or consolidated with or into the
relevant surviving entity, to the extent that they are assets of the types which would
constitute Collateral under the Security Documents and which would be required to be pledged
thereunder, will be treated as After Acquired Property and such surviving entity will take
such action as may be reasonably necessary to cause such assets to be made subject to the
Lien of the Security Documents in the manner and to the extent required in the Indenture;
and




     (iv) the Company will have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, upon which the Trustee may conclusively rely, each stating that such
transaction and, if a supplemental indenture or supplemental Security Documents are required
in connection with such transaction, such supplemental indenture and Security Documents
comply with the applicable provisions of the Indenture, that all conditions precedent in the
Indenture relating to such transaction have been satisfied and that such supplemental
indenture and Security Documents are enforceable, subject to customary qualifications.



     Section 5.02. Successor Corporation Substituted. Upon any consolidation, combination
or merger of the Company, a Guarantor or an I/C Notes Issuer, or any transfer of all or
substantially all of the assets of the Company in accordance with Section 5.01, in which the
Company or such Guarantor or I/C Notes Issuer is not the continuing obligor under the Notes or such
I/C Notes Issuer’s Intercompany Note, the surviving entity formed by such consolidation or into
which the Company or such Guarantor or I/C Notes Issuer is merged or to which the transfer is made
will succeed to, and be substituted for, and may exercise every right and power of, the Company or
such Guarantor or I/C Notes Issuer under this Indenture, the Notes, the Security Documents, the
Note Guarantees, and the Intercompany Notes with the same effect as if such surviving entity had
been named therein as the Company or such Guarantor or I/C Notes Issuer and, except in the case of
a transfer, the Company or such Guarantor or I/C Notes Issuer, as the case may be, will be released
from the obligation to pay the principal of and interest on the Notes or in respect of its
Intercompany Note, as the case may be, and all of the Company’s or such Guarantor’s or I/C Notes
Issuer’s other obligations and covenants under the Notes, this Indenture, the Security Documents,
such Guarantor’s Notes Guarantee and such I/C Notes Issuer’s Intercompany Note, if applicable;
provided that in the case of any sale, assignment, transfer, lease, conveyance, or other
disposition of less than all of the assets of the predecessor Company, Guarantor or I/C Notes
Issuer, the predecessor Company, Guarantor or I/C Notes Issuer will not be released or discharged
from the obligation to pay the principal of or interest on the Notes or such I/C Notes Issuer’s
Intercompany Note, as the case may be.



ARTICLE 6




DEFAULTS AND REMEDIES




     Section 6.01. Events of Default. Each of the following constitutes an “Event of
Default”:




     (a) default in the payment when due of interest on, or Additional Interest with respect
to, the Notes, which default continues for 30 consecutive days;




     (b) default in payment when due of the principal of or premium, if any, on the Notes;




     (c) default by the Company in the performance of its obligations in the covenants or
other agreements described in Sections 4.10, 4.14 and 4.15;




     (d) the Company defaults in the performance of or breaches any other covenant or
agreement of the Company in the Indenture or any Collateral Agreement or under the Notes
(other than a default specified in clause (a), (b) or (c) above), and such default or breach
continues



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for a period of sixty (60) consecutive days after written notice by the Trustee to the
Company or by the holders of 25% or more in aggregate principal amount of the Notes to the
Company (with a copy to the Collateral Agent);




     (e) there occurs with respect to any Indebtedness of the Company or any Restricted
Subsidiary having an outstanding principal amount of $20.0 million or more, whether such
Indebtedness now exists or is created after the Issue Date, (i) an event of default that has
caused the holder of such Indebtedness to declare such Indebtedness to be due and payable
prior to its Stated Maturity and such Indebtedness has not been discharged in full or such
acceleration has not been rescinded or annulled or waived within thirty (30) days of such
acceleration and/or (ii) the failure to make a principal payment at the final (but not any
interim) fixed maturity and such defaulted payment shall not have been made, waived or
extended within thirty (30) days of such payment default;




     (f) one or more judgments, orders, decrees or arbitration awards are entered against
the Company or any of its Restricted Subsidiaries involving in the aggregate a liability (to
the extent not paid when due or covered by insurance) of $20.0 million or more and all such
judgments, orders, decrees or arbitration awards have not been paid and satisfied, vacated,
discharged, stayed or bonded pending appeal within thirty (30) days from the entry thereof;




     (g) except as permitted by the Indenture, any Subsidiary Guarantee will be held in a
judicial proceeding to be unenforceable or invalid or will cease for any reason to be in
full force and effect or any Guarantor, or any Person acting on behalf of any Guarantor,
will deny or disaffirm its obligations under its Subsidiary Guarantee;




     (h) the Company or any of its Significant Subsidiaries or any group of Subsidiaries
that, taken together, would constitute a Significant Subsidiary other than the Healthcare
REIT or any other Unrestricted Subsidiary (other than CapitalSource Bank) pursuant to or
within the meaning of any Bankruptcy Code:




     (i) commences a voluntary case,




     (ii) consents to the entry of an order for relief against it in an involuntary
case in which it is the debtor,




     (iii) consents to the appointment of a custodian of it or for all or
substantially all of its property,




     (iv) makes a general assignment for the benefit of its creditors, or




     (v) admits in writing its inability generally to pay its debts as the same
become due;




     (i) a court of competent jurisdiction enters an order or decree under any Bankruptcy
Code that:




     (i) is for relief against the Company or any of its Significant Subsidiaries or
any group of Subsidiaries that, taken together, would constitute a Significant
Subsidiary other than the Healthcare REIT or any other Unrestricted Subsidiary
(other than CapitalSource Bank) in an involuntary case in which it is the debtor,



- 69 -









 






     (ii) appoints a custodian of the Company or any of its Significant Subsidiaries
or any group of Subsidiaries that, taken together, would constitute a Significant
Subsidiary other than the Healthcare REIT or any other Unrestricted Subsidiary
(other than CapitalSource Bank) or for all or substantially all of the property of
the Company or any of its Significant Subsidiaries or any group of Subsidiaries
that, taken together, would constitute a Significant Subsidiary other than the
Healthcare REIT or any other Unrestricted Subsidiary (other than CapitalSource
Bank), or




     (iii) orders the liquidation of the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken together, would constitute a
Significant Subsidiary other than the Healthcare REIT or any other Unrestricted
Subsidiary (other than CapitalSource Bank),




and the order or decree contemplated in clause (i), (ii) or (iii) remains unstayed and in
effect for sixty (60) consecutive days;




     (j) any Intercompany Note of any I/C Notes Issuer ceases to be in full force and
effect, or any Intercompany Note of any I/C Notes Issuer is declared to be null and void and
unenforceable, or any Intercompany Note is found to be invalid or any I/C Notes Issuer
denies its liability under its Intercompany Note (other than by reason of release of an I/C
Notes Issuer in accordance with the terms of the Indenture);




     (k) (1) default by the Company, any Guarantor or any I/C Notes Issuer in the
performance of the Security Documents which (A) adversely affects the enforceability,
validity, perfection or priority of the Trustee’s Lien on the Primary Direct Collateral or
which adversely affects the condition or value of the Primary Direct Collateral, taken as a
whole, in any material respect or (B) adversely affects the enforceability, validity,
perfection or priority of the Collateral Agent’s Lien on the Shared Collateral or which
adversely affects the condition or value of the Shared Collateral, taken as a whole, in any
material respect, (2) repudiation or disaffirmation by the Company, any Guarantor or any I/C
Notes Issuer of its obligations under the Security Documents or (3) the determination in a
judicial proceeding that the Security Documents are unenforceable or invalid against the
Company, any Guarantor or any I/C Notes Issuer for any reason; and




     (l) the Intercreditor Agreement ceases to be in full force and effect, is declared to
be null and void or unenforceable or is found to be invalid.



     Section 6.02. Acceleration. If any Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately by notice in writing to the Company (and
the Trustee, if given by the Holders) specifying the respective Event of Default and that it is a
“notice of acceleration”. Notwithstanding the foregoing, in the case of an Event of Default
arising under clause (h) or (i) of Section 6.01 above, all outstanding Notes will become due and
payable without further action or notice. Holders of the Notes may not enforce the Indenture or
the Notes except as provided in this Indenture. The Trustee may withhold from Holders of the Notes
notice of any continuing Default or Event of Default (except a Default or Event of Default relating
to the payment of principal or interest) if it determines that withholding notice is in their
interest.



     In the case of any Event of Default occurring by reason of any willful action (or inaction)
taken (or not taken) by or on behalf of the Company with the intention of avoiding payment of the
premium that the Company would have had to pay if the Company then had elected to redeem the Notes
pursuant to the



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optional redemption provisions of the Indenture, an equivalent premium will also become and be
immediately due and payable to the extent permitted by law upon the acceleration of the Notes.




     Notwithstanding the foregoing, to the extent elected by the Company, the sole remedy for an
Event of Default relating to the failure to comply with Section 4.03 and for any failure to comply
with the requirements of Section 314(a)(1) of the TIA, will for the first 120 days after the
occurrence of such an Event of Default consist exclusively of the right to receive additional
interest on the Notes at an annual rate equal to 0.50% of the principal amount of the Notes. This
additional interest will be paid semi-annually in arrears, with the first semi-annual payment due
on the first interest payment date following the date on which the additional interest begins to
accrue on any Notes. The additional interest will accrue on all outstanding Notes from and
including the date on which such Event of Default first occurs to, but excluding, the 120th day
thereafter (or such earlier date on which such Event of Default will have been cured or waived).
On such 120th day (or earlier, if such Event of Default will have been cured or waived prior to
such 120th day), such special interest will cease to accrue and, if such Event of Default has not
been cured or waived prior to such 120th day, the Notes will be subject to acceleration as provided
above. In the event the Company does not elect to pay additional interest upon an Event of Default
in accordance with this Section 6.02, the Notes will be subject to acceleration as provided above.
If the Company elects to pay such additional interest, it will notify the Trustee and paying agent
of such election on or before the close of business on the date on which such Event of Default
first occurs.



     In the event of a declaration of acceleration because an Event of Default set forth in
clause (e) of Section 6.01 above has occurred and is continuing, such declaration of acceleration
will be automatically rescinded and annulled if the event of default triggering such Event of
Default pursuant to such clause (e) of Section 6.01 will be remedied or cured by the Company or the
relevant Restricted Subsidiary or waived by the holders of the relevant Indebtedness within thirty
(30) days after the declaration of acceleration with respect thereto.



     The Holders of a majority in aggregate principal amount of the Notes then outstanding by
notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default
or Event of Default and its consequences under the Indenture except a continuing Default or Event
of Default in the payment of interest on, or the principal of, the Notes.



     Section 6.03. Other Remedies. If an Event of Default occurs and is continuing, the
Trustee may, subject to the Intercreditor Agreement, pursue any available remedy to collect the
payment of principal, premium, if any, interest and Additional Interest, if any, on the Notes or to
enforce the performance of any provision of the Notes, the Security Documents or this Indenture.



     The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not
produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in
exercising any right or remedy accruing upon an Event of Default will not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.



     Section 6.04. Waiver of Past Defaults. Holders of at least a majority in principal
amount of the Notes then outstanding (including consents obtained in connection with a tender offer
or exchange for Notes) by notice to the Trustee may, on behalf of the Holders of all of the Notes,
waive an existing Default or Event of Default and its consequences hereunder, except a continuing
Default or Event of Default in the payment of principal of or premium, if any, or interest or
Additional Interest, if any, on the Notes. Upon any such waiver, such Default will cease to exist,
and any Event of Default arising therefrom will be deemed to have been cured for every purpose of
this Indenture; but no such waiver will extend to any subsequent or other Default or impair any
right consequent thereon.



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     Section 6.05. Control by Majority. Subject to Sections 7.01(e) and 7.02(f), Holders
of a majority in principal amount of the then outstanding Notes may direct the time, method and
place of conducting any proceeding for exercising any remedy available to the Trustee or exercising
any trust or power conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be prejudicial to the rights
of other Holders or that may involve the Trustee in personal liability.



     Section 6.06. Limitation on Suits. A Holder may pursue, subject to the Intercreditor
Agreement in the case of remedies involving Shared Collateral, a remedy with respect to this
Indenture or the Notes only if:




     (a) the Holder gives to the Trustee written notice of a continuing Event of Default;




     (b) the Holders of at least 25% in principal amount of the then outstanding Notes make
a written request to the Trustee to pursue the remedy;




     (c) such Holder or Holders offer and, if requested, provide to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;




     (d) the Trustee does not comply with the request within sixty (60) days after receipt
of the request and the offer and the provision of security or indemnity; and




     (e) during such 60-day period the Holders of a majority in principal amount of the then
outstanding Notes do not give the Trustee a direction inconsistent with the request.



     A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a
preference or priority over another Holder.



     Section 6.07. Rights of Holders to Receive Payment. Notwithstanding any other
provision of this Indenture, the right of any Holder of a Note to receive payment of principal,
premium and Additional Interest, if any, and interest on the Note, on or after the respective due
dates expressed in the Note (including in connection with an offer to purchase), or to bring suit
for the enforcement of any such payment on or after such respective dates, will not be impaired or
affected without the consent of such Holder.



     Section 6.08. Collection Suit by Trustee. If an Event of Default specified in Section
6.01(a) or (b) hereof occurs and is continuing, the Trustee is authorized to recover judgment in
its own name and as trustee of an express trust against the Company or any other obligor under the
Notes for the whole amount of principal of, premium and Additional Interest, if any, and interest
remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest
and such further amount as will be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel.



     Section 6.09. Trustee May File Proofs of Claim. The Trustee is authorized to file
such proofs of claim and other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any
judicial proceedings relative to the Company or any I/C Notes Issuer (or any other obligor upon the
Notes or Intercompany Notes, as the case may be), their creditors or their property and will be
entitled and empowered to collect, receive and distribute any money or other property payable or
deliverable on any such claims, and any custodian in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee,



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and in the event that the Trustee will consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts
due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, will be denied
for any reason, payment of the same will be secured by a Lien on, and will be paid out of, any and
all distributions, dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding, whether in liquidation or under any plan of reorganization
or arrangement or otherwise. Nothing herein contained will be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.




     Section 6.10. Priorities. Subject to the Intercreditor Agreement, if the Trustee
collects any money pursuant to this Article 6 or pursuant to any of the Security Documents, it
will, after complying with the terms of the Intercreditor Agreement, pay out the money in the
following order:




     FIRST: to the Trustee, its agents and attorneys for amounts due under Section 7.07
hereof, including payment of all compensation, expense and liabilities incurred, and all
advances made, by the Trustee and the costs and expenses of collection;




     SECOND: to Holders for amounts due and unpaid on the Notes for principal, premium and
Additional Interest, if any, and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal, premium and
Additional Interest, if any, and interest, respectively; and




     THIRD: to the Company, or to such party as a court of competent jurisdiction will
direct.



     The Trustee may fix a record date and payment date for any payment to Holders pursuant to this
Section 6.10.



     Section 6.11. Undertaking for Costs. In any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit
of an undertaking to pay the costs of the suit, and the court in its discretion may assess
reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant
to Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount of the then
outstanding Notes.



ARTICLE 7




TRUSTEE




     Section 7.01. Duties of Trustee.



     (a) If an Event of Default has occurred and is continuing of which it has knowledge, the
Trustee will exercise such of the rights and powers vested in it by this Indenture and the Security
Documents and use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own affairs.



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     (b) Except during the continuance of an Event of Default:




     (i) the duties of the Trustee will be determined solely by the express provisions of
this Indenture, the Security Documents or the TIA and the Trustee need perform only those
duties that are specifically set forth in this Indenture, the Security Documents or the TIA
and no others, and no implied covenants or obligations will be read into this Indenture or
the Security Documents against the Trustee; and




     (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee will examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.



     (c) The Trustee may not be relieved from liabilities for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:




     (i) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;




     (ii) the Trustee will not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the
pertinent facts;




     (iii) the Trustee will not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to Section 6.05
hereof and the Trustee will be entitled from time to time to request such direction.



     (d) Whether or not therein expressly so provided, every provision of this Indenture that in
any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.



     (e) No provision of this Indenture or the Security Documents will require the Trustee to
expend or risk its own funds or incur any liability. The Trustee will be under no obligation to
exercise any of its rights and powers under this Indenture at the request of any Holders, unless
such Holder will have offered to the Trustee security and indemnity satisfactory to it against any
loss, liability or expense.



     (f) The Trustee will not be liable for interest on any money received by it except as the
Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.



     Section 7.02. Rights of Trustee.



     (a) The Trustee may conclusively rely on the truth of the statements and correctness of the
opinions contained in, and will be protected from acting or refraining from acting upon, any
document believed by it to be genuine and to have been signed or presented by the proper Person.
The Trustee need not investigate any fact or matter stated in the document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or matters as it may see
fit, and, if the Trustee will determine to make such further inquiry or investigation, it will be
entitled to examine the books, records and premises of the Company, personally or by agent or
attorney, at the sole cost of the Company, to the extent reasonably required by such inquiry or
investigation.



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     (b) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate
or an Opinion of Counsel or both. The Trustee will not be liable for any action it takes or omits
to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel. Prior to
taking, suffering or admitting any action, the Trustee may consult with counsel of the Trustee’s
own choosing and the written advice of such counsel or any Opinion of Counsel will be full and
complete authorization and protection from liability in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.



     (c) The Trustee may act through its attorneys and agents and will not be responsible for the
misconduct or negligence of any agent appointed with due care.



     (d) The Trustee will not be liable for any action it takes or omits to take in good faith that
it believes to be authorized or within its rights or powers.



     (e) Unless otherwise specifically provided in this Indenture, any demand, request, direction
or notice from the Company will be sufficient if signed by an Officer of the Company.



     (f) The Trustee will be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request or direction of any of the Holders unless such Holders shall
have offered to the Trustee reasonable security or indemnity satisfactory to the Trustee against
the costs, expenses and liabilities that might be incurred by it in compliance with such request or
direction.



     Section 7.03. Individual Rights of Trustee. The Trustee, in its individual or any
other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Company or
any Affiliate of the Company with the same rights it would have if it were not Trustee. However,
in the event that the Trustee acquires any conflicting interest, it must eliminate such conflict
within ninety (90) days, apply to the Commission for permission to continue as Trustee or resign.
Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections
7.10 and 7.11 hereof.



     Section 7.04. Trustee’s Disclaimer. The Trustee will not be responsible for, and
makes no representation as to the validity or adequacy of, this Indenture, the Notes or the
Collateral, it will not be accountable for the Company’s use of the proceeds from the Notes or any
money paid to the Company or upon the Company’s direction under any provision of this Indenture, it
will not be responsible for the use or application of any money received by any Paying Agent other
than the Trustee, and it will not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the Notes or pursuant
to this Indenture other than its certificate of authentication.



     Section 7.05. Notice of Defaults. If a Default or Event of Default occurs and is
continuing and if it is known to the Trustee, the Trustee will mail to Holders a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case of a Default or
Event of Default in payment on any Note pursuant to Sections 6.01(a) and (b) hereof, the Trustee
may withhold the notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders.



     Section 7.06. Reports by Trustee to Holders. Within sixty (60) days after each May
15, beginning with the May 15 following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee will mail to the Holders a brief report dated as of such reporting date
that complies with TIA Section 313(a) (but if no event described in TIA Section 313(a) has occurred
within the twelve months preceding the reporting date, no report need be transmitted). The Trustee
also will



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comply with TIA Sections 313(b)(1) and 313(b)(2). The Trustee will also transmit by mail all
reports as required by TIA Section 313(c).




     A copy of each report at the time of its mailing to the Holders of Notes will be mailed to the
Company and filed with the Commission and each stock exchange on which the Company has informed the
Trustee in writing the Notes are listed in accordance with TIA Section 313(d). The Company will
promptly notify the Trustee in writing when the Notes are listed on any stock exchange and of any
delisting thereof.



     Section 7.07. Compensation and Indemnity. The Company will pay to the Trustee from
time to time reasonable compensation for its acceptance of this Indenture and services hereunder.
To the extent lawful, the Trustee’s compensation will not be limited by any law on compensation of
a trustee of an express trust. The Company will reimburse the Trustee promptly upon request for
all reasonable disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services, including, without limitation, any and all costs, expenses, fees,
indemnities and other sums owing to the Trustee by the Company or any I/C Note Issuer in connection
with (i) collecting or enforcing any Obligations owed under the Security Documents, (ii) in
realizing on or protecting or preserving any security therefor, or (iii) for taking any action
under or otherwise in connection with any Security Document. Such expenses will include the
reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.



     The Company will indemnify the Trustee against any and all losses, liabilities or expenses
(including reasonable attorney’s fees) incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the reasonable costs and
expenses of enforcing this Indenture and any Security Document against the Company or any I/C Notes
Issuer (including this Section 7.07) and defending itself against any claim (whether asserted by
the Company or any Holder or any other Person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder or thereunder, except to the extent any such
loss, liability or expense may be attributable to its gross negligence, bad faith or willful
misconduct. The Trustee will notify the Company promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company will not relieve the Company or any I/C
Notes Issuer of its obligations hereunder or thereunder, except to the extent that the Company has
been materially prejudiced by such failure. The Company will defend the claim and the Trustee will
cooperate in the defense. The Trustee may have separate counsel and the Company will pay the
reasonable fees and expenses of such counsel. The Company will not pay for any settlement made
without its consent, which consent will not be unreasonably withheld.



     The obligations of the Company under this Section 7.07 will survive the satisfaction and
discharge of this Indenture.



     To secure the Company’s payment obligations in this Section 7.07, the Trustee will have, and
is hereby granted, a Lien prior to the Notes on all money or property held or received by the
Trustee pursuant to this Indenture or any Security Document (subject to the terms of the
Intercreditor Agreement), except that held in trust to pay principal, interest and Additional
Interest, if any, on particular Notes. Such Lien will survive the satisfaction and discharge of
this Indenture and the resignation or removal of the Trustee. The Trustee’s right to receive
payment of any amounts due under this Section 7.07 will not be subordinate to any other Company
Indebtedness.



     When the Trustee incurs expenses or renders services after an Event of Default specified in
Section 6.01(h) or (i) hereof occurs, the expenses and the compensation for the services (including
the fees and expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Code.



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     The Trustee will comply with the provisions of TIA Section 313(b)(2) to the extent applicable.



     Section 7.08. Replacement of Trustee. A resignation or removal of the Trustee and
appointment of a successor Trustee will become effective only upon the successor Trustee’s
acceptance of appointment as provided in this Section 7.08.



     The Trustee may resign in writing at any time and be discharged from the trust hereby created
by so notifying the Company. The Holders of a majority in principal amount of the then outstanding
Notes may remove the Trustee by so notifying the Trustee and the Company in writing. The Company
may remove the Trustee if:




     (a) the Trustee fails to comply with Section 7.10 hereof;




     (b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is
entered with respect to the Trustee under any Bankruptcy Code;




     (c) a Custodian or public officer takes charge of the Trustee or its property; or




     (d) the Trustee becomes incapable of acting.



     If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any
reason, the Company will promptly appoint a successor Trustee. Within one year after the successor
Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes
may appoint a successor Trustee to replace the successor Trustee appointed by the Company.



     If a successor Trustee does not take office within sixty (60) days after the retiring Trustee
resigns or is removed, the retiring Trustee, the Company, or the Holders of at least 10% in
principal amount of the then outstanding Notes may petition any court of competent jurisdiction for
the appointment of a successor Trustee.



     If the Trustee, after written request by any Holder of a Note who has been a Holder of a Note
for at least six months, fails to comply with Section 7.10 hereof, such Holder may petition any
court of competent jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.



     A successor Trustee will deliver a written acceptance of its appointment to the retiring
Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee will
become effective, and the successor Trustee will have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee will mail a notice of its succession to the
Holders. The retiring Trustee will promptly transfer all property held by it as Trustee to the
successor Trustee; provided that all sums owing to the Trustee hereunder have been paid and subject
to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company’s obligations under Section 7.07 hereof will continue
for the benefit of the retiring Trustee.



     Section 7.09. Successor Trustee by Merger, Etc. If the Trustee consolidates, merges
or converts into, or transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation, without any further act, will be the successor Trustee;
provided, such corporation or association will be otherwise eligible and qualified under this
Article 7 and will notify the Company of its succession hereunder.



     Section 7.10. Eligibility; Disqualification. There will at all times be a Trustee
hereunder that is a corporation organized and doing business under the laws of the United States of
America or of any state



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thereof that is authorized under such laws to exercise corporate trustee power, that is
subject to supervision or examination by federal or state authorities, and has a combined capital
and surplus of at least $100.0 million as set forth in its most recent published annual report of
condition.




     This Indenture will always have a Trustee who satisfies the requirements of TIA
Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section 310(b).



     Section 7.11. Preferential Collection of Claims Against the Company. The Trustee is
subject to TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A
Trustee who has resigned or been removed will be subject to TIA Section 311(a) to the extent
indicated therein.



ARTICLE 8




DISCHARGE OF INDENTURE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE




     Section 8.01. Satisfaction and Discharge. This Indenture will be discharged and will
cease to be of further effect (except as set forth below) as to all outstanding Notes when:




     (a) either:




     (i) all Notes theretofore authenticated and delivered (except lost, stolen or
destroyed Notes which have been replaced or paid and Notes for whose payment money
has theretofore been deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from such trust) have
been delivered to the Trustee for cancellation; or




     (ii) all Notes not theretofore delivered to the Trustee for cancellation have
become due and payable and the Company has irrevocably deposited, or caused to be
deposited with the Trustee, funds in an amount sufficient or U.S. Government
Obligations, the principal of and interest on which will be sufficient, or a
combination thereof sufficient, in the written opinion of a nationally recognized
firm of independent public accountants delivered to the Trustee, to pay and
discharge the entire Indebtedness on the Notes not theretofore delivered to the
Trustee for cancellation, for principal of, premium, if any, and interest on the
Notes to the date of deposit together with irrevocable instructions from the Company
directing the Trustee to apply such funds to the payment thereof at maturity or
redemption, as the case may be;




     (b) no Default or Event of Default has occurred and is continuing on the date of such
deposit or will occur as a result of such deposit, and such deposit will not result in a
breach or violation of, or constitute a default under, any other instrument to which the
Company is a party or by which the Company is bound;




     (c) the Company has paid all other sums payable under this Indenture by the Company;
and




     (d) the Company has delivered irrevocable instructions to the Trustee under this
Indenture to apply the deposited money toward the payment of the Notes at maturity or the
applicable Redemption Date, as the case may be.



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In addition, the Company must deliver to the Trustee an Officers’ Certificate and an Opinion of
Counsel, upon which the Trustee may conclusively rely, stating that all conditions precedent under
this Indenture to satisfaction and discharge of this Indenture have been complied with.




     Notwithstanding the foregoing paragraphs, the Company’s Obligations in Article 2 and in
Sections 4.01, 4.02, 7.07, 7.08, 8.07 and 8.08 will survive until the Notes are no longer
outstanding. After the Notes are no longer outstanding, the Company’s Obligations in Sections
7.07, 8.07 and 8.08 will survive.



     After such delivery or irrevocable deposit, the Trustee, upon request, will acknowledge in
writing the discharge of the Company’s Obligations under the Notes and this Indenture except for
those surviving Obligations specified above.



     Section 8.02. Option to Effect Legal Defeasance or Covenant Defeasance. The Company
may, at the option of its Board of Directors evidenced by a Board Resolution, at any time, elect to
have all of its obligations discharged with respect to the outstanding Notes pursuant to Section
8.03 or elect to have its obligations released with respect to certain covenants in this Indenture
pursuant to Section 8.04 hereof and, in either case, upon compliance with the conditions set forth
below in this Article 8.



     Section 8.03. Legal Defeasance and Discharge. Upon the Company’s exercise under
Section 8.02 hereof of the option applicable to this Section 8.03, the Company will, subject to the
satisfaction of the conditions set forth in Section 8.05 hereof, be deemed to have been discharged
from its obligations with respect to all outstanding Notes on the date the conditions set forth
below are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance
means that the Company will be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Notes, which will thereafter be deemed to be “outstanding” only for
the purposes of Section 8.06 hereof and the other Sections of this Indenture referred to in
clauses (a) and (b) below, and to have satisfied all its other obligations under such Notes and
this Indenture (and the Trustee, on demand of and at the expense of the Company, will execute
proper instruments acknowledging the same), except for the following provisions which will survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of outstanding Notes
to receive payments in respect of the principal of, premium, if any, interest and Additional
Interest, if any, on such Notes when such payments are due or on the Redemption Date, as the case
may be, from the trust referred to in Section 8.05(a); (b) the Company’s obligations with respect
to such Notes under Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 2.11 and 4.02 hereof; (c) the
rights, powers, trusts, duties and immunities of the Trustee, including without limitation
thereunder, Sections 7.07, 8.06, 8.07 and 8.08 hereunder and the Company’s obligations in
connection therewith; and (d) the provisions of this Article 8. Subject to compliance with this
Article 8, the Company may exercise its option under this Section 8.03 notwithstanding the prior
exercise of its option under Section 8.04 hereof.



     Section 8.04. Covenant Defeasance. Upon the Company’s exercise under Section 8.02
hereof of the option applicable to this Section 8.04, the Company will, subject to the satisfaction
of the conditions set forth in Section 8.05 hereof, be released from its obligations under the
covenants contained in Sections 3.09, 4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.13, 4.14, 4.15, 4.16,
4.18, 4.19, 4.20, 4.21, 4.22 and 5.01 hereof with respect to the outstanding Notes on and after the
date the conditions set forth below are satisfied (hereinafter, “Covenant Defeasance”), and
the Notes will thereafter be deemed not “outstanding” for the purposes of any direction, waiver,
consent or declaration or act of Holders (and the consequences of any thereof) in connection with
such covenants, but will continue to be deemed “outstanding” for all other purposes hereunder (it
being understood that such Notes will not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Company or its
Subsidiaries may omit to comply with and will have no liability in respect of any term, condition
or limitation set forth in any such covenant, whether directly or indirectly, by reason



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of any reference elsewhere herein to any such covenant or by reason of any reference in any
such covenant to any other provision herein or in any other document, and such omission to comply
will not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as
specified above, the remainder of this Indenture and such Notes will be unaffected thereby. In
addition, upon the Company’s exercise under Section 8.02 hereof of the option applicable to this
Section 8.04, subject to the satisfaction of the conditions set forth in Section 8.05 hereof,
Sections 6.01(a) through 6.01(f) and Sections 6.01(i) through Section 6.01(k) hereof will not
constitute Events of Default.




     Section 8.05. Conditions to Legal or Covenant Defeasance. The following will be the
conditions to the application of either Section 8.03 or 8.04 hereof to the outstanding Notes:



     In order to exercise either Legal Defeasance or Covenant Defeasance:




     (a) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of
the Holders, (i) cash in United States dollars, (ii) non-callable U.S. Government
Obligations or (iii) a combination thereof, in such amounts as will be sufficient, in the
opinion of a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay the principal of, premium, if
any, and interest and Additional Interest on the outstanding Notes on the stated maturity or
on the applicable Redemption Date, as the case may be, and the Company must specify whether
the Notes are being defeased to maturity or to a particular Redemption Date;




     (b) in the case of an election under Section 8.03 hereof, the Company will have
delivered to the Trustee an Opinion of Counsel in the United States, upon which the Trustee
may conclusively rely, confirming that (i) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (ii) since the date hereof, there has
been a change in the applicable federal income tax law, in either case to the effect that,
and based thereon such Opinion of Counsel will confirm that, the Holders of the outstanding
Notes will not recognize income, gain or loss for federal income tax purposes as a result of
such Legal Defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same time as would have been the case if such Legal Defeasance had
not occurred;




     (c) in the case of an election under Section 8.04 hereof, the Company will have
delivered to the Trustee an Opinion of Counsel in the United States, upon which the Trustee
may conclusively rely, confirming that the Holders of the outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Covenant Defeasance had not
occurred;




     (d) no Default or Event of Default has occurred and is continuing on the date of such
deposit (other than a Default or Event of Default resulting from the borrowing of funds to
be applied to such deposit) or insofar as Sections 6.01(h) and (i) hereof are concerned, at
any time in the period ending on the 91st day after the date of deposit (it being understood
that this condition will not be deemed satisfied until the expiration of such period);




     (e) such Legal Defeasance or Covenant Defeasance will not result in a breach or
violation of, or constitute a default under any material agreement or instrument (other than
this Indenture) to which the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound;



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     (f) the Company will have delivered to the Trustee an Opinion of Counsel, upon which
the Trustee may conclusively rely, to the effect that, assuming no intervening bankruptcy of
the Company between the date of deposit and the 91st day following the date of deposit and
that no Holder is an insider of the Company, after the 91st day following the deposit, the
trust funds will not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally;




     (g) the Company will have delivered to the Trustee an Officers’ Certificate, upon which
the Trustee may conclusively rely, stating that the deposit was not made by the Company with
the intent of preferring the Holders over the other creditors of the Company with the intent
of defeating, hindering, delaying or defrauding creditors of the Company or others;




     (h) the Company will have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, upon which the Trustee may conclusively rely, each stating that all
conditions precedent provided for relating to the Legal Defeasance or the Covenant
Defeasance have been complied with; and




     (i) the Trustee will have received such other documents and assurances as the Trustee
will have reasonably required.



     Notwithstanding the foregoing, the Opinion of Counsel required by clause (b) above with
respect to a Legal Defeasance need not be delivered if all Notes not theretofore delivered to the
Trustee for cancellation (i) have become due and payable or (ii) will become due and payable on the
maturity date within one year under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the expense, of the Company.



     Section 8.06. Deposited Money and U.S. Government Obligations to be Held in Trust; Other
Miscellaneous Provisions. Subject to Section 8.07 hereof, all money and non-callable U.S.
Government Obligations (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.06, the “Trustee”) pursuant
to Section 8.05 hereof in respect of the outstanding Notes will be held in trust and applied by the
Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee
may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of
principal, premium, if any, interest and Additional Interest, if any, but such money need not be
segregated from other funds except to the extent required by law.



     The Company will pay and indemnify the Trustee against any tax, fee or other charge imposed on
or assessed against the cash or non-callable U.S. Government Obligations deposited pursuant to
Section 8.05 hereof or the principal and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.



     Anything in this Article 8 to the contrary notwithstanding, subject to the payment of any
monies owed to the Trustee under Section 7.07 hereof, the Trustee will deliver or pay to the
Company from time to time upon the written request of the Company, and be relieved of all liability
with respect to, any money or non-callable U.S. Government Obligations held by it as provided in
Section 8.05 hereof which, in the opinion of a nationally-recognized firm of independent public
accountants expressed in a written certification thereof delivered to the Trustee (which may be the
opinion delivered under Section 8.05(a) hereof), are in excess of the amount thereof that would
then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.



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     Section 8.07. Repayment to the Company. Any money deposited with the Trustee or any
Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium,
if any, interest or Additional Interest, if any, on any Note and remaining unclaimed for one year
after such principal, and premium, if any, or interest or Additional Interest, if any, has become
due and payable will be paid to the Company on its written request or (if then held by the Company)
will be discharged from such trust; and the Holder of such Note will thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the Company as trustee
thereof, will thereupon cease; provided, however, that the Trustee or such Paying Agent, before
being required to make any such repayment, may, at the expense of the Company, cause to be
published once, in the New York Times and The Wall Street Journal (national edition), notice that
such money remains unclaimed and that, after a date specified therein, which will not be less than
30 days from the date of such notification or publication, any unclaimed balance of such money then
remaining will be repaid to the Company.



     Section 8.08. Reinstatement. If the Trustee or Paying Agent is unable to apply any
United States dollars or non-callable U.S. Government Obligations in accordance with Section 8.03
or 8.04 hereof, as the case may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then the obligations of
the Company under this Indenture and the Notes will be revived and reinstated as though no deposit
had occurred pursuant to Section 8.03 or 8.04 hereof until such time as the Trustee or Paying Agent
is permitted to apply all such money in accordance with Section 8.03 or 8.04 hereof, as the case
may be; provided, however, that, if the Company makes any payment of principal of, premium, if any,
interest or Additional Interest, if any, on any Note following the reinstatement of its
obligations, the Company will be subrogated to the rights of the Holders of such Notes to receive
such payment from the money held by the Trustee or Paying Agent.



ARTICLE 9




AMENDMENT, SUPPLEMENT AND WAIVER




     Section 9.01. Without Consent of Holders. Notwithstanding Section 9.02 hereof, the
Company, the Guarantors and the Trustee may, without the consent of any Holder, amend or supplement
this Indenture, the Notes, any Notes Guarantee, any Security Document or the Intercreditor
Agreement, as applicable:



     (a) to cure any ambiguity, defect or inconsistency;



     (b) to provide for uncertificated Notes in addition to or in place of certificated Notes;



     (c) to provide for the assumption of the Company’s obligations to the Holders in the case of a
merger or consolidation;



     (d) to make any change that would provide any additional rights or benefits to the Holders or
that does not adversely affect the legal rights hereunder of any such Holder;



     (e) to comply with requirements of the Commission in order to effect or maintain the
qualification of this Indenture under the TIA;



     (f) to evidence and provide for the acceptance of appointment hereunder of a successor
trustee;



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     (g) to add one or more Guarantors under the Indenture or I/C Notes Issuers under the Security
Documents;



     (h) to provide for the issuance of Additional Notes being issued in accordance with
clause (b)(v) of Clause 4.09;



     (i) to add any additional assets to the Collateral or provide for any perfection actions with
respect to any Collateral;



     (j) to join the authorized representative of the holders of any Refinancing to the
Intercreditor Agreement in accordance with the terms thereof;



     (k) to amend any Security Document or waive any provision thereof in accordance with the terms
of such Security Document (except to the extent the consent of any Holder is required by the terms
thereof); or



     (l) to release Collateral from the Lien of this Indenture and the Security Documents when
permitted or required by this Indenture and the Security Documents.



     Upon the request of the Company accompanied by a Board Resolution authorizing the execution of
any such amended or supplemental indenture, and upon receipt by the Trustee of the documents
described in Section 9.06 hereof, the Trustee will join with the Company in the execution of any
amended or supplemental indenture authorized or permitted by the terms of this Indenture and to
make any further appropriate agreements and stipulations that may be therein contained, but the
Trustee will not be obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.



     Section 9.02. With Consent of Holders. Except as provided below in this Section 9.02,
this Indenture, the Notes, any Notes Guarantee or the Intercreditor Agreement may be amended or
supplemented with the consent of the Holders of at least a majority in principal amount of the
Notes then outstanding (including, without limitation, consents obtained in connection with a
purchase of, or tender offer or exchange offer for, Notes), and, subject to Sections 6.02, 6.04 and
6.07 hereof, any existing Default or compliance with any provision of this Indenture, the Notes,
any Notes Guarantee or the Intercreditor Agreement may be waived with the consent of the Holders of
a majority in principal amount of the then outstanding Notes (including consents obtained in
connection with or a tender offer or exchange offer for the Notes).



     Upon the request of the Company accompanied by a Board Resolution authorizing the execution of
any such amended or supplemental indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders as aforesaid, and upon receipt by the
Trustee of the documents described in Section 9.06 hereof, the Trustee will join with the Company
in the execution of such amended or supplemental Indenture unless such amended or supplemental
indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise,
in which case the Trustee may, but will not be obligated to, enter into such amended or
supplemental indenture.



     It will not be necessary for the consent of the Holders under this Section 9.02 to approve the
particular form of any proposed amendment or waiver, but it will be sufficient if such consent
approves the substance thereof.



     After an amendment, supplement or waiver under this Section 9.02 becomes effective, the
Company will mail to the Holders affected thereby a notice briefly describing the amendment,




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supplement or waiver. Any failure of the Company to mail such notice, or any defect therein,
will not, however, in any way impair or affect the validity of any such amended or supplemental
indenture or waiver. Subject to Sections 6.02, 6.04 and 6.07 hereof, the Holders of a majority in
aggregate principal amount of the Notes then outstanding may waive compliance in a particular
instance by the Company with any provision of this Indenture, the Notes, any Notes Guarantee, the
Security Documents or the Intercreditor Agreement. However, without the consent of each Holder
affected, an amendment or waiver may not (with respect to any Note held by a non-consenting
Holder):





     (a) reduce the principal amount of Notes whose Holders must consent to an amendment,
supplement or waiver;




     (b) reduce the principal of or change the fixed maturity of any Note or alter the
provisions with respect to the redemption of the Notes (other than provisions of Sections
4.10, 4.14 or 4.15);




     (c) reduce the rate of or change the time for payment of interest on any Note;




     (d) waive a Default or Event of Default in the payment of principal of or premium, if
any, or interest on the Notes (except a rescission of acceleration of the Notes by the
Holders of at least a majority in aggregate principal amount of the Notes and a waiver of
the payment default that resulted from such acceleration);




     (e) (1) release any Guarantor or I/C Notes Issuer from any of its obligations under its
Notes Guarantee or Intercompany Note, as the case may be, other than in accordance with the
terms of the Indenture or (2) adversely change any Notes Guarantee, Intercompany Note or the
Holders’ Liens in the Collateral or the priority thereof or release all or substantially all
of the Collateral from the Liens created by the Security Documents except as specifically
provided for in the Indenture and the Security Documents;




     (f) make any Note payable in money other than that stated in the Notes;




     (g) make any change in the provisions of this Indenture relating to waivers of past
Defaults or the right of each Holder to receive payments of principal of or premium, if any,
or interest on the Notes or to bring suit to enforce such payment, or;




     (h) waive a redemption payment with respect to any Note (other than a payment required
Sections 4.10, 4.14 or 4.15); or




     (i) make any change in the foregoing amendment and waiver provisions of this Article 9.




     In
addition, without the consent of the Holders of at least 662/3% in aggregate principal
amount of Notes then outstanding, an amendment or waiver may not (with respect to any Notes
held by a non-consenting Holder):




     (a) modify any Security Document or the provisions of this Indenture dealing with the
Security Documents or application of trust moneys, or otherwise release any Collateral, in
any manner materially adverse to such Holder other than in accordance with this Indenture,
the Security Documents and the Intercreditor Agreement; or



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     (b) modify the Intercreditor Agreement in any manner materially adverse to such Holder
other than in accordance with this Indenture, the Security Documents and the Intercreditor
Agreement.



     Section 9.03. Compliance with Trust Indenture Act. Every amendment or supplement to
this Indenture or the Notes will be set forth in an amended or supplemental indenture that complies
with the TIA as then in effect to the same extent this Indenture is required to comply by its terms
or otherwise.



     Section 9.04. Revocation and Effect of Consents. Until an amendment, supplement or
waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the
Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note.
However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its
Note if the Trustee receives written notice of revocation before the date the waiver, supplement or
amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.



     Section 9.05. Notation on or Exchange of Notes. The Trustee may place an appropriate
notation about an amendment, supplement or waiver on any Note thereafter authenticated. The
Company in exchange for all Notes may issue and the Trustee will, upon receipt of an Authentication
Order, authenticate new Notes that reflect the amendment, supplement or waiver.



     Failure to make the appropriate notation or issue a new Note will not affect the validity and
effect of such amendment, supplement or waiver.



     Section 9.06. Trustee to Sign Amendments, Etc. The Trustee will sign any amended or
supplemental indenture authorized pursuant to this Article 9 if the amendment or supplement does
not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Company may
not sign an amendment or supplemental indenture until the Board of Directors approves it. In
executing any amended or supplemental indenture the Trustee will be entitled to receive and
(subject to Section 7.01 hereof) will be fully protected in relying upon, in addition to the
documents required by Section 14.04 hereof, an Officers’ Certificate and an Opinion of Counsel
stating that the execution of such amended or supplemental indenture is authorized or permitted by
this Indenture, that it is not inconsistent herewith, and that it will be valid and binding upon
the Company in accordance with its terms.



     Section 9.07. Information Regarding Holder Consents, Etc. Upon request of the
Collateral Agent or the Company, the Trustee is hereby authorized and directed to provide the
Collateral Agent (with a copy to the Company), for the purposes of determining the Required
Creditors (as defined in the Intercreditor Agreement), with information regarding the number or
percentage of Holders that have consented to, approved, waived or taken any other action with
respect to any matter in connection with this Indenture (including Section 10.09 hereof), the
Intercreditor Agreement or any Security Document.



ARTICLE 10




COLLATERAL AND SECURITY DOCUMENTS




     Section 10.01. Security Documents and Intercreditor Agreement; Additional Collateral.



     (a) Security Documents. In order to secure the due and punctual payment of the Notes,
and the other amounts payable to the Trustee hereunder, the Company and each Guarantor will, and
the Company will cause the I/C Notes Issuers to, on the Issue Date enter into the applicable
Security



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Documents to create the Security Interests and for related matters. Any Subsidiary that
executes a Notes Guarantee or an Intercompany Note in accordance with Section 4.18 hereof will, in
connection therewith, become a party to each applicable Security Document as will be necessary or
appropriate to grant and create a valid Lien on, and security interest in, the personal property of
such Subsidiary of the type described in the Credit Facility Security Documents, subject to no
Liens other than Permitted Collateral Liens.



     (b) Each Holder, by accepting a Note, consents and agrees to the terms of each Security
Document and the Intercreditor Agreement, as the same may be in effect or may be amended, modified,
supplemented or replaced from time to time in accordance with their respective terms, and
authorizes and directs the Collateral Agent to perform its obligations (if any) and exercise its
rights thereunder in accordance therewith.



     Section 10.02. Recording, Etc.



     (a) The Company and each Guarantor will, and the Company will cause each I/C Notes Issuer to,
take or cause to be taken all action required or desirable to maintain, perfect, preserve and
protect the Security Interests in the Collateral granted by the Security Documents, to the extent
required thereby, including, but not limited to, causing all financing statements, the Security
Documents (or a short form version thereof) and other security documents, other instruments of
further assurance, including, without limitation, continuation statements covering security
interests in personal property to be promptly recorded, registered and filed, and at all times to
be kept recorded and will execute and file such financing statements and cause to be issued and
filed such continuation statements, all in such manner and in such places as may be required by law
fully to preserve and protect the rights of the Holders and the Trustee under this Indenture and
the Security Documents to all property comprising the Collateral, in each case, to the extent
required by the Security Documents. Notwithstanding the foregoing, the Trustee shall not have any
duty or obligation to ascertain whether any such recordings or filings are so required.



     The Company and each Guarantor will, from time to time, promptly pay and discharge all
mortgage and financing and continuation statement recording and/or filing fees, charges and Taxes
relating to this Indenture and the Security Documents, any amendments thereto and any other
instruments of further assurance. Notwithstanding the foregoing, the Trustee will not have any
duty or obligation to ascertain whether any such fees, charges and Taxes are required to be paid at
any time.



     (b) The Company will furnish or cause to be furnished to the Trustee, at the time of execution
and delivery of this Indenture, Opinion(s) of Counsel substantially in the form of the Opinions of
Counsel delivered on the Issue Date to the Initial Purchasers.



     Section 10.03. Possession, Use and Release of Collateral.



     (a) Unless an Event of Default or an event of default under the Credit Agreement has occurred
and is continuing, the Company, each Guarantor and each I/C Notes Issuer will have the right to
remain in possession and retain exclusive control of the Collateral (other than any Primary Direct
Collateral and other than as set forth in the Security Documents).



     (b) Each Holder, by accepting a Note, acknowledges that, subject to the terms of the Security
Documents:




     (i) upon any Guarantor or I/C Notes Issuer, as the case may be, ceasing to be a
Guarantor or I/C Notes Issuer, as the case may be, in accordance with the terms of the
Indenture, the Shared Direct Collateral or Primary Direct Collateral and Shared I/C Notes
Collateral, as the



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case may be, of such Person will be released from the Lien of this Indenture and the
Security Documents and such Person will be released from its obligations under its Notes
Guarantee or Intercompany Note, as the case may be;




     (ii) upon satisfaction of all of the conditions set forth under Section 8.01, all
Collateral will be released from the Lien of this Indenture and the Security Documents; and




     (iii) Shared Collateral may generally be released in connection with an asset sale or
other disposition otherwise permitted hereunder, provided that during the continuance of a
Default or Event of Default, no release, sale or other disposition of the Shared Collateral
in connection with an Asset Sale will be made without the consent of the Trustee, except as
permitted by the Intercreditor Agreement. Unless a Default or Event of Default has occurred
and is continuing, upon release of any such Shared Collateral by the Credit Facility Secured
Creditors, the Trustee, the Company or the Collateral Agent at the direction of the Trustee,
as the case may be, will, to the extent it holds a Lien on such Shared Collateral, release
its Lien on such Shared Collateral.



     (c) Without limiting the ordinary course activities permitted by the Security Documents or the
other activities permitted by this Indenture, the Credit Parties may, in connection with the
formation of the Healthcare REIT, cause the liens on the underlying healthcare net-lease business
to be released; provided that the Security Documents provide for the creation of new liens on any
proceeds received by the Credit Parties in connection therewith.



     Section 10.04. Reserved.





     Section 10.05. Trust Indenture Act Requirements.



     (a) The Company will comply with the provisions of TIA Sections 314(b) and 314(d), in each
case following qualification of this Indenture pursuant to the TIA, except to the extent not
required as set forth in any Commission regulation or interpretation (including any no-action
letter issued by the Staff of the Commission, whether issued to the Company or any other Person).
Following such qualification, to the extent the Company is required to furnish to the Trustee an
Opinion of Counsel pursuant to TIA Section 314(b)(2), the Company will furnish such opinion within
30 days after July 31 in each year, beginning with July 31, 2010.



     (b) Any release of Collateral permitted by Section 10.03 hereof will be deemed not to impair
the Liens under this Indenture and the Security Documents in contravention thereof and any person
that is required to deliver an Officer’s Certificate or Opinion of Counsel pursuant to Section
314(d) of the TIA, following qualification of this Indenture under the TIA, shall be entitled to
rely upon the foregoing as a basis for delivery of such certificate or opinion. The Trustee shall,
to the extent permitted by Section 7.01 and 7.02 hereof, accept as conclusive evidence of
compliance with the foregoing provisions the appropriate statements contained in such Officer’s
Certificate or Opinion of Counsel.



     (c) If any Collateral is released in accordance with this Indenture or any Security Document,
the Trustee will determine whether it has received all documentation required by TIA Section 314(d)
(to the extent applicable following qualification of this Indenture under the TIA) in connection
with such release and, based on such determination, will, upon request, deliver a certificate to
the Collateral Agent and the Company setting forth such determination.



     Section 10.06. Suits to Protect the Collateral. Subject to the provisions of the
Security Documents, the Trustee will have power (but not the obligation) to institute and to
maintain such suits and



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proceedings as it may deem expedient to prevent any impairment of the Collateral by any acts
which may be unlawful or in violation of any of the Security Documents or this Indenture, and such
suits and proceedings as the Trustee may deem expedient to preserve or protect its interests and
the interests of the Notes Secured Creditors in the Collateral (including power to institute and
maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or
other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if
the enforcement of, or compliance with, such enactment, rule or order would impair the Security
Interests or be prejudicial to the interests of the Holders or the Trustee).



     Section 10.07. Purchaser Protected. In no event will any purchaser in good faith of
any property purported to be released hereunder be bound to ascertain the authority of the Trustee
or the Collateral Agent, as the case may be, to execute the release or to inquire as to the
satisfaction of any conditions required by the provisions hereof for the exercise of such authority
or to see to the application of any consideration given by such purchaser or other transferee; nor
will any purchaser or other transferee of any property or rights permitted by this Article 10 to be
sold be under obligation to ascertain or inquire into the authority of the Company, to make any
such sale or other transfer.



     Section 10.08. Powers Exercisable by Receiver or Trustee. In case the Collateral will
be in the possession of a receiver or trustee, lawfully appointed, the powers conferred in this
Article 10 upon the Company with respect to the release, sale or other disposition of such property
may be exercised by such receiver or trustee, and an instrument signed by such receiver or trustee
will be deemed the equivalent of any similar instrument of the Company or of any officer or
officers thereof required by the provisions of this Article 10.



     Section 10.09. Determinations Relating to Collateral. In the event (a) the Trustee
will receive any written request from the Company, any Guarantor, any I/C Notes Issuer or the
Collateral Agent under any Security Document for consent or approval with respect to any matter or
thing relating to any Collateral or the Company’s, such Guarantor’s or such I/C Notes Issuer’s
obligations with respect thereto or (b) there will be required from the Trustee under the
provisions of any Security Document any performance or the delivery of any instrument or (c) a
Responsible Officer of the Trustee will become aware of any nonperformance by the Company, any
Guarantor or any I/C Notes Issuer of any covenant or any breach of any representation or warranty
of the Company, any Guarantor or any I/C Notes Issuer set forth in any Security Document, and, in
the case of clause (a), (b) or (c) above, the Trustee’s response or action is not otherwise
permitted or specifically contemplated hereunder or under the Intercreditor Agreement or the
Security Documents then, in each such event, the Trustee will, within seven (7) Business Days,
advise the Holders, in writing and at the Company’s expense, of the matter or thing as to which
consent has been requested or the performance or instrument required to be delivered or the
nonperformance or breach of which the Trustee has become aware. The Holders of not less than a
majority or, to the extent specified in the Security Documents, 662/3%, in aggregate principal amount
of the outstanding Notes pursuant to Section 6.05 will have the exclusive authority to direct the
Trustee’s response to any of the circumstances contemplated in clauses (a), (b) and (c) above. In
the event the Trustee will be required to respond to any of the circumstances contemplated in this
Section 10.09, the Trustee will not be required so to respond unless it will have received written
authority by not less than a majority or, to the extent specified in the Security Documents, 662/3%,
in aggregate principal amount of the outstanding Notes; provided that the Trustee will be entitled
to hire experts, consultants, agents and attorneys to advise the Trustee on the manner in which the
Trustee should respond to such request or render any requested performance or response to such
nonperformance or breach (the expenses of which will be reimbursed to the Trustee pursuant to
Section 7.07). The Trustee will be fully protected in the taking of any action recommended or
approved by any such expert, consultant, agent or attorney or agreed to by a majority of Holders
pursuant to Section 6.05.



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     Section 10.10. Release Upon Termination of the Company’s Obligations. In the event
that the Company delivers an Officers’ Certificate certifying that its obligations under this
Indenture have been satisfied and discharged by complying with the provisions of Article 8 and such
other documents and/or funds as are required to be delivered or paid pursuant to Article 8, the
Trustee will (a) execute and deliver, in each case without recourse, representation or warranty
such releases, termination statements and other instruments (in recordable form, appropriate) as
the Company may reasonably request evidencing the termination of the Liens created by the Security
Documents and (b) not be deemed to hold the Liens for the benefit of the Trustee and the Holders.



ARTICLE 11




GUARANTEES




     Section 11.01. Guarantees.



     (a) Subject to this Article 11, each of the Guarantors hereby, jointly and severally,
unconditionally guarantees to each Holder authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity and enforceability of this
Indenture, the Notes or the obligations of the Company hereunder or thereunder, that:




     (i) the principal of, premium and Additional Interest, if any, and interest on, the
Notes will be promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of and interest on the Notes,
if any, if lawful, and all other obligations of the Company to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and




     (ii) in case of any extension of time of payment or renewal of any Notes or any of such
other obligations, that same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at Stated Maturity, by
acceleration or otherwise.



     Failing payment when due of any amount so guaranteed or any performance so guaranteed for
whatever reason, the Guarantors will be jointly and severally obligated to pay the same
immediately. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of
collection.



     (b) Subject to Section 11.02, the Guarantors hereby agree that their obligations hereunder are
unconditional, irrespective of the validity, regularity or enforceability of the Notes or this
Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with
respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any
action to enforce the Notes or this Indenture or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a Guarantor. Each Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency
or bankruptcy of the Company, any right to require a proceeding first against the Company, protest,
notice and all demands whatsoever and covenant that this Guarantee will not be discharged except by
complete performance of the obligations contained in the Notes and this Indenture.



     (c) If any Holder or the Trustee is required by any court or otherwise to return to the
Company, any Guarantor or any custodian, trustee, liquidator or other similar official acting in
relation to either the Company or the Guarantors, any amount paid by the Company or any Guarantor
either to the Trustee or such Holder, this Guarantee, to the extent theretofore discharged, will be
reinstated in full force and effect.



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     (d) Each Guarantor agrees that it will not be entitled to any right of subrogation in relation
to the Holders in respect of any obligations guaranteed hereby until payment in full of all
obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on
the one hand, and the Holders and the Trustee, on the other hand, (A) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Section 6.01 hereof for the
purposes of this Guarantee notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and (B) in the event of any
declaration of acceleration of such obligations as provided in Section 6.02 hereof, such
obligations (whether or not due and payable) will forthwith become due and payable by the
Guarantors for the purpose of this Guarantee. The Guarantors will have the right to seek
contribution from any non-paying Guarantor so long as the exercise of such right does not impair
the rights of the Holders under the Guarantee.



     Section 11.02. Limitation on Guarantor Liability. Each Guarantor and, by its
acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that
the Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of
any Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or
any similar federal or state law to the extent applicable to any Guarantee. To effectuate the
foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the
obligations of such Guarantor will be limited to the maximum amount that will, after giving effect
to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are
relevant under such laws, and after giving effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under this Article 11, result in the obligations of such
Guarantor under its Guarantee not constituting a fraudulent transfer or conveyance.



     Section 11.03. Execution and Delivery of Guarantee. To evidence its Guarantee set
forth in Section 11.01 hereof, each Guarantor hereby agrees that a notation of such Guarantee
substantially in the form attached as Exhibit D hereto will be endorsed by an Officer of
such Guarantor on each Note authenticated and delivered by the Trustee and that this Indenture will
be executed on behalf of such Guarantor by one of its Officers.



     Each Guarantor hereby agrees that its Guarantee set forth in Section 11.01 hereof will remain
in full force and effect notwithstanding any failure to endorse on each Note a notation of such
Guarantee.



     If an Officer whose signature is on this Indenture or on the Guarantee no longer holds that
office at the time the Trustee authenticates the Note on which a Guarantee is endorsed, the
Guarantee will be valid nevertheless.



     The delivery of any Note by the Trustee, after the authentication thereof hereunder, will
constitute due delivery of the Guarantee set forth in this Indenture on behalf of the Guarantors.



     Section 11.04. Release of Guarantor. In the event a Guarantor is sold or disposed of
(whether by merger, consolidation, the sale of its Capital Stock or the sale or disposition of all
or substantially all of its assets (other than by lease) and whether or not the Guarantor is the
surviving corporation in such transaction) to a Person which is not the Company, a Restricted
Subsidiary or any of their Affiliates, such Guarantor will be released from its obligations under
its Notes Guarantee if:




     (a) the sale or other disposition is in compliance with the Indenture; and




     (b) all the obligations of such Guarantor under any Guarantees relating to any
Indebtedness of the Company or the Restricted Subsidiaries terminate upon consummation of
such transaction.



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In addition, a Guarantor will be released from its obligations under its Notes Guarantee if the
Company designates such Guarantor as an Unrestricted Subsidiary and such designation complies with
the other applicable provisions of the Indenture.




ARTICLE 12




I/C NOTES ISSUERS




     Section 12.01. Intercompany Note; Contribution Agreement.



     (a) The Company will cause each Credit Facility Guarantor that is not a Guarantor to execute
and deliver an Intercompany Note substantially in the form of Exhibit E executed on behalf
of such Credit Facility Guarantor, by manual or facsimile signature, by an Officer of such Credit
Facility Guarantor. The obligation of each I/C Notes Issuer under its Intercompany Note and under
the Contribution Agreement will be limited to a maximum amount equal to the lesser of (i) the
outstanding principal amount of its Intercompany Note and (ii) the maximum liability which could be
assessed against such I/C Notes Issuer without rendering such I/C Notes Issuer insolvent. The
Company will pledge each Intercompany Note to the Trustee for the benefit of the Holders pursuant
to the terms of the Pledge and Assignment Agreement as security for the performance and punctual
payment when due, whether at Stated Maturity, by acceleration or otherwise, of all monetary
obligations of the Company under this Indenture and the Notes, whether for principal of or premium,
if any, or interest on the Notes, expenses, indemnification or otherwise. The obligations of each
I/C Notes Issuer in respect of its Intercompany Note will be deemed satisfied by the payment by the
Company of its obligations under the Notes. Further, the outstanding amount of the obligations of
each I/C Notes Issuer under such I/C Notes Issuer’s Intercompany Note will be reduced by an amount
equal to the principal amount of Notes surrendered to the Trustee for cancellation following any
redemption or repurchase by the Company or any Subsidiary of such Notes. In addition, the
Intercompany Notes will be deemed satisfied and discharged upon satisfaction of all of the
conditions set forth in Section 8.01 and upon any Legal Defeasance or Covenant Defeasance as set
forth under Sections 8.03 and 8.04.



     (b) The Company will cause each of the I/C Notes Issuers to enter into a contribution
agreement substantially in the form attached hereto as Exhibit H (the “Contribution
Agreement”) that would enable each I/C Notes Issuer to receive a contribution from the other
I/C Notes Issuers to the extent any such I/C Notes Issuer makes a payment on its Intercompany Note.



     Section 12.02. Releases of Obligations Under Intercompany Notes. In the event an I/C
Notes Issuer is sold or disposed of (whether by merger, consolidation, the sale of its Capital
Stock or the sale or disposition of all or substantially all of its assets (other than by lease)
and whether or not the I/C Notes Issuer is the surviving corporation in such transaction) to a
Person which is not the Company, a Restricted Subsidiary or any of their Affiliates, such I/C Notes
Issuer will be released from its obligations under its Intercompany Note if:




     (a) the sale or other disposition is in compliance with this Indenture, including
Sections 4.10 and 5.01; and




     (b) all the obligations of such I/C Notes Issuer under any Guarantees relating to any
Indebtedness of the Company or the Restricted Subsidiaries terminate upon consummation of
such transaction.



     Upon delivery by the Company to the Trustee of an Officers’ Certificate to the effect of the
foregoing, upon which the Trustee may conclusively rely, the Trustee will execute any documents



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reasonably required in order to evidence the release of any I/C Notes Issuer from its
Obligation under its Intercompany Note and the Security Documents. In addition, an I/C Notes
Issuer will be released from its obligations under its Intercompany Note if the Company designates
such I/C Notes Issuer as an Unrestricted Subsidiary and such designation complies with the other
applicable provisions of this Indenture.



ARTICLE 13




APPLICATION OF TRUST MONIES




     Section 13.01. Trust Monies. All Trust Monies will be held by or delivered to the
Trustee, for its benefit and the benefit of the Holders in accordance with the provisions of this
Indenture and the applicable Security Documents.



     On the Issue Date there will be established, and, at all times hereafter until this Indenture
will have terminated, there will be maintained with the Trustee, the Collateral Account. The
Collateral Account will be established and maintained by the Trustee at its corporate trust offices
located in New York. All Trust Monies that are received by the Trustee will be held, applied
and/or disbursed by the Trustee in accordance with the provisions of this Article 13.



     Section 13.02. Retirement of Notes. The Trustee will apply Trust Monies from time to
time (a) to the payment of the principal amount of any Notes when due or to the redemption thereof
or the purchase thereof upon tender pursuant to Section 4.10, (b) to cure any Event of Default
hereunder or (c) to the extent not required to be applied pursuant to Sections 4.10 or 4.14, to the
payment of the principal of, premium, if any, and interest on any Notes at maturity or upon
redemption or retirement, or to the purchase of Notes upon tender or in the open market or
otherwise, in each case as the Company will request in writing, upon receipt by the Trustee of the
following:



     (a) A written request by a proper Officer of the Company directing the application pursuant to
this Section 13.02 of a specified amount of Trust Monies and, in case any such monies are to be
applied to the payment of Notes, designating the Notes so to be paid and, in case any such monies
are to be applied to the purchase or redemption of Notes, prescribing the method of purchase or
redemption, the price or prices to be paid and the maximum principal amount of Notes to be
purchased or redeemed and any other provisions of this Indenture governing such purchase or
redemption;



     (b) U.S. legal tender in the maximum amount of the accrued interest, if any, required to be
paid in connection with any such purchase, which cash will be held by the Trustee in trust for such
purpose;



     (c) an Officers’ Certificate, dated not more than five (5) Business Days prior to the date of
the relevant application stating:




     (i) that no Default or Event of Default exists unless such Default or Event of Default
would be cured thereby; and




     (ii) that all conditions precedent and covenants herein provided for relating to such
application of Trust Monies have been complied with; and



     (d) an Opinion of Counsel, upon which the Trustee may conclusively rely, stating that the
documents and the cash or Cash Equivalents, if any, which have been or are therewith delivered to
and



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deposited with the Trustee conform to the requirements of this Indenture and that all
conditions precedent herein provided for relating to such application of Trust Monies have been
complied with.



     Upon compliance with the foregoing provisions of this Section, the Trustee will apply Trust
Monies as directed and specified by such written request of such proper Officer, up to, but not
exceeding, the principal amount of the Notes so paid or purchased, using the U.S. legal tender
deposited pursuant to paragraph (b) of this Section 13.02, to the extent necessary, to pay any
accrued interest required in connection with such purchase.



     A written request of such proper Officer expressed to be irrevocable directing the application
of Trust Monies under this Section 13.02 to the payment of the principal of particular Notes will,
for all purposes of this Indenture, be deemed the equivalent of the deposit of money with the
Trustee in trust for such purpose. Such Trust Monies and any U.S. legal tender deposited with the
Trustee pursuant to paragraph (b) of this Section 13.02 for the payment of accrued interest will
not, after compliance with the foregoing provisions of this Section, be deemed to be part of the
Collateral or Trust Monies.



     Section 13.03. Withdrawal of Trust Monies for Reinvestment. To the extent that any
Trust Monies consist of Net Proceeds received by the Trustee pursuant to Section 4.10 hereof and
the Company, any Guarantor or any I/C Notes Issuer, as applicable, is permitted to, and intends to
reinvest such Net Proceeds to acquire Replacement Assets, such Trust Monies may be withdrawn by the
Company and will be paid by the Trustee upon a written request by the Company by a proper Officer
or Officers of the Company to reimburse the Company or any I/C Notes Issuer, as applicable, for
expenditures made or to pay costs incurred by the Company or any I/C Notes Issuer, as applicable,
to acquire Replacement Assets, upon receipt by the Trustee of the following:



     (a) An Officers’ Certificate, dated not more than thirty (30) days prior to the date of the
application for the withdrawal and payment of such Trust Monies, stating in substance as follows:




     (i) that the Trust Monies to be released constitute Net Cash Proceeds from an Asset
Sale;




     (ii) setting forth with particularity the investment or acquisition to be made with
such Trust Monies;




     (iii) that the release of the Trust Monies complies with all applicable terms of this
Indenture;




     (iv) that there is no Default or Event of Default (both before and after giving effect
to the acquisition of such Replacement Assets) continuing; and




     (v) that all conditions precedent herein provided for relating to the release of the
Trust Monies in question have been provided.



     (b) An Opinion of Counsel, upon which the Trustee may conclusively rely, stating that (i) all
of the Company’s or the applicable I/C Notes Issuer’s right, title and interest in and to such
personal property are then subject to the Lien of the Security Documents and (ii) the documents
that have been or are therewith delivered to the Trustee conform to the requirements of this
Indenture and that all conditions precedent herein and in the Security Documents relating to such
application of Trust Monies have been complied with.



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     Section 13.04. Withdrawal of Trust Monies Constituting Net Insurance Proceeds. To the
extent that any Trust Monies consist of Net Insurance Proceeds, such Trust Monies may be withdrawn
by the Company and will be paid by the Trustee upon a written request by a proper Officer or
Officers of the Company to repair or replace the relevant Collateral, upon receipt by the Trustee
of the following:



     (a) An Officers’ Certificate, dated not more than thirty (30) days prior to the date of the
application for the withdrawal and payment of such Trust Monies, stating in substance as follows:




     (i) that the Trust Monies to be released constitute Net Insurance Proceeds;




     (ii) setting forth with particularity the repair or replacement of Collateral to be
made with such Trust Monies;




     (iii) that the release of the Trust Monies complies with all applicable terms of this
Indenture;




     (iv) that there is no Default or Event of Default (both before and after giving effect
to the application of such Trust Monies for such purpose) continuing; and




     (v) that all conditions precedent herein provided for relating to the release of the
Trust Monies in question have been provided.



     (b) An Opinion of Counsel, upon which the Trustee may conclusively rely, stating that (i) all
of the Company’s or the applicable I/C Notes Issuer’s right, title and interest in and to such
personal property are then subject to the Lien of the Security Documents and (ii) the documents
that have been or are therewith delivered to the Trustee conform to the requirements of this
Indenture and that all conditions precedent herein and in the Security Documents relating to such
application of Trust Monies have been complied with.



     Section 13.05. Powers Exercisable by Trustee or Receiver. In case the Collateral
(other than any cash, Cash Equivalents, securities and other personal property held by, or required
to be deposited or pledged with, the Trustee hereunder or under the Security Documents or with the
trustee, mortgagee or other holder of a Permitted Collateral Lien) will be in the possession of a
receiver or trustee lawfully appointed, the powers hereinbefore in this Article 13 conferred upon
the Company and any I/C Notes Issuer, as applicable, with respect to the withdrawal or application
of Trust Monies may be exercised by such receiver or trustee, in which case a certificate signed by
such receiver or trustee will be deemed the equivalent of any Officers’ Certificate required by
this Article 13. If the Trustee will be in possession of any of the Collateral hereunder or under
any of the Security Documents, such powers may be exercised by the Trustee, in its discretion.



     Section 13.06. Disposition of Notes Retired. All Notes received by the Trustee and
for whose purchase Trust Monies are applied under this Article 13, if not otherwise canceled, will
be promptly canceled and destroyed by the Trustee in accordance with Section 2.11 unless the
Trustee will be otherwise directed in writing by the Company. Upon destruction of any Notes, the
Trustee will issue a certificate of destruction to the Company.



     Section 13.07. Investment of Trust Monies. All or any part of any Trust Monies held
by the Trustee hereunder (except such as may be held for the account of any particular Notes) will
from time to time be invested or reinvested by the Trustee in any Cash Equivalents pursuant to the
written direction of the Company which will specify the Cash Equivalents in which such Trust Monies
will be invested. Such Cash Equivalents will be held by the Trustee as a part of the Collateral,
subject to the same provisions



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hereof as the cash used by it to purchase such Cash Equivalents. Unless an Event of Default
occurs and is continuing, any interest on such Cash Equivalents (in excess of any accrued interest
paid at the time of purchase) which may be received by the Trustee will be forthwith paid to the
Company.



     The Trustee will not be liable or responsible for any loss resulting from such investments or
sales except only for its own grossly negligent action, its own grossly negligent failure to act or
its own willful misconduct in complying with this Section 13.07.



ARTICLE 14




MISCELLANEOUS




     Section 14.01. Trust Indenture Act Controls. If any provision of this Indenture
limits, qualifies or conflicts with the duties imposed by TIA Section 318(c), the imposed duties of
such Section 318(c) will control.



     Section 14.02. Notices. Any notice or communication by the Company, any Guarantor or
the Trustee to the others is duly given if in writing and delivered in Person or mailed by first
class mail (registered or certified, return receipt requested), telex, telecopier or overnight air
courier guaranteeing next day delivery, to the others’ address:



     If to the Company or any Guarantor:


CapitalSource Inc.

4445 Willard Avenue, 12th Floor

Chevy Chase, Maryland 20815

Fax no.: (301) 841-2380

Attention: Chief Legal Officer




     With a copy to:


Hogan & Hartson LLP

Columbia Square

555 Thirteenth Street, NW

Washington, DC 20004

Fax no.: (202) 637-5910

Attention: James E. Showen




     If to the Trustee:


U.S. Bank National Association

EP MN WS3C

60 Livingston Avenue

St. Paul, MN 55107-1419

Fax no.: (651) 495-8097

Attention: Corporate Trust Services




     The Company or the Trustee, by notice to the others, may designate additional or different
addresses for subsequent notices or communications.



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     All notices and communications (other than those sent to Holders) will be deemed to have been
duly given at the time delivered by hand, if personally delivered; five (5) Business Days after
being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when
receipt acknowledged, if telecopied; and the next Business Day after timely delivery to the
courier, if sent by overnight air courier guaranteeing next day delivery.



     Any notice or communication to a Holder will be mailed by first class mail, certified or
registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to
its address shown on the register kept by the Registrar. Any notice or communication will also be
so mailed to any Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it will not affect its
sufficiency with respect to other Holders.



     If a notice or communication is mailed in the manner provided above within the time
prescribed, it is duly given, whether or not the addressee receives it.



     If the Company mails a notice or communication to Holders, it will mail a copy to the Trustee
and each Agent at the same time.



     Section 14.03. Communication by Holders with Other Holders. Holders may communicate
pursuant to TIA Section 312(b) with other Holders with respect to their rights under this Indenture
or the Notes. The Company, the Trustee, the Registrar and anyone else will have the protection of
TIA Section 312(c).



     Section 14.04. Certificate and Opinion as to Conditions Precedent. Upon any request
or application by the Company to the Trustee to take any action under this Indenture, the Company
will furnish to the Trustee:



     (a) an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee
(which will include the statements set forth in Section 14.05 hereof) stating that, in the opinion
of the signers, all conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and



     (b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which
will include the statements set forth in Section 14.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been satisfied.



     Section 14.05. Statements Required in Certificate or Opinion. Each certificate or
opinion with respect to compliance with a condition or covenant provided for in this Indenture
(other than a certificate provided pursuant to TIA Section 314(a)(4)) will comply with the
provisions of TIA Section 314(e) and will include:



     (a) a statement that the Person making such certificate or opinion has read such covenant or
condition;



     (b) a brief statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are based;



     (c) a statement that, in the opinion of such Person, he or she has made such examination or
investigation as is necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been satisfied; and



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     (d) a statement as to whether or not, in the opinion of such Person, such condition or
covenant has been complied with; provided, however, that, with respect to matters of fact, an
Opinion of Counsel may rely on an Officers’ Certificate or certificates of public officials.



     Section 14.06. Rules By Trustee and Agents. The Trustee may make reasonable rules for
action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.



     Section 14.07. No Personal Liability of Directors, Officers, Employees and
Stockholders. No director, officer, employee, incorporator or stockholder of the Company, and
no director, trustee, officer, employee, incorporator or shareholder (other than the Company or a
Restricted Subsidiary) of any Subsidiary, as such, will have any liability for any obligations of
the Company under the Notes, any Notes Guarantee, this Indenture, the Registration Rights Agreement
or for any claim based on, in respect of, or by reason of, such obligations or their creation.
Each Holder, by accepting a Note, waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes.



     Section 14.08. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN
AND BE USED TO CONSTRUE THIS INDENTURE AND THE NOTES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.



     Section 14.09. No Adverse Interpretation of Other Agreements. This Indenture may not
be used to interpret any other indenture, loan or debt agreement of the Company or its Subsidiaries
or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.



     Section 14.10. Intercreditor Agreement. Notwithstanding anything herein to the
contrary, this Indenture is subject to the provisions of the Intercreditor Agreement, as the same
may be amended, supplemented, modified or replaced from time to time.



     Section 14.11. Successors. All agreements of the Company, the Guarantors and the I/C
Notes Issuers in this Indenture and the Notes will bind its successors. All agreements of the
Trustee in this Indenture will bind its successors.



     Section 14.12. Severability. In case any provision in this Indenture or in the Notes
will be invalid, illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions will not in any way be affected or impaired thereby.



     Section 14.13. Counterpart Originals. The parties may sign any number of copies of
this Indenture. Each signed copy will be an original, but all of them together represent the same
agreement.



     Section 14.14. Table of Contents, Headings, Etc. The Table of Contents,
Cross-Reference Table and headings of the Articles and Sections of this Indenture have been
inserted for convenience of reference only, are not to be considered a part of this Indenture and
will in no way modify or restrict any of the terms or provisions hereof.



     Section 14.15. Acts of Holders. (a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders
may be embodied in and evidenced by one or more instruments of substantially similar tenor signed
by such Holders in person or by an agent duly appointed in writing or may be embodied in or
evidenced by an electronic transmission which identifies the documents containing the proposal on
which such consent is requested and certifies such Holders’ consent thereto and agreement to be
bound thereby; and except as



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herein otherwise expressly provided, such action shall become effective when such instrument
or instruments are delivered to the Trustee, and, where it is hereby expressly required, to the
Company. Proof of execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Article VII) conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section 14.15.



     (b) The fact and date of the execution by any Person of any such instrument or writing may be
proved by the affidavit of a witness to such execution or by the certificate of any notary public
or other officer authorized by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof. Where such execution
is by an officer of a corporation or a member of a partnership or limited liability company, on
behalf of such corporation, partnership or limited liability company, such certificate or affidavit
shall also constitute sufficient proof of his authority. The fact and date of the execution of any
such instrument or writing, or the authority of the person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.



     (c) The ownership of Notes shall be proved by the register of the Notes maintained by the
Registrar.



[Signatures on following page]





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SIGNATURES




	 	 	 	 	 
	Dated as of July 27, 2009 	CAPITALSOURCE INC.

 	 
	 	By:  	/S/ JEFFREY A. LIPSON
 	 
	 	 	Name:  	Jeffrey A. Lipson 	 
	 	 	Title:  	Senior Vice President and Treasurer 	 
	 
	 	U.S. BANK NATIONAL ASSOCIATION

 	 
	 	By:  	/S/ RAYMOND S. HAVERSTOCK
 	 
	 	 	Name:  	Raymond S. Haverstock 	 
	 	 	Title:  	Vice President 	 



 









 






	 	 	 	 	 



SIGNATURES




	 	 	 	 	 
	Dated as of July 27, 2009 	CAPITALSOURCE FINANCE LLC

 	 
	 	By:  	/S/ JEFFREY A. LIPSON
 	 
	 	 	Name:  	Jeffrey A. Lipson 	 
	 	 	Title:  	Senior Vice President and Treasurer