Document:

exv10w9w1

Exhibit
10.9.1

LIMITED WAIVER

     This LIMITED WAIVER is entered into as of February 10, 2009 (this “Limited Waiver”),
by and among CAPITALSOURCE INC., a Delaware corporation (the “Initial Borrower”), the other
Credit Parties party hereto, the Lenders party hereto and WACHOVIA BANK, NATIONAL ASSOCIATION, a
national banking association, as administrative agent for the Lenders hereunder (in such capacity,
the “Administrative Agent”), amending the Credit Agreement referred to below.

     WHEREAS, the Initial Borrower, the other Credit Parties party thereto, the Lenders, the
Administrative Agent, the Swingline Lender and the Issuing Lender have entered into that certain
Credit Agreement dated as of March 14, 2006 (as amended as of June 30, 2006, December 20, 2006,
June 29, 2007, December 19, 2007, June 26, 2008 and December 23, 2008 and as further amended,
amended and restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”);

     WHEREAS, the Initial Borrower has requested that the Required Lenders grant a limited waiver
as specified herein; and

     WHEREAS, the Required Lenders are willing to grant such limited waiver on the terms and
conditions set forth herein.

     NOW, THEREFORE, the parties hereto hereby agree as follows:

     1. Definitions. Capitalized terms used and not defined herein shall have the
respective meanings given to them in the Credit Agreement.

     2. Limited Waiver under Credit Agreement. The Required Lenders hereby waive any
Default or Event of Default that may arise under Section 5.32(f) of the Credit Agreement as a
result of a failure to comply with the financial covenant set forth in such Section in respect of
the four quarter period ended December 31, 2008; provided, however, that such
waiver shall expire and be of no further force or effect on and after March 31, 2009.

     3. Conditions to Effectiveness. This Limited Waiver shall become effective as of the
date hereof when the Administrative Agent shall have received counterparts of this Limited Waiver
executed by the Initial Borrower, each other Credit Party and the Required Lenders.

     4. Representation of Credit Parties. Each Credit Party represents and warrants to the
Administrative Agent and each Lender that, except as specified in Section 2 above, after giving
effect to this Limited Waiver, (a) each representation and warranty made by such Credit Party in
the Credit Agreement and other Credit Documents is true and correct in all respects on the date
hereof (or on the date to which it relates, in the case of any representation or warranty that
specifically relates to another date), and (b) no Default or Event of Default has occurred and is
continuing.

     5. Limited Effect. The waiver contained herein is expressly limited in effect to the
specific waiver set forth in Section 2 above.

     6. Counterparts. This Limited Waiver may be executed in several counterparts and by
the different parties hereto on separate counterparts, all of which taken together shall constitute
but one and

 

 

the same Limited Waiver. Delivery of an executed counterpart of a signature page of this
Limited Waiver by electronic transmission shall be effective as delivery of a manually executed
counterpart of this Limited Waiver.

     7. Governing Law. THIS LIMITED WAIVER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES
THEREOF OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

     8. Credit Documents Remain in Effect.

          (a) Except as expressly provided herein, all provisions, terms and conditions of the Credit
Documents shall remain in full force and effect.

          (b) Nothing contained herein shall constitute a waiver of any other rights or remedies that
the Administrative Agent or any Lender may have, except as expressly set forth herein.

          (c) As temporarily modified hereby, the Credit Agreement is ratified and confirmed in all
respects. During the period of the limited waiver set forth in Section 2 above, whenever the
“Credit Agreement” is referred to in the Credit Agreement, any other Credit Document or any of the
exhibits, schedules or annexes thereto or any other instrument or document executed in connection
therewith, it shall be deemed to mean the Credit Agreement as temporarily modified hereby. The
other Credit Documents are and shall continue to be in full force and effect and are hereby
ratified and confirmed in all respects.

     9. No Other Agreements. This Limited Waiver sets forth the entire agreement among the
parties with respect to the subject matter hereof, and supercedes any prior agreements, written or
oral, relating thereto.

[Remainder of page left blank intentionally; signatures follow.]

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     IN WITNESS WHEREOF, the parties hereto have caused this Limited Waiver to be duly executed as
of the date first above written.

	 	 	 	 	 
	BORROWER AND GRANTOR: 	CAPITALSOURCE INC.,

a Delaware corporation

 	 
	 	By:  	/S/ JEFFREY A. LIPSON
 	 
	 	 	Name:  	Jeffrey A. Lipson 	 
	 	 	Title:  	Vice President & Treasurer 	 
	 
	 	CAPITALSOURCE FINANCE LLC,

a Delaware limited liability company

 	 
	 	By:  	/S/ JEFFREY A. LIPSON
 	 
	 	 	Name:  	Jeffrey A. Lipson 	 
	 	 	Title:  	Vice President & Treasurer 	 
	 
	GUARANTORS AND GRANTORS:	CAPITALSOURCE TRS LLC,

a Delaware limited liability company

 	 
	 	By:  	/S/ JEFFREY A. LIPSON
 	 
	 	 	Name:  	Jeffrey A. Lipson 	 
	 	 	Title:  	Vice President & Treasurer 	 
	 
	 	CSE MORTGAGE LLC,

a Delaware limited liability company

 	 
	 	By:  	/S/ JEFFREY A. LIPSON
 	 
	 	 	Name:  	Jeffrey A. Lipson 	 
	 	 	Title:  	Vice President & Treasurer 	 
	 
	 	CAPITALSOURCE SF TRS LLC,

a Delaware limited liability company

 	 
	 	By:  	/S/ JEFFREY A. LIPSON
 	 
	 	 	Name:  	Jeffrey A. Lipson 	 
	 	 	Title:  	Vice President & Treasurer 	 
	 

[SIGNATURE PAGE TO WAIVER]

 

 

	 	 	 	 	 
	 	CAPITAL SOURCE CF LLC,

a Delaware limited liability company

 	 
	 	By:  	/S/ JEFFREY A. LIPSON
 	 
	 	 	Name:  	Jeffrey A. Lipson 	 
	 	 	Title:  	Vice President & Treasurer 	 
	 
	 	CAPITALSOURCE FINANCE II LLC,

a Delaware limited liability company

 	 
	 	By:  	/S/ JEFFREY A. LIPSON
 	 
	 	 	Name:  	Jeffrey A. Lipson 	 
	 	 	Title:  	Vice President & Treasurer 	 
	 
	 	CSE CHR HOLDCO LLC,

a Delaware limited liability company

 	 
	 	By:  	/S/ JEFFREY A. LIPSON
 	 
	 	 	Name:  	Jeffrey A. Lipson 	 
	 	 	Title:  	Vice President & Treasurer 	 
	 
	 	CSE CHR HOLDINGS LLC,

a Delaware limited liability company

 	 
	 	By:  	/S/ JEFFREY A. LIPSON
 	 
	 	 	Name:  	Jeffrey A. Lipson 	 
	 	 	Title:  	Vice President & Treasurer 	 
	 
	AGREED & ACCEPTED:	CAPITALSOURCE INTERNATIONAL INC.,

a Delaware corporation

 	 
	 	By:  	/S/ JEFFREY A. LIPSON
 	 
	 	 	Name:  	Jeffrey A. Lipson 	 
	 	 	Title:  	Vice President & Treasurer 	 

 

 

	 	 	 	 	 
	 	WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent, as Issuing
Lender, and as a Lender

 	 
	 	By:  	/S/ RAJ SHAH
 	 
	 	 	Name:  	Raj Shah 	 
	 	 	Title:  	Managing Director 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as Issuing Lender and as a Lender

 	 
	 	By:  	/S/ SHELLY HARPER
 	 
	 	 	Name:  	Shelly Harper 	 
	 	 	Title:  	Senior Vice President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	MORGAN STANLEY BANK, as a Lender

 	 
	 	By:  	/S/ MELISSA JAMES
 	 
	 	 	Name:  	Melissa James 	 
	 	 	Title:  	Authorized Signatory 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as a Lender

 	 
	 	By:  	/S/ JAY CHALL
 	 
	 	 	Name:  	Jay Chall 	 
	 	 	Title:  	Director 	 
	 
	 	 	 
	 	By:  	/S/ KARL STUDER
 	 
	 	 	Name:  	Karl Studer 	 
	 	 	Title:  	Director 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	BMO CAPITAL MARKETS FINANCING, INC., as a Lender

 	 
	 	By:  	/S/ AMY K. DUMSER
 	 
	 	 	Name:  	Amy K. Dumser 	 
	 	 	Title:  	Director 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	BEAR STEARNS CORPORATE LENDING INC., as a Lender

 	 
	 	By:  	/S/ RICHARD J. POWOROZNEK
 	 
	 	 	Name:  	Richard J. Poworoznek 	 
	 	 	Title:  	Executive Director 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	BARCLAYS BANK PLC, as a Lender

 	 
	 	By:  	/S/ MARK MANSKI
 	 
	 	 	Name:  	Mark Manski 	 
	 	 	Title:  	Managing Director 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	DEUTSCHE BANK AG NEW YORK BRANCH, as a Lender

 	 
	 	By:  	/S/ MELISSA CURRY
 	 
	 	 	Name:  	Melissa Curry 	 
	 	 	Title:  	Vice President 	 
	 
	 	 	 
	 	By:  	/S/ MICHAEL CAMPITE
 	 
	 	 	Name:  	Michael Campite 	 
	 	 	Title:  	Vice President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A., as a Lender

 	 
	 	By:  	/S/ RICHARD J. POWOROZNEK
 	 
	 	 	Name:  	Richard J. Poworoznek 	 
	 	 	Title:  	Executive Director 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	SOCIÉTÉ GÉNÉRALE, as a Lender

 	 
	 	By:  	/S/ SHELLEY YU
 	 
	 	 	Name:  	Shelley Yu 	 
	 	 	Title:  	Vice President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	FORTIS BANK SA/NV, New York Branch, as a Lender

 	 
	 	By:  	/S/ BARRY K. CHUNG
 	 
	 	 	Name:  	Barry K. Chung 	 
	 	 	Title:  	Director 	 
	 
	 	 	 
	 	By:  	/S/ JACK AU
 	 
	 	 	Name:  	Jack Au 	 
	 	 	Title:  	Director 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	BAYERISCHE HYPO-UND VEREINSBANK AG, as a Lender

 	 
	 	By:  	/S/ CRAIG M. PINSLY
 	 
	 	 	Name:  	Craig M. Pinsly, CFA 	 
	 	 	Title:  	Director 	 
	 
	 	 	 
	 	By:  	/S/ THOMAS LEE
 	 
	 	 	Name:  	Thomas Lee 	 
	 	 	Title:  	Vice President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	CHANG HWA COMMERCIAL BANK, LTD., NEW YORK BRANCH, as a Lender

 	 
	 	By:  	/S/ JIM C.Y. CHEN
 	 
	 	 	Name:  	Jim C. Y. Chen 	 
	 	 	Title:  	V.P. & General Manager 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	CITIBANK, N.A., as a Lender

 	 
	 	By:  	/S/ ROBERT B. GOLDSTEIN
 	 
	 	 	Name:  	Robert B. Goldstein 	 
	 	 	Title:  	Managing Director/Senior Credit Officerexv10w10

Exhibit
10.10

SECURITY AGREEMENT

          THIS SECURITY AGREEMENT (this “Security Agreement”), is entered into as of December
23, 2008, by and among (i) CAPITALSOURCE INC., a Delaware corporation (“Initial Borrower”),
(ii) the direct and indirect Subsidiaries of the Initial Borrower listed on Schedule 1
attached hereto and any other Subsidiary of the Initial Borrower that becomes a guarantor under the
Credit Agreement (collectively, the “Guarantors” and such parties, together with Initial
Borrower, collectively the “Obligors” and each individually as an “Obligor”) and
(iii) WACHOVIA BANK, NATIONAL ASSOCIATION, in its capacity as Administrative Agent under the Credit
Agreement referred to below (in such capacity, the “Administrative Agent”) for the several
banks and other financial institutions as may from time to time become parties to such Credit
Agreement (individually a “Lender” and collectively the “Lenders”).

RECITALS

          WHEREAS, certain Obligors are party to that certain Credit Agreement dated as of March 14,
2006 (as amended, modified, extended, renewed, restated or replaced from time to time, the
“Credit Agreement”), among certain Obligors, other Credit Parties, the Lenders party
thereto and the Administrative Agent;

          WHEREAS, the Guarantors other than the Initial Borrower and CapitalSource International Inc.
(“CS International”) have, pursuant to the Credit Agreement, unconditionally guaranteed the
Secured Obligations (as defined below);

          WHEREAS, the Initial Borrower and CapitalSource International Inc. (the “CSF
Guarantors”) have, pursuant to that certain Guaranty Agreement, dated as of December 20, 2006
(the “CSF Guaranty”), among the CSF Guarantors and the Administrative Agent,
unconditionally guaranteed the Guaranteed Obligations (as defined in the CSF Guaranty);

          WHEREAS, the Obligors are entering into Amendment No. 6 to Credit Agreement, dated as of the
date hereof (“Amendment No. 6”), pursuant to which the Obligors are required to grant a
security interest in the Collateral (as defined below) and certain other assets;

          WHEREAS, it is a condition precedent to the effectiveness of Amendment No. 6 that the Obligors
shall have executed and delivered this Security Agreement to the Administrative Agent for the
ratable benefit of the Lenders;

          WHEREAS, each Obligor acknowledges that it will derive substantial direct and indirect benefit
from the Extensions of Credit under the Credit Agreement as amended by Amendment No. 6; and

          WHEREAS, this Security Agreement is given by each Obligor in favor of the Administrative Agent
for the ratable benefit of the Lenders to(i) in the case of the Pledgors other than CS
International, to secure the payment and performance of all of the Secured Obligations and (ii) in
the case of CS International, to secure the payment and performance of the Guaranteed Obligations.

 

 

          NOW, THEREFORE, in consideration of these premises and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

     1. Definitions.

     (a) Unless otherwise defined herein, capitalized terms used herein shall have the
meanings ascribed to such terms in the Credit Agreement, and the following terms which are
defined in the UCC are used herein as so defined: Accessions, Accounts, As-Extracted
Collateral, Chattel Paper, Commercial Tort Claims, Consumer Goods, Control, Deposit
Accounts, Documents, Electronic Chattel Paper, Equipment, Farm Products, Fixtures, General
Intangibles, Goods, Instruments, Inventory, Investment Property, Letter-of-Credit Rights,
Manufactured Homes, Proceeds, Securities Account, Securities Intermediary, Security
Entitlement, Software, Supporting Obligations and Tangible Chattel Paper.

     (b) In addition, the following terms shall have the following meanings:

     “Administrative Agent” shall have the meaning set forth in the preamble.

     “Amendment No. 6” shall have the meaning set forth in the preamble.

     “Assigned Agreements” shall have the meaning set forth in Section 2.

     “Collateral” shall have the meaning set forth in Section 2.

     “Control Agreements” mean collectively, the Deposit Account Control Agreements
and the Securities Account Control Agreements.

     “Copyrights” means any and all copyrights and copyright registrations,
including, (i) the copyright registrations and recordings thereof and all applications in
connection therewith, (ii) all income, royalties, damages and payments now and hereafter due
or payable under and with respect thereto, including payments under all licenses entered
into in connection therewith and damages and payments for past or future infringements
thereof, (iii) the right to sue for past, present and future infringements thereof, and (iv)
all of each Obligor’s rights corresponding thereto throughout the world.

     “Credit Agreement” shall have the meaning set forth in the preamble.

     “Deposit Account” shall have the meaning assigned to such term in Section 9-102
of the UCC.

     “Deposit Account Control Agreement” shall mean an agreement reasonably
satisfactory to the Administrative Agent establishing the Administrative Agent’s Control
with respect to any Deposit Account.

     “Event of Default” shall have the meaning set forth in Section 9.

-2-

 

     “Excluded Collateral” means the following: (a) Capital Stock of the Initial
Borrower held as treasury stock; (b) any lease, license, permit, contract or agreement or
any property or assets subject to any lease, license, permit, contract or agreement, if and
for so long as a grant of a Lien thereon under Credit Documents shall constitute or result
in (i) the abandonment, invalidation or unenforceability of any right, title or interest of
any Obligor or Subsidiary therein or (ii) a breach or termination pursuant to the terms of,
or a default under, any such lease, license, contract, permit or agreement (other than (x)
to the extent that there would be no abandonment, invalidation, unenforceability, breach or
termination with the consent of, or by the taking of any action solely by, any Obligor or
any of their respective Affiliates that does not involve obtaining the consent or approval
of any third party or (y) to the extent that any such term would be rendered ineffective
pursuant to the UCC (including, without limitation, pursuant to Sections 9-406, 9-407,
9-408, or 9-409 of the UCC) of any relevant jurisdiction or other Applicable Law including
Insolvency Law (at such time as it may be applicable), or principles of equity), provided
that such lease, license, contract, permit or agreement was not entered into in violation of
the restrictions set forth in Section 5.36 of the Credit Agreement; (c) any fixed or capital
asset in which any Obligor has an interest that is subject to a Permitted Lien (as defined
in clause (vii) of the definition of “Permitted Lien” in the Credit Agreement) and so long
as the contractual obligation pursuant to which such Lien is granted (or in the document
providing for such capital lease) prohibits or requires the consent of any Person (other
than the Initial Borrower and its Affiliates) as a condition to the creation of any other
Lien on such asset; and (d) any “intent to use” Trademark applications for which a statement
of use has not been filed (but only until such statement is filed); provided,
however, the term “Excluded Collateral” shall not include any proceeds,
products, substitutions or replacements of Excluded Collateral (unless such proceeds,
products, substitutions or replacements would otherwise constitute Excluded Collateral).

     “Guarantor” shall have the meaning set forth in the preamble.

     “Indemnified Party” shall have the meaning set forth in Section 10.

     “Initial Borrower” shall have the meaning set forth in the preamble.

     “Intellectual Property” means any and all Licenses, Patents, Copyrights,
Trademarks, the goodwill associated with such Trademarks, Software, trade secrets and other
intellectual property rights in all jurisdictions, whether registered or not registered.

     “Lender” shall have the meaning set forth in the preamble.

     “Licenses” means rights under or interests in any Patent, Trademark, Copyright
or other Intellectual Property, including software license agreements with any other party,
whether the applicable Obligor is a licensee or licensor under any such license agreement
and the right to use the foregoing in connection with the enforcement of the Lenders’ rights
under the Credit Documents.

     “Obligor” or “Obligors” shall have the meaning set forth in the
preamble.

-3-

 

     “Patents” means patents and patent applications, including, (i) all reissues,
reexaminations, divisionals, continuations, continuations-in-part, substitutions,
extensions, or renewals thereof and improvements thereon, (ii) all income, royalties,
damages and payments now and hereafter due or payable under and with respect thereto,
including payments under all licenses entered into in connection therewith and damages and
payments for past or future infringements thereof, (iii) the right to sue for past, present
and future infringements thereof, and (iv) all of each Obligor’s rights corresponding
thereto throughout the world.

     “Software” means “software” as such term is defined in Section 9-102(a)(75) of
the UCC.

     “Secured Obligations” means all of the Credit Party Obligations (including, but
not limited to, all expenses and charges, legal and otherwise, incurred by the
Administrative Agent and/or the Lenders in collecting or enforcing any of the Credit Party
Obligations or in realizing on or protecting any security therefor, including without
limitation the security granted hereunder, pursuant to Section 9.5 of the Credit Agreement),
howsoever evidenced, created, incurred or acquired, whether primary, secondary, direct,
contingent, or joint and several, whether now existing or hereafter incurred.

     “Securities Account” shall have the meaning assigned to such term in Section
8-501 of the UCC.

     “Securities Account Control Agreement” means a control agreement in a form
reasonably satisfactory to the Administrative Agent establishing the Administrative Agent’s
Control with respect to any Securities Account.

     “Security Agreement” shall have the meaning set forth in the preamble.

     “Trademarks” means any and all trademarks, trade names, registered trademarks,
trademark applications, service marks, registered service marks, service mark applications,
and domain names, including (i) all renewals thereof, (ii) all income, royalties, damages
and payments now and hereafter due or payable under and with respect thereto, including
payments under all licenses entered into in connection therewith and damages and payments
for past or future infringements or dilutions thereof, (iii) the right to sue for past,
present and future infringements and dilutions thereof, (iv) the goodwill of each Obligor’s
business symbolized by the foregoing or connected therewith, and (v) all of each Obligor’s
rights corresponding thereto throughout the world.

     “UCC” shall mean the Uniform Commercial Code as from time to time in effect in
the State of New York; provided, however, that, in the event that, by reason
of mandatory provisions of law, any of the attachment, perfection or priority of the
Administrative Agent’s and the Lenders’ security interest in any Collateral is governed by
the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York,
the term “UCC” shall mean the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such attachment, perfection
or priority and for purposes of definitions related to such provisions.

-4-

 

     2. Grant of Security Interest in the Collateral.

     (a) To secure the prompt payment and performance in full when due, whether by lapse of
time, acceleration, mandatory prepayment or otherwise, of the Secured Obligations, owing by
each Obligor, each Obligor hereby grants to the Administrative Agent, for the ratable
benefit of the Lenders, a continuing security interest in any and all right, title and
interest of such Obligor in and to the following, whether now owned or existing or owned,
acquired, or arising hereafter (collectively, the “Collateral”):

     (i) all Accounts;

     (ii) all cash and Cash Equivalents;

     (iii) all Chattel Paper (including Electronic Chattel Paper);

     (iv) those certain Commercial Tort Claims of such Obligor set forth on
Schedule 2(a)(iv) attached hereto (as such Schedule may be updated from
time to time by such Obligor);

     (v) all Copyrights;

     (vi) all Deposit Accounts;

     (vii) all Documents;

     (viii) all Equipment;

     (ix) all Fixtures;

     (x) all General Intangibles;

     (xi) all Goods;

     (xii) all Instruments;

     (xiii) all Inventory;

     (xiv) all Investment Property;

     (xv) all Letter-of-Credit Rights;

     (xvi) all Licenses;

     (xvii) all Material Contracts and all such other agreements, contracts,
leases, licenses, tax sharing agreements or hedging arrangements now or hereafter
entered into by an Obligor, as such agreements may be amended or otherwise modified
from time to time (collectively, the “Assigned 

-5-

 

Agreements”), including without limitation, (A) all rights of an
Obligor to receive moneys due and to become due under or pursuant to the Assigned
Agreements, (B) all rights of an Obligor to receive proceeds of any insurance,
indemnity, warranty or guaranty with respect to the Assigned Agreements, (C) claims
of an Obligor for damages arising out of or for breach of or default under the
Assigned Agreements and (D) the right of an Obligor to terminate the Assigned
Agreements, to perform thereunder and to compel performance and otherwise exercise
all remedies thereunder;

     (xviii) all Payment Intangibles;

     (xix) all Patents;

     (xx) all Securities Accounts;

     (xxi) all Trademarks;

     (xxii) all Software;

     (xxiii) all Supporting Obligations;

     (xxiv) all books, records, ledger cards, files, correspondence, computer
programs, tapes, disks, and related data processing software (owned by such Obligor
or in which it has an interest) that at any time evidence or contain information
relating to any Collateral or are otherwise necessary or helpful in the collection
thereof or realization thereupon;

     (xxv) all other personal property of any kind or type whatsoever owned by such
Obligor; and

     (xxvi) to the extent not otherwise included, all Accessions, Proceeds and
products of any and all of the foregoing.

     (b) The Obligors and the Administrative Agent, on behalf of the Lenders, hereby
acknowledge and agree that the security interest created hereby in the Collateral (i)
constitutes continuing collateral security for (x) in the case of the Obligors other than CS
International, all of the Secured Obligations and (y) in the case of CS International, all
of the Guaranteed Obligations, whether now existing or hereafter arising and (ii) is not to
be construed as a present assignment of any Intellectual Property.

     (c) Notwithstanding anything to the contrary contained in clause (a) above, the
security interest created by this Security Agreement shall not extend to and the term
“Collateral” shall not include (i) any Excluded Collateral or (ii) any the Pledged
Collateral (as defined in the Pledge Agreement) in which the Administrative Agent has been
granted a perfected security interest pursuant to the Pledge Agreement.

     (d) Notwithstanding anything herein or in any other Credit Document to the contrary,
the maximum liability under this Security Agreement and under the other Credit

-6-

 

Documents of each Obligor shall not exceed an amount equal to the largest amount that
would not render such Obligor’s obligations hereunder subject to avoidance under Section 548
of the Bankruptcy Code or any equivalent provision of the law of any state.

     3. Provisions Relating to Accounts, Contracts and Agreements.

     (a) Anything herein to the contrary notwithstanding, each of the Obligors shall remain
liable under each of its Accounts, contracts and agreements to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in accordance
with the terms of any agreement giving rise to each such Account or the terms of such
contract or agreement. Neither the Administrative Agent nor any Lender shall have any
obligation or liability under any Account (or any agreement giving rise thereto), contract
or agreement by reason of or arising out of this Security Agreement or the receipt by the
Administrative Agent or any Lender of any payment relating to such Account, contract or
agreement pursuant hereto, nor shall the Administrative Agent or any Lender be obligated in
any manner to perform any of the obligations of an Obligor under or pursuant to any Account
(or any agreement giving rise thereto), contract or agreement, to make any payment, to make
any inquiry as to the nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party under any Account (or any agreement giving rise
thereto), contract or agreement, to present or file any claim, to take any action to enforce
any performance or to collect the payment of any amounts which may have been assigned to it
or to which it may be entitled at any time or times.

     (b) The Administrative Agent hereby authorizes the Obligors to collect the Accounts;
provided, that the Administrative Agent may curtail or terminate such authority at
any time after the occurrence and during the continuation of an Event of Default. If
required by the Administrative Agent at any time after the occurrence and during the
continuation of an Event of Default, any payments of Accounts, when collected by the
Obligors (i) shall be forthwith (and in any event within two (2) Business Days) deposited by
the Obligors in a collateral account in which the Administrative Agent maintains Control,
subject to withdrawal by the Administrative Agent for the account of the Lenders only as
provided in Section 11 hereof, and (ii) until so turned over, shall be held by the Obligors
in trust for the Administrative Agent and the Lenders, segregated from other funds of the
Obligors.

     (c) At any time and from time to time, subject to the limitations set forth in this
clause (c) and Section 5.5 of the Credit Agreement, the Administrative Agent shall have the
right, but not the obligation, to make test verifications of the Accounts in any manner and
through any medium that it reasonably considers advisable, and the Obligors shall furnish
all such assistance and information as the Administrative Agent may require in connection
with such test verifications. Upon the Administrative Agent’s request following the
occurrence and during the continuation of an Event of Default and at the expense of the
Obligors, the Obligors shall cause independent public accountants or others satisfactory to
the Administrative Agent to furnish to the Administrative Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the Accounts.
Following the occurrence and during the continuation of an Event of Default,

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the Administrative Agent in its own name or in the name of others may communicate with
account debtors on the Accounts to verify with them to the Administrative Agent’s
satisfaction the existence, amount and terms of any Accounts.

     4. Representations and Warranties. Each Obligor hereby represents and warrants to the
Administrative Agent, for the benefit of the Lenders, that so long as any of the Secured
Obligations (other than contingent indemnity obligations that survive termination of the Credit
Documents pursuant to the stated terms thereof) remain outstanding, any Credit Document is in
effect and until all Commitments shall have been terminated:

     (a) Chief Executive Office; Books & Records; Legal Name; State of Formation.
As of the date hereof, each Obligor’s chief executive office and chief place of business are
(and for the prior twelve (12) months has been) located at the locations set forth on
Schedule 4(a), and as of the date hereof, each Obligor keeps its books and records
at such locations. As of the date hereof, each Obligor’s exact legal name is as shown in
this Security Agreement and its state of incorporation or organization is (and for the prior
twelve (12) months has been) the location set forth on Schedule 4(a). Except for
the changes described on Schedule 4(a), no Obligor has in the twelve (12) months
preceding date hereof changed its name, been party to a merger or consolidation..

     (b) Intentionally Omitted.

     (c) Intentionally Omitted.

     (d) Ownership. Each Obligor is the legal and beneficial owner of its
Collateral.

     (e) Security Interest/Priority. This Security Agreement creates a valid
security interest in favor of the Administrative Agent, for the benefit of the Lenders, in
the Collateral of such Obligor and, when properly perfected by filing, shall constitute a
valid first priority, perfected security interest in such Collateral, to the extent such
security interest can be perfected by filing a financing statement under the UCC of the
jurisdiction of organization of such Obligor, free and clear of all Liens except for
Permitted Liens.

     (f) Consents. Except for (i) the filing or recording of UCC financing
statements and/or (ii) the filing of appropriate notices with the United States Patent and
Trademark Office and the United States Copyright Office and applicable foreign intellectual
property offices, no consent or authorization of, filing with, or other act by or in respect
of, any arbitrator or Governmental Authority and no consent of any other Person (including,
without limitation, any stockholder, member or creditor of such Obligor), is required (A)
for the grant by such Obligor of the security interest in the Collateral granted hereby or
for the execution, delivery or performance of this Security Agreement by such Obligor or (B)
for the perfection of such security interest.

     (g) Types of Collateral. None of the Collateral consists of, or is the
Proceeds of, As-Extracted Collateral, Consumer Goods, Farm Products, Manufactured Homes or
standing timber (as such term is used in the UCC).

-8-

 

     (h) Intentionally Omitted.

     (i) Intentionally Omitted.

     (j) Intentionally Omitted.

     (k) Intentionally Omitted.

     (l) Intentionally Omitted.

     (m) Intentionally Omitted.

     (n) Intentionally Omitted.

     (o) Binding Obligation; Perfection. This Agreement constitutes a valid and
binding obligation of the Obligors enforceable against them in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, or similar laws relating to
the enforcement of creditors’ rights generally and by general equitable principles.

     (p) Intentionally Omitted.

     5. Covenants. Each Obligor covenants that, so long as any of the Secured Obligations
(other than contingent indemnity obligations that survive termination of the Credit Documents
pursuant to the stated terms thereof) remain outstanding, any Credit Document is in effect and
until all Commitments shall have been terminated, such Obligor shall:

     (a) Perfection of Security Interest by Filing, Etc. Execute and deliver to the
Administrative Agent and/or file such agreements, assignments or instruments (including
affidavits, notices, reaffirmations and amendments and restatements of existing documents,
as the Administrative Agent may reasonably request) and do all such other things as the
Administrative Agent may reasonably deem necessary or appropriate (i) to assure to the
Administrative Agent its security interests hereunder are perfected, including (A) such
financing statements (including continuation statements) or amendments thereof or
supplements thereto or other instruments as the Administrative Agent may from time to time
reasonably request in order to perfect and maintain the security interests granted hereunder
in accordance with the UCC and any other personal property security legislation in the
appropriate state(s) or province(s), (B) with regard to Copyrights, a Notice of Grant of
Security Interest in Copyrights for filing with the United States Copyright Office in the
form of Schedule 5(a)-1 attached hereto, (C) with regard to Patents, a Notice of
Grant of Security Interest in Patents for filing with the United States Patent and Trademark
Office in the form of Schedule 5(a)-2 attached hereto, (D) with regard to
Trademarks, a Notice of Grant of Security Interest in Trademarks for filing with the United
States Patent and Trademark Office in the form of Schedule 5(a)-3 attached hereto
and (E) with regard to non-U.S. Intellectual Property, such recordations and other filings
deemed necessary or desirable by the Administrative Agent, (ii) to consummate the
transactions contemplated hereby and (iii) to otherwise protect and assure the
Administrative Agent of its rights and interests hereunder, provided,
however, that so long as no Default or Event of Default shall have occurred and be
continuing, the

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perfection obligations of the Obligors pursuant to this Security Agreement shall be
limited to such actions as are necessary or desirable to perfect security interests by the
filing of a financing statement in the jurisdiction of each Obligor’s location (as defined
in §9-307 of the UCC). Each Obligor hereby authorizes the Administrative Agent (at such
Obligor’s expense) to prepare and file such financing statements (including continuation
statements) or amendments thereof or supplements thereto or other instruments as the
Administrative Agent may from time to time deem necessary or appropriate in order to perfect
and maintain the security interests granted hereunder in accordance with the UCC, including,
without limitation, any financing statement that describes the Collateral as “all personal
property” or “all assets” of such Obligor or that describes the Collateral in some other
manner as the Administrative Agent deems necessary or advisable.

     (b) Intentionally Omitted.

     (c) Perfection of Security Interest Through Control. If any Collateral shall
consist of Deposit Accounts or Securities Accounts, execute and deliver (and, with respect
to any Collateral consisting of a Securities Account, cause the Securities Intermediary to
execute and deliver) to the Administrative Agent all Control Agreements, assignments,
instruments or other documents as reasonably requested by and in form and substance
reasonably satisfactory to the Administrative Agent for the purposes of obtaining and
maintaining Control of such Collateral; provided, however, that the
Administrative Agent agrees to not deliver any notice of exclusive control or take any other
similar action until an Event of Default has occurred and is continuing. Notwithstanding
anything to the contrary contained herein, Control Agreements shall not be required for (i)
Deposit Accounts used solely and exclusively for payroll, payroll taxes and other employee
wage and benefit payments to or for the benefit of employees and, to the extent consistent
with past practice and in the ordinary course of business, contractors of the Initial
Borrower and its Subsidiaries, (ii) the proceeds in any deposit account that have been
pledged to a Financing Agent (as defined in the Lockbox Agreement) pursuant to the Lockbox
Agreement or (iii) any immaterial Deposit Accounts; provided, that the aggregate
balance in (A) all Deposit Accounts and Securities Accounts of the Obligors not subject to a
Control Agreement and (B) all unrestricted cash in accounts of Subsidiaries that are not
Obligors shall at all times be less than $10,000,000 plus any amounts that are
inadvertently or mistakenly deposited in, or transferred to, any such accounts by a third
Person and which are promptly (and, in any event, within three Business Days) deposited or
transferred to a Deposit Account or a Securities Account subject to a Deposit Account
Control Agreement or Securities Account Control Agreement, as applicable. Notwithstanding
anything to the contrary contained herein, the Obligors shall not be required to deliver any
Control Agreements to the Administrative Agent prior to February 17, 2009.

     (d) Other Liens. Keep the Collateral free from all Liens, except for Permitted
Liens. Neither the Administrative Agent nor any Lender authorizes any Obligor to, and no
Obligor shall, sell, exchange, transfer, assign, lease or otherwise dispose of the
Collateral or any interest therein, except as permitted under the Credit Agreement.

-10-

 

     (e) Preservation of Collateral. Except as could not reasonably be expected to
have a Material Adverse Effect, keep the Collateral in good order, condition and repair in
all material respects, ordinary wear and tear and casualty events excepted; not use the
Collateral in violation of the provisions of this Security Agreement or any other agreement
relating to the Collateral or any policy insuring the Collateral or any requirement of
Applicable Law.

     (f) Changes in Structure or Location. Except for the changes described on
Schedule 5(f), not, without providing ten (10) Business Days (or such shorter period
as the Administrative Agent may approve) prior written notice to the Administrative Agent
and without filing (or confirming that the Administrative Agent has filed) such financing
statements and amendments to any previously filed financing statements as the Administrative
Agent may require, (i) change its state of incorporation or organization or (ii) change its
registered legal name.

     (g) Intentionally Omitted.

     (h) Intentionally Omitted.

     (i) Treatment of Accounts. Maintain at its principal place of business a
record of Accounts consistent with customary business practices.

     (j) Intentionally Omitted.

     (k) Intentionally Omitted.

     (l) Intentionally Omitted.

     (m) Intentionally Omitted.

     (n) Intentionally Omitted.

     (o) Intentionally Omitted.

     (p) Intentionally Omitted.

     (q) Regulatory Approvals. Following the occurrence and during the continuation
of an Event of Default, promptly, and at its expense, execute and deliver, or cause to be
executed and delivered, all applications, certificates, instruments, registration
statements, and all other documents and papers the Administrative Agent may reasonably
request and as may be required by law to acquire any Governmental Approval or the consent,
approval, registration, qualification or authorization of any other Person deemed necessary
or appropriate for the effective exercise of any of the rights under this Security
Agreement. Without limiting the generality of the foregoing, if an Event of Default shall
have occurred and be continuing, each Obligor shall take any action which the Administrative
Agent may request in order to transfer and assign to the Administrative Agent, or to such
one or more third parties as the Administrative Agent may designate, or to a combination of
the foregoing, each Government Approval of such Obligor. To

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enforce the provisions of this subsection, upon the occurrence and during the
continuance of an Event of Default, the Administrative Agent is empowered to request the
appointment of a receiver from any court of competent jurisdiction. Such receiver shall be
instructed to seek from the Governmental Authority an involuntary transfer of control of
each such Governmental Approval for the purpose of seeking a bona fide purchaser to whom
control will ultimately be transferred. Each Obligor hereby agrees to authorize such an
involuntary transfer of control upon the request of the receiver so appointed, and, if such
Obligor shall refuse to authorize the transfer, its approval may be required by the court.
Upon the occurrence and continuance of an Event of Default, such Obligor shall further use
its best efforts to assist in obtaining Governmental Approvals, if required, for any action
or transaction contemplated by this Security Agreement, including, without limitation, the
preparation, execution and filing with the Governmental Authority of such Obligor’s portion
of any necessary or appropriate application for the approval of the transfer or assignment
of any portion of the assets (including any Governmental Approval) of such Obligor. Because
each Obligor agrees that the Administrative Agent’s remedy at law for failure of such
Obligor to comply with the provisions of this subsection would be inadequate and that such
failure would not be adequately compensable in damages, such Obligor agrees that the
covenants contained in this subsection may be specifically enforced, and such Obligor hereby
waives and agrees not to assert any defenses against an action for specific performance of
such covenants.

     (r) Intentionally Omitted.

     (s) Intentionally Omitted.

     (t) Intentionally Omitted.

     (u) Joinder. The Initial Borrower shall cause each Subsidiary which, from time
to time, after the date hereof, shall be required pursuant to the provisions of the Credit
Agreement, or for which the Initial Borrower shall determine advisable on a voluntary basis,
to grant a security interest in any of its assets to the Administrative Agent, by promptly
executing a joinder to this Security Agreement in form and substance reasonably satisfactory
to the Administrative Agent and any additional documents, instruments or agreements
consistent with the requirements hereof as the Administrative Agent shall reasonably
request. Upon execution and delivery of such joinder, such Subsidiary shall constitute an
“Obligor” for all purposes hereunder with the same force and effect as if originally named
an Obligor herein. The execution and delivery of such joinder agreement shall not require
the consent of any Obligor hereunder. The rights and obligations of each Obligor hereunder
shall remain in full force and effect notwithstanding the addition of any new Obligor as a
party to this Security Agreement.

     6. Power of Attorney for Perfection of Liens. Each Obligor hereby irrevocably makes,
constitutes and appoints the Administrative Agent, its nominee or any other person whom the
Administrative Agent may designate, as such Obligor’s attorney-in-fact with full power and for the
limited purpose to file any financing statements, or amendments and supplements to financing
statements, continuation financing statements, notices or any similar documents which in the
Administrative Agent’s discretion would be necessary, appropriate or convenient in order

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to perfect, maintain perfection of, preserve or protect the security interests granted
hereunder in a manner consistent with the perfection actions required hereby, such power, being
coupled with an interest, being and remaining irrevocable so long as any of the Secured Obligations
(other than contingent indemnity obligations that survive termination of the Credit Documents
pursuant to the stated terms thereof) remain outstanding, any Credit Document is in effect and
until all Commitments shall have been terminated. In the event for any reason the law of any
jurisdiction other than New York becomes or is applicable to the Collateral of any Obligor or any
part thereof, or to any of the Secured Obligations, such Obligor agrees to execute and deliver all
such instruments and to do all such other things as the Administrative Agent in its sole discretion
reasonably deems necessary or appropriate to preserve, protect and enforce the security interests
of the Administrative Agent under the law of such other jurisdiction (and, if an Obligor shall fail
to do so promptly upon the request of the Administrative Agent, then the Administrative Agent may
execute any and all such requested documents on behalf of such Obligor pursuant to the power of
attorney granted hereinabove).

     7. License of Intellectual Property. The Obligors hereby grant, assign, transfer and
convey to the Administrative Agent, exercisable upon the occurrence of any Event of Default, the
nonexclusive right and license without liability for royalties or any other charges to use,
sublicense, and otherwise exploit all Intellectual Property owned or used by any Obligor that
relate to the Collateral and any other collateral granted by the Obligors as security for the
Secured Obligations, together with any goodwill associated therewith, for such term or terms, on
such conditions and in such manner as the Administrative Agent shall determine, whether general,
special or otherwise, and whether on an exclusive or nonexclusive basis, and including in such
license reasonable access to all media in which any of the licensed items may be recorded or stored
and to all computer software and programs used for the compilation or printout thereof. The use of
such license or sublicense by the Administrative Agent shall be exercised, at the option of the
Administrative Agent, and only upon the occurrence and during the continuation of an Event of
Default; provided, that any license, sublicense or other transaction entered into by the
Agent in accordance herewith shall be binding upon each applicable Obligor notwithstanding any
subsequent cure of an Event of Default. This right and license shall inure to the benefit of all
successors, assigns and transferees of the Administrative Agent and its successors, assigns and
transferees, whether by voluntary conveyance, operation of law, assignment, transfer, foreclosure,
deed in lieu of foreclosure or otherwise. Such right and license is granted free of charge,
without requirement that any monetary payment whatsoever be made to the Obligors.

     8. Performance of Obligations; Advances by Administrative Agent. On failure of any
Obligor to perform any of the covenants and agreements contained herein, the Administrative Agent
may, at its sole option and in its sole discretion, perform or cause to be performed the same and
in so doing may expend such sums as the Administrative Agent may deem advisable in the performance
thereof, including, without limitation, the payment of any insurance premiums, the payment of any
taxes, a payment to obtain a release of a Lien, expenditures made in defending against any adverse
claim and all other expenditures which the Administrative Agent may make for the protection of the
security interest hereof or may be compelled to make by operation of law. All such sums and
amounts so expended shall be repayable by the Obligors on a joint and several basis promptly upon
timely notice thereof and demand therefor, shall constitute additional Secured Obligations and
shall bear interest from the

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date said amounts are expended at the ABR Default Rate. No such performance of any covenant
or agreement by the Administrative Agent on behalf of any Obligor, and no such advance or
expenditure therefor, shall relieve the Obligors of any default under the terms of this Security
Agreement or any other Credit Documents. The Administrative Agent may make any payment hereby
authorized in accordance with any bill, statement or estimate procured from the appropriate public
office or holder of the claim to be discharged without inquiry into the accuracy of such bill,
statement or estimate or into the validity of any tax assessment, sale, forfeiture, tax lien, title
or claim except to the extent such payment is being contested in good faith by an Obligor in
appropriate proceedings and against which adequate reserves are being maintained in accordance with
GAAP.

     9. Events of Default.

          The occurrence of an event which under the Credit Agreement would constitute an Event of
Default shall be an event of default hereunder (an “Event of Default”).

     10. Remedies.

     (a) General Remedies. If an Event of Default shall have occurred and be
continuing, the Administrative Agent may, without notice to or demand upon any Obligor,
declare this Security Agreement to be in default, and the Administrative Agent shall
thereafter have in any jurisdiction in which enforcement hereof is sought, in addition to
all other rights and remedies, the rights and remedies of a secured party under the UCC or
the Uniform Commercial Code of any other jurisdiction in which Collateral of any Obligor is
located, including, without limitation, the right to take possession of the Collateral of
any Obligor, and for that purpose the Administrative Agent may, so far as the relevant
Obligor can give authority therefor, enter upon any premises on which the Collateral of such
Obligor may be situated and remove the same therefrom. If an Event of Default shall have
occurred and be continuing, the Administrative Agent may in its discretion require such
Obligor to assemble all or any part of the Collateral of such Obligor at such location or
locations within the jurisdiction(s) of such Obligor’s principal office(s) or at such other
locations as the Administrative Agent may designate. Unless the Collateral of such Obligor
is perishable or threatens to decline speedily in value, the Administrative Agent shall give
to such Obligor at least 10 days’ prior notice of the time and place of any public sale of
such Collateral or of the time after which any private sale or any other intended
disposition is to be made. Each Obligor hereby acknowledges that 10 days’ prior notice of
such sale or sales shall be reasonable notice. In addition, each Obligor waives any and all
rights that it may have to a judicial hearing in advance of the enforcement of any of the
Administrative Agent’s rights hereunder, including, without limitation, its right following
an Event of Default to take immediate possession of the Collateral of such Obligor and to
exercise its rights with respect thereto.

     (b) Remedies Relating to Accounts. Upon the occurrence of an Event of Default
and during the continuation thereof, whether or not the Administrative Agent has exercised
any or all of its rights and remedies hereunder, the Administrative Agent shall have the
right to enforce any Obligor’s rights against any account debtors and obligors on such
Obligor’s Accounts. Each Obligor acknowledges and agrees that the Proceeds of its

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Accounts remitted to or on behalf of the Administrative Agent in accordance with the
provisions of this Section shall be solely for the Administrative Agent’s own convenience
and that such Obligor shall not have any right, title or interest in such Proceeds or in any
such other amounts except as expressly provided herein. To the extent required by the
Administrative Agent, each Obligor agrees to execute any document or instrument, and to take
any action, necessary under applicable law in order for the Administrative Agent to exercise
its rights and remedies (or be able to exercise its rights and remedies at some future date)
with respect to any Accounts of such Obligor where the account debtor is a Governmental
Authority; provided, however, unless an Event of Default has occurred and is
continuing, the Administrative Agent shall hold in escrow all documents and instruments
executed by the Obligors to comply with applicable state law and shall not file such
documents and instruments with any Governmental Authority. The Administrative Agent and the
Lenders shall have no liability or responsibility to any Obligor for acceptance of a check,
draft or other order for payment of money bearing the legend “payment in full” or words of
similar import or any other restrictive legend or endorsement or be responsible for
determining the correctness of any remittance. Each Obligor hereby agrees to indemnify the
Administrative Agent, the Lenders and their affiliates and their respective officers,
directors, employees and agents from and against all liabilities, damages, losses, actions,
claims, judgments, costs, expenses, charges and reasonable attorneys’ fees suffered or
incurred by the Administrative Agent or the Lenders (each, an “Indemnified Party”)
because of the maintenance of the foregoing arrangements except as relating to or arising
out of the gross negligence or willful misconduct of an Indemnified Party or its officers,
employees or agents, as finally determined by a court of competent jurisdiction. In the
case of any investigation, litigation or other proceeding, the foregoing indemnity shall be
effective whether or not such investigation, litigation or proceeding is brought by an
Obligor, its directors, shareholders or creditors or an Indemnified Party or any other
Person or any other Indemnified Party is otherwise a party thereto.

     (c) Access. In addition to the rights and remedies hereunder, upon the
occurrence of an Event of Default and during the continuation thereof, the Administrative
Agent shall, so far as the relevant Obligor can give authority therefor, have the right to
enter and remain upon the various premises of the Obligors without cost or charge to the
Administrative Agent, and use the same, together with materials, supplies, books and records
of the Obligors for the purpose of collecting and liquidating the Collateral, or for
preparing for sale and conducting the sale of the Collateral, whether by foreclosure,
auction or otherwise. In addition, the Administrative Agent may remove Collateral, or any
part thereof, from such premises and/or any records with respect thereto, in order to
effectively collect or liquidate such Collateral. If the Administrative Agent exercises its
right to take possession of the Collateral, each Obligor shall also at its expense perform
any and all other steps reasonably requested by the Administrative Agent to preserve and
protect the security interest hereby granted in the Collateral, such as placing and
maintaining signs indicating the security interest of the Administrative Agent, appointing
overseers for the Collateral and maintaining inventory records.

     (d) Nonexclusive Nature of Remedies. Failure by the Administrative Agent or
the Lenders to exercise any right, remedy or option under this Security Agreement, any

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other Credit Document, or as provided by law, or any delay by the Administrative Agent
or the Lenders in exercising the same, shall not operate as a waiver of any such right,
remedy or option. No waiver hereunder shall be effective unless it is in writing, signed by
the party against whom such waiver is sought to be enforced and then only to the extent
specifically stated, which in the case of the Administrative Agent or the Lenders shall only
be granted as provided herein. To the extent permitted by law, neither the Administrative
Agent, the Lenders, nor any party acting as attorney for the Administrative Agent or the
Lenders, shall be liable hereunder for any acts or omissions or for any error of judgment or
mistake of fact or law other than their gross negligence or willful misconduct hereunder, as
finally determined by a court of competent jurisdiction. The rights and remedies of the
Administrative Agent and the Lenders under this Security Agreement shall be cumulative and
not exclusive of any other right or remedy which the Administrative Agent or the Lenders may
have.

     (e) Retention of Collateral. In addition to the rights and remedies hereunder,
upon the occurrence of an Event of Default and during the continuation thereof, the
Administrative Agent may, after providing the notices required by Sections 9-620 and 9-621
of the UCC (or any successor sections of the UCC) or otherwise complying with the notice
requirements of applicable law of the relevant jurisdiction, accept or retain all or any
portion of the Collateral in satisfaction of the Secured Obligations. Unless and until the
Administrative Agent shall have provided such notices, however, the Administrative Agent
shall not be deemed to have retained any Collateral in satisfaction of any Secured
Obligations for any reason.

     (f) Deficiency. In the event that the proceeds of any sale, collection or
realization are insufficient to pay all amounts to which the Administrative Agent or the
Lenders are legally entitled, the Obligors shall be jointly and severally liable for the
deficiency, together with interest thereon at the ABR Default Rate, together with the costs
of collection and the reasonable fees of any attorneys employed by the Administrative Agent
to collect such deficiency. Any surplus remaining after the full payment and satisfaction
of the Secured Obligations shall be returned to the Obligors or to whomsoever a court of
competent jurisdiction shall determine to be entitled thereto.

     (g) Other Security. To the extent that any of the Secured Obligations are now
or hereafter secured by property other than the Collateral (including, without limitation,
real and other personal property and securities owned by an Obligor), or by a guarantee,
endorsement or property of any other Person, then the Administrative Agent shall have the
right to proceed against such other property, guarantee or endorsement upon the occurrence
and during the continuation of any Event of Default, and the Administrative Agent shall have
the right, in its sole discretion, to determine which rights, security, Liens, security
interests or remedies the Administrative Agent shall at any time pursue, relinquish,
subordinate, modify or take with respect thereto, without in any way modifying or affecting
any of them or any of the Administrative Agent’s rights or the Secured Obligations under
this Security Agreement, or under any other of the Credit Documents.

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     11. Standards for Exercising Remedies. To the extent that applicable law imposes
duties on the Administrative Agent to exercise remedies in a commercially reasonable manner, each
Obligor acknowledges and agrees that it is not commercially unreasonable for the Administrative
Agent (a) to fail to complete raw material or work in process into finished goods or other finished
products for disposition or to postpone any such disposition pending any such preparation or
processing; (b) to fail to obtain third party consents for access to Collateral to be disposed of,
or to obtain or, if not required by other law, to fail to obtain governmental or third party
consents for the collection or disposition of Collateral to be collected or disposed of; (c) to
fail to exercise collection remedies against account debtors or other persons obligated on
Collateral or to remove any Lien on or any adverse claims against Collateral; (d) to exercise
collection remedies against account debtors and other persons obligated on Collateral directly or
through the use of collection agencies and other collection specialists; (e) to contact other
persons, whether or not in the same business as a Obligor, for expressions of interest in acquiring
all or any portion of the Collateral of such Obligor; (f) to hire one or more professional
auctioneers to assist in the disposition of Collateral, whether or not the collateral is of a
specialized nature; (g) to disclaim disposition warranties; (h) to dispose of assets in wholesale
rather than retail markets; (i) to purchase insurance or credit enhancements to insure the
Administrative Agent against risks of loss, collection or disposition of Collateral or to provide
to the Administrative Agent a guaranteed return from the collection or disposition of Collateral;
or (j) to the extent deemed appropriate by the Administrative Agent, to obtain the services of
other brokers, investment bankers, consultants and other professionals to assist the Administrative
Agent in the collection or disposition of any of the Collateral; except in any instance where the
Administrative Agent has acted negligently or failed to act as result of its negligence or willful
misconduct, as finally determined by a court of competent jurisdiction. Each Obligor acknowledges
that the purpose of this Section 11 is to provide non-exhaustive indications of what actions or
omissions by the Administrative Agent would not be commercially unreasonable in the Administrative
Agent’s exercise of remedies against the Collateral and that other actions or omissions by the
Administrative Agent shall not be deemed commercially unreasonable solely on account of not being
indicated in this Section 11. Without limiting the foregoing, nothing contained in this Section 11
shall be construed to grant any rights to any Obligor or to impose any duties on the Administrative
Agent that would not have been granted or imposed by this Security Agreement or by applicable law
in the absence of this Section 11.

     12. Rights of the Administrative Agent.

     (a) Power of Attorney. In addition to other powers of attorney contained
herein, each Obligor hereby designates and appoints the Administrative Agent, on behalf of
the Lenders, and each of its designees or agents, as attorney-in-fact of such Obligor,
irrevocably and with power of substitution, with authority to take any or all of the
following actions upon the occurrence and during the continuation of an Event of Default:

     (i) to demand, collect, settle, compromise, adjust and give discharges and
releases concerning the Collateral of such Obligor, all as the Administrative Agent
may reasonably determine in respect of such Collateral;

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     (ii) to commence and prosecute any actions at any court for the purposes of
collecting any Collateral and enforcing any other right in respect thereof;

     (iii) to defend, settle, adjust or compromise any action, suit or proceeding
brought with respect to the Collateral and, in connection therewith, give such
discharge or release as the Administrative Agent may deem reasonably appropriate;

     (iv) to receive, open and dispose of mail addressed to an Obligor and endorse
checks, notes, drafts, acceptances, money orders, bills of lading, warehouse
receipts or other instruments or documents evidencing payment, shipment or storage
of the goods giving rise to the Collateral of such Obligor, or securing or relating
to such Collateral, on behalf of and in the name of such Obligor;

     (v) to sell, assign, transfer, make any agreement in respect of, or otherwise
deal with or exercise rights in respect of, any Collateral or the goods or services
which have given rise thereto, as fully and completely as though the Administrative
Agent were the absolute owner thereof for all purposes;

     (vi) to adjust and settle claims under any insurance policy relating to the
Collateral;

     (vii) to execute and deliver and/or file all assignments, conveyances,
statements, financing statements, continuation financing statements, security
agreements, affidavits, notices and other agreements, instruments and documents
that the Administrative Agent may determine necessary in order to perfect and
maintain the security interests and Liens granted in this Security Agreement and in
order to fully consummate all of the transactions contemplated herein;

     (viii) to institute any foreclosure proceedings that the Administrative Agent
may deem appropriate;

     (ix) to execute any document or instrument, and to take any action, necessary
under applicable law in order for the Administrative Agent to exercise its rights
and remedies (or to be able to exercise its rights and remedies at some future
date) with respect to any Account of an Obligor where the account debtor is a
Governmental Authority; and

     (x) to do and perform all such other acts and things as the Administrative
Agent may deem to be necessary, proper or convenient in connection with the
Collateral.

This power of attorney is a power coupled with an interest and shall be irrevocable for so
long as any of the Secured Obligations (other than contingent indemnity obligations that
survive termination of the Credit Documents pursuant to the stated terms thereof) remain
outstanding, any Credit Document is in effect and until all Commitments shall have been

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terminated. The Administrative Agent shall be under no duty to exercise or withhold the
exercise of any of the rights, powers, privileges and options expressly or implicitly
granted to the Administrative Agent in this Security Agreement, and shall not be liable for
any failure to do so or any delay in doing so. The Administrative Agent shall not be liable
for any act or omission or for any error of judgment or any mistake of fact or law in its
individual capacity or its capacity as attorney-in-fact except acts or omissions resulting
from its gross negligence or willful misconduct, as finally determined by a court of
competent jurisdiction. This power of attorney is conferred on the Administrative Agent
solely to protect, preserve and realize upon its security interest in the Collateral.

     (b) Assignment by the Administrative Agent. To the extent permitted under the
Credit Agreement, the Administrative Agent may from time to time assign the Secured
Obligations or any portion thereof and its rights hereunder to a successor Administrative
Agent, and the assignee shall be entitled to all of the rights and remedies of the
Administrative Agent under this Security Agreement in relation thereto.

     (c) The Administrative Agent’s Duty of Care. Other than the exercise of
reasonable care to assure the safe custody of the Collateral while being held by the
Administrative Agent hereunder, the Administrative Agent shall have no duty or liability to
preserve rights pertaining thereto, it being understood and agreed that the Obligors shall
be responsible for preservation of all rights in the Collateral, and the Administrative
Agent shall be relieved of all responsibility for the Collateral upon surrendering it or
tendering the surrender of it to the Obligors. The Administrative Agent shall be deemed to
have exercised reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that which the
Administrative Agent accords its own property, which shall be no less than the treatment
employed by a reasonable and prudent agent in the industry, it being understood that the
Administrative Agent shall not have responsibility for taking any necessary steps to
preserve rights against any parties with respect to any of the Collateral. In the event of
a public or private sale of Collateral pursuant to Section 10 hereof, the Administrative
Agent shall have no obligation to clean-up, repair or otherwise prepare the Collateral for
sale. The powers conferred on the Administrative Agent, its directors, officers and agents
pursuant to this Section 12 are solely to protect the Administrative Agent’s interests in
the Collateral and shall not impose any duty upon any of them to exercise any such powers.
The Administrative Agent shall be accountable only for the amounts that it actually receives
as a result of the exercise of its powers under this Section, and neither it nor any of its
officers, directors, employees or agents shall be responsible to any Obligor for any act or
failure to act, except for the Administrative Agent’s or such person’s own gross negligence
or willful misconduct, as finally determined by a court of competent jurisdiction.

     13. Marshalling. The Administrative Agent shall not be required to marshal any
present or future collateral security (including but not limited to this Security Agreement and the
Collateral) for, or other assurances of payment of, the Secured Obligations or any of them or to
resort to such collateral security or other assurances of payment in any particular order, and all
of its rights hereunder and in respect of such collateral security and other assurances of payment
shall be cumulative and in addition to all other rights, however existing or arising. To the
extent

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that it lawfully may, each Obligor hereby agrees that it shall not invoke any law relating to
the marshalling of collateral which might cause delay in or impede the enforcement of the
Administrative Agent’s rights under this Security Agreement or under any other instrument creating
or evidencing any of the Secured Obligations or under which any of the Secured Obligations is
outstanding or by which any of the Secured Obligations is secured or payment thereof is otherwise
assured, and, to the extent that it lawfully may, each Obligor hereby irrevocably waives the
benefits of all such laws.

     14. Application of Proceeds. After the exercise of remedies by the Administrative
Agent or the Lenders pursuant to Section 7.2 of the Credit Agreement (or after the Loans (with
accrued interest thereon) and all other amounts under the Credit Documents shall automatically
become due and payable in accordance with the terms of such Section), any proceeds of the
Collateral, when received by the Administrative Agent or any of the Lenders in cash or its
equivalent, will be applied in reduction of the Secured Obligations in the order set forth in
Section 2.12(b) of the Credit Agreement, and each Obligor irrevocably waives the right to direct
the application of such payments and proceeds and acknowledges and agrees that the Administrative
Agent shall have the continuing and exclusive right to apply and reapply any and all such proceeds
in the Administrative Agent’s sole discretion, notwithstanding any entry to the contrary upon any
of its books and records.

     15. Costs of Counsel. If at any time hereafter, whether upon the occurrence of an
Event of Default or not, the Administrative Agent (i) employs counsel to prepare or consider
amendments, waivers or consents with respect to this Security Agreement, or to take action or make
a response in or with respect to any legal or arbitral proceeding relating to this Security
Agreement or relating to the Collateral then the Obligors agree to promptly pay upon demand any and
all reasonable out-of-pocket costs and expenses of the Administrative Agent or (ii) employs counsel
to protect the Collateral or exercise any rights or remedies under this Security Agreement or with
respect to the Collateral, then the Obligors agree to promptly pay upon demand any and such costs
and expenses of the Administrative Agent, all of which such costs and expenses set forth in clauses
(i) and (ii) shall constitute Secured Obligations hereunder.

     16. Continuing Agreement.

     (a) This Security Agreement shall be a continuing agreement in every respect and shall
remain in full force and effect so long as any of the Secured Obligations (other than
contingent indemnity obligations that survive termination of the Credit Documents pursuant
to the stated terms thereof) remain outstanding, any Credit Document is in effect and until
all Commitments shall have been terminated. Upon such payment and termination, this
Security Agreement shall be automatically terminated and the Administrative Agent and the
Lenders shall, upon the request and at the expense of the Obligors, forthwith release all of
the Liens and security interests granted hereunder and shall execute and/or deliver all UCC
termination statements and/or other documents reasonably requested by the Obligors
evidencing such termination. Notwithstanding the foregoing all releases and indemnities
provided hereunder shall survive termination of this Security Agreement.

-20-

 

     (b) This Security Agreement shall continue to be effective or be automatically
reinstated, as the case may be, if at any time payment, in whole or in part, of any of the
Secured Obligations is rescinded or must otherwise be restored or returned by the
Administrative Agent or any Lender as a preference, fraudulent conveyance or otherwise under
any bankruptcy, insolvency or similar law, all as though such payment had not been made;
provided that in the event payment of all or any part of the Secured Obligations is
rescinded or must be restored or returned, all costs and expenses (including without
limitation any reasonable legal fees and disbursements) incurred by the Administrative Agent
or any Lender in defending and enforcing such reinstatement shall be deemed to be included
as a part of the Secured Obligations.

     17. Amendments; Waivers; Modifications. This Security Agreement and the provisions
hereof may not be amended, waived, modified, changed, discharged or terminated except as set forth
in Section 9.1 of the Credit Agreement.

     18. Successors in Interest. This Security Agreement shall create a continuing
security interest in the Collateral and shall be binding upon each Obligor, its successors and
assigns and shall inure, together with the rights and remedies of the Administrative Agent and the
Lenders hereunder, to the benefit of the Administrative Agent and the Lenders and their successors
and permitted assigns; provided, however, that none of the Obligors may assign its
rights or delegate its duties hereunder without the prior written consent of the Administrative
Agent and each Lender or the Required Lenders, as required by the Credit Agreement. To the fullest
extent permitted by law, each Obligor hereby releases the Administrative Agent and each Lender,
each of their respective officers, employees and agents and each of their respective successors and
assigns, from any liability for any act or omission relating to this Security Agreement or the
Collateral, except for any liability arising from the gross negligence or willful misconduct of the
Administrative Agent or such Lender or their respective officers, employees and agents, in each
case as finally determined by a court of competent jurisdiction.

     19. Notices. All notices required or permitted to be given under this Security
Agreement shall be in conformance with Section 9.2 of the Credit Agreement.

     20. Counterparts. This Security Agreement may be executed in any number of
counterparts, each of which where so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. It shall not be necessary in making proof of this
Security Agreement to produce or account for more than one such counterpart.

     21. Headings. The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning, construction or interpretation of any
provision of this Security Agreement.

     22. Governing Law. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.

-21-

 

     23. Waiver of Jury Trial. THE OBLIGORS AND THE ADMINISTRATIVE AGENT HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS SECURITY AGREEMENT AND FOR ANY COUNTERCLAIM
THEREIN. The Obligors and the Administrative Agent agree not to assert any claim against any other
party to this Security Agreement or any of their respective directors, officers, employees,
attorneys, Affiliates or agents, on any theory of liability, for special, indirect, consequential
or punitive damages arising out of or otherwise relating to any of the transactions contemplated
herein.

     24. Consent to Jurisdiction and Service of Process. Any legal action or proceeding
with respect to this Security Agreement shall be brought in the courts of the State of New York in
New York County or of the United States for the Southern District of New York, and, by execution
and delivery of this Security Agreement, each Obligor and the Administrative Agent accepts, for
itself and in connection with its Properties, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any final judgment
rendered thereby in connection with this Security Agreement from which no appeal has been taken or
is available. Each Obligor and the Administrative Agent irrevocably agrees that all service of
process in any such proceedings in any such court may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail), postage prepaid and
return receipt requested, to it at its address set forth in Section 9.2 of the Credit
Agreement or at such other address of which the Administrative Agent shall have been notified
pursuant thereto, such service being hereby acknowledged by such Obligor to be effective and
binding service in every respect. Each Obligor and the Administrative Agent irrevocably waives any
objection, including, without limitation, any objection to the laying of venue or based on the
grounds of forum non conveniens, which it may now or hereafter have to the bringing of any such
action or proceeding in any such jurisdiction. Nothing herein shall affect the right to serve
process in any other manner permitted by law or shall limit the right of any Lender to bring
proceedings against any Obligor in the court of any other jurisdiction.

     25. Severability. If any provision of this Security Agreement is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and the remaining
provisions shall remain in full force and effect and shall be construed without giving effect to
the illegal, invalid or unenforceable provisions.

     26. Entirety. This Security Agreement and the other Credit Documents represent the
entire agreement of the parties hereto and thereto, and supersede all prior agreements and
understandings, oral or written, if any, including any commitment letters or correspondence
relating to this Security Agreement, the other Credit Documents, or the transactions contemplated
herein and therein.

     27. Survival. All representations and warranties of the Obligors hereunder shall
survive the execution and delivery of this Security Agreement, Amendment No. 6 and the other Credit
Documents.

     28. Joint and Several Obligations of Obligors.

-22-

 

     (a) Each of the Obligors is accepting joint and several liability hereunder in
consideration of the financial accommodations to be provided by the Lenders under the Credit
Agreement, for the mutual benefit, directly and indirectly, of each of the Obligors and in
consideration of the undertakings of each of the Obligors to accept joint and several
liability for the obligations of each of them.

     (b) Each of the Obligors jointly and severally hereby irrevocably and unconditionally
accepts, not merely as a surety but also as a co-debtor, joint and several liability with
the other Obligors with respect to the payment and performance of all of the Secured
Obligations arising under this Security Agreement and the other Credit Documents, it being
the intention of the parties hereto that all the Secured Obligations shall be the joint and
several obligations of each of the Obligors without preferences or distinction among them.

     (c) Notwithstanding any provision to the contrary contained herein or in any other of
the Credit Documents, to the extent the obligations of an Obligor shall be adjudicated to be
invalid or unenforceable for any reason (including, without limitation, because of any
applicable state or federal law relating to fraudulent conveyances or transfers) then the
obligations of such Obligor hereunder shall be limited to the maximum amount that is
permissible under applicable law (whether federal or state and including, without
limitation, the Bankruptcy Code).

     29. Rights of Required Lenders. All rights of the Administrative Agent hereunder, if
not exercised by the Administrative Agent, may be exercised by the Required Lenders.

[Remainder of Page Intentionally Left Blank]

-23-

 

          Each of the parties hereto has caused a counterpart of this Security Agreement to be duly
executed and delivered as of the date first above written.

	 	 	 	 	 
	 	CAPITALSOURCE INC.

 	 
	 	By:  	/S/ JEFFREY A. LIPSON
 	 
	 	 	Name:  	Jeffrey A. Lipson 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	CAPITALSOURCE TRS INC.

 	 
	 	By:  	/S/ JEFFREY A. LIPSON
 	 
	 	 	Name:  	Jeffrey A. Lipson 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	CAPITALSOURCE FINANCE LLC

 	 
	 	By:  	/S/ JEFFREY A. LIPSON
 	 
	 	 	Name:  	Jeffrey A. Lipson 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	CSE MORTGAGE LLC

 	 
	 	By:  	/S/ JEFFREY A. LIPSON
 	 
	 	 	Name:  	Jeffrey A. Lipson 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	CAPITALSOURCE CF LLC

 	 
	 	By:  	/S/ JEFFREY A. LIPSON
 	 
	 	 	Name:  	Jeffrey A. Lipson 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	CAPITALSOURCE SF TRS INC.

 	 
	 	By:  	/S/ JEFFREY A. LIPSON
 	 
	 	 	Name:  	Jeffrey A. Lipson 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

 [Signature Page to Security Agreement]

 

 

     

	 	 	 	 	 
	 	CAPITALSOURCE FINANCE II LLC

 	 
	 	By:  	/S/ JEFFREY A. LIPSON
 	 
	 	 	Name:  	Jeffrey A. Lipson 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	CAPITALSOURCE INTERNATIONAL INC.

 	 
	 	By:  	/S/ JEFFREY A. LIPSON
 	 
	 	 	Name:  	Jeffrey A. Lipson 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

[Signature Page to Security Agreement]

 

 

	 	 	 	 	 
	 	Accepted and agreed to as of the date first above

written.

WACHOVIA BANK, NATIONAL ASSOCIATION, as

Administrative Agent

 	 
	 	By:  	/S/ RAJ SHAH
 	 
	 	 	Name:  	Raj Shah 	 
	 	 	Title:  	Managing Director

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