Document:

exv10w35w1

 

 

 

Exhibit 10.35.1

Execution Counterpart

CREDIT AGREEMENT

dated as of

June 30, 2005

between

CAPITALSOURCE FUNDING V TRUST,

as Borrower

CS FUNDING V DEPOSITOR INC.,

as Depositor

CAPITALSOURCE FINANCE LLC,

as Originator

The LENDERS Party Hereto

and

JPMORGAN CHASE BANK, N.A.

as Administrative Agent

 

$300,000,000

 

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE I
	 	 	 	 
	 
	 	 	 	 
	DEFINITIONS
	 	 	 	 
	 
	 	 	 	 
	SECTION 1.01. Defined Terms
	 	 	1	 
	SECTION 1.02. Classification of Advances and Borrowings
	 	 	13	 
	SECTION 1.03. Terms Generally
	 	 	13	 
	SECTION 1.04. Accounting Terms; GAAP
	 	 	14	 
	SECTION 1.05. Currencies; Currency Equivalents
	 	 	14	 
	 
	 	 	 	 
	ARTICLE II
	 	 	 	 
	 
	 	 	 	 
	THE CREDITS
	 	 	 	 
	 
	 	 	 	 
	SECTION 2.01. The Commitments
	 	 	15	 
	SECTION 2.02. Advances and Borrowings
	 	 	15	 
	SECTION 2.03. Requests for Syndicated Borrowings
	 	 	16	 
	SECTION 2.04. Swingline Advances
	 	 	17	 
	SECTION 2.05. Letters of Credit
	 	 	18	 
	SECTION 2.06. Funding of Borrowings
	 	 	23	 
	SECTION 2.07. Interest Elections
	 	 	23	 
	SECTION 2.08. Termination and Reduction of the Commitments
	 	 	25	 
	SECTION 2.09. Repayment of Advances; Evidence of Debt
	 	 	25	 
	SECTION 2.10. Prepayment of Advances
	 	 	26	 
	SECTION 2.11. Fees
	 	 	28	 
	SECTION 2.12. Interest
	 	 	29	 
	SECTION 2.13. Alternate Rate of Interest
	 	 	29	 
	SECTION 2.14. Increased Costs
	 	 	30	 
	SECTION 2.15. Break Funding Payments
	 	 	31	 
	SECTION 2.16. Taxes
	 	 	32	 
	SECTION 2.17. Payments Generally; Pro Rata Treatment; Sharing of Set-offs
	 	 	33	 
	SECTION 2.18. Mitigation Obligations; Replacement of Lenders
	 	 	35	 
	 
	 	 	 	 
	ARTICLE III
	 	 	 	 
	 
	 	 	 	 
	REPRESENTATIONS AND WARRANTIES
	 	 	 	 
	 
	 	 	 	 
	SECTION 3.01. Representations and Warranties of the Borrower and the Depositor
	 	 	36	 
	SECTION 3.02. Information
	 	 	39	 
	SECTION 3.03. Use of Proceeds
	 	 	39	 
	SECTION 3.04. The Depositor
	 	 	39	 
	SECTION
3.05. Taxes, etc.
	 	 	39	 
	SECTION 3.06. Financial Condition
	 	 	39	 

i

 

 

	 	 	 	 	 
	 
	 	 	 	 
	ARTICLE IV
	 	 	 	 
	 
	 	 	 	 
	CONDITIONS
	 	 	 	 
	 
	 	 	 	 
	SECTION 4.01. Closing Date
	 	 	40	 
	SECTION 4.02. Each Credit Event
	 	 	42	 
	 
	 	 	 	 
	ARTICLE V
	 	 	 	 
	 
	 	 	 	 
	AFFIRMATIVE COVENANTS
	 	 	 	 
	 
	 	 	 	 
	SECTION 5.01. Annual Statement as to Compliance
	 	 	44	 
	SECTION 5.02. Notices of Certain Events; Information
	 	 	44	 
	SECTION 5.03. Existence, Etc
	 	 	45	 
	SECTION 5.04. Access to Information
	 	 	45	 
	SECTION 5.05. Ownership and Security Interests; Further Assurances
	 	 	46	 
	SECTION 5.06. Covenants
	 	 	46	 
	SECTION 5.07. Amendments
	 	 	46	 
	SECTION 5.08. Performance of Obligations; Servicing of Loans
	 	 	47	 
	SECTION 5.09. Treatment of Credit Extensions as Debt for All Purposes
	 	 	48	 
	SECTION 5.10. Use of Proceeds
	 	 	48	 
	SECTION 5.11. Further Instruments and Acts
	 	 	48	 
	 
	 	 	 	 
	ARTICLE VI
	 	 	 	 
	 
	 	 	 	 
	NEGATIVE COVENANTS
	 	 	49	 
	 
	 	 	 	 
	ARTICLE VII
	 	 	 	 
	 
	 	 	 	 
	EVENTS OF DEFAULT
	 	 	51	 
	 
	 	 	 	 
	ARTICLE VIII
	 	 	 	 
	 
	 	 	 	 
	THE ADMINISTRATIVE AGENT
	 	 	53	 
	 
	 	 	 	 
	ARTICLE IX
	 	 	 	 
	 
	 	 	 	 
	MISCELLANEOUS
	 	 	 	 
	 
	 	 	 	 
	SECTION 9.01. Notices
	 	 	56	 
	SECTION 9.02. Waivers; Amendments
	 	 	57	 
	SECTION 9.03. Expenses; Indemnity; Damage Waiver
	 	 	58	 
	SECTION 9.04. Successors and Assigns
	 	 	60	 
	SECTION 9.05. Survival
	 	 	63	 
	SECTION 9.06. Counterparts; Integration; Effectiveness
	 	 	63	 

ii

 

 

	 	 	 	 	 
	SECTION 9.07. Severability
	 	 	64	 
	SECTION 9.08. Right of Setoff
	 	 	64	 
	SECTION 9.09. Governing Law; Jurisdiction; Etc
	 	 	64	 
	SECTION 9.10. WAIVER OF JURY TRIAL
	 	 	65	 
	SECTION 9.11. Judgment Currency
	 	 	65	 
	SECTION 9.12. Headings
	 	 	66	 
	SECTION 9.13. Treatment of Certain Information; Confidentiality
	 	 	66	 
	SECTION 9.14. USA PATRIOT Act
	 	 	67	 
	SECTION 9.15. Covenants of the Borrower
	 	 	67	 
	 
	 	 	 	 

	 	 	 	 	 
	SCHEDULE I — Commitments
	 	 	 	 
	SCHEDULE II — Mandatory Cost Schedule
	 	 	 	 
	 
	 	 	 	 
	EXHIBIT A — Form of Assignment and Assumption
	 	 	 	 
	EXHIBIT B — Form of Guarantee and Security Agreement
	 	 	 	 

iii

 

 

          CREDIT AGREEMENT dated as of June 30, 2005, between CAPITALSOURCE FUNDING V TRUST, as
Borrower, CS FUNDING V DEPOSITOR INC., as Depositor, CAPITALSOURCE FINANCE LLC, as Originator and
Servicer, the LENDERS party hereto, and JPMORGAN CHASE BANK, N.A., as Administrative Agent.

          The Borrower (as hereinafter defined) has requested that the Lenders (as so defined) extend
credit to it in an aggregate principal or face amount not exceeding $300,000,000 at any one time
outstanding. The Lenders are prepared to extend such credit upon the terms and conditions hereof,
and, accordingly, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

          SECTION 1.01. Defined Terms. Except as otherwise specified herein or as the context
may otherwise require, capitalized terms used but not otherwise defined herein have the respective
meanings set forth in the Sale and Servicing Agreement for all purposes of this Agreement. In
addition, as used in this Agreement, the following terms have the meanings specified below:

          “Adjusted LIBO Rate” means, for the Interest Period for any Eurocurrency Borrowing, an
interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the
LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate for such Interest
Period.

          “Administrative Agent” means JPMCB, in its capacity as administrative agent for the
Lenders hereunder.

          “Administrative Agent’s Account” means, for each Currency, an account in respect of
such Currency designated by the Administrative Agent in a notice to the Borrower and the Lenders.

          “Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

          “Administration Agreement” means the Administration Agreement dated as of June 30,
2005 between the Borrower and CapitalSource Finance LLC.

          “Administrator” means CapitalSource Finance LLC, in its capacity as Administrator, or
any successor Administrator under the Administration Agreement.

          “Advances” means the advances from time to time made by the Lenders to the Borrower
pursuant to this Agreement.

 

 

- 2 -

          “Agreed Foreign Currency” means, at any time, any of Canadian Dollars, English Pounds
Sterling, Euros and, with the agreement of each Lender, any other Foreign Currency, so long as, in
respect of any such specified Currency or other Foreign Currency, at such time (a) such Currency is
dealt with in the London (or, in the case of English Pounds Sterling, Paris) interbank deposit
market, (b) such Currency is freely transferable and convertible into Dollars in the London foreign
exchange market and (c) no central bank or other governmental authorization in the country of issue
of such Currency (including, in the case of the Euro, any authorization by the European Central
Bank) is required to permit use of such Currency by any Lender for making any Advance hereunder
and/or to permit the Borrower to borrow and repay the principal thereof and to pay the interest
thereon, unless such authorization has been obtained and is in full force and effect.

          “Applicable Margin” means: (a) with respect to any Syndicated Federal Funds Advance,
1.250% per annum; (b) with respect to any Swingline Advance, 1.500% per annum; and (c) with respect
to any Eurocurrency Advance, 0.750% per annum.

          “Applicable Percentage” means, with respect to any Lender, the percentage of the total
Commitments represented by such Lender’s Commitment. If the Commitments have terminated or
expired, the Applicable Percentages shall be determined based upon the Commitments most recently in
effect, giving effect to any assignments.

          “Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required by Section 9.04),
and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by
the Administrative Agent.

          “Authorized Officer” means, with respect to the Borrower, any officer of the Owner
Trustee who is authorized to act for the Owner Trustee in matters relating to the Borrower and who
is identified on the list of Authorized Officers delivered by the Owner Trustee to the
Administrative Agent on the Closing Date (as such list may be modified or supplemented from time to
time thereafter) and, so long as the Administration Agreement is in effect, any Vice President or
more senior officer of the Administrator who is authorized to act for the Administrator in matters
relating to the Borrower and to be acted upon by the Administrator pursuant to the Administration
Agreement and who is identified on the list of Authorized Officers delivered by the Administrator
to the Administrative Agent on the Closing Date (as such list may be modified or supplemented from
time to time thereafter).

          “Availability Period” means the period from and including the Closing Date to but
excluding the earlier of the Commitment Termination Date and the date of termination of the
Commitments.

          “Basic Documents” means, collectively, this Agreement, the Letter of Credit Documents,
the Guarantee and Security Agreement, the Borrower Mortgage(s),

 

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the Sale and Servicing Agreement, the Loan Sale Agreement, the Trust Agreement, the Administration Agreement, the Intercreditor
Agreement and the Lockbox Agreement.

          “Board” means the Board of Governors of the Federal Reserve System of the United
States of America.

          “Borrower” means CapitalSource Funding V Trust, a statutory trust organized under the
laws of the State of Delaware.

          “Borrower Mortgage(s)” means, collectively, one or more instruments of Mortgage, Deed
of Trust, Assignment of Rents, Guarantee and Security Agreement and Fixture Filing executed by the
Borrower in favor of the Collateral Custodian as Trustee, for the benefit of the Administrative
Agent and the Lenders, in each case in form and substance satisfactory to the Administrative Agent
and covering the respective properties and leasehold interests sold by the Depositor to the
Borrower from time to time, as such instruments of Mortgage, Deed of Trust, Assignment of Rents,
Guarantee and Security Agreement and Fixture Filing shall be modified and supplemented and in
effect from time to time.

          “Borrowing” means (a) all Syndicated Federal Funds Advances made, converted or
continued on the same date, (b) all Eurocurrency Advances denominated in the same Currency that
have the same Interest Period or (c) a Swingline Advance.

          “Borrowing Base Certificate” means a certificate of a Financial Officer of the
Borrower, substantially in the form of Exhibit F to the Sale and Servicing Agreement and
appropriately completed.

          “Borrowing Request” means a request by the Borrower for a Syndicated Borrowing in
accordance with Section 2.03.

          “Business Day” means any day (a) that is not a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to remain closed, (b) if such
day relates to a borrowing of, a payment or prepayment of principal of or interest on, a
continuation or conversion of or into, or the Interest Period for, a Eurocurrency Borrowing, or to
a notice by the Borrower with respect to any such borrowing, payment, prepayment, continuation,
conversion, or Interest Period, that is also a day on which dealings in deposits denominated in the
Currency of such Borrowing are carried out in the London (or, in the case of English Pounds
Sterling, Paris) interbank market and (c) if such day relates to a borrowing or continuation of, a
payment or prepayment of principal of or interest on, or the Interest Period for, any Borrowing
denominated in any Foreign Currency, or to a notice by the Borrower with respect to any such
borrowing, continuation, payment, prepayment or Interest Period, that is also a day on which
commercial banks and the London foreign exchange market settle payments in the Principal Financial
Center for such Foreign Currency.

          “Capital Lease Obligations” of any Person means the obligations of such Person to pay
rent or other amounts under any lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are

 

- 4 -

required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

          “Change in Law” means (a) the adoption of any law, rule or regulation after the date
of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date of this Agreement or (c)
compliance by any Lender or the Issuing Lender (or, for purposes of Section 2.14(b), by any lending
office of such Lender or by such Lender’s or the Issuing Lender’s holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any Governmental
Authority made or issued after the date of this Agreement.

          “Class”, when used in reference to any Advance or Borrowing, refers to whether such
Advance, or the Advances constituting such Borrowing, are Syndicated Advances or Swingline
Advances.

          “Closing Date” means the date on which the conditions specified in Section 4.01 are
satisfied (or waived in accordance with Section 9.02).

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

          “Collateral” has the meaning specified in the Guarantee and Security Agreement.

          “Commitment” means, with respect to each Lender, the commitment of such Lender to make
Syndicated Advances and to acquire participations in Letters of Credit and Swingline Advances
hereunder, expressed as an amount representing the maximum aggregate amount of such Lender’s
Revolving Credit Exposure hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant to assignments by
or to such Lender pursuant to Section 9.04. The initial amount of each Lender’s Commitment is set
forth on Schedule I, or in the Assignment and Assumption pursuant to which such Lender shall have
assumed its Commitment, as applicable. The initial aggregate amount of the Lenders’ Commitments is
$300,000,000.

          “Commitment Termination Date” means the Payment Date falling on or nearest to June 30,
2008.

          “Credit Extension Date” means any date on which an Advance is made or a Letter of
Credit is issued hereunder.

          “Credit Party” means, collectively, the Borrower and the Subsidiary Guarantors.

          “Currency” means Dollars or any Foreign Currency.

 

- 5 -

          “Default” means any event or condition which constitutes an Event of Default or which
upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

          “Dollar Equivalent” means, with respect to any Borrowing (or FX Loan) denominated in
any Foreign Currency, the amount of Dollars that would be required to purchase the amount of the
Foreign Currency of such Borrowing (or FX Loan) on the date two Business Days prior to the date of
such Borrowing (or, in the case of any determination made under Section 2.10(b) or redenomination
under the last sentence of Section 2.17(a) or pursuant to the Sale and Servicing Agreement, on the
date of determination or redenomination therein referred to), based upon the spot selling rate at
which the Administrative Agent offers to sell such Foreign Currency for Dollars in the London
foreign exchange market at approximately 11:00 a.m., London time, for delivery two Business Days
later.

          “Dollars” or “$” refers to lawful money of the United States of America.

          “Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities, and
including any Lien filed against any property covered by the Borrower Mortgage(s) in favor of any
governmental entity), of the Borrower or any of its Affiliates directly or indirectly resulting
from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any
Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement pursuant to which
liability is assumed or imposed with respect to any of the foregoing.

          “Eurocurrency”, when used in reference to any Advance or Borrowing, refers to whether
such Advance, or the Advances constituting such Borrowing, are bearing interest at a rate
determined by reference to the Adjusted LIBO Rate.

          “Event of Default” has the meaning assigned to such term in Article VII.

          “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the
Issuing Lender or any other recipient of any payment to be made by or on account of any obligation
of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income
by the United States of America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which the Borrower is located and
(c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower
under Section 2.18(b)), any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement or is attributable to such Foreign Lender’s failure or inability (other than as a result
of a Change in Law) to comply with Section 2.16(e), except to the extent that such

 

- 6 -

Foreign Lender’s
assignor (if any) was entitled, at the time of assignment, to receive additional amounts from the
Borrower with respect to such withholding tax pursuant to Section 2.16(a).

          “Federal Funds”, when used in reference to any Advance or Borrowing, refers to whether
such Advance, or the Advances constituting such Borrowing, are denominated in Dollars and bearing
interest at a rate determined by reference to the Federal Funds Rate.

          “Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received
by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

          “Federal Funds Rate” means, for any day, a fluctuating rate per annum equal to the
rate appearing on Page 5 of the Telerate Service as the “Federal Funds Ask Rate” (or on any
successor or substitute page of such Service, or any successor to or substitute for such Service,
providing rate quotations comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to overnight Federal funds) at or about 9:30 a.m. (New York City time).
The Administrative Agent will confirm the “Federal Funds Rate” to the Lenders by 2:00 p.m. (New
York City time) on the date a Federal Funds Advance is made and on each Business Day on which such
Advance remains outstanding. In the event that such rate is not available for any Borrowing at
such time for any reason, then the “Federal Funds Rate” with respect to such Borrowing shall be the
“offered rate” as determined for such day by JPMCB for overnight federal funds, which rate shall be
reasonably representative (in the judgment of JPMCB) of market conditions at the time.

          “Foreign Currency” means at any time any Currency other than Dollars.

          “Foreign Currency Equivalent” means, with respect to any amount in Dollars, the amount
of any Foreign Currency that could be purchased with such amount of Dollars using the reciprocal of
the foreign exchange rate(s) specified in the definition of the term “Dollar Equivalent”, as
determined by the Administrative Agent.

          “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction
other than the United States of America, a State thereof or the District of Columbia.

          “GAAP” means generally accepted accounting principles in the United States of America.

 

- 7 -

          “Grant” means mortgage, pledge, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer, create and grant a lien upon and a security interest in and right of
set-off against, deposit, set over and confirm pursuant to the Security Documents. A Grant of the
Collateral or of any other agreement or instrument shall include all rights, powers and options
(but none of the obligations) of the granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal and interest
payments in respect of the Collateral and all other moneys payable thereunder, to give and receive
notices and other communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the granting party or otherwise, and generally to do
and receive anything that the granting party is or may be entitled to do or receive thereunder or
with respect thereto.

          “Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such Indebtedness or other
obligation of the payment thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided,
that the term Guarantee shall not include endorsements for collection or deposit in the ordinary
course of business.

          “Guarantee and Security Agreement” means a Guarantee and Security Agreement
substantially in the form of Exhibit B between the Borrower, each Subsidiary of the Borrower that
shall become a party thereto pursuant to Section 5.03 of the Guarantee and Security Agreement, the
Administrative Agent and the Collateral Custodian, as the same shall be modified and supplemented
and in effect from time to time.

          “Guarantee Assumption Agreement” means a Guarantee Assumption Agreement substantially
in the form of Exhibit A to the Guarantee and Security Agreement between the Collateral Agent and
an entity that, pursuant to Section 5.08 is required to become a “Subsidiary Guarantor” under the
Guarantee and Security Agreement (with such changes as the Administrative Agent shall request,
consistent with the requirements of Section 5.08).

          “Hazardous Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated
biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature
regulated pursuant to any Environmental Law.

 

- 8 -

          “Hedging Agreement” means any interest rate protection agreement, foreign currency
exchange agreement, commodity price protection agreement or other interest or currency exchange
rate or commodity price hedging arrangement.

          “Indebtedness” of any Person means, without duplication, (a) all obligations of such
Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations
of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of
such Person upon which interest charges are customarily paid, (d) all obligations of such Person
under conditional sale or other title retention agreements relating to property acquired by such
Person, (e) all obligations of such Person in respect of the deferred purchase price of property or
services (excluding current accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by
such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all
obligations, contingent or otherwise, of such Person as an account party in respect of letters of
credit and letters of guaranty and (j) all obligations, contingent or otherwise, of such Person in
respect of bankers’ acceptances. The Indebtedness of any Person shall include the Indebtedness of
any other entity (including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such Indebtedness provide that
such Person is not liable therefor.

          “Indemnified Taxes” means Taxes other than Excluded Taxes.

          “Interest Election Request” means a request by the Borrower to convert or continue a
Syndicated Borrowing in accordance with Section 2.07.

          “Interest Period” means, for any Eurocurrency Advance or Borrowing, the period
commencing on the date of such Advance or Borrowing and ending on the first, second, third or sixth
Payment Date thereafter; provided, that no Interest Period shall have a duration of less than one
month (and any Interest Period that would otherwise have a duration of less than one month shall
not be available hereunder), except that an Interest Period pertaining to a Eurocurrency Borrowing
denominated in a Foreign Currency that ends on the Commitment Termination Date shall be permitted
to be of less than one month’s duration.

          “Issuing Lender” means JPMCB, in its capacity as the issuer of Letters of Credit
hereunder, and its successors in such capacity as provided in Section 2.05(j).

          “JPMCB” means JPMorgan Chase Bank, N.A.

          “LC Disbursement” means a payment made by the Issuing Lender pursuant to a Letter of
Credit.

 

- 9 -

          “LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all
outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements
that have not yet been reimbursed by or on behalf of the Borrower at such time. The LC Exposure of
any Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.

          “Lenders” means the Persons listed on Schedule I and any other Person that shall have
become a party hereto pursuant to an Assignment and Assumption, other than any such Person that
ceases to be a party hereto pursuant to an Assignment and Assumption. Unless the context otherwise
requires, the term “Lenders” includes the Swingline Lender.

          “Letter of Credit” means any letter of credit issued pursuant to this Agreement.

          “Letter of Credit Documents” means, with respect to any Letter of Credit,
collectively, any application therefor and any other agreements, instruments, guarantees or other
documents (whether general in application or applicable only to such Letter of Credit) governing or
providing for (a) the rights and obligations of the parties concerned or at risk with respect to
such Letter of Credit or (b) any collateral security for any of such obligations, each as the same
may be modified and supplemented and in effect from time to time.

          “LIBO Rate” means, for the Interest Period for any Eurocurrency Borrowing denominated
in any Currency, the rate appearing on the Screen at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as LIBOR for deposits denominated
in such Currency with a maturity comparable to such Interest Period. In the event that such rate
is not available on the Screen at such time for any reason, then the LIBO Rate for such Interest
Period shall be the rate at which deposits in such Currency in the amount of $5,000,000 and for a
maturity comparable to such Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London (or, in the case of English
Pounds Sterling, Paris) interbank market at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period. Notwithstanding the foregoing, the LIBO
Rate for any Eurocurrency Advance denominated in English Pounds Sterling for any Interest Period
shall be the sum of (i) the rate referred to above plus (ii) the MCR Cost.

          “LIBOR” means, for any Currency, the rate at which deposits denominated in such
Currency are offered to leading banks in the London (or, in the case of English Pounds Sterling,
Paris) interbank market.

          “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of such
asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital
lease or title retention agreement (or any financing lease having substantially the same economic
effect as any of the foregoing) relating to such asset and (c) in the case of

 

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securities, any
purchase option, call or similar right of a third party with respect to such securities.

          “Local Time” means, with respect to any Advance denominated in or any payment to be
made in any Currency, the local time in the Principal Financial Center for the Currency in which
such Advance is denominated or such payment is to be made.

          “Margin Stock” means “margin stock” within the meaning of Regulations T, U and X of
the Board.

          “Material Adverse Effect” has the meaning assigned to such term in Section 3.01(a).

          “MCR Cost” means, with respect to any Lender, the cost imputed to such Lender of
compliance with the Mandatory Cost Rate requirements of the Bank of England during the relevant
period, determined in accordance with Schedule II.

          “National Currency” means the currency, other than the Euro, of a Participating Member
State.

          “Obligor” with respect to any Loan, means the obligor(s) under the related Required
Loan Documents, including any Person that has acquired the related Loan Collateral and assumed the
obligations of the original obligor under the related Required Loan Documents, but excluding, in
each case, any such Person that is an obligor or guarantor that is in addition to the primary
obligors or guarantors with respect to the assets, cash flows or credit of which the related Loan
is principally underwritten.

          “Officer’s Certificate” means a certificate signed by any Authorized Officer of the
Borrower or the Administrator. Unless otherwise specified, any reference in this Agreement to an
Officer’s Certificate shall be to an Officer’s Certificate of any Authorized Officer of the
Borrower or the Administrator.

          “Other Taxes” means any and all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any payment made under any
Basic Document or from the execution, delivery or enforcement of, or otherwise with respect to, any
Basic Document.

          “Owner Trust Estate” has the meaning assigned to such term in the Trust Agreement.

          “Owner Trustee” means Wilmington Trust Company, acting not in its individual capacity,
but solely as Owner Trustee under the Trust Agreement.

          “Participating Member State” means any member state of the European Community that
adopts or has adopted the Euro as its lawful currency in accordance with the legislation of the
European Union relating to the European Monetary Union.

 

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          “Payment Date” means (a) the 10th day of each calendar month (or, if any
such day is not a Business Day, the next succeeding Business Day), the first of which shall be the
first such day after the date hereof, and (b) the Commitment Termination Date.

          “Person” means any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, Governmental Authority or other entity.

          “Prime Rate” means the rate of interest per annum publicly announced from time to time
by JPMCB as its prime rate in effect at its principal office in New York City; each change in the
Prime Rate shall be effective from and including the date such change is publicly announced as
being effective.

          “Principal Financial Center” means, in the case of any Currency, the principal
financial center where such Currency is cleared and settled, as determined by the Administrative
Agent.

          “Proceeding” means any suit in equity, action at law or other judicial or
administrative proceeding.

          “Register” has the meaning set forth in Section 9.04.

          “Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and advisors of such Person
and such Person’s Affiliates.

          “Required Lenders” means, at any time, Lenders having Revolving Credit Exposures and
unused Commitments representing more than 50% of the sum of the total Revolving Credit Exposures
and unused Commitments at such time.

          “Revolving Credit Exposure” means, with respect to any Lender at any time, the sum of
the outstanding principal amount of such Lender’s Syndicated Advances and its LC Exposure and
Swingline Exposure at such time.

          “Sale and Servicing Agreement” means the Sale and Servicing Agreement dated as of June
30, 2005, among the Borrower, the Depositor, the Servicer, the Originator and the Administrative
Agent on behalf of the Lenders.

          “Screen” means, for any Currency, the relevant display page for LIBOR for such
Currency (as determined by the Administrative Agent) on the Telerate Service; provided that, if the
Administrative Agent determines that there is no such relevant display page for LIBOR for such
Currency, “Screen” means the relevant display page for LIBOR for such Currency (as determined by the Administrative Agent) on the Reuter Monitor
Money Rates Service.

          “Security Documents” means, collectively, the Guarantee and Security Agreement, the
Borrower Mortgage(s), all Uniform Commercial Code financing

 

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statements filed with respect to any
Collateral, and all other assignments, pledge agreements, security agreements, control agreements
and other instruments executed and delivered on or after the date hereof by any of the Credit
Parties pursuant to the Guarantee and Security Agreement or otherwise providing or relating to any
collateral security for any of the Secured Obligations under and as defined in the Guarantee and
Security Agreement.

          “Servicer Default” means any event or condition which constitutes a Servicer Event of
Default or which upon notice, lapse of time or both would, unless cured or waived, become a
Servicer Event of Default.

          “Statutory Reserve Rate” means, for the Interest Period for any Eurocurrency
Borrowing, a fraction (expressed as a decimal), the numerator of which is the number one and the
denominator of which is the number one minus the arithmetic mean, taken over each day in such
Interest Period, of the aggregate of the maximum reserve percentages (including any marginal,
special, emergency or supplemental reserves) expressed as a decimal established by the Board to
which the Administrative Agent is subject for eurocurrency funding (currently referred to as
“Eurocurrency liabilities” in Regulation D of the Board). Such reserve percentages shall include
those imposed pursuant to such Regulation D. Eurocurrency Advances shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without benefit of or credit
for proration, exemptions or offsets that may be available from time to time to any Lender under
such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve percentage.

          “Subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity the accounts of
which would be consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50% of the equity or
more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as
of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by
the parent and one or more subsidiaries of the parent. Anything herein to the contrary
notwithstanding, the term “Subsidiary” shall not include any Person that constitutes an investment
held by the Borrower in the ordinary course of business and that is not, under GAAP, consolidated
on the financial statements of the Borrower and its Subsidiaries. Unless otherwise specified,
“Subsidiary” means a Subsidiary of the Borrower.

          “Subsidiary Guarantor” means any Subsidiary that is a Guarantor under the Guarantee
and Security Agreement.

          “Swingline Advance” means an Advance made pursuant to Section 2.04.

 

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          “Swingline Exposure” means, at any time, the aggregate principal amount of all
Swingline Advances outstanding at such time. The Swingline Exposure of any Lender at any time
shall be its Applicable Percentage of the total Swingline Exposure at such time.

          “Swingline Lender” means JPMCB, in its capacity as lender of Swingline Advances
hereunder.

          “Syndicated”, when used in reference to any Advance or Borrowing, refers to whether
such Advance, or the Advances constituting such Borrowing, are made pursuant to Section 2.01.

          “Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

          “Transactions” means the execution, delivery and performance by the Borrower of this
Agreement and the other Basic Documents, the borrowing of Advances, the use of the proceeds thereof
and the issuance of Letters of Credit hereunder.

          “Trust Agreement” means the Trust Agreement dated as of June 30, 2005 between the
Depositor and the Owner Trustee.

          “Type”, when used in reference to any Advance or Borrowing, refers to whether the rate
of interest on such Advance, or on the Advances constituting such Borrowing, is determined by
reference to the Adjusted LIBO Rate or the Federal Funds Rate.

          SECTION 1.02. Classification of Advances and Borrowings. For purposes of this
Agreement, Advances may be classified and referred to by Class (e.g., a “Syndicated Advance”), by
Type (e.g., a “Federal Funds Advance”) or by Class and Type (e.g., a “Syndicated Federal Funds
Advance”). Borrowings also may be classified and referred to by Class (e.g., a “Syndicated
Borrowing”), by Type (e.g., a “Federal Funds Borrowing”) or by Class and Type (e.g., a “Syndicated
Federal Funds Borrowing”). Advances and Borrowings may also be identified by Currency.

          SECTION 1.03. Terms Generally. The definitions of terms herein shall apply equally
to the singular and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The
word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the
context requires otherwise (a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any

 

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particular provision hereof,
(d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer
to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
“asset” and “property” shall be construed to have the same meaning and effect and to refer to any
and all tangible and intangible assets and properties, including cash, securities, accounts and
contract rights.

          SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time.

          SECTION 1.05. Currencies; Currency Equivalents.

          (a) Currencies Generally. At any time, any reference in the definition of the term
“Agreed Foreign Currency” or in any other provision of this Agreement to the Currency of any
particular nation means the lawful currency of such nation at such time whether or not the name of
such Currency is the same as it was on the date hereof. Except as provided in Section 2.10(b) and
the last sentence of Section 2.17(a), for purposes of determining (i) whether the amount of any
Borrowing, together with all other Borrowings then outstanding or to be borrowed at the same time
as such Borrowing, would exceed the aggregate amount of the Commitments, (ii) the aggregate
unutilized amount of the Commitments and (iii) the outstanding aggregate principal amount of
Borrowings, the outstanding principal amount of any Borrowing that is denominated in any Foreign
Currency shall be deemed to be the Dollar Equivalent of the amount of the Foreign Currency of such
Borrowing determined as of the date of such Borrowing (determined in accordance with the last
sentence of the definition of the term “Interest Period”). Wherever in this Agreement in
connection with a Borrowing or Advance an amount, such as a required minimum or multiple amount, is
expressed in Dollars, but such Borrowing or Advance is denominated in a Foreign Currency, such
amount shall be the relevant Foreign Currency Equivalent of such Dollar amount (rounded to the
nearest 1,000 units of such Foreign Currency).

          (b) Special Provisions Relating to Euro. Each obligation hereunder of any party
hereto that is denominated in the National Currency of a state that is not a Participating Member
State on the date hereof shall, effective from the date on which such state becomes a Participating
Member State, be redenominated in Euro in accordance with the legislation of the European Union
applicable to the European Monetary Union; provided that, if and to the extent that any such
legislation provides that any such obligation of any such party payable within such Participating
Member State by crediting an account of the creditor can be paid by the debtor either in Euros or
such National Currency, such party shall be entitled to pay or repay such amount either in Euros or
in such National Currency. If the basis of accrual of interest or fees expressed in
this Agreement with respect to an Agreed Foreign Currency of any country that becomes a
Participating Member State after the date on which such currency becomes an Agreed Foreign Currency
shall be inconsistent with any convention or practice in the interbank market for the basis of
accrual of interest or fees in respect of the Euro, such convention or practice shall replace such
expressed basis effective as of and from the date on which such state becomes a Participating
Member State; provided that, with respect to any

 

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Borrowing denominated in such currency that is
outstanding immediately prior to such date, such replacement shall take effect at the end of the
Interest Period therefor.

          Without prejudice to the respective liabilities of the Borrower to the Lenders and the Lenders
to the Borrower under or pursuant to this Agreement, each provision of this Agreement shall be
subject to such reasonable changes of construction as the Administrative Agent may from time to
time reasonably specify to be necessary or appropriate to reflect the introduction or changeover to
the Euro in any country that becomes a Participating Member State after the date hereof; provided
that the Administrative Agent shall provide the Borrower and the Lenders with prior notice of the
proposed change with an explanation of such change in sufficient time to permit the Borrower and
the Lenders an opportunity to respond to such proposed change.

ARTICLE II

THE CREDITS

          SECTION 2.01. The Commitments. Subject to the terms and conditions set forth herein
(and without limiting the provisions of Section 2.04 and 2.05), each Lender agrees to make
Syndicated Advances in Dollars or in any Agreed Foreign Currency to the Borrower from time to time
during the Availability Period in an aggregate principal amount that will not result in (a) such
Lender’s Revolving Credit Exposure exceeding such Lender’s Commitment or (b) the total Revolving
Credit Exposures exceeding the lesser of the total Commitments and the Borrowing Base then in
effect. Within the foregoing limits and subject to the terms and conditions set forth herein, the
Borrower may borrow, prepay and reborrow Syndicated Advances.

          SECTION 2.02. Advances and Borrowings.

          (a) Obligations of Lenders. Each Syndicated Advance shall be made as part of a
Borrowing consisting of Advances of the same Currency and Type made by the Lenders ratably in
accordance with their respective Commitments. The failure of any Lender to make any Advance
required to be made by it shall not relieve any other Lender of its obligations hereunder; provided
that the Commitments of the Lenders are several and no Lender shall be responsible for any other
Lender’s failure to make Advances as required.

          (b) Type of Advances. Subject to Section 2.13, each Syndicated Borrowing shall be
constituted entirely of Federal Funds Advances or of Eurocurrency Advances denominated in a single
Currency as the Borrower may request in accordance herewith. Each Swingline Advance shall be a
Federal Funds Advance. Each Federal Funds Advance (whether a Syndicated Advance or a Swingline
Advance) shall be denominated in Dollars. Each Lender at its option may make any Eurocurrency
Advance by causing any domestic or foreign branch or Affiliate of such Lender to make such

 

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Advance; provided that any exercise of such option shall not affect the obligation of the Borrower to repay
such Advance in accordance with the terms of this Agreement.

          (c) Minimum Amounts; Limitation on Number of Borrowings. Each Syndicated Borrowing
shall be in an aggregate amount of $1,000,000 or a larger multiple of $100,000; provided that a
Syndicated Federal Funds Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Commitments. Each Swingline Advance shall be in an amount equal to $500,000
or a larger multiple thereof. Borrowings of more than one Class, Currency and Type may be
outstanding at the same time; provided that there shall not at any time be more than a total of (x)
20 Eurocurrency Borrowings in Dollars outstanding and (y) 10 Eurocurrency Borrowings in Agreed
Foreign Currencies outstanding.

          (d) Limitations on Interest Periods. Notwithstanding any other provision of this
Agreement, the Borrower shall not be entitled to request (or to elect to convert to or continue as
a Eurocurrency Borrowing) any Borrowing if the Interest Period requested therefor would end after
the Commitment Termination Date.

          SECTION 2.03. Requests for Syndicated Borrowings.

          (a) Notice by the Borrower. To request a Syndicated Borrowing, the Borrower shall
notify the Administrative Agent of such request by telephone (i) in the case of a Eurocurrency
Borrowing denominated in Dollars, not later than 11:00 a.m., New York City time, three Business
Days before the date of the proposed Borrowing, (ii) in the case of a Eurocurrency Borrowing
denominated in a Foreign Currency, not later than 11:00 a.m., London time, three Business Days
before the date of the proposed Borrowing or (iii) in the case of a Syndicated Federal Funds
Borrowing, not later than 11:00 a.m., New York City time, on the date of the proposed Borrowing.
Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Borrowing Request in a form approved
by the Administrative Agent and signed by the Borrower.

          (b) Content of Borrowing Requests. Each telephonic and written Borrowing Request
shall specify the following information in compliance with Section 2.02:

     (i) the aggregate amount and Currency of the requested Borrowing;

     (ii) the date of such Borrowing, which shall be a Business Day;

     (iii) in the case of a Syndicated Borrowing denominated in Dollars, whether such
Borrowing is to be a Federal Funds Borrowing or a Eurocurrency Borrowing;

     (iv) the Interest Period therefor, which shall be a period contemplated by the
definition of the term “Interest Period” and permitted under Section 2.02(d); and

 

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     (v) the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.06.

          (c) Notice by the Administrative Agent to the Lenders. Promptly following receipt of
a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each
Lender of the details thereof and of the amount of such Lender’s Advance to be made as part of the
requested Borrowing.

          (d) Failure to Elect. If no election as to the Currency of a Syndicated Borrowing is
specified, then the requested Syndicated Borrowing shall be denominated in Dollars. If no Interest
Period is specified with respect to any requested Eurocurrency Borrowing, the Borrower shall be
deemed to have selected an Interest Period of one month’s duration.

          SECTION 2.04. Swingline Advances.

          (a) Agreement to Make Swingline Advances. Subject to the terms and conditions set
forth herein, the Swingline Lender agrees to make Swingline Advances to the Borrower from time to
time during the Availability Period, in Dollars, in an aggregate principal amount at any time
outstanding that will not result in (i) the aggregate principal amount of outstanding Swingline
Advances exceeding $30,000,000 and (ii) the total Revolving Credit Exposures exceeding the lesser
of the total Commitments and the Borrowing Base then in effect; provided that the Swingline Lender
shall not be required to make a Swingline Advance to refinance an outstanding Swingline Advance.
Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower
may borrow, prepay and reborrow Swingline Advances.

          (b) Notice of Swingline Advances by the Borrower. To request a Swingline Advance, the
Borrower shall notify the Administrative Agent of such request by telephone (confirmed by
telecopy), not later than 3:00 p.m., New York City time, on the day of a proposed Swingline
Advance. Each such notice shall be irrevocable and shall specify the requested date (which shall
be a Business Day), whether such Swingline Advance shall consist of Federal Funds Advances and
amount of the requested Swingline Advance. The Administrative Agent will promptly advise the
Swingline Lender of any such notice received from the Borrower. The Swingline Lender shall make
each Swingline Advance available to the Borrower by means of a credit to the general deposit
account of the Borrower with the Swingline Lender by 5:00 p.m., New York City time, on the
requested date of such Swingline Advance.

          (c) Participations by Lenders in Swingline Advances. The Swingline Lender may by
written notice given to the Administrative Agent not later than 10:00 a.m., New York City time, on
any Business Day require the Lenders to acquire participations on such Business Day in all or a
portion of the Swingline Advances outstanding. Such notice to the Administrative Agent shall
specify the aggregate amount of Swingline Advances in which Lenders will participate. Promptly
upon receipt of such notice, the Administrative Agent will give notice thereof to each Lender,
specifying in such notice such Lender’s Applicable Percentage of such Swingline Advance or

 

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Advances. Each Lender hereby absolutely and unconditionally agrees, upon receipt of notice as
provided above in this paragraph, to pay to the Administrative Agent, for account of the Swingline
Lender, such Lender’s Applicable Percentage of such Swingline Advance or Advances. Each Lender
acknowledges and agrees that its obligation to acquire participations in Swingline Advances
pursuant to this paragraph is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever. Each Lender shall comply with its obligation under
this paragraph by wire transfer of immediately available funds, in the same manner as provided in
Section 2.06 with respect to Advances made by such Lender (and Section 2.06 shall apply, mutatis
mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly
pay to the Swingline Lender the amounts so received by it from the Lenders. The Administrative
Agent shall notify the Borrower of any participations in any Swingline Advance acquired pursuant to
this paragraph, and thereafter payments in respect of such Swingline Advance shall be made to the
Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender
from the Borrower (or other party on behalf of the Borrower) in respect of a Swingline Advance
after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be
promptly remitted to the Administrative Agent; any such amounts received by the Administrative
Agent shall be promptly remitted by the Administrative Agent to the Lenders that shall have made
their payments pursuant to this paragraph and to the Swingline Lender, as their interests may
appear. The purchase of participations in a Swingline Advance pursuant to this paragraph shall not
relieve the Borrower of any default in the payment thereof.

          SECTION 2.05. Letters of Credit.

          (a) General. Subject to the terms and conditions set forth herein, in addition to the
Advances provided for in Section 2.01, the Borrower may request the Issuing Lender to issue, at any
time and from time to time during the Availability Period, Letters of Credit denominated in Dollars
or any Agreed Foreign Currency for its own account and the account of any Obligor, as the case may
be, in such form as is acceptable to the Issuing Lender in its reasonable determination. Letters
of Credit issued hereunder shall constitute utilization of the Commitments.

          (b) Notice of Issuance, Amendment, Renewal or Extension. To request the issuance of a
Letter of Credit (or the amendment, renewal or extension of an
outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or transmit by
electronic communication, if arrangements for doing so have been approved by the Issuing Lender) to
the Issuing Lender and the Administrative Agent (reasonably in advance of the requested date of
issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit,
or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such
Letter of Credit is to expire (which shall comply with paragraph (d) of this Section), the amount
of such Letter of Credit, the name and address of the beneficiary thereof, the Obligor for whom

 

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such Letter of Credit is being issued and such other information as shall be necessary to prepare,
amend, renew or extend such Letter of Credit. If requested by the Issuing Lender, the Borrower
also shall submit a letter of credit application on the Issuing Lender’s standard form in
connection with any request for a Letter of Credit which, if requested by the Issuing Lender, shall
be countersigned by the relevant Obligor. In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the Borrower to, or entered into by the Borrower with,
the Issuing Lender relating to any Letter of Credit, the terms and conditions of this Agreement
shall control.

          (c) Limitations on Amounts. A Letter of Credit shall be issued, amended, renewed or
extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the
Borrower shall be deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension (i) the aggregate LC Exposure of the Issuing Lender (determined for
these purposes without giving effect to the participations therein of the Lenders pursuant to
paragraph (e) of this Section) shall not exceed $150,000,000 and (ii) the total Revolving Credit
Exposures shall not exceed the lesser of the total Commitments and the Borrowing Base then in
effect.

          (d) Expiration Date. Each Letter of Credit shall expire at or prior to the close of
business on the earlier of (i) the date twelve months after the date of the issuance of such Letter
of Credit (or, in the case of any renewal or extension thereof, twelve months after the
then-current expiration date of such Letter of Credit, so long as such renewal or extension occurs
within three months of such then-current expiration date) and (ii) the date that is five Business
Days prior to the Commitment Termination Date; provided that Letters of Credit expiring after the
Commitment Termination Date shall be permitted, so long as the Borrower (x) deposits into the
Collection Account an amount equal to 102.0% of the amount of such Letter of Credit not later than
five business days prior to the Commitment Termination Date and (y) pays in full prior to the
Commitment Termination Date all commissions required to be paid with respect to any such Letter of
Credit through the then-current expiration date of such Letter of Credit.

          (e) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) by the Issuing Lender, and without any further
action on the part of the Issuing Lender or the Lenders, the Issuing Lender hereby grants to each
Lender, and each Lender hereby acquires from the Issuing Lender, a participation in such Letter of
Credit equal to such Lender’s Applicable
Percentage of the aggregate amount available to be drawn under such Letter of Credit. Each
Lender acknowledges and agrees that its obligation to acquire participations pursuant to this
paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected
by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or reduction or termination of the
Commitments.

          In consideration and in furtherance of the foregoing, each Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for account of

 

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the Issuing Lender, such
Lender’s Applicable Percentage of each LC Disbursement made by the Issuing Lender promptly upon the
request of the Issuing Lender at any time from the time of such LC Disbursement until such LC
Disbursement is reimbursed by the Borrower or at any time after any reimbursement payment is
required to be refunded to the Borrower for any reason. Such payment shall be made without any
offset, abatement, withholding or reduction whatsoever. Each such payment shall be made in the
same manner as provided in Section 2.06 with respect to Advances made by such Lender (and Section
2.06 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to the Issuing Lender the amounts so received by it from
the Lenders. Promptly following receipt by the Administrative Agent of any payment from the
Borrower pursuant to the next following paragraph, the Administrative Agent shall distribute such
payment to the Issuing Lender or, to the extent that the Lenders have made payments pursuant to
this paragraph to reimburse the Issuing Lender, then to such Lenders and the Issuing Lender as
their interests may appear. Any payment made by a Lender pursuant to this paragraph to reimburse
the Issuing Lender for any LC Disbursement shall not constitute an Advance and shall not relieve
the Borrower of its obligation to reimburse such LC Disbursement.

          (f) Reimbursement. If the Issuing Lender shall make any LC Disbursement in respect of
a Letter of Credit, the Borrower shall reimburse the Issuing Lender in respect of such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not
later than 3:00 p.m., New York City time, on (i) the Business Day that the Borrower receives notice
of such LC Disbursement, if such notice is received prior to 10:00 a.m., New York City time, or
(ii) the Business Day immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time. Such reimbursement shall be made in Dollars and, in the
case of a Letter of Credit denominated in an Agreed Foreign Currency, at the Dollar Equivalent of
the amount of such Letter of Credit on the date of reimbursement unless the Administrative Agent
determines otherwise, including if cash collateral in an Agreed Foreign Currency is granted
pursuant to Section 2.05(k).

          If the Borrower fails to make such payment when due, the Administrative Agent shall notify
each Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect
thereof and such Lender’s Applicable Percentage thereof.

          (g) Obligations Absolute. The Borrower’s obligation to reimburse LC Disbursements as
provided in paragraph (f) of this Section shall be absolute, unconditional and irrevocable, and
shall be performed strictly in accordance with the
terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any
lack of validity or enforceability of any Letter of Credit, or any term or provision therein, (ii)
any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or
invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii)
payment by the Issuing Lender under a Letter of Credit against presentation of a draft or other
document that does not comply strictly with the terms of such Letter of Credit, and (iv) any other
event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but
for the provisions of this Section, constitute a legal or equitable discharge of the Borrower’s
obligations hereunder.

 

- 21 -

          Neither the Administrative Agent, the Lenders nor the Issuing Lender, nor any of their Related
Parties, shall have any liability or responsibility by reason of or in connection with the issuance
or transfer of any Letter of Credit by the Issuing Lender or any payment or failure to make any
payment thereunder (irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any
draft, notice or other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of technical terms or
any consequence arising from causes beyond the control of the Issuing Lender; provided that the
foregoing shall not be construed to excuse the Issuing Lender from liability to the Borrower to the
extent of any direct damages (as opposed to consequential damages, claims in respect of which are
hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by the Issuing Lender’s gross negligence or willful misconduct when determining
whether drafts and other documents presented under a Letter of Credit comply with the terms
thereof. The parties hereto expressly agree that:

     (i) the Issuing Lender may accept documents that appear on their face to be in
substantial compliance with the terms of a Letter of Credit without responsibility for
further investigation, regardless of any notice or information to the contrary, and may
make payment upon presentation of documents that appear on their face to be in substantial
compliance with the terms of such Letter of Credit;

     (ii) the Issuing Lender shall have the right, in its sole discretion, to decline to
accept such documents and to make such payment if such documents are not in strict
compliance with the terms of such Letter of Credit; and

     (iii) this sentence shall establish the standard of care to be exercised by the
Issuing Lender when determining whether drafts and other documents presented under a Letter
of Credit comply with the terms thereof (and the parties hereto hereby waive, to the extent
permitted by applicable law, any standard of care inconsistent with the foregoing).

          (h) Disbursement Procedures. The Issuing Lender shall, within a reasonable time
following its receipt thereof, examine all documents purporting to represent a demand for payment
under a Letter of Credit. The Issuing Lender shall
promptly after such examination notify the Administrative Agent and the Borrower by telephone
(confirmed by telecopy) of such demand for payment and whether the Issuing Lender has made or will
make an LC Disbursement thereunder; provided that any failure to give or delay in giving such
notice shall not relieve the Borrower of its obligation to reimburse the Issuing Lender and the
Lenders with respect to any such LC Disbursement.

          (i) Interim Interest. If the Issuing Lender shall make any LC Disbursement, then,
unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement
is made, the unpaid amount thereof shall bear interest, for each day from and including the date
such LC Disbursement is made to but excluding

 

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the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to Syndicated Federal Funds Advances; provided
that, if the Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (f) of
this Section, then Section 2.12(d) shall apply. Interest accrued pursuant to this paragraph shall
be for account of the Issuing Lender, except that interest accrued on and after the date of payment
by any Lender pursuant to paragraph (f) of this Section to reimburse the Issuing Lender shall be
for account of such Lender to the extent of such payment.

          (j) Replacement of the Issuing Lender. The Issuing Lender may be replaced at any time
by written agreement between the Borrower, the Administrative Agent, the replaced Issuing Lender
and the successor Issuing Lender. The Administrative Agent shall notify the Lenders of any such
replacement of the Issuing Lender. At the time any such replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for account of the replaced Issuing Lender pursuant to
Section 2.11(b). From and after the effective date of any such replacement, (i) the successor
Issuing Lender shall have all the rights and obligations of the replaced Issuing Lender under this
Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to
the term “Issuing Lender” shall be deemed to refer to such successor or to any previous Issuing
Lender, or to such successor and all previous Issuing Lenders, as the context shall require. After
the replacement of an Issuing Lender hereunder, the replaced Issuing Lender shall remain a party
hereto and shall continue to have all the rights and obligations of an Issuing Lender under this
Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not
be required to issue additional Letters of Credit.

          (k) Cash Collateralization. If either (i) an Event of Default shall occur and be
continuing and the Borrower receives notice from the Administrative Agent or the Required Lenders
(or, if the maturity of the Advances has been accelerated, Lenders with LC Exposure representing
more than 50% of the total LC Exposure) demanding the deposit of cash collateral pursuant to this
paragraph or (ii) the Borrower shall be required to provide cover for LC Exposure pursuant to
Section 2.05(d), the Borrower shall immediately deposit into the Collection Account an amount in
cash equal to, in the case of an Event of Default, the LC Exposure as of such date plus any accrued
and unpaid interest thereon and, in the case of cover pursuant to Section 2.05(d), the amount
required under Section 2.05(d); provided that the obligation to deposit such cash collateral shall
become effective immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event
of Default with respect to the Borrower described in clause (h) or (i) of Article VII. Such
deposit shall be held by the Administrative Agent in the Collection Account as collateral in the
first instance for the LC Exposure under this Agreement and thereafter for the payment of the
“Secured Obligations” under and as defined in the Guarantee and Security Agreement, and for these
purposes the Borrower hereby grants a security interest to the Administrative Agent for the benefit
of the Lenders in the Collection Account and in any financial assets (as defined in the Uniform
Commercial Code) or other property held therein.

 

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          SECTION 2.06. Funding of Borrowings.

          (a) Funding by Lenders. Each Lender shall make each Advance to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available funds by 12:00
noon, Local Time, to the account of the Administrative Agent most recently designated by it for
such purpose by notice to the Lenders; provided that Swingline Advances shall be made as provided
in Section 2.04. The Administrative Agent will make such Advances available to the Borrower by
promptly crediting the amounts so received, in like funds, to an account of the Borrower designated
by the Borrower in the applicable Borrowing Request.

          (b) Presumption by the Administrative Agent. Unless the Administrative Agent shall
have received notice from a Lender prior to the proposed date of any Borrowing that such Lender
will not make available to the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available on such date in
accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made
its share of the applicable Borrowing available to the Administrative Agent, then the applicable
Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such
corresponding amount with interest thereon, for each day from and including the date such amount is
made available to the Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the Federal Funds Effective Rate or (ii) in the case of the
Borrower, the interest rate applicable to Federal Funds Advances. If such Lender pays such amount
to the Administrative Agent, then such amount shall constitute such Lender’s Advance included in
such Borrowing.

          SECTION 2.07. Interest Elections.

          (a) Elections by the Borrower for Syndicated Borrowings. The Advances constituting
each Syndicated Borrowing initially shall have the Interest Period specified in the applicable
Borrowing Request. Thereafter, the Borrower may elect the Interest Period therefor, as provided in
this Section; provided, however, that (i) a Syndicated Borrowing denominated in one Currency may
not be continued as, or converted to, a Syndicated Borrowing in a different Currency, (ii) no
Eurocurrency Borrowing denominated in a Foreign Currency may be continued if, after giving effect
thereto, the aggregate Revolving Credit Exposures would exceed the aggregate Commitments, and
(iii) a Eurocurrency Borrowing denominated in a Foreign Currency may not be converted to a
Borrowing of a different Type. The Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be allocated ratably
among the Lenders holding the Advances constituting such Borrowing, and the Advances constituting
each such portion shall be considered a separate Borrowing. This Section shall not apply to
Swingline Borrowings, which may not be converted or continued.

          (b) Notice of Elections. To make an election pursuant to this Section, the Borrower
shall notify the Administrative Agent of such election by telephone by the

 

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time that a Borrowing
Request would be required under Section 2.03 if the Borrower were requesting a Syndicated Borrowing
of the Type resulting from such election to be made on the effective date of such election. Each
such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by
hand delivery or telecopy to the Administrative Agent of a written Interest Election Request in a
form approved by the Administrative Agent and signed by the Borrower.

          (c) Content of Interest Election Requests. Each telephonic and written Interest
Election Request shall specify the following information in compliance with Section 2.02:

     (i) the Borrowing to which such Interest Election Request applies and, if different
options are being elected with respect to different portions thereof, the portions thereof
to be allocated to each resulting Borrowing (in which case the information to be specified
pursuant to clause (iii) of this paragraph shall be specified for each resulting
Borrowing);

     (ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day; and

     (iii) the Interest Period therefor after giving effect to such election, which shall
be a period contemplated by the definition of the term “Interest Period” and permitted
under Section 2.02(d).

          (d) Notice by the Administrative Agent to the Lenders. Promptly following receipt of
an Interest Election Request, the Administrative Agent shall advise each Lender of the details
thereof and of such Lender’s portion of each resulting Borrowing.

          (e) Failure to Elect; Events of Default. If the Borrower fails to deliver a timely
and complete Interest Election Request with respect to a Eurocurrency Borrowing prior to the end of
the Interest Period therefor, then, unless such Borrowing is repaid as provided herein, the
Borrower shall be deemed to have selected an Interest Period of one month’s duration. If no
election as to the Type of a Syndicated Borrowing is specified, then the requested Borrowing shall
be a Federal Funds Borrowing unless an Agreed Foreign Currency has been specified, in which case
the requested Syndicated
Borrowing shall be a Eurocurrency Borrowing with an Interest Period ending on the first
Payment Date falling at least one month thereafter denominated in such Agreed Foreign Currency.
Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is
continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the
Borrower, then, so long as an Event of Default is continuing no outstanding Eurocurrency Borrowing
may have an Interest Period of more than one month’s duration.

 

- 25 -

          SECTION 2.08. Termination and Reduction of the Commitments.

          (a) Scheduled Termination. Unless previously terminated, the Commitments shall
terminate on the Commitment Termination Date.

          (b) Voluntary Termination or Reduction. The Borrower may at any time terminate, or
from time to time reduce, the Commitments; provided that (i) each reduction of the Commitments
shall be in an amount that is $10,000,000 or a larger multiple of $1,000,000 and (ii) the Borrower
shall not terminate or reduce the Commitments if, after giving effect to any concurrent prepayment
of the Syndicated Advances in accordance with Section 2.10, the total Revolving Credit Exposures
would exceed the total Commitments then in effect.

          (c) Notice of Voluntary Termination or Reduction. The Borrower shall notify the
Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) of
this Section at least three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly following receipt of
any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice
delivered by the Borrower pursuant to this Section shall be irrevocable; provided that a notice of
termination of the Commitments delivered by the Borrower may state that such notice is conditioned
upon the effectiveness of other credit facilities, in which case such notice may be revoked by the
Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if
such condition is not satisfied.

          (d) Effect of Termination or Reduction. Any termination or reduction of the
Commitments shall be permanent. Each reduction of the Commitments shall be made ratably among the
Lenders in accordance with their respective Commitments.

          SECTION 2.09. Repayment of Advances; Evidence of Debt.

          (a) Repayment. The Borrower hereby unconditionally promises to pay the Advances as
follows:

     (i) to the Administrative Agent for account of the Lenders the outstanding principal
amount of the Syndicated Advances on the Commitment Termination Date, and

     (ii) to the Swingline Lender the then unpaid principal amount of each Swingline
Advance on the earlier of the Commitment Termination Date and the first Payment Date at
least two Business Days after such Swingline Advance is made; provided that on each date
that a Syndicated Borrowing is made, the Borrower shall repay all Swingline Advances then
outstanding.

          (b) Manner of Payment. Prior to any repayment or prepayment of any Borrowings
hereunder, the Borrower shall select the Borrowing or Borrowings to be paid and shall notify the
Administrative Agent by telephone (confirmed by telecopy) of such

 

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selection not later than 11:00
a.m., New York City time, three Business Days before the scheduled date of such repayment; provided
that each repayment of Borrowings shall be applied to repay (i) firstly, any outstanding Federal
Funds Borrowings and (ii) secondly, to repay other outstanding Borrowings. If the Borrower fails
to make a timely selection of the Borrowing or Borrowings to be repaid or prepaid, such payment
shall be applied, first, to pay any outstanding Federal Funds Borrowings and, second, to other
Borrowings in the order of the remaining duration of their respective Interest Periods (the
Borrowing with the shortest remaining Interest Period to be repaid first). Each payment of a
Syndicated Borrowing shall be applied ratably to the Advances included in such Borrowing.

          (c) Maintenance of Records by Lenders. Each Lender shall maintain in accordance with
its usual practice records evidencing the indebtedness of the Borrower to such Lender resulting
from each Advance made by such Lender, including the amounts and Currency of principal and interest
payable and paid to such Lender from time to time hereunder.

          (d) Maintenance of Records by the Administrative Agent. The Administrative Agent
shall maintain records in which it shall record (i) the amount and Currency of each Advance made
hereunder, the Class and Type thereof and each Interest Period therefor, (ii) the amount and
Currency of any principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount and Currency of any sum received by the
Administrative Agent hereunder for account of the Lenders and each Lender’s share thereof.

          (e) Effect of Entries. The entries made in the records maintained pursuant to
paragraph (c) or (d) of this Section shall be prima facie evidence of the existence and amounts of
the obligations recorded therein; provided that the failure of
any Lender or the Administrative Agent to maintain such records or any error therein shall not
in any manner affect the obligation of the Borrower to repay the Advances in accordance with the
terms of this Agreement.

          (f) Promissory Notes. Any Lender may request that Advances made by it be evidenced by
a promissory note. In such event, the Borrower shall prepare, execute and deliver to such Lender a
promissory note payable to such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) and in a form approved by the Administrative Agent. Thereafter, the Advances
evidenced by such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form
payable to the payee named therein (or, if such promissory note is a registered note, to such payee
and its registered assigns).

          SECTION 2.10. Prepayment of Advances.

          (a) Optional Prepayments. The Borrower shall have the right at any time and from time
to time to prepay any Borrowing in whole or in part, subject to the requirements of this Section.

 

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          (b) Mandatory Prepayments — Foreign Currency Valuation.

     (i) Determination of Amount Outstanding. Not later than two Business Days
prior to each Payment Date and promptly upon the receipt by the Administrative Agent of a
Currency Valuation Notice (as defined below), the Administrative Agent shall determine the
aggregate Revolving Credit Exposure. For the purpose of this determination, the
outstanding principal amount of any Advance that is denominated in any Foreign Currency
shall be deemed to be the Dollar Equivalent of the amount in the Foreign Currency of such
Advance, determined as of such Payment Date or, in the case of a Currency Valuation Notice
received by the Administrative Agent prior to 11:00 a.m., New York City time, on a Business
Day, on such Business Day or, in the case of a Currency Valuation Notice otherwise
received, on the first Business Day after such Currency Valuation Notice is received. Upon
making such determination, the Administrative Agent shall promptly notify the Lenders and
the Borrower thereof.

     (ii) Prepayment. If, on the date of such determination the aggregate
Revolving Credit Exposure exceeds 105% of the aggregate amount of the Commitments as then
in effect, the Borrower shall, if requested by the Required Lenders (through the
Administrative Agent), prepay the Syndicated Advances and Swingline Advances (and/or
provide cover for LC Exposure as specified in Section 2.05(k)) in such amounts as shall be
necessary so that after giving effect thereto the aggregate Revolving Credit Exposure does
not exceed the Commitments.

For purposes hereof, “Currency Valuation Notice” means a notice given by the Required Lenders to
the Administrative Agent stating that such notice is a “Currency Valuation Notice” and requesting
that the Administrative Agent determine the aggregate Revolving Credit Exposure. The
Administrative Agent shall not be required to make more than one valuation determination pursuant
to Currency Valuation Notices within any rolling three month period. Any prepayment pursuant to
this paragraph shall be applied, first, to Swingline Advances outstanding, second, to Syndicated
Advances outstanding and third, as cover for LC Exposure.

          (c) Notices, Etc. The Borrower shall notify the Administrative Agent (and, in the
case of prepayment of a Swingline Advance, the Swingline Lender) by telephone (confirmed by
telecopy) of any prepayment hereunder (i) in the case of prepayment of a Eurocurrency Borrowing,
not later than 11:00 a.m., New York City time (or, in the case of a Borrowing denominated in a
Foreign Currency, 11:00 a.m., London time), three Business Days before the date of prepayment, (ii)
in the case of prepayment of a Syndicated Federal Funds Borrowing, not later than 11:00 a.m., New
York City time, one Business Day before the date of prepayment or (iii) in the case of prepayment
of a Swingline Advance, not later than 12:00 noon, New York City time, on the date of prepayment.
Each such notice shall be irrevocable and shall specify the prepayment date, the principal amount
of each Borrowing or portion thereof to be prepaid and, in the case of a mandatory prepayment, a
reasonably detailed calculation of the amount of such prepayment; provided that, if a notice of
prepayment is given in connection with a

 

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conditional notice of termination of the Commitments as
contemplated by Section 2.08, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.08. Promptly following receipt of any such
notice relating to a Syndicated Borrowing, the Administrative Agent shall advise the Lenders of the
contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be
permitted in the case of a Borrowing of the same Type as provided in Section 2.02, except as
necessary to apply fully the required amount of a mandatory prepayment. Each prepayment of a
Syndicated Borrowing shall be applied ratably to the Advances included in the prepaid Borrowing.
Prepayments shall be accompanied by accrued interest to the extent required by Section 2.12 and
shall be made in the manner specified in Section 2.09(b).

          SECTION 2.11. Fees.

          (a) Commitment Fee. The Borrower agrees to pay to the Administrative Agent for
account of each Lender a commitment fee, which shall accrue at a rate per annum equal to 0.15% on
the average daily unused amount of the Commitment of such Lender during the period from and
including the date hereof to but excluding the earlier of the date such Commitment terminates and
the Commitment Termination Date. Accrued commitment fees shall be payable on each Payment Date and
on the earlier of the date the Commitments terminate and the Commitment Termination Date,
commencing on the first such date to occur after the date hereof. All commitment fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day). For
purposes of computing commitment fees, the Commitment of a Lender shall be deemed to be used
to the extent of the outstanding Syndicated Advances and LC Exposure of such Lender (and the
Swingline Exposure of such Lender shall be disregarded for such purpose).

          (b) Letter of Credit Fees. The Borrower agrees to pay (i) to the Administrative Agent
for account of each Lender a participation fee with respect to its participations in Letters of
Credit, which shall accrue at a rate per annum equal to the Applicable Margin applicable to
interest on Eurocurrency Loans on the average daily amount of such Lender’s LC Exposure (excluding
any portion thereof attributable to unreimbursed LC Disbursements) during the period from and
including the Closing Date to but excluding the later of the date on which such Lender’s Commitment
terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) the Issuing
Lender’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter
of Credit or processing of drawings thereunder. Participation fees accrued through and including
each Payment Date shall be payable on such Payment Date, commencing on the first such date to occur
after the Closing Date; provided that all such fees shall be payable on the date on which the
Commitments terminate and any such fees accruing after the date on which the Commitments terminate
shall be payable on demand. Any other fees payable to the Issuing Lender pursuant to this
paragraph shall be payable within 10 days after demand. All participation fees shall be computed
on the basis of a year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).

 

- 29 -

          (c) Administrative Agent Fees. The Borrower agrees to pay to the Administrative
Agent, for its own account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Administrative Agent.

          (d) Payment of Fees. All fees payable hereunder shall be paid on the dates due, in
Dollars and immediately available funds, to the Administrative Agent (or to the Issuing Lender, in
the case of fees payable to it) for distribution, in the case of facility fees and participation
fees, to the Lenders entitled thereto. Fees paid shall not be refundable under any circumstances.

          SECTION 2.12. Interest.

          (a) Federal Funds Advances. The Advances constituting each Federal Funds Borrowing
(including each Swingline Advance) shall bear interest at a rate per annum equal to the Federal
Funds Rate plus the Applicable Margin.

          (b) Eurocurrency Advances. The Advances constituting each Eurocurrency Borrowing
shall bear interest at a rate per annum equal to the Adjusted LIBO Rate for the Interest Period for
such Borrowing plus the Applicable Margin.

          (c) Default Interest. Notwithstanding the foregoing, if any principal of or interest
on any Advance or any fee or other amount payable by the Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration, by mandatory
prepayment or otherwise, such overdue amount shall bear interest, after as well as before judgment,
at a rate per annum equal to (i) in the case of overdue principal of any Advance, 2% plus the rate
otherwise applicable to such Advance as provided above or (ii) in the case of any other amount, 2%
plus the rate applicable to Federal Funds Advances as provided in paragraph (a) of this Section.

          (d) Payment of Interest. Accrued interest on each Advance shall be payable in arrears
on each Payment Date for such Advance and, in the case of Syndicated Advances, upon termination of
the Commitments; provided that interest accrued pursuant to paragraph (c) of this Section shall be
payable on demand.

          (e) Computation. All interest hereunder shall be computed on the basis of a year of
360 days, and in each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Federal Funds Rate or Adjusted LIBO Rate
shall be determined by the Administrative Agent, and such determination shall be conclusive absent
manifest error.

          SECTION 2.13. Alternate Rate of Interest. If prior to the commencement of the
Interest Period for any Eurocurrency Borrowing (the Currency of such Borrowing herein called the
“Affected Currency”):

          (a) the Administrative Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist

 

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for ascertaining the
Adjusted LIBO Rate for the Affected Currency for such Interest Period; or

     (b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO
Rate for the Affected Currency for such Interest Period will not adequately and fairly
reflect the cost to such Lenders of making or maintaining their respective Advances
included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by
telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent
notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer
exist, (i) any Interest Election Request that requests the conversion of any Syndicated Borrowing
to, or the continuation of any Syndicated Borrowing as, a Eurocurrency Borrowing denominated in the
Affected Currency shall be ineffective and, if the Affected Currency is Dollars, such Syndicated
Borrowing (unless prepaid) shall be continued as, or converted to, a Syndicated Federal Funds
Borrowing, (ii) if the Affected Currency is Dollars and any Borrowing Request requests a
Eurocurrency Borrowing denominated in Dollars, such Borrowing shall be made as a Syndicated Federal
Funds Borrowing and (iii) if the Affected Currency is a Foreign Currency, any Borrowing Request
that requests a Eurocurrency Borrowing denominated in the Affected Currency shall be ineffective.

          SECTION 2.14. Increased Costs.

          (a) Increased Costs Generally. If any Change in Law shall:

     (i) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for account of, or credit extended by, any
Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or the
Issuing Lender; or

     (ii) impose on any Lender or the Issuing Lender or the London interbank market any
other condition affecting this Agreement or Eurocurrency Advances made by such Lender or
any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such Lenders of making or
maintaining any Eurocurrency Advance (or of maintaining its obligation to make any such Advance) or
to increase the cost to such Lender or the Issuing Lender of participating in, issuing or
maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such
Lender or the Issuing Lender hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Lender, as the case may be, in Dollars, such
additional amount or amounts as will compensate such Lender or the Issuing Lender, as the case may
be, for such additional costs incurred or reduction suffered.

 

- 31 -

          (b) Capital Requirements. If any Lender or the Issuing Lender determines that any
Change in Law regarding capital requirements has or would have the effect of reducing the rate of
return on such Lender’s or the Issuing Lender’s capital or on the capital of such Lender’s or the
Issuing Lender’s holding company, if any, as a consequence of this Agreement or the Advances made
by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by
the Issuing Lender, to a level below that which such Lender or the Issuing Lender or such Lender’s
or the Issuing Lender’s holding company could have achieved but for such Change in Law (taking into
consideration such Lender’s or the Issuing Lender’s policies and the policies of such Lender’s or
the Issuing Lender’s holding company with respect to capital adequacy), then from time to time the
Borrower will pay to such Lender or the Issuing Lender, as the case may be, in Dollars, such
additional amount or amounts as will compensate such Lender or the Issuing Lender or such Lender’s
or the Issuing Lender’s holding company for any such reduction suffered.

          (c) Certificates from Lenders. A certificate of a Lender or the Issuing Lender
setting forth the amount or amounts, in Dollars, necessary to compensate such Lender or the Issuing
Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this
Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender or the Issuing Lender, as the case may be, the amount shown as due
on any such certificate within 10 days after receipt thereof.

          (d) Delay in Requests. Failure or delay on the part of any Lender or the Issuing
Lender to demand compensation pursuant to this Section shall not constitute a waiver of such
Lender’s or the Issuing Lender’s right to demand such compensation; provided that the Borrower
shall not be required to compensate a Lender or the Issuing Lender pursuant to this Section for any
increased costs or reductions incurred more than six months prior to the date that such Lender or
the Issuing Lender, as the case may be, notifies the Borrower of the Change in Law giving rise to
such increased costs or reductions and of such Lender’s or the Issuing Lender’s intention to claim
compensation therefor; provided further that, if the Change in Law giving rise to such increased
costs or reductions is retroactive, then the six-month period referred to above shall be extended
to include the period of retroactive effect thereof.

          SECTION 2.15. Break Funding Payments. In the event of (a) the payment of any principal of
any Eurocurrency Advance other than on the last day of an Interest Period therefor (including as a
result of an Event of Default), (b) the conversion of any Eurocurrency Advance other than on the
last day of an Interest Period therefor, (c) the failure to borrow, convert, continue or prepay any
Syndicated Advance on the date specified in any notice delivered pursuant hereto (regardless of
whether such notice is permitted to be revocable under Section 2.10(c) and is revoked in accordance
herewith), or (d) the assignment as a result of a request by the Borrower pursuant to Section
2.18(b) of any Eurocurrency Advance other than on the last day of an Interest Period therefor,
then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurocurrency Advance, the loss to any Lender
attributable to any such event shall be deemed to include an amount

 

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determined by such Lender to be
equal to the excess, if any, of (i) the amount of interest that such Lender would pay for a deposit
equal to the principal amount of such Advance denominated in the Currency of such Advance for the
period from the date of such payment, conversion, failure or assignment to the last day of the then
current Interest Period for such Advance (or, in the case of a failure to borrow, convert or
continue, the duration of the Interest Period that would have resulted from such borrowing,
conversion or continuation) if the interest rate payable on such deposit were equal to the Adjusted
LIBO Rate for such Currency for such Interest Period, over (ii) the amount of interest that such
Lender would earn on such principal amount for such period if such Lender were to invest such
principal amount for such period at the interest rate that would be bid by such Lender (or an
affiliate of such Lender) for deposits denominated in such Currency from other banks in the
eurocurrency market at the commencement of such period. A certificate of any Lender setting forth
any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be
delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

          SECTION 2.16. Taxes.

          (a) Payments Free of Taxes. Any and all payments by or on account of any obligation
of the Borrower hereunder or under any other Basic Document shall be
made free and clear of and without deduction for any Indemnified Taxes or Other Taxes;
provided that if the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable under this Section)
the Administrative Agent, Lender or Issuing Lender (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.

          (b) Payment of Other Taxes by the Borrower. In addition, the Borrower shall pay any
Other Taxes to the relevant Governmental Authority in accordance with applicable law.

          (c) Indemnification by the Borrower. The Borrower shall indemnify the Administrative
Agent, each Lender and the Issuing Lender, within 10 days after written demand therefor, for the
full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section) paid by the
Administrative Agent, such Lender or the Issuing Lender, as the case may be, and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or liability delivered to
the Borrower by a Lender or the Issuing Lender, or by the Administrative Agent on its own behalf or
on behalf of a Lender or the Issuing Lender, shall be conclusive absent manifest error.

 

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          (d) Evidence of Payments. As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.

          (e) Foreign Lenders. Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the Borrower is located, or
any treaty to which such jurisdiction is a party, with respect to payments under this Agreement
shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law or reasonably requested by the Borrower, such properly completed and
executed documentation prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate.

          SECTION 2.17. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

          (a) Payments by the Borrower. The Borrower shall make each payment required to be
made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or
under Section 2.14, 2.15 or 2.16, or otherwise) or under any other Basic Document (except to the
extent otherwise provided therein) prior to 12:00 noon, Local Time, on the date when due, in
immediately available funds, without set-off or counterclaim. Any amounts received after such time
on any date may, in the discretion of the Administrative Agent, be deemed to have been received on
the next succeeding Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at the Administrative Agent’s Account, except as
otherwise expressly provided in the relevant Basic Document and except payments to be made directly
to the Issuing Lender or the Swingline Lender as expressly provided herein and payments pursuant to
Sections 2.14, 2.15, 2.16 and 9.03, which shall be made directly to the Persons entitled thereto.
The Administrative Agent shall distribute any such payments received by it for account of any other
Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder
shall be due on a day that is not a Business Day, the date for payment shall be extended to the
next succeeding Business Day and, in the case of any payment accruing interest, interest thereon
shall be payable for the period of such extension. All amounts owing under this Agreement
(including commitment fees, payments required under Section 2.14, and payments required under
Section 2.15 relating to any Advance denominated in Dollars, but not including principal of, and
interest on, any Advance denominated in any Foreign Currency or payments relating to any such
Advance required under Section 2.15, which are payable in such Foreign Currency) or under any other
Basic Document (except to the extent otherwise provided therein) are payable in Dollars.

          (b) Application of Insufficient Payments. If at any time insufficient funds are
received by and available to the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such

 

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funds shall be applied
(i) first, to pay interest and fees then due hereunder, ratably among the parties entitled thereto
in accordance with the amounts of interest and fees then due to such parties, and (ii) second, to
pay principal and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC Disbursements then
due to such parties.

          (c) Pro Rata Treatment. Except to the extent otherwise provided herein: (i) each
Syndicated Borrowing shall be made from the Lenders, each payment of commitment fee under Section
2.11 shall be made for account of the Lenders, and each termination or reduction of the amount of
the Commitments under Section 2.08 shall be applied to the respective Commitments of the Lenders,
pro rata according to the amounts of their respective Commitments; (ii) each Syndicated Borrowing
shall be allocated pro rata among the Lenders according to the amounts of their respective
Commitments (in the case of the making of Syndicated Advances) or their respective Advances that
are to be included in such Borrowing (in the case of conversions and continuations of
Advances); (iii) each payment or prepayment of principal of Syndicated Advances by the
Borrower shall be made for account of the Lenders pro rata in accordance with the respective unpaid
principal amounts of the Syndicated Advances held by them; and (iv) each payment of interest on
Syndicated Advances by the Borrower shall be made for account of the Lenders pro rata in accordance
with the amounts of interest on such Advances then due and payable to the respective Lenders.

          (d) Sharing of Payments by Lenders. If any Lender shall, by exercising any right of
set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on
any of its Syndicated Advances or participations in LC Disbursements or Swingline Advances
resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its
Syndicated Advances and participations in LC Disbursements and Swingline Advances and accrued
interest thereon then due than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value) participations in the
Syndicated Advances and participations in LC Disbursements and Swingline Advances of other Lenders
to the extent necessary so that the benefit of all such payments shall be shared by the Lenders
ratably in accordance with the aggregate amount of principal of and accrued interest on their
respective Syndicated Advances and participations in LC Disbursements and Swingline Advances;
provided that (i) if any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the provisions of this
paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its Advances or
participations in LC Disbursements to any assignee or participant, other than to the Borrower or
any Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower
consents to the foregoing and agrees, to the extent it may effectively do so under applicable law,
that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of set-off and counterclaim with respect to such participation

 

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as fully
as if such Lender were a direct creditor of the Borrower in the amount of such participation.

          (e) Presumptions of Payment. Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due to the Administrative Agent
for account of the Lenders or the Issuing Lender hereunder that the Borrower will not make such
payment, the Administrative Agent may assume that the Borrower has made such payment on such date
in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the
Issuing Lender, as the case may be, the amount due. In such event, if the Borrower has not in fact
made such payment, then each of the Lenders or the Issuing Lender, as the case may be, severally
agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such
Lender or the Issuing Lender with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the Administrative Agent, at
the Federal Funds Effective Rate.

          (f) Certain Deductions by the Administrative Agent. If any Lender shall fail to make
any payment required to be made by it pursuant to Section 2.04(c), 2.05(e), 2.06(b) or 2.17(e),
then the Administrative Agent may, in its discretion (notwithstanding any contrary provision
hereof), apply any amounts thereafter received by the Administrative Agent for account of such
Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied
obligations are fully paid.

          SECTION 2.18. Mitigation Obligations; Replacement of Lenders.

          (a) Designation of a Different Lending Office. If any Lender requests compensation
under Section 2.14, or if the Borrower is required to pay any additional amount to any Lender or
any Governmental Authority for account of any Lender pursuant to Section 2.16, then such Lender
shall use reasonable efforts to designate a different lending office for funding or booking its
Advances hereunder or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i)
would eliminate or reduce amounts payable pursuant to Section 2.14 or 2.16, as the case may be, in
the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such designation or assignment.

          (b) Replacement of Lenders. If any Lender requests compensation under Section 2.14,
or if the Borrower is required to pay any additional amount to any Lender or any Governmental
Authority for account of any Lender pursuant to Section 2.16, or if any Lender defaults in its
obligation to fund Advances hereunder, then the Borrower may, at its sole expense and effort, upon
notice to such Lender and the Administrative Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained in Section 9.04),
all its interests, rights and obligations under this Agreement to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such

 

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assignment);
provided that (i) the Borrower shall have received the prior written consent of the Administrative
Agent (and, if a Commitment is being assigned, the Issuing Lender and the Swingline Lender), which
consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Advances and participations in LC Disbursements
and Swingline Advances, accrued interest thereon, accrued fees and all other amounts payable to it
hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such
assignment resulting from a claim for compensation under Section 2.14 or payments required to be
made pursuant to Section 2.16, such assignment will result in a reduction in such compensation or
payments. A Lender shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

          SECTION 3.01. Representations and Warranties of the Borrower and the Depositor. The
Borrower and the Depositor hereby jointly and severally make the following representations and
warranties to the Administrative Agent and each Lender, as of the Closing Date and as of the date
of each Credit Extension, and the Lenders shall be deemed to have relied on such representations
and warranties in making each Credit Extension on each Credit Extension Date:

     (a) Organization and Qualification. The Borrower has been duly organized and
is validly existing and in good standing as a statutory trust under the laws of the State
of Delaware, with requisite trust power and authority to own its properties and to transact
the business in which it is now engaged, including to enter into and perform its
obligations under each Basic Document to which it is a party, and is duly qualified to do
business and is in good standing (or is exempt from such requirements) in each State of the
United States where the nature of its business requires it to be so qualified and the
failure to be so qualified and in good standing could reasonably be expected to have a
material adverse effect (herein, a “Material Adverse Effect”) on (i) the business,
assets, operations or condition, financial or otherwise, of the Borrower and its
Subsidiaries taken as a whole, (ii) the ability of the Borrower to perform any of its
obligations under this Agreement or any of the other Basic Documents to which it is a party
or (iii) the rights of or benefits available to the Lenders under this Agreement or any of
the other Basic Documents.

     (b) No Conflict. The execution, delivery and performance by the Borrower of
its obligations under each Basic Document to which it is a party and the consummation of
the transactions therein contemplated will not conflict with or result in a breach of any
of the terms or provisions of, or constitute a default

 

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under, or result in the creation or
imposition of any Lien (other than any Lien created by the Basic Documents), charge or
encumbrance upon any of the property or assets of the Borrower or any of its Affiliates
pursuant to the terms of, any of its organizational documents or any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which it or any of its
Affiliates is bound or to which any of its property or assets is subject, nor will such
action result in any violation of the provisions of its organizational documents or any
Governmental Rule applicable to the Borrower or any of its properties.

     (c) Authorization and Enforceability. Each of the Basic Documents to which
the Borrower is a party has been duly authorized, executed and delivered by the Borrower
and (assuming due authorization, execution and delivery by each other party thereto) is a
valid and legally binding obligation of the Borrower, enforceable against the Borrower in
accordance with its terms, subject to
enforcement of bankruptcy, insolvency, reorganization, moratorium and other similar
laws of general applicability relating to or affecting creditors’ rights and to general
principles of equity, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, receivership, moratorium or other similar laws relating to or
affecting the rights of creditors generally, and by general equity principles (regardless
of whether such enforcement is considered in a proceeding in equity or at law).

     (d) No Violation. The Borrower is not in violation of its organizational
documents or in default under any agreement, indenture or instrument the effect of which
violation or default could reasonably be expected to have a Material Adverse Effect. The
Borrower is not in violation of any Governmental Rule of any Governmental Authority having
jurisdiction, which violation could reasonably be expected to have a Material Adverse
Effect.

     (e) Governmental Action. No Governmental Action is required for (i) the
execution, delivery and performance by the Borrower of, or compliance by the Borrower with,
any of the Basic Documents to which the Depositor is a party, (ii) the purchase or
acceptance as a contribution of Loans and Assets from the Depositor, or (iii) the
consummation of the transactions required of it by any Basic Document to which it is a
party, except such as shall have been obtained before the date hereof, other than the
filing or recording of financing statements, instruments of assignment and other similar
documents necessary in connection with the sale and contribution of Loans and Assets to the
Borrower.

     (f) Licenses. The Borrower possesses all material licenses, certificates,
authorities or permits issued by the appropriate state, federal or foreign regulatory
agencies or bodies necessary to conduct the business now operated by it, and has not
received any notice of proceedings relating to the revocation or modification of any such
license, certificate, authority or permit which, singly or in the aggregate, would
reasonably be expected to have a Material Adverse Effect.

 

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     (g) Litigation. There are no actions or proceedings against, or
investigations of, the Borrower currently pending with regard to which the Borrower has
received service of process and no action or proceeding against, or investigation of, the
Borrower is, to the knowledge of the Borrower, threatened or otherwise pending before any
Governmental Authority that (i) would prohibit its entering into any of the Basic Documents
to which it is a party or render the Credit Extensions invalid, (ii) seeks to prevent the
making of the Credit Extensions or the consummation of any of the transactions contemplated
by any of the Basic Documents to which it is a party, (iii) would prohibit or materially
and adversely affect the performance by the Borrower of its obligations under, or the
validity or enforceability of, any of the Basic Documents to which it is a party, (iv) that
could reasonably be expected to have a Material Adverse Effect or (v) seeking to affect
adversely the income tax treatment of the Credit Extensions.

     (h) Investment Company Act. The Borrower is not, and neither the making of
the Credit Extensions nor the activities of the Borrower pursuant to the Basic Documents,
shall require the Borrower to register as an “investment company” or under the “control” of
an “investment company” as such terms are defined in the Investment Company Act of 1940, as
amended.

     (i) Solvency. The Borrower is solvent, is able to pay its debts as they
become due and has capital sufficient to carry on its business and its obligations
hereunder; it will not be rendered insolvent by the execution and delivery of any of the
Basic Documents to which it is a party or the assumption of any of its obligations
thereunder; no petition of bankruptcy (or similar insolvency proceeding) has been filed by
or against the Borrower.

     (k) Title. The Borrower has good and valid title to, and the Borrower is the
sole owner of, each Loan or Asset transferred by the Depositor to the Borrower, and the
Administrative Agent has a first priority perfected Lien in each such Loan and Asset, in
each case free and clear of any other Lien. The Borrower acquired title to each of such
Loans and Assets in good faith, without notice of any adverse claim.

     (l) Disclosure. None of the Basic Documents to which the Borrower is a party,
nor any certificate, statement, report or other document prepared by the Borrower and
furnished or to be furnished by it pursuant to any of the Basic Documents to which it is a
party or in connection with the transactions contemplated thereby contains any untrue
statement of material fact or omits to state a material fact necessary to make the
statements contained herein or therein not misleading.

     (m) Brokers. The Borrower has not dealt with any broker or agent or other
Person who might be entitled to a fee, commission or compensation in connection with the
transaction contemplated by this Agreement or any of the other Basic Documents.

 

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     (n) Chief Executive Offices. The principal place of business and chief
executive offices of the Borrower are located at c/o Wilmington Trust Company, Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890, or, with the consent of
the Administrative Agent, such other address as shall be designated by the Borrower in a
written notice to the other parties hereto.

          SECTION 3.02. Information. The information provided pursuant to Section 5.01 hereof will,
at the date thereof, be true and correct in all material respects.

          SECTION 3.03. Use of Proceeds. No proceeds of an Advance made hereunder will be used
(i) for a purpose that violates or would be inconsistent with Regulations T, U or X promulgated by
the Board of Governors of the Federal Reserve System from time to time or (ii) to
acquire any security in any transaction in violation of Section 13 or 14 of the Exchange Act.

          SECTION 3.04. The Depositor. The Depositor hereby makes to the Administrative Agent
and each Lender each of the representations, warranties and covenants set forth in Section 3.01 and
3.03 of the Sale and Servicing Agreement as of the Closing Date and as of the date of each Credit
Extension (except to the extent that any such representation, warranty or covenant is expressly
made as of another date).

          SECTION 3.05. Taxes, etc. Any taxes, fees and other charges of Governmental
Authorities applicable to the Borrower and the Depositor, except for franchise or income taxes, in
connection with the execution, delivery and performance by the Borrower and the Depositor of each
Basic Document to which they are parties, the making of the Credit Extensions or otherwise
applicable to the Borrower or the Depositor in connection with the Owner Trust Estate have been
paid or will be paid by the Borrower or the Depositor, as applicable, at or prior to the Closing
Date or the date of each Borrowing, as applicable, to the extent then due.

          SECTION 3.06. Financial Condition. On the date hereof and on the date of each
Borrowing, neither the Borrower nor the Depositor is subject to a Bankruptcy Event or has reason to
believe that its insolvency is imminent.

 

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ARTICLE IV

CONDITIONS

          SECTION 4.01. Closing Date. The obligations of the Lenders to make Advances and of
the Issuing Lender to issue Letters of Credit hereunder shall not become effective until the date
on which the Administrative Agent shall have received each of the following documents, each of
which shall be satisfactory to the Administrative Agent (and to the extent specified below, to each
Lender) in form and substance (or such condition shall have been waived in accordance with Section
9.02):

     (a) Documents. A duly executed counterpart of each of the Basic Documents,
and each and every document or certification delivered by any party in connection with any
of the Basic Documents, and each such document shall be in full force and effect.

     (b) Performance by the Borrower, the Depositor, the Servicer and the
Originator. An Officer’s Certificate from of each of the Depositor, the Servicer and
the Originator and a certificate of an Authorized Officer of the Borrower, dated the
Closing Date, (i) that all the terms, covenants, agreements and
conditions of this Agreement and each of the other Basic Documents to be complied with
and performed by the Borrower, the Depositor, the Servicer and the Originator on or before
the Closing Date have been complied with and performed in all material respects and (ii)
that each of the representations and warranties of the Borrower, the Depositor, the
Servicer and the Originator made in this Agreement and each of the other Basic Documents
are true and correct in all material respects as of the Closing Date (except to the extent
they expressly relate to an earlier or later time). In addition, the Administrative Agent
shall have received an Officer’s Certificate from the Servicer, dated the Closing Date,
that no Servicer Default shall have occurred and be continuing and a certificate of an
Authorized Officer of the Borrower, dated the Closing Date, that no Default shall have
occurred and be continuing.

     (c) Financial Covenants. An Officer’s Certificate from the Originator, dated
the Closing Date, that the Originator is in compliance with the financial covenants set
forth in Section 7.01 of the Sale and Servicing Agreement.

     (d) Organization Documents. Such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the organization,
existence and good standing of the Depositor, the Servicer, the Originator and the
Borrower, the authorization of the transactions contemplated by each of the Basic Documents
to which they are a party and any other legal matters relating to the Depositor, the
Servicer, the Originator and the Borrower, this Agreement or such transactions.

     (e) Opinions of Counsel to the Borrower, the Originator, the Servicer and the
Depositor. Counsel to the Borrower, the Originator, the Servicer and the

 

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Depositor shall have delivered to the Administrative Agent favorable opinions, dated as of the
Closing Date. In addition to the foregoing, the Originator shall have caused its counsel
to deliver to the Administrative Agent an opinion to the effect that the Borrower will not
be treated as an association (or publicly traded partnership) taxable as a corporation or
as a taxable mortgage pool, for federal income tax purposes.

     (f) Opinions of Counsel to the Owner Trustee. Delaware counsel to the Owner
Trustee of the Borrower shall have delivered to the Administrative Agent favorable opinions
regarding the formation, existence and standing of the Borrower and of the Borrower’s
execution, authorization and delivery of each of the Basic Documents to which it is a party
and such other matters as the Administrative Agent may reasonably request, dated as of the
Closing Date.

     (g) Approvals and Consents. Copies of all Governmental Actions of all
Governmental Authorities required with respect to the transactions contemplated by the
Basic Documents and the documents related thereto.

     (h) Accounts. Evidence that each Trust Account has been established in
accordance with the terms of the Sale and Servicing Agreement.

     (i) Other Documents. Such other opinions, information, certificates and
documents as the Administrative Agent may reasonably request.

          The obligation of each Lender to make its initial extension of credit hereunder is also
subject to the payment by the Borrower of such fees as the Borrower shall have agreed to pay to any
Lender or the Administrative Agent in connection herewith, including the reasonable fees and
expenses of Milbank, Tweed, Hadley & McCloy LLP, special New York counsel to JPMCB, in connection
with the negotiation, preparation, execution and delivery of this Agreement and the other Basic
Documents and the extensions of credit hereunder (to the extent that statements for such fees and
expenses have been delivered to the Borrower).

          The Administrative Agent shall notify the Borrower and the Lenders of the Closing Date, and
such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the
Lenders to make Advances and of the Issuing Lender to issue Letters of Credit hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived pursuant to
Section 9.02) on or prior to 3:00 p.m., New York City time, on July 15, 2005 (and, in the event
such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

 

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          SECTION 4.02. Each Credit Event. The obligation of each Lender to make any Advance,
and of the Issuing Lender to issue, amend, renew or extend any Letter of Credit, on any Credit
Extension Date, including any of the foregoing on the Closing Date, is additionally subject to the
satisfaction of the following conditions:

     (a) each of the representations and warranties of the Credit Parties, the Depositor,
the Servicer and the Originator made in this Agreement and each of the other Basic
Documents shall be true and correct on and as of such Credit Extension Date (except to the
extent they expressly relate to an earlier or later time);

     (b) at the time of and immediately after giving effect to such Advance or the
issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no
Default or Servicer Default shall have occurred and be continuing;

     (c) the Administrative Agent shall have received (i) a Borrowing Base Certificate as
of such Credit Extension Date demonstrating that, after giving effect to the making of such
Advance or the issuance, amendment, renewal or extension of such Letter of Credit, the
Revolving Credit Exposure shall not exceed the lesser of the Borrowing Base and the
Commitments, (ii) a copy of the S&SA Assignment executed by the Depositor and the Borrower
with respect to the Eligible Loans proposed as Collateral for such Advance or Letter of
Credit, (iii) a copy of the LPA Assignment executed by the Originator and the Depositor and
(iv) such additional information as may be reasonably requested by the Administrative
Agent;

     (d) in the case of an Advance denominated in an Agreed Foreign Currency, the
Administrative Agent shall have received evidence reasonably satisfactory to it that, as to
each Advance (including such Advance) denominated in an Agreed Foreign Currency, there is
included in the Loan Pool an Eligible Loan denominated in such Agreed Foreign Currency in a
principal amount equal to the amount of such Advance divided by the Purchase Price
Percentage (expressed as a decimal) for such Eligible Loan and having a maturity (or
interest period) equal to the duration of the Interest Period for such Advance hereunder;

     (e) the Administrative Agent shall have received evidence reasonably satisfactory to
it of the completion of all recordings, registrations, and filings as may be necessary or,
in the reasonable opinion of the Administrative Agent, desirable, to perfect or evidence
(i) the assignment by the Originator to the Depositor of the Originator’s ownership
interest in the Owner Trust Estate including the Loans, the Loan Collateral, the Assets and
the proceeds of each being conveyed on such Credit Extension Date, (ii) the assignment by
the Depositor to the Borrower (or, in the case of REO, the REO Subsidiary) of the
Depositor’s ownership interest in the Collateral including such Loans, Loan Collateral,
Assets and proceeds, and (iii) the grant of a first priority perfected security interest in
the Credit Parties’ ownership interest in the Collateral including such Loans, Loan
Collateral, Assets and proceeds, in favor of the

 

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Administrative Agent, subject to no Liens
prior to the Lien Granted pursuant to the Guarantee and Security Agreement; and

     (f) each condition set forth in Section 2.06 of the Sale and Servicing Agreement
applicable to the Loans, Loan Collateral and Assets being transferred to the Depositor and
the Credit Parties on such date shall have been satisfied.

          In addition, the Borrower shall or shall cause the Servicer to deliver to the Collateral
Custodian no later than 12:00 p.m. New York time on the Business Day prior to such Credit Extension
Date (or, in the case of the acquisition of a Loan or Asset financed with the proceeds of a
Swingline Advance, before 3:00 p.m. New York time on such Credit Extension Date), by facsimile
transmission or in an electronic format mutually agreed upon by the Servicer and the Collateral
Custodian, a copy of the duly executed original Underlying Notes (if any) of the Eligible Loans and
the related Assignments of Mortgage (if any) and, if any Loans are closed in escrow, a certificate
from the closing attorneys of such Eligible Loans, in form and substance satisfactory to the
Servicer and the Administrative Agent, certifying the possession of the Required Loan Documents;
provided that, notwithstanding the foregoing, the Required Loan Documents (including any UCCs
included in the Required Loan Documents) shall be in the possession of the Collateral Custodian
within two (2) Business Days of any related Credit Extension Date as to such Loans.

          Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall
be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the
matters specified in clauses (a) through (f) above. The Administrative Agent shall determine in
its reasonable discretion whether each of the above conditions have been satisfied and its determination shall be binding on the parties
hereto.

 

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ARTICLE V

AFFIRMATIVE COVENANTS

          Until the Commitments have expired or been terminated and the principal of and interest on
each Advance and all fees payable hereunder shall have been paid in full and all Letters of Credit
shall have expired or terminated and all LC Disbursements shall have been reimbursed, the Borrower
and the Depositor (as applicable) covenants and agrees with the Lenders that:

          SECTION 5.01. Annual Statement as to Compliance. The Borrower will deliver to the
Administrative Agent, within 120 days after the end of each fiscal year of the Borrower (commencing
with the first fiscal year ending after the date hereof), an Officer’s Certificate stating, as to
the Authorized Officer signing such Officer’s Certificate, that:

     (a) a review of the activities of the Credit Parties during such year and of their
performance under this Agreement and each of the other Basic documents has been made under
such Authorized Officer’s supervision; and

     (b) to the best of such Authorized Officer’s knowledge, based on such review, the
Credit Parties have complied in all material respects with all conditions and covenants
under this Agreement and the other Basic Documents throughout such year and that no Default
has occurred and is continuing, or, if there has been a default in its compliance with any
such condition or covenant, or the occurrence of any Default specifying each such default
known to such Authorized Officer and the nature and status thereof.

          SECTION 5.02. Notices of Certain Events; Information. The Borrower and the Depositor
will furnish to the Administrative Agent and each Lender prompt written notice of the following:

     (a) Defaults. As soon as possible and in any event within five Business Days
after a Responsible Officer obtains knowledge of the occurrence thereof, notice of each
Default and Event of Default under the Sale and Servicing Agreement or the Guarantee and
Security Agreement.

     (b) Changes in Address. Promptly and in any event within thirty days after
the occurrence thereof, written notice of a change in address of the chief executive office
or place of organization of any Credit Party, the Originator or the Depositor.

     (c) Other Information. Such information (including financial information),
documents, records or reports with respect to the Collateral,
including the Loans and the Loan Collateral, the Credit Parties, the Originator, the
Servicer or the Depositor as the Administrative Agent on behalf of any Lender may from time
to time reasonably request.

 

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          SECTION 5.03. Existence, Etc.

          (a) Existence, Rights and Franchises, Etc. Subject to subparagraph (b) of this
Section, the Borrower will keep in full effect its existence, rights and franchises as a statutory
trust under the laws of the State of Delaware (unless it becomes, or any successor Borrower
hereunder is or becomes, organized under the laws of any other State or of the United States of
America, in which case the Borrower will keep in full effect its existence, rights and franchises
under the laws of such other jurisdiction) and will obtain and preserve its qualification to do
business in each jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, the other Basic Documents to which it is a party and
the Collateral. The Borrower shall comply in all respects with the covenants contained in the
Trust Agreement, including without limitation, the “special purpose entity” covenants set forth in
Section 4.01 thereof.

          The Borrower will cause each of its Subsidiaries to keep in full effect its existence, rights
and franchises under the laws of the jurisdiction of its organization and will obtain and preserve
its qualification to do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of the Basic Documents to which it is a party
and the Collateral and in which the failure to obtain or preserve such qualification would have a
Material Adverse Effect.

          (b) Successor Owner Trustee. Any successor to the Owner Trustee appointed pursuant to
Section 10.3 of the Trust Agreement shall be the successor Owner Trustee under this Agreement
without the execution or filing of any paper, instrument or further act to be done on the part of
the parties hereto.

          (c) Rights of Successor Owner Trustee. Upon any consolidation or merger of or other
succession to the Owner Trustee, the Person succeeding to the Owner Trustee under the Trust
Agreement may exercise every right and power of the Owner Trustee under this Agreement with the
same effect as if such Person had been named as the Owner Trustee herein.

          SECTION 5.04. Access to Information. Each of the Borrower, the Depositor and the
Originator and the Subsidiaries of the Borrower and the Depositor shall, on reasonable request no
more than twice per calendar year (provided, that if an Event of Default has occurred and is
continuing, there shall be no limitation on frequency) during regular business hours, permit the
Administrative Agent or any Lender, or their agents or representatives to:

     (a) examine all books, records and other documents (including computer tapes and
disks) in the possession or under the control of the Borrower,
the Depositor or the Originator or any of the Subsidiaries of the Borrower and the
Depositor relating to the Loans, the Assets or the Basic Documents as may be requested (it
being understood that the scope of such examination may include a review of the procedures
in which loans and other assets are allocated by the Originator to the Borrower and other
financing trusts and, consequently, may

 

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involve the review of books, records and other
documents relating to such procedures and other allocations for other trusts through which
the Originator obtains financing for its business operations), and

     (b) visit the offices and property of the Borrower, the Depositor and the Originator
and the Subsidiaries of the Borrower and the Depositor for the purpose of examining such
materials described in clause (a) above.

          SECTION 5.05. Ownership and Security Interests; Further Assurances. The Originator
and the Depositor will take all action reasonably necessary to maintain the respective ownership
interests of the Borrower and the other Credit Parties in the Loans, the Assets and the other items
sold pursuant to Article II of the Sale and Servicing Agreement. The Borrower and the Depositor
will, and will cause their respective Subsidiaries to, take all action necessary to maintain the
Administrative Agent’s security interest in the Loans, the Assets and the other items pledged to
the Administrative Agent pursuant to the Security Documents.

          The Borrower and the Depositor agree to take, and to cause their respective Subsidiaries to
take, any and all acts and to execute any and all further instruments reasonably necessary or
requested by the Administrative Agent or any Lender to more fully effect the purposes of this
Agreement.

          SECTION 5.06. Covenants. The Borrower and the Depositor shall each duly observe and
perform, and cause their respective Subsidiaries to observe and perform, each of their respective
covenants set forth in each of the Basic Documents to which they are parties.

          SECTION 5.07. Amendments. None of the Borrower, the Depositor or the Originator nor
any of their respective Subsidiaries shall make, or permit any Person to make, any amendment,
modification or change to, or provide any waiver under any Basic Document to which the Borrower,
the Depositor, the Originator or any of such Subsidiaries, as applicable, is a party without the
prior written consent of the Administrative Agent (with the consent of the Required Lenders);
provided that, (i) without the written consent of each Lender, no such agreement shall
release all or substantially all of the Credit Parties from their respective obligations under the
Security Documents and (ii) without the written consent of each Lender, no such agreement shall
release all or substantially all of the collateral security or otherwise terminate all or
substantially all of the Liens under the Security Documents, alter the relative priorities of the
obligations entitled to the Liens created under the Security Documents with respect to all or
substantially all of the collateral security provided thereby, or release all or substantially all
of the guarantors under the Guarantee and Security Agreement from their guarantee obligations
thereunder, except that no such consent shall be required, and the Administrative Agent is hereby authorized (and so agrees with
the Borrower) to release any Lien covering property (and to release any such guarantor) that is the
subject of either a disposition of property permitted hereunder or a disposition to which the
Required Lenders have consented.

 

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          SECTION 5.08. Performance of Obligations; Servicing of Loans.

          (a) No Adverse Actions. The Borrower shall not take any action and will use its
commercially reasonable efforts not to permit any action to be taken by others that would release
any Person from any of such Person’s material covenants or obligations under any instrument or
agreement included in the Collateral or that would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the validity or effectiveness of, any such
instrument or agreement, except as expressly provided in the Basic Documents or such other
instrument or agreement.

          (b) Performance by Servicers, Etc. The Borrower may contract with or otherwise obtain
the assistance of other Persons (including, without limitation, the Administrator under the
Administration Agreement) to assist it in performing its duties under this Agreement, and any
performance of such duties by a Person identified to the Administrative Agent in an Officer’s
Certificate of the Borrower shall be deemed to be action taken by the Borrower. Initially, the
Borrower has contracted with the Servicer to assist the Borrower in performing its duties under
this Agreement.

          (c) Covenants under Loan Instruments. The Borrower will punctually perform and
observe all of its obligations and agreements contained in the instruments and agreements included
in the Collateral, including but not limited to (i) filing or causing to be filed all UCC financing
statements and continuation statements required to be filed by the terms of this Agreement, the
Guarantee and Security Agreement and the Sale and Servicing Agreement and (ii) recording or causing
to be recorded all Borrower Mortgages, Assignments of Borrower Mortgage, all intervening
Assignments of Borrower Mortgage, all Mortgages, Assignments of Mortgage, all intervening
Assignments of Mortgage and all assumption and modification agreements required to be recorded by
the terms of the Sale and Servicing Agreement, in accordance with and within the time periods
provided for in this Agreement and/or the Sale and Servicing Agreement, as applicable. Except as
otherwise expressly provided therein, the Borrower shall not waive, amend, modify, supplement or
terminate any Basic Document or any provision thereof without the consent of the Administrative
Agent and the Required Lenders.

          (d) Servicer Event of Default. If a Servicer Event of Default shall be continuing due
to the failure of the Servicer to perform any of its duties or obligations under the Sale and
Servicing Agreement with respect to the Loans or the Assets, the Borrower shall take all reasonable
steps available to it to remedy such failure.

          (e) Notice of Appointment of Successor Servicer. Upon any termination of the
Servicer’s rights and powers pursuant to the Sale and Servicing Agreement, the Borrower shall promptly notify the Administrative Agent. As soon as a
successor servicer is appointed, the Borrower shall notify the Administrative Agent of such
appointment, specifying in such notice the name and address of such successor servicer.

 

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          (f) Amendments of Loan Instruments. Without derogating from the absolute nature of
the assignment granted to the Administrative Agent under the Guarantee and Security Agreement or
the rights of the Administrative Agent hereunder, the Borrower agrees (i) that it will not, without
the prior written consent of the Administrative Agent, amend, modify, waive, supplement, terminate
or surrender, or agree to any amendment, modification, supplement, termination, waiver or surrender
of, the terms of any Collateral (except to the extent otherwise permitted by the Sale and Servicing
Agreement) or the Basic Documents, or waive timely performance or observance by the Servicer or the
Depositor under the Sale and Servicing Agreement; and (ii) that no such amendment shall increase or
reduce in any manner the amount of, or accelerate or delay the timing of, distributions that are
required to be made for the benefit of the Lenders. If any such amendment, modification,
supplement or waiver shall so be consented to by the Administrative Agent, the Borrower agrees,
promptly following a request by the Administrative Agent to do so, to execute and deliver, in its
own name and at its own expense, such agreements, instruments, consents and other documents as the
Administrative Agent may deem necessary or appropriate in the circumstances.

          SECTION 5.09. Treatment of Credit Extensions as Debt for All Purposes. The Borrower
shall, and shall cause the Administrator to, treat the Credit Extensions as indebtedness for all
purposes.

          SECTION 5.10. Use of Proceeds. The Borrower shall use the proceeds of the Advances solely
to finance the purchase of the Loans and the Assets and to pay costs and expenses associated with
the Basic Documents.

          SECTION 5.11. Further Instruments and Acts.

          (a) Subsidiary Guarantors. In the event that the Borrower or any of its Subsidiaries
shall form or acquire any new Subsidiary (including any Equity Subsidiary or REO Subsidiary), the
Borrower will cause such new Subsidiary to become a “Subsidiary Guarantor” (and, thereby, a “Credit
Party”) under a Guarantee Assumption Agreement and to deliver such proof of corporate or other
action, incumbency of officers, opinions of counsel and other documents as is consistent with those
delivered by a Guarantor pursuant to Section 4.01 upon the Closing Date or as the Administrative
Agent shall have reasonably requested.

          (b) Ownership of Subsidiaries. The Borrower will, and will cause each of its
Subsidiaries to, take such action from time to time as shall be necessary to ensure that each of
its Subsidiaries is a wholly owned Subsidiary.

          (c) Further Assurances. The Borrower will, and will cause each of the Subsidiary
Guarantors to, take such action from time to time as shall reasonably be requested by the
Administrative Agent to effectuate the purposes and objectives of this Agreement. Without limiting
the generality of the foregoing, the Borrower will, and will cause each of the other Credit Parties
to, from time to time execute and deliver all such reasonable supplements and amendments hereto and
all such financing statements,

 

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continuation statements, instruments of further assurance and other
instruments, and will take such other action necessary or advisable to:

     (a) provide further assurance with respect to the Grant of all or any portion of the
Collateral;

     (b) maintain or preserve the lien and security interest (and the priority thereof) of
this Agreement or carry out more effectively the purposes hereof;

     (c) perfect, publish notice of or protect the validity of any Grant made or to be made
by the Guarantee and Security Agreement;

     (d) enforce any rights with respect to the Collateral; and

     (e) preserve and defend title to the Collateral and the rights of the Administrative
Agent and the Lenders in such Collateral against the claims of all Persons and parties.

          The Borrower hereby designates the Administrator, its agent and attorney-in-fact to execute
any financing statement, continuation statement or other instrument required to be executed
pursuant to this Section.

          (d) Special Exclusion for Equity Subsidiaries. Notwithstanding the foregoing, no
Equity Subsidiary shall be required to grant any collateral security in any of its assets under the
Guarantee and Security Agreement, but shall only be required to be a Subsidiary Guarantor
thereunder.

ARTICLE VI

NEGATIVE COVENANTS

          Until the Commitments have expired or terminated and the principal of and interest on each
Advance and all fees payable hereunder have been paid in full and all Letters of Credit have
expired or terminated and all LC Disbursements shall have been reimbursed, the Borrower covenants
and agrees with the Lenders that it will not, and will not permit any of its Subsidiaries to:

     (a) except as expressly permitted by the Basic Documents, sell, transfer, exchange or
otherwise dispose of any of its properties or assets, including those included in any part
of the Owner Trust Estate, unless directed to do so by the Administrative Agent on behalf
of the Lenders as permitted herein;

     (b) claim any credit on, or make any deduction from the principal or interest payable
in respect of, the Advances (other than amounts properly withheld from such payments under
the Code) or assert any claim against any present or former Lender by reason of the payment
of the taxes levied or assessed upon any part of the Owner Trust Estate;

 

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     (c) engage in any business or activity other than as expressly permitted by this
Agreement and the other Basic Documents, other than in connection with, or relating to, the
Credit Extensions pursuant to this Agreement, or amend this Agreement as in effect on the
Closing Date other than in accordance with Article IX;

     (d) incur or assume any Indebtedness, or guaranty any indebtedness of any Person,
except for such Indebtedness as may be incurred by the Borrower in connection with the
Credit Extensions pursuant to this Agreement;

     (e) dissolve or liquidate in whole or in part or merge or consolidate with any other
Person;

     (f)  (i) permit the validity or effectiveness of this Agreement to be impaired, or
permit the Liens granted pursuant to the Security Documents to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released from any
covenants or obligations hereunder or under any other Basic Document except as may
expressly be permitted hereby, (ii) except as provided in the Basic Documents, permit any
Lien to be created on or extend to or otherwise arise upon or burden the Owner Trust Estate
or any part thereof or any interest therein or the proceeds thereof (other than, tax liens,
mechanics’ liens and other liens that arise by operation of law, in each case, on any
Mortgaged Property and arising solely as a result of an action or omission of the related
Obligors) or (iii) except as provided in the Basic Documents, permit any Person other than
itself, the Owner Trustee, the Administrative Agent and the Lenders to have any right,
title or interest in the Owner Trust Estate;

     (g) remove the Administrator without the prior written consent of the Required
Lenders;

     (h) take any other action or fail to take any action which may cause the Borrower to
be taxable as (x) an association pursuant to Section 7701 of the Code and the corresponding
regulations, or (y) as a taxable mortgage pool pursuant to Section 7701(i) of the Code; or

     (i) (i)pay any dividend or make any distribution (by reduction of capital or
otherwise), whether in cash, property, securities or a combination thereof, to the Owner
Trustee or any owner of a beneficial interest in the Borrower or otherwise with respect to
any ownership or equity interest or security in or of the Borrower or to the Servicer, (ii)
redeem, purchase, retire or otherwise acquire for value any such ownership or equity
interest or security or (iii) set aside or otherwise segregate any amounts for any such purpose; provided, however, that the
Borrower may make, or cause to be made distributions to the Servicer, the Administrative
Agent, the Owner Trustee and the Lenders and the holders of the Trust Certificates as
contemplated by, and to the extent funds are available for such purpose under, the Sale and
Servicing Agreement or the Trust Agreement. The Borrower will not, directly or indirectly,
make or cause to be made payments

 

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to or distributions from the Trust Accounts except in accordance with this Agreement and the Basic Documents.

ARTICLE VII

EVENTS OF DEFAULT

          If any of the following events (“Events of Default)” shall occur and be continuing
(whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or
be effected by operation of law or pursuant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental body):

     (a) notwithstanding any insufficiency of funds in the Distribution Account for payment
thereof on the related Payment Date, default in the payment of any interest on any Advance,
or reimbursement obligation in respect of any LC Disbursement, within two Business Days of
when the same becomes due and payable; or

     (b) notwithstanding any insufficiency of funds in the Distribution Account for payment
thereof on the related Payment Date, default in the payment of any installment of the
principal required to be made pursuant to the Sale and Servicing Agreement of any Advance
or reimbursement obligation in respect of any LC Disbursement (i) on any Payment Date or
(ii) on the Commitment Termination Date or, to the extent that there are funds available in
the Distribution Account therefor, default in the payment of any installment of the
principal of any Advance or reimbursement obligation in respect of any LC Disbursement from
such available funds, as a result of the occurrence of a Trigger Event; or

     (c) the occurrence of a Servicer Event of Default; or

     (d) default in the observance or performance of any covenant or agreement of any
Credit Party in any Basic Document to which it is a party (other than a covenant or
agreement, a default in the observance or performance of which is elsewhere in this Article
specifically dealt with), or any representation or warranty of any Credit Party made in any
Basic Document to which it is a party or in any certificate or other writing delivered
pursuant thereto or in connection therewith proving to have been incorrect in any material
respect as of the time when the same shall have been made, and such default shall continue
or not be cured, or the circumstance or condition in respect of which such
misrepresentation or warranty was incorrect shall not have been eliminated or otherwise
cured, for a period of thirty days after there shall have been given to the Borrower by the
Administrative Agent or any Lender a written notice specifying such default or incorrect
representation or warranty and requiring it to be remedied and stating that such notice is
a notice of Default hereunder; or

     (e) default in the observance or performance of any covenant or agreement of the
Depositor made in any Basic Document to which it is a party or

 

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any representation or
warranty of the Depositor (except as otherwise expressly provided in the Basic Documents
with respect to representations and warranties regarding the Loans) or Originator made in
any Basic Document to which they are a party, proving to have been incorrect in any
material respect as of the time when the same shall have been made, and such default shall
continue or not be cured, or the circumstance or condition in respect of which such
misrepresentation or warranty was incorrect shall not have been eliminated or otherwise
cured, for a period of thirty days after there shall have been given, to the Borrower by
the Administrative Agent or any Lender a written notice specifying such Default or
incorrect representation or warranty and requiring it to be remedied and stating that such
notice is a notice of Default hereunder; or

     (f) default in the observance or performance of any covenant or agreement of the
Originator made in any repurchase agreement, loan and security agreement or other similar
credit facility agreement entered into by the Originator and any third party for borrowed
funds in excess of $10,000,000, it being understood that a default under another agreement
shall constitute an Event of Default hereunder only when and if the lender or counterparty
under the other agreement is presently entitled to exercise default remedies by the terms
of that other agreement; or

     (g) the filing of a decree or order for relief by a court having jurisdiction over any
Credit Party, the Depositor or the Originator or all or substantially all of the Collateral
in an involuntary case under any applicable federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or the appointing of a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of any Credit Party, the
Depositor or the Originator or for all or substantially all of the Collateral, or the
ordering of the winding-up or liquidation of the affairs of any Credit Party, the Depositor
or the Originator, and such decree or order shall remain unstayed and in effect for a
period of sixty consecutive days; or

     (h) the commencement by any Credit Party, the Depositor or the Originator of a
voluntary case under any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by any Credit Party, the Depositor
or the Originator to the entry of an order for relief in an involuntary case under any such
law, or the consent by any Credit Party to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of any
Credit Party, the Depositor or the Originator or for any substantial part of the
Collateral, or the making by any Credit Party, the Depositor or the Originator of any
general assignment for the benefit of creditors, or the failure by any Credit Party, the Depositor or the
Originator generally to pay its respective debts as such debts become due, or the taking of
any action by any Credit Party, the Depositor or the Originator in furtherance of any of
the foregoing;

 

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then, and in every such event (other than an event with respect to the Borrower described in clause
(g) or (h) of this Article), and at any time thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Required Lenders shall, by notice to the
Borrower, take either or both of the following actions, at the same or different times: (i)
terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Advances then outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be due and payable),
and thereupon the principal of the Advances so declared to be due and payable, together with
accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder,
shall become due and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to
the Borrower described in clause (g) or (h) of this Article, the Commitments shall automatically
terminate and the principal of the Advances then outstanding, together with accrued interest
thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically
become due and payable, without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower.

ARTICLE VIII

THE ADMINISTRATIVE AGENT

          Each of the Lenders and the Issuing Lender hereby irrevocably appoints the Administrative
Agent as its agent hereunder and under the other Basic Documents and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof or thereof, together with such actions and powers as are
reasonably incidental thereto.

          The Person serving as the Administrative Agent hereunder shall have the same rights and powers
in its capacity as a Lender as any other Lender and may exercise the same as though it were not the
Administrative Agent, and such Person and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of business with the Borrower or any Affiliate thereof as if it
were not the Administrative Agent hereunder.

          The Administrative Agent shall not have any duties or obligations except those expressly set
forth herein and in the other Basic Documents. Without limiting the generality of the foregoing,
(a) the Administrative Agent shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall
not have any duty to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby or by the other Basic Documents that the Administrative Agent is
required to exercise in writing by the Required Lenders, and (c) except as expressly set forth
herein and in the other Basic Documents, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information relating to the
Borrower or any of its Affiliates that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any

 

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capacity. The Administrative Agent shall not
be liable for any action taken or not taken by it with the consent or at the request of the
Required Lenders or in the absence of its own gross negligence or willful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Default unless and until written
notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the
Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with this Agreement or any other
Basic Document, (ii) the contents of any certificate, report or other document delivered hereunder
or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of
the covenants, agreements or other terms or conditions set forth herein or therein, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement, any other Basic Document
or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth
in Article IV or elsewhere herein or therein, other than to confirm receipt of items expressly
required to be delivered to the Administrative Agent.

          The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument, document or other
writing believed by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any liability for relying
thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall not be liable for
any action taken or not taken by it in accordance with the advice of any such counsel, accountants
or experts.

          The Administrative Agent may perform any and all its duties and exercise its rights and powers
by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative
Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the preceding paragraphs
shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any
such sub-agent, and shall apply to their respective activities in connection with the syndication
of the credit facilities provided for herein as well as activities as Administrative Agent. Each
Lender by its execution and delivery of this Agreement agrees, as contemplated by of the Guarantee
and Security Agreement, that, in the event it shall hold any investments referred to therein, such
investments shall be held in the name and under the control of such Lender, and such Lender shall
hold such investments as a collateral sub-agent for the Administrative Agent thereunder. The
Borrower by its execution and delivery of this Agreement hereby consents to the foregoing.

          The Administrative Agent may resign at any time by notifying the Lenders and the Issuing
Lender and (i) so long as no Event of Default has occurred and is continuing, obtaining the consent
of the Borrower (which consent may be withheld pending designation of a successor Administrative
Agent) or (ii) if an Event of Default has occurred and is continuing, notifying the Borrower. Upon
any such resignation, the Required Lenders shall have the right, in consultation with the Borrower,
to appoint a

 

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successor. If no successor shall have been so appointed by the Required Lenders and
shall have accepted such appointment within thirty days after the retiring Administrative Agent
gives notice of its resignation, then such retiring Agent may, on behalf of the Lenders and the
Issuing Lender, appoint a successor Administrative Agent or Collateral Agent, as the case may be,
which shall be a bank with an office in New York, New York, or an Affiliate of any such bank. Upon
the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and duties of the
retiring (or retired) Administrative Agent and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder (if not already discharged therefrom as
provided above in this paragraph). The fees payable by the Borrower to a successor Administrative
Agent shall be the same as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor. After the Administrative Agent’s resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for its benefit in respect of
any actions taken or omitted to be taken by it while it was acting as Administrative Agent.

          Each Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon the Administrative
Agent or any other Lender and based on such documents and information as it shall from time to time
deem appropriate, continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any other Basic Document or any related agreement or any document furnished
hereunder or thereunder.

          Except as otherwise provided in Section 9.02(b) with respect to this Agreement, the
Administrative Agent may, with the prior consent of the Required Lenders (but not otherwise),
consent to any modification, supplement or waiver under any of the Basic Documents, provided that,
without the prior consent of each Lender, the Administrative Agent shall not (except as provided
herein or in the Security Documents) release all or substantially all of the collateral or
otherwise terminate all or substantially all of the Liens under any Security Document providing for
collateral security, agree to additional obligations being secured by all or substantially all of
such collateral security (unless the Lien for such additional obligations shall be junior to the
Lien in favor of the other obligations secured by such Security Document, in which event the
Administrative Agent may consent to such junior Lien provided that it obtains the consent of the
Required Lenders thereto), alter the relative priorities of the obligations entitled to the
benefits of the Liens created under the Security Documents with respect to all or substantially all
of such collateral, except that no such consent shall be required, and the
Administrative Agent is hereby authorized, to release any Lien covering property that is the
subject of either a disposition of property permitted under the Sale and Servicing Agreement or a
disposition to which the Required Lenders have consented.

 

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ARTICLE IX

MISCELLANEOUS

          SECTION 9.01. Notices.

          (a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopy, as follows:

     (i) if to the Depositor, to CS Funding V Depositor Inc., 4445 Willard Avenue, Chevy
Chase, Maryland 20815, Attention: Chief Legal Officer (Telecopy number (301) 841-2380);

     (ii) if to the Borrower, to CapitalSource Funding IV Trust, c/o Wilmington Trust
Company, as Owner Trustee, Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890 (Telecopy (302) 636-4140, telephone (302) 651-1000);

     (iii) if to the Originator, to CapitalSource Finance LLC, 4445 Willard Avenue, Chevy
Chase, Maryland 20815, Attention: Chief Legal Officer (Telecopy number (301) 841-2380);

     (iv) if to the Administrative Agent, to JPMorgan Chase Bank, N.A., 1111 Fannin Street,
10th Floor, Houston, Texas 77002-8069, Attention of Loan and Agency Services (Telecopy No.
(713) 750-2223; Telephone No. (713) 750-3570), with a copy to JPMorgan Chase Bank, N.A.,
270 Park Avenue, 4th Floor, New York, New York 10017-2014, Attention of
Collateral Management Services Group (Telecopy No. (212) 270-4628; Telephone No. (212)
270-7449); in each case with a copy to JPMorgan Chase Bank, N.A., 270 Park Avenue, New
York, New York 10017, Attention of Financial Institutions Corporate Banking (Telecopy No.
(212) 270-1511; Telephone No. (212) 270-9747);

     (v) if to the Issuing Lender, to JPMorgan Chase Bank, N.A., Attention of Letter of
Credit Department, 10420 Highland Manor Drive, Floor 4, Tampa, FL 33610-9128, (Telecopy No.
(813) 432-5162; Telephone No. (866) 632-5101);

     (vi) if to the Swingline Lender, to JPMorgan Chase Bank, N.A., 1111 Fannin Street,
10th Floor, Houston, Texas 77002-8069, Attention of Loan and Agency Services (Telecopy No. (713) 750-2223; Telephone No. (713) 750-3570); and

     (vii) if to a Lender, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire.

 

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Any party hereto may change its address or telecopy number for notices and other communications
hereunder by notice to the other parties hereto (or, in the case of any such change by a Lender, by
notice to the Borrower and the Administrative Agent). All notices and other communications given
to any party hereto in accordance with the provisions of this Agreement shall be deemed to have
been given on the date of receipt.

          (b) Electronic Communications. Notices and other communications to the Lenders and
the Issuing Lender hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative
Agent, provided that the foregoing shall not apply to notices to any Lender or the Issuing Lender
pursuant to Section 2.06 if such Lender or the Issuing Lender, as applicable, has notified the
Administrative Agent that it is incapable of receiving notices under such Article by electronic
communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be limited to particular
notices or communications.

          Unless the Administrative Agent otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement
from the intended recipient (such as by the “return receipt requested” function, as available,
return e-mail or other written acknowledgement), provided that if such notice or other
communication is not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on the next business day
for the recipient, and (ii) notices or communications posted to an Internet or intranet website
shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as
described in the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

          SECTION 9.02. Waivers; Amendments.

          (a) No Deemed Waivers; Remedies Cumulative. No failure or delay by the Administrative
Agent, the Issuing Lender or any Lender in exercising any right or power hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights and remedies of
the Administrative Agent, the Issuing Lender and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of
this Agreement or consent to any departure by the Borrower, the Depositor, the Servicer or the Originator
therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of
this Section, and then such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. Without limiting the generality of the foregoing, the making of
any Credit Extension shall not be construed as a waiver of any Default, regardless of whether the
Administrative Agent, any Lender or the Issuing Lender may have had notice or knowledge of such
Default at the time.

 

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          (b) Amendments. Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing entered into by the
Borrower, the Depositor, the Servicer, the Originator and the Required Lenders or by the Borrower,
the Depositor, the Servicer, the Originator and the Administrative Agent with the consent of the
Required Lenders; provided that no such agreement shall:

     (i) increase the Commitment of any Lender without the written consent of such Lender,

     (ii) reduce the principal amount of any Advance or LC Disbursement or reduce the rate
of interest thereon, or reduce any fees payable hereunder, without the written consent of
each Lender affected thereby,

     (iii) postpone the scheduled date of payment of the principal amount of any Advance or
LC Disbursement, or any interest thereon, or any fees payable hereunder, or reduce the
amount of, waive or excuse any such payment, or postpone the scheduled date of expiration
of any Commitment, without the written consent of each Lender affected thereby,

     (iv) change Section 2.17(d) without the consent of each Lender affected thereby,

     (v) without the delivery of an opinion of counsel to the Borrower addressing Section
7701 of the Code and the corresponding regulations, create debt obligations with two or
more maturities; or

     (vi) change any of the provisions of this Section or the percentage in the definition
of the term “Required Lenders” or any other provision hereof specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of each Lender;

and provided further that no such agreement shall amend, modify or otherwise affect the rights or
duties of the Administrative Agent, the Issuing Lender or the Swingline Lender hereunder without
the prior written consent of the Administrative Agent, the Issuing Lender or the Swingline Lender,
as the case may be.

          SECTION 9.03. Expenses; Indemnity; Damage Waiver.

          (a) Costs and Expenses. The Borrower shall pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees,
charges and disbursements of counsel for the Administrative Agent (subject to such limitations as
are separately agreed in writing between the Borrower and the Administrative Agent), in connection
with the preparation and administration of this Agreement and the other Basic Documents or any
amendments, modifications or waivers of the provisions hereof or thereof (whether or not the
transactions contemplated hereby

 

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or thereby shall be consummated), (ii) all out-of-pocket expenses
incurred by the Issuing Lender in connection with the issuance, amendment, renewal or extension of
any Letter of Credit or any demand for payment thereunder, (iii) all out-of-pocket expenses
incurred by the Administrative Agent, the Issuing Lender or any Lender, including the fees, charges
and disbursements of any counsel for the Administrative Agent, the Issuing Lender or any Lender, in
connection with the enforcement or protection of its rights in connection with this Agreement and
the other Basic Documents, including its rights under this Section, or in connection with the
Advances made or Letters of Credit issued hereunder, including in connection with any workout,
restructuring or negotiations in respect thereof and (iv) and all costs, expenses, taxes,
assessments and other charges incurred in connection with any filing, registration, recording or
perfection of any security interest contemplated by any Security Document or any other document
referred to therein.

          (b) Indemnification by the Borrower. The Borrower shall indemnify the Administrative
Agent, the Issuing Lender and each Lender, and each Related Party of any of the foregoing Persons
(each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses, including the
reasonable fees, charges and disbursements of a single counsel for the Indemnitees in each relevant
jurisdiction (provided, that if the interests of the Indemnitees conflict with regard to the
representation, each Indemnitee having such a conflict shall be reimbursed for the fees, charges
and disbursements of its own counsel), incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution or delivery of this Agreement or any
agreement or instrument contemplated hereby, the performance by the parties hereto of their
respective obligations hereunder or the consummation of the Transactions or any other transactions
contemplated hereby, (ii) any Credit Extension or the use of the proceeds therefrom (including any
refusal by the Issuing Lender to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly comply with the terms of such
Letter of Credit), any payments that the Administrative Agent is required to make under any
indemnity issued to any bank referred to in the Sale and Servicing Agreement to which remittances
in respect of the Loans are to be made, (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by the Borrower, or any Environmental
Liability related in any way to the Borrower or any of its Affiliates, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related
expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to
have resulted from the gross negligence or willful misconduct of such Indemnitee.

          (c) Reimbursement by Lenders. To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent, the Issuing Lender or the Swingline Lender
under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent, the Issuing Lender or the Swingline

 

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Lender, as the case may be, such Lender’s
Applicable Percentage (determined as of the time that the applicable unreimbursed expense or
indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent, the Issuing Lender or the Swingline Lender in its
capacity as such.

          (d) Waiver of Consequential Damages, Etc. To the extent permitted by applicable law,
the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the Transactions, any Advance or Letter of Credit or
the use of the proceeds thereof.

          (e) Payments. All amounts due under this Section shall be payable promptly after
written demand therefor.

          SECTION 9.04. Successors and Assigns.

          (a) Assignments Generally. The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and assigns permitted
hereby (including any Affiliate of the Issuing Lender that issues any Letter of Credit), except
that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted assignment or
transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign
or otherwise transfer its rights or obligations hereunder except in accordance with this Section.
Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns permitted hereby (including
any Affiliate of the Issuing Lender that issues any Letter of Credit) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Lender
and the Lenders) any legal or equitable right, remedy or claim under or by reason of this
Agreement.

          (b) Assignments by Lenders.

          (i) Assignments Generally. Subject to the conditions set forth in clause (ii) below,
any Lender may assign to one or more assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans and its LC Exposure at
the time owing to it) with the prior written consent (such consent not to be unreasonably withheld
or delayed) of:

     (A) the Borrower, provided that no consent of the Borrower shall be required for an
assignment to a Lender, an Affiliate of a Lender, or, if an Event of Default has occurred
and is continuing, any other assignee; and

     (B) the Administrative Agent and the Issuing Lender.

 

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          (ii) Certain Conditions to Assignments. Assignments shall be subject to the following
additional conditions:

     (A) except in the case of an assignment to a Lender or an Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans and
LC Exposure, the amount of the Commitment or Loans and LC Exposure of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent) shall not be less
than $5,000,000 unless each of the Borrower and the Administrative Agent otherwise consent,
provided that no such consent of the Borrower shall be required if an Event of Default has
occurred and is continuing;

     (B) each partial assignment of any Class of Commitments or Loans and LC Exposure shall
be made as an assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement in respect of such Class of Commitments, Loans and LC
Exposure;

     (C) the parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Assumption in substantially the form of Exhibit A hereto, together
with a processing and recordation fee of $3,500 (for which the Borrower and the Guarantors
shall not be obligated); and

     (D) the assignee, if it shall not already be a Lender of the applicable Class, shall
deliver to the Administrative Agent an Administrative Questionnaire.

          (iii) Effectiveness of Assignments. Subject to acceptance and recording thereof
pursuant to paragraph (c) of this Section, from and after the effective date specified in each
Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case
of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to
the benefits of Sections 2.14, 2.15, 2.16 and 9.03). Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this Section shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (e) of this Section.

          (c) Maintenance of Registers by Administrative Agent. The Administrative Agent,
acting for this purpose as an agent of the Borrower, shall maintain at one of its offices in New
York City a copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the

 

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Lenders, and the Commitments of, and principal amount
of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to
time (the “Registers” and each individually, a “Register”). The entries in the
Registers shall be conclusive, and the Borrower, the Administrative Agent, the Issuing Lender and
the Lenders may treat each Person whose name is recorded in the Registers pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Registers shall be available for inspection by the Borrower, any Issuing Lender and
any Lender, at any reasonable time and from time to time upon reasonable prior notice.

          (d) Acceptance of Assignments by Administrative Agent. Upon its receipt of a duly
completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s
completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder),
the processing and recordation fee referred to in paragraph (b) of this Section and any written
consent to such assignment required by paragraph (b) of this Section, the Administrative Agent
shall accept such Assignment and Assumption and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.

          (e) Participations. Any Lender may, with the consent of the Borrower, but without the
consent of the Administrative Agent or any Issuing Lender, sell participations to one or more banks
or other entities (a “Participant”) in all or a portion of such Lender’s rights and
obligations under this Agreement and the other Loan Documents (including all or a portion of its
Commitments and the Loans and LC Disbursements owing to it); provided that (i) such Lender’s
obligations under this Agreement and the other Loan Documents shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the performance of such
obligations and (iii) the Borrower, the Administrative Agent, the Issuing Lender and the other
Lenders shall continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement and the other Loan Documents. Any agreement
or instrument pursuant to which a Lender sells such a participation shall provide that such Lender
shall retain the sole right to enforce this Agreement and the other Loan Documents and to approve any amendment, modification or waiver of any
provision of this Agreement or any other Loan Document; provided that such agreement or instrument
may provide that such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to Section 9.02(b) that affects
such Participant. Subject to paragraph (f) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.14, 2.15 and 2.16 to the same extent as
if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this
Section.

          (f) Limitations on Rights of Participants. A Participant shall not be entitled to
receive any greater payment under Section 2.14, 2.15 or 2.16 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made

 

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with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 2.16 unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section
2.16(e) as though it were a Lender and in the case of a Participant claiming exemption for
portfolio interest under Section 871(h) or 881(c) of the Code, the applicable Lender shall provide
the Borrower with satisfactory evidence that the participation is in registered form and shall
permit the Borrower to review such register as reasonably needed for the Borrower to comply with
its obligations under applicable laws and regulations.

          (g) Certain Pledges. Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations of such Lender,
including any such pledge or assignment to a Federal Reserve Bank, and this Section shall not apply
to any such pledge or assignment of a security interest; provided that no such pledge or assignment
of a security interest shall release a Lender from any of its obligations hereunder or substitute
any such assignee for such Lender as a party hereto.

          (h) No Assignments to the Borrower or Affiliates. Anything in this Section to the
contrary notwithstanding, no Lender may assign or participate any interest in any Loan or LC
Exposure held by it hereunder to the Borrower or any of its Affiliates or Subsidiaries without the
prior consent of each Lender.

          SECTION 9.05. Survival. All covenants, agreements, representations and warranties
made by the Borrower herein and in the certificates or other instruments delivered in connection
with or pursuant to this Agreement shall be considered to have been relied upon by the other
parties hereto and shall survive the execution and delivery of this Agreement and the making of any
Advances and issuance of any Letters of Credit, regardless of any investigation made by any such
other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Lender
or any Lender may have had notice or knowledge of any Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in full force and effect
as long as the principal of or any accrued interest on any Advance or any fee or any other amount
payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired
or terminated. The provisions of Sections 2.14, 2.15, 2.16 and 9.03 and Article VIII shall survive
and remain in full force and effect regardless of the consummation of the transactions contemplated
hereby, the repayment of the Advances, the expiration or termination of the Letters of Credit and
the Commitments or the termination of this Agreement or any provision hereof.

          SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different counterparts), each of which
shall constitute an original, but all of which when taken together shall constitute a single
contract. This Agreement and any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract between and among the parties relating to the
subject matter hereof and

 

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supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement
shall become effective when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns. Delivery of an
executed counterpart of a signature page to this Agreement by telecopy or other electronic means
shall be effective as delivery of a manually executed counterpart of this Agreement.

          SECTION 9.07. Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such invalidity, illegality or unenforceability without affecting the validity, legality
and enforceability of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

          SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any time owing by such
Lender to or for the credit or the account of the Borrower against any of and all the obligations
of the Borrower now or hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and although such
obligations may be unmatured. The rights of each Lender under this Section are in addition to
other rights and remedies (including other rights of setoff) which such Lender may have.

          SECTION 9.09. Governing Law; Jurisdiction; Etc.

          (a) Governing Law. This Agreement shall be construed in accordance with and governed
by the law of the State of New York.

          (b) Submission to Jurisdiction. Each of the Borrower, the Depositor, the Servicer and
the Originator hereby irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County
and of the United States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or relating to this Agreement or
any of the other Basic documents, or for recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Administrative Agent, the Issuing Lender or any Lender may otherwise have
to bring any action or proceeding

 

- 65 -

relating to this Agreement against the Borrower, the Depositor,
the Servicer or the Originator or any of their respective properties in the courts of any
jurisdiction.

          (c) Waiver of Venue. Each of the Borrower, the Depositor, the Servicer and the
Originator hereby irrevocably and unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement in any court referred to in
paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such
action or proceeding in any such court.

          (d) Service of Process. Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 9.01. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other manner permitted by
law.

          SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

          SECTION 9.11. Judgment Currency. This is a transaction in which the specification of
Dollars or any Foreign Currency, as the case may be (the “Specified Currency”), and payment
in New York City or the country of the Specified Currency, as the case may be (the “Specified
Place”), is of the essence, and the Specified Currency shall be the currency of account in all
events relating to Advances denominated in the Specified Currency. The payment obligations of the
Borrower under this Agreement shall not be discharged or satisfied by an amount paid in another
currency or in another place, whether pursuant to a judgment or otherwise, to the extent that the
amount so paid on conversion to the Specified Currency and transfer to the Specified Place under
normal banking procedures does not yield the amount of the Specified Currency at the Specified
Place due hereunder.

          If for the purpose of obtaining judgment in any court it is necessary to convert a sum due
hereunder in the Specified Currency into another currency (the “Second Currency”), the rate
of exchange that shall be applied shall be the rate at which in accordance with normal banking
procedures the Administrative Agent could purchase

 

- 66 -

the Specified Currency with the Second Currency
on the Business Day next preceding the day on which such judgment is rendered. The obligation of
the Borrower in respect of any such sum due from it to the Administrative Agent or any Lender
hereunder or under any other Basic Document (in this Section called an “Entitled Person”)
shall, notwithstanding the rate of exchange actually applied in rendering such judgment, be
discharged only to the extent that on the Business Day following receipt by such Entitled Person of
any sum adjudged to be due hereunder in the Second Currency such Entitled Person may in accordance
with normal banking procedures purchase and transfer to the Specified Place the Specified Currency
with the amount of the Second Currency so adjudged to be due; and the Borrower hereby, as a
separate obligation and notwithstanding any such judgment, agrees to indemnify such Entitled Person
against, and to pay such Entitled Person on demand, in the Specified Currency, the amount (if any)
by which the sum originally due to such Entitled Person in the Specified Currency hereunder exceeds
the amount of the Specified Currency so purchased and transferred.

          SECTION 9.12. Headings. Article and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement and shall not affect
the construction of, or be taken into consideration in interpreting, this Agreement.

          SECTION 9.13. Treatment of Certain Information; Confidentiality.

          (a) Treatment of Certain Information. Each of the Borrower, the Depositor, the
Servicer and the Originator acknowledges that from time to time financial advisory, investment
banking and other services may be offered or provided to the Borrower, the Depositor, the Servicer or the Originator or one or more of their respective
Subsidiaries (in connection with this Agreement or otherwise) by any Lender or by one or more
subsidiaries or affiliates of such Lender and each of the Borrower, the Depositor, the Servicer and
the Originator hereby authorizes each Lender to share any information delivered to such Lender by
the Borrower and its Subsidiaries pursuant to this Agreement, or in connection with the decision of
such Lender to enter into this Agreement, to any such subsidiary or affiliate, it being understood
that any such subsidiary or affiliate receiving such information shall be bound by the provisions
of paragraph (b) of this Section as if it were a Lender hereunder. Such authorization shall
survive the repayment of the Advances, the expiration or termination of the Letters of Credit and
the Commitments or the termination of this Agreement or any provision hereof.

          (b) Confidentiality. Each of the Administrative Agent, the Lenders and the Issuing
Lender agrees to maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective
partners, directors, officers, employees, agents, advisors and other representatives (it being
understood that the Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information confidential), (b) to the extent
requested by any regulatory authority purporting to have jurisdiction over it (including any
self-regulatory authority),

 

- 67 -

(c) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Basic Document or any action or proceeding
relating to this Agreement or any other Basic Document or the enforcement of rights hereunder or
thereunder, (f) subject to an agreement containing provisions substantially the same as those of
this Section, to (i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction relating to the
Borrower and its obligations, (g) with the consent of the Borrower or (h) to the extent such
Information (x) becomes publicly available other than as a result of a breach of this Section or
(y) becomes available to the Administrative Agent, any Lender, the Issuing Lender or any of their
respective Affiliates on a nonconfidential basis from a source other than the Borrower.

          For purposes of this Section, “Information” means all information received from the
Borrower relating to the Borrower, the Depositor, the Originator or any of their respective
subsidiaries or any of their respective businesses, other than any such information that is
available to the Administrative Agent, any Lender or the Issuing Lender on a nonconfidential basis
prior to disclosure by the Borrower, provided that, in the case of information received from the
Borrower after the date hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

          SECTION 9.14. USA PATRIOT Act. Each Lender hereby notifies the Borrower, the Depositor,
the Servicer and the Originator that pursuant to the requirements of the USA PATRIOT Act (Title III
of Pub. L. 107-56 (signed into law October 26, 2001)), it is required to obtain, verify and record
information that identifies each of the foregoing Persons, which information includes the name and
address of such Persons and other information that will allow such Lender to identify such Persons
in accordance with said Act.

          SECTION 9.15. Covenants of the Borrower. All covenants of the Borrower in this Agreement
are covenants of the Borrower and are not covenants of the Owner Trustee. The Owner Trustee is,
and any successor Owner Trustee under the Trust Agreement will be, executing this Agreement solely
as Owner Trustee under the Trust Agreement and not in its respective individual capacity, and in no
case whatsoever shall the Owner Trustee or any such successor Owner Trustee be personally liable
on, or for any loss in respect of, any of the statements, representations, warranties or
obligations of the Borrower hereunder, as to all of which the parties hereto agree to look solely
to the property of the Borrower.

 

- 68 -

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.

	 	 	 	 	 
	 	 	CAPITALSOURCE FUNDING V TRUST
	 	 	By: Wilmington Trust Company, solely as
	 	 	Owner Trustee and not in its individual
	 	 	capacity
	 
	 	 	 	 
	 

	 	By:	 	/s/ Janel R. Havrilla 
	 

	 	 	 	 

	 

	 	 	 	Name: Janel R. Havrilla
	 

	 	 	 	Title: Financial Services Officer
	 
	 	 	 	 
	 	 	CS FUNDING V
	 	 	   DEPOSITOR INC., as Depositor
	 
	 	 	 	 
	 

	 	By:	 	/s/ Giles R. Coates 
	 

	 	 	 	 

	 

	 	 	 	Name: Giles R. Coates
	 

	 	 	 	Title: Director-Treasury & Risk Management
	 
	 	 	 	 
	 	 	CAPITALSOURCE FINANCE LLC, as
	 	 	   Servicer and Originator
	 
	 	 	 	 
	 

	 	By:	 	 /s/ Giles R. Coates
	 

	 	 	 	 

	 

	 	 	 	Name: Giles R. Coates
	 

	 	 	 	Title: Director-Treasury & Risk Management

 

- 69 -

	 	 	 	 	 
	 	 	LENDERS
	 
	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.,
	 	 	   individually, as Swingline Lender and as
	 	 	   Administrative Agent
	 
	 	 	 	 
	 

	 	By:	 	/s/ Christine Herrick 
	 

	 	 	 	 

	 

	 	 	 	Name: Christine Herrick
	 

	 	 	 	Title: Vice President

 

 

SCHEDULE I

Commitments

[See definitions of “Commitment” and “Lenders” in Section 1.01]

	 	 	 	 	 
	Name of Lender	 	Commitment ($)
	JPMorgan Chase Bank, N.A.

	 	$300,000,000	 	 

 

 

SCHEDULE II

MANDATORY COST RATE

Calculation of Mandatory Cost Rate

	1.	 	The MCR Cost is an addition to the interest rate to compensate Lenders for the cost of
compliance with (a) the requirements of the Bank of England and/or the Financial Services
Authority (or, in either case, any other authority which replaces all or any of its functions)
or (b) the requirements of the European Central Bank.

	2.	 	On the first day of each Interest Period for any Advance denominated in English Pounds
Sterling (or as soon as possible thereafter) the Administrative Agent shall calculate, as a
percentage rate, a rate (the “Additional Cost Rate”) for each Lender participating in
such Advance, in accordance with the paragraphs set out below. The MCR Cost will be
calculated by the Administrative Agent as a weighted average of such Lenders’ Additional Cost
Rates (weighted in proportion to the percentage participation of each such Lender in the
relevant Advance) and will be expressed as a percentage rate per annum.

	3.	 	The Additional Cost Rate for any Lender lending from an Applicable Lending Office in a
Participating Member State will be the percentage notified by that Lender to the
Administrative Agent. This percentage will be certified by that Lender in its notice to the
Administrative Agent to be its reasonable determination of the cost (expressed as a percentage
of that Lender’s participation in all Advances made from that Applicable Lending Office) of
complying with the minimum reserve requirements of the European Central Bank in respect of
loans made from that Applicable Lending Office.

	4.	 	The Additional Cost Rate for any Lender lending from an Applicable Lending Office in the
United Kingdom will be calculated by the Administrative Agent as follows:

	 	(a)	 	in relation to an Advance made in English Pounds Sterling:

	 	 	 
	

	 	per cent. per annum.

	 	(b)	 	in relation to an Advance made in any Alternate Currency other than English
Pounds Sterling:

	 	 	 
	

	 	per cent. per annum.

 

- 2 -

     Where:

	 	A	 	is the percentage of Eligible Liabilities (assuming these to be in excess of
any stated minimum) which such Lender is from time to time required to maintain as an
interest free cash ratio deposit with the Bank of England to comply with cash ratio
requirements.
	 
	 	B	 	is the percentage rate of interest (excluding the Applicable Margin and the
MCR Cost and, if applicable, any additional amount of interest specified in Section
2.07(b)) payable for the relevant Interest Period on the Advance.
	 
	 	C	 	is the percentage (if any) of Eligible Liabilities which such Lender is
required from time to time to maintain as interest bearing Special Deposits with the
Bank of England.
	 
	 	D	 	is the percentage rate per annum payable by the Bank of England to the
Administrative Agent on interest bearing Special Deposits.
	 
	 	E	 	is designed to compensate Lenders for amounts payable under the Fees Rules
and is calculated by the Administrative Agent as being the average of the most recent
rates of charge supplied by the Reference Banks to the Agent pursuant to paragraph 7
below and expressed in pounds per £1,000,000;

	5.	 	For the purposes of this Schedule:

	 	(a)	 	“Eligible Liabilities” has the meaning given to it from time to time
under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the
Bank of England.
	 
	 	(b)	 	“Fees Rules” means the rules on periodic fees contained in the FSA
Supervision Manual or such other law or regulation as may be in force from time to time
in respect of the payment of fees for the acceptance of deposits.
	 
	 	(c)	 	“Fee Tariffs” means the fee tariffs specified in the Fees Rules under
the activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee
required pursuant to the Fees Rules but taking into account any applicable discount
rate).
	 
	 	(d)	 	“Special Deposits” has the meaning given to it from time to time under
or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank of
England.
	 
	 	(e)	 	“Tariff Base” has the meaning given to it in, and will be calculated in
accordance with, the Fees Rules.

 

- 3 -

	6.	 	In application of the above formulae, A, B, C and D will be included in the formulae as
percentages (i.e. 5 per cent. will be included in the formula as 5 and not as 0.05). A
negative result obtained by subtracting D from B shall be taken as zero. The resulting
figures shall be rounded to four decimal places.
	 
	7.	 	If requested by the Administrative Agent, each Reference Bank shall, as soon as
practicable after publication by the Financial Services Authority, supply to the
Administrative Agent, the rate of charge payable by that Reference Bank to the Financial
Services Authority pursuant to the Fees Rules in respect of the relevant financial year of the
Financial Services Authority (calculated for this purpose by that Reference Bank as being the
average of the Fee Tariffs applicable to that Reference Bank for that financial year) and
expressed in pounds per £1,000,000 of the Tariff Base of that Reference Bank.
	 
	8.	 	Each Lender shall supply any information required by the Administrative Agent for the purpose
of calculating its Additional Cost Rate. In particular, but without limitation, each Lender
shall supply the following information on or prior to the date on which it becomes a Lender:

	 	(a)	 	the jurisdiction of its Applicable Lending Office; and
	 
	 	(b)	 	any other information that the Agent may reasonably require for such purpose.

Each Lender shall promptly notify the Administrative Agent of any change to the information
provided by it pursuant to this paragraph.

	9.	 	The percentages of each Lender for the purpose of A and C above and the rates of charge of
each Reference Bank for the purpose of E above shall be determined by the Administrative Agent
based upon the information supplied to it pursuant to paragraphs 7 and 8 above and on the
assumption that, unless a Lender notifies the Administrative Agent to the contrary, each
Lender’s obligations in relation to cash ratio deposits and Special Deposits are the same as
those of a typical bank from its jurisdiction of incorporation with an Applicable Lending
Office in the same jurisdiction as its Applicable Lending Office.

	10.	 	The Administrative Agent shall have no liability to any person if such determination results
in an Additional Cost Rate which over or under compensates any Lender and shall be entitled to
assume that the information provided by any Lender or Reference Bank pursuant to paragraphs 3,
7 and 8 above is true and correct in all respects.

	11.	 	The Administrative Agent shall distribute the additional amounts received as a result of the
MCR to the Lenders on the basis of the Additional Cost Rate for each Lender based on the
information provided by each Lender and each Reference Bank pursuant to paragraphs 3, 7 and 8
above.

 

- 4 -

	12.	 	Any determination by the Administrative Agent pursuant to this Schedule II in relation to a
formula, the MCR, an Additional Cost Rate or any amount payable to a Lender shall, in the
absence of manifest error, be conclusive and binding on all Parties.

	13.	 	The Administrative Agent may from time to time, after consultation with the Company and the
Lenders, determine and provide notice to the Company and the Lenders of any amendments which
are required to be made to this Schedule 1.01 in order to comply with any change in law,
regulation or any requirements from time to time imposed by the Bank of England, the Financial
Services Authority or the European Central Bank (or, in any case, any other authority which
replaces all or any of its functions) and any such determination shall, in the absence of
manifest error, be conclusive and binding on all parties to the Credit Agreement.

 

 

EXHIBIT A

[Form of Assignment and Assumption]

ASSIGNMENT AND ASSUMPTION

          Reference is made to the Credit Agreement dated as of June 30, 2005 (as amended and in effect
on the date hereof, the “Credit Agreement”), between CapitalSource Funding V Trust, CS
Funding V Depositor Inc., CapitalSource Finance LLC, the Lenders named therein and JPMorgan Chase
Bank, N.A., as Administrative Agent for the Lenders. Terms defined in the Credit Agreement are
used herein with the same meanings.

          The Assignor named below hereby sells and assigns, without recourse, to the Assignee named
below, and the Assignee hereby purchases and assumes, without recourse, from the Assignor,
effective as of the Assignment Date set forth below, the interests set forth below (the
“Assigned Interest”) in the Assignor’s rights and obligations under the Credit Agreement,
including the interests set forth below in the Commitment of the Assignor on the Assignment Date
and Syndicated Advances owing to the Assignor which are outstanding on the Assignment Date,
together with unpaid interest accrued on the assigned Advances to the Assignment Date, the
participations in Letters of Credit, LC Disbursements and Swingline Advances held by the Assignor
on the Assignment Date, and the amount, if any, set forth below of the fees accrued to the
Assignment Date for account of the Assignor. The Assignee hereby acknowledges receipt of a copy of
the Credit Agreement. From and after the Assignment Date (i) the Assignee shall be a party to and
be bound by the provisions of the Credit Agreement and, to the extent of the interests assigned by
this Assignment and Assumption, have the rights and obligations of a Lender thereunder and (ii) the
Assignor shall, to the extent of the interests assigned by this Assignment and Assumption,
relinquish its rights and be released from its obligations under the Credit Agreement.

          This Assignment and Assumption is being delivered to the Administrative Agent together with
(i) if the Assignee is a Foreign Lender, any documentation required to be delivered by the Assignee
pursuant to Section 2.16(e) of the Credit Agreement, duly completed and executed by the Assignee,
and (ii) if the Assignee is not already a Lender under the Credit Agreement, an Administrative
Questionnaire in the form supplied by the Administrative Agent, duly completed by the Assignee.
The [Assignee/Assignor] shall pay the fee payable to the Administrative Agent pursuant to Section
9.04(b) of the Credit Agreement.

          This Assignment and Assumption shall be governed by and construed in accordance with the laws
of the State of New York.

Date of Assignment:

 

- 2 -

Legal Name of Assignor:

Legal Name of Assignee:

Assignee’s Address for Notices:

Effective Date of Assignment

(“Assignment Date”)

[Must be at least five Business Days after execution hereof by all required parties.]:

	 	 	 	 	 
	 

	 	Principal Amount

	 

	 	Assigned

	 
	 	 	 	 
	Commitment Assigned:

	 	$	 	 

Syndicated Advances:

Fees Assigned (if any):

The terms set forth above and below are hereby agreed to:

[NAME OF ASSIGNOR], as Assignor

	 	 	 
	By:
	 	 
	 

	 	 

	 

	 	Name:
	 

	 	Title:

[NAME OF ASSIGNEE], as Assignee

	 	 	 
	By:
	 	 
	 

	 	 

	 

	 	Name:
	 

	 	Title:

The undersigned hereby consent to the within assignment:

[Consents to be included to the extent required by Section 9.04(b) of the Credit Agreement.]

 

- 3 -

CAPITALSOURCE FUNDING V TRUST

	 	 	 
	By:
	 	 
	 

	 	 

	 

	 	Name:
	 

	 	Title: Administrator

JPMORGAN CHASE BANK, N.A.,

   as Administrative Agent,

   as Swingline Lender

   and as Issuing Lender

	 	 	 
	By:
	 	 
	 

	 	 

	 

	 	Name:
	 

	 	Title:exv10w35w2

 

Exhibit 10.35.2

Execution Counterpart

 

 

SALE AND SERVICING AGREEMENT

among

CAPITALSOURCE FUNDING V TRUST

as Borrower

CS FUNDING V DEPOSITOR INC.,

as Depositor

CAPITALSOURCE FINANCE LLC,

as Originator and Servicer

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Paying Agent, Collateral Custodian and Backup Servicer

Dated as of June 30, 2005

COMMERCIAL LOAN AND ASSET BACKED OBLIGATIONS

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	Section 1.01 Definitions
	 	 	1	 
	Section 1.02 Other Definitional Provisions
	 	 	31	 
	 
	 	 	 	 
	ARTICLE II CONVEYANCE OF THE COLLATERAL
	 	 	32	 
	 
	 	 	 	 
	Section 2.01 Trust Certificates; Conveyance of the Collateral
	 	 	32	 
	Section 2.02 Ownership and Possession of Collateral Files
	 	 	33	 
	Section 2.03 Books and Records; Intention of the Parties; UCC Financing Statements
	 	 	33	 
	Section 2.04 Delivery of Collateral Documents
	 	 	34	 
	Section 2.05 Acceptance by the Administrative Agent of the Collateral; Certain Substitutions and Repurchases; Certification by the Collateral Custodian
	 	 	35	 
	Section 2.06 Conditions Precedent to Transfer Dates; Letters of Credit; FX Advances, Etc.
	 	 	38	 
	Section 2.07 Additional Advances; Withdrawal from Certain Accounts
	 	 	42	 
	Section 2.08 Termination of Revolving Period or Amortization Period
	 	 	43	 
	Section 2.09 Correction of Errors
	 	 	43	 
	Section 2.10 Commencement of Amortization Period
	 	 	43	 
	 
	 	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES
	 	 	43	 
	 
	 	 	 	 
	Section 3.01 General Representations and Warranties of the Depositor
	 	 	43	 
	Section 3.02 General Representations and Warranties of the Originator
	 	 	46	 
	Section 3.03 Representations and Warranties of Depositor Regarding Transferred Loans and Assets
	 	 	49	 
	Section 3.04 Representations and Warranties of Originator Regarding Transferred Assets
	 	 	50	 
	Section 3.05 Representations and Warranties of Originator Regarding Transferred Loans
	 	 	52	 
	Section 3.06 Purchase and Substitution
	 	 	58	 
	Section 3.07 Dispositions
	 	 	60	 
	Section 3.08 Underwriting Guidelines; Modifications
	 	 	62	 
	Section 3.09 Certain Letter of Credit Provisions
	 	 	62	 
	Section 3.10 Other Covenants and Agreements
	 	 	62	 
	 
	 	 	 	 
	ARTICLE IV ADMINISTRATION AND SERVICING OF THE LOANS
	 	 	64	 
	 
	 	 	 	 
	Section 4.01 Servicer’s Servicing Obligations
	 	 	64	 
	Section 4.02 Loan Register
	 	 	64	 
	Section 4.03 Additional Servicer Obligations
	 	 	65	 
	Section 4.04 The Backup Servicer; Duties of the Backup Servicer
	 	 	65	 
	 
	 	 	 	 
	ARTICLE V ESTABLISHMENT OF TRUST ACCOUNTS
	 	 	66	 
	 
	 	 	 	 
	Section 5.01 Collection Account, Principal Collections Account, Distribution Account and FX Accounts
	 	 	66	 
	Section 5.02 Payments
	 	 	71	 
	Section 5.03 Trust Accounts; Trust Account Property
	 	 	71	 

 

- ii -

	 	 	 	 	 
	 	 	Page	 
	ARTICLE VI STATEMENTS AND REPORTS; SPECIFICATION OF TAX MATTERS
	 	 	73	 
	 
	 	 	 	 
	Section 6.01 Statements
	 	 	73	 
	Section 6.02 Specification of Certain Tax Matters
	 	 	73	 
	 
	 	 	 	 
	ARTICLE VII COVENANTS
	 	 	74	 
	 
	 	 	 	 
	Section 7.01 Financial Covenants of CapitalSource
	 	 	74	 
	Section 7.02 Financial Statements of CapitalSource
	 	 	74	 
	 
	 	 	 	 
	ARTICLE VIII THE SERVICER AND THE BACKUP SERVICER
	 	 	75	 
	 
	 	 	 	 
	Section 8.01 Indemnification; Third Party Claims
	 	 	75	 
	Section 8.02 Merger or Consolidation of the Servicer and Backup Servicer
	 	 	77	 
	Section 8.03 Limitation on Liability of the Servicer and the Backup Servicer
	 	 	77	 
	Section 8.04 No Resignation; Assignment
	 	 	78	 
	Section 8.05 Relationship of Servicer to Borrower and the Administrative Agent
	 	 	79	 
	Section 8.06 Servicer May Own Securities
	 	 	79	 
	Section 8.07 Indemnification of the Administrative Agent, the Lenders and Owner Trustee
	 	 	79	 
	 
	 	 	 	 
	ARTICLE IX SERVICER EVENTS OF DEFAULT
	 	 	79	 
	 
	 	 	 	 
	Section 9.01 Servicer Events of Default
	 	 	79	 
	Section 9.02 Appointment of Successor
	 	 	81	 
	Section 9.03 Waiver of Defaults
	 	 	83	 
	Section 9.04 Accounting Upon Termination of Servicer
	 	 	84	 
	Section 9.05 Removal of Backup Servicer
	 	 	84	 
	 
	 	 	 	 
	ARTICLE X THE COLLATERAL CUSTODIAN
	 	 	84	 
	 
	 	 	 	 
	Section 10.01 Appointment
	 	 	84	 
	Section 10.02 No Representations
	 	 	85	 
	Section 10.03 Custody of Custodial Collateral Files
	 	 	85	 
	Section 10.04 Standard of Care
	 	 	85	 
	Section 10.05 Acknowledgment
	 	 	85	 
	 
	 	 	 	 
	ARTICLE XI TERMINATION
	 	 	85	 
	 
	 	 	 	 
	Section 11.01 Termination
	 	 	85	 
	Section 11.02 Optional Termination
	 	 	86	 
	Section 11.03 Notice of Termination
	 	 	86	 
	 
	 	 	 	 
	ARTICLE XIII MISCELLANEOUS PROVISIONS
	 	 	86	 
	 
	 	 	 	 
	Section 13.01 Acts of Certificateholders
	 	 	86	 
	Section 13.02 Amendment
	 	 	86	 
	Section 13.03 Recordation of Agreement
	 	 	87	 
	Section 13.04 Duration of Agreement
	 	 	87	 
	Section 13.05 Governing Law
	 	 	88	 
	Section 13.06 Notices
	 	 	88	 
	Section 13.07 Severability of Provisions
	 	 	89	 
	Section 13.08 No Partnership
	 	 	89	 
	Section 13.09 Counterparts
	 	 	89	 
	Section 13.10 Successors and Assigns
	 	 	89	 
	Section 13.11 Headings
	 	 	89	 

 

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	 	 	Page	 
	Section 13.12 Actions of Certificateholders
	 	 	89	 
	Section 13.13 Non-Petition Agreement
	 	 	90	 
	Section 13.14 Holders of the Securities
	 	 	90	 
	Section 13.15 Due Diligence
	 	 	90	 
	Section 13.16 No Reliance
	 	 	91	 
	Section 13.17 Conflicts
	 	 	91	 
	Section 13.18 Limitation on Liability
	 	 	91	 
	Section 13.19 No Agency
	 	 	92	 
	Section 13.20 Third Party Beneficiaries
	 	 	92	 
	Section 13.21 Performance by Wells Fargo Bank, National Association
	 	 	92	 
	 
	 	 	 	 
	EXHIBIT A-1 Additional Provisions Relating to Assets
	 	 	 	 
	EXHIBIT A-2 Minimum Documentary Requirements
	 	 	 	 
	EXHIBIT A-3 Reserved
	 	 	 	 
	EXHIBIT B     Form of Monthly Servicer Report
	 	 	 	 
	EXHIBIT C     Form of Request for Release
	 	 	 	 
	EXHIBIT D     Form of Collateral Schedule for Loans
	 	 	 	 
	EXHIBIT E-1  Form of Initial Certification
	 	 	 	 
	EXHIBIT E-2  Form of Final Certification
	 	 	 	 
	EXHIBIT F     Form of Borrowing Base Certificate
	 	 	 	 
	EXHIBIT G     List of Investors
	 	 	 	 
	EXHIBIT H     Section 7.02 Certification
	 	 	 	 

 

 

SALE AND SERVICING AGREEMENT

          This Sale and Servicing Agreement is entered into effective as of June 30, 2005, among:

	 	(1)	 	CapitalSource Funding V Trust, a Delaware statutory trust (the “Borrower”);
	 
	 	(2)	 	CS Funding V Depositor Inc., a Delaware corporation, as Depositor (in such
capacity, the “Depositor”);
	 
	 	(3)	 	CapitalSource Finance LLC, a Delaware limited liability company
(“CapitalSource”), as Originator (in such capacity, the “Originator”) and as Servicer
(in such capacity, the “Servicer”);
	 
	 	(4)	 	JPMORGAN CHASE BANK, N.A., a national banking association, as Administrative
Agent under the Credit Agreement referred to below (in such capacity, the
“Administrative Agent”); and
	 
	 	(5)	 	Wells Fargo Bank, National Association, a national banking association, as
Paying Agent (the “Paying Agent”), Collateral Custodian (the “Collateral Custodian”)
and Backup Servicer (the “Backup Servicer”).

PRELIMINARY STATEMENTS

          In consideration of the mutual agreements herein contained, the parties hereto hereby agree as
follows for the benefit of each of them and for the benefit of the Lenders and the holders of the
Trust Certificates:

ARTICLE I

DEFINITIONS

          Section 1.01 Definitions.

          Whenever used in this Agreement, the following words and phrases, unless the context otherwise
requires, shall have the meanings specified in this Article.

          “Accepted Servicing Practices”: The servicing practices and collection procedures of the
Servicer that are in accordance with the Underwriting Guidelines, the Required Collateral Documents
and applicable law and which are, in any event, customary servicing practices of prudent
institutions which service loans and assets similar to the Loans and the Assets for their own
account.

          “Act” or “Securities Act”: The Securities Act of 1933.

          “Acquired Loan”: A Loan that is originated by a Person other than the Originator and is
acquired by the Originator in a “true sale” transaction pursuant to an acquisition agreement and
that is otherwise acceptable to the Administrative Agent and the Required Lenders.

 

- 2 -

          “Administration Agreement”: The Administration Agreement, dated as of June 30, 2005, between
the Borrower and the Administrator, as the same may be amended and supplemented from time to time.

          “Administrative Agent”: JPMorgan Chase Bank, N.A., a national banking association.

          “Administrative Agent Fee”: The fees payable to the Administrative Agent referred to in
Section 2.11(c) of the Credit Agreement.

          “Administrator”: CapitalSource Finance LLC, in its capacity as Administrator under the
Administration Agreement.

          “Advance”: Has the meaning assigned to it in the Credit Agreement.

          “Affiliate”: With respect to any specified Person, any other Person controlling or controlled
by or under common control with such specified Person. For the purposes of this definition,
“control” when used with respect to any specified Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.

          “Agreed Foreign Currencies”: Has the meaning assigned to it in the Credit Agreement.

          “Agreement”: This Sale and Servicing Agreement, as the same may be amended and supplemented
from time to time.

          “Aggregate Credit Agreement Exposure”: At any time, the Dollar Equivalent of the aggregate
“Revolving Credit Exposures” of all of the Lenders under the Credit Agreement at such time.

          “Allocation Percentage”:

     (a) With respect to any Revolving Loan as of any date, a fraction, the numerator of
which is equal to portion of the total commitments in respect of such Revolving Loan then
held of record by the Originator that have been allocated to the Borrower under the related
S&SA Assignment, and the denominator of which is equal to the total commitments in respect
of such Revolving Loan then held of record by the Originator.

     (b) With respect to any term Loan as of any date, a fraction, the numerator of which is
equal to portion of the outstanding principal balance in respect of the loans owing by the

related Obligor under the related Loan Documents that are then held of record by the
Originator that have been assigned to the Borrower under the related S&SA Assignment, and
the denominator of which is equal to the aggregate outstanding principal balance in respect
of such loans then held of record by the Originator.

          Notwithstanding anything to the contrary in clauses (a) and (b) above, the “Allocation
Percentage” with respect to any Loan governed by FX Loan Documents shall be equal to 100%.

          “Amortization Period”: The period commencing on the date of termination of the Revolving
Period and terminating on the earlier of (i) the date that is 12 months following the end of the
Revolving Period and (ii) the date on which the Amortization Period is terminated pursuant to

 

- 3 -

Section 2.08. If the Revolving Period is terminated pursuant to Section 2.08 prior to the
commencement of the Amortization Period, then the Amortization Period shall not be applicable.

          “ASA Assignment”: The Assignment of Assets from the Originator to the Depositor under the
Asset Sale Agreement(s).

          “Asset”:

     (a) each Equity Investment sold to the Borrower or an Equity Subsidiary of the Borrower
hereunder; and

     (b) each REO sold to a REO Subsidiary of the Borrower hereunder and pledged to the
Collateral Custodian under a REO Mortgage,

which in each case includes (i) the Required Asset Documents and the Asset File and (ii) all right,
title and interest of the Originator in and to such Non-Loan Collateral. References in this
Agreement to an Asset being sold or otherwise transferred “to the Borrower” hereunder will, in
circumstances in which such Asset has in fact been sold or otherwise transferred to an Equity
Subsidiary or REO Subsidiary, be deemed to be a reference to the sale or other transfer of such
Asset to such Equity Subsidiary or REO Subsidiary.

          “Asset Documents”: With respect to any Asset, the documents comprising the Custodial Asset
File for such Asset.

          “Asset File”: With respect to each Asset, the Custodial Asset File and the Servicer’s Asset
File.

          “Asset Sale Agreement(s)”: The Asset Sale Agreement(s) by CapitalSource, as seller, and the
Depositor, as purchaser, pursuant to which the Depositor acquired or will acquire from time to time
interests in certain Equity Investments and REO, and all supplements and amendments thereto.

          “Assigned Loan”: A Loan originated by a Person other than the Originator in which a constant
percentage or a fixed principal amount has been assigned, or in which a participation interest has
been granted, to the Originator by such Person and which assignment or participation was entered
into in accordance with the Originator’s Underwriting Guidelines and (a) such transaction has been
fully consummated prior to such Loan becoming subject to this Agreement; (b) upon the sale of such
Loan to the Depositor under the Loan Sale Agreement and sale to the Borrower by the Depositor under
this Agreement, any Underlying Notes or Participation Certificates, as the case may be, will be
endorsed in blank and held by the Collateral Custodian on behalf of the Administrative Agent for
the benefit of the Lenders; (c) the agent bank or financial institution, in the case of an
assignment, receives payment directly from the Obligor thereof on behalf of each lender that has
been assigned a percentage interest in such Loan or the bank or financial institution that granted
a participation interest, in the case of participations, received payment on behalf of each lender
that it has granted a participation; and (d) such agent bank or financial institution has been
irrevocably instructed to remit all payments owing in respect of such Assigned Loan to a Remittance
Account.

          “Assigned Property”: Has the meaning given to it in Section 2.01(b).

          “Assignment”: An LPA Assignment, ASA Assignment or S&SA Assignment.

 

- 4 -

          “Backup Servicer”: Wells Fargo Bank, National Association, or any successor thereto appointed
as provided herein.

          “Backup Servicer Fee Letter”: The fee letter, dated as of June 2, 2005, among, inter alia,
the Originator, the Servicer and the Backup Servicer.

          “Backup Servicing Fee”: The fee referred to in Paragraph IV of Schedule of Fees attached to
the Backup Servicer Fee Letter.

          “Backup Servicer Termination Notice”: Has the meaning set forth in Section 9.05(a).

          “Bankruptcy Code”: Title 11 of the United States Code, as amended from time to time, and the
rules thereunder.

          “Bankruptcy Event”: With respect to a Person, shall be deemed to have occurred if either:

     (a) a case or other proceeding shall be commenced, without the application or consent
of such Person, in any court seeking the liquidation, reorganization, debt arrangement,
dissolution, winding up, or composition or readjustment of debts of such Person, the
appointment of a trustee, receiver, custodian, liquidator, assignee, sequestrator or the
like for such Person or for all or substantially all of its assets, or any similar action
with respect to such Person under any law relating to bankruptcy, insolvency,
reorganization, winding up or composition or adjustment of debts, and such case or
proceeding shall continue undismissed or unstayed, and in effect, for a period of 60
consecutive days; or an order for relief in respect of such Person shall be entered in an
involuntary case under the Bankruptcy Code or other similar laws now or hereafter in effect,
or

     (b) such Person shall commence a voluntary case or other proceeding under any
applicable bankruptcy, insolvency, reorganization, debt arrangement, dissolution or other
similar law now or hereafter in effect, or shall consent to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) for such Person or for any substantial part of its assets, or shall make
any general assignment for the benefit of creditors, or shall fail to, or admit in writing
its inability to, pay its debts generally as they become due, or, if a corporation or
similar entity, its board of directors shall vote to implement any of the foregoing.

          “Basic Documents”: This Agreement, the Loan Sale Agreement, the Asset Sale Agreement(s), the
Trust Agreement, the Lockbox Agreement, the Intercreditor Agreement, the Administration Agreement,
the Credit Agreement, the Guarantee and Security Agreement, the other “Basic Documents” (as defined
in the Credit Agreement) and, as and when required to be executed and delivered, the Assignments.

          “Borrowing Base”: On any date of determination, the Dollar Equivalent of the sum (after
excluding Eligible Loans or Eligible Assets, or the portion thereof, that exceed applicable
Concentration Limitations) of:

     (i) the sum, for each Eligible Loan included in the Loan Pool, of the product of (A)
the Principal Balance of such Eligible Loan and (B) the applicable Purchase Price Percentage
for such Eligible Loan (all determined on such date);

 

- 5 -

     (ii) the sum, for each Eligible Asset included in the Collateral, of the product of (A)
the Value of such Eligible Asset and (B) the applicable Purchase Price Percentage for such
Eligible Asset (all determined on such date); and

     (iii) the amount on deposit in the Principal Collections Account and the FX Accounts on
such date of determination, but only to the extent such amount has been applied to reduce
the Principal Balance of the related Loans (without duplication).

          For the avoidance of doubt, each item of Non-Compliant Collateral and each item of Unqualified
Collateral will be excluded from calculations of the Borrowing Base.

          “Borrowing Base Certificate”: A certificate in the form of Exhibit F, duly completed and
executed.

          “Borrowing Base Deficiency”: With respect to any date of determination, an amount equal to
the excess of the Aggregate Credit Agreement Exposure over the Borrowing Base as of such date of
determination.

          “Borrowing Base Excess”: With respect to any date of determination, an amount equal to the
excess of the Borrowing Base over the Aggregate Credit Agreement Exposure, in each case as of such
date of determination.

          “Borrowing Base Amount”: On any date of determination:

     (a) for Dollars, the portion of the Borrowing Base (stated in Dollars) attributable to
(1) the Loans denominated in Dollars, (2) the Assets and (3) amounts on deposit in the
Principal Collections Account on such date of determination; and

     (b) for each Agreed Foreign Currency, the portion of the Borrowing Base (stated in such
Agreed Foreign Currency) attributable to (1) the Loans denominated in such Agreed Foreign
Currency and (2) amount on deposit in the FX Account for such Agreed Foreign Currency on
such date of determination.

          “Business Day”: Any day other than (i) a Saturday or Sunday, or (ii) a day on which banking
institutions in New York City or in the city in which the Corporate Trust Office of the Paying
Agent is located or the city in which the Servicer’s servicing operations are located are
authorized or obligated by law or executive order to be closed.

          “CapitalSource”: CapitalSource Finance LLC, a Delaware limited liability company.

          “CapitalSource Entities”: CapitalSource Finance LLC and all of its subsidiaries.

          “CapitalSource Warehouse Documents”: The commercial loan warehouse documents and agreements
from time to time executed by CapitalSource Entities.

          “Certificateholder”: A holder of a Trust Certificate.

          “Change of Control”: Shall occur if (a) any “Person” or “group” (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), other than the Investors, shall become the
“beneficial owner” (as defined in Section 13(d)-3 and 13(d)-5 under such Act), directly or
indirectly, of shares representing more than the greater of (i) 20% of the shares outstanding of
CapitalSource Inc. and (ii) the

 

- 6 -

percentage of the aggregate then outstanding voting stock of CapitalSource Inc. owned beneficially,
directly or indirectly, by the Investors; or (b) the board of directors of CapitalSource Inc. shall
not consist of at least a majority of Continuing Directors; or (c) CapitalSource Finance LLC shall
cease being owned 100% beneficially, directly or indirectly, by CapitalSource Inc.

          “Clean-up Call Date”: The first Payment Date occurring after the end of the Revolving Period
on which the Aggregate Credit Agreement Exposure declines to 10% or less of the Aggregate Credit
Agreement Exposure as of the end of the Revolving Period.

          “Code”: The Internal Revenue Code of 1986, as amended from time to time, and the regulations
promulgated by the United States Treasury thereunder.

          “Collateral”: All “Collateral” (as defined in the Guarantee and Security Agreement) together
with all Equity Investments owned by all Equity Subsidiaries and all REO owned by all REO
Subsidiaries.

          “Collateral Custodian”: Wells Fargo Bank, National Association.

          “Collateral Custodian Fee”: The fee referred to in Paragraph V of the Schedule of Fees
attached to the Backup Servicer Fee Letter.

          “Collateral Documents”: The Loan Documents together with the Asset Documents.

          “Collateral Files”: The Loan Files together with the Asset Files.

          “Collateral Schedule”: The schedule of Loans and Assets conveyed to the Borrower on each
Transfer Date and delivered to the Administrative Agent and the Collateral Custodian in the form of
a computer-readable transmission acceptable to the Administrative Agent and the Collateral
Custodian. The Collateral Schedule shall contain, as to each Loan, the information specified on
Exhibit D. The Collateral Schedule shall contain, as to each Asset, the information specified in
writing by the Lenders (and agreed by the Collateral Custodian and Servicer) prior to the first
Transfer Date on which an Asset is sold or transferred to the Borrower.

          “Collection Account”: The account designated as such, established and maintained in
accordance with Section 5.01(a).

          “Collection Date”: The date following the Termination Date on which the Aggregate Credit
Agreement Exposure has been reduced to zero, all Letters of Credit issued under the Credit
Agreement have expired or been terminated, all commitments to extend credit under the Credit
Agreement have terminated or been reduced to zero and all amounts payable to the Lenders and the
Administrative Agent under the Credit Agreement and the other Basic Documents have been paid in
full.

          “Commission”: The Securities and Exchange Commission.

          “Concentration Limitations”: On any day, each of the Concentration Limitations set forth
below:

     (i) the aggregate Principal Balance of all Loans of a single Obligor shall not exceed
$30,000,000;

 

- 7 -

     (ii) (A) the aggregate Principal Balance of all Loans the Obligors of which are
domiciled within a single state (other than Florida and California) shall not exceed the
greater of (x) $30,000,000 and (y) 20% of the Pool Value and (B) the aggregate Principal
Balance of all Loans the Obligors of which are domiciled in either the state of Florida or
the state of California shall not exceed the greater of (x) $30,000,000 and (y) 30% of the
Pool Value;

     (iii) the aggregate Principal Balance of Loans the Obligors of which are domiciled in
Canada shall not exceed the greater of (x) $30,000,000 and (y) 20% of the Pool Value;

     (iv) the aggregate Principal Balance of Loans the Obligors of which are domiciled
outside of the United States or Canada shall not exceed the greater of (x) $30,000,000 and
(y) 20% of the Pool Value;

     (v) the aggregate Principal Balance of Loans the Obligors of which are within a single
industry (which shall be determined by the Originator based on the four digit NAIC code and
included on the Collateral Schedule) shall not exceed the greater of (x) $30,000,000 and (y)
30% of the Pool Value;

     (vi) the aggregate Principal Balance of Subordinated Loans shall not exceed the greater
of (x) $30,000,000 and (y) 20% of the Pool Value;

     (vii) the aggregate Principal Balance of Loans assigned Loan Rating 4, 5 and 6 shall
not exceed 25% of the Pool Value, the aggregate Principal Balance of Loans assigned Loan
Rating 5 and 6 shall not exceed 10% of the Pool Value, and the aggregate Principal Balance
of Loans assigned Loan Rating 6 shall not exceed 5% of the Pool Value;

     (viii) the aggregate Principal Balance of DIP Loans shall not exceed the greater of (x)
$20,000,000 and (y) 20% of the Pool Value;

     (ix) the aggregate Principal Balance of Loans subject to Scheduled Payments of interest
on a basis other than monthly or quarterly shall not exceed the greater of (x) $30,000,000
and (y) 30% of the Pool Value;

     (x) aggregate Principal Balance of all Senior B-Note Loans shall not exceed the greater
of (x) $30,000,000 and (y) 20% of the Pool Value; provided that any Senior B-Note Loan or
portion thereof in excess of this limitation shall be considered a Subordinated Loan for
purposes of determining eligibility;

     (xi) the sum on (i) aggregate Principal Balance of Loans to Obligors principally
engaged in the origination of mortgage loans to borrowers who have less than perfect (i.e.,
less than “A”) credit histories, higher debt to income ratios or whose loans otherwise were
underwritten with exceptions to customary “A” quality underwriting guidelines or who present
other risks, (ii) the aggregate Principal Balance of Loans made in respect of undeveloped
land, and (iii) the aggregate Principal Balance of any Loan made in respect of construction
or Enhanced Mezzanine Loans, shall not (x) each exceed the greater of 10% of the Pool Value
and $20,000,000 and (y) in total exceed the greater of 20% of the Pool Value and
$30,000,000;

     (xii) the aggregate Principal Balance of Acquired Loans shall not exceed 50% of the
Pool Value;

 

- 8 -

     (xiii) the sum of (a) the aggregate Principal Balance of Senior Loans and Senior B-Note
Loans with an original term to maturity of 7 years or greater and (b) the aggregate
Principal Balance of Subordinated Loans with an original term to maturity of 10 years or
greater shall not exceed $100,000,000;

     (xiv) the aggregate Value of Equity Investments shall not exceed $60,000,000;

     (xv) the aggregate Value of REO shall not exceed $60,000,000;

     (xvi) the aggregate Value of Assets shall not exceed the greater of (x) 20% of the Pool
Value and (y) $120,000,000; and

     (xvii) without limiting anything in Section 3.10(f), less than 40% of the aggregate
Principal Balance of the Pool Value consists of Loans principally secured by real property
or by an interest in real property.

          “Consolidated CapitalSource Balance Sheet”: (a) for all fiscal periods prior to December 31,
2006, the consolidated CapitalSource balance sheet included in the unaudited consolidating balance
sheets of CapitalSource Inc. for such period delivered pursuant to clause (a) or (b) of Section
7.02 and (b) for the fiscal year ending December 31, 2006, and for all fiscal periods thereafter,
the audited or unaudited (as the case may be) consolidated balance sheets for CapitalSource
delivered pursuant to clause (c) of Section 7.02.

          “Continued Errors”: Has the meaning set forth in Section 9.02(d).

          “Continuing Directors”: The directors of CapitalSource Inc. on the Execution Date, and each
other director if, in each case, such other director’s nomination for election to the board of
directors is recommended by majority of the then Continuing Directors or such other director
receives the vote of the Investors in his or her election by the stockholders of CapitalSource Inc.

          “Credit Agreement”: The Credit Agreement dated as of June 30, 2005 between CapitalSource
Funding V Trust, as borrower, CS Funding V Depositor Inc., CapitalSource Finance LLC, the Lenders
from time to time party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent, as the
same may be amended and supplemented from time to time.

          “Credit Extension”: The making of an Advance under the Credit Agreement or the issuance,
amendment, renewal or extension of a Letter of Credit pursuant to the terms of the Credit
Agreement.

          “Credit Extension Date”: Each date on which a Credit Extension is made.

          “Custodial Asset File”: With respect to each Eligible Asset, the documents delivered to the
Collateral Custodian, as agent for the Administrative Agent for the benefit of the Lenders,
pursuant to Section 2.04.

          “Custodial Collateral Files”: The Custodial Asset Files and the Custodial Loan Files required
to the be delivered to and held by the Collateral Custodian pursuant to the terms hereof.

          “Custodial Loan File”: With respect to each Eligible Loan, the documents delivered to the
Collateral Custodian, as agent for the Administrative Agent, for the benefit of the Lenders,
pursuant to Section 2.04.

 

- 9 -

          “Default”: Any occurrence that is, or with notice or the lapse of time or both would become,
an Event of Default.

          “Deleted Collateral”: An item of Collateral replaced or to be replaced by one or more items
of Qualified Substitute Collateral.

          “Delinquent Loan”: A Loan in the Loan Pool as to which there has occurred both (A) all or any
portion of a payment of interest on or principal of such Loan is not paid when due (without giving
effect to any grace period) or would be so delinquent, but for any amendment, modification, waiver
or variance specifically made to such Loan resulting from the Obligor’s inability to pay such Loan
in accordance with its terms and (B) within 90 calendar days of when such delinquent payment was
first due, all delinquencies have not been cured in accordance with the terms of such Loan as in
effect prior to the effectiveness of any such amendment, modification, waiver or variance.

          “Delivery” and “Deliver”: When used with respect to Trust Account Property means:

     (a) with respect to bankers’ acceptances, commercial paper, negotiable certificates of
deposit and other obligations that constitute “instruments” within the meaning of Section
9-105(l)(i) of the UCC and are susceptible of physical delivery (except with respect to
Trust Account Property consisting of certificated securities (as defined in Section
8-102(a)(4) of the UCC)), physical delivery to the Collateral Custodian or its custodian (or
the related Securities Intermediary) endorsed to the Collateral Custodian or its custodian
(or the related Securities Intermediary) or endorsed in blank (and if delivered and endorsed
to the Securities Intermediary, by continuous credit thereof by book entry to the related
Trust Account);

     (b) with respect to a certificated security (i) delivery of such certificated security
endorsed to, or registered in the name of, the Collateral Custodian or endorsed in blank to
its custodian or the related Securities Intermediary and the making by such Securities
Intermediary of appropriate entries in its records identifying such certificated securities
as credited to the related Trust Account, or (ii) by delivery thereof to a “clearing
corporation” (as defined in Section 8-102(5) of the UCC) and the making by such clearing
corporation of appropriate entries in its records crediting the securities account of the
related Securities Intermediary by the amount of such certificated security and the making
by such Securities Intermediary of appropriate entries in its records identifying such
certificated securities as credited to the related Trust Account (all of the Trust Account
Property described in clauses (a) and (b), “Physical Property”); and, in any event, any such
Physical Property in registered form shall be in the name of the Collateral Custodian or its
nominee or custodian (or the related Securities Intermediary); and such additional or
alternative procedures as may hereafter become appropriate to effect the complete transfer
of ownership of any such Trust Account Property to the Collateral Custodian or its nominee
or custodian, consistent with changes in applicable law or regulations or the interpretation
thereof;

     (c) with respect to any security issued by the U.S. Treasury that is a book-entry
security held through the Federal Reserve System pursuant to federal book-entry regulations,
the following procedures, all in accordance with applicable law, including applicable
federal regulations and Articles 8 and 9 of the UCC: the making by a Federal Reserve Bank
of an appropriate entry crediting such Trust Account Property to an account of the related
Securities Intermediary or the securities intermediary that is (x) also a “participant”
pursuant to applicable federal regulations and (y) is acting as securities intermediary on
behalf of the Securities Intermediary with respect to such Trust Account Property; the
making by such Securities

 

- 10 -

Intermediary or securities intermediary of appropriate entries in its records crediting such
book-entry security held through the Federal Reserve System pursuant to federal book-entry
regulations and Articles 8 and 9 of the UCC to the related Trust Account; and such
additional or alternative procedures as may hereafter become appropriate to effect complete
transfer of ownership of any such Trust Account Property to the Collateral Custodian or its
nominee or custodian, consistent with changes in applicable law or regulations or the
interpretation thereof; and

     (d) with respect to any item of Trust Account Property that is an uncertificated
security (as defined in Section 8-102(a)(18) of the UCC) and that is not governed by clause
(c) above, registration in the records of the issuer thereof in the name of the related
Securities Intermediary, and the making by such Securities Intermediary of appropriate
entries in its records crediting such uncertificated security to the related Trust Account.

          “Depositor”: CS Funding V Depositor Inc., a Delaware corporation.

          “Designated Depository Institution”: With respect to an Eligible Account, an institution
whose deposits are insured by the Bank Insurance Fund or the Savings Association Insurance Fund of
the FDIC, the long-term deposits of which shall be rated “A” or better by S&P or “A2” or better by
Moody’s and the short-term deposits of which shall be rated “P-1” or better by Moody’s and “A-1” or
better by S&P, unless otherwise approved in writing by the Administrative Agent and which is any of
the following: (A) a federal savings and loan association duly organized, validly existing and in
good standing under the federal banking laws, (B) an institution duly organized, validly existing
and in good standing under the applicable banking laws of any state, (C) a national banking
association duly organized, validly existing and in good standing under the federal banking laws,
(D) a principal subsidiary of a bank holding company or (E) approved in writing by the
Administrative Agent and, in each case acting or designated by the Servicer as the depository
institution for the Eligible Account; provided that any such institution or association shall have
combined capital, surplus and undivided profits of at least $50,000,000.

          “DIP Loan”: A Loan to an Obligor that is a “debtor in possession” as defined under the
Bankruptcy Code.

          “Disposition”: A Securitization, Whole Loan Sale transaction, or other disposition of Loans
or Assets, including pursuant to Section 3.07.

          “Disposition Participant”: As applicable, with respect to a Disposition, any “depositor” with
respect to such Disposition, the Administrative Agent, the Lenders, the related trustee and the
related custodian, any nationally recognized credit rating agency, the related underwriters, the
related placement agent, the related credit enhancer, the related whole-loan purchaser, the related
purchaser of securities and/or any other party necessary or, in the good faith belief of any of the
foregoing, desirable to effect a Disposition.

          “Disposition Proceeds”: With respect to a Disposition, (x) the proceeds of the Disposition
remitted to the Borrower and its Subsidiaries in respect of the Loans or Assets transferred on the
date of and with respect to such Disposition, including any cash less all costs, fees and expenses
incurred in connection with such Disposition, including all amounts deposited into any reserve
accounts upon the closing thereof plus or minus (y) all other amounts agreed upon in writing by the
Administrative Agent, the Borrower and the Servicer.

 

- 11 -

          “Distribution Account”: The account designated as such, established and maintained in
accordance with Section 5.01(a).

          “Dollars” and “Dollar Equivalent”: The meanings assigned to such terms in the Credit
Agreement.

          “Due Date”: The day of the month on which a Scheduled Payment is due from the Obligor with
respect to a Loan.

          “Eligible Account”: At any time, an account that is: (i) maintained with a Designated
Depository Institution; or (ii) fully insured by either the Bank Insurance Fund or the Savings
Association Insurance Fund of the FDIC; or (iii) a trust account (which shall be a “segregated
trust account”) maintained with the corporate trust department of a federal or state chartered
depository institution or trust company (including the Paying Agent) with trust powers and acting
in its fiduciary capacity for the benefit of the Administrative Agent and the Borrower, which
depository institution or trust company shall have capital and surplus of not less than
$50,000,000; or (iv) with the prior written consent of the Required Lenders, any other account.

          “Eligible Asset”: With respect to any date of determination, any Asset which complies with
the representations and warranties set forth in Sections 3.03 and 3.04 with respect to such Asset.

          “Eligible Loan”: With respect to any date of determination, any Loan which complies with the
representations and warranties set forth in Sections 3.03 and 3.05 with respect to such Loan.

          “Eligible Obligor”: For any date of determination, any Obligor that is (i) an entity, and not
a natural person, (ii) not a Governmental Authority, (iii) not principally engaged in the nuclear
waste industry, (iv) except with respect to any DIP Loan, not the subject of a Bankruptcy Event,
(v) not an Obligor of a Delinquent Loan and (vi) organized and domiciled in a member country of the
Organisation for Economic Co-operation and Development.

          “Eligible Servicer”: (x) CapitalSource or (y) any other Person to which the Required Lenders
may consent in writing.

          “Enhanced Mezzanine Loan”: Any Loan that (a) is ratably secured among all lenders by a Lien
on real property or the membership or other equity interests of the owner of such real property and
has a subordinated right to payment relative to the senior lenders, and (b) at least 80% of the
underlying real property is planned residential.

          “Environmental Claim”: With respect to any REO property, any written notice, written claim,
written demand or other written communication (collectively, a “claim”) by any Person alleging or
asserting liability of the REO Subsidiary for investigatory costs, cleanup costs, governmental
response costs, damages to natural resources or other property, personal injuries, fines or
penalties arising out of, based on or resulting from (i) the presence, or Release into the
environment, of any Hazardous Materials at such property, or (ii) circumstances forming the basis
of any violation, or alleged violation, of any Environmental Law with respect to such property.
The term “Environmental Claim” shall include any claim by any Governmental Authority for
enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law, and any claim by any third party seeking damages (including punitive
damages), contribution, indemnification, cost recovery, compensation or injunctive relief resulting
from the presence of Hazardous Materials or arising from alleged injury or threat of injury to
health, safety or the environment as a result of the presence, exposure or Release of Hazardous
Materials.

 

- 12 -

          “Environmental Laws”: All laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any
Governmental Authority, relating in any way to the environment, preservation or reclamation of
natural resources, the management, release or threatened release of any Hazardous Material or to
health and safety matters.

          “Environmental Liability”: With respect to any REO, any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines, penalties or
indemnities, and including any Lien filed against such REO in favor of any Governmental Authority),
directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any
Hazardous Materials into the environment or (e) any contract, agreement or other consensual
arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

          “Errors”: Has the meaning set forth in Section 9.02(d).

          “Equity Investments”: The equity investments of CapitalSource Entities in Persons that are
not Affiliates of CapitalSource, including common equity, preferred stock, convertible securities,
limited liability company and limited partnership interests or any functional equivalent of any of
the foregoing (including options and warrants to acquire any of the foregoing) issued to or
acquired by any CapitalSource Entity.

          “Equity Subsidiary”: A Wholly Owned Subsidiary of the Borrower formed for the purpose of
holding Equity Investments and that does not hold any property other than Equity Investments
constituting Eligible Assets (a) whose outstanding equity interests have been pledged to the
Collateral Custodian pursuant to the Guarantee and Security Agreement, (b) that has no Indebtedness
other than Indebtedness under the Guarantee and Security Agreement, (c) that satisfies the “special
purposes entity” covenants and other requirements set forth in Section 4.1 of the Trust Agreement
(mutatis mutandis, as if such Equity Subsidiary were the Borrower) and (d) as to which the Borrower
has delivered an opinion in form and scope satisfactory to the Administrative Agent to the effect
that such Subsidiary will not be substantively consolidated with the Borrower or any of its other
Subsidiaries in a bankruptcy or insolvency proceeding.

          “Event of Default”: Either a Servicer Event of Default or an Event of Default under the
Credit Agreement.

          “Exchange Act”: The Securities Exchange Act of 1934, as amended.

          “Excluded Amounts”: (a) Any amount received in the Lock-Box by, on or with respect to any
Loan in the Loan Pool, which is required to be remitted in payment of any tax, fee or other charge
imposed by any Governmental Authority on such Loan, (b) any amount representing a reimbursement of
insurance premiums which are required to be paid to the related Obligor and (c) any amount with
respect to any Loan retransferred or substituted for that is otherwise replaced by a Qualified
Substitute Loan, to the extent such amount is attributable to a time after the effective date of
such replacement.

          “Execution Date”: June 30, 2005.

          “FDIC”: The Federal Deposit Insurance Corporation and any successor thereto.

 

- 13 -

          “Final Certification”: Has the meaning set forth in Section 2.05(c).

          “Fitch”: Fitch, Inc., or any successor thereto.

          “Foreclosed Loan”: As of any date of determination, any Loan that, as of the end of the
preceding Remittance Period, has been discharged as a result of (i) the completion of foreclosure
or comparable proceedings on the related Loan Collateral by the Servicer on behalf of the Borrower;
(ii) in respect of any Loan secured by real property, the acceptance of the deed or other evidence
of title to the related Mortgaged Property in lieu of foreclosure or other comparable proceeding;
or (iii) the acquisition of title to the related Loan Collateral by operation of law.

          “Foreclosure Property”: Any real property securing a Foreclosed Loan that has been acquired
by the Servicer on behalf of the Borrower through foreclosure, deed in lieu of foreclosure or
similar proceedings in respect of the related Foreclosed Loan.

          “Foreign Currency”: Has the meaning assigned to it in the Credit Agreement.

          “Foreign Currency Advance”: An Advance denominated in a Foreign Currency.

          “Foreign Currency Credit Extension”: A Foreign Currency Advance under the Credit Agreement or
the issuance, amendment, renewal or extension of a Foreign Currency Letter of Credit pursuant to
the terms of the Credit Agreement.

          “Foreign Currency Letter of Credit”: A Letter of Credit denominated in a Foreign Currency.

          “FX Account”: The accounts designated as such, established and maintained in accordance with
Section 5.01(a).

          “FX Loan”: A Loan in relation to which an Obligor that is entitled thereunder to borrow in a
Foreign Currency (whether or not it is also entitled to borrow in Dollars, and whether or not it is
borrowing in a Foreign Currency at such time) and which the Servicer has designated as eligible for
possible foreign currency borrowings hereunder.

          “FX Loan Documents”: All Loan Documents in relation to an FX Loan.

          “Funded Principal Balance”: With respect to any Loan, with respect to any date of
determination, the Dollar Equivalent as of such date of determination (after giving effect to all
payments received thereon and the allocation of any Net Loan Losses with respect thereto for a
Delinquent Loan prior to such date of determination), of the outstanding unpaid principal balance
of the Loan, provided that, for purposes of determining the Borrowing Base, any Liquidated Loan
shall be deemed to have a Funded Principal Balance of zero.

          For the avoidance of doubt:

     (1) the Funded Principal Balance of a Revolving Loan will be increased on each date on
which the Originator makes an additional advance to the related Obligor, and will be
increased by the aggregate amount of funds so advanced by the Originator to such Obligor on
such date multiplied by the Allocation Percentage with respect to such Loan; and

 

- 14 -

     (2) the Funded Principal Balance of a Revolving Loan will be decreased on each date on
which the related Obligor repays a portion of the outstanding principal amount of such Loan,
and will be decreased by the aggregate amount of funds so repaid by the Obligor multiplied
by the Allocation Percentage with respect to such Loan.

          “GAAP”: Generally Accepted Accounting Principles as in effect in the United States.

          “Governmental Actions”: Any and all consents, approvals, permits, orders, authorizations,
waivers, exceptions, variances, exemptions or licenses of, or registrations, declarations or
filings with, any Governmental Authority required under any Governmental Rules.

          “Governmental Authority”: The government of the United States of America, or of any other
nation, or any political subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to
government.

          “Governmental Rules”: Any and all laws, statutes, codes, rules, regulations, ordinances,
orders, writs, decrees and injunctions, of any Governmental Authority and any and all legally
binding conditions, standards, prohibitions, requirements and judgments of any Governmental
Authority.

          “Guarantee and Guarantee and Security Agreement”: Has the meaning assigned to it in the
Credit Agreement.

          “Hazardous Materials”: All explosive or radioactive substances or wastes and all hazardous or
toxic substances, wastes or other pollutants, including petroleum or petroleum distillates,
asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.

          “Indebtedness”: Has the meaning set forth in the Credit Agreement.

          “Indemnified Parties”: Has the meaning set forth in Section 8.01(c).

          “Independent”: When used with respect to any specified Person, such Person (i) is in fact
independent of the Originator, the Servicer, the Depositor or any of their respective Affiliates,
(ii) does not have any direct financial interest in, or any material indirect financial interest
in, the Originator, the Servicer, the Depositor or any of their respective Affiliates and (iii) is
not connected with the Originator, the Depositor, the Servicer or any of their respective
affiliates, as an officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions; provided that a Person shall not fail to be Independent of the
Originator, the Depositor, the Servicer or any of their respective Affiliates merely because such
Person is the beneficial owner of 1% or less of any class of securities issued by the Originator,
the Depositor, the Servicer or any of their respective Affiliates, as the case may be.

          “Initial Certification”: Has the meaning set forth in Section 2.05.

          “Initial Term”: Has the meaning set forth in Section 9.01(c).

          “Initial Transfer Date”: With respect to any Loan or Asset, the date of delivery of the Loan
Sale Agreement or Asset Sale Agreement that identifies such Loan or Asset (or that, in the case of
a Revolving Loan or Letter of Credit, identifies the commitment of the Originator to the related
Obligor pursuant to which such Revolving Loan or Letter of Credit will be made or issued).

 

- 15 -

          “Insurance Policies”: With respect to any Collateral, any insurance policy covering liability
and physical damage to or loss of such Collateral, including any hazard, flood, title,
environmental, flood, accident or life insurance policy.

          “Insurance Proceeds”: All amounts collected in respect of any Collateral or related property
under any Insurance Policy and not required either pursuant to applicable law or the related Loan
Documents to be applied to the restoration of such Collateral or paid to the related Obligor.

          “Intercreditor Agreement”: The Fourth Amended and Restated Intercreditor and Lockbox
Administration Agreement, dated as of June 30, 2005, by and among Bank of America, N.A., as the
lockbox bank, each Financing Agent (as defined therein), the Originator, as the original servicer
and as the lockbox servicer, and CapitalSource Funding, LLC, as the owner of the account and as the
owner of the lockbox, as amended from time to time.

          “Investors”: The investors listed on Exhibit G.

          “Issuing Lender”: Has the meaning assigned to it in the Credit Agreement.

          “JPMCB”: JPMorgan Chase Bank, N.A., and its successors.

          “Junior Subordinated Loan”: Any Loan other than a Senior Secured Loan or a Senior
Subordinated Loan.

          “LC Disbursement”: Has the meaning assigned to it in the Credit Agreement.

          “LC Exposure”: Has the meaning assigned to it in the Credit Agreement.

          “LC Principal Balance”: With respect to any Loan in relation to which one or more Letters of
Credit have been issued, with respect to any date of determination, the Dollar Equivalent as of
such date of determination (after giving effect to all payments received thereon and the allocation
of any Net Loan Losses with respect thereto for a Delinquent Loan prior to such date of
determination), of the aggregate LC Exposure of all such Letters of Credit, provided that, for
purposes of determining the Borrowing Base, any Liquidated Loan shall be deemed to have an LC
Principal Balance of zero.

          “Lender”: Has the meaning assigned to it in the Credit Agreement.

          “Letter of Credit”: Has the meaning assigned to it in the Credit Agreement.

          “Leverage Ratio”: With respect to any Person, as of any date of determination, the ratio of
(a) Total Liabilities of such Person and its Subsidiaries (determined on a consolidated basis,
without duplication, in accordance with GAAP) to (b) Tangible Net Worth of such Person.

          “Lien”: With respect to any asset, (a) any mortgage, lien, pledge, charge, security interest,
hypothecation, option or encumbrance of any kind in respect of such asset or (b) the interest of a
vendor or lessor under any conditional sale agreement, financing lease or other title retention
agreement relating to such asset.

          “Liquidated Loan”: Any Delinquent Loan with respect to which the Servicer has recovered,
whether through a trustee’s sale, foreclosure sale or otherwise, all amounts it expects to recover
from or on account of such Delinquent Loan.

 

- 16 -

          “Loan”: Any loan sold to the Borrower hereunder and pledged to the Collateral Custodian,
which loan includes (i) the Required Loan Documents and the Loan File, (ii) all additional advances
made in respect of such loan by the Originator (to the extent of the Allocation Percentage with
respect to such loan), (iii) all obligations of the related Obligor to reimburse drawings under
Letters of Credit issued under the Credit Agreement at the request of such Obligor; (iv) all right,
title and interest of the Originator in and to the Loan and the related Loan Collateral; and (v)
all related Assigned Property.

          “Loan Collateral”: The collateral securing an Underlying Note which, depending on the type of
Loan, typically consists of accounts receivable, inventory, real estate and/or other tangible and
intangible assets of the Obligors.

          “Loan Documents”: With respect to any Loan, the documents comprising the Custodial Loan File
for such Loan.

          “Loan File”: With respect to each Loan, the Custodial Loan File and the Servicer’s Loan File.

          “Loan Interest Rate”: With respect to each Loan, the annual rate of interest borne by the
related Loan, as shown on the Collateral Schedule, and, in the case of an adjustable-rate Loan, as
the same may be periodically adjusted in accordance with the terms of such Loan.

          “Loan List”: Has the meaning set forth in Section 2.05(c).

          “Loan Pool”: As of any date of determination, the pool of all Loans conveyed to the Borrower
pursuant to this Agreement on all Transfer Dates up to and including such date of determination,
which Loans have not been released from the Lien of the Guarantee and Security Agreement pursuant
to the terms of the Basic Documents, together with the rights and obligations of a holder thereof,
and the payments thereon and proceeds therefrom received on and after the applicable Transfer Date,
as identified from time to time on the Collateral Schedule.

          “Loan Rating”: Either Loan Rating 1, Loan Rating 2, Loan Rating 3, Loan Rating 4, Loan Rating
5 or Loan Rating 6, as applicable.

          “Loan Rating 1”: A rating of 1 pursuant to the Underwriting Guidelines.

          “Loan Rating 2”: A rating of 2 pursuant to the Underwriting Guidelines.

          “Loan Rating 3”: A rating of 3 pursuant to the Underwriting Guidelines.

          “Loan Rating 4”: A rating of 4 pursuant to the Underwriting Guidelines.

          “Loan Rating 5”: A rating of 5 pursuant to the Underwriting Guidelines.

          “Loan Rating 6”: A rating of 6 pursuant to the Underwriting Guidelines.

          “Loan Register”: Has the meaning set forth in Section 4.02.

          “Loan Sale Agreement”: The Loan Sale Agreement, between CapitalSource, as seller, and the
Depositor, as purchaser, dated as of June 30, 2005, and all supplements and amendments thereto.

 

- 17 -

          “Lock-Box”: The post office box to which collections on the Loans are remitted for retrieval
by a Lock-Box Bank and deposited by such Lock-Box Bank into a Lockbox Account.

          “Lockbox Account”: Has the meaning set forth in the Lock-Box Agreement.

          “Lock-Box Agreement”: The Fifth Amended and Restated Three Party Agreement Relating to
Lockbox Services and Control (with Activation Upon Notice), dated as of June 30, 2005, among Bank
of America, N.A. as the lockbox bank, each Financing Agent (as defined therein), the Originator, as
the original servicer and as the lockbox servicer, and CapitalSource Funding Inc., as the owner of
the account and as the owner of the lockbox as amended from time to time.

          “Lock-Box Bank”: Bank of America, N.A., or any of the banks or other financial institutions
holding one or more Lockbox Accounts.

          “LPA Assignment”: The Assignment of Loans from the Originator to the Depositor under the Loan
Sale Agreement.

          “Majority Certificateholders”: Has the meaning set forth in the Trust Agreement.

          “Minimum Documentary Requirements”: The requirements set forth on Exhibit A-2 hereto.

          “Monthly Payment Amount”: With respect to any Payment Date:

     (a) the aggregate amount of interest due and owing under the Credit Agreement on such
Payment Date;

     (b) the aggregate amount of commitment fees and letter of credit fees due and owing
under the Credit Agreement on such Payment Date;

     (c) the aggregate amount of increased cost payments, break-funding payments and tax
payments due and owing under Sections 2.14, 2.15 and 2.16 of the Credit Agreement,
respectively; and

     (d) the aggregate principal amount of Advances or other Credit Extensions outstanding
under the Credit Agreement that are then required to be paid or prepaid under the terms of
the Credit Agreement,

including, in each case, all such amounts due and owing on prior Payment Dates but unpaid on such
Payment Dates, and interest thereon, all at the rates and determined in the manner set forth in the
Credit Agreement.

          “Monthly Servicer Report”: Has the meaning set forth in Section 4.04(b)(2).

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

          “Mortgage”: With respect to any Loan secured by real property, the mortgage, deed of trust or
other instrument securing such Loan, which creates a lien on a fee interest in commercial real
property and/or a lien on a leasehold estate in commercial real property and the assignment of
rents and leases related thereto.

 

- 18 -

          “Mortgaged Property”: With respect to a Loan secured by real property, the related Obligor’s
fee and/or leasehold interest in the commercial real property (and/or all improvements, buildings,
fixtures, building equipment and personal property thereon (to the extent applicable) and all
additions, alterations and replacements made at any time with respect to the foregoing) and all
other collateral securing repayment of all amounts payable under such Loan and the other Required
Loan Documents.

          “Net Proceeds”: With respect to any Payment Date, Proceeds received during the prior
Remittance Period, net of any reimbursements to the Servicer made from such amounts for any
unreimbursed Servicing Compensation and Servicing Advances (including Nonrecoverable Servicing
Advances) made and any other fees and expenses paid in connection with the foreclosure, inspection,
conservation, liquidation, exchange or other disposition of the related Loans or Loan Collateral.

          “Net Loan Losses”: With respect to any Delinquent Loan that is subject to a modification, an
amount equal to the portion of the Principal Balance, if any, released in connection with such
modification.

          “Net Worth”: With respect to any Person, the excess of total assets of such Person, over
total liabilities of such Person, determined in accordance with GAAP.

          “Non-Compliant Collateral”: Has the meaning assigned to it in Section 2.05(d).

          “Non-Performing Loans”: (i) Loans for which CapitalSource has ceased accruing interest and
against which specific provision has been made or (ii) Delinquent Loans.

          “Nonrecoverable Servicing Advance”: With respect to any Loan or any Foreclosure Property, any
Servicing Advance previously made and not reimbursed from late collections, condemnation proceeds,
Proceeds or Insurance Proceeds on the related Loan or Foreclosure Property which, in the good faith
business judgment of the Servicer, as evidenced by an Officer’s Certificate of a Servicing Officer
delivered to the Administrative Agent and the Backup Servicer, would not be ultimately recoverable.

          “Noteless Loan”: A Loan with respect to which the underlying Loan Documents do not require
the Obligor to execute and deliver (and with respect to which the Obligor has in fact not executed
and delivered) a promissory note to evidence the indebtedness created under such Loan.

          “Obligor”: With respect to any Loan, means the obligor(s) under the related Required Loan
Documents, including any Person that has acquired the related Loan Collateral and assumed the
obligations of the original obligor under the related Required Loan Documents, but excluding, in
each case, any such Person that is an obligor or guarantor that is in addition to the primary
obligors or guarantors with respect to the assets, cash flows or credit of which the related Loan
is principally underwritten.

          “Officer’s Certificate”: A certificate signed by a Responsible Officer of the Depositor, the
Originator, the Servicer or the Borrower, in each case, as required by this Agreement.

          “Opinion of Counsel”: A written opinion of counsel who may be employed by the Servicer, the
Depositor, the Originator or any of their respective Affiliates.

          “Optional Disposition Date”: Any Business Day, provided that not less than three Business
Day’s prior written notice is given to the Administrative Agent thereof.

 

- 19 -

          “Originator”: CapitalSource and its permitted successors and assigns.

          “Originator Indemnified Party”: Has the meaning set forth in Section 8.01(c).

          “Owner”: Has the meaning assigned to such term in the Intercreditor Agreement (and is the
owner of the Lockbox Accounts).

          “Owner Trustee”: Wilmington Trust Company, a Delaware banking corporation, not in its
individual capacity but solely as Owner Trustee under this Agreement, and any successor owner
trustee under the Trust Agreement.

          “Owner Trustee Fee”: The fee payable in the Fee Letter dated as of the date hereof, among the
Originator, the Depositor and the Owner Trustee.

          “Participation Certificate”: A valid and enforceable certificate issued pursuant to a
standard participation agreement between the Originator and the originator of the related Loan,
evidencing that the registered owner is the beneficial owner of an undivided participating
ownership interest in the related Loan.

          “Participation Loan”: A Loan, originated by the Originator and serviced by the Servicer in
the ordinary course of its business and in accordance with Accepted Servicing Practices, in which a
participation interest has been granted to another Person in accordance with the Underwriting
Guidelines and such transaction has been fully consummated pursuant to a standard participation
agreement.

          “Paying Agent”: Wells Fargo Bank, National Association.

          “Payment Date”: Has the meaning assigned to it in the Credit Agreement.

          “Percentage Interest”: Has the meaning assigned to it in the Trust Agreement.

          “Performing Loans”: All Loans other than Non-Performing Loans.

          “Permitted Investments”: Each of the following:

     (a) direct general obligations of the United States or the obligations of any agency or
instrumentality of the United States fully and unconditionally guaranteed, the timely
payment or the guarantee of which constitutes a full faith and credit obligation of the
United States;

     (b) federal funds, certificates of deposit, time and demand deposits, and bankers’
acceptances (having original maturities of not more than 365 days) issued or guaranteed by
or placed with, and money market deposit accounts issued or offered by, any domestic office
of any commercial bank organized under the laws of the United States of America or any State
thereof or under the laws of the jurisdiction or any constituent jurisdiction thereof of any
Agreed Foreign Currency, provided that (x) such federal funds, certificates of deposit, time
deposits and banker’s acceptances are held in a securities account (as defined in the
Uniform Commercial Code) through which the Collateral Custodian can perfect a security
interest therein and (y) the short-term debt obligations of such bank are rated “A-1” or
better by S&P and “P-1” or better by Moody’s;

     (c) investment agreements approved by the Administrative Agent, provided that:

 

- 20 -

     (1) the agreement is with a bank or insurance company which has an unsecured,
uninsured and unguaranteed obligation (or claims-paying ability) rated “Aa2” or
better by Moody’s and “AA” or better by S&P; and

     (2) monies invested thereunder may be withdrawn without any penalty, premium or
charge upon not more than one day’s notice (provided such notice may be amended or
canceled at any time prior to the withdrawal date); and

     (3) the agreement is not subordinated to any other obligations of such
insurance company or bank; and

     (4) the same guaranteed interest rate will be paid on any future deposits made
pursuant to such agreement; and

     (5) the Backup Servicer and the Administrative Agent receive an opinion of
counsel that such agreement is an enforceable obligation of such insurance company
or bank;

     (d) commercial paper (having original maturities of not more than 365 days) rated “A-1”
or better by S&P and “P-1” or better by Moody’s;

     (e) investments in money market funds rated “AAAM” or “AAAM-G” by S&P and “Aaa” or
“P-1” by Moody’s (which may be managed by the Collateral Custodian or its Affiliates); and

     (f) investments approved in writing by the Administrative Agent;

provided that (i) no instrument described above is permitted to evidence either the right to
receive (1) only interest with respect to obligations underlying such instrument or (2) both
principal and interest payments derived from obligations underlying such instrument and the
interest and principal payments with respect to such instrument provided a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations; (ii) no instrument
described above may be purchased at a price greater than par if such instrument may be prepaid or
called at a price less than its purchase price prior to stated maturity; (iii) with respect to any
instrument described above, such instrument qualifies as a “permitted investment” within the
meaning of Section 860G(a)(5) of the Code and the regulations thereunder; and (iv) in no event
shall Permitted Investments include any obligation that is not denominated in Dollars or an Agreed
Foreign Currency.

          Each of the Permitted Investments may be purchased by the Collateral Custodian or through an
Affiliate of the Collateral Custodian.

          “Permitted Liens”: (i) Liens for state, municipal or other local taxes if such taxes shall
not at the time be due and payable and (ii) liens imposed by law, such as materialmen’s,
mechanics’, carriers’, workmen’s and repairmen’s liens and other similar liens arising in the
ordinary course of business securing obligations that are not overdue for a period of more than 60
days.

          “Person”: Any individual, corporation, partnership, joint venture, limited liability company,
association, joint-stock company, trust, national banking association, unincorporated organization
or government or any agency or political subdivision thereof.

 

- 21 -

          “Physical Property”: Has the meaning set forth in clause (b) of the definition of “Delivery”
above.

          “Pool Principal Balance”: With respect to any date of determination, the aggregate Principal
Balances of the Loans as of such date of determination.

          “Pool Value”: With respect to any date of determination, an amount equal to the sum of the
aggregate Principal Balance of all Loans and the aggregate Value of all Assets as of such date of
determination.

          “Predecessor Servicer Work Product”: Has the meaning set forth in Section 9.02(d).

          “Principal Balance”: With respect to any Loan, with respect to any date of determination, an
amount equal to the sum (without duplication) of the Funded Principal Balance with respect to such
Loan plus the LC Principal Balance with respect to such Loan.

          “Principal Collections Account”: The account designated as such, established and maintained
in accordance with Section 5.01(a).

          “Proceeding”: Any suit in equity, action at law or other judicial or administrative
proceeding.

          “Proceeds”: With respect to a Liquidated Loan, any cash amounts received in connection with
the liquidation of such Loan, whether through sale, foreclosure sale, liquidation, exchange or
other disposition, whether such disposition is voluntary or involuntary, and any other amounts
required to be deposited in the Collection Account pursuant to Section 5.01(b), in each case other
than Insurance Proceeds.

          “Purchase Price Percentage”: On any Business Day, with respect to each Loan, Equity
Investment and REO, as applicable, a percentage determined as follows:

     (a) with respect to all Performing Senior Secured Loans assigned Loan Rating 1, Loan
Rating 2, Loan Rating 3, Loan Rating 4 or Loan Rating 5, 85%;

     (b) with respect to all Non-Performing Senior Secured Loans assigned Loan Rating 1,
Loan Rating 2, Loan Rating 3, Loan Rating 4 or Loan Rating 5, 55%;

     (c) with respect to all Performing Senior B-Note Loans assigned Loan Rating 1, Loan
Rating 2, Loan Rating 3, Loan Rating 4 or Loan Rating 5, 80%;

     (d) with respect to all Non-Performing Senior B-Note Loans assigned Loan Rating 1, Loan
Rating 2, Loan Rating 3, Loan Rating 4 or Loan Rating 5, 50%;

     (e) with respect to all Performing Senior Subordinated Loans assigned Loan Rating 1,
Loan Rating 2, Loan Rating 3, Loan Rating 4 or Loan Rating 5, 65%;

     (f) with respect to all Non-Performing Senior Subordinated Loans assigned Loan Rating
1, Loan Rating 2, Loan Rating 3, Loan Rating 4 or Loan Rating 5, 35%;

 

- 22 -

     (g) with respect to all Performing Junior Subordinated Loans assigned Loan Rating 1,
Loan Rating 2, Loan Rating 3, Loan Rating 4 or Loan Rating 5, 50%;

     (h) with respect to all Non-Performing Junior Subordinated Loans assigned Loan Rating
1, Loan Rating 2, Loan Rating 3, Loan Rating 4 or Loan Rating 5, 30%;

     (i) with respect to all Senior Secured Loans assigned Loan Rating 6, 50% (net of any
required reserve amounts);

     (j) with respect to all Senior B-Note Loans assigned Loan Rating 6, 35% (net of any
required reserve amounts);

     (k) with respect to all Subordinated Loans assigned Loan Rating 6, 25% (net of any
required reserve amounts);

     (l) with respect to all Equity Investments, 50%; and

     (m) with respect to all REO, 50%.

          “Qualified FIRREA Appraisal”: An appraisal of REO property by an appraiser commissioned
directly by the Administrative Agent, which appraisal shall (a) satisfy the requirements set forth
in 12 C.F.R. Part 34 adopted by the Office of the Comptroller of Currency pursuant to the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3331, et seq.), (b) take into
account the results of a Phase I environmental review performed with respect to such property and
(c) be in form and scope satisfactory to the Administrative Agent.

          “Qualified Substitute Collateral”: Eligible Loan(s) and Eligible Asset(s) substituted for
Deleted Collateral or other Collateral pursuant to Section 3.06, which complies or comply as of the
date of substitution with each representation and warranty set forth in Sections 3.03, 3.04 and
3.05, as applicable.

          “Qualified Transferee”:

     (a) the Depositor, the Borrower, the Collateral Custodian and any Affiliate thereof; or

     (b) any other Person which:

     (i) has at least $50,000 in capital/statutory surplus or shareholders’ equity (except
with respect to a pension advisory firm or similar fiduciary); and

     (ii) is one of the following:

     (A) an insurance company, bank, savings and loan association, investment bank,
trust company, commercial credit corporation, pension plan, pension fund, pension
fund advisory firm, mutual fund, real estate investment trust, governmental entity
or plan;

     (B) an investment company, money management firm or a “qualified institutional
buyer” within the meaning of Rule 144A under the Securities Act, or an
“institutional accredited investor” within the meaning of Regulation D who is a
“qualified purchaser” for purposes of Section 3(c)(7) of the 1940 Act;

 

- 23 -

     (C) the trustee, collateral agent or administrative agent in connection with
(x) a securitization of the subject Loan through the creation of collateralized debt
or loan obligations or (y) an asset-backed commercial paper funded transaction
funded by a commercial paper conduit whose commercial paper notes are rated at least
“A-1” by S&P or at least “P-1” by Moody’s, or (z) a repurchase transaction funded by
an entity which would otherwise be a Qualified Transferee so long as the “equity
interest” (other than any nominal or de minimis equity interest) in the special
purpose entity that issues notes or certificates in connection with any such
collateralized debt or loan obligation, asset-backed commercial paper funded
transaction or repurchase transaction is owned by one or more entities that are
Qualified Transferees under subclauses (A) or (B) above; or

     (D) any entity Controlled (as defined below) by any of the entities described
in clauses (i) above or this clause (ii).

          For purposes of this definition only, “Control” means the ownership, directly or indirectly,
in the aggregate of more than fifty percent (50%) of the beneficial ownership interests of an
entity and the possession, directly or indirectly, of the power to direct or cause the direction of
the management or policies of an entity, whether through the ability to exercise voting power, by
contract or otherwise, and “Controlled” has the meaning correlative thereto.

          “Rating Agencies”: S&P, Moody’s and Fitch or such other nationally recognized credit rating
agencies as may from time to time be designated in writing by the Required Lenders in their sole
discretion.

          “Record Date”: With respect to each Payment Date, the close of business two Business Days
before such Payment Date.

          “Release”: Any release, spill, emission, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching or migration into the indoor or outdoor environment, including the
movement of Hazardous Materials through ambient air, soil, surface water, ground water, wetlands,
land or subsurface strata.

          “Remittance Account”: A Lockbox Account or an FX Account.

          “Remittance Date”: The second Business Day immediately preceding each Payment Date.

          “Remittance Period”: With respect to any Payment Date, the period commencing immediately
following the Record Date for the preceding Payment Date (or, in the case of the initial Payment
Date, commencing immediately following the initial Transfer Date) and ending on and including the
related Record Date.

          “REO”: Real property interests and any improvements thereon acquired by the CapitalSource
Entities.

          “REO Expenses”: With respect to any REO property, all costs and expenses associated with the
maintenance, ownership or operation of such property including: (i) property taxes payable to any
Governmental Authority with respect to the ownership of the property (including any past-due
property taxes that may constitute a lien on such property on the Transfer Date for such property),
(ii) costs of obtaining the casualty, liability and other insurance with respect to such property
required under Exhibit A-1, (iii) the costs of utilities (including gas, electric and water) for
such property, (iv) the

 

- 24 -

cost of providing security for such property, (v) the cost of maintaining such property in
accordance with the standards set forth in Exhibit A-1, (vi) any environmental, remediation or
similar costs required with respect to the property and (vii) any other compliance costs associated
with the property, including the maintenance of operating licenses, compliance with fire codes and
the like.

          “REO Mortgage”: Has the meaning set forth on Exhibit A-1.

          “REO Subsidiary”: A Wholly Owned Subsidiary of the Borrower formed for the purpose of holding
interests in REO and that does not hold any property other than REO constituting Eligible Assets,
(a) whose outstanding equity interests have been pledged to the Collateral Custodian pursuant to
the Guarantee and Security Agreement, (b) that has no Indebtedness other than Indebtedness under
the Guarantee and Security Agreement, (c) that satisfies the “special purposes entity” covenants
and other requirements set forth in Section 4.1 of the Trust Agreement (mutatis mutandis, as if
such REO Subsidiary were the Borrower) and (d) as to which the Borrower has delivered an opinion in
form and scope satisfactory to the Administrative Agent to the effect that such Subsidiary will not
be substantively consolidated with the Borrower or any of its other Subsidiaries in a bankruptcy or
insolvency proceeding.

          “Repurchase Price”: With respect to any Loan or Asset, the product of (a) the Purchase Price
Percentage of such Loan or Asset as of the Transfer Date on which such Collateral was acquired by
the Borrower multiplied by (b) (x) with respect to any Loan, the outstanding principal amount
thereof (determined without regard to any letter of credit exposure) as of such date of repurchase
or (y) with respect to any Asset, the Value thereof as of the Transfer Date on which such
Collateral was acquired by the Borrower.

          “Required Asset Documents”: With respect to:

     (a) Equity Investments, the documents specified in writing by the Lenders (and agreed
by the Collateral Custodian and Servicer) prior to the first Transfer Date on which any
Equity Investment is sold or transferred hereunder; and

     (b) REO, the documents specified in writing by the Lenders (and agreed by the
Collateral Custodian and Servicer) prior to the first Transfer Date on which any REO is sold
or transferred hereunder.

          “Required Collateral Documents”: The Required Asset Documents and the Required Loan Documents
to be delivered to and held by Collateral Custodian pursuant to the terms hereof.

          “Required Lenders”: Has the meaning specified in the Credit Agreement. From and after the
date on which all Advances under the Credit Agreement have been repaid, all commitments to make
Credit Extensions under the Credit Agreement have expired or been terminated, all Letters of Credit
have expired and all other obligations owing to the Administrative Agent and the Lenders under the
Credit Agreement and the other Basic Documents have been repaid in full, “Required Lenders” shall
mean the Majority Certificateholders.

          “Required Loan Documents”: With respect to:

     (a) any Loan (other than an Assigned Loan or a Participation Loan), the duly executed
original of the Underlying Note (unless such Loan is a Noteless Loan, in which case clause
(d) below applies) and an executed original or executed copy of an assignment (which may be
by endorsement or allonge, but, if such assignment is by endorsement or allonge, then such
endorsement or allonge must be an executed original) of such Underlying Note, signed by an

 

- 25 -

officer of the Originator, together with executed originals or executed copies of each
of the following: the related loan agreement, the Collateral Schedule, the participation
agreement (if set forth on the Collateral Schedule), the acquisition agreement (if set forth
on the Collateral Schedule), subordination agreement (if set forth on the Collateral
Schedule), intercreditor agreement (if set forth on the Collateral Schedule), security
agreements or instruments (if set forth in the Collateral Schedule or the Loan Register),
UCC financing statements (if set forth in the Collateral Schedule), guarantee (if set forth
on the Collateral Schedule), for each Loan secured by a Mortgaged Property (if set forth on
the Collateral Schedule), an original executed Assignment of Mortgage and an original
executed Assignment of Leases and Rents; and

     (b) any Loan which is identified on the Collateral Schedule as an Assigned Loan, (i)
the duly executed original of the Underlying Note (unless such Loan is a Noteless Loan, in
which case clause (d) below applies), an executed original or executed copy of an assignment
(which may be by endorsement or allonge, but, if such assignment is by endorsement or
allonge, then such endorsement or allonge must be an executed original) of such Underlying
Note, signed by an officer of the Originator, and an original or copy of the executed
assignment agreement and (ii) duly executed originals or executed copies of each of the
following: the related loan agreement, subordination agreement (if set forth on the
Collateral Schedule), intercreditor agreement (if set forth on the Collateral Schedule),
security agreements, mortgages or instruments (if set forth in the Collateral Schedule), UCC
financing statements (if set forth in the Collateral Schedule) and guarantee (if set forth
on the Collateral Schedule); and

     (c) any Loan which is identified on the Collateral Schedule as a Participation Loan,
(i) the duly executed original or executed copy of each of the following: the participation
agreement, signed by an officer of the Originator, and the related Participation Certificate
(if set forth on the Collateral Schedule) and (ii) duly executed originals or executed
copies of each of the following: the related loan agreement, subordination agreement (if
set forth on the Collateral Schedule), intercreditor agreement (if set forth on the
Collateral Schedule), security agreements, mortgages or instruments (if set forth in the
Collateral Schedule), UCC financing statements (if set forth in the Collateral Schedule) and
guarantee (if set forth on the Collateral Schedule); and

     (d) any Loan which is identified on the Collateral Schedule as a Noteless Loan, a copy
of the Loan Register (together with an executed original or executed copy of a certificate
of a Responsible Officer of the Servicer certifying to the accuracy of such Loan Register as
of the date such Loan is included as a part of the Collateral) and the other documents
required by clause (a) above (if such Loan is not identified on the Collateral Schedule as
an Assigned Loan) or clause (b) above (if such Loan is identified on the Collateral Schedule
as an Assigned Loan), in each case other than an executed original Underlying Note and
assignment of such Underlying Note.

          “Required Overcollateralization Amount”: For any day, an amount equal to 1.5 multiplied by
the Principal Balance of all Loans owing by the single Obligor whose Loans constitute the greatest
Principal Balance of Loans owing by any single Obligor.

          “Responsible Officer”: When used with respect to the Collateral Custodian, any officer within
the Corporate Trust Office of such Person, including any Vice President, Assistant Vice President,
Secretary, Assistant Secretary or any other officer of such Person customarily performing functions
similar to those performed by any of the above designated officers and also, with respect to a
particular matter, any other officer to whom such matter is referred because of such officer’s
knowledge of and familiarity with the particular subject. When used with respect to the Borrower,
any officer of the Owner Trustee who is authorized to act for the Owner Trustee in matters relating
to the Borrower and any officer

 

- 26 -

of the Administrator who is identified on the list of Authorized Officers delivered by the
Administrator on the date hereof (as such list may be modified or supplemented from time to time
thereafter) to the Administrative Agent and the Owner Trustee. When used with respect to the
Depositor, the Servicer, the Originator or any Affiliate of any of them, the Controller, the
President, any Vice President or the Treasurer of such Person.

          “Review Criteria”: Has the meaning set forth in Section 2.05.

          “Revolving Loan”: A Loan in respect of which the lender of record is committed to make
additional advances or other extensions of credit to the related Obligor (provided that such
Obligor is in material compliance with all obligations set forth in the underlying related Loan
Documents, as determined by the Servicer).

          “Revolving Period”: The period commencing on June 30, 2005 and ending on the earlier of (i)
June 30, 2008 (unless extended by the mutual agreement of CapitalSource and the Administrative
Agent, acting with the consent of the requisite Lenders under the Credit Agreement) within thirty
days prior to the then-current expiration date, and (ii) the date on which the Revolving Period is
terminated pursuant to Section 2.08.

          “Sales Price”: For any Transfer Date and any Loan and any Asset, the product of (i) the
applicable Purchase Price Percentage multiplied by (ii) the Funded Principal Balance of such Loan
(or the Value assigned such Asset), in each case as of such Transfer Date.

          “S&SA Assignment”: An Assignment (in substantially the form approved by the Lenders in their
sole discretion prior to the initial Transfer Date, or in such other form as the Lenders and the
Servicer may from time to time agree) of Loans, Assets and other property from the Depositor to the
Borrower pursuant to this Agreement.

          “Scheduled Payment”: With respect to any Loan, the payment of principal and/or interest
scheduled to be made by the related Obligor under the terms of such Loan after the related Transfer
Date, as adjusted pursuant to the terms of the related Required Loan Documents, and any such
payment received after the related Transfer Date.

          “Secured Leverage Ratio”: With respect to any Person, as of any date of determination, the
ratio of (a) Total Secured Liabilities of such Person and its Subsidiaries (determined on a
consolidated basis, without duplication, in accordance with GAAP) to (b) Tangible Net Worth of such
Person.

          “Securities”: The Trust Certificates.

          “Securities Intermediary”: A “securities intermediary” as defined in Section 8-102(a)(14) of
the UCC that is holding a Trust Account for the Collateral Custodian as the sole “entitlement
holder” as defined in Section 8-102(a)(7) of the UCC.

          “Securitization”: A sale or transfer of Loans by the Borrower to any other Person in order to
effect one or a series of structured-finance securitization transactions, including transactions
involving the issuance of securities which may be treated for federal income tax purposes as
indebtedness of CapitalSource or one or more of its wholly owned subsidiaries.

          “Senior Loan”: A Loan that (A)(i) is secured by a first priority lien on all of the Obligor’s
assets constituting Loan Collateral for such Loan (subject to Permitted Liens and portions of the
Loan Collateral in which the Originator did not obtain a first priority lien consistent with its
Underwriting

 

- 27 -

Guidelines), and (ii) provides that the payment obligation of the related Obligor on such Loan is
either senior to, or pari passu with, all other loans or financings to such Obligor or (B)(i) is
underwritten to cashflow or enterprise value rather than asset value, (ii) is appropriately secured
and (iii) is classified by the Originator as a Senior Loan at origination.

          “Senior B-Note Loan”: Any Loan that (A)(i) is secured by a first priority lien on all the
Obligor’s assets constituting Loan Collateral for such Loan (subject to Permitted Liens and
portions of the Loan Collateral in which the Originator did not obtain a first priority lien
consistent with its Underwriting Guidelines), and (ii) that contains provisions which, upon the
occurrence of an event of default under the underlying loan documents or in the case of any
liquidation or foreclosure on the related Loan Collateral, the principal portion of such Loan would
be paid only after the senior tranche of such Loan (the right to payment of which is contractually
senior to the Senior B-Note Loan) is paid in full; or (B)(i) is underwritten to cashflow or
enterprise value rather than asset value, (ii) is appropriately secured and (iii) is classified by
the Originator as a Senior B-Note Loan at origination.

          “Senior Secured Loan”: Either a Senior Loan or a Senior B-Note Loan. Notwithstanding
anything to the contrary herein, in the case of a Loan underwritten to cashflow or enterprise value
rather than asset value that is appropriately secured and is classified by the Originator as a
Senior Loan or a Senior B-Note Loan at origination, the fact that another lender has a first
priority lien on the assets of the applicable Obligor with respect to such other lender’s
asset-backed loan shall not affect the classification of the Loan as a Senior Loan or a Senior
B-Note Loan.

          “Senior Subordinated Loan”: Any Loan (other than a Senior Secured Loan) that is subordinated
only to the first and/or the “Senior-B” secured obligations of such Obligor (including any Senior
Secured Loan to such Obligor).

          “Servicer”: CapitalSource, in its capacity as the servicer hereunder, or any successor
appointed as herein provided.

          “Servicer Event of Default”: Has the meaning set forth in Section 9.01(a).

          “Servicer Extension Notice”: Has the meaning set forth in Section 9.01(c).

          “Servicer Indemnified Party”: Has the meaning set forth in Section 8.01(a).

          “Servicer’s Asset File”: With respect to each Asset, all documents (or electronic images
thereof) relating to such Asset, including copies of all of the Asset Documents included in the
related Custodial Asset File.

          “Servicer’s Collateral Files”: The Servicer’s Asset Files and the Servicer’s Loan Files
maintained pursuant to the terms hereof.

          “Servicer’s Loan File”: With respect to each Loan, all documents (or electronic images
thereof) relating to such Loan, including copies of all of the Loan Documents included in the
related Custodial Loan File.

          “Servicing Advance Reimbursement Amount”: With respect to any Record Date, the amount of any
Servicing Advances that have not been reimbursed as of such date, including outstanding
Nonrecoverable Servicing Advances.

 

`

- 28 -

          “Servicing Advances”: Advances that are made by the Servicer in conformity with the
Underwriting Guidelines.

          “Servicing Compensation”: The Servicing Fee, assumption fees, late payment charges and other
ancillary income with respect to any Loan.

          “Servicing Fee”:

     (a) With respect to each Loan (including any Loan that has been foreclosed and for
which the related Mortgaged Property has become a Foreclosure Property, but excluding any
Liquidated Loan), for each Remittance Period, a per annum fee equal to:

     (1) in the case of a Revolving Loan, 1.25% of the Principal Balance thereof;
and

     (2) in the case of each other Loan, 1.00% of the Principal Balance thereof,

in each case determined at the beginning of such Remittance Period and payable to the
Servicer for the servicing of such Loan out of Scheduled Payments made by the Obligor
thereunder in an amount determined in the manner in effect on the related Transfer Date.

     (b) With respect to each Eligible Asset for each Remittance Period, a per annum fee
equal to 1.00% of the Value thereof, in each case determined at the beginning of such
Remittance Period and payable to the Servicer for the servicing of such Asset out of
payments made on such Asset.

          “Servicing Officer”: Any officer of the Servicer involved in, or responsible for, the
administration and servicing of the Loans whose name and specimen signature appears on a list of
servicing officers annexed to an Officer’s Certificate furnished by the Servicer on the date hereof
to the Borrower and the Administrative Agent, on behalf of the Lenders, as such list may from time
to time be amended.

          “S&P”: Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc., or
any successor thereto.

          “State”: Any one of the states of the United States of America or the District of Columbia.

          “Subordinated Loan”: Any Loan other than a Senior Loan or a Senior B-Note Loan.

          “Subsidiary”: With respect to any Person, any corporation, partnership or other entity of
which at least a majority of the securities or other ownership interests having by the terms
thereof ordinary voting power to elect a majority of the board of directors or other persons
performing similar functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other class or classes of
such corporation, partnership or other entity shall have or might have voting power by reason of
the happening of any contingency) is at the time directly or indirectly owned or controlled by such
Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person.

          “Substitution Adjustment”: As to any date on which a substitution occurs pursuant to Section
2.05 or Section 3.06, the amount, if any, by which:

 

- 29 -

     (a) the aggregate Principal Balance plus the Value of any Qualified Substitute
Collateral determined (in the case of this clause (a)) as of the effective date of such
substitution is less than

     (b) the aggregate of the highest Principal Balance for each Loan in the related Deleted
Collateral during the period from the Initial Transfer Date for such Loan to the effective
date of substitution plus the Value of the related Deleted Collateral, minus the aggregate
amount of principal payments received on the related Loans during such period.

          “Swingline Advance”: Has the meaning assigned to it in the Credit Agreement.

          “Tangible Net Worth”: With respect to any Person, as of any date of determination, the
consolidated Net Worth of such Person and its Subsidiaries, less the consolidated net book value of
all assets of such Person and its Subsidiaries (to the extent reflected as an asset in the balance
sheet of such Person or any Subsidiary at such date) which will be treated as intangibles under
GAAP, including such items as deferred financing expenses, net leasehold improvements, good will,
trademarks, trade names, service marks, copyrights, patents, licenses and unamortized debt discount
and expense; provided that residual securities issued by such Person or its Subsidiaries shall not
be treated as intangibles for purposes of this definition.

          “Term Event”: Has the meaning set forth in Section 9.01(c).

          “Termination Date”: The earliest of (a) the date of termination of the Revolving Period
pursuant to Section 2.08, (b) the date upon which this Agreement terminates pursuant to Section
11.01 or is optionally terminated by the Servicer pursuant to Section 11.02, (c) the date of
declaration of the Termination Date pursuant to Section 9.01(d) or the date of the automatic
occurrence of the Termination Date pursuant to Section 9.01(e) and (d) the termination of the
Amortization Period.

          “Termination Price”: Has the meaning set forth in Section 11.02.

          “Third Party Claim”: Has the meaning set forth in Section 8.01(d).

          “Total Credit Agreement Commitments”: At any time, the aggregate “Commitments” under the
Credit Agreement at such time.

          “Total Liabilities”: With respect to any Person, as of any date of determination, the sum for
such Person and its Subsidiaries (determined on a consolidated basis, without duplication, in
accordance with GAAP) of (a) all Indebtedness (including all convertible debt) of such Person or
any of its Subsidiaries and (b) all other liabilities that should be classified as liabilities on a
balance sheet, including all reserves (other than general contingency reserves) and all deferred
taxes and other deferred items, of such Person or any of its Subsidiaries.

          “Total Secured Liabilities”: With respect to any Person, as of any date of determination, the
sum for such Person and its Subsidiaries (determined on a consolidated basis, without duplication,
in accordance with GAAP) of (a) all Indebtedness (including all convertible debt) of such Person or
any of its Subsidiaries entitled to the benefits of any Lien upon assets of such Person or any of
its Subsidiaries and (b) all other liabilities that should be classified as liabilities on a
balance sheet, including all reserves (other than general contingency reserves) and all deferred
taxes and other deferred items, of such Person or any of its Subsidiaries entitled to the benefits
of any Lien upon assets of such Person or any of its Subsidiaries.

 

- 30 -

          “Transaction Accounts”: The Trust Accounts and the Lockbox Accounts.

          “Transfer Date”: With respect to each Loan and each Asset, the day such Loan or such Asset is
sold and conveyed to the Depositor by the Originator pursuant to the Loan Sale Agreement or other
conveyance document and to the Borrower by the Depositor pursuant to Section 2.01. With respect to
any Qualified Substitute Loan, the Transfer Date shall be the day such Loan is conveyed to the
Borrower pursuant to Section 2.05 or 3.06. For the avoidance of doubt, no Transfer Date shall
occur following the termination of the Revolving Period or during the Amortization Period.

          “Transfer Date Principal Balance”: As to each Loan, its Principal Balance as of the close of
business on the Transfer Date (after giving effect to any payments received on the Loan on or
before the Transfer Date).

          “Transition Costs”: Has the meaning set forth in Section 9.02(a).

          “Trigger Event”: Shall exist if any of the following events shall occur: (i) a Borrowing
Base Deficiency shall have occurred and shall not have been cured within five Business Days of the
occurrence thereof; (ii) a Servicer Event of Default shall have occurred and shall not have been
cured within 15 days of the occurrence thereof; (iii) a Change of Control shall occur; or (iv)
CapitalSource shall have suffered an event of default with respect to any payment of indebtedness
for an amount in excess of $25,000,000 and such indebtedness shall have been accelerated by the
applicable lenders.

          “Trust Account Property”: The Trust Accounts, all amounts and investments held from time to
time in the Trust Accounts and all proceeds of the foregoing.

          “Trust Accounts”: The Distribution Account, the Collection Account, the Principal Collections
Account and the FX Accounts.

          “Trust Agreement”: The Amended and Restated Trust Agreement dated as of June 30, 2005 between
the Depositor and the Owner Trustee, as the same may be amended and supplemented from time to time.

          “Trust Certificate”: Has the meaning set forth in the Trust Agreement.

          “UCC”: The Uniform Commercial Code as in effect in the State of New York.

          “UCC Assignment”: A form “UCC-2” or “UCC-3” statement meeting the requirements of the Uniform
Commercial Code of the relevant jurisdiction to reflect an assignment of a secured party’s interest
in collateral.

          “UCC-1 Financing Statement”: A financing statement meeting the requirements of the Uniform
Commercial Code of the relevant jurisdiction.

          “Underlying Note”: With respect to a Loan, the executed promissory note or other evidence of
the indebtedness (including the related Loan Register to the extent no physical promissory note or
other instrument was executed) of the related Obligor or Obligors.

          “Underwriting Guidelines”: The written credit and collection policies and procedures manual
of the Originator, as the same may (subject to Section 3.08) be amended from time to time.

 

- 31 -

          “Unqualified Collateral”: Has the meaning set forth in Section 3.06(a).

          “Value”: At any time:

     (a) with respect to Equity Investments, the fair value estimate assigned such property
by CapitalSource in its most recently completed quarterly assessment of such property; and

     (b) with respect to any REO property, the value of such property as determined in
accordance with a Qualified FIRREA Appraisal (which the Administrative Agent agrees to
commission at the request and expense of the Borrower) made prior to the Transfer Date (as
of a date not earlier than 180 days prior to the Transfer Date) and thereafter not less
frequently than once every year as required pursuant to paragraph (9) of Exhibit A-1.

          “Whole Loan Sale”: A Disposition of Loans pursuant to a whole-loan sale.

          “Wholly Owned Subsidiary”: With respect to any Person, any corporation, partnership, limited
liability company or other entity of which all of the equity securities or other ownership
interests (other than, in the case of a corporation, directors’ qualifying shares) are directly or
indirectly owned or controlled by such Person or one or more Wholly Owned Subsidiaries of such
Person or by such Person and one or more Wholly Owned Subsidiaries of such Person.

          “Withdrawal Date”: Each date on which amounts are withdrawn from the Principals Collection
Account or an FX Account pursuant to Section 2.07.

          Section 1.02 Other Definitional Provisions.

          (a) Any agreement, instrument or statute defined or referred to herein or in any instrument or
certificate delivered in connection herewith means such agreement, instrument or statute as from
time to time amended, modified or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments incorporated therein; references
to a Person are also to its permitted successors and assigns.

          (b) All terms defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto unless otherwise defined therein.

          (c) As used in this Agreement and in any certificate or other document made or delivered
pursuant hereto or thereto, accounting terms not defined in this Agreement or in any such
certificate or other document, and accounting terms partly defined in this Agreement or in any such
certificate or other document to the extent not defined, shall have the respective meanings given
to them under GAAP. To the extent that the definitions of accounting terms in this Agreement or in
any such certificate or other document are inconsistent with the meanings of such terms under GAAP,
the definitions contained in this Agreement or in any such certificate or other document shall
control.

          (d) The words “hereof”, “herein”, “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular provision of this
Agreement; Article, Section, Schedule and Exhibit references contained in this Agreement are
references to Articles, Sections, Schedules and Exhibits in or to this Agreement unless otherwise
specified; and the term “including” shall mean “including without limitation”.

 

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          (e) The definitions contained in this Agreement are applicable to the singular as well as
the plural forms of such terms and to the masculine as well as to the feminine and neuter genders
of such terms.

ARTICLE II

CONVEYANCE OF THE COLLATERAL

          Section 2.01 Trust Certificates; Conveyance of the Collateral.

          (a) Trust Certificates. On the Execution Date, the Owner Trustee, pursuant to the
instructions of the Depositor, has executed (not in its individual capacity, but solely as Owner
Trustee on behalf of the Borrower) and caused the Trust Certificates to be authenticated and
delivered (which may be by facsimile transmission or in an electronic format) to or at the
direction of the Depositor.

          (b) Offers of Loans and Other Assets to Borrower. On each Transfer Date during the
Revolving Period, the Depositor agrees to offer for sale, and to sell, to the Borrower each of the
Loans and each of the Assets sold and contributed to the Depositor pursuant to the Loan Sale
Agreement, the Asset Sale Agreement(s) or other conveyance document on such Transfer Date, and the
Borrower agrees to purchase all such Eligible Loans and Eligible Assets offered for sale by the
Depositor at a price equal to the Sales Price thereof. No Transfer Date shall occur following the
termination of the Revolving Period or during the Amortization Period.

          On each Transfer Date during the Revolving Period, subject to the conditions precedent set
forth in Section 2.06 and in accordance with the procedures set forth in Section 2.01(c):

     (i) on and subject to the terms set forth in the Loan Sale Agreement or Asset Sale
Agreement(s), the Depositor will acquire from the Originator the Loans and other Assets
specified by the Originator in the related LPA Assignment or ASA Assignment together with
all related property (including all interest and principal on or with respect to such Loans
(including, in the case of Revolving Loans, the principal (to the extent of the related
Allocation Percentage) of all additional advances made by the Originator) and any dividends,
rents and other rights to payments with respect to such Assets on or after the related
Transfer Date, together with all right, title and interest in and to the proceeds of any
related Insurance Policies and all of the Originator’s rights, title and interest in and to
(but none of its obligations under) the Required Loan Documents and all proceeds of the
foregoing) for a price equal to the Sales Price thereof (it being understood that the excess
of the Principal Balance or Value of each such Loan or Asset over the Sales Price thereof
shall be treated as a contribution by the Originator to the Depositor); and

     (ii) pursuant to an S&SA Assignment, the Depositor will assign to the Borrower without
recourse all of its respective right, title and interest, in and to the Collateral being
concurrently transferred on such date to the Depositor as described in clause (i) above and
all of the Depositor’s rights, title and interest in and to (but none of its obligations
under the Loan Sale Agreement and the Asset Sale Agreement(s) and all proceeds of the
foregoing (collectively, the “Assigned Property”) for a price equal to the Sales Price
thereof (it being understood that the excess of the Principal Balance or Value of each such
Loan or Asset over the Sales Price thereof shall be treated as a contribution by the
Depositor to the Borrower).

          Under the Guarantee and Security Agreement, the Borrower grants and pledges all such
Collateral to the Collateral Custodian on behalf of the Lenders as security for the Borrower’s
obligations under the Credit Agreement and the other Basic Documents.

 

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          (c) Advances under Credit Agreement to Finance Purchases. Pursuant to and subject to
the Credit Agreement, the Borrower may, at its sole option, from time to time request an Advance on
any Transfer Date and, upon satisfaction of the conditions precedent to such advance in accordance
with the Credit Agreement, the Administrative Agent shall remit on such Transfer Date, to or at the
direction of the Depositor, an amount equal to the amount of the Advances made by the Lenders under
the Credit Agreement pursuant to such request.

          Notwithstanding anything to the contrary herein, in no event shall the Borrower be required to
purchase Loans or Assets, and the Lenders shall not be required to make Advances, on a Transfer
Date if the conditions precedent to a transfer of the Loans or the Assets under Section 2.06 and
the conditions precedent to the making of such Advances set forth in the Credit Agreement have not
been fulfilled.

          The Servicer shall appropriately note the amount of such Advances in the next succeeding
Monthly Servicer Report.

          As provided in the Credit Agreement, the records of the Administrative Agent and the Lenders
maintained pursuant to Section 2.09 of the Credit Agreement shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the failure of any Lender
or the Administrative Agent to maintain such records or any error therein shall not in any manner
affect the obligation of the Borrower to repay the Advances or other amounts owing under the Credit
Agreement in accordance with the terms thereof.

          Section 2.02 Ownership and Possession of Collateral Files.

          With respect to each item of Collateral, as of the Initial Transfer Date the ownership of the
related Required Collateral Documents and the contents of the related Servicer’s Collateral File
and Custodial Collateral File shall be granted to, and shall be vested in, the Borrower and shall
thereupon constitute part of the Collateral for the benefit of the Administrative Agent and the
Lenders, and the Collateral Custodian shall take possession of the Custodial Collateral Files as
contemplated in Section 2.05.

          Section 2.03 Books and Records; Intention of the Parties; UCC Financing
Statements.

          (a) Books and Records. Each of the Originator and the Depositor shall, at its own
expense:

   (1) within one Business Day following each Transfer Date, indicate on its books and
records, including in its computer files, that the Loans and the Assets identified in each
S&SA Assignment and all related Assigned Property have been sold to the Borrower pursuant to
this Agreement; and

   (2) within one Business Day following each additional advance made in respect of a
Revolving Loan, and each issuance of a Letter of Credit, indicate on its books and records,
including in its computer files, that the principal of such additional advance (to the
extent of the related Allocation Percentage), and all rights to reimbursement under such
Letter of Credit, have been sold to the Borrower pursuant to this Agreement.

          (b) Intention of Parties. Subject to Section 3.01(o), the parties hereto intend that
each of the conveyances contemplated hereby be sales from the Depositor to the Borrower of all of
the

 

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Depositor’s right, title and interest in and to the Loans, the Loan Collateral and the Assets.
If the transactions set forth herein are deemed not to be a sale, the Depositor hereby grants to
the Borrower a security interest in all of the Depositor’s right, title and interest in, to and
under the Loans, the Loan Collateral related thereto and the Assets, whether now existing or
hereafter created, to secure all of the Depositor’s obligations hereunder, and this Agreement shall
constitute a security agreement under applicable law.

     (c) UCC Financing Statements. On or prior to the first Transfer Date:

     (1) the Originator shall, at its expense, cause to be filed:

     (x) UCC-1 Financing Statements naming the Originator as “debtor” and the
Depositor as “secured party” and describing the Collateral being sold by the
Originator to the Depositor with the office of the Secretary of the State in which
the Originator is located and in such other jurisdictions as shall be necessary to
perfect a security interest in the Collateral; and

     (y) UCC Assignments assigning the UCC-1 Financing Statements referred to in
clause (x) above to the Borrower, and from the Borrower to the Collateral Custodian;

     (2) the Depositor shall, at such party’s sole expense, cause to be filed:

     (x) an “all assets” UCC-1 Financing Statements naming the Depositor as “debtor”
and the Borrower as “secured party” with the office of the Secretary of State of the
state in which the Depositor is located and in any other jurisdictions as shall be
necessary to perfect a security interest in the Collateral; and

     (y) UCC Assignments assigning the UCC-1 Financing Statements referred to in
clause (x) above to the Collateral Custodian; and

     (3) the Borrower shall, at such party’s sole expense, cause to be filed an “all assets”
UCC-1 Financing Statements naming the Borrower as “debtor” and the Collateral Custodian as
“secured party” with the office of the Secretary of State of the state in which the Borrower
is located and in any other jurisdictions as shall be necessary to perfect a security
interest in the Collateral.

            (d) Additional Perfection Steps. On and after each Transfer Date, the Borrower shall
take the actions referred to in Section 5.01 of the Guarantee and Security Agreement.

            Section 2.04 Delivery of Collateral Documents.

            (a) Delivery of Collateral Documents Prior to the Transfer Date. On the Business Day
prior to each Transfer Date (or, in the case of the acquisition of a Loan or Asset financed with
the proceeds of a Swingline Advance, before 3:00 p.m. New York time on such Transfer Date), the
Originator shall provide, by facsimile transmission or in an electronic format mutually agreed to
by the parties (with a hard copy to be delivered in accordance with clause (b)(2) below), to the
Depositor, the Borrower, the Collateral Custodian and the Administrative Agent a final Collateral
Schedule with respect to the Collateral proposed to be transferred on such Transfer Date. Each
such final Collateral Schedule shall be true, correct and complete in all material respects, and shall set forth, for each item of
Collateral proposed to be sold to the Borrower, a description of each document executed and
delivered in connection with such Collateral.

 

 - 35 -

          The Originator shall, no later than 3:00 p.m. New York time on the Business Day prior to the
related Transfer Date (or, in the case of the acquisition of a Loan or Asset financed with the
proceeds of a Swingline Advance, no later than 3:00 p.m. New York time on the Business Day after
the related Transfer Date), deliver or cause to be delivered to the Collateral Custodian, as the
designated agent of the Administrative Agent, by facsimile transmission or in an electronic format
mutually agreed to by the parties, (A) with regard to each Loan, (i) a copy of the executed
Underlying Note endorsed in blank or (if such Loan is identified on the Collateral Schedule as a
Noteless Loan) the related Loan Register and (ii) an executed copy of the Assignment of Mortgage
(if set forth on the Collateral Schedule) and (B) with respect to each Asset, (i) a schedule
identifying the Assets to be sold or transferred by the Originator and (ii) a statement of the
Value attributed to such Assets.

          (b) Delivery of Collateral Documents After the Transfer Date. The Originator shall,
within two Business Days after each Transfer Date:

   (1) with respect to a Loan, deliver (or caused to be delivered) to the Collateral
Custodian the original and duly executed Underlying Note (unless such Loan is identified on
the Collateral Schedule as a Noteless Loan) and Assignment of Mortgage (if set forth on the
Collateral Schedule), and all other Required Loan Documents for each Loan which are set
forth on the related Collateral Schedule (such documents being, with respect to each Loan, a
“Custodial Loan File”);

   (2) with respect to an Asset, deliver (or caused to be delivered) to the Collateral
Custodian a copy of each Required Asset Document (such documents being, with respect to each
Asset, a “Custodial Asset File”, and together with each Custodial Loan Files, the “Custodial
Collateral Files”); and

   (3) deliver or cause to be delivered to the Servicer the related Servicer’s Collateral
File for the benefit of, and as agent for, the Administrative Agent, on behalf of the
Lenders.

          (c) Maintenance of Custodial Collateral Files. The Collateral Custodian hereby agrees
to take and maintain continuous physical possession of the Custodial Collateral Files in the State
of Minnesota and, in connection therewith, shall act solely as agent for the Administrative Agent
on behalf of the Lenders in accordance with the terms hereof and not as agent for the Originator,
the Servicer or any other party.

          The Collateral Custodian shall not release any of the Custodial Collateral Files to any Person
unless evidenced first by receipt of Administrative Agent’s written consent to such release in
substantially the form attached as Exhibit C. The Collateral Custodian shall follow the
Administrative Agent’s reasonable written instructions concerning the delivery of the Custodial
Collateral Files. Except as is otherwise expressly permitted under the terms of this Agreement, or
as may be specifically ordered by a court of competent jurisdiction, the Collateral Custodian
hereby agrees not to surrender control and/or possession of, sell, encumber, or otherwise dispose
of the Custodial Collateral Files, or take any other action which could compromise the Lenders’
perfected security interest(s) therein.

          Section 2.05 Acceptance by the Administrative Agent of the Collateral; Certain
Substitutions and Repurchases; Certification
                                 by the Collateral Custodian.

          (a) Collateral Custodian Certification. On or before 11:00 a.m. New York City time on
each Transfer Date (or, in the case of the acquisition of a Loan or Asset financed with the
proceeds of a Swingline Advance, before 5:00 p.m. New York time on such Transfer Date), the
Collateral Custodian

 

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will deliver to the Administrative Agent an initial certification in
substantially the form of Exhibit E-1 (the “Initial Certification”) confirming whether or not it
has received, by facsimile transmission or in electronic format mutually agreed upon by the
parties, (A) with regard to each Loan, (i) a copy of the executed Underlying Note endorsed in blank
or (if such Loan is identified on the Collateral Schedule as a Noteless Loan) the related Loan
Register and (ii) an executed copy of the Assignment of Mortgage (if set forth on the Collateral
Schedule) and (B) with respect to each Asset, (i) a schedule identifying the Assets to be sold or
transferred by the Originator and (ii) a statement of the Value attributed to such Assets.

          (b) Acknowledgement of Receipt of Documents. Based on the Initial Certification
received by it from the Collateral Custodian under clause (a) above, the Administrative Agent
acknowledges receipt of, subject to the further review and exceptions reported by the Collateral
Custodian pursuant to the procedures described below, the documents (or certified copies thereof)
delivered to the Administrative Agent or the Collateral Custodian on its behalf pursuant to Section
2.04.

          (c) Collateral Custodian Review of Collateral Documents. Within five Business Days of
its receipt of the remaining Required Collateral Documents for each item of Collateral, the
Collateral Custodian shall review the related Collateral and Required Collateral Documents to
confirm that:

     (1) for each Loan, to the extent set forth on the Collateral Schedule: (A) the
original Underlying Note (if such Loan is not identified on the Collateral Schedule as a
Noteless Loan) has been properly executed and has no missing or mutilated pages, (B) Uniform
Commercial Code Financing Statements have been filed and recorded and other filings (if any
are required by the Required Loan Documents and if set forth on the Collateral Schedule)
have been made, and (C) the related Principal Balance, Loan number and Obligor name with
respect to such Loan is referenced on the related Collateral Schedule and Loan List and is
not a duplicate Loan; and

     (2) for each Asset, to the extent set forth on the Collateral Schedule: (A) each Asset
Document has been properly executed and has no missing or mutilated pages, (B) Uniform
Commercial Code Financing Statements have been filed and recorded and other filings (if any
are required by the Required Asset Documents and if set forth on the Collateral Schedule)
have been made and (C) the Value of such Asset, the Asset number and the name of the issuer
of or obligor on such Asset is referenced on the related Collateral Schedule and Loan List
is not a duplicate Asset.

          The items referred to in clauses (1) and (2) above are referred to herein as the “Review
Criteria”. To facilitate the foregoing review by the Collateral Custodian, in connection with each
delivery of Required Collateral Documents hereunder to the Collateral Custodian, the Servicer shall
provide to the Collateral Custodian an electronic file (in Excel or a comparable format) (the “Loan
List”) that contains the related Collateral Schedule or that otherwise contains the Loan or Asset
number and the name of the Obligor or borrower with respect to each related Loan or Asset. Upon
completion of such review the Collateral Custodian will deliver a final certification in
substantially the form on Exhibit E-2 (the “Final Certification”) to the Administrative Agent, with
a copy to the Originator, confirming its receipt of the Required Collateral Documents. The Final
Certification will also contain an exception
report attached as an exhibit thereto which will identify any Collateral for which (i) the
Collateral Custodian has not received a Required Collateral Document or (ii) any Review Criteria is
not satisfied.

          (d) Delivery of Missing Collateral Documents. The Originator shall have ten Business
Days to deliver any missing Required Collateral Documents or correct any non-compliance with a
Review Criteria. If, after the conclusion of such time period, the Originator has not delivered
such missing Required Loan Collateral Document or cured any non-compliance by an item of Collateral
with a

 

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Review Criteria and such failure has a material adverse effect on the value or
enforceability of any item of Collateral or the interests of the Collateral Custodian, the
Administrative Agent or the Lenders in any item of Collateral (each such item of Collateral,
“Non-Compliant Collateral”), the Originator shall repurchase such Collateral within one Business
Day of notice thereof from the Administrative Agent at the Repurchase Price thereof with respect to
such Collateral by depositing such Repurchase Price in the Collection Account (provided that the
Originator shall only be required to pay the Repurchase Price with respect to any such Collateral
to the extent that, at the time such repurchase is required pursuant to terms hereof, a Borrowing
Base Deficiency would exist, but shall immediately repurchase such Collateral in the event that at
any later time a Borrowing Base Deficiency shall exist and such representation or warranty shall
not have been cured prior to such time). In lieu of such a repurchase, the Depositor and
Originator may comply with the substitution provisions of Section 3.06. The Originator shall
provide the Servicer, the Borrower and the Administrative Agent with a certification of a
Responsible Officer on or prior to such repurchase or substitution indicating that the Originator
intends to repurchase or substitute such Collateral.

          It is understood and agreed that the obligations of the Originator to repurchase or substitute
any such Collateral pursuant to this Section 2.05(d), and to comply with its obligations under
Section 3.09 with respect to related Letters of Credit, shall constitute the sole remedy with
respect to such failure to comply with the foregoing delivery requirements.

          (e) Limitation on Liability of Collateral Custodian for Review of Collateral Files.
In performing its reviews of the Custodial Collateral Files, the Collateral Custodian shall have no
responsibility to determine the genuineness of any document contained therein and any signature
thereon. The Collateral Custodian shall not have any responsibility for determining whether any
document is valid and binding, whether the text of any assignment or endorsement is in proper or
recordable form, whether any document has been recorded in accordance with the requirements of any
applicable jurisdiction, or whether a blanket assignment is permitted in any applicable
jurisdiction.

          (f) Custody of Servicer’s Collateral Files. The Servicer’s Collateral File shall be
held in the custody of the Servicer for the benefit of the Administrative Agent, on behalf of the
Lenders, and the Servicer shall conspicuously note on the Servicer’s Collateral File that such file
is being held as aforesaid. It is intended that, by the Servicer’s agreement pursuant to this
Section 2.05(f), the Administrative Agent shall be deemed to have possession of the Servicer’s
Collateral Files for purposes of Section 9-313 of the Uniform Commercial Code of the state in which
such documents or instruments are located. The Servicer shall promptly report to the
Administrative Agent any failure by it to hold the Servicer’s Loan File as herein provided and
shall promptly take appropriate action to remedy any such failure. In acting as custodian of such
documents and instruments, the Servicer agrees not to assert any legal or beneficial ownership
interest in the Eligible Loans, Eligible Assets or such documents or instruments. Subject to
Section 8.01(d), the Servicer agrees to indemnify the Lenders and the Administrative Agent, their
officers, directors, employees, agents and “control persons” as such term is used under the Act and
under the Exchange Act for any and all liabilities, obligations, losses, damages, payments, costs
or expenses of any kind whatsoever which may be imposed on, incurred by or asserted against the
Lenders or the Administrative Agent as the result of the gross negligence or willful misfeasance by
the Servicer relating to the maintenance and custody of such documents or instruments
which have been delivered to the Servicer; provided that (1) the Servicer will not be liable for
any portion of any such amount resulting from the gross negligence or willful misconduct of any
Lenders or the Administrative Agent; and (2) the Servicer will not be liable for any portion of any
such amount resulting from the Servicer’s compliance with any instructions or directions consistent
with this Agreement issued to the Servicer by the Administrative Agent or the Required Lenders.
The Administrative Agent shall have no duty to monitor or otherwise oversee the Servicer’s
performance as custodian of the Servicer’s Collateral File hereunder.

 

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          Section 2.06 Conditions Precedent to Transfer Dates; Letters of Credit; FX
Advances, Etc.

          (a) Notice of Transfer Dates. At least one Business Day prior to each proposed
Transfer Date (or, in the case of the acquisition of a Loan or Asset financed with the proceeds of
a Swingline Advance, before 3:00 p.m. New York time on such Transfer Date), the Borrower shall give
notice to the Administrative Agent, the Collateral Custodian and the Paying Agent of such proposed
upcoming Transfer Date and shall provide in such notice (1) an estimate of the number of Loans and
Assets to be transferred on such Transfer Date and (2) the aggregate Principal Balance of such
Loans and the aggregate Value of such Assets.

          (b) Actions on Transfer Dates. On each Transfer Date:

     (1) pursuant to the related S&SA Assignment, the Depositor shall convey to the Borrower
the Collateral and the other Assigned Property described in such S&SA Assignment;

     (2) pursuant to the Guarantee and Security Agreement, such Collateral shall become
subject to the lien in favor of the Collateral Custodian for the benefit of the
Administrative Agent and the Lenders; and

     (3) the Borrower, only upon the satisfaction of each of the conditions set forth below
on or prior to such Transfer Date, shall pay or cause to be paid cash in an amount equal to
the related Sales Price.

          (c) Conditions Precedent to Transfer Date. It shall be a condition precedent to the
occurrence of each Transfer Date that each of the following shall have occurred:

     (i) the Servicer shall have delivered to the Borrower and the Administrative Agent
(with a copy to the Collateral Custodian and the Backup Servicer), no later than 3:00 p.m.
New York City time, one Business Day prior to the related Transfer Date, in form and
substance reasonably satisfactory to the Administrative Agent:

     (A) a Borrowing Request (as defined in the Credit Agreement) requesting
Advances in an aggregate amount equal to the Sales Price for the related Loan or
Asset; a Borrowing Base Certificate; and a Collateral Schedule;

     (B) an S&SA Assignment;

     (C) a copy of the fully executed LPA Assignment or ASA Assignment evidencing
the sale of the Loans or Assets (as applicable) proposed to be sold on such Transfer
Date from the Originator to the Depositor; and

     (D) any other conveyance document evidencing the sale of the Assets proposed to
be sold on such Transfer Date from the Originator to the Depositor;

provided that if a Swingline Advance is requested, the Servicer shall have delivered to the
Borrower and the Administrative Agent (with a copy to the Collateral Custodian and the
Backup Servicer), no later than 3:00 p.m. New York City time on the related Transfer Date,
the documents referred to in clauses (A) through (D) above;

 

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     (ii) the Administrative Agent shall have received the Initial Certification prepared by
the Collateral Custodian with respect to the Loans and the Assets;

     (iii) the amount of the Advances requested under the Credit Agreement shall be in a
denomination permitted under the Credit Agreement, and the currency of such Advances shall
be in a currency permitted under the Credit Agreement;

     (iv) on and as of such day, after giving effect to such transfer, the Aggregate Credit
Agreement Exposure shall not exceed the lesser of (x) the Total Credit Agreement Commitments
and (y) the Borrowing Base;

     (v) a Bankruptcy Event shall not have occurred with respect to the Originator, the
Depositor, the Owner or the Borrower;

     (vi) such Transfer Date shall be during the Revolving Period and the Termination Date
shall not have occurred;

     (vii) each of the representations and warranties made by the Depositor in Section 3.03,
and by the Originator in Section 3.04 with respect to the Eligible Assets and in Section
3.05 with respect to the Eligible Loans, purchased and pledged on a Transfer Date shall be
true and correct as of such Transfer Date with the same effect as if then made and each of
the Depositor and the Originator shall have performed all obligations to be performed by it
under the Basic Documents on or prior to such Transfer Date; provided that, if any
representation or warranty made by the Depositor pursuant to Section 3.03, or by the
Originator pursuant to Section 3.04 or Section 3.05, herein shall be incorrect as of any
Transfer Date with respect to any Loan or any Asset to be purchased on such date, then the
Borrower shall only be relieved of its obligation to purchase such Loan or Asset and,
assuming satisfaction or waiver of the other conditions set forth in this clause (viii), the
Borrower shall nonetheless be obligated to purchase all Loans and all Assets to be purchased
on such date that are unaffected by such breach;

     (viii) the Depositor and the Originator shall have taken any action reasonably
requested by the Administrative Agent, the Borrower or the Lenders required to maintain the
ownership interest of the Borrower in the Collateral and the security interest of the
Collateral Custodian in the Collateral;

     (ix) all conditions precedent to the Depositor’s and the Borrower’s purchase and
contribution of Loans pursuant to the Loan Sale Agreement shall have been fulfilled as of
such Transfer Date;

     (x) all conditions precedent to the Depositor’s and the Borrower’s purchase and
contribution of any Asset pursuant to the applicable Asset Sale Agreement(s) shall have been
fulfilled as of such Transfer Date; and

     (xi) all conditions precedent to the Lenders’ making of the related Advances, or the
Issuing Lender’s issuance of a Letter of Credit, pursuant to the Credit Agreement shall have
been fulfilled as of such Transfer Date.

           (d) Additional Conditions and Procedures Relating to Assets. It shall be a condition
precedent to the occurrence of each Transfer Date with respect to an Asset that each of the
applicable conditions precedent to the acquisition of such Asset set forth on Exhibit A-1 shall
have occurred.

 

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          (e) Additional Provisions Relating to Revolving Loans. For the avoidance of doubt,
the acquisition of a Revolving Loan by the Borrower from the Depositor pursuant to the terms of
this Agreement and the other Basic Documents includes none of the obligations of the Originator (or
the Depositor) to fund future advances to the related Obligor.

          (f) Additional Provisions Relating to Letters of Credit.

   (1) Letter of Credit Issuance Procedure. Notwithstanding anything to the
contrary in the Credit Agreement, the Borrower may request that a Letter of Credit be issued
under the Credit Agreement only if an Obligor has requested that a letter of credit be
issued under the terms of the related Loan.

     (2) Cover. The Originator hereby agrees that, if it shall at any time be
entitled to request or demand cover for letters of credit issued under any Loan in respect
of which a Letter of Credit has been issued under the Credit Agreement, or shall be entitled
to apply amounts received from the related Obligor to cover any such letter of credit
exposure under the terms of such Loan, then:

     (i) the Originator will so request or demand such cover to the greatest extent
that it may do so under applicable law;

     (ii) the Originator will remit to the Collection Account (or, in the case of
Letters of Credit denominated in a Foreign Currency, to the applicable FX Account),
to be maintained therein as cover for the LC Exposure related to such Letter of
Credit as provided in the Credit Agreement and the Guarantee and Security Agreement,
all amounts received by the Originator pursuant to such request or demand, together
with all amounts that it is entitled to so apply from amounts received from the
related Obligor;

     (iii) upon any drawing under any such Letter of Credit, the Administrative
Agent shall debit the amount of such drawing from the Collection Account or FX
Account, as applicable (in the currency in which such drawing was made) and remit
such amount to the Issuing Lender;

     (iv) upon the expiration or cancellation of each such Letter of Credit, all
amounts on deposit in the Collection Account (or applicable FX Account) with respect
to such Letter of Credit shall be remitted to the Originator (or, if any amounts are
owing by the Obligor in respect of such Loan, deposited in the Collection Account
(or applicable FX Account) as a collection from such Obligor); and

     (v) all amounts on deposit in the Collection Account (or FX Account) as cover
for LC Exposure shall be withdrawn solely as provided in the Credit Agreement and
the Guarantee and Security Agreement (and the Servicer agrees to follow instructions
of the Administrative Agent in applying such funds), and (without limiting the
foregoing)
such amounts will not be applied on any Payment Date under Section 2.06(g) or
Article V.

     (3) Relationship with Obligors. The Borrower will not request any Letter of
Credit to be issued on behalf of any Obligor:

     (i) before the Transfer Date on which an S&SA Assignment relating to Loans to
such Obligor has become effective;

 

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     (ii) unless the underlying Loan documents with such Obligor contain customary
letter of credit provisions, including obligations to reimburse all drawings under
such Letter of Credit, and meet the Minimum Documentary Requirements;

     (iii) unless the related Loan Sale Agreement and the S&SA Assignment referred
to in clause (i) above includes a sale of all of the Originator’s right, title and
interest in and to all obligations of such Obligor to reimburse drawings under such
Letter of Credit to the Depositor and a sale of all of the Depositor’s right, title
and interest in and to all obligations of such Obligor to reimburse drawings under
such Letter of Credit to the Borrower, respectively; and

     (iv) the Borrower has executed and delivered to the Issuing Lender the Issuing
Lender’s customary letter of credit application and reimbursement agreement.

          (g) Additional Provisions Relating to Foreign Currency Advances and FX Accounts.
Notwithstanding anything to the contrary herein or in the Credit Agreement:

     (1) the Borrower shall ensure that at all times (x) the aggregate amount of Foreign
Currency Credit Extensions under the Credit Agreement in any single Foreign Currency is not
more than 100% of the Borrowing Base Amount for such Foreign Currency and (y) the aggregate
principal amount of outstanding Dollar-denominated Credit Extensions under the Credit
Agreement is not more than 100% of the Borrowing Base Amount for such Dollars;

     (2) the Borrower shall request a Foreign Currency Advance under the Credit Agreement
only to acquire a Loan denominated in that Foreign Currency or to make an additional
extension of credit to the related Obligor in such Foreign Currency;

     (3) the Originator shall irrevocably instruct each Obligor on a Loan governed by FX
Loan Documents to make all payments on or in respect of such Loan to the applicable FX
Account (including, to the extent that such Obligor makes payments in Dollars, to the
Dollar-denominated FX Account);

     (4) so long as no Trigger Event shall have occurred and be continuing, no Event of
Default under the Credit Agreement or an Event of Default hereunder shall have occurred and
be continuing, the Revolving Period shall not have terminated and the Termination Date shall
not have occurred, the Servicer may apply amounts on deposit in an FX Account to acquire a
Loan denominated in that Foreign Currency, or to make an additional extension of credit to
an Obligor in such Foreign Currency, in each case to the extent otherwise permitted
hereunder (including Section 2.07) and under the other Basic Documents;

     (5) all amounts on deposit in each FX Account on the related Record Date will be
applied on the immediately succeeding Payment Date as follows:

     (i) first to interest accrued on all Advances under the Credit Agreement that
are denominated in that Foreign Currency (it being understood that if insufficient
funds are available in such FX Account to repay all such interest, then interest
will be payable out of funds applied under Article V on such Payment Date);

     (ii) then to the outstanding principal amount of Advances that are denominated
in that Foreign Currency;

 

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     (iii) then to reimburse the Issuing Lender for all drawings under Letters of
Credit issued in such Foreign Currency; and

     (iv) then to be re-deposited in such FX Account for application thereafter as
provided in clause (4) above and this clause (5); and

     (6) if an Event of Default has occurred and be continuing, then the Administrative
Agent may converted all amounts on deposit in each FX Account into Dollars and apply such
funds to the obligations owing under the Credit Agreement and the other Basic Documents as
provided in Section 6.05 of the Guarantee and Security Agreement.

The parties agree that, in addition to the above provisions in this Section 2.06(g), the Servicer
may (x) withdraw from each FX Account all amounts deposited therein in error and (y) withdraw
amounts on deposit in an FX Account in a Foreign Currency to repay amounts owing under the Credit
Agreement in such Foreign Currency (in which case amounts so paid will be applied as provided in
the Credit Agreement).

          Section 2.07 Additional Advances; Withdrawal from Certain Accounts.

          If, on any date of determination, there exists a Borrowing Base Excess, the Borrower may, at
its option:

     (a) request an Advance (in Dollars or in an Agreed Foreign Currency) under the Credit
Agreement; or

     (b) withdraw funds on deposit in the Principal Collections Account pursuant to Section
5.01(c)(2)(i) or an FX Account pursuant to Section 2.06(g)(4),

in each case on and subject to the terms provided herein, in the Credit Agreement and in each of
the other Basic Documents, up to an amount equal to such Borrowing Base Excess. Each Advance
requested, and each withdrawal, in accordance with this Section 2.07 shall be subject to the
following conditions:

     (i) as of such date, none of the Originator, the Depositor, the Owner or the Borrower
shall (A) be subject to a Bankruptcy Event or (B) have reason to believe that its insolvency
is imminent;

     (ii) the Revolving Period shall not have terminated and the Termination Date shall not
have occurred;

     (iii) in the case of an Advance, all conditions precedent to the Lenders’ making of
such Advance pursuant to the Credit Agreement shall have been fulfilled as of such date;
and, in the case of a withdrawal, all conditions precedent to the Lenders’ making of an
Advance pursuant to the Credit Agreement in the amount and currency of such withdrawal shall have been
fulfilled as of such date (other than delivery of a Borrowing Request); and

     (iv) without limiting anything above in this Section 2.07, if the proceeds of such
Advance or the amount of such withdrawal is being used to finance the acquisition of Loans
or Assets on a Transfer Date, then the Transfer Date procedures set forth herein (including
in Section 2.06) and in the other Basic Documents shall be followed.

 

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          Section 2.08 Termination of Revolving Period or Amortization Period.

          Upon the occurrence of (i) an Event of Default or (ii) a Trigger Event, the Administrative
Agent may, in any such case, in its sole discretion and upon written notice to the Servicer,
terminate the Revolving Period or the Amortization Period as the case may be.

          Section 2.09 Correction of Errors.

          The parties hereto who have relevant information shall cooperate to reconcile any errors in
calculating the Sales Price of the Collateral from and after the related Transfer Date. If an
error in the Sales Price of the Collateral is discovered by either party, any miscalculations of
Principal Balance of the Loans or of the Value of the Assets, accrued interest, or aggregate
unreimbursed Servicing Advances attributable to the applicable item of Collateral, or any
prepayments not properly credited, such party shall give prompt notice to the other parties hereto,
and the party that shall have benefited from such error shall promptly remit to the other, by wire
transfer of immediately available funds, the amount of such error with no interest thereon.

          Section 2.10 Commencement of Amortization Period.

          If the Revolving Period is not extended by the mutual agreement of CapitalSource and the
Administrative Agent as provided in the definition of “Revolving Period” herein, the Amortization
Period shall automatically commence on the day following the end of the Revolving Period and shall
continue for a period of 12 months unless terminated pursuant to Section 2.08.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

          Section 3.01 General Representations and Warranties of the Depositor.

          The Depositor hereby represents, warrants and covenants to the other parties hereto and the
Lenders that, as of the Execution Date, as of each Transfer Date, as of each Credit Extension Date
and as of each Withdrawal Date:

     (a) Organization and Qualification. The Depositor has been duly organized and
is validly existing and in good standing as a corporation under the laws of the State of
Delaware, with requisite power and authority to own its properties and to transact the
business in which it is now engaged, including to enter into and perform its obligations
under each Basic Document to which it is a party, and is duly qualified to do business and
is in good standing (or is exempt from such requirements) in each State of the United States
where the nature of its business requires it to be so qualified and the failure to be so
qualified and in good standing could reasonably be expected to have a material adverse
effect (herein, a “Depositor Material Adverse Effect”) on (i) the business, assets, operations, prospects or condition, financial or otherwise,
of the Depositor and its Subsidiaries taken as a whole, (ii) the ability of the Depositor to
perform any of its obligations under this Agreement or any of the other Basic Documents to
which it is a party or (iii) the rights of or benefits available to the Collateral
Custodian, the Administrative Agent or the Lenders under this Agreement or any of the other
Basic Documents.

     (b) No Conflict. The execution, delivery and performance by the Depositor of
its obligations under each Basic Document to which it is a party and the consummation of the

 

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transactions therein contemplated will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, or result in the creation or
imposition of any Lien (other than any Lien created by the Basic Documents), charge or
encumbrance upon any of the property or assets of the Depositor or any of its Affiliates
pursuant to the terms of, any of its organizational documents or any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which it or any of its
Affiliates is bound or to which any of its property or assets is subject, nor will such
action result in any violation of the provisions of its organizational documents or any
Governmental Rule applicable to the Depositor or any of its properties.

     (c) Authorization and Enforceability. Each of the Basic Documents to which the
Depositor is a party has been duly authorized, executed and delivered by the Depositor and
(assuming due authorization, execution and delivery by each other party thereto) is a valid
and legally binding obligation of the Depositor, enforceable against the Depositor in
accordance with its terms, subject to enforcement of bankruptcy, insolvency, reorganization,
moratorium and other similar laws of general applicability relating to or affecting
creditors’ rights and to general principles of equity, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other similar
laws relating to or affecting the rights of creditors generally, and by general equity
principles (regardless of whether such enforcement is considered in a proceeding in equity
or at law).

     (d) No Violation. The Depositor is not in violation of its organizational
documents or in default under any agreement, indenture or instrument the effect of which
violation or default could reasonably be expected to have a Depositor Material Adverse
Effect. The Depositor is not in violation of, and the execution and delivery by the
Depositor of each Basic Document to which the Depositor is a party and its performance and
compliance with the terms of each Basic Document to which the Depositor is a party will not
constitute a violation with respect to any Governmental Rule of any Governmental Authority
having jurisdiction, which violation could reasonably be expected to have a Depositor
Material Adverse Effect.

     (e) Governmental Action. No Governmental Action is required for (i) the
execution, delivery and performance by the Depositor of, or compliance by the Depositor
with, any of the Basic Documents to which the Depositor is a party, (ii) the sale and
contribution of Loans and Assets to the Borrower, or (iii) the consummation of the
transactions required of it by any Basic Document to which it is a party, except such as
shall have been obtained before the date hereof, other than the filing or recording of
financing statements, instruments of assignment and other similar documents necessary in
connection with the sale and contribution of Loans and Assets to the Borrower.

     (f) Licenses. The Depositor possesses all material licenses, certificates,
authorities or permits issued by the appropriate state, federal or foreign regulatory
agencies or bodies necessary to conduct the business now operated by it, and has not
received any notice of proceedings relating to the revocation or modification of any such
license, certificate, authority or permit which, singly or in the aggregate, would reasonably be expected to have a
Depositor Material Adverse Effect.

     (g) Litigation. There are no actions or proceedings against, or investigations
of, the Depositor currently pending with regard to which the Depositor has received service
of process and no action or proceeding against, or investigation of, the Depositor is, to
the knowledge of the Depositor, threatened or otherwise pending before any Governmental
Authority that (i) would prohibit its entering into any of the Basic Documents to which it
is a party or render the Credit

 

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Extensions invalid, (ii) seeks to prevent the making of the
Credit Extensions or the consummation of any of the transactions contemplated by any of the
Basic Documents to which it is a party, (iii) would prohibit or materially and adversely
affect the performance by the Depositor of its obligations under, or the validity or
enforceability of, any of the Basic Documents to which it is a party, (iv) that could
reasonably be expected to have a Depositor Material Adverse Effect or (v) seeking to affect
adversely the income tax treatment of the Credit Extensions.

     (h) Investment Company Act. The Depositor is not, and neither the making of
the Credit Extensions nor the activities of the Depositor pursuant to the Basic Documents
shall require the Depositor to register as, an “investment company” or under the “control”
of an “investment company” as such terms are defined in the Investment Company Act of 1940,
as amended.

     (i) Solvency, Etc. The Depositor is solvent, is able to pay its debts as they
become due and has capital sufficient to carry on its business and its obligations
hereunder; it will not be rendered insolvent by the execution and delivery of any of the
Basic Documents to which it is a party or the assumption of any of its obligations
thereunder; and no petition of bankruptcy (or similar insolvency proceeding) has been filed
by or against the Depositor. The Depositor did not transfer the Loans and the Assets sold
or contributed to the Borrower with any intent to hinder, delay or defraud any of its
creditors; nor will the Depositor be rendered insolvent as a result of such sale or
contribution. The Depositor has received fair consideration and reasonably equivalent value
in exchange for the Loans and Assets sold and contributed by it to the Borrower.

     (k) Title. The Depositor had good and valid title to, and was the sole owner
of each Loan or Asset sold or contributed by the Depositor to the Borrower, free and clear
of any Lien other than any Lien released simultaneously with the sale or contribution
contemplated herein, and, immediately upon each transfer and assignment herein contemplated,
the Depositor will have delivered to the Borrower good and valid title to, and the Borrower
will be the sole owner of, each Loan or Asset transferred by the Depositor to the Borrower,
and the Collateral Custodian will have a first priority perfected Lien in each such Loan and
Asset, in each case free and clear of any other Lien. The Depositor acquired title to each
of such Loans and Assets in good faith, without notice of any adverse claim.

     (l) Disclosure. None of the Basic Documents to which the Depositor is a party,
nor any Officer’s Certificate, statement, report or other document prepared by the Depositor
and furnished or to be furnished by it pursuant to any of the Basic Documents to which it is
a party or in connection with the transactions contemplated thereby contains any untrue
statement of material fact or omits to state a material fact necessary to make the
statements contained herein or therein not misleading.

     (m) Brokers. The Depositor has not dealt with any broker or agent or other
Person who might be entitled to a fee, commission or compensation in connection with the
transaction contemplated by this Agreement or any of the other Basic Documents.

     (n) Chief Executive Offices. The principal place of business and chief
executive offices of the Depositor are located at 4445 Willard Avenue, Chevy Chase, Maryland
20815, or such other address within the United States as shall be designated by the
Depositor in a written notice to the other parties hereto.

     (o) Effect of Transfer of Loans and Assets. The transfer of the Loans and
Assets by the Depositor to the Borrower pursuant to the Basic Documents, upon the making of
Advances

 

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and other Credit Extensions under the Credit Agreement, is intended to constitute a
financing of such Loans and Assets for tax and consolidated accounting purposes (with a
notation that it is treating the transfers as a sale for legal and all other purposes on its
books, records and financial statements, in each case, consistent with GAAP).

          It is understood and agreed that the representations and warranties set forth in this Section
3.01 shall survive delivery of the respective Custodial Collateral Files to the Collateral
Custodian (as the agent of the Administrative Agent) and shall inure to the benefit of the Lenders,
the Administrative Agent, the Owner Trustee and the Borrower. Upon discovery by the Depositor or
the Borrower of a breach of any of the foregoing representations and warranties that materially and
adversely affects the value of any Loan or Asset or the interests of the Lenders in any Eligible
Loan, Eligible Asset or in the Advances or other Credit Extensions, the party discovering such
breach shall give prompt written notice to each of the parties hereto.

          Section 3.02 General Representations and Warranties of the Originator.

          The Originator hereby represents and warrants to the other parties hereto and the Lenders
that, as of the Execution Date, as of each Transfer Date, as of each Credit Extension Date and as
of each Withdrawal Date:

     (a) Organization and Qualification. The Originator has been duly organized and
is validly existing and in good standing as a limited liability company under the laws of
the State of Delaware, with requisite power and authority to own its properties and to
transact the business in which it is now engaged, including to enter into and perform its
obligations under each Basic Document to which it is a party, and is duly qualified to do
business and is in good standing (or is exempt from such requirements) in each State of the
United States where the nature of its business requires it to be so qualified and the
failure to be so qualified and in good standing could reasonably be expected to have a
material adverse effect (herein, an “Originator Material Adverse Effect”) on (i) the
business, assets, operations, prospects or condition, financial or otherwise, of the
Originator and its Subsidiaries taken as a whole, (ii) the ability of the Originator to
perform any of its obligations under this Agreement or any of the other Basic Documents to
which it is a party or (iii) the rights of or benefits available to the Collateral
Custodian, the Administrative Agent or the Lenders under this Agreement or any of the other
Basic Documents. Without limiting the generality of the foregoing, the Originator (A) is
duly qualified, in good standing and licensed to carry on its business in each state where
any Loan Collateral related to a Loan sold by it is located to the extent necessary to
ensure the enforceability of each Loan and the servicing of the Loan in accordance with
Accepted Servicing Practices and (B) is in compliance with the laws of any such
jurisdiction, in both cases, to the extent necessary to ensure the enforceability of such
Loan in accordance with the terms thereof.

     (b) No Conflict. The execution, delivery and performance by the Originator of
its obligations under each Basic Document to which it is a party and the consummation of the
transactions therein contemplated will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, or result in the creation or imposition
of any Lien (other than any Lien created by the Basic Documents), charge or encumbrance upon
any of the property or assets of the Originator or any of its Affiliates pursuant to the
terms of, any of its organizational documents or any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which it or any of its Affiliates is
bound or to which any of its property or assets is subject, nor will such action result in
any violation of the provisions of its organizational documents or any Governmental Rule
applicable to the Depositor or any of its properties.

 

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     (c) Authorization and Enforceability. Each of the Basic Documents to which the
Originator is a party has been duly authorized, executed and delivered by the Originator and
(assuming due authorization, execution and delivery by each other party thereto) is a valid
and legally binding obligation of the Originator, enforceable against the Originator in
accordance with its terms, subject to enforcement of bankruptcy, insolvency, reorganization,
moratorium and other similar laws of general applicability relating to or affecting
creditors’ rights and to general principles of equity, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other similar
laws relating to or affecting the rights of creditors generally, and by general equity
principles (regardless of whether such enforcement is considered in a proceeding in equity
or at law).

     (d) No Violation. The Originator is not in violation of its organizational
documents or in default under any agreement, indenture or instrument the effect of which
violation or default could reasonably be expected to have an Originator Material Adverse
Effect. The Originator is not in violation of, and the execution and delivery by the
Originator of each Basic Document to which the Originator is a party and its performance and
compliance with the terms of each Basic Document to which the Originator is a party will not
constitute a violation with respect to any Governmental Rule of any Governmental Authority
having jurisdiction, which violation could reasonably be expected to have an Originator
Material Adverse Effect.

     (e) Governmental Action. No Governmental Action is required for (i) the
execution, delivery and performance by the Originator of, or compliance by the Originator
with, any of the Basic Documents to which the Originator is a party, (ii) the sale and
contribution of Loans and Assets to the Depositor, or (iii) the consummation of the
transactions required of it by any Basic Document to which it is a party, except such as
shall have been obtained before the date hereof, other than the filing or recording of
financing statements, instruments of assignment and other similar documents necessary in
connection with the sale and contribution of Loans and Assets to the Depositor.

     (f) Licenses. The Originator possesses all material licenses, certificates,
authorities or permits issued by the appropriate state, federal or foreign regulatory
agencies or bodies necessary to conduct the business now operated by it, and has not
received any notice of proceedings relating to the revocation or modification of any such
license, certificate, authority or permit which, singly or in the aggregate, would
reasonably be expected to have an Originator Material Adverse Effect.

     (g) Litigation. There are no actions or proceedings against, or investigations
of, the Originator currently pending with regard to which the Originator has received
service of process and no action or proceeding against, or investigation of, the Originator
is, to the knowledge of the Originator, threatened or otherwise pending before any
Governmental Authority that (i) would prohibit its entering into any of the Basic Documents
to which it is a party or render the Credit Extensions invalid, (ii) seeks to prevent the
making of the Credit Extensions or the consummation of any of the transactions contemplated by any of the Basic Documents to which it is a
party, (iii) would prohibit or materially and adversely affect the performance by the
Originator of its obligations under, or the validity or enforceability of, any of the Basic
Documents to which it is a party, (iv) that could reasonably be expected to have an
Originator Material Adverse Effect or (v) seeking to affect adversely the income tax
treatment of the Credit Extensions.

     (h) Investment Company Act. The Originator is not, and neither the making of
the Credit Extensions nor the activities of the Originator pursuant to the Basic Documents
shall

 

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require the Originator to register as, an “investment company” or under the “control”
of an “investment company” as such terms are defined in the Investment Company Act of 1940,
as amended.

     (i) Solvency, Etc. The Originator is solvent, is able to pay its debts as they
become due and has capital sufficient to carry on its business and its obligations
hereunder; it will not be rendered insolvent by the execution and delivery of any of the
Basic Documents to which it is a party or the assumption of any of its obligations
thereunder; and no petition of bankruptcy (or similar insolvency proceeding) has been filed
by or against the Originator. The Originator did not transfer the Loans and the Assets sold
or contributed to the Depositor with any intent to hinder, delay or defraud any of its
creditors; nor will the Originator be rendered insolvent as a result of such sale or
contribution. The Originator has received fair consideration and reasonably equivalent
value in exchange for the Loans and Assets sold and contributed by it to the Depositor.

     (k) Title. The Originator had good and valid title to, and was the sole owner
of each Loan or Asset sold or contributed by the Originator to the Depositor, free and clear
of any Lien other than any Lien released simultaneously with the sale or contribution
contemplated herein, and, immediately upon each transfer and assignment herein contemplated,
the Originator will have delivered to the Depositor good and valid title to, and the
Depositor will be the sole owner of, each Loan or Asset transferred by the Originator to the
Depositor, and the Collateral Custodian will have a first priority perfected Lien in each
such Loan and Asset, in each case free and clear of any other Lien. The Originator acquired
title to each of such Loans and Assets in good faith, without notice of any adverse claim.

     (l) Disclosure. None of the Basic Documents to which the Originator is a
party, nor any Officer’s Certificate, statement, report or other document prepared by the
Originator and furnished or to be furnished by it pursuant to any of the Basic Documents to
which it is a party or in connection with the transactions contemplated thereby contains any
untrue statement of material fact or omits to state a material fact necessary to make the
statements contained herein or therein not misleading.

     (m) Brokers. The Originator has not dealt with any broker or agent or other
Person who might be entitled to a fee, commission or compensation in connection with the
transaction contemplated by this Agreement or any of the other Basic Documents.

     (n) Chief Executive Offices. The principal place of business and chief
executive offices of the Originator are located at 4445 Willard Avenue, Chevy Chase,
Maryland 20815, or such other address within the United States as shall be designated by the
Originator in a written notice to the other parties hereto.

     (o) Effect of Transfer of Loans and Assets. The transfer of the Loans and
Assets by the Originator to the Depositor pursuant to the Basic Documents, upon the making
of Advances and other Credit Extensions under the Credit Agreement, is intended to
constitute a financing of such Loans and Assets for tax and consolidated accounting purposes (with a notation
that it is treating the transfers as a sale for legal and all other purposes on its books,
records and financial statements, in each case, consistent with GAAP).

     (p) Servicing Compensation. The Originator acknowledges and agrees that the
Servicing Compensation represents reasonable compensation for the performance of its
services hereunder and that the entire Servicing Compensation shall be treated by the
Originator, for

 

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accounting purposes, as compensation for the servicing and administration of
the Loans pursuant to this Agreement.

     (q) Financial Covenants. The Originator is in compliance with the financial
covenants set forth in Section 7.01.

     (r) Financial Statements. The Originator has heretofore furnished to the
Administrative Agent (a) CapitalSource Inc.’s audited consolidated balance sheets and
statements of income, cash flows and changes in shareholders’ equity (and, separately
stated, CapitalSource Inc.’s unaudited consolidating balance sheets and statements of
income) as of the end of and for the fiscal year ended December 31, 2004 and (b)
CapitalSource Inc.’s unaudited consolidated balance sheets and statements of income, cash
flows and changes in shareholders’ equity (and, separately stated, CapitalSource Inc.’s
unaudited consolidating balance sheets and statements of income) as of the end of and for
the portion of the fiscal year ended March 31, 2005. The consolidated CapitalSource balance
sheet and income statement included in such unaudited consolidating financial statements
present fairly, in all material respects, the financial condition of the Originator and its
Subsidiaries as at said date and the results of their operations for the fiscal year and
six-month period ended on said date (subject, in the case of such financial statements as at
June 30, 2005, to normal year-end audit adjustments), all in conformity with GAAP. Since
December 31, 2004, there has been no material adverse change in the consolidated business,
operations or financial condition of the Originator and its Subsidiaries taken as a whole
from that set forth in said financial statements as at said date.

          It is understood and agreed that the representations and warranties set forth in this Section
3.02 shall survive delivery of the respective Custodial Collateral Files to the Collateral
Custodian (as the agent of the Administrative Agent) and shall inure to the benefit of the Lenders,
the Depositor, the Servicer, the Administrative Agent, the Owner Trustee and the Borrower. Upon
discovery by the Originator, the Servicer, the Depositor or the Borrower of a breach of any of the
foregoing representations and warranties that materially and adversely affects the value of any
Loan or Asset or the interests of the Lenders in any Eligible Loan, Eligible Asset or in the
Advances or other Credit Extensions, the party discovering such breach shall give prompt written
notice to each of the parties hereto.

          Section 3.03 Representations and Warranties of Depositor Regarding Transferred Loans and
Assets.

          With respect to each Loan or Asset sold or contributed to the Borrower on a Transfer Date, the
Depositor hereby represents and warrants to the Administrative Agent and the Lenders, as of such
Transfer Date and with respect to such Loan or Asset, that:

     (a) Assets. In the case of each Asset, immediately before the transfer, sale
and conveyance thereof to the Borrower pursuant to (and in accordance with) the Asset Sale
Agreement(s), the Depositor had good and valid title to, and was the sole owner and holder
of, such Asset, free and clear of all Liens; and such transfer, sale and conveyance validly
assigns ownership of such Asset to the Borrower, free and clear of any Liens; and

     (b) Loans. In the case of each Loan, immediately before the transfer, sale and
conveyance thereof to the Borrower pursuant to (and in accordance with) the Loan Sale
Agreement(s), the Depositor had good and valid title to, and was the sole owner and holder
of, such Loan, free and clear of all Liens; and such transfer, sale and conveyance validly
assigns ownership of such Loan to the Depositor, free and clear of any Liens.

 

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          Section 3.04 Representations and Warranties of Originator Regarding Transferred
Assets.

          With respect to each Asset sold to the Borrower on a Transfer Date, the Originator hereby
represents and warrants to the Administrative Agent and the Lenders, as of such Transfer Date and
with respect to such Asset, that:

     (a) Title. Immediately before the transfer, sale and conveyance thereof to the
Depositor pursuant to (and in accordance with) the Asset Sale Agreement(s), the Originator
had good and valid title to, and was the sole owner and holder of, such Asset, free and
clear of all Liens; and such transfer, sale and conveyance validly assigns ownership of such
Asset to the Depositor, free and clear of any Liens.

     (b) Lien of Collateral Custodian. The Asset has been subjected to a grant in
favor of the Collateral Custodian for the benefit of the Administrative Agent and the
Lenders of a first priority perfected Lien, in each case free and clear of any other Lien.

     (c) Status of Equity Assets under UCC. For Equity Investments, the Asset is an
“instrument”, a “certificated security”, an “uncertificated security” or a “general
intangible” within the meaning of Article 9 and/or Article 8 of the UCC of all
applicable jurisdictions.

     (d) No Contravention of Law. The Asset does not contravene in any material
respect any applicable laws.

     (e) No Conflict. Neither the transfer, sale and assignment of the Asset under
the Asset Sale Agreement(s) by the Originator to the Depositor, the sale of the Asset by the
Depositor to the Borrower hereunder or the pledge of the Asset and the granting of a Lien
therein to the Collateral Custodian, for the benefit of the Administrative Agent and the
Lenders, pursuant to the Guarantee and Security Agreement or other instrument by the
Borrower violates, conflicts with or contravenes any applicable laws or any contractual or
other restriction, limitation or encumbrance applicable to the Originator, the Depositor or
the Borrower.

     (f) No Litigation. The Asset is not subject to any litigation, valid right of
rescission, set-off, counterclaim or defense, including the defense of usury, nor will the
operation of any of the terms of the transaction documents with respect to such Asset, or
the exercise of any right thereunder, render either the Asset unenforceable, in whole or in
part, or subject to any such right of rescission, set-off, counterclaim or defense,
including the defense of usury, and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto.

     (g) Assignability. The Asset, together with the Required Asset Documents, is
assignable and does not require the consent of or notice of any other Person to consummate
the transactions contemplated by the Basic Documents or contain any restriction on the
transfer or the assignment of the Asset for the purpose of consummating the transactions
contemplated by the Basic Documents, that has not been obtained, complied with or waived, as applicable,
prior to the date on which the Asset was sold to the Depositor.

     (h) No Prior Sales. The Asset has not been sold, transferred, assigned or
pledged by the Originator to any Person other than as contemplated under the Basic
Documents.

     (i) No Compromise, Etc. The Asset has not been compromised, adjusted,
extended, satisfied, rescinded, set-off or modified by the Depositor or the Originator, and
no Asset is subject

 

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to compromise, adjustment, extension, satisfaction, rescission, set-off,
counterclaim, defense, abatement, suspension, deferment, deduction, reduction, termination
or modification, whether arising out of transactions concerning the Asset, or otherwise, by
the Depositor, the Originator or the Borrower thereof except for amendments to such Asset
otherwise permitted under this Agreement.

     (j) No Waiver. No provision of the Asset has been waived, modified or altered
in any respect except by instruments duly authorized and executed and contained in the
Required Asset Documents.

     (k) Flood Hazard. To the extent that any REO is in a zone identified by the
Director of the Federal Emergency Management Agency as a special flood hazard zone described
in 12 C.F.R. § 22.2, the Borrower acknowledges that it has received, prior to the Transfer
Date, the notice regarding Federal disaster relief assistance referred to in the Appendix to
12 C.F.R. Part 22.

     (l) Environmental Matters. All environmental, health and safety permits,
licenses and other authorizations required under all Environmental Laws with respect to any
REO have been obtained. Each of such permits, licenses and authorizations is in full force
and effect and the Borrower is in compliance with the terms and conditions thereof, and is
also in compliance with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in any
applicable Environmental Law or in any regulation, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated or approved thereunder with
respect to any REO. In addition:

     (1) No Pending Environmental Matters. No notice, notification, demand,
request for information, citation, summons or order has been issued, no complaint
has been filed, no penalty has been assessed and no investigation or review is
pending or threatened by any governmental or other entity with respect to any
alleged failure to have any environmental, health or safety permit, license or other
authorization required under any Environmental Law relating to any REO or with
respect to any generation, treatment, storage, recycling, transportation, discharge
or disposal, or any Release of any Hazardous Materials on such REO.

     (2) No Permits Required; Certain Specific Representations. The REO
does not constitute a treatment, storage or disposal facility requiring a permit
under the Resource Conservation and Recovery Act of 1976, as amended, or under any
comparable state or local statute. In addition:

     (i) no polychlorinated biphenyls (PCB’s) are or have been present at
any REO;

     (ii) no asbestos or asbestos-containing materials is or has been
present at any REO;

     (iii) there are no underground storage tanks or surface impoundments
for Hazardous Materials, active or abandoned, at any REO; and

     (iv) no Hazardous Materials have been Released at, on or under any REO
in a reportable quantity established by statute, ordinance, rule, regulation
or order.

 

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     (3) Full Disclosure. All environmental investigations, studies,
audits, tests, reviews or other analyses conducted by or that are in the possession
of the Borrower or any of its Subsidiaries in relation to facts, circumstances or
conditions at or affecting any REO have been made available to the Administrative
Agent prior to the Transfer Date for such REO.

     (m) Other Eligibility Requirements. The Asset satisfies the eligibility
requirements set forth in Exhibit A-1.

          It is understood and agreed that the representations and warranties set forth herein shall
survive delivery of the respective Required Asset Documents to the Borrower and/or the Collateral
Custodian and shall inure to the benefit of the Borrower or Depositor, as applicable, and their
successors and assigns, notwithstanding any restrictive or qualified endorsement or assignment.

          Section 3.05 Representations and Warranties of Originator Regarding Transferred Loans.

          With respect to each Loan sold to the Borrower on a Transfer Date, the Originator hereby
represents and warrants to the Administrative Agent and the Lenders, as of such Transfer Date and
with respect to such Loan, that:

     (a) Title. The Loan, together with the Loan Collateral, has been originated or
acquired by the Originator and immediately before the transfer, sale and conveyance thereof
to the Depositor pursuant to (and in accordance with) the Loan Sale Agreement, the
Originator had good and valid title to, and was the sole owner and holder of, such Loan,
free and clear of all Liens; and such transfer, sale and conveyance validly assigns
ownership of such Loan to the Depositor, free and clear of any Liens. The Depositor, as
assignee of the Loan, will have all of the rights (but none of the obligations) of the
Originator with respect to the Loan and the related Loan Documents (including any collateral
security therefor), including the right to receive and collect payments directly in its own
name and to enforce its rights against the Obligor thereof.

     (b) Non-Performing Loans. At the time such Loan is included in the Loan Pool,
the Loan is not a Non-Performing Loan and the Loan is not more than ten days past due (after
giving effect to the five day grace period set forth in the Originator’s Underwriting
Guidelines in determining the number of days past due), with respect to payments of
principal or interest, provided that any Loan previously included in the Loan Pool which was
a Non-Performing Loan, but was subsequently assigned Loan Rating 1, Loan Rating 2, Loan
Rating 3 or Loan Rating 4 shall not violate the representation contained in this clause (b).

     (c) Eligible Asset. The Loan is an “eligible asset” as defined in Rule 3a-7
under the Investment Company Act of 1940.

     (d) Lien of Collateral Custodian. The Loan has been subject to a grant in
favor of the Collateral Custodian for the benefit of the Administrative Agent and the
Lenders of a first priority perfected security interest.

     (e) Status under UCC. The Loan is an “account”, “chattel paper”, “instrument”,
a “payment intangible” or a “general intangible” within the meaning of Article 9 of the UCC
of all jurisdictions that govern the perfection of security interests granted therein;
provided that if the Loan constitutes “chattel paper”, there is not more than one “secured
party’s original” counterpart

 

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of the Loan and the sole manually executed counterpart of the
Loan is in the possession of and has been properly endorsed to the Collateral Custodian.

     (f) Eligible Obligor. The Loan is to an Eligible Obligor and is denominated
and payable in the United States only in Dollars or an Agreed Foreign Currency.

     (g) Loan Documents. The Loan is evidenced by a promissory note (representing
solely principal amount of the Loan and no other obligations of the respective Obligor not
assigned to the Depositor hereunder), an entry on a Loan Register, a security agreement or
an instrument and related loan documents that are complete in accordance with the
Underwriting Guidelines and have been duly authorized and executed, are in full force and
effect and constitute the legal, valid, binding and absolute and unconditional payment
obligation of the related Obligor, enforceable against such Obligor in accordance with their
terms (subject to applicable bankruptcy, insolvency, moratorium or other similar laws
affecting the rights of creditors generally and to general principles of equity, whether
considered in a suit at law or in equity), and there are no conditions precedent to the
enforceability or validity of the Loan that have not been satisfied or validly waived. The
original promissory note (if any) evidencing the Loan has been endorsed either in blank or
to the Collateral Custodian, and held by the Collateral Custodian on behalf of the
Administrative Agent and the Lenders.

     (h) No Contravention of Law. The Loan does not contravene in any material
respect any applicable laws (including laws, rules and regulations relating to truth in
lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices, licensing and privacy).

     (i) Underwriting Guidelines. The Loan, (i) satisfies all applicable
requirements of and was originated or acquired, underwritten and closed in accordance with
the Originator’s Underwriting Guidelines (including the execution by the Obligor of all
documentation required by the Underwriting Guidelines); (ii) does not contain a
confidentiality provision that restricts or purports to restrict the ability of the
Collateral Custodian or the Administrative Agent, on behalf of the Lenders, to exercise its
rights under this Agreement, including its rights to review the Loan, the Required Loan
Documents and Loan File; (iii) was generated in the ordinary course of the Loan Originators
business; (iv) arises pursuant to loan documentation with respect to which the Originator
has performed all obligations required to be performed by it thereunder; (v) other than
letter of credit accommodations from time to time established for the benefit of Obligors of
the Originator, is not subject to a guaranty by the Originator or any Affiliate thereof; and
(vi) other than with respect to Assigned Loans, is executed on forms substantially similar
to those in use by the Originator on the date hereof or in such other form as shall be
adopted by the Originator and approved in writing by the Administrative Agent prior to such
Loan becoming part of the Loan Pool hereunder. Without limiting the foregoing, the Loan
Documents for such Loan meet the Minimum Documentary Requirements.

     (j) No Conflict. Neither the transfer, sale and assignment of the Loan under
the Loan Sale Agreement by the Originator to the Depositor, the sale of the Loan by the
Depositor to the Borrower hereunder or the pledge of the Loan and the granting of a security
interest therein to the Collateral Custodian, for the benefit of the Administrative Agent
and the Lenders, pursuant to the Guarantee and Security Agreement by the Borrower violates,
conflicts with or contravenes any applicable laws or any contractual or other restriction,
limitation or encumbrance applicable to Originator, Depositor and Borrower.

 

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     (k) Payments to Remittance Accounts. On or before the applicable Transfer
Date, the Obligor of such Loan shall have been directed to make all payments to the Lock-Box
or directly to a Lockbox Account or, in the case of amounts payable under FX Loan Documents,
in the applicable FX Account.

     (l) Insurance. Except with respect to a Loan the Loan Collateral for which
consists of receivables only, the Loan requires the Obligor thereof to maintain adequate
property damage and liability insurance with respect to the real or personal property
constituting the Loan Collateral and the same has been at all times covered by adequate
physical damage and liability insurance policies issued by generally accepted carriers in
accordance with the requirements of the Underwriting Guidelines.

     (m) No Foreclosure or Loss. The Loan Collateral (i) has not been foreclosed
on, or repossessed from the current Obligor, by the Servicer, and (ii) since origination or
acquisition has not suffered any material loss or damage that has not been repaired or
restored.

     (n) Nature of Payment Obligations. The Obligor’s payment obligations are
absolute and unconditional with no right of setoff or counterclaim for any reason against
the Originator or any assignee, and the Loan contains a clause that has the effect of
unconditionally and irrevocably obligating the Obligor to make periodic payments (including
taxes) which is applicable notwithstanding any rights the Obligor may have against the
assignee and notwithstanding any damage to, defects in or destruction of the Loan Collateral
or any other event, including obsolescence of any property or improvements. No right of
rescission, set off, counterclaim, defense or other material dispute has been asserted with
respect to the Loan.

     (o) No Litigation. The Loan is not subject to any litigation, valid right of
rescission, set-off, counterclaim or defense, including the defense of usury, nor will the
operation of any of the terms of the Loan Documents, or the exercise of any right
thereunder, render either the Underlying Note unenforceable, in whole or in part, or subject
to any such right of rescission, set-off, counterclaim or defense, including the defense of
usury, and no such right of rescission, set-off, counterclaim or defense has been asserted
with respect thereto.

     (p) Condition of Collateral. The Loan requires the Obligor to maintain the
Loan Collateral in good condition and to bear all the costs of operating and maintaining
same, including taxes and insurance relating thereto.

     (q) Periodic Payments. The Loan provides (i) for periodic contract payments,
which are due and payable on a monthly, quarterly or semi-annual basis unless otherwise
consented to in writing by the Administrative Agent with the consent of the Required
Lenders, and (ii) that the Servicer may accelerate all payments on the Loan if the Obligor
is in default under the Loan.

     (r) Jurisdiction of Origination, Etc. The Loan shall not have been originated
in, nor shall it be subject to the laws of, any jurisdiction under which the sale, transfer
and assignment of such Loan under the Basic Documents would be unlawful, void or voidable.

     (s) Assignability. The Loan, together with the Required Loan Documents, is
assignable to the Depositor and the Borrower and is pledgeable to the Collateral Custodian
under the Guarantee and Security Agreement, all without the consent of or notice to the
Obligor, and no notice to or consent of such Obligor is needed to consummate the
transactions contemplated by the Basic Documents; and there is no other restriction on the
transfer or the assignment of the Loan for the purpose of consummating the transactions
contemplated by the Basic Documents

 

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other than a consent or waiver of such restriction that
has been obtained prior to the date on which the Loan was sold to the Depositor; provided
that the Required Loan Documents for such Loan may restrict the transfer or assignment of
such Loan to a Qualified Transferee. If the Loan is secured by an interest in real
property, an appropriately completed assignment of mortgage has been delivered to the
Collateral Custodian to be held (and not filed) unless the Administrative Agent is enforcing
remedies under the Credit Agreement.

     (t) Responsibility for Taxes. The Obligor of such Loan is legally responsible
for all taxes relating to the Loan Collateral or other security relating to such Loan, and
all payments in respect of the Loan will be made free and clear of, and without deduction or
withholding for or on account of, any taxes, unless such withholding or deduction is
required by applicable law.

     (u) Compliance with Representations, Etc. The Loan complies in all material
respects with the representations and warranties made by the Originator hereunder and all
information with respect to the Loan is true and correct in all material respects.

     (v) No Prior Sales of Rights. Other than with respect to Participation Loans,
the Loan and the Loan Collateral have not been sold, transferred, assigned or pledged by the
Originator to any Person other than as contemplated under the Basic Documents.

     (w) No Prior Sales of Obligations. Other than Participation Loans and Assigned
Loans, with respect to the Originator’s obligation to fund and the actual funding of the
Loan by the Originator, the Originator has not assigned its obligations, or granted
participations, in whole or in part, to any Person.

     (x) No Compromise. The Loan has not been compromised, adjusted, extended,
satisfied, rescinded, set-off or modified by the Depositor, the Originator or the Obligor
with respect thereto and, with respect to each other Loan, the Obligor with respect thereto,
and no Loan is subject to compromise, adjustment, extension, satisfaction, rescission,
set-off, counterclaim, defense, abatement, suspension, deferment, deductible, reduction,
termination or modification, whether arising out of transactions concerning the Loan, or
otherwise, by the Depositor, the Originator or the Obligor with respect thereto and, with
respect to each other Loan, the Obligor with respect thereto except for amendments to such
Loan otherwise permitted under this Agreement and in accordance with the Underwriting
Guidelines.

     (y) Commercial Loans. The Loan has not been entered into primarily for
personal, family or household purposes.

     (z) No Knowledge of Possible Default. The particular Loan is not one as to
which the Originator has knowledge which should lead it to expect such Loan will not be paid
in full.

     (aa) DIP Loans. With respect to any DIP Loan, the Loan Originator or its
assignee has been granted a first priority lien status in respect of all or certain of the
Obligor’s assets by final order of the applicable federal bankruptcy or district court.

     (bb) Bankruptcy. Except with respect to DIP Loans, the Obligor of such Loan is
not the subject of a Bankruptcy Event.

     (cc) “Put” Rights. The Loan does not represent payment obligations relating to
“put” rights.

 

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     (dd) Loans for Past-Due Principal, Etc. The Loan is not a Loan or extension of
credit by the Originator to the Obligor for the purpose of making any past due principal,
interest or other payments due on such Loan.

     (ee) Collateral Security. The Loan is secured by a valid, perfected, first
priority (other than with respect to Subordinated Loans) security interest (subject to
Permitted Liens) in all assets that constitute the collateral for the Loan. To the extent
entitled to the benefits of a security interest as required by the preceding sentence, the
Loan is secured by an undivided interest in the collateral security therefor that also
secures and is shared by, on a pro rata basis, all other holders of loans and other
obligations of the respective Obligor under the respective Loan Documents that are of equal
priority.

     (ff) Consents. All material consents, licenses, approvals or authorizations
of, or registrations or declarations with, any Governmental Authority required to be
obtained, effected or given in connection with the making or performance of the Loan have
been duly obtained, effected or given and are in full force and effect.

     (gg) Due Diligence; No Impairment, Etc. The Originator (i) has completed to
its satisfaction, in accordance with the Underwriting Guidelines, a due diligence audit and
collateral assessment with respect to such Loan and (ii) has done nothing (and the
Originator covenants that it will do nothing) to impair the rights of the Collateral
Custodian, the Administrative Agent or the Lenders with respect to the Loan, the Loan
Collateral, the Scheduled Payments or any income or Proceeds therefrom.

     (hh) Type. The Loan is a Senior Secured Loan or Subordinated Loan.

     (ii) No Waivers. No provision of the Loan has been waived, modified or altered
in any respect, except in accordance with the Underwriting Guidelines and by instruments
duly authorized and executed and contained in the Required Loan Documents.

     (jj) Subordination. Except with respect to Subordinated Loans and Senior-B
Note Loans, the Loan is not subordinated to any other loan or financing to the related
Obligor.

     (kk) Face Amount. The face amount of the Loan is the Dollar or Agreed Foreign
Currency amount thereof shown on the books and records of the Originator and the Depositor.

     (ll) Intercreditor Arrangements. With respect to Subordinated Loans, the
Originator has entered into an intercreditor agreement or subordination agreement with, or
provisions for the benefit of, the senior lender, which agreement or provisions are
assignable to and have been assigned to the Depositor, and which provide that any standstill
of remedies by the Originator or its assignee is limited (A) such that there shall be no
standstill of remedies (x) until after a payment default in respect of the senior debt, the occurrence of a default in respect
of the senior debt not requiring notice, or the Originator’s or assignee’s receipt from the
senior lender or Obligor of a notice of other default by the Obligor under the senior debt
and (y) unless a covenant or payment default is also in effect, and (B) provided the
Subordinated Loan has not been accelerated or if a payment default is in effect, to no
longer than 180 days in duration in the aggregate in any given year.

     (mm) Acquired and Assigned Loans. With respect to any Acquired Loan or
Assigned Loan, such Loan has been re-underwritten by the Originator and satisfies all of the
Originator’s underwriting criteria as set forth in the Underwriting Guidelines.

 

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     (nn) Loans Acquired from Affiliates, Etc. With respect to any Loan that is
originated by an Affiliate or subsidiary of the Originator, the Depositor has received a
satisfactory legal opinion concerning the acquisition of such Loan by the Originator in a
true sale transaction.

     (oo) Acquired Loans from Pools. With respect to any Acquired Loan that was
acquired in a pool by the Originator along with one or more other Acquired Loans, the
Administrative Agent (acting with the consent of the Required Lenders) has approved in
writing such Loan for inclusion in the Loan Pool and has completed its own due diligence
with respect to such Loan.

     (pp) Loan Ratings. At origination or acquisition by the Originator, such Loan
was assigned Loan Rating 1, Loan Rating 2, Loan Rating 3 or Loan Rating 4; during the period
between such origination or acquisition, until the Transfer Date for such Loan, such Loan
was not assigned Loan Rating 6; and, as of the Transfer Date for such Loan, such Loan is
assigned Loan Rating 1, Loan Rating 2, Loan Rating 3, Loan Rating 4 or Loan Rating 5.

     (qq) Subordinated Loans. Each Subordinated Loan must either (i) have an
interest coverage ratio that is not less than 1.25:1, (ii) be an Enhanced Mezzanine Loan or
(iii) be made in respect of construction or development of unimproved land.

     (rr) Enhanced Mezzanine Loans. The Loan was not an Enhanced Mezzanine Loan or
a Loan made in connection with (i) the construction or development of unimproved land unless
(A) the outstanding Principal Balance of such Loan together with all other Enhanced
Mezzanine Loans and Loans made in respect of construction or development of unimproved land
does not exceed 10% of the aggregate Principal Balance of all Loans and (B) the aggregate
outstanding principal balance of such Loan does not exceed $15,000,000 or (ii) facilitating
the trade-in or exchange of the related mortgaged property.

     (ss) Conversion to Equity. The Loan does not by its terms permit the payment
obligation of the Obligor thereunder to be converted at the Obligor’s option into or
exchanged for equity capital of such Obligor.

     (tt) Transfer Taxes. Any applicable taxes in connection with the transfer of
the Loan have been paid and the relevant Obligor has been given any assurances (including
with respect to the payment of transfer taxes and compliance with securities laws) required
by the Loan Documents in connection with the transfer of the Loan.

     (uu) Agented Loans. If the Loan is originated as a part of a
syndicated loan transaction, then (i) the related Loan Documents provide for the appointment
and duties of a payment agent and a collateral agent (which shall have become effective),
(ii) all required notifications, if any, have been given to the collateral agent, the payment agent and
any other parties required by the Loan Documents, and all required consents, if any, have
been obtained with respect to, the Originator’s assignment of the Loan and the Originator’s
right, title and interest in the Loan Documents and the related collateral security therefor
to the Depositor (and by the Depositor to the Borrower) and (iii) the right to control the
actions of the collateral agent and/or the paying agent of the syndicated notes is by a
simple majority of the holders of the loans thereunder (voting as a single pool).

     (vv) Agented Deals. Either (i) such Loan is an Agented Loan or (ii) no Person
other than the Borrower and the Originator have a direct or indirect legal or beneficial
interest in the

 

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loans made to the related Obligor under the Loan Documents pursuant to which
such Loan is made and outstanding. As used herein, the term “Agented Loan” means a Loan for
which the related Loan Documents provide for (x) appointment of an administrative (or
similar) agent having duties customary for administrative agents under syndicated loan
agreements and (y) customary voting rights (including majority, supermajority and/or
unanimous voting) for the lenders party thereto.

          It is understood and agreed that the representations and warranties set forth herein shall
survive delivery of the respective Required Loan Documents to the Borrower and/or the Collateral
Custodian and shall inure to the benefit of the Borrower or Depositor, as applicable, and their
successors and assigns, notwithstanding any restrictive or qualified endorsement or assignment.

          Section 3.06 Purchase and Substitution.

     (a) Replacement of Unqualified Collateral.

     (i) It is understood and agreed that the representations and warranties set forth in
Sections 3.03, 3.04 and 3.05 shall survive the conveyance of the Collateral to the Borrower
or the Depositor, as applicable, and the making of the Advances and other Credit Extensions
under the Credit Agreement. Upon discovery by the Depositor, the Servicer, the Originator,
the Collateral Custodian, the Borrower, the Administrative Agent or any Lender of a breach
of any of such representations and warranties that materially and adversely affects the
value or enforceability of any Eligible Loan, Eligible Asset or the interests of the
Collateral Custodian on behalf of the Lenders or the Administrative Agent therein, any party
discovering such breach shall give prompt written notice to the others; provided that for
purposes of the repurchase and substitution provisions contained in this Section 3.06, a
breach of a representation or warranty set forth in Section 3.03, 3.04 or 3.05 shall mean
that such representation or warranty was incorrect as of the date such representation or
warranty was made by the Depositor or Originator, as applicable. The Originator shall
within 90 days of the earlier of the Originator’s discovery or the Originator’s receiving
notice of any breach of a representation or warranty, promptly cure such breach in all
material respects. If within 90 days after the earlier of the Originator’s discovery of
such breach or the Originator’s receiving notice thereof such breach has not been remedied
by the Originator and such breach materially and adversely affects the interests of the
Collateral Custodian, the Lenders or the Administrative Agent in the related Eligible Loan
or Eligible Asset (each, “Unqualified Collateral”), the Originator shall promptly upon
receipt of written instructions from the Administrative Agent either (i) remove such
Unqualified Collateral from the Collateral (in which case it shall become Deleted
Collateral) and substitute one or more items of Qualified Substitute Collateral in the
manner and subject to the conditions set forth in this Section 3.06 (except to the extent
that no Borrowing Base Deficiency occurs following the removal of such Unqualified
Collateral) or (ii) purchase such Unqualified Collateral at a purchase price equal to the
Repurchase Price with respect to such Unqualified Collateral by depositing or causing to be
deposited such Repurchase Price in the Collection Account; provided that unless a Borrowing
Base Deficiency exists, the Originator shall only be required to remove such Unqualified
Collateral from the Collateral and shall not be required to pay a Repurchase Price or
substitute an item of Qualified Substitute Collateral therefor, except that if a Borrowing
Base Deficiency shall occur thereafter, the Originator shall be required to immediately
repurchase such Unqualified Collateral.

     (ii) On any day prior to the occurrence of the Termination Date, the Borrower may
recommend in writing to the Administrative Agent (with a copy to the Collateral Custodian)
that any Collateral be replaced with one or more items of Qualified Substitute Collateral.

 

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          Any substitution of Collateral pursuant to this Section 3.06(a) shall be accompanied by
payment by the Originator of the Substitution Adjustment, if any, to be remitted to the
Administrative Agent on behalf of the Lenders in accordance with Section 5.01(b)(4).

          (b) Delivery of Documents and Payments with respect to Qualified Substitute
Collateral. As to any Deleted Collateral for which the Originator substitutes Qualified
Substitute Collateral, the Originator shall effect such substitution by delivering to the
Administrative Agent an Officer’s Certificate of the Originator to the effect that the Substitution
Adjustment has been remitted to the Servicer for deposit in the Collection Account. As to any
Deleted Collateral for which the Originator substitutes Qualified Substitute Collateral, the
Originator shall effect such substitution by delivering to the Collateral Custodian the documents
constituting the Custodial Collateral File for such Qualified Substitute Collateral and taking the
other actions required hereunder and under the other Basic Documents as if the delivery of such
Qualified Substitute Collateral constituted the acquisition of a Loan or Asset (as applicable), and
the date of such delivery shall constitute a Transfer Date for all purposes hereof.

          The Servicer shall deposit in the Collection Account all payments received in connection with
each item of Qualified Substitute Collateral after the date of such substitution. Scheduled
Payments received with respect to such Qualified Substitute Collateral on or before the date of
substitution will be retained by the Originator. The Depositor or the Borrower, as applicable,
will be entitled to all payments received on the Deleted Collateral or substituted Collateral on or
before the date of substitution and the Originator shall thereafter be entitled to retain all
amounts subsequently received in respect of such Deleted Collateral or substituted Collateral. The
Originator shall give written notice to the Depositor, the Borrower, the Servicer and the
Administrative Agent that such substitution has taken place and the Servicer shall amend the
Collateral Schedule to reflect (i) the removal of such Deleted Collateral or substituted Collateral
from the terms of this Agreement and (ii) the substitution of the Qualified Substitute Collateral.
The Servicer shall promptly deliver to the Depositor, the Borrower, the Originator and the
Administrative Agent a copy of the amended Collateral Schedule. Upon such substitution, such
Qualified Substitute Collateral shall be subject to the terms of this Agreement in all respects,
and the Originator shall be deemed to have made with respect to such Qualified Substitute
Collateral, as of the date of substitution, the covenants, representations and warranties set forth
in Section 3.03, 3.04 or 3.05, as applicable. On the date of such substitution, the Collateral
Custodian (at the written direction of the Servicer) shall release the Deleted Collateral from the
lien of the Guarantee and Security Agreement and the Servicer will cause such Qualified Substitute
Collateral to be pledged to the Collateral Custodian under the Guarantee and Security Agreement as
part of the Collateral.

          (c) Assignment of Unqualified Collateral. With respect to all Unqualified Collateral
or other Collateral repurchased by the Originator pursuant to this Agreement, upon the deposit of
the Repurchase Price therefor into the Collection Account, (i) the Borrower or the Depositor, as
applicable, shall assign to the Originator, without representation or warranty, all of the
Borrower’s or the Depositor’s right, title and interest in and to such Unqualified Collateral or other Collateral repurchased by
the Originator and (ii) the Collateral Custodian (at the written direction of the Servicer) shall
assign to the Originator, without recourse, representation or warranty, all the Collateral
Custodian’s right, title and interest in and to such Unqualified Collateral or Collateral, which
right, title and interest were conveyed to the Collateral Custodian pursuant to Section 2.01 and
the Guarantee and Security Agreement. The Borrower or the Depositor, as applicable, and the
Administrative Agent shall, at the expense of the Originator, take any actions as shall be
reasonably requested by the Originator to effect the repurchase of any such Loans, to have the
Collateral Custodian return the Custodial Collateral File of such Collateral to the Servicer and to
execute any termination statements and other releases or instruments prepared by the

 

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Originator and
acceptable to the Administrative Agent to effect the release of the lien of the Collateral
Custodian and transfer of such Collateral.

          (d) Sole Remedy Against Originator for Breach of Representations and Warranties. It
is understood and agreed that the obligations of the Originator set forth in this Section 3.06, and
the obligations under Section 3.09 with respect to related Letters of Credit, to cure, purchase or
substitute for an Unqualified Collateral constitute the sole remedies hereunder of the Depositor,
the Borrower, the Administrative Agent, the Owner Trustee and the Lenders respecting a breach of
the representations and warranties contained in Sections 3.03, 3.04 and 3.05. Any cause of action
against the Originator relating to or arising out of a defect in a Custodial Collateral File or
against the Originator relating to or arising out of a breach of any representations and warranties
made in Sections 3.03, 3.04 and 3.05 shall accrue as to any Loan or Asset, as applicable, upon (i)
discovery of such defect or breach by any party and notice thereof to the Originator or notice
thereof by the Originator to the Administrative Agent, (ii) failure by the Originator to cure such
defect or breach or purchase or substitute such Loan or such Asset as specified above, and (iii)
demand upon the Originator, as applicable, by the Borrower, the Administrative Agent or the
Required Lenders for all amounts payable in respect of such Loan or such Asset.

          (e) Limitation on Liability of Borrower and Administrative Agent. Neither the
Borrower, the Administrative Agent nor any Lender shall have any duty to conduct any affirmative
investigation other than as specifically set forth in this Agreement as to the occurrence of any
condition requiring the repurchase or substitution of any Collateral pursuant to this Section or
the eligibility of any Collateral for purposes of this Agreement.

          (f) Optional Replacement of Collateral. Notwithstanding anything to the contrary
contained herein, the Originator may, at its option, remove or repurchase any Collateral subject to
this Agreement at any time during the term hereof; provided that (1) the Originator shall not be
required to remit a Repurchase Price with respect thereto unless at the time of such removal or
repurchase thereof, a Borrowing Base Deficiency exists or after giving effect to such removal or
repurchase a Borrowing Base Deficiency would exist; and (2) the Originator complies with its
obligations under Section 3.09 with respect to any related Letters of Credit.

          Section 3.07 Dispositions.

          (a) Optional Prepayment in Connection with a Disposition. On any Optional Disposition
Date, the Borrower shall have the right to prepay (or, in the case of LC Exposure, provide cover
pursuant to Section 2.05(k) of the Credit Agreement for) all or a portion of the Aggregate Credit
Agreement Exposure in connection with a Disposition in accordance with the Basic Documents and this
Section 3.07.

          (b) Covenants of Originator Regarding Dispositions. In consideration of the
consideration received from the Depositor under the Loan Sale Agreement and the Asset Sale
Agreement(s), the Originator hereby agrees and covenants that in connection with each Disposition:

     (A) After giving effect to the Disposition on any Optional Disposition Date, the
remaining Aggregate Credit Agreement Exposure shall not exceed the lesser of the Total
Credit Agreement Commitments and the Borrowing Base;

     (B) it shall make such representations and warranties concerning the Loans and Assets
as of the “cut-off date” of the related Disposition to the Disposition Participants as may
be necessary to effect the Disposition and such additional representations and warranties as
may be necessary, in the reasonable opinion of any of the Disposition Participants, to
effect such

 

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Disposition; provided that, to the extent that the Originator has at the time of
the Disposition actual knowledge of any facts or circumstances that would render any of such
representations and warranties materially false, the Originator may notify the Disposition
Participants of such facts or circumstances and, in such event, shall have no obligation to
make such materially false representation and warranty;

     (C) it shall supply such information, opinions of counsel, letters from law and/or
accounting firms and other documentation and certificates regarding the origination of the
Loans and Assets as any Disposition Participant shall reasonably request to effect a
Disposition and enter into such indemnification agreements customary for such transaction
relating to or in connection with the Disposition as the Disposition Participants may
reasonably require; and

     (D) it shall use its commercially reasonable efforts to maximize the cash proceeds
received in connection with any such Disposition,

provided that, notwithstanding anything to the contrary, (1) the Originator shall have no liability
for the Loans arising from or relating to the ongoing ability of the related Obligors to pay under
the Loans; (2) none of the indemnities hereunder shall constitute an unconditional guarantee by the
Originator of collectibility of the Loans; and (3) the Originator shall have no obligation with
respect to the financial inability of any Obligor to pay principal, interest or other amount owing
by such Obligor under a Loan.

          (c) Rights of Servicer upon Disposition; Right of the Administrative Agent to Request
Disposition. As long as no Servicer Event of Default or Event of Default shall have occurred
and be continuing under this Agreement or the Credit Agreement, the Servicer may continue to
service the Loans and Assets included in any Disposition subject to any applicable “term-to-term”
servicing provisions in Section 9.01(c) and subject to any required amendments to the related
servicing provisions as may be necessary to effect the related Disposition including but not
limited to the obligation to make recoverable principal and interest advances on the Loans.

          The Administrative Agent shall have the right, in its sole discretion, upon and following the
termination of the Revolving Period (or if later, the termination of the Amortization Period), to
direct the Originator, the Borrower and the Depositor to effect a Disposition. Any such
Disposition shall be effected by the Originator, the Borrower and the Depositor in a commercially
reasonable manner.

          (d) Covenants of the Borrower in Connection with a Disposition. In connection with
any Disposition under this Section 3.07, the Borrower agrees to assist the Originator in such
Dispositions and accordingly it shall:

     (i) transfer, deliver and sell all or a portion of the Loans and the Assets, as of the
“cut-off dates” of the related Dispositions, to such Disposition Participants as may be
necessary to effect the Dispositions;

     (ii) deposit the cash Disposition Proceeds into the Distribution Account; and

     (iii) take such further actions, including executing and delivering documents,
certificates and agreements, as may be reasonably necessary to effect such Dispositions.

          (e) Covenants of Servicer upon Disposition. The initial Servicer hereby covenants
that it will take such actions as may be reasonably necessary to effect Dispositions as the
Disposition Participants may request and direct, including providing the Originator such
information as may be required to make representations and warranties required hereunder, and
covenants that it will make such

 

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representations and warranties regarding its servicing of the
Loans and Assets hereunder as of the “cut-off date” of the related Disposition as reasonably
required by the Disposition Participants.

          (f) Rights of Parties After an Event of Default. Except as otherwise expressly set
forth under this Section 3.07, the parties’ rights and obligations under this Section 3.07 shall
continue notwithstanding the occurrence of an Event of Default.

          (g) No Fiduciary Obligations. In connection with each Disposition, (1) the
Disposition Participants shall be independent contractors to the Borrower and shall have no
fiduciary obligations to the Borrower or any of its Affiliates; and (2) the Disposition
Participants shall not be liable for any error of judgment made in good faith and shall not be
liable with respect to any action they take or omit to take in good faith in the performance of
their duties.

          Section 3.08 Underwriting Guidelines; Modifications.

          The Originator shall provide the Administrative Agent with the Underwriting Guidelines from
time to time on reasonable request by the Administrative Agent. The Originator shall give the
Administrative Agent prompt written notification of any material modification or material change to
the Underwriting Guidelines. If the Administrative Agent objects in writing to such modification
or change to the Underwriting Guidelines within 15 days after receipt of such notice, no Loans may
be conveyed to the Borrower pursuant to this Agreement unless such Loans have been originated
pursuant to the Underwriting Guidelines without giving effect to such modification or change.
Notwithstanding anything contained in this Agreement to the contrary, any Loan conveyed to the
Borrower pursuant to this Agreement pursuant to a modification or change to the Underwriting
Guidelines that has been rejected by the Administrative Agent, or which the Administrative Agent
did not receive notice of, shall be deemed an Unqualified Loan and be repurchased or substituted
for in accordance with Section 3.06.

          Section 3.09 Certain Letter of Credit Provisions.

          If, pursuant to Section 2.05(d), Section 3.06(a), Section 3.06(f) or Section 11.02, a Loan is
repurchased, replaced, removed or withdrawn by the Originator and such Loan represents (in whole or
in part) a reimbursement obligation in respect of which one or more Letters of Credit have been
issued under the Credit Agreement, then, on the date of such repurchase, replacement, removal or
withdrawal the Originator shall pay to the Administrative Agent an amount equal to the aggregate
amount of all letter of credit commissions and related fees that are scheduled to accrue on such
Letters of Credit until the then-current expiry dates thereof.

          Section 3.10 Other Covenants and Agreements.

          (a) Compliance with Organization Documents. The Depositor hereby covenants and agrees
that during the continuance of this Agreement it will comply in all respects with the provisions of
its organizational documents in effect from time to time.

          (b) Waiver of Loan Assignment Fees. The Originator and Servicer each waives all
rights that it may have (in its separate capacity as administrative agent relating to a Loan or
otherwise) to receive from the Depositor, the Borrower, the Administrative Agent and each Lender
any loan assignment fees that would otherwise be payable to it or any of its Affiliates in
connection with an assignment of each Loan to the Depositor, to the Borrower, to the Administrative
Agent or any nominee or transferee thereof.

          (c) Overcollateralization. The Originator, Servicer, Depositor and Borrower each
covenants and agrees to cause the excess of the Principal Balance of Eligible Loans over the sum of
all

 

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Credit Extensions outstanding under the Credit Agreement at all times to be at least equal to
the Required Over collateralization Amount.

     (d)  Allocation of Loans and Payments. The Originator and Servicer agree that they will allocate all payments received from the
Obligors under or in respect of the related Loan Documents to the Borrower in accordance with its Allocation Percentage(s) for such Obligor. The Originator
further agrees that it will not assign, sell, transfer, pledge or allocate to any Person (other than the Borrower) any interest in any FX Loan.

     (e) Payment of Real Estate Expenses. The Originator hereby agrees to be responsible for paying (as primary obligor) all costs,
expenses, liabilities and other amounts on or in respect of each REO property owned by the Borrower and the Borrower’s Subsidiaries (it being understood that
the Originator may net payments or be reimbursed for all amounts paid in respect of any REO property out of payments received in respect of such REO property
(including rents received, if any), and collections on such REO property remitted to the Collection Account for application under this Agreement and the
Credit Agreement shall be determined and reported net of such amounts.

     (f)  Principal Balance Secured By Real Property. The Originator, initial Servicer, Depositor and Borrower each covenant that at all
times during the period in which any indebtedness or commitment is outstanding under the Credit Agreement, less than 40% of the Principal Balance of the Loan
Pool will consist of Loans principally secured by real property or by an interest in real property. The Originator and initial Servicer will, and will cause
the Depositor and the Borrower to, monitor from time to time (but not less frequently than immediately prior to (but after giving effect to) each (x) advance
or extension of credit under the Credit Agreement and (y) addition or removal of any Loan from the Loan Pool) the asset composition of the Borrower to
ascertain that less than 40% of the Principal Balance of the Loan Pool consists (and will continue to consist) of Loans principally secured by real property
or by an interest in real property. The Borrower will not permit or request an advance or extension of credit under the Credit Agreement or add any Loan to,
or remove any Loan from, the Loan Pool if at the time of such advance, extension, addition or removal (after taking into account collectively any such
additions and/or removals), 40% or more of the Principal Balance of the Loan Pool will consist of Loans principally secured by real property or by an
interest in real property. For these purposes, a Loan will be considered principally secured by real property or by an interest in real property if (a) the
fair market value of the interest in real property securing the Loan was at least equal to 80% of the adjusted issue price of the Loan at the time of its
issuance, (b) substantially all of the proceeds of the Loan were used to acquire, improve or protect an interest in real property or that, at the origination
date, is the only security for the Loan, or (c) the Loan is secured only by real estate mortgages (or interests therein), but in the case of a Loan described
only in clause (c), only to the extent of the value of the real estate mortgages (or interests therein).

     (g)  Compliance with Certain Assumptions, Etc. The Originator, the Servicer, the Depositor and the Borrower each covenants and agrees
to comply with all factual assumptions and statements of fact set forth in the bankruptcy true-sale and non-consolidation opinions delivered by Patton Boggs
LLP pursuant to Section 4.01 of the Credit Agreement.

 

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ARTICLE IV

ADMINISTRATION AND SERVICING OF THE LOANS

          Section 4.01 Servicer’s Servicing Obligations.

          The Servicer, as independent contract servicer, shall service and administer the Collateral in
accordance with Accepted Servicing Practices.

          Section 4.02 Loan Register.

          (a) Maintenance of Loan Register. The Servicer shall maintain with respect to each
Noteless Loan a register in the name of or for the benefit of the Collateral Custodian (each, a
“Loan Register”) in which it will record (1) the amount of such Loan, (2) the amount of any
principal or interest due and payable or to become due and payable from the Obligor thereunder, (3)
the amount of any sum in respect of such Loan received from the Obligor, (4) the date of
origination of such Loan, (5) the maturity date of such Loan and (6) the Allocation Percentage of
the Borrower. The entries made in each Loan Register maintained pursuant to this Section 4.02(a)
shall be prima facie evidence of the existence and amounts of the obligations therein recorded;
provided that the failure of the Servicer to maintain any such Loan Register or any error therein
shall not in any manner affect the obligations of the Obligor to repay the related Loans in
accordance with their terms or the ownership interest of the Borrower in any such Loan. If at any
time the Collateral Custodian shall receive a notice from the Administrative Agent or the Lenders
directing transfer of such Loan Register or other orders concerning such Loan Register from the
Administrative Agent or the Lenders, the Collateral Custodian shall comply with such orders without
further consent of the Servicer or the Depositor or the Borrower. In connection with any such
notice the Servicer shall take whatever action as is requested and reasonably necessary or
advisable to effectuate the foregoing. The Collateral Custodian may rely upon the contents of any
notice or instructions that the Collateral Custodian believes in good faith to be from the Lenders
or the Administrative Agent, as the case may be, without any independent investigation. The
Collateral Custodian shall have no duty to inquire into the authority of the person giving such
notice or instruction. In the event that the Collateral Custodian receives conflicting notices or
instructions, any notice received from the Lenders shall govern and supersede any and all
conflicting notices.

          (b) Delivery of Loan Register. At any time a Noteless Loan is included as part of the
Collateral pursuant to this Agreement, the Servicer shall deliver to the Collateral Custodian a
copy of the Loan Register, together with an original certificate executed by a Responsible Officer
of the Servicer certifying to the accuracy of such Loan Register as of the date such Loan is
included as part of the Collateral.

          (c) Right of Administrative Agent to Require Notes. The Administrative Agent may
terminate the Servicer’s right to maintain such Loan Register at any time and require that all such
Noteless Loans be evidenced by an originally executed Underlying Note (and, in that connection, the
Originator hereby agrees (i) to ensure that the related Loan Documents for each Loan provide that,
upon request of a holder of a Loan, such Loan may be evidenced by a Note and (ii) to cause such a
Note to be executed and delivered in favor of the Borrower and delivered in pledge to the Custodian
in the event the Administrative Agent shall make such request).

          (d) Depositor Not to Cause Loans to be Evidenced by Notes. The Depositor will take no
action to cause any Loan not originally evidenced by an Underlying Note to be evidenced by an
instrument (as defined in the UCC), except in connection with the enforcement or collection of such
Loan or as expressly provided in this Agreement.

 

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          Section 4.03 Additional Servicer Obligations.

          The Servicer shall perform the covenants applicable to the Servicer on Exhibit A-1 hereto.

          Section 4.04 The Backup Servicer; Duties of the Backup Servicer.

          (a) Appointment of Backup Servicer. The parties hereto hereby appoint Wells Fargo
Bank, National Association to act as Backup Servicer, for the benefit of the Administrative Agent
and the Lenders. The Backup Servicer hereby accepts such appointment and agrees to perform the
duties and obligations with respect thereto set forth herein.

          (b) Reports Delivered by Servicer to Backup Servicer.

     (1) On or before the Execution Date, the Backup Servicer shall accept from the Servicer
delivery of the information required to be set forth in the Monthly Servicer Report (as
described below) in hard copy and on computer tape; provided the computer tape is in an MS
DOS, PC readable ASCII format or other format to be agreed upon by the Backup Servicer and
the Servicer on or prior to closing.

     (2) Not later than 3:00 p.m. New York City time on each Record Date, the Servicer shall
deliver to the Backup Servicer a data loan tape and report and Collateral Schedule
(together, the “Monthly Servicer Report”) in the form of Exhibit B, which shall include but
not be limited to the information necessary to enable the Backup Servicer to perform the
following duties:

     (A) compare the information contained in the Monthly Servicer Report to the
definition of Concentration Limitations; and

     (B) determine whether or not a Trigger Event has occurred.

The Backup Servicer shall provide a report which summarizes the results of the performance
of the above duties to the Administrative Agent before 3:00 p.m. New York City time on the
Payment Date immediately following the Record Date on which such Monthly Servicer Report was
delivered to the Backup Servicer by the Servicer.

     (3) On a weekly basis to the extent a Borrowing Base Certificate and Collateral
Schedule has not been received pursuant to a Transfer Date during the immediately preceding
7 days, not later than 3:00 p.m. New York City time, the Servicer shall deliver to the
Backup Servicer, with a copy to the Administrative Agent, a Borrowing Base Certificate and
Collateral Schedule. Upon the receipt of a Borrowing Base Certificate and Collateral
Schedule pursuant to this Section 4.04(b)(3) or any other provision this Agreement, the
Backup Servicer shall:

     (A) track the Principal Balances of the Eligible Loans and the Value of
Eligible Assets and verify the Eligible Loans and Eligible Assets with the
Collateral Schedule;

     (B) compare the advance rates set forth in the Borrowing Base Certificate to
the percentages set forth under the definition of “Purchase Price Percentage”
herein;

 

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     (C) compare the delinquent Loans set forth in the Borrowing Base Certificate to
the definition of “Delinquent Loan” set forth herein;

     (D) compare the “Subordinated Loans” and “Senior B-Note Loans” set forth in the
Borrowing Base Certificate to the definitions of such terms set forth herein; and

     (E) calculate the Borrowing Base, Borrowing Base Excess (if applicable),
Borrowing Base Deficiency (if applicable) and Borrowing Base Amount for Dollars and
each Foreign Currency.

The Backup Servicer shall provide a report which summarizes the results of the performance
of the above duties to the Administrative Agent within one Business Day immediately
following the day on which any such Borrowing Base Certificate and Collateral Schedule is
delivered to the Backup Servicer.

          (c) Limitation on Liability of Backup Servicer. With respect to the duties described
in Section 4.04(b)(2) and (3), the Backup Servicer is entitled to rely conclusively, and shall be
fully protected in so relying, on the contents of each Monthly Servicer Report, Borrowing Base
Certificate, Collateral Schedule and all other reports, including the completeness and accuracy
thereof, provided by the Servicer to the Backup Servicer as described in this Agreement.

ARTICLE V

ESTABLISHMENT OF TRUST ACCOUNTS

          Section 5.01 Collection Account, Principal Collections Account, Distribution
Account and FX Accounts.

     (a) Establishment of Accounts.

     (1) Establishment of Collection Account. The Servicer, for the benefit of the
Administrative Agent and the Lenders, shall cause to be established and maintained one or
more Collection Accounts (collectively, the “Collection Account”), which shall be separate
Eligible Accounts entitled “CapitalSource Funding V Trust Collection Account, CapitalSource
Finance LLC, as Servicer, for the benefit of the Administrative Agent and the holders of
Commercial Loan and Asset Backed Obligations”. Funds in the Collection Account shall be
invested in accordance with Section 5.03. Net investment earnings shall not be considered
part of funds available in the Collection Account.

     (2) Establishment of Principal Collections Account. The Servicer, for the
benefit of the Administrative Agent and the Lenders, shall cause to be established and
maintained one or more Principal Collections Accounts (collectively, the “Principal
Collections Account”), which shall be separate Eligible Accounts entitled “CapitalSource
Funding V Trust Principal Collections Account, CapitalSource Finance LLC, as Servicer, for
the benefit of the Administrative Agent and the holders of Commercial Loan and Asset Backed
Obligations”. Funds in the Principal Collections Account shall be invested in accordance
with Section 5.03. Net investment earnings shall not be considered part of funds available
in the Principal Collections Account.

     (3) Establishment of Distribution Account. The Administrative Agent, for the
benefit of the Lenders, shall cause to be established and maintained one or more
Distribution

 

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Accounts (collectively, the “Distribution Account”), which shall be separate Eligible
Accounts, entitled “CapitalSource Funding V Trust Distribution Account”. Funds in the
Distribution Account shall remain uninvested.

     (4) Establishment of FX Accounts. The Administrative Agent, for the benefit of
the Lenders, shall cause to be established and maintained one or more Eligible Accounts for
each Agreed Foreign Currency and Dollars (collectively, the “FX Accounts”), which shall be
separate Eligible Accounts, entitled “CapitalSource Funding V Trust FX Account”.

     (5) Location of Trust Accounts. Each FX Account shall be maintained with JPMCB
(for so long as such account satisfies the requirements set forth in the definition of
“Eligible Account”). Each other Trust Account shall be maintained with Wells Fargo Bank,
National Association (for so long as such account satisfies the requirements set forth in
the definition of “Eligible Account”). If, at any time, any Trust Account ceases to be an
Eligible Account, then the Administrative Agent shall, within ten Business Days (i)
establish a new Trust Account with another depository institution selected by the
Administrative Agent (and acceptable to the Required Lenders) as an Eligible Account, (ii)
terminate the ineligible Trust Account, and (iii) transfer any cash and investments from
such ineligible Trust Account to such new Trust Account. The Administrative Agent will
inform the Servicer of the location of the Trust Accounts, including any location to which
an account is transferred.

          (b) Deposits to Collection and FX Accounts. The Servicer shall deposit or cause to be
deposited (without duplication) into the Collection Account:

     (1) all payments on or in respect of each item of Collateral collected on or after the
related Transfer Date (net, in each case, of any Servicing Compensation retained therefrom
by the Servicer (if other than CapitalSource)) within two Business Days after receipt
thereof;

     (2) all Net Proceeds within two Business Days after receipt thereof;

     (3) all Insurance Proceeds within two Business Days after receipt thereof;

     (4) any amounts payable in connection with the repurchase of any Collateral and the
amount of any Substitution Adjustment, if any, pursuant to Sections 2.05 and 3.06
concurrently with payment thereof;

     (5) the deposit of the Termination Price under Section 11.02 concurrently with payment
thereof; and

     (6) the proceeds from any Disposition of Assets pursuant to Section 3.07 within one
Business Day after receipt thereof,

provided that any such amounts received in Foreign Currency shall be deposited in the applicable FX
Account within the time period set forth in clause (1) through (6) above, as applicable.

          Except as otherwise expressly provided in Section 5.01(c)(3)(i)(b) and Section
5.01(c)(4)(i)(b), the Servicer agrees that it will cause the Originator, Depositor, Obligor or
other appropriate Person paying such amounts, as the case may be, to remit (i) in respect of Loans
that are not FX Loans, directly to the Lock-Box Accounts for deposit into the Collection Account
(or directly to the Collection Account) all amounts referenced above in this Section 5.01(b) or
(ii) in respect of FX Loans, directly to the applicable FX Accounts all amounts referenced above in
this Section 5.01(b). To the

 

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extent the Servicer receives any such amounts, it will deposit them into the Collection Account or
the applicable FX Account (as the case may be) on the Business Day following receipt thereof.

          (c) Withdrawals From Collection Account; Deposits to the Principal Collections Account and
the Distribution Account.

     (1) Withdrawals From Collection Account — Reimbursement Items. The Servicer
shall periodically, but in any event on each Remittance Date, make the following withdrawals
from the Collection Account:

     (i) to withdraw any amount not required to be deposited in the Collection
Account or deposited therein in error; and

     (ii) to deposit the remaining balance of the Collection Account into the
Principal Collections Account.

     (2) Withdrawals From the Principal Collections Account.

     (i) On any date of determination occurring during the Revolving Period, the
Servicer may withdraw the amount on deposit in the Principal Collections Account and
use such amounts (x) to originate or acquire new Eligible Loans and new Eligible
Assets in accordance with the terms of this Agreement and the other Basic Documents
or (y) to repay amounts owing under the Credit Agreement (in which case amounts so
paid will be applied as provided under the Credit Agreement).

     (ii) On each Remittance Date prior to the end of the Revolving Period, the
Servicer shall withdraw from the Principal Collections Account and deposit in the
Distribution Account an amount equal to the aggregate amount of distributions
required to be made under clauses (i) through (vi) of clause (3) below on the
related Payment Date, and the Servicer may withdraw from the Principal Collections
Account and deposit in the Distribution Account any additional amounts then on
deposit in the Principal Collections Account.

     (iii) On each Remittance Date after the end of the Revolving Period, the
Servicer shall withdraw from the Collection Account and deposit in the Distribution
Account an amount equal to the aggregate amount of distributions required to be made
under clauses (i) through (vi) of clause (4) below on the related Payment Date, and
the Servicer may withdraw from the Principal Collections Account and deposit in the
Distribution Account any additional amounts then on deposit in the Principal
Collections Account.

     (3) Withdrawals From Distribution Account During the Revolving Period – Payment
Dates. On each Payment Date occurring during the Revolving Period, to the extent funds
are available in the Distribution Account, the Paying Agent (based on the information
provided by the Servicer contained in the Monthly Servicer Report for such Payment Date)
shall make withdrawals therefrom for application in the following order of priority:

     (i) to distribute on such Payment Date the following amounts in the following
order: (a) on each anniversary of the Execution Date, to the Administrative Agent,
an amount equal to the annual Administrative Agent Fee, (b) to the Administrative
Agent, all amounts owing to the Administrative Agent pursuant to

 

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Section 9.03 of the Credit Agreement, (c) to the Servicer, an amount equal to
the Servicing Compensation (only if CapitalSource is not the Servicer and such
amounts were not previously retained by the Servicer) and any Servicing Advance
Reimbursement Amounts, (d) to the reimbursement or payment of any expenses incurred
by the Administrative Agent in connection with the appointment of a successor
Servicer pursuant to Section 9.02, (e) to the Backup Servicer, all Transition Costs
payable to the Backup Servicer, an amount equal to one-twelfth of the annual Backup
Servicer Fee and all accrued and unpaid expenses owing to the Backup Servicer by the
Borrower (in each case other than any indemnification payments owing by the
Borrower, which are payable under clause (vi) below), (f) to the Collateral
Custodian, an amount equal to all accrued and unpaid Collateral Custodian Fees and
all accrued and unpaid expenses owing to the Collateral Custodian by the Borrower
(in each case other than any indemnification payments owing by the Borrower, which
are payable under clause (vi) below), and (g) on each anniversary of the Execution
Date, to the Owner Trustee, an amount equal to the annual Owner Trustee Fee;

     (ii) to the Administrative Agent, on behalf of the Lenders, the sum of the
Monthly Payment Amount for such Payment Date (to the extent not paid under Section
2.06(g)(5) with Foreign Currency amounts on deposit in the FX Accounts);

     (iii) unless the Administrative Agent otherwise elects in its sole discretion
(or the Required Lenders otherwise elect in their sole discretions), if (a) a
Trigger Event shall have occurred and be continuing, (b) an Event of Default under
the Credit Agreement or an Event of Default hereunder shall have occurred and be
continuing or (c) the Revolving Period shall have terminated, all remaining amounts
on deposit in the Distribution Account shall be paid to the Administrative Agent for
application in the manner provided in the Credit Agreement, until all obligations
owing to the Lenders and the Administrative Agent under the Credit Agreement and the
other Basic Documents have been satisfied in full;

     (v) if CapitalSource is the Servicer, to the Servicer, an amount equal to the
Servicing Compensation, all unpaid Servicing Compensation from prior Payment Dates
and any Servicing Advance Reimbursement Amounts;

     (vi) (a) to the appropriate Persons, amounts in respect of Borrower/Depositor
Indemnities (as defined in the Trust Agreement) until such amounts are paid in full;
and (b) to the Backup Servicer and Collateral Custodian, all amounts owing by the
Borrower to the Backup Servicer and Collateral Custodian pursuant to the Basic
Documents and not otherwise paid;

     (vii) to the Owner Trustee all amounts owing to the Owner Trustee pursuant to
the Trust Agreement and not otherwise paid; and

     (viii) to the Paying Agent, for distribution to the holders of the Trust
Certificates, in accordance with Section 5.2(b) of the Trust Agreement, all amounts
remaining therein.

     (4) Withdrawals From Distribution Account During the Amortization Period.
Notwithstanding anything herein to the contrary, on each Payment Date during the
Amortization Period, to the extent funds are available in the Distribution Account, the
Paying Agent (based on the information provided by the Servicer contained in the Monthly
Servicer Report for such

 

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Payment Date) shall make withdrawals therefrom for application in the following order
of priority:

     (i) to distribute on such Payment Date the following amounts in the following
order: (a) on each anniversary of the Execution Date, to the Administrative Agent,
an amount equal to the annual Administrative Agent Fee, (b) to the Administrative
Agent, all amounts owing to the Administrative Agent pursuant to Section 9.03 of the
Credit Agreement, (c) to the Servicer, an amount equal to the Servicing Compensation
(only if CapitalSource is not the Servicer and such amounts were not previously
retained by the Servicer) and any Servicing Advance Reimbursement Amounts, (d) to
the reimbursement or payment of any expenses incurred by the Administrative Agent in
connection with the appointment of a successor Servicer pursuant to Section 9.02,
(e) to the Backup Servicer, all Transition Costs payable to the Backup Servicer, an
amount equal to one-twelfth of the annual Backup Servicer Fee and all accrued and
unpaid expenses owing to the Backup Servicer by the Borrower (in each case other
than any indemnification payments owing by the Borrower, which are payable under
clause (v) below), (f) to the Collateral Custodian, an amount equal to all accrued
and unpaid Collateral Custodian Fees and all accrued and unpaid expenses owing to
the Collateral Custodian by the Borrower (in each case other than any
indemnification payments owing by the Borrower, which are payable under clause (v)
below), and (g) on each anniversary of the Execution Date, to the Owner Trustee, an
amount equal to the annual Owner Trustee Fee;

     (ii) to the Administrative Agent on behalf of the Lenders, the sum of the
Monthly Payment Amount for such Payment Date (to the extent not paid under Section
2.06(g)(5) with Foreign Currency amounts on deposit in the FX Accounts);

     (iii) all remaining amounts on deposit in the Distribution Account shall be
paid to the Administrative Agent for application in the manner provided in the
Credit Agreement, until all obligations owing to the Lenders and the Administrative
Agent under the Credit Agreement and the other Basic Documents have been satisfied
in full;

     (iv) if CapitalSource is the Servicer, to the Servicer, an amount equal to the
Servicing Compensation, all unpaid Servicing Compensation from prior Payment Dates
and any Servicing Advance Reimbursement Amounts;

     (v) (a) to the appropriate Persons, amounts in respect of Borrower/Depositor
Indemnities (as defined in the Trust Agreement) until such amounts are paid in full;
and (b) to the Backup Servicer and Collateral Custodian, all amounts owing by the
Borrower to the Backup Servicer and Collateral Custodian pursuant to the Basic
Documents and not otherwise paid;

     (vi) to the Owner Trustee, all amounts owing to the Owner Trustee pursuant to
the Trust Agreement and not otherwise paid; and

     (vii) to the Paying Agent, for distribution to the holders of the Trust
Certificates, in accordance with Section 5.2(b) of the Trust Agreement, all amounts
remaining therein.

     (5) Withdrawal of Excluded Amounts. With the prior written consent of the
Administrative Agent, which consent shall not be unreasonably withheld (a copy of which will
be

 

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provided by the Servicer to the Backup Servicer), the Servicer may withdraw from the
Collection Account and each FX Account any deposits thereto constituting Excluded Amounts if
the Servicer has, prior to such withdrawal and consent, delivered to the Administrative
Agent a report setting forth the calculation of such Excluded Amounts in a format
satisfactory to the Administrative Agent in its sole discretion.

          Notwithstanding that the obligations owing to the Administrative Agent and the Lenders under
the Credit Agreement and the other Basic Documents have been paid in full, the Paying Agent and the
Servicer shall continue to maintain the Distribution Account, the Collection Account, the Principal
Collections Account and the FX Accounts hereunder until this Agreement has been terminated.

          Section 5.02 Payments.

          (a) Distribution in Respect of Secured Obligations. All distributions made in respect
of the Advances or the other Secured Obligations (as defined in the Guarantee and Security
Agreement) shall be paid to the Administrative Agent for application under the Credit Agreement or
the Guarantee and Security Agreement, as applicable.

          (b) Distributions in Respect of Trust Certificates. All distributions made on the
Trust Certificates on each Payment Date will be made in accordance with the Percentage Interest
among the holders of the Trust Certificates of record on the next preceding Record Date based on
their Percentage Interests on the date of distribution, without preference or priority of any kind,
and, except as otherwise provided in the next succeeding sentence, shall be made by wire transfer
of immediately available funds to the account of each such holder, if such holder shall own of
record a Trust Certificate in an original denomination aggregating at least 25% of the Percentage
Interests and shall have so notified the Paying Agent and the Administrative Agent five Business
Days prior to the related Record Date, and otherwise by check mailed to the address of such
Certificateholder appearing in the Certificate Register. The final distribution on each Trust
Certificate will be made in like manner, but only upon presentment and surrender of such Trust
Certificate at the location specified in the notice to holders of the Trust Certificates of such
final distribution. Any amount distributed to the holders of the Trust Certificates on any Payment
Date shall not be subject to any claim or interest of the Lenders.

          Section 5.03 Trust Accounts; Trust Account Property.

          (a) Control of Trust Accounts. Each of the Trust Accounts established hereunder has
been pledged by the Borrower to the Collateral Custodian under the Guarantee and Security Agreement
and shall be subject to the lien of the Guarantee and Security Agreement. Amounts distributed from
each Trust Account in accordance with the terms of this Agreement shall be released for the benefit
of the Lenders from the Collateral upon such distribution thereunder or hereunder. The Collateral
Custodian shall possess all right, title and interest in and to all funds on deposit from time to
time in the Trust Accounts and in all proceeds thereof (including all income thereon) and all such
funds, investments, proceeds and income shall be part of the Trust Account Property and the
Collateral.

          With respect to the Trust Accounts, the Borrower and the Administrative Agent agree that:

     (1) the Collection Account, the Principal Collections Account and the FX Accounts
shall, until all of the obligations under the Credit Agreement and the other Basic Documents
have been paid in full, be subject to the sole and exclusive dominion, custody and control
of the Collateral Custodian for the benefit of the Administrative Agent and the Lenders
(provided that

 

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the Servicer, unless terminated as such, shall be entitled to withdraw funds therefrom
in the manner and to the extent provided in this Agreement); and

     (2) the Distribution Account shall be subject to the sole and exclusive dominion,
custody and control of the Paying Agent on behalf of the Collateral Custodian for the
benefit of the Administrative Agent and the Lenders, and the Paying Agent (on behalf of the
Collateral Custodian) shall have sole signature and withdrawal authority with respect
thereto.

     (b) Certain Trust Account Matters.

     (1) Investment of Funds. Funds held in the Trust Accounts may be invested (to
the extent practicable and consistent with any requirements of the Code) in Permitted
Investments by or at the direction of the Servicer. In any case, funds in the Trust Account
must be available for withdrawal without penalty, and any Permitted Investments must mature
or otherwise be available for withdrawal, one Business Day prior to the next Remittance Date
and shall not be sold or disposed of prior to its maturity subject to clause (b)(2) of this
Section. All interest and any other investment earnings on amounts or investments held in
the Trust Accounts shall be retained by the Servicer.

     (2) Insufficiency and Losses in Trust Accounts. If any amounts are needed for
disbursement from the Trust Account and sufficient uninvested funds are not available to
make such disbursement, the Servicer shall cause to be sold or otherwise converted to cash a
sufficient amount of the investments in such Trust Account. The Servicer shall be liable
for any investment loss or other charge resulting therefrom.

          If any losses are realized in connection with any investment in a Trust Account pursuant to
this Agreement, then the Servicer shall deposit the amount of such losses (to the extent not offset
by income from other investments in such Trust Account) into such Trust Account promptly upon the
realization of such loss.

          (c) Administrative Agent Not Liable. The Administrative Agent shall not in any way be
held liable by reason of any insufficiency in any Trust Account held by the Administrative Agent
resulting from any investment loss on any Permitted Investment included therein.

          (d) Certain Administrative Agent Acknowledgements. With respect to the Trust Account
Property, the Administrative Agent acknowledges and agrees that:

     (1) any Trust Account Property that is held in deposit accounts shall be held solely in
the Eligible Accounts;

     (2) any Trust Account Property that constitutes Physical Property shall be delivered to
the Collateral Custodian or the Paying Agent on behalf of the Collateral Custodian in
accordance with paragraphs (a) and (b) of the definition of “Delivery” in Section 1.01 and
shall be held, pending maturity or disposition, solely by the Paying Agent on behalf of the
Collateral Custodian or the Collateral Custodian or a securities intermediary (as such term
is defined in Section 8-102(a)(14) of the UCC) acting solely for the Collateral Custodian;

     (3) any Trust Account Property that is a book-entry security held through the Federal
Reserve System pursuant to federal book-entry regulations shall be delivered in accordance
with paragraph (c) of the definition of “Delivery” in Section 1.01 and shall be maintained
by the Paying Agent on behalf of the Collateral Custodian, pending maturity or disposition,
through

 

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continued book-entry registration of such Trust Account Property as described in such
paragraph; and

     (4) any Trust Account Property that is an “uncertificated security” under Article 8 of
the UCC and that is not governed by clause (3) above shall be delivered to the Paying Agent
on behalf of the Administrative Agent in accordance with paragraph (d) of the definition of
“Delivery” in Section 1.01 and shall be maintained by the Paying Agent on behalf of the
Collateral Custodian, pending maturity or disposition, through continued registration of the
Paying Agent on behalf of the Collateral Custodian’s (or its nominee’s) ownership of such
security.

ARTICLE VI

STATEMENTS AND REPORTS; SPECIFICATION OF TAX MATTERS

          Section 6.01 Statements.

          (a) Monthly Reports. No later than 3:00 p.m. (New York City time) on each Record
Date, the Servicer shall deliver to the Administrative Agent and Backup Servicer, by electronic
transmission, the Monthly Servicer Report, setting forth the date of such report (day, month and
year), the name of the Borrower (i.e., “CapitalSource Funding V Trust”), and the date of this
Agreement, all in substantially the form set out in Exhibit B hereto. In addition, the Servicer
shall provide to the Lenders and the Administrative Agent such additional reports and information
regarding the Loans and the Assets as the Required Lenders or the Administrative Agent may
reasonably request from time to time.

          (b) Additional Reporting After Servicer Default. Upon the occurrence of a Servicer
Event of Default, or an event that, with lapse of time or notice or both would become a Servicer
Event of Default (a “Servicer Default”), the Servicer shall notify the Administrative Agent and the
Backup Servicer thereof promptly. After the occurrence and during the continuance of a Servicer
Default or a Servicer Event of Default, the Servicer shall provide to the Administrative Agent,
promptly following the Administrative Agent’s request therefor, such documents, reports and other
information relating to the Collateral (and in such form, scope and detail) as the Administrative
Agent may request.

          Section 6.02 Specification of Certain Tax Matters.

          The Paying Agent shall comply with all requirements of the Code and applicable state and local
law with respect to the withholding from any distributions made to any Certificateholder of any
applicable withholding taxes imposed thereon and with respect to any applicable reporting
requirements in connection therewith, giving due effect to any applicable exemptions from such
withholding and effective certifications or forms provided by the recipient. Any amounts withheld
pursuant to this Section 6.02 shall be deemed to have been distributed to the Certificateholders,
as the case may be, for all purposes of this Agreement. Neither the Paying Agent nor the
Administrative Agent shall have any responsibility for preparing or filing any tax returns.

 

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ARTICLE VII

COVENANTS

          Section 7.01 Financial Covenants of CapitalSource.

          (a) Minimum Tangible Net Worth. At all times during the term of this Agreement,
CapitalSource shall maintain a minimum consolidated Tangible Net Worth at least equal to the sum of
(i) $1,100,000,000 plus (ii) 75% of any new equity of CapitalSource issued after March 31, 2005
plus (iii) 50% of cumulative positive consolidated net income of CapitalSource as reported on the
Consolidated CapitalSource Balance Sheet for the period (taken as a single accounting period) from
April 1, 2005 through the last day of the most recent fiscal quarter for which Consolidated
CapitalSource Balance Sheet are available.

          (b) Maximum Leverage Ratios. At all times during the term of this Agreement,
CapitalSource shall maintain a Secured Leverage Ratio of not greater than 4.00 to 1 and a Leverage
Ratio of not greater than 5.00 to 1.

          Section 7.02 Financial Statements of CapitalSource.

          CapitalSource shall furnish or cause to be furnished to the Administrative Agent the following
financial statements:

     (x) as soon as available and in any event within 90 days after the end of each fiscal
year of CapitalSource Inc, CapitalSource Inc.’s audited consolidated balance sheets and
statements of income, cash flows and changes in shareholders’ equity (and, separately
stated, CapitalSource Inc.’s unaudited consolidating balance sheets and statements of
income) as of the end of and for such fiscal year,

     (y) as soon as available and in any event within 45 days after the end of the first
three quarters of each fiscal year of CapitalSource Inc, CapitalSource Inc.’s unaudited
consolidated balance sheets and statements of income, cash flows and changes in
shareholders’ equity (and, separately stated, CapitalSource Inc.’s unaudited consolidating
balance sheets and statements of income) as of the end of and for the portion of such fiscal
year then ended and

     (z) commencing with the fiscal year ending December 31, 2006 and for all fiscal periods
thereafter, (i) as soon as available and in any event within 90 days after the end of each
fiscal year of CapitalSource, CapitalSource’s audited consolidated balance sheets and
statements of income, cash flows and changes in members’ equity as of the end of and for
such fiscal year and (ii) as soon as available and in any event within 45 days after the end
of the first three quarters of each fiscal year of CapitalSource, CapitalSource’s unaudited
consolidated balance sheets and statements of income, cash flows and changes in members’
equity as of the end of and for the portion of such fiscal year then ended.

Each of the financial statements referred to in clauses (x), (y) and (z) above shall have been
prepared in accordance with GAAP (subject to year-end adjustments in the case of interim
statements) and shall be accompanied by a Section 7.02 Certification substantially in the form of
Exhibit H pursuant to which (A) such financial statements shall be certified by a Responsible
Officer of CapitalSource and (B) CapitalSource shall set forth a calculation of its compliance with
the financial covenants in Section 7.01. The consolidating financial statements referred to in
clause (x) above shall be accompanied by a statement of the independent auditors for CapitalSource
Inc. to the effect that such consolidating

 

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statements have been subjected to the auditing procedures applied to the audits of the
corresponding consolidated financial statements and are fairly stated in all material respects in
relation to such consolidated financial statements taken as a whole. Each such financial statement
and certificate shall be delivered to the Administrative Agent at the following electronic mail
addresses (or such other contact information as may be provided by the Administrative Agent):
Christine.herrick@jpmorgan.com and
bill.castro@jpmorgan.com. CapitalSource shall furnish or cause
to be furnished to the Administrative Agent any other financial information regarding
CapitalSource, the Borrower, the Depositor or any Subsidiary of the Borrower or the Depositor
reasonably requested by the Administrative Agent (it being understood that CapitalSource shall not
be required to furnish or cause to be furnished hereunder any financial information relating to any
subsidiary financing trust other than the Borrower).

ARTICLE VIII

THE SERVICER AND THE BACKUP SERVICER

          Section 8.01 Indemnification; Third Party Claims.

          (a) Indemnification by Servicer. The Servicer shall indemnify the Originator, the
Owner Trustee, the Borrower, the Paying Agent, the Collateral Custodian, the Backup Servicer, the
Depositor, the Administrative Agent and the Lenders, their respective officers, directors,
employees, agents and “control persons”, as such term is used under the Act and under the Exchange
Act (each a “Servicer Indemnified Party”) and hold harmless each of them against any and all
claims, losses, damages, penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments, and other costs and expenses resulting from any claim, demand, defense or assertion
based on or grounded upon, or resulting from, a breach of any of the Servicer’s representations and
warranties and covenants contained in this Agreement or in any way relating to the failure of the
Servicer to perform its duties and service Collateral in compliance with the terms of this
Agreement except to the extent such loss arises out of such Servicer Indemnified Party’s fraud,
gross negligence or willful misconduct; provided that if the Servicer is not liable pursuant to the
provisions of Section 8.01(b) for its failure to perform its duties and service the Collateral in
compliance with the terms of this Agreement, then the provisions of this Section 8.01 shall have no
force and effect with respect to such failure; provided that no successor Servicer shall be liable
for the actions or omissions of a predecessor Servicer.

          (b) Limitation on Liability of Depositor and Servicer. None of the Depositor or the
Servicer or any of their respective Affiliates, directors, officers, employees or agents shall be
under any liability to the Owner Trustee, the Borrower, the Administrative Agent, the Lenders or
any other Person for any action taken, or for refraining from the taking of any action, in good
faith pursuant to this Agreement, or for errors in judgment; provided that this provision shall not
protect the Depositor, the Servicer or any of their respective Affiliates, directors, officers,
employees, agents against the remedies provided herein for the breach of any warranties,
representations or covenants made herein, or against any expense or liability specifically required
to be borne by such party without right of reimbursement pursuant to the terms hereof, or against
any expense or liability which would otherwise be imposed by reason of misfeasance, bad faith or
negligence in the performance of the respective duties of the Servicer, the Depositor or the
Originator, as the case may be. The Originator, the Depositor, the Servicer and any of their
respective Affiliates, directors, officers, employees, agents may rely in good faith on any
document of any kind which, prima facie, is properly executed and submitted by any Person
respecting any matters arising hereunder.

          (c) Indemnification by Originator. The Originator agrees to indemnify and hold
harmless the Depositor, the Collateral Custodian, the Backup Servicer, the Administrative Agent and
the

 

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Lenders, as the ultimate assignees from the Depositor (each an “Originator Indemnified Party”,
together with the Servicer Indemnified Parties, the “Indemnified Parties”), from and against any
loss, liability, expense, damage, claim or injury arising out of or based on (i) any breach of any
representation, warranty or covenant of the Originator, the Servicer or their Affiliates, in any
Basic Document, including the origination or prior servicing of the Collateral by reason of any
acts, omissions, or alleged acts or omissions arising out of activities of the Originator, the
Servicer or their Affiliates, and (ii) any untrue statement by the Originator, the Servicer or its
Affiliates of any material fact, including any Officer’s Certificate, statement, report or other
document or information prepared by any such Person and furnished or to be furnished by it pursuant
to or in connection with the transactions contemplated thereby and not corrected prior to
completion of the relevant transaction including such written information as may have been and may
be furnished in connection with any due diligence investigation with respect to the Collateral or
any such Person’s business, operations or financial condition, including reasonable attorneys’ fees
and other costs or expenses incurred in connection with the defense of any actual or threatened
action, proceeding or claim; provided that the Originator shall not indemnify an Originator
Indemnified Party to the extent such loss, liability, expense, damage or injury is due to either an
Originator Indemnified Party’s willful misfeasance, bad faith or negligence or by reason of an
Originator Indemnified Party’s reckless disregard of its obligations hereunder; provided that the
Originator shall not be so required to indemnify an Originator Indemnified Party or to otherwise be
liable to an Originator Indemnified Party for any losses in respect of the performance of the
Collateral, the creditworthiness of the Obligors under the Loans, changes in the market value of
the Collateral or other similar investment risks associated with the Collateral arising from a
breach of any representation or warranty set forth in Section 3.04 or 3.05 hereto, as applicable, a
remedy for the breach of which is provided in Section 3.06. The provisions of this indemnity shall
run directly to and be enforceable by an Originator Indemnified Party subject to the limitations
hereof.

          (d) Notification of Indemnification. With respect to a claim subject to indemnity
hereunder made by any Person against an Indemnified Party (a “Third Party Claim”), such Indemnified
Party shall notify the related indemnifying parties (each an “Indemnifying Party”) in writing of
the Third Party Claim within a reasonable time after receipt by such Indemnified Party of written
notice of the Third Party Claim unless the Indemnifying Parties shall have previously obtained
actual knowledge thereof. Thereafter, the Indemnified Party shall deliver to the Indemnifying
Parties, within a reasonable time after the Indemnified Party’s receipt thereof, copies of all
notices and documents (including court papers) received by the Indemnified Party relating to the
Third Party Claim. No failure to give such notice or deliver such documents shall effect the
rights to indemnity hereunder. Each Indemnifying Party shall promptly notify the Administrative
Agent and the Indemnified Party (if other than the Administrative Agent) of any claim of which it
has been notified and shall promptly notify the Administrative Agent and the Indemnified Party (if
applicable) of its intended course of action with respect to any claim.

          (e) Cooperation in Defense of Suit. If a Third Party Claim is made against an
Indemnified Party, while maintaining control over its own defense, the Indemnified Party shall
cooperate and consult fully with the Indemnifying Party in preparing such defense, and the
Indemnified Party may defend the same in such manner as it may deem appropriate, including settling
such claim or litigation after giving notice to the Indemnifying Party of such terms and the
Indemnifying Party will promptly reimburse the Indemnified Party upon written request; provided
that the Indemnified Party may not settle any claim or litigation without the consent of the
Indemnifying Party; provided that the Indemnifying Party shall have the right to reject the
selection of counsel by the Indemnified Party if the Indemnifying Party reasonably determines that
such counsel is inappropriate in light of the nature of the claim or litigation and shall have the
right to assume the defense of such claim or litigation if the Indemnifying Party determines that
the manner of defense of such claim or litigation is unreasonable.

 

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          Section 8.02 Merger or Consolidation of the Servicer and Backup Servicer.

          The Servicer shall keep in full effect its existence, rights and franchises as a limited
liability company, and will obtain and preserve its qualification to do business as a foreign
entity and maintain such other licenses and permits in each jurisdiction necessary to protect the
validity and enforceability of each Basic Document to which it is a party and each of the Eligible
Loans and to perform its duties under each Basic Document to which it is a party; provided that the
Servicer may merge or consolidate with any other corporation upon the satisfaction of the
conditions set forth in the following paragraph.

          Any Person into which the Servicer may be merged or consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Servicer shall be a party, or any Person
succeeding to the business of the Servicer, shall be an Eligible Servicer and shall be the
successor of the Servicer, as applicable hereunder, without the execution or filing of any paper or
any further act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding. The Servicer shall send notice of any such merger, conversion, consolidation or
succession to the Administrative Agent and the Borrower.

          Any Person (i) into which the Backup Servicer may be merged or consolidated, (ii) that may
result from any merger or consolidation to which the Backup Servicer shall be a party, or (iii)
that may succeed to the properties and assets of the Backup Servicer substantially as a whole,
which Person in any of the foregoing cases executes an agreement of assumption to perform every
obligation of the Backup Servicer hereunder, shall be the successor to the Backup Servicer under
this Agreement without further act on the part of any of the parties to this Agreement provided
such Person is organized under the laws of the United States of America or any one of the States
thereof or the District of Columbia (or any domestic branch of a foreign bank), (i) (a) that has
either (1) a long-term unsecured debt rating of “A” or better by S&P and “A2” or better by Moody’s
or (2) a short-term unsecured debt rating or certificate of deposit rating of “A-1” or better by
S&P or “P-1” or better by Moody’s, (b) the parent corporation which has either (1) a long-term
unsecured debt rating of “A” or better by S&P and “A2” or better by Moody’s or (2) a short-term
unsecured debt rating or certificate of deposit rating of “A-1” or better by S&P and “P-1” or
better by Moody’s or (c) is otherwise acceptable to the Administrative Agent.

          Section 8.03 Limitation on Liability of the Servicer and the Backup
Servicer.

          (a) Reliance on Documents; No Obligation with Respect to Legal Actions. The Servicer
and any director, officer, employee or agent of the Servicer may rely on any document of any kind
which it in good faith reasonably believes to be genuine and to have been adopted or signed by the
proper authorities respecting any matters arising hereunder. Subject to the terms of Section 8.01,
the Servicer shall have no obligation to appear with respect to, prosecute or defend any legal
action which is not incidental to the Servicer’s duty to service the Collateral in accordance with
this Agreement.

          (b) Limited Duties of Backup Servicer. The Backup Servicer undertakes to perform only
such duties and obligations as are specifically set forth in this Agreement, it being expressly
understood by all parties hereto that there are no implied duties or obligations of the Backup
Servicer hereunder. Without limiting the generality of the foregoing, the Backup Servicer, except
as expressly set forth herein, shall have no obligation to supervise, verify, monitor or administer
the performance of the Servicer. The Backup Servicer may act through its agents, nominees,
attorneys and custodians in performing any of its duties and obligations under this Agreement, it
being understood by the parties hereto that the Backup Servicer will be responsible for any
misconduct or negligence on the part of such agents, attorneys or custodians acting on the routine
and ordinary day-to-day operations for and on behalf of the Backup Servicer. Neither the Backup
Servicer nor any of its officers, directors, employees or

 

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agents shall be liable, directly or indirectly, for any damages or expenses arising out of the
services performed under this Agreement other than damages or expenses that result from the
negligence or willful misconduct of it or them or the failure to perform materially in accordance
with this Agreement.

          (c) Backup Servicer not Liable for Servicer Actions. The Backup Servicer shall not be
liable for any obligation of the Servicer contained in this Agreement or for any errors of the
Servicer contained in any computer tape, certificate or other data or document delivered to the
Backup Servicer hereunder or on which the Backup Servicer must rely in order to perform its
obligations hereunder, and the Administrative Agent, the Lenders and the Collateral Custodian each
agree to look only to the Servicer to perform such obligations. The Backup Servicer shall have no
responsibility and shall not be in default hereunder or incur any liability for any failure, error,
malfunction or any delay in carrying out any of its duties under this Agreement if such failure or
delay results from the Backup Servicer acting in accordance with information prepared or supplied
by a Person other than the Backup Servicer or the failure of any such other Person to prepare or
provide such information. The Backup Servicer shall have no responsibility, shall not be in
default and shall incur no liability for (i) any act or failure to act of any third party,
including the Servicer, (ii) any inaccuracy or omission in a notice or communication received by
the Backup Servicer from any third party, (iii) the invalidity or unenforceability of any
Collateral under applicable law, (iv) the breach or inaccuracy of any representation or warranty
made with respect to any Collateral, or (v) the acts or omissions of any successor Backup Servicer.

          Section 8.04 No Resignation; Assignment.

          (a) No Resignation or Assignment by the Servicer. The Servicer shall not resign from
the obligations and duties hereby imposed on it except upon determination that its duties hereunder
are no longer permissible under applicable law. Any such determination shall be evidenced by an
Independent opinion of counsel to such effect delivered (at the expense of the Servicer) to the
Administrative Agent and the Lenders. No resignation of the Servicer shall become effective until
a successor Servicer, appointed pursuant to the provisions of Section 9.02 shall have assumed the
Servicer’s responsibilities, duties, liabilities (other than those liabilities arising prior to the
appointment of such successor) and obligations under this Agreement.

          Except as expressly provided herein, the Servicer shall not assign or transfer any of its
rights, benefits or privileges hereunder to any other Person, or delegate to or subcontract with,
or authorize or appoint any other Person to perform any of the duties, covenants or obligations to
be performed by the Servicer hereunder and any agreement, instrument or act purporting to effect
any such assignment, transfer, delegation or appointment shall be void.

          The Servicer agrees to cooperate with any successor Servicer in effecting the transfer of the
Servicer’s servicing responsibilities and rights hereunder pursuant to the first paragraph of this
Section 8.04, including the transfer to such successor of all relevant records and documents
(including any Loan Files and the Asset Files in the possession of the Servicer) and all amounts
received with respect to the Loans and Assets and not otherwise permitted to be retained by the
Servicer pursuant to this Agreement. In addition, the Servicer, at its sole cost and expense,
shall prepare, execute and deliver any and all documents and instruments to the successor Servicer
including all Loan Files and Asset Files in its possession and do or accomplish all other acts
reasonably necessary or appropriate to effect such termination and transfer of servicing
responsibilities.

          (b) No Resignation by the Backup Servicer. The Backup Servicer shall not resign
(except with prior consent of the Administrative Agent which consent shall not be unreasonably
withheld) from the obligations and duties hereby imposed on it except upon the Backup Servicer’s
determination that (i) the performance of its duties hereunder is or has become impermissible under
applicable law and

 

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(ii) there is no reasonable action that the Backup Servicer could take to make the performance of
its duties hereunder permissible under applicable law. Any such determination permitting the
resignation of the Backup Servicer shall be evidenced as to clause (i) above by an Opinion of
Counsel to such effect delivered to the Administrative Agent. No such resignation shall become
effective until a successor Backup Servicer shall have assumed the responsibilities and obligations
of the Backup Servicer hereunder.

          Section 8.05 Relationship of Servicer to Borrower and the Administrative
Agent.

          The relationship of the Servicer (and of any successor to the Servicer as servicer under this
Agreement) to the Borrower, the Owner Trustee and the Administrative Agent under this Agreement is
intended by the parties hereto to be that of an independent contractor and not of a joint venturer,
agent or partner of the Borrower, the Owner Trustee or the Administrative Agent.

          Section 8.06 Servicer May Own Securities.

          Each of the Servicer and any Affiliate of the Servicer may in its individual or any other
capacity become the owner or pledgee of Securities with the same rights as it would have if it were
not the Servicer or an Affiliate thereof except as otherwise specifically provided herein.
Securities so owned by or pledged to the Servicer or such Affiliate shall have an equal and
proportionate benefit under the provisions of this Agreement, without preference, priority, or
distinction as among all of the Securities; provided that any Securities owned by the Servicer or
any Affiliate thereof, during the time such Securities are owned by them, shall be without voting
rights for any purpose set forth in this Agreement unless the Servicer or such Affiliate owns all
outstanding Securities of the related class. The Servicer shall notify the Administrative Agent
promptly after it or any of its Affiliates becomes the owner or pledgee of a Security. At any time
that CapitalSource or any of its Affiliates is the Servicer, neither the Servicer nor any of its
Affiliates may be a Lender.

          Section 8.07 Indemnification of the Administrative Agent, the Lenders and Owner
Trustee.

          CapitalSource agrees to indemnify the Administrative Agent, the Lenders and their respective
employees, officers, directors and agents, and reimburse them reasonable out-of-pocket expenses in
accordance with Section 9.03 of the Credit Agreement as if it was a signatory thereto.
CapitalSource agrees to indemnify the Owner Trustee in accordance with Section 8.2 of the Trust
Agreement as if it were a signatory thereto.

ARTICLE IX

SERVICER EVENTS OF DEFAULT

          Section 9.01 Servicer Events of Default.

          (a) Servicer Events of Default. A “Servicer Event of Default” means the occurrence
and continuation of any of the following:

     (1) any failure by Servicer to deposit amounts into the Collection Account, an FX
Account or the Distribution Account when required, or any failure by Servicer to make any of
the required payments therefrom, which continues unremedied for two Business Days; or

 

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     (2) any failure on the part of the Servicer duly to observe or perform in any material
respect any other of the material covenants or agreements on the part of the Servicer,
contained in any Basic Document to which it is a party, which continues unremedied for a
period of 30 days (or, in the case of payment of insurance premiums with respect to Loans
for which the Servicer is required pursuant to the Loan Documents to escrow such premiums,
for a period of 15 days) after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Servicer by any other party hereto or
to the Servicer (with copy to each other party hereto), by the Administrative Agent or
Lenders holding at least 25% of the Aggregate Credit Agreement Exposure; or

     (3) any breach on the part of the Servicer of any representation or warranty contained
in any Basic Document to which it is a party that has a material adverse affect on the
interests of any of the parties hereto or any Certificateholder and which continues
unremedied for a period of 30 days after the date on which notice of such breach, requiring
the same to be remedied, shall have been given to the Servicer by any other party hereto or
to the Servicer (with copy to each other party hereto) by the Administrative Agent or
Lenders holding at least 25% of the Aggregate Credit Agreement Exposure; or

     (4) a Bankruptcy Event shall occur with respect to the Servicer;

     (5) so long as the Servicer or the Originator is an Affiliate of either of the
Depositor or the Borrower, any “event of default” by any such party occurs under any of the
Basic Documents; or

     (6) CapitalSource fails to comply with the financial covenants set forth in Section
7.01.

          (b) Remedies of Administrative Agent and Lenders Upon Servicer Event of Default.
Then, and in each and every such case, so long as a Servicer Event of Default shall not have been
remedied, the Administrative Agent or the Required Lenders, by notice in writing to the Servicer
may, in addition to whatever rights such Person may have at law or in equity to damages, including
injunctive relief and specific performance, on thirty days’ notice, terminate all the rights and
obligations of the Servicer under this Agreement and in and to the Collateral and the proceeds
thereof, as servicer under this Agreement. Within a commercially reasonable time following receipt
by the Servicer of such written notice, all authority and power of the Servicer under this
Agreement, whether with respect to the Collateral or otherwise, shall, subject to Section 9.02,
pass to and be vested in a successor servicer, and the successor servicer is hereby authorized and
empowered to execute and deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, any
and all documents and other instruments and do or cause to be done all other acts or things
necessary or appropriate to effect the purposes of such notice of termination, including the
transfer and endorsement or assignment of the Collateral and related documents. The Servicer
agrees to cooperate with the successor servicer in effecting the termination of the Servicer’s
responsibilities and rights hereunder, including the transfer to the successor servicer for
administration by it of all amounts which shall at the time be credited by the Servicer to each
Collection Account or thereafter received with respect to the Collateral.

          (c) Termination of Servicer’s Rights Upon Term Event. Upon the occurrence, and during
the continuation, of (i) an Event of Default under any of the Basic Documents, (ii) a Servicer
Event of Default under this Agreement, or (iii) a Trigger Event (each, a “Term Event”), the
Servicer’s right to service the Collateral pursuant to the terms of this Agreement shall be in
effect for an initial period commencing on the date on which such Term Event occurred and shall
automatically terminate at 5:00 p.m. (New York City time), on the last business day of the calendar
month in which such Term

 

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Event occurred (the “Initial Term”). Thereafter, the Initial Term shall be extendible in the sole
discretion of the Administrative Agent by written notice (each, a “Servicer Extension Notice”) of
the Administrative Agent for successive one-month terms (each such term ending at 5:00 p.m. (New
York City time), on the last business day of the related month). Following a Term Event, the
Servicer hereby agrees that the Servicer shall be bound for the duration of the Initial Term and
the term covered by any such Servicer Extension Notice to act as the Servicer pursuant to this
Agreement. Following a Term Event, the Servicer agrees that if, as of 3:00 p.m. (New York City
time) on the last business day of any month, the Servicer shall not have received a Servicer
Extension Notice from the Administrative Agent, the Servicer shall give written notice of such
non-receipt to the Administrative Agent by 4:00 p.m. (New York City time). Following a Term Event,
the failure of the Administrative Agent to deliver a Servicer Extension Notice by 5:00 p.m. (New
York City time) shall result in the termination of the Servicer upon the completion of the transfer
of the servicing (the “Servicer Termination Date”). The Servicer and the Administrative Agent
shall comply with all applicable laws in connection with such transfer and the Servicer shall
continue to service the Collateral until completion of such transfer.

          (d) Declaration of Termination Date. Upon the occurrence of a Term Event (other than
the occurrence of a Bankruptcy Event with respect to the Servicer, the Depositor or the Borrower),
the Administrative Agent shall, at the request of, or may, with the consent of the Required
Lenders, by notice to the Borrower and the Servicer, declare the Termination Date to have occurred
and all amounts due the Lenders, the Administrative Agent and the Owner Trustee shall be
immediately due and payable.

          (e) Automatic Determination Termination Date. Upon the occurrence of a Bankruptcy
Event with respect to the Servicer, the Depositor or the Borrower, the Termination Date shall occur
immediately and all amounts due and payable to the Lenders, the Administrative Agent and the Owner
Trustee shall be immediately due and payable.

          Section 9.02 Appointment of Successor.

          (a) Succession of Backup Servicer or Successor Servicer. On and after the date the
Servicer receives a notice of termination pursuant to Section 9.01 or is terminated pursuant to
Section 9.01(c), or the Owner Trustee receives the resignation of the Servicer evidenced by an
Opinion of Counsel or accompanied by the consents required by Section 8.04, or the Servicer is
removed as servicer pursuant to this Article IX, then, Backup Servicer shall automatically succeed
and assume all obligations of the Servicer hereunder, and all authority and power of the Servicer
under this Agreement shall pass to and be vested in the Backup Servicer. As compensation therefor,
the Backup Servicer shall be entitled to the Servicing Fee, together with other servicing
compensation in the form of assumption fees, late payment charges or otherwise as provided herein;
including expenses incurred by the Backup Servicer in connection with the transition of the
servicing obligations (“Transition Costs”). In the event that there is no Backup Servicer or the
Backup Servicer is unable to assume such obligations on such date, the Administrative Agent shall
submit to CapitalSource the name of a proposed successor servicer (the “Successor Servicer”).
CapitalSource shall have the right to reject one proposed Successor Servicer within two Business
Days of the Administrative Agent’s submission and, upon such rejection CapitalSource shall have no
further consent rights with respect to the appointment of any Successor Servicer. If CapitalSource
shall not have rejected such proposed Successor Servicer within such two Business Day period, the
Administrative Agent shall, as promptly as possible, appoint such Successor Servicer as servicer
hereunder so long as such proposed Successor Servicer is acceptable to the Administrative Agent.
The Successor Servicer shall accept its appointment by a written assumption in a form acceptable to
the Administrative Agent and the Lenders. In the event that a Successor Servicer has not accepted
its appointment at the time when the Servicer ceases to act as Servicer, the Administrative Agent
shall petition a court of competent jurisdiction to appoint any established financial institution,

 

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having a net worth of not less than United States $50,000,000 and whose regular business includes
the servicing of loans and assets similar to the Loans and the Assets, as the Successor Servicer
hereunder.

          (b) Duties of Backup Servicer or Successor Servicer. Upon its appointment, the Backup
Servicer or the Successor Servicer, as applicable, shall be the successor in all respects to the
Servicer with respect to servicing functions under this Agreement and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof, and all references in this Agreement to the Servicer shall be deemed to refer to
the Backup Servicer or the Successor Servicer, as applicable; provided that the Backup Servicer or
Successor Servicer, as applicable, shall have (i) no liability with respect to any action performed
by the terminated Servicer prior to the date that the Backup Servicer or Successor Servicer, as
applicable, becomes the successor to the Servicer or any claim of a third party based on any
alleged action or inaction of the terminated Servicer, (ii) no obligation to perform any advancing
obligations, if any, of the Servicer unless it elects to in its sole discretion, (iii) no
obligation to pay any taxes required to be paid by the Servicer (provided that the Backup Servicer
or Successor Servicer, as applicable, shall pay any income taxes for which it is liable), (iv) no
obligation to pay any of the fees and expenses of any other party to the transactions contemplated
hereby, (v) no liability or obligation with respect to any indemnification obligations of any prior
Servicer, including the original Servicer, (vi) no obligation to perform any duties of the Servicer
set forth on Exhibit A-1 hereto (which duties will, instead, be performed by the Originator), and
(vii) no obligation to perform any duties of the Servicer with respect to any FX Loan, FX Account,
FX Document, Foreign Currency Advance, Foreign Currency Credit Extension or Foreign Currency Letter
of Credit (which duties will, instead, be performed by the Administrative Agent). The
indemnification obligations of the Backup Servicer or the Successor Servicer, as applicable, upon
becoming a Successor Servicer, are expressly limited to those instances of negligence or willful
misconduct of the Backup Servicer or Successor Servicer, as applicable.

          (c) No Authority of Servicer Upon Termination of Agreement. All authority and power
granted to the Servicer under this Agreement shall automatically cease and terminate upon
termination of this Agreement and shall pass to and be vested in the Borrower and, without
limitation, the Borrower is hereby authorized and empowered to execute and deliver, on behalf of
the Servicer, as attorney-in-fact or otherwise, all documents and other instruments, and to do and
accomplish all other acts or things necessary or appropriate to effect the purposes of such
transfer of servicing rights. The Servicer agrees to cooperate with the Seller in effecting the
termination of the responsibilities and rights of the Servicer to conduct servicing of the
Collateral.

          (d) Duties of Backup Servicer Upon Succession as Servicer. Upon the Backup Servicer
receiving notice that it is required to serve as the Servicer hereunder pursuant to the foregoing
provisions of this Section 9.02, the Backup Servicer will promptly begin the transition to its role
as Servicer. Notwithstanding the foregoing, the Backup Servicer may, in its discretion, appoint,
or petition a court of competent jurisdiction to appoint, any established servicing institution as
the successor to the Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer hereunder. As compensation, any Successor
Servicer so appointed shall be entitled to receive the Servicing Fee, together with any other
servicing compensation in the form of assumption fees, late payment charges or otherwise as
provided herein that accrued prior thereto, including Transition Costs. In the event the Backup
Servicer is required to solicit bids as provided herein, the Backup Servicer shall solicit, by
public announcement, bids from banks and mortgage servicing institutions meeting the qualifications
set forth in this Section 9.02. Such public announcement shall specify that the Successor Servicer
shall be entitled to the full amount of the Servicing fee as servicing compensation, together with
the other servicing compensation in the form of assumption fees, late payment charges or otherwise
that accrued prior thereto. Within 30 days after any such public announcement, the Backup Servicer
shall negotiate and effect the sale, transfer and assignment of the servicing rights and
responsibilities hereunder

 

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to the qualified party submitting the highest qualifying bid. The Backup Servicer shall deduct
from any sum received by the Backup Servicer from the successor to the Servicer in respect of such
sale, transfer and assignment all costs and expenses of any public announcement and of any sale,
transfer and assignment of the servicing rights and responsibilities hereunder and the amount of
any unreimbursed Servicing Advances. After such deductions, the remainder of such sum shall be
paid by the Backup Servicer to the Servicer at the time of such sale, transfer and assignment to
the Servicer’s successor. The Backup Servicer and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such succession. No
appointment of a successor to the Servicer hereunder shall be effective until written notice of
such proposed appointment shall have been provided by the Backup Servicer to the Administrative
Agent and the Lenders and the Backup Servicer shall have consented thereto. The Backup Servicer
shall not resign as servicer until a Successor Servicer has been appointed and accepted such
appointment. Notwithstanding anything to the contrary contained herein, in no event shall Wells
Fargo Bank, National Association, in any capacity, be liable for any Servicing Fee or for any
differential in the amount of the Servicing Fee paid hereunder and the amount necessary to induce
any Successor Servicer under this Agreement and the transactions set forth or provided for by this
Agreement.

          If Wells Fargo Bank, National Association becomes the Successor Servicer, Wells Fargo Bank,
National Association shall not be required to service the Collateral in accordance with the terms
of the Underwriting Guidelines but rather it shall be required to service the Collateral in
accordance with applicable law, the Required Collateral Documents and current industry standards.

          Notwithstanding anything contained in this Agreement to the contrary, Wells Fargo Bank,
National Association as successor Servicer is authorized to accept and rely on all of the
accounting, records (including computer records) and work of the prior Servicer relating to the
Collateral (collectively, the “Predecessor Servicer Work Product”) without any audit or other
examination thereof, and Wells Fargo Bank, National Association shall have no duty, responsibility,
obligation or liability for the acts and omissions of the prior Servicer. If any error,
inaccuracy, omission or incorrect or non-standard practice or procedure (collectively, “Errors”)
exist in any Predecessor Servicer Work Product and such Errors make it materially more difficult to
service or should cause or materially contribute to Wells Fargo Bank, National Association making
or continuing any Errors (collectively, “Continued Errors”), Wells Fargo Bank, National Association
shall have no duty, responsibility, obligation or liability to perform servicing or for such
Continued Errors; provided that Wells Fargo Bank, National Association agrees to use its best
efforts to prevent further Continued Errors. In the event that Wells Fargo Bank, National
Association becomes aware of Errors or Continued Errors, Wells Fargo Bank, National Association
shall, with the prior consent of the Administrative Agent, use its best efforts to reconstruct and
reconcile such data as is commercially reasonable to correct such Errors and Continued Errors and
to prevent future Continued Errors. Wells Fargo Bank, National Association shall be entitled to
recover its costs thereby expended in accordance with Section 5.01(c)(3)(i)(b) and 5.01(c)(4)(i)(b)
of this Agreement.

          Section 9.03 Waiver of Defaults.

          The Administrative Agent may waive any events permitting removal of the Servicer as servicer
pursuant to this Article IX. Upon any waiver of a past default, such default shall cease to exist
and any Servicer Event of Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereto except to the extent expressly so waived.

 

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          Section 9.04 Accounting Upon Termination of Servicer.

          Upon termination of the Servicer under this Article IX, the Servicer shall, at its own
expense:

     (a) deliver to its successor or, if none shall yet have been appointed, to the Paying
Agent the funds in the Collection Account;

     (b) deliver to its successor or, if none shall yet have been appointed, to the
Collateral Custodian all Loan Files, Asset Files and related documents and statements held
by it hereunder and a Loan portfolio computer tape and Collateral Schedule;

     (c) deliver to its successor, the Administrative Agent, the Lenders, the Borrower and
the Certificateholders a full accounting of all funds, including a statement showing the
Scheduled Payments collected by it and a statement of monies held in trust by it for
payments or charges with respect to the Collateral; and

     (d) execute and deliver such instruments and perform all acts reasonably requested in
order to effect the orderly and efficient transfer of servicing of the Collateral to its
successor and to more fully and definitively vest in such successor all rights, powers,
duties, responsibilities, obligations and liabilities of the Servicer under this Agreement.

          Section 9.05 Removal of Backup Servicer.

     (a) Removal by Administrative Agent. The Backup Servicer may be removed, with or
without cause, by the Administrative Agent, at the direction of the Administrative Agent, by notice
given in writing to the Backup Servicer (the “Backup Servicer Termination Notice”). In the event
of any such removal, a replacement Backup Servicer may be appointed by the Administrative Agent or
the Administrative Agent with the consent of the Required Lenders.

     (b) Agreement by Backup Servicer to Terminate. Upon the Backup Servicer’s receipt of
a Backup Servicer Termination Notice from the Administrative Agent of the designation of a
replacement Backup Servicer, the Backup Servicer agrees that it will terminate its activities as
Backup Servicer hereunder.

ARTICLE X

THE COLLATERAL CUSTODIAN

          Section 10.01 Appointment.

          The Administrative Agent, at the direction of the Lenders, hereby appoints Wells Fargo Bank,
National Association to act as Collateral Custodian, for the benefit of the Administrative Agent,
as agent for the Lenders. The Collateral Custodian hereby accepts such appointment and agrees to
perform the duties and obligation with respect thereto set forth herein and in the other Basic
Documents (including the Guarantee and Security Agreement).

 

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          Section 10.02 No Representations.

          In taking and retaining custody of the Required Collateral Documents, the Collateral Custodian
shall be deemed to be acting as the agent of the Lenders; provided that (a) the Collateral
Custodian makes no representations as to the existence, perfection or priority of any Lien on the
Required Collateral Documents or the instruments therein; and (b) the Collateral Custodian’s duties
as agent shall be limited to those expressly contemplated herein and in the other Basic Documents
(including the Guarantee and Security Agreement).

          Section 10.03 Custody of Custodial Collateral Files.

          All Custodial Collateral Files shall be kept in fire resistant vaults, rooms or cabinets at
the office of the Collateral Custodian set forth in Section 13.06, or at such other office as shall
be specified to the Administrative Agent by the Collateral Custodian in a written notice delivered
at least 45 days prior to such change. All Custodial Collateral Files shall be placed together
with an appropriate identifying label and maintained in such a manner so as to permit retrieval and
access. All Custodial Collateral Files shall be clearly segregated from any other documents or
instruments maintained by the Collateral Custodian.

          Section 10.04 Standard of Care.

          In performing its duties, the Collateral Custodian shall use the same degree of care and
attention as it employs with respect to loans and assets similar to the Loans and the Assets that
it holds as Collateral Custodian.

          Section 10.05 Acknowledgment.

          The parties hereto hereby acknowledge and agree that the Collateral Custodian’s execution of
this Agreement shall constitute the Collateral Custodian’s written acknowledgment and agreement
that the Collateral Custodian is holding any Collateral it receives that may be perfected by
possession under the UCC on behalf of and for the benefit of the Administrative Agent and the
Lenders.

ARTICLE XI

TERMINATION

          Section 11.01 Termination.

          (a) Date of Termination. This Agreement shall terminate upon either: (A) the later
of (i) the Collection Date and (ii) the disposition of all funds with respect to the last item of
Collateral and the remittance of all funds due hereunder and the payment of all amounts due and
payable, including, in both cases, without limitation, indemnification payments payable pursuant to
any Basic Document to the Administrative Agent, the Owner Trustee, the Borrower, the Servicer, the
Backup Servicer, the Paying Agent and the Collateral Custodian, written notice of the occurrence of
either of which shall be provided to the Administrative Agent by the Servicer; or (B) the mutual
consent of the Servicer, the Depositor and all Lenders in writing and delivered to the
Administrative Agent by the Servicer.

          (b) Early Termination. Following the payment in full of the Secured Obligations (as
defined in the Guarantee and Security Agreement), the Securities shall be subject to an early
redemption or termination at the option of the Servicer in the manner and subject to the provisions
of Section 11.02.

 

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          (c) Termination of Borrower. Except as provided in this Article XI, none of the
Depositor, the Servicer nor any Certificateholder or Lender shall be entitled to revoke or
terminate the Borrower.

          Section 11.02 Optional Termination.

          The Servicer may, at its option, effect an early termination of this Agreement and the
Collateral on any Business Day on or after the Clean-up Call Date. The Servicer shall effect such
early termination by (a) providing notice thereof to the Administrative Agent and Owner Trustee,
(b) paying all amounts due the Administrative Agent, the Owner Trustee and the Lenders hereunder
and under the other Basic Documents, (c) providing cover to the Issuing Lender for all outstanding
Letters of Credit in the amount determined under Section 2.05(d) of the Credit Agreement and (d)
complying with the obligations under Section 3.09 with respect to any outstanding Letters of
Credit. The amounts payable under clauses (b), (c) and (d) above shall constitute the “Termination
Price”.

          Any such early termination by the Servicer shall be accomplished by depositing into the
Collection Account on the third Business Day prior to the Payment Date on which the purchase is to
occur the amount of the Termination Price to be paid. The Termination Price and any amounts then
on deposit in the Collection Account (other than any amounts withdrawable pursuant to Section
5.01(c)(1)) shall be deposited in the Distribution Account and distributed by the Paying Agent
pursuant to Section 5.01(c)(4) of this Agreement and Section 9.1 of the Trust Agreement on the next
succeeding Payment Date; and any amounts received with respect to the Collateral and Foreclosure
Properties subsequent to the final Payment Date shall belong to the purchaser thereof.

          Section 11.03 Notice of Termination.

          Notice of termination of this Agreement or of early redemption and termination of the Borrower
pursuant to Section 11.01 shall be sent by the Administrative Agent to the Lenders pursuant to the
terms of the Credit Agreement.

ARTICLE XIII

MISCELLANEOUS PROVISIONS

          Section 13.01 Acts of Certificateholders.

          Except as otherwise specifically provided herein and except with respect to Section 13.02(b),
whenever action, consent or approval of the Certificateholders is required under this Agreement,
such action, consent or approval shall be deemed to have been taken or given on behalf of, and
shall be binding upon, all Certificateholders if the Required Lenders agree to take such action or
give such consent or approval.

          Section 13.02 Amendment.

          (a) Amendment to Correct this Agreement. This Agreement may be amended from time to
time by the Depositor, the Servicer, the Paying Agent, the Originator, the Collateral Custodian,
the Backup Servicer, the Administrative Agent (acting with the consent of the requisite Lenders
under the Credit Agreement) and the Borrower by written agreement with notice thereof to the
holders of the Trust Certificates, without the consent of any of the Certificateholders, to cure
any error or ambiguity, to correct or supplement any provisions hereof which may be defective or
inconsistent with any other provisions

 

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hereof or to add any other provisions with respect to matters or questions arising under this
Agreement; provided that such action will not adversely affect in any material respect the
interests of the Certificateholders, as evidenced by an Opinion of Counsel to such effect provided
at the expense of the party requesting such amendment.

          (b) Amendments Generally. This Agreement may also be amended from time to time by the
Depositor, the Servicer, the Paying Agent, the Originator, the Collateral Custodian, the Backup
Servicer, the Administrative Agent (acting with the consent of the requisite Lenders under the
Credit Agreement), the Certificateholders and the Borrower by written agreement for the purpose of
adding any provisions to or changing in any manner or eliminating any of the provisions of this
Agreement, or of modifying in any manner the rights of the Lenders or the Certificateholders;
provided that no such amendment shall (i) reduce in any manner the amount of, or delay the timing
of, collections of payments on Loans, Assets or distributions which are required to be made
hereunder or under any of the other Basic Documents without the consent of all of the Lenders and
all of the Certificateholders, (ii) adversely affect in any material respect the interests of any
of the Lenders or any of the Certificateholders, in any manner other than as described in clause
(i), without the consent of the holders of all of the Lenders and all of the Certificateholders, or
(iii) reduce the percentage of Lenders or Certificateholders whose consent is required for any such
amendment without the consent of the holders of all of the Lenders and all of the
Certificateholders.

          (c) Approval of Substance of Amendments. It shall not be necessary for the consent of
Certificateholders under this Section to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof.

          Prior to the execution of any amendment to this Agreement, the Borrower and the Administrative
Agent shall be entitled to receive and rely upon an Opinion of Counsel stating that the execution
of such amendment is authorized or permitted by this Agreement. The Borrower and the
Administrative Agent may, but shall not be obligated to, enter into any such amendment which
affects the Borrower’s own rights, duties or immunities of the Borrower or the Administrative
Agent, as the case may be, under this Agreement.

          Any amendment to this Agreement which affects the rights or duties of the Owner Trustee shall
require the prior written consent of the Owner Trustee.

          Section 13.03 Recordation of Agreement.

          To the extent permitted by applicable law, this Agreement, or a memorandum thereof if
permitted under applicable law, is subject to recordation in all appropriate public offices for
real property records in all of the counties or other comparable jurisdictions in which any or all
of the Mortgaged Property is situated, and in any other appropriate public recording office or
elsewhere, such recordation to be effected by the Servicer at the Lenders’ expense on direction of
the Required Lenders but only when accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the Lenders or is necessary for
the administration or servicing of the Collateral.

          Section 13.04 Duration of Agreement.

          This Agreement shall continue in existence and effect until terminated as herein provided.

 

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          Section 13.05 Governing Law.

          THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.

          Section 13.06 Notices.

          All demands, notices and communications hereunder shall be in writing and shall be deemed to
have been duly given if (i) delivered personally, mailed by overnight mail, certified mail or
registered mail, postage prepaid, or (ii) transmitted by telecopy, upon telephone confirmation of
receipt thereof, as follows:

     (A) in the case of the Depositor, to CS Funding V Depositor Inc., 4445 Willard Avenue,
Chevy Chase, Maryland 20815, Attention: Chief Legal Officer, telecopy number (301)
841-2380, or such other addresses or telecopy or telephone numbers as may hereafter be
furnished to the Lenders and the other parties hereto in writing by the Depositor;

     (B) in the case of the Borrower, to CapitalSource Funding IV Trust, c/o Wilmington
Trust Company, as Owner Trustee, Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890, telecopy (302) 636-4140, telephone (302) 651-1000, or such other address or
telecopy or telephone numbers as may hereafter be furnished to the Lenders and the other
parties hereto in writing by the Borrower;

     (C) in the case of the Originator, to CapitalSource Finance LLC, 4445 Willard Avenue,
Chevy Chase, Maryland 20815, Attention: Chief Legal Officer, telecopy number (301)
841-2380, or such other addresses or telecopy or telephone numbers as may hereafter be
furnished to the Lenders and the other parties hereto in writing by the Originator;

     (D) in the case of the Servicer, to CapitalSource, 4445 Willard Avenue, Chevy Chase,
Maryland 20815, Attention: Chief Legal Officer, telecopy number (301) 841-2380, or such
other addresses or telecopy or telephone numbers as may hereafter be furnished to the
Lenders and the other parties hereto in writing by the Servicer;

     (E) in the case of the Collateral Custodian, to Wells Fargo Bank, National Association,
751 Kasota Avenue, Suite ABS, MAC N9328-011, Minneapolis, Minnesota, 55414, Attention:
Corporate Trust Services/Asset-Backed Securities Vault, telecopy number (612) 667-1080, with
a copy to Wells Fargo Bank, National Association, MAC N9311-161, Sixth Street and Marquette,
Minneapolis, Minnesota 55479, Attention: Corporate Trust Services/Asset-Backed
Administration, telecopy number (612) 667-3464, or such other addresses or telecopy or
telephone numbers as may hereafter be furnished to the Lenders and the other parties hereto
in writing by the Collateral Custodian;

     (F) in the case of the Backup Servicer and Paying Agent, to Wells Fargo Bank, National
Association, MAC N9311-161, Sixth Street and Marquette, Minneapolis, Minnesota 55479,
Attention: Corporate Trust Services/Asset-Backed Administration, telecopy number (612)
667-3539, or such other addresses or telecopy or telephone numbers as may hereafter be
furnished to the Lenders and the other parties hereto in writing by the Backup Servicer and
Paying Agent; and

 

 - 89 -

     (G) in the case of the Administrative Agent, to the address for notices specified in
the Credit Agreement;

any such notices shall be deemed to be effective with respect to any party hereto upon the receipt
of such notice or telephone confirmation thereof by such party.

          Section 13.07 Severability of Provisions.

          If any one or more of the covenants, agreements, provisions or terms of this Agreement shall
be held invalid for any reason whatsoever, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions or terms of this
Agreement and shall in no way affect the validity or enforceability of the other covenants,
agreements, provisions or terms of this Agreement.

          Section 13.08 No Partnership.

          Nothing herein contained shall be deemed or construed to create any partnership or joint
venture between the parties hereto and the services of the Servicer shall be rendered as an
independent contractor.

          Section 13.09 Counterparts.

          This Agreement may be executed in one or more counterparts (including by facsimile or other
electronic means) and by the different parties hereto on separate counterparts, each of which, when
so executed, shall be deemed to be an original; such counterparts, together, shall constitute one
and the same Agreement.

          Section 13.10 Successors and Assigns.

          This Agreement shall inure to the benefit of and be binding upon the Servicer, the Originator,
the Depositor, the Administrative Agent, the Lenders, the Borrower and the Certificateholders and
their respective successors and permitted assigns.

          Section 13.11 Headings.

          The headings of the various Sections of this Agreement have been inserted for convenience of
reference only and shall not be deemed to be part of this Agreement.

          Section 13.12 Actions of Certificateholders.

          (a) Requirements of Written Instruments. Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Agreement to be given or taken
by Certificateholders may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Certificateholders in person or by an agent duly appointed in writing;
and except as herein otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Depositor, the Servicer or the Borrower. Proof of
execution of any such instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Agreement and conclusive in favor of the Depositor, the Servicer and the
Borrower if made in the manner provided in this Section 13.12.

 

 - 90 -

          (b) Proof of Written Instrument. The fact and date of the execution by any
Certificateholder of any such instrument or writing may be proved in any reasonable manner which
the Depositor, the Servicer or the Borrower may deem sufficient.

          (c) Binding Effect of Written Instrument. Any request, demand, authorization,
direction, notice, consent, waiver or other act by a Certificateholder shall bind every holder of
every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu
thereof, in respect of anything done, or omitted to be done, by the Depositor, the Servicer or the
Borrower in reliance thereon, whether or not notation of such action is made upon such Security.

          (d) Additional Proof of Written Instrument. The Depositor, the Servicer or the
Borrower may require additional proof of any matter referred to in this Section 13.12 as it shall
deem necessary.

          Section 13.13 Non-Petition Agreement.

          Notwithstanding any prior termination of any Basic Document, the Originator, the Paying Agent,
the Servicer, the Depositor and the Administrative Agent each severally and not jointly covenants
that it shall not, prior to the date which is one year and one day after the payment in full of the
all amounts owing under the Credit Agreement and the other Basic Documents, acquiesce, petition or
otherwise, directly or indirectly, invoke or cause the Borrower or the Depositor to invoke the
process of any governmental authority for the purpose of commencing or sustaining a case against
the Borrower or Depositor under any Federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar
official of the Borrower or Depositor or any substantial part of their respective property or
ordering the winding up or liquidation of the affairs of the Borrower or the Depositor.

          Section 13.14 Holders of the Securities.

          (a) Distribution Pro Rata. Any sums to be distributed or otherwise paid hereunder or
under this Agreement to the holders of the Securities shall be paid to such holders pro rata based
on their Percentage Interests.

          (b) Majority Approval. Where any act or event hereunder is expressed to be subject to
the consent or approval of the holders of the Securities without reference to a specific percentage
of such holders, such consent or approval shall be capable of being given by the holder or holders
evidencing in the aggregate not less than 51% of the Percentage Interests.

          Section 13.15 Due Diligence.

          The Originator acknowledges that the Administrative Agent and the Lenders may enter into
transactions based solely upon the information provided by the Originator to the Administrative
Agent and the Lenders in the Collateral Schedule and the representations, warranties and covenants
contained herein, and that the Administrative Agent and the Lenders, at their option, have the
right prior to the making of any Credit Extension under the Credit Agreement to conduct a partial
or complete due diligence review on some or all of the Collateral securing such purchase, including
ordering new credit reports on the related Mortgaged Properties and otherwise re-generating the
information used to originate such Collateral. The Administrative Agent or any Lender may
underwrite such Collateral itself or engage a mutually agreed upon third party underwriter to
perform such underwriting. The Originator agrees to cooperate with the Administrative Agent and
any third party underwriter in connection with such underwriting, including providing the
Administrative Agent and any third party underwriter with access

 

 - 91 -

to any and all documents, records, agreements, instruments or information relating to such
Collateral in the possession, or under the control, of the Servicer. The Originator also shall
make available to the Administrative Agent and the Lenders a knowledgeable financial or accounting
officer for the purpose of answering questions respecting the Collateral Files and the Collateral.
The Administrative Agent and each Lender agrees (on behalf of itself and its Affiliates, directors,
officers, employees and representatives) to use reasonable precaution to keep confidential, in
accordance with its customary procedures for handling confidential information and in accordance
with safe and sound practices, and not to disclose to any third party, any non-public information
supplied to it or otherwise obtained by it hereunder with respect to the Originator or any of its
Affiliates (including the Collateral Files); provided that (1) nothing herein shall prohibit the
disclosure of any such information to the extent required by statute, rule, regulation or judicial
process and (2) unless specifically prohibited by applicable law or court order, the Administrative
Agent or such Lender shall, prior to disclosure thereof, notify the Originator of any request for
disclosure of any such non-public information. The Administrative Agent and each Lender further
agrees not to use any such non-public information for any purpose unrelated to this Agreement, and
the Administrative Agent and each Lender agrees that it shall not disclose such non-public
information to any third party underwriter in connection with a potential Disposition without
obtaining a written agreement from such third party underwriter to comply with the confidentiality
provisions of this Section.

          Section 13.16 No Reliance.

          Each of the Originator, the Depositor and the Borrower hereby acknowledges that it has not
relied on the Administrative Agent or any of the Lenders or any of their respective officers,
directors, employees, agents and “control persons” as such term is used under the Act and under the
Exchange Act for any tax, accounting, legal or other professional advice in connection with the
transactions contemplated by the Basic Documents, that each of the Originator, the Depositor and
the Borrower has retained and been advised by such tax, accounting, legal and other professionals
as it has deemed necessary in connection with the transactions contemplated by the Basic Documents;
and that the Administrative Agent and the Lenders make no representation or warranty, and shall
have no liability with respect to, the tax, accounting or legal treatment or implications relating
to the transactions contemplated by the Basic Documents.

          Section 13.17 Conflicts.

          Notwithstanding anything contained in the Basic Documents to the contrary, in the event of the
conflict between the terms of this Agreement and any other Basic Document, the terms of this
Agreement shall control.

          Section 13.18 Limitation on Liability.

          It is expressly understood and agreed by the parties hereto that (a) this Agreement is
executed and delivered by Wilmington Trust Company, not individually or personally, but solely as
Owner Trustee of CapitalSource Funding V Trust, in the exercise of the powers and authority
conferred and vested in it, (b) each of the representations, undertakings and agreements herein
made on the part of the Borrower is made and intended not as personal representations, undertakings
and agreements by Wilmington Trust Company but is made and intended for the purpose for binding
only the Borrower, (c) nothing herein contained shall be construed as creating any liability on
Wilmington Trust Company, individually or personally, to perform any covenant either expressed or
implied contained herein, all such liability, if any, being expressly waived by the parties hereto
and by any Person claiming by, through or under the parties hereto and (d) under no circumstances
shall Wilmington Trust Company be personally liable for the payment of any indebtedness or expenses
of the Borrower or be liable for the breach or

 

 - 92 -

failure of any obligation, representation, warranty or covenant made or undertaken by the Borrower
under this Agreement or any other related documents.

          Section 13.19 No Agency.

          Nothing contained herein or in the Basic Documents shall be construed to create an agency or
fiduciary relationship between the Administrative Agent, the Lenders or any of their Affiliates and
the Borrower, the Depositor, the Originator or the Servicer. None of the Administrative Agent, any
Lenders or any of their Affiliates shall be liable for any acts or actions affected in connection
with a Disposition, including any Securitization pursuant to Section 3.07 or any Whole Loan Sale
pursuant to Section 3.07.

          Section 13.20 Third Party Beneficiaries.

          The Owner Trustee is an intended third party beneficiary of this Agreement.

          Section 13.21 Performance by Wells Fargo Bank, National Association.

          The parties expressly acknowledge and consent to Wells Fargo Bank, National Association acting
in the capacities of successor Servicer and in the capacity as Paying Agent, Backup Servicer and
Collateral Custodian. Wells Fargo Bank, National Association may, in such capacities, discharge
its separate functions fully, without hindrance or regard to conflict of interest principles, duty
of loyalty principles or other breach of fiduciary duties to the extent that any such conflict or
breach arises from the performance by Wells Fargo Bank, National Association of express duties set
forth in this Agreement in any of such capacities, all of which defenses, claims or assertions are
hereby expressly waived by the other parties hereto except in the case of negligence (other than
errors in judgment) and willful misconduct by Wells Fargo Bank, National Association.

(SIGNATURE PAGE FOLLOWS)

 

          IN WITNESS WHEREOF, the parties hereto have caused their names to be signed by their
respective officers thereunto duly authorized, as of the day and year first above written, to this
Agreement.

	 	 	 	 	 
	 	 	CAPITALSOURCE FUNDING V TRUST,
	 
	 	 	 	 
	 

	 	By:
	 	Wilmington Trust Company, not in its individual

capacity but solely as Owner Trustee
	 
	 	 	 	 
	 

	 	By:	 	/s/ Janel R. Havrilla 
	 

	 	 	 	 
	 

	 	 	 	Name: Janel R. Havrilla

Title: Financial Services Officer
	 
	 	 	 	 
	 	 	CS FUNDING V DEPOSITOR INC., as Depositor
	 
	 	 	 	 
	 

	 	BY:	 	/s/ Giles R. Coates 
	 

	 	 	 	 
	 

	 	 	 	Name: Giles R. Coates

Title: Director-Treasury & Risk Management
	 
	 	 	 	 
	 	 	CAPITALSOURCE FINANCE LLC, as Originator and Servicer
	 
	 	 	 	 
	 

	 	BY:	 	/s/ Giles R. Coates 
	 

	 	 	 	 
	 

	 	 	 	Name: Giles R. Coates

Title: Director-Treasury & Risk Management
	 
	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A., as Administrative Agent
	 
	 	 	 	 
	 

	 	BY:	 	/s/ Christine Herrick 
	 

	 	 	 	 
	 

	 	 	 	Name: Christine Herrick

Title: Vice President
	 
	 	 	 	 
	 	 	WELLS FARGO BANK, NATIONAL ASSOCIATION, as Paying
Agent, Collateral Custodian and Backup Servicer
	 
	 	 	 	 
	 

	 	BY:	 	/s/ Joe Nardi 
	 

	 	 	 	 
	 

	 	 	 	Name: Joe Nardi

Title: Vice President

 

EXHIBIT A-1

ADDITIONAL PROVISIONS RELATING TO REAL ESTATE OWNED

          Conditions Treatment of REO as an “Eligible Asset”. It shall be a condition to the
treatment as an “Eligible Asset” of each REO property that each of the following conditions (in
addition to those set forth in the Sale and Servicing Agreement to which this Exhibit A-1 is
attached) are at all times met with respect to such property:

     (1) Fee Interest. Such property represents a fee ownership interest located in
the United States of America.

     (2) Title. Title to such property is recorded in the name of a REO Subsidiary
in the applicable local land records for the jurisdiction(s) in which such property is
located, and on or before the Transfer Date for such property the Administrative Agent shall
have received evidence of such recordation in the form of a copy of a filed and stamped deed
of title (including a torrens title certificate, if relevant).

     (3) Mortgage. Such property is subject to the Lien of one or more mortgages,
deeds of trust, deeds to secure debt or similar instruments (collectively, “REO Mortgages”)
in form and substance satisfactory to the Administrative Agent securing the obligations of
the REO Subsidiary to the Administrative Agent and the Lenders under the Credit Agreement
and the Security Documents, which Lien has been recorded in the applicable local land
records for the jurisdiction(s) in which such property is located, and on or before the
Transfer Date for such property the Administrative Agent shall have received evidence of
such recordation in the form of a filed and stamped mortgage, deed of trust, deed to secure
debt or similar instrument and which shall indicate that all recording and stamp taxes
payable in connection with recording of such REO Mortgages in the appropriate local land
office(s) has been paid.

     (4) Fixture Filing. To the extent the applicable REO Mortgage covering such
property is not also a fixture filing for purposes of the Uniform Commercial Code, an
appropriate Uniform Commercial Code fixture filing shall have been recorded in the
applicable local land records for the jurisdiction(s) in which such property is located, and
on or before the Transfer Date for such property the Administrative Agent shall have
received evidence of such filing in the form of a filed and stamped fixture filing.

     (5) Title Policies. The validity and priority of the Liens created under the
REO Mortgages shall have been insured by one or more mortgagee policies of title insurance
on forms of and issued by one or more title companies satisfactory to the Administrative
Agent (the “Title Companies”), for a face amount at least equal to the Value of such
property, subject only to such exceptions as are satisfactory to the Administrative Agent
(which shall not in any event show any Liens for any Indebtedness other than the
Indebtedness of the Borrower in respect of the Credit Agreement), and on or before the
Transfer Date for such property the Administrative Agent shall have received evidence of a
commitment from a title company for the issuance of such policy and that the Title Companies
shall have been paid all expenses and premiums in connection with the issuance of such
policies and the recording of such REO Mortgages, it being understood that such policies
shall not in any event include a survey-exception.

     (6) Opinion of Counsel. On or before the Transfer Date for such property, the
Originator shall have delivered to the Administrative Agent an opinion in form and scope
satisfactory to the Administrative Agent, and from counsel admitted in the jurisdiction in
which

A-1-1

 

such property is located and satisfactory to the Administrative Agent, covering the
following matters:

     (i) The REO Mortgage covering such property creates the lien it purports to
create on such property, as security for the payment of the obligations secured by
such REO Mortgage, and such REO Mortgage is in proper form for enforcement under the
law of the jurisdiction in which such property is located.

     (ii) Such REO Mortgage is, under the law of such jurisdiction a legal, valid
and binding obligation of the REO Subsidiary, enforceable against the REO Subsidiary
in accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the rights
of creditors generally and except as the enforceability of such REO Mortgage is
subject to the application of general principles of equity (regardless of whether
considered in a proceeding in equity or at law), including (a) the possible
unavailability of specific performance, injunctive relief or any other equitable
remedy and (b) concepts of materiality, reasonableness, good faith and fair dealing.

     (iii) The recording of such REO Mortgage in the applicable local land office(s)
(which shall be specified by such counsel), and (if applicable) the filing with
respect to fixtures of Uniform Commercial Code financing statements, are the only
recordings or filings necessary to publish notice of and to the rights of the
parties thereto, and to perfect the liens and security interests created pursuant
thereto.

     (iv) The exercise of remedies under such REO Mortgage (including, in the event
such REO Mortgage is a deed of trust, the exercise of the trustee’s power of sale
thereunder), and the foreclosure of such REO Mortgage, will not in any manner
restrict, affect or impair the obligations of the REO Subsidiary with respect to the
obligations secured by such REO Mortgage, or the rights and remedies of the
Collateral Custodian, Administrative Agent and the Lenders with respect to the
foreclosure or enforcement of any other security interests or liens securing such
obligations to the extent that any deficiency remains unpaid after application of
the proceeds of such exercise or foreclosure.

     (v) Except as specified in such opinion, no recording, filing, privilege,
documentary stamp, intangibles or other tax must be paid in connection with the
execution, delivery, recordation or enforcement of such REO Mortgage or any Uniform
Commercial Code financing statements with respect to fixtures.

     (7) Property and Liability Insurance. Property and liability insurance shall
at all times be maintained with respect to such property and the risks associated with the
ownership thereof, including:

     (a) Casualty Insurance insurance against loss or damage covering such
property (including all improvements thereon) by reason of any Peril (as defined
below) in an amount not less than the Value thereof (subject to a deductible not
exceeding 5% of such Value) but in any event, at least equal to 100% of the actual
replacement cost of such property (including all improvements thereon).

     (b) Comprehensive General Liability Insurance insurance against claims
for bodily injury, death or property damage occurring on, in or about such property
(and any

A-1-2

 

adjoining streets, sidewalks and waterways), in such amounts as are then
customary for property similar in use in the jurisdictions where such properties are
located.

     (c) Other Insurance such other insurance, including War Risk Insurance
when and to the extent obtainable from the United States Government, in each case as
generally carried by owners of similar properties in the jurisdictions where such
property is located, in such amounts and against such risks as are then customary
for property similar in use.

          Such insurance shall be written by financially responsible companies selected by the
Servicer and having an A. M. Best rating of “A+” or better and being in a financial size
category of XIV or larger, or by other companies acceptable to the Required Lenders, and
shall name the Collateral Custodian (on behalf of the Administrative Agent and the Lenders)
as loss payee (to the extent covering risk of loss or damage to tangible property) and as an
additional named insured as its interests may appear (to the extent covering any other
risk). Each policy referred to in this paragraph (7) shall provide that it will not be
canceled or reduced, or allowed to lapse without renewal, except after not less than 30
days’ notice to the Administrative Agent and shall also provide that the interests of the
Collateral Custodian, Administrative Agent and the Lenders shall not be invalidated by any
act or negligence of the Borrower or any Person having an interest in such property nor by
occupancy or use of any such property for purposes more hazardous than permitted by such
policy nor by any foreclosure or other proceedings relating to such property. The Servicer
will advise the Administrative Agent promptly of any policy cancellation, reduction or
amendment.

          On or before the Transfer Date for such property, the Servicer will deliver to the
Administrative Agent certificates of insurance satisfactory to the Administrative Agent
evidencing the existence of all insurance required to be maintained by the Servicer
hereunder setting forth the respective coverages, limits of liability, carrier, policy
number and period of coverage and showing that such insurance will remain in effect through
the December 31 falling at least six months after the date hereof, subject only to the
payment of premiums as they become due. Thereafter, on each November 15 in each year
(commencing with the first November 15 after the date hereof), the Servicer will deliver to
the Administrative Agent certificates of insurance evidencing that all insurance required to
be maintained by the Servicer hereunder will be in effect through the December 31 of the
calendar year following the calendar year of the current November 15, subject only to the
payment of premiums as they become due. In addition, the Servicer will not modify or permit
to be modified any of the provisions of any policy with respect to casualty insurance
without delivering the original copy of the endorsement reflecting such modification to the
Administrative Agent. The Servicer will not obtain or carry, or permit to be obtained or
carried, separate insurance concurrent in form or contributing in the event of loss with
that required by this paragraph (7) unless the Collateral Custodian (on behalf of the
Administrative Agent and the Lenders) is the named insured thereunder, with loss payable as
provided herein. The Servicer will immediately notify the Administrative Agent whenever any
such separate insurance is obtained and shall deliver to the Administrative Agent the
certificates evidencing the same.

          For purposes hereof, the term “Peril” means, collectively, fire, lightning, flood,
windstorm, hail, earthquake, explosion, riot and civil commotion, vandalism and malicious
mischief, damage from aircraft, vehicles and smoke and all other perils covered by the “all
risk” endorsement then in use in the jurisdictions where such property is located.

A-1-3

 

     (8) Environmental Reports. On or before the Transfer Date for such property,
the Originator shall have obtained and delivered to the Administrative Agent a “Phase I”
environmental survey and assessment prepared by a firm of licensed engineers (familiar with
the identification of toxic and hazardous substances) in form and detail satisfactory to the
Administrative Agent, such environmental survey and assessment to be based upon physical on
site inspections by such firm of such property, as well as an historical review of the uses
of such property and of the business and operations conducted at such property. Such report
shall not reveal any material risk of any Environmental Liability with respect to such
property.

     Thereafter, not less frequently than once every year, the Originator shall obtain and
deliver to the Administrative Agent a certificate of a Servicing Officer repeating to the
Administrative Agent and the Lenders the representation set forth in Section 3.04(l) of the
Sale and Servicing Agreement with respect to such property and identifying any exceptions to
such representation that would be required by reason of developments occurring with respect
to such property subsequent to the Transfer Date therefor.

     (9) Appraisal. On or before the Transfer Date for such property, a Qualified
FIRREA Appraisal shall have obtained by the Administrative Agent (which the Administrative
Agent agrees to commission at the request and expense of the Originator), which appraisals
shall have been made as of a date prior to the Transfer Date for such property (but not
earlier than 180 days prior to such Transfer Date). Thereafter, not less frequently than
once every year, the Administrative Agent shall be entitled (at the expense of the
Originator) to commission an updated Qualified FIRREA Appraisal of such property setting
forth any change in the Value of such property and taking into account any change in the
environmental status of such property based upon a certificate of a Servicing Officer
repeating to the respective appraisal firm the representation set forth in Section 3.04(l)
of the Sale and Servicing Agreement with respect to such property and identifying any
exceptions to such representation that would be required by reason of developments occurring
with respect to such property subsequent to the Transfer Date therefor.

     (10) Maintenance of Condition. Such property shall at all times be maintained
in good working order and condition, ordinary wear and tear excepted so as to avoid a
diminution of the Value of such property after the Transfer Date for such property
(excluding any diminution resulting from changes resulting from a reduction in market value
of such property).

     (11) Certain Reports. The Originator will deliver to the Administrative Agent,
promptly upon the occurrence thereof, notice written notice of the following:

     (i) the filing or commencement of any action, suit or proceeding by or before
any arbitrator or Governmental Authority against or affecting such property or
arising out of the ownership of such property;

     (ii) the assertion by any Person of any Environmental Claim against, or with
respect to, such property, and any alleged violation of or non compliance with any
Environmental Laws or any permits, licenses or authorizations with respect to such
property;

     (iii) any event or development that has led to, or could reasonably be expect
to lead to, the submission of a claim under any title, casualty, liability or other
insurance policy maintained by the Originator with respect to such property;

A-1-4

 

     (iv) the assertion by any Governmental Authority (including any local property
tax authority) that any taxes payable with respect to such property are past due;
and

     (v) any other event or development that has resulted in, or could reasonably be
expected to result in, a material diminution in the Value of such property.

Each notice delivered under this paragraph (11) shall be accompanied by a statement of a
Servicing Officer setting forth the details of the event or development requiring such
notice and any action taken or proposed to be taken with respect thereto.

A-1-5

 

EXHIBIT A-2

MINIMUM DOCUMENTARY REQUIREMENTS

     (1) Minimum documentary requirements for the Required Loan Documents for any Loan that
is to be made, or any Letter of Credit under the Credit Agreement that is to be issued, in
any currency other than U.S. Dollars shall be determined at the time that such Loan
Documents have been prepared by the Originator and delivered to the Administrative Agent and
the Lenders for review.

     (2) Minimum documentary requirements for the Required Loan Documents for any Loan that
is to be made to any Person that is not organized under the laws of the United States of
America or any State thereof shall be determined at the time that such Loan Documents have
been prepared by the Originator and delivered to the Administrative Agent and the Lenders
for review.

     (3) Minimum documentary requirements for the Required Loan Documents under which a
Letter of Credit under the Credit Agreement is to be issued shall include a requirement that
upon acceleration of the Loans under such Loan Documents, or other maturity of such Loans,
the respective Obligors shall post cash collateral in the currency of such Letter of Credit
in an amount equal to 105% of the face amount of such Letter of Credit.

A-2-1

 

EXHIBIT A-3

[reserved]

A-3-1

 

EXHIBIT B

FORM OF MONTHLY SERVICER REPORT

[to be attached]

 

 

EXHIBIT C

REQUEST FOR RELEASE OF DOCUMENTS

	 	 	 
	To:

	 	Wells Fargo Bank, National Association
	 

	 	MAC N9328-011
	 

	 	Suite ABS
	 

	 	751 Kasota Ave.
	 

	 	Minneapolis, MN 55414
	 

	 	Attn: Corporate Trust Services – Asset Backed Securities
	 
	 	 
	Re:

	 	Sale and Servicing Agreement, dated as of June 30, 2005, by and among
CapitalSource Funding V Trust, as borrower, CS Funding V Depositor
Inc., as depositor, CaptialSource Finance LLC, as originator and
servicer, JPMorgan Chase Bank, N.A., as administrative agent, and
Wells Fargo Bank, National Association, as paying agent, backup
servicer and collateral custodian (“Collateral Custodian”)

           In connection with the administration of the Custodial Collateral Files held by you as
Collateral Custodian under the above referenced Sale and Servicing Agreement, we request the
release of the Custodial Collateral File for the Loan or Asset described below, and further
identified on the Addendum annexed hereto:

	 	 	 	 	 
	Account
Name:

	 	 	 	 
	 

	 	 	 	 
	 
	Account Number:
	 	 	 	 
	 

	 	 	 	 

Reason For Release (Pick One):

Payoff

Foreclosure

Repurchase

Substitution

Servicing

	 	 	 	 	 
	 	

CAPITALSOURCE FINANCE LLC, as Servicer

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	CONFIRMED BY:

JPMORGAN CHASE BANK, N.A.,

      as Administrative Agent

 	 
	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

C-1

 

	 	 	 	 	 

EXHIBIT D

FORM OF COLLATERAL SCHEDULE (FOR LOANS)

          The Collateral Schedule shall set forth the following information with respect to each
Eligible Loan:

	 	 	 
	A.	 	General Information
	 
	1.

	 	Noteless Loan (yes/no)
	2.

	 	Loan Number
	3.

	 	Obligor (full legal name)
	4.

	 	Four-digit NAIC code
	5.

	 	Principal Balance as of the Initial Transfer Date for such Loan
	6.

	 	Allocation Percentage
	7.

	 	Revolving Loan (yes/no)
	8.

	 	If a Revolving Loan, the total commitments in respect of such
Revolving Loan held of record by the Originator as of the Initial
Transfer Date for such Revolving Loan
	9.

	 	Letters of Credit (yes/no)
	10.

	 	Foreign Currency Advances permitted (yes/no)
	11.

	 	Foreign Currencies allowed:
	 

	 	          Canadian Dollars (y/n)
	 

	 	          English Pounds Sterling (y/n)
	 

	 	          Euros (y/n)

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Original	 	Copy	 	Executed	 	Recorded
	B.	 	Required Loan Documents	 	Description	 	(Y/N)	 	(Y/N)	 	(Y/N)	 	(Y/N)
	 
	1.

	 	Loan Register	 	 	 	 	 	 	 	 	 	 
	2.

	 	Certificate	 	 	 	 	 	 	 	 	 	 
	3.

	 	Loan Agreement	 	 	 	 	 	 	 	 	 	 
	4.

	 	Collateral Schedule	 	 	 	 	 	 	 	 	 	 
	5.

	 	Participation Agreement (if any)	 	 	 	 	 	 	 	 	 	 
	6.

	 	Acquisition Agreement (if any)	 	 	 	 	 	 	 	 	 	 
	7.

	 	Subordination Agreement (if any)	 	 	 	 	 	 	 	 	 	 
	8.

	 	Intercreditor Agreement (if any)	 	 	 	 	 	 	 	 	 	 
	9.

	 	Security Agreement/Instruments (if any)	 	 	 	 	 	 	 	 	 	 
	10.

	 	UCC Financing Statements (if any)	 	 	 	 	 	 	 	 	 	 
	11.

	 	Guarantee (if any)	 	 	 	 	 	 	 	 	 	 
	12.

	 	Mortgage (if any)	 	 	 	 	 	 	 	 	 	 
	13.

	 	If Mortgage, Assignment of Mortgage	 	 	 	 	 	 	 	 	 	 
	14.

	 	If Mortgage, Assignment of Leases &
Rents	 	 	 	 	 	 	 	 	 	 

D-1

 

EXHIBIT E-1

FORM OF INITIAL CERTIFICATION

BY FACSIMILE:

JPMorgan Chase Bank, N.A.

270 Park Avenue, 4th Floor

New York, New York 10017-2014

	 	 	 
	Attention:

	 	Collateral Management Services Group
	 

	 	Telecopy No. (212) 270-4628

	 	 	 
	Re:

	 	Sale and Servicing Agreement dated as of June 30,
2005 (the “Agreement”), by and among CapitalSource
Funding V Trust, CS Funding V Depositor Inc., as
Depositor, CapitalSource Finance LLC, as the
Originator and Servicer, JPMorgan Chase Bank,
N.A., as Administrative Agent, and Wells Fargo
Bank, National Association, as Paying Agent,
Collateral Custodian and Backup Servicer.

Ladies and Gentlemen:

          In accordance with the provisions of Section 2.05 of the above-referenced Agreement, the
undersigned, as the Collateral Custodian, hereby certifies:

     (A) as to each Loan in the Loan List, that it has received by facsimile transmission or
in electronic format mutually agreed upon by the parties (i) if such Loan is not identified
in such Loan List as Noteless Loan, a copy of the executed Underlying Note endorsed in
blank; (ii) if such Loan is identified on the Collateral Schedule as a Noteless Loan, a copy
of the related Loan Register acknowledging the Collateral Custodian is the entitlement
holder on behalf of the Administrative Agent and the Lenders; and (iii) an executed copy of
the Assignment of Mortgage (if set forth on the Collateral Schedule); and

     (B) as to each Asset in the Loan List, that it has received (i) a copy of a schedule
identifying the Assets to be sold or transferred by the Originator and (ii) a statement of
the Value attributed to such Assets.

          The Collateral Custodian makes no representations as to (i) the validity, legality,
enforceability, sufficiency, due authorization or genuineness of any of the documents contained in
each Collateral File or of any of the Collateral or (ii) the collectibility, insurability,
effectiveness or suitability of any such Collateral.

          The Collateral Custodian hereby confirms that it is holding each such Collateral Document as
agent and bailee of, and custodian for the exclusive use and benefit, and subject to the sole
direction, of the Administrative Agent pursuant to the terms and conditions of the Agreement.

E-1-1

 

          The Collateral Custodian will accept and act on instructions with respect to the Collateral
subject hereto upon surrender of this Initial Certification at its office at Sixth Street and
Marquette Avenue, N9311-161, Minneapolis, Minnesota 55479.

          Capitalized terms used herein shall have the meaning ascribed to them in the Agreement.

	 	 	 	 	 
	 	WELLS FARGO BANK, NATIONAL ASSOCIATION, as Collateral
Custodian
 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

E-1-2

 

	 	 	 	 	 

EXHIBIT E-2

FORM OF FINAL CERTIFICATION

BY FACSIMILE: 

JPMorgan Chase Bank, N.A.

270 Park Avenue, 4th Floor

New York, New York 10017-2014

	 	 	 
	Attention:

	 	Collateral Management Services Group
	 

	 	Telecopy No. (212) 270-4628

	 	 	 
	Re:

	 	Sale and Servicing Agreement dated as of June 30,
2005 (the “Agreement”), by and among CapitalSource
Funding V Trust, CS Funding V Depositor Inc., as
Depositor, CapitalSource Finance LLC, as the
Originator and Servicer, JPMorgan Chase Bank,
N.A., as Administrative Agent, and Wells Fargo
Bank, National Association, as Paying Agent,
Collateral Custodian and Backup Servicer.

Ladies and Gentlemen:

                    In accordance with the provisions of Section 2.05 of the above-referenced Agreement, the
undersigned, as the Collateral Custodian, hereby certifies as to each item of Collateral in the
Loan List or Collateral Schedule that it has received the Required Collateral Documents with
respect to each item of Collateral identified on the Loan List or Collateral Schedule attached
hereto, except for the items described therein as “missing items”. The Collateral Custodian makes
no representations as to (i) the validity, legality, enforceability, sufficiency, due authorization
or genuineness of any of the documents contained in each Collateral File or of any of the
Collateral or (ii) the collectibility, insurability, effectiveness or suitability of any such
Collateral.

                    The Collateral Custodian hereby confirms that it is holding each such Collateral Document as
agent and bailee of, and custodian for the exclusive use and benefit, and subject to the sole
direction, of the Lenders pursuant to the terms and conditions of the Agreement.

                    The Collateral Custodian will accept and act on instructions with respect to the Collateral
subject hereto upon surrender of this Final Certification at its office at Sixth Street and
Marquette Avenue, N9311-161, Minneapolis, Minnesota 55479.

                    Capitalized terms used herein shall have the meaning ascribed to them in the Agreement.

	 	 	 	 	 
	 	WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Collateral Custodian

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

E-2-1

 

	 	 	 	 	 

EXHIBIT F

FORM OF BORROWING BASE CERTIFICATE

[DATE]

JPMorgan Chase Bank, N.A.

270 Park Avenue, 4th Floor

New York, New York 10017-2014

	 	 	 
	Attention:

	 	 Collateral Management Services Group
	 

	 	 Telecopy No. (212) 270-4628

Ladies and Gentlemen:

          This Borrowing Base Certificate is delivered to you pursuant to the terms of the Credit
Agreement (the “Credit Agreement”), dated as of June 30, 2005, among CapitalSource Funding V Trust,
as Borrower, CS Funding V Depositor Inc., as Depositor, CapitalSource Finance LLC
(“CapitalSource”), as Originator and Servicer, JPMorgan Chase Bank, N.A., as Administrative Agent,
and the financial institutions from time to time party thereto as Lenders; and the Sale and
Servicing Agreement dated as of June 30, 2005 (the “Sale and Servicing Agreement” and, together
with the Credit Agreement, the “Agreements”), by and among CapitalSource Funding V Trust, CS
Funding V Depositor Inc., as Depositor, CapitalSource Finance LLC, as the Originator and Servicer,
JPMorgan Chase Bank, N.A., as Administrative Agent, and Wells Fargo Bank, National Association, as
Paying Agent, Collateral Custodian and Backup Servicer. Capitalized terms used and not otherwise
defined herein shall have the meanings set forth in the Agreements.

          This Borrowing Base Certificate is being delivered to you pursuant to Section 4.02 of the
Credit Agreement and/or Section 2.06 of the Sale and Servicing Agreement or Section 4.04(b)(3) of
the Sale and Servicing Agreement. CapitalSource hereby makes the following representations and
warranties:

     (1) Attached hereto as Schedule 1 is a true, correct and complete copy of the borrowing
base report as of the date hereof (the “Borrowing Base Report”), which sets forth the
calculation of the Borrowing Base and all components thereof.

     (2) All of the representations and warranties set forth in Article III of the Sale and
Servicing Agreement and in Article III of the Credit Agreement are true and correct as of
the date hereof and (if this Borrowing Base Certificate is being delivered pursuant to
Section 2.06 of the Sale and Servicing Agreement and/or Section 4.02 of the Credit
Agreement) as of the related Transfer Date and/or Credit Extension Date, as applicable.

     (3) If this Borrowing Base Certificate is being delivered pursuant to Section 4.02 of
the Credit Agreement, all of the conditions precedent set forth in Sections 4.01 and 4.02 of
the Credit Agreement have been satisfied as of the date hereof and will remain satisfied on
the related Credit Extension Date.

     (4) If this Borrowing Base Certificate is being delivered pursuant to Section 2.06 of
the Sale and Servicing Agreement, all conditions precedent to the related Transfer Date set
forth in Section 2.06 of the Sale and Servicing Agreement have been satisfied as of the date
hereof and will remain satisfied on the related Transfer Date.

F-1

 

     (5) No Trigger Event has occurred and is continuing.

     (6) Each of the Originator, the Servicer, the Borrower and the Depositor is in
compliance with the terms and conditions set forth in the Basic Documents.

          IN WITNESS WHEREOF, the undersigned have executed this Borrowing Base Certificate this ___day
of ___, 200_.

	 	 	 	 	 
	 	CAPITALSOURCE FINANCE LLC, as Originator and Servicer

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

F-2

 

	 	 	 	 	 

Schedule 1

BORROWING BASE REPORT

[to be attached]

F-3

 

EXHIBIT G

LIST OF INVESTORS

Farallon Capital Management LLC

Madison Dearborn Partners

Farallon Partners

T. Rowe Price Associates

John Delaney

Jason Fish

Franklin Resources

Andrew Fremder

Tully Friedman

Timothy Hurd

Thomas Steyer

Paul Wood

G-1

 

EXHIBIT H

SECTION 7.02 CERTIFICATION

          I,                                         , am the                                          of CapitalSource Finance LLC, a Delaware
limited liability company (the “Company”), and do hereby certify that:

     (i) the Company is in compliance with all provisions and terms of the Sale and
Servicing Agreement, dated as of June 30, 2005 (the “Sale and Servicing Agreement”), by and
among CapitalSource Funding V Trust, CS Funding V Depositor Inc., as Depositor,
CapitalSource Finance LLC as the Originator and Servicer, JPMorgan Chase Bank, N.A., as
Administrative Agent, and Wells Fargo Bank, National Association, as Paying Agent,
Collateral Custodian and Backup Servicer;

     (ii) no Event of Default (or, to the Company’s knowledge, any event that with notice
or the lapse of time or both, would become an Event of Default) has occurred under the Sale
and Servicing Agreement;

     (iii) attached hereto are complete and correct copies of [specify financial statement
being delivered pursuant to Section 7.02(x), (y) or (z) of the Sale and Servicing
Agreement], each of which has been prepared in accordance with GAAP;

     (iv) the consolidated Tangible Net Worth of the Company is not less than $___;

     (v) the Secured Leverage Ratio of the Company does not exceed ___to 1;

     (vi) the Leverage Ratio of the Company does not exceed ___to 1; and

     (vii) calculations of the Company’s consolidated Tangible Net Worth, Secured Leverage
Ratio and Leverage Ratio are set forth on Schedule I attached hereto.

            Capitalized terms used but not defined herein shall have the meanings assigned thereto in the
Sale and Servicing Agreement.

            IN WITNESS WHEREOF, I have signed this certificate.

            Date:                                         , 200___

	 	 	 	 	 
	 	CAPITALSOURCE FINANCE LLC

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 

H-1

 

	 	 	 	 	 

SCHEDULE I TO SECTION 7.02 CERTIFICATION

[CapitalSource to attach]

H-2

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