Document:

EX-10.1

U.S. $140,000,000

AMENDED AND RESTATED

LOAN FUNDING AND SERVICING AGREEMENT

by and among

PATRIOT CAPITAL FUNDING LLC I,

as the Borrower

PATRIOT CAPITAL FUNDING, INC.,

as the Servicer

FAIRWAY FINANCE COMPANY, LLC,

as the Conduit Lender

BMO CAPITAL MARKETS CORP.,

as the Agent

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as the Backup Servicer and as the Trustee

Dated as of September 18, 2006

	 	 	 	 	 	 	 	 	 
	ARTICLE IDEFINITIONS
	 	 	2	 	 	 	 	 
	Section 1.1
	 	Certain Defined Terms
	 	 	2	 
	Section 1.2
	 	Other Terms
	 	 	41	 
	Section 1.3
	 	Computation of Time Periods
	 	 	41	 
	Section 1.4
	 	Interpretation
	 	 	41	 
	Section 1.5
	 	Section References
	 	 	42	 
	Section 1.6
	 	Calculations
	 	 	42	 
	ARTICLE IIPURCHASE OF THE VARIABLE FUNDING NOTE
	 	 	42	 
	Section 2.1
	 	The Variable Funding Note
	 	 	42	 
	Section 2.2
	 	Procedures for Advances by the Conduit Lender
	 	 	43	 
	Section 2.3
	 	Optional Changes in Facility Amount; Prepayments
	 	 	44	 
	Section 2.4
	 	Deemed Collections
	 	 	45	 
	Section 2.5
	 	Notations on the Variable Funding Note
	 	 	46	 
	Section 2.6
	 	Principal Repayments
	 	 	46	 
	Section 2.7
	 	Interest Payments
	 	 	46	 
	Section 2.8
	 	Settlement Procedures
	 	 	47	 
	Section 2.9
	 	Collections and Allocations
	 	 	51	 
	Section 2.10
	 	Payments, Computations, Etc
	 	 	51	 
	Section 2.11
	 	[Reserved]	 	 	52	 
	Section 2.12
	 	Fees
	 	 	52	 
	Section 2.13
	 	Increased Costs; Capital Adequacy; Illegality
	 	 	52	 
	Section 2.14
	 	Taxes
	 	 	54	 
	Section 2.15
	 	Assignment of the Purchase Agreement
	 	 	55	 
	Section 2.16
	 	Lien Release Dividend
	 	 	56	 
	Section 2.17
	 	Appointment of Registrar and Duties
	 	 	58	 

	 	 	 	Section 2.18 Substitution of Loans; Repurchase or Substitution of Ineligible Loans
58	 

	 	 	 	 	 	 	 	 	 
	ARTICLE IIICLOSING; CONDITIONS OF CLOSING AND ADVANCES
	 	 	62	 
	Section 3.1
	 	Conditions to Closing and Initial Advances
	 	 	62	 
	Section 3.2
	 	Conditions Precedent to All Advances
	 	 	62	 
	ARTICLE IVREPRESENTATIONS AND WARRANTIES
	 	 	65	 
	Section 4.1
	 	Representations and Warranties of the Borrower
	 	 	65	 

	 	 	 	Section 4.2 Representations and Warranties of the Borrower Relating to the Agreement
and the Loans 73	 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	ARTICLE VGENERAL COVENANTS OF THE BORROWER
	 	 	74	 	 	 	 	 
	Section 5.1
	 	Covenants of the Borrower
	 	 	74	 	 	 	 	 
	Section 5.2
	 	Hedging Agreement
	 	 	78	 	 	 	 	 
	Section 5.3
	 	Delivery of Loan Files
	 	 	79	 	 	 	 	 
	ARTICLE VIPERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS
	 	 	 	 	 	 	80	 
	Section 6.1
	 	Custody of Transferred Loans
	 	 	80	 	 	 	 	 
	Section 6.2
	 	Filing
	 	 	80	 	 	 	 	 
	Section 6.3
	 	Changes in Name, Structure or Location
	 	 	80	 	 	 	 	 
	Section 6.4
	 	Chief Executive Office
	 	 	81	 	 	 	 	 
	Section 6.5
	 	Costs and Expenses
	 	 	81	 	 	 	 	 
	Section 6.6
	 	Sale Treatment
	 	 	81	 	 	 	 	 
	Section 6.7
	 	Separateness from the Borrower
	 	 	81	 	 	 	 	 
	ARTICLE VIIADMINISTRATION AND SERVICING OF LOANS
	 	 	81	 	 	 	 	 
	Section 7.1
	 	Appointment of the Servicer
	 	 	81	 	 	 	 	 
	Section 7.2
	 	Duties and Responsibilities of the Servicer
	 	 	82	 	 	 	 	 
	Section 7.3
	 	Authorization of the Servicer
	 	 	83	 	 	 	 	 
	Section 7.4
	 	Collection of Payments
	 	 	84	 	 	 	 	 
	Section 7.5
	 	Servicer Advances
	 	 	86	 	 	 	 	 
	Section 7.6
	 	Realization Upon Defaulted Loans or Charged-Off Loans
	 	 	86	 	 	 	 	 
	Section 7.7
	 	Maintenance of Insurance Policies
	 	 	87	 	 	 	 	 
	Section 7.8
	 	Representations and Warranties of the Servicer
	 	 	87	 	 	 	 	 
	Section 7.9
	 	Covenants of the Servicer
	 	 	89	 	 	 	 	 
	Section 7.10
	 	The Trustee
	 	 	91	 	 	 	 	 
	Section 7.11
	 	Representations and Warranties of the Trustee
	 	 	96	 	 	 	 	 
	Section 7.12
	 	Covenants of the Trustee
	 	 	97	 	 	 	 	 
	Section 7.13
	 	The Backup Servicer
	 	 	98	 	 	 	 	 
	Section 7.14
	 	Representations and Warranties of the Backup Servicer101
	 	 	 	 	 	 	 	 
	Section 7.15
	 	Covenants of the Backup Servicer102
	 	 	 	 	 	 	 	 
	Section 7.16
	 	Payment of Certain Expenses by the Servicer and the Borrower102
	 	 	 	 	 	 	 	 
	Section 7.17
	 	Reports103
	 	 	 	 	 	 	 	 
	Section 7.18
	 	Annual Statement as to Compliance103
	 	 	 	 	 	 	 	 
	Section 7.19
	 	Annual Independent Public Accountant’s Servicing Reports104
	 	 	 	 	 	 	 	 
	Section 7.20
	 	Limitation on Liability of the Servicer and Others104
	 	 	 	 	 	 	 	 
	Section 7.21
	 	The Servicer, the Backup Servicer and the Trustee Not to Resign
	 	 	105	 	 	 	 	 

	 	 	 	Section 7.22 Access to Certain Documentation and Information Regarding the Loans 105	 

	 	 	 	 	 	 	 	 	 
	Section 7.23
	 	[Reserved]	 	 	105	 
	Section 7.24
	 	Identification of Records
	 	 	105	 
	Section 7.25
	 	Servicer Termination Events
	 	 	105	 
	Section 7.26
	 	Appointment of Successor Servicer
	 	 	107	 
	Section 7.27
	 	Market Servicing Fee
	 	 	108	 
	ARTICLE VIIISECURITY INTEREST
	 	 	109	 
	Section 8.1
	 	Grant of Security Interest
	 	 	109	 
	Section 8.2
	 	Release of Lien on Loans
	 	 	109	 
	Section 8.3
	 	[Reserved]	 	 	110	 
	Section 8.4
	 	Further Assurances
	 	 	110	 
	Section 8.5
	 	Remedies
	 	 	110	 
	Section 8.6
	 	Waiver of Certain Laws
	 	 	110	 
	Section 8.7
	 	Power of Attorney
	 	 	111	 
	ARTICLE IXTERMINATION EVENTS
	 	 	111	 
	Section 9.1
	 	Termination Events
	 	 	111	 
	Section 9.2
	 	Remedies
	 	 	113	 
	ARTICLE XINDEMNIFICATION
	 	 	 	 	 	 	115	 
	Section 10.1
	 	Indemnities by the Borrower
	 	 	115	 
	Section 10.2
	 	Indemnities by the Servicer
	 	 	117	 
	ARTICLE XITHE AGENT
	 	 	 	 	 	 	118	 
	Section 11.1
	 	Authorization and Action
	 	 	118	 
	Section 11.2
	 	Delegation of Duties
	 	 	118	 
	Section 11.3
	 	Exculpatory Provisions
	 	 	119	 
	Section 11.4
	 	Reliance
	 	 	119	 
	Section 11.5
	 	Non-Reliance on Agent
	 	 	119	 
	Section 11.6
	 	The Agent in its Individual Capacity
	 	 	120	 
	Section 11.7
	 	Successor Agent
	 	 	120	 
	ARTICLE XIIMISCELLANEOUS
	 	 	 	 	 	 	120	 
	Section 12.1
	 	Amendments and Waivers
	 	 	120	 
	Section 12.2
	 	Notices, Etc
	 	 	121	 
	Section 12.3
	 	Liabilities to Obligors
	 	 	121	 
	Section 12.4
	 	No Waiver, Rights and Remedies
	 	 	121	 
	Section 12.5
	 	Binding Effect
	 	 	122	 
	Section 12.6
	 	Term of this Agreement
	 	 	122	 

	 	 	 	Section 12.7 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF OBJECTION TO VENUE
122	 

	 	 	 	 	 	 	 	 	 
	Section 12.8
	 	WAIVER OF JURY TRIAL
	 	 	122	 
	Section 12.9
	 	Costs, Expenses and Taxes
	 	 	123	 
	Section 12.10
	 	No Proceedings
	 	 	123	 
	Section 12.11
	 	Recourse Against Certain Parties
	 	 	124	 
	Section 12.12	 	Protection of Security Interest; Appointment of Attorney-in-Fact124

	Section 12.13
	 	Confidentiality
	 	 	125	 
	Section 12.14
	 	Third Party Beneficiaries
	 	 	126	 
	Section 12.15
	 	Execution in Counterparts; Severability; Integration
	 	 	126	 
	Section 12.16
	 	Waiver of Setoff
	 	 	127	 
	Section 12.17
	 	Assignments by the Conduit Lender
	 	 	127	 
	Section 12.18
	 	Heading and Exhibits
	 	 	127	 

	 	 	 	Section 12.19 Sharing of Payments on Transferred Loans Subject to the Retained
Interest Provisions 127	 

	 	 	 	 	 	 	 	 	 
	Section 12.20
	 	Non-Confidentiality of Tax Treatment
	 	 	128	 
	Section 12.21
	 	Condition to Effectiveness
	 	 	128	 

	 	 	 
	ANNEXES

ANNEX A

ANNEX B

	 	

Notice Information

Commitments
	 
	 	 
	EXHIBITS

EXHIBIT A-1

EXHIBIT A-2

EXHIBIT B

EXHIBIT C

EXHIBIT D

EXHIBIT E

EXHIBIT F

EXHIBIT G

EXHIBIT H

EXHIBIT I

EXHIBIT J

EXHIBIT K

EXHIBIT L

EXHIBIT M

EXHIBIT N

EXHIBIT O-1

EXHIBIT O-2

EXHIBIT P-1

EXHIBIT P-2

EXHIBIT Q-1

EXHIBIT Q-2

EXHIBIT R

	 	

Borrower Notice (Funding Request)

Borrower Notice (Reduction of Advances Outstanding and Reduction of

Facility Amount)

Form of Variable Funding Note

Form of Operating Agreement

Form of Assignment and Acceptance

Form of Monthly Report

Form of Servicer’s Certificate

Credit and Collection Policy

Form of Hedging Agreement (including Schedule and Confirmation)

Form of Certificate of Borrower’s Counsel

Form of Trust Receipt and Initial Certification

Form of Trust Receipt and Final Certification

Form of Request for Release of Loan Files and Receipt

Form of Assignment of Mortgage

Form of Reinvestment Certification

Officer’s Certificate as to Solvency from Originator

Officer’s Certificate as to Solvency from Borrower

Officer’s Closing Certificate from Originator

Officer’s Closing Certificate from Borrower

Power of Attorney from Servicer

Power of Attorney from Borrower

[Reserved]
	
 
	 	 
	EXHIBIT S

	 	[Reserved]
	
 
	 	 
	EXHIBIT T

EXHIBIT U

EXHIBIT V

	 	Form of Agent and Intercreditor Provisions for Agented Notes

Form of Intercreditor and Subordination Agreement

Form of Transferee Letter

SCHEDULES

	 	 	 
	SCHEDULE I

SCHEDULE II

	 	Schedule of Documents

[Reserved]
	
 
	 	 
	SCHEDULE III

	 	[Reserved]
	
 
	 	 
	SCHEDULE IV

SCHEDULE V

	 	Loan List

Location of Loan Files

1

P R E A M B L E

THIS AMENDED AND RESTATED LOAN FUNDING AND SERVICING AGREEMENT (such agreement as amended,
modified, waived, supplemented or restated from time to time, the “Agreement”) is made as
of this 18 day of September, 2006, by and among:

(1) PATRIOT CAPITAL FUNDING LLC I, a Delaware limited liability company, as the borrower
(together with its successors and assigns in such capacity, the “Borrower”);

(2) PATRIOT CAPITAL FUNDING, INC., a Delaware corporation (“Patriot Capital”), as the
servicer (together with its successors and assigns in such capacity, the “Servicer”);

(3) FAIRWAY FINANCE COMPANY, LLC, a Delaware limited liability company (“Fairway”), as
the conduit lender (together with its successors and assigns in such capacity, the “Conduit
Lender”);

(4) BMO CAPITAL MARKETS CORP. (formerly known as Harris Nesbitt Corp.), a Delaware corporation
(“BMO”), as the Agent (together with its successors and assigns in such capacity, the
“Agent”); and

(5) WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association (“Wells
Fargo”), not in its individual capacity, but solely as the backup servicer (together with its
successors and assigns in such capacity, the “Backup Servicer”) and as the trustee
(together with its successors and assigns in such capacity, the “Trustee”).

R E C I T A L S

WHEREAS, the Borrower, the Servicer, the Conduit Lender, the Agent, the Backup Servicer and
the Trustee have entered into the Loan Funding and Servicing Agreement, dated as of July 27, 2005
(such agreement as amended, modified, waived, supplemented or restated from time to time, the
“Original Agreement”);

WHEREAS, the Borrower, the Servicer, the Conduit Lender, the Agent, the Backup Servicer and
the Trustee desire to amend and restate the Original Agreement;

NOW, THEREFORE, based upon the foregoing Recitals, the mutual premises and agreements
contained herein, and other good and valuable consideration the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:

ARTICLE I

DEFINITIONS

	 	 	 	Section 1.1 Certain Defined Terms.

(a) Certain capitalized terms used throughout this Agreement are defined above or in this
Section 1.1.

(b) As used in this Agreement and its schedules, exhibits and other attachments, unless the
context requires a different meaning, the following terms shall have the following meanings:

“1940 Act”: The Investment Company Act of 1940, as amended.

“Accreted Interest”: The accrued interest on a PIK Loan that is added to the
principal amount of such PIK Loan instead of being paid as it accrues.

“Accrual Period”: With respect to each Advance (or portion thereof) (a) with respect
to the first Payment Date, the period from and including the Closing Date to and including the last
day of the calendar month in which the Closing Date occurs and (b) with respect to any subsequent
Payment Date, the calendar month immediately preceding the month in which such Payment Date occurs.

“Add-On Loan”: Any additional loan or extension of credit made subsequent to any Loan
made by the Originator or one of its Subsidiaries to the Obligor of such Loan in accordance with
the Credit and Collection Policy.

“Adjusted Eurodollar Rate”: For any Accrual Period, an interest rate per annum equal
to a fraction, expressed as a percentage and rounded upwards (if necessary), to the nearest 1/100
of 1%, (i) the numerator of which is equal to the LIBOR Rate for such Accrual Period and (ii) the
denominator of which is equal to 100% minus the Eurodollar Reserve Percentage for such Accrual
Period.

“Advance”: Defined in Section 2.1(b).

“Advances Outstanding”: On any day, the aggregate principal amount of Advances
outstanding on such day, after giving effect to all repayments of Advances and makings of new
Advances on such day.

“Affected Party”: The Agent, the Conduit Lender, each Liquidity Bank, all assignees
and participants of the Conduit Lender and each Liquidity Bank, any successor to BMO as Agent and
any sub-agent of the Agent.

“Affiliate”: With respect to a Person, means any other Person controlling, controlled
by or under common control with such Person. For 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” or “controlled” have meanings correlative to the foregoing;
provided that (x) in the case of the Servicer or any Subsidiary, “Affiliate” shall not include any
Person that is a Portfolio Investment and (y) the term Affiliate shall not include any Affiliate
relationship which may exist solely as a result of direct or indirect ownership of, or control by,
a common owner which is a financial institution, fund or other investment vehicle which is in the
business of making diversified investments.

“Agent”: Defined in the Preamble.

“Agent’s Account”: A special account (ABA number 071000288; account number 2545804)
in the name of BMO at Harris Trust and Savings Bank.

“Agented Notes”: One or more promissory notes issued by an Eligible Obligor wherein
(a) the note(s) are originated in accordance with the Credit and Collection Policy as a part of a
syndicated loan transaction, (b) upon an assignment of the note to the Borrower under the Purchase
Agreement and the grant of a security interest in such note under this Agreement, the original note
will be endorsed either in blank or to the Trustee on behalf of the Secured Parties, and held by
the Trustee, on behalf of the Secured Parties, (c) the Borrower, as assignee of the note, will have
all of the rights (but none of the obligations) of the Originator with respect to such note and the
Related Property, including the right to receive and collect payments directly in its own name or
through the agent described in item (e) and to enforce its rights against the Obligor thereof, (d)
the note is secured by an undivided interest in the Related Property that also secures and is
shared by, on a pro rata basis, all other holders of such Obligor’s notes of equal priority and (e)
the Originator is the agent for all noteholders of such Obligor; provided, however, Agented Notes
shall not include (1) the obligations, if any, of any agents under the Loan Documents evidencing
such Agented Notes, and (2) the interests, rights and obligations under the Loan Documents
evidencing such Agented Notes that are retained by the Originator or are owned or owed by other
noteholders.

“Aggregate Net Mark to Market Amount”: As of each Determination Date, the sum of all
Net Mark to Market Amounts for such date for all Hedge Transactions; provided, however, that if
such sum shall be a negative number, the Aggregate Net Mark to Market Amount shall be deemed to be
$0.

“Aggregate Outstanding Loan Balance”: As of any date of determination, the sum of the
Outstanding Loan Balances of all Eligible Loans included as part of the Collateral on such date
minus, without duplication, the Outstanding Loan Balance of all Charged-Off Loans, Defaulted Loans,
Delinquent Loans, Restructured Loans and Recapitalized Loans included as part of the Collateral on
such date.

“Aggregate Purchased Loan Balance”: As of any date of determination, the sum of the
Purchased Loan Balances of all Eligible Loans included as part of the Collateral on such date
minus, without duplication, the Purchased Loan Balance of all Charged-Off Loans, Defaulted Loans,
Delinquent Loans, Restructured Loans and Recapitalized Loans included as part of the Collateral on
such date.

“Agreement”: Defined in the Preamble.

“Alternative Rate”: An interest rate per annum equal to the Adjusted Eurodollar Rate;
provided, however, that the Alternative Rate shall be the Base Rate if a Eurodollar Disruption
Event occurs; provided, further, that the Alternative Rate for the first two (2) Business Days
following any Advance made by a Liquidity Bank shall be the Base Rate unless such Liquidity Bank
has received at least two Business Days prior notice of such Advance.

“Amendment Fee”: Defined in the Fee Letter.

“Amortization Period”: The period beginning on the Termination Date and ending on the
Collection Date.

“Annual Reporting Date”: July 23 of each year.

“Applicable Law”: For any Person or property of such Person, all existing and future
applicable laws, rules, regulations (including proposed, temporary and final income tax
regulations), statutes, treaties, codes ordinances, permits, certificates, orders and licenses of
and interpretations by any Governmental Authority (including, without limitation, usury laws,
predatory lending laws, the Federal Truth in Lending Act, and Regulation Z and Regulation B of the
Federal Reserve Board), and applicable judgments, decrees, injunctions, writs, orders, or line
action of any court, arbitrator or other administrative, judicial, or quasi-judicial tribunal or
agency of competent jurisdiction.

“Assignment”: The Assignment entered into between the Originator and the Borrower in
substantially the form of Exhibit A to the Purchase Agreement.

“Assignment of Mortgage”: As to each Loan secured by an interest in real property,
one or more assignments, notices of transfer or equivalent instruments, each in recordable form and
sufficient under the laws of the relevant jurisdiction to reflect the transfer of the related
mortgage, deed of trust, security deed or similar security instrument and all other documents
related to such Loan and to the Borrower and to grant a perfected lien thereon by the Borrower in
favor of the Trustee for the benefit of the Secured Parties, each such Assignment of Mortgage to be
substantially in the form of Exhibit M hereto; provided, however, with respect to Agented
Notes, Assignment of Mortgage shall mean such documents, including assignments, notices of transfer
or equivalent instruments, each in recordable form as necessary, as are sufficient under the laws
of the relevant jurisdiction to reflect the transfer to the Originator, as collateral agent for all
noteholders of the Obligor, of the related mortgage, deed of trust, security deed or other similar
instrument securing such notes and all other documents relating to such notes and to grant a
perfected lien thereon by the Obligor in favor of the Originator, as collateral agent for all such
noteholders.

“Availability”: On any day, the excess, if any, of (a) the Maximum Availability
over (b) the Advances Outstanding on such day; provided, however, that during the
Amortization Period, for all purposes of this Agreement other than determining whether a
Termination Event has occurred under Section 9.1(f), the Availability shall be $0.

“Available Funds”: With respect to any Payment Date, (a) all amounts received in the
Collection Account (including, without limitation, any Collections on any of the Collateral) as of
the later of (i) the immediately preceding Determination Date or (ii) the date of the calculations
set forth in the most recent Borrower Notice and (b) to the extent that the amounts in the
preceding clause (a) of this definition are insufficient on any Payment Date to make the
payments required by (I) Section 2.8(a)(1)(iii), (iv), (v), (vi)
and (vii), then amounts on deposit in the Reserve Account on such date, (II) Section
2.8(b)(iii), (iv), (v), (vi) and (vii), then amounts on deposit
in the Reserve Account on such date.

“Backup Servicer”: Defined in the Preamble.

“Backup Servicer Expenses”: The reasonable out-of-pocket expenses to be paid to the
Backup Servicer under and in accordance with the Backup Servicer and Trustee Fee Letter.

“Backup Servicer Fee”: The fee to be paid to the Backup Servicer under the terms of
the Backup Servicer and Trustee Fee Letter.

“Backup Servicer and Trustee Fee Letter”: The Backup Servicer and Trustee Fee Letter,
dated as of the date hereof, among the Servicer, the Backup Servicer, the Trustee and the Agent.

“Bank of Montreal”: The Bank of Montreal, a Canadian chartered bank, acting through
its Chicago, Illinois branch.

“Bankruptcy Code”: The United States Bankruptcy Reform Act of 1978 (11 U.S.C. §§ 101,
et seq.), as amended from time to time.

“Base Rate”: On any date, a fluctuating rate of interest per annum equal to the
higher of (a) the Prime Rate or (b) the Federal Funds Rate plus 0.5%.

“Benefit Plan”: Any employee benefit plan as defined in Section 3.1(3) of ERISA in
respect of which the Borrower or any ERISA Affiliate of the Borrower is, or at any time during the
immediately preceding six years was, an “employer” as defined in Section 3.1(5) of ERISA.

“BMO”: Defined in the Preamble.

“Borrower”: Defined in the Preamble.

“Borrowing Base”: On any date of determination, an amount equal to the sum of (i) the
Aggregate Purchased Loan Balance on such date and (ii) the Purchased Loan Balance of all Eligible
Loans to become included as part of the Collateral on such date.

“Borrowing Base Certificate”: A certificate of a Responsible Officer of the Servicer
setting forth the current Borrowing Base as of the date set forth in such certificate and the
manner of calculation thereof, to be delivered to the parties and at the times specified herein.

“Borrower Notice”: A written notice, in the form of Exhibit A-1,
A-1-X or A-2, as applicable, to be used for each Advance, repayment of each Advance
or termination or reduction of the Facility Amount or Prepayments of Advances or any reinvestment
of Principal Collections under Section 2.8(a)(2).

“Breakage Costs”: Any amount or amounts as shall compensate the Conduit Lender for
any loss, cost or expense incurred by the Conduit Lender (as reasonably determined by the Agent on
behalf of the Conduit Lender) as a result of (i) a prepayment by the Borrower of Advances
Outstanding or (ii) any difference between the CP Rate and the Adjusted Eurodollar Rate. All
Breakage Costs shall be due and payable upon demand. The determination by the Agent of the amount
of any such loss or expense shall be set forth in a written notice to the Borrower and shall be
conclusive absent manifest error.

“Business Day”: Any day of the year other than a Saturday or a Sunday on which (a)
banks are not required or authorized to be closed in Chicago, Illinois, New York, New York or
Minneapolis, Minnesota, and (b) if the term “Business Day” is used in connection with the Adjusted
Eurodollar Rate, means the foregoing only if such day is also a day of year on which dealings in
United States dollar deposits are carried on in the London interbank market.

“Capital Expenditures”: With respect to any Person and for any period, the sum of
capital expenditures and payments under Capitalized Leases of such Person for such period
determined and consolidated in accordance with GAAP.

“Capitalized Leases”: With respect to any Person, leases of (or other agreements
conveying the right to use) any property (whether real, personal or mixed) by such Person as lessee
that, in accordance with GAAP, either would be required to be classified and accounted for as
capital leases on a balance sheet of such Person or otherwise be disclosed as such in a note to
such balance sheet.

“Change in Control”: The date on which (a) any Person or “group” acquires any
“beneficial ownership” (as such terms are defined under Rule 13d-3 of, and Regulation 13D under the
Exchange Act), either directly or indirectly, of stock or other equity interests or any interest
convertible into any such interest in the Originator or Servicer having more than fifty percent
(50%) of the voting power for the election of directors of the Originator, or Servicer, if any,
under ordinary circumstances, or (b) (except in connection with any Permitted Securitization
Transaction) the Originator or Servicer sells, transfers, conveys, assigns or otherwise disposes of
all or substantially all of the assets of the Originator or Servicer.

“Charged-Off Loan”: Any Transferred Loan:

(a) that is more than 90 days past due (without giving effect to any Servicer Advance thereon)
with respect to any interest or principal payment;

(b) as to which an Insolvency Event has occurred with respect to the related Obligor;

(c) as to which the related Obligor has suffered any Material Adverse Change which materially
affects its viability as a going concern;

(d) that is or otherwise should be written off as uncollectible by the Servicer in accordance
with the Credit and Collection Policy;

(e) that has been placed on “non-accrual” status in accordance with the Credit and Collection
Policy;

(f) that has been assigned a risk rating of “Grade 4” or “Grade 5” on the Patriot Capital
standard credit rating scale in accordance with the Credit and Collection Policy; or

(g) that has been sold for less than its Outstanding Loan Balance upon foreclosure or upon
exercise of remedies, provided that, only the portion of the Transferred Loan not recouped in such
sale shall be deemed to be “charged-off” for purposes of this clause (g).

“Charged-Off Portfolio Loan”: Any Portfolio Loan:

(a) that is 90 days or more past due (without giving effect to any Servicer Advance thereon)
with respect to any interest or principal payment,

(b) as to which an Insolvency Event has occurred with respect to the related Obligor,

(c) as to which the related Obligor has suffered any Material Adverse Change which materially
affects its viability as a going concern,

(d) that is or otherwise should be written off as uncollectible by the Servicer in accordance
with the Credit and Collection Policy or

(e) that has been placed on “non-accrual” status in accordance with the Credit and Collection
Policy;

(f) that has been assigned a risk rating of “Grade 4” or “Grade 5” on the Patriot Capital
standard credit rating scale in accordance with the Credit and Collection Policy; or

(g) that has been sold for less than its Outstanding Loan Balance upon foreclosure or upon
exercise of remedies, provided, that, only the portion of the Portfolio Loan not recouped in such
sale shall be deemed to be “charged-off” for purposes of this clause (g).

“Charged-Off Ratio”: With respect to any Collection Period, the percentage equivalent
of a fraction, calculated as of the Determination Date for such Collection Period, (a) the
numerator of which is equal to the excess of (p) the aggregate Outstanding Loan Balance of all
Transferred Loans that became Charged-Off Loans during such Collection Period over (q) any
Recoveries received during such Collection Period with respect to all Transferred Loans that became
Charged-Off Loans and (b) the denominator of which is equal to the decimal equivalent of a fraction
(x) the numerator of which is equal to the sum of (A) the Aggregate Outstanding Loan Balance as of
the first day of such Collection Period plus (B) the Aggregate Outstanding Loan Balance as of the
last day of such Collection Period and (y) the denominator of which is 2.

“Closing Date”: July 27, 2005.

“Code”: The Internal Revenue Code of 1986, as amended.

“Collateral”: All right, title and interest, whether now owned or hereafter acquired
or arising, and wherever located, of the Borrower in and to the property described in clauses (i)
through (xi) below and all accounts, cash and currency, chattel paper, tangible chattel paper,
electronic chattel paper, copyrights, copyright licenses, equipment, fixtures, contract rights,
general intangibles, instruments, certificates of deposit, certificated securities, uncertificated
securities, financial assets, securities entitlements, commercial tort claims, deposit accounts,
inventory, other goods, investment property, letter-of-credit rights, documents, software,
supporting obligations, accessions, and all products and proceeds of any of the foregoing, and
other property consisting of, arising out of, or related to any of the following (in each case
excluding the Retained Interest and the Excluded Amounts):

(i) the Transferred Loans, and all monies due or to become due in payment of such
Transferred Loans on and after the related Cut-Off Date, including but not limited to all
Collections and all obligations owed to the Originator in connection with such Loans;

(ii) any Related Property securing or purporting to secure the Transferred Loans (to
the extent the Originator, other than solely in its capacity as collateral agent under any
loan agreement with an Obligor, has been granted a Lien thereon) including the related
security interest granted by the Obligor under such Transferred Loans, all proceeds from any
sale or other disposition of such Related Property;

(iii) all security interests, Liens, guaranties, warranties, letters of credit,
accounts, securities accounts, deposit accounts or other bank accounts, mortgages or other
encumbrances and property subject thereto from time to time purporting to secure payment of
any Transferred Loan, together with all UCC financing statements or similar filings relating
thereto;

(iv) all claims (including “claims” as defined in Bankruptcy Code § 101(5)), suits,
causes of action, and any other right of the Borrower, whether known or unknown, against the
related Obligors, if any, or any of their respective Affiliates, agents, representatives,
contractors, advisors, or any other Person that in any way is based upon, arises out of or
is related to any of the foregoing, including, to the extent permitted to be assigned under
applicable law, all claims (including contract claims, tort claims, malpractice claims, and
claims under any law governing the purchase and sale of, or indentures for, securities),
suits, causes of action, and any other right of the Borrower against any attorney,
accountant, financial advisor, or other Person arising under or in connection with the
related Loan Documents;

(v) all cash, securities, or other property, and all setoffs and recoupments, received
or effected by or for the account of the Borrower under such Transferred Loans (whether for
principal, interest, fees, reimbursement obligations, or otherwise) after the related
Cut-Off Date, including all distributions obtained by or through redemption, consummation of
a plan of reorganization, restructuring, liquidation, or otherwise of any related Obligor or
the related Loan Documents, and all cash, securities, interest, dividends, and other
property that may be exchanged for, or distributed or collected with respect to, any of the
foregoing;

(vi) all Insurance Policies;

(vii) the Loan Documents with respect to such Transferred Loans;

(viii) the Collection Account, the Reserve Account, and, to the extent that amounts on
deposit therein or credited thereto relate to the Transferred Loans, the Concentration
Account, together with all funds held in or credited to such accounts, and all certificates
and instruments, if any, from time to time representing or evidencing each of the foregoing
or such funds;

(ix) any Hedging Agreement and any payment from time to time due thereunder; and

(x) the Purchase Agreement and the assignment to the Trustee on behalf of the Secured
Parties of all UCC financing statements filed by the Borrower against the Originator under
or in connection with the Purchase Agreement.

“Collection Account”: Defined in Section 7.4(e).

“Collection Date”: The date following the Termination Date on which the Obligations
have been reduced to zero and indefeasibly paid in full other than contingent indemnification
obligations.

“Collection Period”: Each calendar month, except in the case of the first Collection
Period, the period beginning on the Closing Date to and including the last day of the calendar
month in which the Closing Date occurs.

“Collections”: (a) All cash collections or other cash proceeds received by the
Borrower or by the Servicer or Originator on behalf of the Borrower from any source in payment of
any amounts owed in respect of a Transferred Loan, including, without limitation, Interest
Collections, Principal Collections, Deemed Collections, Insurance Proceeds, interest earnings in
the Collection Account, all Recoveries, finance charges and all other charges, (b) all amounts
received by the Borrower in connection with the repurchase of an Ineligible Loan pursuant to
Section 2.18(b), (c) any other funds received by or on behalf of the Borrower with respect
to any Transferred Loan or Related Property including, without limitation, insurance payments and
net proceeds of sale or other disposition of repossessed goods, and (d) all payments received
pursuant to any Hedging Agreement or Hedge Transaction, but excluding, in the case of (a), (b) or
(c), as applicable, amounts in respect of any Retained Interest and Excluded Amounts.

“Commercial Paper Notes”: On any day, any short-term promissory notes issued by the
Conduit Lender in the commercial paper market.

“Commitment”: The commitment of the Conduit Lender to make Advances in accordance
herewith in an amount not to exceed (a) prior to the Termination Date, the amount set forth
opposite the Conduit Lender’s name on Annex B of this Agreement, under the heading “Commitment,”
and (b) on and after the Termination Date, the aggregate Advances Outstanding.

“Commitment Termination Date”: July 23, 2009, or such later date as the Agent, in its
sole discretion, shall notify the Borrower of in writing in accordance with Section 2.1(c).

“Concentration Account”: Account number 743028-701 maintained in the name of Patriot
Capital Funding, Inc. with the Concentration Account Bank for the purpose of receiving Collections.

“Concentration Account Agreement”: The Concentration Account Agreement, dated as of
July 27, 2005, by and among U.S. Bank, as Concentration Account Bank and Patriot Capital Funding,
Inc. as such agreement may be amended, modified, waived, supplemented or restated from time to
time.

“Concentration Account Bank”: U.S. Bank, as Concentration Account Bank.

“Concentration Limits”: On any day, each of the following (calculated on the basis of
a percentage of the Aggregate Outstanding Loan Balance):

(a) the sum of the Outstanding Loan Balances of Eligible Loans included in the Collateral to
Obligors with a National Revenue Base shall not be less than 70%;

(b) [the sum of the Outstanding Loan Balances of Eligible Loans included in the Collateral to
Obligors (i) which are in the same Industry shall not exceed the greater of $20,000,000 or 10%];

(c) the sum of the Outstanding Loan Balances of Eligible Loans included in the Collateral to
any one Obligor shall not exceed $[17,500,000];

(d) the sum of the Outstanding Loan Balances of Eligible Loans to the seven Obligors
representing the greatest proportion of the Aggregate Outstanding Loan Balance shall not exceed
$[105,000,000];

(e) the sum of the Outstanding Loan Balances of Eligible Loans included in the Collateral to
the ten Obligors whose Loans represent the greatest proportion of the Aggregate Outstanding Loan
Balance shall not exceed (i) on any day the Aggregate Outstanding Loan Balance is less than
$100,000,000, $80,000,000, (ii) on any day the Aggregate Outstanding Loan Balance is at least
$100,000,000 but less than $125,000,000, $100,000,000 and (iii) on any day the Aggregate
Outstanding Loan Balance is at least $125,000,000, $[140,000,000];

(f) the sum of the Outstanding Loan Balances of Eligible Loans which are Grade 3 Loans shall
not exceed [20]%;

(g) the sum of the Outstanding Loan Balances of Eligible Loans included in the Collateral that
have interest due and payable monthly shall not be less than [40]%;

(h) the sum of the Outstanding Loan Balances of Eligible Loans included in the Collateral that
are secured by a security interest in a material portion or all of the assets of the related
Obligor shall not be less than 70%;

(i) the sum of the Outstanding Loan Balances of Eligible Loans included in the Collateral
which are Subordinated Loans shall not exceed 55%;

(j) the sum of the Outstanding Loan Balances of Eligible Loans included in the Collateral the
entire principal amount of which is due in a single installment at the maturity of such Loan shall
not exceed 70%;

(k) [the sum of the Outstanding Loan Balances of each Eligible Loan included in the Collateral
which is a PIK Loan and which is either (a) a Fixed Rate Loan having a cash coupon of less than 10%
per annum or (b) a Floating Rate Loan shall not exceed 0%];

(l) the sum of the Outstanding Loan Balances of Eligible Loans included in the Collateral that
have at least a portion of the monthly or quarterly interest that is due under such Loans payable
on a current basis by the Obligors thereof in cash (or such Obligors shall have other Loans
included as part of the Collateral that pay current monthly or quarterly interest on a current
basis in cash) shall not be less than 100%;

(m) the sum of the Outstanding Loan Balances of Eligible Loans included in the Collateral
which are Revolving Loans shall not exceed 7.5%;

(n) the sum of the Outstanding Loan Balances of Eligible Loans included in the Collateral to
Obligors in which the Originator holds a direct or indirect ownership interest (on a fully-diluted
basis) of [20]% or greater shall not exceed 10%;

(o) [the sum of the Outstanding Loan Balance of Eligible Loans to Obligors in Canada shall not
exceed 7.5%]; and

(p) [the sum of the Outstanding Loan Balance of Eligible Loans relating to purchased and
re-underwritten Loans shall not exceed 35%; provided that (i) such Loans rated either Caa1 or CCC+
or less or that are unrated shall not exceed $30,000,000; and (ii) no individual Loan purchased and
re-underwritten by the Originator shall exceed $12,500,000].

For the avoidance of doubt, while determining the ratings under clause (p)(i) of this
definition, in case of any Loan with respect to which the ratings issued by Moody’s and S&P differ,
the rating of such Loan shall be deemed to be the average of the ratings issued by Moody’s and S&P
with respect to such Loan, provided that if the ratings issued by Moody’s and S&P with respect to
such Loan differ only by a single notch the rating of such Loan shall be deemed to be higher of the
ratings issued by Moody’s and S&P with respect to such Loan.

“Conduit Lender”: Defined in the Preamble.

“Contractual Obligation”: With respect to any Person, means any provision of any
securities issued by such Person or any indenture, mortgage, deed of trust, contract, undertaking,
agreement, instrument or other document to which such Person is a party or by which it or any of
its property is bound or is subject.

“CP Rate”: For any Accrual Period, means (a) the per annum rate equivalent to the
weighted average of the per annum rates paid or payable by the Conduit Lender from time to time as
interest on or otherwise in respect of those promissory notes issued by the Conduit Lender that are
allocated, in whole or in part, by the Agent (on behalf of the Conduit Lender) to fund the purchase
or maintenance of an Advance during an Accrual Period as determined by the Agent (on behalf of the
Conduit Lender) and reported to the Borrower and the Servicer, which rates shall include and give
effect to the commissions of placement agents and dealers in respect of such promissory notes,
incremental carrying costs incurred with respect to such promissory notes maturing on dates other
than those on which corresponding funds are received by the Conduit Lender, and any other costs
associated with the issuance of promissory notes, in each case to the extent such commissions and
other costs are allocated, in whole or in part, to such promissory notes by the Agent (on behalf of
the Conduit Lender); provided, however, that if any component of such rate is a discount rate, in
calculating the “CP Rate” for such Accrual Period the Agent shall for such component use the rate
resulting from converting such discount rate to an interest bearing equivalent rate per annum;
provided, further, that notwithstanding anything in this Agreement or any other Transaction
Document to the contrary, the Borrower agrees that any amounts payable to the Conduit Lender in
respect of Interest for any Accrual Period with respect to any Advance funded by the Conduit Lender
at the CP Rate shall include an amount equal to the portion of the face amount of the outstanding
promissory notes issued to fund or maintain such Advance that corresponds to the portion of the
proceeds of such promissory notes that was used to pay the interest component of maturing
promissory notes issued to fund or maintain such Advance, to the extent that the Conduit Lender had
not received payments of interest in respect of such interest component prior to the maturity date
of such maturing promissory notes (for purposes of the foregoing, the “interest component” of
promissory notes equals the excess of the face amount thereof over the net proceeds received by the
Conduit Lender from the issuance of promissory notes, except that if such promissory notes are
issued on an interest-bearing basis its “interest component” will equal the amount of interest
accruing on such promissory notes through maturity).

“Credit and Collection Policy”: Those credit, collection, customer relation and
service policies: (a) determined by the Borrower, the Originator and the initial Servicer as of
the date hereof relating to the Loans and related Loan Documents, described in Exhibit G,
as the same may be amended or modified from time to time in accordance with Section 7.9(g);
and (b) with respect to any Successor Servicer, the collection procedures and policies of such
person (as approved by the Agent) at the time such Person becomes Successor Servicer.

“Current Fixed Charges”: For any period, the sum of (i) total cash interest expense
of an Obligor and its Subsidiaries in connection with Indebtedness and any other obligations
required by GAAP to be shown as liabilities on the consolidated balance sheet of an Obligor and its
Subsidiaries, plus (ii) all Scheduled Debt Amortization for such period plus (iii) all scheduled
payments on Capitalized Leases for such period determined in accordance with GAAP; but including,
in each case, as applicable, all commissions, discounts and other fees and charges in connection
with letters of credit and bankers’ acceptances and net costs or benefits under Interest Rate
Protection Agreements and excluding any original issue discount related to the issuance of
Indebtedness pursuant to the applicable Loan Documents.

“Cut-Off Date”: With respect to each Transferred Loan, the date on and after which
Collections on such Transferred Loan become included as part of the Collateral.

“Debt/EBITDA Ratio”: As of any date of determination, the ratio of (i) the
Indebtedness of the Obligor (other than Deeply Subordinated Debt) and its Subsidiaries on a
consolidated basis as of the last day of the most recent fiscal quarter for which financial
statements are available to (ii) EBITDA of the Obligor and its Subsidiaries on a consolidated basis
for the twelve month period ended on the last day of the most recent fiscal quarter for which
financial statements are available.

“Debt Service Coverage Ratio”: As of any date of determination, the ratio of (i)
EBITDA of the Obligor and its Subsidiaries on a consolidated basis for the twelve month period
ended on the last day of the most recent fiscal quarter for which financial statements are
available to (ii) the amount of all scheduled principal payments due and payable by the Obligor and
its Subsidiaries on a consolidated basis during such period plus the interest on Indebtedness
payable in cash accrued during such period.

“Deemed Collection”: Defined in Section 2.4.

“Deeply Subordinated Debt”: Any debt instrument issued by an Obligor or any of its
Subsidiaries which shall permit cash payments of current interest at a rate not to exceed 10% per
annum, but containing terms providing for the suspension of any right to payment under such debt
instrument during the occurrence and continuation of an event of default under the related Loan.

“Defaulted Loan”: Any Transferred Loan (other than a Delinquent Loan or Charged-Off
Loan) (a) that is more than 60 days past due (without giving effect to any Servicer Advance
thereon) with respect to any interest or principal payments or (b) that is or otherwise should be
considered a Defaulted Loan by the Servicer in accordance with the Credit and Collection Policy.

“Defaulted Portfolio Loan”: Any Portfolio Loan (that is not a Charged-Off Portfolio
Loan) (a) that is more than 60 days past due with respect to any interest or principal payments (b)
that is or otherwise should be considered a Defaulted Portfolio Loan by the Servicer in accordance
with the Credit and Collection Policy.

“Default Ratio”: With respect to any Collection Period, the percentage equivalent of
a fraction, calculated as of the Determination Date for such Collection Period, (a) the numerator
of which is equal to the aggregate Outstanding Loan Balance of all Defaulted Loans (excluding
Charged-Off Loans) and (b) the denominator of which is equal to the decimal equivalent of a
fraction the numerator of which is equal to the sum of (i) the Aggregate Outstanding Loan Balance
as of the first day of such Collection Period plus (ii) the Aggregate Outstanding Loan Balance as
of the last day of such Collection Period and the denominator of which is 2.

“Delinquent Loan”: Any Loan (other than a Charged-Off Loan or Defaulted Loan) (a)
that is more than 45 days past due (without giving effect to any Servicer Advance thereon) with
respect to any interest or principal payments or (b) that is or otherwise should be considered a
Delinquent Loan by the Servicer in accordance with the Credit and Collection Policy.

“Derivatives”: Any exchange-traded or over-the-counter (a) forward, future, option,
swap, cap, collar, floor, foreign exchange contract, any combination thereof, whether for physical
delivery or cash settlement, relating to any interest rate, interest rate index, currency, currency
exchange rate, currency exchange rate index, debt instrument, debt price, debt index, depository
instrument, depository price, depository index, equity instrument, equity price, equity index,
commodity, commodity price or commodity index, (b) any similar transaction, contract, instrument,
undertaking or security, or (c) any transaction, contract, instrument, undertaking or security
containing any of the foregoing.

“Determination Date”: The last day of each Collection Period.

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

“Dollars”: Means, and the conventional “$” signifies, the lawful currency of
the United States.

“EBITDA”: For any period, EBIT plus the amount of all depreciation and amortization
expense deducted in determining net income for such period, which will include adjustments deemed
reasonable by the Servicer and in accordance with the Servicer’s underwriting methodology and in
accordance with the Credit and Collection Policy.

“EBIT”: For any period, net income for such period plus the interest on Indebtedness,
provisions for taxes based on income, and any extraordinary losses for such period, minus any
extraordinary gains for such period, but without adjustment for any noncash income or noncash
charges that are classified as such under GAAP.

“Eligible Loan”: On any date of determination, any Loan that satisfies each of the
following requirements; provided that any Loan that is a Permitted Investment which, upon
acquisition by the Borrower is credited to the Principal Collection Account, shall be deemed to
constitute an Eligible Loan for all purposes of this Agreement:

(i) the Loan is evidenced by a promissory note that has been duly authorized and that,
together with the related Loan Documents, is in full force and effect and constitutes the
legal, valid and binding obligation of the Obligor of such Loan to pay the stated amount of
the Loan and interest thereon, and the related Loan Documents are enforceable against such
Obligor in accordance with their respective terms;

(ii) the Loan was originated in accordance with the terms of the Credit and Collection
Policy and arose in the ordinary course of the Originator’s business from the loaning of
money to the Obligor thereof;

(iii) the Loan has an original term to maturity of no more than 90 months, and is
either fully amortizing in installments (which installments need not be in identical
amounts) over such term or the principal amount thereof is due in a single installment at
the end of such term;

(iv) the Loan is not a loan or extension of credit made by the Originator or one of its
Affiliates to an Obligor for the purpose of making any principal, interest (other than
deferred interest) or other payment on a loan to the same Obligor necessary in order to keep
such loan from becoming delinquent and such Loan is not being kept current by the Originator
or one of its Affiliates making other Loans to the Obligor;

(v) the Obligor of such Loan has executed all appropriate documentation required by the
Originator, as required by, and in accordance with, the Credit and Collection Policy;

(vi) no right of rescission, set off, counterclaim, defense or other material dispute
has been asserted with respect to such Loan;

(vii) the Loan was documented and closed in accordance with the Credit and Collection
Policy, and there is only one current original promissory note representing the portion of
such Loan constituting a Transferred Loan, which has been delivered to the Trustee, duly
endorsed as collateral;

(viii) the Loan has not been modified or extended in any way unless in the normal
course of business in accordance with the Originator’s or the Servicer’s policies and
procedures and unless such modification in no way adversely affected the Loan’s otherwise
eligible status or its collectibility;

(ix) such Loan does not represent payment obligations relating to “put” rights relating
to Margin Stock;

(x) the Loan, together with the Loan Documents related thereto, was originated in
accordance with and does not contravene in any material respect any Applicable Laws
(including, without limitation, laws, rules and regulations relating to usury, predatory
lending, truth in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy) and with respect to which no party
to the Loan Documents related thereto is in material violation of any such Applicable Laws;

(xi) the Loan bears some current interest, which is due and payable monthly or
quarterly;

(xii) for purposes of the initial Advance made with respect to such Loan, no payment of
principal or interest or portion thereof is more than ten days past due;

(xiii) the Loan is denominated and payable only in Dollars in the United States;

(xiv) the Obligor with respect to such Loan is an Eligible Obligor;

(xv) the Loan has not had any material term, provision or covenant amended, rewritten,
extended, modified or waived in a manner that would materially and adversely affect the
collectibility of such Loan more than two times in the preceding 12 months;

(xvi) the Loan is not a DIP Loan;

(xvii) the Loan Documents with respect to such Loan require the related Obligor to
provide ongoing financial information to the Originator, including, without limitation,
quarterly financial statements, annual audited financial statements audited by an
independent third-party auditor, and ongoing covenant compliance certificates;

(xviii) a third party audit or due diligence has been performed to the satisfaction of
the Originator and the Obligor has agreed to provide the Servicer or a Successor Servicer
with rights to inspect any Records or Related Property;

(xix) the Weighted Average Life of the Transferred Loans in the aggregate does not
exceed 5 years;

(xx) [the minimum coupon on Fixed Rate Loans shall be at least (a) 10% per annum in the
event such Loan is a Subordinated Loan, (b) 7% per annum in the event such Loan is a Junior
Secured Loan and (c) 5.75% per annum in the event such Loan is a Senior Secured Loan; and
the minimum spread on Floating Rate Loans shall be at least: (a) 7% per annum in the event
such Loan is a Subordinated Loan, (b) 4% per annum in the event such Loan is a Junior
Secured Loan and (c) 2.75% per annum in the event such Loan is a Senior Secured Loan];

(xxi) the Loan does not by its terms permit the payment obligation of the Obligor
thereunder to be converted into or exchanged for equity capital of such Obligor;

(xxii) the Loan was originated by the Originator or purchased and re-underwritten by
the Originator;

(xxiii) the Loan, together with the Loan Documents related thereto, is a “general
intangible”, an “instrument”, a “payment intangible”, an “account”, or “chattel paper”
within the meaning of the UCC of all jurisdictions that govern the perfection of the
security interest granted therein;

(xxiv) 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 of such Loan have been duly obtained,
effected or given and are in full force and effect;

(xxv) any applicable taxes in connection with the transfer of such Loan have been paid
and the 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;

(xxvi) the Loan, together with the related Loan Documents, is fully assignable, (and,
if such Loan is secured by an interest in real property, an Assignment of Mortgage has been
delivered to the Trustee);

(xxvii) the Loan and the Borrower’s interest in all related Collateral and Related
Property are free of any Liens, except for Permitted Liens and all filings and other actions
required to perfect the security interest of (a) the Trustee on behalf of the Secured
Parties, in the Collateral have been made or taken and (b) in the case of Agented Notes, the
collateral agent, as agent for all noteholders of the related Obligor, in the Related
Property, have been made or taken;

(xxviii) any Related Property with respect to such Loan is insured in accordance with
the Credit and Collection Policy;

(xxix) the Obligor of such Loan is legally responsible for all taxes relating to the
Related Property, and all payments in respect of the Loan are required to 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 in which case the Obligor thereof is
required to make “gross-up” payments that cover the full amount of any such withholding
taxes on an after-tax basis (taking into account all available credits or deductions
attributable to the payment or accrual of such taxes);

(xxx) neither the Loan nor any portion of the Related Property constitute Margin Stock;

(xxxi) the Obligor of such Loan has waived all rights of set-off and/or counterclaim
against the Originator of the Loan and all assignees thereof;

(xxxii) after giving effect to the inclusion of such Loan in the Collateral, the sum of
the Outstanding Loan Balances of Eligible Loans included in the Collateral principally
secured by real property shall not exceed 40%;

(xxxiii) the Loan has an Eligible Risk Rating;

(xxxiv) with respect to Agented Notes, the related Loan Documents (a) shall include a
note purchase agreement containing provisions relating to the appointment and duties of a
payment agent and a collateral agent and intercreditor and (if applicable) subordination
provisions substantially similar to the forms provided to and approved by the Agent and
attached hereto as Exhibit T, and (b) are duly authorized, fully and properly
executed and are the valid, binding and unconditional payment obligation of the Obligor
thereof;

(xxxv) with respect to Agented Notes, the Originator has been appointed the collateral
agent of the security and the payment agent for all such notes prior to such Agented Note
becoming a part of the Collateral;

(xxxvi) with respect to Agented Notes, if the entity serving as the collateral agent of
the security for all syndicated notes of the Obligor has or will change from the time of the
origination of the notes, all appropriate assignments of the collateral agent’s rights in
and to the collateral on behalf of the noteholders have been executed and filed or recorded
as appropriate prior to such Agented Note becoming a part of the Collateral;]

(xxxvii) with respect to Agented Notes, 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 Agented Notes and the Originator’s right, title and interest
in the Related Property to the Borrower and the Trustee’s security interest therein on
behalf of the Secured Parties;

(xxxviii) with respect to Agented Notes, the right to control the actions of and to
replace the collateral agent and/or the paying agent of the syndicated notes is by the Note
Majority;

(xxxix)  with respect to Agented Notes, all syndicated notes of the Obligor of the same
priority are cross-defaulted, the Related Property securing such notes is held by the
collateral agent for the benefit of all holders of the syndicated notes and all holders of
such notes (a) have an undivided interest in the collateral securing such notes, (b) share
in the proceeds of the sale or other disposition of such collateral on a pro rata basis and
(c) may transfer or assign their right, title and interest in the Related Property; and

(xl) all information on the Loan List delivered to the Agent with respect to such Loan
is true and correct.

“Eligible Obligor”: On any day, any Obligor that satisfies each of the following
requirements at all times:

(i) such Obligor’s primary business is not in the gaming, nuclear waste, bio-tech, oil
and gas exploration or real estate industries;

(ii) such Obligor is not a natural person and is a legal operating entity, duly
organized in the United States or Canada and validly existing under the laws of its
jurisdiction of organization;

(iii) unless the Agent shall have otherwise consented in writing, such Obligor is not
nor has been for the previous six years the subject of any Insolvency Event;

(iv) such Obligor is not an Affiliate of any of the parties hereto;

(v) [such Obligor’s principal office and any Related Property are located in the United
States or Canada (excluding the province of Quebec)];

(vi) no other Loan of such Obligor is more than 45 days past due;

(vii) such Obligor is not a Governmental Authority;

(viii) such Obligor is in compliance with all material terms and conditions of its Loan
Documents;

(ix) such Obligor and/or its operating subsidiaries each have an Operating History in
its primary business of at least 60 months from the date of its incorporation or formation;
and

(x) such Obligor satisfies, as of the Cut-Off Date with respect to a Loan of such
Obligor, the following Debt/EBITDA and Fixed Charge Coverage Ratios (as calculated on an
“adjusted basis” by the Servicer pursuant to and in accordance with the Credit and
Collection Policy), as applicable, as of the most recent date for which financial statements
are available:

	 	 	 
	Ratio

	 	Required Level
	 

	 	 
	 
	 	 
	Debt/EBITDA Ratio

	 	Less than or equal to 5.50 to 1.0
	 

	 	 
	 
	 	 
	Fixed Charge Coverage Ratio

	 	At least 1.15 to 1.0
	 

	 	 

“Eligible Risk Rating”: With respect to any Loan, (i) as of the Cut-Off Date for such
Loan, a risk rating of “Grade 2” or better, and (ii) as of any other date of determination, a risk
rating of “Grade 3” or better.

“Equity Contribution”: As of any date of determination, an amount equal to the
excess, if any, of (a) the sum of (i) the Aggregate Purchased Loan Balance on such date plus (ii)
all Principal Collections on deposit in the Principal Collection Account on such date, minus (b)
the Advances Outstanding on such date.

“ERISA”: The U.S. Employee Retirement Income Security Act of 1974, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.

“ERISA Affiliate”: (a) Any corporation that is a member of the same controlled group
of corporations (within the meaning of Section 414(b) of the Code) as the Borrower; (b) a trade or
business (whether or not incorporated) under common control (within the meaning of Section 414(c)
of the Code) with the Borrower or (c) a member of the same affiliated service group (within the
meaning of Section 414(m) of the Code) as the Borrower, any corporation described in clause
(a) above or any trade or business described in clause (b) above.

“Estimated Payment Amount”: As of each Determination Date, an amount (to be
calculated by the Servicer in good faith in its reasonable judgment) equal to the sum of the
following: (a) the Interest, (b) the Program Fee, (c) the Facility Fee, (d) the Servicing Fee, (e)
the Backup Servicer Fee, and (f) the Trustee Fee, each as estimated by the Servicer to be due and
payable on the next succeeding Payment Date; provided, however, notwithstanding the foregoing, in
no event without the prior written approval of the Agent shall the Estimated Payment Amount be less
than the product of (i) 1.1 and (ii) the sum of the Interest, the Program Fee, the Facility Fee,
the Servicing Fee, the Backup Servicer Fee and the Trustee Fee actually due and payable on the
Payment Date with respect to the preceding Collection Period.

“Eurocurrency Liabilities”: Defined in Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.

“Eurodollar Disruption Event”: The occurrence of any of the following: (a)  any
Liquidity Bank shall have notified the Agent of a determination by such Liquidity Bank or any of
their respective assignees or participants, as applicable, that it would be contrary to law or to
the directive of any central bank or other Governmental Authority (whether or not having the force
of law) to obtain Dollars in the London interbank market to fund any Advance, (b) any Liquidity
Bank shall have notified the Agent of the inability, for any reason, of such Liquidity Bank or any
of its respective assignees or participants, as applicable, to determine the Adjusted Eurodollar
Rate, (c) any Liquidity Bank shall have notified the Agent of a determination by such Liquidity
Bank or any of its respective assignees or participants, as applicable, that the rate at which
deposits of Dollars are being offered to such Liquidity Bank or any of their respective assignees
or participants in the London interbank market does not accurately reflect the cost to such
Liquidity Bank, such assignee or such participant, as applicable, of making, funding or maintaining
any Advance or (d) any Liquidity Bank shall have notified the Agent of the inability of such
Liquidity Bank or any of its respective assignees or participants, as applicable, to obtain Dollars
in the London interbank market to make, fund or maintain any Advance.

“Eurodollar Reserve Percentage”: For any period, means the reserve percentage
(expressed as a decimal, rounded upward to the next 1/100th of one percent (0.01%)), if
any, applicable during such period (or, if more than one such percentage shall be so applicable,
the daily average of such percentages for those days in such period during which any such
percentage shall be so applicable) under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any basic, emergency, supplemental, marginal or other
reserve requirements) with respect to liabilities or assets consisting of or including Eurocurrency
Liabilities having a term of one month.

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

“Excluded Amounts”: Any Collections received with respect to Repurchased Loans,
Replaced Loans or Loans which are the subject of a Lien Release Dividend to the extent such
Collections are attributable to a time after the effective date of such repurchase, substitution or
Lien Release Dividend.

“Facility Amount”: $140,000,000, as such amount may vary from time to time upon the
written agreement of the parties hereto; provided, that, on or after the Termination Date, the
Facility Amount shall be $0.

“Facility Fee”: Defined in the Fee Letter.

“Fair Market Value”: As of any date of determination with respect to each Eligible
Loan included in the Collateral, if such Eligible Loan has been reduced in value on such date of
determination below the original principal amount (other than as a result of the allocation of a
portion of the original principal amount to warrants), the fair market value of such Eligible Loan,
as determined in accordance with the quarterly loan grading and asset valuation functions specified
in the Credit and Collection Policy, and as required by, and in accordance with, the 1940 Act and
any orders of the Securities and Exchange Commission issued to the Originator, to be determined by
the Board of Directors of the Originator and reviewed by its auditors.

“Fairway”: Defined in the Preamble.

“FATF”: Defined in Section 4.1(jj).

“Federal Funds Rate”: For any period, a fluctuating interest rate per annum equal for
each day during such period to the weighted average of the federal funds rates as quoted by the
Agent and confirmed in Federal Reserve Board Statistical Release H.15 (519) or any successor or
substitute publication selected by the Agent (or, if such day is not a Business Day, for the
preceding Business Day), or, if, for any reason, such rate is not available on any day, the rate
determined, in the sole opinion of each Agent to be the rate at which federal funds are being
offered for sale in the national federal funds market at 9:00 a.m. (New York City time)

“Fee Letter”: The Amended and Restated Fee Letter, dated as of the date hereof, among
the Borrower, the Servicer, the Agent as such letter may be amended, supplemented, modified, waived
or restated from time to time.

“Federal Reserve Board”: The Board of Governors of the Federal Reserve System.

“Fixed Charge Coverage Ratio”: For any twelve-month period, the ratio of (i) EBITDA
of an Obligor and its Subsidiaries on a consolidated basis during such period plus scheduled
payments on Capitalized Leases included in the computation of EBITDA for such period minus Capital
Expenditures during such period minus Taxes paid in cash during such period to (ii) the Current
Fixed Charges during such period.

“Fixed Rate Loan”: A Transferred Loan that is other than a Floating Rate Loan.

“Fixed Rate Loan Percentage”: As of any date of determination, the percentage
equivalent of a fraction (i) the numerator of which is equal to the sum of the Outstanding Loan
Balances of all Fixed Rate Loans as of such date and (ii) the denominator of which is equal to the
Aggregate Outstanding Loan Balance as of such date.

“Floating Rate Loan”: A Transferred Loan where the interest rate payable by the
Obligor thereof is based on the prime interest rate (daily rate) or the London interbank offered
rate (one-month, two-month, three-month, six-month or twelve-month rate) plus some specified
interest percentage in addition thereto, and such Transferred Loan provides that such interest rate
will reset periodically upon any change in the related prime interest rate or London interbank
offered rate.

“Funding Date”: Any Business Day on which an Advance is made.

“Funding Request”: A Borrower Notice requesting an Advance and including the items
required by Section 2.2.

“GAAP”: Generally accepted accounting principles in the United States of America.
All ratios and computations based on GAAP contained in this Agreement shall be computed in
conformity with GAAP as in effect on the date hereof.

“Governmental Authority”: Any nation or government, any state or other political
subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any
entity exercising executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, any court or arbitrator and any accounting board or authority (whether or
not a part of the government) which is responsible for the establishment or interpretation of
national or international accounting principles.

“Grade 1 Loan”: As of any date of determination, any Loan that the Servicer
determines to be or, in accordance with the Credit and Collection Policy, should have determined to
be, classified as “Grade 1.”

“Grade 2 Loan”: As of any date of determination, any Loan that the Servicer
determines to be or, in accordance with the Credit and Collection Policy should have determined to
be, classified as “Grade 2.”

“Grade 3 Loan”: As of any date of determination, any Loan that the Servicer
determines to be or, in accordance with the Credit and Collection Policy, should have determined to
be, classified as “Grade 3.”

“Grade 4 Loan”: As of any date of determination, any Loan that the Servicer
determines to be or, in accordance with the Credit and Collection Policy and Section
7.9(l), should have determined to be, classified as “Grade 4.”

“Grade 5 Loan”: As of any date of determination, any Loan that the Servicer
determines to be or, in accordance with the Credit and Collection Policy and Section
7.9(l), should have determined to be, classified as “Grade 5.”

“Grant”: To grant, bargain, sell, warrant, alienate, remise, demise, release, convey,
assign, transfer, mortgage, pledge, create and grant a security interest in and right of set-off
against, deposit, set over and confirm. A Grant of any instrument, shall include all rights,
powers and options (but none of the obligations) of the granting party thereunder, including
without limitation, the immediate and continuing right to claim for, collect, receive and give
receipt for principal and interest payments in respect thereof, and all other monies payable
thereunder, to give and receive notices and other communications, to make waivers or other
agreements, to exercise all rights and options, to bring any suit in equity, action at law or other
judicial or administrative proceeding in the name of the granting party or otherwise, and generally
to do and receive anything that the granting party may be entitled to do or receive thereunder or
with respect thereto.

“Hedge Amount”: On any day, an amount equal to the excess, if any, of (a) the product
of (i) the product of (1) the Borrowing Base (excluding, solely for the purposes of this
calculation, the Purchased Loan Balance of any Permitted Investment which is deemed to be an
Eligible Loan by operation of the proviso to the initial paragraph of Eligible Loan) and (2) the
Fixed Rate Loan Percentage and (ii) the Advances Outstanding divided by the Aggregate Outstanding
Loan Balance over (b)(i) at any time any of the conditions set forth in clauses (b),
(c), (d) or (e) in the definition of Hedge Trigger shall exist, zero and
(ii) at all other times, $15,000,000, unless otherwise consented to by the Agent.

“Hedge Breakage Costs”: With respect to each Hedge Counterparty upon the early
termination of any Hedge Transaction with such Hedge Counterparty, the net amount, if any, payable
by the Borrower to such Hedge Counterparty for the early termination of that Hedge Transaction or
any portion thereof.

“Hedge Collateral”: Defined in Section 5.2(b).

“Hedge Counterparty”: Means (a) Bank of Montreal and (b) any other entity that (i) on
the date of entering into any Hedge Transaction (x) is an interest rate swap dealer that has been
approved in writing by the Agent (which approval shall not be unreasonably withheld), and (y) has a
long-term unsecured debt rating of not less than “A” by S&P and not less than “A2” by Moody’s (the
“Long-term Rating Requirement”) and a short-term unsecured debt rating of not less than
“A-1” by S&P and not less than “P-1” by Moody’s (the “Short-term Rating Requirement”), and
(ii) in a Hedging Agreement (x) consents to the assignment of the Borrower’s rights under the
Hedging Agreement to the Trustee on behalf of the Secured Parties pursuant to Section
5.2(b) and (y) agrees that in the event that Moody’s or S&P reduces its long-term unsecured
debt rating below the Long-term Rating Requirement, it shall either collateralize its obligations
in a manner satisfactory to the Agent or transfer its rights and obligations under each Hedging
Agreement (excluding, however, any right to net payments or Hedge Breakage Costs under any Hedge
Transaction, to the extent accrued to such date or to accrue thereafter and owing to the
transferring Hedge Counterparty as of the date of such transfer) to another entity that meets the
requirements of clauses (b)(i) and (b)(ii) hereof and has entered into a Hedging
Agreement with the Borrower on or prior to the date of such transfer.

“Hedge Notional Amount”: The aggregate notional amount in effect on any day under all
Hedge Transactions entered into pursuant to Section 5.2(a), that have not matured, been
terminated or cancelled.

“Hedge Percentage”: On any day (a) prior to the occurrence of a Hedge Trigger, 0%,
and (b) on or after the day on which a Hedge Trigger occurs, 100%.

“Hedge Transaction”: Each interest rate swap, index rate swap or interest rate cap
transaction or comparable derivative arrangements as the Agent may approve in its discretion
between the Borrower and a Hedge Counterparty that is entered into pursuant to Section
5.2(a) and is governed by a Hedging Agreement.

“Hedge Trigger”: The occurrence of any of the following: (a) the Hedge Amount shall be
greater than $0; (b) on any two consecutive Determination Dates, the Rolling Three-Month Portfolio
Yield shall be less than 6.0%; (c) the occurrence of a Termination Event; (d) on any date during
the Revolving Period, the Liquidity Purchase Agreement as in effect on the date hereof (without
giving effect to any amendment, modification, waiver, supplement or restatement), shall cease to be
in full force and effect; or (e) during the Amortization Period, the Liquidity Purchase Agreement
shall expire in accordance with its terms and fail to be renewed for an additional period of 364
days pursuant to Section 2.1(c) or shall otherwise cease to be in full force and effect.

“Hedging Agreement”: The agreement between the Borrower and a Hedge Counterparty that
governs one or more Hedge Transactions entered into by the Borrower and such Hedge Counterparty
pursuant to Section 5.2(a), which agreement shall consist of a “Master Agreement” in a form
published by the International Swaps and Derivatives Association, Inc., together with a “Schedule”
thereto substantially in the form of Exhibit H hereto or such other form as the Agent shall
approve in writing, and each “Confirmation” thereunder confirming the specific terms of each such
Hedge Transaction.

“Increased Costs”: Any amounts required to be paid by the Borrower to an Affected
Party pursuant to Section 2.13.

“Indebtedness”: With respect to any Person as of any date, whether or not reflected
on the balance sheet or comparable statement of financial position of such Person, (a) all
indebtedness of such Person as well as any special purpose entity Subsidiaries of such Person for
borrowed money or for the deferred purchase price of property or services (other than current
liabilities incurred in the ordinary course of business and payable in accordance with customary
trade practices) or that is evidenced by a note, bond, debenture or similar instrument (including,
without limitation, any note, bond, debenture or similar instrument issued in connection with a
securitization transaction), (b) all obligations of such Person under capital leases, (b) all
obligations of such Person under capital leases, (c) all obligations of such Person in respect of
acceptances issued or created for the account of such Person, (d) all liabilities secured by any
Lien on any property owned by such Person even though such Person has not assumed or otherwise
become liable for the payment thereof, and (e) all indebtedness, obligations or liabilities of that
Person in respect of Derivatives, determined as of such date on a net mark to market basis in
accordance with customary market practice and (f) obligations under direct or indirect guaranties
in respect of obligation (contingent or otherwise) to purchase or otherwise acquire, or to
otherwise assure a creditor against loss in respect of, clauses (a) through (e)
above.

“Indemnified Amounts”: Defined in Section 10.1.

“Indemnified Parties”: Defined in Section 10.1.

“Independent Director”: Defined in Section 4.1(t)(xxvii).

“Industry”: The industry of an Obligor as determined by reference to the four digit
standard industry classification (SIC) codes.

“Ineligible Loan”: Defined in Section 2.18(b)(i).

“Initial Advance”: The first Advance.

“Insolvency Event”: With respect to a specified Person, (a) the filing of a decree or
order for relief by a court having jurisdiction in the premises in respect of such Person or any
substantial part of its property in an involuntary case under any applicable Insolvency Law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person’s affairs, and such decree or order shall
remain unstayed and in effect for a period of 60 consecutive days; or (b) the commencement by such
Person of a voluntary case under any applicable Insolvency Law now or hereafter in effect, or the
consent by such Person to the entry of an order for relief in an involuntary case under any such
law, or the consent by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for
any substantial part of its property, or the making by such Person of any general assignment for
the benefit of creditors, or the failure by such Person generally to pay its debts as such debts
become due, or the taking of action by such Person in furtherance of any of the foregoing.

“Insolvency Laws”: The Bankruptcy Code and all other applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization,
suspension of payments, or similar debtor relief laws from time to time in effect affecting the
rights of creditors generally.

“Insolvency Proceeding”: Any case, action or proceeding before any court or
Governmental Authority relating to an Insolvency Event.

“Insurance Policy”: With respect to any Transferred Loan included in the Collateral,
an insurance policy covering physical damage to or loss to any assets or Related Property of the
Obligor securing such Transferred Loan.

“Insurance Proceeds”: Any amounts payable or any payments made to the Borrower or to
the Servicer on its behalf under any Insurance Policy.

“Intercreditor Agreement”: The Intercreditor and Concentration Account Administration
Agreement, dated as of July 27, 2005, among U.S. Bank, as the Concentration Account Bank, Wells
Fargo, as the account custodian, each Securitization Agent that from time to time executes a
joinder thereto, and Patriot Capital Funding, Inc., as Originator, Original Servicer and
Concentration Account Servicer, as such agreement may be amended, modified, waived, supplemented or
restated from time to time.

“Interest”: For each Accrual Period and each Advance outstanding during such Accrual
Period, the sum of the products (for each day during such Accrual Period) of:

	 	 	 	 	 	 	 
	
 
	 	IR x P x  1 
	 	

	 	

	 
	 	 	 	 	 	 
	 	 	 
	 	 
	 
	 	 	 	 	 	 
	where

	 	

IR

P
	 	D

=

=
	 	

the Interest Rate applicable on such day;

the principal amount of such Advance on such day; and

	 	 	 	D = 360 or, to the extent the Interest Rate is based on the Base
Rate, 365 or 366 days, as applicable.

provided, however, that (i) no provision of this Agreement shall require or permit the collection
of Interest in excess of the maximum permitted by Applicable Law and (ii) Interest shall not be
considered paid by any distribution if at any time such distribution is rescinded or must otherwise
be returned for any reason.

“Interest Collection Account”: The subaccount of the Collection Account into which
all Interest Collections are deposited by the Borrower or the Servicer on behalf of the Borrower in
accordance with Section 2.9.

“Interest Collections”: Any and all amounts received on a Transferred Loan from or on
behalf of any Obligors that are deposited into the Collection Account, or received by the Borrower
or by the Servicer or Originator on behalf of the Borrower in respect of Transferred Loans (not
constituting Principal Collections) and, solely for purposes of calculating the Portfolio Yield,
any and all amounts accrued in respect of any fees and other charges (but only to the extent such
fees are not part of the Retained Interest or were not received during such Collection Period) owed
by any Obligor in respect of any Eligible Loan (net of any payment owed by the Borrower to, and
including any receipts from, any Hedge counterparties).

“Interest Coverage Ratio”: For any twelve month period, the ratio of (i) EBITDA of
the Obligor and its Subsidiaries on a consolidated basis during such twelve month period to (ii)
the interest on Indebtedness payable in cash accrued during such twelve month period.

“Interest Rate”: For each Accrual Period and for each Advance outstanding for each
day during such Accrual Period:

(a) to the extent the Conduit Lender has funded the Advance through the issuance of Commercial
Paper Notes, a rate equal to the CP Rate; or

(b) to the extent the Conduit Lender did not fund the Advance through the issuance of
Commercial Paper Notes, a rate equal to the Alternative Rate;

provided, that: (i) the Interest Rate shall be the Base Rate for any Accrual Period for any Advance
as to which the Conduit Lender has funded the making or maintenance thereof by a sale of an
interest therein to any Liquidity Bank under the Liquidity Purchase Agreement on any day other than
the first day of such Accrual Period and without giving such Liquidity Bank at least two Business
Days’ prior notice of such assignment; (ii) the Interest Rate shall be the Base Rate if the Conduit
Lender or Liquidity Bank shall have notified the Agent that a Eurodollar Disruption Event has
occurred; and (iii) the Interest Rate shall be the rate set forth in the Fee Letter for each day
during any Accrual Period following the Termination Date.

“Interest Rate Protection Agreement”: Any interest rate swap, interest rate cap,
interest rate collar or other interest rate hedging agreement or arrangement.

“Investment”: With respect to any Person, any direct or indirect loan, advance or
investment by such Person in any other Person, whether by means of share purchase, capital
contribution, loan or otherwise, excluding the acquisition of assets pursuant to the Purchase
Agreement and excluding commission, travel and similar advances to officers, employees and
directors made in the ordinary course of business.

“ISDA Definitions”: The 2000 ISDA Definitions, as published by the International
Swaps and Derivatives Association, Inc.

“Junior Secured Loan”: Any loan that (i) is secured by a second priority Lien on
substantially all the obligor’s assets constituting collateral for the Loan and (ii) contains
provisions that, upon the occurrence of an event of default under the related Loan Documents or in
the case of any liquidation or foreclosure on the related collateral, the Borrower’s portion of
such Loan would be paid only after certain other lenders party to such Loan are paid in full.

“Leverage Ratio”: With respect to any person, the ratio of Indebtedness of such
Person to stockholders’ equity (as defined in accordance with GAAP) of such Person.

“LIBOR Rate”: For any Accrual Period and any Advance, an interest rate per annum
equal to:

(a) the posted rate for one-month deposits in Dollars appearing on Telerate page 3750 as of
11:00 a.m. (London time) on the Business Day that is the second Business Day immediately preceding
the applicable Funding Date (with respect to the initial Accrual Period for such Advance) and as of
the second Business Day immediately preceding the first (1st) day of the applicable
Accrual Period (with respect to all subsequent Accrual Periods for such Advance); or

(b) if no rate appears on Telerate page 3750 at such time and day, then the LIBOR Rate shall
be determined by the Agent as its rate (each such determination, absent manifest error, to be
conclusive and binding on all parties hereto and their assignees) at which one-month deposits in
Dollars are being, have been, or would be offered or quoted by the Agent to major banks in the
applicable interbank market for Eurodollar deposits at or about 11:00 a.m. (New York, New York
time) on such day.

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

“Lien Release Dividend”: Defined in Section 2.16(a).

“Lien Release Dividend Date”: The date specified by the Borrower, which date may be
any Business Day, provided written notice is given in accordance with Section 2.16(a).

“Liquidation Expenses”: With respect to any Defaulted Loan or Charged-Off Loan, the
aggregate amount of all out-of-pocket expenses reasonably incurred by the Borrower or on behalf of
the Borrower by the Servicer (including amounts paid to any subservicer) in connection with the
repossession, refurbishing and disposition of any related assets securing such Transferred Loan
including the attempted collection of any amount owing pursuant to such Transferred Loan.

“Liquidity Bank”: Each liquidity bank that is a party to the Liquidity Purchase
Agreement.

“Liquidity Purchase Agreement”: The Liquidity Asset Purchase Agreement, dated as of
July 27, 2005 by and among Fairway, as the issuer, the Liquidity Banks named therein, Bank of
Montreal, as liquidity agent, and BMO, as the servicing agent, as such agreement may be amended,
modified, waived, supplement or restated from time to time.

“Loan”: (i) Any Senior Secured Loan, Junior Secured Loan or Subordinated Loan arising
from the extension of credit to an Obligor by the Originator or purchased and re-underwritten in
the ordinary course of the Originator’s business including, without limitation, all Add-On Loans,
Revolving Loans and PIK Loans, monies due and owing and all Interest Collections, Principal
Collections and other amounts received from time to time with respect to such loan or note
receivable and all Proceeds thereof, and (ii) any Permitted Investments; provided that at no time
shall the total amount of Permitted Investments that constitute Loans exceed $70,000,000 in the
aggregate.

“Loan Checklist”: With respect to any Loan, the index prepared by the Servicer
identifying each of the Loan Documents and any other document contained in the related Loan File.

“Loan Documents”: With respect to any Loan, the related Underlying Note and any
related loan agreement, security agreement, mortgage, assignment of Loans, all guarantees, note
purchase agreement, intercreditor and/or subordination agreement, and UCC financing statements and
continuation statements (including amendments or modifications thereof) executed by the Obligor
thereof or by another Person on the Obligor’s behalf in respect of such Loan and related promissory
note, including, without limitation, general or limited guaranties and, for each Loan secured by
real property by a mortgage document, an Assignment of Mortgage, and for all Loans with an
Underlying Note, an assignment (which may be by allonge), in blank, signed by an officer of the
Originator.

“Loan File”: With respect to any Loan, each of the Loan Documents and any other
documents identified on the Loan Checklist, related thereto.

“Loan List”: The Loan List provided by the Borrower to the Agent and the Trustee in
connection with each Advance or as new Eligible Loans are added to the Collateral, initially as set
forth in Schedule IV hereto (which shall set forth a description of each Transferred Loan,
including, without limitation, the name of the Obligor of each such Transferred Loan, the related
loan number (as set forth in the Servicer’s internal records), the maturity date and type of each
such Transferred Loan), as the same may be amended, modified or supplemented from time to time in
accordance with the provisions hereof.

“Loan Rate”: For each Loan, in a Collection Period, the current cash pay interest
rate for such Loan in such period as specified in the related Loan Documents.

“Margin Stock”: Means “Margin Stock” as defined in Regulation U issued by the Board
of Governors of the Federal Reserve System.

“Market Servicing Fee”: Defined in Section 7.27.

“Market Servicing Fee Differential”: On any date of determination, an amount equal to
the excess, if any, of the Market Servicing Fee over the Servicing Fee.

“Material Adverse Change”: With respect to any Person, any material adverse change in
the business, condition (financial or otherwise), operations, performance, properties or prospects
of such Person.

“Material Adverse Effect”: With respect to any event or circumstance, means a
material adverse effect on, as applicable, (a) the business, condition (financial or otherwise),
operations, performance, properties or prospects of the Servicer, the Borrower, the Backup Servicer
or the Trustee, (b) the validity, enforceability or collectibility of this Agreement or any other
Transaction Document or the validity, enforceability or collectibility of the Loans, (c) the rights
and remedies of the Trustee on behalf of the Secured Parties, the Agent or any other Secured Party
under this Agreement or any Transaction Document or (d) the ability of the Servicer, the Borrower,
the Backup Servicer or the Trustee to perform its obligations under this Agreement or any other
Transaction Document, or (e) the status, existence, perfection, priority, or enforceability of the
Trustee’s, for the benefit of the Secured Parties, interest in the Collateral.

“Maximum Availability”: On any day, the lesser of (i) the sum of (A) the excess of
(1) the Borrowing Base over (2) the Minimum Overcollateralization Amount plus (B) the
amount of Principal Collections on deposit in the Principal Collection Account and (ii) the
Facility Amount; provided, however, that during the Amortization Period, the Maximum Availability
shall be equal to the Advances Outstanding.

“Maximum Lawful Rate”: Defined in Section 2.7(c).

“Minimum Overcollateralization Amount”: As of any date of determination, an amount
equal to the sum of (I) the greater of (a) the amount determined by multiplying (i) the Borrowing
Base on such date times (ii) one minus the Weighted Average Advance Rate, and (b) the Required
Equity Contribution plus (II) the Aggregate Net Mark to Market Amount, as reported in the most
recent Monthly Report.

“Minimum Portfolio Yield”: 6.0%

“Monthly Report”: Defined in Section 7.17(a).

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

“Multiemployer Plan”: A “multiemployer plan” as defined in Section 4001(a)(3) of
ERISA that is or was at any time during the current year or the immediately preceding five years
contributed to by the Borrower or any ERISA Affiliate on behalf of its employees.

“National Revenue Base”: With respect to any Obligor, means such Obligor derives
revenues from at least 14 states.

“Net Mark to Market Amount”: With respect to each Hedge Counterparty, as set forth on
each Monthly Report for each Determination Date, the net amount that would be payable by the
Borrower to such Hedge Counterparty if all Hedge Transactions of the Borrower with such Hedge
Counterparty were being terminated as of such date, which amount (i) shall have been provided to
the Servicer by such Hedge Counterparty for inclusion in each Monthly Report and (ii) shall have
been determined by such Hedge Counterparty in good faith and in accordance with its usual business
practices; provided, however, that such valuation will be based on a mid-market valuation of each
such Hedge Transaction and as such is an indicative valuation calculation provided for purposes of
determining the Minimum Overcollateralization Amount hereunder, it being understood that the net
amount that would be payable in the event of any termination of any Hedge Transaction would be
determined in accordance with the provisions of the applicable Hedging Agreement governing a
termination due to an event of default or termination event and would be subject to market
conditions at the time the applicable Hedge Transaction is terminated.

“Net Worth”: The total of stockholder’s equity (determined in accordance with GAAP)
plus Subordinated Debt, less (i) the total amount of loans to officers, directors, or employees and
(ii) the total amount of any intangible assets, including without limitation, deferred charges and
goodwill.

“Note Majority”: With respect to Agented Notes, the holders of the notes evidencing
not less than 66 2/3% of the outstanding amount of all such notes issued by the Obligor.

“Obligations”: All loans, advances, debts, liabilities and obligations, for monetary
amounts owing by the Borrower to the Secured Parties, the Backup Servicer and the Trustee or any of
their assigns, as the case may be, whether due or to become due, matured or unmatured, liquidated
or unliquidated, contingent or non-contingent, and all covenants and duties to pay such amounts, of
any kind or nature, present or future, arising under or in respect of any of this Agreement, any
fee letter (including, without limitation, the Fee Letter and the Backup Servicer and Trustee Fee
Letter) delivered in connection with the transactions contemplated by this Agreement, any
Transaction Document, or any Hedging Agreement, as amended or supplemented from time to time,
whether or not evidenced by any separate note, agreement or other instrument. This term
Obligations includes, without limitation, all Advances Outstanding, Interest (including interest
that accrues after the commencement against the Borrower of any action under the Bankruptcy Code),
Breakage Costs, Hedge Breakage Costs, fees, including, without limitation, any and all arrangement
fees, loan fees, facility fees, and any and all other fees, expenses, costs or other sums
(including attorney costs) chargeable to the Borrower under any of the Transaction Documents or
under any Hedging Agreement.

“Obligor”: With respect to any Loan, the Person or Persons obligated to make payments
pursuant to such Loan, including any guarantor thereof. For purposes of calculating any of the
Concentration Limits, all Loans included in the Collateral or to become part of the Collateral the
Obligor of which is an Affiliate of another Obligor shall be aggregated with all Loans of such
other Obligor, for example, if Corporation A is an Affiliate of Corporation B; and
the aggregate Outstanding Loan Balance of all of Corporation A’s Loans in the Collateral
constitutes 10% of the Aggregate Outstanding Loan Balance and the aggregate Outstanding Loan
Balance of all Corporation B’s Loans in the Collateral constitute 10% of the Aggregate Outstanding
Loan Balance, the Obligor concentration for Corporation A would be 20% and the Obligor
concentration for Corporation B would be 20%.

“Officer’s Certificate”: A certificate signed by any officer of the Borrower or the
Servicer, as the case may be, and delivered to the Backup Servicer, the Trustee and the Agent.

“Operating History”: With respect to any specified Person, the time since the date of
such Person’s incorporation or formation that it has continuously operated its business; provided,
however, the Operating History of any Person, newly formed as a result of a merger of two or more
Persons or as a result of the acquisition of one or more Persons by a newly formed Person
(“Merged Parties”) shall be based on the weighted average (by relative sales) of the
Operating Histories of the Merged Parties (excluding for such purposes, entities that are created
only for the purpose of being acquisition entities), for example, if Corporation A
with sales of $10 million has an Operating History of four years and Corporation B with sales of
$20 million has an Operating History of eight years, merge to form NEWCO, the Operating History of
NEWCO will be 6.67 years.

“Opinion of Counsel”: A written opinion of external counsel, who may be external
counsel for the Borrower or the Servicer, as the case may be, and who shall be reasonably
acceptable to the Agent.

“Original Agreement”: Defined in the Recitals.

“Originator”: Patriot Capital Funding, Inc.

“Other Costs”: Defined in Section 12.9(c).

“Outstanding Loan Balance”: As of any date of determination, (a) with respect to any
Loan other than a Permitted Investment, the total remaining amounts of principal payable by the
Obligor thereof exclusive of interest payments and Accreted Interest; provided that any principal
previously covered by a Servicer Advance will be excluded from the principal amounts payable for
purposes of this definition; and (b) with respect to any Loan that is a Permitted Investment the
purchase price paid by the Borrower for such Permitted Investment; provided further that the
Outstanding Loan Balance of any Permitted Investment which is deemed to be an Eligible Loan by
operation of the proviso to the initial paragraph of the definition of Eligible Loan shall be
deemed to equal zero for all purposes hereunder other than the determination of the Purchased Loan
Balance of such Loan.

“Overcollateralization Amount”: As of any date of determination, the excess of (a)
the sum of the Borrowing Base plus the amount of Principal Collections on deposit in the Collection
Account on such date over (b) the Advances Outstanding on such date.

“Overcollateralization Shortfall”: As of any date of determination, the excess, if
any, of (a) Minimum Overcollateralization Amount on such date over (b) the
Overcollateralization Amount on such date.

“Parent”: Defined in Section 4.1(t)(xxvii).

“Patriot Capital”: Defined in the Preamble.

“Paying Agent”: Patriot Capital in its capacity as Servicer and any Successor
Servicer.

“Payment Date”: The 12th day of each calendar month or, if such day is not
a Business Day, the next succeeding Business Day, commencing August 12, 2005.

“Permitted Investments”: Means negotiable instruments or securities or other
investments that, as of any date of determination, mature by their terms on or prior to the
Business Day immediately preceding the next Payment Date immediately following such date of
determination and which may include one or more of the following types of investments:

(a) marketable obligations of the United States, the full and timely payment of which are
backed by the full faith and credit of the United States;

(b) marketable obligations, the full and timely payment of which are directly and fully
guaranteed by the full faith and credit of the United States;

(c) bankers’ acceptances and certificates of deposit and other interest-bearing obligations
denominated and payable in Dollars and issued by any bank with capital, surplus and undivided
profits aggregating at least $100,000,000, the short-term obligations of which are rated “A-1” by
S&P and “P-1” by Moody’s;

(d) repurchase obligations for underlying securities of the types described in clauses
(a), (b) and (c) above entered into with any bank of the type described in
clause (c) above;

(e) commercial paper rated at least “A-1” by S&P and “P-1” by Moody’s;

(f) investments in money market funds rated in the highest investment category or otherwise
approved in writing by S&P or Moody’s; and

(g) demand deposits, time deposits or certificates of deposit (having original maturities of
no more than 365 days of depository institutions or trust companies incorporated under the laws of
the United States or any state thereof (or domestic branches of any foreign bank) and subject to
supervision and examination by federal or state banking or depository institution authorities;
provided, however, that at the time such investment, or the commitment to make such investment, is
entered into, the short-term debt rating of such depository institution or trust company shall be
at least “A-1” by S&P and “P-1” by Moody’s.

Each of the Permitted Investments may be purchased by or through the Backup Servicer or
Trustee or an Affiliate of the Backup Servicer or Trustee.

“Permitted Liens”: (a) With respect to the Loans, Liens in favor of the Trustee on
behalf of the Secured Parties, created pursuant to this Agreement, and (b) with respect to the
Borrower’s interest in the related Collateral, any of the following as to which no enforcement,
collection, execution, levy or foreclosure proceedings shall have been commenced:
(i) materialmen’s, warehousemen’s, mechanics’ and other liens arising by operation of law in the
ordinary course of business for sums not due or sums that are being contested in good faith,
(ii) Liens for state, municipal and other local taxes if such taxes are not at the time due and
payable or if the Obligor shall currently be contesting the validity thereof in good faith by
appropriate proceedings, (iii) Liens held by senior lenders with respect to subordinated Loans,
(iv) Liens created pursuant to this Agreement in favor of the Trustee on behalf of the Secured
Parties (v) the rights of a Hedge Counterparty under its Hedging Agreement, (vi) with respect to
Agented Notes, Liens in favor of the collateral agent on behalf of all noteholders of the related
Obligor and (vii) any Liens permitted under the terms of the related Loan Documents.

“Permitted Securitization Transaction”: Any financing transaction undertaken by the
Borrower or an Affiliate of the Borrower or the Originator that is secured, directly or indirectly,
by the Collateral or any portion thereof or interest therein, including any sale, lease, whole loan
sale, asset securitization, secured loan or other transfer.

“Person”: An individual, partnership, corporation (including a business or statutory
trust), limited liability company, joint stock company, trust, unincorporated association, sole
proprietorship, joint venture, government (or any agency or political subdivision thereof) or other
entity.

“PIK Loan”: A Loan to an Obligor, which provides for a portion of the interest that
accrues thereon to be added to the principal amount of such Loan for some period of the time prior
to such Loan requiring the current cash payment of interest on a monthly or quarterly basis, which
cash payment shall be treated as Interest Collections at the time it is received.

“Portfolio Aggregate Outstanding Loan Balance”: With respect to all Portfolio Loans,
as of any date of determination, the sum of the Portfolio Outstanding Loan Balances of such
Portfolio Loans on such date minus the Portfolio Outstanding Loan Balances of any Defaulted
Portfolio Loans and Charged-Off Portfolio Loans on such date.

“Portfolio Investments”: Investments made by the Originator in the ordinary course of
business and consistent with practices existing on the Closing Date in a Person that is accounted
for under GAAP as a portfolio investment of the Originator.

“Portfolio Loan”: Any Loan serviced by the Servicer, but excluding any Loan which the
Servicer services for an unaffiliated third party.

“Portfolio Outstanding Loan Balance”: With respect to any Portfolio Loan, as of any
date of determination, the total remaining amounts of principal payable by the Obligor thereof
(excluding interest payments and Accreted Interest); it being understood that any principal payment
previously the subject of a Servicer Advance (of the type described in Section 7.5) will be
excluded from the principal amounts payable for purposes of this definition.

“Portfolio Yield”: As of each Determination Date, the annualized percentage
equivalent of a fraction (a) the numerator of which is equal to all Interest Collections deposited
in the Collection Account during the related Collection Period minus the sum of (i) the Interest,
(ii) the Servicing Fee, (iii) the Program Fee, (iv) the Facility Fee, (v) any Backup Servicer Fees
and (vi) any Trustee Fees and (b) the denominator of which is equal to the Aggregate Outstanding
Loan Balance as of such Determination Date.

“Prepaid Loan”: Any Loan (other than a Charged-Off Loan) that was terminated or has
been prepaid in full or in part prior to its scheduled maturity date.

“Pre-Positioned Loan”: Any Loan which will be funded at the closing of such Loan or
in connection with the Initial Advance with the proceeds of an Advance and which is designated by
the Borrower (or the Servicer on the Borrower’s behalf) in writing to the Agent as a
“Pre-Positioned Loan” shall constitute a “Pre-Positioned Loan” for purposes of the conditions,
obligations, certifications and delivery requirements (as applicable) provided for in Sections
2.2(b), 2.2(c), 3.2(f), 4.1(u)(x), 5.3(a) and 7.10(a),
and shall constitute a Transferred Loan for all other purposes under this Agreement.

“Prime Rate”: The rate announced by Bank of Montreal from time to time as its prime
rate in the United States, such rate to change as and when such designated rate changes. The Prime
Rate is not intended to be the lowest rate of interest charged by Bank of Montreal in connection
with extensions of credit to debtors.

“Principal Collection Account”: The subaccount of the Collection Account into which
all Principal Collections are deposited by the Borrower or by the Servicer on its behalf in
accordance with Section 2.9.

“Principal Collections”: Any and all amounts received in respect of any principal due
and payable under any Loan from or on behalf of Obligors that are deposited into the Principal
Collection Account, or received by the Borrower or the Servicer or Originator on behalf of the
Borrower in respect of Loans, in the form of cash, checks, wire transfers, electronic transfers or
any other form of cash payment and applied to reduce the Outstanding Loan Balance of a Loan in
accordance with the Credit and Collection Policy.

“Proceeds”: With respect to any Collateral, whatever is receivable or received when
such Collateral is sold, collected, liquidated, foreclosed, exchanged, or otherwise disposed of,
whether such disposition is voluntary or involuntary, and includes all rights to payment with
respect to any Insurance Policy relating to such Collateral.

“Program Fee”: Defined in the Fee Letter.

“Purchase Agreement”: The Purchase and Sale Agreement, dated as of the date hereof,
by and between the Originator and the Borrower, as such agreement may be amended, modified, waived,
supplemented or restated from time to time.

“Purchased Loan Balance”: As of any date of determination and any Loan, an amount
equal to (a) the lesser of (i) the Outstanding Loan Balance of such Loan on such date, and (ii) the
Fair Market Value of such Loan on such date, minus (b) all amounts in excess of applicable
Concentration Limits on such date; provided that no deduction under clause (b) shall be made in
respect of Loans which are Permitted Investments.

“Qualified Institution”: Defined in Section 7.4(e).

“Recapitalized Loans”: With respect to any Loan and its related Obligor, a Loan
which, as of the date such Loan was included in the Collateral, was to an Obligor in which the
Originator held a direct or indirect ownership interest (on a fully-diluted basis) in such Obligor
of less than 50%, but as of any subsequent date of determination, the Originator holds a direct or
indirect ownership interest (on a fully-diluted basis) in the related Obligor of greater than or
equal to 50%, unless the Agent, in its sole discretion, shall have consented in writing to such
Loan not being designated as a Recapitalized Loan.

“Records”: With respect to any Loans, all documents, books, records and other
information (including without limitation, computer programs, tapes, disks, punch cards, data
processing software and related property and rights) maintained with respect to any item of
Collateral and the related Obligors, other than the Loan Documents.

“Recoveries”: With respect to any Defaulted Loan or Charged-Off Loan, proceeds of the
sale of any Related Property, proceeds of any related Insurance Policy, and any other recoveries
with respect to such Loan and Related Property, and amounts representing late fees and penalties,
net of Liquidation Expenses and amounts, if any, received that are required to be refunded to the
Obligor on such Loan.

“Registrar”: BMO, not in its individual capacity but solely as Registrar, its
successor or successors in interest and any Person which at any time may be selected by the
Borrower upon the resignation of BMO to act as Registrar.

“Related Property”: With respect to any Loan, any property or other assets of the
Obligor thereunder pledged or purported to be pledged as collateral to secure the repayment of such
Loan.

“Released Amounts”: With respect to any payment or Collection received with respect
to any Loan on any Business Day (whether such payment or Collection is received by the Servicer,
the Originator or the Borrower), an amount equal to that portion of such payment or collection
constituting Excluded Amounts or Retained Interest.

“Replaced Loan”: Defined in Section 2.18(a).

“Reporting Date”: The date that is two Business Days prior to each Payment Date.

“Repurchased Loan”: Defined in Section 2.4.

“Required Advance Reduction Amount”: On any day, the amount of Advances Outstanding
required to be repaid to cause the Availability to equal or exceed $0.

“Required Equity Contribution”: As of any date of determination prior to the
Termination Date, an Equity Contribution in an amount equal to $[105,000,000].

“Required Equity Shortfall”: On any day, the excess, if any, of the Required Equity
Contribution over the Equity Contribution on such day.

“Required Reports”: Collectively, the Monthly Report, the Servicer’s Certificate and
the quarterly financial statement of the Servicer required to be delivered to the Borrower, the
Agent and the Backup Servicer pursuant to Section 7.17 hereof.

“Reserve Account”: Defined in Section 7.4(f).

“Reserve Account Required Amount”: An amount payable on each Payment Date, as
determined on the related Determination Date, equal to the sum of (a) 2.0 times the Estimated
Payment Amount plus (b) for any Payment Date and the related Determination Date during the
Revolving Period on which the Default Ratio exceeds 4.0%, an amount equal to 5.0% of the Aggregate
Outstanding Loan Balance.

“Responsible Officer”: As to any Person, any officer of such Person with direct
responsibility for the administration of this Agreement 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.

“Restricted Payments”: Defined in Section 5.1(z).

“Restructured Loan”: Any Loan as to which the terms of payment of principal and
interest have been modified by the Originator, the Servicer or any subservicer due to an Obligor’s
inability to pay, including, without limitation, to permit the Obligor to pay interest in kind
rather than in cash when due but excluding any Loans re-underwritten that conform to the Credit and
Collection Policy.

“Retained Interest”: With respect to each Loan, the following interests, rights and
obligations in such Loan and under the associated Loan Documents, which are being retained by the
Originator: (a) all of the obligations, if any, to provide additional funding with respect to such
Loan, (b) all of the rights and obligations, if any, of the agent(s) under the documentation
evidencing such Loan, (c) the applicable portion of the interests, rights and obligations under the
documentation evidencing such Loan that relate to such portion(s) of the indebtedness that is owned
by another lender or is being retained by the Originator, (d) any unused, commitment or similar
fees associated with the additional funding obligations that are not being transferred in
accordance with clause (a) of this definition, (e) any agency or similar fees associated
with the rights and obligations of the agent that are not being transferred in accordance with
clause (b) of this definition and (f) any advisory, consulting or similar fees due from the
Obligor associated with services provided by the agent that are not being transferred in accordance
with clause (b) of this definition.

“Retransfer Price”: Defined in Section 2.18(b).

“Revolving Loan”: Any Loan that is a line of credit or other similar extension of
credit by the Originator where the Originator’s commitment under such Loan is not fully funded
and/or the proceeds of such Loan may be repaid and reborrowed.

“Revolving Period”: The period commencing on the Closing Date and ending on the day
immediately preceding the Termination Date.

“RIC/BDC Requirements”: The requirements (including, without limitation, requirements
pertaining to asset diversification) Patriot Capital Funding, Inc. must satisfy to maintain its
status as a “business development company,” within the meaning of the Small Business Incentive Act
of 1980, and its election to be treated as a “registered investment company” under the Code.

“Rolling Three-Month Charged-Off Ratio”: As of any Determination Date, the percentage
equivalent of a fraction (a) the numerator of which equals the sum of the Charged-Off Ratios for
the Collection Period ending on such Determination Date and each of the two preceding Determination
Dates (or such lesser number of Charged-Off Ratios as are available), and (b) the denominator of
which equals three (or the corresponding number of Charged-Off Ratios available, if less than
three).

“Rolling Three-Month Default Ratio”: As of any Determination Date, the percentage
equivalent of a fraction (a) the numerator of which equals the sum of the Default Ratios for the
Collection Period ending on such Determination Date and each of the two preceding Determination
Dates (or such lesser number of Default Ratios as are available), and (b) the denominator of which
equals three (or the corresponding number of Default Ratios available if less than three).

“Rolling Three-Month Portfolio Yield”: As of any Determination Date, the percentage
equivalent of a fraction (a) the numerator of which equals the sum of the Portfolio Yields for the
Collection Period ending on such Determination Date and each of the two preceding Determination
Dates (or such lesser number of Portfolio Yields as are available), and (b) the denominator of
which equals three (or the corresponding number of Portfolio Yields available if less than three).

“Rolling Twelve-Month Portfolio Charged-Off Ratio”: As of any Determination Date, the
percentage equivalent of a fraction (i) the numerator of which is equal to the excess of (A) the
sum of the Portfolio Outstanding Loan Balance of all Portfolio Loans that became Charged-Off
Portfolio Loans during the Collection Period related to such Determination Date and during the
Collection Periods related to each of the 11 preceding Determination Dates, respectively (or such
lesser number as shall have elapsed as of such Determination Date) over (B) the sum of any
Recoveries received during such twelve-month period (or such shorter period as shall have elapsed
as of such Determination Date) with respect to all Portfolio Loans that became Charged-Off
Portfolio Loans, and (ii) the denominator of which is equal to a fraction, the numerator of which
is equal to the sum of the Portfolio Aggregate Outstanding Loan Balance as of the first day of the
Collection Period related to such Determination Date and as of the first day of the Collection
Period related to each of the 11 preceding Determination Dates, respectively (or such lesser number
as shall have elapsed as of such Determination Date), and the denominator of which is equal to 12
(or the corresponding lesser number of Determination Dates included in the calculations described
herein).

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

“Scheduled Debt Amortization”: The principal amount of Indebtedness scheduled to be
amortized in any period on Indebtedness other than revolving Indebtedness.

“Scheduled Payment”: On any Determination Date, with respect to any Loan, each
monthly or quarterly payment (whether principal, interest or principal and interest) scheduled to
be made by the Obligor thereof after such Determination Date under the terms of such Loan.

“Secured Party”: (a) The Conduit Lender, (b) the Agent, and (c) each Hedge
Counterparty that is either a Conduit Lender or an Affiliate of the Agent that executes a
counterpart of this Agreement agreeing to be bound by the terms of this Agreement applicable to a
Secured Party.

“Senior Secured Loan”: Any Loan that (i) is secured by a first priority Lien on
substantially all the assets of an Obligor or a specifically identified property of an Obligor
securing such Loan (subject to Permitted Liens) 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.

“Servicer”: Defined in the Preamble.

“Servicer Advance”: Defined in Section 7.5.

“Servicer Termination Event”: Defined in Section 7.25.

“Servicer Termination Notice”: Defined in Section 7.25.

“Servicer’s Certificate”: Defined in Section 7.17(b).

“Servicing Duties”: Defined in Section 7.2.

“Servicing Fee”: For each Payment Date, an amount equal to the sum of the products,
for each day during the related Collection Period, of (a) a fraction, the numerator of which is the
sum of (i) the Aggregate Outstanding Loan Balance as of the first day of such Collection Period
plus (ii) the Aggregate Outstanding Loan Balance as of the last day of such Collection Period, and
the denominator of which is two, (b) the Servicing Fee Rate, and (c) a fraction, the numerator of
which is 1 and the denominator of which is 360.

“Servicing Fee Rate”: A rate equal to 1.0% per annum.

“Servicing Records”: All documents, books, records and other information (including,
without limitation, computer programs, tapes, disks, data processing software and related property
rights) prepared and maintained by the Servicer with respect to the Loans and the related Obligors.

“Solvent”: As to any Person at any time, having a state of affairs such that all of
the following conditions are met: (a) the fair value of the property owned by such Person is
greater than the amount of such Person’s liabilities (including disputed, contingent and
unliquidated liabilities) as such value is established and liabilities evaluated for purposes of
Section 101(32) of the Bankruptcy Code; (b) the present fair salable value of the property owned by
such Person in an orderly liquidation of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they become absolute and
matured; (c) such Person is able to realize upon its property and pay its debts and other
liabilities (including disputed, contingent and unliquidated liabilities) as they mature in
the normal course of business; (d) such Person does not intend to, and does not believe that
it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and
liabilities mature; and (e) such Person is not engaged in business or a transaction, and is not
about to engage in a business or a transaction, for which such Person’s property would constitute
unreasonably small capital.

“Subordinated Debt”: Any debt that is subordinated in right of payment to another
class of indebtedness of a Person.

“Subordinated Loan”: Any Loan other than a Senior Secured Loan or a Junior Secured
Loan that provides that the payment obligation of the related Obligor on such Loan is subordinate
to one or more classes of lenders and contains provisions (x) blocking payments on such Loan by the
related Obligor for a period of greater than 60 days upon the occurrence of a payment default on
loans held by the senior lenders to such Obligor or upon the exercise of remedies by such senior
lenders upon a default under such senior indebtedness and (y) prohibiting the holder of such Loan
from exercising remedies following a default under such Loan for a period of greater than 60 days.
For avoidance of doubt, all of an Obligor’s senior loans or financings shall be considered one
“class” for purposes of this definition.

“Subsidiary”: With respect to any Person, means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more than 50% of (a) the
issued and outstanding capital stock having ordinary voting power to elect a majority of the Board
of Directors of such entity (irrespective of whether at the time capital stock of any other class
or classes of such entity shall or might have voting power upon the occurrence of any contingency),
(b) the interest in the capital or profits of such partnership, limited liability company or joint
venture or (c) the beneficial interest in such trust or estate is at the time directly or
indirectly owned or controlled by such Person, or such Person and one or more of its other
Subsidiaries or by one or more of such Person’s other Subsidiaries; provided that, with respect to
the Originator and the Servicer, “Subsidiary” shall not include any Person that is a Portfolio
Investment.

“Substitute Loan”: Defined in Section 2.18.

“Successor Servicer”: Defined in Section 7.26(a).

“Tangible Net Worth”: With respect to any Person, the Net Worth of such Person after
subtracting therefrom the aggregate amount of such Person’s intangible assets, including, without
limitation, goodwill, franchises, licenses, patents, trademarks, tradenames, copyrights and service
marks.

“Tape”: Defined in Section 7.13(b)(ii).

“Taxes”: Any present or future taxes, levies, imposts, duties, charges, assessments
or fees of any nature (including interest, penalties, and additions thereto) that are imposed by
any Government Authority.

“Termination Date”: The earliest to occur of (a) the Business Day designated by the
Borrower to the Agent upon at least two Business Days’ prior written notice, (b) the date of the
occurrence of a Termination Event pursuant to Section 9.1, (c) the date on which the
Liquidity Purchase Agreement shall expire in accordance with its terms and fail to be renewed for
an additional period of 364 days pursuant to Section 2.1(c) or shall otherwise cease to be
in full force and effect as in effect on the date hereof (without giving effect to any amendment,
modification, waiver, supplement or restatement), and (d) the second Business Day prior to the
Commitment Termination Date.

“Termination Event”: Defined in Section 9.1.

“Transaction Documents”: This Agreement, the Purchase Agreement, the Assignments, the
Liquidity Purchase Agreement, all Hedging Agreements, the Intercreditor Agreement, the
Concentration Account Agreement, the Variable Funding Note, the Fee Letter, the Backup Servicer and
Trustee Fee Letter, any UCC financing statements filed pursuant to the terms of this Agreement, and
any additional document, letter, fee letter, certificate, opinion, agreement or writing the
execution of which is necessary or incidental to carrying out the terms of the foregoing documents.

“Transferred Loans”: Each Loan that is acquired by the Borrower under the Purchase
Agreement and all Loans received by the Borrower in respect of the Required Equity Contribution;
provided, that, the term Transferred Loan shall not include any Retained Interests.

“Transition Costs”: The reasonable costs and expenses incurred by the Backup Servicer
in transitioning to Servicer; provided, however, in no event shall such Transition Costs exceed
$100,000.00 in the aggregate.

“Trustee”: Defined in the Preamble.

“Trustee Expenses”: The reasonable out-of-pocket expenses to be paid to the Trustee
under and in accordance with the Backup Servicer and Trustee Fee Letter.

“Trustee Fee”: The fee to be paid to the Trustee under the terms of the Backup
Servicer and Trustee Fee Letter, including the “Trustee Fee” and “Administration Fee,” each as
defined in the Backup Servicer and Trustee Fee Letter.

“UCC”: The Uniform Commercial Code as from time to time in effect in the specified
jurisdiction.

“Underlying Note”: The promissory note of an Obligor evidencing a Loan.

“United States”: The United States of America.

“Unmatured Termination Event”: An event that, with the giving of notice or lapse of
time, or both, would become a Termination Event.

“Unreimbursed Servicer Advances”: At any time, the amount of all previous Servicer
Advances (or portions thereof) as to which the Servicer has not been reimbursed as of such time
pursuant to Section 2.8(a)(1)(ii) and (b)(ii) and that the Servicer has determined
in its sole discretion will not be recoverable from Collections with respect to the related
Transferred Loan.

“U.S. Bank”: U.S. Bank National Association.

“Variable Funding Note”: Defined in Section 2.1(a).

“Warranty Event”: Occurs as to any Loan included as part of the Collateral, if any
representation or warranty herein relating to such Loan was not true and correct in any material
respect when made and such breach is not cured within the relevant cure period.

“Weighted Average Advance Rate”: The percentage equivalent of the sum of (a) the
product of (i) 65% times (ii) a fraction, the numerator of which is the sum of the Purchased Loan
Balances of all Subordinated Loans included in the Aggregate Purchased Loan Balance as of such date
and the denominator of which is the Aggregate Purchased Loan Balance as of such date plus (b) the
product of (i) 70% times (ii) a fraction, the numerator of which is the sum of the Purchased Loan
Balances of all Junior Secured Loans included in the Aggregate Purchased Loan Balance as of such
date and the denominator of which is the Aggregate Purchased Loan Balance as of such date plus (c)
the product of (i) 75% times (ii) a fraction, the numerator of which is the sum of the Purchased
Loan Balances of all Senior Secured Loans included in the Aggregate Purchased Loan Balance as of
such date and the denominator of which is the Aggregate Purchased Loan Balance as of such date plus
(d) the product of (i) 100% times (ii) a fraction, the numerator of which is the sum of the
Purchased Loan Balances of all Loans which are Permitted Investments included in the Aggregate
Purchased Loan Balance as of such date and the denominator of which is the Aggregate Purchased Loan
Balance as of such date.

“Weighted Average Life”: At any date of determination, with respect to any Loan, is
determined by: (a) multiplying the number of months from and including the month in which such
date of determination falls to but excluding the month when each Scheduled Payment is to be
received under such Loan, (b) summing said products, (c) dividing the sum total by the total amount
of all Scheduled Payments to be received under the Loan, and (d) dividing the total by 12.

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

	 
	 	 
	 

	 
	 	 
	Section 1.2

	 	Other Terms.
	
 
	 	 

All accounting terms not specifically defined herein shall be construed in accordance with
GAAP. All terms used in Article 9 of the UCC in the State of New York, and not specifically
defined herein, are used herein as defined in such Article 9.

	 	 	 	Section 1.3 Computation of Time Periods.

Unless otherwise stated in this Agreement, in the computation of a period of time from a
specified date to a later specified date, the word “from” means “from and including” and the words
“to” and “until” each mean “to but excluding.”

	 	 	 	Section 1.4 Interpretation.

In each Transaction Document, unless a contrary intention appears:

(i) the singular number includes the plural number and vice versa;

(ii) reference to any Person includes such Person’s successors and assigns but, if
applicable, only if such successors and assigns are permitted by the Transaction Documents;

(iii) reference to any gender includes each other gender;

(iv) reference to day or days without further qualification means calendar days;

(v) unless otherwise stated, reference to any time means New York City time;

(vi) references to “writing” include printing, typing, lithography, electronic or other
means of reproducing words in a visible form;

(vii) reference to any agreement (including any Transaction Document), document or
instrument means such agreement, document or instrument as amended, modified, waived,
supplemented or restated and in effect from time to time in accordance with the terms
thereof and, if applicable, the terms of the other Transaction Documents and reference to
any promissory note includes any promissory note that is an extension or renewal thereof or
a substitute or replacement therefor; and

(viii) reference to any Applicable Law means such Applicable Law as amended, modified,
codified, replaced or reenacted, in whole or in part, and in effect from time to time,
including rules and regulations promulgated thereunder and reference to any section or other
provision of any Applicable Law means that provision of such Applicable Law from time to
time in effect and constituting the substantive amendment, modification, codification,
replacement or reenactment of such section or other provision.

	 	 	 	Section 1.5 Section References.

All Section references (including to the Recitals and the Preamble), unless otherwise
indicated, shall be to Sections (and the Recitals and the Preamble) in this Agreement.

	 	 	 	Section 1.6 Calculations.

Except as otherwise provided herein, all interest rate and basis point calculations hereunder
will be made on the basis of a 360-day year and the actual days elapsed in the relevant period and
will be carried out to at least three decimal places.

ARTICLE II

PURCHASE OF THE VARIABLE FUNDING NOTE

	 	 	 	Section 2.1 The Variable Funding Note.

(a) On the terms and conditions hereinafter set forth, on the Closing Date, the Borrower shall
deliver to the Agent, at the address set forth on Annex A to this Agreement, a duly executed
variable funding note (the “Variable Funding Note”), in substantially the form of
Exhibit B-1, dated as of the date of this Agreement, in a face amount equal to the Conduit
Lender’s Commitment as of the Closing Date and otherwise duly completed. Each Variable Funding
Note evidences, and at all times on and after the date hereof shall continue to evidence each
Conduit Lender’s ratable share of the security interest in the Collateral granted pursuant to
Section 8.1. Interest shall accrue, and each Variable Funding Note shall be payable, as
described herein.

(b) During the Revolving Period, the Borrower may, at its option, request the Conduit Lender
to make advances of funds (each, an “Advance”) under the Variable Funding Note, each such
Funding Request to be substantially in the form of Exhibit A-1 hereto, in an aggregate
amount up to the Availability as of the date of the proposed Advance. Following the receipt of a
Funding Request, subject to the terms and conditions hereinafter set forth, during the Revolving
Period, the Conduit Lender shall fund such Advance. Notwithstanding anything to the contrary
contained herein, the Conduit Lender shall not be obligated to provide the Agent or the Borrower
with aggregate funds in connection with an Advance that would exceed the lesser of (i) the Conduit
Lender’s unused Commitment or (ii) the Availability, in each case on the date such Advance is to be
made.

(c) The Borrower may, within 60 days but not less than 45 days prior to (x) the date on which
the Liquidity Purchase Agreement terminates, in the case of an extension of the Liquidity Purchase
Agreement or (y) the Termination Date then in effect pursuant to clause (c) of the definition
thereof, in the case of an extension of the Termination Date, request by written notice to (i) the
Agent for each applicable Liquidity Bank to extend the term of the Liquidity Purchase Agreement for
an additional period of 364 days and (ii) the Agent for the Conduit Lender, to extend the
Termination Date then in effect pursuant to clause (c) of the definition thereof. The Agent will
give prompt notice to the Liquidity Bank or the Conduit Lender, as applicable, of its receipt of
such request, and each of the Liquidity Bank and the Conduit Lender shall make a determination,
each in its respective sole discretion, not less than 15 days prior to the expiration of the
Liquidity Purchase Agreement or the Commitment Termination Date, as applicable, as to whether or
not it will agree to the extension requested. The failure of the Agent to provide timely notice of
the Liquidity Bank’s and the Conduit Lender’s decision to the Borrower shall be deemed to
constitute a refusal by the Liquidity Bank and the Conduit Lender to extend the Commitment
Termination Date or the term of the Liquidity Purchase Agreement, as applicable. The Borrower
confirms that the Liquidity Bank and the Conduit Lender, in their sole and absolute discretion,
without regard to the value or performance of the Collateral or any other factor, may elect not to
extend the term of such Liquidity Purchase Agreement, the date set forth in clause (c) of the
definition of Termination Date or the Commitment Termination Date, as applicable.

	 	 	 	Section 2.2 Procedures for Advances by the Conduit Lender.

(a) Subject to the limitations set forth in Section 2.1, the Borrower may request an
Advance from the Conduit Lender by delivering to the Agent at the times set forth below, the
information and documents set forth in this Section 2.2.

(b) No later than 2:00 p.m. (New York City time) one Business Day prior to the proposed
Funding Date the Borrower shall deliver:

(i) to the Trustee and the Agent, a duly completed Funding Request substantially in the
form of Exhibit A-1 hereto;

(ii) subject to its receipt of a written request from the Agent, to the Agent a credit
report and transaction summary for each Pre-Positioned Loan that is to be funded with the
proceeds of the proposed Advance setting forth the credit underwriting by the Originator of
such Pre-Positioned Loan, including, without limitation, a description of the Obligor and
the proposed Loan transaction in a form reasonably acceptable to the Agent; and

Each Funding Request shall (i) specify the aggregate amount of the requested Advance, which
shall be in an amount equal to at least $1,000,000 or an integral multiple of $100,000 in excess
thereof, (ii) specify the proposed Funding Date of the requested Advance, (iii) specify the amount
of Advances Outstanding, (iv) include a representation that all conditions precedent for a funding
have been met, (v) include a Borrowing Base Certificate calculated as of the date the Advance is
requested and after giving effect to the Advance requested therein and the use of proceeds thereof,
(vi) include a wire disbursement and authorization form and (vii) include an updated Loan List
including each Pre-Positioned Loan to be funded with the proceeds of the requested Advance. Any
Funding Request shall be irrevocable. If any Funding Request is received by the Agent after 2:00
p.m. (New York City time) on the Business Day that is one Business Day prior to the Business Day
for which such Advance is requested or on a day that is not a Business Day, such Funding Request
shall be deemed to be received by the Agent at 9:00 a.m. on the next Business Day.

(c) No later than 2:00 p.m. (New York City time) on the proposed Funding Date, the Borrower
(or the Servicer on its behalf) shall deliver to the Agent and the Trustee a certification
substantially in the form of Exhibit I from outside counsel to the Borrower concerning the
Trustee’s receipt of certain documentation relating to each Pre-Positioned Loan to be funded with
the proceeds of such Advance.

(d) On the Funding Date, the Conduit Lender shall, subject to the limitations set forth in
Section 2.1, and upon satisfaction of the applicable conditions set forth in
Article III, make available to the Borrower in same day funds, at such bank or other
location reasonably designated by the Borrower in the Funding Request given pursuant to this
Section 2.2, an amount equal to the lesser of (x) the amount requested by the Borrower for
such Advance and (y) an amount equal to the Availability on such Funding Date.

(e) On each Funding Date, the Conduit Lender, to the extent the Conduit Lender will fund the
requested Advance through the issuance of Commercial Paper Notes, will use commercially reasonable
efforts to select maturities for such Commercial Paper Notes which will correspond as nearly as
practicable to the periodic settlement date of any Hedge Transaction the Borrower may be required
to enter into on such Funding Date pursuant to Section 5.2; provided, that prior to the
occurrence of a Hedge Trigger, the maturities of the Commercial Paper Notes will be selected at the
discretion of the Agent; and provided further, that, the Conduit Lender shall not incur any
liability or obligation to any party under this Agreement or any other Transaction Document by
reason of its failure or inability to cause the maturities of its Commercial Paper Notes then
issued to correspond to the tenor of any such Hedge Transaction as described herein.

	 	 	 	Section 2.3 Optional Changes in Facility Amount; Prepayments.

(a) The Borrower shall be entitled at its option, at any time prior to the occurrence of a
Termination Event, to terminate in whole or reduce in part the portion of the Facility Amount that
exceeds the sum of the Advances Outstanding, accrued Interest, Breakage Costs and Hedge Breakage
Costs; provided, that, the Borrower shall give prior written notice in the form of Exhibit
A-2 of such reduction to the Agent as provided in Section 2.3(b) and that any partial
reduction of the Facility Amount shall be in an amount equal to $1,000,000 or integral multiples
thereof to a minimum of $100,000. Any request for a reduction or termination pursuant to this
Section 2.3(a) shall be irrevocable.

(b) Prior to the occurrence of a Termination Event, the Borrower may, upon one Business Day’s
prior written notice (such notice to be received by the Agent and the Hedge Counterparty no later
than 5:00 p.m. (New York City time) on such day) to the Agent, the Trustee, and each applicable
Hedge Counterparty, reduce the Advances Outstanding by delivering to the Agent, for payment to the
Conduit Lender (i) immediately available funds and (ii) instructions to reduce such Advances
Outstanding, and to pay accrued Interest, Breakage Costs and Hedge Breakage Costs related to
Advances Outstanding so reduced; provided, that, no such reduction shall be given effect unless the
Borrower has complied with the terms of any Hedging Agreement requiring that one or more Hedge
Transactions be terminated in whole or in part as the result of any such reduction of the Advances
Outstanding, and the Borrower has paid in full all Hedge Breakage Costs owing to the relevant Hedge
Counterparty for any such termination. Any reduction of the Advances Outstanding (other than (i)
with respect to prepayments of Advances Outstanding to be made by the Borrower to reduce Advances
Outstanding such that the Availability is greater than or equal to $0 or (ii) permanent reductions
in the Facility Amount) shall be in a minimum amount of $1,000,000 with integral multiples of
$100,000. Any such reduction will occur only if sufficient funds have been remitted to pay all such
amounts in the succeeding sentence in full. Upon receipt of such amounts, the Agent shall apply
such amounts to the payment of any Hedge Breakage Costs, to the pro rata reduction of the Advances
Outstanding, to the payment of accrued Interest on the amount of the Advances Outstanding to be
repaid by paying such amounts to the Conduit Lender, and to the payment of any Breakage Costs. Any
Advance so prepaid may, subject to the terms and conditions hereof, be reborrowed during the
Revolving Period. Any Borrower Notice relating to any prepayment pursuant to this Section
2.3(b) shall be irrevocable.

	 	 	 	Section 2.4 Deemed Collections.

If on any day (a) the Trustee on behalf of the Secured Parties does not own or have a valid
and perfected first priority security interest in any Loan and Related Property (subject to
Permitted Liens) or (b) any representation or warranty that such Loan was an Eligible Loan was not
true when made, upon the earlier of the Borrower’s receipt of notice from the Agent or the Borrower
becoming aware thereof and the Borrower’s failure to cure such breach within 30 days (if cure is
reasonably possible and otherwise immediately upon receipt of such notice or the Borrower becoming
aware), the Borrower shall be deemed to have received on such day a collection (a “Deemed
Collection”) of such Loan in full and shall on such day pay to the Trustee on behalf of the
Secured Parties an amount equal to (x) the sum of (i) the amount determined by multiplying the
percentage set forth in the definition of Weighted Average Advance Rate herein applicable to such
Loan times the Outstanding Loan Balance of such Loan on the date of repurchase, plus (ii) accrued
Interest to be applied to the pro rata reduction of the Advances Outstanding, plus (y) any Breakage
Costs and Hedge Breakage Costs and any other payments owing to the applicable Hedge Counterparty in
respect of the termination of any Hedge Transaction required as a result of the Deemed Collection,
plus (z) any other costs and expenses related to the retransfer of such Loan and any Related
Property contemplated by this Section 2.4. In connection with any such Deemed Collection,
the Trustee on behalf of the Secured Parties shall automatically and without further action (unless
otherwise necessary or requested by the Borrower or Servicer) be deemed to release the Lien on such
Loan and any Related Property created by this Agreement in favor of the Trustee on behalf of the
Secured Parties and transfer to the Borrower, free and clear of any Lien created by the Trustee on
behalf of the Secured Parties, all of the right, title and interest of the Trustee on behalf of the
Secured Parties in, to, and under the Loan and any Related Property with respect to which the Agent
has received such Deemed Collection (such Loan a “Repurchased Loan”), but without any
recourse, representation and warranty of any kind, express or implied.

	 	 	 	Section 2.5 Notations on the Variable Funding Note.

The Agent is hereby authorized to enter on a schedule attached to the Variable Funding Note a
notation (which may be computer generated) or to otherwise record in its internal books and records
or computer system with respect to each Advance under the Variable Funding Note made by the Conduit
Lender of: (a) the date and principal amount thereof and (b) each payment and repayment of
principal thereof. Any such recordation shall, absent manifest error, constitute prima facie
evidence of the accuracy of the information so recorded. The failure of the Agent to make any such
notation on the schedule attached to the Variable Funding Note shall not limit or otherwise affect
the obligation of the Borrower to repay the Advances under the Variable Funding Note in accordance
with the terms set forth herein.

	 	 	 	Section 2.6 Principal Repayments.

(a) Unless sooner prepaid pursuant to Section 2.3(b) or Section 9.1, the
Advances Outstanding shall be repaid in full on the date that occurs twenty-four (24) months
following the Termination Date. In addition, Advances Outstanding shall be repaid as and when
necessary to cause the Availability to equal or exceed $0, and any amount so repaid may, subject to
the terms and conditions hereof, be reborrowed hereunder during the Revolving Period.

(b) All repayments of any Advance or any portion thereof shall be made together with payment
of (i) all Interest accrued and unpaid on the amount repaid to (but excluding) the date of such
repayment, (ii) any and all Breakage Costs, and (iii) all Hedge Breakage Costs and any other
amounts payable by the Borrower under or with respect to any Hedging Agreement.

	 	 	 	Section 2.7 Interest Payments.

(a) Interest shall accrue on each Advance during each Accrual Period at the applicable
Interest Rate. The Borrower shall pay Interest on the unpaid principal amount of each Advance for
the period commencing on and including the Funding Date of such Advance, as applicable, through but
excluding the date that such Advance, as applicable, shall be paid in full. Interest shall accrue
during each Accrual Period and be payable on each Advance on each Payment Date, unless earlier paid
pursuant to (i) a prepayment in accordance with Section 2.3 or (ii) a reimbursement or
repayment in accordance with Section 2.4.

(b) The Agent shall determine the Interest Rate and Interest (including unpaid Interest, if
any, due and payable on a prior Payment Date) to be paid by the Borrower with respect to each
Advance on each Payment Date for the Accrual Period and shall advise the Servicer on behalf of the
Borrower thereof three Business Days prior to each Payment Date.

(c) Anything in this Agreement or the other Transaction Documents to the contrary
notwithstanding, if at any time the rate of interest payable by any Person under this Agreement and
the Transaction Documents exceeds the highest rate of interest permissible under Applicable Law
(the “Maximum Lawful Rate”), then, so long as the Maximum Lawful Rate would be exceeded,
the rate of interest under this Agreement and the Transaction Documents shall be equal to the
Maximum Lawful Rate. If at any time thereafter the rate of interest payable under this Agreement
and the Transaction Documents is less than the Maximum Lawful Rate, such Person shall continue to
pay interest under this Agreement and the Transaction Documents at the Maximum Lawful Rate until
such time as the total interest received from such Person is equal to the total interest that would
have been received had Applicable Law not limited the interest rate payable under this Agreement
and the Transaction Documents. In no event shall the total interest received by the Conduit Lender
under this Agreement and the Transaction Documents exceed the amount that the Conduit Lender could
lawfully have received, had the interest due under this Agreement and the Transaction Documents
been calculated since the Closing Date at the Maximum Lawful Rate.

	 	 	 	Section 2.8 Settlement Procedures.

(a) (1) During the Revolving Period. On each Payment Date during the Revolving
Period, the Servicer on behalf of the Borrower shall pay to the following Persons pursuant to the
Monthly Report, to the extent of Available Funds, from the Collection Account and, to the extent of
Available Funds, as applicable, from the Reserve Account, the following amounts in the following
order of priority:

(i) First, pro rata to each Hedge Counterparty, any amounts, excluding any
Hedge Breakage Costs and any payments due in respect of the termination of any Hedge
Transactions, owing to that Hedge Counterparty under its respective Hedging Agreement in
respect of any Hedge Transaction(s), for the payment thereof;

(ii) Second, to the Servicer, to the extent of Collections received with
respect to the specific Loans and Obligors for which such Servicer Advances were made, in an
amount equal to any Unreimbursed Servicer Advances on such Loans, for the payment thereof;

(iii) Third, to the Servicer, in an amount equal to its accrued and unpaid
Servicing Fees and, to any Successor Servicer, Market Servicing Fee Differential to the end
of the preceding Collection Period, for the payment thereof; provided, that, the amount of
Market Servicing Fee Differential payable in any 12-month period under this clause
Third shall not exceed 1.0% of the Aggregate Outstanding Loan Balance;

(iv) Fourth, to the Backup Servicer, in amount equal to any accrued and unpaid
currently due Backup Servicer Fee and Transition Costs, for the payment thereof; provided,
that, the amount of Transition Costs payable under this clause Fourth shall not
exceed $100,000.00 in the aggregate with respect to such Payment Date;

(v) Fifth, to the Trustee in an amount equal to any accrued and unpaid
currently due Trustee Fee, for the payment thereof;

(vi) Sixth, to the Agent in an amount equal to any accrued and unpaid Interest
and Breakage Costs, for the payment thereof;

(vii) Seventh, to the Agent in an amount equal to any accrued and unpaid
Program Fee and Facility Fee, for the payment thereof;

(viii) Eighth, to the Agent for the account of the applicable Affected Party,
to be paid pro rata to such Affected Party in accordance with the amount owed to such Person
under this clause Eighth, in an amount equal to any unpaid Increased Costs, Taxes
and any Other Costs, for the payment thereof;

(ix) Ninth, to the Agent, if the Required Advance Reduction Amount is greater
than zero, an amount necessary to reduce the Required Advance Reduction Amount to zero;

(x) Tenth, to the Reserve Account, an amount, if necessary, required for the
amount on deposit in the Reserve Account to equal the Reserve Account Required Amount;

(xi) Eleventh, to the Agent, the Conduit Lender, the Affected Parties and the
Indemnified Parties, pro rata in accordance with the amount owed to such Person under this
clause Eleventh, all other amounts (other than Advances Outstanding) then due under
this Agreement, for the payment thereof;

(xii) Twelfth, pro rata to each Hedge Counterparty, any Hedge Breakage Costs,
any payments due in respect of the termination of any Hedge Transactions owing that Hedge
Counterparty under its respective Hedging Agreement in respect of any Hedge Transaction(s),
for the payment thereof;

(xiii) Thirteenth, to the extent not paid by the Servicer, to the Backup
Servicer, to the Trustee, and to any Successor Servicer, as applicable, pro rata in
accordance with the amount owed to such Person under this clause Thirteenth, in an
amount equal to any accrued and unpaid Backup Servicer Expenses, Trustee Expenses and, to
the extent not previously paid pursuant to (x) clause Third above, the Market
Servicing Fee Differential, and (y) clause Fourth above, Transition Costs, for the
payment thereof;

(xiv) Fourteenth, to the Servicer, in an amount equal to any Unreimbursed
Servicer Advances, to the extent not reimbursed pursuant to clause Second above, for
the payment thereof;

(xv) Fifteenth, to the extent of remaining Available Funds representing
Principal Collections, to deposit in the Principal Collection Account;

(xvi) Sixteenth, any amounts on deposit in the Reserve Account in excess of the
Reserve Account Required Amount and all remaining amounts shall be distributed to the
Borrower.

(2) On the terms and conditions hereinafter set forth, from time to time during the
Revolving Period, the Servicer may, to the extent of any Principal Collections on deposit in
the Principal Collection Account:

(i) withdraw such funds for the purpose of reinvesting in additional Eligible Loans,
provided the following conditions are satisfied:

a. all conditions precedent set forth in Section 3.2(a) have been
satisfied;

b. the Servicer provides same day written notice to the Agent and Trustee by
facsimile (to be received no later than 2:00 p.m. (New York time) on such day) of
the request to withdraw Principal Collections and the amount thereof;

c. the notice required in clause (b) above shall be accompanied by a Borrower
Notice in the form of Exhibit A-2 and a Borrowing Base Certificate and the
same are executed by the Borrower and at least one Responsible Officer of the
Servicer;

d. the Trustee provides to the Agent by facsimile or email (to be received no
later than 2:00 p.m. (New York time) on that same date) a statement reflecting the
total amount on deposit on such day in the Principal Collection Account; and

e. upon confirmation by the Agent of the satisfaction of the conditions set
forth in clauses (a) through (d) above, and the Trustee’s confirmation of available
funds, the Trustee shall release funds from the Principal Collection Account to the
Servicer in an amount not to exceed the lesser of (A) the amount requested by the
Servicer and (B) the amount on deposit in the Principal Collection Account on such
day; or

(ii) withdraw such funds for the purpose of making payments in respect of the Advances
Outstanding at such time in accordance with and subject to the terms of Section 2.3(b).

(b) During the Amortization Period. On each Payment Date during the Amortization
Period, the Servicer on behalf of the Borrower shall pay to the following Persons pursuant to the
Monthly Report, to the extent of Available Funds, from the Collection Account and, to the extent of
Available Funds, as applicable, from the Reserve Account, the following amounts in the following
order of priority:

(i) First, pro rata to each Hedge Counterparty, any amounts, including any
Hedge Breakage Costs and any payments due in respect of the termination of any Hedge
Transactions owing to that Hedge Counterparty under its respective Hedging Agreement in
respect of any Hedge Transaction(s), for the payment thereof; provided, that, the amount of
Hedge Breakage Costs payable under this clause First shall not exceed $250,000.00 in
the aggregate;

(ii) Second, to the Servicer, to the extent of Collections received with
respect to the specific Loans and Obligors for which such Servicer Advances were made, in an
amount equal to any Unreimbursed Servicer Advances on such Loans, for the payment thereof;

(iii) Third, to the Servicer, in an amount equal to its accrued and unpaid
Servicing Fees and, to any Successor Servicer, Market Servicing Fee Differential to the end
of the preceding Collection Period, for the payment thereof; provided, that, the amount of
Market Servicing Fee Differential payable in any 12-month period under this clause
Third shall not exceed 1.0% of the Aggregate Outstanding Loan Balance;

(iv) Fourth, to the Backup Servicer, in amount equal to any accrued and unpaid
currently due Backup Servicer Fee and Transition Costs, for the payment thereof; provided,
that, the amount of Transition Costs payable under this clause Fourth shall not
exceed $100,000.00 in the aggregate with respect to such Payment Date;

(v) Fifth, to the Trustee in an amount equal to any accrued and unpaid
currently due Trustee Fee, for the payment thereof;

(vi) Sixth, to the Agent, in an amount equal to any accrued and unpaid Interest
and Breakage Costs, for the payment thereof;

(vii) Seventh, to the Agent, in an amount equal to any accrued and unpaid
Program Fee and Facility Fee, for the payment thereof;

(viii) Eighth, to the Agent, for the account of the applicable Affected Party,
to be paid pro rata to such Affected Party in accordance with the amount owed to such Person
under this clause Eighth, in an amount equal to any unpaid Increased Costs, Taxes
and any Other Costs, for the payment thereof;

(ix) Ninth, to the Reserve Account, an amount, if necessary, required for the
amount on deposit in the Reserve Account to equal the Reserve Account Required Amount;

(x) Tenth, to the extent of all remaining Available Funds and any amounts on
deposit in the Reserve Account in excess of the Reserve Account Required Amount, to the
Agent for the account of the Conduit Lender, in an amount necessary to reduce the Advances
Outstanding and Obligations to zero, for the payment thereof;

(xi) Eleventh, to the Agent, the Conduit Lender, the Affected Parties and the
Indemnified Parties, pro rata in accordance with the amount owed to such Person under this
clause Eleventh, all other amounts (other than Advances Outstanding) then due under
this Agreement, for the payment thereof;

(xii) Twelfth, to the extent not previously paid pursuant to clause
First above, pro rata to each Hedge Counterparty, any Hedge Breakage Costs owing to
that Hedge Counterparty under its respective Hedging Agreement in respect of any Hedge
Transaction(s), for the payment thereof;

(xiii) Thirteenth, to the extent not paid by the Servicer, to the Backup
Servicer, to the Trustee, and to any Successor Servicer, as applicable, pro rata in
accordance with the amount owed to such Person under this clause Thirteenth, in an
amount equal to any accrued and unpaid Backup Servicer Expenses, Trustee Expenses and, to
the extent not previously paid pursuant to (x) clause Third above, the Market
Servicing Fee Differential, and (y) clause Fourth above, Transition Costs, for the
payment thereof;

	 	 	 
	(xiv)

	 	Fourteenth, any remaining amounts shall be distributed to the Borrower.
	
 
	 	 
	Section 2.9

	 	Collections and Allocations.
	
 
	 	 

(a) The Borrower or the Servicer on behalf of the Borrower shall promptly (but in no event
later than two (2) Business Days after the receipt thereof) identify any Collections received by it
as being Interest Collections or Principal Collections and deposit all such Interest Collections or
Principal Collections received directly by it into the Collection Account and corresponding
Interest Collection Account or Principal Collection Account. The Servicer on behalf of the
Borrower shall make such deposits or payments on the date indicated by wire transfer, in
immediately available funds.

(b) Until the occurrence of a Termination Event, to the extent there are uninvested amounts
deposited in the Collection Account or the Reserve Account, all amounts shall be invested in
Permitted Investments selected by the Servicer on behalf of the Borrower, and from and after the
occurrence of a Termination Event, to the extent there are uninvested amounts deposited in the
Collection Account all amounts may be invested in Permitted Investments selected by the Agent that
mature no later than the next Business Day. Any earnings (and losses) thereon shall be for the
account of the Conduit Lender.

(c) Notwithstanding anything to the contrary contained herein or in any other Transaction
Document, all payments required to be made by the Borrower hereunder shall be made by the Borrower
through the Servicer acting as its Paying Agent.

	 	 	 	Section 2.10 Payments, Computations, Etc.

(a) Unless otherwise expressly provided herein, all amounts to be paid or deposited by the
Borrower, the Servicer on behalf of the Borrower or the Conduit Lender hereunder shall be paid or
deposited in accordance with the terms hereof no later than 12:00 p.m. (New York City time) on the
day when due in lawful money of the United States in immediately available funds to the Agent’s
Account. The Borrower shall, to the extent permitted by law, pay to the Secured Parties interest
on all amounts not paid or deposited when due hereunder at 2% per annum above the Base Rate, and in
the case of any amounts not paid or deposited under any Hedging Agreement, interest at the “rate”
specified in the applicable Hedging Agreement, in each case, payable on demand; provided, however,
that such interest rate shall not at any time exceed the Maximum Lawful Rate. All computations of
interest and all computations of the Interest Rate and other fees hereunder shall be made on the
basis of a year of 360 (other than calculations with respect to the Base Rate which shall be based
on a year consisting of 365 or 366 days, as applicable) days for the actual number of days
(including the first but excluding the last day) elapsed.

(b) Whenever any payment hereunder shall be stated to be due on a day other than a Business
Day, such payment shall be made on the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of payment of Interest, other interest or any fee
payable hereunder, as the case may be.

(c) All payments hereunder shall be made without set-off or counterclaim and in such amounts
as may be necessary in order that all such payments shall not be less than the amounts otherwise
specified to be paid under this Agreement (after withholding for or on account of any Taxes).
Promptly following the Collection Date, the Agent and the Conduit Lender shall mark the Variable
Funding Note “Paid” and return it to the Borrower.

	 	 	 
	Section 2.11

	 	[Reserved].
	
 
	 	 
	Section 2.12

	 	Fees.
	
 
	 	 

(a) The Borrower shall pay to the Agent, to the extent of Available Funds, from the Collection
Account and, as applicable, from the Reserve Account, on each Payment Date, monthly in arrears, in
accordance with Section 2.8(a)(1)(vii) and Section 2.8(b)(vii), the Program Fee and
Facility Fee.

(b) The Borrower shall pay to the Servicer, to the extent of Available Funds, from the
Collection Account and, as applicable, from the Reserve Account, on each Payment Date, monthly in
arrears, in accordance with Section 2.8(a)(1)(iii) and Section 2.8(b)(iii), the
Servicing Fee and, as applicable to any Successor Servicer, the Market Servicing Fee Differential.

(c) The Backup Servicer shall be entitled to receive, to the extent of Available Funds, from
the Collection Account and, as applicable, from the Reserve Account, on each Payment Date, monthly
in arrears, in accordance with Section 2.8(a)(1)(iv) and Section 2.8(b)(iv), the
Backup Servicer Fee.

(d) The Trustee shall be entitled to receive, to the extent of Available Funds, from the
Collection Account and, as applicable, from the Reserve Account, on each Payment Date, monthly in
arrears, in accordance with Section 2.8(a)(1)(v) and Section 2.8(b)(v), the Trustee
Fee.

(e) The Borrower shall pay to Dechert LLP, as counsel to the Agent, in accordance with
Section 12.9, (i) the estimated legal fees and itemized out-of-pocket expenses of such
counsel as of such date, and (ii) all additional reasonable fees and out-of-pocket expenses of such
counsel within 30 days Business Days after receiving an invoice for such amounts; provided,
however, all such fees shall be broken down by time and hourly rates and not value billed.

	 	 	 	Section 2.13 Increased Costs; Capital Adequacy; Illegality.

(a) If either (i) the introduction of or any change (including, without limitation, any change
by way of imposition or increase of reserve requirements) in or in the interpretation of any
Applicable Law or regulation or (ii) the compliance by an Affected Party with any guideline or
request from any central bank or other Governmental Authority (whether or not having the force of
law), (A) shall subject an Affected Party to any Tax (except for Taxes on the overall net income of
such Affected Party), duty or other charge with respect to an Advance hereunder, or on any payment
made hereunder or (B) shall impose, modify or deem applicable any reserve requirement (including,
without limitation, any reserve requirement imposed by the Federal Reserve Board, but excluding any
reserve requirement, if any, included in the determination of Interest), special deposit or similar
requirement against assets of, deposits with or for the amount of, or credit extended by, any
Affected Party or (C) shall impose any other condition affecting an Advance or the Conduit Lender’s
rights hereunder (or of maintaining a Lender’s obligation to make any such Advance), the result of
which is to increase the cost to any Affected Party or to reduce the amount of any sum received or
receivable by an Affected Party under this Agreement, then within ten (10) days after demand by
such Affected Party (which demand shall be accompanied by a statement setting forth the basis for
such demand), the Borrower shall pay directly to such Affected Party such additional amount or
amounts as will compensate such Affected Party for such additional or increased cost incurred or
such reduction suffered.

(b) If either (i) the introduction of or any change in or in the interpretation of any
Applicable Law, guideline, rule, regulation, directive or request or (ii) compliance by any
Affected Party with any Applicable Law, guideline, rule, regulation, directive or request from any
central bank or other Governmental Authority (whether or not having the force of law), including,
without limitation, compliance by an Affected Party with any request or directive regarding capital
adequacy, has or would have the effect of reducing the rate of return on the capital of any
Affected Party as a consequence of its obligations hereunder or arising in connection herewith to a
level below that which any such Affected Party could have achieved but for such introduction,
change or compliance (taking into consideration the policies of such Affected Party with respect to
capital adequacy) by an amount deemed by such Affected Party to be material, then from time to
time, within ten (10) days after demand by such Affected Party (which demand shall be accompanied
by a statement setting forth the basis for such demand), the Borrower shall pay directly to such
Affected Party such additional amount or amounts as will compensate such Affected Party for such
reduction. For avoidance of doubt, any interpretation of Accounting Research Bulletin No. 51 by
the Financial Accounting Standards Board shall constitute an adoption, change, request or directive
subject to this Section 2.13(b)

(c) If as a result of any event or circumstance similar to those described in Sections
2.13(a) and (b), any Affected Party is required to compensate a bank or other financial
institution providing liquidity support, credit enhancement or other similar support to such
Affected Party in connection with this Agreement or the funding or maintenance of Advances
hereunder, then within ten days after demand by such Affected Party, the Borrower shall pay to such
Affected Party such additional amount or amounts as may be necessary to reimburse such Affected
Party for any such amounts paid by it.

(d) In determining any amount provided for in this Section 2.13, the Affected Party
may use any reasonable averaging and attribution methods. Any Affected Party making a claim under
this section shall submit to the Borrower a certificate as to such additional or increased cost or
reduction, which certificate shall calculate in reasonable detail any such charges and shall be
conclusive absent demonstrable error.

(e) If the Conduit Lender shall notify the Agent that a Eurodollar Disruption Event as
described in clause (a) of the definition of “Eurodollar Disruption Event” has occurred,
the Agent shall in turn so notify the Borrower, whereupon all Advances in respect of which Interest
accrues at the LIBOR Rate shall immediately be converted into Advances in respect of which Interest
accrues at the Base Rate.

(f) Failure or delay on the part of any Affected Party to demand compensation pursuant to this
Section 2.13 shall not constitute a waiver of such Affected Party’s right to demand such
compensation.

	 	 	 	Section 2.14 Taxes.

(a) All payments made by the Borrower in respect of any Advance and all payments made by the
Borrower or the Servicer on behalf of the Borrower under this Agreement 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 law. In such event, the Borrower shall pay to the appropriate taxing
authority any such Taxes required to be deducted or withheld and the amount payable to the Agent
and each other Secured Party (as the case may be) will be increased (such increase, the
“Additional Amount”) such that every net payment made under this Agreement after deduction
or withholding for or on account of any Taxes (including, without limitation, any Taxes on such
increase) is not less than the amount that would have been paid had no such deduction or
withholding been deducted or withheld. The foregoing obligation to pay Additional Amounts,
however, will not apply with respect to, and the term “Additional Amount” shall be deemed not to
include net income or franchise taxes imposed on the Agent or another Secured Party, respectively,
with respect to payments required to be made by the Borrower or Servicer on behalf of the Borrower
under this Agreement, by a taxing jurisdiction in which such Secured Party or the Agent is
organized, conducts business or is paying taxes as of the Closing Date (as the case may be). If
the Agent or another Secured Party pays any Taxes in respect of which the Borrower is obligated to
pay Additional Amounts under this Section 2.14(a), the Borrower shall promptly reimburse
such Secured Party or the Agent, as applicable, in full.

(b) The Borrower will indemnify each Secured Party and the Agent for the full amount of Taxes
in respect of which the Borrower is required to pay Additional Amounts (including, without
limitation, any Taxes imposed by any jurisdiction on such Additional Amounts) paid by such Secured
Party or the Agent (as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto; provided, however, that such Secured Party or
the Agent, as appropriate, making a demand for indemnity payment, shall provide the Borrower, at
its address set forth under its name on Annex A hereto, with a certificate from the
relevant taxing authority or from a Responsible Officer of such Secured Party or the Agent stating
or otherwise evidencing that such Secured Party or the Agent has made payment of such Taxes and
will provide a copy of or extract from documentation, if available, furnished by such taxing
authority evidencing assertion or payment of such Taxes. This indemnification shall be made within
ten (10) days from the date the Secured Party or the Agent (as the case may be) makes written
demand therefor.

(c) Within 30 days after the date of any payment by the Borrower of any Taxes, the Borrower
will furnish to the Agent, at its address set forth on Annex A hereto, appropriate evidence of
payment thereof.

(d) If the Secured Party is not created or organized under the laws of the United States or a
political subdivision thereof, the Secured Party shall, to the extent that it may then do so under
Applicable Laws, deliver to the Borrower with a copy to the Agent (i) within 15 days after the date
hereof, or, if later, the date on which the Secured Party becomes a Secured Party hereunder two (or
such other number as may from time to time be prescribed by Applicable Laws) duly completed copies
of IRS Form W-8ECI or Form W-8BEN (or any successor forms or other certificates or statements that
may be required from time to time by the relevant United States taxing authorities or Applicable
Laws), as appropriate, to permit the Borrower to make payments hereunder for the account of such
Secured Party, as the case may be, without deduction or withholding of United States federal income
or similar Taxes and (ii) upon the obsolescence of or after the occurrence of any event requiring a
change in, any form or certificate previously delivered pursuant to this Section 2.14(d),
two copies (or such other number as may from time to time be prescribed by Applicable Laws) of such
additional, amended or successor forms, certificates or statements as may be required under
Applicable Laws to permit the Borrower to make payments hereunder for the account of such Secured
Party, without deduction or withholding of United States federal income or similar Taxes.

(e) For any period with respect to which the applicable Secured Party has failed to provide
the Borrower with the appropriate form, certificate or statement described in Section
2.14(d) (other than if such failure is due to a change in law occurring after the date of this
Agreement), the applicable Secured Party shall not be entitled to indemnification under clauses
(a) or (b) of this Section 2.14 with respect to any Taxes.

(f) Within 30 days of the written request of the Borrower therefor, the applicable Secured
Party shall execute and deliver to the Borrower such certificates, forms or other documents that
can be furnished consistent with the facts and that are reasonably necessary to assist the Borrower
in applying for refunds of Taxes remitted hereunder; provided, however, that such Secured Party
shall not be required to deliver such certificates forms or other documents if in its respective
sole discretion it is determined that the delivery of such certificate, form or other document
would have a material adverse effect on such Secured Party; provided further, however, that the
Borrower shall reimburse the applicable Secured Party for any reasonable expenses incurred in the
delivery of such certificate, form or other document.

(g) If, in connection with an agreement or other document providing liquidity support, credit
enhancement or other similar support to the Conduit Lender in connection with this Agreement or the
funding or maintenance of Advances hereunder, the Conduit Lender is required to compensate a bank
or other financial institution in respect of Taxes under circumstances similar to those described
in this Section 2.14, then within ten days after demand by the Conduit Lender, the Borrower
shall pay to the Conduit Lender such additional amount or amounts as may be necessary to reimburse
the Conduit Lender for any amounts paid by them.

	 	 	 	Section 2.15 Assignment of the Purchase Agreement.

The Borrower hereby assigns to the Trustee, for the ratable benefit of the Secured Parties
hereunder, all of the Borrower’s right, and title and interest in and to (but none of its
obligations under) the Purchase Agreement. In furtherance and not in limitation of the foregoing,
the Borrower hereby assigns to the Trustee on behalf of the Secured Parties, its right to
Indemnification under Section 10.18 of the Purchase Agreement. The Borrower confirms that following
a Termination Event the Agent shall have the sole right to enforce the Borrower’s rights and
remedies under the Purchase Agreement for the benefit of the Secured Parties, but without any
obligation on the part of the Trustee, the Secured Parties or any of their respective Affiliates,
to perform any of the obligations of the Borrower under the Purchase Agreement. The Borrower
further confirms and agrees that such assignment to the Agent shall terminate upon the Collection
Date; provided, however, that the rights of the Trustee and the Secured Parties pursuant to such
assignment with respect to rights and remedies in connection with any indemnities and any breach of
any representation, warranty or covenants made by the Originator pursuant to the Purchase
Agreement, which rights and remedies survive the termination of the Purchase Agreement, shall be
continuing and shall survive any termination of such assignment.

	 	 	 	Section 2.16 Lien Release Dividend.

(a) Notwithstanding any provision contained in this Agreement to the contrary, provided there
is not then existing an Unmatured Termination Event, a Termination Event or a Servicer Termination
Event, on a Lien Release Dividend Date, the Borrower may dividend to the Originator a portion of
the Transferred Loans or portions thereof (the “Lien Release Dividend”), subject to the
following terms and conditions:

(i) The Borrower and the Originator shall have given the Agent at least two (2)
Business Days’ prior written notice of their intent to effectuate a Lien Release Dividend,
unless such notice is waived by the Agent;

(ii) Any Lien Release Dividend shall only be in connection with a Permitted
Securitization Transaction;

(iii) After giving effect to the Lien Release Dividend and the transfer to the
Originator of the Transferred Loans or portions thereof on the Lien Release Dividend Date,
(A) the Availability is greater than or equal to $0, (B) the representations and warranties
contained in Sections 3.2 (k), 3.2 (l), 3.2 (m), and 3.2
(o), and Section 4.1 and 4.2 hereof shall continue to be correct in all
material respects, except to the extent relating to an earlier date, (C) the eligibility of
any Transferred Loan remaining as part of the Collateral after the Lien Release Dividend
will be redetermined as of the Lien Release Dividend Date, (D) the Concentration Limits will
be redetermined as of the Lien Release Dividend Date and (E) neither an Unmatured
Termination Event, a Termination Event nor a Servicer Termination Event shall have resulted;

(iv) Such Lien Release Dividend must be in compliance with Applicable Law and may not
(A) be made with the intent to hinder, delay or defraud any creditor of the Borrower or
(B) leave the Borrower, immediately after giving effect to the Lien Release Dividend,
(i) insolvent, (ii) with insufficient funds to pay its obligations as and when they become
due or (iii) with inadequate capital for its present and anticipated business and
transactions;

(v) On or prior to the Lien Release Dividend Date, the Borrower shall have
(A) delivered to the Agent a list specifying all Transferred Loans or portions thereof to be
transferred pursuant to such Lien Release Dividend and the Agent shall have approved same in
its sole discretion and (B) obtained all authorizations, consents and approvals required to
effectuate the Lien Release Dividend;

(vi) A portion of a Transferred Loan may be transferred pursuant to a Lien Release
Dividend provided that (A) such transfer does not have an adverse effect on the portion of
the Loan remaining as a part of the Collateral, any other Collateral, the Conduit Lender,
the Secured Parties or the Agent, (B) the Loan Documents for such portion of the Transferred
Loan remaining as a part of the Collateral have been amended to contain pro rata sharing,
intercreditor and, if applicable, subordination, provisions substantially the same as those
contained in the form of the intercreditor and subordination agreement attached hereto as
Exhibit U and (C) a new promissory note for the portion of the Transferred Loan
remaining as a part of the Collateral has been executed by the Obligor, and the original
thereof has been endorsed to the Trustee on behalf of the Secured Parties and delivered to
the Trustee; and

(vii) The Borrower shall deliver a Borrowing Base Certificate (including a calculation
of the Borrowing Base after giving effect to such Lien Release Dividend) to the Agent; and

(viii) The Borrower shall have paid in full an aggregate amount equal to the sum of all
amounts due and owing to the Agent, the Conduit Lender and the Hedge Counterparty, as
applicable, under this Agreement and the other Transaction Documents, to the extent accrued
to such date (including, without limitation, Breakage Costs and Hedge Breakage Costs) with
respect to the Transferred Loans to be transferred pursuant to a Lien Release Dividend and
incurred in connection with the transfer of such Transferred Loans pursuant to such Lien
Release Dividend and the termination of any Hedge Transactions, in whole or in part, in
connection therewith.

(b) In connection with the Lien Release Dividend, there shall be sold and assigned to the
Borrower, without recourse, representation or warranty, all of the right, title and interest of the
Trustee on behalf of the Secured Parties in, to and under the Transferred Loans or portions thereof
so transferred (together with, in the case of the transfer of the Transferred Loans but not
portions thereof, any related Collateral) and such Transferred Loans or portions thereof so
transferred (together with, in the case of the transfer of the Transferred Loans but not portions
thereof, any related Collateral) shall be released from the Lien of this Agreement (subject to the
requirements of Section 2.16(a)(iii) above).

(c) The Borrower hereby agrees to pay the reasonable legal fees and expenses of the Agent and
the other Secured Parties in connection with any Lien Release Dividend (including, but not limited
to, expenses incurred in connection with the release of the Lien of the Trustee on behalf of the
Secured Parties and any other party having an interest in the Transferred Loans in connection with
such Lien Release Dividend).

(d) In connection with any Lien Release Dividend, on the related Lien Release Dividend Date,
the Trustee at the written direction of the Secured Parties shall, at the expense of the Borrower
(1) execute such instruments of release with respect to the Transferred Loans or portions thereof
to be transferred to the Borrower (together with, in the case of the transfer of the Transferred
Loans but not portions thereof, any related Collateral), in recordable form if necessary, in favor
of the Borrower as the Borrower may reasonably request, (2) deliver any portion of the Transferred
Loans or portions thereof to be transferred to the Borrower (together with, in the case of the
transfer of the Transferred Loans but not portions thereof, any related Collateral) in its
possession to the Borrower and (3) otherwise take such actions, as are necessary and appropriate to
release the Lien of the Trustee on behalf of the Secured Parties on the Transferred Loans or
portions thereof to be transferred to the Borrower (together with, in the case of the transfer of
the Transferred Loans but not portions thereof, any related Collateral) and release and deliver to
the Borrower such Transferred Loans or portions thereof to be transferred to the Borrower (together
with, in the case of the transfer of the Transferred Loans but not portions thereof, any related
Collateral).

	 	 	 	Section 2.17 Appointment of Registrar and Duties.

(a) BMO is hereby appointed to act as Registrar under this Agreement and hereby accepts such
appointment and agrees to perform the duties and obligations with respect thereto set forth in the
Agreement.

(b) As long as any Advances remain outstanding under the Variable Funding Note, the Borrower
shall maintain a Registrar therefor.

(c) The Borrower shall cause to be kept a register (the “Note Register”) that contains
an accurate and complete list of those Persons who from time to time shall be holders of the
Variable Funding Note. The Note Register shall be maintained by the Registrar, and so long as BMO
is the Registrar, the Registrar may not be removed by the Borrower. Upon the resignation of any
Registrar, the Borrower shall promptly appoint a successor or, if it elects not to make such an
appointment, assume the duties of Registrar. So long as BMO is the Registrar, the Note Register
shall be kept at 115 South LaSalle Street, 13th Floor West, Chicago, Illinois 60603.

(d) Upon the resignation of BMO as Registrar, the Borrower will give the Agent prompt written
notice of the appointment of a successor Registrar and of the location, and any change in the
location, of the Note Register, and the Agent shall have the right to inspect the Note Register at
all reasonable times and to obtain copies thereof, and the Agent shall have the right to rely upon
a certificate executed on behalf of the Registrar by a Responsible Officer thereof as to the names
and addresses of the holder(s) of the Variable Funding Note and the principal amounts and the
amounts and number of the Variable Funding Note.

	 	 	 	Section 2.18 Substitution of Loans; Repurchase or Substitution of Ineligible Loans.

(a) Substitution of Loans. On any day prior to the occurrence of a Termination Event
(and after the Termination Date at the discretion of the Agent), the Borrower may, subject to the
conditions set forth in this Section 2.18 and subject to the other restrictions contained
herein, replace any Transferred Loan with one or more Eligible Loans (each, a “Substitute
Loan”), provided that no such replacement shall occur unless each of the following conditions
is satisfied as of the date of such replacement and substitution:

(i) the Borrower has recommended to the Agent (with a copy to the Trustee) in writing
that the Transferred Loan to be replaced should be replaced (each a “Replaced
Loan”);

(ii) each Substitute Loan is an Eligible Loan on the date of substitution;

(iii) the aggregate Outstanding Loan Balance of such Substitute Loans shall be equal to
or greater than the aggregate Outstanding Loan Balance of the Replaced Loans;

(iv) all representations and warranties of the Borrower contained in Sections
4.1 and 4.2 shall be true and correct as of the date of substitution of any such
Substitute Loan;

(v) the substitution of any Substitute Loan does not cause a Termination Event or
Unmatured Termination Event to occur;

(vi) as of any date of determination, the sum of the Outstanding Loan Balances of all
Substitute Loans does not exceed 20% of the highest Aggregate Outstanding Loan Balance of
any month during the 12 month period immediately preceding such date of determination;

(vii) as of any date of determination, the sum of the Outstanding Loan Balances of all
Substitute Loans substituted for Defaulted Loans, Charged-Off Loans and Loans subject to a
Warranty Event shall not exceed 10% of the highest Aggregate Outstanding Loan Balance of any
month during the 12 month period immediately preceding such date of determination;

(viii) no adverse selection procedures shall have been employed in the selection of
such Substitute Loan from the Originator’s portfolio;

(ix) all actions or additional actions (if any) necessary to perfect the security
interest and assignment of such Substitute Loan and related Collateral to the Borrower and
the Agent shall have been taken as of or prior to the Substitution Date;

(x) the Eligible Risk Rating of the Substitute Loan is equal to or better than that of
the Replaced Loan;

(xi) the Loan Rate on the Substitute Loan is not less than the Loan Rate on the Loan to
be replaced and reconveyed to the Originator in exchange for such Substitute Loan;

(xii) the total interest rate (inclusive of any deferred interest component) of the
Substitute Loan is greater than or equal to the total interest rate on the Loan to be
replaced and reconveyed to the Originator in exchange for such Substitute Loan; and

(xiii) the Borrower shall deliver to the Agent on the date of such substitution (a) a
certificate of a Responsible Officer certifying that each of the foregoing is true and
correct as of such date and (b) a Borrowing Base Certificate (including a calculation of
Borrowing Base after giving effect to such substitution).

In addition, the Borrower shall in connection with such substitution deliver to the Trustee
the related Loan Documents and shall pay to the Conduit Lender and the Hedge Counterparty, as
applicable, all Breakage Costs or Hedge Breakage Costs, if any, incurred in connection with the
substitution of such Loan pursuant to this Section 2.18 and the termination of any Hedge
Transactions, in whole or in part, in connection therewith. In connection with any such
substitution, the Trustee on behalf of the Secured Parties shall, automatically and without further
action (unless otherwise necessary or requested by the Borrower or the Servicer), be deemed to
transfer to the Borrower, free and clear of any Lien created by the Trustee on behalf of the
Secured Parties, all of the right, title and interest of the Trustee on behalf of the Secured
Parties in, to and under such Replaced Loan, but without any representation and warranty of any
kind, express or implied.

(b) Repurchase or Substitution of Ineligible Loans.

(i) In the event of a breach of any representation or warranty set forth in Section 4.2
with respect to a Transferred Loan, Related Property and other related Collateral (each such
Loan, Related Property and other related Collateral, an “Ineligible Loan”), no later than 30
days after the earlier of (x) knowledge of such breach on the part of the Borrower and (y)
receipt by the Borrower of written notice thereof given by the Agent, the Borrower shall
either (1) repay Advances Outstanding in an amount equal to the aggregate Retransfer Price
of such Ineligible Loan(s) to which such breach relates on the terms and conditions set
forth below, or (2) substitute for such Ineligible Loan a Substitute Loan; provided,
however, that no such repayment shall be required to be made with respect to such Ineligible
Loan (and such Loan shall cease to be an Ineligible Loan) if, on or before the expiration of
such 30 day period, the representations and warranties in Section 4.2 with respect
to such Ineligible Loan shall be made true and correct in all material respects with respect
to such Ineligible Loan as if such Ineligible Loan had become part of the Collateral on such
day. Notwithstanding anything contained in this Section 2.18(b) to the contrary, in
the event of a breach of any representation and warranty set forth in Section 4.2 with
respect to each Transferred Loan, Related Property and other related Collateral having been
(A) granted to the Trustee on behalf of the Secured Parties free and clear of any Lien of
any Person claiming through or under the Borrower and its Affiliates and (B) in compliance,
in all material respects, with all requirements of laws applicable to the Borrower,
immediately upon the earlier to occur of the discovery of such breach by the Borrower or
receipt by the Borrower of written notice of such breach given by the Agent, the Borrower
shall repay Advances Outstanding in an amount equal to the sum of (i) the amount determined
by multiplying the percentage set forth in the definition of Weighted Average Advance Rate
herein applicable to such Loan times the Outstanding Loan Balance of such Loan on the date
of repurchase, plus (ii) any accrued and unpaid Interest thereon, plus (iii) all Hedge
Breakage Costs owed to any relevant Hedge Counterparty for any termination of one or more
Hedge Transactions, in whole or in part, as required by the terms of any Hedge Agreement,
plus (iv) any Breakage Costs incurred in connection with the retransfer of such Loan
pursuant to this Section 2.18(b) and the termination of any Hedge Transactions in
whole or in part in connection therewith (collectively, the “Retransfer Price”), and
the Trustee on behalf of the Secured Parties shall release to Borrower any such Ineligible
Loan(s) and relinquish any Lien created pursuant to this Agreement or otherwise, and the
Secured Parties shall, in connection with such conveyance and without further action, be
deemed to represent and warrant that they have the corporate authority and has taken all
necessary corporate action to accomplish such release, but without any other representation
or warranty, express or implied. In the foregoing instances, the Borrower shall make such
repayment and on and after the date of such repayment, each Ineligible Loan so repaid shall
not be included in the Collateral. In consideration of any such release by the Secured
Parties, the Borrower shall, on the date of such repayment, remit to the Agent, on behalf of
the Secured Parties, in immediately available funds an amount equal to the Retransfer Price
therefor. Upon each such repayment, the Trustee on behalf of the Secured Parties shall
automatically and without further action be deemed to release to the Borrower all the right,
title and interest of the Secured Parties in, to and under such Ineligible Loan(s) and all
monies due or to become due with respect thereto, all proceeds thereof and all rights to
security for any such Ineligible Loan, and all proceeds and products of the foregoing. The
Agent shall, at the sole expense of the Borrower, execute such documents and instruments of
transfer as may be prepared by the Borrower and take such other actions as shall reasonably
be requested by the Borrower to effect the transfer of such Ineligible Loan pursuant to this
Section 2.18(b).

(ii) The Borrower hereby agrees that (x) if any real property collateral securing any
Transferred Loan becomes the subject of any claims, proceedings, Liens or encumbrances with
respect to any material violation or claimed material violation of any federal or state
environmental laws or regulations or (y) in the event of a breach of the representation and
warranty in Section 4.1(ee), such Transferred Loan shall for all purposes hereunder
be, at and following the time of discovery by the Servicer of such fact, the Borrower, the
Agent or any other Secured Party, deemed an Ineligible Loan and the Borrower shall either
repay Advances Outstanding in an amount equal to the aggregate Retransfer Price of such
Ineligible Loan or substitute for such Ineligible Loan a Substitute Loan. Such Ineligible
Loan shall otherwise be treated in accordance with Section 2.18(b) and shall be
subject to the same remedial and recourse provisions hereunder as other Transferred Loans
determined to be Ineligible Loans hereunder.

(c) Notwithstanding anything in Section 2.17 or Section 2.18, the Borrower
shall not, and the Servicer shall not on the Borrower’s behalf, acquire, sell or substitute any
Loan with the primary purpose of recognizing gain or decreasing losses on such Loan or in any
manner that would cause the Borrower not to be in compliance with the requirements of Rule 3a-7
under the 1940 Act.

ARTICLE III

CLOSING; CONDITIONS OF CLOSING AND ADVANCES

	 	 	 	Section 3.1 Conditions to Closing and Initial Advances.

The Conduit Lender shall not be obligated to make any Advance hereunder on the occasion of the
Initial Advance, nor shall the Conduit Lender, the Agent, the Backup Servicer or the Trustee be
obligated to take, fulfill or perform any other action hereunder, until the following conditions
have been satisfied, in the sole discretion of, or waived in writing by, the Agent:

(a) This Agreement and all other Transaction Documents or counterparts hereof or thereof shall
have been duly executed by, and delivered to, the parties hereto and thereto and the Agent shall
have received such other documents, instruments, agreements and legal opinions as the Agent shall
request in connection with the transactions contemplated by this Agreement, including all those
listed in the Schedule of Documents, attached hereto as Schedule I, as due on the Closing
Date, each in form and substance satisfactory to the Agent.

(b) The Agent shall have received (i) satisfactory evidence that the Originator, the Borrower
and the Servicer have obtained all required consents and approvals of all Persons, including all
requisite Governmental Authorities, and have all authority necessary to the execution, delivery and
performance of this Agreement and other Transaction Documents to which each is a party and the
consummation of the transactions contemplated hereby or thereby or (ii) an Officer’s Certificate
from each of the Borrower and the Servicer in form and substance satisfactory to the Agent
affirming that no such consents or approvals are required.

(c) The Borrower and the Servicer shall each be in compliance in all material respects with
all Applicable Laws.

(d) The Agent shall have received acknowledgment copies of proper financing statements filed
in all jurisdictions required by the Conduit Lender.

(e) The Agent shall have become a party to the Intercreditor Agreement by its execution of a
joinder thereto and such agreement shall be in full force and effect.

(f) The Agent shall have received a copy of the Credit and Collection Policy from the initial
Servicer.

	 	 	 	Section 3.2 Conditions Precedent to All Advances.

Each Advance (including the Initial Advance) and each reinvestment of Principal Collections
made pursuant to Section 2.8(a)(1)(xv) or Section 2.8(a)(2) shall be subject to the
further conditions precedent that:

(a) On the related Funding Date or date of reinvestment, the Borrower or the Servicer, as the
case may be, shall have certified in the related Borrower Notice that:

(i) the representations and warranties set forth in Sections 4.1, 4.2
and 7.8 are true and correct on and as of such date, before and after giving effect
to such borrowing and to the application of the proceeds therefrom, as though made on and as
of such date;

(ii) no event has occurred, or would result from such Advance or from the application
of the proceeds therefrom, that constitutes a Termination Event or Unmatured Termination
Event;

(iii) such Person is in material compliance with each of its covenants set forth
herein; and

(iv) no event has occurred that constitutes a Servicer Termination Event.

(b) with respect to the initial Funding Date, the Agent shall have received all Transaction
Documents listed on the Schedule of Documents, attached hereto as Schedule I, as due on the
initial Funding Date, or counterparts thereof, each of which has been duly executed by, and
delivered to, the parties hereto and each shall be in form and substance satisfactory to the Agent
and (ii) on any date on which Principal Collections are reinvested pursuant to Section
2.8(a)(1)(xv), or Section 2.8(a)(2), the Agent shall have received a certification in
the form of Exhibit N;

(c) the Termination Date shall not have occurred;

(d) (i) in the case of any Advance, on and as of the applicable Funding Date, before and after
giving effect to such Advance and to the application of proceeds therefrom, the Availability is
greater than or equal to $0;

(ii) in the case of each Advance, each Loan submitted by the Borrower for funding on the
related Funding Date or date of reinvestment of Available Funds pursuant to Section
2.8(a)(1)(xv) or Section 2.8(a)(2) is an Eligible Loan;

(e) with respect to each Pre-Positioned Loan that is funded with the proceeds of such Advance,
the Agent, the Conduit Lender and the Trustee shall have received a faxed copy of the executed
Underlying Note and the Certificate of Borrower in the form of Exhibit I, and, if requested in
writing by the Agent, the Agent shall have received a copy of the credit report and transaction
summary for each such Pre-Positioned Loan;

(f) no claim has been asserted or proceeding commenced challenging enforceability or validity
of any of the Loan Documents, excluding any instruments, certificates or other documents relating
to Loans that were funded with the proceeds of prior Advances;

(g) there shall have been no Material Adverse Change as to the Servicer or as to the Borrower
since the preceding Advance, as applicable;

(h) the Servicer and Borrower shall have taken such other action, including delivery of
approvals, consents, opinions, documents, and instruments to the Secured Parties and the Agent as
each may reasonably request;

(i) no law, rule, regulation, judgment, order or decree applicable to any party shall prohibit
such purchase or any transaction contemplated by any Transaction Document;

(j) after giving effect to the applicable Advance or reinvestment of Available Funds, the
Weighted Average Life of the Transferred Loans included in the Collateral (weighted based on
Outstanding Loan Balances) will not exceed five (5) years;

(k) the weighted average Interest Coverage, Debt Service Coverage and Debt/EBITDA Ratios (as
calculated by the Servicer pursuant to and in accordance with the Credit and Collection Policy) of
all Obligors as of the end of most recent fiscal quarter of the Servicer for which financial
statements are available, satisfy the following required levels, as applicable:

	 	 	 
	Ratio

	 	Required Level
	 

	 	 
	 
	 	 
	Interest Coverage Ratio

	 	At least 2.4 to 1.0
	 

	 	 
	 
	 	 
	Debt Service Coverage Ratio

	 	At least 1.10 to 1.0
	 

	 	 
	 
	 	 
	Debt/EBITDA Ratio

	 	Less than or equal to 4.70 to 1.0
	 

	 	 

(l) the Borrower shall have delivered an Officer’s Certificate stating that, after giving
effect to such Advance or reinvestment of Available Funds, as applicable, each of the foregoing
conditions precedent has been satisfied;

(m) the Portfolio Yield shall be greater than the Minimum Portfolio Yield;

(n) the Reserve Account shall contain an amount greater than or equal to the Reserve Account
Required Amount;

(o) solely in the case of the Initial Advance, the Agent shall have received evidence
satisfactory to it of the reduction to zero of all outstanding amounts under, and the termination
of, that certain Credit Agreement, dated as of February 11, 2003, by and between Wilton Funding,
LLC, as borrower and iStar Financial Inc., as lender, the release of all Liens created in
connection therewith and the termination of all UCC financing statements filed in connection
therewith; and

(p) solely in the case of the Initial Advance, the Borrower shall have paid all fees required
to be paid by it hereunder, including all fees payable pursuant to the Fee Letter, and shall have
reimbursed the Conduit Lender and the Agent for all fees, costs and expenses of closing the
transactions contemplated hereunder and under the other Transaction Documents, including the legal
and other document preparation costs incurred by the Conduit Lender and the Agent.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

	 	 	 	Section 4.1 Representations and Warranties of the Borrower.

The Borrower represents and warrants as follows:

(a) Organization and Good Standing; Power and Authority. The Borrower is a Delaware
limited liability company duly organized, validly existing, and in good standing under the laws of
the jurisdiction of its formation, and has full limited liability company power, authority and
legal right to own or lease its properties and conduct its business as such business is presently
conducted and to enter into and perform its obligations under this Agreement each other Transaction
Document to which it is a party.

(b) Due Qualification. The Borrower is qualified to do business as a limited
liability company, is in good standing, and has obtained all licenses and approvals as required
under the laws of all jurisdictions in which the ownership or lease of its property and or the
conduct of its business (other than the performance of its obligations hereunder) requires such
qualification, standing, license or approval, except to the extent that the failure to so qualify,
maintain such standing or be so licensed or approved would not have an adverse effect on the
interests of the Conduit Lender.

(c) Due Authorization. The execution and delivery of this Agreement and each
Transaction Document to which the Borrower is a party and the consummation of the transactions
provided for herein and therein have been duly authorized by the Borrower by all necessary limited
liability company action on the part of the Borrower.

(d) No Conflict. The execution and delivery of this Agreement and each Transaction
Document to which the Borrower is a party, the performance by the Borrower of the transactions
contemplated hereby and thereby and the fulfillment of the terms hereof and thereof will not
conflict with or result in any breach of any of the material terms and provisions of, and will not
constitute (with or without notice or lapse of time or both) a default under, the Borrower’s
operating agreement or any Contractual Obligation of the Borrower.

(e) No Violation. The execution and delivery of this Agreement and each Transaction
Document to which the Borrower is a party, the performance of the transactions contemplated hereby
and thereby and the fulfillment of the terms hereof and thereof will not conflict with or violate,
in any material respect, any Applicable Law.

(f) No Proceedings. Except as previously disclosed to the Agent in writing, there are
no proceedings or investigations (formal or informal) pending or, to the best knowledge of the
Borrower, threatened against the Borrower, before any Governmental Authority (i) asserting the
invalidity of this Agreement or any Transaction Document to which the Borrower is a party, (ii)
seeking to prevent the consummation of any of the transactions contemplated by this Agreement or
any Transaction Document to which the Borrower is a party or (iii) seeking any determination or
ruling that could reasonably be expected to have a Material Adverse Effect.

(g) All Consents Required. All approvals, authorizations, consents, orders or other
actions of any Person or of any Governmental Authority (if any) required in connection with the due
execution, delivery and performance by the Borrower of this Agreement and any Transaction Document
to which the Borrower is a party, have been obtained.

(h) Bulk Sales. The execution, delivery and performance of this Agreement do not
require compliance with any “bulk sales” law by Borrower.

(i) Solvency. The transactions contemplated under this Agreement and each Transaction
Document to which the Borrower is a party do not and will not render the Borrower not Solvent.

(j) Selection Procedures. No procedures believed by the Borrower to be materially
adverse to the interests of the Secured Parties were utilized by the Borrower in identifying and/or
selecting the Loans that are part of the Collateral.

(k) Taxes. The Borrower has filed or caused to be filed all Tax returns required to
be filed by it. The Borrower has paid all Taxes and all assessments made against it or any of its
property (other than any amount of Tax the validity of which is currently being contested in good
faith by appropriate proceedings and with respect to which reserves in accordance with GAAP have
been provided on the books of the Borrower), and no Tax lien has been filed and, to the Borrower’s
knowledge, no claim is being asserted, with respect to any such Tax, fee or other charge.

(l) Agreements Enforceable. This Agreement and each Transaction Document to which the
Borrower is a party constitute the legal, valid and binding obligation of the Borrower enforceable
against the Borrower in accordance with their respective terms, except as such enforceability may
be limited by Insolvency Laws and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity).

(m) [Reserved].

(n) Reports Accurate. All Monthly Reports (if prepared by the Borrower, or to the
extent that information contained therein is supplied by the Borrower), information, exhibit,
financial statement, document, book, record or report furnished or to be furnished by the Borrower
to the Agent, the Trustee or the Conduit Lender in connection with this Agreement are accurate,
true and correct in all material respects.

(o) Location of Offices. The Borrower’s name is “Patriot Capital Funding LLC I” and
its location (within the meaning of Article 9 of the UCC) is the State of Delaware. The Borrower
has not changed its name, identity, structure, existence or state of formation, whether by
amendment of its certificate of formation, by reorganization or otherwise, and has not changed its
location (within the meaning of Article 9 of the UCC) within the four months preceding the Closing
Date.

(p) Tradenames. The Borrower has no trade names, fictitious names, assumed names or
“doing business as” names or other names under which it has done or is doing business.

(q) Purchase Agreement. The Purchase Agreement is the only agreement pursuant to
which the Borrower acquires Collateral (other than the Hedge Collateral).

(r) Value Given. The Borrower gave reasonably equivalent value to the Originator in
consideration for the transfer to the Borrower of the Loans under the Purchase Agreement, no such
transfer was made for or on account of an antecedent debt owed by the Originator to the Borrower,
and no such transfer is voidable or subject to avoidance under any Insolvency Law.

(s) Special Purpose Entity. The operating agreement of the Borrower is in the form
attached as Exhibit C hereto.

(t) Separate Entity. The Borrower has not and shall not:

(i) engaged in any business or activity other than the purchase and receipt of Loans
and related Collateral from the Originator under the Purchase Agreement, the sale of Loans
and related Collateral under the Transaction Documents, and such other activities as are
incidental or related thereto;

(ii) acquired or owned any material assets other than (a) the Loans and related
Collateral from the Originator under the Purchase Agreement and (b) incidental property as
may be necessary for the operation of the Borrower;

(iii) merged into or consolidated with any Person or dissolved, terminated or
liquidated in whole or in part, transferred or otherwise disposed of all or substantially
all of its assets or changed its legal structure, without in each case first obtaining the
consent of the Agent;

(iv) failed to preserve its existence as an entity duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization or formation, or
without the prior written consent of the Agent, amended, modified, terminated or failed to
comply with the provisions of its operating agreement, or failed to observe limited
liability company formalities;

(v) owned any Subsidiary or made any investment (other than the purchase of Loans
pursuant to the Transaction Documents) in any Person without the consent of the Agent;

(vi) except as permitted by this Agreement, the Concentration Account Agreement and the
other Transaction Documents, commingled its assets with the assets of any of its Affiliates,
or of any other Person;

(vii) incurred any debt, secured or unsecured, direct or contingent (including
guaranteeing any obligation), other than (A) indebtedness to the Secured Parties hereunder
or in conjunction with a repayment of all Advances owed to the Conduit Lender, (B)
obligations in respect of Hedging Agreements, (C) trade payables in the ordinary course of
its business and (D) other operating expenses; provided, that, such debt is not evidenced by
a note and is paid when due;

(viii) become insolvent or failed to pay its debts and liabilities from its assets as
the same shall have become due;

(ix) failed to maintain its records, books of account and bank accounts separate and
apart from those of any other Person;

(x) entered into any contract or agreement with any Person other than as contemplated
by the Transaction Documents, except upon terms and conditions that are commercially
reasonable and intrinsically fair and substantially similar to those that would be available
on an arms–length basis with third parties other than such Person;

(xi) sought its dissolution or winding up in whole or in part;

(xii) failed to correct any known misunderstandings regarding the separate identity of
Borrower and the Originator or any principal or Affiliate thereof or any other Person;

(xiii) guaranteed, become obligated for, or held itself out to be responsible for the
debt of another Person;

(xiv) made any loan or advances to any third party, including any principal or
Affiliate, or, except as otherwise contemplated by the Transaction Documents, held evidence
of indebtedness issued by any other Person (other than cash and investment–grade
securities);

(xv) failed either to hold itself out to the public as a legal entity separate and
distinct from any other Person or to conduct its business solely in its own name in order
not (a) to mislead others as to the identity with which such other party is transacting
business, or (b) to suggest that it is responsible for the debts of any third party
(including any of its principals or Affiliates);

(xvi) failed to maintain adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its contemplated
business operations;

(xvii) filed or consented to the filing of any petition, either voluntary or
involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or
reorganization statute, or made an assignment for the benefit of creditors;

(xviii) except as may be required by the Code and regulations, shared any common logo
with or held itself out as or been considered as a department or division of (a) any of its
principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;

(xix) permitted any transfer (whether in any one or more transactions) of any direct or
indirect ownership interest in the Borrower to the extent it has the ability to control the
same, unless the Borrower shall have delivered to the Agent an acceptable non–consolidation
opinion and the Agent shall have consented to such transfer;

(xx) failed to maintain separate financial statements, showing its assets and
liabilities separate and apart from those of any other Person;

(xxi) failed to pay its own liabilities and expenses only out of its own funds;

(xxii) failed to pay the salaries of its own employees in light of its contemplated
business operations;

(xxiii) acquired the obligations or securities of its Affiliates or stockholders;

(xxiv) failed to allocate fairly and reasonably any overhead expenses that are shared
with an Affiliate, including paying for office space and services performed by any employee
of an Affiliate;

(xxv) failed to use separate invoices and checks bearing its own name;

(xxvi) pledged its assets for the benefit of any other Person, other than with respect
to payment of the indebtedness to the Secured Parties hereunder;

(xxvii) failed at any time to have at least two independent directors (each, an
“Independent Director”), each of which is not and, for the immediately preceding two
year period, was not (a) a director (other than an Independent Director), officer of
employee of the Borrower; (b) a director, officer or employee of Patriot Capital Funding,
Inc. (the “Parent”) or any of its affiliates; (c) a supplier, independent contractor
or any other person who derives more than 15% of its gross revenues from its activities with
the Borrower, the Parent and/or any affiliate of the foregoing; (d) a holder (directly or
indirectly) of more than 5% of any voting securities of the Borrower, the Parent or any
affiliate of the foregoing; (e) a person controlling any such director, officer, employee,
supplier, independent contractor, holder or any other person meeting the criteria set forth
in clauses (a), (b), (c) or (d) of this Section 4.1(t)(xxvii) or (f) a member of the
immediate family of any person meeting the criteria set fourth in clauses (a), (b), (c), (d)
or (e) of this Section 4.1(t)(xxvii); provided, however, that such independent
directors may be an independent director or director of another special purpose entity
affiliated with the Originator;

(xxviii) failed to provide in its operating agreement that the unanimous consent of all
directors (including the consent of the Independent Directors) is required for the Borrower
to (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated
bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or
insolvency proceedings against it, (c) file a petition seeking or consent to reorganization
or relief under any applicable federal or state law relating to bankruptcy or insolvency,
(d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator, custodian or any similar official for the Borrower, (e) make any assignment
for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its
debts generally as they become due, or (g) take any action in furtherance of any of the
foregoing; and

(xxix) taken or refrained from taking, as applicable, each of the activities specified
in the non–consolidation opinion of Alston & Bird LLP, dated as of the Closing Date, upon
which the conclusions expressed therein are based.

(u) Security Interest.

(i) This Agreement creates a valid, continuing and enforceable security interest (as
defined in the applicable UCC) in the Collateral in favor of the Trustee on behalf of the
Secured Parties which security interest is prior to all other Liens (except for Permitted
Liens), and is enforceable as such against creditors of and purchasers from the Borrower;

(ii) the Loans, along with the related Loan Files, constitute either a “general
intangible,” an “instrument,” an “account,” “investment property,” or “chattel paper,”
within the meaning of the applicable UCC;

(iii) the Borrower is the lawful owner of and has good and marketable title to the
Transferred Loans and all related Collateral free and clear of any Lien (other than
Permitted Liens);

(iv) the Borrower has received all consents and approvals required by the terms of the
Collateral to the grant of a security interest in the Collateral hereunder to the Agent, on
behalf of the Second Parties;

(v) the Borrower has caused the filing of all appropriate financing statements in the
proper filing office in the appropriate jurisdictions under Applicable Law in order to
perfect the security interest in such Collateral granted to the Trustee on behalf of the
Secured Parties under this Agreement;

(vi) other than the security interest granted to the Trustee on behalf of the Secured
Parties pursuant to this Agreement, the Borrower has not pledged, assigned, sold, granted a
security interest in or otherwise conveyed any of such Collateral;

(vii) the Borrower has not authorized the filing of and is not aware of any financing
statements against the Borrower that include a description of collateral covering such
Collateral other than any financing statement (A) relating to the security interest granted
to the Trustee on behalf of the Secured Parties under this Agreement, or (B) that has been
terminated and/or fully and validly assigned to the Trustee on behalf of the Secured Parties
on or prior to the date hereof;

(viii) the Borrower is not aware of the filing of any judgment or tax Lien filings
against the Borrower;

(ix) other than in the case of Pre-Positioned Loans (and subject to Sections
3.2(f), (4.1(u)(x), 5.3(a) and 7.10(a) in the case of
Pre-Positioned Loans), all original executed Underlying Notes that constitute or evidence
any Transferred Loans have been delivered to the Trustee;

(x) the Borrower has received a written acknowledgment from the Trustee that the
Trustee or its bailee is holding the Underlying Notes that constitute or evidence the
Transferred Loans solely on behalf of and for the benefit of the Secured Parties; provided,
however, notwithstanding the foregoing, with respect to any Pre-Positioned Loan to be funded
with the proceeds of an Advance, the Borrower shall have received a written acknowledgment
from the Trustee (A) that the Trustee has received a faxed copy of the Underlying Note and
(B) within two Business Days after such Funding Date, that the Trustee or its bailee is
holding the Underlying Note that constitutes or evidences the Loans included in the
Collateral solely on behalf of the Secured Parties; and

(xi) none of the Underlying Notes that constitute or evidence the Transferred Loans has
any marks or notations indicating that it has been pledged, assigned or otherwise conveyed
to any Person other than the Borrower and the Agent.

(v) [Reserved].

(w) [Reserved].

(x) [Reserved].

(y) ERISA. The Borrower is in compliance with ERISA and has not incurred and does not
expect to incur any liabilities (except for premium payments arising in the ordinary course of
business) payable to the Pension Benefit Guaranty Corporation under ERISA.

(z) No Broker. No broker or finder acting on behalf of the Borrower was employed or
utilized in connection with this Agreement or the other Transaction Documents or the transactions
contemplated hereby or thereby and the Borrower has no obligation to any Person in respect of any
finder’s or brokerage fees in connection therewith.

(aa) Investment Company Act.

(i) The Borrower is not an “investment company” within the meaning of the 1940 Act.

(ii) The Borrower represents and warrants that, if the Borrower operates in such a
manner as to be an “investment company” within the meaning of the 1940 Act, the Borrower
will register as an “investment company” under the 1940 Act immediately upon being required
to do so under the 1940 Act and will conduct its business and other activities in compliance
with the provisions of the 1940 Act and any rules, regulations or orders issued by the SEC
thereunder.

(iii) The business and other activities of the Borrower, including but not limited to,
the making of the Advances by the Conduit Lender, the application of the proceeds and
repayment thereof by the Borrower and the consummation of the transactions contemplated by
the Transaction Documents to which the Borrower is a party do not now and will not at any
time result in any violations, with respect to the Borrower, of the provisions of the 1940
Act or any rules, regulations or orders issued by the SEC thereunder.

(bb) Accuracy of Representations and Warranties. Each representation or warranty by
the Borrower contained herein or in any certificate or other document furnished by the Borrower
pursuant hereto or in connection herewith is true and correct.

(cc) Government Regulations. The Borrower is not engaged in the business of extending
credit for the purpose of “purchasing” or “carrying” any Margin Stock. The Borrower owns no Margin
Stock, and no portion of the proceeds of any Advance hereunder will be used, directly or
indirectly, for the purpose of purchasing or carrying any Margin Stock, for the purpose of reducing
or retiring any Indebtedness that was originally incurred to purchase or carry any Margin Stock or
for any other purpose that might cause any portion of such proceeds to be considered a “purpose
credit” within the meaning of Regulation T, U or X of the Federal Reserve Board. The Borrower will
not take or permit to be taken any action that might cause any Transaction Document to violate any
regulation of the Federal Reserve Board.

(dd) [Reserved].

(ee) Environmental. At the time of origination of any Loan and on the Cut-Off Date
where real property that is material to the operations of the related business constitutes Related
Property securing such Loan, the related mortgaged property was free of contamination from toxic
substances or hazardous wastes requiring action under Applicable Law or is subject to ongoing
environmental rehabilitation approved by the Servicer, and, as of the related Cut-Off Date of such
Loan, the Borrower has no knowledge of any such contamination from toxic substances or hazardous
waste material on any such real property unless such items are below action levels.

(ff) Material Adverse Change. Since the Closing Date, there has been no Material
Adverse Change with respect to the Borrower.

(gg) Credit and Collection Policy. Since the Closing Date, there have been no
material changes in the Credit and Collection Policy other than in accordance with this Agreement.
Since such date, the Borrower has at all times complied with the Credit and Collection Policy with
respect to each Loan.

(hh) Coverage Requirement. The Availability is greater than or equal to $0.

(ii) No Termination Event. No event has occurred and is continuing and no condition
exists, or would result from any Advance or from the application of the proceeds therefrom, which
constitutes or may be reasonably expected to constitute a Termination Event.

(jj) USA PATRIOT Act. Neither the Borrower nor any Affiliate of the Borrower is (1) a
country, territory, organization, person or entity named on an OFAC list, (2) a Person that resides
or has a place of business in a country or territory named on such lists or which is designated as
a Non-Cooperative Jurisdiction by the Financial Action Task Force on Money Laundering
(“FATF”), or whose subscription funds are transferred from or through such a jurisdiction;
(3) a “Foreign Shell Bank” within the meaning of the USA PATRIOT Act, i.e., a foreign bank that
does not have a physical presence in any country and that is not affiliated with a bank that has a
physical presence and an acceptable level of regulation and supervision; or (4) a person or entity
that resides in or is organized under the laws of a jurisdiction designated by the United States
Secretary of the Treasury under Section 311 or 312 of the USA PATRIOT Act as warranting special
measures due to money laundering concerns.

The representations and warranties in Section 4.1 shall survive the termination of
this Agreement.

	 	 	 	Section 4.2 Representations and Warranties of the Borrower Relating to the Agreement and
the Loans.

The Borrower hereby represents and warrants to the Agent and each Secured Party, as of the
Closing Date and as of each Funding Date, that:

(a) Security Interest. This Agreement constitutes a Grant of a security interest by
the Borrower in all Collateral to the Trustee on behalf of the Secured Parties. The Trustee on
behalf of the Secured Parties, has a first priority perfected security interest in the Collateral.
Neither the Borrower nor any Person claiming through or under the Borrower shall have any claim to
or interest in the Collection Account or the Reserve Account, except for the interest of the
Borrower in such property as a debtor for purposes of the UCC.

(b) Eligibility of Loans. As of the Closing Date, (i) the Loan List and the
information contained in the Borrower Notice delivered pursuant to Section 2.2 is a true
and correct listing in all material respects of all the Loans that are part of the Collateral as of
the Closing Date, and the information contained therein with respect to the identity of such
Transferred Loans and the amounts owing thereunder is true and correct in all material respects as
of such date, (ii) each such Transferred Loan is an Eligible Loan, (iii) each such Transferred Loan
and the Related Property is free and clear of any Lien (other than Permitted Liens) and in
compliance with all Applicable Laws and (iv) with respect to each such Loan, all consents,
licenses, approvals or authorizations of or registrations or declarations with any Governmental
Authority or other Person required to be obtained, effected or given by the Borrower in connection
with the transfer of an interest in such Loan and the Related Property to the Trustee on behalf of
the Secured Parties, have been duly obtained, effected or given and are in full force and effect.
On each Funding Date, the Borrower shall be deemed to represent and warrant that (i) any additional
Transferred Loan referenced on the related Borrower Notice delivered pursuant to Section
2.2 is an Eligible Loan, (ii) each such Transferred Loan and the related Property is free and
clear of any Lien (other than Permitted Liens) and in compliance with all Applicable Laws, (iii)
with respect to each such Transferred Loan, all consents, licenses, approvals, authorizations,
registrations or declarations with any Governmental Authority or other Person required to be
obtained, effected or given by the Borrower in connection with the addition of such Transferred
Loan and the Related Property to the Collateral have been duly obtained, effected or given and are
in full force and effect and (iv) the representations and warranties set forth in Section
4.2(a) are true and correct with respect to each Loan transferred on such day as if made on
such day.

(c) No Fraud. Each Loan was originated without any fraud or material
misrepresentation by the Originator or, to the best of the Borrower’s knowledge, on the part of the
Obligor.

ARTICLE V

GENERAL COVENANTS OF THE BORROWER

	 	 	 	Section 5.1 Covenants of the Borrower.

The Borrower hereby covenants that:

(a) Compliance with Laws. The Borrower will comply in all material respects with all
Applicable Laws, including those with respect to the Loans in the Collateral and any Related
Property.

(b) Preservation of Existence. The Borrower will preserve and maintain its existence,
rights, franchises and privileges in the jurisdiction of its formation, and qualify and remain
qualified in good standing in each jurisdiction where the failure to maintain such existence,
rights, franchises, privileges and qualification could reasonably be expected to have a Material
Adverse Effect.

(c) Loans Not to Be Evidenced by Promissory Notes. The Borrower will not take any
action to cause any Transferred 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.

(d) Security Interests. Except as contemplated in this Agreement and except in the
case of any Permitted Lien, the Borrower will not sell, pledge, assign or transfer to any other
Person, or grant, create, incur, assume or suffer to exist any Lien on any part of the Collateral,
whether now existing or hereafter transferred hereunder, or any interest therein. The Borrower
will promptly notify the Trustee and the Agent of the existence of any Lien on any part of the
Collateral and the Borrower shall defend the right, title and interest of the Trustee on behalf of
the Secured Parties in, to and under any part of the Collateral, against all claims of third
parties; provided, however, that nothing in this Section 5.1(d) shall prevent or be deemed
to prohibit the Borrower from suffering to exist Permitted Liens upon any part of the Collateral.

(e) Delivery of Collections. The Borrower shall deposit in the Collection Account
promptly (but in no event later than two Business Days after receipt) all Collections (including
any Deemed Collections) received (or deemed received) by Borrower in respect of the Loans that are
part of the Collateral.

(f) Activities of Borrower. The Borrower shall not engage in any business or activity
of any kind, or enter into any transaction or indenture, mortgage, instrument, agreement, contract,
Loan or other undertaking, which is not incidental to the transactions contemplated and authorized
by this Agreement or the Purchase Agreement.

(g) Indebtedness. The Borrower shall not create, incur, assume or suffer to exist any
Indebtedness or other liability whatsoever, except (i) obligations incurred under this Agreement,
under any Hedging Agreement required by Section 5.2(a), or the Purchase Agreement, or (ii)
liabilities incident to the maintenance of its existence in good standing.

(h) Guarantees. The Borrower shall not become or remain liable, directly or
indirectly, in connection with any Indebtedness or other liability of any other Person, whether by
guarantee, endorsement (other than endorsements of negotiable instruments for deposit or collection
in the ordinary course of business), agreement to purchase or repurchase, agreement to supply or
advance funds, or otherwise.

(i) Investments. The Borrower shall not make or suffer to exist any loans or advances
to, or extend any credit to, or make any investments (by way of transfer of property, contributions
to capital, purchase of stock or securities or evidences of indebtedness, acquisition of the
business or assets, or otherwise) in, any Person except for purchases of Loans pursuant to the
Purchase Agreement, or for investments in Permitted Investments in accordance with the terms of
this Agreement.

(j) Merger; Sales. The Borrower shall not enter into any transaction of merger or
consolidation, or liquidate or dissolve itself (or suffer any liquidation or dissolution), or
acquire or be acquired by any Person, or convey, sell, loan or otherwise dispose of all or
substantially all of its property or business, except as provided for in this Agreement.

(k) Distributions. The Borrower may not declare or pay or make, directly or
indirectly, any distribution (whether in cash or other property) with respect to the assets of the
Borrower or any Person’s interest therein (collectively, a “Distribution”); provided,
however, if no Termination Event has occurred or will occur as a result thereof, the Borrower may
make Distributions.

(l) Agreements. The Borrower shall not become a party to, or permit any of its
properties to be bound by, any indenture, mortgage, instrument, contract, agreement, loan or other
undertaking, except the Transaction Documents or amend or modify the provisions of its operating
agreement, without the consent of the Agent, or issue any power of attorney except to the Agent or
the Servicer.

(m) Separate Existence. The Borrower shall not take any action or permit or acquiesce
in any action to be taken which would have the effect, directly or indirectly, of causing (i) its
representations and warranties made pursuant to Section 4.1(t)(i)-(xxix) to be inaccurate
in any respect, or (ii) any breach of the covenants of the Borrower set forth in Section 9(j) of
the Borrower’s operating agreement.

(n) ERISA Matters. The Borrower will not (a) engage or permit any ERISA Affiliate to
engage in any prohibited transaction for which an exemption is not available or has not previously
been obtained from the United States Department of Labor; (b) permit to exist any accumulated
funding deficiency, as defined in Section 302(a) of ERISA and Section 412(a) of the Code, or
funding deficiency with respect to any Benefit Plan other than a Multiemployer Plan; (c) fail to
make any payments to a Multiemployer Plan that the Borrower or any ERISA Affiliate may be required
to make under the agreement relating to such Multiemployer Plan or any law pertaining thereto; (d)
terminate any Benefit Plan so as to result in any liability; or (e) permit to exist any occurrence
of any reportable event described in Title IV of ERISA.

(o) Collateral Acquired from the Originator. With respect to each item of Collateral
granted to the Trustee, for the benefit of the Secured Parties, the Borrower will (i) acquire such
Collateral pursuant to and in accordance with the terms of the Purchase Agreement, (ii) take all
action necessary to perfect, protect and more fully evidence the Trustee’s, for the benefit of the
Secured Parties, ownership of such Collateral, including, without limitation, (A) filing and
maintaining, at the Servicer’s expense, effective financing statements against the Borrower in all
necessary or appropriate filing offices, and filing continuation statements, amendments or
assignments with respect thereto in such filing offices and (B) executing or causing to be executed
such other instruments or notices as may be necessary or appropriate, and (iii) take all additional
action that the Agent or the Trustee may reasonably request to perfect, protect and more fully
evidence the respective interests of the parties to this Agreement in the Collateral.

(p) Transactions with Affiliates. The Borrower will not enter into, or be a party to,
any transaction with any of its Affiliates, except (i) the transactions permitted or contemplated
by this Agreement, the Purchase Agreement and any Hedging Agreements and (ii) other transactions
(including, without limitation, transactions related to the use of office space or computer
equipment or software by the Borrower to or from an Affiliate) (A) in the ordinary course of
business, (B) pursuant to the reasonable requirements of the Borrower’s business, (C) upon fair and
reasonable terms that are no less favorable to the Borrower than could be obtained in a comparable
arm’s-length transaction with a Person not an Affiliate of the Borrower, and (D) not inconsistent
with the factual assumptions set forth in the “substantive non-consolidation” legal opinion letter
issued by Alston & Bird LLP and delivered to the Agent as a condition to the Initial Advance, as
such assumptions may be modified in any subsequent opinion letters delivered to the Agent pursuant
to Section 3.2 or otherwise. It is understood that any compensation arrangement for any
trustee shall be permitted under clause (ii)(A) through (C) above if such
arrangement has been expressly approved by the directors of the Borrower in accordance with the
Borrower’s operating agreement.

(q) Change in the Transaction Documents. The Borrower shall provide notice of any
proposed amendment, modification, waiver or termination of any terms or conditions of the
Transaction Documents other than this Agreement to the Agent. The Borrower will not amend, modify,
waive or terminate any terms or conditions of any of the Transaction Documents other than this
Agreement to which it is a party, without the prior written consent of the Agent and, if so
requested by the Agent, the opinions of counsel delivered pursuant to Section 3.1(a) with respect
to (x) the creation, perfection and priority of the security interest of the Secured Parties in the
Collateral, (y) the sale of the Transferred Loans and Related Property from Patriot Capital to the
Borrower constituting a true sale, and (z) the assets of the Borrower not constituting property of
the estate of Patriot Capital following an Insolvency Event with respect to Patriot Capital can be
confirmed, after giving effect to the proposed amendment, modification, waiver or termination. For
the avoidance of doubt, the amendment, modification or waiver of this Agreement is governed by
Section 12.1.

(r) Credit and Collection Policy. The Borrower will (i) comply in all material
respects with the Credit and Collection Policy in regard to each Loan and the Related Property
included in the Collateral, and (ii) furnish to the Agent, prior to its effective date, prompt
notice of any changes in the Credit and Collection Policy. The Borrower will not agree to or
otherwise (x) permit any change in the Credit and Collection Policy which would materially and
adversely affect or impair the collectibility of any Loan, or (y) any material change in the Credit
and Collection Policy without the prior written consent of the Agent (in its sole discretion).

(s) Termination Events. The Borrower will furnish to the Agent, as soon as possible
and in any event within three Business Days after any officer of the Borrower becoming aware of the
occurrence of each Termination Event and each Unmatured Termination Event, a written statement
setting forth the details of such event and the action that the Borrower proposes to take with
respect thereto.

(t) Extension or Amendment of Loans. The Borrower will not, except as otherwise
permitted in Section 7.4(a), extend, amend or otherwise modify, or permit the Servicer on
its behalf to extend, amend or otherwise modify, the terms of any Transferred Loan.

(u) Other. The Borrower will furnish to the Agent such other information, documents,
records or reports respecting the Loans or the condition or operations, financial or otherwise, of
the Borrower or Originator as the Agent may from time to time reasonably request in order to
protect the interests of the Trustee on behalf of the Secured Parties, the Agent or the other
Secured Parties under or as contemplated by this Agreement.

(v) Notices Under the Purchase Agreement. The Borrower will promptly, but in no event
later than two Business Days after its receipt furnish to the Agent copies of any and all notices,
certificates, documents, or reports delivered to it by the Originator under the Purchase Agreement.

(w) Inspection of Records. The Borrower will, at any time and from time to time
during regular business hours, as requested by the Agent, permit the Agent, or its agents or
representatives, (i) to examine and make copies of and take abstracts from all books, records and
documents (including computer tapes and disks) relating to the Transferred Loans and the related
Loan Documents and (ii) to visit the offices and properties of the Borrower, the Originator or the
Servicer, as applicable, for the purpose of examining such materials described in clause (i), and
to discuss matters relating to the Transferred Loans or the Borrower’s, the Originator’s or the
Servicer’s performance hereunder, under the Loan Documents and under the other Transaction
Documents to which such Person is a party with any of the officers, directors, employees or
independent public accountants of the Borrower, the Originator or the Servicer, as applicable,
having knowledge of such matters.

(x) Keeping of Records. The Borrower will maintain and implement administrative and
operating procedures (including an ability to recreate records evidencing Transferred Loans and the
related Loan Documents in the event of the destruction of the originals thereof), and keep and
maintain, all documents, books, computer tapes, disks, records and other information reasonably
necessary or advisable for the collection of all Transferred Loans (including records adequate to
permit the daily identification of each new Transferred Loan and all Collections of and adjustments
to each existing Loan). The Borrower shall give the Agent prompt notice of any material change in
its administrative and operating procedures referred to in the previous sentence.

(y) Compliance with Loans. The Borrower will (i) at its own expense, timely and fully
perform and comply with all material provisions, covenants and other promises required to be
observed by it under the Transferred Loans and the related Loan Documents; and (ii) timely and
fully comply in all material respects with the Credit and Collection Policy with respect to each
Loan and the related Transferred Loan Document.

(z) Restricted Payments. The Borrower shall not (i) purchase or redeem any shares of
its capital stock, (ii) prepay, purchase or redeem any Indebtedness, (iii) lend or advance any
funds or (iv) repay any loans or advances to, for or from any of its Affiliates (the amounts
described in clauses (i) through (iv) being referred to as “Restricted Payments”), except
that the Borrower may (a) make Restricted Payments out of funds received pursuant to Article II and
(b) make other Restricted Payments (including the payment of dividends and Lien Release Dividends)
if, after giving effect thereto, no Termination Event shall have occurred and be continuing.

(aa) Notice of Litigation. The Borrower will promptly, but in no event later than two
(2) Business Days after any officer of the Borrower becoming aware thereof, deliver written notice
to the Agent regarding any claim, action, investigation or proceeding pending or threatened against
the Borrower and shall provide copies of any and all notices, certificates or documents delivered
to it in connection therewith.

	 	 	 	Section 5.2 Hedging Agreement.

(a) Immediately upon the occurrence of a Hedge Trigger and on or prior to each Funding Date
following the occurrence of a Hedge Trigger, the Borrower shall enter into one or more Hedge
Transactions, provided that each such Hedge Transaction shall:

(i) be entered into with a Hedge Counterparty and governed by a Hedging Agreement;

(ii) have a schedule of periodic monthly (or quarterly, as applicable) calculation
periods which settle on a Payment Date, the first of which commences on the Funding Date and
the last of which ends on the date of the last Scheduled Payment due to occur under the
Loans to which it relates;

(iii) have an amortizing notional amount (a) corresponding to a prepayment speed not to
exceed a 15% constant prepayment rate and (b) such that the Hedge Notional Amount in effect
on each day during the term of such Hedge Transactions shall be at least equal to the
product of the Hedge Percentage and the Hedge Amount, subject to any permitted excess or
shortfall in the Hedge Amount as may be allowed by a Hedge Amount notional band as agreed by
the Agent in its sole discretion;

(iv) provide, in the case of any interest rate swap, for two series of monthly (or
quarterly, as applicable) payments to be netted against each other, one such series being
payments to be made by the Borrower to a Hedge Counterparty by reference to a fixed rate for
that Hedge Transaction, and the other such series being payments to be made by the Hedge
Counterparty at a floating rate equal to “USD-LIBOR-BBA” (as defined in the ISDA
Definitions), the net amount of which shall be paid into the Collection Account (if payable
by the Hedge Counterparty) or, to the extent of Available Funds and from the Collection
Account, under Sections 2.8(a)(1)(i) and 2.8(b)(i) and (xii) of this
Agreement (if payable by the Borrower); and

(v) have a fixed rate or strike price and ensure that the Portfolio Yield on any
Determination Date after such Hedge Transaction has been entered into shall be not less than
the Minimum Portfolio Yield.

(b) Subject to, and without limiting the provisions of, Article VIII of this
Agreement, the Borrower hereby assigns to the Trustee on behalf of the Secured Parties, all right,
title and interest of Borrower in each Hedging Agreement, each Hedge Transaction, and all present
and future amounts payable by a Hedge Counterparty to Borrower under or in connection with the
respective Hedging Agreement and Hedge Transaction(s) with that Hedge Counterparty (“Hedge
Collateral”), and grants a security interest to the Trustee on behalf of the Secured Parties,
in the Hedge Collateral; provided, however, that so long as the Hedge Counterparty is the Agent or
any Affiliate thereof, the Trustee hereby grants to the Servicer a non-exclusive license (which
shall be deemed revoked upon the occurrence of a Termination Event) to exercise any rights under
any related Hedging Agreement or Hedge Transaction. The Borrower acknowledges that as a result of
such assignment the Borrower may not, except as set forth in the proviso to the immediately
preceding sentence, without the prior written consent of the Agent, exercise any rights under any
Hedging Agreement or Hedge Transaction, except for Borrower’s right under any Hedging Agreement to
enter into Hedge Transactions in order to meet the Borrower’s obligations under Section
5.2(a) hereof. Nothing herein shall have the effect of releasing the Borrower from any of its
obligations under any Hedging Agreement or any Hedge Transaction, nor be construed as requiring the
consent of the Agent or any Secured Party for the performance by Borrower of any such obligations.

	 	 	 	Section 5.3 Delivery of Loan Files

(a) The Borrower, or the Servicer on its behalf, shall deliver possession of all “instruments”
(within the meaning of Article 9 of the UCC) not constituting part of “chattel paper” (within the
meaning of Article 9 of the UCC) that evidence any Transferred Loan set forth on a Loan List,
including all Underlying Notes, and all portions of the Loan Files to the Trustee on behalf of the
Trustee on behalf of the Secured Parties prior to the applicable Funding Dates, in each case
endorsed in blank without recourse; provided, however, that notwithstanding the foregoing, with
respect to any Pre-Positioned Loan, the Borrower shall (i) have a copy of the executed Underlying
Note faxed to the Trustee on the applicable Funding Date with the original to be received by the
Trustee within two (2) Business Days after such Funding Date and (ii) within ten Business Days of
the Funding Date deliver all other portions of the Loan File in each case endorsed in blank without
recourse, where applicable. Pursuant to Section 7.10, the Borrower is required to deliver
such instruments and Loan Files to the Trustee for the benefit of the Secured Parties.
Accordingly, the Borrower hereby authorizes and directs the Servicer to deliver possession of all
such instruments and Loan Files to the Trustee on behalf of the Secured Parties, and agrees that
such delivery shall satisfy the condition set forth in the first sentence of this Section
5.3(a). The Servicer shall also identify on the Loan List (including any amendment thereof),
whether by attached schedule or marking or other effective identifying designation, all Transferred
Loans that are not evidenced by such instruments.

(b) Prior to the occurrence of a Termination Event or Servicer Termination Event, the Trustee
shall not record the Assignments of Mortgage delivered pursuant to Section 5.3(a) and the
definition of Loan Documents. Upon the occurrence of a Termination Event or a Servicer Termination
Event, the Trustee shall, if so directed by the Agent, cause to be recorded in the appropriate
offices each Assignment of Mortgage delivered to it with respect to all Transferred Loans except
those Transferred Loans covered by the proviso to the definition of Assignment of Mortgage. Each
such recording shall be at the expense of the Servicer; provided, however, to the extent the
Servicer does not pay such expenses, the Trustee shall be reimbursed pursuant to the provisions of
Section 2.8.

ARTICLE VI

PERFECTION OF TRANSFER AND

PROTECTION OF SECURITY INTERESTS

	 	 	 	Section 6.1 Custody of Transferred Loans.

The contents of each Loan File relating to a Transferred Loan shall be held in the custody of
the Trustee under the terms of the Purchase Agreement and this Agreement for the benefit of the
Secured Parties.

	 	 	 	Section 6.2 Filing.

On or prior to the Closing Date, the Borrower and Servicer shall cause the UCC financing
statement(s) referred to in Section 4.1(u)(v) hereof to be filed, and from time to time the
Servicer shall take and cause to be taken such actions and execute such documents as are necessary
or desirable or as the Agent may reasonably request to perfect and protect the first priority
perfected security interest of the Trustee on behalf of the Secured Parties in the Collateral
against all other Persons, including, without limitation, the filing of financing statements,
amendments thereto and continuation statements, the execution of transfer instruments and the
making of notations on or taking possession of all records or documents of title. Notwithstanding
the obligations of the Borrower and the Servicer set forth in the preceding sentence, the Borrower
and the Servicer hereby authorize the Agent to prepare and file, at the expense of the Servicer,
UCC financing statements (including but not limited to renewal, continuation or in lieu statements)
and amendments or supplements thereto or other instruments as the Agent may from time to time deem
necessary or appropriate in order to perfect and maintain the security interest granted hereunder
in accordance with the UCC.

	 	 	 	Section 6.3 Changes in Name, Structure or Location.

(a) During the term of this Agreement, neither the Servicer nor the Borrower shall change its
name, identity, structure, existence or location (as defined in Article 9 of the UCC) without first
giving at least 30 days’ prior written notice to the Agent and each other Secured Party.

(b) If any change in either the Servicer’s or the Borrower’s name, identity, structure,
existence, location (as defined in Article 9 of the UCC) or other action would make any financing
or continuation statement or notice of ownership interest or Lien relating to any Collateral
seriously misleading within the meaning of applicable provisions of the UCC, the Servicer, no later
than five (5) Business Days after the effective date of such change, shall file such amendments as
may be required to preserve and protect the security interest of the Trustee on behalf of the
Secured Parties in the Collateral and the proceeds thereof. Promptly after taking any of the
foregoing actions, the Servicer shall deliver to the Agent and each other Secured Party an Opinion
of Counsel reasonably acceptable to the Agent stating that, in the opinion of such counsel, all
financing statements or amendments necessary to preserve and protect the security interest of the
Trustee on behalf of the Secured Parties in the Collateral have been filed, and reciting the
details of such filing.

	 	 	 	Section 6.4 Chief Executive Office.

During the term of this Agreement, and subject to the other terms and provisions herein
relating to changes in location, the Originator will maintain its chief executive office in one of
the States of the United States.

	 	 	 	Section 6.5 Costs and Expenses.

The Servicer agrees to pay all reasonable costs and disbursements in connection with the
perfection and the maintenance of perfection, as against all third parties, of the Borrower’s and
the Trustee’s (on behalf of the Secured Parties) right, title and interest in and to the Collateral
(including, without limitation, the security interest in the Collateral related thereto and the
security interests provided for herein).

	 	 	 	Section 6.6 Sale Treatment.

The Borrower shall treat the transfer of Collateral made hereunder for all purposes (other
than for financial accounting purposes) as a sale and purchase on all of its relevant books,
records, financial statements and other applicable documents. Notwithstanding the preceding
sentence, for federal income tax purposes, the grant of a security interest in the Collateral by
the Borrower hereunder shall not be treated as a sale and purchase for federal income tax purposes.

	 	 	 	Section 6.7 Separateness from the Borrower.

The Borrower agrees to take or refrain from taking or engaging in with respect to the
Originator each of the actions or activities specified in the “substantive non-consolidation”
opinion of Alston & Bird LLP (including any certificates of the Originator attached thereto),
delivered on the Closing Date, upon which the conclusions therein are based.

ARTICLE VII

ADMINISTRATION AND SERVICING OF LOANS

	 	 	 	Section 7.1 Appointment of the Servicer.

The Borrower hereby appoints Patriot Capital as the Servicer hereunder to service the
Transferred Loans and enforce its respective rights and interests in and under each Transferred
Loan in accordance with the terms and conditions of this Article VII and to serve in such
capacity until the termination of its responsibilities pursuant to Section 7.25. Patriot
Capital hereby accepts such appointment and agrees to perform the duties and obligations with
respect thereto set forth herein. The Servicer and the Borrower hereby acknowledge that the Agent
and the other Secured Parties are third party beneficiaries of the obligations undertaken by the
Servicer hereunder.

	 	 	 	Section 7.2 Duties and Responsibilities of the Servicer.

(a) The Servicer shall conduct the servicing, administration and collection of the Transferred
Loans and shall take, or cause to be taken, all such actions as may be reasonably necessary or
advisable to service, administer and collect Transferred Loans from time to time on behalf of the
Borrower and as the Borrower’s agent. The Servicer will service, administer and make collections
on the Transferred Loans with reasonable care, using that degree of skill and attention that the
Servicer exercises with respect to all comparable loans that it services for itself or others.

(b) The duties of the Servicer (the “Servicing Duties”), as the Borrower’s agent,
shall include, without limitation:

(i) preparing and submitting of claims to, and post-billing liaison with, Obligors on
Transferred Loans;

(ii) maintaining all necessary Servicing Records with respect to the Transferred Loans
and providing such reports to the Borrower and the Agent in respect of the servicing of the
Transferred Loans (including information relating to its performance under this Agreement)
as may be required hereunder or as the Borrower or the Agent may reasonably request;

(iii) maintaining and implementing administrative and operating procedures (including,
without limitation, an ability to re-create Servicing Records evidencing the Transferred
Loans in the event of the destruction of the originals thereof) and keeping and maintaining
all documents, books, records and other information reasonably necessary or advisable for
the collection of the Transferred Loans (including, without limitation, records adequate to
permit the identification of each new Transferred Loan and all Collections of and
adjustments to each existing Transferred Loan); provided, however, that any Successor
Servicer shall only be required to re-create the Servicing Records of each prior Servicer to
the extent such records have been delivered to it in a format reasonably acceptable to such
Successor Servicer;

(iv) promptly delivering to the Borrower, the Agent and the Trustee, from time to time,
such information and Servicing Records (including information relating to its performance
under this Agreement) as the Borrower, the Agent and the Trustee may from time to time
reasonably request;

(v) identifying each Transferred Loan clearly and unambiguously in its Servicing
Records to reflect that such Transferred Loan is owned by the Borrower and pledged to the
Trustee on behalf of the Secured Parties;

(vi) complying in all material respects with the Credit and Collection Policy in regard
to each Transferred Loan;

(vii) complying in all material respects with all Applicable Laws with respect to it,
its business and properties and all Transferred Loans and Collections with respect thereto;

(viii) preserving and maintaining its existence, rights, licenses, franchises and
privileges as a corporation in the jurisdiction of its organization, and qualifying and
remaining qualified in good standing as a foreign corporation and qualifying to and
remaining authorized and licensed to perform obligations as Servicer (including enforcement
of collection of Transferred Loans on behalf of the Borrower, the Agent and the other
Secured Parties) in each jurisdiction where the failure to preserve and maintain such
existence, rights, franchises, privileges and qualification would materially adversely
affect (A) the rights or interests of the Borrower, the Agent and the other Secured Parties
in the Transferred Loans, (B) the collectibility of any Transferred Loan, or (C) the ability
of the Servicer to perform its obligations hereunder;

(ix) notifying the Borrower and the Agent of any material action, suit, proceeding,
dispute, offset deduction, defense or counterclaim that (1) is or is threatened to be
asserted by an Obligor with respect to any Transferred Loan; or (2) would reasonably be
expected to have a Material Adverse Effect; and

(c) The Borrower and Servicer hereby acknowledge that none of the Agent, any other Secured
Party nor the Trustee shall have any obligation or liability with respect to any Transferred Loans,
nor shall any of them be obligated to perform any of the obligations of the Servicer hereunder.

	 	 	 	Section 7.3 Authorization of the Servicer.

(a) Each of the Borrower and the Trustee on behalf of the Secured Parties hereby authorizes
the Servicer (including any successor thereto) to take any and all reasonable steps in its name and
on its behalf necessary or desirable and not inconsistent with the pledge of the Transferred Loans
to the Secured Parties, in the determination of the Servicer, to collect all amounts due under any
and all Transferred Loans, including, without limitation, endorsing any of their names on checks
and other instruments representing Collections, executing and delivering any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, and all other comparable
instruments, with respect to the Transferred Loans and, after the delinquency of any Transferred
Loan and to the extent permitted under and in compliance with Applicable Law, to commence
proceedings with respect to enforcing payment thereof, to the same extent as the Originator could
have done if it had continued to own such Loan. The Borrower shall furnish the Servicer (and any
successors thereto) with any powers of attorney and other documents necessary or appropriate to
enable the Servicer to carry out its servicing and administrative duties hereunder, and shall
cooperate with the Servicer to the fullest extent in order to ensure the collectibility of the
Transferred Loans. In no event shall the Servicer be entitled to make the Borrower, the Trustee,
the Agent or any other Secured Party a party to any litigation without such party’s express prior
written consent, or to make the Borrower a party to any litigation (other than any routine
foreclosure or similar collection procedure) without the Agent’s consent.

(b) After a Termination Event has occurred and is continuing, at the Agent’s direction, the
Servicer shall take such action as the Agent may deem necessary or advisable to enforce collection
of the Transferred Loans; provided, however, that (i) the Servicer shall not be required to take
any action hereunder at the request of the Agent if the taking of such action, in the reasonable
determination of the Servicer (after consultation with the Agent) would be in violation of any
Applicable Law; and (ii) the Agent may, at any time after a Termination Event has occurred and is
continuing, notify any Obligor with respect to any Transferred Loans of the assignment of such
Transferred Loans to the Agent and direct that payments of all amounts due or to become due to the
Borrower thereunder be made directly to the Agent or any servicer, collection agent or lock-box or
other account designated by the Agent and, upon such notification and at the expense of the
Borrower, the Agent may enforce collection of any such Transferred Loans and adjust, settle or
compromise the amount or payment thereof. The Agent shall give written notice to any Successor
Servicer of the Agent’s actions or directions pursuant to this Section 7.3(b), and no
Successor Servicer shall take any actions pursuant to this Section 7.3(b) that are outside
of its Credit and Collection Policy.

Section 7.4 Collection of Payments.

(a) Collection Efforts, Modification of Loans. The Servicer will make reasonable
efforts to collect all payments called for under the terms and provisions of the Transferred Loans
as and when the same become due, and will follow those collection procedures which it follows with
respect to all comparable Loans that it services for itself or others. The Servicer may not waive,
modify or otherwise vary any provision of a Transferred Loan, except as may be in accordance with
the provisions of the Credit and Collection Policy, which permits, among other things, the waiver
of any late payment charge or any other fees that may be collected in the ordinary course of
servicing any Loan included in the Collateral.

(b) [Reserved].

(c) Taxes and other Amounts. To the extent provided for in any Transferred Loan, the
Servicer will use its best efforts to collect all payments with respect to amounts due for taxes,
assessments and insurance premiums relating to such Transferred Loans or the Related Property and
remit such amounts to the appropriate Governmental Authority or insurer on or prior to the date
such payments are due.

(d) Payments to Concentration Account. On or before the Cut-Off Date with respect to
each Transferred Loan, the Servicer shall have instructed all Obligors to make all payments in
respect of all Transferred Loans included in the Collateral to the Concentration Account Bank for
deposit in the Concentration Account. All proceeds in the Concentration Account shall be
distributed into the Collection Account within two Business Days as provided in the Concentration
Account Agreement and the Intercreditor Agreement.

(e) Establishment of the Collection Account. The Borrower or the Servicer on its
behalf shall cause to be established, on or before the Closing Date, and maintained in the name of
the Borrower but under the control of the Trustee on behalf of the Secured Parties with an office
or branch of a depository institution or trust company organized under the laws of the United
States or any one of the States thereof or the District of Columbia (or any domestic branch of a
foreign bank) a segregated corporate trust account (the “Collection Account”) with
subaccounts thereof, including the Principal Collections Account and the Interest Collections
Account, for the purpose of receiving Collections from the Collateral; provided, however, that at
all times such depository institution or trust company shall be a depository institution organized
under the laws of the United States 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 “A-3” 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 of which such depository institution is a Subsidiary has either (1) a
long-term unsecured debt rating of “A-” or better by S&P and “A-3” 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 Agent and (ii) whose deposits are
insured by the Federal Deposit Insurance Corporation (any such depository institution or trust
company, a “Qualified Institution”) which Qualified Institution has agreed with the
Borrower, the Servicer and the Agent to comply with any and all orders, notices, requests and other
instructions originated by the Agent directing disposition of the funds in the Collection Account
without any further consent from the Borrower or the Servicer. In order to provide the Agent with
control over the Collection Account within the meaning of Section 9-104(a) of the UCC and any other
applicable law, the Borrower and the Servicer hereby agree that the Agent may at any time provide
Wells Fargo or any successor Person that maintains the Collection Account with instructions as to
the disposition of funds in the Collection Account or as to any other matters relating to the
Collection Account without any further consent from the Borrower or the Servicer. Wells Fargo
agrees with the Borrower, the Servicer and the Agent to comply with any and all orders, notices,
requests and other instructions originated by the Agent directing disposition of the funds in the
Collection Account without any further consent from the Borrower or the Servicer.

(f) Establishment of Reserve Account. The Borrower or the Servicer on its behalf
shall cause to be established, on or before the Closing Date, and maintained in the name of the
Borrower but under the control of the Trustee on behalf of the Secured Parties with an office or
branch of a Qualified Institution a segregated corporate trust account (the “Reserve
Account”) for the purpose of receiving deposits with respect to and maintaining therein the
Reserve Account Required Amount and, to the extent required pursuant to Section 2.8, to
fund payments thereunder; provided, however, that at all times such depository institution or trust
company shall be a Qualified Institution.

(g) Adjustments. If (i) the Servicer makes a deposit into the Collection Account in
respect of a Collection of a Loan in the Collateral and such Collection was received by the
Servicer in the form of a check that is not honored for any reason or (ii) the Servicer makes a
mistake with respect to the amount of any Collection and deposits an amount that is less than or
more than the actual amount of such Collection, the Servicer shall appropriately adjust the amount
subsequently deposited into the Collection Account to reflect such dishonored check or mistake.
Any Scheduled Payment in respect of which a dishonored check is received shall be deemed not to
have been paid.

(h) Released Amounts. The Agent and the other Secured Parties hereby agree to release
to the Borrower from the Collateral, and the Borrower hereby agrees to release to the Originator,
an amount equal to the Released Amounts immediately upon identification thereof and upon receipt of
an Officer’s Certificate of the Servicer, which release shall be automatic and shall require no
further act by the Trustee on behalf of the Secured Parties, or the other Secured Parties;
provided, that, the Trustee on behalf of the Secured Parties and the other Secured Parties shall
execute and deliver such instruments of release and assignment, or otherwise confirm the foregoing
release, as may reasonably be requested by the Originator in writing. Upon such release, such
Released Amounts shall not constitute and shall not be included in the Collateral.

	 	 	 	Section 7.5 Servicer Advances.

(a) For each Collection Period, if the Servicer determines that any Scheduled Payment (or
portion thereof) that was due and payable pursuant to a Loan included in the Collateral during such
Collection Period was not received prior to the end of such Collection Period, the Servicer may,
but shall not be obligated to, make an advance in an amount up to the amount of such delinquent
Scheduled Payment (or portion thereof) if the Servicer reasonably believes that the advance will be
reimbursed by the related Obligor; in addition, if on any day there are not sufficient funds on
deposit in the Interest Collection Account to pay accrued Interest and Program Fees on any Advance
the Collection Period of which ends on such day, the Servicer may make an advance in the amount
necessary to pay such Interest and Program Fees if the Servicer reasonably believes that the
advance will be reimbursed by the related Obligor (in either case, any such advance, a
“Servicer Advance”). Notwithstanding the preceding sentence, any successor Servicer will
not be obligated to make any Servicer Advances.

(b) The Servicer will deposit any Servicer Advances into the Collection Account on or prior to
11:00 a.m. (New York City time) on the related Payment Date, in immediately available funds. A
Servicer Advance for a delinquent payment on a Loan will not constitute a reclassification of the
delinquency status of such Loan for reporting purposes and the delinquent payment with respect to
such Loan will continue to age as if no payment has been made.

	 	 	 	Section 7.6 Realization Upon Defaulted Loans or Charged-Off Loans.

The Servicer will use its reasonable efforts to repossess or otherwise comparably convert the
ownership of any Related Property with respect to a Defaulted Loan or Charged-Off Loan and will act
as sales and processing agent for Related Property that it repossesses. The Servicer will follow
the practices and procedures set forth in the Credit and Collection Policy in order to realize upon
such Related Property; provided, that the Servicer shall not be required to pay or incur any
Liquidation Expense in connection with the realization of such Related Property unless, in the
reasonable opinion of the Servicer, such Liquidation Expenses will be recoverable by the Servicer
from the proceeds of sale or other disposition of such Related Property or otherwise. Without
limiting the foregoing, unless the Agent has specifically given instruction to the contrary, the
Servicer may sell any such Related Property with respect any Defaulted Loan or Charged-Off Loan to
the Servicer or its Affiliates for a purchase price equal to the then fair market value thereof;
any such sale to be evidenced by a certificate of a Responsible Officer of the Servicer delivered
to the Agent identifying the Defaulted Loan or Charged-Off Loan and the Related Property, setting
forth the sale price of the Related Property and certifying that such sale price is the fair market
value of such Related Property; provided, however, that if after giving effect to such sale (a) the
Availability is not greater than or equal to $0 or (b) an Unmatured Termination Event, a
Termination Event or a Servicer Termination Event would occur, then the Servicer prior to selling
any Related Property with respect a Defaulted Loan or Charged-Off Loan shall obtain the prior
written consent of the Agent. In any case in which any such Related Property has suffered damage,
the Servicer will not expend funds in connection with any repair or toward the repossession of such
Related Property unless it reasonably determines that such repair and/or repossession will increase
the Recoveries by an amount greater than the amount of such expenses. The Servicer will remit to
the Collection Account the Recoveries received in connection with the sale or disposition of
Related Property with respect to a Defaulted Loan or Charged-Off Loan.

Section 7.7 Maintenance of Insurance Policies.

The Servicer will require that each Obligor with respect to a Transferred Loan maintain an
Insurance Policy with respect to each Transferred Loan and the Related Property in accordance with
the Credit and Collection Policy. In connection with its activities as Servicer, the Servicer
agrees to present, on behalf of the Borrower and the Trustee on behalf of the Secured Parties, with
respect to the respective interests, claims to the insurer under each Insurance Policy and any such
liability policy, and to settle, adjust and compromise such claims, in each case, consistent with
the terms of each related Loan.

	 	 	 	Section 7.8 Representations and Warranties of the Servicer.

The Servicer hereby represents and warrants as follows:

(a) Organization and Good Standing; Power and Authority. The Servicer is a
corporation duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation with all requisite corporate power and authority to own its
properties and to conduct its business as presently conducted and to enter into and perform its
obligations pursuant to this Agreement and each other Transaction Document to which it is a party.

(b) Due Qualification. The Servicer is qualified to do business as a corporation, is
in good standing, and has obtained all licenses and approvals as required under the laws of all
jurisdictions in which the ownership or lease of its property and or the conduct of its business
(other than the performance of its obligations hereunder) requires such qualification, standing,
license or approval, except to the extent that the failure to so qualify, maintain such standing or
be so licensed or approved would not have an adverse effect on the interests of the Borrower or of
the Conduit Lender.

(c) Authorization. The Servicer has duly authorized the execution, delivery and
performance of this Agreement by all requisite corporate action.

(d) No Violation. The consummation of the transactions contemplated by, and the
fulfillment of the terms of, this Agreement by the Servicer (with or without notice or lapse of
time) will not (i) conflict with, result in any breach of any of the terms or provisions of, or
constitute a default under, the articles of incorporation or by-laws of the Servicer, or any
Contractual Obligation to which the Servicer is a party or by which it or any of its property is
bound, (ii) result in the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such Contractual Obligation (other than this Agreement or the Purchase Agreement),
or (iii) violate any Applicable Law.

(e) No Consents. All approvals, authorizations, consents, orders or other actions of
any Person or of any Governmental Authority (if any) required in connection with the due execution,
delivery and performance by the Servicer of this Agreement and any Transaction Document to which
the Servicer is a party, have been obtained.

(f) Binding Obligation. This Agreement constitutes a legal, valid and binding
obligation of the Servicer, enforceable against the Servicer in accordance with its terms, except
as such enforceability may be limited by (i) applicable Insolvency Laws and (ii) general principles
of equity (whether considered in a suit at law or in equity).

(g) No Proceedings. Except as previously disclosed to the Agent in writing, there are
no proceedings or investigations (formal or informal) pending or, to the best knowledge of the
Servicer, threatened against the Servicer, before any Governmental Authority (i) asserting the
invalidity of this Agreement, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or (iii) seeking any determination or ruling that would (in the
reasonable judgment of the Servicer) be expected to have a Material Adverse Effect.

(h) Reports Accurate. All Servicer Certificates, information, exhibits, financial
statements, documents, books, Servicer Records or reports furnished or to be furnished by the
Servicer to the Agent, the Trustee or any other Secured Party in connection with this Agreement are
and will be accurate, true and correct in all material respects.

(i) No Servicer Default. No event has occurred and is continuing and no condition
exists, or would result from a purchase in respect of any Investment or from the application of the
proceeds therefrom, which constitutes or may reasonably be expected to constitute a Servicer
Termination Event.

(j) Material Adverse Change. Since March 31, 2005, there has been no Material Adverse
Change with respect to the initial Servicer.

(k) Credit and Collection Policy. Since the Closing Date, there have been no material
changes in any Credit and Collection Policy other than in accordance with this Agreement. Since
such date, the Servicer has at all times complied with the Credit and Collection Policy with
respect to each Loan.

(l) RIC/BDC Requirements. The initial Servicer is in compliance with the RIC/BDC
Requirements.

	 	 	 	Section 7.9 Covenants of the Servicer.

The Servicer hereby covenants that:

(a) Compliance with Law. The Servicer will comply in all material respects with all
Applicable Laws, including those with respect to the Transferred Loans, the Related Property and
Loan Documents or any part thereof.

(b) Preservation of Corporate Existence. The Servicer will preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction of its formation, and
qualify and remain qualified in good standing as a foreign corporation in each jurisdiction where
the failure to maintain such existence, rights, franchises, privileges and qualification could
reasonably be expected to have a Material Adverse Effect.

(c) Obligations with Respect to Loans. The Servicer will duly fulfill and comply with
all obligations on the part of the Borrower to be fulfilled or complied with under or in connection
with each Loan and will do nothing to impair the rights of the Borrower or the Trustee on behalf of
the Secured Parties in, to and under the Collateral.

(d) Preservation of Security Interest. The Borrower or the Servicer on behalf of the
Borrower will execute and file (or cause the execution and filing of) such financing and
continuation statements and any other documents and take such other actions that may be required by
any law or regulation of any Governmental Authority to preserve and protect fully the interest of
the Trustee on behalf of the Secured Parties in, to and under the Collateral.

(e) RIC/BDC Requirements. The initial Servicer shall at all times maintain compliance
with the RIC/BDC Requirements.

(f) Change of Name or Location; Records. The Servicer (i) shall not change its name,
move the location of its principal executive office or change its jurisdiction of incorporation,
without 30 days’ prior written notice to the Borrower, the Agent, and (ii) shall not move, or
consent to the Trustee moving the Loan Documents without 30 days’ prior written notice to the
Borrower, the Agent and (iii) will promptly take all actions required of each relevant jurisdiction
in order to continue the first priority perfected security interest of the Trustee on behalf of the
Secured Parties, in all Collateral including delivery of an Opinion of Counsel.

(g) Credit and Collection Policy. The initial Servicer will (i) comply in all
material respects with the Credit and Collection Policy in regard to each Loan and the Related
Property included in the Collateral, including, without limitation, performing the Loan grading and
asset valuation functions specified in the Credit and Collection Policy on a quarterly basis, and
(ii) furnish to the Agent, prior to its effective date, prompt notice of any change in the Credit
and Collection Policy. The initial Servicer will not agree or otherwise permit (x) any change in
the Credit and Collection Policy which would materially and adversely affect or impair the
collectibility of any Loan, or (y) any material change in the Credit and Collection Policy without
the prior written consent of the Agent (in its sole discretion).

(h) Termination Events. The Servicer will furnish to the Agent, as soon as possible
and in any event within three Business Days after an officer of the Servicer becomes aware of the
occurrence of each Termination Event or Unmatured Termination Event, a written statement setting
forth the details of such event and the action that the Servicer proposes to take with respect
thereto.

(i) Extension or Amendment of Loans. The Servicer will not, except as otherwise
permitted in Section 7.4(a), extend, amend or otherwise modify the terms of any Transferred
Loan.

(j) Other. The Servicer will furnish to the Borrower and the Agent such other
information, documents records or reports respecting the Loans or the condition or operations,
financial or otherwise of the Servicer as the Borrower and the Agent may from time to time
reasonably request in order to protect the respective interests of the Borrower, the Trustee on
behalf of the Secured Parties or the other Secured Parties under or as contemplated by this
Agreement.

(k) Agented Notes. Except as provided in Section 7.4(a), the Servicer and the
Originator covenant that they shall not without the prior written consent of the Agent (i) make or
consent to any amendment or alteration of the terms of any Agented Note or related Loan Documents,
including without limitation the payments due thereunder, (ii) undertake to release or authorize or
consent to the release of any collateral or security for the Agented Notes, (iii) accelerate or
extend the maturity of any Agented Note or (iv) waive any claim against the Obligor or any
applicable guarantor thereof, where the effect of any of the foregoing would have a material
adverse effect on the Collateral, the Agent or any other Secured Party.

(l) Grade 4 Loan. In the event that the Originator or an Affiliate thereof provides
to any Obligor an Add-On Loan the proceeds of which are intended to be used for the purpose of
providing funds for the Obligor to make an interest and/or principal payment on a Loan included in
the Collateral, the Servicer shall designate such Loan a Grade 4 Loan or a Grade 5 Loan through the
date that is one year after the date that such Add-On Loan is made; provided, that, this
Section 7.9(l) shall not apply in connection with Add-On Loans that are part of a single
plan of financing (regardless of when such plan of financing is actually funded) involving Add-On
Loans to the Obligor by, in addition to the Originator, a Person who is neither the Originator nor
an Affiliate thereof; provided, further, that, the restriction set forth in this Section
7.9(l) shall not apply after the date on which a subsequent Add-On Loan is made to the Obligor
and neither the Originator nor an Affiliate thereof is a party to such subsequent Add-On Loan.

(m) Inspection of Records. The Servicer will, at any time and from time to time
during regular business hours, as requested by the Agent, permit the Agent, or its agents or
representatives, (i) to examine and make copies of and take abstracts from all books, records and
documents (including computer tapes and disks) relating to the Loans and the related Loan Documents
and (ii) to visit the offices and properties of the Borrower, the Originator or the Servicer, as
applicable, for the purpose of examining such materials described in clause (i), and to discuss
matters relating to the Loans or the Borrower’s, the Originator’s or the Servicer’s performance
hereunder, under the Loan Documents and under the other Transaction Documents to which such Person
is a party with such officers, directors, employees or independent public accountants of the
Borrower, the Originator or the Servicer, as applicable, as might reasonably be determined to have
knowledge of such matters; provided that at all times prior to the occurrence of a Termination
Event, the Agent will give the Servicer at least two Business Days’ notice of any examination or
audit to be undertaken pursuant to this Section 7.9(m).

(n) Keeping of Records. The Servicer will maintain and implement administrative and
operating procedures (including an ability to recreate records evidencing Loans and the related
Loan Documents in the event of the destruction of the originals thereof), and keep and maintain,
all documents, books, computer tapes, disks, records and other information reasonably necessary or
advisable for the collection of all Loans (including records adequate to permit the daily
identification of each new Loan and all Collections of and adjustments to each existing Loan). The
Borrower shall give the Agent prompt notice of any material change in its administrative and
operating procedures referred to in the previous sentence.

(o) Compliance with Loans. The Servicer will (i) at its own expense, timely and fully
perform and comply with all material provisions, covenants and other promises required to be
observed by it under the Loans and the related Loan Documents; and (ii) timely and fully comply in
all material respects with the Credit and Collection Policy with respect to each Loan and the
related Loan Document.

(p) Consolidation or Merger of the Servicer. The initial Servicer shall not
consolidate or merge with or into, or sell, lease or transfer all or substantially all of its
assets to, any other Person, unless, in the case of any such action (i) no Termination Event or
Material Adverse Effect would occur or be reasonably likely to occur as a result of such
transaction, (ii) the Agent provides its prior written consent to such transaction and (iii) such
Person executes and delivers to the Agent an agreement by which such Person assumes the obligations
of the Servicer hereunder and under the other Transaction Documents to which it is a party, or
confirms that such obligations remain enforceable against it, together with such certificates and
opinions of counsel as Agent may reasonably request.

(q) Compliance with Operating Agreement Accounting/Recordkeeping Requirements. The
initial Servicer shall comply with, and not take any action, or permit or acquiesce in any action
being taken which would have the effect, directly, or indirectly, of causing any breach of, the
covenants of the initial Servicer set forth in the Borrower’s operating agreement.

	 	 	 	Section 7.10 The Trustee.

(a) Appointment; Custodial Duties. The Borrower and the Agent each hereby appoints
Wells Fargo to act as Trustee hereunder, for the benefit of the Borrower, the Agent and the Secured
Parties, as provided herein. Wells Fargo hereby accepts such appointment and agrees to perform the
duties and responsibilities with respect thereto set forth herein.

The Trustee shall act as custodian for, and take and retain custody of the Loan Files
delivered by the Borrower or on its behalf pursuant to Section 5.3 hereof in accordance
with the terms and conditions of this Agreement, all for the benefit of the Secured Parties and
subject to the Lien thereon in favor of the Secured Parties. Within one Business Day of receipt of
any such Loan File, the Trustee shall deliver to the Agent a custodial receipt in form of
Exhibit J hereto. Within five Business Days of its receipt of any Loan File and the
related Loan Checklist, the Trustee shall review the related Loan File to verify that each document
listed on the Loan Checklist has been received, is executed (where applicable) and has no missing
or mutilated pages and that each Underlying Note with respect to each Loan is an original note
(except that with respect to any Pre-Positioned Loan, the Trustee shall have received a faxed copy
of each Underlying Note and within two Business Days after the related Funding Date, the Trustee
shall have received an original of each Underlying Note), and to confirm (in reliance on the
related Loan number and Obligor name as listed on the Loan List) that such Loan is referenced on
the related Loan List and shall, at the expiration of such period, deliver to the Agent a
certification in the form of Exhibit K hereto. Except as described in the preceding
sentence with respect to Underlying Notes, the Trustee may fulfill its obligations hereunder by
accepting and reviewing copies of all documents in a Loan File. In order to facilitate the
foregoing review by the Trustee, in connection with each delivery of Loan Files hereunder to the
Trustee, the Servicer shall provide to the Trustee an electronic file in a mutually acceptable
electronic format that contains the related Loan List. If, at the conclusion of such review, the
Trustee shall determine that any such Loan Document is not executed (where applicable), is missing
pages or has mutilated pages, that any Underlying Note is not an original as required, that any
document listed on the Loan Checklist is missing from the Loan File or that any such document
received in the Loan File is not listed on the related Loan Checklist, the Trustee shall promptly
notify the Borrower and the Agent of such determination by providing an exception report to such
Persons setting forth, with particularity, such of the foregoing defects as may exist. In
addition, unless instructed otherwise in writing by the Borrower and the Agent within ten days of
the Trustee’s delivery of such report, the Trustee shall return any Loan File not referenced on
such Loan List to the Borrower. Other than the foregoing, the Trustee shall not have any
responsibility for reviewing any Loan File.

In taking and retaining custody of the Loan Files, the Trustee shall be acting as the agent of
the Agent and the other Secured Parties; provided, that, the Trustee makes no representations as to
the existence, perfection or priority of any Lien on the Loan Files or the instruments therein;
provided, further, that, the Trustee’s duties as agent shall be limited to those expressly
contemplated herein. All Loan Files shall be kept in fire-resistant vaults or cabinets at the
locations specified on Schedule V attached hereto, or at such other office as shall be
specified to the Agent and the Borrower by the Trustee in a written notice delivered at least 45
days prior to such change. All Loan Files shall be segregated with an appropriate identifying
label and maintained in such a manner so as to permit retrieval and access. All Loan Files shall
be clearly segregated from any other documents or instruments maintained by the Trustee. The
Trustee shall clearly indicate that such Loan Files are the sole property of Borrower, subject to
the security interest of the Trustee on behalf of the Secured Parties. In performing its duties,
the Trustee shall use the same degree of care and attention as it employs with respect to similar
loan files that it holds as trustee for others. Except as otherwise provided herein, the Trustee
shall have no power or authority to assign, hypothecate or otherwise dispose of Loan Files.

(b) Concerning the Trustee.

(i) Except for its willful misconduct, gross negligence or bad faith, the Trustee may
conclusively rely on and shall be fully protected in acting upon any certificate,
instrument, opinion, notice, letter, telegram or other document delivered to it and that in
good faith it reasonably believes to be genuine and that has been signed by the proper party
or parties. Except for its willful misconduct, gross negligence or bad faith, the Trustee
may rely conclusively on and shall be fully protected in acting upon the written
instructions of any designated officer of the Agent.

(ii) The Trustee may consult counsel satisfactory to it and the advice or opinion of
such counsel shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in accordance with the
advice or opinion of such counsel.

(iii) The Trustee shall not be liable for any error of judgment, or for any act done or
step taken or omitted by it, in good faith, or for any mistakes of fact or law, or for
anything that it may do or refrain from doing in connection herewith except in the case of
its willful misconduct, gross negligence or bad faith.

(iv) The Trustee makes no warranty or representation and shall have no responsibility
(except as expressly set forth in this Agreement) as to the content, enforceability,
completeness, validity, sufficiency, value, genuineness, ownership or transferability of the
Loans or the Loan Documents, and will not be required to and will not make any
representations as to the validity or value of any of the Loans. The Trustee shall not be
obligated to take any legal action hereunder that might in its judgment involve any expense
or liability unless it has been furnished with an indemnity reasonably satisfactory to it.

(v) The Trustee shall have no duties or responsibilities except such duties and
responsibilities as are specifically set forth in this Agreement and no covenants or
obligations shall be implied in this Agreement against the Trustee.

(vi) The Trustee shall not be required to expend or risk its own funds in the
performance of its duties hereunder.

(vii) It is expressly agreed and acknowledged that the Trustee is not guaranteeing
performance of or assuming any liability for the obligations of the other parties hereto or
any parties to the Loans.

(viii) In case any reasonable question arises as to its duties hereunder, the Trustee
may, prior to the occurrence of a Termination Event or the Termination Date, request
instructions from the Servicer and may, after the occurrence of a Termination Event or the
Termination Date, request instructions from the Agent, and shall be entitled at all times to
refrain from taking any action unless it has received instructions from the Servicer or the
Agent, as applicable. The Trustee shall in all events have no liability, risk or cost for
any action taken pursuant to and in compliance with the instruction of the Agent.

(c) Release for Servicing. From time to time and as appropriate for the enforcement
or servicing of any of the Transferred Loans, the Trustee is hereby authorized, upon receipt from
the Servicer on behalf of the Borrower, of a written request for release of Loan Files and receipt
in the form annexed hereto as Exhibit L and upon receipt from the Agent of its written
consent to such request and receipt, to release to the Servicer the related Loan File set forth in
such request and receipt to the Servicer; provided, however, notwithstanding the foregoing or any
other provision of this Agreement, upon its receipt of written instructions from the Agent, the
Trustee shall cease releasing Loan Files to the Servicer. All Loan Files so released to the
Servicer on behalf of the Borrower shall be held by the Servicer in trust for the benefit of the
Borrower, the Agent and the other Secured Parties, with respect to their respective interests, in
accordance with the terms of this Agreement. The Servicer, on behalf of the Borrower, shall return
to the Trustee the Loan File when the Servicer’s need therefor in connection with such foreclosure
or servicing no longer exists, unless the Loan shall be liquidated, in which case, upon receipt of
an additional request for release of Loan Files and receipt certifying such liquidation from the
Servicer to the Trustee in the form annexed hereto as Exhibit L, the Servicer’s request and
receipt submitted pursuant to the first sentence of this Section 7.10(c) shall be released
by the Trustee to the Servicer. Notwithstanding anything in this Section 7.10(c) to the
contrary, in no event shall the Trustee release any Loan File or part thereof to the Servicer for
any reason without the Agent’s prior written consent.

(d) Release for Payment. Upon receipt by the Trustee (with a copy to the Agent) of
the Servicer’s request for release of Loan Files and receipt in the form annexed hereto as
Exhibit L (which certification shall include a statement to the effect that all amounts
received in connection with such payment or repurchase have been credited to the Collection Account
as provided in this Agreement), the Trustee shall promptly release the related Loan File to the
Servicer, on behalf of the Borrower.

(e) Trustee Compensation. As compensation for its activities hereunder, the Trustee
shall be entitled to a Trustee Fee to the extent of funds available therefor pursuant to the
provision of Sections 2.8(a)(1)(v) and 2.8(b)(v). The Trustee’s entitlement to
receive the Trustee Fee (other than due and unpaid Trustee Fees owed through such date) shall cease
on the earlier to occur of: (i) its removal as Trustee or (ii) the termination of this Agreement.

(f) Replacement of the Trustee. The Trustee may be replaced by the Borrower with the
prior consent of the Agent; provided, however, no such replacement shall be effective until a
replacement Trustee has been appointed, has agreed to act as Trustee hereunder and has received all
Loan Files held by the previous Trustee.

(g) Release of Loan Documents Following a Lien Release Dividend. To the extent that
portions of Transferred Loans are transferred pursuant to a Lien Release Dividend under Section
2.16 and such portions of transferred Loans are part of a Permitted Securitization Transaction,
the Trustee may, but only with the Agent’s prior written consent, and upon terms and conditions
satisfactory to the Agent, including without limitation the execution by the servicer of the sold
Loans of all such documents as the Agent may require, release original Loan Documents (excluding
the related original Underlying Note(s) evidencing the portion of the Transferred Loan remaining as
part of the Collateral) to the servicer of such sold Transferred Loans for the purposes of
enforcing or servicing such Loans in connection with a Permitted Securitization Transaction.

(h) The Agent and the Conduit Lender hereby appoint Wells Fargo, in its capacity as Trustee
hereunder, as their agent for the purposes of perfection of a security interest in the Loans.
Wells Fargo, in its capacity as Trustee hereunder, hereby accepts such appointment and agrees to
perform the duties set forth in Section 7.10.

(i) The Trustee shall provide to the Servicer and the Backup Servicer (if the Backup Servicer
is not the Trustee) a copy of all written notices and communications identified as being sent to it
in connection with the Loans and the other Collateral held hereunder which it receives from the
related Obligor, participating bank and/or agent bank. In no instance shall the Trustee be under
any duty or obligation to take any action on behalf of the Servicer in respect of the exercise of
any voting or consent rights, or similar actions, unless it receives specific written instructions
from the Servicer, prior to the occurrence of a Termination Event or the Agent, after the
occurrence of a Termination Event, in which event the Trustee shall vote, consent or take such
other action in accordance with such instructions.

(j) (i) Each of the Agent and each other Secured Party further authorizes the Trustee to take
such action as agent on its behalf and to exercise such powers under this Agreement and the other
Transaction Documents as are expressly delegated to the Trustee by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto. In furtherance, and without
limiting the generality of the foregoing, each Secured Party hereby appoints the Trustee as its
agent to execute and deliver all further instruments and documents, and take all further action
that the Trustee or the Agent deems necessary or desirable in order to perfect, protect or more
fully evidence the security interests granted by the Borrower hereunder, or to enable any of them
to exercise or enforce any of their respective rights hereunder, including, without limitation, the
execution by the Trustee as secured party/assignee of such financing or continuation statements, or
amendments thereto or assignments thereof, relative to all or any of the Loans now existing or
hereafter arising, and such other instruments or notices, as may be necessary or appropriate for
the purposes stated hereinabove. Nothing in this Section 7.10(i) shall be deemed to relieve the
Borrower of its obligation to protect the interest of the Trustee (for the benefit of the Secured
Parties) in the Collateral, including to file financing and continuation statements in respect of
the Collateral in accordance with this Agreement.

(ii) The Agent may direct the Trustee to take any such incidental action hereunder.
With respect to other actions which are incidental to the actions specifically delegated to
the Trustee hereunder, the Trustee shall not be required to take any such incidental action
hereunder, but shall be required to act or to refrain from acting (and shall be fully
protected in acting or refraining from acting) upon the direction of the Agent; provided
that the Trustee shall not be required to take any action hereunder at the request of the
Agent, any Secured Parties or otherwise if the taking of such action, in the reasonable
determination of the Trustee, (x) shall be in violation of any Applicable Law or contrary to
any provisions of this Agreement or (y) shall expose the Trustee to liability hereunder or
otherwise (unless it has received indemnity which it reasonably deems to be satisfactory
with respect thereto). In the event the Trustee requests the consent of the Agent and the
Trustee does not receive a consent (either positive or negative) from the Agent with 10
Business Days of its receipt of such request, then the Agent shall be deemed to have
declined to consent to the relevant action.

(iii) Except as expressly provided herein, the Trustee shall not be under any duty or
obligation to take any affirmative action to exercise or enforce any power, right or remedy
available to it under this Agreement or any of the Loan Documents (i) unless and until (and
to the extent) expressly so directed by the Agent or (ii) prior to the occurrence of the
Termination Date pursuant to clause (b) of the definition of “Termination Date” (and upon
such occurrence, the Trustee shall act in accordance with the written instructions of the
Agent pursuant to clause (i)). The Trustee shall not be liable for any action taken,
suffered or omitted by it in accordance with the request or direction of any Secured Party,
to the extent that this Agreement provides such Secured Party the right to so direct the
Trustee, or the Agent. The Trustee shall not be deemed to have notice or knowledge of any
matter hereunder, including a Termination Event, unless a Responsible Officer of the Trustee
has knowledge of such matter or written notice thereof is received by the Trustee.

	 	 	 	Section 7.11 Representations and Warranties of the Trustee.

The Trustee represents and warrants as follows:

(a) Organization and Good Standing. It is a national banking association duly
organized, validly existing and in good standing under the laws of the United States with all
requisite power and authority to own its properties and to conduct its business as presently
conducted and to enter into and perform its obligations pursuant to this Agreement.

(b) Due Qualification. It is duly qualified to do business as a national banking
association and is in good standing, and has obtained all necessary licenses and approvals in all
jurisdictions in which the ownership or lease of its property or the conduct of its business
requires such qualification, licenses or approval except where the failure to so qualify or have
such licenses or approvals has not had, and would not be reasonably expected to have, a Material
Adverse Effect.

(c) Power and Authority. It has the power and authority to execute and deliver this
Agreement and each other Transaction Document to which it is a party and to carry out their
respective terms. It has duly authorized the execution, delivery and performance of this Agreement
and each other Transaction Document to which it is a party by all requisite action.

(d) No Violation. The consummation of the transactions contemplated by, and the
fulfillment of the terms of, this Agreement and each other Transaction Document to which it is a
party by it will not (i) conflict with, result in any breach of any of the terms or provisions of,
or constitute a default under, its articles of association, or any Contractual Obligation to which
it is a party or by which it or any of its property is bound, (ii) result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of any Contractual
Obligation, or (iii) violate any Applicable Law.

(e) No Consents. No consent, approval, authorization, order, registration, filing,
qualification, license or permit (collectively, the “Consents”) of or with any Governmental
Authority having jurisdiction over it or any of its respective properties is required to be
obtained in order for it to enter into this Agreement or perform its obligations hereunder.

(f) Binding Obligation. This Agreement constitutes its legal, valid and binding
obligation, enforceable in accordance with its terms, except as such enforceability may be limited
by (i) applicable Insolvency Laws and (ii) general principles of equity (whether considered in a
suit at law or in equity).

(g) No Proceedings. There are no proceedings or investigations pending or, to the
best of its knowledge, threatened, against it before any Governmental Authority (i) asserting the
invalidity of this Agreement, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or (iii) seeking any determination or ruling that might (in its
reasonable judgment) have a Material Adverse Effect.

	 	 	 	Section 7.12 Covenants of the Trustee.

The Trustee hereby covenants that:

(a) Compliance with Law. The Trustee will comply in all material respects with all
Applicable Laws.

(b) Preservation of Existence. The Trustee will preserve and maintain its existence,
rights, franchises and privileges as a national banking association in good standing under the laws
of the United States.

(c) No Bankruptcy Petition. With respect to Fairway, prior to the date that is one
year and one day (or such longer preference period as shall then be in effect) after the payment in
full of all amounts owing in respect of all outstanding Commercial Paper Notes issued by Fairway
and, with respect to the Borrower, prior to the date that is one year and one day (or such longer
preference period as shall then be in effect) after the Collection Date, it will not institute
against the Borrower or Fairway, or join any other Person in instituting against the Borrower or
Fairway, any Insolvency Proceedings or other similar proceedings under the laws of the United
States or any state of the United States. This Section 7.12(c) will survive the
termination of this Agreement.

(d) Loan Files. The Trustee will not dispose of any documents constituting the Loan
Files in any manner that is inconsistent with the performance of its obligations as the Trustee
pursuant to this Agreement and will not dispose of any Loan except as contemplated by this
Agreement.

(e) Location of Loan Files. The Loan Files shall remain at all times in the
possession of the Trustee at the address set forth on Annex A hereto unless notice of a different
address is given in accordance with the terms hereof.

(f) No Changes in Trustee Fee. The Trustee will not make any changes to the Trustee
Fee set forth in the Backup Servicer and Trustee Fee Letter without the prior written approval of
the Agent.

	 	 	 	Section 7.13 The Backup Servicer.

(a) Appointment. The Borrower and the Agent hereby appoint Wells Fargo to act as
Backup Servicer for the benefit of the Borrower, the Agent and the other Secured Parties in
accordance with the terms of this Agreement. Wells Fargo hereby accepts such appointment and
agrees to perform the duties and responsibilities with respect thereto set forth herein.

(b) Duties. On or before the initial Funding Date, and until the receipt by the
Servicer of a Servicer Termination Notice, the Backup Servicer shall perform, on behalf of the
Borrower and the Agent and the other Secured Parties, the following duties and obligations:

(i) On or before the Closing Date, the Backup Servicer shall accept from the Servicer
delivery of the information required to be set forth in the Monthly Reports in hard copy and
in an agreed upon electronic format.

(ii) Not later than 1:00 p.m. (New York City time) on each Reporting Date, the Servicer
shall provide to the Backup Servicer and the Backup Servicer shall accept delivery of tape
in an agreed upon electronic format (the “Tape”) from the Servicer, which shall
include but not be limited to the following information: (x) for each Transferred Loan, the
name and number of the related Obligor, the collection status, the Loan status, the date of
each Scheduled Payment, the Outstanding Loan Balance and the Purchased Loan Balance, (y) the
Aggregate Purchased Loan Balance, and (z) the Aggregate Outstanding Loan Balance.

(iii) Prior to the related Payment Date, the Backup Servicer shall review the Monthly
Report to ensure that it is complete on its face and that the following items in such
Monthly Report have been accurately calculated, if applicable, and reported: (A) the
Availability, (B) the Aggregate Purchased Loan Balance, (C) the Aggregate Outstanding Loan
Balance, (D) the Backup Servicer Fee, (E) the Loans that are 45 or more days Delinquent
(other than Defaulted Loans and Charged-Off Loans), (F) the Defaulted Loans (other than
Charged-Off Loans), (G) the Charged-Off Loans, (H) the Portfolio Yield, (I) the Rolling
Three-Month Portfolio Yield, (J) the Rolling Three-Month Default Ratio, (K) the Rolling
Three-Month Charged-Off Ratio, (L) the Estimated Payment Amount and (M) the Reserve Account
Required Amount. The Backup Servicer shall notify the Agent, the Borrower and the Servicer
of any disagreements with the Monthly Report based on such review not later than the
Business Day preceding such Payment Date to such Persons.

(iv) If the Borrower or the Servicer disagrees with the report provided under
Section 7.13(b)(iii) by the Backup Servicer or if the Borrower or the Servicer or
any subservicer has not reconciled such discrepancy, the Backup Servicer agrees to confer
with the Borrower or the Servicer to resolve such disagreement on or prior to the next
succeeding Determination Date and shall settle such discrepancy with the Borrower or the
Servicer if possible, and notify the Agent of the resolution thereof. The Borrower or the
Servicer hereby agree to cooperate at their own expense, with the Backup Servicer in
reconciling any discrepancies herein. If within twenty (20) days after the delivery of the
report provided under Section 7.13(b)(iii) by the Backup Servicer, such discrepancy
is not resolved, the Backup Servicer shall promptly notify the Borrower and the Agent of the
continued existence of such discrepancy. Following receipt of such notice by the Agent, the
Servicer shall deliver to the Borrower, the Agent, the Secured Parties and the Backup
Servicer no later than the related Payment Date a certificate describing the nature and
amount of such discrepancies and the actions the Servicer proposes to take with respect
thereto.

With respect to the duties described in this Section 7.13(b), in the absence of bad
faith or gross negligence, the Backup Servicer, in the performance of its duties and obligations
hereunder, is entitled to rely conclusively, and shall be fully protected in so relying, on the
contents of each Tape, including, but not limited to, the completeness and accuracy thereof,
provided by the Servicer.

(c) Transition to Servicer Role. After the receipt by the Servicer of an effective
Servicer Termination Notice, all authority, power, rights and responsibilities of the Servicer,
under this Agreement, whether with respect to the Loans or otherwise, shall pass to and be vested
in the Backup Servicer, subject to and in accordance with the provisions of Section 7.26,
as long as the Backup Servicer is not prohibited by Applicable Law from fulfilling the same, as
evidenced by an Opinion of Counsel.

(d) Merger or Consolidation. 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.

(e) Backup Servicing Compensation. As compensation for its backup servicing
activities hereunder, the Backup Servicer shall be entitled to receive the Backup Servicer Fee to
the extent of funds available therefor pursuant to the provision of Sections 2.8(a)(1)(iv)
and 2.8(b)(iv). The Backup Servicer’s entitlement to receive the Backup Servicer Fee
(other than due and unpaid Backup Servicer Fees owed through such date) shall cease on the earliest
to occur of: (i) it becoming the Successor Servicer, (ii) its removal as Backup Servicer, or (iii)
the Termination of this Agreement.

(f) Backup Servicer Removal. The Backup Servicer may be removed with or without cause
by the Agent, or by the Borrower with the prior written approval of the Agent, by notice given in
writing to the Backup Servicer. In the event of any such removal, a replacement Backup Servicer
may be appointed by (i) the Borrower, acting with the written consent of the Agent or (ii) if no
such replacement is appointed within 30 days following such removal, by the Agent.

(g) Scope of Backup Servicing Duties. 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, 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 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 gross negligence or bad faith of it or them or the failure
to perform materially in accordance with this Agreement.

(h) Limitation on Liability. Except for its willful misconduct, gross negligence or
bad faith, 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 Borrower, the Agent, the Trustee,
the Backup Servicer and the other Secured Parties each agree to look only to the Servicer to
perform such obligations. Except for its willful misconduct, gross negligence or bad faith, 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 their respective
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. Except for its gross
negligence or bad faith, 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 Loan or Loan
Document under Applicable Law, (iv) the breach or inaccuracy of any representation or warranty made
with respect to any Loan, or (v) the acts or omissions of any successor Backup Servicer.

(i) Possible Dual Capacity. The parties expressly acknowledge and consent to Wells
Fargo acting in the possible dual capacity of Backup Servicer or successor Servicer and in the
capacity of Trustee. Wells Fargo may, in such dual capacity, 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 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, acts of bad faith and willful misconduct by Wells Fargo.

(j) Subservicers. The Backup Servicer may, with the prior written consent of the
Agent, subservice any and all of its duties and responsibilities hereunder, including but not
limited to its duties as successor Servicer hereunder should the Backup Servicer become the
successor Servicer pursuant to Section 7.26 hereof. Notwithstanding any subservicing
agreement or other delegation of duties to a subservicer, so long as this Agreement shall remain
effective, the Backup Servicer (whether in its capacity as Backup Servicer or as a successor
Servicer) shall remain obligated and primarily liable to the Trustee and the other Secured Parties,
for the servicing and administering of the Loans in accordance with the provisions of this
Agreement, and, to the extent applicable, the Credit and Collection Policy, without diminution of
such obligation or liability by virtue of such subservicing agreement or other arrangements with
third parties pursuant to this clause (j) or by virtue of indemnification from any
subservicer and to the same extent and under the same terms and conditions as if the Backup
Servicer alone were, as applicable, servicing and administering the Loans.

	 	 	 	Section 7.14 Representations and Warranties of the Backup Servicer.

The Backup Servicer hereby represents and warrants as follows:

(a) Organization and Good Standing. It is a national banking association duly
organized, validly existing and in good standing under the laws of the United States with all
requisite power and authority to own its properties and to conduct its business as presently
conducted and to enter into and perform its obligations pursuant to this Agreement.

(b) Due Qualification. The Backup Servicer is duly qualified to do business as a
national banking association and is in good standing, and have obtained all necessary licenses and
approvals in all jurisdictions in which the ownership or lease of its property and the conduct of
its business requires such qualification, licenses or approvals except where the failure to so
qualify or have such licenses or approvals has not had, and would not be reasonably expected to
have, a Material Adverse Effect.

(c) Power and Authority. It has the power and authority to execute and deliver this
Agreement and to carry out its terms. It has duly authorized the execution, delivery and
performance of this Agreement by all requisite action.

(d) No Violation. The consummation of the transactions contemplated by, and the
fulfillment of the terms of, this Agreement by it will not (i) conflict with, result in any breach
of any of the terms or provisions of, or constitute a default under, its articles of association or
any Contractual Obligation by which it or any of its property is bound, (ii) result in the creation
or imposition of any Lien upon any of its properties pursuant to the terms of any Contractual
Obligation (other than the Agreement), or (iii) violate any Applicable Law.

(e) No Consents. No Consents of or with any Governmental Authority having
jurisdiction over it or any of its respective properties is required to be obtained in order for it
to enter into this Agreement or perform its obligations hereunder.

(f) Binding Obligation. This Agreement constitutes its legal, valid and binding
obligation, enforceable in accordance with its terms, except as such enforceability may be limited
by (i) applicable Insolvency Laws and (ii) general principles of equity (whether considered in a
suit at law or in equity).

(g) No Proceedings. There are no proceedings or investigations pending or, to the
best of its knowledge, threatened, against it before any Governmental Authority (i) asserting the
invalidity of this Agreement, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or (iii) seeking any determination or ruling that might (in its
reasonable judgment) have a Material Adverse Effect.

	 	 	 	Section 7.15 Covenants of the Backup Servicer.

The Backup Servicer hereby covenants that:

(a) Compliance with Law. The Backup Servicer will comply in all material respects
with all Applicable Laws.

(b) Preservation of Existence. The Backup Servicer will preserve and maintain its
existence, rights, franchises and privileges as a national banking association in good standing
under the laws of the United States.

(c) No Bankruptcy Petition. With respect to Fairway, prior to the date that is one
(1) year and one day (or such longer preference period as shall then be in effect) after the
payment in full of all amounts owing in respect of all outstanding Commercial Paper Notes issued by
Fairway and with respect to the Borrower, prior to the date that is one year and one day (or such
longer preference period as shall then be in effect) after the Collection Date, the Backup Servicer
will not institute against the Borrower or Fairway, or join any other Person in instituting against
the Borrower or Fairway, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceedings under the laws of the United States or any state of the
United States. This Section 7.15(c) will survive the termination of this Agreement.

(d) No Changes in Backup Servicer Fee. The Backup Servicer will not make any changes
to Backup Servicer Fee set forth in the Backup Servicer and Trustee Fee Letter without the prior
written approval of the Agent.

Section 7.16 Payment of Certain Expenses by the Servicer and the Borrower.

(a) The Servicer will be required to pay all fees and expenses incurred by it in connection
with the transactions and activities contemplated by this Agreement (subject, as applicable, to the
conditions set forth in Section 7.6), including fees and disbursements of legal counsel and
independent accountants, Taxes imposed on the Servicer, expenses incurred in connection with
payments and reports pursuant to this Agreement, and all other fees and expenses not expressly
stated under this Agreement for the account of the Borrower. In consideration for the payment by
the Borrower of the Servicing Fee, the Servicer will be required to pay all reasonable fees and
expenses owing to any bank or trust company in connection with the maintenance of the Collection
Accounts and the Reserve Account and the Backup Servicer Fee and Trustee Fee pursuant to the Backup
Servicer and Trustee Fee Letter. The Servicer shall be required to pay such expenses for its own
account and shall not be entitled to any payment therefor other than the Servicing Fee.

(b) The Borrower will be required to pay all fees and expenses incurred by the Agent and the
Conduit Lender in connection with the transactions and activities contemplated by this Agreement,
including reasonable fees and disbursements of legal counsel and independent accountants.

Section 7.17 Reports.

(a) Monthly Report. With respect to each Determination Date and the related
Collection Period, the Servicer will provide to the Borrower, the Backup Servicer, the Trustee and
the Agent, on the related Reporting Date, a monthly statement (a “Monthly Report”), signed
by a Responsible Officer of the Servicer and substantially in the form of Exhibit E.
Except as otherwise set forth herein, the Backup Servicer shall have no obligation to review any
information in the Monthly Report.

(b) Servicer’s Certificate. Together with each Monthly Report, the Servicer shall
submit to the Borrower, the Backup Servicer, the Trustee and the Agent a certificate substantially
in the form of Exhibit F (a “Servicer’s Certificate”), signed by a Responsible
Officer of the Servicer, which shall include a certification by such Responsible Officer that no
Termination Event or Unmatured Termination Event has occurred and is continuing (or if a
Termination Event or Unmatured Termination Event has occurred and is continuing, specifying each
such event, the nature and status thereof and the steps necessary to remedy such event). Except as
otherwise set forth herein, the Backup Servicer shall have no duty to review any information set
forth in the Servicer’s Certificate.

(c) Financial Statements. The Servicer will submit to the Borrower, the Backup
Servicer, the Trustee and the Agent, within 45 days following the end of each of the Servicer’s
fiscal quarters (other than the final fiscal quarter), commencing for the fiscal quarter ending on
September 30, 2005, unaudited financial statements of the Servicer (including an analysis of
delinquencies and losses for each fiscal quarter) as of the end of each such fiscal quarter. The
Servicer shall submit to the Borrower and the Agent, within 90 days following the end of the
Servicer’s fiscal year, commencing with the fiscal year ending on December 31, 2005, annual audited
financial statements as of the end of such fiscal year. Except as otherwise set forth herein, the
Backup Servicer shall have no duty to review any of the financial information set forth in such
financial statements.

(d) Quarterly Valuation Report. The Servicer will submit to the Borrower, the Backup
Servicer, the Trustee and the Agent, within 45 days following the end of each of the Servicer’s
fiscal quarters, commencing with the fiscal quarter ending on December 31, 2005, a valuation report
prepared by Duff & Phelps, LLC in form and substance reasonably satisfactory to the Agent. Except
as otherwise set forth herein, the Backup Servicer shall have no duty to review any of the
information set forth in such quarterly valuation reports.

Section 7.18 Annual Statement as to Compliance.

The Servicer will provide to the Borrower, the Backup Servicer and the Agent within 90 days
following the end of each fiscal year of the Servicer, commencing with the fiscal year ending on
December 31, 2005, an annual report signed by a Responsible Officer of the Servicer certifying that
(a) a review of the activities of the Servicer, and the Servicer’s performance pursuant to this
Agreement, for the period ending on the last day of such fiscal year has been made under such
Responsible Officer’s supervision and (b) the Servicer has performed or has caused to be performed
in all material respects all of its obligations under this Agreement throughout such year and no
Servicer Termination Event has occurred and is continuing (or if a Servicer Termination Event has
so occurred and is continuing, specifying each such event, the nature and status thereof and the
steps necessary to remedy such event.

Section 7.19 Annual Independent Public Accountant’s Servicing Reports.

At its own expense, the Servicer will cause a firm of nationally recognized independent public
accountants acceptable to the Agent in its reasonable discretion (who may also render other
services to the Servicer) to furnish to the Borrower and the Agent, no later than the Annual
Reporting Date, commencing with the Annual Reporting Date occurring in 2006, (i) a report relating
to such fiscal year to the effect that (A) such firm has reviewed certain documents and records
relating to the servicing of the Loans, and (B) based on such examination, such firm is of the
opinion that the Monthly Reports for such year were prepared in compliance with this Agreement,
except for such exceptions as it believes to be immaterial and such other exceptions as will be set
forth in such firm’s report and (ii) a report covering such fiscal year to the effect that such
accountants have applied certain agreed-upon procedures (which procedures shall not be amended from
those procedures in effect as of the Closing Date without the prior approval of the Borrower and
Agent) to certain documents and records relating to the servicing of Loans under this Agreement,
compared the information contained in the Monthly Reports and the Servicer’s Certificates delivered
during the period covered by such report with such documents and records and that no matters came
to the attention of such accountants that caused them to believe that such servicing was not
conducted in compliance with this Article VI of this Agreement, except for such exceptions
as such accountants shall believe to be immaterial and such other exceptions as shall be set forth
in such statement.

	 	 	 	Section 7.20 Limitation on Liability of the Servicer and Others.

Except as provided herein, neither the Servicer nor any of the directors or officers or
employees or agents of the Servicer shall be under any liability to the Borrower, the Agent, the
Secured Parties or any other Person for any action taken or for refraining from the taking of any
action expressly provided for in this Agreement; provided, however, that this provision shall not
protect the Servicer or any such Person against any liability that would otherwise be imposed by
reason of its willful misfeasance, bad faith or gross negligence in the performance of duties or by
reason of its failure to perform materially in accordance with this Agreement.

The Servicer shall not be under any obligation to appear in, prosecute or defend any legal
action that is not incidental to its duties to service the Loans in accordance with this Agreement
that in its reasonable opinion may involve it in any expense or liability. The Servicer may, in
its sole discretion, undertake any legal action relating to the servicing, collection or
administration of Loans and the Related Property that it may reasonably deem necessary or
appropriate for the benefit of the Borrower and the Secured Parties with respect to this Agreement
and the rights and duties of the parties hereto and the respective interests of the Borrower and
the Secured Parties hereunder.

	 	 	 	Section 7.21 The Servicer, the Backup Servicer and the Trustee Not to Resign.

None of the Servicer, the Backup Servicer or the Trustee shall resign from the obligations and
duties hereby imposed on such Person except upon such Person’s determination that (i) the
performance of its duties hereunder is or becomes impermissible under Applicable Law and (ii) there
is no reasonable action that such Person could take to make the performance of its duties hereunder
permissible under Applicable Law. Any such determination permitting the resignation of the
Servicer, the Backup Servicer or the Trustee shall be evidenced as to clause (i) above by
an Opinion of Counsel to such effect delivered to the Borrower, the Agent. No such resignation
shall become effective until a successor shall have assumed the responsibilities and obligations of
such Person in according with the terms of this Agreement.

	 	 	 	Section 7.22 Access to Certain Documentation and Information Regarding the Loans.

The Borrower, the Servicer or the Trustee, as applicable, shall provide to the Agent access to
the Loan Documents and all other documentation regarding the Loans included as part of the
Collateral and the Related Property in such cases where the Agent is required in connection with
the enforcement of the rights or interests of the Conduit Lender, or by applicable statutes or
regulations, to review such documentation, such access being afforded without charge but only (i)
upon two Business Days’ prior written request, (ii) during normal business hours and (iii) subject
to the Servicer’s and the Trustee’s normal security and confidentiality procedures. From and after
the Closing Date and periodically thereafter at the discretion of the Agent, the Agent or their
respective agents may review the Borrower’s and the Servicer’s collection and administration of the
Loans in order to assess compliance by the Servicer with the Servicer’s written policies and
procedures, as well as with this Agreement and may conduct an audit of the Loans, Loan Documents
and Records in conjunction with such a review. Such review shall be reasonable in scope and shall
be completed in a reasonable period of time. The Borrower shall bear the cost of such audits;
provided, however that prior to the date on which a Termination Event shall have occurred and be
continuing, the Borrower shall not be required to bear the cost of more than one audit in any
12-month period.

	 	 	 
	Section 7.23

	 	[Reserved].
	
 
	 	 
	Section 7.24

	 	Identification of Records.
	
 
	 	 

The Servicer shall clearly and unambiguously identify each Loan that is part of the Collateral
and the Related Property in its computer or other records to reflect that the interest in such
Loans and Related Property have been transferred to and are owned by the Borrower and that the
Trustee on behalf of the Secured Parties has the interest therein Granted by Borrower pursuant to
this Agreement.

	 	 	 	Section 7.25 Servicer Termination Events.

If any one of the following events (a “Servicer Termination Event”) shall occur and be
continuing on any date:

(a) any failure by the Servicer to make any payment, transfer or deposit or to give
instructions or notice to the Borrower and the Agent as required by this Agreement on or before the
date such payment, transfer, deposit, instruction or notice is required to be made or given, as the
case may be, under the terms of this Agreement;

(b) any failure on the part of the Servicer duly to observe or perform in any material respect
any other covenants or agreements of the Servicer set forth in this Agreement or any other
Transaction Document to which it is a party as Servicer that continues unremedied for a period of
30 days after the first to occur of (i) the date on which written notice of such failure requiring
the same to be remedied shall have been given to the Servicer by the Agent or the Borrower and (ii)
the date on which an officer of the Servicer becomes aware thereof;

(c) an Insolvency Event shall occur with respect to the Servicer or any of its Affiliates;

(d) the Servicer shall fail in any material respect to service the Transferred Loans in
accordance with the Credit and Collection Policy;

(e) the Servicer agrees to or otherwise permits any material change in the Credit and
Collection Policy without the prior written consent of the Agent;

(f) any Change in Control of the Servicer is made without the prior written consent of the
Agent;

(g) as of any date after the date of the Initial Funding, the Servicer fails to maintain a
minimum Net Worth of at least $100,000,000 plus seventy-five (75%) percent of any new equity issued
after August 2, 2005;

(h) the Servicer shall fail to maintain its status as a business development company or as a
registered investment company under the 1940 Act;

(i) the Servicer’s Leverage Ratio shall exceed 1.0:1.0;

(j) any failure by the Servicer to deliver any Required Reports hereunder on or before the
date occurring five Business Days after the date such report is required to be made or given, as
the case may be, under the terms of this Agreement;

(k) any representation, warranty or certification made by the Servicer in this Agreement or in
any certificate delivered pursuant to this Agreement shall prove to have been incorrect when made;

(l) the rendering against the Servicer of one or more final judgments, decrees or orders for
the payment of money in excess of 10% of the Tangible Net Worth of the Servicer (individually or in
the aggregate);

(m) the failure of the Servicer to make any payment due with respect to aggregate recourse
debt or other obligations with an aggregate principal amount exceeding U.S. $1,000,000 or the
occurrence of any event or condition that would permit acceleration of such recourse debt or other
obligations if such event or condition has not been waived; or

(n) the Servicer shall incur additional Indebtedness in excess of $30,000,000 after the
Closing Date;

then notwithstanding anything herein to the contrary, so long as any such Servicer Termination
Events shall not have been remedied at the expiration of any applicable cure period, the Agent, by
written notice to the Servicer and the Backup Servicer (a “Servicer Termination Notice”),
may, subject to the provisions of Section 7.26, terminate all of the rights and obligations
of the Servicer as Servicer under this Agreement. The Borrower shall pay all reasonable set-up and
conversion costs associated with the transfer of servicing rights to the Successor Servicer.

	 	 	 	Section 7.26 Appointment of Successor Servicer.

(a) On and after the receipt by the Servicer of a Servicer Termination Notice pursuant to
Section 7.25, the Servicer shall continue to perform all servicing functions under this
Agreement until the date specified in the Servicer Termination Notice or otherwise specified by the
Agent to the Servicer and the Backup Servicer in writing. The Agent may at the time described in
the immediately preceding sentence, in its sole discretion, appoint the Backup Servicer as the
Servicer hereunder, and the Backup Servicer shall on such date 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; provided, however, that any successor Servicer shall not (i)
be responsible or liable for any past actions or omissions of the outgoing Servicer, (ii) be
obligated to make Servicer Advances, (iii) have any obligation to pay any taxes required to be paid
by the Servicer, if any, (iv) have no obligation to pay the fees and expenses of any other party
involved in this transaction or any third party, or (v) have any liability or obligation with
respect to any Servicer indemnification obligations of any prior servicer including the initial
Servicer. In the event that the Agent does not so appoint the Backup Servicer, there is no Backup
Servicer or the Backup Servicer is unwilling or unable to assume such obligations on such date, the
Agent shall as promptly as possible appoint a successor servicer (in such capacity, the
“Successor Servicer”), and such Successor Servicer shall accept its appointment by a
written assumption in a form acceptable to the Agent. In the event that a Successor Servicer has
not been appointed and has not accepted its appointment at the time when the Servicer ceases to act
as Servicer, the Agent shall petition a court of competent jurisdiction to appoint any established
financial institution having a net worth of not less than U.S. $100,000,000 and whose regular
business includes the servicing of Loans as the Successor Servicer hereunder.

(b) Upon its appointment as successor to the Servicer, the Backup Servicer (subject to
Section 7.26(a)) or the Successor Servicer, as applicable, shall be the successor in all
respects to the Servicer (except as otherwise expressly provided for herein) with respect to
servicing functions under this Agreement, shall assume all Servicing Duties hereunder 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. Any Successor
Servicer shall be entitled, with the prior consent of the Agent, to appoint agents to provide some
or all of its duties hereunder, provided that no such appointment shall relieve such Successor
Servicer of the duties and obligations of the Successor Servicer pursuant to the terms hereof and
that any such subcontract may be terminated upon the occurrence of a Servicer Termination Event.

(c) All authority and power granted to the Servicer under this Agreement shall automatically
cease and terminate upon termination of the Servicer under this Agreement and shall pass to and be
vested in the Successor Servicer, and, without limitation, the Successor Servicer 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 Successor Servicer in effecting the termination of the
responsibilities and rights of the Servicer to conduct servicing on the Collateral.

(d) Upon the Backup Servicer receiving notice that it is required to serve as the Servicer
hereunder pursuant to the foregoing provisions of this Section 7.26, the Backup Servicer
will promptly begin the transition to its role as Servicer.

(e) The Backup Servicer shall be entitled to receive its reasonable costs incurred in
transitioning to Servicer.

(f) Notwithstanding anything contained in this Agreement to the contrary, any 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 Loans (collectively, the “Predecessor
Servicer Work Product”) without any audit or other examination thereof, except, in all cases,
where audit, examination or other inquiry would be required in the exercise of reasonable care or
the degree of skill and attention the successor Servicer exercises with respect to all comparable
loans that it services for itself and others, and the successor Servicer shall have no liability
for the acts and omissions of the prior Servicer; provided, however, if any successor Servicer
discovers any error, inaccuracy, omission or incorrect or non-standard practice or procedure
(collectively, “Errors”) in any Predecessor Servicer Work Product, then such successor
Servicer shall use its best commercially reasonable efforts to correct such Errors. Wells Fargo
agrees to use its best efforts to prevent further errors, inaccuracies or omissions relating to
Errors (collectively, “Continued Errors”) previously discovered by the successor Servicer
and shall, with the prior consent of the Agent, use its best commercially reasonable efforts to
reconstruct and reconcile such data to correct such Errors and Continued Errors and to prevent
future Continued Errors. The successor Servicer shall be entitled to recover its costs incurred
pursuant to this Section 7.26(f).

	 	 	 	Section 7.27 Market Servicing Fee.

Notwithstanding anything to the contrary herein, in the event that a Successor Servicer is
appointed, the Servicing Fee shall equal the market rate for comparable servicing duties to be
fixed upon the date of such appointment by such Successor Servicer with the consent of the Agent;
in the event that the Backup Servicer becomes the Successor Servicer, the Backup Servicer shall
solicit three bids, with a copy to the Borrower and the Agent, from not less than three entities
experienced in the servicing of loans similar to the Loans and that are not Affiliates of the
Backup Servicer, the Servicer or the Borrower, and the Servicing Fee shall be equal to the average
of the fees proposed as determined by the Backup Servicer with the consent of the Agent (the
“Market Servicing Fee”).

ARTICLE VIII

SECURITY INTEREST

	 	 	 	Section 8.1 Grant of Security Interest.

(a) The parties hereto intend that this Agreement constitute a security agreement and the
transactions effected hereby constitute secured loans by the Secured Parties to the Borrower under
Applicable Law. For such purpose, the Borrower hereby Grants as of the Closing Date to the
Trustee, on behalf of the Secured Parties, a lien and continuing security interest in all of the
Borrower’s right, title and interest in, to and under (but none of the obligations under) all
Collateral (including any Hedging Agreements), whether now existing or hereafter arising or
acquired by the Borrower, and wherever the same may be located, to secure the prompt, complete and
indefeasible payment and performance in full when due, whether by lapse of time, acceleration or
otherwise, of the Obligations of the Borrower owed to the Secured Parties. The Grant of a security
interest under this Section 8.1 does not constitute and is not intended to result in a
creation or an assumption by the Trustee, the Agent or any of the other Secured Parties of any
obligation of the Borrower or any other Person in connection with any or all of the Collateral or
under any agreement or instrument relating thereto. Anything herein to the contrary
notwithstanding, (a) the Originator and the Borrower shall remain liable under the Transferred
Loans and related Collateral to the extent set forth therein to perform all of their respective
duties and obligations thereunder to the same extent as if this Agreement had not been executed,
(b) the exercise by the Trustee on behalf of the Secured Parties or the Agent, as agent for the
Secured Parties, of any of its rights in the Collateral shall not release the Originator and the
Borrower from any of their respective duties or obligations under the Transferred Loans and other
Collateral, and (c) none of the Trustee, the Agent nor any other Secured Party shall have any
obligations or liability under the Loans and other Collateral by reason of this Agreement, nor
shall the Trustee, the Agent or any other Secured Party be obligated to perform any of the
obligations or duties of the Borrower thereunder or to take any action to collect or enforce any
claim for payment assigned hereunder.

(b) The Borrower, the Trustee and the Agent, on behalf of the Secured Parties, hereby
acknowledge and agree that the security interest Granted hereby in the Collateral constitutes
continuing collateral security for all of the Obligations, whether now existing or hereafter
arising.

	 	 	 	Section 8.2 Release of Lien on Loans.

If (a) there is no Overcollateralization Shortfall, and (b) no Termination Event or Unmatured
Termination Event has occurred and is continuing, at the same time as (i) any Transferred Loan in
the Collateral expires by its terms and all amounts in respect thereof have been paid in full by
the related Obligor and deposited in the Collection Account, (ii) any Transferred Loan becomes a
Prepaid Loan and all amounts in respect thereof have been paid in full by the related Obligor and
deposited in the Collection Account, (iii) any Transferred Loan is replaced in accordance with
Section 2.18(a), (iv) any Transferred Loan is repurchased in accordance with Section
2.18(b), (v) any Transferred Loan is subject to a Lien Release Dividend in accordance with
Section 2.16, or (vi) this Agreement terminates in accordance with Section 12.6,
the Trustee, on behalf of the Secured Parties, will be deemed to automatically release its interest
in such Loan without representation or warranty express or implied. In connection with any such
prepayment, release or substitution, the Trustee, on behalf of the Secured Parties, will, after the
deposit by the Servicer of the Proceeds of such event into the Collection Account, at the sole
expense of the Servicer, execute and deliver to the Servicer any assignments, bills of sale,
termination statements and any other releases and instruments as the Servicer may reasonably
request in order to effect the release and transfer the Related Property if such Related Property
is not also serving as Collateral to secure the repayment of another Transferred Loan; provided,
that, the Trustee on behalf of the Secured Parties will make no representation or warranty, express
or implied, with respect to any such Related Property in connection with such prepayment, release
or substitution. Nothing in this Section 8.2 shall diminish the Servicer’s obligations
pursuant to Section 7.6 with respect to the Proceeds of any such sale.

	 	 	 
	Section 8.3	 	[Reserved].
	Section 8.4

	 	Further Assurances.
	
 
	 	 

The provisions of Section 12.12 shall apply to the security interest granted under
Section 8.1 as well as to the Advances hereunder.

	 	 	 	Section 8.5 Remedies.

Upon the occurrence of a Termination Event, the Trustee, on behalf of the Secured Parties, the
Agent and other Secured Parties shall have, with respect to the Collateral granted pursuant to
Section 8.1, and in addition to all other rights and remedies available to the Trustee on
behalf of the Secured Parties, the Agent and the other Secured Parties under this Agreement or
other Applicable Law, all rights and remedies of a secured party upon default under the UCC.

	 	 	 	Section 8.6 Waiver of Certain Laws.

Each of the Borrower and the Servicer agrees, to the full extent that it may lawfully so
agree, that neither it nor anyone claiming through or under it will set up, claim or seek to take
advantage of any appraisement, valuation, stay, extension or redemption law now or hereafter in
force in any locality where any Collateral may be situated in order to prevent, hinder or delay the
enforcement or foreclosure of this Agreement, or the absolute sale of any of the Collateral or any
part thereof, or the final and absolute putting into possession thereof, immediately after such
sale, of the Secured Parties thereof, and each of the Borrower and the Servicer, for itself and all
who may at any time claim through or under it, hereby waives, to the full extent that it may be
lawful so to do, the benefit of all such laws, and any and all right to have any of the properties
or assets constituting the Collateral marshaled upon any such sale, and agrees that the Trustee, on
behalf of the Secured Parties, the Agent on its behalf or any court having jurisdiction to
foreclose the security interests granted in this Agreement may sell the Collateral as an entirety
or in such parcels as the Trustee on behalf of the Secured Parties, the Agent or such court may
determine.

	 	 	 	Section 8.7 Power of Attorney.

Each of the Borrower and the Servicer, upon the occurrence and during the continuance of a
Termination Event, hereby irrevocably appoints the Trustee on behalf of the Secured Parties its
true and lawful attorney (with full power of substitution) in its name, place and stead and at its
expense, in connection with the enforcement of the rights and remedies provided for in this
Agreement, including without limitation the following powers: (a) to give any necessary receipts
or acquittance for amounts collected or received hereunder, (b) to make all necessary transfers of
the Collateral in connection with any such sale or other disposition made pursuant hereto, (c) to
execute and deliver for value all necessary or appropriate bills of sale, assignments and other
instruments in connection with any such sale or other disposition, the Borrower and the Servicer
hereby ratifying and confirming all that such attorney (or any substitute) shall lawfully do
hereunder and pursuant hereto, and (d) to sign any agreements, orders or other documents in
connection with or pursuant to any Transaction Document or Hedging Agreement. Nevertheless, if so
requested by the Trustee, the Borrower shall ratify and confirm any such sale or other disposition
by executing and delivering to the Trustee and the Agent all proper bills of sale, assignments,
releases and other instruments as may be designated in any such request. The appointment by each
of the Servicer and the Borrower of the Trustee on behalf of the Secured Parties as its
attorney-in-fact shall be evidenced by its execution and delivery of a Power of Attorney
substantially in the form of Exhibit Q-1 and Q-2, respectively.

ARTICLE IX

TERMINATION EVENTS

	 	 	 	Section 9.1 Termination Events.

If any of the following events (each, a “Termination Event”) shall occur and be
continuing:

(a) the Borrower or the Servicer shall default in the payment of any amount required to be
made under the terms of this Agreement; or

(b) (i) the Borrower shall fail to perform or observe in any material respect any other
covenant or other agreement of the Borrower set forth in this Agreement and any other Transaction
Document to which it is a party, or (ii) the Originator shall fail to perform or observe in any
material respect any term, covenant or agreement of the Originator set forth in any other
Transaction Document to which it is a party, in each case when such failure continues unremedied
for more than 20 days after written notice thereof shall have been given by the Agent or any
Secured Party to such Person; or

(c) an Insolvency Event shall occur with respect to the Borrower or the Originator; or

(d) a Servicer Termination Event occurs; or

(e) any representation or warranty made or deemed made hereunder shall prove to be incorrect
as of the time when the same shall have been made, and such incorrect representation or warranty
shall not have been eliminated or otherwise cured within a period of 20 days after written notice
thereof shall have been given by the Agent or any Secured Party to the Borrower; or

(f) the amount of Advances Outstanding shall exceed the Maximum Availability, for more than
three consecutive Business Days; or

(g) an Overcollateralization Shortfall exists and continues unremedied for a period of three
Business Days; or

(h) a Required Equity Shortfall exists and continues unremedied for a period of three Business
Days; or

(i) the Borrower or the Originator agrees or consents to, or otherwise permits any amendment,
modification, change, supplement or rescission of or to the Credit and Collection Policy in whole
or in part that could have a material adverse effect upon the Loans or the interests of the Conduit
Lender; or

(j) any Change in Control of the Borrower or Originator occurs; or

(k) on each day during a period of five consecutive days, either (i) the aggregate Hedge
Notional Amount is less than the product of the Hedge Percentage on such day and the Hedge Amount
on that day, or (ii) any Hedge Transaction fails to meet the requirements set forth in
subsection 5.2(a); or

(l) the Trustee on behalf of the Secured Parties, shall fail for any reason to have a valid
and perfected first priority security interest in any of the Collateral; or

(m) the Rolling Three-Month Portfolio Yield does not equal or exceed 5.0% and such failure
continues for a period of 15 consecutive days; or

(n) the Rolling Three-Month Default Ratio shall exceed the percentage equivalent of a
fraction, the numerator of which is $22,600,000 and the denominator of which is the Aggregate
Outstanding Loan Balance; or

(o) the Rolling Three-Month Charged-Off Ratio shall exceed the percentage equivalent of a
fraction, the numerator of which is $15,100,000 and the denominator of which is the Aggregate
Outstanding Loan Balance; or

(p) the Rolling Twelve-Month Portfolio Charged-Off Ratio shall exceed 15.0%; or

(q) both Rich Buckanavage and Tim Hassler shall cease to be employed by the Borrower or
Originator in the capacity as executive officers thereof; or

(r) the Borrower or the Originator defaults in making any payment required to be made with
respect to any material recourse debt or other obligation to which either is a party and such
default is not cured within the relevant cure period or any event or condition shall occur or exist
that would cause or permit the acceleration of such recourse debt or other obligation, whether or
not such event or condition has been waived or any such recourse debt or other obligation shall be
declared to be due and payable or required to be prepaid (other than by scheduled payment) prior to
maturity; or

(s) (i) a final judgment for the payment of money in excess of 10% of the Tangible Net Worth
of the Originator shall have been rendered against the Originator or $100,000 against the Borrower
by a court of competent jurisdiction and, if such judgment relates to the Originator, the
Originator shall not have either: (1) discharged or provided for the discharge of such judgment in
accordance with its terms, or (2) perfected a timely appeal of such judgment and caused the
execution thereof to be stayed (by supersedes or otherwise during the pendency of such appeal or
(ii) the Originator or the Borrower, as the case may be, shall have made payments of amounts in
excess of $1,000,000 or $100,000, respectively, in settlement of any litigation; or

(t) the Borrower shall become required to register as an “investment company” under the 1940
Act or the arrangements contemplated by the Transaction Documents shall require registration as an
“investment company” within the meaning of the 1940 Act or any rules, regulations or orders issued
by the SEC thereunder; or

(u) the business and other activities of the Borrower or the Originator, including but not
limited to, the acceptance of the Advances by the Borrower made by the Conduit Lender, the
application and use of the proceeds thereof by the Borrower and the consummation and conduct of the
transactions contemplated by the Transaction Documents to which the Borrower or the Originator is a
party result in a violation by the Originator, the Borrower, or any other person or entity of the
1940 Act or the rules and regulations promulgated thereunder; or

(v) a Material Adverse Change in the operations of the Originator, the Servicer or the
Borrower shall occur; or

(w) a change in any binding law or any rule or regulation having the force of law shall occur,
which would cause the legal conclusions made in the true sale, non-consolidation and perfection
opinions delivered in connection with the Transaction Documents to be incorrect; or

(x) the Borrower or its Affiliates shall enter into a binding engagement letter or similar
letter of intent with any third party contemplating a structured financing transaction including
the Collateral or assets comparable to the Loans included in the Collateral as of any date prior to
the date on which the Borrower or its Affiliates shall have consummated (or irrevocably committed
to consummate) one or more structured financing transactions in which BMO or an Affiliate thereof
shall act as administrative agent or sole or lead initial purchaser (or in a comparable capacity)
representing an aggregate notional amount of at least $250,000,000, if BMO shall have agreed to
negotiate in good faith to offer to the Borrower or its affiliates substantially similar terms for
a structured financing transaction comparable to the financing contemplated by such engagement
letter or letter of intent (or similar agreement or undertaking).

	 	 	 	Section 9.2 Remedies.

(a) Upon the occurrence of a Termination Event, the Agent may, by notice to the Borrower,
declare the Termination Date to have occurred, without demand, protest or future notice of any
kind, all of which are hereby expressly waived by the Borrower, and all Obligations owing by the
Borrower under this Agreement shall be accelerated and become immediately due and payable;
provided, that, in the event that the Termination Event described in Section 9.1(c) herein
has occurred, the Termination Date shall automatically occur, without demand, protest or any notice
of any kind, all of which are hereby expressly waived by the Borrower.

(b) Upon any such declaration or automatic occurrence of the Termination Date, no Advances
will be made, and the Agent and the other Secured Parties shall have, in addition to all other
rights and remedies under this Agreement or otherwise, all rights and remedies provided under the
UCC of each applicable jurisdiction and other Applicable Laws, including the right to sell the
Collateral, which rights and remedies shall be cumulative.

(c) At any time on and after the Termination Date, the Borrower and the Servicer hereby agree
that they will, at the Servicer’s expense and upon request of the Trustee, or the Agent on its
behalf, forthwith, (i) assemble all or any part of the Collateral as directed by the Trustee, or
the Agent on its behalf, and make the same available to the Trustee, or the Agent on its behalf, at
a place to be designated by the Trustee, or the Agent on its behalf, and (ii) without notice except
as specified below, sell the Collateral or any part thereof in one or more parcels at a public or
private sale, at any of the Agent’s offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Agent may deem commercially reasonable. The Borrower
agrees that, to the extent notice of sale shall be required by law, at least ten days’ notice to
the Borrower of the time and place of any public sale or the time after which any private sale is
to be made shall constitute reasonable notification. The Trustee shall not be obligated to make
any sale of Collateral regardless of notice of sale having been given. The Trustee, if so
requested by the Agent, shall adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. All cash Proceeds received by the Trustee in respect
of any sale of, collection from, or other realization upon, all or any part of the Collateral
(after payment of any amounts incurred by the Trustee or any of the Secured Parties in connection
with such sale) shall be deposited into the Collection Account and to be applied against all or any
part of the Obligations pursuant to Section 2.09(b) or otherwise in such order as the
Trustee shall elect in its discretion.

(d) If the Trustee, or the Agent on its behalf, proposes to sell the Collateral or any part
thereof in one or more parcels at a public or private sale, the Borrower shall have the right of
first refusal to repurchase the Collateral, in whole but not in part, prior to such sale at a price
not less than the Obligations as of the date of such proposed repurchase. The aforementioned
rights and remedies shall be without limitation, and shall be in addition to all other rights and
remedies of the Agent and the Secured Parties otherwise available under any provision of this
Agreement by operation of law, at equity or otherwise, each of which are expressly preserved.

ARTICLE X

INDEMNIFICATION

	 	 	 	Section 10.1 Indemnities by the Borrower.

(a) Without limiting any other rights that any such Person may have hereunder or under
Applicable Law, the Borrower hereby agrees to indemnify the Agent, the Backup Servicer, the
Trustee, any other Secured Party or its assignee and each of their respective Affiliates and
officers, directors, employees and agents thereof (collectively, the “Indemnified
Parties”), forthwith on demand, from and against any and all damages, losses, claims,
liabilities and related costs and expenses, including reasonable attorneys’ fees and disbursements
(all of the foregoing being collectively referred to as “Indemnified Amounts”) awarded
against or incurred by, any such Indemnified Party or other non-monetary damages of any such
Indemnified Party any of them arising out of or as a result of this Agreement, excluding,
however, (a) Indemnified Amounts to the extent resulting from gross negligence or willful
misconduct on the part of any Indemnified Party, and (b) under any Federal, state or local income
or franchise taxes or any other Tax imposed on or measured by income (or any interest or penalties
with respect thereto or arising from a failure to comply therewith) required to be paid by such
Indemnified Party in connection herewith to any taxing authority. The provisions of this indemnity
shall run directly to and be enforceable by the applicable Indemnified Party subject to the
limitations hereof. If the Borrower has made any indemnity payment pursuant to this Section
10.1 and such payment fully indemnified the recipient thereof and the recipient thereafter
collects any payments from others in respect of such Indemnified Amounts, the recipient shall repay
to the Borrower an amount equal to the amount it has collected from others in respect of such
indemnified amounts. Without limiting the foregoing, the Borrower shall indemnify the Indemnified
Parties for Indemnified Amounts relating to or resulting from:

(i) any Transferred Loan treated as or represented by the Borrower to be an Eligible
Loan that is not at the applicable time an Eligible Loan;

(ii) reliance on any representation or warranty made or deemed made by the Borrower,
the Servicer or any of their respective officers under or in connection with this Agreement,
which shall have been false or incorrect in any material respect when made or deemed made or
delivered;

(iii) the failure by the Borrower or the Servicer to comply with any term, provision or
covenant contained in this Agreement or any agreement executed in connection with this
Agreement, or with any Applicable Law with respect to any Transferred Loan comprising a
portion of the Collateral, or the nonconformity of any Transferred Loan, the Related
Property with any such Applicable Law or any failure by the Originator, the Borrower or any
Affiliate thereof to perform its respective duties under the Transferred Loans included as a
part of the Collateral;

(iv) the failure to vest and maintain vested in the Trustee on behalf of the Secured
Parties a first priority perfected security interest in the Collateral;

(v) the failure to file, or any delay in filing, financing statements or other similar
instruments or documents under the UCC of any applicable jurisdiction or other Applicable
Laws with respect to any Collateral whether at the time of any Advance or at any subsequent
time and as required by the Transaction Documents;

(vi) any dispute, claim, offset or defense (other than the discharge in bankruptcy of
the Obligor) of the Obligor to the payment of any Transferred Loan included as part of the
Collateral that is, or is purported to be, an Eligible Loan (including, without limitation,
a defense based on the Transferred Loan not being a legal, valid and binding obligation of
such Obligor enforceable against it in accordance with its terms);

(vii) any failure of the Borrower or the Servicer (if the Originator or one of its
Affiliates) to perform its duties or obligations in accordance with the provisions of this
Agreement or any failure by the Originator, the Borrower or any Affiliate thereof to perform
its respective duties under the Transferred Loans;

(viii) any products liability claim or environmental liability claim or personal injury
or property damage suit or other similar or related claim or action of whatever sort arising
out of or in connection with the Related Property, merchandise or services that are the
subject of any Transferred Loan included as part of the Collateral or the Related Property
included as part of the Collateral;

(ix) the failure by Borrower to pay when due any Taxes for which the Borrower is
liable, including without limitation, sales, excise or personal property taxes payable in
connection with the Collateral;

(x) any repayment by the Agent or another Secured Party of any amount previously
distributed in reduction of Advances Outstanding or payment of Interest or any other amount
due hereunder or under any Hedging Agreement, in each case which amount the Agent or another
Secured Party believes in good faith is required to be repaid;

(xi) any investigation, litigation or proceeding related to this Agreement or the use
of proceeds of Advances or in respect of any Transferred Loan included as part of the
Collateral or the Related Property included as part of the Collateral;

(xii) any failure by the Borrower to give reasonably equivalent value to the Originator
in consideration for the transfer by the Originator to the Borrower of any Transferred Loan
or the Related Property or any attempt by any Person to void or otherwise avoid any such
transfer under any statutory provision or common law or equitable action, including, without
limitation, any provision of the Bankruptcy Code; or

(xiii) the failure of the Borrower, the Originator or any of their respective agents or
representatives to remit to the Servicer or the Agent, Collections on the Collateral
remitted to the Borrower or any such agent or representative in accordance with the terms
hereof or the commingling by the Borrower or any Affiliate of any collections.

(b) Any amounts subject to the indemnification provisions of this Section 10.1 shall
be paid by the Borrower to the applicable Indemnified Party within two (2) Business Days following
such Person’s demand therefor.

(c) If for any reason the indemnification provided above in this Section 10.1 is
unavailable to the Indemnified Party or is insufficient to hold an Indemnified Party harmless, then
the Borrower, shall contribute to the amount paid or payable by such Indemnified Party as a result
of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only
the relative benefits received by such Indemnified Party on the one hand and the Borrower, on the
other hand but also the relative fault of such Indemnified Party as well as any other relevant
equitable considerations.

(d) The obligations of the Borrower under this Section 10.1 shall survive the removal
of the Agent, the Backup Servicer or the Trustee and the execution, delivery, performance and
termination of this Agreement for a period of three years following the Termination Date,
regardless of any investigation made by the Conduit Lender or the Agent.

(e) The parties hereto agree that the provisions of this Section 10.1 shall not be
interpreted to provide recourse to the Borrower against loss by reason of the bankruptcy,
insolvency or lack of creditworthiness of an Obligor on any Transferred Loan.

	 	 	 	Section 10.2 Indemnities by the Servicer.

(a) Without limiting any other rights that any such Person may have hereunder or under
Applicable Law, the Servicer hereby agrees to indemnify each Indemnified Party, forthwith on
demand, from and against any and all Indemnified Amounts awarded against or incurred by any such
Indemnified Party by reason of any acts, omissions or alleged acts or omissions of the Servicer,
including, but not limited to (i) any representation or warranty made by the Servicer under or in
connection with any Transaction Documents to which it is a party, any Monthly Report, Servicer’s
Certificate or any other information or report delivered by or on behalf of the Servicer pursuant
hereto, which shall have been false, incorrect or misleading in any material respect when made or
deemed made, (ii) the failure by the Servicer to comply with any Applicable Law, (iii) the failure
of the Servicer to comply with its duties or obligations in accordance with the Agreement, or (iv)
any litigation, proceedings or investigation against the Servicer, excluding,
however, (a) Indemnified Amounts to the extent resulting from gross negligence or willful
misconduct on the part of such Indemnified Party, and (b) under any Federal, state or local income
or franchise taxes or any other Tax imposed on or measured by income (or any interest or penalties
with respect thereto or arising from a failure to comply therewith) required to be paid by such
Indemnified Party in connection herewith to any taxing authority. The provisions of this indemnity
shall run directly to and be enforceable by the applicable Indemnified Party subject to the
limitations hereof. If the Servicer has made any indemnity payment pursuant to this Section
10.2 and such payment fully indemnified the recipient thereof and the recipient thereafter
collects any payments from others in respect of such Indemnified Amounts, the recipient shall repay
to the Servicer an amount equal to the amount it has collected from others in respect of such
indemnified amounts.

(b) Any amounts subject to the indemnification provisions of this Section 10.2 shall
be paid by the Servicer within two Business Days following such Person’s demand therefor.

(c) If for any reason the indemnification provided above in this Section 10.2 is
unavailable to the Indemnified Party or is insufficient to hold an Indemnified Party harmless, then
Servicer shall contribute to the amount paid or payable to such Indemnified Party as a result of
such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the
relative benefits received by such Indemnified Party on the one hand and Servicer on the other hand
but also the relative fault of such Indemnified Party as well as any other relevant equitable
considerations.

(d) The obligations of the Servicer under this Section 10.2 shall survive the
resignation or removal of the Agent, the Backup Servicer or the Trustee and the execution,
delivery, performance and termination of this Agreement for a period of three years following the
Termination Date, regardless of any investigation made by the Conduit Lender or the Agent.

(e) The parties hereto agree that the provisions of this Section 10.2 shall not be
interpreted to provide recourse to the Servicer against loss by reason of the bankruptcy or
insolvency (or other credit condition) of, or default by, related Obligor on, any Loan.

(f) Any indemnification pursuant to this Section 10.2 shall not be payable from the
Collateral.

ARTICLE XI

THE AGENT

	 	 	 	Section 11.1 Authorization and Action.

Fairway hereby designates and appoints BMO as the Agent hereunder, and authorizes the Agent to
take such actions as agent on its behalf and to exercise such powers as are delegated to the Agent
by the terms of this Agreement together with such powers as are reasonably incidental thereto. The
Agent shall not have any duties or responsibilities, except those expressly set forth herein, or
any fiduciary relationship with Fairway, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities on the part of the Agent shall be read into this Agreement or
otherwise exist for the Agent. In performing its functions and duties hereunder, the Agent shall
act solely as agent for the Fairway and does not assume nor shall be deemed to have assumed any
obligation or relationship of trust or agency with or for the Borrower or any of its successors or
assigns. The Agent shall not be required to take any action that exposes the Agent to personal
liability or that is contrary to this Agreement, any other Transaction Document or Applicable Law.
The appointment and authority of the Agent hereunder shall terminate at the indefeasible payment in
full of the Obligations.

	 	 	 	Section 11.2 Delegation of Duties.

The Agent may execute any of its duties under this Agreement by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.

	 	 	 	Section 11.3 Exculpatory Provisions.

Neither the Agent nor any of its directors, officers, agents or employees shall be (i) liable
for any action lawfully taken or omitted to be taken by it or them under or in connection with this
Agreement (except for its, their or such Person’s own gross negligence or willful misconduct or, in
the case of the Agent, the breach of its obligations expressly set forth in this Agreement), or
(ii) responsible in any manner to Fairway or the other Secured Parties for any recitals,
statements, representations or warranties made by the Borrower contained in Article IV of,
any other Transaction Document or in any certificate, report, statement or other document referred
to or provided for in, or received under or in connection with, this Agreement or any other
Transaction Document, for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other document furnished in connection herewith, for any
failure of the Borrower to perform its obligations hereunder, or for the satisfaction of any
condition specified in Article III. The Agent shall not be under any obligation to Fairway
or the other Secured Parties to ascertain or to inquire as to the observance or performance of any
of the agreements or covenants contained in, or conditions of, this Agreement or any other
Transaction Document, or to inspect the properties, books or records of the Borrower. The Agent
shall not be deemed to have knowledge of any Unmatured Termination Event, Termination Event or
Servicer Termination Event unless the Agent has received notice from the Borrower or a Secured
Party.

	 	 	 	Section 11.4 Reliance.

The Agent shall in all cases be entitled to rely, and shall be fully protected in relying,
upon any document or conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent accountants and other experts
selected by the Agent. The Agent shall in all cases be fully justified in failing or refusing to
take any action under this Agreement or any other document furnished in connection herewith unless
it shall first receive such advice or concurrence of Fairway, as it deems appropriate, or it shall
first be indemnified to its satisfaction by Fairway, provided, that, unless and until the Agent
shall have received such advice, the Agent may take or refrain from taking any action as the Agent
shall deem advisable and in the best interests of the Fairway. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, in accordance with a request of Fairway,
and such request and any action taken or failure to act pursuant thereto shall be binding upon
Fairway.

	 	 	 	Section 11.5 Non-Reliance on Agent.

Fairway expressly acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates has made any representations or warranties to it
and that no act by the Agent hereafter taken, including, without limitation, any review of the
affairs of the Borrower, shall be deemed to constitute any representation or warranty by the Agent.
Fairway represents and warrants to the Agent that it has and will, independently and without
reliance upon the Agent, and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, operations, property, prospects,
financial and other conditions and creditworthiness of the Borrower and made its own decision to
enter into this Agreement, the other Transaction Documents and all other documents related hereto
or thereto.

	 	 	 	Section 11.6 The Agent in its Individual Capacity.

The Agent and any of its Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with the Borrower or any Affiliate of the Borrower as though the
Agent were not the Agent hereunder. With respect to the Advances made pursuant to this Agreement,
the Agent and each of its Affiliates shall have the same rights and powers under this Agreement as
the Conduit Lender and may exercise the same as though it were not the Agent and in such context
the term “Conduit Lender” shall include the Agent in its individual capacity.

	 	 	 	Section 11.7 Successor Agent.

The Agent may, upon five days’ notice to the Borrower and Fairway, and the Agent will, upon
the direction of Fairway, resign as Agent. If the Agent shall resign, then Fairway, during such
five (5) day period, shall appoint a successor agent. If for any reason no successor Agent is
appointed by Fairway during such five (5) day period, then effective upon the expiration of such
five (5) day period, the Borrower or the Agent, as applicable, shall make all payments it otherwise
would have made to the Agent in respect of the Obligations or under any fee letter delivered in
connection herewith directly to Fairway and for all purposes shall deal directly with Fairway.
After any retiring Agent’s resignation hereunder as Agent, the provisions of Article X and
this Article XI shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was the Agent under this Agreement. Notwithstanding the resignation or removal of
BMO as the Agent, BMO, as the Hedge Counterparty, shall continue to be a Secured Party hereunder.

ARTICLE XII

MISCELLANEOUS

	 	 	 	Section 12.1 Amendments and Waivers.

(a) Except as provided in this Section 12.1, no amendment, waiver or other
modification of any provision of this Agreement shall be effective without the written agreement of
the Borrower, the Agent, the Conduit Lender and the Servicer; provided, that, any amendment of this
Agreement that is solely for the purpose of adding a Conduit Lender may be effected with the
written consent of the Agent; provided, further, that any amendment to this Agreement which would
(i) reduce or impair Collections or the payment of Interest or fees to any Conduit Lender, (ii)
modify any provisions of this Agreement relating to the timing of payments required to be made by
the Borrower or the application of the proceeds of such payments, including, without limitation,
any provisions of Section 2.8, (iii) release any Collateral from the Lien of this Agreement
(other than as provided herein), or (iv) increase the Facility Amount, any Conduit Lender’s
Commitment or extend the Commitment Termination Date or (v) make any modification to the
definitions of “Advance”, “Advances Outstanding”, “Aggregate Net Mark to Market Amount”,
“Availability”, “Borrowing Base”, “Concentration Limits”, “Eligible Loan”, “Eligible Obligor”
“Facility Amount”, “Fair Market Value”, “Maximum Availability”, “Required Equity Contribution” or
“Termination Event” (each of the amendments described in clauses (i) through (iv)
of this proviso, a “Material Amendment”), shall not be effective without the written
agreement of the Borrower, the Agent, each Conduit Lender and the Servicer. Any waiver or consent
shall be effective only in the specific instance and for the specific purpose for which given.

(b) No amendment, waiver or other modification (i) affecting the rights or obligations of any
Hedge Counterparty or (ii) having a material affect on the rights or obligations of the Trustee or
the Backup Servicer (including any duties of the Servicer that the Backup Servicer would have to
assume as Successor Servicer) shall be effective against such Person without the written agreement
of such Person. The Borrower or the Servicer on its behalf will deliver a copy of all waivers and
amendments to the Trustee and the Backup Servicer.

	 	 	 	Section 12.2 Notices, Etc.

All notices and other communications provided for hereunder shall, unless otherwise stated
herein, be in writing (including telex communication and communication by facsimile copy) and
mailed, telexed, transmitted or hand delivered, as to each party hereto, at its address set forth
on Annex A hereto or specified in such party’s Assignment and Acceptance or at such other address
as shall be designated by such party in a written notice to the other parties hereto. All such
notices and communications shall be effective, upon receipt, or in the case of (a) notice by mail,
five days after being deposited in the United States mail, first class postage prepaid, (b) notice
by telex, when telexed against receipt of answer back, or (c) notice by facsimile copy, when verbal
communication of receipt is obtained, except that notices and communications pursuant to
Article XII shall not be effective until received with respect to any notice sent by mail
or telex.

	 	 	 	Section 12.3 Liabilities to Obligors.

No obligation or liability to any Obligor under any of the Transferred Loans is intended to be
assumed by the Agent and the other Secured Parties under or as a result of this Agreement and the
transactions contemplated hereby.

	 	 	 	Section 12.4 No Waiver, Rights and Remedies.

No failure on the part of the Agent or any other Secured Party or any assignee of any Secured
Party to exercise, and no delay in exercising, any right or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right or remedy hereunder preclude
any other or further exercise thereof or the exercise of any other right. The rights and remedies
herein provided are cumulative and not exclusive of any rights and remedies provided by law.

	 	 	 	Section 12.5 Binding Effect.

This Agreement shall be binding upon and inure to the benefit of the Borrower, the Agent, the
Secured Parties, the Backup Servicer and their respective successors and permitted assigns and, in
addition, the provisions of Section 2.8(a)(1)(i) and Section 2.8(b)(i) and
(xii) shall inure to the benefit of each Hedge Counterparty, whether or not that Hedge
Counterparty is a Secured Party.

	 	 	 	Section 12.6 Term of this Agreement.

This Agreement, including, without limitation, the Borrower’s obligation to observe its
covenants set forth in Article V and VI, and the Servicer’s obligation to observe
its covenants set forth in Article VII, shall remain in full force and effect until the
Collection Date; provided, however, that the rights and remedies with respect to any breach of any
representation and warranty made or deemed made by the Borrower pursuant to Article IV and
the indemnification and payment provisions of Article X and the provisions of Section
12.10 and Section 12.11 shall be continuing and shall survive any termination of this
Agreement. For the avoidance of doubt, amounts remaining on deposit in the Reserve Account, the
Collection Account, the Principal Collection Account and the Interest Collection Account after the
Collection Date shall be the property of the Borrower.

	 	 	 	Section 12.7 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF OBJECTION TO VENUE.

THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK. EACH OF THE PARTIES HERETO AND THE HEDGE COUNTERPARTY HEREBY AGREES TO THE
NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK. EACH OF THE
PARTIES HERETO AND THE HEDGE COUNTERPARTY HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE
AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT.

	 	 	 	Section 12.8 WAIVER OF JURY TRIAL.

TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO AND THE HEDGE
COUNTERPARTY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE PARTIES HERETO ARISING OUT OF, CONNECTED WITH, RELATED
TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN ANY OF THEM IN CONNECTION WITH THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN
A BENCH TRIAL WITHOUT A JURY.

	 	 	 	Section 12.9 Costs, Expenses and Taxes.

(a) In addition to the rights of indemnification granted to the Agent, the other Secured
Parties, the Backup Servicer and the Trustee and its or their Affiliates and officers, directors,
employees and agents thereof under Article X hereof, the Borrower agrees to pay on demand
all reasonable costs and expenses of the Agent and the other Secured Parties incurred in connection
with the preparation, execution, delivery, administration including periodic auditing), amendment
or modification of, or any waiver or consent issued in connection with, this Agreement and the
other documents to be delivered hereunder or in connection herewith, (including any Hedging
Agreement) including, without limitation, the reasonable fees and out-of-pocket expenses of counsel
for the Agent and the other Secured Parties with respect thereto and with respect to advising the
Agent and the other Secured Parties as to their respective rights and remedies under this Agreement
and the other documents to be delivered hereunder or in connection herewith (including any Hedging
Agreement) and all costs and expenses, if any (including reasonable counsel fees and expenses),
incurred by the Agent or the other Secured Parties in connection with the enforcement of this
Agreement and the other documents to be delivered hereunder or in connection herewith (including
any Hedging Agreement).

(b) The Borrower shall pay on demand any and all stamp, sales, excise and other taxes and fees
payable or determined to be payable in connection with the execution, delivery, filing and
recording of this Agreement, the other documents to be delivered hereunder or any agreement or
other document providing liquidity support, credit enhancement or other similar support to the
Conduit Lender in connection with this Agreement or the funding or maintenance of Advances
hereunder.

(c) The Borrower shall pay on demand all other costs, expenses and taxes (excluding income
taxes) (“Other Costs”), including, without limitation, all reasonable costs and expenses
incurred by the Agent in connection with periodic audits of the Borrower’s or the Servicer’s books
and records (subject to the limitations set forth in Section 7.22), and the amount of any
taxes and insurance (to the extent that maintenance of insurance with respect to the applicable
Related Property would be commercially reasonable and consistent with prudent servicing practices)
due and unpaid by an Obligor with respect to any Transferred Loan or Related Property.

	 	 	 	Section 12.10 No Proceedings.

(a) Each of the parties hereto (other than Fairway) and each Hedge Counterparty hereby agrees
that it will not institute against, or join any other Person in instituting against, Fairway any
Insolvency Proceeding so long as any Commercial Paper Notes issued by Fairway shall be outstanding
and there shall not have elapsed two years and one day (or such longer preference period as shall
then be in effect) since the last day on which any such Commercial Paper Notes shall have been
outstanding.

(b) Each of the parties hereto (other than the Agent and the other Secured Parties) hereby
agrees that it will not institute against, or join any other Person in instituting against the
Borrower any Insolvency Proceeding so long as there shall not have elapsed two years and one day
(or such longer preference period as shall then be in effect) since the Collection Date.

	 	 	 	Section 12.11 Recourse Against Certain Parties.

(a) No recourse under or with respect to any obligation, covenant or agreement (including,
without limitation, the payment of any fees or any other obligations) of the Borrower, the
Servicer, the Agent or any other Secured Party as contained in this Agreement or any other
agreement, instrument or document entered into by it pursuant hereto or in connection herewith
shall be had against any Person or any manager or administrator of such Person or any incorporator,
affiliate, stockholder, officer, employee or director of such Person or of the Borrower or of any
such manager or administrator, as such, by the enforcement of any assessment or by any legal or
equitable proceeding, by virtue of any statute or otherwise.

(b) Notwithstanding anything in this Agreement or any other Transaction Document to the
contrary, Fairway shall have no obligation to pay any amount required to be paid by it hereunder or
thereunder in excess of any amount available to Fairway after paying or making provision for the
payment of its Commercial Paper Notes. All payment obligations of Fairway hereunder are contingent
upon the availability of funds in excess of the amounts necessary to pay Commercial Paper Notes;
and each of the Borrower, the Servicer, the Backup Servicer, the Fairway Trustee, the Agent and the
other Secured Parties agree that they shall not have a claim under Section 101(5) of the Bankruptcy
Code if and to the extent that any such payment obligation exceeds the amount available to Fairway
to pay such amounts after paying or making provision for the payment of its Commercial Paper Notes.

(c) The provisions of this Section 12.11 shall survive the termination of this
Agreement.

	 	 	 	Section 12.12 Protection of Security Interest; Appointment of Attorney-in-Fact.

(a) The Borrower shall, or shall cause the Servicer to, cause this Agreement, all amendments
hereto and/or all financing statements and continuation statements and any other necessary
documents covering the right, title and interest of the Trustee, on behalf of for the Secured
Parties, and of the Secured Parties to the Collateral to be promptly recorded, registered and
filed, and at all time to be kept recorded, registered and filed, all in such manner and in such
places as may be required by law fully to preserve and protect the right, title and interest of the
Trustee, on behalf of the Secured Parties, hereunder to all property comprising the Collateral.
The Borrower shall deliver or, shall cause the Servicer to deliver, to the Trustee (with a copy to
the Agent) file-stamped copies of, or filing receipts for, any document recorded, registered or
filed as provided above, as soon as available following such recording, registration or filing.
The Borrower and the Servicer shall cooperate fully in connection with the obligations set forth
above and will execute any and all documents reasonably required to fulfill the intent of this
Section 12.12.

(b) The Borrower agrees that from time to time, at its expense, it will promptly execute and
deliver all instruments and documents, and take all actions, that may reasonably be necessary or
desirable, or that the Agent may reasonably request, to perfect, protect or more fully evidence the
security interest Granted to the Trustee, on behalf of the Secured Parties, in the Collateral, or
to enable the Trustee, on behalf of the Secured Parties, the Agent or the Secured Parties to
exercise and enforce their rights and remedies hereunder.

(c) If the Borrower or the Servicer fails to perform any of its obligations hereunder after
five Business Days’ notice from the Trustee, on behalf of the Secured Parties, the Agent or any
other Secured Party, the Trustee, on behalf of the Secured Parties, the Agent or any other Secured
Party may (but shall not be required to) perform, or cause performance of, such obligation; and the
Trustee’s, the Agent’s or such other Secured Party’s reasonable costs and expenses incurred in
connection therewith shall be payable by the Borrower (if the Servicer that fails to so perform is
the Borrower or an Affiliate thereof) as provided in Article X, as applicable. The
Borrower irrevocably authorizes the Trustee and appoints the Trustee as its attorney-in-fact to act
on behalf of the Borrower, (i) to file financing statements necessary or desirable in either of the
Agent’s or the Trustee’s sole discretion to perfect and to maintain the perfection and priority of
the interest of the Secured Parties in the Collateral and (ii) to file a carbon, photographic or
other reproduction of this Agreement or any financing statement with respect to the Collateral as a
financing statement in such offices as either of the Trustee or the Agent in its sole discretion
deems necessary or desirable to perfect and to maintain the perfection and priority of the
interests of the Secured Parties in the Collateral. This appointment is coupled with an interest
and is irrevocable.

(d) Without limiting the generality of the foregoing, Borrower will, on or prior to June 30 of
each year unless the Collection Date shall have occurred, if requested by the Agent in its
reasonable discretion, deliver or cause to be delivered to the Agent an Opinion of the Counsel for
Borrower, in form and substance reasonably satisfactory to the Agent, confirming and updating the
opinion delivered pursuant to Section 3.1 with respect to perfection and otherwise to the
effect that the Collateral hereunder continues to be subject to a perfected security interest in
favor of the Trustee on behalf of the Secured Parties, subject to no other Liens of record except
as provided herein or otherwise permitted hereunder, which opinion may contain usual and customary
assumptions, limitations and exceptions.

	 	 	 	Section 12.13 Confidentiality.

(a) Each of the Agent, the Secured Parties and the Borrower shall maintain and shall cause
each of its employees and officers to maintain the confidentiality of this Agreement and the other
confidential proprietary information with respect to the other parties hereto and their respective
businesses obtained by it or them in connection with the structuring, negotiating and execution of
the transactions contemplated herein, except that each such party and its officers and employees
may (i) disclose such information to its external accountants, investigators, auditors, attorneys,
investors, potential investors or other agents engaged by such party in connection with any due
diligence or comparable activities with respect to the transactions and Collateral contemplated
herein and the agents of such Persons, (ii) disclose any information as required to be publicly
filed with or furnished to the Securities and Exchange Commission, or as required by Applicable
Law, (iii) disclose the existence of this Agreement, but not the financial terms thereof and (iv)
disclose the Agreement and such information in any suit, action, proceeding or investigation
(whether in law or in equity or pursuant to arbitration) involving any of the Transaction Documents
or any Hedging Agreement for the purpose of defending itself, reducing its liability, or protecting
or exercising any of its claims, rights, remedies, or interests under or in connection with any of
the Transaction Documents or any Hedging Agreement.

(b) Anything herein to the contrary notwithstanding, the Borrower hereby consents to the
disclosure of any nonpublic information with respect to it for use in connection with the
transactions contemplated herein and in the Transaction Documents (i) to the Agent or the Secured
Parties by each other, (ii) by the Agent or the other Secured Parties to any prospective or actual
Eligible Assignee or participant of any of them or (iii) by the Agent or the Conduit Lender to any
rating agency, commercial paper dealer or provider of a surety, guaranty or credit or liquidity
enhancement to the Conduit Lender and to any officers, directors, employees, outside accountants
and attorneys of any of the foregoing, provided each such Person is informed of the confidential
nature of such information and agree to be bound hereby. In addition, the Conduit Lender, the
Agent and the Hedge Counterparty may disclose any such nonpublic information pursuant to any law,
rule, regulation, direction, request or order of any judicial, administrative or regulatory
authority or proceedings.

(c) The Borrower and the Servicer each agrees that it shall not (and shall not permit any of
its Affiliates to) issue any news release or make any public announcement pertaining to the
transactions contemplated by this Agreement and the Transaction Documents without the prior written
consent of the Agent (which consent shall not be unreasonably withheld) unless such news release or
public announcement is required by law, in which case the Borrower or the Servicer shall consult
with the Agent prior to the issuance of such news release or public announcement. The Borrower and
the Servicer each may, however, disclose the general terms of the transactions contemplated by this
Agreement and the Transaction Documents to trade creditors, suppliers and other similarly situated
Persons so long as such disclosure is not in the form of a news release or public announcement.

	 	 	 	Section 12.14 Third Party Beneficiaries.

Except as otherwise specifically provided herein, the parties hereto hereby manifest their
intent that no third party, other than the Hedge Counterparties, shall be deemed a third party
beneficiary of this Agreement, and specifically that the Obligors are not third party beneficiaries
of this Agreement.

	 	 	 	Section 12.15 Execution in Counterparts; Severability; Integration.

This Agreement may be executed in any number of counterparts and by different parties hereto
in separate counterparts, each of which when so executed shall be deemed to be an original and all
of which when taken together shall constitute one and the same agreement. In case any provision in
or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be affected or impaired
thereby. This Agreement contains the final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and shall constitute the entire
agreement among the parties hereto with respect to the subject matter hereof, superseding all prior
oral or written understandings other than any fee letter delivered to the Agent and the Conduit
Lender.

	 	 	 	Section 12.16 Waiver of Setoff.

Each of the parties hereto (other than Fairway) hereby waives any right of setoff it may have
or which it may be entitled under this Agreement from time to time against Fairway or its assets.

	 	 	 	Section 12.17 Assignments by the Conduit Lender.

(a) With the prior written consent of the Borrower (which consent shall not be unreasonably
withheld), Fairway may at any time assign, or grant a security interest or sell a participation
interest in, any Advance (or portion thereof) to any Person; provided, that, (i) no such consent of
the Borrower shall be required following the occurrence of a Termination Event, (ii) in the case of
an assignment of the Variable Funding Note, the assignee (other than any assignee described in the
following provision) executes and delivers to the Servicer and the Agent a fully-executed
Assignment and Acceptance substantially in the form of Exhibit D hereto and a Transferee
Letter substantially in the form of Exhibit V hereto); and (iii) Fairway shall not need
prior consent to at any time assign, or grant a security interest or sell a participation interest
in, any Advance (or portion thereof) to a Liquidity Bank or an Affiliate of the Agent. The
Borrower shall not assign or delegate, or grant any interest in, or permit any Lien to exist upon,
any of the Borrower’s rights, obligations or duties under this Agreement without the prior written
consent of the Agent and the Hedge Counterparty.

	 	 	 	Section 12.18 Heading and Exhibits.

The headings of the various Articles and Sections herein are for purposes of references only
and shall not otherwise affect the meaning or interpretation of any provision hereof. The
schedules and exhibits attached hereto and referred to herein shall constitute a part of this
Agreement and are incorporated into this Agreement for all purposes.

	 	 	 	Section 12.19 Sharing of Payments on Transferred Loans Subject to the Retained Interest
Provisions.

(a) With respect to any Transferred Loan (including, without limitation, any Revolving Loan)
subject to the Retained Interest provisions of this Agreement, the Borrower will own only the
principal portion of such Transferred Loans outstanding as of the applicable Cut-off Date.
Principal Collections received by the Servicer on any such Transferred Loan will be allocated first
to the portion of such Transferred Loan owned by the Borrower, until the principal amount of such
portion is reduced to zero, and then to the portion not owned by the Borrower; provided, however,
if a payment with respect to such Transferred Loan is delinquent beyond any applicable grace
period, then Principal Collections received on the applicable Transferred Loan will be allocated
between the portion owned by the Borrower and the portion not owned by the Borrower, pro rata based
upon the outstanding principal amount of each such portion.

(b) With respect to any Transferred Loan (including, without limitation, any Revolving Loan)
subject to the Retained Interest provisions of this Agreement, Interest Collections received by the
Servicer on those Transferred Loans will be allocated between the portion not owned by the Borrower
and the portion owned by the Borrower on a pro rata basis according to the outstanding principal
amount of each such portion.

(c) Notwithstanding the foregoing or anything to the contrary contained herein or any
Transaction Document, any payments made by any Hedge Counterparty pursuant to the terms of the
Hedge Agreements shall be solely for the benefit of the Borrower, subject to the lien of the
Trustee on behalf of the Secured Parties, and shall not be subject to the pro rata sharing
provisions of Section 12.19(a). In furtherance of the foregoing clause of this paragraph,
the Originator hereby releases any right, title, or interest it may have in or to any payment made
or to be made at any time by any Hedge Counterparty pursuant to the terms of any Hedge Agreement.

	 	 	 	Section 12.20 Non-Confidentiality of Tax Treatment.

All parties hereto agree that each of them and each of their employees, representatives, and
other agents may disclose to any and all persons, without limitation of any kind, the tax treatment
and tax structure of the transaction and all materials of any kind (including, without limitation,
opinions or other tax analyses) that are provided to any of them relating to such tax treatment and
tax structure. “Tax treatment” and “tax structure” shall have the same meaning as such terms have
for purposes of Treasury Regulation Section 1.6011-4; provided, however, that with respect to any
document or similar item that in either case contains information concerning the tax treatment or
tax structure of the transaction as well as other information, the provisions of this Section
12.20 shall only apply to such portions of the document or similar item that relate to the tax
treatment or tax structure of the transactions contemplated hereby.

	 	 	 	Section 12.21 Condition to Effectiveness.

All parties hereto agree that notwithstanding anything to the contrary contained in this
Agreement, this amendment and restatement of the Original Agreement shall not be effective if any
fee due to be paid on or prior to the date hereof pursuant to the Fee Letter has not been paid.

[The remainder of this page is intentionally left blank.]

2

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

PATRIOT CAPITAL FUNDING LLC I, as the Borrower

By: /s/ Timothy W. Hassler

Name:  Timothy W. Hassler     

Title: Chief Operating Officer

PATRIOT CAPITAL FUNDING, INC., as the Originator and

the Servicer

By: /s/ Timothy W. Hassler

Name:  Timothy W. Hassler     

Title: Chief Operating Officer

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

3

FAIRWAY FINANCE COMPANY, LLC,

as the Conduit Lender

By: /s/ Amy S. Keith

Name: Amy S. Keith

Title: Vice President

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

4

BMO CAPITAL MARKETS CORP., as the Agent

By: /s/ David J. Kucera

Name: David J. Kucera

Title: Managing Director

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

5

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as the Backup Servicer and as the Trustee

By: /s/ Cheryl Zimmerman

Name: Cheryl Zimmerman

Title: Assistant Vice President

6

Annex A

Addresses for Notices

The Borrower:

	 	 	 
	Patriot Capital Funding LLC I

	 	

	 
	 	 
	c/o Patriot Capital Funding, Inc.

	 
	 	 
	61 Wilton Road, 2nd Floor

	 
	 	 
	Westport, Connecticut 06880

Attention:Compliance Officer

Facsimile No.:

Confirmation No.:

	 	

(203) 221-8253

(203) 227-7778

The Originator and Servicer:

	 	 	 
	Patriot Capital Funding, Inc.

	 
	 	 
	61 Wilton Road, 2nd Floor

Westport, Connecticut 06880

Attention:Compliance Officer

Facsimile No.:

Confirmation No.:

	 	

(203) 221-8253

(203) 227-7778

The Conduit Lender:

	 	 	 	 	 
	Fairway Finance Company, LLC

	c/o Lord Securities Corporation

	48 Wall Street, 27th Floor
New York, New York 10005
Attention:
	 	 	 	 
	Facsimile No.(212) 346-9012
Telephone No.
	 	 	(212) 346-9000	 

With a copy to:

	 	 	 	 	 
	c/o BMO Capital Markets Corp.

	115 South LaSalle Street
13th Floor West
Chicago, Illinois 60603
Attention:Keith Niebrugge
	 	 	 	 
	Facsimile No.(312) 293-4908

	Telephone No.
	 	 	(312) 461-3134	 

The Agent:

	 	 	 	 	 
	BMO Capital Markets Corp.

	115 South LaSalle Street
13th Floor West
Chicago, Illinois 60603
Attention:
	 	Keith Niebrugge

	Facsimile No.
	 	 	(312) 293-4908	 

The Backup Servicer and Trustee:

	 	 	 	 	 
	Wells Fargo Bank, National Association

	MAC N9311-161
	 	 	 	 
	Sixth Street and Marquette Avenue

	Minneapolis, MN 55479
	 	 	 	 
	Attention:Corporate Trust Services

	Asset-Backed Administration
Facsimile No.:
	 	 	(612) 667-3539	 

Location of Loan Files:

	 
	Wells Fargo Bank, National Association
MAC N9328-011
Suite ABS
751 Kasota Avenue
Minneapolis, MN 55414
Attention: Corporate Trust Services –
Asset-Backed Securities Vault

Facsimile No.: (612) 667-1080

7

Annex B

Commitments

	 	 	 	 	 
	Conduit Lender	 	Commitment
	Fairway Finance Company, LLC
	 	$	140,000,000	 

8EX-10.132

Exhibit 10.132

EQUITY PURCHASE AGREEMENT

This EQUITY PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of September 15,
2006, by and between Halo Technology Holdings, Inc., a Nevada corporation (“Purchaser”), the
stockholders (the “RevCast Stockholders”) of RevCast, Inc., an Arkansas corporation (“RevCast”) and
the members (the “Enterprises Members”) of RevCast Enterprises, LLC, a Delaware limited liability
company (“Enterprises;” and, together with RevCast, the “Companies” and each a “Company”). The
RevCast Stockholders and the Enterprises Members are collectively referred to as the “Sellers”
herein, and the names of the Sellers are listed on the signature page to this Agreement.

R E C I T A L S

A. The Sellers own in the aggregate 100% of the outstanding equity securities of the Companies
(the “Equity Interests”).

B. Each Seller desires to sell the Equity Interest owned by such Seller to the Purchaser, on
the terms and subject to the conditions of this Agreement.

A G R E E M E N T

In consideration of the foregoing recitals and the respective covenants, agreements,
representations and warranties contained herein, the parties, intending to be legally bound, agree
as follows:

ARTICLE 1

DEFINITIONS

1.1 Unless otherwise defined, capitalized terms used herein shall have the following
meanings:

“Action” shall mean any action, claim, suit, litigation, proceeding, arbitration or
mediation.

“Agreement” shall have the meaning given to it in the Preamble.

“APP Design Agreement” shall mean the outsourcing services agreement between the
Purchaser and APP Design requiring a payment to APP Design of $10,000 for the first month after the
Closing and $15,000 for each month thereafter until the agreement is terminated or modified by the
parties.

“Books and Records” shall mean all all product, business and marketing plans, sales
and promotional literature and artwork relating to the Companies, (b) all books, records, lists,
ledgers, financial data, files, reports, product and design manuals, plans, drawings, technical
manuals and operating records of every kind relating to the Companies (including records and lists
of customers, distributors, suppliers and personnel), and (c) all telephone and fax numbers used by
the Companies, in each case whether maintained as hard copy or stored in computer memory, and (d)
the organizational documents of the Companies.

“Business” shall mean the business and operations of the applicable Company.

“Closing” shall have the meaning given to such term in Section 5.1.1 hereof.

“Closing Date” shall have the meaning given to such term in Section 5.1.1 hereof.

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

“Company” shall have the meanings given to such term in the Preamble to this
Agreement.

“Contracts” shall mean all contracts, arrangements, licenses, Leases, understandings,
purchase orders, invoices and other agreements to which either of the Companies is a party, whether
written, oral, established through course of dealing or otherwise.

“Damages” shall mean all claims, demands, losses, liabilities, obligations,
damages (including incidental and consequential damages), expenses, actions, judgments,
injunctions, orders, decrees, taxes, fines or diminution of value, including, without limitation,
interest, penalties and reasonable attorneys’, accountants’ and experts’ fees and costs of
investigation incurred as a result thereof.

“Drop Dead Date” shall have the meaning ascribed to it in Section 5.1.1.

Environmental Laws” shall mean all applicable Laws (including consent decrees and
administrative orders) relating to the public health and safety and protection of the environment,
including those governing the use, handling, storage, transportation and disposal or remediation of
hazardous substances.

“Equity Interests” shall have the meaning ascribed to it in Recital A to this
Agreement.

“Employee Benefit Plan(s)” shall mean other than any obligations pursuant to any Laws,
(i) any Employee Welfare Plan or any Pension Plan, (ii) any “multi-employer plan,” as defined in
Section 4001(a)(3) of ERISA to which any of the Companies has contributed or been obligated to
contribute, and (iii) any deferred compensation plan, severance pay, bonus plan, profit sharing
plan, stock option plan, employee stock purchase plan, and any other employee benefit plan,
agreement (other than employment agreements with individual Employees), arrangement or commitment
maintained by any of the Companies for the benefit of Employees.

“Employee Welfare Plan” shall mean other than any obligations pursuant to any Laws,
any “employee welfare benefit plan,” as defined in Section 3(l) of ERISA, which any of the
Companies sponsor, or under which any of the Companies may incur any liability, and which covers
any Employees, including each multi-employer welfare benefit plan.

“Employees” shall have the meaning given to such term in Section 3.10.5 hereof.

“Employment Agreements” means those certain employment agreements between the Company
and Shad Gamel and Geoff Gitelson, in such form as may be agreed upon between Purchaser and such
individuals.

“Encumbrances” shall mean any claim, lien, pledge, option, charge, mortgage, security
interest, restriction, encumbrance or other right of third parties, whether voluntarily incurred or
arising by operation of law, and includes any agreement to give any of the foregoing in the future,
and any contingent sale or other title retention agreement or lease in the nature thereof.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

“Financial Statements” shall have the meaning given to such term in Section 3.9.1
hereof.

“GAAP” shall mean generally accepted accounting principles as in effect in the United
States of America on the date hereof, consistently applied.

“Governmental Authority” shall mean (i) any nation, state, county, city or other
jurisdiction of any nature, (ii) any federal, state, local, municipal, foreign or other government
(or any department, agency, or political subdivision thereof), (iii) any governmental or
quasi-governmental authority of any nature, or (iv) any body exercising executive, legislative,
judicial, regulatory or administrative actions of or pertaining to government.

“Indebtedness” shall mean (i) any liability for borrowed money, including without
limitation (i) any liability evidenced by a note, (ii) any obligation for the acquisition of
property or assets, (iii) the sale or factoring of any obligation under working capital or other
debt facility, (iv) any liability arising from a guarantee or endorsement of another Person’s
borrowed money, (v) a promissory note or similar instrument of indebtedness, (vi) any lease
payments due under leases constituting Material Contracts and which are required to be capitalized
in accordance with GAAP, and (vii) any liability for the payment of purchase price from past
acquisitions of any of the Companies, or past acquisitions of other businesses by any of the
Companies.

“Indemnitee” shall have the meaning given to such term in Section 9.2.3 hereof.

“Indemnitor” shall have the meaning given to such term in Section 9.2.3 hereof.

“Intellectual Property” shall mean (i) any and all trademarks, service marks,
tradenames, mask works, copyrights and patents (including registrations, licenses, and applications
pertaining thereto) owned by or licensed to any of the Companies, and (ii) any and all trade
secrets, confidential Business information, discoveries, inventions, know-how and any and all other
intellectual property rights owned by or licensed to any of the Companies that relate to, or are
used by, such Company, other than standard licenses to use ordinary, commercially available
software and systems.

“Knowledge of Sellers”, “to Sellers’ knowledge” and any similar phrase shall
mean the actual knowledge of Shad Gamel; Geoff Gitelson; Rob Quinn; Ivan Kiselev; and Dave Warren.

“Laws” shall mean any and all case law, common law, and any and all federal, state,
local or foreign laws, statutes, rules, regulations, executive orders, codes or ordinances enacted,
adopted, issued or promulgated by any Governmental Authority.

“Leased Real Property” has the meaning ascribed to it in Section 3.11.

“Leases” shall mean all leases, subleases, licenses and other lease agreements,
together with all amendments, supplements and nondisturbance agreements pertaining thereto, to
which any of the Companies is a party and pursuant to which any of the Companies leases, subleases
or licenses any real property.

“Material Adverse Effect” shall mean any event, change, circumstance or effect that
has, or is reasonably likely to have, a material adverse effect on the business, operations,
condition, financial or otherwise, or prospects, taken as a whole, of the respective Company, other
than any event, change, circumstance or effect relating (i) to the United States economy in
general, or the economy of any foreign country in general in which the applicable Company
participates, (ii) in general to the industries in which the applicable Company operates and not
specifically relating to the applicable Company, (iii) financial, banking, or securities markets
(including any disruption thereof and any decline in the price of any security or any market
index), (iv) to the announcement of the Agreement or any transactions contemplated hereunder, the
fulfillment of the parties’ obligations hereunder or the consummation of the transactions
contemplated by this Agreement, or (v) to any outbreak or escalation of hostilities or acts of
terrorism involving the United States or any declaration of war by the U.S. Congress.

“Material Contracts” shall have the meaning given to such term in Section 3.12.1.

“Obligation” shall mean any debt, liability or obligation of any nature, whether
secured, unsecured, recourse, nonrecourse, liquidated, unliquidated, accrued, absolute, fixed,
contingent, ascertained, unascertained, known, unknown or otherwise.

“Ordinary Course” means the ordinary course of Business of the applicable Company
consistent with past custom and practice (including with respect to quantity and frequency).

“Pension Plan” shall mean other than any obligations pursuant to any Laws, any
“employee pension benefit plan,” as defined in Section 3(2) of ERISA (including any “multiemployer
plan,” as defined in Section 3(37) of ERISA), which any of the Companies sponsors or to which any
of the Companies contributes or is required to contribute, or under which any of the Companies may
incur any liability.

“Permits” shall mean all franchises, permits, licenses, qualifications, rights-of-way,
easements, municipal and other approvals, authorizations, orders, consents and other rights from,
and filings with, any Governmental Authority.

“Permitted Encumbrances” shall mean (i) tax liens with respect to taxes not yet due
and payable or which are being contested in good faith by appropriate proceedings and for which
appropriate reserves have been established in accordance with GAAP, consistently applied; (ii)
deposits or pledges made in connection with, or to secure payment of, utilities or similar
services, workers compensation, unemployment insurance, old age pensions or other social security
obligations; (iii) liens reflected on the Most Recent Balance Sheet; (iv) mechanics’, materialmen’s
or contractors’ liens or encumbrances or any similar lien or restriction for amounts not yet due
and payable or which are being contested in good faith by appropriate proceedings and for which
appropriate reserves have been established in accordance with GAAP, consistently applied; (v)
easements, rights-of-way, restrictions and other similar charges and encumbrances not interfering
with the Ordinary Course of any of the Companies or materially detracting from the value of the
assets of any of the Companies; and (vi) source code escrows granted in favor of certain customers.

“Person” means an individual, a partnership (general or limited), a corporation, an
association, a limited liability company, a joint stock company, a trust, an estate, a joint
venture or an unincorporated organization.

“Pre-Closing Tax Period” shall have the meaning given to such term in Section 7.1
hereof.

“Proceeding” shall mean any demand, claim, suit, action, litigation, investigation,
audit, arbitration, administrative hearing or other proceeding of any nature.

“Purchase Price” shall have the meaning given to such term in Section 2.2.1 hereof.

“Purchaser” shall have the meaning given to such term in the Preamble to this
Agreement.

“Purchaser Shares” means shares of Common Stock of the Purchaser.

“Related Party” shall mean, with respect to any Person, any partner, owner, equity
owner, member, director, officer, manager, or controlling Person of such Person.

“Representative” shall mean any officer, director, principal, shareholder, partner,
member, attorney, accountant, advisor, agent, trustee, employee or other representative of a party.

“Royalty Payment” shall mean an amount equal to twenty percent (20%) of revenues
generated by the assets of the Companies. The Royalty Payments will be paid in cash quarterly as,
when and if earned, paid within forty-five (45) days of the end of each such quarter. The maximum
Royalty Payment will be $400,000, with $100,000 of this amount accelerated if Purchaser secures an
aggregate of $3.0 million in new debt or equity financing after the date of this Agreement.

“Sellers” shall have the meaning given to such term in the Preamble to this Agreement
and “Seller” shall mean any one of them, as applicable.

“Software” shall mean any computer program, operating or other system, application,
firmware or software of any nature, whether operational, active, under development or design,
non-operational, or inactive (including, without limitation, all object code, source code, comment
code, algorithms, processes, formulae, interfaces, navigational devices, menu structures or
arrangements, icons, operational instructions, scripts, commands, syntax, screen designs, reports,
designs, concepts, and visual expressions), technical manuals, test scripts, user manuals and other
documentation therefore, whether in machine-readable form, programming language or any other
language or symbols, and whether stored, encoded, recorded or written on disk, tape, film, memory
device, paper or other media of any nature and any and all databases necessary or appropriate to
operate or in the use of any such computer program, operating or other system, application,
firmware or software.

“Subsidiary” and “Subsidiaries” shall have the meanings given to such terms in
Section 3.5.1 hereof.

“Subsidiary Interests” shall have the meaning given to such term in Section 3.5.2
hereof.

“Tax(es)” shall mean all taxes, charges, fees, levies, duties, imposts or other
assessments or charges imposed by and required to be paid to any Governmental Authority, including,
without limitation, income, excise, property, sales, use, transfer, gains, ad valorem or value
added, stamp, payroll, windfall, profits, gross receipts, employment, withholding, social security,
workers’’ compensation, unemployment compensation, documentation, license, registration,
customs duties, tariffs, net worth and franchise taxes (including any interest, penalties or
additions attributable to or imposed on or with respect to any such assessment) and any estimated
payments or estimated taxes.

“Tax Audit” shall have the meaning given to such term in Section 10.4 hereof.

“Tax Return” shall mean any return, report, information return or other similar
document or statement (including any related or supporting information) filed or required to be
filed with any Governmental Authority in connection with the determination, assessment or
collection of any Tax or the administration of any Laws, regulations or administrative requirements
relating to any Tax, including, without limitation, any information, return, claim for refund,
amended return or declaration of estimated Tax and all federal, state, local and foreign returns,
reports and similar statements.

“Third Party Reimbursement” shall have the meaning given to such term in Section 9.5
hereof.

ARTICLE 2

PURCHASE AND SALE

2.1 Sale and Purchase of the Equity Interests. On the Closing Date, subject
to the other terms and conditions of this Agreement, the Sellers shall sell, assign and deliver the
Equity Interests to Purchaser, and Purchaser shall purchase and acquire the Equity Interests from
each Seller, free and clear of all Encumbrances. The Purchase Price shall be allocated among the
Sellers as set forth in Exhibit 2.1 hereto.

2.1.1 Purchase Price and Adjustments. The total purchase price for the
Equity Interests (the “Purchase Price”) shall be 350,000 Purchaser Shares, delivered to the Sellers
at the Closing; and the Royalty Payments, if and when due under this Agreement.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF SELLER

Sellers jointly and severally represent and warrant to Purchaser as set forth below:

3.1 Organization and Existence. Each of the Companies is a limited
liability company or corporation, as applicable, duly formed or incorporated, validly existing and
in good standing under the laws of its state of formation or incorporation (as listed on Schedule
3.1). Each of the Companies has all requisite power and authority to own and operate its Business
and to carry on such Business as presently conducted. Each of the Companies is qualified or
licensed to do business in each jurisdiction in which the conduct of its Business or ownership of
its properties make such qualification necessary, except for such jurisdictions in which the
failure to be so duly qualified or licensed would not have a Material Adverse Effect on the
Companies. Schedule 3.1 lists: (i) the employer identification number for each of the Companies;
(ii) all legal names used by each of the Companies and its predecessors in the last three (3)
years; (iii) all entities merged with or into each of the Companies or its predecessors in the last
three (3) years; and (iv) the address for each location at which each of the Companies has an
office or otherwise has any material assets (other than Employees working out of their homes).
Accurate and complete copies of the articles or certificates of organization or formation,
operating agreements and other organization documents for each of the Companies, each as amended to
date, have been delivered to Purchaser.

3.2 Authorization. Each Seller has the requisite power and authority to
enter into this Agreement, to perform its obligations hereunder, and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement by each Seller has
been duly authorized by all necessary action on the part of such Seller.

3.3 Due Execution and Delivery; Binding Obligations. This Agreement has
been duly executed and delivered by each Seller. This Agreement constitutes a legal, valid and
binding agreement of each Seller, enforceable against each Seller in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency, reorganization, arrangement,
moratorium or similar Laws relating to or limiting creditors’ rights generally or by equitable
principles relating to enforceability.

3.4 Capitalization; Title to Equity Interests.

3.4.1 (i) The Equity Interests are solely owned, of record and beneficially, by the
Sellers. As of the Closing Date, the Equity Interests will represent the only outstanding
economic, voting, ownership or any other type of equity interest in the Companies. As of the
Closing Date, there are no securities in the Companies other than the Equity Interests.

3.4.2 The certificate of incorporation and bylaws (or certificate of formation and
operating agreement, as the case may be) of either Company do not impose upon any holder of any
Equity Interests any obligation to make capital contribution commitments to such Company. As of
the Closing Date, the Equity Interests will be held by Sellers free and clear of all Encumbrances.

3.4.3 As of the Closing Date, none of the Sellers are subject to any restrictions on
transfer, rights of first refusal or other restrictions or obligations relating to the Equity
Interests. As of the Closing Date, except as set forth on Schedule 3.4, there will be no
outstanding subscription, option, warrant, call right, preemptive right or other agreement or
commitment obligating either Company to issue, sell, deliver or transfer (including any right of
conversion or exchange under any outstanding security or other instrument) any economic, voting,
ownership or any other type of membership or other interest or security in such Company, other than
pursuant to any actions taken by on behalf of Purchaser or its affiliates.

3.4.4 Schedule 3.4.4 sets forth a list of the officers and directors of each
Company.

3.5 Subsidiaries and Joint Ventures.

3.5.1 Neither Company owns or controls any other partnership, corporation, limited
liability company or other form of entity (a “Subsidiary”).

3.5.2 Neither Company is a party to any joint venture with any other Person.

3.6 No Conflict or Violation; Consents. Except as set forth on Schedule
3.6, neither the execution and delivery of this Agreement by Sellers nor the consummation of the
transactions contemplated hereby, will result in (i) a violation of, or a conflict with, the
organizational documents of such Seller or the Companies; (ii) a violation by any Sellers or any of
the Companies of any applicable Law; (iii) a violation by any Seller or any of the Companies of any
order, judgment, writ, injunction, decree or award to which such Seller or any of the Companies is
a party or by which any Seller or any of the Companies is bound or affected; (iv) a breach of or
cause a default under, or result in the termination of, or accelerate the performance of, or create
in favor of any Person other than any of the Companies a right of termination or consent under, any
Material Contract to which either Company is a party; or (v) an imposition of an Encumbrance on the
Equity Interests or the assets of either Company.

3.7 Governmental Consents and Approvals. Except as set forth on Schedule
3.7, and except to the extent that the absence thereof would not have a Material Adverse Effect on
the Companies, no Permit, approval, consent or authorization of, or declaration, filing,
application, transfer or registration with, any Governmental Authority is required to be made or
obtained by any Seller or either Company by virtue of the execution, delivery or performance of
this Agreement or the consummation of the transactions contemplated hereby in order to enable
Purchaser to own the Equity Interests and to permit the Companies to continue the lawful operation
of their Business following the Closing Date in substantially the same manner as it is presently
conducted by such Company.

3.8 Pending Litigation. Schedule 3.8 sets forth a complete and correct list
of all pending Actions and, to the knowledge of each Seller, any Actions threatened against the
Companies, or which have been initiated by the Companies, or which would affect the ability of any
Seller to consummate the sale of his or its respective Equity Interests. None of the Actions, if
adversely determined against the Companies, or their directors or officers, would reasonably be
expected to result in a loss, individually or in the aggregate, in excess of $5,000. To the
knowledge of the Sellers, there is no basis for any Action which, if adversely determined against
either Company, would reasonably be expected to result in a loss, individually or in the aggregate,
in excess of $5,000.

3.9 Financial Information.

3.9.1 Financial Statements. Sellers have furnished to Purchaser copies of
(i) the unaudited balance sheet of the Companies as of      , and the related statements of
income for the      month period then ended (the “Financial Statements”). The Financial Statements
have been prepared in accordance with GAAP on a consistent basis during the respective periods,
fairly and accurately present in all material respects the financial condition of the Companies and
the results of operations of the Companies for the respective periods covered by the statements of
income contained therein, and are correct and complete in all material respects.

3.9.2 Accounting Controls. Each Company has maintained a system of internal
accounting controls sufficient to provide reasonable assurance that transactions have been executed
with management’s authorizations, and transactions have been recorded as necessary to permit
preparation of the Financial Statements in accordance with GAAP.

3.9.3 Indebtedness. As of the Closing Date, neither Company will have any
outstanding Indebtedness.

3.9.4 Undisclosed Liabilities. Except as set forth on Schedule 3.9.4,
neither Company has any liabilities or obligations (known, unknown, asserted, unasserted, absolute,
contingent, accrued, unaccrued, liquidated, unliquidated, due, to become due, or otherwise,
including any liability for Taxes) except (i) liabilities which are reflected and properly reserved
against in the Financial Statements and (ii) liabilities incurred in the ordinary course since the
date of the Financial Statements in an aggregate amount not exceeding $5,000 arising under any of
the Contracts listed on Schedule 3.12.1.

3.9.5 Inter-company Assets and Liabilities. Except as set forth on Schedule
3.9.5, as of the Closing Date, all payable inter-company accounts receivable, accounts payable and
accrued inter-company expenses between or among the inter-company group consisting of the
Companies, the Sellers and their respective affiliates, shall have been paid or otherwise
extinguished and there will be no inter-company assets or liabilities.

3.10 Absence of Certain Changes. Since the date of the Financial
Statements, there has been no Material Adverse Effect. Without limiting the generality of the
foregoing, except as set forth on Schedule 3.10, since the date of the Financial Statements neither
Company has:

3.10.1 sold, assigned, licensed, leased, transferred, disposed of, or agreed to
sell, assign, license, lease, transfer or dispose of, any asset other than in the Ordinary Course;

3.10.2 acquired any equity interests in any other Person, acquired any material
assets, except in the Ordinary Course, nor acquired or merged with any other business or Person;

3.10.3 incurred or created any material Encumbrances on any of its assets;

3.10.4 suffered the destruction, damage or other loss (whether or not covered by
insurance) of any assets or property material to the conduct of the Business;

3.10.5 increased the salary or other compensation payable or to become payable to
any employee of such Company (“Employees”) or obligated itself to pay any bonus or other
additional salary or compensation to any Employee in each case other than in the Ordinary Course;

3.10.6 other than with respect to at-will Employees, entered into any employment
Contract or collective bargaining Contract, or modified the terms of any existing such Contract, or
made any other change in employment terms for any Employees outside of the Ordinary Course;

3.10.7 terminated any Employees whose responsibilities are material to any of the
Companies.

3.10.8 adopted, amended, modified, or terminated any Employee Benefit Plan;

3.10.9 made any loan to, or entered into any other transaction with, any Employees,
other than the hiring of at-will Employees in the Ordinary Course;

3.10.10 entered into any new Contract not in the Ordinary Course;

3.10.11 waived, amended, modified, terminated or canceled any Material Contract or
material right, nor has any third party taken any such action with respect to any Material
Contracts;

3.10.12 suffered any disposition or lapse of any Intellectual Property, including,
without limitation, the expiration of any applications for registration of any Intellectual
Property rights;

3.10.13 licensed any Intellectual Property, other than to end users, customers or
distributors in the Ordinary Course;

3.10.14 made any capital expenditures;

3.10.15 made any investment in, or any loan to, any other Person;

3.10.16 created, incurred, assumed, or guaranteed any Indebtedness (other than
Indebtedness to the Purchaser or one of its subsidiaries);

3.10.17 entered into any Contract to take any action, or permit any occurrence,
described above;

3.10.18 satisfied or discharged any Encumbrances or discharged or paid any
Indebtedness or other Obligation to any party;

3.10.19 entered into any other Obligation with any third party;

3.10.20 declared, set aside or paid any dividends, or in respect of any shares of
capital stock, repurchased, redeemed or otherwise acquired shares of outstanding stock of RevCast;

3.10.21 transferred any membership interests in Enterprises;

3.10.22 mortgaged, pledged or transferred any security interest in, or lien, created
by any of the Companies, with respect to any assets (except for tax liens for taxes not yet due and
payable);

3.10.23 instituted or settled any action or Proceeding against any of the Companies;

	 	 	 
	3.10.24

3.10.25

3.10.26

	 	issued any new equity securities;

changed accounting methods or internal controls; or

failed to pay any obligation due in the ordinary course.

3.11 Real Property. Schedule 3.11 sets forth a complete and correct list
of all real property leased by the Companies (“Leased Real Property”). Except as set forth in
Schedule 3.11, neither Company has subleased or otherwise granted any other Person a right to use
any real property. Neither Company owns any fee interest in any real property.

3.11.1 To Sellers’ knowledge, no Proceedings are pending which would affect or
pertain to the zoning, use or environmental condition of any of the Leased Real Property.

3.12 Material Contracts.

3.12.1 Schedule 3.12.1 sets forth a complete list of the following Contracts (the
“Material Contracts”): all (i) agreements for Indebtedness to which any of the
Companies is a party; (ii) agreements or commitments to make material capital expenditures; (iii)
agreements to sell, lease or otherwise dispose of any material assets or properties of either
Company, other than in the Ordinary Course; (iv) agreements limiting the freedom of a Company to
compete in any line of business or in any geographic area or with any Person; (v) Leases; (vi)
joint venture agreements and partnership agreements to which a Company is a party; (vii) any
license from a third party to any of the Companies for Intellectual Property, other than shrink
wrapped software that is generally available in the commercial markets, such as word processing
programs; (viii) Contracts involving any Companies’ investment in, or any loan to, any other
Person; (ix) other than with respect to at-will Employees, employment agreements or loan agreements
with any Employees; (x) Contracts that involve payments or receipts of either (A) more than $10,000
annually or (B) $20,000 in the aggregate in future payments or receipts over the life of such
Contract; (xi) Contracts of value which default could have a Material Adverse Effect; (xii)
Contracts outside of the Ordinary Course and (xiii) Contracts that require consent or notice of
assignment or will accelerate or terminate on change of control; (xiv) manufacturing or joint
development agreements; (xv) confidentiality and non-disclosure agreements (whether any of the
Companies is the beneficiary or the obligated party thereunder); (xvi) contracts or commitments
relating to commission arrangements with others; (xvii) consulting contracts and severance
agreements, (xviii) indemnification agreements; (xix) any Contract with the federal, state or local
government or any agency or department thereof; (xx) any Contract or other arrangement or
understanding with a Related Party; (xxi) Contracts that are in the nature of offset or barter
agreements.

3.12.2 Each Material Contract is valid, binding and enforceable against the Company
that is a party thereto, in accordance with its term, except that (i) such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other laws,
now or hereafter in effect, relating to or limiting creditors’ rights generally, and (ii) general
principles of equity (regardless of whether enforceability is considered in a proceeding at law or
in equity). To the knowledge of the Sellers, each Material Contract is valid, binding and
enforceable against the other parties thereto, in accordance with its terms. None of the Companies
is in default, violation or breach in any material respect under any Material Contract, and no
event has occurred which with notice or lapse of time would constitute a material breach or
default, or permit termination, modification, or acceleration, under such Material Contract.
Except as disclosed on Schedule 3.12.2, each Material Contract shall be in full force and effect
without penalty in accordance with its terms immediately following the consummation of the
transaction contemplated hereby. None of the Companies has committed any act, and there has been
no omission by any of the Companies, which may result in, and there has been no occurrence which
may give rise to, material product liability or liability for breach of warranty (whether covered
by insurance or not) on the part of any of the Companies, with respect to products designed,
manufactured, assembled, sold, repaired, maintained, delivered or installed or services rendered
prior to or on the Closing Date.

3.13 Intellectual Property.

3.13.1 Schedule 3.13.1 sets forth a complete and correct list of all patents, patent
applications, registered trademarks, registered service marks, mask works, trade names, registered
copyrights, Software owned or licensed, under development or held for use by any of the Companies,
and, in the case of Software developed by any of the Companies, if any, a product description, the
language in which it is written and the type of hardware platform(s) on which it runs, and all
applications for registration included in the registered Intellectual Property filed by or held in
the name of a Company.

3.13.2 (i) Without expansion of the representations and warranties made in this
subsection 3.13.2(ii) and 3.13.2(iii), all right, title and interest in and to the Intellectual
Property is either owned by the Companies to whose Business such Intellectual Property relates free
and clear of all Encumbrances, other than Permitted Encumbrances, or is licensed by the Companies
from a third party unaffiliated with any Seller pursuant to a valid and enforceable written
license, other than any such license or sublicense between the Companies, and the Companies have
good and marketable title to such Intellectual Property, (ii) no claims have been made or, to the
knowledge of the Sellers, threatened (including by way of a demand letter or offer to license), to
the Sellers or the Companies by any Person, and there are no grounds for any Person to claim that
(A) the Companies do not own or have the right to use, as applicable, any material Intellectual
Property used in their Business, (B) the operation of the Business of the applicable Company as
presently conducted is infringing, misappropriating or otherwise violating the intellectual
property rights of any Person, or (C) the Intellectual Property purported to be owned by either
Company infringes, misappropriates or otherwise violates the intellectual property rights of any
third party or is invalid or unenforceable, and (iii) to the knowledge of the Sellers, neither of
the Companies is infringing, misappropriating or otherwise violating, or has infringed,
misappropriated or otherwise violated any intellectual property rights of any other Person. The
Companies have taken all steps customary and reasonable in the industry (including, entering into
appropriate confidentiality and nondisclosure agreements and work product agreements with all
current and former officers, directors, subcontractors, employees, licensees and customers) in
connection with the Business to safeguard and maintain the secrecy and confidentiality of, and the
proprietary rights in, the Intellectual Property. Without limiting the foregoing, all Intellectual
Property rights that were created by consultants, independent contractors or other third parties
for or on behalf of any of the Companies are subject to written agreements pursuant to which all
right, title and interest therein, including without limitation the copyrights thereto, have been
duly and properly assigned to one of the Companies. No current or former owners, equity owners,
partners, directors, executives, officers, employees, independent contractors or any other parties
has any interest in or right to any Intellectual Property, including, but not limited to, the right
to royalty payments.

3.13.3 Except as set forth on Schedule 3.13.3, to the knowledge of the Sellers, no
Person is currently infringing or otherwise violating any Companies’ rights in any owned
Intellectual Property.

3.13.4 No rights or permission of any of the Companies or any other party are
necessary to use, make, manufacture, reproduce, distribute, display, perform, market, license,
sell, offer to sell, modify, adapt, translate, enhance, improve, update, or create derivative works
based upon any Intellectual Property, except as provided under any licenses relating thereto.

3.13.5 Set forth on Schedule 3.13.5 are all Internet domain names related to or used
or held for use in connection with, related to, pursuant to, in the conduct of, or as part of the
Business, or licensed to or used, owned, or registered by the Companies.

3.13.6 The registrations with respect to the registered Intellectual Property owned
by the Companies set forth on Schedule 3.13.1 (other than those trademarks designated “Inactive
Marks” or “Trademark Applications”) are complete and accurate and are in full force and effect.

3.14 Employee Matters.

3.14.1 There is no labor strike, dispute, slowdown, or stoppage pending or, to the
knowledge of the Sellers or the Companies, threatened against the Companies. None of the Companies
is a party to or bound by any collective bargaining agreement with respect to any Employees. To
the knowledge of the Sellers and the Companies, no certification question or organizational drive
exists or has existed within the past two (2) years with respect to Employees. Except as set forth
on Schedule 3.8, there is no unfair labor practice, charge or complaint of discrimination
(including discrimination based upon sex, age, marital status, race, national origin, sexual
preference, handicap or veteran status) or any other matter against or involving any of the
Companies pending or, to the knowledge of the Sellers and the Companies, threatened before the
National Labor Relations Board, the Equal Employment Opportunity Commission or any other
Governmental Authority pertaining to or involving Employees. Except as set forth on Schedule
3.14.1 and except as required by any Law, none of the Companies has entered into any severance
Contract or similar arrangement in respect of any Employee that will result in any obligation
(absolute or contingent) of any of the Companies to make any payment to any Employee following
termination of employment or upon consummation of the transactions contemplated by this Agreement.

3.14.2 Schedule 3.14.2 lists the names, current base salary or hourly wage rate and
the 2004 bonuses and commissions of all Employees, consultants and third party agents of the
Companies.

3.14.3 The Companies are in compliance in all material respects with all applicable
Laws relating to employment practices. The Companies have delivered to Purchaser accurate and
complete copies of all current employee manuals and handbooks, disclosure materials, policy
statements and other materials relating to the employment of its employees.

3.14.4 Schedule 3.14.4 sets forth a complete and correct list of all Employee
Benefit Plans of each of the Companies. Each such Employee Benefit Plan complies in all material
respects with the provisions of and has been administered in compliance with the provisions of
ERISA and all other applicable Laws. Without limiting the generality of the foregoing, no
“prohibited transaction” (as such term is defined in Section 4975 of the Code, or in Part 4 of
Subtitle B of Title I of ERISA) has occurred with respect to any such Employee Benefit Plan that
could result in the imposition of material Taxes or penalties on the Companies, and neither any
Seller nor any of the Companies has failed to make any contribution to, or to make any payment
under, any such Employee Benefit Plan that it was required to make prior to Closing pursuant to the
terms of such Employee Benefit Plan or pursuant to applicable Law that could result in any material
liability to the Companies.

3.15 Taxes. Except as set forth on Schedule 3.15, (i) all Tax Returns
relating to the Companies that are required by Law to be filed have been duly filed on a timely
basis, (ii) all amounts set forth thereon have been paid in full and all such Tax Returns are
correct and complete in all material respects, (iii) none of the Companies have waived nor has been
requested to waive any statute of limitations in respect of Taxes, (iv) there are no pending or
threatened Actions for the assessment or collection of Taxes that relate to the activities or
income of any of the Companies, (v) there are no liens for Taxes upon the assets of any of the
Companies other than liens for Taxes not yet due and payable or being contested in good faith, (vi)
all material Taxes which any of the Companies is required by Law to withhold or to collect for
payment have been duly withheld and collected, and have been paid or accrued, reserved against and
entered on their respective Books and Records in accordance with GAAP and (vii) all Tax
deficiencies of any of the Companies determined as a result of any past completed audit have been
satisfied. There are no Tax-sharing agreements or similar arrangements (including indemnity
arrangements) with respect to or involving the Companies. The Sellers have properly requested,
received and retained all necessary exemption certificates and other documentation supporting any
claimed exemption or waiver of Taxes on sales or other transactions for which Purchaser would have
been obligated to collect or withhold Taxes.

3.16 Compliance with Law. Except as set forth on Schedule 3.16, each
Company currently conducts its Business in compliance in all material respects with all Laws
applicable to the conduct of its Business. No Seller or either Company has received any written
notice from, nor does any Seller have any knowledge that, any Governmental Authority or other
Person is claiming or threatening to claim any violation or potential violation of any Law with
respect to any of the Companies.

3.17 Permits. Each of the Companies holds all material Permits necessary
for the lawful operation of its Business as presently conducted, and all such Permits are in full
force and effect.

3.18 Insurance. Schedule 3.18 contains an accurate list of all policies of
insurance in effect on the date hereof relating to the Companies. All such policies are valid,
outstanding and enforceable. None of the Companies has received notice of any actual or threatened
modification or cancellation of any such insurance. Except as set forth on Schedule 3.18, there
are no pending claims under any insurance policies.

3.19 Brokers and Finders. Except as listed on Schedule 3.19, all
negotiations relating to this Agreement and the transactions contemplated hereby have been carried
on without the intervention of any Person acting on behalf of any Seller or the Companies in such
manner as to give rise to any claim for any brokerage or finders’ commission, fee or similar
compensation.

3.20 Accounts Receivable; Expenses. 

3.20.1 The accounts and notes receivable reflected in the Financial Statements of
the Companies are recorded in accordance with GAAP. The accounts and notes receivable on the
date of the Financial Statements arose from bona fide transactions, including sales of goods or
services rendered, and represent bona fide claims against debtors for sales, services performed or
other charges and all of the goods delivered and services performed which give rise to such
accounts were delivered or performed in accordance with applicable orders, contract or customer
requirements. All such accounts and notes are collectible except to the extent of any reserves.
All reserves for bad debt shown on the Financial Statements of each of the Companies are reflected
properly in accordance with GAAP.

3.20.2 The collection practices employed by each of the Companies have not changed
from the Ordinary Course since the date of the Financial Statements.

3.20.3 There has been no unusual discounts or accelerations in connection with any
accounts or notes receivable after the date of the Financial Statements.

3.20.4 As of the Closing Date, the Companies shall have paid all expenses currently
due and owing, consistent with past practices.

3.21 Customers. Schedule 3.21 sets forth a complete and accurate list of
the names of all of the customers of each of the Companies, showing the approximate total billings
in United States dollars to each such customer during the last fiscal year and the present year to
date. None of the Companies has received any written communication from any customer named on
Schedule 3.21 of any intention to return, terminate or materially reduce purchases from the
Companies.

3.22 Bank Accounts. Set forth on Schedule 3.22 is a complete list of all
bank, brokerage or similar account of each of the Companies and the names of all officers or
employees who are authorized to make withdrawals therefrom or dispositions thereof.

3.23 Books and Records. Except as set forth on Schedule 3.23, the Books and
Records of each of the Companies have been maintained in accordance with generally accepted
industry practice. The Books and Records are true, accurate and complete in all material respects
and fairly reflect the activities of the Companies.

3.24 Questionable Payments. None of the partners, members, owners,
directors, managers, executives, officers, representatives, agents or employees of any of the
Companies (when acting in such capacity or otherwise on behalf of the Companies): (i) has used or
is using any corporate funds for illegal contributions, gifts, entertainment or other unlawful
expenses relating to political activity; (ii) has used or is using any corporate funds for any
direct or indirect unlawful payments to any foreign or domestic government officials or employees;
(iii) has violated or is violating any provision of the Foreign Corrupt Practices Act of 1977; (iv)
has established or maintained, or is maintaining, any unlawful or unrecorded fund of corporate
monies or other corporate properties; (v) has made at any time since the date of formation any
false or fictitious entries on the books and records of the Companies; or (vi) has made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment of any nature using corporate
funds or otherwise on behalf of any of the Companies.

3.25 Environmental Matters.

The Companies have at all times been in compliance in all material respects with applicable
Environmental Laws in respect to the Leased Real Properties. No Company has received any notice
from any governmental agency in connection with environmental issues arising out of or relating to
the Leased Real Property. There are no pending civil, criminal or administrative proceedings
against any of the Companies under any Environmental Laws arising out of relating to the condition
of any of the Leased Properties or any of the Companies’ activities thereon. Except as set forth
on Schedule 3.25, to the Companies’ knowledge, no underground or above ground storage tanks, active
or abandoned, are present at any Leased Real Property.

3.26 Financial Projections: Operating Plan. The Sellers have made available
to Purchaser certain financial projections with respect to the Companies which projections were
prepared for internal use only. These projections were prepared in good faith and are based on
assumptions believed by the Sellers to be reasonable as of the date the projections were prepared
and the Sellers have disclosed any material changes since their delivery to the Purchaser.

3.27 Investment Intent. Sellers are acquiring the Purchaser Shares for
their own account for investment and not with a view to, or for sale in connection with, any
distribution thereof. Sellers are “accredited investors” as defined in Rule 501(a) of Regulation D
of the Securities Act of 1933, as amended. Sellers understand and agree that they may not sell,
dispose, transfer, pledge, hypothecate or otherwise dispose of any of the Purchaser Shares (i)
without registration under the Securities Act of 1933, as amended, except pursuant to an exemption
from such registration available under such Act and (ii) except in accordance with any applicable
provisions of state and local securities Laws.

3.28 No Other Agreements to Sell the Companies or the Equity Interests. The
Sellers do not have any legal obligation, absolute or contingent, to any other Person to sell the
Equity Interests or the assets of any of the Companies or to effect any merger, consolidation or
other reorganization of any of the Companies or to enter into any agreement with respect thereto,
except pursuant to this Agreement.

3.29 Full Disclosure. No representation or warranty of any of the Sellers
in this Agreement and no statement contained in any written material or certificates furnished or
to be furnished to Purchaser (including the information provided in the Schedules hereto) pursuant
hereto (i) contains any untrue statement of any material fact or (ii) omits to state any fact that
is necessary to make the statements made, in the context in which made, not false or misleading in
any material respects.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser represents and warrants to Sellers as follows:

4.1 Organization. Purchaser is a corporation duly organized, validly
existing and in good standing under the Laws of Nevada.

4.2 Authorization. Purchaser has the requisite power and authority to enter
into this Agreement, to perform its obligations hereunder, and to consummate the transactions
contemplated hereby. The execution, delivery and performance by Purchaser of this Agreement has
been duly authorized by all necessary action on the part of Purchaser.

4.3 Due Execution and Delivery; Binding Obligations. This Agreement has
been duly executed and delivered by Purchaser and constitutes a legal, valid and binding agreement
of Purchaser, enforceable in accordance with its terms, except as such enforcement may be limited
by bankruptcy, insolvency, reorganization, arrangement, moratorium or similar Laws relating to or
limiting creditors’ rights generally or by equitable principles relating to enforceability.

4.4 No Conflict or Violation. Neither the execution and delivery of this
Agreement by Purchaser nor the consummation of the transactions contemplated hereby, will result in
(i) a violation of, or a conflict with, Purchaser’s organizational documents or any subscription,
members’ or similar agreements or understandings to which Purchaser is a party; (ii) a violation by
Purchaser of any applicable Law or (iii) a violation by Purchaser of any order, judgment, writ,
injunction, decree or award to which Purchaser is a party or by which Purchaser is bound or
affected.

4.5 Consents and Approvals. No consent, permit, approval or authorization
of, or declaration, filing, application, transfer or registration with, any Governmental Authority,
or any other Person is required to be made or obtained by Purchaser by virtue of the execution,
delivery or performance of this Agreement.

4.6 Brokers and Finders. All negotiations relating to this Agreement and
the transactions contemplated hereby have been carried on without the intervention of any Person
acting on behalf of Purchaser in such manner as to give rise to any claim for any brokerage or
finders’ commission, fee or similar compensation.

4.7 Investment Intent. Purchaser is acquiring the Equity Interests for its
own account for investment and not with a view to, or for sale in connection with, any distribution
thereof. Purchaser is an “accredited investor” as defined in Rule 501(a) of Regulation D of the
Securities Act of 1933, as amended. Purchaser understands and agrees that it may not sell,
dispose, transfer, pledge, hypothecate or otherwise dispose of any of the Equity Interests (i)
without registration under the Securities Act of 1933, as amended, except pursuant to an exemption
from such registration available under such Act and (ii) except in accordance with any applicable
provisions of state and local securities Laws.

4.8 Capital Structure. The authorized capital stock of Purchaser consists
of 150,000,000 shares of Common Stock, par value $0.00001 per share and 50,000,000 shares of
preferred stock, par value $0.00001 per share, of which 8,863,636 shares of Series D Preferred
Stock have been designated. As of the date hereof, there are (i) approximately 30,000,000 shares
of Common Stock issued and outstanding and 0 shares of Common Stock held in Parent’s treasury, (ii)
approximately 24,000,000 shares of Common Stock reserved for issuance upon exercise of outstanding
stock options or otherwise, (iii) no shares of Series C Preferred Stock issued and outstanding and
(iv) 7,045,454 shares of Series D Preferred Stock issued and outstanding. There no issued and
outstanding shares of Purchaser’s Series A Preferred Stock or Series B Preferred Stock or Series C
Preferred Stock. Other than the convertible instruments described above, no person has any phantom
rights, options, warrants or other equity interest or instrument convertible into any equity
interest in Purchaser or otherwise has any right to acquire any equity interest or any instrument
convertible into any equity interest in Purchaser.  All of the issued and outstanding shares of
Purchaser’s capital stock have been duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights and were issued in full compliance with applicable
state and Federal securities law and any rights of third parties.

4.9 SEC Documents/Purchaser Financial Statements. Purchaser has furnished or made
available to the Sellers true and complete copies of all reports or registration statements filed
by it with the U.S. Securities and Exchange Commission (the “SEC”) since January 1, 2004, all in
the form so filed (all of the foregoing being collectively referred to herein as the “SEC
Documents”). As of their respective filing dates, the SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act as the case may be, and
none of the SEC Documents contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements therein, in light
of the circumstances in which they were made, not misleading, except to the extent corrected by a
document subsequently filed with the SEC. The consolidated financial statements of Purchaser,
including the notes thereto, included in the SEC Documents (the “Purchaser Financial
Statements”) have been prepared in accordance with GAAP consistently applied (except as may be
indicated in the notes thereto or, in the case of unaudited statements, as permitted by SEC rule)
and present fairly, in all material respects, the consolidated financial position of Purchaser at
the dates thereof and the consolidated results of its operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).

ARTICLE 5 

CLOSING

5.1.1 Closing. The closing shall take place at 10.00 a.m., Chicago time, on
or about September 15,, 2006 or such later date as all of the conditions in Articles 7 and 8 are
fulfilled or waived (the “Closing”), but in no event shall the Closing be later than September 30,
2006 (the “Drop Dead Date”), at the offices of Enterprises, or at such other time and place
mutually agreeable to the parties. The date on which Closing occurs is referred to herein as the
Closing Date.

5.1.2 General Procedure. At the Closing, each party shall deliver to the
party entitled to receipt thereof the documents required to be delivered pursuant to Article VIII
hereof and such other documents, instruments and materials (or complete and accurate copies
thereof, where appropriate) as may be reasonably required in order to effectuate the intent and
provisions of this Agreement, and all such documents, instruments and materials shall be
satisfactory in form and substance to counsel for the receiving party.

ARTICLE 6

COVENANTS

6.1 Access to Information.

6.1.1 The Companies and Sellers shall give Purchaser and its designated
representatives, upon reasonable notice and at mutually agreeable times, access to all of the
properties and assets and customers of the Companies and to all of each Company’s documents, Books
and Records relating to its current and past operations and Business and to make copies thereof and
permit such representatives to interview and question the Customer’s employees. Purchaser will not
reveal any confidential data and/or information supplied by the Companies except to its management,
counsel, accountants, insurance representatives, investment and commercial bankers and like agents,
for purposes relating to the evaluation and consummation of the transactions contemplated by this
Agreement, and in the event the transactions contemplated by this Agreement are not consummated,
such data and information will be returned to the Companies and will be held confidential by those
to whom it is disclosed.

6.1.2 Provided Purchaser and Purchaser’s representatives have signed reasonable
confidentiality agreements protecting the confidential information of Sellers, each Seller shall
give Purchaser access to such Seller’s Books and Records as they relate to the Companies after the
Closing, during regular business hours upon not less than two (2) business days’ notice, as
necessary, in order for Purchaser to prepare tax filings and audits and in connection with debt or
equity financings.

6.2 Conduct of the Business Pending Closing. Between the date hereof and the
Closing hereunder, each Company will:

6.2.1 not take any action which would render untrue any of the representations or
warranties of the Companies and the Sellers herein contained, and not omit to take any action
within its power, the omission of which would render untrue any such representation or warranty;

6.2.2 conduct its Business in the Ordinary Course;

6.2.3 not enter into any Contract with any party, other than Contracts entered into
in the Ordinary Course, and not amend, modify or terminate any Contract other than in the Ordinary
Course without the prior written consent of Purchaser;

6.2.4 use commercially reasonable efforts to preserve its business intact, to keep
available the services of its Employees, and to preserve its relationships with its customers and
others with whom it deals consistent with past practice;

6.2.5 not reveal, orally or in writing, to any party, other than Purchaser and
Purchaser’s authorized agents, any of the business procedures and practices followed by it in the
conduct of its Business or any technology used in the conduct of its Business;

6.2.6  maintain in full force and effect all of the insurance policies listed on
Schedule 3.18 and make no change in any insurance coverage without the prior written consent of
Purchaser;

6.2.7 keep the premises occupied by it and all of its equipment and other tangible
personal property in good order and repair and perform all necessary repairs and maintenance within
normal time frames of scheduled maintenance;

6.2.8 continue to maintain all of its usual Books and Records in accordance with its
past practices and not to make any material Tax elections;

6.2.9 not amend its articles or incorporation, bylaws or other organizational
documents;

6.2.10 not declare or make any dividend or other payment on or with respect to the
Equity Interests, redeem or otherwise acquire any securities or issue any securities or any,
option, warrant or right relating thereto;

6.2.11 not pay any bonuses to any of its Employees, other than in the Ordinary
Course;

6.2.12 not waive any right or cancel any claim;

6.2.13 not increase the compensation or the rate of compensation payable to any of
its Employees without the prior written approval of the Purchaser;

6.2.14 maintain its entity existence and not merge or consolidate with any other
entity;

6.2.15 comply with all provisions of any Contract applicable to it and all
applicable Laws consistent with past practices;

6.2.16 except with Purchaser’s consent, not make any capital expenditures in excess
of $5,000 per expenditure and/or $10,000 in the aggregate;

6.2.17 neither discuss nor negotiate with any other Person or entity the sale or
other transfer, or Encumbrance, of the assets or the Equity Interests of the Companies;

6.2.18 deposit all funds received into the Companies’ principal bank accounts and
will pay all expenses of the Companies from such accounts; and

6.2.19 use commercially reasonable efforts to effectuate the transactions
contemplated by this Agreement, and to do all things whatsoever necessary and proper to effect the
transactions and agreements contemplated herein.

6.3 Payment on Account of Contract. Between the date hereof and up until
and after the Closing hereunder, each Seller shall immediately remit any payment it receives (if
any) on account of a Contract to the Companies.

6.4 Product Development; Competition. Sellers who are not affiliates of APP
Design shall not directly or indirectly sell or develop products that are functionally similar or
that would compete with the current products of any of the Companies. Sellers who are affiliates of
APP Design shall not sell (but may develop for third party clients of APP Design or such Sellers)
products that are functionally similar or competitive with the current products of any of the
Companies (provided that the restrictions in this sentence shall terminate on the three month
anniversary of the termination of the APP Design Agreement). Sellers will not solicit any current
or future customers of the Companies without Purchaser’s written consent.

6.5 Governmental Permits and Approvals. The Companies and the Sellers shall
use their commercially reasonable efforts to obtain all Permits and approvals from any Governmental
Authority required to be obtained by the Sellers and/or any Company and/or the Purchaser for the
lawful consummation of the transactions contemplated hereby, and to take all steps necessary to
transfer or have reissued to Purchaser any governmental licenses, approvals or permits by Closing.

6.6 Reasonable Efforts. Purchaser shall use commercially reasonable efforts
to effectuate the transactions contemplated by this Agreement, and to do all things whatsoever
necessary and proper to effect the transactions and agreements contemplated herein.

6.7 Confidentiality. No party shall use any information or data obtained in
connection with the negotiation of the transactions contemplated by this Agreement for any purpose
other than to pursue and further the consummation of such transactions.

ARTICLE 7

CONDITIONS PRECEDENT TO CLOSING

7.1 Conditions Precedent to Closing of Purchaser. Each and every obligation
of Purchaser to enter into the transactions contemplated by this Agreement and complete the Closing
is subject, at Purchaser’s option, to the fulfillment and satisfaction of each of the following
conditions:

7.1.1 The representations and warranties of the Companies and Sellers contained in
this Agreement will be true and correct in all material respects on and as of the Closing Date with
the same force and effect as though made on and as of the Closing Date. The Schedules to this
Agreement will be complete, accurate and current on and as of the Closing Date. Each Seller and the
Company and each Subsidiary will have performed and complied with all covenants and agreements
required by this Agreement to be performed or complied with by them on or prior to the Closing
Date. Each Seller and the Companies will have delivered to Purchaser a certificate, dated the
Closing Date, to the foregoing effect;

7.1.2 No action, suit or proceeding will have been instituted before any court or
Governmental Authority or instituted or threatened by any Person which could materially affect the
assets, Obligations, financial condition or prospects of any of the Companies or restrain or
prevent the carrying out of the transactions contemplated hereby or seek damages in connection with
such transactions;

7.1.3 All necessary approvals and/or filings for the transactions contemplated
hereby to be obtained and/or made by any of the Companies and any Seller will have been obtained
and/or made, as the case may be, and shall be in full force and effect; and

7.1.4 The deliveries set forth in Section 8.1 shall have occurred.

7.2 Conditions Precedent to Closing of the Companies and Sellers. Each and every
obligation of the Companies and Sellers to enter into the transactions contemplated by this
Agreement and complete the Closing is subject, at their option, to the fulfillment and satisfaction
of each of the following conditions:

7.2.1 The representations and warranties of Purchaser contained in this Agreement
will be true and correct on and as of the Closing Date with the same force and effect as though
made on and as of the Closing Date. Purchaser will have performed and complied with all covenants
and agreements required by this Agreement to be performed or complied with by it on or prior to the
Closing Date. Purchaser will have delivered to Seller a certificate, dated the Closing Date, to
the foregoing effect;

7.2.2 All necessary approvals and/or filings for the transactions contemplated
hereby to be obtained and/or made by Purchaser will have been obtained and/or made, as the case may
be, and shall be in full force and effect;

7.2.3 No action, suit or proceeding will have been instituted before any court or
government body or restricted or threatened by any person which could materially prevent the
carrying out of the transactions contemplated hereby; and

7.2.4 The deliveries set forth in Section 8.2 shall have occurred.

ARTICLE 8

DELIVERIES AT CLOSING 

8.1 The Companies’ and Sellers’ Deliveries at Closing. The Companies and the
Sellers, as applicable, shall deliver to Purchaser at Closing:

8.1.1 The stock certificates or membership interests and an assignment of membership
interest or stock power assigning all of the Equity Interests to Purchaser.

8.1.2 Good standing certificate or the equivalent for each of the Companies, dated
no earlier than ten (10) days before the Closing Date, from the jurisdiction of incorporation or
formation.

8.1.3 A certified copy of the articles of incorporation or organization, and each
amendment thereto, of each of the Companies, from the secretary of state of the jurisdiction in
which such Company is incorporated.

8.1.4 A true and correct copy of each Companies’ bylaws or operating or similar
agreement, and each amendment thereto.

8.1.5 Duly executed resignations of each member of the board of directors of each of
the Companies.

8.1.6 The minute books, equity transfer books or similar books and records and seal
of each of the Companies.

8.1.7 The APP Design Agreement, executed by all parties other than the Purchaser.

8.1.8 All keys to safe deposit boxes of any of the Companies and authorized forms to
change (i) the permitted users of the safe deposit boxes and (ii) permitted users and authorized
persons for banking relationships.

8.1.9  Each Employment Agreement, executed by all parties other than the Purchaser.

8.1.10 All other agreements, certificates, instruments, financial statement
certifications and documents reasonably requested by Purchaser in order to fully consummate the
transactions contemplated by this Agreement and carry out the purposes and intent of this
Agreement.

8.2 Purchaser’s Deliveries at Closing. Purchaser shall deliver to the Sellers at Closing:

8.2.1 The Purchaser Shares delivered in accordance with the Sellers’ written instructions.

8.2.2 The Employment Agreements, duly executed by the Purchaser or the Company.

8.2.3 The APP Design Agreement, executed by the Purchaser.

8.2.4 All other agreements, certificates, instruments and documents reasonably requested by
any Seller in order to fully consummate the transactions contemplated by this Agreement and carry
out the purposes and intent of this Agreement.

ARTICLE 9

INDEMNIFICATION

9.1 Survival of Representations and Warranties. All representations and
warranties made hereunder or pursuant hereto or in connection with the transactions contemplated
hereby shall survive the Closing for a period of one year following the Closing Date, except all
representations and warranties made by Sellers under Sections 3.1, 3.2, 3.3, 3.4, 3.5, and 3.15,
which shall survive the Closing through the date of the applicable statute of limitations.

9.2 Indemnification Obligations.

9.2.1 Indemnification by Seller. Sellers shall jointly and severally
indemnify, defend and hold harmless Purchaser, the Companies and their respective affiliates, and
Representatives, and shall reimburse each such Person on demand for any Damages resulting from any
of the following: (i) any breach or default in the performance by any of the Sellers of any
covenant or agreement contained herein, in any agreement contemplated hereby or executed in
connection herewith, or in any certificate or other instrument delivered or to be delivered by or
on behalf of any of the Sellers pursuant hereto or thereto; (ii) any breach of warranty or
inaccurate representation made by any of the Sellers herein; and (iii) the operation of the
Business of each of the Companies prior to the Closing Date provided, however, that:

9.2.1.1 None of the Sellers shall be required to pay any Damages to Purchaser unless
the aggregate amount of all Damages exceeds $5,000, in which case all Damages shall be paid, and
(ii) in no event shall the aggregate amount of Damages payable by the Sellers exceed $75,000,
provided, however, that this limit on Damages shall not apply to Damages for breaches of warranty
or inaccurate representation made by Sellers under Sections 3.1, 3.2, 3.4, 3.5, 3.9.5, 3.15 and
3.19; and

9.2.1.2 Indemnity claims under this Section 9.2.1 shall be paid in cash by the
Sellers.

9.2.2 Indemnification by Purchaser. Purchaser shall indemnify, defend and
hold harmless Sellers and any of their affiliates and Representatives, and shall reimburse each
such Person on demand for any Damages resulting from any of the following: (i) any breach or
default in the performance by Purchaser of any covenant or agreement of Purchaser contained herein,
in any agreement contemplated hereby or executed in connection herewith, or in any certificate or
other instrument delivered or to be delivered by or on behalf of Purchaser pursuant hereto or
thereto; (ii) any breach of warranty or inaccurate representation made by Purchaser herein; and
(iii) the operation of the Business of each of the Companies after the Closing Date provided,
however, that, (A) Purchaser shall not be required to pay any Damages to Sellers or any such
Persons with respect to the breach of any representation or warranty pursuant to the foregoing
clause (ii) unless the aggregate amount of all Damages exceeds $5,000, in which case all Damages
shall be paid, and (B) in no event shall the aggregate amount of Damages payable by Purchaser
exceed $75,000.

9.2.3 Claims for Indemnity. Whenever a claim for Damages shall arise for
which one party (“Indemnitee”) shall be entitled to indemnification hereunder, Indemnitee
shall notify the other party(s) (“Indemnitor”) in writing within thirty (30) days of the
first receipt of notice of such claim, and in any event within such shorter period as may be
necessary for Indemnitor to take appropriate action to resist such claim; provided that the failure
to give notice as herein provided shall not relieve Indemnitor of its obligation to indemnify
Indemnitee except to the extent that Indemnitor shall have been prejudiced in its ability to defend
such claim. Notwithstanding anything in this Agreement to the contrary, written notice of any
Indemnitee’s claim for indemnification for breach of representations and warranties must be given
within the survival period for such representations and warranties set forth in Section 9.1, and
any indemnity claim for breaches of representations and warranties which has not been noticed in
writing by such date shall be time-barred, irrespective of whether such claim was known or unknown
by such date to the party seeking indemnification. Each notice shall specify all facts known to
Indemnitee giving rise to such indemnity rights and shall estimate the amount of the liability
arising therefrom. If Indemnitee is duly notified of a dispute, the parties shall attempt to settle
and compromise the same, or if unable to do so within thirty (30) days (or such longer period as
they may agree) of Indemnitor’s delivery of notice of a dispute, either party may seek judicial
resolution of the dispute. Any rights of indemnification established by reason of such settlement,
compromise or arbitration shall promptly thereafter be paid and satisfied by Indemnitor.

9.2.4 Defense of Third Party Claims. Upon receipt by Indemnitor of a notice
from an Indemnitee with respect to any claim of a third party against Indemnitee, Indemnitor may
assume the defense of such claim with counsel reasonably satisfactory to Indemnitee, and Indemnitee
shall cooperate to the extent reasonably requested by Indemnitor in defense or prosecution thereof
and shall furnish such records, information and testimony and attend all such conferences,
discovery proceedings, hearings, trials and appeals as may be reasonably requested by Indemnitor in
connection therewith. If Indemnitor assumes the defense of such claim, Indemnitee shall have the
right to employ its own counsel in any such case, but the fees and expenses of such counsel shall
be at the expense of Indemnitee. If Indemnitor has assumed the defense of any claim against
Indemnitee, Indemnitor shall have the right to settle any claim for which indemnification has been
sought and is available hereunder involving only cash payment and/or a release it from liability;
provided that, to the extent that such settlement requires Indemnitee to take, or prohibits
Indemnitee from taking, any action or purports to obligate Indemnitee, then Indemnitor shall not
settle such claim without the prior written consent of Indemnitee. If Indemnitor does not assume
the defense of a third party claim and disputes Indemnitee’s right to indemnification, Indemnitee
shall have the right to participate in the defense of such claim through counsel of its choice, at
Indemnitor’s expense (subject to the validity of the Indemnitee’s claim), and Indemnitee shall have
control over the litigation and authority to resolve such claim with the prior consent of
Indemnitor, which consent shall not be unreasonably withheld.

9.3 No Double Recovery. Notwithstanding the fact that any Indemnitee may
have the right to assert claims for indemnification under or in respect of more than one provision
of this Agreement or another agreement entered into in connection herewith in respect of any fact,
event, condition or circumstance, no Indemnitee shall be entitled to recover the amount of any
Damages suffered by such Indemnitee more than once under all such agreements in respect of such
fact, event, condition or circumstance, and an Indemnitor shall not be liable for indemnification
to the extent the Indemnitee has otherwise been fully compensated on a dollar-for-dollar basis for
such Damages pursuant to the procedures set forth in Section 9.2.

9.4 Cooperation. Notwithstanding anything to the contrary contained in this
Article 6, the parties shall cooperate with each other in connection with any claim for
indemnification hereunder, including to obtain the benefits of any insurance coverage for third
party claims that may be in effect at the time a third party claim is asserted.

9.5 Mitigation. The amount of any Damages of any Indemnitee under this
Article 6 shall be net of (a) the amount, if any, receivable by the Indemnitee from any third party
(including, without limitation, any insurance company or other insurance provider) and (b) the
amount, if any, equal to the Tax benefit (such amounts being collectively referred to herein as a
“Third Party Reimbursement”), in respect of or attributable to the Damages suffered
thereby. If, after receipt by the Indemnitee of any indemnification payment hereunder, such Person
receives or becomes entitled to receive a Third Party Reimbursement in respect of the same Damages
for which indemnification was made and such Third Party Reimbursement was not taken into account in
assessing the amount of indemnification, then the Indemnitee shall turn over all of such Third
Party Reimbursement to the Indemnitor up to the amount of the indemnification paid pursuant hereto.

9.6 Exclusive Remedy. Except in the case of fraud, the indemnification
provided in this Article 9 will constitute the exclusive remedy of the Purchaser, the Companies and
their respective affiliates and Representatives, or Sellers and their affiliates and
Representatives, as the case may be, and their respective assigns from and against any and all
Damages asserted against, resulting to, imposed upon or incurred or suffered by, any of them,
directly or indirectly, as a result of, or based upon or arising from the breach of any
representation or warranty or the non-fulfillment of any agreement or covenant in or pursuant to
this Agreement or any other agreement, document, or instrument required hereunder. Purchaser and
Sellers each hereby waive, to the fullest extent permitted under applicable Law, any and all
rights, claims, and causes of action it may have against any other party, or any of such other
party’s affiliates, to the contrary.

9.7 Adjustments to Purchase Price. Any payments made pursuant to this
Article 6 shall be consistently treated as adjustments to Purchase Price for all Tax purposes by
Sellers and Purchaser.

9.8 Intentional Misrepresentation. Notwithstanding any other provision
hereof to the contrary, any claims of fraud shall not be limited by any survival period contained
in this Agreement or any limit on indemnification or remedy contained in this Agreement.

9.9 Damages. Notwithstanding anything to the contrary elsewhere in this
Agreement, no party or its affiliates will be liable to the other party(s) or its affiliates for
any Damages other than compensatory Damages. Each party agrees that it is not entitled to recover
and agrees to waive any claim with respect to, and will not seek, consequential, punitive or any
other special Damages as to any matter under, relating to or arising out of the transactions
contemplated by this Agreement; provided, however that the foregoing shall not limit any
indemnification obligations of either party with respect to third party claims.

ARTICLE 10

TAX MATTERS

10.1 Payment of Taxes. Sellers shall pay, and indemnify, defend and hold
the Purchaser and the Companies harmless against, any and all Taxes of the Companies (including
without limitation, any Taxes due from Sellers) allocable to any taxable periods ending on or
before the Closing Date and the portion through the end of the Closing Date for any taxable period
that includes (but does not end on) the Closing Date, including Taxes due after the Closing Date
relating to deferred revenue for which the underlying license or maintenance payments were
collected prior to the Closing Date (the “Pre-Closing Tax Period”). In the case of any taxable
period that includes (but does not end on) the Closing Date, the amount of any Taxes based on or
measured by income or receipts of the Companies allocable to the Pre-Closing Tax Period shall be
determined based on an interim closing of the books as of the close of business on the Closing
Date, and the amount of other Taxes of the Company allocable to the Pre-Closing Tax Period shall be
deemed to be the amount of such Tax for the entire taxable period multiplied by a fraction the
numerator of which is the number of days in the taxable period ending on the Closing Date and the
denominator of which is the number of days in such taxable period.

10.2 Preparation of Tax Returns. Sellers shall prepare and file all income
Tax Returns for the Companies for any tax periods ending on or prior to the Closing Date, except
for any Tax Returns due after the Closing Date in which case Purchaser shall prepare such Tax
Returns and Sellers shall have the right to review and approve such Tax Returns at least 10
business days prior to filing, which approval shall not be unreasonably withheld. Except as
otherwise provided in the preceding sentence, Purchaser shall prepare all Tax Returns for the
Companies. Sellers shall reimburse Purchaser for Taxes of the Companies which are allocable to the
Pre-Closing Period (in accordance with Section 10.1) within 15 days after payment by Purchaser or
the applicable Company of such Taxes. Purchaser shall not file, or cause any of the Companies to
file, any amended Tax Returns for any Company for tax periods that include a period prior to the
Closing Date without prior written consent of Sellers, such consent not to be unreasonably withheld
or delayed.

10.3 Payment Over of Refunds. The Companies shall promptly pay, and
Purchaser shall cause the Companies to pay, to Sellers any refund, overpayment, or credit
(including any interest paid or credited with respect thereto) of Taxes attributable to Tax periods
(or portions thereof) ending on or before the Closing Date.

10.4 Control of Tax Audits. Sellers shall have the right, at their own
expense, to control any audit or examination by any Governmental Authority (a “Tax Audit”),
initiate any claim for refund, contest, resolve and defend against any assessment, notice of
deficiency, or other adjustment or proposed adjustment relating to any and all Taxes for any
taxable period ending on or before the Closing Date with respect to any of the Companies; provided
that Sellers shall not resolve any such contest without the consent of Purchaser, such consent not
to be unreasonably withheld or delayed. Purchaser shall have the right, at its own expense, to
control, or have the applicable Company control, any other Tax Audit, initiate any other claim for
refund, and contest, resolve and defend against any other assessment, notice of deficiency, or
other adjustment for tax years beginning after the Closing Date.

10.5 Cooperation. Purchaser and the Companies, on the one hand, and
Sellers, on the other hand, shall cooperate fully, as and to the extent reasonably requested by the
other party, in connection with the filing of Tax Returns pursuant to this Article 10, and any
audit, litigation or other proceeding with respect to Taxes. Such cooperation shall include the
retention and (upon the other party’s request) the provision of records and information which are
reasonably relevant to any such audit, litigation or other proceeding and making employees
available on a mutually convenient basis to provide additional information and explanation of any
material provided hereunder. Purchaser, the Companies, and Sellers shall (i) retain all books and
records with respect to Tax matters pertinent to the Companies relating to any taxable period
beginning before the Closing Date until the expiration of the statute of limitations (and, to the
extent notified by Purchaser or Sellers, any extensions thereof) of the respective taxable periods,
and to abide by all record retention agreements entered into with any Governmental Authority and
(ii) to give the other party reasonable written notice prior to transferring, destroying or
discarding any such books and records and, if the other party so requests, the Companies or Sellers
as the case may be, shall allow the other party to take possession of such books and records. Upon
request, Purchaser and Sellers further agree to use their reasonable commercial efforts to obtain
any certificate or other document from any Governmental Authority or any other Person as may be
necessary to mitigate, reduce or eliminate any Tax that could be imposed (including but not limited
to with respect to the transactions contemplated hereby).

10.6 Transfer Taxes. Purchaser and Sellers shall each bear one half of all
sales, transfer, stamp, real property transfer or gains or similar Taxes incurred, whether direct
or indirect, as a result of the purchase of the Equity Interests by the Purchaser.

ARTICLE 11

TERMINATION

11.1 Right to Terminate. Notwithstanding anything to the contrary set forth
in this Agreement, this Agreement may be terminated and the transactions contemplated herein
abandoned at any time prior to the Closing:

(i) by mutual consent of Purchaser, on the one hand, and Sellers on the other;

(ii) by Purchaser, on the one hand, or Sellers, on the other hand, if the Closing shall not
have occurred by the Drop Dead Date, provided, however, that the right to terminate this Agreement
under this Section 11.1 shall not be available to any party whose failure to fulfill any obligation
under this Agreement has been the cause of, or resulted in, the failure of the Closing to occur on
or before such date;

(iii) by Purchaser, on the one hand, or Sellers on the other hand, if a court of competent
jurisdiction shall have issued an order, decree or ruling permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement, and such order, decree,
ruling or other action shall have become final and nonappealable;

(iv) by Sellers if Purchaser (x) breaches its representations and warranties in any material
respect or (y) fails to comply in any material respect with any of its covenants or agreements
contained herein; or

(v) by Purchaser if Sellers and/or the Companies (x) breach their representations and
warranties in any material respect or (y) fail to comply in any material respect with any of its
covenants or agreements contained herein.

11.2 Effect of Termination. In the event of termination of this Agreement
by either Purchaser or Sellers as provided above, the provisions of this Agreement shall
immediately become void and of no further force and effect (other than this Section 11.2 and
Sections 6.7 (Confidentiality), the limitations on indemnity set forth in Article 9, Section 12.3
(Expenses) and 12.5 (Controlling Law), which shall each survive the termination of this Agreement),
and there shall be no liability on the part of any of Purchaser or Seller to one another, except
for knowing or willful breaches of this Agreement prior to the time of such termination.

ARTICLE 12

MISCELLANEOUS PROVISIONS

12.1 Further Assurances. Each party to this Agreement shall execute,
acknowledge and deliver any further documents and instruments and take any other action consistent
with the terms of this Agreement that may reasonably be requested by the other party for the
purpose of giving effect to the transactions contemplated by this Agreement, whether before,
concurrent with or after the consummation of the transactions contemplated hereby. 

12.2 Publicity. Any press release or similar announcement concerning the
consummation of the transactions contemplated hereby by any party shall be provided to the other
parties for review and approval prior to its release, which approval shall not be unreasonably
withheld; provided, however, Sellers or Purchaser or their affiliates may, without the consent of
the other, publish and use standard tombstone announcements regarding the consummation of the
transactions contemplated by this Agreement; provided further, that in no event shall any party
publicly disclose the Purchase Price or the approximate amount thereof, without the consent of the
other parties. Following the issuance of the initial announcement, either party may, without the
consent of the other, publish additional announcements that contain substantially similar material
as the initial announcement. This Section 12.2 shall not prevent announcements required by law or
securities regulations, provided that the other parties hereto shall have the opportunity to read
and comments on such announcements prior to the release thereof.

12.3 Expenses. Each of the parties shall pay all costs and expenses
incurred by it or on its behalf in connection with this Agreement and the transactions contemplated
hereby, including, without limitation, fees and expenses of its own financial consultants,
accountants and counsel.

12.4 Entire Agreement. This Agreement, together with the agreements
referred to herein and the Schedules hereto and thereto, set forth the entire agreement between the
parties with regard to the subject matter hereof and thereof.

12.5 Governing Law. The validity, construction and performance of this
Agreement, and any Action arising out of or relating to this Agreement shall be governed by the
Laws of the State of Illinois, without regard to the Laws of the State of Illinois as to choice or
conflict of Laws.

12.6 Waiver and Amendment. This Agreement may be amended, supplemented,
modified and/or rescinded only through an express written instrument signed by the parties or their
respective successors and permitted assigns. Any party may specifically and expressly waive in
writing any portion of this Agreement or any breach hereof, but only to the extent such provision
is for the benefit of the waiving party, and no such waiver shall constitute a other or continuing
waiver of any preceding or succeeding breach of the same or any other provision. The consent by one
party to any act for which such consent was required shall not be deemed to imply consent or waiver
of the necessity of obtaining such consent for the same or similar acts in the future, and no
forbearance by a party to seek a remedy for noncompliance or breach by another party shall be
construed as a waiver of any right or remedy with respect to such noncompliance or breach.

12.7 Assignment. Except as specifically provided otherwise in this
Agreement, neither this Agreement nor any interest herein shall be assignable (voluntarily,
involuntarily, by judicial process, operation of Law, or otherwise), in whole or in part, by any
party without the prior written consent of the other party. Notwithstanding the foregoing,
Purchaser may, without the consent of Sellers, whether before or after the Closing, assign all of
its rights under this Agreement to a wholly owned subsidiary of Purchaser, provided that such
assignment shall not relieve Purchaser of any of its obligations under this Agreement prior to
Closing.

12.8 Successors and Assigns; No Third Party Beneficiary. Each of the terms,
provisions, and obligations of this Agreement shall be binding upon, shall inure to the benefit of,
and shall be enforceable by the parties and their respective legal representatives, successors and
permitted assigns. Nothing in this Agreement will be construed as giving any Person, other than the
parties to this Agreement and their successors and permitted assigns, any right, remedy or claim
under, or in respect of, this Agreement or any provision hereof.

12.9 Notices. All notices, requests, demands and other communications made
under this Agreement shall be in writing, correctly addressed to the recipient as follows:

If to Sellers:

	 	 	 
	RevCast Enterprises, LLC

555 Pierce Rd.

Suite 195

Itasca, IL 60195

Attention:

	 	

Shad Gamel

Facsimile No.: (     )      -     

If to Purchaser:

HALO Technology Holdings, Inc.

200 Railroad Avenue, Third Floor

Greenwich, CT 06830

Attn: Ernest Mysogland

Facsimile No.: (203) 422-5329

Notices, requests, demands and other communications made under this Agreement shall be deemed to
have been duly given (i) upon delivery, if served personally on the party to whom notice is to be
given, (ii) on the date of receipt, refusal or non-delivery indicated on the receipt if mailed to
the party to whom notice is to be given by first class mail, registered or certified, postage
prepaid, or by air courier, or (iii) upon confirmation of satisfactory transmission of a facsimile
if sent by facsimile. Any party may give written notice of a change of address in accordance with
the provisions of this Section and after such notice of change has been received, any subsequent
notice shall be given to such party in the manner described at such new address.

12.10 Severability. Each provision of this Agreement is intended to be
severable. Should any provision of this Agreement or the application thereof be judicially declared
to be or become illegal, invalid, unenforceable or void, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other Persons or
circumstances will be interpreted so as reasonably to effect the intent of the parties.

12.11 Cumulative Remedies. No remedy made available hereunder by any of the
provisions of this Agreement is intended to be exclusive of any other remedy, and each and every
remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or
hereafter existing at Law or in equity or by statute or otherwise.

12.12 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute
a single agreement.

12.13 Facsimile Signatures. This Agreement and any other document or
agreement executed in connection herewith (other than any document for which an originally executed
signature page is required by law) may be executed by delivery of a facsimile copy of an executed
signature page with the same force and effect as the delivery of an originally executed signature
page. In the event any party delivers a facsimile copy of a signature page to this Agreement or any
other document or agreement executed in connection herewith, such party shall deliver an originally
executed signature page upon request; provided, however, that the failure to deliver any such
originally executed signature page shall not affect the validity of the signature page delivered by
facsimile, which has and shall continue to have the same force and effect as the originally
executed signature page.

12.14 Interpretation. The language in all parts of this Agreement shall be
in all cases construed simply according to its fair meaning and not strictly for or against any
party. The captions of the Sections and Subsections of this Agreement are for convenience only and
shall not affect the construction or interpretation of any of the provisions of this Agreement.
Except as otherwise provided or if the context otherwise requires, whenever used in this Agreement,
(a) any noun or pronoun shall be deemed to include the plural and the singular, (b) the terms
“include” and “including” shall be deemed to be followed by the phrase “without limitation,” (c)
the word “or” shall be inclusive and not exclusive, (d) unless the context otherwise requires, all
references to Articles and Sections refer to Articles and Sections of this Agreement and all
references to Schedules are to Schedules attached to this Agreement, each of which is made a part
of this Agreement for all purposes, (e) the words “herein,” “hereof” and “hereunder” and other
words of similar import refer to this Agreement as a whole and not to any particular Section or
other subdivision, (f) any definition of or reference to any Law, agreement, instrument or other
document herein will be construed as referring to such Law, agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified, and (g) any definition of or
reference to any statute will be construed as referring also to any rules and regulations
promulgated thereunder.

12.15 Warranty of Authority. Each of the entities signing this Agreement
warrants and represents that the individual signing on behalf of such entity is duly authorized and
empowered to enter into this Agreement and bind such entity hereto.

12.16 Return of Software. If at any time after the Closing (i) Shad Gamel’s
employment with the Purchaser or any affiliate of the Purchaser is terminated without cause by
the Purchaser or any affiliate of the Purchaser; (ii) the maximum Royalty Payment has not been
paid under the Agreement; and (iii) revenues associated with sales of the Company’s products
average less than $200,000 per quarter for any two consecutive quarters; The Purchaser shall
at its election, within thirty (30) days of the end of such second consecutive quarter, either
pay out the balance of the Royalty Payment or grant to Shad Gamel a fully paid, royalty free,
unrestricted license to the Software, to use, resell or market in any manner Mr. Gamel elects.

[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]

[SIGNATURE PAGE TO PURCHASE AGREEMENT]

IN WITNESS WHEREOF, each of the parties has executed this Agreement as of the date first set forth
above.

PURCHASER:

HALO TECHNOLOGY HOLDINGS, INC.

By:

Name:

An authorized officer

SELLERS:

Name:      

Name:      

Name:      

Name:

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