SECOND AMENDED AND RESTATED SALE AND SERVICING AGREEMENT

Exhibit 10.2

SECOND AMENDED AND RESTATED
SALE AND SERVICING AGREEMENT

by and among

CAPITALSOURCE REAL ESTATE LOAN LLC, 2007-A,
as the Seller

CSE MORTGAGE LLC,
as the Originator and as the Servicer

EACH OF THE ISSUERS
FROM TIME TO TIME PARTY HERETO,

EACH OF THE LIQUIDITY BANKS
FROM TIME TO TIME PARTY HERETO

CITICORP NORTH AMERICA, INC.,
as the Administrative Agent

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as the Backup Servicer and as the Collateral Custodian

Dated as of May 8, 2008

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITION			2
Section 1.1 Certain Defined Terms			2
Section 1.2 Other Terms			55
Section 1.3 Computation of Time Periods			55
Section 1.4 Interpretation			55
Section 1.5 Special Provisions Relating to Alternative Currency Loans			56
ARTICLE II PURCHASE OF THE VARIABLE FUNDING CERTIFICATES			56
Section 2.1 The Variable Funding Certificates			56
Section 2.2 [Intentionally Omitted]			58
Section 2.3 Procedures for Advances			58
Section 2.4 Reduction of the Facility Amount; Mandatory and Optional Repayments; Increase of Commitment			60
Section 2.5 Determination of Interest			61
Section 2.6 Percentage Evidenced by each Variable Funding Certificate			61
Section 2.7 [Reserved]			62
Section 2.8 Notations on Variable Funding Certificates			62
Section 2.9 Settlement Procedures During the Revolving Period and the Amortization Period			62
Section 2.10 Settlement Procedures During the Turbo Period			63
Section 2.11 Collections and Allocations			65
Section 2.12 Payments, Computations, Etc.			65
Section 2.13 Mandatory Repurchase			66
Section 2.14 Fees			66
Section 2.15 Increased Costs; Capital Adequacy; Illegality			67
Section 2.16 Taxes			69
Section 2.17 Assignment of the Sale Agreement			70
Section 2.18 Substitution of Assets			70
Section 2.19 Optional Sales			71
Section 2.20 Discretionary Sales			73
Section 2.21 FDIC Sales			75
ARTICLE III CONDITIONS TO ADVANCES			76
Section 3.1 Conditions to Closing and Initial Advance			76
Section 3.2 Conditions Precedent to All Advances			77
Section 3.3 Conditions to Closing and Initial Advance under the Class B VFC			79
Section 3.4 Conditions to the Second Amendment and Restatement Effective Date			80

TABLE OF CONTENTS
(continued)

		Page
ARTICLE IV REPRESENTATIONS AND WARRANTIES			81
Section 4.1 Representations and Warranties of the Seller			81
Section 4.2 Representations and Warranties of the Seller Relating to the Agreement and the Collateral			91
Section 4.3 Representations and Warranties of the Servicer			92
Section 4.4 Representations and Warranties of the Backup Servicer			95
Section 4.5 Representations and Warranties of the Collateral Custodian			96
Section 4.6 Breach of Certain Representations and Warranties			96
ARTICLE V GENERAL COVENANTS			97
Section 5.1 Affirmative Covenants of the Seller			97
Section 5.2 Negative Covenants of the Seller			101
Section 5.3 Covenants of the Seller Relating to the Hedging of Assets			103
Section 5.4 Affirmative Covenants of the Servicer			104
Section 5.5 Negative Covenants of the Servicer			107
Section 5.6 Affirmative Covenants of the Backup Servicer			108
Section 5.7 Negative Covenants of the Backup Servicer			108
Section 5.8 Affirmative Covenants of the Collateral Custodian			108
Section 5.9 Negative Covenants of the Collateral Custodian			109
Section 5.10 Covenant of the Seller, the Servicer and the Originator			109
ARTICLE VI ADMINISTRATION AND SERVICING OF ASSETS			110
Section 6.1 Designation of the Servicer			110
Section 6.2 Duties of the Servicer			110
Section 6.3 Authorization of the Servicer			113
Section 6.4 Collection of Payments			114
Section 6.5 Servicer Advances			116
Section 6.6 Realization Upon Charged-Off Assets			116
Section 6.7 Maintenance of Insurance Policies			116
Section 6.8 Servicing Compensation			117
Section 6.9 Payment of Certain Expenses by Servicer			117
Section 6.10 Reports			117
Section 6.11 Annual Statement as to Compliance			118
Section 6.12 Annual Independent Public Accountant’s Servicing Reports			118
Section 6.13 Limitation on Liability of the Servicer and Others			119
Section 6.14 The Servicer Not to Resign			119
Section 6.15 Servicer Defaults			119
Section 6.16 Appointment of Successor Servicer			121
ARTICLE VII THE BACKUP SERVICER			123
Section 7.1 Designation of the Backup Servicer			123
Section 7.2 Duties of the Backup Servicer			123

TABLE OF CONTENTS
(continued)

		Page
Section 7.3 Merger or Consolidation			125
Section 7.4 Backup Servicing Compensation			125
Section 7.5 Backup Servicer Removal			125
Section 7.6 Limitation on Liability			125
Section 7.7 The Backup Servicer Not to Resign			126
ARTICLE VIII THE COLLATERAL CUSTODIAN			127
Section 8.1 Designation of Collateral Custodian			127
Section 8.2 Duties of Collateral Custodian			127
Section 8.3 Merger or Consolidation			129
Section 8.4 Collateral Custodian Compensation			129
Section 8.5 Collateral Custodian Removal			129
Section 8.6 Limitation on Liability			129
Section 8.7 The Collateral Custodian Not to Resign			130
Section 8.8 Release of Documents			130
Section 8.9 Return of Required Asset Documents			131
Section 8.10 Access to Certain Documentation and Information Regarding the Collateral; Audits			132
Section 8.11 Intentionally Omitted			132
ARTICLE IX SECURITY INTEREST			132
Section 9.1 Grant of Security Interest			132
Section 9.2 Release of Lien on Collateral			133
Section 9.3 Further Assurances			133
Section 9.4 Remedies			133
Section 9.5 Waiver of Certain Laws			134
Section 9.6 Power of Attorney			134
ARTICLE X TERMINATION EVENTS			134
Section 10.1 Termination Events			134
Section 10.2 Remedies			137
ARTICLE XI INDEMNIFICATION			138
Section 11.1 Indemnities by the Seller			138
Section 11.2 Indemnities by the Servicer			141
Section 11.3 After-Tax Basis			142
ARTICLE XII THE ADMINISTRATIVE AGENT			142
Section 12.1 The Administrative Agent			142
ARTICLE XIII MISCELLANEOUS			146
Section 13.1 Amendments and Waivers			146
Section 13.2 Notices, Etc.			146
Section 13.3 Ratable Payments			146
Section 13.4 No Waiver; Remedies			147

TABLE OF CONTENTS
(continued)

		Page
Section 13.5 Binding Effect; Benefit of Agreement			147
Section 13.6 Term of this Agreement			147
Section 13.7 Governing Law; Consent to Jurisdiction; Waiver of Objection to Venue			147
Section 13.8 Waiver of Jury Trial			148
Section 13.9 Costs, Expenses and Taxes			148
Section 13.10 No Proceedings			149
Section 13.11 Recourse Against Certain Parties			149
Section 13.12 Protection of Right, Title and Interest in the Collateral; Further Action Evidencing Advances			150
Section 13.13 Confidentiality			151
Section 13.14 Execution in Counterparts; Severability; Integration			153
Section 13.15 Waiver of Set-off			153
Section 13.16 Assignments			153
Section 13.17 Heading and Exhibits			156
Section 13.18 Loans Subject to Retained Interest Provisions			156
Section 13.19 Tax Treatment of Advances			156
Section 13.20 Acknowledgement			157

EXHIBITS

EXHIBIT A-1		Form of Borrowing Notice (Advances)
EXHIBIT A-2		Form of Borrowing Notice (Reduction of Advances Outstanding and Facility Amount)
EXHIBIT A-3		Form of Borrowing Base Certificate
EXHIBIT B-1		Form of Class A Variable Funding Certificate
EXHIBIT B-2		Form of Class B Variable Funding Certificate
EXHIBIT C		Form of Monthly Report
EXHIBIT D		Form of Hedging Agreement (including Schedule and Confirmation)
EXHIBIT E-1		Form of Officer’s Certificate to Solvency (CapitalSource Real Estate Loan LLC, 2007-A)
EXHIBIT E-2		Form of Officer’s Certificate to Solvency (CSE Mortgage LLC)
EXHIBIT F-1		Form of Officer’s Closing Certificate (CapitalSource Real Estate Loan LLC, 2007-A)
EXHIBIT F-2		Form of Officer’s Closing Certificate (CSE Mortgage LLC)
EXHIBIT G-1		Form of Power of Attorney (CapitalSource Real Estate Loan LLC, 2007-A)
EXHIBIT G-2		Form of Power of Attorney (CSE Mortgage LLC)
EXHIBIT H		Form of Release of Required Asset Documents
EXHIBIT I		Form of Assignment of Mortgage
EXHIBIT J		Form of Servicer’s Certificate
EXHIBIT K		Intentionally Omitted
EXHIBIT L		Form of Certificate of Outside Counsel
EXHIBIT M		Form of Assignment and Acceptance

TABLE OF CONTENTS
(continued)

		Page

EXHIBIT N		Form of Parent Undertaking — Originator
EXHIBIT O		Form of Parent Undertaking — Servicer

SCHEDULES

SCHEDULE I		Condition Precedent Documents
SCHEDULE I-A		Condition Precedent Documents to Restatement Date
SCHEDULE I-B		Condition Precedent Documents to Second Amendment and Restatement Effective Date
SCHEDULE II		List of Lock-Box Banks and Lock-Box Accounts
SCHEDULE III		Location of Required Asset Documents and Asset Files
SCHEDULE IV		Asset List
SCHEDULE V		Residential Mortgage Policies and Procedures
SCHEDULE VI		Investors
SCHEDULE VII		Intentionally Omitted
SCHEDULE VIII		Excess Concentration Loans
SCHEDULE IX		Exempt Facilities

SECOND AMENDED AND RESTATED
SALE AND SERVICING AGREEMENT

      THIS SECOND AMENDED AND RESTATED SALE AND SERVICING AGREEMENT (such agreement as amended, modified, waived, supplemented, restated or replaced from time to time, the “ Agreement ”) dated as of May 8, 2008, by and among:

     (1)  CAPITALSOURCE REAL ESTATE LOAN LLC, 2007-A , a Delaware limited liability company, as the seller (together with its successors and assigns in such capacity, the “ Seller ”);

     (2)  CSE MORTGAGE LLC , a Delaware limited liability company (“ CSE Mortgage ”), as the originator (together with its successors and assigns in such capacity, the “ Originator ”), and as the servicer (together with its successors and assigns in such capacity, the “ Servicer ”);

     (3)  EACH OF THE ISSUERS FROM TIME TO TIME PARTY HERETO (together with their respective successors and assigns in such capacities, each an “ Issuer ”);

     (4)  EACH OF THE LIQUIDITY BANKS FROM TIME TO TIME PARTY HERETO (together with their respective successors and assigns in such capacities, each a “ Liquidity Bank ”);

     (5)  CITICORP NORTH AMERICA, INC., a Delaware corporation (“ CNAI ”), as the administrative agent for the Issuers and Liquidity Banks hereunder (together with its successors and assigns in such capacity, including any successor appointed pursuant to ARTICLE XII , the “ Administrative Agent ”); and

     (6)  WELLS FARGO BANK, NATIONAL ASSOCIATION (“ Wells Fargo ”), not in its individual capacity but as the backup servicer (together with its successors and assigns in such capacity, the “ Backup Servicer ”), and not in its individual capacity but as the collateral custodian (together with its successors and assigns in such capacity, the “ Collateral Custodian ”).

RECITALS

      WHEREAS , the Seller has acquired, and may from time to time continue to acquire, certain Assets (as defined below) from the Originator pursuant to the Sale Agreement (as defined below);

      WHEREAS , the Seller is prepared to transfer and assign, and grant security interests in, certain Assets and other proceeds with respect thereto to the Purchasers (as defined below) from time to time;

      WHEREAS , the Purchasers may, in accordance with the terms of this Agreement, purchase such Assets;

      WHEREAS , all other conditions precedent to the execution of this Agreement have been complied with; and

      WHEREAS , the parties hereto amended and restated this Agreement as of October 30, 2007 in order to create and issue two Classes of Variable Funding Certificates, and wish to again AMEND AND RESTATE this Agreement in order to effectuate certain amendments of various provisions set forth herein;

      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 is hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

ARTICLE I

DEFINITION

      Section 1.1 Certain Defined Terms .

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

“ Accrual Period ”: (a) with respect to each Advance (or portion thereof) funded at an Interest Rate other than the CP Rate, (i) with respect to the first Payment Date, the period from and including the Closing Date to but excluding such first Payment Date and (ii) with respect to any subsequent Payment Date, the period from and including the previous Payment Date to but excluding such subsequent Payment Date, and (b) with respect to each Class A Advance (or portion thereof) funded at an Interest Rate equal to the CP Rate, (i) 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 (ii) with respect to any subsequent Payment Date, the period ending on the last day of the calendar month immediately preceding the month in which the Payment Date occurs and commencing on the first day of such immediately preceding calendar month.

“ Acquired Loan ”: A Loan that is either (a) originated by a Person other than the Originator, CapitalSource Inc. or any of their respective Subsidiaries and is acquired by the Originator, CapitalSource Inc. or any of their respective Subsidiaries in an arm’s length transaction from an unaffiliated third party or (b) extended by the Originator, CapitalSource Inc. or any of their respective Subsidiaries directly to the Obligor as part of a multi-lender Loan in which neither CapitalSource Inc. nor any of its Subsidiaries is the administrative (or other analogous) agent; provided that, the calculation of the principal amount of any Acquired Loan hereunder shall exclude any Retained Interest with respect to such Acquired Loan.

“ Addition Date ”: With respect to any Additional Assets, the date on which such Additional Assets become part of the Collateral.

“ Additional Assets ”: All Assets that become part of the Collateral after the initial Funding Date.

“ 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 offered quotation to first-class banks in the New York interbank Eurodollar market by the Administrative Agent for Dollar deposits of amounts in same day funds comparable to the outstanding principal amount of the Advance for which an interest rate is then being determined with maturities comparable to the Accrual Period to be applicable to such Advance, determined as of 10:00 a.m. (New York City, New York time) on the date which is two Business Days prior to the commencement of such Accrual Period (and rounded upward to the next whole multiple of 1/16 of 1%) to a fraction, expressed as a percentage and rounded upwards (if necessary) to the nearest 1/100 of 1%, and (ii) the denominator of which is equal to 100% minus the Eurodollar Reserve Percentage for such Accrual Period.

“ Administrative Agent ”: Defined in the Preamble of this Agreement.

“ Advance ”: A Class A Advance or Class B Advance.

“ Advance Rate ”: For any Advance, (i) with respect to the Class A Variable Funding Certificates, the Class A Advance Rate, and (ii) with respect to the Class B Variable Funding Certificates, the Class B Advance Rate.

“ Advances Outstanding ”: On any day, the aggregate principal amount of all Class A Advances Outstanding and Class B Advances Outstanding.

“ Affected Party ”: The Administrative Agent, the Purchasers, each Liquidity Bank, all assignees, participants and Affiliates of the Purchasers and each Liquidity Bank, any successor to CNAI as Administrative Agent and any sub-agent of the Administrative Agent.

“ Affiliate ”: With respect to a Person, means any other Person that, directly or indirectly, controls, is controlled by or under common control with such Person, or is a director or officer of such Person. For purposes of this definition, “control” (including the terms “controlling,” “controlled by” and “under common control with”) when used with respect to any specified Person means the possession, direct or indirect, of the power to vote 20% or more of the voting securities of such Person or to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

“ Agent’s Account ”: A special account (account number 40517805) in the name of the Administrative Agent maintained at Citibank, N.A.

“ Agented Loans ”: With respect to any Loan, one or more loans to an Eligible Obligor wherein (a) the loan(s) are originated by the Originator in accordance with the Credit and Collection Policy as a part of a loan transaction that has been fully consummated between the Originator and the related Obligor (without regard to any subsequent syndication of such Loan) prior to such Agented Loans becoming part of the Collateral hereunder, (b) upon an assignment of the loan under the Sale Agreement to the Seller, any original note related thereto will be endorsed to the Administrative Agent and held by the Collateral Custodian, on behalf of the Secured Parties, (c) the Seller, as assignee of the loan, will have all of the rights but none of the obligations of the Originator with respect to such loan and the Originator’s right, title and interest in and to the

Related Property including the right to receive and collect payments directly in its own name and to enforce its rights directly against the Obligor thereof, (d) the loan, if secured, 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 loan of equal priority and (e) CapitalSource Finance LLC or the Originator (or a wholly owned subsidiary of the Originator) is the administrative (or other analogous) agent for loans to such Obligor.

“ Aggregate Notional Amount ”: On any date of determination, the aggregate notional amount in respect of the payment obligations of the relevant Hedge Counterparty that is outstanding on that date under all Hedge Transactions or any group thereof, as the context requires.

“ Aggregate Outstanding Asset Balance ”: On any date of determination, the sum of the Outstanding Asset Balances of all Eligible Assets included as part of the Collateral on such date.

“ Aggregate Outstanding Principal Balance ”: As of any date of determination, the sum of Advances Outstanding, plus the amount of the Seller Investment.

“ Aggregate Unpaids ”: At any time, an amount equal to the sum of all unpaid Advances Outstanding, Interest, Breakage Costs, Hedge Breakage Costs and all other amounts owed by the Seller to the Purchasers, the Administrative Agent, the Backup Servicer, each Hedge Counterparty and the Collateral Custodian hereunder (including, without limitation, all Indemnified Amounts, other amounts payable under Article XI and amounts required under Section 2.9 , Section 2.10 , Section 2.14 , Section 2.15 and Section 2.16 to the Affected Parties or Indemnified Parties) or under any Hedging Agreement (including, without limitation, payments in respect of the termination of any such Hedging Agreement) or by the Seller or any other Person under any fee letter (including, without limitation, the Purchaser Fee Letter, the Backup Servicer and Collateral Custodian Fee Letter) delivered in connection with the transactions contemplated by this Agreement (whether due or accrued).

“ Alternative Currency ”: At any time, any of Canadian Dollars, British Pounds Sterling or Euros.

“ Alternative Rate ”: An interest rate per annum equal to the Adjusted Eurodollar Rate calculated on a daily basis; provided that the Alternative Rate shall be the Base Rate (i) for all Advances of any Class B Purchaser or Liquidity Bank which has provided a notice pursuant to clause (a), (b), (c) or (d) of the definition of Eurodollar Disruption Event and (ii) for the relevant Advances of any Class B Purchaser or Liquidity Bank which has provided a notice pursuant to clause (e) of the definition of Eurodollar Disruption Event.

“ Amortization Period ”: The period beginning on the occurrence of the Termination Date pursuant to clause (a), (b), (c) or (d) of the definition thereof and ending on the earlier of (i) the commencement of the Turbo Period and (ii) the Collection Date.

“ 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, the Federal Truth in Lending Act, and Regulation Z and Regulation B of the Board of Governors of the Federal Reserve System), and applicable judgments, decrees, injunctions, writs, awards or

orders of any court, arbitrator or other administrative, judicial, or quasi-judicial tribunal or agency of competent jurisdiction.

“ Appraisal ”: With respect to any Mortgaged Property as to which an appraisal is required or permitted to be performed pursuant to the terms of this Agreement, an appraisal performed in conformance with the guidelines of the Appraisal Institute.

“ Appraisal Institute ”: The international membership association of professional real estate appraisers.

“ Asset Checklist ”: The list of loan documents delivered by or on behalf of the Seller to the Collateral Custodian that identifies each of the items contained in the related Asset File, as amended from time to time.

“ Asset Files ”: With respect to any Asset, as applicable, and Related Security, copies of each of the Required Asset Documents and duly executed originals (to the extent required by the Credit and Collection Policy) and copies of any other Records relating to such Asset and Related Security.

“ Asset List ”: The Asset List provided by or on behalf of the Seller to the Administrative Agent and the Collateral Custodian, in the form of Schedule IV hereto, as such list may be amended, supplemented or modified from time to time in accordance with this Agreement.

“ Assets ”: Loans, individually or collectively, as the context requires.

“Assignment and Acceptance ”: An assignment and acceptance agreement entered into by a Purchaser, an Eligible Assignee and the Agent, pursuant to which such Eligible Assignee may become a party to this Agreement, in substantially the form of Exhibit M hereto.

“ Assignment of Leases and Rents ”: With respect to any Mortgaged Property, any assignment of leases, rents and profits or similar instrument executed by the Obligor, assigning to the mortgagee all of the income, rents and profits derived from the ownership, operation, leasing or disposition of all or a portion of such Mortgaged Property, whether contained in the Mortgage or in a document separate from the Mortgage, in the form that was duly executed, acknowledged and delivered, as amended, modified, renewed or extended through the date hereof and from time to time hereafter in accordance with the Credit and Collection Policy.

“ Assignment of Mortgage ”: As to each Loan (other than Agented Loans, Acquired Loans that have been syndicated and with respect to which neither the Originator nor any of its Affiliates is acting in the capacity of adminstrative agent, and other Loans for which an Assignment of Mortgage has been delivered to Wells Fargo in its capacity as trustee or custodian pursuant to a prior term transaction or warehouse facility involving the Originator or one of its Affiliates) 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 or similar security instrument and all other documents related to such Loan and to the Seller and to grant a perfected lien thereon by the Seller in favor of the Administrative Agent, on behalf of the Secured Parties, each such Assignment of Mortgage to be substantially in the form of Exhibit I hereto.

“ Available Collections Amount ”: As of any Payment Date, the amount of funds remaining after making the distributions required by clauses (1) through (5) of Section 2.9(a).

“ Available Collections Shortfall ”: As of any Payment Date, the Total Principal Payable exceeds the Available Collections Amount.

“ Availability ”: At any time, an amount equal to the sum of the Class A Availability plus the Class B Availability.

“ Available Funds ”: With respect to any Payment Date, all amounts received in the Collection Account (including, without limitation, any Collections on the Assets included in the Collateral and earnings from Permitted Investments in the Collection Account) during the Collection Period immediately preceding such Payment Date.

“ Average Pool Charged-Off Ratio ”: As of any Determination Date, the percentage equivalent of a fraction (i) the numerator of which is equal to the sum of the Outstanding Asset Balance of all Assets that became Charged-Off Assets (net of Recoveries during such Collection Period) during the Collection Period related to such Determination Date and each of the 11 preceding Determination Dates (or such lesser number as shall have elapsed as of such Determination Date), and (ii) the denominator of which is equal to a fraction the numerator of which is the sum of the Aggregate Outstanding Asset Balance as of the first day of the Collection Period related to such Determination Date and each of the 11 preceding Determination Dates (or such lesser number as shall have elapsed as of such Determination Date) and the denominator of which is 12 (or the corresponding lesser number of Determination Dates included in the calculations described herein).

“ Average Portfolio Charged-Off Ratio ”: As of any Determination Date, the percentage equivalent of a fraction (i) the numerator of which is equal to the sum of the Portfolio Outstanding Asset Balance of all Portfolio Assets (excluding equity investments) that became Charged-Off Portfolio Assets (net of Recoveries during such Collection Period) during the Collection Period related to such Determination Date and each of the 11 preceding Determination Dates (or such lesser number as shall have elapsed as of such Determination Date), and (ii) the denominator of which is equal to a fraction the numerator of which is the sum of the Portfolio Outstanding Asset Balance (excluding equity investments) as of the first day of the Collection Period related to such Determination Date and each of the 11 preceding Determination Dates (or such lesser number as shall have elapsed as of such Determination Date) and the denominator of which is 12 (or the corresponding lesser number of Determination Dates included in the calculations described herein); provided that such calculation shall exclude the effects of any Liquid Real Estate Assets that are acquired and levered by the Originator solely to satisfy REIT asset and income tests.

“ Average Portfolio Delinquency Ratio ”: As of any Determination Date, the percentage equivalent of a fraction the numerator of which is equal to the sum of the Portfolio Delinquency Ratio on such Determination Date and each of the two preceding Determination Dates (or such lesser number as shall have elapsed as of such Determination Date) and the denominator of which is equal to three (or the corresponding lesser number of Determination Dates included in the calculations described herein); provided that such calculation shall exclude the effects of any

Liquid Real Estate Assets that are acquired and levered by the Originator solely to satisfy REIT asset and income tests.

“ Backup Servicer ”: Wells Fargo Bank, National Association, not in its individual capacity, but solely as Backup Servicer, its successor in interest pursuant to Section 7.3 or such Person as shall have been appointed as Backup Servicer pursuant to Section 7.5 .

“ Backup Servicer and Collateral Custodian Fee Letter ”: The Backup Servicer Fee Letter and Collateral Custodian Fee Letter, dated as of September 10, 2007, by and among the Servicer, the Administrative Agent, the Backup Servicer and the Collateral Custodian, as such letter may be amended, modified, supplemented, restated or replaced from time to time.

“ Backup Servicer Fee Rate ”: The rate per annum set forth in the Backup Servicer and Collateral Custodian Fee Letter as the “Backup Servicer Fee Rate.”

“ Backup Servicer Termination Notice ”: Defined in Section 7.5 .

“ Backup Servicing Fee ”: Defined in the Backup Servicer and Collateral Custodian Fee Letter.

“ Banded Floating Rate Loan ”: A Loan where the interest rate payable by the Obligor thereof fluctuates between a minimum interest rate and a maximum interest rate allowable under its Underlying Instruments.

“ 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 interest rate per annum equal to the highest of (a) the Prime Rate, (b) the CD Rate and (c) the Federal Funds Rate plus 1.5%.

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

“ B-Note Loan ”: Any Term Loan that (i) is secured by a first or second priority Lien on all of the Obligor’s assets constituting Related Property for the Loan, (ii) has a “first dollar” at risk not to exceed 65% of the Loan to Value Ratio and a “last dollar” at risk not to exceed 90% of the Loan to Value Ratio, and (iii) contains terms which, upon the occurrence of an event of default under the Underlying Instruments or in the case of any liquidation or foreclosure on the Related Property, provide that the principal of the Seller’s portion of such Loan would be paid only after the other lenders parties on the senior tranche related to such Loan are paid in full.

“ Borrowing Base ”: On any date of determination, the sum of (i) the Aggregate Outstanding Asset Balance and (ii) (a) the Outstanding Asset Balances of all Additional Assets that are Eligible Assets to be included as part of the Collateral on such date minus (b) the amount (calculated without duplication) by which such Eligible Assets exceed any applicable Pool Concentration Criteria.

“ Borrowing Base Certificate ”: Each certificate, in the form of Exhibit A-3 , required to be delivered by the Seller along with each Borrowing Notice.

“ Borrowing Notice ”: Each notice, in the form of Exhibit A-1 or A-2 (as applicable), required to be delivered by the Seller (i) in respect of (a) each Initial Advance and each incremental Advance (as applicable) or (b) any reduction of the Facility Amount or repayment of the Advances Outstanding; and (ii) on each Determination Date.

“ Breakage Costs ”: Any amount or amounts as shall compensate a Purchaser for any loss, cost or expense incurred by such Purchaser (as determined by the Administrative Agent in its sole discretion) as a result of a prepayment by the Seller of Advances Outstanding or Interest. All Breakage Costs shall be due and payable hereunder upon demand.

“ British Pound Sterling ”: The lawful currency of the United Kingdom.

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

“ CAFCO ”: CAFCO, LLC, together with its successors and assigns, each as permitted pursuant to this Agreement.

“ Canadian Dollars ”: The lawful currency of Canada.

“ Capital Stock ”: Any capital stock or membership interests (in the case of a limited liability company) or equivalent equity interests of CapitalSource Inc. or any Consolidated Subsidiary (to the extent issued to a Person other than CapitalSource Inc.), whether common or preferred.

“ CD Rate ”: A fluctuating interest rate per annum equal to 1/2 of one percent above the latest three-week moving average of secondary market morning offering rates in the United States for three-month certificates of deposit of major United States money market banks, such three-week moving average being determined weekly on each Monday (or, if such day is not a Business Day, on the next succeeding Business Day) for the three-week period ending on the previous Friday by Citibank on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspended or terminated, on the basis of quotations for such rates received by Citibank from three New York certificate of deposit dealers of recognized standing selected by Citibank, in either case adjusted to the nearest 1/4 of one percent or, if there is no nearest 1/4 of one percent, to the next higher 1/4 of one percent.

“ Change-in-Control ”: Any of the following:

     (a) Any “Person” or “group"(as such terms are used in Sections 13(d) and 14(d) of the Securities and Exchange Act of 1934, as amended), other than the Investors, shall become the “beneficial owner” (as defined in Section 13(d)-3 and 13(d)-5 under such Act), directly or indirectly, of shares representing more than the greater of (i) 20% of the shares outstanding of

CapitalSource Inc. and (ii) the percentage of the aggregate then outstanding voting stock of CapitalSource Inc. owned beneficially, directly or indirectly, by the Investors;

     (b) the board of directors of CapitalSource Inc. shall not consist of at least a majority of Continuing Directors;

     (c) the failure of CapitalSource Inc. to own (directly or through wholly owned subsidiaries), free and clear of all Liens, the greater of (x) 51% of the outstanding Voting Stock of the Originator and (y) the aggregate amount of the outstanding Voting Stock of the Originator necessary to require the consolidation of the Originator’s financial statements with those of CapitalSource Inc. in accordance with GAAP; or

     (d) the failure by the Originator to own all of the limited liability company membership interests in the Seller.

“ Charged-Off Asset ”: An Asset with respect to which either of the following occurs: (a) the Servicer has deemed such Asset to be “charged-off” pursuant to the criteria set forth in the Credit and Collection Policy or (b) all or any portion of one or more principal or interest payments (other than in respect of default rate interest) remain unpaid for at least 120 days from the original due date for such payment (without giving effect to any Servicer Advance thereon).

“ Charged-Off Portfolio Asset ”: A Portfolio Asset the Servicer has deemed to be “charged-off” pursuant to the criteria set forth in the Credit and Collection Policy.

“ CIESCO ”: CIESCO, LLC, together with its successors and assigns, each as permitted pursuant to this Agreement.

“ Citibank ”: Citibank, N.A.

“ Citibank Facilities ”: The securitization/warehouse facilities provided under (i) this Agreement, (ii) that certain Sale and Servicing Agreement, dated as of May 8, 2008, among CS Funding VII Depositor LLC, CapitalSource Finance LLC, each of the Issuers and Liquidity Banks from time to time party thereto, Citicorp North America Inc., as Administrative Agent and Wells Fargo Bank, National Association, and (iii) the Second Amended and Restated Sale and Servicing Agreement, dated as of May 8, 2008, by and among CSE QRS Funding II LLC, CSE Mortgage LLC, each of the Issuers and Liquidity Banks from time to time party thereto, Citicorp North America, Inc., as the Administrative Agent and Wells Fargo Bank, National Association, as the Backup Servicer and as the Collateral Custodian, and the related documentation with respect thereto, in each case, as now or hereafter amended, modified, supplemented, restated or replaced or substituted from time to time in accordance with their respective terms.

“ Class ”: Either the Class A Variable Funding Certificates or the Class B Variable Funding Certificates.

“ Class A Advance ”: Defined in Section 2.1(b) .

“ Class A Advance Rate ”: 80% with respect to any Senior Secured ABLs on any date of determination, and for all other Eligible Assets the corresponding percentage set forth below:

Senior Secured Loan

Classification		LTV <=65%		LTV <=70%		LTV<=75%		LTV <=80%		LTV <=85%		LTV <=90%
Multifamily		80%		80%		80%		75%		65%		55%
Retail, Office, Industrial, Healthcare, Land Development, Construction Properties and other		80%		80%		80%		75%		65%		60%
Hotel		80%		75%		70%		65%		N/A		N/A

Sale/Leaseback Loan

Classification		LTV <=65%		LTV <=70%		LTV<=75%		LTV <=80%		LTV <=85%		LTV <=90%
Multifamily		80%		80%		80%		75%		65%		55%
Retail, Office, Industrial, Healthcare, Land Development and other		80%		80%		80%		75%		60%		50%
Hotel		80%		75%		70%		65%		N/A		N/A

B-Note Loans

Classification		LTV<=75%		LTV <=80%		LTV <=85%		LTV <=90%
Multifamily		60%		60%		60%		50%
Retail, Office, Industrial, Healthcare, Land Development and other		55%		55%		55%		50%
Hotel		60%		55%		N/A		N/A

Mezzanine Loan

Classification		LTV <=80%				LTV <=85%				LTV <=90%
Multifamily			40	%			40	%			40	%
Retail, Office, Industrial, Healthcare and other			40	%			40	%			40	%
Hotel			50	%			N/A				N/A

For purposes of calculating the Class A Advance Rate with respect to any Acquired Loans, Agented Loans and Participation Loans, the applicable Class A Advance Rate will be determined by reference to the type of underlying Loan being acquired, assigned, agented or participated in, as the case may be.

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

“ Class A Availability ”: At any time, an amount equal to the difference (positive or negative) of (i) the lesser of (a) the Class A Facility Amount and (b) the Maximum Availability minus (ii) the Class A Advances Outstanding on such day.

“ Class A Collection Date ”: The later of the Termination Date and the date on which the Aggregate Unpaids with respect to the Class A VFC have been reduced to zero and indefeasibly paid in full.

“ Class A Commitment ”: With respect to each Liquidity Bank the commitment of such Liquidity Bank to make Class A Advances under the Class A Variable Funding Certificate in accordance herewith in an amount not to exceed (a) with respect to Citibank, prior to the Termination Date, an amount equal to $1,250,000,000 (provided that such amount may be increased pursuant to Section 2.4(d) to an amount not exceeding $1,500,000,000) or such amount as reduced or increased by any Assignment and Acceptance Agreement or (b) on or after the Termination Date, such Liquidity Bank’s pro rata share of the aggregate Class A Advances Outstanding. Any reduction (or termination) of the Class A Facility Amount pursuant to the terms of this Agreement shall reduce ratably (or terminate) each Liquidity Bank’s Class A Commitment.

“ Class A Facility Amount ”: The aggregate Class A Commitments then in effect; provided that such amount may not at any time exceed $1,500,000,000 without the written agreement of the parties hereto; provided further that, on or after the Termination Date, the Class A Facility Amount shall mean the Class A Advances Outstanding.

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

     (i) to the extent the applicable Purchaser is an Issuer that has funded the applicable Class A Advance through the issuance of commercial paper or other senior notes, a rate equal to the applicable CP Rate; or

     (ii) to the extent the applicable Purchaser is (x) an Issuer that did not fund the applicable Class A Advance through the issuance of commercial paper or other senior notes, or (y) is a Liquidity Bank, a rate equal to the Alternative Rate;

provided that the Class A Interest Rate shall be the Base Rate for any Accrual Period for any Class A Advance as to which a Purchaser has funded the making or maintenance thereof without having received at least two Business Days’ prior written notice thereof (including, without limitation, by reason of a sale of an interest therein to any Liquidity Bank under the applicable Liquidity Agreement).

“ Class A Purchaser ”: (i) any Issuer and (ii) any Liquidity Bank, as the context requires; and “ Class A Purchasers ” means collectively (a) the Issuers and (b) the Liquidity Banks.

“ Class A Total Principal Payable ”: As of any date of determination, the sum of (I) the product of (i) Total Principal Payable multiplied by (ii) Class A Advances Outstanding divided by Advances Outstanding, plus (II) an amount equal to (i) the Combined Advances Outstanding on such date minus (ii) the Combined Commitment Amount on such date (recognizing that Combined Advances Outstanding may be lowered by reductions in Advances Outstanding hereunder as well as by reductions in “Advances Outstanding” under the other Citibank Facilities).

“ Class A Variable Funding Certificate ” or “ Class A VFC ”: Defined in Section 2.1(a) .

“ Class B Advance ”: Defined in Section 2.1(d) .

“ Class B Advance Rate ”: With respect to any Class B Advance, a percentage equal to the product of (x) 5/75, multiplied by (y) the Class A Advance Rate for the related Advance on the Class A Variable Funding Certificates.

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

“ Class B Availability ”: At any time, an amount equal to the difference (positive or negative) of (i) the lesser of (a) the Class B Facility Amount and (b) the product of 5/75 and the Maximum Availability minus (ii) the Class B Advances Outstanding on such day.

“ Class B Commitment ”: With respect to each Purchaser of Class B Variable Funding Certificates, (a) the commitment of such Purchaser to make Class B Advances under the Class B Variable Funding Certificate in accordance herewith in an amount not to exceed $83,333,333; provided , that such amount may be increased pursuant to Section 2.4(d) to an amount not to exceed $100,000,000, or (b) on or after the Termination Date, such Purchaser’s pro rata share of the aggregate Class B Advances Outstanding. Any reduction (or termination) of the Class B Facility Amount pursuant to the terms of this Agreement shall reduce ratably (or terminate) each such Purchaser’s Commitment.

“ Class B Facility Amount ”: The aggregate Class B Commitments then in effect; provided that such amount may not at any time exceed $100,000,000 without the written agreement of the parties hereto; provided further that, on or after the Termination Date, the Class B Facility Amount shall mean the Class B Advances Outstanding.

“ Class B Interest Rate ”: For any Accrual Period and for each Class B Advance outstanding for each day during such Accrual Period, a rate equal to the Alternative Rate plus 4.00%.

“ Class B Purchaser ”: CSE Mortgage LLC and any Eligible Assignee of the Class B Variable Funding Certificates.

“ Class B Variable Funding Certificate ” or “ Class B VFC ”: Defined in Section 2.1(a) .

“ Clearing Agency ”: An organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act.

“ Closing Date ”: September 10, 2007.

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

“ Collateral ”: All right, title, and interest (whether now owned or hereafter acquired or arising, and wherever located) of the Seller in all accounts, cash and currency, chattel paper, tangible chattel paper, electronic chattel paper, copyrights, copyright licenses, equipment, fixtures, general intangibles, instruments, commercial tort claims, deposit accounts, securities accounts, inventory, investment property, letter-of-credit rights, software, supporting obligations, accessions, 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 Existing Assets and the Additional Assets, and all monies due or to become due in payment under such Existing Assets and the Additional Assets on and after the related Cut-Off Date, including but not limited to all Collections, but excluding any Excluded Amounts; and (ii) all Related Security with respect to the Existing Assets and the Additional Assets, and (iii) all income and Proceeds of the foregoing.

“ Collateral Custodian ”: Wells Fargo Bank, National Association, not in its individual capacity, but solely as Collateral Custodian, its successor in interest pursuant to Section 8.3 or such Person as shall have been appointed Collateral Custodian pursuant to Section 8.5 .

“ Collateral Custodian Fee ”: Defined in the Backup Servicer and Collateral Custodian Fee Letter.

“ Collateral Custodian Termination Notice ”: Defined in Section 8.5 .

“ Collection Account ”: Defined in Section 6.4(f) .

“ Collection Date ”: The date following the Termination Date on which the Aggregate Unpaids have been reduced to zero and indefeasibly paid in full.

“ Collection Period ”: With respect to the first Payment Date, the period from and including the Closing Date to but excluding the 11th day of the calendar month immediately preceding the first Payment Date; and with respect to each Payment Date thereafter, the period from and including the 11th day of the previous calendar month to but excluding the 11th day of the month in which such Payment Date occurs.

“ Collections ”: (a) All cash collections and other cash proceeds of any Asset, including, without limitation, Scheduled Payments, Finance Charges, Prepayments, Insurance Proceeds, all Recoveries or other amounts received in respect thereof but excluding any Excluded Amounts, (b) any cash proceeds or other funds received by the Seller or the Servicer with respect to any Related Security, (c) all payments received pursuant to any Hedging Agreement or Hedge Transaction and (d) all Deemed Collections.

“ Combined Advances Outstanding ”: As of any day, the aggregate amount of Advances Outstanding (other than Class B Advances Outstanding) hereunder plus all “Advances Outstanding” under the other Citibank Facilities.

“ Combined Commitment Amount ”: As of any day, the lesser of (i) aggregate Commitments outstanding hereunder plus the aggregate “Commitments” outstanding under the other Citibank Facilities (other than the Class B Commitment hereunder), and (ii) as of any day, an amount equal to the sum of (x) the Combined Threshold Amount for such day, plus (y) $500,000,000.

“ Combined Threshold Amount ”: For all periods unless and until a Fremont Failed Transaction Date occurs, as of any day with respect to the Combined Advances Outstanding, the amounts set forth on the chart below for the periods opposite such amounts:

Period		Combined Threshold Amount
From the Restatement Date until (but not including) 30 days after the Fremont Transfer Date		$1,700,000,000 minus the Combined Voluntary Reductions
From 30 days after the Fremont Transfer Date until (but not including) 90 days after the Fremont Transfer Date		$1,250,000,000 minus the Combined Voluntary Reductions
From 90 days after the Fremont Transfer Date until (but not including) 180 days after the Fremont Transfer Date		$1,000,000,000 minus the Combined Voluntary Reductions
From and at all times after 180 days after the Fremont Transfer Date		$750,000,000 minus the Combined Voluntary Reductions

provided ; upon the occurrence of a Fremont Failed Transaction Date, the Combined Threshold Amount with respect to the Combined Advances Outstanding, shall equal the amounts set forth on the chart below for the periods opposite such amounts:

Period		Combined Threshold Amount
From the Restatement Date until (but not including) 60 days following the Fremont Failed Transaction Date		$1,700,000,000 minus the Combined Voluntary Reductions
From 60 days after the Fremont Failed Transaction Date until (but not including) 150 days following the Fremont Failed Transaction Date		$1,250,000,000 minus the Combined Voluntary Reductions
From 150 days after the Fremont Failed Transaction Date until (but not including) 240 days following the Fremont Failed Transaction Date		$1,000,000,000 minus the Combined Voluntary Reductions
From and at all times after 240 days after the Fremont Failed Transaction Date		$750,000,000 minus the Combined Voluntary Reductions

“ Combined Voluntary Reductions ”: As of any date, the aggregate amount of reductions to the amount of the Combined Threshold Amount set forth in a written request to the Administrative Agent by the Servicer and Originator (or any other “Servicer” or “Originator” under the other Citibank Facilities); provided, that (a) such written request may be in the form of standing instructions with respect to (i) voluntary reductions by the Seller of Advances Outstanding in

accordance with Section 2.4(b) hereof, and (ii) payments on a Payment Date in reduction of Advances Outstanding in accordance with Sections 2.9 or 2.10 hereof and (b) any such voluntary reduction shall be permanent.

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

“ Commitments ”: The Class A Commitment and the Class B Commitment.

“ Commitment Fee ”: With respect to Class A Purchasers, as defined in the Purchaser Fee Letter.

“ Confirmation and Undertaking Letter ”: The Intercreditor and Lockbox Confirmation and Undertaking Letter, dated the date hereof, among the Administrative Agent, the Seller, the Servicer and Originator, CapitalSource Inc., CapitalSource Funding Inc. and CapitalSource Finance LLC, regarding certain agreements between the parties with respect to the Lock-Box Agreement and the Intercreditor Agreement, as the Confirmation and Undertaking Letter may be amended, restated, modified or supplemented from time to time.

“ Consolidated Funded Indebtedness ”: As of any date of determination, all outstanding Indebtedness of the Originator and its Subsidiaries determined on a consolidated basis in accordance with GAAP.

“ Consolidated Subsidiary ”: At any date any Subsidiary the accounts of which, in accordance with GAAP, would be consolidated with those of CapitalSource Inc. in its consolidated and consolidating financial statements as of such date.

“ Consolidated Tangible Net Worth ”: As of any date of determination, the assets less the liabilities of any Person and its Subsidiaries on a consolidated basis, less intangible assets (including goodwill), all determined in accordance with GAAP for the most recent monthly period for which monthly financial statements of such Person should be available in the ordinary course of business of such Person.

“ Construction Loan ”: A Senior Secured Loan (which may be a Revolving Loan or a Loan with an unfunded commitment) that is secured by Construction Properties and has a shadow rating of at least Caa1/CCC+ from Moody’s or S&P.

“ Construction Properties ”: Properties that (a) are subject to ground up construction of new improvements, involving, without limitation, new foundations, new structural steel or wood frame, and new mechanical, electrical and plumbing systems and (b) secure a future advance loan or Revolving Loan, and which either (x) the related future funding obligation represented more than 30% of the total committed amount of the underlying loan as of the date the Seller acquired such future advance loan or Revolving Loan or (y) the related future funding obligation represented more than 40% of the total committed amount of the underlying loan as of the date of origination of such future advance loan or Revolving Loan.

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

“ Contractual Obligation ”: With respect to any Person, 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.

“ Corporate Trust Office ”: With respect to Wells Fargo, the office at which any particular time its corporate trust business shall be principally administered, which office at the date of the execution of this Agreement is located at the address set forth under the signature of Wells Fargo on the applicable signature page hereto.

“ CP Rate ”: For any day during any Accrual Period, the per annum rate equivalent to the weighted average of the per annum rates paid or payable by an Issuer from time to time as interest on or otherwise (by means of interest rate hedges or otherwise) in respect of the promissory notes issued by such Issuer that are allocated, in whole or in part, by the Administrative Agent on behalf of such Issuer to fund or maintain the Class A Advances Outstanding funded by such Issuer during such period, as determined by the Administrative Agent (on such Issuer’s behalf) and reported to the Seller and the Servicer, which rates shall reflect and give effect to (i) the commissions of placement agents and dealers in respect of such promissory notes, to the extent such commissions are allocated, in whole or in part, to such promissory notes by the Administrative Agent (on such Issuer’s behalf) and (ii) other borrowings by such Issuer, including, without limitation, borrowings to fund small or odd dollar amounts that are not easily accommodated in the commercial paper market; provided that if any component of such rate is a discount rate, in calculating the CP Rate, the Administrative Agent shall for such component use the rate resulting from converting such discount rate to an interest bearing equivalent rate per annum .

“ CRC Funding ”: CRC Funding, LLC, together with its successors and assigns, each as permitted pursuant to this Agreement.

“ Credit and Collection Policy ”: The written credit policies and procedures manual of the Originator and the Servicer (which policies shall include without limitation policies on a risk rating system, due diligence format, underwriting parameters and credit approval procedures) in the form provided to the Administrative Agent prior to the Closing Date, as it may be amended or supplemented from time to time in accordance with Section 5.1(h) and Section 5.4(f) .

“ CSE LIBOR Rate ”: The Eurodollar or LIBO rate for 30, 60, 90 or 180 day, as applicable, deposits in Dollars, as and when determined in accordance with the applicable Required Asset Documents.

“ CSE Management Agreement ”: The management agreement, dated as of January 1, 2006, by and among CapitalSource Inc., CSE Mortgage and CapitalSource Finance LLC, as the same may be amended, restated, modified or supplemented from time to time.

“ CSE Prime Rate ”: The rate designated by CSE Mortgage (or the originator of an Acquired Loan) from time to time and/or pursuant to the related Underlying Instruments as its prime rate in the United States, such rate to change as and when the designated rate changes; provided that

the CSE Prime Rate is not intended to be the lowest rate of interest charged by CSE Mortgage (or such originator) in connection with extensions of credit to debtors.

“ Cut-Off Date ”: With respect to each Asset and Additional Asset, the related Funding Date therefor.

“ Currency ”: Dollars or any Alternative Currency.

“ Deemed Collection ”: Defined in Section 2.4(c) .

“ Delayed-Draw Term Loan ”: A Loan that is fully committed on the closing date thereof and is required by its terms to be fully funded in one or more installments on draw dates to occur within three years after the closing date thereof but which, once fully funded, has the characteristics of a Term Loan.

“ Delinquent Asset ”: An Asset (that is not a Charged-Off Asset) as to which either of the following first occurs: (a) all or any portion of one or more principal or interest payments (other than in respect of default rate interest) remain unpaid for at least 60 days from the original due date for such payment (without giving effect to any Servicer Advance thereon) or (b) consistent with the Credit and Collection Policy such Asset would be classified as delinquent by the Servicer.

“ Delinquent Portfolio Asset ”: A Portfolio Asset (that is not a Charged-Off Portfolio Asset) (excluding equity investments) as to which either of the following first occurs: (a) all or any portion of one or more principal or interest payments (other than in respect of default rate interest) remain unpaid for at least 60 days from the original due date for such payment (without giving effect to any Servicer Advance thereon) or (b) consistent with the Credit and Collection Policy (or such similar policies and procedures utilized by the Servicer in servicing such Portfolio Asset) such Portfolio Asset would be classified as delinquent by the Servicer.

“ Derivatives ”: Any exchange-traded or over-the-counter (i) forward, future, option, swap, cap, collar, floor or foreign exchange contract or 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, (ii) any similar transaction, contract, instrument, undertaking or security, or (iii) any transaction, contract, instrument, undertaking or security containing any of the foregoing.

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

“ Development Properties ”: An existing property that is undergoing renovation or redevelopment that either (i) disrupts at least 30% of the occupancy of the property, or (ii) temporarily reduces the NOI of the property by more than 30%; provided that a property will not be considered a Development Property after it has an occupancy rate of at least 80%.

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

“ Discretionary Sale ”: Defined in Section 2.20 .

“ Discretionary Sale Date ”: The Business Day identified by the Seller to the Administrative Agent in a Discretionary Sale Notice as the proposed date of a Discretionary Sale.

“ Discretionary Sale Notice ”: Defined in Section 2.20(a) .

“ Dollar Equivalent ”: On any day, with respect to the amount of any Alternative Currency, the amount of Dollars that would be required to purchase such amount of Alternative Currency on such day, based on the spot selling rate from the prior Business Day as determined by the Servicer reported on Wall Street Journal to sell such Alternative Currency for Dollars in the London foreign exchange market.

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

“ Eligible Asset ”: On any date of determination, each Asset (A) for which the Administrative Agent, Collateral Custodian and Backup Servicer have received the following no later than 2:00 p.m. (New York City, New York time) on the day prior to the related Funding Date: (1) a faxed copy of the duly executed original promissory note, master purchase agreement and purchase statements, Loan Register and Asset Checklist, as applicable, in a form and substance satisfactory to the Administrative Agent and, with respect to any Loans closed in escrow, a certificate (in the form of Exhibit L ) from the counsel to the Originator or the Obligor of such Loans certifying the possession of the Required Asset Documents; provided that notwithstanding the foregoing, the Required Asset Documents (including any UCCs included in the Required Asset Documents) shall be in the possession of the Collateral Custodian within two Business Days of any related Funding Date as to any Additional Assets; (2) a Borrowing Notice delivered by the Seller to the Collateral Custodian and the Administrative Agent as part of the Borrowing Notice or Monthly Report delivered by the Servicer, (3) a Borrowing Base Certificate, and (4) a Certificate of Assignment (Exhibit A to the Sale Agreement, including Schedule I thereto); provided that if such Asset is part of a capital contribution to the Seller the Collateral Custodian shall have received the Required Asset Documents within three Business Days of receipt of the Certificate of Assignment and (B) that satisfies each of the following eligibility requirements, as applicable:

(1) With respect to any Asset:

     (a) the Asset, together with the Related Security, has been originated or acquired by the Originator, sold to the Seller pursuant to (and in accordance with) the Sale Agreement and the Seller has good title, free and clear of all Liens (other than Permitted Liens), on such Asset and Related Security;

     (b) the Asset, (i) (together with the Collections and Related Security related thereto) has been the subject of a grant by the Seller in favor of the Administrative Agent on behalf of the Secured Parties, of a first priority perfected security interest, and (ii) with respect to which, at the time of the sale of such Asset to the Seller, the Originator had a first priority (other than in the case of B-Note Loans or Mezzanine Loans) perfected security interest in the Related Property (other than Liens expressly permitted by the Underlying Instruments) relating to such Loan;

     (c) at the time such Asset is included in the Collateral, the Asset (i) is not (and since its origination by the Originator or, in the case of Acquired Loans, acquisition by the Originator has never been) a Charged-Off Asset (either in whole or in part), (ii) is not past due in the case of a Loan, with respect to payments of principal or interest ( provided that if such Asset is past due at the time it is included in the Collateral but not more than ten days past due, the Originator and the Servicer must reasonably believe that such Asset will promptly and in no event later than the date of the next Scheduled Payment due on such Asset, be brought current with respect to all payments due thereunder), and (iii) has never been more than 60 days past due, with respect to payments of principal or interest, or, in the case of Acquired Loans, to the best of the Originator’s knowledge after due inquiry, has never been more than 60 days past due in the 12 months prior to acquisition;

     (d) the Asset is an “eligible asset” as defined in Rule 3a-7 under the 1940 Act;

     (e) the Asset is an “account”, “chattel paper”, “instrument” or a “general intangible” within the meaning of Article 9 of the UCC of all applicable jurisdictions;

     (f) the Obligor with respect to such Asset is an Eligible Obligor and such Asset is payable only in Dollars and does not permit the currency in which or the country in which such Asset is payable to be changed; provided that notwithstanding the foregoing, any such Asset denominated in an Alternative Currency shall be deemed to satisfy the requirements in this clause that it be payable in Dollars if such Asset is subject to appropriate currency hedging as determined by the Administrative Agent in its sole discretion;

     (g) the Asset is evidenced by a promissory note, Loan Register, security agreement, credit, loan or note purchase agreement or other Underlying Instruments, in each case, that have been duly authorized and executed, are in full force and effect and constitute the legal, valid, binding and absolute and unconditional payment obligation of the related Obligor, enforceable against such Obligor in accordance with their terms (subject to applicable bankruptcy, insolvency, moratorium or other similar laws affecting the rights of creditors generally and to general principles of equity, whether considered in a suit at law or in equity), and there are no conditions precedent to the enforceability or validity of the Asset that have not been satisfied or validly waived;

     (h) the Asset does not contravene in any material respect any Applicable Laws (including, without limitation all applicable predatory and abusive lending laws and all laws, rules and regulations relating to usury, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices, licensing and privacy) and with respect to which no part thereof is in violation of any Applicable Law in any material respect;

     (i) neither the assignment of the Asset under the Sale Agreement by the Originator, the sale of the Asset hereunder or the granting of a security interest hereunder by the Seller violates, conflicts with or contravenes any Applicable Laws or any contractual or other restriction, limitation or encumbrance;

     (j) on or before the applicable Cut-Off Date, the Obligor of such Asset (or, in the case of Acquired Loans, the applicable agent) shall have been directed to make all payments to the Lock-Box or directly to the Lock-Box Account;

     (k) the Asset requires the Obligor thereof to maintain reasonable and customary property damage and loss insurance with respect to the real or personal property constituting the Related Property (if any) if such Related Property is of a type customarily so insured;

     (l) the Related Property (if any) (i) has not been foreclosed on or repossessed from the current Obligor by the Servicer, and (ii) has not suffered any material loss or damage that has not been repaired or restored or for which insurance proceeds are not available;

     (m) the Asset provides by its terms that the Obligor’s payment obligations are absolute and unconditional without any right of rescission, setoff, counterclaim or defense for any reason against the Originator and the Asset contains a clause that has the effect of unconditionally and irrevocably obligating the Obligor to make periodic payments (including taxes) notwithstanding any damage to, defects in, or destruction of the Related Property (if any) or any other event, including obsolescence of any property or improvements;

     (n) the Asset is not subject to any litigation, dispute, refund, claims of rescission, setoff, netting, counterclaim or defense whatsoever, including but not limited to, claims by or against the Obligor thereof or a payor to or account debtor of such Obligor;

     (o) the Asset requires the Obligor to maintain the Related Property in good condition and to bear all the costs of operating and maintaining same, including taxes and insurance relating thereto;

     (p) the Asset shall not have been originated in, nor shall it be subject to the laws of, any jurisdiction under which the sale, transfer and assignment of such Asset under the Transaction Documents would be unlawful, void or voidable;

     (q) the Asset, together with the Required Asset Documents and Asset File related thereto, is assignable and does not require the consent of or notice to the Obligor to consummate the transactions contemplated by the Transaction Documents or contain any other restriction on the transfer or the assignment of the Asset for the purpose of consummating the transactions contemplated by the Transaction Documents other than a consent or waiver of such restriction that has been obtained prior to the date on which the Asset was sold to the Seller; provided that with respect to Loans which are secured by an interest in commercial real estate, the Required Asset Documents may restrict the transfer or the assignment of the related Loan so long as such Loan is freely assignable or transferable to a Qualified Transferee;

     (r) the Obligor of such Asset is legally responsible for all taxes relating to the Related Security or other security relating to such Asset, and all payments in respect of the Asset 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;

     (s) the Asset complies with the representations and warranties made by the Seller and Servicer hereunder and all information provided by the Seller or the Servicer with respect to the Asset is true and correct in all material respects;

     (t) the Asset and the Related Security have not been sold, transferred, assigned or pledged by the Seller to any Person;

     (u) no selection procedure adverse to the interests of the Administrative Agent or the Secured Parties was utilized by the Seller or Originator in the selection of Assets for inclusion in the Collateral;

     (v) the Asset has not been compromised, adjusted, extended, satisfied, rescinded, set-off or modified by the Seller, the Originator or the Obligor with respect thereto, and no Asset is subject to compromise, adjustment, extension, satisfaction, rescission, set-off, counterclaim, defense, abatement, suspension, deferment, deductible, reduction, termination or modification, whether arising out of transactions concerning the Asset, or otherwise, by the Seller, the Originator or the Obligor with respect thereto except as otherwise permitted under Section 6.4(a) of this Agreement and in accordance with the Credit and Collection Policy;

     (w) the particular Asset is not one as to which the Seller or the Servicer has knowledge which should lead it to expect such Asset will not be paid in full;

     (x) the Obligor of such Asset is not the subject of an Insolvency Event or Insolvency Proceedings;

     (y) the Asset is secured by a valid, perfected, first priority (other than with respect to B-Note Loans and Mezzanine Loans) security interest in all assets that constitute the collateral for the Asset (subject to Liens expressly permitted by the Underlying Instruments);

     (z) all material consents, licenses, approvals or authorizations of, or registrations or declarations with, any Governmental Authority required to be obtained, effected or given in connection with the making or performance of the Asset have been duly obtained, effected or given and are in full force and effect;

     (aa) the Asset satisfies all applicable requirements of and was originated or acquired, underwritten and closed in accordance with the Credit and Collection Policy (including without limitation the execution by the Obligor of all documentation required by the Credit and Collection Policy);

     (bb) the Asset was originated or acquired in the ordinary course of the Originator’s business;

     (cc) the Asset arises pursuant to documentation with respect to which the Originator has performed all obligations required to be performed by it thereunder;

     (dd) the Asset is not Margin Stock;

     (ee) the acquisition of the Asset by the Seller will not cause the Seller or the pool of Collateral to be required to be registered as an investment company under the 1940 Act;

     (ff) the Asset is not subject to a guaranty by the Originator or any Affiliate thereof; and

     (gg) the proceeds of the Asset will not be used to finance “ground-up” construction activities; provided that financing for purposes of Land Development shall not be considered a “ground-up” construction activity.

(2) With respect to any Loan:

     (a) the Loan provides (i) for periodic payments of interest and/or principal in cash, which are due and payable on a monthly, quarterly or semi-annual basis unless otherwise consented to in writing by the Administrative Agent, and (ii) that the Servicer (or, with respect to Acquired Loans or Agented Loans, that the agent or a majority of the related lenders) may accelerate all payments if the Obligor is in default under the Loan and any applicable grace period has expired (in the case of any B-Note Loan or Mezzanine Loan, subject to any applicable intercreditor or subordination agreement); provided that Sale/Leaseback Loans shall provide for payments of interest and/or principal in cash, no less frequently than on a quarterly basis;

     (b) the Loan is underwritten as (i) a rediscount loan, (ii) a commercial real estate loan, or (iii) a Sale/Leaseback Loan, in each case pursuant to and in accordance with the Credit and Collection Policy;

     (c) the Loan is a Sale/Leaseback Loan, Senior Secured ABL Loan, Senior Secured Loan, B-Note Loan or Mezzanine Loan;

     (d) the Loan has an original term to maturity of not more than 25 years;

     (e) the Loan provides for cash payments that fully amortize the Outstanding Asset Balance of such Loan on or by its maturity and does not provide for such Outstanding Asset Balance to be discounted pursuant to a prepayment in full;

     (f) the Loan does not permit the Obligor to defer all or any portion of the current cash interest due thereunder;

     (g) the Loan does not permit the payment obligation of the Obligor thereunder to be converted or exchanged for equity capital of such Obligor;

     (h) Intentionally Omitted

     (i) except with respect to B-Note Loans, Mezzanine Loans and certain Loans that, in the Originator’s reasonable judgment cannot be cross-collateralized or cross-defaulted because of REIT eligibility criteria, if the Obligor of such Loan is the Obligor of more than one Loan, all such Loans are cross-collateralized and cross-defaulted;

     (j) the Loan does not represent capitalized interest or payment obligations relating to “put” rights;

     (k) the Loan is not a Loan or extension of credit by the Originator to the Obligor for the purpose of making any past due principal, interest or other payments due on such Loan;

     (l) the Originator (i) has completed to its satisfaction, in accordance with the Credit and Collection Policy, a due diligence audit and collateral assessment with respect to such Loan and (ii) has done nothing to impair the rights of the Administrative Agent or the Secured Parties with respect to the Loan, the Related Security, the Scheduled Payments or any income or Proceeds therefrom;

     (m) except with respect to B-Note Loans and Mezzanine Loans and, to the extent set forth in the definition thereof, the Loan is not subordinated to any other loan or financing to the related Obligor;

     (n) if the Loan is a Revolving Loan, either it provides by its terms that any future funding thereunder is in the Originator’s sole and absolute discretion or it is subject to the Retained Interest provision of this Agreement;

     (o) the Face Amount of the Loan is the dollar amount thereof shown on the books and records of the Originator and Seller;

     (p) with respect to B-Note Loans or Mezzanine Loans, the Originator has entered into an intercreditor agreement or subordination agreement (or such provisions are contained in the principal Underlying Instruments) with, or provisions for the benefit of, the senior lender, which agreement or provisions are assignable to and have been assigned to the Seller, and which provide that any standstill of remedies by the Originator or its assignee is limited (A) such that no standstill of remedies may be imposed unless (x) a default with respect to the senior obligation has occurred and is continuing and (y) in the case of such a default, other than a payment default, the Originator’s or assignee’s receipt from the senior lender or Obligor of a notice of default by the Obligor under the senior debt, and (B) to no longer than 180 days in duration in the aggregate in any given year;

     (q) with respect to any Acquired Loan, such Loan has been re-underwritten by the Originator and satisfies all of the Originator’s underwriting criteria;

     (r) with respect to any Loan transferred from an Affiliate of the Originator to the Originator, such transfer to the Originator constituted an absolute sale or conveyance (and not a secured loan) and with respect to any such transfer occurring on or after the Second Amendment and Restatement Effective Date, the Administrative Agent has received a satisfactory legal opinion concerning the acquisition of such Loan by the Originator in a true sale transaction;

     (s) with respect to any Acquired Loan that was acquired in a pool by the Originator along with one or more other Acquired Loans, the Administrative Agent has approved in writing such Loan for inclusion in the Collateral and has completed its own due diligence with respect to such Loan;

     (t) with respect to Agented Loans, the related Underlying Instruments (a) shall include a credit or note purchase or similar agreement containing provisions relating to the appointment and duties of an administrative (or other analogous) agent and intercreditor and (if applicable) subordination provisions, and (b) are duly authorized, fully and properly executed and are the valid, binding and unconditional payment obligation of the Obligor thereof;

     (u) with respect to Agented Loans, CapitalSource Finance LLC or the Originator (or a wholly owned subsidiary of CapitalSource Inc.) has been appointed the administrative (or other analogous) agent for all such loans prior to such Agented Loan becoming a part of the Collateral;

     (v) with respect to Agented Loans, if the entity serving as the collateral agent of the security of the lenders to such Obligor with respect to such Loan 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 lenders have been or will be executed and filed or recorded as appropriate prior to such Agented Loan becoming a part of the Collateral or if such entity has or will change after such Agented Loan becomes part of the Collateral, then prior to such entity becoming the collateral agent;

     (w) with respect to any Agented Loan, all required notifications, if any, have been given to the collateral agent, the payment agent and any other parties required by the Required Asset Documents of, and all required consents, if any, have been obtained with respect to, the Originator’s assignment of such Agented Loan and the Originator’s right, title and interest in the Related Property to the Seller and the Administrative Agent’s security interest therein on behalf of the Secured Parties;

     (x) with respect to Agented Loans, the right to control the actions of and replace the collateral agent and/or the paying agent of the syndicated loans is to be exercised by at least a majority in interest of all holders of such Agented Loans;

     (y) with respect to Agented Loans, all syndicated loans of the Obligor of the same priority are cross-defaulted, the Related Property securing such loans is held by the collateral agent for the benefit of all holders of the syndicated loans and all holders of such loans (a) have an undivided interest in the collateral securing such loans and (b) share in the proceeds of the sale or other disposition of such collateral on a pro rata basis;

     (z) no portion of the proceeds used to make payments of principal or interest on such Loan have come from a new loan by the Originator;

     (aa) does not contain a confidentiality provision that restricts or purports to restrict the ability of the Administrative Agent or any Secured Party to exercise their rights under this Agreement, including, without limitation, their rights to review the Loan, the Required Asset Documents and Asset File;

     (bb) is not a consumer loan;

     (cc) is not a DIP loan; and

     (dd) none of the Loans secured by a Mortgage are high-cost loans as defined by applicable predatory and abusive-lending laws.

(3) In addition to the criteria set forth in clauses (1) and (2) above, with respect to any Sale/Leaseback Loan, the following additional criteria:

     (a) the Originator or CapitalSource Finance LLC shall be the owner and lender of record for such Loan; provided that with respect to any Sale/Leaseback Loan for which CapitalSource Finance LLC is the lender and owner of record prior to such Sale/Leaseback Loan becoming part of the Collateral the Seller shall deliver either (i) a true sale opinion in form and substance acceptable to the Administrative Agent or (ii) an executed copy of an omnibus assignment and assumption agreement for such Sale/Leaseback Loan in a form satisfactory to the Administrative Agent;

     (b) (i) other than with respect to Agented Loans or Acquired Loans (or other Loans for which an Assignment of Mortgage has been delivered to Wells Fargo in its capacity as trustee or custodian pursuant to a prior term transaction or warehouse facility involving the Originator or one of its Affiliates), the Collateral Custodian or an escrow agent (pursuant to an escrow agreement in form and substance acceptable to the Administrative Agent in its sole discretion) shall hold all instruments and other documents in blank for the benefit of each Purchaser with respect to all documentation evidencing, securing, insuring or otherwise benefiting the Originator or CapitalSource Finance LLC’s interest in such Sale/Leaseback Loan, together with (promptly upon written request) such affidavits, forms, tax returns and statements and other documents as shall be necessary to accomplish such assignment and (ii) the Administrative Agent shall have the right to cause the Collateral Custodian (at the expense of the Originator) to effectuate the foregoing assignment upon (A) the occurrence of a Termination Event or an Unmatured Termination Event or (B) a default, event of default, or any event that, with the giving of notice or the lapse of time, or both, would become a default or event of default (however defined or described) in the Underlying Instruments for such Sale/Leaseback Loan;

     (c) the Originator shall provide an indemnity to the Purchasers to cover any losses suffered by the Purchasers as a result of any Lien against any of the SPE Obligor’s assets that is pari passu or takes priority over the Liens granted pursuant to the Transaction Documents;

     (d) the Underlying Lessee is not an Affiliate of CapitalSource Inc. or its Subsidiaries;

     (e) the SPE Obligor owns the fee simple or ground lease interest in the underlying property and shall not grant a Lien on such underlying property to any Person other than the Originator;

     (f) in no event shall the payments on the Lease abate or diminish, except:

     (I) [Reserved],

     (II) [Reserved],

     (III) upon the termination of the Underlying Lease following a casualty or condemnation with respect to the underlying property (the “ Leased Property ”) which

renders the Leased Property unsuitable for its primary intended use, such termination to be conditioned upon (i) the prepayment by SPE Obligor of the Sale/Leaseback Loan at par plus any accrued interest or (ii) SPE Obligor providing assurances of such prepayment which are acceptable to the Administrative Agent, or

     (IV) in the event a condemnation or casualty described in clause (III) above, respectively, occurs in the final 12 months of the term of the Underlying Lease, the Underlying Lessee shall have the right to terminate the Underlying Lease with no further obligations thereunder other than the satisfaction of all accrued and unpaid obligations to the date of termination.

     (g) the terms of the Lease shall provide periodic payments (which shall not be subject to defense, set-off or counterclaim) from Underlying Lessee to SPE Obligor no less frequently than on a quarterly basis to at least equal the interest and principal payments on the related Loan;

     (h) the term of the Lease shall be at least equal to the term of the related Loan;

     (i) the Underlying Lessee shall not be in default under the Lease at the time of contribution and thereafter shall not be in payment default;

     (j) any extraordinary payments by Underlying Lessee to SPE Obligor, including, but not limited to, default, bankruptcy and early lease termination payments (but excluding late payment fees) shall be applied to effectuate a reduction in the principal to the related Loan;

     (k) (i) the Underlying Lessee or SPE Obligor shall maintain risk property insurance in an amount at least equal to the full replacement cost of the underlying property, (ii) shall maintain general liability, business interruption and any other insurance agreed upon in the Lease and (iii) all such insurance policies shall name the Originator and the Administrative Agent on behalf of each Purchaser as additional insureds;

     (l) either the rights of the SPE Obligor under the Lease are freely assignable by the SPE Obligor or the Underlying Lessee has consented to the assignment of such rights to the Originator and its assignees;

     (m) the Loan shall contain customary representations, warranties, indemnities, events of default and remedies (including liquidated damages) similar to other transactions that Originator would make to a third party in an arms-length transaction; and

     (n) the Seller shall have a pledge of the SPE Obligor’s equity interest.

“Eligible Assignee” : (A) with respect to the Class A Variable Funding Certificate, (i) CNAI or any of its Affiliates, (ii) any Person managed by Citibank, CNAI or any of their Affiliates, or (iii) any financial or other institution acceptable to the Administrative Agent and approved by the Seller (which approval by the Seller shall not be unreasonably withheld, delayed or conditioned and shall not be required if a Termination, Event or an Unmatured Termination Event has occurred and is continuing), and (B) with respect to the Class B Variable Funding Certificate, (i) CSE Mortgage LLC or any entity wholly-owned by CSE Mortgage LLC that is disregarded for income tax purposes or (ii) any financial or other institution acceptable to the Administrative

Agent and approved by the Seller (which approval by the Seller shall not be unreasonably withheld, delayed or conditioned and shall not be required (x) if a Termination, Event or an Unmatured Termination Event has occurred and is continuing, or (y) to the extent that such Person becomes a Class B Purchaser pursuant to the exercise of its rights under a Lien granted by a Class B Purchaser in a Class B Variable Funding Certificate).

“ Eligible Obligor ”: On any date of determination, any Obligor that:

     (i) is a business organization (and not a natural person) duly organized and validly existing under the laws of its jurisdiction of organization,

     (ii) [intentionally omitted],

     (iii) has not entered into the Loan primarily for personal, family or household purposes,

     (iv) is not a Governmental Authority,

     (v) except with respect to Sale/Leaseback Loans to SPE Obligors, the Obligor is not an Affiliate of the Originator or Seller,

     (vi) is not in the gaming (other than Obligors in the business of providing services to the gaming industry), nuclear waste or natural resource exploration/production and oil field service industries,

     (vii) is not engaged in the business of conducting proprietary research on new drug development,

     (viii) is not the subject of an Insolvency Proceeding,

     (ix) as of the applicable Cut-Off Date, has an Eligible Risk Rating, and

     (x) is not an Obligor of a Charged-Off Asset or Delinquent Asset.

“ Eligible Repurchase Obligations ”: Repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed by, the United States or any agency or instrumentality thereof the obligations of which are backed by the full faith and credit of the United States, in either case entered into with a depository institution or trust company (acting as principal) described in clauses (c)(ii) and (c)(iv) of the definition of Permitted Investments.

“ Eligible Risk Rating ”: With respect to a designated Obligor, a “Rating 1,” “Rating 2,” “Rating 3,” or “Rating 4” each as determined in accordance with the Credit and Collection Policy.

“ Environmental Laws ”: Any and all foreign, federal, state and local laws, statutes, ordinances, rules, regulations, permits, licenses, approvals, interpretations and orders of courts or Governmental Authorities, relating to the protection of human health or the environment, including, but not limited to, requirements pertaining to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation, handling, reporting, licensing,

permitting, investigation or remediation of hazardous materials. Environmental Laws include, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9601 et seq .), the Hazardous Material Transportation Act (49 U.S.C. § 331 et seq .), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq .), the Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq .), the Clean Air Act (42 U.S.C. § 7401 et seq .), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq .), the Safe Drinking Water Act (42 U.S.C. § 300, et seq .), the Environmental Protection Agency’s regulations relating to underground storage tanks (40 C.F.R. Parts 280 and 281), and the Occupational Safety and Health Act (29 U.S.C. § 651 et seq .), and the rules and regulations thereunder, each as amended or supplemented from time to time.

“ ERISA ”: The United States 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 Seller, (b) a trade or business (whether or not incorporated) under common control (within the meaning of Section 414(c) of the Code) with the Seller, or (c) a member of the same affiliated service group (within the meaning of Section 414(m) of the Code) as the Seller, any corporation described in clause (a) above or any trade or business described in clause (b) above.

“ Euro ”: The lawful currency of the Participating Member States.

“ 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 or Class B Purchaser shall have notified the Administrative Agent of a determination by such Liquidity Bank or Class B Purchaser or any of its assignees or participants 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 or Class B Purchaser shall have notified the Administrative Agent of the inability, for any reason, of such Liquidity Bank or Class B Purchaser or any of its assignees or participants to determine the Adjusted Eurodollar Rate, (c) any Liquidity Bank or Class B Purchaser shall have notified the Administrative Agent of a determination by such Liquidity Bank or Class B Purchaser or any of its assignees or participants that the rate at which deposits of Dollars are being offered to such Liquidity Bank or Class B Purchaser or any of its assignees or participants in the London interbank market does not accurately reflect the cost to such Liquidity Bank or Class B Purchaser, such assignee or such participant of making, funding or maintaining any Advance, (d) any Liquidity Bank or Class B Purchaser shall have notified the Administrative Agent of the inability of such Liquidity Bank or Class B Purchaser or any of its assignees or participants to obtain Dollars in the London interbank market to make, fund or maintain any Advance or (e) any Liquidity Bank or Class B Purchaser shall have notified the Administrative Agent that the principal amount of Advances to be funded by it is less than $500,000.

“ Eurodollar Reserve Percentage ”: For any period means the percentage, 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.

“ Excepted Person ”: Defined in Section 13.13(a) .

“ Excess Concentration Loan ”: Each Loan listed on Schedule VIII attached hereto.

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

“ Excluded Amounts ”: (a) Any amount received in the Lock-Box by, on or with respect to any Asset included as part of the Collateral, which amount is attributable to the payment of any tax, fee or other charge imposed by any Governmental Authority on such Asset, (b) any amount representing a reimbursement of insurance premiums and (c) any amount with respect to any Asset retransferred or substituted for upon the occurrence of a Warranty Event (if the Seller has decided that such Asset is no longer to be included in the Collateral) or that is otherwise replaced by a Substitute Asset (if the Seller has decided that such Asset is no longer to be included in the Collateral), to the extent such amount is attributable to a time after the effective date of such replacement.

“ Existing Assets ”: Each Asset purchased by the Seller under the Sale Agreement and owned by the Seller on the initial Funding Date.

“ Face Amount ”: With respect to any Asset, the Outstanding Asset Balance thereof, in each case as shown on the applicable Asset List.

“ Facility Amount ”: The aggregate amount of the Class A Facility Amount and Class B Facility Amount.

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

“ FDIC Sale ”: Defined in Section 2.21 .

“ FDIC Sale Date ”: The Business Day (which may be the Fremont Closing Date or any Business Day thereafter) identified by the Seller to the Administrative Agent as the proposed date of the FDIC Sale in accordance with the terms of Section 2.21 .

“ FDIC Sale Notice ”: Defined in Section 2.21(a) .

“ 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 overnight federal funds rates as in Federal Reserve Board Statistical Release H.15(519) or any successor or substitute publication selected by the Administrative Agent (or, if such day is not a Business Day, for the next preceding

Business Day), or, if, for any reason, such rate is not available on any day, the rate determined, in the sole opinion of the Administrative Agent, to be the rate at which overnight federal funds are being offered in the national federal funds market at 9:00 a.m. (New York City, New York time).

“ Finance Charges ”: With respect to any Asset, any interest or finance charges owing by an Obligor pursuant to or with respect to such Asset.

“ Financial Sponsor ”: Any Person, including any Subsidiary of another Person, whose principal business activity is acquiring, holding, and selling investments (including controlling interests) in otherwise unrelated companies that each are distinct legal entities with separate management, books and records and bank accounts, whose operations are not integrated one with another and whose financial condition and creditworthiness are independent of the other companies so owned by such Person.

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

“ Fixed Rate Asset ”: A Loan that is an Eligible Asset other than a Floating Rate Asset.

“ Fixed Rate Asset Percentage ”: As of any date of determination, the percentage equivalent of a fraction (a) the numerator of which is equal to the sum of the Outstanding Asset Balances of all Fixed Rate Assets and Banded Floating Rate Loans that are within 0.50% of the maximum interest rate allowable under their Required Asset Documents as of such date, and (b) the denominator of which is equal to the Aggregate Outstanding Asset Balance as of such date.

“ Floating Rate Asset ”: A Loan that is an Eligible Asset where the interest rate payable by the Obligor thereof is based on the CSE Prime Rate or CSE LIBOR Rate, plus some specified interest percentage in addition thereto, and the Loan provides that such interest rate will reset immediately upon any change in the related CSE Prime Rate or CSE LIBOR Rate.

“ Floating Prime Rate Permitted Excess Amount ”: $25,000,000 in the aggregate.

“ Fremont Bank Adjustment ”: The amount of goodwill to be recorded on the balance sheet of CapitalSource Inc. directly as a result of the consummation of the Fremont Transaction, as certified to the Administrative Agent by the chief financial officer, chief accounting officer or treasurer of CapitalSource Inc. on or about the Fremont Closing Date (but in no event later than the second Business Day of the immediately following calendar month), as such amount may be adjusted, upward or downward, by any adjustment to such figure in CapitalSource Inc.’s financial statements required by its independent public accountants.

“ Fremont Closing Date ”: The closing date for the Fremont Transaction, including the receipt of all necessary governmental approvals in connection therewith.

“ Fremont Failed Transaction Date ”: The earliest to occur of (i) the date that notice is received by CapitalSource Inc. (or its representatives) from a Governmental Authority having jurisdiction over the Fremont Transaction that it does not intend to approve the Fremont Transaction, (ii) the date that CapitalSource Inc. determines that it does not intend to consummate the Fremont Transaction, (iii) the termination of the Fremont Purchase Agreement without consummation of the Fremont Transaction, and (iv) unless the Fremont Closing Date has occurred on or prior to such

date, July 31, 2008 (subject to extensions requested by CapitalSource Inc. and consented to by the Administrative Agent relating to obtaining all necessary approvals of Governmental Authorities in connection with the Fremont Transaction).

“ Fremont Purchase Agreement ”: That certain Purchase and Assumption Agreement dated as of April 13, 2008, by and among CapitalSource Inc., CapitalSource TRS Inc., Fremont General Corporation, Fremont General Credit Corporation and Fremont Investment & Loan.

“ Fremont Transaction ”: The acquisition by CapitalSource Inc. of the assets of Fremont Investment & Loan (to the extent and as contemplated under the Fremont Purchase Agreement, without material waiver or amendment, except as consented to by the Administrative Agent), including the receipt of all necessary governmental approvals in connection therewith.

“ Fremont Transfer Date ”: The earlier to occur of (i) the first Business Day following the Fremont Closing Date on which the sale and assignment of any loans or financial assets by CapitalSource Inc. or any of its Subsidiaries in connection with the Fremont Transaction is permitted under Applicable Law, without regard to eligibility and qualifications that may be imposed with respect thereto, and (ii) the first Business Day 30 days following the Fremont Closing Date (subject to extensions requested by CapitalSource Inc. and consented to by the Administrative Agent relating to obtaining all necessary approvals of Governmental Authorities in connection with the Fremont Transaction).

“ Funding Date ”: With respect to the initial Funding Date for Class A Advances, the second Business Day following the Closing Date, with respect to the initial Funding Date for Class B Advances, the Restatement Date, and as to any incremental Advance, any Business Day that is two Business Days immediately following the receipt by the Administrative Agent of a Borrowing Notice (along with a Borrowing Base Certificate) in accordance with Section 2.3 .

“ GAAP ”: Generally accepted accounting principles as in effect from time to time in the United States.

“ Governmental Authority ”: With respect to any Person, any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any body or entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator having jurisdiction over such Person.

“ H.15 ”: Federal Reserve Statistical Release H.15.

“ Hedge Collateral ”: Defined in Section 5.3(b) .

“ Hedge Breakage Costs ”: For any Hedge Transaction, any amount payable by the Seller for the early termination of that Hedge Transaction or any portion thereof.

“ Hedge Counterparty ”: At any date of determination, a Permitted Hedge Counterparty which has entered into a Hedging Agreement that remains in effect and has not been terminated on such date of determination.

“ Hedge Guaranty ”: The Guarantee Agreement, dated as of September 10, 2007, by and between CSE Mortgage in favor of the applicable Hedge Counterparty, or any other Guarantee Agreement in substantially similar form, in each case, as amended, modified, waived, supplemented, restated or replaced from time to time.

“ Hedge Transaction ”: Each interest rate or index rate swap transaction between the Seller and a Hedge Counterparty that is entered into pursuant to Section 5.3(a) and is governed by a Hedging Agreement.

“ Hedging Agreement ”: Each agreement between the Seller and a Hedge Counterparty that governs one or more Hedge Transactions entered into pursuant to Section 5.3(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 D hereto or such other form as the Administrative Agent shall approve in writing, detailing the specific terms of each such Hedge Transaction.

“ Highest Required Investment Category ”: (i)  With respect to ratings assigned by Moody’s, “Aa2” or “P-1” for one month instruments, “Aa2” and “P-1” for three month instruments, “Aa3” and “P-1” for six month instruments and “Aa2” and “P-1” for instruments with a term in excess of six months, (ii) with respect to rating assigned by S&P, “A-1” for short-term instruments and “A” for long-term instruments, and (iii) with respect to rating assigned by Fitch (if such investment is rated by Fitch), “F-1+” for short-term instruments and “AAA” for long-term instruments.

“ Increased Costs ”: Any amounts required to be paid by the Seller to an Affected Party pursuant to Section 2.15 .

“ Indebtedness ”: With respect to any Person at any date, (a) all indebtedness 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 or other evidence of indebtedness customary for indebtedness of that type, (b) all obligations of such Person under leases that shall have been or should be, in accordance with generally accepted accounting principles, recorded as 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, (e) all indebtedness, obligations or liabilities of that Person in respect of Derivatives, and (f) obligations under direct or indirect guaranties in respect of obligations (contingent or otherwise) to purchase or otherwise acquire, or to otherwise assure a creditor against loss in respect of, indebtedness or obligations of others of the kind referred to in clauses (a) through (e) above.

“ Indemnified Amounts ”: Defined in Section 11.1 .

“ Indemnified Parties ”: Defined in Section 11.1 .

“ Independent Director ”: Defined in Section 4.1(u)(xxviii) .

“ Industry ”: The industry of an Obligor as determined by reference to the two digit standard industry classification or North American Industry Classification System codes.

“ Initial Advance ”: The first Advance under the Class A VFC and the Class B VFC, respectively.

“ 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 other Governmental Authority relating to any Insolvency Event.

“ Instrument ”: Any “instrument” (as defined in Article 9 of the UCC), other than an instrument that constitutes part of chattel paper.

“ Insurance Policy ”: With respect to any Asset an insurance policy covering liability and physical damage to or loss of the Related Property.

“ Insurance Proceeds ”: Any amounts payable or any payments made on or with respect to an Asset under any Insurance Policy.

“ Intercreditor Agreement ”: The Fourth Amended and Restated Intercreditor and Lockbox Administration Agreement, dated as of June 30, 2005, by and among each of the financing agents from time to time party thereto, Bank of America, N.A., as the lockbox bank, CapitalSource Finance LLC, as the originator, as the original servicer and as the lockbox servicer, and CapitalSource Funding LLC, as the owner of the account and as the owner of the lockbox, as amended, modified, waived, supplemented, restated or replaced from time to time.

“ Interest ”: For each Accrual Period and each Advance outstanding, the sum of the products of:

IR x P x		1
		360

where:

IR = the Interest Rate applicable on such day; and

P = the principal amount of such Advance on such day;

provided that (i) no provision of this Agreement shall require the payment 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 Collections ”: Any and all amounts received in respect of any interest, fees or other similar charges (including any Finance Charges) from or on behalf of any Obligor that are deposited into the Collection Account, or received by or on behalf of the Seller by the Servicer or Originator in respect of an Asset, in the form of cash, checks, wire transfers, electronic transfers or any other form of cash payment (net of any payment owed by the Seller to, and including any receipts from, any Hedge Counterparties).

“ Interest Rate ”: The Class A Interest Rate or the Class B Interest Rate, as applicable.

“ Interests in Real Property ”: A fee simple interest, a financeable estate for years or a leasehold interest, in each case in real property.

“ Investors ”: The Persons listed on Schedule VI attached hereto.

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

“ Issuer ”: CAFCO, CIESCO, CRC Funding and any other any Person that becomes an owner of Class A Advances, by assignment or otherwise, and whose principal business consists of issuing commercial paper or other securities to fund its acquisition or maintenance of receivables, accounts, instruments, chattel paper, general intangibles and other similar assets.

“ Issuer Purchase Limit ”: With respect to each Issuer, the lesser of $600,000,000 and the Class A Facility Amount in effect from time to time.

“ Land Development ”: Financing to an entity engaged in the business of purchasing land for the purposes of resale to a developer.

“ Lease ”: The underlying triple-net lease between SPE Obligor and any Underlying Lessee pursuant to which the Underlying Lessee is responsible for all expenses arising from the use or operation of the underlying property, including, without limitation, taxes, insurance premiums, alterations, and repairs and maintenance costs.

“ Leased Property ”: Defined in clause 3(f) of the definition of Eligible Asset.

“ LIBOR Rate ”: For any day during any Accrual Period and any Advance or portion thereof, an interest rate per annum equal to the rate per annum at which deposits in Dollars are offered by the principal office of Citibank in London, England to prime banks in the London interbank market at 11:00 A.M. (London time) two (2) Business Days 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 day of the applicable Accrual Period (with respect to all subsequent Accrual Periods for such Advance).

“ Lien ”: Any mortgage, lien, pledge, charge, right, claim, security interest or encumbrance of any kind of or on any Person’s assets or properties in favor of any other Person (including any UCC financing statement or any similar instrument filed against such Person’s assets or properties).

“ Liquid Real Estate Assets ”: (a) Residential mortgage-backed securities that (i) have a rating of not less than “AA” by S&P/Fitch and “Aa2” by Moody’s, (ii) are purchased by CapitalSource Inc. or its Consolidated Subsidiaries solely to meet REIT asset and income tests, and (iii) are leveraged through debt facilities utilizing leverage greater than 12 times the amount of equity investment in such Liquid Real Estate Assets and (b) residential mortgage whole loan purchases made by CapitalSource Inc. or its Consolidated Subsidiaries solely to meet REIT asset and income tests, all in accordance with the Residential Mortgage Policies and Procedures.

“ Liquidation Expenses ”: With respect to (a) any Asset, the aggregate amount of all out-of-pocket expenses reasonably incurred by the Servicer (including amounts paid to any subservicer) and any reasonably allocated costs of counsel (if any), in each case in accordance with the Servicer’s customary procedures in connection with the repossession, refurbishing and disposition of any related assets securing such Asset upon or after the expiration or earlier termination of such Asset and other out-of-pocket costs related to the liquidation of any such assets, including the attempted collection of any amount owing pursuant to such Asset if it is a Charged-Off Asset, and if requested by the Administrative Agent, the Servicer and Originator must provide to the Administrative Agent a breakdown of the Liquidation Expenses for any Asset along with any supporting documentation therefor, and (b) any Portfolio Asset, the aggregate amount of all out-of-pocket expenses reasonably incurred by the Servicer (including amounts paid to any subservicer) and any reasonably allocated costs of counsel (if any), in each case in accordance with the Servicer’s customary procedures in connection with the repossession, refurbishing and disposition of any related assets securing such Portfolio Asset upon or after the expiration or earlier termination of such Portfolio Asset and other out-of-pocket costs related to the liquidation of any such assets, including the attempted collection of any amount owing pursuant to such Portfolio Asset if it is a Charged-Off Portfolio Asset, and if requested by the Administrative Agent, the Servicer and Originator must provide to the Administrative Agent a breakdown of the Liquidation Expenses for any Portfolio Asset along with any supporting documentation therefor.

“ Liquidity Agreement ”: With respect to each Purchaser which is an Issuer, the asset purchase agreement, secondary market agreement or other liquidity agreement, by and among such Purchaser, the Liquidity Banks named therein, and the Administrative Agent, as such agreement may be amended, modified, waived, supplemented, restated or replaced from time to time.

“ Liquidity Bank ”: Citibank and each other Person or Persons who provide liquidity support to any Purchaser which is an Issuer pursuant to a Liquidity Agreement in connection with the issuance by such Issuer of Commercial Paper Notes.

“ Loan ”: Any loan originated by the Originator or, in the case of an Acquired Loan, otherwise acquired by the Originator, that is identified on an Asset List and sold or contributed to the Seller hereunder and included as part of the Collateral, which loan includes, without limitation, (i) the Required Asset Documents and Asset File, and (ii) all right, title and interest of the Originator in and to the loan and any Related Property.

“ Loan Register ”: Defined in Section 5.4(n) .

“ Loan-to-Liquidation Value ” or “ LLV ”: With respect to any Loan, as of the date of its origination, the percentage equivalent of a fraction (i) the numerator of which is equal to the maximum availability (as provided in the applicable Underlying Instruments) of such Loan as of the date of its origination and (ii) the denominator of which is equal to the liquidation value of the Related Property securing such Loan that is subject to a first priority lien in favor of the Originator (as determined by the Servicer in accordance with the Credit and Collection Policy and in a commercially reasonable manner).

“Loan-to-Value Ratio ” or “ LTV ”: With respect to any Loan, as of the date of its origination, the percentage equivalent of a fraction (a) the numerator of which is equal to the total commitment amount of such Loan as of the date of its origination (as provided in the related Underlying Instruments) (or the Outstanding Asset Balance with respect to Delayed-Draw Term Loans as determined on the last day of each calendar month) plus the total commitment amount or principal amount, as the case may be, as of the applicable date of origination or incurrence, of all loans and other indebtedness which is senior to or pari passu with such Loan in the “capital structure” of the related Obligor (as defined in, and as determined by the Servicer in accordance with, the Credit and Collection Policy and in a commercially reasonable manner), and (b) the denominator of which is equal to the lower of the Obligor’s cost to acquire the Related Property or the current value (determined by means of an Appraisal) of the Related Property.

“ Lock-Box ”: The post office box to which Collections are remitted for retrieval by a Lock-Box Bank and deposited by such Lock-Box Bank into a Lock-Box Account, the details of which are contained in Schedule II .

“ Lock-Box Account ”: The account maintained at the Lock-Box Bank for the purpose of receiving Collections, the details of which are contained in Schedule II , as such schedule may be amended from time to time.

“ Lock-Box Agreement ”: The Fifth Amended and Restated Three Party Agreement Relating to Lockbox Services and Control (with Activation Upon Notice), dated as of June 30, 2005, by and among certain financing agents party thereto, Bank of America, N.A., as the lockbox bank, CapitalSource Finance LLC, as the originator, as the original servicer and as the lockbox servicer, and CapitalSource Funding LLC, as the owner of the account and as the owner of the lockbox, as amended, modified, waived, supplemented, restated or replaced from time to time.

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

“ Margin Stock ”: Margin Stock as defined under Regulation U.

“ Material Adverse Effect ”: With respect to any event or circumstance, means a material adverse effect on (a) the business, financial condition, operations, performance or properties of the Servicer or the Seller, (b) the validity, enforceability or collectibility of this Agreement or any other Transaction Document or the validity, enforceability or collectibility of the Assets generally or any material portion of the Assets, (c) the rights and remedies of the Administrative Agent, the Purchasers and the Secured Parties under the Transaction Documents, (d) the ability of the Seller, the Servicer, the Backup Servicer or the Collateral Custodian to perform its obligations under this Agreement or any Transaction Document, or (e) the status, existence, perfection, priority or enforceability of the Administrative Agent’s or the Secured Parties’ interest in the Collateral.

“ Material Mortgage Loan ”: Any Loan for which the underlying Related Property consisting of real property owned by the Obligor (i) represents 25% or more (measured by the book value of the three most valuable parcels of real property as of the date of such Loan) of (a) the original commitment for such Loan and (b) the fair value of the underlying Obligor and Related Property as a whole and (ii) is material to the operations of the related business of such Obligor; provided that a Material Mortgage Loan shall not include certain parcels of real property which the Obligor is in the process of disposing.

“ Materials of Environmental Concern ”: Any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products or any hazardous or toxic substances, materials or wastes, defined or regulated as such in or under any Environmental Laws, including, without limitation, asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.

“ Maximum Advance Rate ” as of any Determination Date, equals 70%.

“ Maximum Availability ”: On any date of determination an amount equal to the least of:

     (a) the Class A Facility Amount;

     (b) an amount equal to (i) the product of the Borrowing Base and the Weighted Average Advance Rate on such date plus (ii) the amount on deposit in the Principal Collections Account;

     (c) an amount equal to (i) the Borrowing Base minus (ii) the Minimum Overcollateralization Amount plus (iii) the amount on deposit in the Principal Collections Account; and

     (d) an amount equal to (i) the Aggregate Outstanding Asset Balance, minus (ii) the Minimum Equity Amount, plus (iii) the amount on deposit in the Principal Collections Account.

“ Mezzanine Loan ”: Any Term Loan (i) that is subordinate to a B-Note Loan, if any, in terms of priority of payment obligations, (ii) the payment of which may contain a form of equity

participation in the issuer or Obligor and is secured by a pledge from the parent of the Obligor of the equity in such Obligor, and (iii) that does not share in the same collateral package as the Obligor’s senior loans.

“ Minimum Equity Amount ”: As of any date of determination, an amount equal to the product of (i) the Aggregate Outstanding Asset Balance multiplied by (ii) a percentage equal to 100% minus the Maximum Advance Rate.

“ Minimum Overcollateralization Amount ”: As of any date of determination, an amount equal to the product of 3.0 and the sum of the Outstanding Asset Balances of all Eligible Assets attributable to the Obligor having the largest aggregate Outstanding Asset Balance of Eligible Assets included as part of the Collateral (excluding the amount, calculated without duplication, by which such Eligible Assets exceed any applicable Pool Concentration Criteria).

“ Minimum Pool Yield ”: A Pool Yield equal to 2.20%.

“ Monthly Report ”: Defined in Section 6.10(b) .

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

“ Mortgage ”: The mortgage, deed of trust or other instrument creating a first or second Lien on an Interest in Real Property securing a Loan subject to this Agreement, including the Assignment of Leases and Rents related thereto.

“ Mortgaged Property ”: The underlying Interests in Real Property which are subject to the Lien of a Mortgage that secures a Loan, consisting of Interests in Real Property in a parcel or parcels of land, at least one of which parcels is improved by a commercial building or facility, together with Interests in Real Property in such commercial building or facility and any personal property, fixtures, leases and other property or rights pertaining to such land, commercial building or facility which are subject to the related Mortgage.

“ 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 Seller or any ERISA Affiliate on behalf of its employees.

“ NAICS Code ”: the North American Industry Classification System Codes by at least four digits.

“ Net Proceeds of Capital Stock/Conversion of Debt ”: Any and all proceeds (whether cash or non-cash) or other consideration received by CapitalSource Inc. and its Consolidated Subsidiaries, on a consolidated basis, in respect of the issuance of Capital Stock (including, without limitation, the aggregate amount of any and all Indebtedness converted into Capital Stock), after deducting therefrom all reasonable and customary costs and expenses incurred by CapitalSource Inc. and such Consolidated Subsidiary in connection with the issuance of such Capital Stock in each case to the extent classified as equity on the consolidated balance sheet of CapitalSource Inc. and its Consolidated Subsidiaries.

“ NOI ”: With respect to any Mortgaged Property, as of the last day of any fiscal quarter, the amount determined for the period consisting of such fiscal quarter and each of the three immediately preceding fiscal quarters of the sum of all rents and other revenues received in the ordinary course from such Mortgaged Property minus all expenses paid related to the ownership, operation and maintenance of such Mortgaged Property.

“ Noteless Loan ”: A Loan with respect to which the Underlying Instruments do not require the Obligor to execute and deliver a promissory note to evidence the indebtedness created under such Loan.

“ Obligor ”: With respect to any Asset, as applicable, any Person or Persons obligated to make payments pursuant to or with respect to such Asset, including any guarantor thereof. For purposes of calculating any of the Pool Concentration Criteria only, all Assets included as part of the Collateral or to be transferred to the Collateral the Obligor of which is an Affiliate of another Obligor (excluding any Financial Sponsor or Obligors that are Affiliates solely because of common ownership or control by a Financial Sponsor) shall be aggregated with all Assets of such other Obligor; for example , if Corporation A is an Affiliate (other than because of a common Financial Sponsor) of Corporation B, and the sum of the Outstanding Asset Balances of all of Corporation A’s Loans included as part of the Collateral constitutes 10% of the Aggregate Outstanding Asset Balance and the sum of the Outstanding Asset Balances all of Corporation B’s Loans included as part of the Collateral constitutes 10% of the Aggregate Outstanding Asset Balance, the combined Obligor concentration for Corporation A and Corporation B would be 20%.

“ Officer’s Certificate ”: A certificate signed by a Responsible Officer of the Seller or the Servicer, as the case may be, and delivered to the Collateral Custodian.

“ Opinion of Counsel ”: A written opinion of counsel, which opinion and counsel are acceptable to the Administrative Agent in its sole discretion.

“ Optional Sale ”: Defined in Section 2.19(a) .

“ Optional Sale Date ”: Any Business Day, provided the required written notice is given in accordance with Section 2.19(a) .

“ Original Agreement ”: This Agreement prior to the amendment and restatement thereof on the Second Amendment and Restatement Effective Date.

“ Originator ”: Defined in the Preamble of this Agreement and the Originator shall be deemed to be the originator of the Loans listed on the Asset List on the first two Funding Dates, all of which Loans have either been originated by the Originator or acquired by the Originator from CapitalSource Finance LLC.

“ Other Costs ”: Defined in Section 13.9(c) .

“ Outstanding Asset Balance ”: With respect to any Asset at any time, the sum of (a) all future Scheduled Payments becoming due under or with respect to such Asset plus (b) any past due Scheduled Payments with respect to such Asset (other than with respect to those payments to the

extent a Servicer Advance is outstanding with respect thereto); provided that notwithstanding anything to the contrary contained herein, for purposes of determining the Outstanding Asset Balance, if any Asset is a Charged-Off Asset or if any portion of an Asset is deemed to be “charged-off” in accordance with the provisions of the definition of Charged-Off Asset, then the entire Asset shall be deemed to have an Outstanding Asset Balance of zero, except for purposes of calculating the Average Pool Charged-Off Ratio; provided further that notwithstanding anything to the contrary contained herein, the Outstanding Asset Balance of any Asset that is a Delinquent Asset shall be deemed to be zero; and provided, further that the Outstanding Asset Balance for any Participation Loan shall not include that portion of such Loan in which a participation interest has been granted to another Person.

“ Overcollateralization Amount ”: As of any date of determination, an amount equal to the product of (i) the Overcollateralization Percentage on such date and (ii) the Borrowing Base on such date.

“ Overcollateralization Percentage ”: As of any date of determination, the percentage equivalent of (a) one minus (b) a fraction (i) the numerator of which is equal to the Class A Advances Outstanding on such date and (ii) the denominator of which is equal to the Aggregate Outstanding Asset Balance as of such date.

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

“ Parent Undertaking — Originator ”: The Parent Undertaking Agreement, in substantially the form of Exhibit N hereto, dated as of the date hereof, relating to the obligations of the Originator, made by CapitalSource Inc. in favor of the Seller, and assigned to the Administrative Agent, as such Parent Undertaking Agreement may be amended, modified, supplemented, restated or replaced from time to time.

“ Parent Undertaking — Servicer ”: The Parent Undertaking Agreement, in substantially the form of Exhibit O hereto, dated as of the date hereof, relating to the obligations of the Servicer, made by CapitalSource Inc. in favor of the Administrative Agent, as such Parent Undertaking Agreement may be amended, modified, supplemented, restated or replaced from time to time.

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

“ Participation Loan ”: A Loan to an Obligor, originated by the Originator and serviced by the Servicer in the ordinary course of its business, in which a participation interest has been granted to another Person in accordance with the Credit and Collection Policy and (i) such transaction has been fully consummated, pursuant to a participation agreement, (ii) such Loan (other than in the case of a Noteless Loan) is represented by a separate promissory note, and (iii) the Originator has the right to receive and collect payments directly in its own name, and to enforce its rights directly against the Obligor thereof including the right to proceed against collateral; provided that any such Loan shall exclude any Retained Interest.

“ Payment Date ”: The 20th day of each calendar month or, if such day is not a Business Day, the next succeeding Business Day, commencing October 22, 2007.

“ Payment Duties ”: Defined in Section 8.2(b) .

“ Permitted Hedge Counterparty ”: Means (a) Citibank, N.A. and its successors and assigns, and (b) any entity that (i) on the date of entering into a Hedging Agreement (x) is an interest rate swap dealer that has been approved in writing by the Administrative 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, not less than “A2” by Moody’s and not less than “A” by Fitch (if such entity is rated by Fitch) (“Long-term Rating Requirement”) and a short-term unsecured debt rating of not less than “A-1” by S&P, not less than “P-1” by Moody’s and not less than “F-1” by Fitch (if such entity is rated by Fitch) (“Short-term Rating Requirement”), and (ii) in a Hedging Agreement (x) consents to the assignment of the Seller’s rights under each Hedging Agreement to the Administrative Agent for the benefit of the Secured Parties pursuant to Section 5.3(b) and (y) agrees that in the event that Moody’s, S&P or Fitch reduces its long-term unsecured debt rating below the Long-term Rating Requirement, or reduces its short-term unsecured debt rating below the Short-term Rating Requirement, it shall transfer its rights and obligations under each Hedge Transaction to another entity that meets the requirements of clause (i) and (ii) hereof and has entered into a Hedging Agreement with the Seller on or prior to the date of such transfer.

“ Permitted Investments ”: With respect to any Payment Date means negotiable instruments or securities or other investments maturing on or before such Payment Date (a) which, except in the case of demand or time deposits, investments in money market funds and Eligible Repurchase Obligations, are represented by instruments in bearer or registered form or ownership of which is represented by book entries by a Clearing Agency or by a Federal Reserve Bank in favor of depository institutions eligible to have an account with such Federal Reserve Bank who hold such investments on behalf of their customers, (b) 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 (c) that evidence:

     (1) direct obligations of, and obligations fully guaranteed as to full and timely payment by, the United States (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States);

     (2) demand deposits, time deposits or certificates of deposit of depository institutions or trust companies incorporated under the laws of the United States or any state thereof and subject to supervision and examination by federal or state banking or depository institution authorities; provided that at the time of the Seller’s investment or contractual commitment to invest therein, the commercial paper, if any, and short-term unsecured debt obligations (other than such obligation whose rating is based on the credit of a Person other than such institution or trust company) of such depository institution or trust company shall have a credit rating from each Rating Agency in the Highest Required Investment Category;

     (3) commercial paper, or other short term obligations, having, at the time of the Seller’s investment or contractual commitment to invest therein, a rating in the Highest Required Investment Category granted by each Rating Agency;

     (4) demand deposits, time deposits or certificates of deposit that are fully insured by the FDIC and either have a rating on their certificates of deposit or short-term deposits from Moody’s and S&P of “P-1” and “A-1”, respectively, and if rated by Fitch, from Fitch of “F-1+”;

     (5) notes that are payable on demand or bankers’ acceptances issued by any depository institution or trust company referred to in clause (ii) above;

     (6) investments in taxable money market funds or other regulated investment companies having, at the time of the Seller’s investment or contractual commitment to invest therein, a rating of the Highest Required Investment Category from Moody’s, S&P and Fitch (if rated by Fitch);

     (7) time deposits (having maturities of not more than 90 days) by an entity the commercial paper of which has, at the time of the Seller’s investment or contractual commitment to invest therein, a rating of the Highest Required Investment Category granted by each Rating Agency; or

     (8) Eligible Repurchase Obligations with a rating acceptable to the Administrative Agent, which rating, in the case of Fitch, shall be “F-1+” and, in the case of S&P, shall be “A-1”.

The Collateral Custodian may pursuant to the direction of the Servicer or Administrative Agent, as applicable, purchase or sell to itself or an Affiliate, as principal or agent, the Permitted Investments described above.

“ Permitted Liens ”: With respect to the Collateral (i) Liens for state, municipal or other local taxes (other than payroll taxes) if such taxes shall not at the time be due and payable or are being contested in good faith by appropriate proceedings and with respect to which adequate reserves or other appropriate provisions are being maintained in accordance with GAAP so long as there exists no material risk of sale, forfeiture, loss, or loss of or interference with use or possession of, or diminution of value, utility or useful life of, the related Collateral, (ii) Liens imposed by operation of law, such as materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s liens and other similar liens arising in the ordinary course of business securing obligations that are not overdue for a period of more than thirty (30) days or are being contested in good faith by appropriate proceedings and with respect to which adequate reserves or other appropriate provisions are being maintained in accordance with GAAP so long as there exists no material risk of sale, forfeiture, loss, or loss of or interference with use or possession of, or diminution of value, utility or useful life of, the related Collateral, (iii) Liens (other than any Lien imposed by ERISA) on or in respect of deposits or pledges of cash or letters of credit posted in the ordinary course of business (including, without limitation, surety bonds and appeal bonds) in connection with workers’ compensation, unemployment insurance and other types of social security benefits or to secure the performance of tenders, bids, leases, contracts (other than for the repayment of

Indebtedness), statutory obligations and other similar obligations, provided that any such Lien attaches only to the cash collateral or letter of credit posted to secure such obligation, and (iv) Liens pursuant to indebtedness incurred by an Obligor that is subordinated, pursuant to a customary and appropriate subordination agreement, to all present and future obligations, indebtedness and liabilities of Obligor or any related guarantor under or in respect of the related Asset at any time and from time to time of every kind, nature and description, direct or indirect, secured or unsecured, joint and several, absolute or contingent, due or to become due, matured or unmatured, now existing or hereafter arising, contractual or tortious, liquidated or unliquidated, such that the Lien in favor of the Originator is senior in priority and the subordinated lien holder is subject to restrictions for a customary and reasonable period of time with respect to its right to take foreclosure actions or exercise other remedies with respect to the related collateral (other than the subordinated lien holder’s customary purchase option of the senior indebtedness at par) in accordance with its credit and collection policies. With respect to the Assets, Liens in favor of the Administrative Agent.

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

“ Person ”: An individual, partnership, corporation (including a business 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.

“ Pool Charged-Off Ratio ”: As of any Determination Date, the product of (i) 12 and (ii) the percentage equivalent of a fraction, (a) the numerator of which is equal to the sum of the Outstanding Asset Balances of all Eligible Assets that became Charged-Off Assets (net of Recoveries during such Collection Period) during the Collection Period related to such Determination Date, and (b) the denominator of which is equal to the Aggregate Outstanding Asset Balance as of the first day of the Collection Period related to such Determination Date.

“ Pool Concentration Criteria ”: On any day, each of the concentration limitations as set forth below, which concentration limitations (unless otherwise indicated) shall be measured on the basis of a percentage of the Aggregate Outstanding Asset Balance:

     (1) the sum of the Outstanding Asset Balance of all Eligible Assets the Obligors of which are residents of the same state shall not exceed 20%, with the exception of the State of Florida, the State of California and the State of New York, which shall not exceed 30%;

     (2) the sum of the Outstanding Asset Balances of all Eligible Assets that are Loans secured by Development Properties shall not exceed 20%; provided that condominium conversions shall not exceed 15%;

     (3) the sum of the Outstanding Asset Balances of all Eligible Assets that are Senior Secured ABLs shall not exceed 35%;

     (4) the sum of the Outstanding Asset Balances of all Eligible Assets that are B-Note Loans or Mezzanine Loans shall not exceed 10%;

     (5) the sum of the Outstanding Asset Balances comprised of all Eligible Assets that are Construction Loans shall not exceed 5%;

     (6) the sum of the Outstanding Asset Balances of all Eligible Assets that are Loans secured by the same classification of Mortgaged Property shall not exceed 30% with the exception of Loans secured by Mortgaged Property classified as hotel property, which shall not exceed 20%;

     (7) the sum of the Outstanding Asset Balances of all Eligible Assets that are Loans used to finance Land Development activities shall not exceed 10%;

     (8) the sum of the Outstanding Asset Balances of all Eligible Assets that are Sale/Leaseback Loans shall not exceed 20%;

     (9) the sum of the Outstanding Asset Balances of all Eligible Assets with a “Risk Rating 4”, a “Risk Rating 5” and a “Risk Rating 6” shall not exceed 20%, 10% and 0%, respectively;

     (10) the sum of the Outstanding Asset Balances of all Eligible Assets to a single Obligor shall not exceed 3%, except that with respect to the Excess Concentration Loans, the sum of the Outstanding Asset Balances of all Excess Concentration Loans to a single Obligor shall not exceed the lesser of (a) 3.5% (measured on the initial Funding Date) and (b) the amount set forth for such Obligor on Schedule VIII hereto;

     (11) the Aggregate Outstanding Asset Balances of all Eligible Assets divided by the number of Obligors (including Affiliates thereof) shall not exceed the greater of (a) 1.75% or (b) $15 million;

     (12) the sum of the Outstanding Asset Balances of all Eligible Assets that are Acquired Loans shall not exceed 15%;

     (13) the sum of the Outstanding Asset Balances of all Eligible Assets that are Fixed Rate Assets shall not exceed 5%;

     (14) the sum of the Outstanding Asset Balances of all Eligible Assets where all or any portion of the Related Property is located outside of the United States and its territories and protectorates shall not exceed 15%;

     (15) subject to the requirements of clause (1)(f) of the definition of Eligible Asset, the sum of the Outstanding Asset Balances of all Eligible Assets which provide for interest and principal payments in British Pounds Sterling, Euros or Canadian Dollars shall not exceed 10%; and

     (16) the sum of the Outstanding Asset Balances of all Loans which provide for payments of interest on a semi-annual basis shall not exceed the lesser of (a) 5% and (b) $20,000,000.

“ Pool Rate ”: As of any Determination Date, the annualized percentage equivalent of a fraction, (a) the numerator of which is equal to all Interest Collections on Assets included in the Aggregate Outstanding Asset Balance as of the first day of the Collection Period related to such Determination Date that are deposited into the Collection Account during such Collection Period, and (b) the denominator of which is equal to the Aggregate Outstanding Asset Balance as of the first day of such Collection Period.

“ Pool Yield ”: On any day, the excess, if any, of (a) the Pool Rate on such day over (b) the sum of (i) the weighted average Class A Interest Rate multiplied by the Pool Yield Applicable Advance Rate, (ii) the weighted average Program Fee Rate applicable to the Class A Advances multiplied by the Pool Yield Applicable Advance Rate and (iii) the Servicing Fee Rate, in each case as of such day.

“ Pool Yield Applicable Advance Rate ”: On any date of determination, if (i) the Maximum Availability is determined hereunder in accordance with clause (d) of the definition thereof, the Maximum Advance Rate then in effect, or (ii) if the Maximum Availability is determined hereunder in accordance with clauses (a), (b) or (c) of the definition thereof, the Weighted Average Advance Rate.

“ Portfolio Aggregate Outstanding Asset Balance ”: With respect to all Portfolio Assets, on any day, the sum of the Portfolio Outstanding Asset Balances of such Portfolio Assets on such date. Notwithstanding anything to the contrary contained herein, for purposes of determining the Portfolio Aggregate Outstanding Asset Balance, if any portion of a Portfolio Asset is deemed to be “charged-off” in accordance with the provisions of the definition of Charged-Off Portfolio Asset, then the entire Portfolio Asset shall have a zero Outstanding Asset Balance, except for purposes of calculating the Average Portfolio Charged-Off Ratio.

“ Portfolio Asset ”: Any asset owned or serviced by the Originator (including each Asset). For the avoidance of doubt, the term Portfolio Asset shall not include any asset owned and/or serviced solely by one or more Affiliates of the Originator (but not by the Originator); provided that (i) such asset shall not have been originated or acquired by the Originator and (ii) such asset shall not be included in the consolidated financial statements of the Originator.

“ Portfolio Delinquency Ratio ”: As of any Determination Date, the percentage equivalent of a fraction, (i) the numerator of which is equal to the sum of the Portfolio Outstanding Asset Balances of all Delinquent Portfolio Assets on such date and (ii) the denominator of which is equal to the Portfolio Aggregate Outstanding Asset Balance on such date; provided that, such calculation shall exclude the effects of any Liquid Real Estate Assets that are acquired and levered by the Originator solely to satisfy REIT asset and income tests.

“ Portfolio Outstanding Asset Balance ”: With respect to any Portfolio Asset, the sum of (i) the portion of all future Scheduled Payments becoming due under or with respect to such Portfolio Asset plus (ii) any past due Scheduled Payments with respect to such Portfolio Asset.

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

“ Prepayment Amount ”: Defined in Section 6.4(b) .

“ Prepayments ”: Any and all (i) partial or full prepayments on or with respect to an Asset (including, with respect to any Asset and any Collection Period, any Scheduled Payment, Finance Charge or portion thereof that is due in a subsequent Collection Period that the Servicer has received, and pursuant to the terms of Section 6.4(b) expressly permitted the related Obligor to make, in advance of its scheduled due date, and that will be applied to such Scheduled Payment on such due date), (ii) Recoveries, and (iii) Insurance Proceeds.

“ Prime Rate ”: The rate announced publicly by Citibank from time to time as its base 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 Citibank or any other specified financial institution in connection with extensions of credit to debtors.

“ Prime Rate Asset ”: A Floating Rate Asset where the interest rate payable by the Obligor thereof is based on the CSE Prime Rate.

“ Principal Collections ”: Any and all amounts received in respect of any principal due and payable from or on behalf of Obligors that are deposited into the Principal Collections Account, or received by or on behalf of the Seller by the Servicer or Originator in respect of Assets, in the form of cash, checks, wire transfers, electronic transfers or any other form of cash payment.

“ Principal Collections Account ”: Defined in Section 6.4(f) .

“ Proceeds ”: With respect to any Collateral, whatever is receivable or received when such Collateral is sold, 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 relating to such Collateral.

“ Program Fee ”: With respect to any Purchaser, as defined in the Purchaser Fee Letter.

“ Program Fee Rate ”: With respect to any Purchaser and any Class A Advance, the rate set forth in the Purchaser Fee Letter, but without consideration of clause (y) in subsection (c) thereof.

“ Purchaser ”: any Class A Purchaser or Class B Purchaser; and “ Purchasers ” means collectively the Class A Purchasers and Class B Purchasers.

“ Purchaser Affiliate ”: With respect to a Purchaser, means any other Person that, directly or indirectly, controls, is controlled by or under common control with such Person. For purposes of this definition, “control” (including the terms “controlling,” “controlled by” and “under common control with”) when used with respect to any specified Person means the possession, direct or indirect, of the power to vote 50% or more of the voting securities of such Person or to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise

“ Purchaser Fee Letter ”: (i) Prior to the Second Amendment and Restatement Effective Date, the Fee Letter Agreement, dated as of September 10, 2007, by and among the Seller, the Servicer, and the Administrative Agent, as amended, modified, waived, supplemented, restated or replaced from time to time, and (ii) on and after the Second Amendment and Restatement Effective Date, the Omnibus Purchaser Fee Letter, dated the Second Amendment and Restatement Effective Date, by and among the Seller, the Servicer, the Administrative Agent, CSE QRS Funding II LLC, CS Funding VII Depositor LLC, and CapitalSource Finance LLC, as amended, modified, waived, supplemented, restated or replaced from time to time.

“ Qualified Institution ”: Defined in Section 6.4(f) .

“ Qualified Transferee ”:

	(a)		The Seller, the Administrative Agent or any of their Affiliates; or
	(b)		any other Person which:

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

     (ii) is regularly engaged in the business of making or owning commercial real estate loans or operating commercial real estate properties; and

     (iii) is one of the following: (I) an insurance company, bank, savings and loan association, investment bank, trust company, commercial credit corporation, pension plan, pension fund, pension fund advisory firm, mutual fund, real estate investment trust, governmental entity or plan; (II) an investment company, money management firm or a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended, or an “institutional accredited investor” within the meaning of Regulation D under the Securities Act of 1933, as amended; or (III) the trustee, collateral agent or administrative agent in connection with (x) a securitization of the subject Asset through the creation of collateralized debt or loan obligations or (y) an asset-backed commercial paper transaction funded by a commercial paper conduit whose commercial paper notes are rated at least “A-1” by S&P or at least “P-1” by Moody’s, or (z) a repurchase transaction funded by an entity which would otherwise be a Qualified Transferee so long as the “equity interest” (other than any nominal or de minimis equity interest) in the special purpose entity that issues notes or certificates in connection with any such collateralized debt or loan obligation, asset-backed commercial paper funded transaction or repurchase transaction is owned by one or more entities that are Qualified Transferees under subclauses (A) or (B) above; or (IV) any entity Controlled (as defined below) by any of the entities described in subclauses (i), (ii) or (iii) above.

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

“ Quarterly Determination Date ”: March 31, June 30, September 30 and December 31 of each calendar year.

“ Rating Agency ”: Each of S&P, Moody’s and Fitch.

“ Records ”: All documents relating to the Assets, including books, records and other information (including without limitation, computer programs, tapes, disks, punch cards, data processing software and related property and rights) executed in connection with the origination or acquisition of the Collateral or maintained with respect to the Collateral and the related Obligors that the Seller, the Originator or the Servicer have generated, in which the Seller, the Originator or the Servicer have acquired an interest pursuant to the Sale Agreement or in which the Seller, the Originator or the Servicer have otherwise obtained an interest.

“ Recoveries ”: As of the time any Related Property or any other related property is sold, discarded (after a determination by the Servicer that such Related Property or any other related property has little or no remaining value) or otherwise determined to be fully liquidated by the Servicer in accordance with the Credit and Collection Policy (or such similar policies and procedures utilized by the Servicer in servicing the Portfolio Assets) with respect to any Charged-Off Asset or Charged-Off Portfolio Asset, the proceeds from the sale of the Related Property or any other related property, the proceeds of any related Insurance Policy, any other recoveries with respect to such Charged-Off Asset or Charged-Off Portfolio Asset, the Related Property, any other related property, and amounts representing late fees and penalties, net of Liquidation Expenses and amounts, if any, received that are required under such Asset or Portfolio Asset, as applicable, to be refunded to the related Obligor.

“ Register ”: Defined in Section 13.16(c) .

“ Regulation U ”: Regulation U of the Board of Governors of the Federal Reserve System, 12 C.F.R. §221, or any successor regulation.

“ REIT ”: A “real estate investment trust” as defined in Section 856(c)(5)(B) of the Code.

“ Related Property ”: With respect to an Asset, any property or other assets pledged as collateral to the Originator to secure repayment of such Asset including all Proceeds from any sale or other disposition of such property or other assets.

“ Related Security ”: All of the Seller’s right, title and interest in and to:

     (a) any Related Property securing an Asset and all Recoveries related thereto;

     (b) all Required Asset Documents, Asset Files related to any Asset, Records, and the documents, agreements, and instruments included in the Asset File or Records, including without limitation, rights of recovery of the Seller against the Originator;

     (c) all Insurance Policies with respect to any Asset;

     (d) all security interests, liens, guaranties, warranties, letters of credit, accounts, bank accounts, mortgages or other encumbrances and property subject thereto from time to time

purporting to secure or support payment of any Asset, together with all UCC financing statements or similar filings signed by an Obligor relating thereto;

     (e) the Collection Account, Lock Box and all Lock Box Accounts together with all cash and investments in each of the foregoing other than amounts earned on investments therein;

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

     (g) the Sale Agreement and the assignment to the Administrative Agent of all UCC financing statements filed by the Seller against the Originator under or in connection with the Sale Agreement; and

     (h) the proceeds of each of the foregoing.

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

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

“ Required Asset Documents ”: With respect to (i) any Noteless Loan identified as a Noteless Loan on the Asset Checklist, a copy of the related Loan Register (together with a certificate of a Responsible Officer of the Servicer certifying to the accuracy of such Loan Register as of the date such Loan is included as a part of the Collateral), (ii) all Loans other than Noteless Loans, the duly executed original of the promissory note and an assignment (which may be by endorsement or allonge) of each such promissory note to the Seller and then the Administrative Agent, signed by an officer of the Originator and the Seller, respectively, (iii) any Loan, any related loan agreement and the Asset Checklist together with, to the extent set forth on the Asset Checklist, duly executed (if applicable) originals or copies of each of any related participation agreement, acquisition agreement, subordination agreement, intercreditor agreement, security agreements or similar instruments, UCC financing statements, guarantee, or Insurance Policy (iv) for each Loan, other than Agented Loans or Acquired Loans (or other Loans for which an Assignment of Mortgage has been delivered to Wells Fargo in its capacity as trustee or custodian pursuant to a prior term transaction or warehouse facility involving the Originator or one of its Affiliates), secured by real property, an Assignment of Mortgage and (v) for any Loan identified as an Acquired Loan on the Asset Checklist, the duly executed original assignment agreement; provided that with respect to any Acquired Loan, any of the foregoing documents, other than any related promissory notes in the case of Acquired Loans only, may be copies.

“ Required Reports ”: Collectively, the Monthly Report, the Servicer’s Certificate required pursuant to Section 6.10(c) , the financial statements of the Servicer required pursuant to Section 6.10(d) , the annual statements as to compliance required pursuant to Section 6.11 , and the annual independent public accountant’s report required pursuant to Section 6.12 .

“ Residential Mortgage Policies and Procedures ”: The written residential mortgage policies and procedures manual of CapitalSource Inc. attached hereto as Schedule V as it may be amended or supplemented from time to time.

“ Responsible Officer ”: With respect to any Person, any duly authorized officer of such Person with direct responsibility for the administration of this Agreement and also, with respect to a

particular matter, any other duly authorized officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

“ Restatement Date ”: October 30, 2007.

“ Restricted Junior Payment ”: (i) any dividend or other distribution, direct or indirect, on account of any class of membership interests of the Seller now or hereafter outstanding, except a dividend payment solely in interests of that class of membership interests or in any junior class of membership interests of the Seller; (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any class of membership interest of the Seller now or hereafter outstanding, (iii) any payment made to redeem, purchase, repurchase or retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire membership interests of Seller now or hereafter outstanding, and (iv) any payment of management fees by the Seller (except for reasonable management fees to the Originator or its Affiliates in reimbursement of actual management services performed).

“ Retained Interest ”: (A) With respect to any Revolving Loan or any Loan with an unfunded commitment on the part of the Originator that does not provide by its terms that funding thereunder is in Originator’s sole and absolute discretion and that is transferred by the Originator to the Seller and/or by the Seller to the Purchasers, all of the obligations, if any, to provide additional funding with respect to such Revolving Loan, and (B) with respect to any Acquired Loan, any Participation Loan or any Agented Loan that is transferred by the Originator to the Seller and/or by the Seller to the Purchasers, (i) all of the obligations, if any, of the agent(s) under the documentation evidencing such Acquired Loan, Participation Loan, or Agented Loan and (ii) the applicable portion of the interests, rights and obligations under the documentation evidencing such Acquired Loan, Participation Loan, or Agented Loan that relate to such portion(s) of the indebtedness that is owned by another lender or is being retained by the Originator pursuant to clause (A) of this definition.

“ Retransfer Date ”: Defined in Section 4.6 .

“ Retransfer Price ”: Defined in Section 4.6 .

“ Review Criteria ”: Defined in Section 8.2(b)(i) .

“ Revolving Loan ”: A Loan that is a line of credit or contains an unfunded commitment arising from an extension of credit by the Originator to an Obligor, pursuant to the terms of which amounts borrowed may be repaid and subsequently reborrowed; provided that any such Loan shall exclude any Retained Interest.

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

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

“ Sale Agreement ”: The Sale and Contribution Agreement, dated as of the date hereof, between the Originator and the Seller, as amended, modified, waived, supplemented, restated or replaced from time to time.

“ Sale/Leaseback Loan ”: Any Loan by the Originator to an SPE Obligor that is collateralized by real estate and the SPE Obligor’s rights under a Lease with an Underlying Lessee.

“ Scheduled Payments ”: With respect to any Asset, each monthly, quarterly, or annual payment of principal required to be made by the Obligor thereof under the terms of such Asset; in all cases, excluding any payment in the nature of, or constituting, interest.

“ Second Amendment and Restatement Effective Date ”: May 8, 2008.

“ Secured Party ”: (i) each Purchaser, (ii) the Administrative Agent and (iii) each Hedge Counterparty that is either a Purchaser or an Affiliate of the Administrative Agent if that Affiliate is a Hedge Counterparty that executes a counterpart of this Agreement agreeing to be bound by the terms of this Agreement applicable to a Secured Party.

“ Seller ”: Defined in the Preamble of this Agreement.

“ Seller Investment ”: As of any date of determination, the sum, with respect to each Funding Date that has occurred on or prior to such determination date, of the excess of (x) the Outstanding Asset Balance (as of such Funding Date) of all Eligible Assets which became part of the Collateral on such Funding Date, over (y) the Advances made on such Funding Date; provided , however , that on the Restatement Date, the Seller Investment shall be reduced by the principal amount of the Class B Advance made on the Restatement Date.

“ Senior Secured ABL Loan ”: Any Revolving Loan that (i) is secured by a first priority Lien on all of the Obligor’s assets constituting Related Property for the Loan, (ii) provides the related Obligor with the option to receive additional borrowings thereunder based on the value of its eligible accounts receivable, residential mortgage receivables, inventory (other than real estate property or land) or equipment, (iii) has a Loan-to-Liquidation Value of less than or equal to (a) 85% with respect to the Related Property which constitutes accounts receivable, (b) 90% with respect to the Related Property which constitutes residential mortgage receivables, (c) 50% with respect to the Related Property which constitutes inventory (other than real estate property or land), and (d) 80% with respect to the Related Property which constitutes equipment, and (iii) provides that the payment obligation of the Obligor on such Loan is either senior to, or pari passu with, all other loans or financings to such Obligor.

“ Senior Secured Loan ”: Any Loan that (i) is secured by a first priority Lien on all of the Obligor’s assets constituting Related Property for the Loan, (ii) has a Loan-to-Value of not greater than 90%, and (iii) provides that the payment obligation of the Obligor on such Loan is either senior to, or pari passu with, all other loans or financings to such Obligor.

“ Servicer ”: CSE Mortgage, and each successor (in the same capacity) appointed as Successor Servicer pursuant to Section 6.16(a) .

“ Servicer Advance ”: An advance of Scheduled Payments made by the Servicer pursuant to Section 6.5 .

“ Servicer Default ”: Defined in Section 6.15 .

“ Servicer Termination Notice ”: Defined in Section 6.15 .

“ Servicer’s Certificate ”: Defined in Section 6.10(c) .

“ Servicing Fee ”: Defined in Section 2.14(b) .

“ Servicing Fee Rate ”: 0.50% per annum for Eligible Assets which are not Workout Assets and 0.75% per annum for Workout Assets, without duplication.

“ 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 of 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 of 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 a 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.

“ SPE Obligor ”: An Obligor that (a) is organized as a bankruptcy remote, special purpose entity (as evidenced by an Opinion of Counsel in form and substance satisfactory to the Administrative Agent) and is not an operating company and (b) has as its primary assets real property and rights under a Lease.

“ Subsidiary ”: As to any Person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly, through one or more intermediaries, or both, by such Person; provided that any joint ventures in which each party to the joint venture possesses 50% of the voting stock of such entity shall be expressly excluded from this definition.

“ Substitute Asset ”: On any day, an Eligible Asset that meets each of the conditions for substitution set forth in Section 2.18 .

“ Successor Servicer ”: Defined in Section 6.16(a) .

“ Tape ”: Defined in Section 7.2(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 Governmental Authority.

“ Termination Date ”: The earliest of (a) the date of the termination of the Facility Amount pursuant to Section 2.4 , (b) the Business Day designated by the Seller to the Administrative Agent as the Termination Date at any time following two Business Days’ prior written notice thereof to the Administrative Agent, (c) November 30, 2007, (d) with respect to any Purchaser who is an Issuer the date any Liquidity Agreement shall cease to be in full force and effect, or (e) the date of the declaration of the Termination Date pursuant to Section 10.2(a) or 10.2(c) or the date of the automatic occurrence of the Termination Date pursuant to Section 10.2(b) .

“ Termination Event ”: Defined in Section 10.1 .

“ Term Loan ”: A Loan that is a term loan that has been fully funded and does not contain any unfunded commitment on the part of the Originator arising from an extension of credit by the Originator to an Obligor.

“ TNW Test Level ”: The greater of (A) the sum of (i) $1,925,000,000, minus (ii) the Fremont Bank Adjustment, plus (iii) 70% of the cumulative Net Proceeds of Capital Stock/Conversion of Debt received at any time after December 31, 2006 and prior to the Restatement Date, and (B) the Unsecured Covenant Floor.

“ Total Principal Payable ”: As of any date of determination, the excess, if any, of the Aggregate Outstanding Principal Balance over the Aggregate Outstanding Asset Balance.

“ Transaction ”: Defined in Section 3.2 .

“ Transaction Documents ”: This Agreement, the Sale Agreement, each Hedging Agreement, the Hedge Guaranty, the Lock-Box Agreement, the Intercreditor Agreement, the Confirmation and Undertaking Letter, the Parent Undertaking-Originator, the Parent Undertaking-Servicer, each Variable Funding Certificate, the Purchaser Fee Letter, the Backup Servicer and Collateral Custodian Fee Letter, any UCC financing statements filed pursuant to the terms of this Agreement, and any additional document the execution of which is necessary or incidental to carrying out the terms of the foregoing documents.

“ Transition Expenses ”: The reasonable costs (including reasonable attorneys’ fees) of the Backup Servicer incurred in connection with the transferring the servicing obligations under this Agreement and amending this Agreement to reflect such transfer in an amount not to exceed $100,000.

“ Turbo Period ”: The period beginning on the date of the declaration of the Turbo Period pursuant to Section 10.2(a) or 10.2(c) or the date of the automatic occurrence of the Turbo Period pursuant to Section 10.2(b) and ending on the Collection Date.

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

“ Underlying Instruments ”: The indenture, loan agreement, credit agreement or other agreement pursuant to which a Loan has been issued or created and each other agreement that governs the terms of or secures the obligations represented by such Loan or of which the holders of such Loan are the beneficiaries related thereto.

“ Underlying Lessee ”: A lessee that is obligated on a Lease with an SPE Obligor.

“ United States ”: The United States of America.

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

“ Unsecured Covenant Floor ”: The sum of (a) the higher of (i) the covenant level for “Minimum Consolidated Tangible Net Worth” set forth under Section 5.32(c) of the Unsecured Credit Facility (or any replacement provision thereunder), and (ii) the covenant level for minimum consolidated tangible net worth found under any securitization or other credit facility that is subject of the “Debt Acceleration” provision found in Section 7.1(e) of the Unsecured Credit Facility (or any replacement provision thereunder), plus (b) $50,000,000.

“ Unsecured Credit Facility ”: (i) The Credit Agreement, dated as of March 14, 2006, among CapitalSource Inc., as the Borrower, the guarantors listed therein, the lenders listed therein, Wachovia Bank, National Association, as the Administrative Agent, Swingline Lender, and Issuing Lender, Bank of America, N.A., as Issuing Lender, Wachovia Capital Markets, LLC, as Sole Bookrunner and as Lead Arranger, Bank of Montreal, Barclays Bank PLC, and SunTrust Bank, as Co-Documentation Agents, as now or hereafter amended, modified, supplemented, restated or replaced or substituted from time to time in accordance with its terms, and (ii) any other unsecured credit facility entered into by CapitalSource Inc. from time to time following the Second Amendment and Restatement Effective Date that expressly permits the use of proceeds of advances thereunder to pay obligations outstanding under the Citibank Facilities.

“ Unsecured TNW Threshold ”: The sum of (a) the higher of (i) the covenant level for “Minimum Consolidated Tangible Net Worth” set forth under Section 5.32(c) of the Unsecured Credit Facility (or any replacement provision thereunder), and (ii) the covenant level for minimum consolidated tangible net worth found under any securitization or other credit facility that is subject of the “Debt Acceleration” provision found in Section 7.1(e) of the Unsecured Credit Facility (or any replacement provision thereunder), plus (b) $75,000,000.

“ Variable Funding Certificate ” or “ VFC ”: Defined in Section 2.1(a) .

“ Voting Stock ”: With respect to any Person, capital stock or membership interests (in the case of a limited liability company) issued by such Person the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even though the right so to vote has been suspended by the happening of such contingency.

“ Warranty Asset ”: Any Asset that fails to satisfy any criteria of the definition of Eligible Asset; provided that notwithstanding the foregoing, for purposes of determining what is a Warranty Asset, the criteria set forth in clauses (1)(c) , (1)(d) , 1(l)(i) , 1(s) (but solely to the extent the criteria in such clause 1(s) relates to any express representation and warranty that an Asset is an Eligible Asset), 1(w) , 1(x) , (1)(y) and clauses (2)(e) and 2(f) (but solely to the extent that the criteria in such clauses 2(e) and 2(f) would not be satisfied as a result of the operation of law or

an effective court order in connection with an Insolvency Event) and clause (3)(i) of the definition of Eligible Asset and clauses (viii) and (x) in the definition of Eligible Obligor shall apply only as of the applicable Cut-Off Date of such Asset.

“ Warranty Event ”: As to any Asset, the discovery that as of the related Cut-Off Date or Funding Date there had existed a breach of any representation or warranty relating to such Asset and the continuance of such breach through any applicable determination date or beyond any applicable cure period.

“ Weighted Average Advance Rate ”: For any day on which Class A Advances are outstanding, the weighted average of the Class A Advance Rates applicable to the Eligible Assets included in the Collateral on such day, weighted according to the proportion of the Aggregate Outstanding Asset Balance each type of Asset represents; provided that the Weighted Average Advance Rate shall in no event exceed 75%.

“ Workout Asset ”: A Delinquent Asset or a Charged-Off Asset.

“ Zero-Coupon Bond ”: A bond that, at the time of determination, does not make periodic payments of interest.

      Section 1.2 Other Terms .

     All accounting terms used but 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 used but 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) reference to any time means New York, New York time;

     (vi) reference to any agreement (including any Transaction Document), document or instrument means such agreement, document or instrument as amended, modified, waived, supplemented, restated or replaced 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

     (vii) 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 Special Provisions Relating to Alternative Currency Loans .

     For purposes of (a) complying with any requirement of this Agreement stated in Dollars and (b) calculating any ratio or other test set forth in this Agreement, the amount of any Asset that is denominated in an Alternative Currency shall be deemed to be the Dollar Equivalent of such amount of Alternative Currency determined as of the date of such calculation including, without limitation, the following (together with any defined terms in which such defined terms are used): “Aggregate Outstanding Asset Balance”, “Borrowing Base”, “Pool Concentration Criteria”, “Interest Collections”, “Outstanding Asset Balance”, “Permitted Investments”, “Portfolio Aggregate Outstanding Asset Balance”, “Portfolio Outstanding Asset Balance”, “Principal Collections”, “Scheduled Payment” and “Servicing Fee”.

ARTICLE II

PURCHASE OF THE VARIABLE FUNDING CERTIFICATES

      Section 2.1 The Variable Funding Certificates .

     (a) On the terms and conditions hereinafter set forth, Seller shall deliver to the Administrative Agent at its address set forth on the signature pages of this Agreement (for the benefit of the applicable Purchaser thereof) (i) on the Restatement Date, a duly executed variable funding certificate — Class A (each such certificate, a “ Class A Variable Funding Certificate ” or “ Class A VFC ”), in substantially the form of Exhibit B-1 , and (ii) on the Restatement Date, a duly executed variable funding certificate — Class B (each such certificate, a “ Class B Variable Funding Certificate ” or “ Class B VFC ”; and together with the Class A VFCs, each, a “ Variable Funding Certificate ” or “ VFC ”, and collectively, the “ Variable Funding Certificates ” or “ VFCs ”). Each Variable Funding Certificate shall evidence an undivided ownership interest (and the Seller does hereby sell, transfer, assign and convey such undivided ownership interest to the Administrative Agent for the benefit of the Purchasers) in the Collateral purchased by a Purchaser in an amount equal, at any time, to the percentage equivalent of a fraction (i) the

numerator of which is the Advances outstanding under the applicable VFC on such day, and (ii) the denominator of which is the total aggregate Advances Outstanding on such day. Interest shall accrue, and each VFC shall be payable, as described herein; provided that the aggregate amount outstanding under (i) all Class A VFCs at any one time shall not exceed the Class A Facility Amount, and (ii) all Class B VFCs at any one time shall not exceed the Class B Facility Amount.

     (b) On the terms and conditions hereinafter set forth, from the Closing Date to, but excluding the Termination Date, the Seller may, at its option, request advances of funds under the Class A VFCs (each, a “ Class A Advance ”) and the Issuers may, in their sole discretion, fund such Class A Advance ratably in accordance with their Issuer Purchase Limits (or in such other proportion as the Issuers may mutually agree), and if the Issuers do not fund the entire amount of such Class A Advance, the Liquidity Banks shall fund, ratably in accordance with their Class A Commitments, any portion of such Class A Advance not funded by the Issuers; provided that in no event shall the Class A Purchasers make any Class A Advance if, after giving effect to such Class A Advance, either (i) the aggregate Class A Advances Outstanding hereunder would exceed the lesser of (x) the Class A Facility Amount, or (y) the Maximum Availability, or (ii) the Combined Advances Outstanding would exceed the Combined Commitment Amount. Notwithstanding anything contained in this Section 2.1 or elsewhere in this Agreement to the contrary, (i) no Issuer shall fund any Class A Advance at any time if, after giving effect thereto, the outstanding principal amount of Class A Advances funded by such Issuer would exceed such Issuer’s Issuer Purchase Limit, (ii) no Liquidity Bank shall be obligated to provide the Administrative Agent or the Seller with aggregate funds in connection with a Class A Advance that would exceed such Liquidity Bank’s Class A Commitment then in effect and (iii) to the extent that the making of any Class A Advance would result in the Combined Advances Outstanding exceeding the Combined Threshold Amount then in effect, such Class A Advance will be made at the sole discretion of Administrative Agent, and no Issuer or Liquidity Bank shall be obligated to fund any such Class A Advance. Each Class A Advance made by the Class A Purchasers hereunder is subject to the interests of the Hedge Counterparties under Section 2.9(a)(1) and Section 2.10(a)(1) of this Agreement.

     (c) Notwithstanding the foregoing or anything in this Agreement or any other Transaction Document to the contrary, (i) nothing contained in this Agreement or any other Transaction Document shall constitute a commitment by any Issuer to fund any Advance and (ii) the Issuers shall not be liable to make any payments under this Agreement or any other Transaction Document (all liability with respect to which shall be an obligation of the Liquidity Banks or the Administrative Agent).

     (d) On the terms and conditions hereinafter set forth, from the Restatement Date to, but excluding the Termination Date, the Seller may, at its option, request advances of funds under the Class B VFCs (each, a “ Class B Advance ”) and the Class B Purchasers shall fund, ratably in accordance with their Class B Commitments, such Class B Advance; provided that in no event shall the Class B Purchasers make any Class B Advance if, after giving effect to such Class B Advance, the aggregate Class B Advances Outstanding hereunder would exceed the lesser of (x) the Class B Facility Amount and (y) an amount equal to the product of 5/75 multiplied by the Class A Advances Outstanding as of the proposed Funding Date, after giving effect to any Class A Advances to be funded on such date. Notwithstanding anything contained

in this Section 2.1 or elsewhere in this Agreement to the contrary,  no Class B Purchaser shall fund any Class B Advance at any time if, after giving effect thereto, the outstanding principal amount of Class B Advances funded by such Class B Purchaser would exceed its Class B Commitment then in effect.

     (e) [Intentionally Omitted.]

     (f) Notwithstanding anything to the contrary contained herein, this Agreement and the Class A VFCs to be issued thereunder shall constitute a single revolving debt facility with a single maturity and Seller shall not take any action under the Agreement that would cause Seller to have outstanding one or more debt obligations with two or more maturities hereunder, provided that if an Eligible Assignee other than CSE Mortgage LLC or any entity wholly-owned by CSE Mortgage LLC that is disregarded for income tax purposes becomes a Class B Purchaser, the Class B VFCs shall be treated as issued and outstanding without, and not due to any action by, Seller, including a pledge by Seller of the Class B VFCs.

For purposes of this section, debt obligations have “two or more maturities” if they have different stated maturities or if the holders of the debt obligations possess different rights concerning the acceleration of or delay in the maturities of the obligations.

      Section 2.2 [Intentionally Omitted.]

      Section 2.3 Procedures for Advances .

     (a) Each Advance from a Purchaser hereunder shall be effected by the Seller (or the Servicer on its behalf) delivering to the Administrative Agent and Class B Purchaser (with a copy to the Collateral Custodian and the Backup Servicer) a duly completed Borrowing Notice (along with a Borrowing Base Certificate) no later than 2:00 p.m. (New York City, New York time) at least two Business Days prior to the proposed Funding Date; provided that no more than four Class A Advances shall be made in any one calendar month without the Administrative Agent’s prior consent. Each Borrowing Notice (along with a Borrowing Base Certificate) shall (i) specify the desired amount of such Class A Advance (which amount must be at least equal to $250,000) and Class B Advance, (ii) specify the date of such Advances, (iii) specify the Assets to be financed on such Funding Date (including the appropriate file number and Outstanding Asset Balance for each Asset, and identifying each Loan by type and whether such Loan is a Senior Secured ABL Loan, Senior Secured Loan, B-Note Loan, Mezzanine Loan, Acquired Loan or Participation Loan) and (iv) include a representation that all conditions precedent for an Advance described in Article III hereof have been met. Each Borrowing Notice shall be irrevocable.

     Each Borrowing Notice shall set forth, and each Advance shall be comprised of (i) a proposed Class A Advance and (ii) a proposed Class B Advance, which shall be calculated at the Class B Advance Rate based on the proposed Class A Advance.

     Each Issuer shall promptly thereafter notify the Administrative Agent whether such Issuer has determined to make the requested Class A Advance on the terms specified by the Seller, and the Issuers shall notify the Administrative Agent of the funding allocation as between

them (if other than proportional to their Issuer Purchase Limits). The Administrative Agent shall promptly thereafter notify the Seller whether the Issuers have determined to make the requested purchase and, if so, whether all of the terms specified by the Seller are acceptable to the Issuers. If the Issuers have determined not to make the entire amount of a Class A Advance requested to be made, the Administrative Agent shall promptly send notice of the proposed Class A Advance to all of the Liquidity Banks concurrently specifying the date of such Class A Advance, the aggregate amount of such Class A Advance to be funded by the Liquidity Banks (which amount shall be equal to the portion of the Class A Advance not funded by the Issuers), and each such Liquidity Bank’s portion thereof (determined ratably in accordance with its respective Class A Commitment).

     (b) On the date of each Advance, the applicable Purchasers shall upon satisfaction of the applicable conditions set forth in Article III , make available to the Seller in same day funds, at such bank or other location reasonably designated by Seller in its Borrowing Notice given pursuant to this Section 2.3 , an aggregate amount equal to: (X) with respect to the Class A VFC, the least of (i) the amount requested by the Seller for such Class A Advance, (ii) an amount equal to the Class A Availability on such Funding Date, and (iii) the Class A Facility Amount, and (Y) with respect to the Class B VFC, the least of (i) the amount requested by the Seller for such Class B Advance, (ii) 5/75 multiplied by Class A Advances Outstanding after giving effect to the proposed Class A Advance, subject to the limitation set forth in the proviso to Section 2.1(b) , and (iii) the undrawn portion of the Class B Facility Amount.

     (c) Effective on the date of each Advance pursuant to this Section 2.3, the Seller hereby sells and assigns to the Administrative Agent, for the benefit of the Purchasers making such Advance, all Assets listed on the attachment to the Borrowing Notice delivered in connection with such Advance, and the Related Security and Collections with respect thereto.

     (d) On each Funding Date, the obligation of each Liquidity Bank to remit its pro rata share of each Class A Advance shall be several from that of each other Liquidity Bank and the failure of any Liquidity Bank to so make such amount available to the Seller shall not relieve any other Liquidity Bank of its obligation hereunder. No Liquidity Bank shall be responsible for the failure of any other Liquidity Bank to make funds available in connection with any Class A Advance.

     (e) Notwithstanding the foregoing, an Additional Asset may not be included in the Assets being financed unless (x) if all Pool Concentration Criteria were satisfied immediately prior to giving effect to such inclusion, all Pool Concentration Criteria continue to be satisfied after giving effect to the inclusion of such Additional Asset or (y) if any Pool Concentration Criteria was not satisfied immediately prior to giving effect to such inclusion, the degree of non-satisfaction of each Pool Concentration Criteria will be maintained or improved after giving effect to the inclusion of such Additional Asset.

     (f) Notwithstanding the foregoing, (x) no Construction Loan may become an Additional Asset, if after giving effect thereto, the Outstanding Asset Balance of all Construction Loans that are included in the Collateral (expressed as a percentage of Aggregate Outstanding Asset Balance) would exceed the Outstanding Asset Balance (as of the initial Funding Date) of all Construction Loans included in the Collateral on the initial Funding Date (expressed as a

percentage of Aggregate Outstanding Asset Balance as of the initial Funding Date), and (y) no Loan due from the Obligor of an Excess Concentration Loan may become an Additional Asset.

      Section 2.4 Reduction of the Facility Amount; Mandatory and Optional Repayments; Increase of Commitment .

     (a) The Seller may, upon at least 10 days’ prior written notice (such notice to be received by the Administrative Agent no later than 5:00 p.m. (New York City, New York time) on such day) to the Administrative Agent and Class B Purchaser, 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 each partial reduction of the Facility Amount shall be in an aggregate amount equal to at least $1,000,000; and provided, further that, the reduction in the Facility Amount shall be allocated pro rata between the Class A Facility Amount and the Class B Facility Amount. Each notice of reduction or termination pursuant to this Section 2.4(a) shall be irrevocable.

     (b) The Seller may, upon two Business Days’ prior written notice (such notice to be received by the Administrative Agent and each Hedge Counterparty no later than 2:00 p.m. (New York City, New York time) on such day) to the Administrative Agent, reduce the Advances Outstanding by remitting, to the Administrative Agent, for payment to the applicable Purchasers, (i) cash and (ii) instructions to reduce such Advances Outstanding, related accrued Interest, Breakage Costs and Hedge Breakage Costs; provided that no such reduction shall be given effect unless the Seller 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 Seller has paid all Hedge Breakage Costs and any payments owing to the relevant Hedge Counterparty for any such termination. Any reduction of the Advances Outstanding shall be in a minimum amount of $250,000. 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 Administrative Agent shall apply such amounts first to the pro rata reduction of the Advances Outstanding by paying such amounts to the applicable Purchasers, second to the payment of related accrued Interest on the amount of the Advances Outstanding to be repaid by paying such amounts to the applicable Purchasers, and third to the payment of 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; provided , however , (x) if such amounts are received during the Amortization Period or the Turbo Period, such amounts shall be applied in the order of priority set forth in Section 2.10, and (y) if such amounts are received during the Revolving Period, such amounts shall be applied first to Class A Advances Outstanding and related Interest, Breakage Costs and Hedge Breakage Costs and then to Class B Advances Outstanding and related Interest and Breakage Costs. Any notice relating to any prepayment pursuant to this Section 2.4(b) shall be irrevocable.

     (c) If on any day (i) the Administrative Agent, as agent for the Secured Parties, does not own or have a valid and perfected first priority security interest in any of the Collateral or (ii) any Asset which has been represented by the Seller to be an Eligible Asset is later determined not to have been an Eligible Asset as of the related Cut-Off Date, upon the earlier of the Seller’s receipt of notice from the Administrative Agent or the Seller becoming aware thereof and the

Seller’s failure to cure such breach within 30 days, the Seller shall be deemed to have received on such day a collection (a “ Deemed Collection ”) of such Asset in full and shall on such day pay to the Administrative Agent, on behalf of the Purchasers and each Hedge Counterparty, an amount equal to (x) the Outstanding Asset Balance of the Asset (calculated without regard to the first two provisos contained in the definition of “Outstanding Asset Balance”) to be applied towards the reduction of the principal of the Class A VFCs until paid in full and then towards the reduction of the principal of the Class B VFCs until paid in full, 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 and retransfer of the related Asset contemplated by this Section 2.4(c) . In connection with any such Deemed Collection, the Administrative Agent, as agent for the Secured Parties, shall automatically and without further action, be deemed to transfer to the Seller, free and clear of any Lien created by the Administrative Agent, all of the right, title and interest of the Administrative Agent, as agent for the Secured Parties, in, to, and under the Asset with respect to which the Administrative Agent has received such Deemed Collection, but without any other representation and warranty of any kind, express or implied.

     (d) At any time prior to the Termination Date, the Seller may, upon at least two (2) Business Days’ prior written notice to the Administrative Agent, request that the aggregate Class A Commitments be increased in increments of $125,000,000 up to a maximum incremental amount of $250,000,000, with a commensurate increase in the Class A Commitment of each Liquidity Bank and the pro rata increase in the Class B Commitments in increments of $8,333,334 (or $8,333,333, as applicable) up to a maximum incremental amount of $16,666,667, any such increase to be subject to the written consent of the Administrative Agent, the Class B Purchaser and each Liquidity Bank.

      Section 2.5 Determination of Interest .

     To the extent any Purchaser’s Class A Interest Rate is determined by reference to the CP Rate, the Administrative Agent shall determine such Purchaser’s CP Rate and the Interest (including unpaid Interest, if any, due and payable on a prior Payment Date) to be paid by the Seller with respect to each Advance, as applicable, on each Payment Date for the related Accrual Period and shall advise the Servicer thereof on or before the third Business Day prior to such Payment Date.

      Section 2.6 Percentage Evidenced by each Variable Funding Certificate .

     The variable percentage ownership interest in the Collateral represented by each VFC shall be initially computed on its date of purchase as set forth in Section 2.1(a) . Thereafter, until the Termination Date, each VFC shall be automatically recomputed (or deemed to be recomputed) on each day prior to the Termination Date as set forth in Section 2.1(a) . The variable percentage ownership interest in the Collateral represented by each VFC as computed (or deemed to be recomputed) as of the close of business on the day immediately preceding the Termination Date shall remain constant at all times on and after the Termination Date. The variable percentage ownership interest in the Collateral represented by each VFC shall become zero when its Advances and Interest have been indefeasibly paid in full.

      Section 2.7 [Reserved] .

      Section 2.8 Notations on Variable Funding Certificates .

     The Administrative Agent is hereby authorized to enter on a schedule attached to the VFC a notation (which may be computer generated) with respect to each Advance under a VFC made by the applicable Purchaser of: (a) the date and principal amount thereof, and (b) each repayment of principal thereof, and any such recordation shall constitute prima facie evidence of the accuracy of the information so recorded. The failure of the Administrative Agent to make any such notation on the schedule attached to the VFC shall not limit or otherwise affect the obligation of the Seller to repay the Advances in accordance with their respective terms as set forth herein.

      Section 2.9 Settlement Procedures During the Revolving Period and the Amortization Period .

     (a) On each Payment Date during the Revolving Period and the Amortization Period, the Servicer shall direct the Collateral Custodian to pay pursuant to the Monthly Report to the following Persons, from (1) the Collection Account, to the extent of Available Funds, and (2) Servicer Advances received with respect to the immediately preceding Collection Period, the following amounts in the following order of priority:

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

     (2) to the Servicer, in an amount equal to any unreimbursed Servicer Advances, for the payment thereof;

     (3) to the Servicer, in an amount equal to any accrued and unpaid Servicing Fees to the end of the preceding Collection Period, for the payment thereof;

     (4) to the extent not paid for by the Originator, pro rata to the Backup Servicer and the Collateral Custodian, in an amount equal to any accrued and unpaid Backup Servicing Fees, Collateral Custodian Fees and Transition Expenses, for the payment thereof;

     (5) to the Administrative Agent, for the account of the applicable Class A Purchasers pro rata in accordance with the amount of Class A Advances Outstanding hereunder (or portions thereof) held by each Class A Purchaser, an amount equal to any accrued and unpaid Interest (including Interest payable on any prior Payment Date and related interest thereon), Program Fee, Commitment Fee and Breakage Costs with respect to the Class A Variable Funding Certificates, for the payment thereof;

     (6) to the Administrative Agent, the Class A Total Principal Payable for the account of the applicable Class A Purchasers pro rata in accordance with the amount of

Class A Advances Outstanding hereunder (or portions thereof) held by each Class A Purchaser, for the payment thereof;

     (7) [intentionally omitted];

     (8) to the Administrative Agent, for the account of the applicable Class B Purchasers pro rata in accordance with the amount of Class B Advances Outstanding hereunder (or portions thereof) held by each Class B Purchaser, in an amount equal to any accrued and unpaid Interest (including Interest payable on any prior Payment Date and related interest thereon) and Breakage Costs with respect to the Class B Variable Funding Certificates, for the payment thereof;

     (9) to the Administrative Agent, any remaining Total Principal Payable for the account of the applicable Class B Purchasers pro rata in accordance with the amount of Class B Advances Outstanding hereunder (or portions thereof) held by each Class B Purchaser, for the payment thereof;

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

     (11) to the Administrative Agent, the applicable Purchasers, the Backup Servicer, the Collateral Custodian, the Affected Parties, the Indemnified Parties or the Secured Parties, pro rata in accordance with the amount owed to such Person under this clause (11) , all other amounts, including Increased Costs but other than Advances Outstanding, then due under this Agreement, for the payment thereof; and

     (12) any remaining amount shall be distributed to the Seller.

     (b) [Intentionally Omitted.]

      Section 2.10 Settlement Procedures During the Turbo Period .

     (a) On each Payment Date during the Turbo Period, the Servicer shall direct the Collateral Custodian to pay pursuant to the Monthly Report to the following Persons, (i) from the Collection Account, to the extent of Available Funds, and (ii) from Servicer Advances received with respect to the immediately preceding Collection Period, the following amounts in the following order of priority:

     (1) 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 Transaction in an amount not to exceed $250,000 in the aggregate for all Hedging Agreements), owing to that Hedge Counterparty under its respective Hedging Agreement in respect of any Hedge Transaction(s), for the payment thereof;

     (2) to the Servicer, in an amount equal to any unreimbursed Servicer Advances, for the payment thereof;

     (3) to the