U.S. $90,000,000 SALE AND SERVICING AGREEMENT

Exhibit 10.4

COMPOSITE VERSION
Reflects all Amendments through April 29, 2009

U.S. $90,000,000

SALE AND SERVICING AGREEMENT

by and among

CAPITALSOURCE FUNDING III LLC,
as the Seller

CAPITALSOURCE FINANCE LLC,
as the Originator and as the Servicer

EACH OF THE CONDUIT PURCHASERS AND THE INSTITUTIONAL
PURCHASERS FROM TIME TO TIME PARTY HERETO,
as Purchasers

EACH OF THE PURCHASER AGENTS
FROM TIME TO TIME PARTY HERETO,
as the Purchaser Agents

WACHOVIA CAPITAL MARKETS, LLC,
as the Administrative Agent and as the WBNA Agent

and

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

Dated as of April 20, 2004
Conformed as of April 29, 2009

SALE AND SERVICING AGREEMENT

      THIS SALE AND SERVICING AGREEMENT (such agreement as amended, modified, waived, supplemented, restated or replaced from time to time, the “ Agreement ”) is made as of this April 20, 2004, by and among:

     (1)  CAPITALSOURCE FUNDING III LLC , a Delaware limited liability company (as successor-in-interest to CapitalSource Funding III Inc.), as the seller (together with its successors and assigns in such capacity, the “ Seller ”);

     (2)  CAPITALSOURCE FINANCE LLC , a Delaware limited liability company (“ CapitalSource Finance ”), 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 CONDUIT PURCHASERS FROM TIME TO TIME PARTY HERETO (together with their successors and assigns in such capacity, each a “ Conduit Purchaser ”);

     (4)  EACH OF THE INSTITUTIONAL PURCHASERS FROM TIME TO TIME PARTY HERETO (together with their respective successors and assigns in such capacities, each an “ Institutional Purchaser ”, and together with Conduit Purchasers, the “ Purchasers ”); and

     (5)  EACH OF THE PURCHASER AGENTS FROM TIME TO TIME PARTY HERETO (together with its successors and assigns in such capacity, each a “ Purchaser Agent ”);

     (6)  WACHOVIA CAPITAL MARKETS, LLC , a Delaware limited liability company (together with its successors and assigns, “ WCM ”), as the administrative agent for the Purchaser Agents hereunder (together with its successors and assigns in such capacity, the “ Administrative Agent ”), and as the Purchaser Agent for Wachovia Bank, National Association (“ WBNA ”), as an Institutional Purchaser (together with its successors and assigns in such capacity, the “ WBNA Agent ”); and

     (7)  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 ”).

R E C I T A L S

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

      WHEREAS , the Seller is prepared to grant security interests in, certain Assets and other proceeds with respect thereto to the Purchasers from time to time;

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

      WHEREAS , it is the intention of the parties hereto that (i) in connection with each Advance hereunder, the Seller hereby grants a security interest to the Administrative Agent, for the benefit of the Secured Parties, in all of the Seller’s right, title and interest in and to the Assets and proceeds with respect thereto, and (ii) this Agreement shall constitute a security agreement under Applicable Law, in respect of the grant described in the second Recital above, and all other security interests granted hereunder; and

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

      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 .

     (a) 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:

     “ 40 Act ”: Defined in Section 10.1(i) .

     “ Accrual Period ”: With respect to each Advance (or portion thereof), (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 (1st) day of such immediately preceding calendar month.

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

     “ Additional Agent ”: Each Person (together with its successors and assigns) that becomes a party to this Agreement as an Additional Agent, on behalf of any Additional Purchaser, pursuant to an Additional Purchaser Agreement.

     “ Additional Agent Fee Letter ”: Each Additional Agent Fee Letter Agreement that shall be entered into by and among the Seller, the Servicer and such Additional Agent in connection with the transactions contemplated by this Agreement, as amended, modified, waived, supplemented, restated or replaced from time to time.

     “ Additional Agent’s Account ”: A special account, designated by the Additional Agent in an Additional Purchaser Agreement, in the name of an Additional Agent maintained with the related Additional Purchaser.

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

     “ Additional Purchaser ”: Each Person (together with its successors and assigns) that becomes a party to this Agreement as an Additional Purchaser pursuant to an Additional Purchaser Agreement.

     “ Additional Purchaser Agreement ”: With respect to each Additional Purchaser, the Transferee Letter or Assumption Agreement relating to such Additional Purchaser.

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

     “ Administrative Agent ”: WCM, in its capacity as administrative agent for the Purchaser Agents, together with its successors and assigns, including any successor appointed pursuant to ARTICLE XII .

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

     “ Advance Rate ”: With respect to any type of Asset on any date of determination, the corresponding percentage set forth below:

      provided , however , with respect to any Assigned Loans, Agented Loans, Participation Loans and DIP Loans, the applicable 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.

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

     “ Affected Party ”: The Administrative Agent, the Purchaser Agents, the Purchasers, each Liquidity Bank, all assignees and participants of the Purchasers and each Liquidity Bank, any successor to WCM as Administrative Agent and any sub-agent of the Administrative Agent and any successor to a Purchaser 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 ”: The WBNA Agent’s Account or any Additional Agent’s Account, as applicable.

     “ 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 related original note will be endorsed to the Administrative Agent and held by the Collateral Custodian, on behalf of the Secured Parties and any Loan Register will be revised to reflect the transfer of the loan to the Seller, (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 to the extent the Originator has such rights, (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 loans of equal priority and (e) the Originator (or a wholly-owned subsidiary of CapitalSource Inc.) is the collateral agent and payment agent for all holders of such Loan.

     “ 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, minus the Outstanding Asset Balances of any Delinquent Assets. Notwithstanding anything to the contrary contained herein, for purposes of determining the Aggregate Outstanding Asset Balance, 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

a zero Outstanding Asset Balance, except for purposes of calculating Average Pool Charged-Off Ratio.

     “ 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 Purchaser Agents, 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, any Additional Agent Fee Letter, the Backup Servicer Fee Letter and the Collateral Custodian Fee Letter) delivered in connection with the transactions contemplated by this Agreement (whether due or accrued).

     “ Alarm Service Agreement ”: An agreement between a Dealer and its customer pursuant to which the Dealer is obligated to service and monitor the customer’s alarm system in consideration for monthly payments by the customer.

     “ Allocation Adjustment Event ”: With respect to each Loan included in the Collateral subject to the Retained Interest provisions of this Agreement, the occurrence of any one or more of the following under and as defined in any Permitted Securitization Transaction rated by the Rating Agencies, as applicable: (i) a “servicer default”, (ii) an “event of default”, (iii) an “accelerated amortization event”, (iv) a “collateral manager default”, (v) a “termination event”, (vi) a “servicer termination event” or (vii) any event with substantially similar results to the foregoing.

     “ Alternative Rate ”: An interest rate per annum equal to the Adjusted Eurodollar Rate; provided, however , that the Alternative Rate shall be the Base Rate if a Eurodollar Disruption Event occurs.

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

     “ Asset Checklist ”: An electronic 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 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 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.

     “ Assigned Loan ”: A Loan originated by a Person other than the Originator or any other Subsidiary of CapitalSource Inc. in compliance with Section 2.21 in which a constant percentage interest has been assigned to the Originator by such Person in accordance with the Credit and Collection Policy and (i) such transaction has been fully consummated prior to such Loan becoming part of the Collateral hereunder, (ii) the Originator is a party to a credit agreement and/or an assignment agreement and a promissory note or loan register, as applicable, with the Obligor with respect to such Loan and (iii) the agent receives payment directly from the Obligor thereof on behalf of each lender that has been assigned a percentage interest in such Loan.

     “ Assignment of Mortgage ”: As to each Loan secured by an interest in real property, one or more assignments, notices of transfer or equivalent instruments, each in recordable form and sufficient under the laws of the relevant jurisdiction to reflect the transfer of the related mortgage, deed of trust, security deed or similar security instrument and all other documents related to such Loan and to the 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.

     “ Assumption Agreement ”: Defined in Section 13.16(b) .

     “ Availability ”: At any time, an amount equal to the excess, if any, of (i) the lesser of (a) the Facility Amount and (b) the Maximum Availability minus (ii) the Advances Outstanding on such day; provided that during the Amortization Period, the Availability shall be zero.

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

     “ 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 twelve (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 twelve (or the corresponding lesser number of Determination Dates included in the calculations described herein).

     “ 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).

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

     “ Banded Floating Rate Asset ”: An Asset where the interest rate payable by the Obligor thereof fluctuates between a minimum interest rate and a maximum interest rate allowable under its Required Asset Documents.

     “ Bank Subsidiary ”: CapitalSource Bank, an industrial bank incorporated under the laws of the State of California.

     “ 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 higher of (a) the Prime Rate or (b) 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.

     “ 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) the Initial Advance, each incremental Advance (as applicable), (b) any reduction of the Facility Amount or repayment of Advances Outstanding, or (c) any reinvestment of Principal Collections under Section 2.9(b) ; 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 such Purchaser’s Purchaser Agent in such Purchaser Agent’s sole discretion) as a result of (i) a prepayment by the Seller of Advances Outstanding or Interest or (ii) any difference between the CP Rate and the Adjusted Eurodollar Rate. All Breakage Costs shall be due and payable hereunder upon demand.

     “ 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, New York City, New York, Charlotte, North Carolina, and (b) if the term “Business Day” is used in connection with the determination of the LIBOR Market Index Rate, dealings in United States dollar deposits are carried on in the London interbank market.

     “ CapitalSource Bank Transaction ”: The acquisition by CapitalSource Inc. of the assets of Fremont Investment & Loan that occurred on July 25, 2008.

     “ CapitalSource LIBOR Rate ”: The London interbank offered rate for deposits in Dollars for the applicable maturity, as and when determined in accordance with the applicable Required Asset Documents.

     “ CapitalSource Prime Rate ”: The rate designated by CapitalSource Finance (or the originator of, or applicable agent with respect to, an Assigned Loan) from time to time and/or pursuant to the related loan documents as its prime rate in the United States, such rate to change as and when the designated rate changes; provided , however , the CapitalSource Prime Rate is not intended to be the lowest rate of interest charged by CapitalSource (or such originator) in connection with extensions of credit to debtors.

     “ Capital Stock ”: With respect to any Person, shares of capital stock of (or other ownership or profit interests in) such Person, warrants, options or other rights for the purchase or other acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or other acquisition from such Person of such shares (or such other interests), and other ownership or profit interests in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are authorized or otherwise existing on any date of determination.

     “ Change-in-Control ”: Means (a) any Person or two or more Persons acting in concert shall have acquired “beneficial ownership,” directly or indirectly, of, or shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will result in its or their acquisition of, or control over, Voting Stock of CapitalSource Inc. (or other securities convertible into such Voting Stock) representing 33-1/3% or more of the combined voting power of all Voting Stock of CapitalSource Inc., (b) the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of CapitalSource Inc. and its Subsidiaries taken as a whole to any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), (c) the failure of CapitalSource Inc. to own (directly or through wholly owned subsidiaries) 99.9% of the outstanding Voting Stock of CapitalSource TRS LLC (f/k/a CapitalSource TRS Inc.) or any Servicing Guarantor, (d) the failure of CapitalSource TRS LLC (f/k/a CapitalSource TRS Inc.) to own (directly or through wholly owned subsidiaries) 99.9% of the outstanding Voting Stock of the Originator or any Servicing Guarantor, (e) the creation or imposition of any Lien on any limited liability company membership interests in the Seller; provided , however , that it shall not be a Change-in-Control if a Lien on such limited liability membership interests of the Seller shall be created or imposed in favor of WBNA, as agent, or its successors, assigns or subsequent transferees in such capacity, in connection with (i) that certain Credit Agreement, dated as of March 14, 2006, by and among CapitalSource Inc., the guarantors listed therein, the lenders listed therein, WBNA and Bank of America, N.A., and all Credit Documents (as defined therein) thereunder, (ii) that certain Pledge Agreement, dated as of December 23, 2008, by and among CapitalSource Inc., its direct and indirect subsidiaries listed therein, WBNA, the Collateral Custodian and the Servicer, and (iii) that certain Security Agreement, dated as of December 23, 2008, by and among CapitalSource Inc., its direct and indirect subsidiaries listed therein and WBNA or (f) the failure by the Originator to own all of the limited liability company membership interests in the Seller; provided , however , that it shall not be a Change-in-Control if WBNA, or its successors, assigns or subsequent transferees, shall own such limited liability membership interests of the Seller. Notwithstanding the foregoing, solely for the purpose of determining whether there has been a Change-in-Control pursuant to clause (a) above, any purchase by one or more Excluded Persons which increases any of such Excluded Persons’ direct or indirect ownership interest (whether individually or in the aggregate) in the Voting Stock of CapitalSource Inc. shall not constitute a Change-in-Control even if the amount of Voting Stock acquired or controlled by such Excluded Person(s) exceeds (whether individually or in the aggregate) 33-1/3% of the combined voting power of all Voting Stock of the Originator, any Servicing Guarantor or CapitalSource Inc., as applicable; provided that for so long as any of such Excluded Persons’ direct or indirect ownership interest in the Voting Stock

of the Originator, any Servicing Guarantor or CapitalSource Inc. exceeds (individually or in the aggregate) 33-1/3% of the combined voting power of all Voting Stock of the Originator, any Servicing Guarantor or CapitalSource Inc., as applicable, the initiation by the Originator, any Servicing Guarantor or CapitalSource Inc. of any action intended to terminate or having the effect of terminating the registration of its securities under Section 12(g) of the Exchange Act or intended to suspend or having the effect of suspending its obligation to file reports with the U.S. Securities and Exchange Commission under Sections 13 and 15(d) of the Exchange Act, shall constitute a Change-in-Control. “Excluded Person” shall mean each of John Delaney, Farallon Capital Management, LLC and Madison Dearborn Partners, LLC and their Affiliates. As used herein, “beneficial ownership” shall have the meaning provided in Rule 13d-3 of the Securities and Exchange Commission under the Exchange Act.

     “ Charged-Off Asset ”: An Asset (or portion thereof deemed to be “charged-off”) as to which any of the following first occurs: (i) the Servicer has determined or should have reasonably determined in accordance with the Credit and Collection Policy that such Asset is not collectible, (ii) (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 ninety (90) days from the original due date for such payment (without giving effect to any Servicer Advance thereon), in which case not less than fifty percent (50%) of the Outstanding Asset Balance shall be deemed to be “charged-off” for purposes of this Agreement (and for the avoidance of doubt, the remaining fifty percent (50%) of such Outstanding Asset Balance shall be deemed to be “delinquent” for purposes of this Agreement), and (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 one hundred and eighty (180) days from the original due date for such payment (without giving effect to any Servicer Advance thereon), in which case not less than one hundred percent (100%) of the Outstanding Asset Balance of an Asset shall be deemed to be “charged-off” for purposes of this Agreement, or (iii) (a) the Obligor thereof or any Person obligated thereon is subject to an Insolvency Event, in which case not less than fifty percent (50%) of the Outstanding Asset Balance of an Asset shall be deemed to be “charged-off” as of the date of the occurrence of such Insolvency Event for purposes of this Agreement, (b) the Obligor thereof or any Person obligated thereunder has suffered a material adverse change which materially affects its viability as a going concern as reasonably determined by the Servicer, or (c) adequate collateral or other source of payment does not exist to repay the full amount due to the Seller under the Asset as determined by the Servicer.

     “ Charged-Off Portfolio Asset ”: A Portfolio Asset (or portion thereof deemed to be “charged-off”) (excluding equity investments) as to which any of the following first occurs: (i) the Servicer has determined or should have reasonably determined in accordance with the Credit and Collection Policy (or such similar policies and procedures utilized by the Servicer in servicing such Portfolio Asset) that such Portfolio Asset is not collectible, (ii) (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 ninety (90) days from the original due date for such payment (without giving effect to any Servicer Advance thereon), in which case not less than fifty percent (50%) of the Portfolio Outstanding Asset Balance of such Portfolio Asset shall be deemed to be “charged-off” for purposes of this Agreement (and for the avoidance of doubt, the remaining fifty percent (50%) of such Outstanding Asset Balance shall be deemed to be “delinquent” for purposes of this Agreement), and (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 one hundred

and eighty (180) days from the original due date for such payment (without giving effect to any Servicer Advance thereon), in which case not less than one hundred percent (100%) of the Portfolio Outstanding Asset Balance of such Portfolio Asset shall be deemed to be “charged-off” for purposes of this Agreement, or (iii) (a) the Obligor thereof or any Person obligated thereon is subject to an Insolvency Event, in which case not less than fifty percent (50%) of the Portfolio Outstanding Asset Balance of such Portfolio Asset shall be deemed to be “charged-off” as of the date of the occurrence of such Insolvency Event for purposes of this Agreement, (b) the Obligor or any Person obligated thereon has suffered a material adverse change which materially affects its viability as an ongoing concern as reasonably determined by the Servicer, or (c) adequate collateral or other source of payment does not exist to repay the principal due under the Portfolio Asset as determined by the Servicer.

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

     “ Closing Date ”: April 20, 2004.

     “ 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, 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 Additional Assets, and all monies due or to become due in payment under such Existing Assets and Additional Assets on and after the related Cut-Off Date, including but not limited to all Collections, but excluding any Excluded Amounts; (ii) all Related Security with respect to the Assets referred to in clause (i) 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 Collateral Custodian Fee Letter.

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

     “ 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 ”: Each calendar month.

     “ Collections ”: (a) All cash collections and other cash proceeds of any Asset, including, without limitation, Scheduled Payments, Finance Charges, Prepayments, Insurance Proceeds, Distributions, 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.

     “ Commercial Paper Notes ”: On any day, any short-term promissory notes of any Purchaser (or its related commercial paper issuer) issued in the commercial paper market.

     “ Commitment ”: With respect to each Purchaser, the commitment of such Purchaser to make Advances in accordance herewith in an amount not to exceed (i) (a) prior to the Termination Date, the dollar amount set forth opposite such Purchaser’s signature on the signature pages hereto or the signature pages of the Additional Purchaser Agreement relating to such Purchaser, as applicable, under the heading “Commitment” and (b) on or after the Termination Date, such Conduit Purchaser’s Pro Rata Share of the aggregate Advances Outstanding or (ii) as to Conduit Purchasers only, with respect to each Advance, the Pro-Rata Share.

     “ Commitment Fee ”: (a) With respect to any Purchaser, as defined in such Purchaser’s Purchaser Fee Letter and (b) with respect to any Additional Purchaser, as defined in such Additional Purchaser’s Additional Agent Fee Letter.

     “ Conduit Purchasers ”: Defined in the Preamble of this Agreement.

     “ 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 ”: With respect to any Person, at any date, any Subsidiary the accounts of which, in accordance with GAAP, would be consolidated with those of such Person in its consolidated and consolidating financial statements as of such date.

     “ Consolidated Tangible Net Worth ”: As of any date of determination, (i) with respect to CapitalSource Inc., the assets less the liabilities of CapitalSource Inc. and its Consolidated Subsidiaries, less intangible assets (including goodwill), less loans or advances to stockholders, directors, officers or employees, all determined in accordance with GAAP; provided , however , that if CapitalSource Inc.’s financial statements as of such date include goodwill created as a result of the CapitalSource Bank Transaction, then all such goodwill in an amount not to exceed $200,000,000 shall be treated as a tangible asset for the purpose of this definition; provided , further , however , that with respect to any Consolidated Subsidiary, if all of the shares of Capital Stock are not, directly or indirectly, owned by CapitalSource Inc., then, with respect to any such Person, the Consolidated Tangible Net Worth of such Person shall be calculated by multiplying the Consolidated Tangible Net Worth of such Person by the percentage of the aggregate proceeds that would be distributed to CapitalSource Inc., directly or indirectly, upon the dissolution of such Person, and (ii) with respect to any other Person, the assets less the liabilities of such Person

and its Subsidiaries on a consolidated basis, less intangible assets (including goodwill), all determined in accordance with GAAP.

     “ 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.

     “ 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 a Conduit Purchaser from time to time as interest on or otherwise (by means of interest rate hedges or otherwise taking into consideration any incremental carrying costs associated with short-term promissory notes issued by such Conduit Purchaser (or its related commercial paper issuer) maturing on dates other than those certain dates on which such Conduit Purchaser is to receive funds) in respect of the promissory notes issued by such Conduit Purchaser (or its related commercial paper issuer) that are allocated, in whole or in part, by such Conduit Purchaser’s Purchaser Agent (on its behalf) to fund or maintain the Advances Outstanding funded by such Conduit Purchaser during such period, as determined by such Conduit Purchaser’s Purchaser Agent (on its 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 such Conduit Purchaser’s Purchaser Agent (on its behalf) and (ii) other borrowings by such Conduit Purchaser, 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, such Conduit Purchaser’s Purchaser Agent shall for such component use the rate resulting from converting such discount rate to an interest bearing equivalent rate per annum .

     “ 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 as amended or supplemented from time to time in accordance with Section 5.1(h) and Section 5.4(f) .

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

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

     “ 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 (i) at least thirty (30) days but less than sixty (60) days from the original due date for such payment (without giving effect to any Servicer Advance thereon), in which case not less than fifty percent (50%) of the Outstanding Asset Balance of such Asset shall be deemed to be “delinquent” for purposes of this Agreement, (ii) at least sixty (60) days from the original due date for such payment (without giving effect to

any Servicer Advance thereon), in which case, for the avoidance of doubt, one hundred percent (100%) of the Outstanding Asset Balance of such Asset shall be deemed to be “delinquent” for purposes of this Agreement, 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 sixty (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.

     “ DIP Loan ”: Any Loan to an Obligor that is a Chapter 11 debtor under the Bankruptcy Code which is permitted by the Credit and Collection Policy and also satisfies the following criteria: (a) the Loan is duly authorized by a final order of the applicable bankruptcy or federal district court under the provisions of subsection (b) , (c) or (d) of 11 U.S.C. § 364, (b) the Obligor’s bankruptcy case is still pending as a case under the provisions of Chapter 11 of Title 11 of the Bankruptcy Code and has not been dismissed or converted to a case under the provisions of Chapter 7 of Title 11 of the Bankruptcy Code, (c) the Obligor’s obligations under such Loan have not been (i) disallowed, in whole or in part, or (ii) subordinated, in whole or in part, to the claims or interests of any other Person under the provisions of 11 U.S.C. § 510, (d) the Loan is secured and the liens and security interests granted by the applicable federal bankruptcy or district court in relation to the Loan have not been subordinated, in whole or in part, to the liens or interests of any other lender under the provisions of 11 U.S.C. § 364(d) or otherwise, (e) the Obligor is not in default on its payment obligations under the Loan, (f) neither the Obligor nor any party in interest has filed a Chapter 11 plan with the applicable federal bankruptcy or district court that, upon confirmation, would (i) disallow or subordinate the Loan, in whole or in part, (ii) subordinate, in whole or in part, any lien or security interest granted in connection with such Loan, (iii) fail to provide for the repayment, in full and in cash, of the Loan upon the effective date of such plan or (iv) otherwise impair, in any manner, the claim evidenced by the Loan and (g) the Loan is substantially in a form previously delivered by the Originator to the Administrative Agent in connection with this transaction or in such other form as shall be adopted by the Originator and approved in writing by the Administrative Agent at least ten days prior to such Loan becoming part of the Collateral hereunder. For the purposes of this definition, an order is a “final order” if the applicable period for filing a motion to reconsider or notice of

appeal in respect of a permanent order authorizing the Obligor to obtain credit has lapsed and no such motion or notice has been filed with the applicable federal bankruptcy or district court or the clerk thereof.

     “ 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 .

     “ Distributions ”: All dividends, payments, deferred payments, money and other distributions (whether in cash or in kind) on and all interest on and in respect of, and all proceeds of the Collateral, of whatever kind or description, real or personal, whether in the ordinary course or in partial or total liquidation or dissolution, or any recapitalization, reclassification of capital, or reorganization or reduction of capital, or otherwise.

     “ 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. (Charlotte, North Carolina 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 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 , further , 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 (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;

     (c) at the time such Asset is included in the Collateral, the Asset (i) is not (and since its origination by the Originator) a Charged-Off Asset (either in whole or in part), (ii) is not more than ten days past due with respect to payments of principal or interest, and (iii) has never been more than thirty days past due (after giving effect to a five day grace period in determining the number of days past due) with respect to payments of principal or interest;

     (d) the Asset is an “eligible asset” as defined in Rule 3a-7 under the 40 Act;

     (e) the Asset is a contract the purchase of which with the proceeds of Commercial Paper Notes would constitute a “current transaction” within the meaning of Section 3(a)(3) of the Securities Act of 1933, as amended;

     (f) 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;

     (g) the Obligor with respect to such Asset is an Eligible Obligor and such Asset is payable only in United States Dollars and the Related Property with respect to which the Asset is principally underwritten is located in the United States;

     (h) the Asset is evidenced by (1) a promissory note or Loan Register and (2) a credit agreement, security agreement, 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; provided that, in the case of clause (2) above, in the absence of a separate security agreement, the related credit agreement, loan or note purchase agreement or other Underlying Instruments shall provide for the grant of a security interest in the Related Property by the Obligor;

     (i) 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;

     (j) neither the assignment of the Asset under the Sale Agreement by the Originator nor 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;

     (k) on or before the applicable Cut-Off Date, the Obligor of such Asset or agent for such Asset, as applicable, shall have been directed to make all payments to the Lock-Box or directly to the Lock-Box Account;

     (l) 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;

     (m) 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;

     (n) 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;

     (o) 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;

     (p) 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;

     (q) 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;

     (r) 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;

     (s) 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;

     (t) 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;

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

     (v) no selection procedure adverse to the interests of the Administrative Agent, the Purchaser Agents or the Secured Parties was utilized by the Seller or Originator in the selection of Asset for inclusion in the Collateral; it being understood that selection procedures used by the Seller or Originator for the inclusion of Assets in one or more of its various securitizations or other financing facilities and which are solely intended to obtain the most beneficial advance rates thereunder and/or otherwise maximize the efficiency of such facilities, shall not be deemed to be adverse procedures for purposes of this paragraph;

     (w) 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 for amendments to such Asset otherwise permitted under Section 7.4(a) of this Agreement and in accordance with the Credit and Collection Policy;

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

     (y) except with respect to DIP Loans, the Obligor of such Asset is not and has not been the subject of an Insolvency Event or Insolvency Proceeding in the past three years;

     (z) the Asset is secured by a valid, perfected, first priority (other than with respect to Subordinated Loans) security interest in all assets that constitute the collateral for the Asset (subject to Liens expressly permitted by the Underlying Instruments; provided that such Liens are not material in relation to the value of the Related Property and are customary for transactions of such nature), and, other than the loan types listed above, such collateral shall include but not be limited to the material intellectual property of the Obligor (if any);

     (aa) 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;

     (bb) [Reserved];

     (cc) 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);

     (dd) the Asset was generated in the ordinary course of the Originator’s business;

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

     (ff) the Asset is not Margin Stock;

     (gg) 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 40 Act;

     (hh) the Asset was purchased, acquired or originated by the Originator (or an Affiliate thereof) at not less than 85% of its par value as of the date of its purchase, acquisition or origination;

     (ii) from and after the date on which the Asset was first added to the Collateral, the Asset has not been, and is not, a Materially Modified Asset; and

     (jj) the Asset is not subject to a guaranty by the Originator or any Affiliate thereof.

(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 Agented Loans and Assigned Loans, that the agent or a majority of the related lenders) may accelerate all payments on the Loan, if the Obligor is in default under the Loan and any applicable grace period has expired (in the case of any Subordinated Loan, subject to any applicable intercreditor or subordination agreement);

     (b) unless such Loan is a Security System Loan, 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;

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

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

     (e) other than Participation Loans, Agented Loans and Assigned Loans, with respect to the Originator’s obligation to fund and the actual funding of the Loan by the Originator, the Originator has not assigned or granted participations to, in whole or in part, any Person;

     (f) with respect to any DIP Loan, the Originator or its assignee has been granted a first priority lien status in respect of all or certain of the Obligor’s assets by final order of the applicable federal bankruptcy or district court;

     (g) if the Obligor of such Loan is the Obligor of more than one Loan, all such Loans are cross-collateralized and cross-defaulted;

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

     (i) [Reserved];

     (j) 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, the Purchaser Agents or the Secured Parties with respect to the Loan, the Related Security, the Scheduled Payments or any income or Proceeds therefrom;

     (k) the Loan (or the underlying Loan in the case of any Agented Loan, Assigned Loan or Participation Loan) is a Senior Secured ABL Loan, Senior Secured Loan, Stretch Senior Secured Loan, Senior B-Note Loan or Subordinated Loan;

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

     (m) 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;

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

     (o) with respect to Senior B-Note Loans or Subordinated Loans, the Originator has entered into an intercreditor agreement or subordination agreement (or such provisions are contained in the principal loan documents) 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 there shall be no standstill of remedies (x) until after a payment default with respect to the senior obligation or 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 (y) unless a covenant or payment default is also in effect, and (B) to no longer than one hundred eighty (180) days in duration in the aggregate in any given year;

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

     (q) such Loan is not a Real Estate Loan (other than a Senior Secured ABL Loan that is secured by timeshare receivables);

     (r) [Reserved];

     (s) with respect to Agented Loans, the related underlying loan documents (i) shall include a credit agreement, note purchase agreement or similar agreement containing provisions relating to the appointment and duties of a payment agent and a collateral agent and intercreditor

and (if applicable) subordination provisions substantially similar to the forms previously delivered by the Originator to the Administrative Agent in connection with this transaction, (ii) are duly authorized, fully and properly executed and are the valid, binding and unconditional payment obligation of the Obligor thereof and (iii) are consistent with the documentation and perfection standards of transactions of such nature;

     (t) with respect to Agented Loans, the Originator (or a wholly owned subsidiary of CapitalSource Inc.) has been appointed the collateral agent of the security and the payment agent for all such loans prior to such Agented Loan becoming a part of the Collateral;

     (u) with respect to Agented Loans, (i) 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 noteholders have been executed and filed or recorded as appropriate prior to such Agented Loan becoming a part of the Collateral and (ii) 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 after such Agented Loan becomes part of the Collateral, all appropriate assignments of the collateral agent’s rights in and to the collateral on behalf of the noteholders have been executed and filed or recorded as appropriate prior to such entity being the collateral agent of the security of the lenders to such Obligor;

     (v) 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;

     (w) 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;

     (x) 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, (b) share in the proceeds of the sale or other disposition of such collateral on a pro-rata basis and (c) may transfer or assign their right, title and interest in the Related Property;

     (y) 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, CapitalSource Inc. or an Affiliate of CapitalSource Inc.;

     (z) 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;

     (aa) has an original term to maturity (A) in the case of Senior Secured ABL Loans, Senior Secured Loans, Stretch Senior Secured Loans and Senior B-Note Loans of not greater than 84 months, or (B) in the case of Subordinated Loans of not greater than 120 months;

     (bb) is not a consumer loan;

     (cc) none of the Loans secured by a mortgage are high-cost loans as defined by applicable predatory- and abusive-lending laws; and

     (dd) the proceeds of the Loan will not be used to finance activities of the type engaged in by businesses classified under NAICS Codes 2361 (Residential Building Construction), 2362 (Nonresidential Building Construction), 2371 (Utility System Construction), 2372 (Land Subdivision); provided , that the foregoing shall not be deemed to render inventory loans to timeshare operators ineligible.

     “ 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 and has a billing address within the United States, (ii) has not entered into the related asset agreement primarily for personal, family or household purposes, (iii) is not a Governmental Authority, (iv) is not an Affiliate of the Originator or the Seller, (v) is not in the gaming (other than Obligors in the business of providing services to the gaming industry), real estate construction or development (other than Obligors in the business of providing services to the real estate construction or development industries), nuclear waste or natural resource exploration/production and oil field service industries, (vi) is not engaged in the business of conducting proprietary research on new drug development, (vii) is not and has not been the subject of an Insolvency Proceeding (except with respect to a DIP Loan) in the past three years, (viii) as of the applicable Cut-Off Date, has an Eligible Risk Rating, and (ix) 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 “Risk Rating 1,” “Risk Rating 2” or “Risk Rating 3,” 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.

     “ Equipment ”: Healthcare related equipment or such other equipment types as are approved for inclusion in the Collateral by the Administrative Agent (in its sole discretion).

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

     “ 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.

     “ 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 any Institutional Purchaser shall have notified the Administrative Agent of a determination by such Liquidity Bank or any of its assignees or participants or such Institutional Purchaser 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 any Institutional Purchaser shall have notified the Administrative Agent of the inability, for any reason, of such Liquidity Bank or any of its assignees or participants or such Institutional Purchaser, as applicable, to determine the Adjusted Eurodollar Rate, (c) any Liquidity Bank or any Institutional Purchaser shall have notified the Administrative Agent of a determination by such Liquidity Bank or any of its assignees or participants or such Institutional Purchaser, as applicable, that the rate at which deposits of Dollars are being offered to such Liquidity Bank or any of its assignees or participants or such Institutional Purchaser in the London interbank market does not accurately reflect the cost to such Liquidity Bank, such assignee or such participant or such Institutional Purchaser of making, funding or maintaining any Advance or (d) any Liquidity Bank any Institutional Purchaser shall have notified the Administrative Agent of the inability of such Liquidity Bank or any of its assignees or participants or such Institutional Purchaser, as

applicable, to obtain Dollars in the London interbank market to make, fund or maintain any Advance.

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

     “ 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 Closing Date.

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

     “ Facility Amount ”: $90,000,000, as such amount may vary from time to time upon the written agreement of the parties hereto; provided, that such amount may not at any time exceed the aggregate Commitments then in effect; provided, further , that on or after the Termination Date, the Facility Amount shall mean the Advances Outstanding.

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

     “ 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. (Charlotte, North Carolina 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, with respect to Loans, the percentage equivalent of a fraction (i) the numerator of which is equal to the sum of the Outstanding Asset Balances of all Fixed Rate Assets and Banded Floating Rate Assets that are within 0.50% of the maximum interest rate allowable under their Required Asset Documents as of such date, and (ii) 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 CapitalSource Prime Rate or CapitalSource 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 CapitalSource Prime Rate or CapitalSource LIBOR Rate.

     “ Funding Date ”: The third Business Day following the Closing Date, and (i) as to any incremental Advance funded on a same-day basis pursuant to Section 2.3(a) , the Business Day of, and (ii) as to any other incremental Advance, any Business Day that is one Business Day immediately following, the receipt by the Administrative Agent and each Purchaser 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.

     “ Healthcare REIT ”: The REIT resulting from the consummation of a spin-off or initial public offering of the healthcare net-lease business of CapitalSource Inc. and its Subsidiaries after which the shares of such REIT are listed on a U.S. national securities exchange or the NASDAQ Stock Market.

     “ Healthcare REIT Consolidated Subsidiary ”: At any date, any Healthcare REIT Entity, if such Healthcare REIT Entity’s accounts, in accordance with GAAP, would be consolidated with

those of CapitalSource Inc. in its consolidated and consolidating financial statements as of such date.

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

     “ Hedge Amount ”: On any day, an amount equal to the product of (i) the product of (x) the Borrowing Base and (y) the Fixed Rate Asset Percentage with respect to Loans on such day and (ii) one minus the Overcollateralization Percentage on such day.

     “ 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 ”: Means (a) Wachovia Bank, National Association 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 clauses (i) and (ii) hereof and has entered into a Hedging Agreement with the Seller on or prior to the date of such transfer.

     “ Hedge Guaranty ”: The Guaranty, dated as of the date hereof, by and between CapitalSource Finance in favor of WBNA, as Hedge Counterparty, as amended, modified, waived, supplemented, restated or replaced from time to time.

     “ Hedge Notional Amount ”: For any Advance, the aggregate notional amount in effect on any day under all Hedge Transactions entered into pursuant to Section 5.3(a) for that Advance.

     “ Hedge Percentage ”: With respect to:

     (a) Fixed Rate Assets that are Loans, on any day that (i) the Aggregate Outstanding Asset Balance exceeds $150,000,000, an amount equal to 100% if the sum of the Outstanding Asset Balances of all Fixed Rate Assets that are Loans exceeds $35,000,000 or (ii) the Aggregate Outstanding Asset Balance is less than or equal to $150,000,000, an amount equal to 100% if the sum of the Outstanding Asset Balances of all Fixed Rate Assets that are Loans exceeds $20,000,000;

     (b) Floating Rate Assets is 0%; and

     (c) Banded Floating Rate Assets, on any day, is an amount equal to 100% if the interest rate on any such Loan is within 0.50% of the maximum interest rate allowable under its Required Asset Documents.

     “ 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.

     “ Hedged Rate ”: For any Advance, the interest rate payable to a Hedge Counterparty under the Hedge Transaction related to such Advance computed as of the Cut-Off Date under or with respect to the Asset to which that Advance relates.

     “ 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, and each “Confirmation” thereunder confirming 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, (f) all obligations of such Person to redeem preferred stock of such Person (in the event such Person is a corporation), (g) all obligations (absolute or contingent) of such Person to reimburse any bank or other Person in respect of amounts which are available to be drawn or have been drawn under a letter of credit or similar instrument, (h) the principal portion of all obligations of such Person under any synthetic lease, tax retention

operating lease, off-balance sheet loan or similar off-balance sheet financing product where such transaction in each case (I) is considered borrowed money indebtedness for tax purposes, and (II) is classified as an operating lease under GAAP and (i) 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 (h) above.

     “ Indemnified Amounts ”: Defined in Section 11.1 .

     “ Indemnified Parties ”: Defined in Section 11.1 .

     “ 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.

     “ 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 sixty (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.

     “ Institutional Purchaser ”: Defined in the Preamble of this Agreement.

     “ 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 Inc., 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 (for each day during such Accrual Period) of:

IR x P x     1
                  D

     where:

provided, however , 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) on or with respect to a Loan 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 ”: For any Accrual Period and for each Advance outstanding for each day during such Accrual Period:

     (i) to the extent the applicable Conduit Purchaser has funded the applicable Advance through the issuance of commercial paper, a rate equal to the applicable CP Rate; or

     (ii) to the extent the applicable Conduit Purchaser or Institutional Purchaser did not fund the applicable Advance through the issuance of commercial paper, a rate equal to the Alternative Rate;

provided, however , the Interest Rate shall be the Base Rate for any Accrual Period for any Advance as to which a Conduit Purchaser has funded the making or maintenance thereof by a sale of an interest therein to any Liquidity Bank under the applicable Liquidity Agreement on any day other than the first day of such Accrual Period without giving such Liquidity Bank(s) at least two Business Days’ prior notice of such assignment.

     “ Investment ”: Any investment in any Person, whether by means of purchase or acquisition of obligations or securities of such Person, capital contribution to such Person, loan or advance to such Person, making of a time deposit with such Person, guarantee or assumption of any obligation of such Person or otherwise.

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

     “ Investment Loan Subsidiary ”: Any Person that becomes a Subsidiary as a result of the exercise of remedies by CapitalSource Inc. or any Consolidated Subsidiary under any Investment Loan.

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

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

     “ Issuer ”: Any Conduit Purchaser 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.

     “ LIBOR Market Index Rate ”: For any day, with respect to any Advance (a) the rate per annum appearing on Page 3750 of the Bridge Telerate Service (formerly Dow Jones Market

Service) (or on any successor or substitute page of such service, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time for such day, provided, if such day is not a Business Day, the immediately preceding Business Day, as the rate for dollar deposits with a one-month maturity; (b) if for any reason the rate specified in clause (a) of this definition does not so appear on Page 3750 of the Bridge Telerate Service (or any successor or substitute page or any such successor to or substitute for such service), the rate per annum appearing on Reuters Screen LIBO page (or any successor or substitute page) as the London interbank offered rate for deposits in dollars at approximately 11:00 a.m., London time, for such day, provided, if such day is not a Business Day, the immediately preceding Business Day, for a one-month maturity; and (c) if the rate specified in clause (a) of this definition does not so appear on Page 3750 of the Bridge Telerate Service (or any successor or substitute page or any such successor to or substitute for such service) and if no rate specified in clause (b) of this definition so appears on Reuters Screen LIBO page (or any successor or substitute page), the interest rate per annum at which dollar deposits of $5,000,000 and for a one-month maturity are offered by the principal London office of WBNA in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, for such day.

     “ 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 ”: (a) with respect to each Conduit Purchaser, the Liquidity Purchase Agreement or liquidity loan agreement by and among such Conduit Purchaser, the Liquidity Banks named therein, and the related Purchaser Agent, as such agreement may be amended, modified, waived, supplemented, restated or replaced from time to time, and (b) with respect to each Additional Purchaser that is also a Conduit Purchaser, the liquidity purchase agreement or liquidity loan agreement by and among such Additional Purchaser, the Liquidity Banks named therein and the related Additional Agent, as such agreement may be amended, modified, waived, supplemented, restated or replaced from time to time.

     “ Liquidity Bank ”: The Person or Persons who provide liquidity support to any Conduit Purchaser or Additional Purchaser that is also a Conduit Purchaser pursuant to a Liquidity Agreement in connection with the issuance by such Purchaser of Commercial Paper Notes.

     “ Liquidity Factor Reduction Event ”: With respect to each Asset included as part of the Collateral subject to the Retained Interest provisions of this Agreement, a “Liquidity Factor Reduction Event” under and as defined in any Permitted Securitization Transaction rated by the Rating Agencies.

     “ Loan ”: Any loan originated by the Originator or, in the case of an Assigned 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 origination, the percentage equivalent of a fraction (i) the numerator of which is equal to the maximum availability (as provided in the applicable underlying loan documents) 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 any date of determination, 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 loan documents) 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 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 “capital structure” of the related Obligor. With respect to any Security System Loan, as of any date of determination, the percentage equivalent of a fraction (a) the numerator of which is equal to the related Security System Loan Advance Multiple and (b) the denominator of which is equal to the related Security System Loan Average Contract Term.

     “ 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 Wells Fargo, as the indenture trustee and as the Citi indenture trustee (as defined therein), Bank of America, N.A., as the lockbox bank, WCM, as the conduit administrative agent and as the acquisition administrative agent, CapitalSource Finance, 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, condition (financial or otherwise), operations, performance, properties or prospects of the Originator, 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, the Purchaser Agents and the Secured Parties, (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, the Purchaser Agents’, or the Secured Parties’ interest in the Collateral.

     “ Material Modification ”: (1) Any amendment or waiver of, or modification or supplement to, an Underlying Instrument governing an Asset that (a) reduces the principal amount of such Asset, (b) waives one or more interest payments, or reduces the spread over the applicable reference rate comprising the interest rate on such Asset if such Asset is a Floating Rate Asset or reduces the coupon comprising the interest rate on such Asset if such Asset is a Fixed Rate Asset; provided that the foregoing shall not apply to waivers or reductions related to the operation of default or penalty interest clauses and, in addition, the spread or coupon, as

applicable, may be reduced by not more than 1.5% applicable to the spread or coupon of such Asset, so long as the interest coverage ratio (howsoever defined in the related Underlying Instruments) is greater than 2.0:1 at the time of such reduction, (c) contractually or structurally subordinates such Asset by operation of a priority of payments, turnover provisions, the transfer of assets in order to limit recourse to the related Obligor or the granting of security (other than permitted security) on any of the Related Property securing such Asset, (d) postpones the due date of any Scheduled Payment in respect of such Asset, (e) terminates or releases any material lien or security interest securing such Asset (other than the release of such lien or security interest (i) as required by the Underlying Instruments so long as it does not involve a material portion of the Collateral or (ii) in conjunction with the sale or disposition of the assets subject to such lien or security interest so long as 100% of the cash proceeds from such sale or disposition ( minus any taxes and expenses incurred in connection with such sale or disposition) are applied to prepay the applicable Asset and the gross cash proceeds from such sale or disposition are at least equal to 100% of the value of the property being released from such lien or security interest) or (f) alters the status of such Loan as a Delinquent Loan or Charged-Off Loan and (2) any loan or extension of credit by the Originator (or any other lender) to the Obligor for the purpose of (a) making any past due principal, interest or other payments due on such Asset, (b) preventing such Asset or any other loan to the related Obligor from becoming past due or (c) causing a Delinquent Loan or a Charged-Off Loan to cease to be so classified; provided that a loan or extension of credit provided for refinancing purposes at or around such Asset’s then schedule maturity date shall not be deemed to be a Material Modification.

     “ Materially Modified Asset ”: Any Asset subject to a Material Modification.

     “ 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 Availability ”: An amount equal to the least of:

     (a) the Facility Amount;

     (b) the sum of (i) the product of the Borrowing Base and the Weighted Average Advance Rate plus (ii) the amount on deposit in the Principal Collections Account received in reduction of the Outstanding Asset Balance of any Asset that is an Eligible Asset; or

     (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 received in reduction of the Outstanding Asset Balance of any Asset that is an Eligible Asset.

     “ Minimum Overcollateralization Amount ”: As of any date of determination, an amount equal to the sum of the Outstanding Asset Balances of all Eligible Assets attributable to the three Obligors 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), calculated for the Borrowing Base on such date.

     “ Minimum Pool Yield ”: A Pool Yield equal to 2.15%.

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

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

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

     “ NAICS Code ” means the North American Industry Classification System Codes by two 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., its Consolidated Subsidiaries (excluding the Healthcare REIT Consolidated Subsidiaries), on a consolidated basis, in respect of the issuance of Capital Stock to a Person other than CapitalSource Inc. or its Consolidated Subsidiaries (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; provided , however , that such proceeds shall exclude any consideration received in connection with an initial public offering of the Healthcare REIT.

     “ Noteless Loan ”: A Loan with respect to which the underlying loan documents 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, 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 during the Revolving Period, provided ten (10) Business Days’ prior written notice is given in accordance with Section 2.19(a) .

     “ Originator ”: CapitalSource Finance, together with its successors and assigns in such capacity; all Assets originated by Affiliates of CapitalSource Inc. (other than CapitalSource Finance) and acquired by CapitalSource Finance or its successors and assigns from such Affiliates in compliance with Section 2.21 shall be deemed to have been originated by CapitalSource Finance or its successors and assigns; provided that such acquisition shall be reflected on the Borrowing Base Certificate.

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

     “ Outstanding Asset Balance ”: With respect to (i) any Asset purchased at less than 95% of its par value, the purchase price of such Asset (excluding any PIK component or accrued interest payable) minus the sum of principal payments received in respect of such Asset on or before the date of determination and (ii) any Asset purchased at no less than 95% of par or originated directly by the Originator or an Affiliate, the sum of (a) the portion of 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 Aggregate Outstanding Asset Balance, 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 (i) calculating the Average Pool Charged-Off Ratio and (ii) Section 2.20(a)(vii) .

     “ 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 Advances Outstanding on such date and (ii) the denominator of which is equal to the Aggregate Outstanding Asset Balance as of such date.

     “ 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 in a form previously delivered by the Originator to the Administrative Agent in connection with this transaction or in such other form as shall be adopted by the Originator and approved in writing by the Administrative Agent at least five days prior to such Loan becoming part of the Collateral hereunder, (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, however , any such Loan shall exclude any Retained Interest.

     “ Payment Date ”: The fifteenth (15th) day of each calendar month or, if such day is not a Business Day, the next succeeding Business Day.

     “ 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, however, 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 Fitch and each Rating Agency in the Highest Required Investment Category granted by Fitch and such Rating Agency, which in the case of Fitch, shall be “F-1+”;

     (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, which in the case of Fitch, shall be “F-1+”;

     (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 (2) 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 ninety (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 Fitch and each Rating Agency; or

     (8) Eligible Repurchase Obligations with a rating acceptable to the Rating Agencies, which 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 ”: Any of the following as to which no enforcement, collection, execution, levy or foreclosure proceeding shall have been commenced (a) Liens for state, municipal or other local taxes if such taxes shall not at the time be due and payable, (b) Liens imposed by law, such as materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and other similar Liens, arising in the ordinary course of business securing obligations that are not overdue for a period of more than thirty (30) days, and (c) Liens granted pursuant to or by the Transaction Documents.

     “ 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) twelve (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 (1st) 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 resident of the same state shall not exceed 20%;

     (2) the sum of the Outstanding Asset Balances of all Eligible Assets the Obligors of which are in the same Industry (as defined by 2-digit NAICS Codes) shall not exceed 20%;

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

     (4) the sum of the Outstanding Asset Balances of all Eligible Assets that are DIP Loans shall not exceed 10%;

     (5) the sum of the Outstanding Asset Balances of all Eligible Assets to a single Obligor shall not exceed $20,000,000;

     (6) the Aggregate Outstanding Asset Balance divided by the number of Obligors (including any Affiliates thereof) shall not exceed the greater of (a) 2% or (b) $5,000,000;

     (7) the sum of the Outstanding Asset Balances of all Eligible Assets that are Senior Secured ABL Loans or Revolving Loans shall not exceed 65%;

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

     (9) the sum of the Outstanding Asset Balances of all Eligible Assets that are Subordinated Loans and Senior B-Note Loans shall not exceed 10%;

     (10) (a) up to and including April 28, 2009, the sum of the Outstanding Asset Balances of all Eligible Assets which have ever been included as part of the Collateral for eighteen (18) months or more shall not exceed 50%; and (b) from and after April 29, 2009, the sum of the Outstanding Asset Balances of all Eligible Assets which have ever been included as part of the Collateral for eighteen (18) months or more shall not exceed 20%;

     (11) 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) $10,000,000;

     (12) the sum of the Outstanding Asset Balances of all Loans that are Security System Loans shall not exceed 10%;

     (13) the sum of the Outstanding Asset Balances of all Loans that were first purchased by the Originator or any affiliate thereof at a purchase price of less than 95% of their par value shall not exceed 10%; and

     (14) the sum of the Outstanding Asset Balances of all Loans that are Senior Secured ABL Loans secured by timeshare receivables shall not exceed 10%.

     “ 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 (1st) 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 (1st) day of such Collection Period.

     “ Pool Weighted Average Life ”: At any point in time, the number obtained by (i) for each Asset included in the Borrowing Base as of such point in time, multiplying each Scheduled Payment by the number of months from such point in time until such Scheduled Payment is due; (ii) summing all of the products calculated pursuant to clause (i); (iii) dividing the sum calculated pursuant to clause (ii) by the sum of all successive Scheduled Payments due on all Assets included in the Borrowing Base as of such point in time; and (iv) dividing the amount calculated pursuant to clause (iii) by 12.

     “ Pool Yield ”: On any day, the excess, if any, of (a) the Pool Rate on such day minus (b) the sum of (i) the Interest Rate multiplied by the Weighted Average Advance Rate, (ii) the Program Fee Rate multiplied by the Weighted Average Advance Rate and (iii) the Servicing Fee Rate, in each case as of such day.

     “ 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 (0) 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 Charged-Off Ratio ”: As of any Determination Date, the product of (i) twelve (12) and (ii) the percentage equivalent of a fraction, (a) the numerator of which is equal to the sum of the Portfolio Outstanding Asset Balances of all Portfolio Assets (excluding equity and preferred stock investments) that became Charged-Off Portfolio Asset (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 Portfolio Aggregate Outstanding Asset Balance (excluding equity and preferred stock investments) as of the first (1st) day of the Collection Period related to such Determination 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 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 ”: (a) The rate announced by WBNA from time to time as its prime rate in the United States, such rate to change as and when such designated rate changes, or (b) with respect to any Additional Purchaser, as otherwise specified by or on behalf of such Additional Purchaser in the applicable Additional Purchaser Agreement. The Prime Rate is not intended to be the lowest rate of interest charged by WBNA or any other specified financial institution in connection with extensions of credit to debtors.

     “ Principal Collections ”: Any and all amounts received in respect of any principal due and payable under the Loans 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 ”: (a) With respect to any Purchaser, as defined in the applicable Purchaser Fee Letter and (b) with respect to any Additional Purchaser, as specified in the applicable Additional Agent Fee Letter.

     “ Program Fee Rate ”: (a) With respect to any Purchaser, the rate set forth in the applicable Purchaser Fee Letter and (b) with respect to any Additional Purchaser, the rate set forth in the applicable Additional Agent Fee Letter as the “Program Fee Rate.”

     “ Pro-Rata Share ”: (i) the percentage obtained by dividing each Conduit Purchaser’s, as applicable, Commitment (as determined under subsection (i)(a) of the definition of Commitment) by the aggregate Commitments of all the Conduit Purchasers (as determined under subsection (i)(a) of the definition of Commitment).

     “ Purchaser ”: (i) WBNA, (ii) any Additional Purchaser, as the context requires, and “ Purchasers ” means collectively (a) WBNA and (b) the Additional Purchasers.

     “ Purchaser Agent ”: With respect to (i) WBNA, the WBNA Agent, (ii) any Additional Purchasers, the related Additional Agent and (iii) each Institutional Purchaser which may from time to time become a party hereto, each shall be deemed to be its own Purchaser Agent.

     “ Purchaser Fee Letter ”: Each Fee Letter Agreement, dated as of the date hereof, by and among the Seller, the Servicer, and the applicable Purchaser Agent, 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, each Purchaser Agent and any Affiliate thereof, or the Administrative Agent or any Affiliate of the Administrative Agent; 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:

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

     (B) 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

     (C) 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 sub clauses (A) or (B) above; or

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

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

     “ 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 any other rating agency that has been requested to issue a rating with respect to a Permitted Securitization Transaction.

     “ Real Estate Loan ”: Any Loan (including any lease financing) (i) for which the underlying Related Property consists primarily of real property or (ii) the proceeds of which are primarily used to finance the acquisition, construction or development of real property or (iii) the primary source of repayment from which is from the sale or liquidation of real property.

     “ 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.

     “ 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.

     “ REIT Requirements ”: The requirements (including, without limitation, the requirements relating to assets and income) CapitalSource Inc. must satisfy to qualify as a REIT under the Code and applicable regulations of the Department of the Treasury promulgated thereunder.

     “ 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, each 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 Advance Reduction Amount ”: On any day, an amount equal to the positive difference, if any, of (a) Advances Outstanding on such day minus (b) the Maximum Availability on such day.

     “ 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) each Loan secured by real property, an Assignment of Mortgage and (v) any Loan identified as an Assigned Loan on the Asset Checklist, the duly executed original assignment agreement; provided, that with respect to any Assigned Loan, any of the foregoing documents, other than any related promissory notes in the case of Assigned Loans only, may be copies. For the avoidance of doubt, with respect to any Loan originated by an Affiliate of CapitalSource Inc. and acquired by CapitalSource Finance or its successors and assigns from such Affiliate in compliance with Section 2.21 , Required Asset Documents shall include duly executed originals or copies, as applicable, of each of the foregoing categories of documents with respect to the sale or transfer of each such Loan from such Affiliate to CapitalSource Finance.

     “ 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. in the form attached hereto as Schedule X 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.

     “ 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, all of the obligations, if any, to provide additional funding with respect to such Revolving Loan, and (B) with respect to any Assigned Loan, any Participation Loan or any Agented Loan that is transferred by the Originator to the Seller, (i) all of the obligations, if

any, of the agent(s) under the documentation evidencing such Assigned Loan, Participation Loan, or Agented Loan and (ii) the applicable portion of the interests, rights and obligations under the documentation evidencing such Assigned 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.

     “ 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, however , 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.

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

     “ Secured Party ”: (i) each Purchaser, (ii) the Administrative Agent and each Purchaser Agent, and (iii) each Hedge Counterparty that is either a Purchaser or an Affiliate of the WBNA 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.

     “ Security System Loan ”: A Loan with respect to which the related Obligor is in the business classified under 2002 NAICS Code 56162 (Security Systems Services) and which is secured by Alarm Service Agreements.

     “ Security System Loan Advance Multiple ”: With respect to any Security System Loan, the amount funded under such Security System Loan divided by the related RMR.

     “ Security System Loan Average Contract Term ”: With respect to any Security System Loan, the weighted average of the non-cancellable terms measured in months of the Alarm Service Agreements securing such Security System Loan.

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

     “ Senior B-Note Loan ”: Any Term 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 “first dollar” at risk not to exceed 60% of the Loan-to-Value and a “last dollar” at risk not to exceed 70% of the Loan-to-Value, (iii) contains terms which, upon the occurrence of an event of default under the Loan Documents 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 party to such Loan (including any lender party making any Senior Secured Loan or Stretch Senior Secured Loan whose right to payment is contractually senior to the Seller) is paid in full, and (iv) is substantially in a form of “Senior B-Note Loan” previously delivered by the Originator to the Administrative Agent in connection with this transaction or such other form as shall be adopted by the Originator and approved in writing by the Administrative Agent at least five days prior to such Loan becoming part of the Collateral hereunder.

     “ 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, inventory 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) 50% with respect to the Related Property which constitutes inventory, and (c) 80% with respect to the Related Property which constitutes Equipment, (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, (iv) has an availability mechanism that is governed by a dynamic borrowing base formula that specifies eligible collateral and advance rates, and where the borrowing base and availability are calculated at least monthly, (v) employs lock-boxes for cash control and (vi) is substantially in the form of a “Senior Secured ABL Loan” previously delivered by the Originator to the Administrative Agent in connection with this transaction or such other form as shall be adopted by the Originator and approved in writing by the Administrative Agent at least five days prior to such Loan becoming part of the Collateral hereunder; provided, however , any such Loan shall exclude any Retained Interest.

     “ 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 less than 60%, (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, and (iv) is substantially in the form of a “Senior Secured Loan” previously delivered by the Originator to the Administrative Agent in connection with this transaction or such other form as shall be adopted by the Originator and approved in writing by the Administrative Agent at least five days prior to such Loan becoming part of the Collateral hereunder.

     “ Servicer ”: CapitalSource Finance LLC, 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.

     “ Servicing Guarantor ”: An Affiliate of CapitalSource Inc. that executes a Servicing Guaranty.

     “ Servicing Guaranty ”: Each Servicing Guaranty by an Affiliate of CapitalSource Inc. in favor of the Administrative Agent, as agent for the Secured Parties, pursuant to Section 2.21 in form and substance satisfactory to the Administrative Agent in its sole discretion.

     “ 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.

     “ Stretch Senior Secured Loan ”: Any Term Loan other than a Senior Secured Loan that (i) is secured by a first priority Lien on all of the Obligor’s assets constituting Related Property for the Loan (which may include a pledge of common equity), (ii) has a Loan-to-Value of greater than 60% and less than 70%, (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, and (iv) is substantially in a form of “Stretch Senior Secured Loan” previously delivered by the Originator to the Administrative Agent in connection with this transaction or such other form as shall be adopted by the Originator and approved in writing by the Administrative Agent at least five days prior to such Loan becoming part of the Collateral hereunder.

     “ Subordinated Loan ”: Any Term Loan that (i) may be secured by a combination of senior and/or junior Liens on substantially all of the Obligor’s assets constituting Related Property for the Loan, (ii) has a Loan-to-Value of less than 85%, (iii) contains terms which, upon the occurrence of certain events of default under the senior loan documents between another lender and the Obligor or in the case of any liquidation or foreclosure on any Related Property, provide that the Seller’s portion of such Loan would be paid only after the other lender party to such related senior loan documents (including any lender party making any Senior Secured ABL Loan, Senior Secured Loan, Stretch Senior Secured Loan or Senior B-Note Loan whose right to payment is contractually senior to the Seller) is paid in full, and (iv) is substantially in the form of a “Subordinated Loan” previously delivered by the Originator to the Administrative Agent in connection with this transaction or such other form as shall be adopted by the Originator and approved in writing by the Administrative Agent at least five days prior to such Loan becoming part of the Collateral hereunder.

     “ Subordinated Servicing Fee Ra te”: 0.50% per annum.

     “ 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 , however , that, solely for the purpose of calculating the Consolidated Tangible Net Worth, the term “Subsidiary” shall not include any Person that constitutes an Investment in Equity Instruments or an Investment Loan Subsidiary.

     “ 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 and each Purchaser Agent as the Termination Date at any time following two Business Days’ prior written notice thereof to the Administrative Agent and each Purchaser Agent, (c) May 29, 2009, (d) the date any Liquidity Agreement shall cease to be in full force and effect, and (d) the date of the declaration of the Termination Date pursuant to Section 10.2(a) 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.

     “ Transaction ”: Defined in Section 3.2 .

     “ Transaction Documents ”: The Agreement, the Sale Agreement, each Hedging Agreement, the Hedge Guaranty, the Lock-Box Agreement, the Intercreditor Agreement, each Variable Funding Note, each Servicing Guaranty, each Purchaser Fee Letter, any Additional Agent Fee Letters, any Additional Purchaser Agreements, the Backup Servicer Fee Letter, the 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.

     “ Transferee Letter ”: Defined in Section 13.16(a) .

     “ 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.

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

     “ 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.

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

     “ VFCC ”: Variable Funding Capital Company LLC, a Delaware limited liability company.

     “ 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.

     “ Wachovia ”: Wachovia Bank, National Association, a national banking association in its individual capacity, and its successors and assigns.

     “ Warranty Asset ”: Any Asset that fails to satisfy any criteria of the definition of Eligible Asset; provided, however, that notwithstanding the foregoing, for purposes of determining what is a Warranty Asset, the criteria set forth in clauses (1)(c) , (1)(d) , 1(m)(i) , 1(t) (but solely to the extent the criteria in such clause 1(t) relates to any express representation and warranty that an Asset is an Eligible Asset), 1(w) , 1(x) , (1)(y) and clauses (2)(c) and 2(d) (but solely to the extent that the criteria in such clauses 2(c) and 2(d) would not be satisfied as a result of the operation of law or an effective court order in connection with an Insolvency Event) of the definition of Eligible Asset and clauses (vi) , (viii) and (ix) 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.

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

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

     “ WBNA Agent’s Account ”: A special account (account number 1459160000192) in the name of the WBNA Agent maintained at WBNA.

     “ Weighted Average Advance Rate ”: For any Advances Outstanding on any day, the weighted average of the Advance Rates applicable to the Eligible Assets backing such Advances on such day, weighted according to the proportion of the Aggregate Outstanding Asset Balance each type of Asset represents.

      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 Charlotte, North Carolina 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.

ARTICLE II

PURCHASE OF THE VARIABLE FUNDING NOTES

      Section 2.1 The Variable Funding Notes .

     (a) On the terms and conditions hereinafter set forth, Seller shall deliver a duly executed variable funding note (each such note, a “ Variable Funding Note ” or “ VFN ”), in substantially the form of Exhibit B-1 or B-2 , as applicable, (i) on the Closing Date, to each Purchaser Agent at their respective addresses set forth on the signature pages of this Agreement, and (ii) on each date on which an Additional Purchaser purchases a Variable Funding Note, to the related Additional Agent at the address designated by such Additional Agent. Each Variable Funding Note shall evidence each Purchaser’s ratable share of the security interest in the Collateral granted pursuant to Section 9.1 . Interest shall accrue, and each VFN shall be payable, as described herein. The VFN purchased by (1) WBNA shall be in the name of “Wachovia Capital Markets, LLC, as the WBNA Agent” and shall be in the face amount equal to $90,000,000 and otherwise duly completed, and (2) an Additional Purchaser shall be in the name of such Additional Purchaser and shall be in a face amount to be determined; provided , that the aggregate amount outstanding under all VFNs at any one time shall not exceed the 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 the Purchasers to make advances of funds under the VFNs (each, an “ Advance ”) and the Purchasers shall make such Advance in an amount equal to their Pro-Rata Share of such requested Advance; provided , that in no event shall the Purchasers make any Advance if, after giving effect to such Advance the aggregate Advances Outstanding hereunder would exceed the lesser of (i) the Facility Amount or (ii) the Maximum Availability. Notwithstanding anything contained in this Section 2.1 or elsewhere in this Agreement to the contrary, no Purchaser shall be obligated to provide its Purchaser Agent or the Seller with aggregate funds in connection with an Advance that would exceed such Purchaser’s unused Commitment then in effect. Each Advance made by the Purchasers hereunder is subject to the interests of the Hedge Counterparties under Section 2.9(a)(i) and Section 2.10(a)(i) of this Agreement.

     (c) [Reserved].

     (d) The Seller may, within sixty (60) days but not less than forty-five (45) days prior to the expiration of any Liquidity Agreement in the case of an extension of any Liquidity Agreement or the date set forth in clause (c) of the definition of Termination Date in the case of an extension of this Agreement, by written notice to each Purchaser Agent, make a request (i) for each applicable Liquidity Bank to extend the term of such Liquidity Agreement for an additional period of 364 days and (ii) for each Purchaser to extend the date set forth in clause (c) of the definition of Termination Date. Each Purchaser Agent will give prompt notice to the applicable Purchaser and each applicable Liquidity Bank of its receipt of such request, and each Purchaser and each Liquidity Bank shall make a determination, in their sole discretion, not less than fifteen (15) days prior to the date set forth in clause (c) of the definition of Termination Date or the expiration of any Liquidity Agreement (as applicable) as to whether or not it will agree to the

extension requested. The failure of a Purchaser Agent or a Liquidity Bank to provide timely notice of its decision to the Seller shall be deemed to constitute a refusal by such Purchaser or such Liquidity Bank (as applicable) to extend the date set forth in clause (c) of the definition of Termination Date or the term of the Liquidity Agreement, respectively. The Seller confirms that each Liquidity Bank and each Purchaser, in their sole and absolute discretion, without regard to the value or performance of the Collateral or any other factor, may elect not to extend any Liquidity Agreement or the date set forth in clause (c) of the definition of Termination Date (as applicable).

      Section 2.2 [Reserved].

      Section 2.3 Procedures for Advances by Purchasers .

     (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 each Purchaser Agent (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. (Charlotte, North Carolina time) at least one Business Day prior to the proposed Funding Date; provided , however , that Advances in an aggregate amount not to exceed $15,000,000 may be requested no later than 2:00 p.m. on the Business Day of the proposed Funding Date. Each Borrowing Notice (along with a Borrowing Base Certificate) shall (i) specify the desired amount of such Advance, which amount must be at least equal to $250,000 per Purchaser, (ii) specify the date of such Advance, (iii) specify the Assets to be financed on such Funding Date (including the appropriate file number, 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, Stretch Senior Secured Loan, Senior B-Note Loan, Subordinated Loan, Assigned 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.

     (b) On the date of each Advance, each Purchaser 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 amount equal to its Pro-Rata Share of the lesser of (i) the amount requested by the Seller for such Advance, (ii) an amount equal to the Availability on such Funding Date or (iii) the Facility Amount.

     (c) On each Funding Date, the obligation of each Purchaser to remit its Pro-Rata Share of any such Advance shall be several from that of each other Purchaser and the failure of any Purchaser to so make such amount available to the Seller shall not relieve any other Purchaser of its obligation hereunder.

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

     (a) The Seller may, upon at least twenty (20) Business Days’ prior written notice (such notice to be received by the Administrative Agent and each Purchaser Agent no later than 5:00 p.m. (Charlotte, North Carolina time) on such day) to the Administrative Agent and each

Purchaser Agent, 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 , however , that each partial reduction of the Facility Amount shall be in an aggregate amount equal to at least $1,000,000. Each notice of reduction or termination pursuant to this Section 2.4(a) shall be irrevocable. The Commitment of each Conduit Purchaser and each Institutional Purchaser shall be reduced by an amount equal to its Pro Rata Share (prior to giving effect to any reduction of Commitments hereunder) of the aggregate amount of any reduction under this Section 2.4(a) .

     (b) The Seller may, upon one Business Days’ prior written notice (such notice to be received by the Administrative Agent, each Hedge Counterparty and each Purchaser Agent no later than 2:00 p.m. (Charlotte, North Carolina time) on such day) to the Administrative Agent and each Purchaser Agent, reduce the Advances Outstanding by remitting, in accordance with their Pro-Rata Share, to each Purchaser Agent, for payment to the respective 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 (1) 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 (2) if a Termination Event or Unmatured Termination Event has occurred, is continuing or would result from such reduction. Any reduction of the Advances Outstanding shall be in a minimum amount of $500,000. 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 Purchaser Agents shall apply such amounts first to the pro-rata reduction of the Advances Outstanding, second to the payment of related accrued Interest on the amount of the Advances Outstanding to be repaid by paying such amounts to the respective 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. 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 thirty (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 to be applied to the pro-rata reduction of the principal of each VFN 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 release 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 release 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.

      Section 2.5 Determination of Interest .

     (a) Each Purchaser Agent shall determine such Purchaser’s Interest 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 on each Payment Date for the related Accrual Period and shall advise the Servicer thereof on or before the third (3rd) Business Day prior to such Payment Date.

     (b) Each Additional Agent shall determine such Additional Purchaser’s Interest Rate and Interest (including unpaid Interest related to such Interest Rate, if any, due and payable to a prior Payment Date) to be paid by the Seller with respect to each Advance on each Payment Date for the related Accrual Period and shall advise the Servicer thereof on or before the third (3rd) Business Day prior to such Payment Date.

      Section 2.6 [Reserved] .

      Section 2.7 [Reserved].

      Section 2.8 Notations on Variable Funding Notes .

     Each Purchaser Agent is hereby authorized to enter on a schedule attached to the VFN a notation (which may be computer generated) with respect to each Advance under the VFN made by the related 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 any Purchaser Agent to make any such notation on the schedule attached to the VFN 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 .

     (a) On each Payment Date during the Revolving 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 that ended on the last day of the calendar month immediately preceding the calendar month in which such Payment Date occurs, the following amounts in the following order of priority:

     (i) FIRST , 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;

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

     (iii) THIRD , to the Servicer, in an amount equal to any accrued and unpaid Servicing Fees and, if the Servicer is not CapitalSource Finance, CapitalSource, Inc. or an Affiliate of CapitalSource, Inc., Subordinated Servicing Fees, to the end of the preceding Collection Period, for the payment thereof;

     (iv) FOURTH , 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 Fee, Collateral Custodian Fee and Transition Expenses, for the payment thereof;

     (v) FIFTH , to each Purchaser Agent, pro rata in accordance with the amount of Advances Outstanding hereunder for the account of the applicable Purchaser, in an amount equal to any accrued and unpaid Interest, Program Fee, Commitment Fee and Breakage Costs, for the payment thereof;

     (vi) SIXTH , (i) prior to the occurrence of a Termination Event, pro rata in accordance with the amounts due under subclauses (a) and (b) of this clause, (a) to each Purchaser Agent, if the Required Advance Reduction Amount is greater than zero, an amount necessary to reduce the Required Advance Reduction Amount to zero, pro rata in accordance with the amount of Advances Outstanding hereunder for the account of the applicable Purchaser, for the payment thereof and (b) pro rata in accordance with the amounts due under this subclause (b) , 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; or (ii) following the occurrence of a Termination Event, pro rata in accordance with the amounts due under subclauses (1) and (2) of this clause, (1) to each Purchaser Agent, pro rata in accordance with the amount of Advances Outstanding hereunder for the account of the applicable Purchaser, in an amount necessary to reduce the Advances Outstanding and Aggregate Unpaids to zero, for the payment thereof and (2) pro rata in accordance with the amounts due under this subclause (2) , 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;

     (vii) SEVENTH , to the Servicer, if the Servicer is CapitalSource Finance, CapitalSource, Inc. or an Affiliate of CapitalSource, Inc., in an amount equal to any accrued and unpaid Subordinated Servicing Fee to the end of the preceding Collection Period, for the payment thereof;

     (viii) EIGHTH , to the Administrative Agent, each Purchaser Agent, the applicable Purchaser, 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 EIGHTH clause, all other amounts, including Increased Costs but other than Advances Outstanding, then due under this Agreement, for the payment thereof; and

     (ix) NINTH , any remaining amount shall be distributed to the Seller.

     (b) On the terms and conditions hereinafter set forth, from time to time during the Revolving Period, the Servicer may, to the extent of any Principal Collections on deposit in the Principal Collections Account, withdraw such funds for the purpose of reinvesting in additional Eligible Assets, provided the following conditions are satisfied:

     (i) all conditions precedent set forth in Section 3.2(b) have been satisfied;

     (ii) the Servicer provides same day written notice to the Administrative Agent and Collateral Custodian by facsimile (to be received no later than 2:00 p.m. (Charlotte, North Carolina time) on such day) of the request to withdraw Principal Collections and the amount thereof;

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

     (iv) the Collateral Custodian provides to the Administrative Agent by facsimile (to be received no later than 2:00 p.m. (Charlotte, North Carolina time) on that same date) a statement reflecting the total amount on deposit on such day in the Principal Collections Account; and

     (v) upon the satisfaction of the conditions set forth in clauses (i) through (iv) above, and the Administrative Agent’s confirmation of available funds, the Administrative Agent will instruct the Collateral Custodian by facsimile on such day to release funds from the Principal Collections Account to the Servicer in an amount not to exceed the lesser of (A) the amount requested by the Servicer and (B) the amount on deposit in the Principal Collections Account on such day.

      Section 2.10 Settlement Procedures During the Amortization Period .

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

     (i) FIRST , pro rata to each Hedge Counterparty, any amounts, (including any Hedge Breakage Costs and any payments due in respect of the termination of any Hedge 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;

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

     (iii) THIRD , to the Servicer, in an amount equal to any accrued and unpaid Servicing Fee and, if the Servicer is not CapitalSource Finance, CapitalSource, Inc. or an

Affiliate of CapitalSource, Inc., Subordinated Servicing Fee, to the end of the preceding Collection Period, for the payment thereof;

     (iv) FOURTH , 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 Fee, Collateral Custodian Fee and Transition Expenses, for the payment thereof;

     (v) FIFTH , to each Purchaser Agent, pro rata in accordance with the amount of Advances Outstanding hereunder for the account of the applicable Purchaser, in an amount equal to any accrued and unpaid Interest, Program Fee, Commitment Fee and Breakage Costs, for the payment thereof;

     (vi) SIXTH , pro rata in accordance with the amounts due under su