Exhibit 99.1

Hercules Enters Into $100 Million Securitized Credit Facility

PALO ALTO, Calif. – Aug. 3, 2005 -Hercules Technology Growth Capital, Inc. (NASDAQ: HTGC), a leading debt and equity growth capital provider to technology related companies, today announced that one of its wholly-owned affiliates has entered into a $100 million securitized credit facility with an affiliate of Citigroup, Inc.

Hercules’ wholly-owned affiliate may borrow up to $100 million under the securitized credit facility which will be used to make additional portfolio investments. Hercules has employed a significant portion of its equity capital and expects to begin using the securitized credit facility in the coming months to support additions to its portfolio.

“We are very pleased to have closed on a securitized credit facility with Citigroup Global Markets Realty Corp. that gives us the flexibility to continue to grow our investment portfolio and to strengthen our balance sheet going forward on a cost-effective basis, which we believe will ultimately translate into improved yields for our shareholders,” said chairman and chief executive officer Manuel A. Henriquez.

In addition, Hercules has extended the maturity of its $25 million credit facility with Alcmene Funding, L.L.C. (“Alcmene”), an affiliate of Farallon Capital Management, L.L.C. to April 2006. Alcmene agreed to a number of amendments to the facility, and the company agreed to increase the annual interest rate on the facility from 8 percent to LIBOR plus 5.6 percent. Mr. Henriquez stated, “We believe that it is in the best interests of the company to maintain our flexibility. By keeping this facility, we can make additional investments in promising portfolio companies.”

For additional information, please review the company’s current report on 8-K, to be filed with the Securities and Exchange Commission, that will include the complete transaction documents for both transactions.

About Hercules Technology Growth Capital

Founded in December 2003, Hercules Technology Growth Capital, Inc. is a NASDAQ traded specialized finance company providing debt and equity growth capital to technology-related companies at all stages of development. The company primarily finances privately-held companies backed by leading venture capital and private equity firms and also may finance certain publicly-traded companies. Hercules focuses its investments in companies active in technology and technology-related industries such as computer software and hardware, networking systems, semiconductors, semiconductor capital equipment, information technology infrastructure, Internet consumer and business services, telecommunications, and life sciences. The company’s investments are originated through its principal office located in Silicon Valley, as well as additional offices in the Boston, Boulder and Chicago areas. Providing capital to privately-held companies backed by leading venture capital and private equity firms involves a certain degree of credit risk and may result in potential losses. For more information or

companies interested in learning more about financing opportunities should contact info@herculestech.com or call at 650-289-3060 or visit http://www.herculestech.com.

Forward-Looking Statements

The statements contained in this release that are not purely historical are forward-looking statements, which involve risk and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. These statements may be identified by their use of forward-looking terminology such as “believes”, “expects”, “may”, “should”, “would”, “will”, “intends”, “plans”, “estimates”, “anticipates” and similar words, and include, but are not limited to, statements regarding the expectations, intentions or strategies of Hercules Technology Growth Capital, Inc. For these statements, Hercules claims the protection of the safe harbor for forward-looking statements provisions contained in the Private Securities Litigation Reform Act of 1995. You should be aware that Hercules’ actual results could differ materially from those contained in the forward-looking statements due to a number of risks and uncertainties affecting its business. Factors that may cause actual results to differ from forward-looking statements include Hercules’ limited operating history as a business development company, the extent to which Hercules incurs debt to fund its investments, fluctuations in interest rates, the concentration of Hercules’ investments in a limited number of emerging-growth or expansion stage technology-related companies, the illiquid nature of the securities Hercules’ holds, the highly competitive market for investment opportunities in which Hercules operates and others discussed in Hercules’ filings with the Securities and Exchange Commission. The forward-looking statements contained in this release are made as of the date hereof, and Hercules assumes no obligation to update the forward-looking statements for subsequent events.

Exhibit 99.2

FIRST AMENDMENT TO

CREDIT AGREEMENT AND PLEDGE AND SECURITY AGREEMENT

THIS FIRST AMENDMENT TO CREDIT AGREEMENT AND PLEDGE AND SECURITY AGREEMENT (this “ Amendment ”) is entered into as of August 1, 2005 by and among HERCULES TECHNOLOGY GROWTH CAPITAL, INC., a Maryland corporation (the “ Company ”), ALCMENE FUNDING, L.L.C., as a Lender and as Administrative Agent (the “ Administrative Agent ”) for the “ Lenders ” party from time to time to the Credit Agreement referred to below, and such Lenders.

W I T N E S S E T H:

WHEREAS , Company, Administrative Agent and Lenders have entered into that certain Credit Agreement dated as of April 12, 2005 (as amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”); and

WHEREAS , the parties to the Credit Agreement desire to amend the Credit Agreement and the Pledge and Security Agreement on the terms and subject to the conditions set forth herein.

NOW, THEREFORE , in consideration of the mutual agreements, provisions and covenants contained herein, the parties agree as follows:

1. Defined Terms . Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Credit Agreement, as amended by this Amendment.

2. Amendments to Credit Agreement .

(A) Amendment to Definitions .

(a) Deleted Definitions . The following definitions are hereby deleted in their entirety: “Extended Maturity Date”, “Extension Fee”, “Extension Notice”, “Extension Option”, “Extension Period” and “Initial Maturity Date”.

(b) Restated Definitions . The following definitions are hereby amended by deleting such definitions in their entirety and substituting the following therefor:

“ Loan Coverage Ratio ” means the ratio of (x) the sum, without duplication, of the Company’s Net Loan Assets plus Cash or Cash Equivalents held by the Company, in each case which are subject to a perfected first priority Lien created pursuant to this Agreement or the other Loan Documents and not subject to any other Lien, to (y) all secured Indebtedness of the Company and its Subsidiaries incurred pursuant to this Agreement. For purposes of determining the Loan Coverage Ratio, there shall be excluded any Cash Equivalents of any SBIC Subsidiary.

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“ Maturity Date ” means April 12, 2006, or such earlier date on which all of the Obligations hereunder become due and payable, whether at such stated maturity date, by declaration of acceleration, or otherwise.

(c) Modified Definitions . The following definitions are amended and modified as set forth below:

The definition of “ Subsidiary ” is hereby amended by—

(x) deleting clause (i) therein in its entirety and substituting the following therefor: “in which an entity, directly or indirectly, owns at least fifty percent (50%) of the securities or other ownership interests of such corporation or other entity;”;

(y) adding the words “, directly or indirectly,” after the words “owns or controls” in each case in which such words appear in clause (iii) therein.

The definition of “ Total Debt Service ” is hereby amended by deleting “the Extension Fee or” in the proviso therein.

The definition of “ Borrowing Loan ” is hereby amended by adding the following proviso to the end thereof:

“; provided further that, except to the extent appearing in the definition of “EBITDA”, “Securitization Transaction,” “Related Securitization Property” or “Securitization Transaction Borrowing Loan,” or appearing in Section 5.08, the term “Borrowing Loan” shall not include any loan from and after the time such loan becomes a Securitization Transaction Borrowing Loan”.

(B) New Definitions . The following definitions shall be inserted in Section 1.01 of the Credit Agreement in proper alphabetical order:

“ LIBOR ” means, the rate of interest per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in U.S. Dollars for a period of twelve (12) months at approximately 11:00 A.M. (London time) one (1) Business Day prior to August 1, 2005; provided , that if more than one rate is specified on Telerate Page 3750, the applicable rate shall be the arithmetic mean of all such rates.

“ Related Securitization Property ” has the meaning set forth on Annex I hereto.

“ Securitization Transaction ” means, a financing transaction, or series of transactions, pursuant to which the Company or any Subsidiary sells, contributes, conveys or otherwise transfers, or grants a Lien on, Borrowing Loans, and related Property for the administration thereof, to an SPV, for the purpose of securing, directly or indirectly, loans or advances received by the Company or any Subsidiary in connection with such financing transaction or transactions.

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“ Securitization Transaction Borrowing Loan ” means any Borrowing Loan sold, conveyed, contributed or otherwise transferred, or to be sold, conveyed, contributed or otherwise transferred, as the context requires, to an SPV pursuant to a Securitization Transaction and not subsequently sold, conveyed, contributed or transferred by the SPV back to the Company or any Subsidiary, and all Related Securitization Property.

“ SPV ” means a Subsidiary or Affiliate of the Company formed for the special purpose of participating in a Securitization Transaction.

“ Warrant ” means with respect to any Securitization Transaction Borrowing Loan, a warrant or similar right convertible into or exercisable or exchangeable for any equity interests received by the Company or a Subsidiary as an “equity-kicker” in connection with such Securitization Transaction Borrowing Loan; provided that the term Warrant shall in no event include the right of the Company to participate as an investor in future equity financings.

“ Warrant Participation Agreement ” means an agreement pursuant to which a Person participating in a Securitization Transaction receives, in connection with such transaction, an interest or participation in Warrants issued to the Company or a Subsidiary by a borrower under a Securitization Transaction Borrowing Loan, provided that the interest or participation received shall not exceed fifteen percent (15%) of the total amount of Warrants issued to the Company or a Subsidiary by the borrower in connection with such Securitization Transaction Borrowing Loan.

“ Warrant Pledge and Security Agreement ” means an agreement pursuant to which a Person participating in a Securitization Transaction pledges certain Warrants and certain other collateral related thereto as security for the payment and performance of such Person’s obligations under a Warrant Participation Agreement.

(C) Amendment to Interest Provision . Section 2.06(a) of the Credit Agreement is hereby amended by deleting such section in its entirety and substituting the following therefor:

(a) Each Loan shall bear interest on the outstanding principal amount thereof (i) from the applicable Borrowing Date until July 31, 2005 at a rate per annum equal to 8.0%; (ii) from August 1, 2005 through December 31, 2005 at a rate per annum equal to LIBOR plus 5.60%; and (ii) from January 1, 2006 and thereafter until the Maturity Date, at a rate per annum equal to 13.5%.

(D) Amendment to Extension Provision . Section 2.07(b) of the Credit Agreement is hereby amended by deleting such section (b) in its entirety and substituting “[Reserved]” therefor.

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(E) Amendment to Information Provision . Section 6.02(b) the Credit Agreement is hereby amended by adding the words “or by Section 7.14” after the words “clauses (a) and (h) of Section 6.03” appearing in lines 5 and 6 thereof.

(F) Amendment to Financial Covenants .

(a) Section 6.13(a) of the Credit Agreement is hereby amended by deleting clauses (i) and (ii) therein and substituting the following therefor: “(i) 1:1 for each month ending prior to October 12, 2005 and (ii) 2:1 for each month thereafter”.

(b) Section 6.13(e) of the Credit Agreement is hereby amended by deleting clauses (i) and (ii) therein and substituting the following therefor: “(1) 20% prior to October 12, 2005 and (ii) 15% thereafter”.

(G) Amendment to Limitation on Liens Covenant .

(a) Section 7.01(i) of the Credit Agreement is hereby amended by deleting the “[Reserved]” therein and substituting the following therefor:

“Liens created or deemed to exist in connection with a Securitization Transaction, but only to the extent that any such Lien relates to a Securitization Transaction Borrowing Loan, actually sold, conveyed, contributed or otherwise transferred to an SPV pursuant to such Securitization Transaction, and any Proceeds of the foregoing, provided that such sale, conveyance, contribution or transfer complies with Section 7.14 hereof”.

(b) Section 7.01 of the Credit Agreement is hereby amended by deleting the “and” at the end of clause (k) therein; deleting the “.” at the end of clause (l) therein and substituting “; and” at the end therefor; and adding a new clause (m) thereafter as follows:

“(m) Liens granted pursuant to a Warrant Pledge and Security Agreement and a Warrant Participation Agreement.”

(H) Amendment to Disposition of Assets Covenant . Section 7.02 of the Credit Agreement is hereby amended by inserting “(x)” following the word “except” in the fifth line thereof and the following immediately before the “.” at the end thereof:

“; (y) sales, contributions, conveyances or other transfers of Securitization Transaction Borrowing Loans, provided that such sale, conveyance, contribution or transfer complies with Section 7.14 hereof; and (z) dispositions of interests or participations in Warrants made pursuant to a Warrant Participation Agreement and in compliance with the proviso to the definition thereof.”

(I) Amendment to Loans and Investments Covenant . Section 7.04 of the Credit Agreement is hereby amended by deleting the “and” at the end of clause (g) therein; deleting the “.” at the end of clause (h) therein and substituting “; and” at the end therefor; and adding a new clause (i) thereafter as follows:

“(i) Investments by the Company or a Subsidiary in an SPV in connection with a Securitization Transaction.”

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(J) Amendment to Limitation on Indebtedness Covenant . Section 7.05 of the Credit Agreement is hereby amended by deleting the “and” at the end of clause (d) therein; deleting the “.” at the end of clause (e) therein and substituting “; and” at the end therefor; and adding a new clause (f) thereafter as follows:

“(f) Indebtedness incurred pursuant to a Securitization Transaction.”

(K) Amendment to Transactions with Affiliates Covenant . Section 7.06 of the Credit Agreement is hereby amended by inserting the following at the end of clause (i) and immediately preceding the “;” at the end thereof: “including a Securitization Transaction”.

(L) Amendment to Contingent Obligations Covenant . Section 7.08 of the Credit Agreement is hereby amended by deleting the “and” at the end of clause (b) therein; deleting the “.” at the end of clause (c) therein and substituting “; and” at the end therefor; and adding a new clause (d) thereafter as follows:

“(d) Contingent Obligations consisting of unsecured guarantees provided by the Company or a Subsidiary in connection with a Securitization Transaction.”

(M) Amendment to SBIC Subsidiary Covenant . Section 7.13 of the Credit Agreement is hereby amended by deleting the heading of “ SBIC Subsidiary ” and substituting “ Subsidiaries ” therefor and inserting “or any SPV in connection with a Securitization Transaction” immediately preceding the “.” at the end thereof.

(N) Addition of New Covenant . A new Section 7.14 of the Credit Agreement is hereby added immediately after Section 7.13 as follows:

“7.14 Transfer of Loans to an SPV . The Company shall not sell, convey, contribute or otherwise transfer any Borrowing Loan or Related Securitization Property to an SPV in connection with a Securitization Transaction, or grant a Lien in a Securitization Transaction Borrowing Loan unless (i) the foregoing proceeds shall constitute Collateral hereunder and under the Pledge and Security Agreement and shall be deposited upon receipt into a “deposit account” (as such term is defined in the UCC) subject to the Pledge and Security Agreement, (ii) the sale, conveyance, contribution or transfer of such Securitization Transaction Borrowing Loan to an SPV shall be made on not less than two (2) Business Days’ prior written notice to the Administrative Agent, and (iii) such notice shall identify the Securitization Transaction Borrowing Loan, the aggregate outstanding amount of such Securitization Transaction Borrowing Loan, to the extent requested by the Administrative Agent in writing, the amount of the proceeds intended to be received by the Company in connection with such sale, conveyance, contribution or transfer and the interest or participation, if any, in any Warrants being received by any Person pursuant to a Warrant Participation Agreement in connection therewith, and shall confirm that as a result of such sale, conveyance, contribution or transfer no Default or Event of Default shall occur and be continuing.

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(O) Amendment to Event of Default . Section 8.01(c) of the Credit Agreement is hereby amended by inserting “, 7.14” immediately after the reference to “6.02” in clause (ii) thereof.

(P) Amendment to Collateral Matters . Section 9.10 of the Credit Agreement is hereby amended by adding a new Section 9.10(d) at the end thereof as follows:

“(d) Notwithstanding anything to the contrary contained herein (including the requirements of Section 7.14) or in the other Loan Documents, the Lien of Administrative Agent and the Lenders shall automatically be released, without further action by the Administrative Agent or any Lender, in (x) a Securitization Transaction Borrowing Loan, upon the sale, conveyance, contribution or transfer of such Securitization Transaction Borrowing Loan to an SPV in connection with a Securitization Transaction and (y) any Warrant upon the transfer of any interest or participation therein pursuant to a Warrant Participation Agreement, to the extent, but only to the extent, of such interest or participation.”

(Q) Amendment to Governing Law : Section 10.15 of the Credit Agreement is hereby amended by deleting the words “THE LAW OF THE STATE OF NEW YORK” and substituting therefor the words “THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES”.

3. Amendments to Pledge and Security Agreement .

(A) Amendment to Exhibit A . Exhibit A to the Pledge and Security Agreement is hereby amended by adding the following at the end thereof:

“Notwithstanding anything to the contrary contained in this Exhibit A or in the Pledge and Security Agreement, after August 1, 2005, the Collateral shall not include (x) any Securitization Transaction Borrowing Loan that is sold, conveyed, contributed or otherwise transferred to an SPV in connection with a Securitization Transaction or (y) any interest or participation in Warrants transferred pursuant to a Warrant Participation Agreement, and any proceeds thereof (all such capitalized terms not otherwise defined being as defined in the Credit Agreement).

(B) Amendment to Covenants Relating to Collateral .

Section 5(b) of the Pledge and Security Agreement is hereby amended by deleting the words “(the ‘ Custody Agreement’ )” appearing in lines 7 and 8 and substituting the following therefor:

“or, in the case of any Warrants in which an interest or participation has been transferred pursuant to a Warrant Participation Agreement, substantially in the form attached hereto as Exhibit D (each a ‘ Custody Agreement ’)”.

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Section 5(c) of the Pledge and Security Agreement is hereby amended by deleting such provision in its entirely and substituting the following therefor:

“(c) As of the August 1, 2005, Grantor maintains no ‘deposit account’ (as such term is defined in the New York UCC) other than (i) Business Checking Account number 4720009656, at Union Bank of California, N.A. subject to the Special Deposit Account Control Agreement dated as of April 12, 2005 as amended by that First Amendment dated as of August 1, 2005 and (ii) Concentration Account No. at the U.S. Bank National Association (‘ U.S. Bank’ ) subject to the Intercreditor and Concentration Account Administration Agreement, dated as of August 1, 2005 by and among Deposit Bank, Grantor and each Financing Agent party thereto. If, at any time, Grantor shall open any other ‘deposit account’ (as defined in the New York UCC), Grantor agrees that it shall promptly, but in no event later than the time funds of the Grantor are first deposited in, or credited to, such deposit account, cause the bank at which such deposit account is maintained, to execute an agreement in the form of Exhibit E hereto (the ‘ Deposit Account Control Agreement’ ) (or other agreement reasonably acceptable to Secured Party) in order to perfect the security interest of Secured Party in the deposit account pursuant to the Applicable UCC; provided , however , that the foregoing shall not apply to a ‘deposit account’ maintained by the Company or a Subsidiary in connection with a Securitization Transaction.” ‘

There is hereby added an Exhibit D to the Pledge and Security Agreement in the form of the Warrant Pledge and Security Agreement attached hereto as Annex II .

Exhibit D to the Pledge and Security Agreement is hereby redesignated Exhibit E .

(C) Consent to UCC-3 Partial Release . Upon the effectiveness of this Amendment as provided in Section 4 hereof, the Administrative Agent hereby consents to the release of the Related Securitization Property pursuant to a UCC-3 financing statement to be filed in the Maryland Secretary of State office in the form attached hereto as Schedule I .

4. Effectiveness . This Amendment shall be effective upon the delivery to Administrative Agent of signature pages to this Amendment signed on behalf of the Company, the Administrative Agent and each Lender.

5. Representations and Warranties . Company hereby represents and warrants to Administrative Agent and each Lender as follows:

(A) Company is a corporation duly organized, validly existing and in good standing under the laws of the state of Maryland;

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(B) Company has the power and authority to execute, deliver and perform its obligations under this Amendment;

(C) Company’s execution, delivery and performance of this Amendment has been duly authorized by all necessary action;

(D) this Amendment constitutes the legal, valid and binding obligation of Company, enforceable against Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditor’s rights generally or by equitable principles relating to enforceability; and

(E) no Default or Event of Default has occurred and is continuing.

6. No Waiver . Nothing contained herein shall be deemed to constitute a waiver of compliance with any term or condition contained in the Credit Agreement or any of the other Loan Documents or constitute a course of conduct or dealing among the parties. Except as amended hereby, the Credit Agreement and other Loan Documents remain unmodified and in full force and effect. All references in the Loan Documents to the Credit Agreement shall be deemed to be references to the Credit Agreement as amended hereby.

7. Counterparts . This Amendment may be executed by one or more of the parties to this Amendment and any number of separate counterparts, each of which when so executed, shall be deemed an original and all said counterparts when taken together shall be deemed to constitute but one and the same instrument.

8. Successors and Assigns . This Amendment shall be binding upon and inure to the benefit of Company, Administrative Agent, the Lenders and their successors and assigns.

9. Further Assurance . The Company hereby agrees from time to time, as and when requested by the Administrative Agent, to execute and deliver or cause to be executed and delivered, all such documents, instruments and agreements and to take or cause to be taken such further or other action as the Administrative Agent may reasonably deem necessary or desirable in order to carry out the intent and purposes of this Amendment, the Credit Agreement and the Loan Documents.

10. GOVERNING LAW AND JURISDICTION . THIS AMENDMENT SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES. The provisions of Section 10.15 of the Credit Agreement shall apply to this Amendment.

11. Severability . Wherever possible, each provision of this Amendment shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Amendment shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Amendment.

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IN WITNESS WHEREOF , the parties have executed this Amendment as of the date set forth above.

SCHEUDLE I

Form of UCC-3 Amendment and Partial Release

ANNEX I

Definition of Related Securitization Property

“ Related Securitization Property ,” means all of the right, title and interest, of the Company, any Subsidiary or the respective SPV in, to and under any and all of the following:

This Partial Release of the Financing Statement terminates the Secured Party’s right, title and interest in, to and under any and all of the following:

All of the right, title and interest, whether now owned or hereafter acquired or arising, and wherever located, of the Company in and to the property described in clauses (i) through (xii) below and all accounts, cash and currency, chattel paper, tangible chattel paper, electronic chattel paper, copyrights, copyright licenses, equipment, fixtures, contract rights, general intangibles, instruments, certificates of deposit, certificated securities, uncertificated securities, financial assets, securities entitlements, commercial tort claims, deposit accounts, inventory, 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) pursuant to the Loan Sale Agreement (the “Loan Sale Agreement”) dated as of August 1, 2005, between the Company and Hercules Funding I LLC (the “Depositor”), all Assigned Assets sold, assigned or conveyed to the Depositor and identified in each related LSA Assignment delivered pursuant to the Loan Sale Agreement, and all payments paid in respect thereof and all monies due, to become due or paid in respect thereof accruing on and after the Closing Date, in each case as they arise after the Closing Date, but not including the Retained Interest or Excluded Amounts;

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

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

(iv) 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 payment of any Transferred Loan, together with all UCC financing statements or similar filings relating thereto;

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

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

(vii) all Insurance Policies;

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

(ix) the Collection Account, the Principal Collections Account, the Distribution Account, and the Concentration Account (to the extent the amounts on deposit thereto or credited thereto relate to the Collateral), together with all funds held in or credited to such accounts, and all certificates and instruments (to the extent the amounts on deposit in the Concentration Account or credited to the Concentration Account relate to the Collateral), if any, from time to time representing or evidencing each of the foregoing or such funds;

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

(xi) the Securitization Pledged Warrants as defined in the Warrant Pledge and Security Agreement; and

(xii) the proceeds of each of the foregoing.

For the avoidance of doubt, (x) the term “related to” as used in the introduction to this definition means related in particular to (or to the extent so related) and not related to the business of the Company generally; and (y) the term “related to” as used in clause (ix) does not refer to, and the term “proceeds” as used in clause (xii) does not include, any proceeds received by the Company, directly or indirectly, in connection with the sale, conveyance, contribution or other transfer of a transferred Loan by the Company to the Depositor.

For the purposes of this Annex I, capitalized but undefined terms shall have the meaning assigned to them in the Sale and Servicing Agreement, dated as of August 1, 2005, among the Company as originator and servicer, Hercules Funding Trust I as issuer, the Depositor as depositor, U.S. Bank National Association as indenture trustee and collateral custodian, and Lyon Financial Services, Inc. d/b/a U.S. Bank Portfolio Services, Inc. as backup servicer, a copy of which may be obtained at the office of the Company.

ANNEX II

Form of Warrant Pledge and Security Agreement

Exhibit 99.3

LOAN SALE AGREEMENT

between

HERCULES FUNDING I LLC

as Depositor

and

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

as Originator

Dated as of August 1, 2005

HERCULES FUNDING TRUST I

ASSET BACKED NOTES

- i -

LOAN SALE AGREEMENT

LOAN SALE AGREEMENT, dated as of August 1, 2005 (this “ Agreement ”), between HERCULES TECHNOLOGY GROWTH CAPITAL, INC., a Maryland corporation (the “ Originator ”), and HERCULES FUNDING I LLC, a Delaware limited liability company (the “ Depositor ”).

W I T N E S S E T H

WHEREAS, the Originator owns and from time to time originates certain commercial loans secured by, among other things, accounts receivable, inventory, real estate, and/or other tangible or intangible property;

WHEREAS, the Originator is the owner of 100% of the membership interests of the Depositor;

WHEREAS, the parties hereto desire that on each Transfer Date the Originator sell all its right, title and interest in and to the Assigned Assets identified in the related LSA Assignment to the Depositor pursuant to the terms of this Agreement; and

WHEREAS, on the Closing Date, to the extent of any Assigned Assets sold hereunder on the Closing Date, and on each Transfer Date, with respect to the Assigned Assets identified in the applicable LSA Assignment the Depositor will sell and assign all of its right, title and interest in and to the Assigned Assets and its related rights under this Agreement to Hercules Funding Trust I, as Issuer (the “ Issuer ”), and on the Closing Date the Depositor will further assign its related rights under this Agreement to the Issuer, all pursuant to the terms of the Sale and Servicing Agreement, dated as of August 1, 2005 (the “ Sale and Servicing Agreement ”), among the Issuer, the Depositor, the Originator, the Servicer, U.S. Bank National Association, as Collateral Custodian (in such capacity, the “ Collateral Custodian ”), as Indenture Trustee (in such capacity, the “ Indenture Trustee ”) on behalf of the related Noteholders and Lyon Financial Services, Inc. doing business as U.S. Bank Portfolio Services, as Backup Servicer (in such capacity, the “ Backup Servicer ”);

NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS; CONSTRUCTION

Section 1.01 Definitions . Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the meanings specified in this Article. All other capitalized terms used but not defined herein shall have the meanings assigned thereto in the Sale and Servicing Agreement.

“ Assigned Assets ”: All right, title and interest, whether now owned or hereafter acquired or arising, and wherever located, of the Originator in and to the property described in clauses (i) through (x) below and all accounts, cash and currency, chattel paper, tangible chattel

paper, electronic chattel paper, copyrights, copyright licenses, equipment, fixtures, contract rights, general intangibles, instruments, certificates of deposit, certificated securities, uncertificated securities, financial assets, securities entitlements, commercial tort claims, deposit accounts, inventory, 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 Transferred Loans, and all monies due or to become due in payment of such Transferred Loans on and after the related Transfer Date, including but not limited to all Collections and all obligations owed to the Originator in connection with the Transferred Loans;

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

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

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

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

(vi) all Insurance Policies;

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

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

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

(x) the proceeds of each of the foregoing.

“ Purchase Price ”: Has the meaning provided in Section 2.01(b) .

Section 1.02 Construction . For purposes of this Agreement: (i) the singular includes the plural and the plural includes the singular; (ii) words importing any gender include the other genders; (iii) the words “and” and “or” are used in the conjunctive or disjunctive as the sense and circumstances may require, (iv) references to “writing” include printing, typing, lithography and other means of reproducing words in a visible form; (v) references to agreements and other contractual instruments include all subsequent amendments thereto or changes therein entered into in accordance with their respective terms and not prohibited by this Agreement or the Basic Documents; (vi) references to Persons include their permitted successors and assigns; (vii) any form of the word “include” shall be deemed to be followed by the words “without limitation”; (viii) the phrase “in and to” shall be deemed to include “under” and “with respect to” whenever appropriate; (ix) unless the context clearly requires otherwise, the word “finance” shall be deemed to include “refinance”; (x) the words “herein”, “hereof’ and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision; and (xi) Article, Section, Schedule and Exhibit references, unless otherwise specified, refer to Articles and Sections of and Schedules and Exhibits to this Agreement. 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.”

ARTICLE II

SALE OF THE ASSIGNED ASSETS; PAYMENT OF PURCHASE PRICE

Section 2.01 Sale of the Assigned Assets to the Depositor . (a) On the terms and conditions of this Agreement, on each Transfer Date during the Revolving Period, the Originator agrees to offer for sale and to sell, the Assigned Assets described in the related LSA Assignment substantially in the form attached hereto as Exhibit A (the “ LSA Assignment ”) to the Depositor and to deliver the related Loan Documents to or at the direction of the Depositor and the Depositor agrees to purchase such Assigned Assets offered for sale by the Originator.

(b) The purchase price for each Transferred Loan and the Related Property and other collateral constituting part of the Assigned Assets with respect to such Transferred

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(c) On each Transfer Date, the Originator shall convey to the Depositor the Assigned Assets and the other property and rights related thereto described in the related LSA Assignment to be delivered by the Originator, and, upon the satisfaction of each of the conditions set forth in this Section 2.01 (c) and in Section 2.08 of the Sale and Servicing Agreement on or prior to such Transfer Date, the Depositor shall pay or cause to be paid to or at the direction of the Originator, the aggregate Purchase Price in respect of the Assigned Assets sold hereunder on such Transfer Date.

(i) the Originator shall have provided to the Servicer for deposit in the related Collection Account all collections received with respect to each Transferred Loan constituting a part of the Assigned Assets relating to the period after the applicable Transfer Date;

(ii) the Originator shall, at its own expense, within one Business Day after each Transfer Date, indicate in its computer files that the Assigned Assets identified in the related LSA Assignment have been sold to the Depositor pursuant to this Agreement;

(iii) the Originator shall have taken any action requested by the Indenture Trustee, the Issuer or the Noteholders required to maintain the ownership interest of the Issuer in the Assigned Assets and the first perfected security interest therein of the Indenture Trustee;

(iv) the Originator shall have used no selection procedures that identified any of the Loans identified in the related LSA Assignment as being less desirable or valuable than other comparable Loans originated or acquired by the Originator; and such Loans collectively shall be representative of the Originator’s portfolio of Loans; and

(v) all conditions precedent to any advance of a Borrowing to be made by the Initial Noteholder pursuant to the Note Purchase Agreement shall have been fulfilled as of such date.

(d) Subject to Section 6.07 , the parties hereto intend that each of the conveyances contemplated hereby be sales from the Originator to the Depositor of all of the Originator’s right, title and interest in and to the Assigned Assets and other property described above. In the event the transactions set forth herein are deemed not to be a sale, the Originator hereby grants to the Depositor a security interest in all of the Originator’s right, title and interest in, to and under the Assigned Assets, whether now existing or hereafter created, to secure all of the Originator’s obligations hereunder, and this Agreement shall constitute a security agreement under applicable law.

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Section 2.02 Obligations of Originator .

(a) On or prior to the Closing Date and each Transfer Date, as applicable, the Initial Noteholder shall have received evidence satisfactory to it of (i) the completion of all recordings, registrations and filings as may be necessary or, in the opinion of the Initial Noteholder, reasonably desirable to perfect or evidence the assignment by the Originator to the Depositor of the Originator’s ownership interest in the applicable Assigned Assets to be assigned to the Depositor on such date, including, without limitation, the applicable Transferred Loans and Related Property and other collateral constituting part of the Assigned Assets with respect to such Transferred Loans, (ii) the completion of all recordings, registrations and filings as may be necessary or, in the opinion of the Initial Noteholder, reasonably desirable to perfect or evidence the assignment by the Depositor to the Issuer of the Depositor’s ownership interest in the Assigned Assets and (iii) the completion of all recordings, registrations and filings as may be necessary or, in the opinion of the Initial Noteholder, reasonably desirable to perfect or evidence the grant of a first priority perfected security interest in the Assigned Assets in favor of the Indenture Trustee as Collateral pursuant to the Indenture. The Originator agrees to file all UCC-1 financing statements (and all continuation statements and amendments thereto) necessary to perfect the interest of the Depositor and the Issuer and the Indenture Trustee in and to the Assigned Assets and to take such other action as may be necessary or, in the opinion of the Depositor or the Initial Noteholder, desirable to perfect or evidence the Depositor’s, the Issuer’s and Indenture Trustee’s interest in the Assigned Assets conveyed under the Basic Documents.

(b) In connection with each sale and contribution of a Transferred Loan hereunder, the Originator shall deliver to, and deposit with the Collateral Custodian, as the designated agent of the Indenture Trustee, as assignee of the Depositor and the Issuer, on or before the related Transfer Date, the Loan File with respect to each Transferred Loan conveyed on such Transfer Date.

It is understood and agreed that the obligations set forth in this Section 2.02(b) shall survive delivery of the Loan Files to the Collateral Custodian (as the designated agent of the Indenture Trustee) and shall inure to the benefit of the Securityholders, the Depositor, the Servicer, the Backup Servicer, the Indenture Trustee and the Issuer.

(c) [Reserved].

(d) The Originator hereby further confirms to the Depositor that, within one Business Day after the Closing Date and each Transfer Date, it shall cause the portions of the Originator’s electronic ledger relating to the Assigned Assets to be clearly and unambiguously marked to indicate that the Assigned Assets have been sold to the Depositor hereunder, the Purchased Assets have been sold by the Depositor to the Issuer under the Sale and Servicing Agreement, and the Purchased Assets have been pledged to the Indenture Trustee by the Issuer as Collateral pursuant to the Indenture.

(e) On and after each Transfer Date, the Issuer shall own the Purchased Assets which have been identified in the related S&SA Assignment as being sold by the Depositor to the Issuer under the Sale and Servicing Agreement and the Originator shall not take

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any action inconsistent with such ownership and shall not claim any ownership interest in any such conveyed Purchased Asset.

ARTICLE III

REPRESENTATIONS AND

WARRANTIES; REMEDIES FOR BREACH

Section 3.01 Originator’s Representations and Warranties . (a) The Originator hereby makes each of the representations and warranties to the Depositor as of the Closing Date and as of each Transfer Date as are set forth in Section 3.02 of the Sale and Servicing Agreement.

(b) The Originator further hereby makes each of the representations and warranties set forth in Section 3.03 of the Sale and Servicing Agreement as of the Closing Date with respect to the Assigned Assets conveyed on the Closing Date, if any, and as of each Transfer Date with respect to the Assigned Assets conveyed on each Transfer Date.

(c) Except as otherwise expressly set forth in the Basic Documents, it is understood and agreed that the representations and warranties set forth in this Section 3.01 shall survive delivery of the respective Loan Documents and Loan Files to the Collateral Custodian (as the designated agent of the Indenture Trustee) and shall inure to the benefit of the Securityholders, the Depositor, the Servicer, the Backup Servicer, the Indenture Trustee and the Issuer. Upon the discovery by the Servicer, the Backup Servicer, the Collateral Custodian, the Indenture Trustee, the Originator, the Depositor or any Securityholder of a breach of any of the representations and warranties of the Originator set forth in Section 3.02 or 3.03 of the Sale and Servicing Agreement that materially and adversely affects the value of any of the Assigned Assets or Purchased Assets or the interests of the Securityholders in any Collateral or the Securities with respect to which such representation or warranty is made, any party discovering such breach shall give prompt written notice to the others.

Section 3.02 Retransfer of Purchased Assets .

If on any day a Transferred Loan is (or becomes) an Ineligible Loan, no later than the earlier of the Originator obtaining actual knowledge of such Transferred Loan becoming an Ineligible Loan or receipt by the Originator from the Depositor of written notice thereof, the Originator shall within ten Business Days either:

(a) make a deposit to the Collection Account (for application pursuant to Section 5.01(c)(4) or (5), as applicable, of the Sale and Servicing Agreement) in immediately available funds in an amount equal to the Retransfer Price with respect to such Transferred Loan; or

(b) subject to the satisfaction of the conditions in Section 3.03 , substitute for such Ineligible Loan, a Substitute Loan.

(c) In either of the foregoing instances, the Originator may (in its discretion) accept retransfer of each such Ineligible Loan and any Related Property. Upon

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confirmation of the deposit of such Retransfer Price into the Collection Account or the delivery by the Originator of a Substitute Loan for each Ineligible Loan the Depositor shall, automatically and without further action be deemed to transfer, assign and set–over to the Originator, without recourse, representation or warranty, all the right, title and interest of the Depositor in, to and under such Ineligible Loan and all future monies due or to become due with respect thereto, the Related Property and all Collections with respect to such Ineligible Loan, all rights to security for any such Ineligible Loan and all Proceeds and products of the foregoing. The Depositor shall, at the sole expense of the Originator, execute such documents and instruments of transfer as may be prepared by the Originator and take other such actions as shall reasonably be requested by the Originator to effect the transfer of such Ineligible Loan pursuant to this Section 3.02 .

Section 3.03 Substitutions .

(a) Substitution of Loans . On any Business Day during the Revolving Period (and after the Revolving Period at the discretion of the Depositor), the Originator may, subject to the conditions set forth in this Section 3.03 and subject to the other restrictions contained herein, replace any Transferred Loan with one or more Eligible Loans (each, a “ Substitute Loan ”), provided that no such replacement shall occur unless each of the following conditions is satisfied as of the date of such replacement and substitution:

(i) the Originator has recommended to the Depositor in writing that the Transferred Loan to be replaced should be replaced (each a “ Replaced Loan ”);

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

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

(iv) all representations and warranties contained in Section 3.01 shall be true and correct as of the date of substitution of any such Substitute Loan;

(v) the substitution of any Substitute Loan does not cause a Default, a Trigger Event or an Event of Default to occur;

(vi) after giving effect to the proposed substitution, the sum of the Outstanding Loan Balances of all Substitute Loans does not exceed 15% of the highest Aggregate Outstanding Loan Balance for any month during the 12 month period immediately preceding the applicable date of determination (or such lesser number of months as shall have elapsed as of such date of determination);

(vii) after giving effect to the proposed substitution, the sum of the Outstanding Loan Balances of all Substitute Loans substituted for Defaulted Loans and Charged-Off Loans shall not exceed 10% of the highest Aggregate Outstanding Loan Balance of any month during the 12 month period immediately preceding the applicable date of determination (or such lesser number of months as shall have elapsed as of such date of determination);

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(viii) the remaining maturity of the Substitute Loan is less than or equal to the remaining maturity of the Replaced Loan;

(ix) the Weighted Average Life of such Substitute Loan is less than or equal to that of the Replaced Loan;

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

(xi) all actions or additional actions (if any) necessary to perfect the security interest and assignment of such Substitute Loan and Related Property constituting part of the Assigned Assets related to such Substitute Loan to the Depositor shall have been taken as of or prior to the Substitution Date;

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

(xiii) the Loan Rate on the Substitute Loan is not less than the Loan Rate on the Replaced Loan;

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

(xv) the Originator shall deliver to the Depositor on the date of such substitution a certificate of a Responsible Officer certifying that each of the foregoing is true and correct as of such date.

(b) In connection with any such substitution, Depositor, shall, automatically and without further action (unless otherwise necessary or requested by the Originator), be deemed to transfer to the Originator, free and clear of any Lien created by this Agreement, all of the right, title and interest of the Depositor, in, to and under such Replaced Loan, but without any representation and warranty of any kind, express or implied.

Section 3.04 Deemed Collections .

(a) If on any day the Depositor does not own or have a valid and perfected first priority security interest in any Transferred Loan and Related Property (subject to Permitted Liens), if within 30 days after the earlier of the Originator’s receipt of notice from the Depositor or the Originator becoming aware thereof the Originator has failed to cure such breach (if cure is reasonably possible and otherwise immediately upon receipt of such notice or upon the Originator becoming aware), the Originator shall be deemed to have received on such 30 ^th day (or such earlier day, as applicable) a collection (a “ Deemed Collection ”) of such Transferred Loan in full and shall on such day pay to the Depositor, an amount equal to (x) the Retransfer Price with respect to such Transferred Loan, plus (y) any other costs and expenses related to the retransfer of such Transferred Loan and any Related Property contemplated by this Section 3.03 .

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(b) In connection with any such Deemed Collection, the Depositor shall automatically and without further action (unless otherwise necessary or requested by the Originator), be deemed to release the Lien on such Transferred Loan and any Related Property created by this Agreement and transfer to the Originator, free and clear of any Lien created by this Agreement, all of the right, title and interest of the Depositor, in, to, and under the Transferred Loan and any Related Property with respect to which the Depositor has received such Deemed Collection, but without any recourse, representation and warranty of any kind, express or implied.

Section 3.05 Repurchase Limitations .

The Originator and Depositor agree that the Originator and any Affiliate of the Originator may repurchase any Assigned Assets only from the Depositor in the case of (a) an Optional Sale or (b) a repurchase or retransfer of any Assigned Assets pursuant to Section 3.01 , Section 3.02 or Section 3.04 .

ARTICLE IV

ORIGINATOR COVENANTS

Section 4.01 Covenants of the Originator . The Originator hereby covenants that except for the sales hereunder, the Originator will not sell, pledge, assign or transfer to any other Person, or grant, create, incur, assume or suffer to exist any lien on, any Assigned Asset or any interest therein; and the Originator will defend the right, title and interest of the Issuer, as assignee of the Depositor, in, to and under the Assigned Assets against all claims of third parties claiming through or under the Originator.

Whenever and so often as reasonably requested by the Depositor or the Initial Noteholder, the Originator promptly will execute and deliver or cause to be executed and delivered all such other and further instruments, documents, or assurances, and promptly do or cause to be done all such other things, as may be necessary and reasonably required to vest more fully in the requesting party all rights, interests, powers, benefits, privileges and advantages conferred or intended to be conferred upon it by this Agreement.

ARTICLE V

TERMINATION

Section 5.01 Termination . The respective obligations and responsibilities of the Originator and the Depositor created hereby shall terminate upon the Termination Date.

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ARTICLE VI

MISCELLANEOUS PROVISIONS

Section 6.01 Amendment . This Agreement may be amended from time to time with the prior written consent of the Initial Noteholder, in its sole discretion, by a written agreement signed by the Originator and the Depositor.

Section 6.02 GOVERNING LAW; JURISDICTION . THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY APPELLATE COURT HAVING JURISDICTION TO REVIEW THE JUDGMENTS THEREOF. EACH OF THE PARTIES HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.

Section 6.03 Notices . All demands, notices and communications hereunder shall be in writing and shall be deemed to have been duly given upon receipt thereof if (i) personally delivered or mailed by registered mail, postage prepaid, or (ii) transmitted by facsimile (with a copy delivered by overnight courier) upon electronic confirmation of receipt of such transmission, as follows:

(a) if to the Originator:

Hercules Technology Growth Capital, Inc.

525 University Avenue, Suite 700

Palo Alto, California 94301

Attention: Manuel A. Henriquez, Chief Executive Officer

Facsimile: 650-473-9194

and

Hercules Technology Growth Capital, Inc.

3702 River Road

Franklin Park, Illinois 60131

Attention: Scott Harvey, Chief Legal Officer

Facsimile: 866-828-6687

or, such other addresses, facsimile numbers and confirmation numbers as may hereafter be furnished to the Depositor in writing by the Originator.

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(b) if to the Depositor:

Hercules Funding I LLC

525 University Avenue, Suite 700

Palo Alto, California 94301

Attention: Manuel A. Henriquez, Chief Executive Officer

Facsimile: 650-473-9194

and

Hercules Funding I LLC

3702 River Road

Franklin Park, Illinois 60131

Attention: Scott Harvey, Chief Legal Officer

Facsimile: 866-828-6687

or such other addresses, facsimile numbers and confirmation numbers as may hereafter be furnished to the Originator in writing by the Depositor.

Section 6.04 Severability of Provisions . If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be held invalid for any reason whatsoever, then such covenants, agreements, provisions or terms shall he deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement.

Section 6.05 Counterparts . This Agreement may be executed in one or more counterparts and by the different parties hereto on separate counterparts, each of which, when so executed, shall be deemed to be an original and such counterparts, together, shall constitute one and the same agreement.

Section 6.06 Further Agreements . The Originator and the Depositor each agree to execute and deliver to the other such amendments to documents and such additional documents, instruments or agreements as reasonably may be necessary or appropriate to effectuate the purposes of this Agreement or in connection with the offering of securities representing interests in the Assigned Assets.

Section 6.07 Intention of the Parties . It is the intention of the parties, other than for federal, state and local income and franchise tax purposes, that the Depositor is purchasing, and the Originator is selling, the Assigned Assets rather than pledging the Assigned Assets to secure a loan by the Depositor to the Originator. As of the Closing Date (to the extent of any Assigned Assets sold hereunder on the Closing Date) and each Transfer Date, the sale of the Assigned Assets conveyed by the Originator on the Closing Date or such Transfer Date, as the case may be, shall be reflected on the balance sheets and other financial statements of the Depositor and the Originator, as the case may be, as a sale of such Assigned Assets by the Originator to the Depositor, in accordance with GAAP.

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Section 6.08 Successors and Assigns; Assignment of Loan Sale Agreement . This Agreement shall bind and inure to the benefit of and be enforceable by the Originator, the Depositor, the Indenture Trustee and the Noteholders. The obligations of the Originator under this Agreement cannot be assigned or delegated to a third party without the consent of each of the Depositor and the Initial Noteholder, which consent shall be at each such Person’s sole discretion. The parties hereto acknowledge that the Depositor is acquiring the Assigned Assets for the purpose of selling them to the Issuer that will issue the related Notes, which will be secured by such Assigned Assets. As an inducement to the Depositor to purchase the Assigned Assets and to the Initial Noteholder to purchase the Note, the Originator acknowledges and consents to the assignment by the Depositor to the Issuer of all of the Depositor’s rights against the Originator pursuant to this Agreement and to the enforcement or exercise of any right or remedy against the Originator pursuant to this Agreement by the Indenture Trustee, for the benefit of the Issuer and the Noteholders. Such enforcement of a right or remedy by the Indenture Trustee, for the benefit of the Issuer and the Noteholders, shall have the same force and effect as if the right or remedy had been enforced or exercised by the Depositor directly.

Section 6.09 Survival . The representations and warranties set forth in Article III and the provisions of Articles II, IV, V and VI shall survive the purchase of the Assigned Assets hereunder, the sale of the Purchased Assets by the Depositor to the Issuer pursuant to the Sale and Servicing Agreement and the pledge of such Purchased Assets by the Issuer to the Indenture Trustee as Collateral pursuant to the Indenture.

Section 6.10 Successors and Assigns . This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns.

[Signature page to follow]

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IN WITNESS WHEREOF, the Originator and the Depositor have caused this Loan Sale Agreement to be duly executed on their behalf by their respective officers thereunto duly authorized as of the day and year first above written.

EXHIBIT A

FORM OF LSA ASSIGNMENT

ASSIGNMENT NO.              OF LOANS (this “ LSA Assignment ”), dated August 1, 2005 the “ Transfer Date ”), by HERCULES TECHNOLOGY GROWTH CAPITAL, INC. (the “ Originator ”) to HERCULES FUNDING I LLC, (the “ Depositor ”) pursuant to the Loan Sale Agreement referred to below.

W I T N E S S E T H :

WHEREAS, the Originator and the Depositor are the parties to the Loan Sale Agreement, dated as of August 1, 2005 (the “ Agreement ”), hereinafter as such agreement may have been, or may from time to time be, amended, supplemented or otherwise modified;

WHEREAS, pursuant to the Agreement, the Originator wishes to sell the Assigned Assets to the Depositor in exchange for cash consideration and other good and valid consideration, the receipt and sufficiency of which is hereby acknowledged; and

WHEREAS, the Depositor is willing to acquire such Assigned Assets subject to the terms and conditions hereof and of the Agreement;

NOW THEREFORE, the Originator and the Depositor hereby agree as follows:

1. Defined Terms . All capitalized terms defined in the Agreement and used herein shall have such defined meanings when used herein, unless otherwise defined herein.

2. Designation of Loans . The Originator does hereby deliver herewith a Loan Schedule containing a true and complete list of each Loan to be conveyed on the Transfer Date. Such list is marked as Schedule A to this LSA Assignment and is hereby incorporated into and made a part of this LSA Assignment.

3. Conveyance of Assigned Assets . The Originator hereby sells, contributes and assigns to the Depositor, without recourse and on a servicing released basis, all of the right, title and interest of the Originator in and to the Assigned Assets (and all proceeds thereof and collections thereon) including the Loans listed on the Loan Schedule attached hereto and all Related Property and other related collateral constituting a part of the Assigned Assets related to such Loan, including, without limitation, all Collections on or with respect to the Loans, in each case arising on or after the related Transfer Date.

4. Depositor Acknowledges Assignment . As of the Transfer Date, pursuant to this LSA Assignment and Section 2.01(a) of the Agreement, the Depositor acknowledges its receipt of the Loans listed on the attached Loan Schedule and all Related Property and other related collateral constituting a part of the Assigned Assets related to such Loan.

5. Acceptance of Rights But Not Obligations . The foregoing sale, contribution and assignment does not, and is not intended to, result in a creation or an assumption by the Depositor of any obligation of the Originator or any other Person in connection with this LSA

A-1

Assignment or under any agreement or instrument relating thereto except as specifically set forth herein.

6. Originator Acknowledges Receipt of Purchase Price . The Originator hereby acknowledges receipt of the aggregate Purchase Price or that it has otherwise been distributed at its direction.

7. Conditions Precedent . The conditions precedent in Section 2.01(c) of the Agreement have been satisfied.

8. Amendment of the Loan Sale Agreement . The Loan Sale Agreement is hereby amended by providing that all references to the “Loan Sale Agreement,” “this Agreement” and “herein” shall be deemed from and after the Transfer Date to which this LSA relates to be a dual reference to the Loan Sale Agreement as supplemented by this LSA Assignment. Except as expressly amended hereby, all of the representations, warranties, terms, covenants and conditions of the Loan Sale Agreement shall remain unamended and the Loan Sale Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms and except as expressly provided herein, this LSA Assignment shall not constitute or be deemed to constitute a waiver of compliance with or consent to noncompliance with any term or provision of the Loan Sale Agreement.

9. Counterparts . This LSA Assignment may be executed in any number of counterparts all of which taken together shall constitute one and the same instrument.

[Signature page to follow]

A-2

IN WITNESS WHEREOF, the Originator and the Depositor have caused this LSA Assignment to be duly executed on their behalf by their respective officers thereunto duly authorized as of the day and year first above written.

Schedule A

[Loan Schedule]

Exhibit 99.4

SALE AND SERVICING AGREEMENT

among

HERCULES FUNDING TRUST I,

as Issuer

and

HERCULES FUNDING I LLC,

as Depositor

and

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.,

as Originator and Servicer

and

U.S. BANK NATIONAL ASSOCIATION,

as Indenture Trustee and Collateral Custodian

and

LYON FINANCIAL SERVICES, INC.,

d/b/a U.S. Bank Portfolio Services, Inc.

as Backup Servicer

ASSET BACKED NOTES

Dated as of August 1, 2005

TABLE OF CONTENTS

-i-

TABLE OF CONTENTS

(continued)

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TABLE OF CONTENTS

(continued)

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i

SALE AND SERVICING AGREEMENT

This Sale and Servicing Agreement is entered into as of August 1, 2005, among Hercules Funding Trust I, a Delaware statutory trust, as Issuer (in such capacity, the “ Issuer ”), Hercules Funding I LLC, a Delaware limited liability company, as Depositor (in such capacity, the “ Depositor ”), Hercules Technology Growth Capital, Inc., a Maryland corporation (“ Hercules ”), as Originator (in such capacity, the “ Originator ”) and as Servicer (in such capacity, the “ Servicer ”) and U.S. Bank National Association, a national banking association, as Indenture Trustee (in such capacity, the “ Indenture Trustee ”) and as Collateral Custodian (in such capacity, the “ Collateral Custodian ”), and Lyon Financial Services, Inc., a Minnesota corporation, doing business as U.S. Bank Portfolio Services, Inc., as Backup Servicer (in such capacity, the “ Backup Servicer ”).

W I T N E S S E T H:

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

ARTICLE I

DEFINITIONS

Section 1.01. Definitions .

Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the meanings specified in this Article. Unless otherwise specified, all calculations of interest with respect to the Notes described herein shall be made on the basis of a 360-day year and the actual number of days elapsed in each Accrual Period.

“ 1940 Act ”: The Investment Company Act of 1940, as amended, and the rules and regulations promulgated thereunder.

“ Accepted Servicing Practices ”: The servicing practices and collection procedures of the Servicer that are in accordance with the applicable Loan Documents and Applicable Law and which are consistent with the higher standard of (i) customary servicing practices of prudent institutions which service loans or other financial assets similar to the Transferred Loans for their own account or for the account of others and (ii) the same care, skill, prudence and diligence with which the Servicer services and administers loans or other financial assets which are similar to the Transferred Loans serviced or administered pursuant to this Agreement, for its own account or for the account of others.

“ Account Control Agreement ”: The securities account control agreement, dated as of the date hereof, among the Issuer, as the debtor, the Servicer and U.S. Bank, as the account bank and as the Collateral Custodian, as the same may be amended, modified, waived, supplemented or restated from time to time.

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

“ Accrual Period ”: With respect to any Payment Date of the Notes, the period from and including the preceding Payment Date (or, in the case of the first Payment Date, the period from and including the Closing Date) to but excluding such Payment Date.

“ Administration Agreement ”: The Administration Agreement, dated as of August 1, 2005, between the Issuer and the Administrator, as the same may be amended, modified, waived, supplemented or restated from time to time.

“ Administrator ”: Hercules, in its capacity as Administrator under the Administration Agreement.

“ Advance Rate : A percentage equal to 55%.

“ Advances Outstanding : As of any date of determination, the aggregate principal amount of Borrowings outstanding on such date, after giving effect to all repayments of Borrowings and makings of new Borrowings on such date.

“ Affiliate ”: With respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have meanings correlative to the foregoing; provided , that in the case of the Servicer or any Subsidiary, “Affiliate” shall not include any Person that is a Portfolio Investment.

“ Agented Notes ”: One or more promissory notes issued by an Obligor wherein (a) the note(s) are originated in accordance with the Credit and Collection Policy as a part of a syndicated loan transaction, (b) the Issuer, as assignee of the note, will have all of the rights (but none of the obligations) of the Originator with respect to such note and the Related Property, including the right to receive and collect payments directly in its own name or through the Originator, as agent for the noteholders of such Obligor and to enforce its rights against the Obligor thereof, (c) the note is secured by an undivided interest in the Related Property that also secures and is shared by, on a pro rata basis, all other holders of such Obligor’s notes of equal priority and (d) the Originator is the agent for all noteholders of such Obligor.

“ Aggregate Net Mark to Market Amount ”: As of each Record Date, the sum of all Net Mark to Market Amounts for such date for all Hedge Counterparties.

“ Aggregate Outstanding Loan Balance ”: As of any date of determination, the sum of the Outstanding Loan Balances of all Eligible Loans included as part of the Collateral on such date minus the Outstanding Loan Balance of all Charged-Off Loans included as part of the Collateral on such date.

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“ Aggregate Unpaids ”: At any time, an amount equal to the sum of all unpaid Advances Outstanding, Interest Payment Amounts and Interest Carry-Forward Amounts, Hedge Breakage Costs and all other amounts owed to the Depositor, the Noteholders, the Servicer, the Backup Servicer, each Hedge Counterparty and the Indenture Trustee hereunder and the Indenture (including, without limitation, all amounts in respect of indemnities hereunder, other amounts payable under Section 8.01 , Section 8.03 , and amounts required to be paid under Section 5.01(c)(4) and Section 5.01(c)(5) ) or under any Hedging Agreement (including, without limitation, payments in respect of the termination of any such Hedging Agreement) or by the Depositor or the Issuer or any other Person under any fee letter delivered in connection with the transactions contemplated by this Agreement, in each case whether due or accrued.

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

“ Amortization Date ”: The date that occurs 364 days after the Closing Date (or, if such date is not a Business Day, the preceding Business Day), as such date may be extended pursuant to Section 2.09 .

“ Amortization Period ”: The period commencing on the Amortization Date and ending on the Termination 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, predatory lending laws, the Federal Truth in Lending Act, and Regulation Z and Regulation B of the Federal Reserve Board), and applicable judgments, decrees, injunctions, writs, orders, or line action of any court, arbitrator or other administrative, judicial, or quasi-judicial tribunal or agency of competent jurisdiction.

“ Assigned Assets ”: Has the meaning provided in the Loan Sale Agreement.

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

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“ Availability ”: At any time during the Revolving Period, an amount equal to the excess, if any, of (i) the lesser of (a) the Facility Amount and (b) the Maximum Availability over (ii) the sum of (a) the Advances Outstanding on such day plus (b) the Aggregate Net Mark to Market Amount; provided , that on any date after the last day of the Revolving Period, the Availability shall be zero.

“ Average Obligor Amount ”: As of any date of determination, the Aggregate Outstanding Loan Balance minus all amounts in excess of Concentration Limits (a) through (j) and (l), divided by the number of Obligors represented in the Aggregate Outstanding Loan Balance as of such date.

“ Backup Servicer ”: Lyon Financial Services, Inc., a Minnesota corporation, doing business as U.S. Bank Portfolio Services, Inc., as Backup Servicer under this Agreement, or any successor backup servicer under this Agreement.

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

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

“ Bankruptcy Code ”: Title 11 of the United States Code.

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

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

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

“ Bankruptcy Laws ”: The Bankruptcy Code and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency,

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reorganization, suspension of payments, composition or adjustment of debts or similar debtor relief laws from time to time in effect affecting the rights of creditors generally.

“ Bankruptcy Proceeding ”: Any case, action or proceeding before any Governmental Authority relating to a Bankruptcy Event.

“ Basic Documents ”: This Agreement, the Indenture, the Loan Sale Agreement, the Note Purchase Agreement, the Trust Agreement, the Administration Agreement, each LSA Assignment, each S&SA Assignment, all Hedging Agreements, the Intercreditor Agreement, the Account Control Agreement, the Notes, the Fee Letter, the Collateral Custodian and Backup Servicer Fee Letter, the Warrant Pledge and Security Agreement, the Warrant Participation Agreement, any UCC financing statements (or their equivalents in any Canadian jurisdiction) filed pursuant to the terms of this Agreement, the Loan Sale Agreement or the Indenture, and any additional document, letter, fee letter, certificate, opinion, agreement or writing the execution of which is necessary or incidental to carrying out the terms of the foregoing documents.

“ Borrowing ”: Has the meaning set forth in Section 2.01(b) hereof.

“ Borrowing Base ”: On any date of determination, an amount equal to (i) the Aggregate Outstanding Loan Balance on such date plus (ii) the Outstanding Loan Balance of all Eligible Loans to become included as part of the Collateral on such date minus (iii) the amount (calculated without duplication) by which the Eligible Loans in clauses (i) and (ii) together exceed any applicable Concentration Limits minus (iv) the Outstanding Loan Balance of any Defaulted Loans.

“ Borrowing Base Certificate ”: The certificate in the form attached hereto as Exhibit F .

“ Borrowing Date ”: The date identified as such in a Borrowing Notice.

“ Borrowing Notice ”: The notice in the form attached hereto as Exhibit A .

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

“ Certificateholder ”: A holder of a Trust Certificate.

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

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“ Charged-Off Loan ”: Any Transferred Loan (i) that is 180 days or more past due (without giving effect to any Servicer Advance thereon) with respect to any interest or principal payment, (ii) as to which a Bankruptcy Event has occurred with respect to the related Obligor, (iii) as to which the related Obligor has suffered any Material Adverse Change, (iv) that is or should be written off as uncollectible by the Servicer in accordance with the Credit and Collection Policy, (v) that has been placed on non-accrual status by the Servicer in accordance with the Credit and Collection Policy, (vi) all or any portion of which has been converted into or exchanged for an Equity Security or (vii) has been sold for less than its Outstanding Loan Balance upon foreclosure or upon exercise of remedies, provided , that only the portion of the Transferred Loan not recouped in such sale shall be deemed to be “charged-off” for purposes of clause (vii).

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

“ Clean-up Call Date ”: The first Payment Date during the Amortization Period on which the Note Principal Balance declines to 10% or less of the aggregate Note Principal Balance as of the Amortization Date.

“ Closing Date ”: August 1, 2005.

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

“ Collateral ”: Has the meaning provided in the Indenture.

“ Collateral Custodian ”: U.S. Bank National Association, a national banking association, as Collateral Custodian under this Agreement, or any successor collateral custodian under this Agreement.

“ Collateral Custodian Fee ”: Means the fee identified as such in the Collateral Custodian and Backup Servicer Fee Letter.

“ Collateral Custodian and Backup Servicer Fee Letter ”: Means the fee letter, dated as of the date hereof, among the Originator, U.S. Bank National Association as Indenture Trustee and as Collateral Custodian, the Backup Servicer and Citigroup Global Markets Realty Corp.

“ Collection Account ”: The account (#790456-200) designated as such, established and maintained by the Servicer in accordance with Section 5.01(a) hereof.

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“ Collection Date ”: The date following the Termination Date on which the Note Principal Balance has been reduced to zero and paid in full.

“ Collection Period ”: With respect to any Payment Date, the period from and including the day following the Record Date for the preceding Payment Date (or, in the case of the initial Payment Date, from and including the Closing Date) to and including the Record Date with respect to the current Payment Date.

“ Collections ”: (a) All cash collections or other cash proceeds received by the Issuer or by the Servicer, the Depositor or the Originator on behalf of the Issuer from any source in payment of any amounts owed in respect of a Transferred Loan, including, without limitation, Interest Collections, Principal Collections, Insurance Proceeds, interest earnings in the Collection Account and the Principal Collections Account and all Recoveries, (b) all amounts received by the Depositor or the Issuer, as applicable, in connection with the removal of a Transferred Loan from the Collateral pursuant to Section 3.05 , Section 3.06 , Section 3.07 or Section 3.08 , (c) any other funds received by or on behalf of the Issuer with respect to any Transferred Loan or Related Property, and (d) all payments received pursuant to any Hedging Agreement or Hedge Transaction, but excluding, in the case of (a), (b) or (c), as applicable, amounts in respect of any Retained Interest and Excluded Amounts.

“ Commission ”: The Securities and Exchange Commission.

“ Concentration Account ”: The account (#790456-700) maintained in the name of the Originator for the purpose of receiving Collections at the Concentration Account Bank.

“ Concentration Account Bank ”: U.S. Bank National Association, a national banking association, as Concentration Account Bank under the related account agreement, or any successor concentration account bank under such account agreement.

“ Concentration Limits ”: On any day, each of the following (calculated and expressed in each case as a percentage of the Aggregate Outstanding Loan Balance):

(a) the sum of the Outstanding Loan Balances of Eligible Loans included in the Collateral to Obligors whose chief executive office is in any one state shall not exceed 70%;

(b) the sum of the Outstanding Loan Balances of Eligible Loans included in the Collateral to Obligors which are in the same Industry shall not exceed 55%;

(c) the sum of the Outstanding Loan Balances of Eligible Loans included in the Collateral to any one Obligor shall not exceed the Large Obligor Limit;

(d) the sum of the Outstanding Loan Balances of Eligible Loans included in the Collateral the Obligors of which are Grade 3 Obligors shall not exceed 30%;

(e) the sum of the Outstanding Loan Balances of Eligible Loans included in the Collateral that have interest due and payable monthly shall not be less than 75%, and

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not less than 100% of the Eligible Loans included in the Collateral shall have interest due and payable no less frequently than quarterly;

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

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

(h) the sum of the Outstanding Loan Balances of each Eligible Loan included in the Collateral which is a PIK Loan and which is either (a) a Fixed Rate Loan having a Loan Rate of less than 7.0% per annum or (b) a Floating Rate Loan having a Loan Rate of less than 7.0% per annum shall not exceed 0%;

(i) the sum of the Outstanding Loan Balances of Eligible Loans included in the Collateral principally secured by real property shall not exceed 40%;

(j) the sum of the Outstanding Loan Balances of all Eligible Loans included in the Collateral which have been included as part of the Collateral for 15 months or more shall not exceed 60% ( provided , that, if a portion of a Loan has been transferred, sold, contributed or otherwise conveyed to the Originator or any Affiliate thereof as part of a Permitted Securitization that is a private placement collateralized loan or collateralized debt obligation transaction, such sum shall be calculated by treating the portion of the applicable Loan remaining in the Collateral as if such Loan was first included in the Collateral as of the closing date of such Permitted Securitization);

(k) the Average Obligor Amount shall not exceed the greater of $15,000,000 and 15%; and

(l) the sum of the Outstanding Loan Balances of all Eligible Loans included in the Collateral that are Loans to Obligors organized or continued under the federal, territorial or provincial laws of, or principally located in Canada, or the Related Property by which such Loans are principally secured is located in or arises under the federal or provincial laws of, Canada shall not exceed the greater of 10% or $10,000,000.

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

“ Credit and Collection Policy ”: Means the written credit and collection policies and procedures of the Originator and Servicer in effect as of the Closing Date and attached hereto as Exhibit L , as such policies and procedures may be amended or supplemented from time to time in compliance with Section 4.09(f) .

“ Daily Interest Accrual Amount ”: With respect to each day during an Accrual Period, an amount equal to the interest accrued at the Note Interest Rate on an amount equal to

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the Note Principal Balance, as determined as of the preceding Business Day after giving effect to all changes to the Note Principal Balance on or prior to such preceding Business Day.

“ Deemed Collection ”: Defined in Section 3.08 .

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

“ Defaulted Loan ”: Any Transferred Loan (that is not a Charged-Off Loan) (a) that is 90 days or more past due with respect to any interest or principal payments or (b) that is or otherwise should be considered a Defaulted Loan by the Servicer in accordance with the Credit and Collection Policy.

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

“ Delinquent ”: On any day with respect to any Transferred Loan, (i) any payment, or portion thereof, due with respect thereto, has not been made by the Obligor of such Transferred Loan on the due date of such payment or (ii) the related Obligor is not paying any of the accrued and unpaid interest thereon in cash on a current basis in violation of the terms of such Transferred Loan.

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

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

(b) with respect to a certificated security (i) delivery of such certificated security endorsed to, or registered in the name of, the Indenture Trustee or endorsed in blank to its custodian or the related Securities Intermediary and the making by such Securities Intermediary of appropriate entries in its records identifying such certificated securities as credited to the related Trust Account, or (ii) by delivery thereof to a “clearing corporation” (as defined in Section 8-102(5) of the UCC) and the making by such clearing corporation of appropriate entries in its records crediting the securities account of the related Securities Intermediary by the amount of such certificated security and the making by such Securities Intermediary of appropriate entries in its records identifying such certificated securities as

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credited to the related Trust Account (all of the Trust Account Property described in Subsections (a) and (b), “ Physical Property ”); and, in any event, any such Physical Property in registered form shall be in the name of the Indenture Trustee or its nominee or custodian (or the related Securities Intermediary); and such additional or alternative procedures as may hereafter become appropriate to effect the complete transfer of ownership of any such Trust Account Property to the Indenture Trustee or its nominee or custodian, consistent with changes in applicable law or regulations or the interpretation thereof;

(c) with respect to any security issued by the U.S. Treasury, Fannie Mae or Freddie Mac that is a book-entry security held through the Federal Reserve System pursuant to federal book-entry regulations, the following procedures, all in accordance with applicable law, including applicable federal regulations and Articles 8 and 9 of the UCC: the making by a Federal Reserve Bank of an appropriate entry crediting such Trust Account Property to an account of the related Securities Intermediary or the securities intermediary that is (x) also a “participant” pursuant to applicable federal regulations and (y) is acting as securities intermediary on behalf of the Securities Intermediary with respect to such Trust Account Property; the making by such Securities Intermediary of appropriate entries in its records crediting such book-entry security held through the Federal Reserve System pursuant to federal book-entry regulations and Articles 8 and 9 of the UCC to the related Trust Account; and such additional or alternative procedures as may hereafter become appropriate to effect complete transfer of ownership of any such Trust Account Property to the Indenture Trustee or its nominee or custodian, consistent with changes in applicable law or regulations or the interpretation thereof; and

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

“ Depositor ”: Hercules Funding I LLC, a Delaware limited liability company.

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

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“ Distribution Account ”: The account established and maintained pursuant to Section 5.01(a)(2) hereof.

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

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

“ Eligible Loan ”: On any date of determination, any Transferred Loan which complies with the representations and warranties set forth in Section 3.03 .

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

(i) such Obligor is not in the gaming, nuclear waste, oil and gas or real estate industries;

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

(iii) the business being financed by such Obligor has an Operating History of at least 9 months from the date of its incorporation or formation;

(iv) such Obligor is not the subject of any Bankruptcy Event (and, as of the Transfer Date on which such Transferred Loan became part of the Collateral, such Obligor has not experienced a Material Adverse Change);

(v) such Obligor is not an Affiliate of any other Obligor hereto (other than as a result of being an Affiliate of the Originator);

(vi) no other Loan of such Obligor is Delinquent for more than 30 days;

(vii) such Obligor is not a Governmental Authority;

(viii) such Obligor is in compliance with all material terms and conditions of the Loan Documents related to the applicable Transferred Loan;

(ix) such Obligor’s principal office and any Related Property are located in the United States or Canada or any other country or territory of the United States (approved by the Initial Noteholder upon receipt and review of satisfactory legal due diligence, Rating Agency discussions and credit approval);

(x) such Obligor has an Eligible Risk Rating.

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“ Eligible Risk Rating ”: As of any date of determination, with respect to a designated Obligor, a risk rating of “Grade 1,” “Grade 2,” or “Grade 3.”

“ Eligible Servicer ”: (x) Hercules or (y) any other Person to which the Initial Noteholder may consent in writing.

“ Equity Security ”: Any equity security or other obligation or security that does not entitle the holder thereof to receive periodic payments of interest and one or more installments of principal.

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

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

“ Exchange Act ”: The Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“ Excluded Amounts ”: Any Collections received with respect to Loans which have been removed from the Collateral pursuant to Section 3.05 , Section 3.06 , Section 3.07 or Section 3.08 , to the extent such Collections are attributable to a time after the effective date of the applicable substitution, repurchase or release.

“ Exit Fee ”: An amount equal to 1.00% of the amount set forth in clause (i) of the definition of Facility Amount.

“ Facility Amount ”: On any date of determination (i) during the Revolving Period, an amount equal to $100,000,000, and (ii) after the end of the Revolving Period, an amount equal to $0.

“ Fair Market Value ”: With respect to a Transferred Loan included in the Collateral if such Transferred Loan has been reduced in value on such date of determination below the original principal amount (other than as a result of the allocation of a portion of the original principal amount to warrants or other equity entitlements), the fair market value of such Transferred Loan as required by, and in accordance with, the 1940 Act and any orders of the Commission issued to the Originator, to be determined by the Board of Directors of the Originator and reviewed by its auditors and communicated to the Servicer.

“ Fannie Mae ”: The Federal National Mortgage Association and any successor thereto.

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

“ Fee Letter ”: Means the fee letter, dated as of the date hereof, between Hercules and Citigroup Global Markets Realty Corp.

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“ Final Collateral Certification ”: The certification in the form of Exhibit E-2 hereto prepared by the Collateral Custodian.

“ Fitch ”: Fitch Ratings or any successor in interest.

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

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

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

“ Freddie Mac ”: The Federal Home Loan Mortgage Corporation and any successor thereto.

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

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

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

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

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

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

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

“ Grant ”: Shall have the meaning provided in the Indenture.

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

“ Hedge Collateral ”: Defined in Section 7.02(b) .

“ Hedge Counterparty ”: Means (a) Citibank N.A., New York and (b) any other entity that (i) on the date of entering into any Hedge Transaction (x) is an interest rate swap dealer that has been approved in writing by (I) at any time when there are two or fewer Noteholders party hereto, each Noteholder, and (II) at any time when there are more than two Noteholders party hereto, the Initial Noteholder (which approval shall not, in the case of either clause (I) or clause (II) , 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) (the “ 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 “F1” by Fitch (if such entity is rated by Fitch) (the “ Short-term Rating Requirement ”), and (ii) in a Hedging Agreement (x) consents to the assignment of the Issuer’s rights under the Hedging Agreement to the Indenture Trustee on behalf of the Noteholders pursuant to Section 7.02(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 it short-term debt rating below the Short-Term Rating Requirement, it shall either collateralize its obligations in a manner satisfactory to (I) at any time when there are two or fewer Lenders party hereto, each Noteholder, and (II) at any time when there are more than two Noteholders party hereto, the Initial Noteholder, or transfer its rights and obligations under each Hedging Agreement (excluding, however, any right to net payments or Hedge Breakage Costs under any Hedge Transaction, to the extent accrued to such date or to accrue thereafter and owing to the transferring Hedge Counterparty as of the date of such transfer) to another entity that meets the requirements of clauses (b)(i) and (b)(ii) hereof and has entered into a Hedging Agreement with the Issuer on or prior to the date of such transfer.

“ Hedge Transaction ”: Each interest rate swap, index rate swap or interest rate cap transaction or comparable derivative arrangements between the Issuer and a Hedge Counterparty that is entered into pursuant to Section 7.02(a) and is governed by a Hedging Agreement.

“ Hedging Agreement ”: The agreement between the Issuer and a Hedge Counterparty that governs one or more Hedge Transactions entered into by the Issuer and such Hedge Counterparty pursuant to Section 7.02(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, and each “Confirmation” thereunder confirming the specific terms of each such Hedge Transaction.

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

“ Indenture ”: The Indenture dated as of August 1, 2005, between the Issuer and the Indenture Trustee, as it may be amended or supplemented from time to time.

“ Indenture Trustee ”: U.S. Bank National Association, a national banking association, as indenture trustee under the Indenture, or any successor indenture trustee under the Indenture.

“ Indenture Trustee Fee ”: Shall have the meaning given such term in the Collateral Custodian and Backup Servicer Fee Letter.

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

“ Industry ”: The industry of an Obligor as determined, in the discretion of the Originator, by reference to either (a) the four digit standard industry classification (SIC) codes or (b) the Dow Jones VentureOne Industry Segments.

“ Ineligible Loan ”: Shall have the meaning given such term in Section 3.05(b)(i) .

“ Initial Collateral Certification ”: The certification in the form of Exhibit E-1 hereto prepared by the Collateral Custodian.

“ Initial Noteholder ”: Citigroup Global Markets Realty Corp., a New York corporation.

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

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

“ Intercreditor Agreement ”: The Intercreditor and Concentration Account Administration Agreement, dated as of the date hereof, by and among U.S. Bank National Association, as the Indenture Trustee, Hercules Technology Growth Capital, Inc., as the originator and as the original servicer, Hercules Funding Trust I, as the issuer and each other Person that from time to time executes a joinder thereto, as amended, modified, waived, supplemented, restated or replaced from time to time.

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“ Interest Carry-Forward Amount ”: With respect to any Payment Date, an amount equal to the excess, if any, of the Interest Payment Amount for the immediately preceding Payment Date over the amount that was actually paid from the Distribution Account in respect of interest on the immediately preceding Payment Date, together with any Interest Carry-Forward Amount remaining unpaid from any previous Payment Date, with interest on any such unpaid amounts at the Note Interest Rate.

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

“ Interest Payment Amount ”: With respect to any Payment Date, the sum of the Daily Interest Accrual Amounts for all days in the related Accrual Period.

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

“ Issuer ”: Hercules Funding Trust I, a Delaware statutory trust.

“ Large Obligor Limit ”: As of any date of determination, an amount equal to the greater of (i) 10% of the Aggregate Outstanding Loan Balance as of such date and (ii) $10,000,000.

“ LIBOR Business Day ”: Any day on which banks in the City of London are open and conducting transactions in United States dollars.

“ LIBOR Determination Date ”: With respect to each Accrual Period, the second LIBOR Business Day prior to the end of the month immediately preceding the month in which such Accrual Period commenced.

“ LIBOR Margin ”: Has the meaning set forth in the Fee Letter.

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

“ Loan ”: Any senior or subordinate loan arising from the extension of credit to an Obligor in the ordinary course of the Originator’s business including, without limitation, all Revolving Loans, PIK Loans and Agented Notes, and including monies due and owing and all Interest Collections, Principal Collections and other amounts received from time to time with respect to such loan or note receivable and all Proceeds thereof.

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“ Loan Checklist ” means the list delivered to the Indenture Trustee and Collateral Custodian pursuant to Section 2.04 of this Agreement that identifies the documents contained in the related Loan File.

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

“ Loan File ”: With respect to any Loan, each of the Loan Documents related thereto as reflected on the Loan Checklist accompanying such File..

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

“ Loan Sale Agreement ”: The Loan Sale Agreement, between Hercules, as seller, and the Depositor, as purchaser, dated as of August 1, 2005, as it may be supplemented and amended from time to time.

“ Loan Schedule ”: The schedule of Loans conveyed to the Issuer on each Transfer Date and delivered to the Initial Noteholder (with a copy to the Indenture Trustee and the Collateral Custodian) in connection with each Borrowing or as new Loans are contributed to the Depositor, initially as set forth in Exhibit D hereto.

“ Loan Tape ”: Has the meaning set forth in the Section 4.13(b)(ii) .

“ LSA Assignment ”: The assignment of Assigned Assets from the Originator to the Depositor under the Loan Sale Agreement.

“ Lyon Financial ”: Lyon Financial Services, Inc., a Minnesota company, d/b/a U.S. Bank Portfolio Services.

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

“ Majority Noteholders ”: The holder or holders of in excess of 50% of the Note Principal Balance. In the event of the release of the Lien of the Indenture in accordance with the terms thereof, the Majority Noteholders shall mean the Majority Certificateholders.

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

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“ Material Adverse Effect ”: With respect to any event or circumstance, means a material adverse effect on, as applicable, (a) the business, condition (financial or otherwise), operations, performance, properties or prospects of the Servicer, the Depositor, the Backup Servicer or the Collateral Custodian, (b) the validity, enforceability or collectibility of this Agreement, any other Basic Document or the Purchased Assets, (c) the rights and remedies of the Initial Noteholder or the Indenture Trustee on behalf of the Noteholders under this Agreement or any Basic Document or (d) the ability of any of the Servicer, the Depositor, the Issuer, the Backup Servicer or the Collateral Custodian to perform its obligations under this Agreement or any other Basic Document, or (e) the status, existence, perfection, priority, or enforceability of the interest of the Issuer in the Purchased Assets or of the Indenture Trustee on behalf of the Noteholders in the Collateral.

“ Maximum Availability ”: On any date of determination (a) during the Revolving Period, an amount equal to the sum of (i) the lesser of (x) the Borrowing Base minus the Required Equity Contribution and (y) the product of the Borrowing Base times the Advance Rate plus (ii) the amount of Principal Collections on deposit in the Collection Account and the Principal Collections Account received in reduction of the Outstanding Loan Balance of any Transferred Loan, and (b) after the Revolving Period, an amount equal to the Advances Outstanding.

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

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

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

“ Nonutilization Fee ”: Has the meaning set forth in the Fee Letter.

“ Note ”: Has the meaning set forth in the Indenture.

“ Noteholder ”: Has the meaning set forth in the Indenture.

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“ Note Interest Rate ”: With respect to each Accrual Period, a per annum interest rate equal to One-Month LIBOR for the related LIBOR Determination Date plus the LIBOR Margin.

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

“ Note Principal Balance ”: With respect to the Notes, as of any date of determination (a) the aggregate of all Borrowings consummated on or prior to such date of determination minus (b) the aggregate of all amounts previously distributed in respect of principal of the Notes on or prior to such date of determination.

“ Note Purchase Agreement ”: The Note Purchase Agreement among the Initial Noteholder, the Issuer and the Depositor, dated as of August 1, 2005, as it may be amended or supplemented from time to time.

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

“ Officer’s Certificate ”: A certificate signed by a Responsible Officer of the Person delivering such certificate, in each case as required by this Agreement.

“ One-Month LIBOR ”: For any Accrual Period and any Borrowing, the rate determined by the Initial Noteholder on the related Borrowing Date on the basis of the offered rate for one-month U.S. dollar deposits, as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London time) on such date (rounded up to the nearest whole multiple of 1/16%); provided , that if such rate does not appear on Telerate Page 3750, the rate for such date will be the rate determined by reference to such other comparable publicly available service publishing such rates as may be selected by the Initial Noteholder in its sole reasonable discretion and communicated to the Servicer. The Initial Noteholder shall have the sole discretion to reset One-Month LIBOR daily.

“ Operating History ”: With respect to any specified Person, the time since the date of such Person’s incorporation or formation that it has continuously operated its business; provided , that the Operating History of any Person, newly formed as a result of a merger of two or more Persons or as a result of the acquisition of one or more Persons by a newly formed Person (“ Merged Parties ”) shall be based on the weighted average (by relative sales) of the Operating Histories of the Merged Parties (excluding for such purposes, entities that are created

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only for the purpose of being acquisition entities), for example , if Corporation A with sales of $10 million has an Operating History of four years and Corporation B with sales of $20 million has an Operating History of eight years, merge to form NEWCO, the Operating History of NEWCO will be 6.67 years.

“ Opinion of Counsel ”: A written opinion of counsel who may be employed by the Servicer, the Depositor, the Originator or any of their respective Affiliates, in form and substance satisfactory to the Initial Noteholder.

“ Optional Sale Date ”: Any Business Day during the Revolving Period, provided 30 days’ prior written notice is given in accordance with Section 3.06(a)(i) .

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

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

“ Outstanding Loan Balance ”: With respect to any Loan, as of any date of determination, the lesser of (i) the Fair Market Value of such Loan and (ii) the total remaining amounts of principal payable by the Obligor thereof, excluding principal payments in respect of Accreted Interest (it being understood that any principal amount previously covered by a Servicer Advance will be excluded from the principal amounts payable for purposes of this definition).

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

“ Owner Trustee Fee ”: Means the fee identified as such in the Owner Trustee Fee Letter.

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

“ Paying Agent ”: A Person that meets the eligibility standards for the Indenture Trustee specified in Section 3.03 of the Indenture and authorized by the Issuer to make payments to and distributions from the Distribution Account, including payment of principal of or interest on the Notes on behalf of the Issuer. The initial Paying Agent for all purposes under the Basic Documents shall be the Indenture Trustee.

“ Payment Date ”: The 15 ^th day of each calendar month, or if any such day is not a Business Day, the first Business Day following such day, commencing on September 15, 2005.

“ Percentage Interest ”: Has the meaning set forth in the Trust Agreement and the Indenture, as applicable.

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“ Permitted Investments ”: Each of the following:

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

(b) Federal Housing Administration debentures rated “Aa2” or higher by Moody’s and “AA” or better by S&P;

(c) Freddie Mac senior debt obligations rated “Aa2” or higher by Moody’s and “AA” or better by S&P;

(d) Federal Home Loan Banks’ consolidated senior debt obligations rated “Aa2” or higher by Moody’s and “AA” or better by S&P;

(e) Fannie Mae senior debt obligations rated “Aa2” or higher by Moody’s;

(f) Federal funds, certificates of deposit, time and demand deposits, and bankers’ acceptances (having original maturities of not more than 365 days) of any domestic bank, the short-term debt obligations of which have been rated “A-1” or better by S&P and “P-1” or better by Moody’s;

(g) Investment agreements approved by the Initial Noteholder; provided :

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

(i) Investments in money market funds rated “AAAM” or “AAAM-G” by S&P and “Aaa” or “P-1” by Moody’s;

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(j) Investments approved in writing by the Initial Noteholder;

provided that no instrument described above is permitted to evidence either the right to receive (i) only interest with respect to obligations underlying such instrument or (ii) both principal and interest payments derived from obligations underlying such instrument and the interest and principal payments with respect to such instrument provided a yield to maturity at par greater than 120% of the yield to maturity at par of the underlying obligations; and provided , further , that no instrument described above may be purchased at a price greater than par if such instrument may be prepaid or called at a price less than its purchase price prior to stated maturity.

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

“ Permitted Liens ”: (a) With respect to the Transferred Loans, Liens in favor of the Issuer created pursuant to this Agreement and Liens in favor of the Indenture Trustee, on behalf of the Noteholders, created pursuant to the Indenture; and

(b) with respect to the Issuer’s interest in the Related Property, any of the following as to which no enforcement, collection, execution, levy, foreclosure or realization proceedings shall have been commenced:

(i) Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate proceedings; provided , that such Liens do not have priority over any of the Originator’s Liens and the related Obligor maintains adequate reserves therefor in accordance with GAAP;

(ii) Liens securing claims or demands of materialmen, artisans, mechanics, carriers, warehousemen, landlords and other like Persons arising in the ordinary course of the related Obligor’s business and imposed without action of such parties; provided, that the payment thereof is not yet required;

(iii) Liens arising from judgments, decrees or attachments in circumstances which do not constitute an “event of default” under the related Loan Documents;

(iv) the following deposits, to the extent made in the ordinary course of business: deposits under worker’s compensation, unemployment insurance, social security and other similar laws, or to secure the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or to secure indemnity, performance or other similar bonds for the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or to secure statutory obligations (other than liens arising under ERISA or environmental liens) or surety or appeal bonds, or to secure indemnity, performance or other similar bonds;

(v) purchase money liens on equipment (to the extent permitted under the related Loan Documents) which has been acquired or held by the related Obligor

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and such Liens are incurred for financing the acquisition of the equipment, if, the Liens are confined to the equipment and proceeds of the equipment;

(vi) Liens incurred in connection with the extension, renewal or refinancing of the indebtedness secured by Liens of the type described in clauses (i) through (iv) above; provided, that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness being extended, renewed or refinanced (as may have been reduced by any payment thereon) does not increase;

(vii) Liens held by senior lenders with respect to subordinated Transferred Loans;

(viii) the rights of a Hedge Counterparty under its Hedging Agreement; and

(ix) with respect to Agented Notes, Liens in favor of the collateral agent on behalf of all noteholders of the related Obligor.

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

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

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

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

“ Portfolio Investment ”: Any investment made by the Originator in the ordinary course of business in a Person that is accounted for under GAAP as a portfolio investment of the Originator.

“ Portfolio Yield ”: As of each Record Date, the annualized percentage equivalent of a fraction (a) the numerator of which is equal to all Interest Collections deposited in the Collection Account during the related Collection Period minus the sum of (i) the Interest Payment Amount and any Interest Carry-Forward Amount, (ii) the Servicing Fee and (iii) any Trust Fees and Expenses and (b) denominator of which is equal to the Aggregate Outstanding Loan Balance as of the first day of the related Collection Period.

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

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

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

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

“ Purchased Assets ”: All right, title and interest, whether now owned or hereafter acquired or arising, and wherever located, of the Depositor in and to the property described in clauses (i) through (xi) below and all accounts, cash and currency, chattel paper, tangible chattel paper, electronic chattel paper, copyrights, copyright licenses, other intellectual property rights, equipment, fixtures, contract rights, general intangibles, instruments, certificates of deposit, certificated securities, uncertificated securities, financial assets, securities entitlements, 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 Transferred Loans, and all monies due or to become due in payment of such Transferred Loans on and after the related Transfer Date, including but not limited to all Collections and all obligations owed to the Originator in connection with the Transferred Loans;

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

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

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

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against any attorney, accountant, financial advisor, or other Person arising under or in connection with the related Loan Documents;

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

(vi) all Insurance Policies;

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

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

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

(x) the Loan Sale Agreement and the assignment to the Indenture Trustee of all UCC financing statements filed by the Depositor against the Originator under or in connection with the Loan Sale Agreement; and

(xi) the proceeds of each of the foregoing.

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

“ Record Date ”: With respect to each Payment Date, the second Business Day before such Payment Date.

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

“ Reference Bank ”: Any bank that provides information for purposes of determining One-Month LIBOR.

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“ Related Property ”: With respect to any Loan, any property or other assets of the Obligor thereunder pledged or purported to be pledged as collateral or in which a Lien has been granted or purported to be granted to secure the repayment of such Loan and including, without limitation, intellectual property rights. In no event shall Related Property include any Warrant Assets.

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

“ Renewal Fee ”: A fee payable by the Issuer in connection with any extension of the Amortization Date pursuant to Section 2.09 , in an amount equal to the product of (a) 0.25% times (b) the Borrowing Base as determined as of the Business Day prior to the effective date of such extension of the Amortization Date.

“ Replaced Loan ”: Defined in Section 3.05(a) .

“ Required Equity Contribution ”: As of any date of determination, an amount equal to the greater of (i) the sum of the Outstanding Loan Balances of the four largest Transferred Loans included in the Collateral as of such date and (ii) $20,000,000.

“ Reserve Interest Rate ”: With respect to any LIBOR Determination Date, the rate per annum that the Initial Noteholder determines to be either (i) the arithmetic mean (rounded to the nearest whole multiple of 1/16%) of the one-month U.S. dollar lending rates which New York City banks selected by the Initial Noteholder are quoting on the relevant LIBOR Determination Date to the principal London offices of leading banks in the London interbank market or (ii) in the event that the Initial Noteholder can determine no such arithmetic mean, the lowest one-month U.S. dollar lending rate which New York City banks selected by the Initial Noteholder are quoting on such LIBOR Determination Date to leading European banks.

“ Responsible Officer ”: When used with respect to:

(a) the Indenture Trustee, the Collateral Custodian or the Paying Agent, any officer within the Corporate Trust Office of such Person, including any Vice President, Assistant Vice President, Secretary, Assistant Secretary or any other officer of such Person customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject;

(b) the Issuer, any officer of the Owner Trustee who is authorized to act for the Owner Trustee in matters relating to the Issuer and any officer of the Administrator who is identified on the list of Responsible Officers delivered by the Administrator on the date hereof (as such list may be modified or supplemented from time to time thereafter) to the Indenture Trustee and the Owner Trustee; and

(c) the Depositor, the Servicer, the Originator or any Affiliate of any of them, the Controller, the President, any Vice President or the Treasurer of such Person.

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

“ Retransfer Price ”: Defined in Section 3.05(b) .

“ Review Criteria ”: Defined in Section 2.05(b)(ii) .

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

“ Revolving Period ”: The period commencing on the Closing Date and ending on the Business Day preceding the earlier of (i) the Amortization Date and (ii) the Termination Date.

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

“ RIC/BDC Sale ”: Defined in Section 3.07(a) .

“ RIC/BDC Sale Date ”: The Business Day identified by the Borrower to the Initial Noteholder and the Trustee in a RIC/BDC Sale Notice as the proposed date of a RIC/BDC Sale.

“ RIC/BDC Sale Notice ”: Defined in Section 3.07(a)(i) .

“ Rolling Three-Month Charged-Off Ratio ”: As of any date, the percentage equivalent of a fraction (a) the numerator of which equals the sum of the Charged-Off Ratios for the three Collection Periods immediately preceding such date (or such lesser number of Collection Periods as shall have elapsed as of such date), and (b) the denominator of which equals three (or such lesser number described in clause (a)).

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“ Rolling Three-Month Default Ratio ”: As of any date, the percentage equivalent of a fraction (a) the numerator of which equals the sum of the Default Ratios for the three Collection Periods immediately preceding such date (or such lesser number of Collection Periods as shall have elapsed as of such date), and (b) the denominator of which equals three (or such lesser number described in clause (a)).

“ Rolling Three-Month Yield ”: As of any date, the percentage equivalent of a fraction (a) the numerator of which equals the sum of the Portfolio Yields for the three Collection Periods immediately preceding such date (or such lesser number of Collection Periods as shall have elapsed as of such date), and (b) the denominator of which equals three (or such lesser number described in clause (a)).

“ Rolling Twelve-Month Charged-Off Ratio ”: As of any Record Date, the percentage equivalent of a fraction (a) the numerator of which is equal to the sum of the Charged-Off Ratios for the Collection Period related to such Record Date and each of 11 preceding Record Dates (or such lesser number of Collection Periods as shall have elapsed as of such date), and (b) the denominator of which is 12 (or such lesser number described in clause (a)).

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

“ S&SA Assignment ”: An assignment of Purchased Assets from the Depositor to the Issuer pursuant to this Agreement, in the form of Exhibit C hereto.

“ Sales Price ”: With respect to any Transferred Loan and all Related Property and other Collateral constituting part of the Purchased Assets with respect to such Transferred Loan, an amount determined by multiplying the Advance Rate times the Outstanding Loan Balance of such Transferred Loan.

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

“ Securities ”: The Notes and the Trust Certificates.

“ Securities Act ”: The Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

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

“ Securityholder ”: Any Noteholder or Certificateholder.

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

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“ Servicer Advance ”: Defined in Section 4.05 hereof.

“ Servicer Default ”: Has the meaning set forth in Section 9.01 hereof.

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

“ Servicer Report ”: A report substantially in the form of Exhibit B hereto, to be delivered as contemplated by Section 4.17(a) .

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

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

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

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

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

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

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

“ Successor Engagement Fee ”: The “One-Time Successor Engagement Fee,” as defined in the Collateral Custodian and Backup Servicer Fee Letter.

“ Successor Servicer ”: Defined in Section 9.02(a) .

“ Tangible Net Worth ”: With respect to any Person, as of any date of determination, the consolidated Net Worth of such Person and its Subsidiaries, less the consolidated net book value of all assets of such Person and its Subsidiaries (to the extent reflected as an asset in the balance sheet of such Person or any Subsidiary at such date) which will be treated as intangibles under GAAP, including, without limitation, such items as deferred financing expenses, net leasehold improvements, good will, trademarks, trade names, service marks, copyrights, patents, licenses and unamortized debt discount and expense; provided , that residual securities issued by such Person or its Subsidiaries shall not be treated as intangibles for purposes of this definition.

“ Termination Date ”: The earliest of (i) the date designated as such by the Initial Noteholder in its sole discretion by written notice to the Servicer and the Indenture Trustee following the occurrence of an Event of Default or a Trigger Event, (ii) the date upon which this Agreement terminates pursuant to Section 10.01 or is optionally terminated by the Servicer pursuant to Section 10.02 , (iii) the date of the occurrence of a Bankruptcy Event with respect to the Servicer, the Depositor or the Issuer and (iv) the date that is six months following the Amortization Date.

“ Termination Price ”: Has the meaning set forth in Section 10.02 hereof.

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

“ Transfer Date ”: With respect to each Transferred Loan, the date specified as the “Transfer Date” in the related S&SA Assignment, on and after which Collections on such Transferred Loan shall be included as part of the Collateral.

“ Transferred Loans ”: Each Loan that is purchased by the Depositor or received by the Depositor as a contribution to the capital of the Depositor under the Loan Sale Agreement, and sold or contributed to the Issuer hereunder; provided , that the term Transferred Loan shall not include any Retained Interests.

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

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“ Trigger Event ”: Shall exist, as of any date of determination, if any of the following events shall have occurred and be continuing:

(i) the Rolling Three-Month Yield is less than 8.0%;

(ii) the weighted average Risk Rating of Obligors with respect to the Transferred Loans included in the Collateral is less than 3.0;

(iii) the Rolling Three-Month Charged-Off Ratio as of any Record Date is greater than 4.0%;

(iv) the Rolling Three-Month Default Ratio as of any Record Date is greater than 6.0%;

(v) Rolling Twelve-Month Charged-Off Ratio as of any Record Date is greater than 12.0%; or

(vi) The amount described in clause (ii) of the definition of “Availability” shall exceed the amount described in clause (i) of the definition of “Availability” and such condition shall not be cured within three Business Days of the occurrence thereof.

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

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

“ Trust Agreement ”: The Trust Agreement dated as of August 1, 2005 between the Depositor and the Owner Trustee, as it may be amended and supplemented from time to time.

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

“ Trust Fees and Expenses ”: As of each Payment Date, an amount equal to the Owner Trustee Fee, if applicable, and the Indenture Trustee Fee, the Collateral Custodian Fee, the Backup Servicer Fee, the Backup Servicer Expenses, and any expenses of the Servicer, the Owner Trustee, the Indenture Trustee, the Collateral Custodian and the Backup Servicer under any Basic Documents.

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

“ UCC Assignment ”: A financing statement meeting the requirements of the UCC of the relevant jurisdiction to reflect an assignment of a secured party’s interest in collateral.

“ UCC Financing Statement ”: A financing statement meeting the requirements of the UCC of the relevant jurisdiction.

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

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“ Unreimbursed Servicer Advances ”: As of any Payment Date, the amount of all previous Servicer Advances (or portions thereof) as to which the Servicer has not been reimbursed as of such time pursuant to Section 5.01(c) on a prior Payment Date.

“ U.S. Bank ”: U.S. Bank National Association, a national banking association.

“ Warrant Asset ”: Means any equity purchase warrants or similar rights convertible into or exchangeable or exercisable for any equity interests received by Hercules as an “equity kicker” from the Obligor in connection with such Transferred Loan; provided that the term Warrant shall in no event include the right of Hercules to participate as an investor in future equity financings by an Obligor.

“ Warrant Participation Agreement ”: The warrant participation agreement relating to the Warrant Assets, dated as of August 1, 2005, by and among the Originator and the Initial Noteholder.

“ Warrant Pledge and Security Agreement ”: The warrant pledge and security agreement relating to the Warrant Assets, dated as of August 1, 2005, by and among the Originator, the Initial Noteholder, Alcmene Funding L.L.C., a Delaware limited liability company, and U.S. Bank, as the escrow agent thereunder.

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

Section 1.02. Other Definitional Provisions .

(a) Any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; references to a Person are also to its permitted successors and assigns.

(b) All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.

(c) As used in this Agreement and in any certificate or other document made or delivered pursuant hereto or thereto, accounting terms not defined in this Agreement or in any such certificate or other document, and accounting terms partly defined in this Agreement or in any such certificate or other document to the extent not defined, shall have the respective meanings given to them under GAAP. To the extent that the definitions of accounting terms in this Agreement or in any such certificate or other document are inconsistent with the meanings of such terms under GAAP, the definitions contained in this Agreement or in any such certificate or other document shall control.

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(d) The words “hereof,” “herein,” “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; Article, Section, Schedule and Exhibit references contained in this Agreement are references to Articles, Sections, Schedules and Exhibits in or to this Agreement unless otherwise specified; and the term “including” shall mean “including without limitation.”

(e) The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms.

ARTICLE II

CONVEYANCE OF THE PURCHASED ASSETS;

BORROWINGS

Section 2.01. Conveyance of the Purchased Assets; Borrowings .

(a) Conveyance of the Purchased Assets . (i) On each Transfer Date during the Revolving Period, in consideration of the payment of the Sales Price therefor and subject to the satisfaction of the conditions to each Transfer set forth in Section 2.08 hereof, the Depositor hereby sells and assigns to the Issuer, without recourse, but subject to the other terms and provisions of this Agreement, all of the right, title and interest of the Depositor in and to the Purchased Assets identified in the applicable S&SA Assignment and the related Loan Schedule, together with all of the Depositor’s right, title and interest in and to (but none of its obligations under) the Loan Sale Agreement and all proceeds of the foregoing.

(ii) On each Transfer Date, the Issuer hereby purchases, and acknowledges the conveyance to it, of the Purchased Assets identified in the applicable S&SA Assignment and the related Loan Schedule, receipt of which is hereby acknowledged by the Issuer. Concurrently with such delivery, as of the applicable Transfer Date, the Issuer Grants the Purchased Assets identified in the applicable S&SA Assignment and the related Loan Schedule (a copy of which has or will concurrently therewith be delivered to the Indenture Trustee) to the Indenture Trustee pursuant to the Indenture as security for the Issuer’s obligations under the Indenture and the other Basic Documents.

(iii) On the Closing Date, and in exchange for the conveyances of Purchased Assets contemplated hereby, the Owner Trustee, pursuant to the instructions of the Depositor, has executed (not in its individual capacity, but solely as Owner Trustee on behalf of the Issuer) and caused the Trust Certificates to be authenticated and delivered (which may be by facsimile transmission or in an electronic format) to or at the direction of the Depositor.

(iv) Notwithstanding anything to the contrary herein, in no event shall the Issuer be required to purchase the Purchased Assets identified in any S&SA Assignment and the related Loan Schedule on any Transfer Date if the conditions precedent to the applicable Transfer set forth in Section 2.08 have not been fulfilled.

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(v) The Servicer shall, at its own expense, within one Business Day following each Transfer Date, indicate in its computer files that the Purchased Assets identified in the applicable S&SA Assignment and the related Loan Schedule have been sold to the Issuer pursuant to this Agreement.

(vi) Subject to Section 3.01(o) , the parties hereto intend that the conveyances contemplated hereby be sales from the Depositor to the Issuer of the Purchased Assets identified in each S&SA Assignment and related Loan Schedule. In the event the transactions with respect to the Purchased Assets set forth herein are deemed not to be a sale, the Depositor hereby grants to the Issuer a security interest in all of the Depositor’s right, title and interest in, to and under such Purchased Assets, to secure all of the Depositor’s obligations hereunder, and this Agreement shall constitute a security agreement under Applicable Law.

(b) Borrowings . (i) Pursuant to the Note Purchase Agreement, the Issuer may, at its sole option, from time to time request by delivery to the Initial Noteholder (with a copy to the Indenture Trustee) of a Borrowing Notice, that the Initial Noteholder make an advance of funds to the Issuer (each, a “ Borrowing ”) on any Borrowing Date and, upon satisfaction of the conditions precedent to such Borrowing in Section 2.07 hereof and Section 3.01 of the Note Purchase Agreement, the Initial Noteholder shall remit on such Borrowing Date, to or at the direction of the Depositor, an amount equal to the requested Borrowing. The amount of any Borrowing shall be at least equal to $1,000,000.

(ii) The Servicer shall appropriately note each Borrowing (and the increased Note Principal Balance) in each Servicer Report; provided , that the failure to make any such notation or any error in such notation shall not adversely affect any Noteholder’s rights with respect to its Note Principal Balance and its right to receive interest and principal payments in respect of the Note Principal Balance held by such Noteholder. The Initial Noteholder shall record on the schedule attached to such Noteholder’s Note, the date and amount of any Borrowing advanced by it; provided , that failure to make such recordation on such schedule or any error in such schedule shall not adversely affect any Noteholder’s rights with respect to its Note Principal Balance and its right to receive interest and principal payments in respect of the Note Principal Balance held by such Noteholder.

(iii) Absent manifest error, the Note Principal Balance of each Note as set forth in the Initial Noteholder’s records shall be binding upon the Indenture Trustee, the Noteholders and the Issuer, notwithstanding any notation made by the Servicer in its Servicer Report pursuant to the preceding paragraph.

(iv) Notwithstanding anything to the contrary herein, in no event shall the Initial Noteholder be required to advance Borrowings if the conditions precedent to the making of Borrowings set forth in Section 2.07 hereof and Section 3.01 of the Note Purchase Agreement have not been fulfilled.

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Section 2.02. Ownership and Possession of Loan Files .

With respect to each Loan, as of the related Transfer Date, the ownership of the related Loan Documents shall be vested in the Issuer as part of the Collateral for the benefit of the Noteholders, and the related Loan Documents shall be Granted and pledged to the Indenture Trustee on behalf of the Noteholders, and the Collateral Custodian shall take possession of the Loan Files as contemplated in Section 2.04 hereof.

Section 2.03. Books and Records; Intention of the Parties .

On the Closing Date, the Depositor shall, at such party’s sole expense, cause to be filed UCC Financing Statements naming the Issuer as “secured party” and describing the Purchased Assets being sold by the Depositor to the Issuer with the office of the Secretary of State of the state in which the Depositor is “located” for purpose of the applicable UCC and in any other jurisdictions as shall be necessary to perfect a security interest in the Purchased Assets. In addition, on the Closing Date, the Originator shall, at its expense, cause to be filed UCC Financing Statements naming the Depositor as “secured party” and describing the Assigned Assets being sold by the Originator to the Depositor with the office of the Secretary of the State in which the Originator is “located” for purpose of the applicable UCC and in such other jurisdictions as shall be necessary to perfect a security interest in the Assigned Assets.

Section 2.04. Delivery of Loan Files .

(a) The Originator shall, with respect to each Loan subject to a Transfer, as of the related Transfer Date, (i) no later than 12:00 p.m. New York City time on the related Transfer Date, deliver or cause to be delivered to the Collateral Custodian, as the designated agent of the Indenture Trustee, by facsimile transmission or in an electronic format mutually agreed to by the Originator, the Initial Noteholder and the Indenture Trustee, the Loan Schedule and a copy of each executed Underlying Note endorsed in blank and (ii) within two Business Days after such Transfer Date, deliver (or caused to be delivered) to the Collateral Custodian each original and duly executed Underlying Note and Assignment of Mortgage (if any), in each case endorsed in blank, any security agreement related to each such Loan, and all other Loan Documents for each such Loan, including a Loan Checklist for such Loan being transferred (on which List the Collateral Custodian shall rely).

(b) The Indenture Trustee shall cause the Collateral Custodian to take and maintain continuous physical possession of the Loan Files delivered to it by the Originator in the State of South Carolina and, in connection therewith, shall act solely as agent for the Indenture Trustee on behalf of the Noteholders in accordance with the terms hereof and not as agent for the Originator, the Servicer or any other party.

Section 2.05. Acceptance by the Indenture Trustee of the Loan Files; Certification by the Collateral Custodian .

(a) Based on the Final Collateral Certification received by it from the Collateral Custodian and as of the date of delivery thereof, the Indenture Trustee acknowledges receipt of the Loan Files delivered to the Collateral Custodian on behalf of the Indenture Trustee pursuant to Section 2.04 and declares that it holds and will continue to hold directly the Loan Documents and any amendments, replacements or supplements thereto and all other assets

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constituting the Collateral delivered to it in trust for the use and benefit of all present and future Noteholders.

(b) (i) On or before 3:00 p.m. New York City time on the related Transfer Date, the Collateral Custodian will deliver to the Initial Noteholder, with a copy to the Indenture Trustee, the Backup Servicer, the Collateral Custodian and the Originator, an Initial Collateral Certification, confirming whether or not it has received a copy of each executed Underlying Note endorsed in blank, for each Loan identified on the Loan Schedule to the S&SA Assignment with respect to such Transfer Date.

(ii) Within five Business Days after its receipt of the remaining Loan Documents for each such Transferred Loan, the Collateral Custodian shall review the related Loan Documents to confirm that: (A) each related Underlying Note has been properly executed and has no missing or mutilated pages, (B) UCC Financing Statements and other filings required by the related Loan Documents have been made, (C) other than in the case of a Transferred Loan secured by receivables only (as identified on the Loan Checklist), an Insurance Policy is contained in such Loan Documents with respect to any real or personal property constituting the Related Property for such Transferred Loan, (D) the related Outstanding Loan Balance, and Obligor name with respect to such Transferred Loan is accurately reflected on the related Loan Schedule and (E) based on the Loan Documents received, such Transferred Loan is not already included in the Collateral (collectively, the “ Review Criteria ”). Upon completion of such review the Collateral Custodian will deliver a Final Collateral Certification to the Initial Noteholder, with a copy to the Indenture Trustee, the Backup Servicer, the Collateral Custodian and the Originator, confirming its receipt of the Loan Documents. Such certification will also contain an exception report attached as Attachment A thereto which will identify any Transferred Loans for which (i) the Collateral Custodian has not received a Loan Document or (ii) any Review Criteria is not satisfied.

(iii) The Originator shall have ten Business Days to deliver any missing Loan Documents or correct any non-compliance with any Review Criteria. If after the conclusion of such time period the Originator has not delivered such missing Loan Document or cured any non-compliance by a Transferred Loan with any Review Criteria and such failure has a material adverse effect on the value or enforceability of any Transferred Loan or the interests of the Noteholders in any Transferred Loan, such Transferred Loan shall be deemed to be an Ineligible Loan and the Depositor shall repurchase such Transferred Loan pursuant to Section 3.05(b) within one Business Day after notice thereof at the Retransfer Price thereof by depositing such Retransfer Price in the Collection Account; provided that the Originator shall not be required to pay the Retransfer Price with respect to any such Transferred Loan to the extent that, after giving effect to the removal of such Loan from the Collateral, the Availability shall exceed $0. In lieu of such a repurchase, the Depositor and Originator may comply with the substitution provisions of Section 3.05(a) . On or prior to the date of such substitution or repurchase, the Originator shall deliver to the Initial Noteholder, with a copy to the Indenture Trustee, the Backup Servicer and the Collateral Custodian, a certification of a Responsible Officer indicating that the Originator intends to cause the Issuer to repurchase or substitute such Transferred Loan.

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(iv) It is understood and agreed that the obligation of the Originator to repurchase or substitute any such Transferred Loan pursuant to this Section 2.05(b) and Section 3.05 shall constitute the sole remedy with respect to such failure to comply with the foregoing delivery requirements.

(c) In performing its reviews of the Loan Documents, the Collateral Custodian shall have no responsibility to determine the genuineness of any document contained therein and any signature thereon. The Collateral Custodian shall not have any responsibility for determining whether any document is valid and binding, whether the text of any assignment or endorsement is in proper or recordable form, whether any document has been recorded in accordance with the requirements of any applicable jurisdiction or whether a blanket assignment is permitted in any applicable jurisdiction.

Section 2.06. Conditions Precedent to Closing . The effectiveness of this Agreement shall be subject to the satisfaction of the following conditions precedent as of the Closing Date:

(a) all conditions precedent to closing under Section 4.01 of the Note Purchase Agreement shall have been fulfilled;

(b) all conditions precedent to the Depositor’s purchase and contribution of any Purchased Assets to be transferred on the Closing Date pursuant to the Loan Sale Agreement shall have been fulfilled;

(c) the Originator and the Initial Noteholder shall have executed and delivered the Warrant Participation Agreement;

(d) the Originator shall have delivered to the Initial Noteholder a copy of the Credit and Collection Policy;

(e) the Originator, the Initial Noteholder and the Indenture Trustee shall have executed and delivered the Warrant Pledge and Security Agreement ;

(f) the Originator shall have delivered to the Initial Noteholder evidence of the amendment or partial termination, as the case may be, in form and substance reasonably satisfactory to the Initial Noteholder, of the UCC-1 financing statement previously filed with the Maryland Department of Assessments and Taxation naming Hercules Technology Growth Capital, Inc. as debtor and Alcmene Funding, L.L.C. as the secured party;

(g) the Originator shall have delivered to the Initial Noteholder copies of fully-executed amendments, in form and substance reasonably satisfactory to the Initial Noteholder, to (i) that certain Credit Agreement, dated as of April 12, 2005, among Hercules, Alcmene Funding, L.L.C. and the other lenders party thereto, and (ii) that certain Pledge and Security Agreement, dated as of April 12, 2005, by Hercules in favor of Alcmene Funding, L.L.C., together with such other amendments or terminations of security documents or other ancillary documents related to such credit agreement as the Initial Noteholder may reasonably require;

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(h) the Depositor shall have taken any action reasonably requested by the Indenture Trustee, the Issuer or the Initial Noteholder required to maintain or evidence the ownership interest of the Issuer in the Purchased Assets and the security interest of the Indenture Trustee in the Collateral.

Section 2.07. Conditions to Borrowings . On the Closing Date and on any Business Day during the Revolving Period, the Issuer may, upon two Business Days’ notice to the Initial Noteholder (with a copy to the Indenture Trustee), request a Borrowing from the Initial Noteholder. Any Borrowing (including any Borrowing made on the Closing Date) shall be subject to the following conditions:

(a) the Servicer shall have delivered on behalf of the Issuer a Borrowing Notice and a Borrowing Base Certificate;

(b) all conditions precedent to the Noteholders’ advance of the Borrowing under Section 3.01 of the Note Purchase Agreement shall have been fulfilled as of such Borrowing Date.

(c) as of such date, neither the Originator nor the Depositor shall have reason to believe that its insolvency is imminent;

(d) on and as of such date, after giving effect to such Borrowing, the Availability shall exceed zero;

(e) the Depositor shall have taken any action reasonably requested by the Indenture Trustee, the Issuer or the Initial Noteholder required to maintain or evidence the ownership interest of the Issuer in the Purchased Assets and the security interest of the Indenture Trustee in the Collateral;

(f) the Depositor shall have deposited, or caused to be deposited, in the Collection Account all Collections received with respect to each of the Loans Transferred on and after the Closing Date;

(g) neither the Termination Date nor the Amortization Date shall have occurred;

(h) each of the representations and warranties made by the Originator contained in Section 3.03 with respect to the Loans on the Closing Date shall be true and correct as of the applicable Borrowing Date (in the case of a Borrowing other than on the Closing Date, with the same effect as if then made) and each of the Depositor and the Originator shall have performed all obligations to be performed by it under the Basic Documents on or prior to such Borrowing Date; provided that, if any representation or warranty made by the Originator pursuant to Section 3.03 shall be incorrect as of any Transfer Date with respect to any Loan to be purchased on such date, the Issuer shall only be relieved of its obligation to purchase such Loan affected by such breach and, assuming satisfaction or waiver of the other conditions set forth in this clause (h), the Issuer shall nonetheless be obligated to purchase all Loans to be purchased on such date that are unaffected by such breach; and

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(i) it shall be a condition to the initial Borrowing that the Servicer shall have delivered the form of Servicer Report, to be attached hereto as Exhibit B , to the Backup Servicer, the Indenture Trustee and the Initial Noteholder.

Section 2.08. Conditions to Transfers of Loans . On the Closing Date and on any Business Day during the Revolving Period, the Depositor may convey Loans to the Issuer (each such conveyance, a “ Transfer ”). Any Transfer (including any Transfer made on the Closing Date) shall be subject to the following conditions:

(a) At least two Business Days prior to the proposed Transfer Date, the Servicer shall give notice to the Initial Noteholder and the Indenture Trustee (with a copy to the Collateral Custodian and the Backup Servicer) of such proposed Transfer Date and provide an estimate of the number of Loans and aggregate Outstanding Loan Balance of such Loans proposed to be conveyed to the Issuer on such Transfer Date.

(b) On the Business Day prior to the proposed Transfer Date, the Issuer shall deliver to the Initial Noteholder and the Indenture Trustee (with a copy to the Collateral Custodian and the Backup Servicer) a final Loan Schedule setting forth the Loans proposed to be transferred on such Transfer Date.

(c) On the applicable Transfer Date, the Issuer shall deliver to the Initial Noteholder and the Indenture Trustee (with a copy to the Collateral Custodian and the Backup Servicer) a fully-executed S&SA Assignment and a final Loan Schedule setting forth the Loans Transferred on such Transfer Date.

(d) If the Issuer will consummate a Borrowing on such Date in connection with the applicable Transfer, the conditions precedent to such Borrowing set forth in Section 2.07 hereof and Section 3.01 of the Note Purchase Agreement shall be satisfied.

(e) As of the applicable Transfer Date, neither the Originator nor the Depositor shall have reason to believe that its insolvency is imminent.

(f) The Depositor shall have taken any action reasonably requested by the Indenture Trustee, the Issuer or the Initial Noteholder required to maintain or evidence the ownership interest of the Issuer in the Purchased Assets and the security interest of the Indenture Trustee in the Collateral.

(g) Neither the Termination Date nor the Amortization Date shall have occurred.

(h) Each of the representations and warranties made by the Originator contained in Section 3.03 with respect to the Loans made on the Closing Date shall be true and correct as of the applicable Transfer Date, with the same effect as if then made, and each of the Depositor and the Originator shall have performed all obligations to be performed by it under the Basic Documents on or prior to such Transfer Date; provided that, if any representation or warranty made by the Originator pursuant to Section 3.03 shall be incorrect as of any Transfer Date with respect to any Loan to be purchased on such date, the Issuer shall only be relieved of its obligation to purchase such Loan affected by such breach and, assuming satisfaction or

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waiver of the other conditions set forth in this clause (h), the Issuer shall nonetheless be obligated to purchase all Loans to be purchased on such date that are unaffected by such breach.

Section 2.09. Extension of Amortization Date; Commencement of Amortization Period; Permitted Securitization Transactions .

(a) Hercules and the Initial Noteholder may, within 30 days prior to the Amortization Date, agree in writing to an extension of the then-current Amortization Date for an additional period of up to 364 days; provided that any such extension shall be subject to the payment by the Issuer of the Renewal Fee. The Initial Noteholder agrees to respond to any request by Hercules for such an extension not later than 20 days prior to the Amortization Date.

(b) If Hercules shall decline to extend the then-current Amortization Date, the Exit Fee shall become due and payable by Hercules to the Initial Noteholder on the next Payment Date unless (x) Hercules and the Initial Noteholder shall have entered into a binding commitment letter pursuant to which all or substantially all of the Transferred Loans then included in the Collateral shall be refinanced pursuant to either (i) a Permitted Securitization in which an Affiliate of the Initial Noteholder shall act as sole lead manager or (ii) another financing transaction in a form to be agreed between Hercules and the Initial Noteholder pursuant to such Commitment Letter, under which the Initial Noteholder or an Affiliate of the Initial Noteholder will arrange or provide financing for such Transferred Loans, or (y) the Initial Noteholder shall have declined to offer to enter into a binding commitment letter with Hercules with respect to a refinancing transaction of the type contemplated by clauses (x)(i) or (ii) above on terms not materially less favorable to Hercules and substantially similar to terms generally available to Hercules in the securitization market (as evidenced by not less than two binding commitment letters from investment banks and/or commercial banks of national or international standing proposing such a refinancing transaction).

(c) In the event that the Amortization Date is not extended pursuant to Section 2.09(a) , the Amortization Period shall automatically commence on the Amortization Date. The Servicer shall deliver notice of any extension or non-extension pursuant to this Section 2.09 to the Indenture Trustee promptly, and in no event later than the Business Day following such extension or non-extension.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

Section 3.01. Representations and Warranties of the Depositor .

The Depositor hereby represents, warrants and covenants to the other parties hereto and the Noteholders that as of the Closing Date and as of each Transfer Date:

(a) The Depositor is a limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has, and had at all relevant times, full power to own its property, to carry on its business as currently conducted and to enter into and perform its obligations under each Basic Document to which it is a party;

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(b) The execution and delivery by the Depositor of each Basic Document to which the Depositor is a party and its performance of and compliance with all of the terms thereof will not violate the Depositor’s organizational documents or constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or result in the breach or acceleration of, any material contract, agreement or other instrument to which the Depositor is a party or which are applicable to the Depositor or any of its assets;

(c) The Depositor has the full power and authority to enter into and consummate the transactions contemplated by each Basic Document to which the Depositor is a party, has duly authorized the execution, delivery and performance of each Basic Document to which it is a party and has duly executed and delivered each Basic Document to which it is a party; each Basic Document to which it is a party, assuming due authorization, execution and delivery by the other party or parties thereto, constitutes a valid, legal and binding obligation of the Depositor, enforceable against it in accordance with the terms thereof, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other similar laws relating to or affecting the rights of creditors generally, and by general equity principles (regardless of whether such enforcement is considered in a proceeding in equity or at law);

(d) The Depositor is not in violation of, and the execution and delivery by the Depositor of each Basic Document to which the Depositor is a party and its performance and compliance with the terms of each Basic Document to which the Depositor is a party will not constitute a violation with respect to any order or decree of any court or any order or regulation of any federal, state, municipal or governmental agency having jurisdiction over it or its business, which violation would materially and adversely affect the financial condition or operations of the Depositor or any of its properties or materially and adversely affect the performance of any of its duties hereunder;

(e) There are no actions or proceedings against, or investigations of, the Depositor currently pending with regard to which the Depositor has received service of process, and no action or proceeding against, or investigation of, the Depositor is, to the knowledge of the Depositor, threatened or otherwise pending before any court, administrative agency or other tribunal that (A) would prohibit its entering into any of the Basic Documents to which it is a party or render the Securities invalid, (B) seeks to prevent the issuance of the Securities or the consummation of any of the transactions contemplated by any of the Basic Documents to which it is a party or (C) would prohibit or materially and adversely affect the performance by the Depositor of its obligations under, or the validity or enforceability of, any of the Basic Documents to which it is a party or the Securities;

(f) No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Depositor of, or compliance by the Depositor with, any of the Basic Documents to which the Depositor is a party or the Securities, or for the consummation of the transactions contemplated by any of the Basic Documents to which the Depositor is a party, except for such consents, approvals, authorizations and orders, if any, that have been obtained prior to such date;

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

(h) The Depositor did not transfer the Purchased Assets sold to the Issuer with any intent to hinder, delay or defraud any of its creditors; nor will the Depositor be rendered insolvent as a result of such sale or pledge;

(i) The Depositor had good and valid title to, and was the sole owner of the Purchased Assets sold by the Depositor to the Issuer, free and clear of any Lien other than Permitted Liens and any such Lien released simultaneously with the sale contemplated herein, and, immediately upon each transfer and assignment herein contemplated, the Depositor will have delivered to the Issuer good and valid title to, and the Issuer will be the sole owner of, each item in the Purchased Assets transferred by the Depositor and, subject to the Indenture, the Indenture Trustee will have a first priority perfected security interest in each item of Collateral, in each case free and clear of any Lien;

(j) The Depositor acquired title to the Purchased Assets in good faith, without notice of any adverse claim;

(k) None of the Basic Documents to which the Depositor is a party, nor any Officer’s Certificate, statement, report or other document prepared by the Depositor and furnished or to be furnished by it pursuant to any of the Basic Documents to which it is a party or in connection with the transactions contemplated thereby contains any untrue statement of material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading;

(l) The Depositor is not required to be registered as an “investment company,” under the 1940 Act;

(m) The Depositor’s principal place of business and chief executive offices are located at 525 University Avenue, Suite 700, Palo Alto, California 94301, or at such other address as shall be designated by such party in a written notice to the other parties hereto;

(n) The Depositor covenants that during the continuance of this Agreement it will comply in all respects with the provisions of its organizational documents in effect from time to time; and

(o) The transfer of the Purchased Assets by the Depositor to the Issuer pursuant to the Basic Documents upon completion pursuant to the Basic Documents of the sale of the Notes by the Issuer to the Initial Noteholder, was intended to constitute a financing of such Purchased Assets for tax and consolidated accounting purposes (with a notation that it is treating the transfers as a sale for legal and all other purposes on its books, records and financial statements, in each case, consistent with GAAP).

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Section 3.02. Representations and Warranties of the Originator .

The Originator hereby represents and warrants to the other parties hereto and the Noteholders that as of the Closing Date and as of each Transfer Date:

(a) The Originator is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, is duly qualified, in good standing and licensed to carry on its business in each state where the conduct of its business requires it to be so qualified and licensed and has full corporate power and authority to own its property, to carry on its business as currently conducted and to enter into and perform its obligations under each Basic Document to which it is a party;

(b) The execution and delivery by the Originator of each Basic Document to which it is a party and its performance of and compliance with the terms thereof will not violate the Originator’s organizational documents or constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or result in the breach or acceleration of, any material contract, agreement or other instrument to which the Originator is a party or which may be applicable to the Originator or any of its assets in each case that is likely to affect materially and adversely its ability to carry out the transactions contemplated hereby;

(c) The Originator has the full power and authority to enter into and consummate all transactions contemplated by the Basic Documents to be consummated by it, has duly authorized the execution, delivery and performance of each Basic Document to which it is a party and has duly executed and delivered each Basic Document to which it is a party; each Basic Document to which it is a party, assuming due authorization, execution and delivery by each of the other parties thereto, constitutes a valid, legal and binding obligation of the Originator, enforceable against it in accordance with the terms hereof, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other similar laws relating to or affecting the rights of creditors generally, and by general equity principles (regardless of whether such enforcement is considered in a proceeding in equity or at law);

(d) The Originator is not in violation of, and the execution and delivery of each Basic Document to which it is a party by the Originator and its performance and compliance with the terms of each Basic Document to which it is a party will not constitute a violation with respect to, any order or decree of any court or any order or regulation of any federal, state, municipal or governmental agency having jurisdiction over it or its business, which violation would materially and adversely affect the financial condition, business or operations of the Originator or its properties or materially and adversely affect the performance of its duties under any Basic Document to which it is a party;

(e) There are no actions or proceedings against, or investigations of, the Originator currently pending with regard to which the Originator has received service of process, and no action or proceeding against, or investigation of, the Originator is, to the Originator’s knowledge, threatened or otherwise pending before any court, administrative agency or other tribunal that (A) would prohibit its entering into any Basic Document to which it is a party or render the Securities invalid, (B) seeks to prevent the issuance of the Securities or the consummation of any of the transactions contemplated by any Basic Document to which it is a party or (C) would prohibit or materially and adversely affect the sale and contribution of the

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Assigned Assets to the Depositor, the performance by the Originator of its obligations under, or the validity or enforceability of, any Basic Document to which it is a party or the Securities;

(f) No consent, approval, authorization or order of any court or governmental agency or body is required for: (1) the execution, delivery and performance by the Originator of, or compliance by the Originator with, any Basic Document to which it is a party, (2) the sale and contribution of the Assigned Assets to the Depositor, or (3) the consummation of the transactions required of it by any Basic Document to which it is a party, except such as shall have been obtained before such date, other than: (A) the filing or recording of financing statements, instruments of assignment and other similar documents necessary in connection with the sale of the Purchased Assets to the Issuer, (B) such consents, approvals, authorizations, qualifications, registrations, filings or notices as have been obtained or made and (C) where the lack of such consent, approval, authorization, qualification, registration, filing or notice is unlikely to have a material adverse effect on its performance hereunder;

(g) Immediately prior to the sale of the Assigned Assets to the Depositor, the Originator had good and valid title to the Assigned Assets sold by it on such date free and clear of all Liens other than Permitted Liens;

(h) The Originator is solvent, is able to pay its debts as they become due and has capital sufficient to carry on its business and its obligations under each Basic Document to which it is a party; it will not be rendered insolvent by the execution and delivery of this Agreement or by the performance of its obligations under each Basic Document to which it is a party; no petition of bankruptcy (or similar Bankruptcy Proceeding) has been filed by or against the Originator prior to the date hereof;

(i) The Originator has transferred the Assigned Assets transferred by it on each Transfer Date without any intent to hinder, delay or defraud any of its creditors;

(j) The Originator has received fair consideration and reasonably equivalent value in exchange for the Assigned Assets sold and contributed by it on each Transfer Date to the Depositor;

(k) The Originator has not dealt with any broker or agent or other Person who might be entitled to a fee, commission or compensation in connection with the transaction contemplated by this Agreement;

(l) The Originator’s principal place of business and chief executive offices are located at 525 University Avenue, Suite 700, Palo Alto, California 94301 or at such other address as shall be designated by such party in a written notice to the other parties hereto;

(m) The Originator and the Servicer acknowledge and agree that the Servicing Fee represents reasonable compensation for the performance of the servicing duties hereunder and that the entire Servicing Fee shall be treated by the Servicer and the Originator, for accounting purposes, as compensation for the servicing and administration of the Transferred Loans pursuant to this Agreement; and

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(n) The Originator is in compliance with the financial covenants set forth in Section 7.01.

It is understood and agreed that the representations and warranties set forth in this Section 3.02 shall survive delivery of the respective Loan Files to the Collateral Custodian, as the agent of the Indenture Trustee, and shall inure to the benefit of the Noteholders, the Depositor, the Servicer, the Indenture Trustee, the Owner Trustee and the Issuer. Upon discovery by the Originator, the Servicer, the Indenture Trustee or the Issuer of a breach of any of the foregoing representations and warranties that materially and adversely affects the value of any item of Collateral or the interests of the Noteholders in any item of Collateral or in the Securities, the party discovering such breach shall give prompt written notice to the other parties. The fact that the Initial Noteholder has conducted or has failed to conduct any partial or complete due diligence investigation of the Loan Files shall not affect any rights of the Securityholders’ under this Agreement.

Section 3.03. Representations and Warranties Regarding the Loans .

The Originator hereby represents and warrants, to the Indenture Trustee, for the benefit of the Noteholders, that as of the Closing Date with respect to each Loan sold to the Issuer on the Closing Date, if any, and as of each Transfer Date with respect to each Loan sold to the Issuer on each Transfer Date:

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

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

(c) the Loan is not a Defaulted Loan or a Charged-Off Loan, and no payment or portion thereof is more than 30 days Delinquent;

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

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

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

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(g) any applicable taxes in connection with the transfer of such Loan have been paid and the Obligor has been given any assurances (including with respect to the payment of transfer taxes and compliance with securities laws) required by the Loan Documents in connection with the transfer of the Loan;

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

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

(j) the Loan, together with the related Loan Documents, was originated in accordance with, and does not contravene in any material respect any Applicable Laws (including, without limitation, laws, rules and regulations relating to usury, predatory lending, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy);

(k) the Loan, together with the related Loan Documents, is fully assignable without consent of the applicable Obligor or any agent with respect to the Loan (except for such consents which have been obtained prior to the related Transfer Date), (and, if such Loan is secured by an interest in real property, an Assignment of Mortgage, in a form reasonably approved by the Initial Noteholder and attached hereto as Exhibit H prior to the first Borrowing pursuant to which a Loan secured by an interest in real property shall become part of the Collateral, has been delivered to the Collateral Custodian);

(l) the Loan was documented and closed in accordance with the Credit and Collection Policy, and there is only one current original of each promissory note representing all or a portion of the Outstanding Loan Balance of any Loan that is included in the Collateral, and each such note has been delivered to the Collateral Custodian on behalf of the Indenture Trustee, duly endorsed as Collateral;

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

(n) the Loan has an original term to maturity of no more than 60 months, and is either fully amortizing in installments (which installments need not be in identical amounts) over such term or the principal amount thereof is due in a single installment at the end of such term (and with respect to Loans to Obligors located in Canada, in which case the original term to maturity of such Loan shall be such as to permit compliance with the representations and warranties in Item 1 of Exhibit M );

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

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(p) any Related Property with respect to such Loan is insured to the extent consistent with the Credit and Collection Policy;

(q) the Loan Documents with respect to such Loan are complete in accordance with the Credit and Collection Policy;

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

(s) such Loan does not contain any confidentiality provision which would purport to restrict disclosure of data or other information related to such Loan or the related Obligor to any Rating Agency, investment bank or independent accounting firm in connection with a Permitted Securitization if such Rating Agency, investment bank or independent accounting firm is otherwise subject to confidentiality restrictions that reasonably protect against the disclosure of such data or other information;

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

(u) if such Loan was originated after August 1, 2005, the Obligor of such Loan has waived all rights of set-off and/or counterclaim against the Originator of the Loan and all assignees thereof;

(v) with respect to Agented Notes, the related Loan Documents (a) shall include a note purchase agreement containing provisions relating to the appointment and duties of a payment agent and a collateral agent and intercreditor and (if applicable) subordination provisions substantially similar to the forms provided to and approved by the Initial Noteholder and attached hereto as Exhibit G prior to the first Borrowing pursuant to which an Agented Note shall become part of the Collateral, and (b) are duly authorized, fully and properly executed and are the valid, binding and unconditional payment obligation of the Obligor thereof;

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

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

(y) with respect to Agented Notes, all required notifications, if any, have been given to the collateral agent, the payment agent and any other parties required by the Loan Documents, and all required consents, if any, have been obtained with respect to, the Originator’s assignment of the Agented Notes and the Originator’s right, title and interest in the Related Property to the Depositor and the security interest therein of the Issuer and of the Indenture Trustee for the benefit of the Noteholders;

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

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

(bb) all information on the Loan Schedule delivered to the Collateral Custodian on behalf of the Indenture Trustee with respect to such Loan is true and correct;

(cc) if the Obligor with respect to such Loan is organized or continued under the federal, territorial or provincial laws of, or principally located in Canada, or the Related Property by which such Loan is principally secured is located in or arises under the federal, territorial or provincial laws of, Canada, the Loan complies with the additional criteria attached hereto as Exhibit M ; and

(dd) if the Obligor with respect to such Loan is organized or continued under the provincial laws of, or principally located in the Province of Quebec, or the Related Property by which such Loan is principally secured is located in or arises under the provincial laws of, the Province of Quebec, the Loan complies with the additional criteria attached hereto as Exhibit N.

It is understood and agreed that the representations and warranties set forth herein shall survive delivery of the respective Loan Files to the Issuer and/or the Collateral Custodian and shall inure to the benefit of the Issuer or Depositor, as applicable, and their successors and assigns, notwithstanding any restrictive or qualified endorsement or assignment.

Section 3.04. Notice of Breach of Representations and Warranties . It is understood and agreed that the representations and warranties set forth in Section 3.03 shall survive the conveyance of the Purchased Assets to the Issuer and the Grant by the Issuer of an interest in the Collateral to the Indenture Trustee, as applicable, and the delivery of the Notes to the Noteholders. Upon discovery by the Depositor, the Servicer, the Originator, the Collateral Custodian, the Issuer, the Indenture Trustee or any Securityholder of a breach of any of such representations and warranties or the representations and warranties of the Originator set forth in Section 3.02 or 3.03 , which breach materially and adversely affects the value or enforceability of all or any portion of the Purchaser Assets or the interests of the Noteholders in all or any portion of the Collateral, any party discovering such breach shall give prompt written notice to the others.

Section 3.05. Substitution of Loans; Repurchase or Substitutions of Ineligible Loans .

(a) Substitution of Loans . On any Business Day during the Revolving Period (and after the Revolving Period at the discretion of the Initial Noteholder), the Depositor may, subject to the conditions set forth in this Section 3.05 and subject to the other restrictions contained herein, replace any Transferred Loan with one or more Eligible Loans (each, a

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“ Substitute Loan ”), provided that no such replacement shall occur unless each of the following conditions is satisfied as of the date of such replacement and substitution:

(i) the Depositor has recommended to the Initial Noteholder (with a copy to the Indenture Trustee and the Collateral Custodian) in writing that the Transferred Loan to be replaced should be replaced (each a “ Replaced Loan ”);

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

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

(iv) all representations and warranties contained in Section 3.03 shall be true and correct as of the date of substitution of any such Substitute Loan;

(v) the substitution of any Substitute Loan does not cause a Default, a Trigger Event or an Event of Default to occur;

(vi) after giving effect to the proposed substitution, the sum of the Outstanding Loan Balances of all Substitute Loans does not exceed 15% of the highest Aggregate Outstanding Loan Balance for any month during the 12 month period immediately preceding the applicable date of determination (or such lesser number of months as shall have elapsed as of such date of determination);

(vii) after giving effect to the proposed substitution, the sum of the Outstanding Loan Balances of all Substitute Loans substituted for Defaulted Loans and Charged-Off Loans shall not exceed 10% of the highest Aggregate Outstanding Loan Balance for any month during the 12 month period immediately preceding the applicable date of determination (or such lesser number of months as shall have elapsed as of such date of determination);

(viii) the remaining maturity of the Substitute Loan is less than or equal to the remaining maturity of the Replaced Loan;

(ix) the Weighted Average Life of such Substitute Loan is less than or equal to that of the Replaced Loan;

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

(xi) all actions or additional actions (if any) necessary to perfect the security interest and assignment of such Substitute Loan and Related Property constituting part of the Purchased Assets related to such Substitute Loan to the Issuer and the Grant of a security interest therein to the Indenture Trustee shall have been taken as of or prior to the Substitution Date;

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

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(xiii) the Loan Rate on the Substitute Loan is not less than the Loan Rate on the Replaced Loan;

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

(xv) the Depositor shall deliver to the Initial Noteholder (with a copy to the Indenture Trustee) on the date of such substitution (i) a certificate of a Responsible Officer certifying that each of the foregoing is true and correct as of such date and (ii) a Borrowing Base Certificate (including a calculation of the Availability after giving effect to such substitution).

In addition, the Depositor shall in connection with such substitution deliver to the Collateral Custodian the related Loan Documents and shall pay to each Hedge Counterparty, as applicable, all Hedge Breakage Costs, if any, incurred in connection with the substitution of such Transferred Loan pursuant to this Section 3.05 and the termination of any Hedge Transactions, in whole or in part, in connection therewith. In connection with any such substitution, the Indenture Trustee, on behalf of Noteholders, shall, automatically and without further action (unless otherwise necessary or requested by the Issuer or the Servicer), be deemed to transfer to the Issuer (for transfer to the Depositor), free and clear of any Lien created by the Indenture, all of the right, title and interest of the Indenture Trustee, on behalf of the Noteholders, in, to and under such Replaced Loan, but without any representation and warranty of any kind, express or implied.

(b) Repurchase or Substitution of Ineligible Loans .

(i) Subject to Section 3.05(b)(ii) , in the event of a breach of (A) any representation or warranty set forth in Section 3.03 with respect to a Transferred Loan (or the Related Property and other related collateral constituting part of the Purchased Assets related to such Transferred Loan) (each such Transferred Loan, an “ Ineligible Loan ”), no later than 30 days after the earlier of (x) knowledge of such breach on the part of the Depositor or the Servicer and (y) receipt by the Depositor or the Servicer of written notice thereof given by the Initial Noteholder or the Indenture Trustee on its behalf, or (B) the applicable Transferred Loan is identified for repurchase pursuant to Section 2.05(b)(ii) , the Issuer shall either (1) repay Advances Outstanding in an amount equal to the aggregate Retransfer Price of such Ineligible Loan(s) to which such breach relates on the terms and conditions set forth below, or (2) substitute for such Ineligible Loan a Substitute Loan; provided , that no such repayment shall be required to be made with respect to any Ineligible Loan (and such Transferred Loan shall cease to be an Ineligible Loan) if, on or before the expiration of such 30 day period, the representations and warranties in Section 3.03 with respect to such Ineligible Loan shall be made true and correct in all material respects with respect to such Ineligible Loan as if such Ineligible Loan had become part of the Collateral on such day. If the Issuer will repay Advances Outstanding pursuant to clause (1) above, the Depositor shall make a contemporaneous deposit to the Collection Account of the related Retransfer Price, as contemplated by Section 3.05(b)(iii) .

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(ii) Notwithstanding anything contained in this Section 3.05(b) to the contrary, in the event that a Transferred Loan is determined to be an Ineligible Loan by reason of a breach of any representation and warranty set forth in Section 3.03 with respect to each Transferred Loan, the Related Property and other related collateral constituting part of the Purchased Assets related to such Transferred Loan having been (A) conveyed to the Issuer or Granted to the Indenture Trustee, on behalf of the Noteholders, free and clear of any Lien of any Person claiming through or under the Originator or the Depositor and their respective Affiliates and (B) in compliance, in all material respects, with all Applicable Law, immediately upon the earlier to occur of the discovery of such breach by the Issuer or receipt by the Issuer of written notice of such breach given by the Initial Noteholder (or the Indenture Trustee on its behalf), the Depositor shall make a contemporaneous deposit to the Collection Account as contemplated by Section 3.05(b)(iii) to enable the Issuer to repay, and the Issuer shall repay, Advances Outstanding in an amount equal to the sum of (I) the aggregate Outstanding Loan Balance of such Ineligible Loan(s), (II) any accrued and unpaid interest thereon, (III) any outstanding Servicer Advances thereon and (IV) all Hedge Breakage Costs owed to any relevant Hedge Counterparty for any termination of one or more Hedge Transactions, in whole or in part, as required by the terms of any Hedge Agreement incurred in connection with the retransfer of such Transferred Loan pursuant to this Section 3.05(b) and the termination of any Hedge Transactions in whole or in part in connection therewith, (collectively, the “ Retransfer Price ”), and the Indenture Trustee on behalf of the Noteholders shall release to Issuer (for release to the Depositor) any such Ineligible Loan(s) and relinquish any Lien created pursuant to the Indenture, this Agreement or otherwise. On and after the date of payment of the Retransfer Price, the applicable Ineligible Loan and the Related Property and other related collateral constituting part of the Purchased Assets with respect to such Ineligible Loan shall not be included in the Collateral.

(iii) In consideration of any such release by the Issuer (and by the Indenture Trustee on behalf of the Noteholders), the Depositor shall, on the date of such repayment, deposit to the Collection Account, in immediately available funds, an amount equal to the Retransfer Price therefor. Upon each such repayment, the Indenture Trustee, on behalf of the Noteholders, shall automatically and without further action be deemed to release to the Issuer (which shall release to the Depositor) all the right, title and interest of the Indenture Trustee on behalf of the Noteholders (and all right, title and interest of the Issuer) in, to and under such Ineligible Loan(s) and all monies due or to become due with respect thereto, all proceeds thereof and all rights to security for any such Ineligible Loan, and all proceeds and products of the foregoing. The Issuer and the Indenture Trustee shall, at the sole expense of the Issuer, execute such documents and instruments of transfer as may be prepared by the Issuer and the Depositor (or the Servicer on their behalf) and take such other actions as shall reasonably be requested by the Issuer to effect the transfer of such Ineligible Loan pursuant to this Section 3.05 .

(iv) The Issuer hereby agrees that if any real property collateral securing any Transferred Loan becomes the subject of any claims, proceedings, Liens or encumbrances with respect to any material violation or claimed material violation of any Environmental Law, such Transferred Loan shall for all purposes hereunder be deemed

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an Ineligible Loan at and following the time of discovery of such fact by the Servicer, the Issuer, the Initial Noteholder, the Collateral Custodian or the Indenture Trustee, and the Depositor shall either deposit to the Collection Account an amount equal to the Retransfer Price of such Ineligible Loan or replace such Ineligible Loan with a Substitute Loan. Such Ineligible Loan shall otherwise be treated in accordance with this Section 3.05 .

Section 3.06. Optional Sales .

(a) During the Revolving Period and prior to the occurrence of a Trigger Event, a Default or an Event of Default, on any Optional Sale Date, the Issuer shall have the right to prepay all or a portion of the Advances Outstanding in connection with the sale and assignment to the Depositor by the Issuer, and the release from the Lien of the Indenture by the Indenture Trustee on behalf of the Noteholders, of all or a portion of the Transferred Loans in connection with a Permitted Securitization (each, an “ Optional Sale ”), subject to the following terms and conditions:

(i) The Servicer on behalf of the Depositor and the Issuer shall have given the Initial Noteholder (with a copy to the Indenture Trustee) at least 30 Business Days’ prior written notice of its intent to effect an Optional Sale, unless such notice requirement is waived or reduced by the Initial Noteholder;

(ii) Any Optional Sale shall be in connection with a Permitted Securitization;

(iii) Unless an Optional Sale is to be effected on a Payment Date (in which case the relevant calculations with respect to such Optional Sale shall be reflected on the applicable Servicer Report), the Servicer shall deliver to the Initial Noteholder (with a copy to the Indenture Trustee) a certificate and evidence to the reasonable satisfaction of the Initial Noteholder (which evidence may consist solely of an Officer’s Certificate from the Servicer) that the Issuer shall have sufficient funds on the related Optional Sale Date to effect the contemplated Optional Sale in accordance with this Agreement. In effecting an Optional Sale, the Issuer may use the Proceeds of sales of the Transferred Loans to repay all or a portion of the Aggregate Unpaids;

(iv) After giving effect to the Optional Sale and the assignment to the Issuer of all or a portion of the Transferred Loans, as the case may be, on any Optional Sale Date, (a) the Availability shall be greater than or equal to zero, (b) the representations and warranties contained in Section 3.03 hereof shall continue to be correct and (c) none of a Trigger Event, a Default or an Event of Default shall have resulted from the Optional Sale;

(v) On the related Optional Sale Date, the Noteholders, the Hedge Counterparties, the Indenture Trustee, the Collateral Custodian and the Backup Servicer, as applicable, shall have received, as applicable, in immediately available funds, an amount equal to the sum of (a) the portion of the Advances Outstanding to be repaid (that are attributable to the Purchased Assets to be sold by the Issuer in connection with such Optional Sale) plus (b) an amount equal to all unpaid Interest Payment Amounts and

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Interest Carry-Forward Amounts to the extent reasonably determined by the Initial Noteholder to be attributable to that portion of the Advances Outstanding to be repaid in connection with the Optional Sale plus (c) an aggregate amount equal to the sum of all other amounts due and owing to the Noteholders, the Indenture Trustee, the Backup Servicer, the Collateral Custodian, the Indemnified Parties and the Hedge Counterparties, as applicable, under this Agreement and the other Basic Documents, to the extent accrued to such date and to accrue thereafter to the next Payment Date and attributed to that portion of the Advances Outstanding to be repaid in connection with the Optional Sale; provided that the Initial Noteholder shall have the right in connection with a Permitted Securitization to determine whether the amount paid (or proposed to be paid) by the Issuer on the Optional Sale Date is sufficient to satisfy the requirements of clauses ( a ) through ( c ) and is sufficient to reduce the Advances Outstanding to the extent requested by the Issuer in connection with the Optional Sale;

(vi) On or prior to each Optional Sale Date, the Servicer on behalf of the Issuer shall have delivered to the Initial Noteholder (with a copy to the Indenture Trustee and the Collateral Custodian) a list specifying all Transferred Loans to be sold and assigned pursuant to such Optional Sale; and

(vii) No selection procedure adverse to the interests of the Noteholders shall have been employed in the selection of the Transferred Loans to be sold and assigned pursuant to such Optional Sale.

(b) In connection with any Optional Sale, upon receipt by the Noteholders, the Hedge Counterparties, the Indenture Trustee, the Collateral Custodian and the Backup Servicer, as applicable, of the amounts referred to in clause (a)(v) above (receipt of which by the Noteholders and the Hedge Counterparties shall be confirmed to the Collateral Custodian and Trustee), there shall be sold and assigned to the Depositor without recourse, representation or warranty all of the right, title and interest of the Issuer, in, to and under the portion of the Purchased Assets so retransferred and such portion of the Purchased Assets so retransferred shall be released from the Lien of this Agreement and the Lien of the Indenture and shall no longer be a part of the Collateral under the Indenture.

(c) The Originator hereby agrees to pay the reasonable legal fees and expenses of the Initial Noteholder and each party hereto in connection with any Optional Sale (including, but not limited to, expenses incurred in connection with the release of the Lien of the Indenture Trustee on behalf of the Noteholders and any other party having an interest in the Collateral in connection with such Optional Sale).

(d) In connection with any Optional Sale, on the related Optional Sale Date, the Indenture Trustee, on behalf of the Noteholders, shall, at the expense of the Issuer, and the Issuer shall, at the request of the Depositor, as the case may be, (i) execute such instruments of release in favor of the Issuer or the Depositor, as applicable, with respect to the portion of the Collateral to be retransferred to the Issuer and the portion of the Purchased Assets to be retransferred to the Depositor, as applicable, as the Issuer, the Depositor or the Initial Noteholder, as applicable, may reasonably request (in recordable form if necessary and, in each case, without recourse), (ii) deliver any portion of the Collateral to be retransferred to the Issuer

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and the portion of the Purchased Assets to be retransferred to the Depositor, as applicable, in its possession to the Issuer or the Depositor, as applicable, and (iii) otherwise take such actions, and cause or permit the Issuer or the Indenture Trustee to take such actions, as are necessary and appropriate to release the Lien of the Indenture Trustee on the portion of the Collateral to be retransferred to the Issuer (and the Depositor) and release and deliver to the Depositor such portion of the Purchased Assets to be retransferred to the Depositor.

(e) Notwithstanding anything in this Section 3.06 the Issuer shall not, and the Servicer shall not on the Issuer’s behalf, purchase, sell or substitute any Transferred Loan with the primary purpose of recognizing gain or decreasing losses on such Transferred Loan or in any manner that would cause the Issuer not to be in compliance with the requirements of Rule 3a-7 under the 1940 Act.

Section 3.07. RIC/BDC Sales .

(a) During the Revolving Period, and prior to the occurrence of a Trigger Event, a Default or an Event of Default, on any RIC/BDC Sale Date, the Issuer shall have the right to prepay all or a portion of the Advances Outstanding in connection with the sale and assignment to a third party by the Issuer, and the release from the Lien of the Indenture by the Indenture Trustee of one or more Transferred Loans (each, a “ RIC/BDC Sale ”), subject to the following terms and conditions:

(i) At least five Business Days prior to such RIC/BDC Sale Date, the Servicer on behalf of the Issuer shall have recommended to the Initial Noteholder in writing that the related Transferred Loan should be sold and shall have given the Initial Noteholder (with a copy to the Indenture Trustee and the Collateral Custodian) written notice of its intent to effect a RIC/BDC Sale (each such notice, a “ RIC/BDC Sale Notice ”), specifying the RIC/BDC Sale Date, including a list of all Transferred Loans to be sold and assigned pursuant to such RIC/BDC Sale and demonstrating that after such RIC/BDC Sale, the RIC/BDC Requirements shall be satisfied;

(ii) Any RIC/BDC Sale shall be made by the Issuer to an unaffiliated third party purchaser in a transaction (x) in accordance with Accepted Servicing Practices, (y) reflecting arms-length market terms and (z) in which the Issuer makes no representations, warranties or covenants and provides no indemnification for the benefit of any other party to the RIC/BDC Sale (other than any representations, warranties or covenants relating to the Issuer’s ownership of or title to the Transferred Loan that is the subject of the RIC/BDC Sale that are standard and customary in connection with such a sale or for which the Originator has agreed to fully indemnify the Issuer);

(iii) The Servicer shall deliver to the Initial Noteholder (with a copy to the Indenture Trustee and the Collateral Custodian) a completed Borrowing Base Certificate and other evidence to the reasonable satisfaction of the Initial Noteholder that (w) the RIC/BDC Requirements are not satisfied prior to the related RIC/BDC Sale and after such sale the RIC/BDC Requirements shall be satisfied or the extent of compliance with the RIC/BDC Requirements will be improved, (x) the requirements of Section 3.07(a)(v) will be satisfied on the related RIC/BDC Sale Date after giving effect to the contemplated

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RIC/BDC Sale, (y) the sum of the Outstanding Loan Balances of all Transferred Loans that have been sold pursuant to RIC/BDC Sales does not exceed 10% of the highest Aggregate Outstanding Loan Balance for any month during the 12 month period immediately preceding the applicable date of determination (or such lesser number of months as shall have elapsed as of such date of determination);

(iv) After giving effect to the RIC/BDC Sale and the release to the Issuer of the related Collateral on any RIC/BDC Sale Date, (a) the Availability shall be equal to or greater than zero, (b) the representations and warranties contained in Section 3.03 hereof shall continue to be correct, and (c) none of a Trigger Event, a Default or an Event of Default shall have resulted;

(v) On the related RIC/BDC Sale Date, the Indenture Trustee on behalf of the Noteholders shall have received, into the Collection Account, in immediately available funds, an amount equal to the sum of (a) the portion of the Advances Outstanding to be prepaid that are attributable to the Collateral to be sold by the Issuer pursuant to this Section 3.07 plus (b) an amount equal to all unpaid Interest Payment Amounts and Interest Carry-Forward Amounts to the extent reasonably determined by the Initial Noteholder to be attributable to that portion of the Advances Outstanding to be paid in connection with the RIC/BDC Sale plus (c) an aggregate amount equal to the sum of all other amounts due and owing to the Noteholders, the Indenture Trustee, the Collateral Custodian and the Backup Servicer, the Indemnified Parties and the Hedge Counterparties, as applicable, under this Agreement and the other Basic Documents, to the extent accrued to such date and to accrue to the next Payment Date (including, without limitation, Hedge Breakage Costs and any other payments owing to the Hedge Counterparties in respect of the termination of any Hedge Transaction) in each case, to the extent attributable to the Collateral to be sold by the Issuer pursuant to this Section 3.07 ; provided that the Initial Noteholder shall have the right to determine whether the amount paid (or proposed to be paid) by the Issuer on the RIC/BDC Sale Date is sufficient to satisfy the requirements in clauses (a) through (c) and is sufficient to reduce the Advances Outstanding to the extent requested by the Issuer in connection with the RIC/BDC Sale; provided, further , that any proceeds of such RIC/BDC Sale in excess of the amount so deposited into the Collection Account also shall be deposited into the Collection Account and used to prepay Advances Outstanding on such RIC/BDC Sale Date; and

(vi) Any RIC/BDC Sale shall be made only to the extent such sale is necessary (as certified by a Responsible Officer of the Servicer in the related RIC/BDC Sale Notice) to satisfy the RIC/BDC Requirements.

(b) In connection with any RIC/BDC Sale, following receipt by the Noteholders of the amounts referred to in clause (v) above (receipt of which shall be confirmed to the Collateral Custodian and Indenture Trustee), there shall be released to the Issuer (for further sale to a third-party unaffiliated with the Issuer, the Originator or the Servicer) without recourse, representation or warranty all of the right, title and interest of the Indenture Trustee and the Noteholders in, to and under the portion of the Collateral so released and such portion of the

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Collateral so released shall be released from the Lien of the Indenture and this Agreement (subject to the requirements of clauses (iii) and (iv) above).

(c) The Originator hereby agrees to pay the reasonable legal fees and expenses of the Initial Noteholder and each party hereto in connection with any RIC/BDC Sale (including, but not limited to, expenses incurred in connection with the release of the Lien of the Indenture Trustee on behalf of the Noteholders and any other party having an interest in the portion of the Collateral to be released in connection with such RIC/BDC Sale).

(d) In connection with any RIC/BDC Sale, on the related RIC/BDC Sale Date, the Indenture Trustee on behalf of the Noteholders shall, at the expense of the Issuer (i) execute such instruments of release with respect to the portion of the Collateral to be released to the Issuer, in recordable form if necessary, in favor of the Issuer as the Servicer on behalf of the Issuer may reasonably request, (ii) deliver any portion of the Collateral to be released to the Issuer in its possession to the Issuer and (iii) otherwise take such actions, and cause or permit the Indenture Trustee to take such actions, as are determined by the Issuer or Servicer to be reasonably necessary and appropriate to release the Lien of the Indenture on the portion of the Collateral to be released to the Issuer and release and deliver to the Issuer such portion of the Collateral to be released to the Issuer.

(e) Notwithstanding anything in this Section 3.07 the Issuer shall not, and the Servicer shall not on the Issuer’s behalf, purchase, sell or substitute any Transferred Loan with the primary purpose of recognizing gain or decreasing losses on such Transferred Loan or in any manner that would cause the Issuer not to be in compliance with the requirements of Rule 3a-7 under the 1940 Act.

Section 3.08. Deemed Collections .

(a) If on any day the Indenture Trustee, on behalf of the Noteholders, does not own or have a valid and perfected first priority security interest in any Transferred Loan and Related Property (subject to Permitted Liens), if within 30 days after the earlier of the Servicer’s receipt of notice from the Indenture Trustee or the Servicer becoming aware thereof the Servicer has failed to cure such breach (if cure is reasonably possible and otherwise immediately upon receipt of such notice or upon the Servicer becoming aware), the Depositor shall be deemed to have received on such 30 ^th day (or such earlier day, as applicable) a collection (a “ Deemed Collection ”) of such Transferred Loan in full and shall on such day pay to the Issuer for payment to the Noteholders (by deposit in the Collection Account), an amount equal to (x) the Retransfer Price with respect to such Transferred Loan, plus (y) any other costs and expenses related to the retransfer of such Transferred Loan and any Related Property contemplated by this Section 3.08 .

(b) In connection with any such Deemed Collection, the Indenture Trustee, on behalf of the Noteholders, shall automatically and without further action (unless otherwise necessary or requested by the Initial Noteholder, the Issuer, the Depositor or the Servicer), be deemed to release the Lien on such Transferred Loan and any Related Property created by this Agreement and the Indenture and transfer to the Issuer, for transfer to the Depositor, free and clear of any Lien created by the Indenture or this Agreement, all of the right, title and interest of the Indenture Trustee, on behalf of the Noteholders, in, to, and under the Transferred Loan and

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any Related Property with respect to which the Depositor has received such Deemed Collection, but without any recourse, representation and warranty of any kind, express or implied.

ARTICLE IV

ADMINISTRATION AND SERVICING OF LOANS

Section 4.01. Appointment of the Servicer .

The Issuer hereby appoints Hercules Technology Growth Capital, Inc. as the Servicer hereunder to service the Transferred Loans and enforce its respective rights and interests in and under each Transferred Loan in accordance with the terms and conditions of this Article IV and to serve in such capacity until the termination of its responsibilities pursuant to Section 9.01 . Hercules Technology Growth Capital, Inc. hereby accepts such appointment and agrees to perform the duties and obligations with respect thereto set forth herein. The Servicer and the Issuer hereby acknowledge that the Indenture Trustee, the Initial Noteholder and the other Noteholders are third party beneficiaries of the obligations undertaken by the Servicer hereunder.

Section 4.02. Duties and Responsibilities of the Servicer .

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

(b) The duties of the Servicer, as the Issuer’s agent, shall include, without limitation:

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

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

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

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prior Servicer to the extent such records have been delivered to it in a format reasonably acceptable to such successor Servicer;

(iv) promptly delivering to the Issuer, the Indenture Trustee, the Initial Noteholder and the Collateral Custodian, from time to time, such information and Servicing Records (including information relating to its performance under this Agreement) as the Issuer, the Indenture Trustee, the Initial Noteholder or the Collateral Custodian may from time to time reasonably request;

(v) identifying each Transferred Loan clearly and unambiguously in its Servicing Records to reflect that such Transferred Loan is owned by the Issuer and pledged to the Indenture Trustee, for the benefit of the Noteholders;

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

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

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

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

(c) The Issuer and Servicer hereby acknowledge that none of the Indenture Trustee, the Initial Noteholder, any other Noteholder nor the Collateral Custodian shall have any obligation or liability with respect to any Transferred Loans, nor shall any of them be obligated to perform any of the obligations of the Servicer hereunder.

Section 4.03. Authorization of the Servicer .

(a) Each of the Issuer and the Indenture Trustee, on behalf of the Noteholders, hereby authorizes the Servicer (including any successor thereto) to take any and all reasonable steps in its name and on its behalf necessary or desirable and not inconsistent with the pledge of the Transferred Loans pursuant to the Indenture, in the determination of the Servicer, to collect all amounts due under any and all Transferred Loans, including, without limitation, endorsing

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any of their names on checks and other instruments representing Collections, executing and delivering any and all instruments of satisfaction or cancellation, or of partial or full release or discharge, and all other comparable instruments, with respect to the Transferred Loans and, after the delinquency of any Transferred Loan and to the extent permitted under and in compliance with Applicable Law, to commence proceedings with respect to enforcing payment thereof, to the same extent as the Originator could have done if it had continued to own such Loan. The Issuer shall furnish the Servicer (and any successors thereto) with any powers of attorney and other documents necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties hereunder, and shall cooperate with the Servicer to the fullest extent in order to ensure the collectibility of the Transferred Loans. In no event shall the Servicer be entitled to make the Issuer, the Collateral Custodian, the Indenture Trustee or any Noteholder a party to any litigation without such party’s express prior written consent, or to make the Issuer a party to any litigation (other than any routine foreclosure or similar collection procedure) without the Indenture Trustee’s consent.

(b) After a Trigger Event or an Event of Default has occurred and is continuing, at the Initial Noteholder’s direction, the Servicer shall take such action as the Initial Noteholder or the Indenture Trustee may deem necessary or advisable to enforce collection of the Transferred Loans; provided , that the Initial Noteholder or the Indenture Trustee may, at any time after a Trigger Event or an Event of Default has occurred and is continuing, notify any Obligor with respect to any Transferred Loans of the pledge of such Transferred Loans to the Indenture Trustee and direct that payments of all amounts due or to become due to the Issuer thereunder be made directly to the Indenture Trustee or any servicer, collection agent or lock-box or other account designated by the Initial Noteholder or the Indenture Trustee and, upon such notification and at the expense of the Issuer, the Indenture Trustee may enforce collection of any such Transferred Loans and adjust, settle or compromise the amount or payment thereof. The Indenture Trustee shall give written notice to any successor Servicer of the Indenture Trustee’s actions or directions pursuant to this Section 4.3(b) .

Section 4.04. Collection of Payments .

(a) Collection Efforts, Modification of Loans . The Servicer will make reasonable efforts to collect all payments called for under the terms and provisions of the Transferred Loans as and when the same become due, and will follow those collection procedures as are consistent with Accepted Servicing Practices. The Servicer may not waive, modify or otherwise vary any provision of a Transferred Loan, except as may be in accordance with the Credit and Collection Policy. Notwithstanding anything to the contrary contained herein, if after giving effect to any sale (1) the amount described in clause (ii) of the definition of Availability shall exceed the amount described in clause (i) of the definition of Availability or (2) a Trigger Event, a Default or an Event of Default would occur then the Servicer prior to any such sale which would result in a loss to the Noteholders based on the Outstanding Loan Balance plus accrued interest and other fees due and payable shall obtain the prior written consent of the Initial Noteholder.

(b) Taxes and other Amounts . To the extent provided for in any Transferred Loan, the Servicer will use its best efforts to collect all payments with respect to amounts due for taxes, assessments and insurance premiums relating to such Transferred Loans or the Related

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Property and remit such amounts to the appropriate Governmental Authority or insurer on or prior to the date such payments are due.

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

(d) Control . In order to provide the Indenture Trustee with control over the Collection Account, the Principal Collections Account and the Distribution Account within the meaning of Section 9-104(a) of the UCC and any other applicable law, the Issuer and the Servicer hereby agree that the Indenture Trustee may at any time provide U.S. Bank or any successor Person that maintains the Collection Account, the Principal Collections Account and the Distribution Account with instructions as to the disposition of funds in the Collection Account, the Principal Collections Account and the Distribution Account or as to any other matters relating to the Collection Account, the Principal Collections Account and the Distribution Account without any further consent from the Issuer or the Servicer. U.S. Bank agrees with the Issuer, the Servicer and the Indenture Trustee to comply with any and all orders, notices, requests and other instructions originated by the Indenture Trustee directing disposition of the funds in the Collection Account, the Principal Collections Account and the Distribution Account without any further consent from the Issuer or the Servicer.

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

(f) Released Amounts . The Indenture Trustee hereby agrees that it shall, at the direction of the Initial Noteholder, release to the Issuer from the Collateral, and the Issuer hereby agrees to release to the Depositor, an amount equal to the Released Amounts promptly upon receipt of an Officer’s Certificate of the Servicer setting forth the calculation thereof, which release shall be automatic and shall require no further act by the Indenture Trustee or the Noteholders; provided , that, the Indenture Trustee and the Issuer, as applicable, shall execute and deliver such instruments of release and assignment, or otherwise confirm the foregoing release, as may reasonably be requested by the Servicer on behalf of the Issuer or the Depositor, as applicable, in writing. Upon such release, such Released Amounts shall not constitute and shall not be included in the Collateral. Immediately upon the release to the Issuer by the Indenture Trustee of the Released Amounts, the Issuer hereby irrevocably agrees to release to the Originator such Released Amounts, which release shall be automatic and shall require no further act by the Issuer; provided, that, the Issuer shall execute and deliver such instruments of release and assignment, or otherwise confirming the foregoing release of any Released Amounts, as may be reasonably requested by the Originator.

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Section 4.05. Servicer Advances .

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

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

Section 4.06. Realization Upon Defaulted Loans or Charged-Off Loans .

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

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Section 4.07. Maintenance of Insurance Policies .

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

Section 4.08. Representations and Warranties of the Servicer .

The Servicer hereby represents and warrants as follows:

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

(b) Due Qualification . The Servicer is qualified to do business as a corporation, is in good standing, and has obtained all licenses and approvals as required under the laws of all jurisdictions in which the ownership or lease of its property and or the conduct of its business (other than the performance of its obligations hereunder) requires such qualification, standing, license or approval, except to the extent that the failure to so qualify, maintain such standing or be so licensed or approved would not have an adverse effect on the interests of the Issuer or of the Initial Noteholder. The Servicer is qualified to do business as a corporation, is in good standing, and has obtained all licenses and approvals as required under the laws of all states in which the performance of its obligations pursuant to this Agreement requires such qualification, standing, license or approval, except where the failure to qualify or obtain such license or approval would not reasonably be expected to have a Material Adverse Effect on its ability to perform hereunder.

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

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

(e) No Consent . No consent, approval, authorization, order, registration, filing, qualification, license or permit of or with any Governmental Authority having jurisdiction over the Servicer or any of its properties is required to be obtained by or with respect to the

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Servicer in order for the Servicer to enter into this Agreement or perform its obligations hereunder.

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

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

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

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

(j) Material Adverse Change . Since December 31, 2004, there has been no Material Adverse Change with respect to the initial Servicer.

(k) Credit and Collection Policy . It has at all times, since the adoption of the Credit and Collection Policy, complied with the Credit and Collection Policy with respect to each Transferred Loan.

Section 4.09. Covenants of the Servicer .

The Servicer hereby covenants that:

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

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

(c) Obligations with Respect to Transferred Loans . The Servicer will duly fulfill and comply with all obligations on the part of the Issuer to be fulfilled or complied with under or in connection with each Transferred Loan and will do nothing to impair the rights of the

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Issuer or the Indenture Trustee, on behalf of the Noteholders, or of the Noteholders in, to and under the Collateral.

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

(e) Change of Name or Location; Records . The Servicer (i) shall not change its name, move the location of its principal executive office or change its jurisdiction of incorporation, without 30 days’ prior written notice to the Issuer, the Initial Noteholder and the Indenture Trustee, and (ii) shall not move, or consent to the Collateral Custodian moving the Loan Documents without 45 days’ prior written notice to the Issuer, the Initial Noteholder and the Indenture Trustee and (iii) will promptly take all actions required of each relevant jurisdiction in order to continue the first priority perfected security interest of the Indenture Trustee, on behalf of the Noteholders, in all Collateral, including delivery of an Opinion of Counsel.

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

(g) Notice of Certain Events . The Servicer will furnish to the Initial Noteholder, as soon as possible and in any event within one Business Day after the Servicer shall have knowledge of the occurrence of any Trigger Event, Default or Event of Default, a written statement setting forth the details of such event and the action that the Servicer proposes to take with respect thereto.

(h) Extension or Amendment of Transferred Loans . The Servicer will not, except as otherwise permitted in Section 4.04(a), extend, amend or otherwise modify the terms of any Transferred Loan.

(i) Other . The Servicer will furnish to the Issuer, the Indenture Trustee and the Initial Noteholder such other information, documents records or reports respecting the Transferred Loans or the condition or operations, financial or otherwise of the Servicer as the Issuer, the Indenture Trustee or the Initial Noteholder may from time to time reasonably request in order to protect the respective interests of the Issuer, the Indenture Trustee and the Noteholders under or as contemplated by this Agreement or any other Basic Document.

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(j) Agented Notes . Except as provided in Section 4.04(a) , the Servicer and the Originator covenant that they shall not without the prior written consent of the Initial Noteholder (i) make or consent to any amendment or alteration of the terms of any Agented Note or related Loan Documents, including without limitation the payments due thereunder, (ii) undertake to release or authorize or consent to the release of any collateral or security for the Agented Notes, (iii) accelerate or extend the maturity of any Agented Note or (iv) waive any claim against the Obligor or any applicable guarantor thereof, where the effect of any of the foregoing would have a material adverse effect on the Collateral, any Noteholder or the interest of the Indenture Trustee on behalf of the Noteholders in any Collateral.

(k) Inspection of Records . The Servicer will, at any time and from time to time during regular business hours, as requested by the Indenture Trustee or the Initial Noteholder, permit the Indenture Trustee or the Initial Noteholder, or their respective agents or representatives, (i) to examine and make copies of and take abstracts from all books, records and documents (including computer tapes and disks) relating to the Transferred Loans and the related Loan Documents and (ii) to visit the offices and properties of the Issuer, the Originator or the Servicer, as applicable, for the purpose of examining such materials described in clause (i), and to discuss matters relating to the Transferred Loans or the Issuer’s, the Originator’s or the Servicer’s performance hereunder, under the Loan Documents and under the other Basic Documents to which such Person is a party with such officers, directors, employees or independent public accountants of the Issuer, the Originator or the Servicer, as applicable, as might reasonably be determined to have knowledge of such matters. Prior to the occurrence of an Event of Default or a Trigger Event, the Servicer shall bear the expense of up to two such inspections in any 12-month period, subject to a maximum of $40,000 of such expenses in the aggregate, and any additional inspections or expenses in excess of $40,000 shall be for the account of the Initial Noteholder. Upon and after the occurrence of an Event of Default or a Trigger Event, the Servicer shall be required to bear the expense of all such inspections.

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

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

(n) Consolidation or Merger of the Servicer . The initial Servicer shall not consolidate or merge with or into, or sell, lease or transfer all or substantially all of its assets to,

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any other Person, unless, in the case of any such action (i) no Trigger Event, Event of Default or Material Adverse Effect would occur or be reasonably likely to occur as a result of such transaction, (ii) the Initial Noteholder provides its prior written consent to such transaction and (iii) such Person executes and delivers to the Initial Noteholder (with a copy to the Indenture Trustee) an agreement by which such Person assumes the obligations of the Servicer hereunder and under the other Basic Documents to which it is a party, or confirms that such obligations remain enforceable against it, together with such certificates and opinions of counsel as the Initial Noteholder may reasonably request.

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

Section 4.10. The Collateral Custodian .

(a) Appointment; Custodial Duties . The Issuer and the Initial Noteholder each hereby appoints U.S. Bank to act as Collateral Custodian hereunder, for the benefit of the Issuer, the Indenture Trustee and the Noteholders, as provided herein. U.S. Bank hereby accepts such appointment and agrees to perform the duties and responsibilities with respect thereto set forth herein.

The Collateral Custodian shall take and retain custody of the Loan Files delivered by the Issuer or on its behalf pursuant to Section 2.04 hereof in accordance with the terms and conditions of this Agreement, all for the benefit of the Noteholders and subject to the Lien thereon in favor of the Indenture Trustee, on behalf of the Noteholders. Upon receipt of any such Loan File, the Collateral Custodian shall perform the review and certification functions with respect thereto specified in Section 2.05 .

In taking and retaining custody of the Loan Files, the Collateral Custodian shall be acting as the agent of the Indenture Trustee on behalf of the Noteholders; provided , that the Collateral Custodian makes no representations as to the existence, perfection or priority of any Lien on the Loan Files or the instruments therein; provided , further , that, the Collateral Custodian’s duties as agent shall be limited to those expressly contemplated herein. All Loan Files shall be kept in fire-resistant vaults or cabinets at the location specified in Section 11.05 hereof, or at such other office as shall be specified to the Indenture Trustee and the Issuer (with a copy to the Initial Noteholder) by the Collateral Custodian in a written notice delivered at least 45 days prior to such change. All Loan Files shall be segregated with an appropriate identifying label and maintained in such a manner so as to permit retrieval and access. All Loan Files shall be clearly segregated from any other documents or instruments maintained by the Collateral Custodian. The Collateral Custodian shall clearly indicate that such Loan Files are the sole property of Issuer, subject to the security interest of the Indenture Trustee, on behalf of the Noteholders. In performing its duties, the Collateral Custodian shall use the same degree of care and attention as it employs with respect to similar loan files that it holds as collateral custodian for others.

(b) Concerning the Collateral Custodian .

(i) Except for its willful misconduct, gross negligence or bad faith, the Collateral Custodian may conclusively rely on and shall be fully protected in acting upon

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any certificate, instrument, opinion, notice, letter, telegram or other document delivered to it and that in good faith it reasonably believes to be genuine and that has been signed by the proper party or parties. Except for its willful misconduct, gross negligence or bad faith, the Collateral Custodian may rely conclusively on and shall be fully protected in acting upon the written instructions of any designated officer of the Initial Noteholder. In no event shall the Collateral Custodian be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits).

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

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

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

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

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

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

(viii) The parties hereto hereby acknowledge and agree that the Collateral Custodian’s execution of this Agreement shall constitute the Collateral Custodian’s written acknowledgment and agreement that the Collateral Custodian is holding any Collateral it receives that may be perfected by possession under the UCC on behalf of and for the benefit of the Indenture Trustee and the Noteholders.

(c) Release for Servicing . From time to time and as appropriate for the enforcement or servicing of any of the Transferred Loans, the Collateral Custodian is hereby authorized, upon receipt from the Servicer on behalf of the Issuer, of a written request for release

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of documents and receipt in the form annexed hereto as Exhibit J and upon receipt from the Initial Noteholder of its written consent to such request and receipt, to release to the Servicer the related Loan File or the documents set forth in such request and receipt to the Servicer; provided , however, notwithstanding the foregoing or any other provision of this Agreement, upon its receipt of written instructions from the Initial Noteholder, the Collateral Custodian shall cease releasing documents to the Servicer. All documents so released to the Servicer on behalf of the Issuer shall be held by the Servicer in trust for the benefit of the Issuer, the Indenture Trustee and the Noteholders, with respect to their respective interests, in accordance with the terms of this Agreement. The Servicer, on behalf of the Issuer, shall return to the Collateral Custodian the Loan File or other such documents when the Servicer’s need therefor in connection with such foreclosure or servicing no longer exists, unless the Transferred Loan shall be liquidated, in which case, upon receipt of an additional request for release of documents and receipt certifying such liquidation from the Servicer to the Collateral Custodian in the form annexed hereto as Exhibit J , the Servicer’s request and receipt submitted pursuant to the first sentence of this Section 4.10(c) shall be released by the Collateral Custodian to the Servicer. Notwithstanding anything in this Section 4.10(c) to the contrary, in no event shall the Collateral Custodian release any Loan File or part thereof to the Servicer for any reason without the Initial Noteholder’s prior written consent.

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

(e) Collateral Custodian Compensation . As compensation for its activities hereunder, the Collateral Custodian shall be entitled to a Collateral Custodian Fee from the Servicer. To the extent that such Collateral Custodian Fee is not paid by the Servicer, the Collateral Custodian shall be entitled to receive the unpaid balance of such Collateral Custodian Fee to the extent of funds available therefor pursuant to the provision of Sections 5.01(c)(4) and (5). The Collateral Custodian’s entitlement to receive the Collateral Custodian Fee (other than due and unpaid Collateral Custodian Fees owed through such date) shall cease on the earlier to occur of: (i) its removal as Collateral Custodian or (ii) the termination of this Agreement.

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

(g) Release of Loan Documents Following Optional Sale or RIC/BDC Sale . To the extent that portions of Transferred Loans are transferred pursuant to an Optional Sale or RIC/BDC Sale under Sections 3.06 or 3.07 and such portions of Transferred Loans are part of a Permitted Securitization or have been sold in a RIC/BDC Sale, the Collateral Custodian may, but only with the Initial Noteholder’s prior written consent, and upon terms and conditions satisfactory to the Initial Noteholder, including without limitation the execution by the Servicer

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of all such documents as the Initial Noteholder or the Indenture Trustee may require, release original Loan Documents (excluding the related original Underlying Note(s) evidencing the portion of the Transferred Loan, if any, remaining as part of the Collateral) to the servicer of such sold Loans for the purposes of enforcing or servicing such Loans in connection with a Permitted Securitization.

Section 4.11. Representations and Warranties of the Collateral Custodian .

The Collateral Custodian represents and warrants as follows:

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

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

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

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

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

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

(g) No Proceedings . There are no proceedings or investigations pending or, to the best of its knowledge, threatened, against it before any Governmental Authority (i) asserting the invalidity of this Agreement, (ii) seeking to prevent the consummation of any of the

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transactions contemplated by this Agreement or (iii) seeking any determination or ruling that might (in its reasonable judgment) have a Material Adverse Effect.

Section 4.12. Covenants of the Collateral Custodian .

The Collateral Custodian hereby covenants that:

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

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

(c) No Bankruptcy Petition . Prior to the date that is one year and one day (or such longer preference period as shall then be in effect) after the Collection Date, it will not institute against the Issuer, or join any other Person in instituting against the Issuer, any Bankruptcy Proceedings or other similar proceedings under the laws of the United States or any state of the United States. This Section 4.12(c) will survive the termination of this Agreement.

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

(e) Location of Loan Files . The Loan Files shall remain at all times in the possession of the Collateral Custodian at the address set forth on Annex 1 hereto unless notice of a different address is given in accordance with the terms hereof.

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

Section 4.13. The Backup Servicer .

(a) Appointment . The Issuer and the Initial Noteholder hereby appoint Lyon Financial to act as Backup Servicer for the benefit of the Issuer, the Indenture Trustee and the Noteholders in accordance with the terms of this Agreement. Lyon Financial hereby accepts such appointment and agrees to perform the duties and responsibilities with respect thereto set forth herein.

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(b) Duties . On or before the initial Borrowing Date, and until the receipt by the Servicer of a notice of termination pursuant to Section 9.01 hereof, the Backup Servicer shall perform, on behalf of the Issuer and the Indenture Trustee for the benefit of the Noteholders, the following duties and obligations:

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

(ii) Not later than 12:00 noon (New York City time) on each Record Date (or with respect to the initial Payment Date, the fourth Business Day preceding the Payment Date), the Servicer shall provide to the Backup Servicer and the Backup Servicer shall accept delivery of tape in an agreed upon electronic format (the “ Loan Tape ”) from the Servicer, which shall include but not be limited to the following information: (x) for each Transferred Loan, the name and number of the related Obligor, the collection status, the loan status, the date of each Scheduled Payment and the Outstanding Loan Balance and (y) the Aggregate Outstanding Loan Balance.