EXHIBIT 10.4.2

     SECOND AMENDMENT, dated as of August 20, 2008 (“Second Amendment”), to the
Second Amended and Restated Sale and Servicing Agreement dated as of May 8, 2008
(as amended, restated or otherwise modified, the “Agreement”), by and among
CapitalSource Real Estate Loan LLC, 2007-A, as the seller (the “Seller”), CSE
Mortgage LLC, as the originator (the “Originator”), and as the servicer (the
“Servicer”), each of the Issuers from time to time party thereto (collectively,
the “Issuers”), each of the Liquidity Banks from time to time party thereto
(collectively, the “Liquidity Banks”), Citicorp North America, Inc., as the
administrative agent for the Issuers and Liquidity Banks thereunder (the
“Administrative Agent”); and Wells Fargo Bank, National Association, not in its
individual capacity but as the backup servicer (the “Backup Servicer”), and not
in its individual capacity but as the collateral custodian (the “Collateral
Custodian”). Terms not otherwise defined in this Second Amendment shall have the
meanings set forth in the Agreement.
     The parties hereto desire to amend the Agreement as set forth below.
     Accordingly, for good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
     Section 1. Amendments to the Agreement. Effective as of the Effective Date
(as defined below), the Agreement is hereby amended as follows:
     (i) The definition of “Citibank Facilities” set forth in Section 1.1 of the
Agreement is hereby amended by (x) inserting “and” immediately before clause
(ii) thereof, (y) deleting clause (iii) in its entirety, and (z) adding the
following immediately prior to the end of such defined term: “(the “CS Funding
VII Facility”)”.
     (ii) The definition of “Class A Commitment” set forth in Section 1.1 of the
Agreement is hereby amended by (x) deleting clause (a) of such defined term in
its entirety, and (y) substituting therefor the following new clause (a):
“(a) with respect to Citibank, prior to the Termination Date, an amount equal to
$464,899,615, or such amount as reduced or increased by any Assignment and
Acceptance Agreement, or”
     (iii) The definition of “Class A Facility Amount” set forth in Section 1.1
of the Agreement is hereby amended by replacing the dollar amount
“$1,500,000,000” appearing in the second line thereof with the dollar amount
“$464,899,615”.
     (iv) The definition of “Combined Commitment Amount” set forth in
Section 1.1 of the Agreement is hereby amended and restated in its entirety to
read as follows:
“Combined Commitment Amount”: As of any day, the lesser of (x) the aggregate
Class A Commitments outstanding hereunder plus the “Commitments” outstanding
under the CS Funding VII Facility, and (y) $750,000,000.
     (v) The definitions of “Combined Threshold Amount” and “Combined Voluntary
Reductions” set forth in Section 1.1 of the Agreement are hereby deleted in
their entirety.

 

--------------------------------------------------------------------------------

 

     (vi) The definition of “Issuer Purchase Limit” set forth in Section 1.1 of
the Agreement is hereby amended by replacing the dollar amount “$600,000,000”
appearing in the first line thereof with the dollar amount “$464,899,615”.
     (vii) Section 2.1(b) of the Agreement is hereby amended by (x) inserting
“and” immediately before clause (ii) in the second sentence thereof and
(y) deleting clause (iii) in such sentence in its entirety.
     Section 2. Representations and Warranties of the Seller and the Servicer.
     Each of the Seller and the Servicer, jointly and severally, hereby
represents and warrants as of the date hereof as follows (which representations
and warranties shall survive the execution and delivery of this Second
Amendment):
     (i) The representations and warranties of each of the Seller and the
Servicer set forth in the Agreement are true and correct on and as of such date,
after giving effect to this Second Amendment, as though made on and as of such
date;
     (ii) Following the effectiveness of this Second Amendment, no event has
occurred and is continuing which constitutes a Termination Event or Unmatured
Termination Event;
     (iii) Each of the Seller and the Servicer is in compliance with each of its
covenants and agreements set forth in the Transaction Documents; and
     (iv) This Second Amendment has been duly executed and delivered by the
Seller and the Servicer and constitutes the legal, valid and binding obligation
of the Seller and Servicer, and is enforceable in accordance with its terms
subject (x) as to enforcement of remedies, to applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the enforcement of
creditors’ rights generally, from time to time in effect, and (y) to general
principles of equity.
     Section 3. Effective Date; Continued Effectiveness; Governing Law;
Counterparts.
     (a) This Second Amendment shall become effective as of the time and date
(the “Effective Date”) when the Administrative Agent shall have received a
counterpart of (i) this Second Amendment, duly executed and delivered on behalf
of each of the parties hereto, (ii) the Second Amendment to the CS Funding VII
Facility, dated as of the date of this Second Amendment, duly executed and
delivered on behalf of each of the parties thereto, and (iii) the Collateral
Repurchase Agreement, dated as of the date of this Second Amendment, relating to
that certain Second Amended and Restated Sale and Servicing Agreement, dated as
of May 8, 2008, among CSE QRS Funding II LLC, CSE Mortgage LLC, each of the
Issuers and Liquidity Banks from time to time party thereto, Citicorp North
America, Inc., as the Administrative Agent and Wells Fargo Bank, National
Association, as the Backup Servicer and as the Collateral Custodian.
     (b) Nothing herein shall be deemed to be a waiver of any covenant, or
agreement contained in, or any Termination Event or Unmatured Termination Event
under the Agreement

2

--------------------------------------------------------------------------------

 

and each of the parties hereto agrees that all other covenants and agreements
and other provisions contained in the Agreement and the other Transaction
Documents as modified by this Second Amendment shall remain in full force and
effect from and after the date of this Second Amendment.
     (c) THIS SECOND AMENDMENT, AND THE AGREEMENT AS AMENDED BY THE SECOND
AMENDMENT, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW PROVISIONS
THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK).
     (d) This Second Amendment may be executed in any number of counterparts and
by different parties hereto in separate counterparts (including by facsimile or
by electronic mail in portable document format (pdf)), each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same agreement.
[Remainder of Page Intentionally Left Blank.]

3

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the parties have caused this Second Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

              THE SELLER:   CAPITALSOURCE REAL ESTATE LOAN LLC, 2007-A    
 
           
 
  By:   /S/ JEFFREY A. LIPSON    
 
           
 
  Name:   Jeffrey A. Lipson    
 
  Title:   Vice President and Treasurer    
 
            THE ORIGINATOR AND SERVICER:   CSE MORTGAGE LLC    
 
           
 
  By:   /S/ JEFFREY A. LIPSON    
 
           
 
  Name:   Jeffrey A. Lipson    
 
  Title:   Vice President and Treasurer    

[Signatures Continued on the Following Page]

 

--------------------------------------------------------------------------------

 

              ISSUERS:   CRC FUNDING, LLC,         in its capacity as an Issuer
   
 
           
 
 
By: Citicorp North America, Inc.,
as Attorney-in-Fact
   
 
           
 
  By:   /S/ GERALD F. KEEFE    
 
           
 
  Name:   Gerald F. Keefe    
 
  Title:   Vice President    
 
                CAFCO, LLC,         in its capacity as an Issuer    
 
           
 
 
By: Citicorp North America, Inc.,
as Attorney-in-Fact
   
 
           
 
  By:   /S/ GERALD F. KEEFE    
 
           
 
  Name:   Gerald F. Keefe    
 
  Title:   Vice President    
 
                CIESCO, LLC,         in its capacity as an Issuer    
 
           
 
 
By: Citicorp North America, Inc.,
as Attorney-in-Fact
   
 
           
 
  By:   /S/ GERALD F. KEEFE    
 
           
 
  Name:   Gerald F. Keefe    
 
  Title:   Vice President    

 

--------------------------------------------------------------------------------

 

              LIQUIDITY BANK:   CITIBANK, N.A.,         in its capacity as a
Liquidity Bank    
 
           
 
  By:   /S/ GERALD F. KEEFE    
 
           
 
  Name:   Gerald F. Keefe    
 
  Title:   Vice President    
 
            THE ADMINISTRATIVE AGENT:   CITICORP NORTH AMERICA, INC.    
 
           
 
  By:   /S/ GERALD F. KEEFE    
 
           
 
  Name:   Gerald F. Keefe    
 
  Title:   Vice President