Exhibit 10.14.1.2

SECOND AMENDMENT TO SALE AND SERVICING AGREEMENT

     This Second Amendment (this “Amendment”) to the Sale and Servicing
Agreement referenced below is entered into as of April 15, 2004, among
CapitalSource Funding II Trust, a Delaware statutory trust (the “Issuer”), CS
Funding II Depositor LLC, a Delaware limited liability company, as Depositor (in
such capacity, the “Depositor”), CapitalSource Finance LLC, a Delaware limited
liability company (“CapitalSource”), as Loan Originator (in such capacity, the
“Loan Originator”) and as Servicer (in such capacity, the “Servicer”) and Wells
Fargo Bank, National Association, successor-by-merger to Wells Fargo Bank
Minnesota, National Association, a national banking association, as Indenture
Trustee on behalf of the Noteholders (in such capacity, the “Indenture
Trustee”), as Paying Agent (the “Paying Agent”), as Collateral Custodian (the
“Collateral Custodian”) and as Backup Servicer (the “Backup Servicer”).

R E C I T A L S:

     WHEREAS, the Issuer, the Depositor, CapitalSource, the Loan Originator, the
Servicer, the Indenture Trustee, the Paying Agent, the Collateral Custodian and
the Backup Servicer are parties to the Sale and Servicing Agreement, dated as of
September 17, 2003 (as amended, supplemented and otherwise modified from time to
time, the “Sale and Servicing Agreement”);

     WHEREAS, the parties wish to reduce the Purchase Price Percentage for
certain Loans acquired by the Issuer;

     NOW, THEREFORE, in consideration of the mutual covenants and undertakings
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

     1. Amendments to the Sale and Servicing Agreement. Effective as of the
execution and delivery of this Amendment by all parties hereto, the definition
of “Purchase Price Percentage” in Section 1.01 of the Sale and Servicing
Agreement is hereby amended and restated in its entirety as follows:

     “Purchase Price Percentage: On any Business Day, with respect to each Loan
(other than Alarm Service Loans) acquired by the Issuer during any period in
which the Issuer has acquired Loans (other than Alarm Service Loans) with an
aggregate Additional Note Principal Balance in excess of Four Hundred Million
Dollars ($400,000,000) (after giving effect to all repurchases by the Depositor
and/or Originator) from the Depositor and/or the Originator, a percentage
determined as follows:

     (a) with respect to all Senior Secured Loans assigned Loan Rating 1, Loan
Rating 2, Loan Rating 3 or Loan Rating 4, 70%;

     (b) with respect to all Subordinated Loans assigned Loan Rating 1, Loan
Rating 2, Loan Rating 3 or Loan Rating 4, 45%;

     (c) with respect to all Senior Secured Loans assigned Loan Rating 5, 45%;

     (d) with respect to all Subordinated Loans assigned Loan Rating 5, 20%; and

 

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     (e) with respect to all Loans assigned Loan Rating 6, 0%.

     On any Business Day, with respect to each other Loan, a percentage
determined as follows:

     (a) with respect to all Senior Secured Loans assigned Loan Rating 1, Loan
Rating 2, Loan Rating 3 or Loan Rating 4, 80%;

     (b) with respect to all Subordinated Loans assigned Loan Rating 1, Loan
Rating 2, Loan Rating 3 or Loan Rating 4, 50%;

     (c) with respect to all Senior Secured Loans assigned Loan Rating 5, 50%;

     (d) with respect to all Subordinated Loans assigned Loan Rating 5, 25%; and

     (e) with respect to all Loans assigned Loan Rating 6, 0%.”

     2. Representations and Warranties. Each of the Issuer, the Depositor, the
Servicer and the Loan Originator hereby represents and warrants that (i) it has
the power and is duly authorized to execute and deliver this Amendment,
(ii) this Amendment has been duly authorized, executed and delivered, (iii) it
is and will continue to be duly authorized to perform its obligations under the
Basic Documents and this Amendment, (iv) the execution, delivery and performance
by it of this Amendment shall not (1) result in the breach of, or constitute
(alone or with notice or with the lapse of time or both) a default under, any
material agreement or instrument to which it is a party, (2) violate (A) any
provision of law, statute, rule or regulation, or organizational documents or
other constitutive documents, (B) any order of any Governmental Authority or
(C) any provision of any material indenture, agreement or other instrument to
which it is a party or by which it or any of its property is or may be bound, or
(3) result in the creation or imposition of any Lien upon or with respect to any
property or assets now owned or hereafter acquired by the Issuer other than
pursuant to the Basic Documents, (v) this Amendment and each of the Basic
Documents to which it is a party or by which it or its assets may be or is bound
constitutes its legal, valid and binding obligations, enforceable against it
(subject, as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium and similar laws affecting creditors’
rights generally and to general principles of equity), (vi) except as publicly
disclosed, there are not any actions, suits, investigations (civil or criminal)
or proceedings at law or in equity or by or before any Governmental Authority
pending or, to its knowledge, threatened against or affecting it or any of its
business, property or rights (1) which involve any Basic Document or the Loan
Documents or (2) which would be materially likely to result in a Material
Adverse Effect, (vii) it is not in default or violation with respect to any law,
rule or regulation, judgment, writ, injunction or decree order of any court,
governmental authority, regulatory agency or arbitration board or tribunal and,
with respect to the Loan Originator and Depositor, the effect of which would
have a material adverse effect on its business, assets, operations or financial
condition and (viii) no Termination Event, Default or Event of Default has
occurred or is continuing. Except as expressly amended by the terms of this
Amendment, all terms and conditions of the Sale and Servicing Agreement shall
remain in full force and effect and are hereby ratified in all respects. The
Initial Noteholder does not object to the execution of this Amendment by
Wilmington Trust Company or the Issuer.

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     3. No Reliance. Each of the Loan Originator, the Depositor and the Issuer
hereby acknowledges that it has not relied on the Initial Noteholder or any of
its officers, directors, employees, agents and “control persons” as such term is
used under the Act and under the Securities Exchange Act of 1934, as amended,
for any tax, accounting, legal or other professional advice in connection with
the transactions contemplated by this Amendment or the Basic Documents, that
each of the Loan Originator, the Depositor and the Issuer has retained and been
advised by such tax, accounting, legal and other professionals as it has deemed
necessary in connection with the transactions contemplated by this Amendment and
the Basic Documents and that the Initial Noteholder makes no representation or
warranty, and shall have no liability with respect to, the tax, accounting or
legal treatment or implications relating to the transactions contemplated by
this Amendment and the Basic Documents.

     4. Defined Terms; Headings. All capitalized terms used herein, unless
otherwise defined herein, have the same meanings provided herein or in the Sale
and Servicing Agreement. The headings of the various Sections of this Amendment
have been inserted for convenience of reference only and shall not be deemed to
be part of this Amendment.

     5. Limited Amendment. This Amendment is limited precisely as written and
shall not be deemed to (a) be a consent to a waiver or any other term or
condition of the Sale and Servicing Agreement, the other Basic Documents or any
of the documents referred to therein or executed in connection therewith or
(b) prejudice any right or rights the Noteholders may now have or may have in
the future under or in connection with the Sale and Servicing Agreement, the
other Basic Documents or any documents referred to therein or executed in
connection therewith. Whenever the Sale and Servicing Agreement is referred to
in the Sale and Servicing Agreement or any of the instruments, agreements or
other documents or papers executed and delivered in connection therewith, it
shall be deemed to mean the Sale and Servicing Agreement, as the case may be, as
modified by this Amendment. Except as hereby amended, no other term, condition
or provision of the Sale and Servicing Agreement shall be deemed modified or
amended, and this Amendment shall not be considered a novation.

     6. Construction; Severability. This Amendment is a document executed
pursuant to the Sale and Servicing Agreement and shall (unless otherwise
expressly indicated therein) be construed, administered or applied in accordance
with the terms and provisions thereof. If any one or more of the covenants,
agreements, provisions or terms of this Amendment shall be held invalid in a
jurisdiction for any reason whatsoever, then, in such jurisdiction, such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Amendment and shall
in no way affect the validity or enforceability of the other covenants,
agreements, provisions or terms of this Amendment.

     7. Counterparts; Facsimile Signature. This Amendment may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement. The parties may execute facsimile copies of this Amendment and the
facsimile signature of any such party shall be deemed an original and fully
binding on said party.

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     8. Governing Law. This Amendment shall be governed and construed in
accordance with the applicable terms and provisions of Section 13.05 (Governing
Law) of the Sale and Servicing Agreement, which terms and provisions are
incorporated herein by reference.

     9. Limitation on Liability. It is expressly understood and agreed by the
parties hereto that (a) this Amendment is executed and delivered by Wilmington
Trust Company, not individually or personally, but solely as Owner Trustee of
CapitalSource Funding II Trust, in the exercise of the powers and authority
conferred and vested in it, (b) each of the representations, undertakings and
agreements herein made on the part of the Issuer is made and intended not as
personal representations, undertakings and agreements by Wilmington Trust
Company but is made and intended for the purpose for binding only the Issuer,
(c) nothing herein contained shall be construed as creating any liability on
Wilmington Trust Company, individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties hereto and by any Person claiming by, through or
under the parties hereto and (d) under no circumstances shall Wilmington Trust
Company be personally liable for the payment of any indebtedness or expenses of
the Issuer or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Issuer under this
Amendment or any other related documents.

     10. Recordation of Amendment. To the extent permitted by applicable law,
this Amendment, or a memorandum thereof if permitted under applicable law, is
subject to recordation in all appropriate public offices for real property
records in all of the counties or other comparable jurisdictions and in any
other appropriate public recording office or elsewhere, such recordation to be
effected by the Servicer at the Securityholders’ expense on direction of the
Majority Noteholders but only when accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Securityholders or is necessary for the administration or servicing of
the Loans.

     11. Successor and Assigns. This Amendment shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.

[Remainder of Page Intentionally Left Blank. Signature Pages Follow.]

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     IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
the Sale and Servicing Agreement to be duly executed by their respective
authorized officers as of the day and year first written above.

              CAPITALSOURCE FUNDING II TRUST,

  By:   Wilmington Trust Company, not in its individual capacity but solely as
Owner Trustee
 
       

  By:   /s/ Rachel L. Simpson

     

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  Name:   Rachel L. Simpson

  Title:   Financial Services Officer
 
            CS FUNDING II DEPOSITOR LLC,     as Depositor
 
       

  By:   /s/ Steven A. Museles

     

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  Name:   Steven A. Museles

  Title:   Senior Vice President
 
            CAPITALSOURCE FINANCE LLC,     as CapitalSource, Loan Originator and
Servicer
 
       

  By:   /s/ Steven A. Museles

     

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  Name:   Steven A. Museles

  Title:   Senior Vice President

[Signature Pages to Second Amendment to Sale and Servicing Agreement]

 

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              WELLS FARGO BANK, NATIONAL ASSOCIATION,     successor-by-merger to
Wells Fargo Bank Minnesota, National Association as Indenture Trustee,
Collateral Custodian, Paying Agent and Backup Servicer
 
       

  By:   /s/ Jeanine C. Casey

     

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  Name:   Jeanine C. Casey

  Title:   Corporate Trust Officer

[Signature Pages to Second Amendment to Sale and Servicing Agreement]

 

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  ACKNOWLEDGED AND AGREED:
 
            CITIGROUP GLOBAL MARKETS REALTY     CORP., as Initial Noteholder
 
       

  By:   /s/ Jeff Cady

     

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  Name:   Jeff Cady

  Title:   Vice President

[Signature Pages to Second Amendment to Sale and Servicing Agreement]