exv10w14w4



 





April 19, 2007




CapitalSource Funding II Trust

c/o Wilmington Trust Company, as Owner Trustee

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890




Ladies and Gentlemen:




     Reference is hereby made to that certain Amended and Restated Sale and Servicing Agreement,
entered into effective as of September 17, 2003 (as amended, supplemented and otherwise modified
from time to time, the “Sale and Servicing Agreement”), among CapitalSource Funding II Trust (the
“Issuer”), CS Funding II Depositor LLC, as Depositor (in such capacity, the “Depositor”),
CapitalSource Finance LLC (“CapitalSource”), as Loan Originator (in such capacity, the “Loan
Originator”) and as Servicer (in such capacity, the “Servicer”), and Wells Fargo Bank, National
Association, as Indenture Trustee on behalf of the Noteholders (in such capacity, the “Indenture
Trustee”), as Collateral Custodian (the “Collateral Custodian”) and as Backup Servicer (the “Backup
Servicer”). Capitalized terms used but not defined herein have the meanings assigned to them in
the Sale and Servicing Agreement.



     In connection with the extension of the CSVII Financing Facility (defined below) by Citigroup
Global Markets Realty Corp. to CapitalSource Funding VII Trust, an affiliate of the Issuer,
Citigroup Global Markets Realty Corp. and Transamerica Life Insurance Company, as
Noteholders/Purchasers, agree that the Issuer shall have no obligation to pay the Nonutilization
Fee contemplated by the Sale and Servicing Agreement from and after the date hereof until the
earlier of (x) October 16, 2007 and (y) the termination of the obligations of Citigroup to make any
future advances under the CSVII Financing Facility and the repayment in full of all interest on and
principal of the notes issued pursuant to that certain Indenture, dated as of April 19, 2007 (the
“CSVII Indenture”), between CapitalSource Funding VII Trust, as issuer, and Wells Fargo Bank,
National Association, as indenture trustee, and purchased by Citigroup Global Markets Realty Corp.
pursuant to that certain Note Purchase Agreement, dated as of April 17, 2007, among CapitalSource
Funding VII Trust, as issuer, CS Funding VII Depositor LLC, CapitalSource and Citigroup Global
Markets Realty Corp., as purchaser (the “CSVII Financing Facility”); provided that the Issuer or
the Servicer shall notify in writing the Noteholders/Purchasers of the earlier to occur of (x)
repayment in full of all interest on and principal of the notes issued pursuant to the CSVII
Indenture and the termination of the obligations of Citigroup to make any future advances under the
CSVII Financing Facility and (y) October 16, 2007 at least ten (10) Business Days prior to the
occurrence thereof. From and after the date hereof, the Issuer agrees that until the repayment in
full of all obligations payable under the CSVII Financing Facility and the termination of the
obligations of Citigroup to make any future advances under the CSVII Financing Facility,
notwithstanding anything to the contrary in the Basic Documents, the Issuer may not request that
either Purchaser purchase any Additional Note Principal Balances and neither Purchaser shall have
any obligation to purchase any Additional Note Principal Balances.



 









 





     The parties hereto agree that while the CSVII Financing Facility is outstanding, the Issuer
owns no Loans and no interest on or principal of the Notes remains unpaid or Outstanding, the
Servicer shall not be obligated to deliver a Monthly Servicing Report for any Payment Date
occurring after the Payment Date following the date hereof.



     Except as specifically provided in the second paragraph of this Side Letter, no other term,
condition or provision of the Credit Agreement shall be deemed modified or amended, this Side
Letter shall not be considered a novation of the Sale and Servicing Agreement and/or any other
Basic Document, and the Sale and Servicing Agreement and the other Basic Documents shall remain in
full force and effect. This Side Letter represents the entire agreement between the parties with
respect to the subject matter hereof.



     Each of the Depositor, the Servicer, the Loan Originator and the Issuer hereby represents and
warrants that (i) it has the power and is duly authorized to execute and deliver this Side Letter,
(ii) this Side Letter 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, (iv) except as
required by this Side Letter, the execution, delivery and performance by it of this Side Letter
does not and will not require any consent or approval, which has not already been obtained, from
any Governmental Authority, equityholder or any other Person, (v) the execution, delivery and
performance by it of this Side Letter shall not result in the breach of, or constitute a default
under, any material agreement or instrument to which it is a party, (vi) this Side Letter and each
of the Basic Documents to which it is a party constitutes its legal, valid and binding obligations,
enforceable against it in accordance with their respective terms, except as limited by bankruptcy,
reorganization, insolvency, fraudulent conveyance, moratorium and other similar laws (whether
statutory, regulatory or decisional) and general equitable principles affecting creditors’ rights
and remedies regardless of whether such enforceability is considered in a proceeding in equity or
at law, and (vii) no Default, Event of Default or Servicer Event of Default exists.



     Each of the Depositor, the Servicer, the Loan Originator and the Issuer hereby (i) agrees to
promptly reimburse the other parties hereto for any and all fees and expenses (including, without
limitation, legal fees and expenses) which any such party hereto has incurred, incurs or will incur
in connection with the preparation, negotiation, execution and enforcement of this Side Letter or
any document, instrument or agreement delivered or to be delivered pursuant to this Side Letter,
and (ii) affirms the reimbursement and indemnification provisions set forth in the Basic Documents,
which are hereby incorporated herein by reference.



     This Side Letter 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.



     This Side Letter may be executed in any number of counterparts, each of which (including any
copy hereof delivered by facsimile or PDF) shall constitute one and the same original instrument.



     This Side Letter shall be governed by, and construed in accordance with, the laws of the State
of New York without regard to its conflict of law principles (except for Sections 5-1401 and 5-1402
of the New York General Obligations Law).



 









 





     The Owner (as such term is defined in the Trust Agreement) hereby instructs the Owner
Trustee, pursuant to Section 6.3 of the Trust Agreement, to execute and deliver this Side Letter.



[remainder of page intentionally left blank; signature page follows]





 









 








	 	 	 	 	 
	 	Very truly yours,



CITIGROUP GLOBAL MARKETS REALTY CORP.

 	 
	 	BY:  	/s/ Gerald F. Keefe
 	 
	 	 	Name:  	Gerald F. Keefe 	 
	 	 	Title:  	Authorized Signatory 	 
	 
	 	TRANSAMERICA LIFE INSURANCE COMPANY

as Purchasing Noteholder

 	 
	 	BY:  	/s/ Greg A. Podhajsky
 	 
	 	 	Name:  	Greg A. Podhajsky 	 
	 	 	Title:  	Vice President 	 
	 




 









 





     ACKNOWLEDGED AND AGREED:



	 	 	 	 	 
	 	CAPITALSOURCE FUNDING II TRUST,

 	 
	 	BY:  	Wilmington Trust Company, not in its individual
capacity but solely as Owner Trustee 	 
	 
	 	 	 
	 	BY:  	                       /s/ Ian P. Monigle
 	 
	 	 	Name:  	Ian P. Monigle 	 
	 	 	Title:  	Financial Services Officer 	 
	 




 









 





     ACKNOWLEDGED AND AGREED:



	 	 	 	 	 
	 	CS FUNDING II DEPOSITOR LLC, as Depositor

 	 
	 	BY:  	/s/ Jeffrey Lipson
 	 
	 	 	Name:  	Jeffrey Lipson 	 
	 	 	Title:  	Vice President & Treasurer 	 
	 
	 	CAPITALSOURCE FINANCE LLC, as Loan 
Originator and Servicer

 	 
	 	BY:  	/s/ Jeffrey Lipson
 	 
	 	 	Name:  	Jeffrey Lipson 	 
	 	 	Title:  	Vice President & Treasurer 	 
	 




 









 









     ACKNOWLEDGED AND AGREED:



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

 	 
	 	BY:  	/s/ Jeanine C. Casey
 	 
	 	 	Name:  	Jeanine C. Casey 	 
	 	 	Title:  	Assistant Vice President