exv10w14w1w2



 





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



 









 






     (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
	

	 	 	 	
 
	

	 	Name:
	 	Rachel L. Simpson
	

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

	 	By:
	 	/s/ Steven A. Museles
	

	 	 	 	
 
	

	 	Name:
	 	Steven A. Museles
	

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

	 	By:
	 	/s/ Steven A. Museles
	

	 	 	 	
 
	

	 	Name:
	 	Steven A. Museles
	

	 	Title:
	 	Senior Vice President





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


 









 






	 	 	 	 	 
	 	 	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
	

	 	 	 	
 
	

	 	Name:
	 	Jeanine C. Casey
	

	 	Title:
	 	Corporate Trust Officer





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


 









 






	 	 	 	 	 
	

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

	 	By:
	 	/s/ Jeff Cady
	

	 	 	 	
 
	

	 	Name:
	 	Jeff Cady
	

	 	Title:
	 	Vice President






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