Document:

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]exv10w14w1w3

 

Exhibit 10.14.1.3

THIRD AMENDMENT TO SALE AND SERVICING AGREEMENT

     This Third Amendment, dated as of June 29, 2004 (this “Amendment”) to the
Sale and Servicing Agreement, dated as of September 17, 2003, 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 Issuer has requested that certain provisions of the Sale and
Servicing Agreement be further amended, on the terms and subject to the
conditions set forth in this Amendment, to permit, inter alia,
all of the following: (i) allow the Issuer to acquire a loan for which CIG
Holdings, Inc., an affiliate of the Issuer, is the obligor and to include such
loan in the calculation of the Borrowing Base until not later than December 31,
2004; (ii) increase the note interest rate payable by the Issuer solely with
respect to the loan referred to in clause (i); and (iii) amend the Sale and
Servicing Agreement in order to implement certain additional changes consistent
with the foregoing;

     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.

a. Section 1.01 of the Sale and Servicing Agreement is hereby
amended and supplemented by adding the following defined terms in
appropriate alphabetical order:

     “CIG: CIG International LLC, a limited liability company
organized and existing under the laws of the State of Delaware, and
its successors and permitted assigns.”

     “CIG Allocated Principal Balance: As of any date of
determination, an amount equal to the excess of (1) the sum of all
Noteholder CIG Advances funded on or after the Effective Date, over
(2) the product of (A) sixty percent (60%) and (B) all principal
payments (including prepayments) actually received by Issuer

 

 

with respect to the CIG Loan (including all principal payments
on all CIG Underlying Loans) since the Effective Date.”

     “CIG Loan: Each loan made by the Loan Originator to CIG
pursuant to the terms of the CIG Loan Agreement.”

     “CIG Loan Agreement: Any or all, as the context may require,
of the loan agreement, the security agreement and the note, each
dated June 29, 2004 and between CIG, as borrower, and the Loan
Originator, as lender, and substantially in the form attached as
Exhibit A hereto, as each such agreement may be amended, modified
or supplemented from time to time in accordance with its respective
terms and the terms of this Amendment.”

     “CIG Loan Ineligible Date: The earliest to occur of (i)
December 31, 2004, (ii) the first date on which an event of default
occurs under the CIG Loan Agreement, and (iii) the date on which
the number of CIG Underlying Loans pledged as collateral security
for the CIG Loan is less than ten (10).”

     “CIG Loan LIBOR Margin: Two and one quarter percent (2.25%)
per annum.”

     “CIG Loan Default Rate: Five percent (5%) per annum.”

     “CIG Loan 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 CIG Loan LIBOR Margin.”

     “CIG Payment Account: Each deposit account set forth on
Exhibit D hereto to which the obligors on the CIG Underlying Loans
remit payments.”

     “CIG Underlying Loan: Each mezzanine and gap equity loan
pledged by CIG as collateral security for its obligations under the
CIG Loan Agreement. A listing of such loans as of the Effective
Date is set forth on Exhibit B hereto.”

     “Effective Date: The date upon which the acquisition of the
equity interests of CIG is consummated by the Loan Originator.”

     “Noteholder CIG Advance: Each advance of funds made by the
Noteholders to the Issuer pursuant to the terms of the Basic
Documents that allow the Issuer to fund or maintain its investment
in the CIG Loan.”

     “Note Purchase Agreement Amendment: The fourth amendment to
the note purchase agreement, substantially in the form of Exhibit E
hereto.”

b. the definition of the term “Borrowing Base” is hereby amended
and restated to read as follows:

     “Borrowing Base: On any date of determination, the sum of

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	 	(i)	 	the product of (A) the outstanding
unpaid principal balance of all Eligible Loans included
in the Loan Pool (other than the CIG Loan) prior to such
date of determination minus the amount (calculated
without duplication) by which such Eligible Loans exceed
any applicable Concentration Limitations and minus, with
respect to Charged-Off Loans, (x) 50% of the outstanding
unpaid principal balance of all Charged-Off Loans for
which any Scheduled Payment is at least ninety (90) days
but less than one hundred eighty (180) days delinquent
as of such date of determination and (y) the outstanding
unpaid principal balance of all Charged-Off Loans that
are Charged-Off Loans for any reason other than the
Scheduled Payment delinquency referenced in clause (x)
above and (B) the applicable Purchase Price Percentages
(determined on such date), and
	 
	 	(ii)	 	the amount on deposit in the
Principal Collections Account on such date of
determination, and
	 
	 	(iii)	 	until the CIG Loan Ineligible Date,
an amount equal to the lesser of (A) Sixty Million
Dollars ($60,000,000), and (B) the product of (x) the
then unpaid principal balance of all CIG Underlying
Loans, and (y) sixty percent (60%).”

c. the definition of “Concentration Limitations” in Section 1.01 of
the Sale and Servicing Agreement is hereby amended and supplemented
by adding the following to the end thereof:

     “(xx) the aggregate unpaid Principal Balance of all CIG Loans
does not exceed One Hundred Million Dollars ($100,000,000).”

d. the definition of the term “Daily Interest Accrual Amount” is
hereby amended and restated to read as follows:

     “Daily Interest Accrual Amount: With respect to each day and
the related Accrual Period, an amount equal to the sum of (i)
interest accrued at the Note Interest Rate with respect to such
Accrual Period on an amount equal to the excess of (x) the Note
Principal Balance, over (y) the CIG Allocated Principal Balance, in
each case determined as of the preceding Business Day after giving
effect to all changes to the Note Principal Balance and the CIG
Allocated Principal Balance on or prior to such preceding Business
Day, and (ii) interest accrued at the CIG Loan Interest Rate with
respect to such Accrual Period on the CIG Allocated Principal
Balance, determined as of the preceding Business Day after giving
effect to all changes to the CIG Allocated Principal Balance on
such Date.”

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e. the definition of the term “Eligible Loan” is hereby amended and
restated to read as follows:

     “Eligible Loan: With respect to any date of determination,
both of the following: (i) any Loan (other than the CIG Loan) which
complies with the representations and warranties set forth in
Section 3.04 with respect to such Loan and (ii) until the CIG Loan
Ineligible Date, the CIG Loan.”

f. the definition of the term “LIBOR Determination Date” is hereby
amended and restated to read as follows:

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

g. Section 3.04 of the Sale and Servicing Agreement is hereby
amended and supplemented by adding the following clause (ss) in
appropriate alphabetical order:

	 	“(ss)	 	with respect to each CIG Underlying Loan:
	 
	 	(i)	 	except as set forth in Exhibit C
hereto, the Loan Originator makes, mutatis mutandis, the
applicable representations and warranties set forth in
clauses (a) through (pp) of this Section 3.04 with
respect to each CIG Underlying Loan as if such CIG
Underlying Loan was treated as a Loan;
	 
	 	(ii)	 	the scheduled payments owing to the
Loan Originator under each CIG Underlying Loan have
been, or will be, remitted by the related obligor
directly to the applicable CIG Payment Account.

     The parties hereto acknowledge and agree that CIG and the Loan
Originator are Affiliates. Accordingly, any restriction contained
in the Sale and Servicing Agreement to the inclusion of a Loan for
which the related Obligor is an Affiliate is waived solely with
respect to the CIG Loan until the CIG Loan Ineligible Date.

     2. Conditions Precedent to Effectiveness. The amendments and
modifications to the Sale and Servicing Agreement set forth in this Amendment
shall become effective on the Effective Date upon all of the following
conditions precedent being satisfied to the reasonable satisfaction of the
Purchaser:

     (a) The Loan Originator shall have acquired, or will acquire
with the proceeds of the initial Noteholder CIG Advance, all of the
issued and outstanding voting securities of CIG;

4

 

     (b) The Purchaser shall have received from the Issuer an
origination fee in an amount equal to the product of (i)
thirty-five hundredths of one percent (.35%) and (ii) the
Noteholder CIG Advance to be made on the Effective Date;

     (c) The representations and warranties of the Depositor and
the Loan Originator contained in Sections 3.01 and 3.02 of the Sale
and Servicing Agreement shall be deemed to be repeated as of the
Effective Date, and such representations and warranties shall be
correct in all material respects at and as of such Effective Date;

     (d) Each of the Depositor, the Loan Originator and the
Servicer shall have performed and complied in all material respects
with all terms and conditions herein, the Sale and Servicing
Agreement and the Indenture required to be performed or complied
with by it prior to or at the time of the Effective Date, and there
shall not exist on the Effective Date, and the consummation of the
transactions on the Effective Date shall not result in, (i) a
Default or an Event of Default, (ii) a Servicer Default, or (iii) a
Trigger Event;

     (e) The Purchaser shall have received an Officer’s Certificate
dated as of the Effective Date, in form and substance reasonably
satisfactory to the Purchaser, in which each of the Issuer, the
Depositor, the Loan Originator and the Servicer shall represent and
warrant to the Purchaser that the conditions precedent set forth in
(c) and (d) were satisfied at and as of the Effective Date;

     (f) This Amendment, the Note Purchase Agreement Amendment (and
the supplementary note referred to therein), and each CIG Loan
Agreement shall have been duly and properly authorized, executed
and delivered by the respective parties thereto and shall be in
full force and effect on and as of the Effective Date, and the
Collateral Custodian shall have received the sole originally
executed counterpart of the CIG Loan Agreement;

     (g) All actions necessary shall have been taken to perfect (x)
in favor of the Indenture Trustee a legal, valid and enforceable
first-priority security interest in the CIG Loan, and (y) in favor
of the Loan Originator a legal, valid and enforceable first
priority security interest in each CIG Underlying Loan and the
other collateral set forth in the CIG Loan Agreement, and all other
actions desirable for the perfection of such interests shall have
been completed to the satisfaction of the Purchaser and its
counsel.

     3. Representations and Warranties; Covenants. (a) The Loan
Originator hereby makes as of the Effective Date with respect to the CIG Loan
all of the representations and warranties set forth in Section 3.04 of the Sale
and Servicing Agreement. 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

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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 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.

     (b) The Loan Originator hereby makes the following covenants
for the benefit of the Issuer, the Indenture Trustee and the
Purchaser:

     (i) On or before July 31, 2004, the Loan Originator
shall, or shall cause CIG to, deliver to the Purchaser fully
executed control agreements, in form and substance reasonably
satisfactory to the Purchaser, with respect to each CIG
Payment Account;

     (ii) The Loan Originator shall, or shall cause the
Issuer, to remit to the Purchaser on each funding date
subsequent to the Effective Date a fee in the amount equal to
the product of (A) thirty-five hundredths of one percent
(.35%) and (B) the requested Noteholder CIG Advance.

     4. 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

6

 

respect to, the tax, accounting or legal treatment or implications
relating to the transactions contemplated by this Amendment and the Basic
Documents.

     5. 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.

     6. 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.

     7. 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.

     8. 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.

     9. 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.

     10. 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

7

 

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.

     11. 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.

     12. 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.]

8

 

     IN WITNESS WHEREOF, the parties hereto have caused this Third 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/ Roseline K. Maney
	

	 	 	 	
 
	

	 	Name:
	 	Roseline K. Maney
	

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 	 	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 Fifth Amendment to Amended and Restated Senior Secured Credit 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 Fifth Amendment to Amended and Restated Senior Secured Credit Agreement]

 

 

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

	 	By:
	 	/s/ Ted Yarbrough
	

	 	 	 	
 
	

	 	Name:
	 	Ted Yarbrough
	

	 	Title:
	 	Managing Director

[Signature Pages to Fifth Amendment to Amended and Restated Senior Secured Credit Agreement]

 

 

EXHIBIT A

COPY OF CIG LOAN AGREEMENT

[Signature Pages to Fifth Amendment to Amended and Restated Senior Secured Credit Agreement]

 

 

EXHIBIT B

LISTING OF CIG UNDERLYING LOANS ON EFFECTIVE DATE

[Signature Pages to Fifth Amendment to Amended and Restated Senior Secured Credit Agreement]

 

 

EXHIBIT C

EXCEPTIONS TO SECTION 3.04

REPRESENTATIONS AND WARRANTIES

	1.	 	The Loan Originator does not make any representation or warranty with
respect to the conformity of any CIG Underlying Loan with the
representations and warranties set forth in clauses (j), (k), (s) or (kk)
of Section 3.04 of the Sale and Servicing Agreement.
	 
	2.	 	[Add other delinquency exceptions]

[Signature Pages to Fifth Amendment to Amended and Restated Senior Secured Credit Agreement]

 

 

EXHIBIT D

LISTING OF CIG PAYMENT ACCOUNTS

[Signature Pages to Fifth Amendment to Amended and Restated Senior Secured Credit Agreement]

 

 

EXHIBIT E

COPY OF NOTE PURCHASE AGREEMENT AMENDMENT

[Signature Pages to Fifth Amendment to Amended and Restated Senior Secured Credit Agreement]

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