CADC/RADC Venture 2011-1 Structured Transaction 

SERVICING AGREEMENT 

by and between 

ACORN LOAN PORTFOLIO PRIVATE OWNER VI, LLC 

and 

SABAL FINANCIAL GROUP, L.P. 

Dated as of August 24, 2011 

CADC/RADC Venture 2011-1 Structured Transaction 

Servicing Agreement 

Version 3_! 

EXFCUTlllN VI-:'R~!ON 

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TABLE OF CONTENTS 


ARTICLE I DEFINITIONS AND CONSTRUCTION ......................................................... I 


Section 1 .1. Definitions.................................................................................................... I 


Section 1.2. Construction .................................................................................................2 


ARTICLE II SERVICING OBLIGATIONS OF TilE SERVICER .......................................2 


Section 2.1 0. Maintenance of Insurance Policies; Errors and Omissions and 


Section 2.ll. Funding of Working Capital Expenses and Certain Other 


Section 2. I. Appointment and Acceptance as Servicer ...................................................2 


Section 2.2. Limited Power of Attorney ..........................................................................3 


Section 2.3. Servicing Fee ...............................................................................................3 


Section 2.4. Servicing Standard .......................................................................................3 


Section 2.5. Collection Account. .....................................................................................4 


Section 2.6. Working Capital Reserve Account ............................................................. .4 


Section 2.7. [Intentiona11y Omitted] ................................................................................5 


Section 2.8. Escrow Accounts ......................................................................................... 5 


Section 2.9. Other Accounts ............................................................................................5 


Fidelity Coverage .........................................................................................5 


Payments; Permitted Vertical Completion Expenses .................................. 7 


Section 2.12. Expenses ...................................................................................................... 7 


Section 2.13. Insured or Guaranteed Assets ...................................................................... 8 


Section 2.14. Registration with MERS ..............................................................................8 


ARTICLE Ill LOAN DEFAULTS; ACQUISITION OF COLLATERAL .............................. ? 


Section 3.1. Delinquency Control ....................................................................................9 


Section 3.2. Discretion of the Servicer in Responding to Defaults ofBorrower.............9 


Section 3.3. Acquisition of Acquired Property .............................................................. !0 


Section 3.4. Administration of Acquired REO Properties ............................................. 1 0 


ARTICLE IV SUBSERVICING ............................................................................................ 12 


Section 4.1. Retention ofSubservicer............................................................................ 12 


Section 4.2. Subservicing Agreement Requirements ..................................................... 12 


Section 4.3. Servicer Liable for Subservicers ................................................................ 13 


Section 4.4. Manager Approval Required ...................................................................... l3 


Section 4.5. Regulation AB Requirements .................................................................... 13 


ARTICLE V REPRESENTATIONS, WARRANTIES AND COVENANTS OF 


THE SERVICER ............................................................................................ 14 


Section 5.1. Representations and Warranties ............................................................... 14 


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Section 5.2. Reporting, Books and Records and Compliance Covenants ..................... 15 


Section 5.3. Audits ......................................................................................................... l9 


Section 5.4. No Licns ..................................................................................................... l9 


Section 5.5. Servicer's Duty to Advise; Delivery of Certain Notices ...........................20 


Section 5.6. Notice of Breach or Change of Control .....................................................21 


Section 5.7. Copies of Documents .................................................................................21 


Section 5.8. Financial lnformation .................................................................................21 


ARTICLE VI MANAGER CONSENT ..................................................................................21 


Section 6.1. Actions Requiring Manager Consent. ........................................................21 


Section 6.2. Amendments, Modification and Waivers ..................................................23 


ARTICLE VII DEFAULTS; TERMINATION; TERMINATION WITHOUT CAUSE ........23 


Section 7 .1. Defaults ......................................................................................................23 


Section 7.2. Termination with Cause .............................................................................25 


Section 7.3. Termination without Cause ........................................................................26 


Section 7.4. Effective Termination Date ........................................................................27 


Section 7.5. Accounting .................................................................................................27 


ARTICLE VIII INDEPENDENCE OF PARTIES; INDEMNIFJCATJON ..............................27 


Section 8.1. Independence of Parties .............................................................................27 


Section 8.2. Indemnification..........................................................................................28 


Section 8.3. Pre-Effective Date Liabilities ....................................................................29 


ARTICLE IX NOTICES .........................................................................................................30 


ARTICLE X GOVERNING LAW; JURISDICTION ..........................................................31 


Section 1 0.1. Governing Law ..........................................................................................31 


Section 10.2. Jurisdiction; Venue and Service .................................................................32 


Section 10.3. Waiver of Jury Trial.. ................................................................................. 34 


ARTICLE XI MISCELLANEOUS ....................................................................................... .34 


Section 11.1. No Assignment by Servicer; No Transfer of Ownership Interests in 


Servicing Rights .........................................................................................34 


Section 11.2. Legal Fees ..................................................................................................35 


Section 11 .3. Entire Agreement .......................................................................................35 


Section 11.4. Counterparts; Facsimile Signatures ...........................................................35 


Section 11.5. Headings ....................................................................................................35 


Section 11 .6. Compliance with Law ................................................................................35 


Section 11.7. Severability ................................................................................................36 


Section 11.8. Third Party Beneficiaries .......................................................................... .36 


Section 11.9. Protection of Confidential Information ......................................................37 


Section 11.10. Time of Essence ........................................................................................38 


Section 11.11. No Presumption ........................................................................................38 


Section 11.12. No Right of Setoff.....................................................................................38 


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CADC/RADC Vcnfurr 201 I.J Structured Transadion 

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Section 11.13. Release oflnitial Member and Others ..................................................... .38 


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SCHEDULES AND EXHIBITS 


Exhibits 

Exhibit A 

Exhibit B 

Schedules 

Schedule I 

Schedule 2 

Schedule 3 

Schedule 4 

Schedule 5 

Schedule 6 

Asset Schedule 

Form of Electronic Tracking Agreement 

Fee Schedule 

Servicing Obligations 

Reimbursement of Servicer Advances 

Form of Electronic Report on the Assets and Collateral 

Termination Without Cause 

Business Plan Schedule 

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CADCIRADC Venture 2011-1 Structured Transaction 

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SERVICING AGREEMENT 


THIS SERVICING AGREEMENT (as the same shall be amended or supplemented, this 

"Agreement'') is made and entered into as of the 24111 day of August, 2011 (the "Effective 

Date"), by and between Acorn Loan Portfolio Private Owner VL LLC, a Delaware limited 

liability company (including its successors and assigns, the "Manager"), and Saba! Financial 

Group, L.P ., a Delaware limited partnership (including those of its successors and assigns as are 

expressly permitted pursuant to this Agreement, the "Servicer"). 

RECITALS 

WHEREAS, CADC/RADC Venture 20I 1-1. LLC (the "Company") owns the Assets 

described on the Asset Schedule attached hereto as Exhibit A (the "Asset Schedule"); 

WHEREAS, the Manager is the "Manager" of the Company with the authority and 

responsibility to service and manage the Assets and related Collateral pursuant to the LLC 

Operating Agreement; and 

WHEREAS, the Manager and the Servicer desire that the Servicer service and administer 

the Assets and Collateral on behalf of the Company and the Manager in a manner that is, at all 

times, consistent with the requirements of this Agreement; 

NOW, THEREFORE, in consideration of the foregoing and the mutual promises and 

agreements contained herein, and for other good and valuable consideration the receipt and 

sufficiency of which arc hereby acknowledged, the Manager and the Servicer hereby agree as 

follows: 

ARTICLE! 


DEFINITIONS AND CONSTRUCTION 


Section 1.1. Definitions. For purposes of this Agreement, (i) terms used herein 

(including in the preamble and recitals hereto), but not defined herein, shall have the respective 

meanings and definitions given, or referred to, in the Agreement of Definitions. and (ii) the 

foilowing i.erms shaH have i.he meanings and definitions hneinafter respediveiy set forth. 

"Agreement" shall have the meaning given in the preamble ofthis Agreement. 

"Agreement of Definitions'' shall mean the Agreement of Definitions- CADC/RADC 

Venture 2011-1 Structured Transaction, dated as of the date hereof, by and among the Company, 

the Manager, the FDIC, as Receiver, in its capacity as the Initial Member, and certain others. 

"Asset Schedule" shall have the meaning given in the recitals of this Agreement. 

"Business Plan Schedule" shall have the meaning given in Section 5.2(h). 

"Company" shall have the meaning given in the recitals of this Agreement. 

CAOC/RADC Venture 2011·1 Structured Transaction 

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EXECUTION VLRSION 
"Effective Date'' shall have the meaning given in the preamble of this Agreement. 


"Electronic Report" shall have the meaning given in Section 5.2(e). 


"Fee Schedule" shall mean Schedule 1, as the same may be amended from time to time 


by the Manager and the Servicer, which amendment may be made without the consent of the 

Required Consenting Parties. 

"Indemnified Parties" shall have the meaning given in Section 8.2. 

"Manager" shall have the meaning given in the preamble of this Agreement. 

"Other Accounts" shall have the meaning given in Section 2.9. 

"Pre-Existing Liabilities" shall have the meaning given in Section 8.3. 

"Servicer" shall have the meaning given in the preamble of this Agreement. 

"Servicing" means servicing, administering, managing and disposing of the Assets and 

the Collateral, and the terms "Service" and "Serviced" have correlative meanings. 

''Servicing Fee" shall have the meaning given in Section 2.3. 

"Servicing Obligations" shall have the meaning given in Section 2.4. 

"Servicing Standard" shall have the meaning given in Section 2.4. 

"Termination Notice" shall mean any written notice of termination required pursuant to 

ARTICLE VII. 

"Third Party Claim" shall have the meaning given in Section 8.2. 

Section 1.2. Construction. The Rules of Construction apply to this Agreement; 

provided, that any reference herein (including by reference to any defined term in the Agreement 

of Definitions) to any other J'ransaction Document (including as to any term defined therein) 

shall mean and refer to such Transaction Document as amended or otherwise modified or 

replaced from time to time in accordance with the terms thereof. 

ARTICLE II 


SERVICING OBLIGATIONS OF THE SERVTCER 


Section 2.1. Appointment and Acceptance as Servicer. Effective as of the date 

hereof (and, with respect to each Asset or Group of Assets, as of the applicable Servicing 

Transfer Date with respect thereto), the Manager appoints the Servicer to service, administer, 

manage and dispose of the Assets and the Coliateral on behalf of and as an agent of the Manager. 

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Section 2.2. Limited Power of Attorney. The Manager hereby grants to the 

Scrvicer a limited power of attorney to execute all documents on its behalf (including as the 

"Manager" of the Company, in tum acting on behalf of the Company) in accordance with the 

Servicing Standard set forth below and as may be necessary to effectuate the Serviccr's 

obligations under this Agreement until such time as the Manager revokes said limited power of 

attorney. Revocation of the limited power of attorney shall take effect upon: (i) the receipt by 

the Serviccr of written notice thereof from or on behalf of the Manager, or (ii) termination of this 

Agreement pursuant to ARTICLE VII. 

Section 2.3. Servicing Fee. As consideration for Servicing, the Manager shall 

pay the Serviccr a servicing fee in the amount and at such times as are set forth on the Fee 

Schedule (the "Servicing Fee"). 

Section 2.4. Servicing Standard. The Servicer shall take such actions and 

perform such duties in connection with the Servicing as are set forth on Schedule 2, as the same 

may be amended from time to time by the Manager and the Servicer (the "Servicing 

Obligations"). The Servicer shall perform its Servicing Obligations (i) in the best interests and 

for the benefit of the Company, (ii) in accordance with the terms of the Assets (and related Asset 

Documents), (iii) in accordance with the terms of this Agreement (including this ARTICLE II), 

(iv) in accordance with all applicable Laws, (v) subject to Section 5.7, in accordance with the 

requirements of the LLC Operating Agreement, the Custodial and Paying Agency Agreement 

and the other Transaction Documents, and (vi) to the extent consistent with the foregoing terms, 

in the same manner in which a prudent servicer would service and administer similar loans and 

in which a prudent servicer would manage and administer similar properties for its own portfolio 

or for other Persons, whichever standard is higher, but using no less care and diligence than 

would be customarily employed by a prudent servicer following customary and usual standards 

of practice of prudent mortgage lenders, loan servicers and asset managers servicing, managing 

and administering similar loans and properties on an arms' length basis, provided that, with 

respect to each Loan and related Collateral, in the absence of a customary and usual standard of 

practice, the Servicer shall comply with the applicable Fannie Mae Guidelines, if any, with 

respect to similar loans or properties in similar situations (the requirements in clauses (i) through 

.(yj)_ collectively, the "Servicing Standard"). In addition, the Servicer shall perform its 

Servicing Obligations without regard to (w) any relationship that the Scrv·iccr, the Company, t.~e 

Manager or any Subservicer or any of their respective Affiliates may have to any Borrower, 

Obligor or other obligor or any of their respective Affiliates, including any other banking or 

lending relationship and any other relationship described in Section S.l(h), (x) the obligations of 

any of the Company, the Manager, the Servicer or any Subservicer to make disbursements and 

advances with respect to the Assets and the Collateral, (y) any relationship that the Servicer or 

any Subscrvicer may have to each other or to the Company, the Manager or any of their 

respective Affiliates, or any relationship that any of their respective Affiliates may have to the 

Company, the Manager or any of their respective Affillates (other than the contractual 

relationship evidenced by this Agreement or any Sub~>ervicing Agreement), and (z) the 

Servicer's or any Subscrvicer's right to receive compensation (including the Servicing Fee) for 

its ~>ervices under this Agreement or any Subservicing Agreement. 

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Section 2.5. Collection Account. 

(a) Pursuant to the LLC Operating Agreement and the Custodial and Paying 

Agency Agreement, the Servicer shall deposit (and cause each Subservicer to so deposit) into the 

Collection Account all Asset Proceeds on a daily basis (without deduction or setoff as provided 

in Section 11.12 hereof) within two Business Days after receipt thereof by the Servicer (or such 

Subservicer). The Servicer shall not cause (and shall ensure that no Subservicer causes) funds 

from any other source (other than interest or earnings on the Asset Proceeds, funds transferred 

from the Working Capital Reserve Account, the proceeds of Excess Working Capital Advances 

and Discretionary Funding Advances and other funds expressly permitted to be deposited into 

the Collection Account pursuant to the Custodial and Paying Agency Agreement) to be 

commingled in the Collection Account. 

(b) Except as otherwise directed by the Manager, any and all amounts on 

deposit in (or that are required to have been deposited into) the Collection Account (including 

interest and earnings thereon) shall be disbursed strictly in accordance with this Agreement 

(including the additional terms and conditions set forth in the Servicing Obligations) for 

purposes of payment of applicable Working Capital Expenses (including the making of 

applicable Required Funding Draws) and Permitted Vertical Completion Expenses (including the 

making of Permitted Vertical Development Funding Draws); provided, however, that if the 

Servicer or any Subservicer erroneously deposits any amounts into the Collection Account, it 

may request the Manager to withdraw such erroneously deposited amount in accordance with 

Section 3.1(c) of the Custodial and Paying Agency Agreement. 

(c) Except as otherwise directed by the Manager, any and all amounts 

required to be remitted by the Servicer (or any Subservicer) to the Collection Account under this 

Agreement shall be remitted by wire transfer, in inunediately available funds. 

(d) The Collection Accotmt (and all funds therein) will be subject to an 

account control agreement among the Company, the P:MN Agent and the Paying Agent. 

Section 2.6. Working Capital Reserve Account. 

(a) Pursuant to the LLC Operating Agreement and the Custodial and Paying 

Agency Agreement, the Company has established the Working Capital Reserve Accotmt to be 

maintained with the Paying Agent, and the Initial Member and the Private Ovvner have funded 

the Working Capital Reserve into the Working Capital Reserve Account in an initial amount of 

the WCR Accotmt Deposit for purposes of funding Working Capital Expenses and Permitted 

Vertical Completion Expenses of the Company in accordance with the LLC Operating 

Agreement and the Custodial and Paying Agency Agreement. Except as otherwise directed by 

the Manager, the Servicer shall not cause (and shall ensure that no Subservicer causes) funds 

from any other source (other than interest or earnings on the Working Capital Reserve) to be 

commingled in the Working Capital Reserve Account (it being understood that deposits into 

such Working Capital Reserve Account shall be made only pursuant to the Custodial and Paying 

Agency Agreement and the LLC Operating Agreement). 

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(b) Except as otherwise directed by the Manager, any and all amounts on 

deposit in the Working Capital Reserve Account (including interest and earnings thereon) shall 

be disbursed strictly in accordance with this Agreement (including the additional terms and 

conditions set forth in the Servicing Obligations) and Section 3.6 of the Custodial and Paying 

Agency Agreement. 

(c) The Working Capital Reserve Account (and all funds therein) will be 

subject to an account control agreement among the Company, the P:MN Agent and the Paying 

Agent. 

Section 2.7. [Intentionally Omitted). 

Section 2.8. Escrow Accounts. Except as othenvise directed by the Manager, 

the Servicer shall (including through applicable Subserviccrs) establish and maintain one or more 

Escrow Accounts, each of \Vhich shall be held in trust for the benefit of the Company and the 

P:MN Agent for amounts deposited or required to be deposited therein by the applicable 

Borrower. Except as otherwise directed by the Manager, the Servicer shall (and shall cause each 

Subservicer to) deposit into the applicable Escrow Account on a daily basis, within two Business 

Days of receipt, all Escrow Payments and all other amounts required to be deposited in such 

Escrow Account pursuant to the applicable Asset Documents. The Servicer shall pay (or cause 

the applicable Subservicer to pay) to the Borrowers interest on funds in Escrow Accounts to the 

extent required by Law or the applicable Asset Documents. 

Section 2.9. Other Accounts. At the direction of the Manager, the Servicer 

shall (itself or through applicable Subservicers) establish and maintain such other Eligible 

Accounts ("Other Accounts") as may be directed by the Manager, each of which shall be held in 

trust for the benefit of the Company and the PMN Agent, and shall be funded and disbursed only 

in accordance with such instructions as are provided by the Manager. 

Section 2.10. Maintenance of Insurance Policies· Errors and Omissions and 

Fidelity Coverage. 

(a) The Servicer and each Subservicer shall cause insurance coverage to be 

maintained for the Collateral, and any Acquired Property, as required under the Reimbursement, 

Security and Guaranty Agreement and the LLC Operating Agreement. Such insurance shall be 

issued by an insurer reasonably acceptable to the Manager for each Asset for which the Borrower 

has failed to maintain required insurance including, without limitation, fire, hurricane, flood and 

hazard insurance with extended coverage as is customary in the area in which the Collateral is 

located and in such amoWlts and with such deductibles as, from time to time, is directed by the 

Manager. 

(b) The Servicer and each Subservicer shall maintain each of the following 

types of insurance coverage having such limits as described below: 

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(i) Errors & omtsswns liability with limits of not less than 

$10,000,000 per claim and $10,000,000 in the aggregate. The Servicer or 

Subservicer, as applicable, shall notify the Manager immediately upon the 

reduction of, or potential reduction of, 50% of these limits. The Manager may 

require that the Servicer and each Subservicer purchase additional insurance or 

coverage equal to the required limits as stated above. "Potential reduction of 

50%" shall mean any knowledge by the Servicer or Subservicer, as applicable, 

that a claim or the sum of all claims, current or initiated after the effective date of 

the policy, would reduce the limits by 50%. 

(ii) Directors & officers liability with limits of not less than 

$10,000,000 per elaim and $10,000,000 in the aggregate. 

(iii) Crime insurance or a fidelity bond in an amount of not less than 

$1 0,000,000 per claim and $10,000,000 in the aggregate, covering employee 

theft, forgery and alteration, wire/funds transfer, computer fraud, client coverage. 

Such coverage shall insure all employees or any other persons authorized by the 

Servicer or Subservicer to handle any funds, money, documents and papers 

relating to any Asset, and shall protect the Servicer or Subservicer, as applicable, 

against losses arising out of theft, embezzlement, fraud, misplacement, or other 

similar causes. The Manager and the Company shall each be named as a loss 

payee with respect to claims arising out of assets handled under this Agreement or 

any applicable or Subservicing Agreement. 

(iv) General liability with limits of not less than $1,000,000 per 

occurrence and $2,000,000 in the aggregate, in each case, including coverage for 

products/completed operations, advertising and personal injury. The Manager 

and the Company shall each be named as additional insured. The policy shall 

include a waiver of subrogation in favor of the Manager and the Company. 

(v) Auto liability with a combined single limit of not less than 

$1,000,000 to provide coverage for any owned, hired, or non-owned vehicles. 

(vi) Workers compensation in such amount as required by the states in 

which the Servicer or Subservicer, as applicable, operates, including coverage for 

employer's liability in an amount not less than, $1,000,000. The policy shall 

include a waiver of subrogation in favor of the Manager and the Company. 

(vii) Umbrella liability in an amount of not tess than $10,000,000 per 

occurrence and in the aggregate. 

All such policies shall be written with carriers having a minimum insurer rating of A- VIII from 

A.M. Best and A from Standard & Poor's. All such policies shall have a minimum prior written 

notice of cancellation of thirty days, except for non-payment of premium whereby a ten day 

notice of cancellation is acceptable. Certificates shall show each of the Manager and the 

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Company as additional insured, or as otherwise designated by the language in clauses (i)~(vii) 

above. 

(c) The Servicer shall notify (or shall cause each Subservieer to notify) the 

Manager and each Required Consenting Party and each Purchase Money Notes Guarantor 

immediately of the cancellation or nonrenewal or the receipt of a notice of cancellation or 

nonrenewal of any fidelity bond or insurance policy required to be maintained pursuant to this 

Section 2.10 and the efforts made to obtain replacement coverage. 

(d) The Servicer shall provide (or shall cause each Subservicer to provide) 

each Required Consenting Party, each Purchase Money Notes Guarantor and the Manager with 

certificates evidencing all fidelity bonds and insurance policies required to be maintained 

pursuant to this Section 2.10, on the Effective Date (and, with respect to each Asset, the 

applicable Servicing Transfer Date with respect thereto) and each anniversary of the Closing 

Date thereafter, and otherwise upon request of such Required Consenting Party, such Purchase 

Money Notes Guarantor or the Manager. Copies of fidelity bonds and insurance policies 

required to be maintained pursuant to this Section 2.10 shall be made available to the Manager, 

each Required Consenting Party and each Purchase Money Notes Guarantor, or their respective 

representatives, on the Effective Date (and, with respect to each Asset, on or before the 

applicable Servicing Transfer Date with respect thereto), and shall otherwise be made available 

to the Manager, any Required Consenting Party or any Purchase Money Notes Guarantor, and its 

respective representatives, upon request. 

Section 2.11. Funding of Working Capital Expenses and Certain Other 

Payments; Permitted Vertical Completion Expenses. To the extent set forth in, and subject to the 

terms of, this Agreement (including the Servicing Obligations), the Servicer shall, on behalf of 

the Manager, in tum acting on behalf of the Company (and from funds in the applicable 

Company Accounts), pay (or cause the applicable Subservicers to so pay) applicable Working 

Capital Expenses and Permitted Vertical Completion Expenses (including making applicable 

Required Funding Draws and Permitted Vertical Development Funding Draws, it being 

understood that the Servicing Obligations may set forth rights and limitations of the Servicer 

(and the Subservicers) with respect to applicable decisions and rights of the Manager in 

rormection with the making of Required Funding Draws and Permitted Vertical Development 

Funding Draws); provided that the payment of the same is consistent with the applicable terms 

and conditions in the Custodial and Paying Agency Agreement and, subject to Section 5.7, the 

applicable terms and conditions in the LLC Operating Agreement and the other Transaction 

Documents. Servicer acknowledges that funds in the Company Accounts, and proceeds of 

Excess Working Capital Advances and Discretionary Funding Advances, shall be used 

exclusively as provided in (and subject to the terms of) the Custodial and Paying Agency 

Agreement and, subject to Section 5.7, the applicable terms of the LLC Operating Agreement 

and the other Transaction Documents. 

Section 2.12. Expenses. Except as otherwise directed by the Manager, the 

Servicer shall use (and cause each applicable Subservicer to so use) its reasonable best efforts to 

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recover from Borrowers and Obligors all amounts of Servicing Expenses that are advanced by 

the Scrvicer (as permitted or required pursuant to the Servicing Obligations) as Servicer 

Advances to the extent that the Borrowers and Obligors are responsible for such Servicing 

Expenses under the Asset Documents. All such amounts not recovered from Borrowers or 

Obligors and all other Servicer Advances shaH be reimbursed only in accordance with the terms 

set forth on Schedule 3, as the same may be amended from time to time by the Manager (without 

the consent of any required Consenting Party) and the Servicer. In no event shall any Servicer 

Advances be deducted from or netted against any Asset Proceeds. In the event the Serviccr is 

reimbursed for any amount that does not qualify as a Servicing Expense, the Servicer shall be 

obligated to refund such amount to the Manager, or, if so directed by the Manager, directly to the 

Company (to the Collection Account) on the Specified Date immediately following the 

Servicer's receipt of notice from the Manager requesting the same. No Scrvicer Advances shall 

bear interest chargeable in any way to the Company or deductible from any Asset Proceeds. 

Section 2.13. Insured or Guaranteed Assets. If any Assets being Serviced 

pursuant to this Agreement are insured or guaranteed by any Governmental Authority, the 

Scnricer acknowledges and agrees that, if the Manager so directs pursuant to the Servicing 

Obligations with respect to such Assets, it shall take any and all actions as may be necessary to 

insure that such insurance or guarantees remain in full force and effect The Scrvicer 

acknowledges and agrees that, upon assumption of the Servicing Obligations with respect to the 

Assets pursuant to this Agreement, it agrees to fulfill all of the Company's obligations under the 

contracts of insurance or guaranty. 

Section 2.14. Registration with MERS. In the event that any ofthe Loans are (or 

are required by the Servicing Obligations to be) registered on the MERS® System, the Scn'icer 

shall maintain (or register, as applicable) such Loan on the MERS® System and execute and 

deliver on behalf of the Company (including, as applicable, on behalf of the Manager, in turn on 

behalf of the Company) any and all instruments of assignment and other comparable instruments 

with respect to such assignment or re-recording of a mortgage securing a Loan in the name of 

MERS®, solely as nominee for the Company and its successors and assigns. With respect to 

each Loan that is registered on the MERS® System, (A) the Servicer shall be designated as the 

"servicer" and 1000002 (Org Id.) shall be designated as the "investor" with respect to such Loan, 

and, if applicable, the Ma11agcr may cause or permit an applicable Subservic.er (and, in the event 

such Loan is being serviced by a Rated Subservicer, shall so cause such Subservicer) to be 

designated as the "subservicer" with respect to such Loan (provided, that (i) upon the Company 

becoming a member of MERS in good standing, the Manager shall cause the Company to be 

identified in the "investor" field on the MERS® System, and (ii) at the option of the Manager in 

accordance with the LLC Operating Agreement and so long as the Manager is and remains a 

MERS member in good standing, the Manager may be designated as the "servicer" with respect 

to any such Loan, in which case the Servicer shall be designated as the "subscrvicer" with 

respect thereto), and (B) no other Person shall be identified on the MERS® System as having 

any interest in such Loan unless otherwise consented to by the Manager (or required pursuant to 

the Electronic Tracking Agreement). Except as otherwise directed by the Manager (in 

connection with a voluntary removal by the Manager of any Loan from the MERS® System 

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pursuant to Section 12.3(h) of the LLC Operating Agreement), all Loans registered on the 

MERS® System shall remain registered on the MERS® System unless default, foreclosure or 

similar legal or MERS® requirements dictate otherwise. The Servicer shall provide the Manager 

and the Initial Member with such reports from the MERS® System as the Manager or the Initial 

Member, from time to time, may request, including to allow the Manager and the Initial Member 

to verify the Persons identified on the MERS® System as having any interest in any of the Loans 

and to confirm that the Loans required to be registered on the MERS® System are so registered. 

For so long as any Loans remain registered with MERS, the same shall be subject to an 

Electronic Tracking Agreement in the form of Exhibit B, and, to the extent any such Loans arc 

so registered with MERS as of the Closing Date, the Servicer, together with the Manager, the 

PMN Agent and the Initial Member, shall execute such Electronic Tracking Agreement on the 

Closing Date and deliver the same to MERS. Without limiting the foregoing, upon the request of 

the Manager or the Initial Member, the Servicer shall cause :MERS to run a query with respect to 

any and all specified fields on the MERS® System with respect to any or all of the Loans 

registered on the MERS® System and provide the results to the Manager and the Initial Member 

and, if requested by the Manager or the Initial Member (and subject to any applicable provisions 

of the Electronic Tracking Agreement), shall cause MERS to change the information in such 

fields, to the extent MERS will do so in accordance with its policies and procedures, to reflect 

such instructions. 

ARTICLE III 


LOAN DEFAULTS; ACQUISITION OF COLLATERAL 


Section 3.1. Delinquency Control. Except as othenvise directed by the 

Manager, the Servicer shall maintain (and cause each applicable Subservicer to maintain) a 

collection department that complies with the Servicing Standard and protects the Company's 

interests in the Assets and the Collateral in accordance with the Servicing Standard. 

Section 3.2. Discretion of the Servicer in Responding to Defaults of Borrower. 

Upon the occurrence of an event of default under any of the Asset Documents, but subject to the 

other terms and conditions of this Agreement, including the Servicing Obligations of the Servicer 

and such direction as the Manager may otherwise provide that is consistent with the Servicer's 

compliaiice with the Sen'icing Sta.:1dard, the Servicer, ·with the consent of the Manager, shall 

determine the response to such default and the course of action with respect to such default, 

including (a) the selection of attorneys to be used in connection with any action, whether judicial 

or otherwise, to protect the interests of the Company in the Asset and the Collateral, (b) the 

declaration and recording of a notice of such default and the acceleration of the maturity of the 

Loan, (c) the institution of proceedings to foreclose the Asset Documents, Collateral or Acquired 

Property securing the Loan pursuant to the power of sale contained therein or through a judicial 

action, or to appoint a receiver, (d) the institution of proceedings against any Obligor, (e) the 

acceptance of a deed in lieu of foreclosure, (f) the purchase of the real property Collateral at a 

foreclosure sale or trustee's sale or the purchase of the personal property Collateral at a UCC 

sale, and (g) the institution or continuation of proceedings to obtain a deficiency judgment 

against such Borrower or any Obligor and the collection of such judgment. Notwithstanding 

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anything to the contrary contained herein, but subject to Section 5.7, the Servicer shall not, in 

connection with any such default or otherwise, take (or refrain from taking) any action if the 

taking (or refraining from taking) of such action is inconsistent with the terms of the LLC 

Operating Agreement or any other Transaction Documents without the prior written consent of 

the Manager. 

Section 3.3. Acquisition of Acquired Property. Any acquisition of Collateral 

shall conform with the terms and conditions of this Agreement (including the Servicing 

Obligations of the Scrvicer). With respect to any Asset as to which the Scrvicer has received 

actual notice of, or has actual knowledge of, any Environmental Hazard with respect to the 

related Collateral, the Servicer shall immediately provide written notice of same to the Manager. 

In addition, if the Manager so directs (and if required pursuant to the LLC Operating 

Agreement), prior to the acquisition of title (whether by foreclosure, deed in lieu of foreclosure, 

by power of sale or by sale pursuant to the Uniform Commercial Code, or otherwise) to any 

Acquired REO Property, the Servicer shall cause a Site Assessment to be commissioned with 

respect to such Collateral, and the costs of such Site Assessment shall be deemed to be Servicing 

Expemes as long as such costs were not paid to any Affiliate of the Manager or any Afiiliate of 

the Servicer or any Subservicer. Except as is otherwise directed by the Manager, the Servicer or 

any Subservicer shall not acquire or otherwise cause the Company or any Subsidiary or other 

entity in which the Company owns any interest to acquire all or any portion of any Collateral 

having any actual or threatened Environmental Hazard by foreclosure, deed in lieu of 

foreclosure, power ofsale or sale pursuant to the UCC or otherwise. If title to any Collateral that 

constitutes real property is to be acquired by foreclosure, by deed in lieu of foreclosure, by power 

of sale or by sale pursuant to the UCC, or otherwise, title to such Acquired REO Property shall 

be taken by and held in the name of an Ownership Entity; provided, however, that for any 

Collateral which becomes Acquired REO Property after the applicable Servicing Transfer Date 

which contains an Environmental Hazard, the Ownership Entity that holds such Acquired REO 

Property may not hold title to any other Acquired REO Property. In connection with any such 

acquisition of title to Acquired Property by the Company (or any Ownership Entity) occurring 

afler the Closing Date (by foreclosure, by deed in lieu of foreclosure, by power of sale or by sale 

pursuant to the Unifoffil Commercial Code, or otherwise), and suhject to applicable instructions 

from the Manager, the Servicer shall obtain (or shall have obtained), during the period 

commencing six monlhs prior iu such acquisition and ending on the earlier of(i) sixty days after 

such acquisition or (ii) such earlier date as may be required in connection with the relevant 

exercise of remedies so as to comply with applicable Law and preserve rights to collect any 

Deficiency Balance), an updated Appraisal for determination of the Appraised Value (to serve as 

the basis for the initial Net Fair Value) of such Acquired Property. 

Section 3.4. Administration of Acquired REO Properties. In addition to any 

other terms and conditions set forth herein, in connection with any Acquired REO Properties, the 

Servicer shall, in each case subject to applicable instmctions from the Manager and the Servicing 

Obligations, comply with the following terms and conditions: 

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(a) The Serviccr shall cause the applicable Ownership Entity to maintain 

insurance m compliance with applicable requirements herein and in the LLC Operating 

Agreement. 

(b) The Servicer shall cause the applicable Ownership Entity to (i) perform 

the obligations that such Ownership Entity is required to perform under the leases to which it is a 

party in all material respects and (ii) enforce, in accordance with commercially reasonable 

practices for properties similar to the applicable Acquired REO Property, the material obligations 

to be performed by the tenants under such leases. 

(c) The Servicer shall not permit any Ownership Entity to initiate or consent 

to any zoning reclassification of any portion of the Acquired REO Property O\\·ned by such 

Ownership Entity, or use or permit the use of any portion of an Acquired REO Property in any 

manner that could result in such use (taking into at:count any applicable variance obtained in 

accordance with the Servicing Standard) becoming a non-conforming use under any zoning 

ordinance or any other applicable land use Law, without the prior consent of the Manager and 

the Required Consenting Parties. 

(d) The Servicer shall not permit any Ownership Entity to suffer, permit or 

tmtmtc the joint assessment of Acquired REO Property (i) with any other real property 

constituting a Tax lot separate from such Acquired REO Property, and (ii) \Vith any portion of an 

Acquired REO Property which may be deemed to constitute personal property, or any other 

procedure whereby the Lien of any Taxes which may be levied against such personal property 

shall be assessed or levied or charged to such Acquired REO Property. 

(e) From and after the completion of any buildings or other improvements at 

an Acquired REO Property, the Scrvicer shall cause the applicable Ownership Entity to maintain 

such Acquired REO Property in a good and safe condition and repair (such repair subject to such 

alterations as the Manager may from time to time determine to be appropriate in accordance with 

the Servicing Standard and applicable requirements herein and in the other Transaction 

Documents) and in accordance with applicable Law. 

([) With respect to any Acquired REO Property that is a Ground Lease, the 

Serviccr shall cause the applicable Ownership Entity (as the lessee) to (i) pay all rents and other 

sums required to be paid by the tenant under and pursuant to the provisions of the applicable 

Ground Lease as and when such rent or other charge is payable, and (ii) diligently and timely 

perform and observe all of the terms, covenants and conditions binding on the tenant under the 

Ground Lease. The Servicer shall not permit the applicable Ownership Entity to subordinate or 

consent to the subordination of any GroW1d Lease to any mortgage, lease or other interest on or 

in the ground lessor's interest in the applicable Acquired REO Property without the prior consent 

of the Manager and the Required Consenting Parties unless such subordination is required under 

the provisions of such Ground I ,case. 

(g) In the event the Manager elects to cause the Company to fund any 

permitted construction with respect to Acquired REO Property, then the Servicer shall cause 

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each Ownership Entity to pursue with diligence the construction of the Acquired REO Property 

owned by such Ownership Entity (i) in accordance with the construction, construction 

management (if any) and all other material contracts relating to such construction, and all 

requirements of Law, all restrictions, covenants and easements affecting such Acquired REO 

Property, and all applicable governmental approvals, (ii) in the case of any Substantially 

Complete Vertical Development, in substantial compliance with the plans and specifications 

therefor as in existence on the Closing Date and as thereafter modified by the Manager in its 

business judgment exercised in accordance \Vith the LLC Operating Agreement and the other 

Transaction Documents, (iii) in a good and workmanlike manner and free of defects, (iv) in a 

manner such that such Acquired REO Property remaim free from any Liens, claims or 

assessments (actual or contingent) for any material, labor or other item furnished in connection 

therewith, and (v) in conformance with all other applicable requirements set forth herein and in 

the other Transaction Documents. 

(h) Notwithstanding any other provision of this Section 3.4 to the contrary, 

(i) in operating, managing, leasing or disposing of any Acquired REO Property, the Servicer 

shall act in the best interests of the Company, and the Members and creditors of the Company 

(including the FDIC in its various capacities) and in accordance with the Servicing Standard, and 

(ii) without relieving the Servicer of any obligation elsewhere in this Agreement, and subject to 

any applicable Servicing Obligations and requirements in the Transaction Documents, the 

Servicer shall not be required to act in accordance with a specific provision of this Section 3.4 if 

such action is (A) not in the best interests of Company and the Members and creditors of the 

Company (including the FDIC in its various capacities), as determined by the Servicer in the 

exercise of its reasonable discretion, or (B) not in accordance with the Servicing Standard. 

(i) The Servicer shall furnish to the Manager, the P"MN Agent and the Initial 

Member such reports regarding the construction, leasing and sales efforts of or relating to the 

Acquired REO Property as the Manager, the P"MN Agent or the Initial Member shall reasonably 

request. 

ARTICLE IV 


SUBSERVICING 


Section 4.1. Retention of Subservicer. The Servicer may engage or retain one 

or more Subservicers, including Affiliates of the Manager or of the Servicer, as it may deem 

necessary and appropriate, provided that any Subservicer meets the requirements set forth in the 

definition of Qualified Servicer. 

Section 4.2. Subservicing Agreement Requirements. Any Subservicing 

Agreement with any Subservicer shall provide for the Servicing by the Subservicer in 

accordance with the Servicing Standard and the other terms of this Agreement and the LLC 

Operating Agreement, and shall comply with the requirements set forth in Section 12.l(b) of the 

LLC Operating Agreement. Without limitation of the foregoing, and to further clarify certain 

requirements so set forth in such Section 12.1(b) of the LLC Operating Agreement, the Servicer 

agrees that: 

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(a) for purposes of Section 12. ](b)(v) of the LLC Operating Agreement, any 

such Subservicing Agreement shall include rights in favor of the FDIC, each Purchase Money 

Notes Guarantor, the Pl\AN Agent and the Company that arc equivalent to the rights granted to 

such Persons hereunder; and 

(b) for purposes of, and in addition to, as applicable, the termination rights as 

outlined in Section 12.l(b) of the LLC Operating Agreement, any such Subservicing Agreement 

shall (i) provide that the Subscrvicer consents to its immediate termination under the 

Subservicing Agreement pursuant to Section 7.2 and Section 7.3 of this Agreement, (ii) provide 

that the Subservicer consents to its immediate termination under the Subservicing Agreement 

upon the occurrence of any of (x) a Default under Section 7 .l(b) of this Agreement, or (y) an 

Insolvency Event with respect to the Subservicer, (iii) provide that the occurrence of any 

Insolvency Event with respect to the Subservicer constitutes a default under the Subservicing 

Agreement, (iv) contain default provisions that relate to the Subservicer (including to actions of 

the Subservicer) that correspond to the provisions of Section 7.1 (a), {Q1 ££1lil1 hl.ill_,_ (g1.(hl 

and ill of this Agreement, and contain provisions that correspond to Section 7.2, 7.4, and 7.5 of 

this Agreement, and (v) without limitation of the foregoing, provide that each of the Manager, 

the Initial Member and the PMN Agent has the right (x) to terminate the Subservicing 

Agreement by providing written notice upon the occurrence of any default so required to be 

included therein, without any cure period other than as may be provided for in such default 

provisions under such Subservicing Agreement (which cure periods shall be no longer than the 

cure provisions in the corresponding provisions of Section 7.1 of this Agreement, if any), and 

(y) otherwise to enforce the rights of the Servicer under the Subservicing Agreement. Nothing 

contained in any Subservicing Agreement shall alter any obligation of the Servicer under this 

Agreement or the Manager under the LLC Operating Agreement and, in the event of any 

inconsistency between the Subservicing Agreement and the terms of either this Agreement or the 

LLC Operating Agreement, the terms of this Agreement or the LLC Operating Agreement, as 

applicable, shall apply and govern. 

Section 4.3. Servicer Liable for Subservicers. Notwithstanding anything to the 

contrary contained herein, the use of any Subscrvicer shall not release the Servicer from any of 

its Servicing Obligations or other obligations under this Agreement, and the Servicer shall 

remain responsible a."1.d liable for all acts a:-:d omissions of each Subservicer as fully as if such 

acts and omissions were those of the Servicer. All actions of any Subservicer performed 

pursuant to any Subservicing Agreement sha!I be performed as an agent of the Senricer. No 

Subservicer shall be paid any fees or indemnified out of any Asset Proceeds, it being understood 

that all fees and related costs and liabilities of retaining any Subservicers shall be the sole costs, 

expense and responsibility of the Servicer. 

Section 4.4. Manager Approval Required. Each Subservicing Agreement and 

all Modifications thereto and the selection of the Subserviccr, regardless of whether the 

Subservicer is an Afliliate of the Scrvicer, shall be subject to the prior written approval of the 

Manager (which approval shall not be unreasonably withheld, delayed or conditioned so long as 

the provisions required under Section 4.2 are not modified or deleted). A copy of all 

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Subscrvicing Agreements, as executed and delivered and all amendments thereto, shall be 

provided to the Manager and each Required Consenting Party. 

Section 4.5. Regulation AB Requirements. The Servicer shall use 

commercially reasonable efforts (i) to maintain in place, and to confirm that each Subservicer 

has in place, policies and procedures instituted to monitor any performance or other triggers and 

events of default in accordance with the applicable Asset Documents and the Servicing 

Obligations (as generally required pursuant to Section 1 1 22( d)( 1)(i) and (ii) of Regulation AR), 

and (ii) to comply, and confirm, where applicable, that each Subservicer complies, with 

Section 1122(d)(2)(i) through (vii), and Section 1122(d)(4)(i) through (xiv) of Regulation AB, it 

being understood that any such requirements of Regulation AB referenced herein shall be 

deemed applicable to the Servicing conducted hereunder (and under any Subservicing 

Agreement) regardless of whether such requirements apply, by their tem1s. only to companies 

registered or required to file reports with the Securities and Exchange Commission. 

ARTICLEV 


REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SERVICER 


Section 5.1. Representations and Warranties. The Servicer hereby makes the 

following representations and warranties as of the date hereof: 

(a) The Servicer (i) is a Saba! Financial Group, L.P., duly organized, validly 

existing and in good standing under the laws of the State of Delaware, (ii) has qualified or will 

qualify to transact business as a foreign entity and will remain so qualified, in the state or states 

and other jurisdictions where the Assets or the nature of the Servicer's activities under this 

Agreement makes such qualification necessary; (iii) has all licenses and other governmental 

approvals necessary to carry on its business as now being conducted and to perform its 

obligations hereunder; and (iv) has established and shall maintain its principal place of business 

in the United States. 

(b) The Servicer has all requisite power, authority and legal right to Service 

each Asset, and to execute, deliver and perform, and to enter into and consummate the 

transactions contemplated by, this Agreement, and this Agreement has been duly authorized by 

all requisite action on the part of the Servicer. 

(c) The Agreement of Definitions, this Agreement and all agreements 

contemplated hereby to which the Servicer is or will be a party constitute the valid, legal, binding 

and enforceable obligations of the Servicer, except as such enforcement may be limited by 

bankruptcy, insolvency, reorganization or other similar Jaws affecting the enforcement of 

creditors' rights generally, and by general principles of equity (regardless of whether such 

enforcement is considered in a proceeding in equity or at law); and all requisite organizational 

action has been taken by the Serviccr to make this Agreement and all agreements contemplated 

hereby to which the Servicer is or will be a party valid and binding upon the Servicer in 

accordance with their terms and conditions. 

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v.3 
(d) The Persons executing this Agreement on behalf of the Servicer are duly 

authorized to do so. 

(e) The execution and delivery of this Agreement by the Servicer, the 

Servicing, the consummation of any other of the transactions contemplated by this Agreement, 

and the fulfillment of or compliance with the terms hereof are in the ordinary course of business 

of the Servicer and will not (i) result in a breach of any term or provision of the articles or charter 

or bylaws or other organizational documents of the Servieer; (ii) conflict with, result in a breach, 

violation or acceleration o( or result in a default (or an event which, with notice or lapse of time, 

or both, would constitute a default) under the terms of any agreement or other instrument to 

which the ServiL:er is a party or by which it may be bound; or (iii) constitute a violation of any 

Law applicable to the Servicer, and the Servicer is not in breach or violation of any agreement or 

instrument, or in violation of any Law of any Governmental Authority having jurisdiction over it 

which breach or violation may impair the Servicer's ability to perform or meet any of its 

obligations under this Agreement. 

(i) No litigation is pending or, to the Servicer's knowledge, threatened, 

against the Servieer that would prohibit the Servicer from entering into this Agreement or is 

likely to materially and adversely affect either the ability of the Servicer to perform its 

obligations under this Agreement or the financial condition of the Scrvicer. 

(g) Any consent, approval, authorization or order of any Governmental 

Authority required for the execution, del ivcry and pcrfom1ance by the Servicer of or compliance 

by the Servicer with this Agreement or the consummation of the transactions contemplated by 

this Agreement has been obtained and is effective. 

(h) None of the Servicer, any Subservicer or their respective Affiliates shall, 

at any time, without the prior written approval of the Manager and the Initial Member, (i) be an 

Affiliate of or a partner or joint venturer with any Borrower or Obligor, (ii) be an agent of any 

Borrower or Obligor, or allow any Borrower or Obligor to be an agent of the Servicer or any 

Subservicer or any such Affiliate of either, or (iii) have any interest whatsoever in any Borrower 

or Obligor or other obligor with respect to any Asset or any ofthe Collateral. 

(i) The Servicer is, and at all times so long as this Agreement is in effect shail 

remain, a Qualified Servicer. 

Section 5.2. Reporting, Books and Records and Compliance Covenants. The 

Servicer covenants to the Manager as follows: 

(a) The Servicer shall be responsible for submitting all lntemal Revenue 

Service information returns related to each Asset for all applicable periods commencing with the 

Servicing Transfer Date with respect thereto (or, if later, the Effective Date). Information returns 

include reports on Forms 1098 and 1099 and any other reports required by Law. The Servicer 

shall be responsible for submitting all information returns required under applicable Law of any 

foreign Governmental Authority, to the extent such are required to be filed by the Company 

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LXLCUTJO:-J VERSION 
under such Law, relating to the Assets, for the calendar or tax year in which the Effective Date 

falls and thereafter. 

(b) (i) The Servicer shall cause to be kept and maintained, at all times, at the 

Servicer's principal place of business, a complete and accurate set of files, books and records 

(including records transferred by the Manager to the Servicer) regarding the Assets and the 

Collateral, and the Company's and the relevant secured parties' interests in the Assets and the 

Collateral, including records relating to the Company Accounts, the Escrow Accounts and any 

Other Accounts maintained in connection with the Assets, Servicer Advances, Funding Draws, 

Working Capital Expenses, Permitted Vertical Completion Expenses and collection and 

remittance of Asset Proceeds and all other amounts disbursed from any Company Account. The 

books of account shall be maintained in a manner that provides sufficient assurance: (A) that 

transactions of the Company are executed in accordance with, and only in accordance with, the 

general or specific authorization of the Manager consistent with the provisions of the LLC 

Operating Agreement; (B) that transactions of the Company are recorded in such form and 

manner as will (x) permit preparation of federal, state and local income and franchise Ta'\: returns 

and infonnation returns in accordance with the LLC Operating Agreement and as required by 

Law, (y)pennit preparation of the Company's financial statements in accordance with GAAP 

and as otherwise set forth in the LLC Operating Agreement, and (z) maintain accountability for 

the Company's assets; (C) regarding the prevention or timely detection of any unauthorized, and 

non-de minimus, acquisition, use or disposition of assets of the Company or any Ownership 

Entity; and (D) that any material information regarding the business or affairs of the Company is 

accumulated, recorded, processed, summarized and reported to the Manager in a timely manner. 

For purposes of the preceding sentence "transactions of the Company" include (without 

limitation) all transfers of funds out of, into, or between, Accounts (to the extent that the 

Company has discretion with respect thereto), and the making of any Bulk Sale. 

(ii) without limiting the generality of Section 5.2(b)(i), the obligation 

to cause to be kept and maintained a complete and accurate set of records as set forth in Section 

5.2(b)(i) shall at all times include the obligation to cause each of the following to be maintained: 

(A)(x) accurate records reflecting the status of ground rents, Taxes, assessments, water rates, 

sewer rents, and other charges which are or may become a Lien upon the Mortgaged Property (or 

any other Coiiaieral) and the status of fire and hazard insurance coverage and all bills foi the 

payment of such charges (including renewal premiums), and (y) accurate records, in rea<;onable 

detail, of all detem1inations as to whether (or not) to pay any of the foregoing on behalf of any 

Borrower, and the basis (and back-up documentation) for such detem1inations, (B) accurate 

records, in reasonable detail, of the results of site inspections of any Mortgaged Property or 

Acquired REO Property, (C) accurate records, in reasonable detail, of all determinations as to 

whether (or not) to transfer (or cause to be transferred) funds out of, into, or between, Accounts 

(to the extent that the Manager has discretion with respect thereto), and the basis (and back-up 

documentation) for all such determinations, (D) accurate records, in reasonable detail, of all 

determinations as to whether (or not) to effect any proposed Bulk Sale, and the basis (and backup documentation) of such determination, and (E) accurate records, in reasonable detail, of all 

other determinations that are material to the Company. 

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EXECUTION VFR~ION 
(c) The Servicer shall cause all books and records at any time kept or 

maintained pursuant to Section 5.2(b) to be maintained and retained until the date that is the later 

of ten years after the Closing Date and three years after the Final Distribution Date, which date 

shall be established by notice to such effect to the Servicer by the Manager. All such books and 

records shall be available during such period for inspection by the Manager, the FDIC, the PMN 

Agent, each Purchase Money Notes Guarantor and the Initial Member (and their respective 

representatives, including any applicable Governmental Authority) at all reasonable times during 

business hours on any Business Days (or, in the case of any such inspection after the term hereof, 

at such other location as is provided by notice to the Manager, the FDIC, the PMN Agent, each 

Purchase Money Notes Guarantor and the Initial Member, as applicable), in each instance upon 

not less than two Business Days' prior notice to the Servicer. Upon request by the Manager, the 

Scrvicer, at the sole cost and expense of the Manager, shall promptly send copies (the number of 

copies of which shall be reasonable) of such books and records to the Manager. The Servicer 

shall (and shall cause each Subservicer to) provide the Manager with reasonable advance notice 

of the Servicer's (or any such Subservicer's) intention to destroy or dispose of any docwnents or 

files relating to the Assets and, upon the request of the Manager, shall allow the Manager, at its 

own expense, to recover the same from the Servicer (or such Subscrvicer). 

(d) The covenants set forth in Section 5.2{b) and (£)_ above to maintain a 

complete and accurate set of records shall encompass all files in the Servicer's (or any 

Subservicer's) custody, possession or control pertaining to the Assets and the Collateral, 

including (except as required to be held by the Custodian pursuant to the Custodial and Paying 

Agency Agreement) all original and other documentation pertaining to the Assets and the 

Collateral, all documentation relating to items of income and expense pertaining to the Assets 

and the Collateral, and all of the Servicer's (and any Subservicer's) internal memoranda 

pertaining to the Assets and the Collateral. 

(e) The Servicer shall cause to be furnished to the Manager, each month on 

the Specified Date, commencing with October 2011 (or such other date as may be set forth in the 

Servicing Obligations), a monthly electronic report on the Assets and Collateral containing such 

information and substantially in the form set forth on Schedule 4 as the same may be amended 

from time to time by the Manager (without the consent of any Required Consenting Party) and 

the Servicer (the "E!ectronk Report"). The Electronic Report shall include, but not be limited 

to, the information required for the Manager to prepare, in accordance with the LLC Operating 

Agreement, the Cash Flow and Distribution Report and the Monthly Report, and such other 

reports and information as the Manager shall reasonably require, to the extent such information 

is reasonably available to the Servicer (or any Subservicer). Notwithstanding the above, with 

respect to any period prior to the applicable Servicing Transfer Date, the applicable Electronic 

Reports may exclude certain of the information otherwise required to be included therein if and 

to the extent the Initial Member (or the Transferor) is obligated to provide such information (or 

other information that is a prerequisite to the Servicer being able to provide such infonnation) to 

the Servicer and the Manager pursuant to the interim servicing and asset management support 

obligation set forth in Section 3.3 of the Contribution Agreement and the Initial Member (or the 

Transferor) fails to timely deliver such infommtion to the Servicer and the Manager. 

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(f) The Servicer shall deliver, and shall cause each Subserviccr to deliver, to 

the Manager and each Required Consenting Party, on or before March I 0 of each year, or such 

other day as the Manager and the Servicer may agree, commencing in the year 2012, an aruma! 

officer's certificate stating, as to the signer thereof, that (i) a review of such party's activities 

during the preceding Fiscal Year (or other applicable period as set forth below in this Section 

22ill) and of its performance under this Agreement (or, as applicable, any Subservicing 

Agreement) has been made under such officer's supervision, and (ii) to the best of such officer's 

knowledge and belief, based on such review, such party has fulfilled all of its obligations under 

this Agreement (or, as applicable, any Subservicing Agreement) in all material respects 

throughout such year (or other applicable period as set forth below in this Section 5.2(0), if there 

has been a failure to fulfill any such obligation in any material respect, specifying each such 

failure and the nature and status thereof. The first such officer's certificate shall, with respect to 

any Asset, shall cover the period commencing on the Servicing Transfer Date and continuing 

through the end of the 2011 Fiscal Year. In the event the Servicer or any Subservicer has been 

terminated, resigned or otherwise performed in such capacity for only part of a year (or other 

applicable period, as the case may be, with respect to the period commencing, with respect to 

any Asset, on the Servicing Transfer Date through the end of the 2011 Fiscal Year), such party 

shall provide an officer's certificate pursuant to this Section 5.2 with respect to such portion of 

the year (or other applicable period). 

(g) On or before March 10 of each year, or such other day as the Manager and 

the Servicer agree, commencing in the year 2012, the Servicer shall, and shall cause each 

Subscrviccr to, provide to the Manager, each Required Consenting Party and each Purchase 

Money Notes Guarantor (and/or to such other Person as the Manager may direct) a report 

prepared by a nationally recognized firm of independent certitied public accountants to the effect 

that, with respect to the prior Fiscal Year (or other applicable period as set forth below), such 

firm has examined certain records and documents relating to compliance with the servicing 

requirements in this Agreement and that, on the basis of such examination conducted 

substantially in compliance with either the Uniform Single Attestation Program for Mortgage 

Bankers or item 1122 of Regulation AB, such firm is of the opinion that the Servicer or 

applicable Subserviccr's activities have been conducted in compliance with this Agreement 

(including, to the extent applicable pursuant to Section 4.5 above, Regulation AB), or that such 

examinalion has d.isdoscU no malt:rial itt:rns of noncOlnpliance except for (i) such exceptions as 

such firm believes to be immaterial, and (ii) such other exceptions as arc set forth in the report. 

The first such reports shall cover the period commencing on the Effective Date (and for each 

Asset, covering the period from the applicable Servicing Transfer Date) and continuing through 

the end of the 2011 Fiscal Year. 

(h) In connection with the Manager's obligations under the LLC Operating 

Agreement to prepare, review and periodically update Business Plans, the Servicer shall prepare 

and deliver to the Manager, and thereafter periodically update, such Business Plans, or relevant 

portions thereof or information to be included therein, in each case to the extent set forth and 

required pursuant to Schedule 6 hereto as the same may be amended from time to time by the 

Manager and the Servicer without the consent of any Required Consenting Party (the "Business 

18 

<:ADCIRADC \'enture 2011·1 Structured Transaction 

Serv1emg Agreement 

Version 3,1

,, 

l.'XLCUTlON VERSION 
Plan Schedule"). Upon reasonable notice by any Required Consenting Party or the Manager, 

the Scrvicer shall make its (and each applicable Subservicer's) personnel who are familiar with 

the Business Plans (or relevant portions thereof) available during normal business hours for the 

purposes of discussing such Business Plans with representatives of such Required Consenting 

Party and/or the Manager and responding to questions therefrom. 

Section 5.3. Audits. Until the later of the date that is ten years after the Closing 

Date and the date that is three years after the Final Distribution Date, which date shall be 

established by notice to such effect to the Scrvicer by the Manager, the Servicer shall, and shall 

cause each Subservicer to, (a) provide the Manager, the PMN Agent, each Purchase Money 

Notes Guarantor and the Initial Member and their respective representatives (including any 

Governmental Authority), during nmmal business hours and on reasonable notice, with access to 

and the right to review all of the books of account, reports and records relating to the Assets or 

any Collateral, the Servicing Obligations, the Company Accounts, the Escrow Accounts, any 

Other Accounts, disbursements under the Custodial and Paying Agency Agreement, distributions 

under the LLC Operating Agreement or any matters relating to this Agreement or the rights or 

obligations hereunder or under the other Transaction Documents, (b) permit such representatives 

to make copies of and extracts from the same, (c) allow the Manager, the PMN Agent, any 

Purchase Money Notes Guarantor or the Initial Member to cause such books to be audited by 

accountants selected by the Manager, the PMN Agent, such Purchase Money Notes Guarantor or 

the Initial Member, as applicable, and (d) allow the representatives of the Manager, the PMN 

Agent, any Purchase Money Notes Guarantor or the Initial Member to discuss any Servicer's and 

any Subservicer's affairs, finances and accounts, as they relate to the Assets, the Collateral, the 

Servicing Obligations, the Company Accounts, the Escrm.v Accounts or any Other Accounts or 

any other matters relating to this Agreement, the other Transaction Documents, or the rights or 

obligations hereunder and thereunder, with any such Servicer's and any such Subservicer's 

officers, directors, employees, attorneys and accountants (and by this provision the Servicer 

hereby authorizes such accountants to discuss such affairs, finances and accounts with such 

representatives). Any expense incurred by the Manager, the PMN Agent, any Purchase Money 

Notes Guarantor or the Initial Member and any reasonable out-of-pocket expense incurred by the 

Servicer in connection with the exercise by the Manager, the PMN Agent, such Purchase Money 

Notes Guarantor or the Initial Member of its rights in this Section 5.3 shall be borne by the 

Manager, the PMN Agent, such Purchase Money Nult:s Guarantor 01 the Initial Member, as 

applicable (and in all events subject to any obligation of the Manager to bear such expenses of 

the PMN Agt:nt, such Purchase Money Notes Guarantor or the Initial Member pursuant to the 

LLC Operating Agreement); provided, however, that any expense incident to the exercise by the 

Manager, the PMN Agent, any Purchase Money Notes Guarantor or the Initial Member of their 

respective rights pursuant to this Section 5.3 as a result of or during the continuance of a Default 

by the Servicer hereunder (including any such Default relating or attributable to any Subservicer) 

shall in all cases be borne by the Servicer. 

Section 5.4. No Liens. The Servicer shall not (i) place, or (ii) knowingly 

(including for this purpose any knowledge that the Servicer would have obtained if it had 

complied with the Servicing Standard) permit (voluntarily or involuntarily) to be placed, or to 

19 

CADCIRADC Venture 2011-1 Shuctu~cd Transaction 

Scrvic•ng Agreement 

Verswn 3. I 

,] 

LXECUTION VER~JON 
exist, any Lien on any of the Assets, the Collateral, the Asset Documents, or the Asset Proceeds, 

except for the Liens in favor of the Secured Parties pursuant to the Reimbursement, Security and 

Guaranty Agreement and, in the case of Collateral or Acquired Property, such other Permitted 

Liens as the Manager may permit from time to time; and the Servicer shall not take any action to 

interfere with the P:MN Agent's rights as a secured party with respect to Assets, the Collateral 

and the Asset Proceeds. Notwithstanding the foregoing, (i) with respect to any Mortgaged 

Property included in the Collateral, the Servicer shall not be required pursuant to this Section 5.4 

to cause the Company to discharge (or pay or advance funds on behalf of any Borrower for 

payment of) any Lien arising by operation of Law as a result of the applicable Borrower's failure 

to pay ground rents, Taxes, assessments, water rates, sewer rents, and other similar charges with 

respect to such Mortgaged Property, so long as the Servicer shall have determined in accordance 

with the Servicing Standard (and shall have maintained applicable records of such determination 

pursuant to Section 5.2) that the amount of such Lien (or applicable aggregate amount required 

to be paid by the Servicer so as to discharge the same) exceeds the net recoverable amount to the 

Company \Vith respect to such Mortgaged Property and provided that, so long as such Lien 

remains in eifect, the Company will not acquire title to such Mortgaged Property or otherwise 

have any liability with respect to such Lien, and (ii) in each case, to the extent the Servicer is 

required to make any applicable payment pursuant to the foregoing, such payment shall be from 

Company funds available (or made available by the Manager) for such payment (and, except as 

provided otherwise in the Servicing Obligations or with respect to a Lien arising as a result of 

actions or omissions of the Servicer in violation of other applicable provisions of this 

Agreement, the Servicer shall not be required to use its own funds, or make any Servicer 

Advances, to prevent or discharge any such Lien). 

Section 5.5. Servicer's Duty to Advise; Delivery of Certain Notices. In 

addition to such other reports and access to records and reports as are required to be provided to 

the Manager or any Required Consenting Party hereunder, the Serviccr shall cause to be 

delivered to the Manager such information relating to the Assets, the Collateral, the Servicer and 

any Subservicer as the Manager may reasonably request from time to time and, in any case, shall 

ensure that the Manager is promptly advised, in writing, of any matter of which the Scrvicer or 

Subservicer becomes aware relating to the Assets, any of the Collateral, the Company Accounts, 

the Escrow Accounts, any other accounts created under the Custodial and Paying Agency 

Agreement, any Other Accounts, or any Borrower or Obiigor ihat materially and adversely 

affects the interests of the Company or any Required Consenting Party. Without limiting the 

generality of the foregoing, the Servicer shall immediately notify the Manager of (i) any claim, 

threatened claim or litigation against the Servicer, the Company, the Manager or the Initial 

Member (including as Transferor) arising out of or with respect to any Asset, (ii) any material 

notice from any Governmental Authority relating to any Collateral, (iii) any occurrence which 

could reasonably be expected to result in cost overruns \Vith respect to any Loan or Acquired 

Property for which Required Funding Draws or Permitted Vertical Development Funding Draws 

have been, or are contemplated to be, made, or (iv) any other occurrence which would 

reasonably be expected to materially hamper, prevent or interfere with the effectuation of any 

then-applicable Business Plan. In addition, the Servicer shall cause to be delivered to the 

Manager information indicating any possible Environmental Hazard with respect to any 

20 

CADC/RADC Venture 2011-1 Structured Transaction 

Se!Vicing Agreement 

Version 3.! 

v.J 

EXECUTION VERSION 
Collateral. Further, the Servicer shall cause to be furnished to the Manager, each month on the 

Specified Date, commencing the first month following the Effective Date and together with the 

Electronic Report, a report \Vith respect to each Asset and Collateral (A) containing a summary 

of the progress made, to the extent applicable, in the construction, marketing and leasing of the 

applicable project since the last such report, (B) in the case of any Asset, describing the remedial 

efforts or enforcement actions, if any, being undertaken by the Servicer with respect to the 

applicable Asset, (C) describing the status of the activities contemplated by the Business Plans 

(which, among other things, identifies any facts or circumstances which are reasonably likely to 

hamper, interfere with, prevent or postpone effectuation of the applicable Business Plans), (D) to 

the extent applicable, containing an itemized statement of costs and expenses remaining to be 

paid in order to complete construction of the applicable project (including capitalized interest, 

real estate taxes and other soft costs), (E) to the extent requested by the Manager, any materials 

delivered by the Borrower to the Company or the Servicer pursuant to the applicable Asset 

Documents not theretofore delivered to the Manager (including, copies of all plans and 

specifications, construction budgets and construction schedules, construction contracts, 

architect's agreements, leasing and brokerage agreements, management agreements (and 

modifications to each of the foregoing) and materials delivered by the applicable Borrower in 

connection with each request for an advance under the related Loan and (F) such other 

information as the Manager reasonably requests. 

Section 5.6. Notice of Breach or Change of Control. The Servicer shall 

immediately notify the Manager of (i) any failure or anticipated failure on its part to observe and 

perform any warranty, representation, covenant or agreement required to be observed and 

performed by it as the Servicer, and (ii) any Change of Control with respect to the Serviccr. 

Section 5.7. Copies of Docwnents. Copies of the LLC Operating Agreement 

and the other Transaction Documents (or portions thereof) as Manager has determined to be 

necessary for the Serviccr to be familiar with in order to perform its obligations hereunder have 

been delivered to the Servicer by the Manager, and the Servicer acknowledges receipt thereof. 

The Manager may from time to time deliver to the Servicer such Modifications or additional 

Transaction Documents (or portions of any thereof) as Manager may determine to be so 

necessary for the continued performance by Servicer of its obligations hereunder. All references 

1~"' .. "': ... l" tt."' S",.,_,;,.,.,'s ,.,.hl:ga•1·,,,.." •v:tt. r"'"""""+ +o ...,.,..h T T C n ........ ,..~:~" Ag~,..,..~cn• a-d o'hc­
 ""''"''" V <'''- ,._,,u,.,,_ '-'L'H" <'-'U'-' > L<LL '-''']:--''-'-'< < JU'-H .L-.L- '----'J-''-I<H"l!S ''-'\..-lli l II ll l 

Transaction Documents shall, as between the Manager and the Servicer (and without limitation 

of obligations of the Manager, or the rights of the Initial Member or the PMN Agent under this 

Agreement, the LLC Operating Agreement or the other Transaction Documents), be deemed to 

refer to the LLC Operating Agreement and other Transaction Documents (or portions thereof) as 

have been, or from time to time are, delivered to Servicer. 

Section 5.8. Financial Information. The Servicer shall submit to the Company, 

with copies thereof to be delivered by the Servicer to each Required Consenting Party, (i) within 

forty-five days after the end of each of its fiscal quarters, commencing on the Effective Date, and 

(ii) within ninety days after the end of each of its fiscal years, commencing on the Effective 

Date, a letter certified by an officer of the Servicer that details certain agreed upon financial 

21 

CAnCIRADC Venture 2011-1 Structured TrQnsadion 

Servicmg Agreeme~t 

Version J 1 

" EXECUTION VERSION 
trends and ratios relating to the Scrvicer (and/or such other financial information as the Manager 

or such Required Consenting Party may n;:asonably request from time to time). 

ARTICLE VI 


MANAGER CONSENT 


Section 6.1. Actions Requiring Manager Consent. Notwithstanding anything to 

the contrary contained in this Agreement, the Servicer shall not cause or permit to be taken any 

of the following actions without the prior \Vritten consent of the Manager (which may require the 

Manager to obtain the written consent of the Required Consenting Parties), which consent may 

be withheld or conditioned in the sole and absolute discretion of the Manager: 

(a) conducting any Bulk Sale, except to the extent both (x) permitted under 

the LLC Operating Agreement and (y) expressly permitted in the Servicing Obligations; 

(b) the payment of fees to, the sale or other transfer (including through 

foreclosure or by deed in lieu thereof) of any Asset or Collateral or Acquired Property (or any 

portion thereof) to, or any other transaction with (whether or not at usual and customary rates), 

any Affiliate of the Company, the Manager, the Servicer, any Affiliate of the Servicer, any 

Subservicer, or any Affiliate of any Subservicer; 

(c) the financing of the sale or other transfer of any Assets, Collateral or 

Acquired Property (or any portion thereof); 

(d) the sale of any Asset or Collateral or Acquired Property (or any portion 

thereof) that provides for any recourse against the Company, the Initial Member or the FDIC in 

any capacity, or against any interest in the Company held by the Initial Member or any share of 

the Asset Proceeds allocable to the Initial Member; 

(e) any disbursement of any funds in the Collection Account (including any 

such funds made available through transfers of funds from the Working Capital Reserve Account 

or from Discretionary Funding Advances or Excess Working Capital Advances) or any other 

Company Account, any other account created under the Custodial and Paying Agency 

Agreement or any Other Account other than in accordance with the provisions of this 

Agreement, the LLC Operating Agreement, the Reimbursement, Security and Guaranty 

Agreement and the Custodial and Paying Agency Agreement; 

(t) advancing additional funds that would increase the Unpaid Principal 

Balance of any Asset other than (i) Required Funding Draws, (ii) Permitted Vertical Completion 

Expenses or (iii) Servicing Expenses to the extent that capitalizing such Servicing Expenses is or 

would have been, prior to the conversion of the Loan to Acquired Property. permitted under the 

applicable Asset Documents; 

(g) m connection with its Sen,icing, (i) approving (x) any material 

modification or amendment to, or cancellation or termination of~ any Asset Documents, or 

22 

CADC!RADC Venture 2011·1 Structured Transaction 

Servicing Agrecm<'nt 

Version3_! 

d 

EXECUTIO~ VERS!Ol" 
(y) plans and specifications, construction budgets or construction schedules with respect to the 

projects which are the subject of such Asset (or material modifications to any of such items, 

including any change orders); (ii) waiving or forbearing from exercising any of the lender's 

rights under, or any conditions precedent to the funding of any advances under, such Loan; 

(iii) forgiving or reducing or forbearing from collecting any indebtedness; (iv) releasing any 

parties liable for the payment of the Asset or the performance of any other obligation relating 

thereto; (v) granting any consent under any Asset Documents (including, with respect to any 

proposed transfers of any Collateral or transfers, pledges or changes in management of any direct 

or indirect interests in any Borrower, proposed alterations, proposed settlements of insurance 

claims. condemnation claims or deficiencies or proposed applications of insurance proceeds or 

condemnation awards); (vi) consenting to any agreement in any Insolvency Proceeding relating 

to any Asset, any Borrower or any Obligor with respect to a Loan, or any Collateral, including 

voting for a plan of reorganization~ (vii) subordinating the liens of any Asset Document; (viii) 

amending or waiving any provision of any intercreditor agreement or making any decisions with 

respect to the Assets under any intercreditor agreement; or (ix) taking any other action regarding 

such Asset, Collateral or Acquired Property that is prohibited under the LLC Operating 

Agreement or the other Transaction Documents or othef\,vise inconsistent with the Servicing 

Standard; or 

(h) reimbursement for any expense or cost incurred (or paid) to any Affiliate 

of the Company, any Affiliate of the Servicer or any Affiliate of any Subservicer. 

Section 6.2. Amendments. Modilication and Waivers. No provision of this 

Agreement may be amended, modified or waived except in writing executed by the Manager and 

the Servicer, and each such amendment and modification shall be subject to the prior vvritten 

consent of each Required Consenting Party, except for those provisions that may be amended by 

the express terms hereof without the consent of the Required Consenting Parties. In no event 

shall any such amendment or waiver limit or affect the rights or benefits expressly granted in this 

Agreement to any third party beneficiary of this Agreement other than the Initial Member (to the 

extent such third party beneficiary is, and remains, a third party beneficiary hereunder pursuant 

to Section I 1 .8), and/or any Related Person in relation to such third party beneficiary, without 

the express written consent of such third party beneficiary. 

ARTICLE VII 


DEFAULTS; TERMINATION; TERMINATION WITHOUT CAUSE 


Section 7 .I. Defaults. A default ("Default") means the occurrence of: 

(a) any failure by the Servicer to remit (as and when required) to the 

Company or deposit in the Collection Account, any other Company Account, the Escrow 

Accounts. any other accounts created under the Custodial and Paying Agency Agreement or any 

Other Accounts any amount required to be so remitted or deposited under the tenns of (i) this 

Agreement, (ii) the Custodial and Paying Agency Agreement or (iii) the LLC Operating 

Agreement; or 

23 

CAOC!RAf)C Venture 21111-1 Structured TransHtion 

Servicing Agreement 

Ver>~on 3 I 

>.) 

EXF.Cl:TJOI': VERSJ()N 
(b) any Insolvency Event (without any cure period other than as may be 

provided for in the definition of Insolvency Event) (i) with respect to the Serviccr, or (ii) with 

respect to any Subservicer; provided, that if such Subservicer is not an Affiliate of the Serviccr, 

then such Insolvency Event under this clause (ii) shall not be a Default hereunder (but shall in all 

events be a default under the applicable Subservicing Agreement) so long as the Serviccr shall 

have fully replaced such affected Subservicer within thirty days after the occurrence of such 

Insolvency Event; or 

(c) any failure by the Servicer to duly perform its obligations in (i) Section 

5.2(e), which failure continues unremedied for a period of five days, or such other period as the 

Manager and the Servicer agree, after the date on which written notice of such failure, requiring 

the same to be remedied, shall have been given by the Manager to the Servicer, or (ii) Section 

5.2(f) or Section 5.2{g), which failure continues unremedied for a period of twenty-five days, or 

such other period as the Manager and the Servicer agree, after the date on which v.Titten notice of 

such failure, requiring the same to be remedied, shall have been given by the Manager to the 

Servicer; or 

(d) any failure by the Scrviccr at mty time (i) to be a Qualified Servicer or to 

renew or maintain m1y permit or license necessary to carry out its responsibilities under this 

Agreement in compliance with Law, or (ii) to cause each Subservicer to meet the applicable 

characteristics of a Qualified Servicer as required under Section 4.1 and to renew or maintain any 

permit or license necessary to carry out its responsibilities under any Subservicing Agreement, 

which, in the case of either (i) or (ii), continues unremedied for a period of thirty days after the 

date on which written notice of such failure requiring the same to be remedied shall have been 

given by the Manager or the Initial Member to the Servicer; or 

(c) any failure by the Servicer to cause any Subservicer to comply with the 

terms of its Subservicing Agreement with the Servicer, the occurrence of a default or material 

breach by any Subservicer under its Subservicing Agreement or the failure by the Servicer to 

replace any Subservicer upon the occurrence of any such event in accordance with the terms 

governing material breach or default under the applicable Subservicing Agreement; or 

(f) any other failure (other than those specified in any of s_ection 7.1(a) 

through W, or (g)_ through ik)_) by the Scrvicer to perform its obligations under, and otherwise to 

comply with and observe the provisions of, this Agreement or to perform any Servicing 

Obligation in compliance with the Servicing Standard, and such failure continues unremedied for 

a period of thirty days. or such other period as the Manager, with the consent of the Initial 

Member, and the Servicer agree, after the date on which written notice of such failure shall have 

been given by the Manager or the Initial Member to the Servicer; provided, however, that in the 

case of a failure that cannot be cured within thirty days (or such other period as the Manager, 

with the consent of the Initial Member, and the Serviccr agree) with the exercise of reasonable 

diligence, but which by its nature is curable, the cure period shail be extended for an additional 

thirty days if the Serviccr can demonstrate to the reasonable satisfaction of the Manager and the 

Initial Mcm bcr that the Servicer is diligently pursuing remedial action; and provided, further, 

24 

C\DC/R.\DC Venture 2011·1 Structured Tr~nsMrtion 

Servicing Agr~~m~nt 

Version 3 1 

v_3 

EXL:ClJTION VER~ION 
that, with respect to any such failure under this Section 7.l(D that relates exclusively to 

obligations included in any applicable Schedule hereto that can be amended or otherwise 

modified without the c0nsent of the Initial Member, then no such consent of the Initial Member 

shall be required with respect to an applicable cure period hereunder so long as such failure 

hereunder is not, or would not result in, a failure by the Manager to comply with its obligations 

under the LLC Operating Agreement and the other Transaction Documents; or 

(g) any Dissolution Event (without any cure period other than as may be 

provided for in the definition of Dissolution Event) (i) with respect to the Servicer or (ii) with 

respect to any Subservicer; provided, that any such Dissolution Event under this clause (ii) shall 

not be a Default hereunder (but shall in all events be a default under the applicable Subservicing 

Agreement) so long as the Servicer shall have fully replaced such affected Subservicer within 

thirty days after the occurrence of such Dissolution Event; 

(h) the occurrence of any "Event of Default," as defined in the LLC Operating 

Agreement; 

(i) receipt by the Manager or the Serviccr, from the PMN Agent, of notice 

that an "Event of Default'' as defined in the Reimbursement, Security and Guaranty Agreement, 

has occurred and is continuing; 

(j) any failure by the Servicer to duly observe or perform its obligations in 

Section 11.9; provided, that in the event that any such failure of the Servicer is due to the failure 

of any Subservicer to comply with the provisions of Section 11.9, then it shall not be a Default 

under this clause (j) (but shall in all events be a default m1der the applicable Subservicing 

Agreement) so long as Servicer shall have replaced such Subservicer within thirty days after the 

occurrence of such Subservicer's failure to duly observe or perform Servicer's obligation under 

Section 11.9; or 

(k) the occurrence of any Restricted Servicer Change of Control. 

Section 7.2. Tennination with Cause. 

(a) Upon the occurrence of a Default pursuant to this Agreement, in each 

case, without any cure period other than as may be provided for in Section 7.1 above, the 

Manager (including, if applicable, any successor "Manager" pursuant to the LLC Operating 

Agreement), the Initial Member or the P~ Agent, in addition to any other rights the Manager, 

the Initial Member or the PMN Agent, may have at Law (including under the Uniform 

Commercial Code) or equity, including injunctive relief, specific performance or otherwise, may 

(i) terminate this Agreement by providing a Termination Notice to the Servicer, (ii) terminate the 

Subservicing Agreements by providing a written termination notice to the Servicer and the 

applicable Subservicers, and (iii) otherwise enfOrce this Agreement, in any case, without penalty 

or payment of any fee. 

25 

C\OC!RADC Venture 2011-l Structured Transaction 

Scrv1cmg Agreement 

Ver>ion 3.1 

,] 

EXECCTION VERSION 
(b) In addition to the rights set forth above in Section 7.2(a), (i) upon the 

removal of the Manager as the "Manager" pursuant to the LLC Operating Agreement and/or 

notice from the Initial Member or the Manager of the occurrence of any Event of Default (as 

defined in the LLC Operating Agreement) under the LLC Operating Agreement, or notice from 

the PMN Agent of the occWTence of any Event of Default (as defined in the Reimbursement, 

Security and Guaranty Agreement), the Initial Member (or any successor "Manager" to the 

Manager under the LLC Operating Abrreement) or the PMN Agent may exercise all of the rights 

of the Manager under this Agreement and further cause the termination or assignment of this 

Agreement from the Manager to any other Person, without penalty or payment of any fee, and 

(ii) upon the occurrence of any Default under this Agreement, the Manager (or applicable 

successor "Manager" to the Manager under the LLC Operating Agreement), the Initial Member 

or the PMN Agent may exercise all of the rights of (A) the Manager under this Agreement and 

cause the termination or assignment of this Agreement to any other Person, without penalty or 

payment of any fee, and (B) the Serviccr under the Subservicing Agreement and cause the 

termination or assignment of the Subservicing Agreement to any other Person, without penalty or 

payment of any fee. 

(c) The Servicer hereby consents to its immediate and automatic termination 

under this Agreement upon a Default under Section 7.l{b) of this Agreement. 

(d) Upon a default or failure of the Manager to perform its obligations under 

this Agreement in a material manner, including but not limited to, the failure of the Manager to 

pay to the Servicer the Servicing Fee in a full and timely manner, the Servicer, in addition to any 

other rights it may have pursuant to this Agreement, at law or in equity, may terminate this 

Agreement by providing a Termination Notice to the Manager, with a copy to each Required 

Consenting Party. The Termination Notice shall set forth with specificity the nature of the 

default or failure to perform of the Manager and provide the Manager with no less than thirty 

days to cure any such default or failure to perform. In the event that the default or failure to 

perform is not cured within thirty days after the date of delivery of the Termination Notice, the 

Servicer shall provide a second Termination Notice to the Manager with a copy to each Required 

Consenting Party, which second Termination Notice shall be prominently labeled as the "Second 

Termination Notice". Such second Termination Notice shall confirm to the Manager that the 

Sc"'""':~c· S'-"{' "0~~;.~.,~ tO .-.o....f.-...,..,..... j"h"" ~.,..... ,;~; .... , OhJ;,.,.,~;O"" U",-1,... th;" A "f"""'.,..,"'"'l unt;l <he LYI\o, L 11<1 l V UUUUV f-''-'LLVJJI< 1<'-' '-''-'L>J'-'LJJ6 '-''-'"6'-'" "-' ,..._..,_,, C<<'CI '•o '-'~•••,_..u J I ,,,,_.. 

earlier to occur of (i) ninety days after the delivery of such second Termination Notice to the 

Manager and each Required Consenting Party, and (ii) the transfer of the Servicing Obligations 

to a successor Servicer approved hereunder. The duty of the Servicer to continue to perform the 

Servicing Obligations as provided in the second Tem1ination Notice is contingent upon the 

timely and full payment of the Servicing Fee to the Servicer during such period. The Servicer 

shall cooperate fully and completely with the transition of the Servicing Obligations to a 

successor Scrvicer in order to assure an orderly transfer. 

Section 7.3. Tennination without Cause. 

26 

CADCIRAOC Venture 2011-I Structured Tran~actiM 

Servicing Agreement 

Version3.l 

"

EXECUTION VLRS!Ol\ 
(a) The Manager may, without cause, terminate this Agreement, upon 

providing a Termination Notice to the Servicer, but only as and in accordance with the 

provisions set forth on Schedule 5 as the same may be amended from time to time by the 

Manager (without the consent of any Required Consenting Party) and the Servicer. 

(b) The Servicer may, at any time after the first armiversary of the Effective 

Date, without cause, terminate this Agreement. No termination of this Agreement by the 

Scrvicer shall be effective unless the Servicer delivers to the Manager, with a copy to each 

Required Consenting Party, a Termination Notice, which for the purpose of this Section 7.3(b) 

shall be a notice of the Servicer's intent to terminate this Agreement. Such Termination Notice 

shall be provided at least sixty days prior to any date specified by the Servicer as the date of 

termination of the Serviccr's Obligations under this Agreement. Notwithstanding the foregoing, 

such Termination Notice shall not be effective unless the Termination Notice contains 

confirmation of the intent and obligation of the Servicer to continue to perform its Servicing 

Obligations until the earlier of (i) ninety days after the Termination Notice is given and (ii) such 

other date on which the Servicing Obligations are transferred to a successor Serviccr in an 

orderly manner. Servicer shall cooperate fully and completely with the transition of the 

Servicing Obligations to a successor Servicer, to be designated by the Manager, in order to 

assure an orderly transfer. The Servicer issuing the Termination Notice shall be liable for all 

costs and expenses associated with the transfer of Servicing Obligations to the successor 

Servicer, including but not limited to the costs of transporting the Servicing files and the 

provision of any notices to any Borrowers. 

Section 7.4. Effective Termination Date. Termination as specified in this 

ARTICLE VII shall be effective at such time as is permitted hereunder and specified in the 

Tcrn1ination Notice. In the event of such termination, all authority and power of the Scrvicer 

under this Agreement, whether with respect to the Assets or otherwise, shall pass to and be 

vested in the Manager or the successor servicer designated by the Manager in the case of 

termination by the Manager, or as designated solely by the Initial Member (or any successor 

"Manager" under the LLC Operating Agreement) in the case of termination by the Initial 

Member (or such successor "Manager" under the LLC Operating Agreement), or as designated 

by solely by the PMN Agent in the case of termination by the PMN Agent. The Servicer agrees 

- ~--~-"-"[~ .,.;th [h"" ~,r,.,..,.,,-,-,.r •h.,. lniti<>l ?\-ft>mbo" onv "''""~"<:<:n,. "Mnn<>oP:r" u._nder the tU \_,UVJ-''-'~<l '-' V>HH H'-' i\><.U'U.f:,'"''> "'"' " '"" ••'"'"' _,, <A •.J v~---•·vv• •·•'-•~' ~·· • --" 

Operating Agreement, the PMN Agent and any successor servicer with respect to the timely and 

orderly transition of its obligations under this Agreement. The Servicer shall be liable for all 

obligations of the Servicer that have accrued or arisen under this Agreement or at Law prior to 

such termination. 

Section 7.5. Accounting. Upon termination or assignment of this Agreement as 

set forth herein, the Servicer shall account for and turn over to the Manager or its designee (or, if 

applicable, (i) pursuant to such instructions as may be provided by the Initial Member or any 

successor "Manager" pursuant to the LLC Operating Agreement or (ii) pursuant to such 

instructions as may be provided by the PMN Agent) funds collected under the terms of this 

Agreement. The Servicer shall provide written notice in conformance with all applicable Law to 

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the Borrowers to indicate that their A~sets will henceforth be Serviced by the Manager (or 

applicable successor "Manager" under the LLC Operating Agreement) or any applicable 

successor Servicer designated by the Manager (or any successor "Manager'' under the LLC 

Operating Agreement), the Initial Member or the PMN Agent, as the case may be, and transfer 

its duties as the Serviccr to the Manager (or successor "Manager" under the LLC Operating 

Agreement) or such successor Servicer. 

ARTICLE VIII 


INDEPENDENCE OF PARTIES; INDEMNIFICATION 


Section 8.1. Independence of Parties. The Servicer shall have the status of, and 

act as, an independent contractor. Nothing herein contained shall be construed to create a 

partnership or joint venture or any similar relationship between the Manager and the Servicer. 

Section 8.2. Indemnification. 

(a) The Serviccr shall indemnify and hold harmless the Company, the 

Manager, the P.MN Agent, each Purchase Money Notes Guarantor, the Initial Member, the 

Receiver and the FDIC, and their respective Related Persons (all of the foregoing, collectively, 

the "Indemnified Parties") from and against any and all Losses whatsoever directly or 

indirectly resulting from, connected with, arising out of or related to (i) any breach of or 

inaccuracy in any of the Servicer's repreresenations or warranties contained in this Agreement, 

(ii) any failure of the Servicer to timely perform its obligations under, and otherwise to comply 

with and observe the provisions of, this Agreement, or (iii) any act taken by the Servicer 

purportedly pursuant to a power of attorney granted by the Manager which act results in a claim 

related to the unlawful use of such power of attorney. The Servicer's obligations under this 

Section 8.2 shall survive termination of this Agreement or termination of the Servicer pursuant to 

the provisions of this Agreement, and, with respect to any third party beneficiary of this 

Agreement (and its Related Persons) shall also survive such third party beneficiary otherwise 

ceasing generally to constitutes such a third party beneficiary. Each Indemnified Party shall 

deliver notice, of any claim or demand made by any Person against such Indemnified Party for 

which such Indemnified Party may seck indemnification under this Section 8.2 (a "Third Party 

C!aim"), to the Servicer promptly after receipt by such Indemnified Party of written notice of the 

Third Party Claim, describing such Third Party Claim in reasonable detail. The failure or delay 

to provide such notice, however, shall not release the Servicer from any of its obligations under 

this Section 8.2 except to the extent that it is materially prejudiced by such failure or delay. The 

Servicer acknowledges and agrees that it shall have no recourse against the Company for any 

amounts the Servicer is required to pay pursuant to this Section 8.2, and in no event shatl 

expenses incurred by the Servicer or any Subservicer in connection with its obligations under 

this Section 8.2 constitute Servicing Expenses or otherwise be deducted from or reimbursed out 

of Asset Proceeds. 

(b) If the Servicer confirms in writing to the Indemnified Party within fifteen 

days after receipt of a Third Party Claim the Servicer's responsibility to indemnify and hold 

harmless the Indemnified Party therefor, the Servicer may elect to assume control over the 

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FXFCUTION VERSION 
compromise or defense of such Third Party Claim at the Servicer's sole expense and v.rith 

counsel selected by the Servicer, which counsel must be reasonably satisfactory to the 

Indemnified Party, provided that (i) the Indemnified Party may, if such Indemnified Party so 

desires, employ counsel at such indenmified Party's own expense to assist in the handling (but 

not control the defense) of any Third Party Claim; (ii) the Servicer shall keep the Indemnified 

Party advised of all material events with respect to any Third Party Claim; (iii) the Servicer shall 

obtain the prior written approval of the Indemnified Party before ceasing to defend against any 

Third Party Claim or entering into any settlement, adjustment or compromise of such Third Party 

Claim involving injunctive or similar equitable relief being imposed upon the Indemnified Party 

or any of its Affiliates; and (iv) the Scrvicer will not, without the prior written consent of the 

Indemnified Party, settle or compromise or consent to the entry of any judgment in any pending 

or threatened action in respect of which indemnification may be sought hereunder (whether or 

not any such Indemnified Party is a party to such action), unless such settlement, compromise or 

consent by its terms obligates the Servicer to satisfy the full amount of the liability in connection 

with such Third Party Claim and includes an unconditional release of such Indemnified Party 

from all liability arising out of such Third Party Claim. 

(c) Notwithstanding anything contained herein to the contrary, the Servicer 

shall not be entitled to control (and if the Indemnified Party so desires, it shall have sole control 

over) the defense, settlement, adjustment or compromise of (but the Servicer shall nevertheless 

be required to pay all Losses incurred by the Indemnified Party in connection with such defense, 

settlement or compromise): (i) any Third Party Claim that seeks an order, injunction or other 

equitable relief against the Indemnified Party or any of its Affiliates; (ii) any action in which 

both the Servicer or any Affiliate of the Servicer, on one hand, and the Indemnified Party, on the 

other hand, are named as parties and either the Servicer (or such Affiliate) or the Indemnified 

Party determines with advice of counsel that there may be one or more legal defenses available 

to it that are different from or additional to those available to the other party or that a conflict of 

interest between such parties may exist in respect of such action; and (iii) v.rith respect to any 

such T11ird Party Claim against the FDIC (in any capacity), any matter that raises or implicates 

any issue relating to any power, right or obligation of the FDIC under any Law. In addition to 

the foregoing, if the Servicer elects not to assume the cnmpromise or defense of any Third Party 

Claim, fails to timely and properly notify the Indemnified Party of its election as herein 

provided, or, at any tim_e after assumittg such Jeft:nse, fails i.o diiigentiy defend againsi such 

Third Party Claim in good faith, the Indemnified Party may pay, settle, compromise or defend 

against such Third Party Claim (but the Servicer shall nevertheless be required to pay all Losses 

incurred by the Indemnified Party in connection with such payment, settlement, compromise or 

defense). In connection with any defense of a Third Party Claim (whether by the Servicer or the 

Indenmified Party), all of the parties hereto shall, and shall cause their respective Affiliates to, 

cooperate in the defense or prosecution thereof and to in good faith retain and furnish such 

records, information and testimony, and attend such conferences, discovery proceedings, 

hearings, trials and appeals, as may be reasonably requested by a party hereto in connection 

therewith. The Scrvicer shall promptly pay, discharge and satisfy any judgment or decree which 

may be entered against it or any Indemnified Party in respect of such claim subject to 

indemnification hereunder. 

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Section 8.3. Pre-Effective Date Liabilities. Notwithstanding anything to the 

contrary herein, but without limitation of the release set forth in Section 11.13, it is understood 

and agreed that the Servicer shall not be liable to the Manager for any liabilities or obligations 

attributable to an act, omission or circumstances of the Initial Member (including as Transferor), 

the FDIC, any Failed Bank and the Company that occurred or existed prior to the Effective Date 

or, with respect to any particular Asset, the Servicing Transfer Date applicable thereto (the "PreExisting Liabilities"). In the event there is asserted against the Company, the Manager, the 

Serviccr or any Subserviccr any claim or action with respect to any such Pre-Existing Liabilities, 

the Servicer or Subserviccr, as applicable, shall notify the Manager and the Initial Member of 

such claim or action in accordance with ARTICLE IX. Except as provided otherwise in Section 

8.2 above (in the event that such claim or action is subject to the indemnification obligations of 

Servicer pursuant to Section 8.2 above), the Manager shall have the right to control and assume 

the defense of the Company, the Manager, the Servicer and the Subserviccr with respect to such 

claim or action at the Manager's ovvn expense. The Serviccr shall be reimbursed by the Manager 

in connection with the foregoing only to the extent of and in accordance with the terms set forth 

on Schedule 3, as the same may be amended from time to time by the Manager (without the 

consent of the Initial Member) and the Scrvicer. 

ARTICLE IX 


NOTICES 


All notices, requests, demands and other conununications required or pe1mitted to be 

given or delivered W1der or by reason of the provisions of this Agreement shall be in writing and 

shall be given by certified or registered mail, postage prepaid, by delivery by hand or by 

nationally recognized courier service, or by electronic mail (followed up by a hard copy 

delivered through an alternate manner permitted under this ARTICLE IX), in each case mailed 

or delivered to the applicable address or electronic mail address specified in, or in the manner 

provided, in this ARTICLE IX below. All such notices, requests, demands and other 

communications shall be deemed to be given or made upon the earlier to occur of (i) actual 

receipt (or refusal thereof) by the relevant party hereto and (ii) (A) if delivered by hand or by 

nationally recognized courier service, when signed for (or refused) by or on behalf of the 

relevant party hereto; (B) if delivered by mail, four Business Days after deposit in the mails, 

po:-;lage prepaid; anJ (C) if delivered by deelronic mail (which form of deiivery is subject to the 

provisions ofthis paragraph), when delivered and capable of being accessed from the recipient's 

office computer, provided that any notice , request, demand or other communication that is 

received other than during regular business hours of the recipient shall be deemed to have been 

given at the opening of business on the next business day of the recipient. In no event shall a 

voice mail message be effective as a notice, commW1ication or confirmation hereunder. From 

time to time, any party may designate a new address for purposes of notice to it hereunder by 

notice to such effect to the other parties hereto in the manner set forth in this ARTICLE IX. 

If to the Manager: Acorn Loan Portfolio Private Owner VI, LLC 

c/o Saba! Financial Group, L.P. 

4675 MacArthur Court, Suite 1550 

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EXECUTION \'ERSlON 
with a copy to: 

If to the Initial Member, or the 

PMN Agent: 

\Vith a copy to: 

If to the Servicer: 

with a copy to: 

CADCfRAilC \'~nture 2011-l Structured Transaction 

Scrv1cmg Agreement 

Version ],I 

d 

EXECUTJ0'\1 VFR~!ON 

Newport Beach, CA 92660 

Attention: R. Patterson Jackson 

E-mail Ad,dre:;s 

Paul Hastings LLP 

515 South Flower Street, 25th Floor 

Los Angeles, CA 90071 

Attention: 

E·mail Address: 

Assistant Director· Structured Transactions 

Federal Deposit Insurance Corporation 

550 17th Street, NW (Room F-7014) 

Washillb~on, D.C. 20429-0002 

Attention: Ralph Malami 

E·mail Address: rmalami@fdic.gov 

Supervisory Counsel 

FDIC Legal Division 

Litigation and Resolutions Branch, Receivership Section 

Special Issues Unit 

3501 Fairfax Drive (Room D·7102) 

Arlington, Virginia 22226 

Attention: Kathleen Russo 

E-mail Address: krusso@fdic.gov 

Saba! Financial Group, L.P. 

4675 MacArthur Court, Suite 1550 

Newport Beach, CA 92660 

Attention: R. Patterson Jackson 

E·mail Address: 

Maureen Connaughton 

201 W. Mitchell Street, Suite 121 

Petoskey, 49770 

E·mail 

31 
ARTICLE X 


GOVERNING LAW; JURISDICTION 


Section 10.1. Governing Law. EACH PARTY TO THIS AGREEMENT 

AGREES AND ELECTS THAT, IN ACCORDANCE WITH SECTION 5-1401 Of THE 

GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, TillS AGREEMENT IS 

TO BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF 

THE STATE OF NEW YORK, EXCLUDING ANY CONFLICT OF LAWS RULE OR 

PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR THE CONSTRUCTION OF 

THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION AND EACH PARTY 

TO THIS AGREEMENT UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY 

CLAIM TO ASSERT THAT THE LAWS OF ANY OTHER JURISDICTION GOVERN THIS 

AGREEMENT. NOTHING IN Tfi!S AGREEMENT SHALL REQUIRE ANY UNLAWFUL 

ACTION OR INACTION BY ANY PARTY HERETO. 

Section 1 0.2. Jurisdiction; Venue and Service. Each of the Manager and the 

Servicer, in each case for itself and each of its Affiliates, hereby irrevocably and unconditionally: 

(a) (i) agrees that any suit, action or proceeding instituted against it by any 

other party, or any third-party beneficiary other than the FDIC (in any capacity), with respect to 

this Agreement may be instituted, and that any suit, action or proceeding instituted by it against 

any other party with respect to this Agreement shaH be instituted, only in the Supreme Court of 

the State of New York, County of New York, or the U.S. District Court for the Southern District 

of New York, as the party instituting such suit, action or proceeding may choose (and appellate 

courts from any of the foregoing), 

(ii) consents and submits, for itself and its property, to the jurisdiction 

of such courts for the purpose of any such suit, action or proceeding instituted against it by any 

other party, and 

(iii) agrees that a final judgment in any such suit, action or proceeding 

shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any 

other manner provided by Law; 

(b) agrees that service of all writs, process and summonses in any suit, action 

or proceeding pursuant to Section 10.2(a) may be effected by the mailing of copies thereof by 

registered or certified mail, postage prepaid, to it at its address for notices pursuant to ARTICLE 

IX (with copit:s to such other Persons as specified therein); provided, however, that nothing 

contained in this Section 10.2(b) shall affect the ability of any party to be served process in any 

other manner permitted by Law; 

(c) (i) waives any objection that it may now or hereafter have to the laying of 

venue of any suit, action or proceeding arising out of or relating to this Agreement brought in 

any court specified in Section 1 0.2(a), (ii) waives any claim that any such suit, action or 

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proceeding brought in any such court has been brought in an inconvenient forum and (iii) agrees 

not to plead or claim either of the foregoing; and 

(d) agrees that nothing contained in this Section 10.2 shall be binding upon or 

construed to constitute consent to jurisdiction by any Failed Bank or the FDIC, in any capacity, 

or constitute a limitation on any removal rights the FDIC, in any capacity, may have. 

Notwithstanding the above, with respect to any proceedings initiated by the FDIC (in any 

capacity) as a third party beneficiary, or if at any time the FDIC (in any capacity) shall be a party 

hereto as the "Manager" (as a result of an applicable replacement of the "Manager" pursuant to 

the terms of the LLC Operating Agreement), the terms of this Section 10.2 shall be restated as 

follows: 

"The Servicer, on behalf of itself and its Affiliates, hereby irrevocably and 


unconditionally: 


(a) (i) consents to the jurisdiction of the United States District Court fOr 

the Southern District of New York and to the jurisdiction of the United States District Court for 

the District of Columbia for any suit, action or proceeding against it or any of its Atliliates 

commenced by the FDIC, in any capacity, arising out ot~ relating to, or in connection with this 

Agreement, and waives any right to: 

(A) remove or transfer such suit, action or proceeding to any 

court or dispute-resolution forum other than the court in which the FDIC, in any capacity, files 

the action, suit or proceeding without the consent of the FDIC; 

(B) assert that venue is improper in either the United States 

District Court for the Southern District of New York or the United States District Court for the 

District ofColumbia; or 

(C) assert that the United States District Court for the Southern 

District of New York or the United States District Court for the District of Columbia is an 

inconvenient forum; 

(ii) consents to the jurisdiction of the Supreme Court of the State of 

New York, County of New York, for any suit, action or proceeding against it or any of its 

Affiliates commenced by the FDIC, in any capacity, arising out of, relating to, or in connection 

with this Agreement, and waives any right to: 

(A) remove or transfer such suit, action or proceeding to any 

other court or dispute-resolution forum without the consent ofthe FDIC; 

(B) assert that venue is improper in the Supreme Court of the 

State of New York, County of New York; or 

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(C) assert that the Supreme Court of the State of New York, 

County of New York is an inconvenient forum; 

(iii) agrees to bring any suit, action or proceeding against the FDIC, in 

any capacity, arising out of, relating to, or in connection with this Agreement, the LLC Operating 

Agreement or any other Transaction Document in only either the United States District Court for 

the Southern District of New York or the United States District Court for the District of 

Columbia, and waives any right to remove or transfer such suit, action or proceeding to any other 

court or dispute-resolution forum without the consent of the FDIC, and agrees to consent 

thereafter to transfer of the suit, action or proceeding to either the United States District Court for 

the Southern District of New York or the United States District Court for the District of 

Columbia at the option of the FDIC; and 

(iv) agrees, if the United States District Court for the South em District 

of New York and the United States District Court for the District of Columbia both lack 

jurisdiction to hear a suit, action or proceeding falling within Section 10.2{a)(iii), to bring that 

suit, action or proceeding in only the Supreme Court of the State of New York, County of New 

York, and waives any right to remove or transfer such suit, action or proceeding to any other 

court or dispute-resolution forum without the consent ofthe FDIC. 

(b) The Servicer, on behalf of itself and its Affiliates, hereby irrevocably and 

unconditionally agrees that any final judgment entered against it in any suit, action or proceeding 

falling within Section 1 0.2{a) may be enforced in any court of competent jurisdiction. 

(c) Subject to the provisions of Section 10.2{d), the Servicer, on behalf of 

itself and its Affiliates, and the FDIC hereby irrevocably and unconditionally agrees that service 

of all writs, process and summonses in any suit, action or proceeding pursuant to Section 10.2{a) 

or Section 10.2{b) may be effected by the mailing of copies thereof by registered or certified 

mail, postage prepaid, to it at its address for notices pursuant to ARTICLE IX (with copies to 

such other Persons as specified therein); provided, however, that nothing contained in this 

Section 10.2{c) shall affect the right of any party to serve process in any other manner permitted 

by law. 

(d) Nothing in this Section 10.2 shall constitute consent to jurisdiction in any 

court by the FDIC, other than as expressly provided in Section 1 0.2(a)(iii) and Section 

1 0.2(a)(iv), or in any way limit the FDIC's right to remove, transfer, seek to dismiss, or 

otherwise respond to any suit, action, or proceeding against it in any forum." 

Section 10.3. Waiver of Jurv Trial. EACH OF THE PARTIES HERETO, FOR 

ITSELF AND EACH OF ITS AFFILIATES, HEREBY IRREVOCABLY AND 

UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF 

ANY DISPUTE ARISING OUT OF OR RELATING TO TI-llS AGREEMENT AND AGREES 

TIIAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT 

A JURY. 

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ARTICLE XI 


MISCELLANEOUS 


Section 11.1. No Assignment by Servicer; No Transfer of Ownership Interests in 

Servicing Rights. 

(a) The Servicer hereby acknowledges that this Agreement constitutes a 

personal services agreement between the Manager and the Servicer. Any of the following shall 

constitute an assignment for all purposes of this Agreement: (i) any merger, consolidation or 

dissolution involving the Serviccr or (ii) any transfer or all or substantially all of the assets of the 

Serviet~r. notwithstanding whether any of the foregoing transactions occur at one time or in the 

aggregate over a period of time. The Servicer shall not assign any rights or obligations 

hereunder to any other Person other than as is expressly provided in this Agreement. Any 

purported sale, sub-participation or assignment or delegation in violation of this Section 11.1 (a) 

shall be void ab initio and of no force or effect whatsoever. 

(b) Under no circumstances shall the Servicer (i) transfer to any Subservicer 

or any other Person any ownership interest in the Servicing or any right to transfer or sell the 

Sen,icing, or (ii) assign, pledge or otherwise transfer or purport to assign, pledge or otheT\vise 

transfer any interest to any Subserviccr or other Person in the Servicing. Any purported 

assignment, pledge, delegation or other transfer in violation of this Section 11.1 (b) shall be void 

ab initio and of no force or effect whatsoever. For the avoidance of doubt, upon any sale of any 

Asset by the Company (including by the Servicer on behalf of the Manager on behalf of the 

Company) in accordance \Vith the terms hereof and the other Transaction Documents, such Asset 

shall prospectively cease to constitute an "Asset'' for any purpose of this Agreement, provided 

that nothing in this sentence releases the Scrvicer from any liability or obligation hereunder with 

respect to such Asset in relation to the period prior to such sale. 

Section 11.2. Legal Fees. No party to this Agreement shall be responsible for 

the payment of the legal fees or expenses incurred by the other party hereto in connection with 

the negotiation and execution of this Agreement or any subsequent modifications or supplements 

hereto. 

Section I 1.3. Entire Agreement. This Agreement contains the entire agreement 

bet\-veen the Manager and the Servicer and supersedes any and all other prior agreements, 

whether oral or v-,rritten, with respect to the subject matter hereof. 

Section 11.4. Counterparts; Facsimile Signatures. This Agreement may be 

executed in two or more counterparts, each of which shall be deemed an original but all of which 

together shall constitute but one and the same agreement. This Agreement and any amendments 

hereto, to the extent signed and delivered by facsimile or uther electronic means, shall be treated 

in all manner and respects as an original agreement and shall be considered to have the same 

binding legal effect as if it were the original signed version thereof delivered in person. No 

signatory to this Agreement shall raise the use of a 1~tcsimile machine or other electronic means 

to deliver a signature or the fact that any signature or agreement was transmitted or 

35 

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commW1icated through the use of a facsimile machine or other electronic means as a defense to 

the formation or enforceability of a contract and each such Person forever waives any such 

defense. 

Section 11.5. Headings. Paragraph titles or captions contained in this Agreement 

are inserted only as a matter of convenience and for reference and in no way define. limit, extend 

or describe the scope of this Agreement or the intent of any provisions hereof. All Article, 

Section and paragraph references contained herein shall refer to Articles, Sections and 

paragraphs in this Agreement unless otherwise specified. 

Section 11.6. Compliance with Law. Except as otherwise specifically provided 

herein, each party to this Agreement shall, at its own cost and expense, obey and comply with all 

applicable Laws, as they may pertain to such party's performance of its obligations hereunder. 

Section 11.7. Severability. Any provision of this Agreement which is prohibited 

or unenforceable in any jurisdiction shall be ineffective, but such ineffectiveness shall be limited 

as follows: (i) if such provision is prohibited or unenforceable in such jurisdiction only as to a 

particular Person or Persons and/or under any particular circumstance or circumstances, such 

provision shall be ineffective, but only in such jurisdiction and only with respect to such 

particular Person or Persons and/or under such particular circumstance or circwnstances, as the 

case may be; (ii) without limitation of clause (i), such provision shall in any event be ineffective 

only as to such jurisdiction and only to the extent of such prohibition or unenforceability, and 

such prohibition or tmenforceability in such jurisdiction shall not invalidate or render 

unenforceable such provision in any other jurisdiction; and (iii) without limitation of clauses (i) 

or ill}, such ineffectiveness shall not invalidate any of the remaining provisions of this 

Agreement. Without limitation of the preceding sentence, it is the intent of the parties to this 

Agreement that in the event that in any court proceeding, such court determines that any 

provision of this Agreement is prohibited or unenforceable in any jurisdiction (because of the 

duration or scope (geographic or otherwise) of such provision. or for any other reason) such 

court shall have the power to, and shall, (x) modify such provision (including, to the extent 

applicable, by limiting the duration or scope of such provision and/or the Persons against whom, 

and/or the circumstances under which, such provision shall be effective in such jurisdiction) for 

purposes of such proceeding to the minimum extent necessary so that such provision, as so 

modified, may then be enforced in such proceeding and (y) enforce such provision, as so 

modified pursuant to clause (x), in such proceeding. Nothing in this Section 11.7 is intended to, 

or shall, limit (I) the ability of any party to this Agreement to appeal any court ruling or the 

effect of any favorable ruling on appeal or (2) the intended effect of Section 10. I. 

Section 11.8. Third Party Beneficiaries. The Initial Member (including as 

Transferor) shall be and is hereby designated as a third party beneficiary under this Agreement, 

and, as such, the Initial Member is entitled to enforce this Agreement as if the Initial Member 

were a party hereto. The Company, the P:MN Agent, each Purchase Money Notes Guarantor, the 

Receiver and the FDIC shall be and are hereby designated as third party beneficiaries under this 

Agreement with respect to those provisions of this Agreement which expressly grant rights to 

36 

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v.3 
such Persons, and, as such, each is entitled to enforce such provisions of this Agreement as if 

such Person were a party hereto; provided, that, (i) with respect to the P:MN Agent, at such time 

when such Person ceases to be a Required Consenting Party (and subject to any rights of such 

Required Consenting Party that, by their terms or nature, survive such date), and (ii) with respect 

to each Purchase Money Notes Guarantor, upon the occurrence of the PMN 

Satisfaction/Defeasance Date (and subject to any rights of such Purchase Money Notes 

Guarantor that, by their tenns or nature, survive such date), such Person shall cease to have any 

of the specified rights set forth herein with respect to consents/approvals, the exercise of 

remedies following a Default and receipt of reports and other information with respect to the 

continued operation of the Business, in each case (x) to the extent relating exclusively to the 

period following such date on which such Person so ceases to be a Required Consenting Party, 

and (y) except as to any rights or remedies relating to (or the exercise or non·exercise of which 

rights or remedies would affect) the Defeasance Account or the repayment of the Purchase 

Money Notes in accordance with the terms hereof and of the other Transaction Documents, as 

determined by the PMN Agent and each Purchase Money Notes Guarantor, in each case in its 

sole discretion, and (z) unless and until the P'MN Satisfaction/Defeasance Date thereafter shall be 

deemed not to have occurred as specified in the definition of such tem1 (in which event, until any 

subsequent occurrence of the P:MN Satisfaction/Defeasance Date, all of such specified rights set 

fmih herein automatically shall be restored). Notwithstanding the foregoing or anything else to 

the contrary in this Agreement, none of the P'MN Agent, any Purchase Money Notes Guarantor, 

the FDIC, the Company and the Initial Member shall have any obligation to undertake any of the 

duties of the Manager hereunder and or have any liability whatsoever (including, without 

limitation, the payment of any costs, expenses, indemnities or otherwise) to the Servicer, any 

Subservicer or any other party related to this Agreement. There shall be no other third party 

beneficiaries. For U1e avoidance of doubt, the Manager is entering into this Agreement in its 

individual capacity and not on behalf of the Company. 

Section 11.9. Protection of Confidential Information. 

(a) The Scrvicer shall keep confidential (and shall cause any Subservicer to 

keep confidential), and shall not divulge (and shall cause any Subservicer to not divulge) to any 

party without the Manager's prior written consent, any information pertaining to the LLC 

Operating Agreement, the Assets or any Borrower or Obligor or the Collateral, except as 

required pursuant to this Agreement and except to the extent that it is necessary and appropriate 

for the Servicer or a Subservicer, as applicable, to do so in working with legal counsel, auditors, 

taxing authorities, regulatory authorities or any other Governmental Authority or in accordance 

with the Servicing Standard; provided, that, to the extent that disclosure should be required by 

law, rule, regulation (including any securities listing requirements or the requirements of any 

self·regulatory organization), subpoena, or in connection with any legal or regulatory proceeding 

(including in connection with or pursuant to any action, suit, subpoena, arbitration or other 

dispute resolution process or other legal proceedings, whether civil or criminaL and including 

before any court or administrative or legislative body), the Servicer shall, and shalt cause all 

Subserviccrs to, use all reasonable efforts to maintain confidentiality and shall (unless otherwise 

prohibited by Law) notify the Manager, the P'MN Agent and the Initial Member within one 

37 

CADC/RAD(' Venture 2011 "1 Structured Transaction 

Servicing Agreement 

Version 3_1 

" EXECUTitJN VER:iiON 
Business Day after its knowledge of such legally required disclosure so that the Manager, the 

PMN Agent and/or the Initial Member may seek an appropriate protective order and/or (in the 

case of the Manager) direct the Manager to waive the Servicer's or Subserviccr's, as the case 

may be, compliance with this Agreement. Notice shall be by telephone, by email and in writing. 

In the absence of a protective order or waiver, the Servicer and any applicable Subscrviccr may 

make such required disclosure if, in the written opinion of Servicer's outside counsel (which 

opinion shall be provided to the Manager, the PMN Agent and the Initial Member prior to 

disclosure pursuant to this Section 11.9), failure to make such disclosure would subject the 

Scrvicer or the Subservicer, as the case may be, to liability for contempt, censure or other legal 

penalty or liability. 

(b) The Scrvicer shall, and shall cause each Subservicer to, (i) comply with all 

applicable Laws regarding the privacy or security of Customer Information, and (ii) maintain and 

comply with policies and procedures for protection of Customer Information in a way that is 

designed to ensure such compliance with applicable Laws (including by obtaining information 

technology audits and maintaining monitoring software on internal accounting systems and the 

systems of applicable Scrvicers, Subservicers and other third-party vendors generating, 

maintaining or otherwise having access to any Customer Information). The Servicer shall, and 

shall cause each Subserviccr to, promptly make available to the Initial Member and the P:MN 

Agent information regarding such policies and procedures as requested by either of them from 

time to time. The Serviccr further agrees that any Customer Information transmitted 

electronically by it shall be encrypted. 

Section 11.1 0. Time of Essence. Time is hereby declared to be of the essence of 

this Agreement and of every part hereof. 

Section 11.11. No Presumption. This Agreement shall be construed fairly as to 

each party hereto and if at any time any such term or condition is desired or required to be 

interpreted or construed, no consideration shall be given to the issue of who actually prepared, 

drafted or requested any term or condition of this Agreement or any agreement or instrument 

subject hereto. 

Section 11.12. No Right of Setoff. ·n1e Scrvicer hereby waives any and all rights 

it may otherwise have (whether by contract or operation of Law or othenvise) to any setoff, 

offset. counterclaim or deduction (or to assert any claim for any setoff. offset counterclaim or 

deduction) against the Asset Proceeds (or the Company). 

Section 11.13. Release of Initial Member and Others. The Servicer hereby 

releases and discharges each Prior Servicer from any and all claims (including any counterclaim 

or defensive claim), demands, causes of action, judgments or legal proceedings and remedies of 

whatever kind or nature that the Servicer had, has or might have in the future, whether known or 

unknown, which are related in any manner whatsoever to the Servicing (prior to the applicable 

Servicing Transfer Date) by the Prior Servicers, in each case other than for acts or omissions 

constituting gross negligence, violation of law or willful misconduct of such Prior Servicer. 

38 

C ADC/RADC Venture 20 Il-l Structured Transaction 

Scrv1cing Agrccmenl 

VerSIOn 3.1 

v_3 

EXECUTION VfRSJ(JN 
[Remainder ofPage Intentionally Leji Blank] 

39 


C,\DCIRADC Venture 20Il·l Structured Transaction 


Scr~1cing Agreement 


Version J l 


v 3 


FXTCUTION VERSION 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed 

as of the day and year first above written. 

~'lAGER: 

Acorn Loan Portfolio Private Owner VI, LLC 

By:Acom Loan Acquisition Venture VI, L.P., its 

managing member 

Title: Authorized Signatory 

SERVICER: 

Saba! Financial Group, L.P., a Delaware limited 

partnership 

By: Sabal Financial Group GP, LLC 

a Delaware limited liability company 

its General Partner 

By:__________ 

Name:_____________ 

Its:-----------­

[Signature Page to Servicing Agreement- Page 1 of J] 

CADCIRADC V~ntnn: 2011-t Structured Transaction 

Servicing Agreement 

Version 3.1 

d 

EXECUTION VERSION 
IN WI1NESS WHEREOF, the parties hereto have caused this Agreement to he executed 

as of the day and year fust above written. 

MANAGER: 

Acorn Loan Portfolio Private Owner VI, LLC 

By: Acorn Loan Acquisition Venttn'e VI, L.P., its 

managing member 

By: Nrun·--.,-----------------------­

Title: Authorized SignatOry 

By: Nrun'-c.,---------------------­

Title: Authorized Signatory 

SERVICER: 

Sabal Financial Group, L.P ., a Delaware limited 

partnership 

Sy: Saba! Financial Group GP, LLC 

a Delaware limited liability company 

its 

(Stgqatun! Page toServlcBlg Agn:emerll- Page I of I] 

CAOCJRADc VtlltPR 2011-l Slrochlftd TraotaetloR 

Servicing Agteement 

Versiol'l3.1 

'·' EXECUTION VERSION 
EXHIBIT A 


ASSET SCHEDULE 


A-I 


('ADC/RAJ)C Vrnturr 2011-l Structured Transaction 

Scrvicmg Agreement 

Vcrswn J I 

EXECUTION VFRSlON 

v.3 
EXHIBITB 


(Form of Electronic Tracking Agreemcntj 

B-1 


CADC/RAIJC Ve11ture 2()11-1 Structured Tran~Htion 

Scn11cmg Agreement 


Version 3.1 


,.] 


EXECUTION VERSION 

CADCIRADC Venture 2011~1 Structured Transaction 

ELECTRONIC TRACKING AGREEMENT 

by and among 

FEDERAL DEPOSIT INSURANCE CORPORATION, 


ACORN LOAN PORTFOLIO PRIVATE OWNER VI, LLC, 


SABAL FINANCIAL GROUP, L.P., 


MERSCORP, INC., 


and 

MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. 

Dated as of August 24,2011 

CADC/RADC Ventur~ 2011-1 Strudtlrcd Transaction 

[Jectromc Tracking Agreement 

'·' EXECUTION VFRSIO)',' 
ELECTRONIC TRACKING AGREEMENT 


THIS ELECTRONIC TRACKING AGREEMENT (this "Agreement") is made and 

entered into as of August 24, 2011, by and among (a) Acorn Loan Portfolio Private Owner, LLC, 

a Delaware limited liability company (the "Manager"); (b) Saba! financial Group, L.P., a 

Delaware limited partnership (the "Sen>icer"); (c) MERSCORP, Inc. (the "Electronic Agent"); 

(d) Mortgage Electronic Rcgi~tration Systems, Inc. ("MERS"); (e) the Federal Deposit Insurance 

Corporation (in any capacity, the ''FDIC"), as receiver ("Receiver") for various failed financial 

institutions (including its successors and assigns thereto), as initial member pursuant to the LLC 

Operating Agreement referred to below (the "Initial Member"); and (f) the FDIC, as Receiver, 

as PMN agent pursuant to the Reimbursement, Security and Guaranty referred to below 

(including its successors and assigns thereto) (the "PMN Agent"). 

WHEREAS, the Manager and the Servicer have entered into that certain Servicing 

Agreement, dated as of August 24, 2011 (the "Servicing Agreement"), pursuant to which, 

an1ong other things, the Servicer is responsible for servicing the Mortgage Loans; and 

WHEREAS, pursuant to the Amended and Restated Limited Liability Company 

Operating Agreement of CADC/RADC Venture 2011-1, LLC (the "Company"), dated as of 

August 24, 20 I I (the "LLC Operating Agreement"), the Initial Member has the right to replace 

the Manager and to control the actions of the Company with respect to the Mortgage Loans (as 

defined below); and 

WHEREAS, pursuant to the Reimbursement, Security and Guaranty Agreement dated as 

of August 24,2011 (the "Reimbur~ement, Security and Guaranty Agreement"), by and 

among the Company, the P:MN Agent, the Initial Member, the FDIC acting in its corporate 

capacity and the guarantors party thereto, the Company has pledged the Mortgage Loans to the 

Secured Parties defined therein and such Secured Parties will have a first priority security 

interest in the Mortgage Loans; and 

WHEREAS, the Manager and each Rights Holder (as defined below) desire to continue 

to have the Mortgage Loans registered on the MERS® System (defined below) such that the 

mortgagee of record under each Mortgage (defined below) shall be identified as MERS. 

NOW, THEREFORE, the parties, intending to be legally bound, agree as follows: 

1. Definitions. For purposes of this Agreement, certain terms used in this Agreement shall 

have the meaning and definitions set forth in that certain Agreement ofDefinitions dated of even 

date herewith among the Initial Member, the Company and others. In addition, for purposes of 

this Agreement, the following terms shall have the meanings and definitions hereinafter 

respectively set forth. 

"Affected Loans" shall have the meaning assigned to such tcnn in Section 4(b). 

"Agreement" shall have the meaning assigned to such term in the preamble. 

CADL'/RADC Venlur~ 2011·1 Struclllred Trun>action 

Flcctronic Tracking Agre~mcnt 

'2 

FXFCUTION VERSION 
"Assignment of Mortgage" shall mean, with respect to any Mortgage, an assignment of 

the Mortgage, notice of transfer or equivalent instrument in recordable form, sufficient under the 

laws of the jurisdiction wherein the related mortgaged property is located to effect the 

assignment of the Mortgage upon recordation. 

"Company" shall have the meaning given in the recitals. 

"Electronic Agent" shall have the meaning given in the preamble. 

"Event of Default" shall mean any Default as defined in the Servicing Agreement or an 

"Event of Default" as defined in the LLC Operating Agreement or an "Event of Default" as 

defined in the Reimbursement, Security and Guaranty Agreement. 

''FDIC" shall have the meaning given in the preamble. 

"Initial Member" shall have the meaning given in the preamble. 

"LLC Operating Agreement" shall have the meaning given in the recitals. 

"Manager" shall have the meaning given in the preamble. 

"MERS" shall have the meaning given in the preamble. 

"MERS Designated Mortgage Loan" shall have the meaning given in Section 3. 

"MERS Procedures Manual" shall mean the MERS Procedures Manual attached as 

Exhibit B hereto, as it may be amended from time to time. 

"MERS® System" shall mean the Electronic Agent's mortgage electronic registry 

system, as more particularly described in the MERS Procedures Manual. 

"Mortgage" shall mean a lien, mortgage or deed of trust securing a Mortgage Note. 

"Mortgage Loan" shall mean each mortgage loan held by the Company that is, as of the 

date hereof, registered on the MERS® System. 

"Mortgage Note" shall mean a promissory note or other evidence of indebtedness of the 

obligor thereunder, representing a Mortgage Loan, and secured by the related Mortgage. 

"Notice of Default" shall mean a notice from any Rights Holder that an Event of Default 

has occurred and is continuing, substantially in the form of Exhibit C hereto. 

"Opinion of Counsel" shall mean a written opinion of counsel in form and substance 

reasonably acceptable to each Rights Holder. 

"Person" shall mean any individual, corporation, company, voluntary association, 

partnership, joint venture, limited liability company, trust, unincorporated association or 

government (or any agency, instrumentality or political subdivision thereof). 

CADCIRADC Vemure 201 1-1 Structured Transactwn 

Llectronic Tr~cking Agreement 2

,, 

l.'XLCUT!ON VERSIO"' 
"PMN Agent" shall have the meaning given in the preamble. 

''PMN Agent Notice" shall have the meaning given in Section 4(i). 

"ReceiYer" shall have the meaning given in the preamble. 

"Reimbursement, Security and Guaranty Agreement" shall have the meaning given in 

the recitals. 

"Rights Holder" shall mean the Initial Member and the PMN Agent; provided, that (a) 

rights of the Initial Member as Rights Holder shall be junior and subordinate to the rights of the 

PMN Agent in such capacity to the extent set forth in Section 4(i) below; and (b) upon delivery 

by PMN Agent of the PMN Agent Notice pursuant to Section 4(i) below, the PMN Agent shall 

cease, on a going forward basis (and without termination of any indemnity rights or rights with 

respect to any period prior to delivery of such PMN Agent Notice), to be a Rights Holder 

hereunder. 

"Servicing Agreement" shall have the meaning given in the recitals. 

"Secured Parties" shall mean collectively, the PMN Agent, each co-agent or sub-agent 

appointed by the PMN Agent from time to time pursuant to the Reimbursement, Security and 

Guaranty Agreement and the FDIC acting in its corporate capacity as Purchase Money Note 

Guarantor under the Reimbursement, Security and Guaranty Agreement. 

"Senior Rights Holder" shall mean (a) the PMN Agent, for so long as it is a Rights 

Holder, and (b) thereafter, the Initial Member. 

"Servicer" shall have the meaning given in the preamble. 

"Subservicer" shall mean any subservicers engaged by the Servicer as permitted under 

the LLC Operating Agreement. 

2. 	 Appointment of the Electronic Agent. 

(a) Each Rights Holder and the Manager, by execution and delivery of this 

Agreement, each does hereby appoint MERSCORP, [nc. as the Electronic Agent, subject to the 

terms ofthis Agreement, to perform the obligations set forth herein. 

(b) 	 MERSCORP, Inc., by execution and delivery ofthis Agreement, does hereby 

(i) agree \Vith each Rights Holder and the Manager, subject to the terms of this Agreement, to 

perform the services set forth herein, and (ii) accepts its appointment as the Electronic Agent. 

3. 	 Designation of MERS as Mortgagee of Record; Designation of Investor and Servicer of 

Record in MERS. 

The Manager represents, warrants and covenants that (a) it has designated or shall 

designate MERS as, and has taken or will take such action as is necessary to cause MERS to be, 

CADCIRADC Venture 2011-1 Structured Transaction 

Electromc Tracking Agreement 3 

EXECUTION VERSfO:-l 

v.2 
the mortgagee of record, as nominee for the Company, with respect to the Mortgage Loans in 

accordance with the "MERS Procedures Manual and (b) it has designated or will promptly 

designate 1000002 (Org Id.) as the "investor" and the Servicer as the "servicer" in the MERS® 

System for each such Mortgage Loan (each Mortgage Loan so designated is a "MERS 

Designated Mortgage Loan") and the PMN Agent or the Initial Member as the "interim funder" 

on the MERS® System with respect to each MERS Designated Mortgage Loan, and, if 

applicable pursuant to the LLC Operating Agreement, will designate any Subservicer retained 

under the Servicing Agreement as the "subservicer"; provided, that upon the Company becoming 

a member of"MERS in good standing, the Manager shall cause the Company to be identified in 

the "investor" field on the "MERS® System; provided further, the "Manager may, pursuant to the 

terms of the LLC Operating Agreement designate itself as the "servicer" with respect to any such 

MERS Designated Mortgage Loan, in which case the Servicer shall be designated as the 

"subservicer" with respect thereto; provided, further, however, no other Person shall be 

identified on the MERS® System as having any interest in such MERS Designated Mortgage 

Loan unless othenvise consented to by the PMN Agent or required pursuant to this Agreement, 

and (c) upon receipt of the PMN Agent Notice will promptly designate the Initial Member as the 

"interim funder" on the MERS® System with respect to each "MERS Designated Mortgage Loan. 

4. Obligations of the Electronic Agent; Rights ofP:MN Agent Superior to Initial Member. 

(a) The Electronic Agent shall ensure that MERS, as the mortgagee of record under 

each "MERS Designated Mortgage Loan, shall promptly forward all properly identified notices 

MERS receives in such capacity to the person or persons identified in the MERS® System as the 

servicer as well as, if a subservicer is identified in the MERS® System, the subservicer for such 

MERS Designated Mortgage Loan. 

(b) Upon receipt of a Notice of Default, in the form of Exhibit C, from a Rights 

Holder in which such Rights Holder shall identify the MERS Designated Mortgage Loans with 

respect to which the "Manager's right to act as servicer or undisclosed investor's or the 

Company's right to act as investor, or the Servicer's right to act as servicer, or subservicer, as 

applicable thereof has been terminated by such Rights Holder (the "Affected Loans"), the 

Electronic Agent shall modify the applicable investor fields, servicer fields and/or subservicer 

fields to reflect the investor, servicer and/or subservicer on the MERS® System as such Rights 

Holder or such Rights Holder's designate with respect to such Affected Loans. Following such 

Notice of Default, the Electronic Agent shall follow the instructions of each Rights Holder with 

respect to the Affected Loans, without further consent of the Manager or the Servicer (and, in the 

case of instructions by the P:MN Agent, without further consent of the Initial Member), and shall 

deliver to each Rights Holder any documents and/or information (to the extent such documents 

or information are in the possession or control of the Electronic Agent) with respect to the 

Affected Loans requested by such Rights Holder. 

(c) Upon the Senior Rights Holder's request and instructions, and at the Manager's 

sole cost and expense, the Electronic Agent shall deliver to such Rights Holder or its designee an 

Assignment of Mortgage from MERS, in blank, in recordable form but unrecorded with respect 

to each Affected Loan; provided, however, that the Electronic Agent shall not he required to 

CADC/RADC Venture 20I I. I Stru~tured Transaction 

Eiectromc Tracking Agreement 4 •.2 

EXFCl}TION VERSION 
comply with the foregoing unless the costs of doing so shall be paid by the Servicer, the Manager 

or a third party. 

(d) The Electronic Agent shall promptly notify each Rights I I older and the Manager 

if it has actual know\cdgc that any mortgage, pledge, lien, security interest or other charge or 

encumbrance exists with respect to any of the Mortgage Loans. Upon the reasonable request of a 

Rights Holder or the Manager, the Electronic Agent shall review the "investor" and "interim 

funder" fields and shall notify such Rights Holder if any Person other than the Company is 

identified in the "investor" field or if any Person is identified in the "interim funder" field. 

(e) In the event that (i) any Rights Holder, the Company, the Manager, the Servicer, 

the Electronic Agent or MERS shall be served by a third party with any type oflevy, attachment, 

writ or court order with respect to any MERS Designated Mortgage Loan or (ii) a third party 

shall institute any court proceeding by which any MERS Designated Mortgage Loan shall be 

required to be delivered otherwise than in accordance with the provisions of this Agreement, the 

Electronic Agent shall promptly deliver or cause to be delivered to the other parties to this 

Agreement copies of all court papers, orders, documents and other materials concerning such 

proceedings. 

(f) Upon the request of any Rights Holder, the Electronic Agent shall run a query 

with respect to any and all specified fields with' respect to any or all of the MERS Designated 

Mortgage Loans and, if requested by the Senior Rights Holder, shall change the information in 

the "interim funder" field in accordance with the Senior Rights Holder's instructions. 

(g) MERS, as mortgagee of record for the MERS Designated Mortgage Loans, shall 

take all such actions as may be required by a mortgagee in connection with servicing the MERS 

Designated Mortgage Loans at the request of the applicable servicer identified on the MERS® 

System, including, but not limited to, executing and/or recording, any modification, waiver, 

subordination agreement, instrument of satisfaction or cancellation, partial or full release, 

discharge or any other comparable instruments, at the sole cost and expense of the Manager. 

(h) MERS shall cause certain officers or other representatives of each Rights Holder 

to be appointed as agents of MERS with respect to the MERS Designated Mortgage Loans, with 

the power to wield all of the powers specified in the form of power of attorney used to appoint 

such agent, substantially in the form attached hereto as Exhibit D. 

(i) Until such time as MERS and the Electronic Agent receive notice from the PMN 

Agent that all obligations under the Reimbursement, Security and Guaranty Agreement have 

been paid and performed in full (the "PMN Agent Notice''), (i) all rights of the PNfN Agent as a 

Rights Holder hereunder shall be senior and superior to all rights of the Initial Member, as a 

Rights Holder hereunder, including without limitation the right to assign Mortgage Loans, 

change the "interim funder" field, instruct MERS, deliver a Notice of Default. permit MERS or 

the Electronic Agent to assign this Agreement or resign hereunder, remove MERS or the 

Electronic Agent under this Agreement, or terminate this Agreement, and (ii) in the event of any 

conflicting instructions from the P"MN Agent and the Initial Member, the instructions from the 

PMN Agent shall govern and controL 

CADC/R.-\DC Venlm~ 20 11·1 Structured T ran<;action 

Electronic Tracking Agr~emcnl 5

,, 

EXFC!JTHN VERSIO:--J 
5. Access to Information. 

Upon any Rights Holder's request, the Electronic Agent shall fumish to such Rights 

Holder or its respective auditors infonnation in its possession with respect to the MERS 

Designated Mortgage Loans and shall permit them to inspect the Electronic Agent's and MERS' 

records relating to the MERS Designated Mortgage Loans at all reasonable times during regular 

business hours. 

6. Representations of the Electronic Agent and MERS. 

The Electronic Agent and MERS hereby represent and warrant as of the date hereof that: 

(a) each of the Electronic Agent and MERS has the corporate power and authority 

and the legal right to execute and deliver, and to perform its obligations under this Agreement, 

and has taken all necessary corporate action to authorize its execution, delivery and performance 

of this Agreement; 

(b) no consent or authorization of, filing with, or other act by or in respect of, any 

arbitrator or governmental authority and no consent of any other Person is required in connection 

with the execution, delivery, performance, validity or enforceability of this Agreement; 

(c) this Agreement has been duly executed and delivered on behalf of the Electronic 

Agent and MERS and constitutes a legal, valid and binding obligation ofthe Electronic Agent 

and MERS enforceable in accordance with its terms, except as enforceability may be limited by 

bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of 

creditors' rights generally and by general principles of equity (whether enforcement is sought in 

proceedings in equity or at law); and 

(d) the Electronic Agent and MERS will maintain at all times insurance policies for 

fidelity and errors and omissions in amounts of at least three million dollars ($3,000,000) and 

five million dollars ($5,000,000) respectively, and a certificate and policy of the insurer shall be 

furnished to each Rights Holder upon request and shall contain a statement of the insurer that 

such insurance will not be terminated prior to thirty (30) days' written notice to each Rights 

Holder. 

7. Covenants ofMERS. 

(a) MERS shall (i) not incur any indebtedness other than in the ordinary course of its 

business, (ii) not engage in any dissolution, liquidation, consolidation, merger or sale of assets, 

(iii) not engage in any business activity in which it is not currently engaged, (iv) not take any 

action that might cause MERS to become insolvent, (v) not form, or cause to be formed, any 

subsidiarie.<i, (vi) maintain books and records separate from any other Person, (vii) maintain its 

bank accounts separate from any other Person, (viii) not commingle its assets with those of any 

other Person and hold a!! of its assets in its o\m name, (ix) conduct its own business in its own 

name, (x) pay its own liabilities and expenses only out of its own funds, (xi) observe all 

corporate formalities, (xii) enter into transactions with affiliates only if each such transaction is 

intrinsically fair, commercially reasonable, and on the same terms as would he available in an 

C.WCfRADC Venture 2011-1 Structured rransactwn 

Electronic Tracking Agreement 6

,, 

EXECUTION VERS!Ol\' 
ann's length transaction with a Person that is not an affiliate, (xiii) pay the salaries of its own 

employees from its own funds, (xiv) maintain a sufficient number of employees in light of its 

contemplated business operations, (xv) not guarantee or become obligated for the debts of any 

other Person, (xvi) not hold out its credit as being available to satisfy the obligation of any other 

Person, (xvii) not acquire the obligations or securities of its affiliates or owners, including 

partners, members or shareholders, as appropriate, (xviii) not make loans to any other Person or 

buy or hold evidence of indebtedness issued by any other Person (except for cash and 

investment-grade securities), (xix) allocate fairly and reasonably any overhead expenses that are 

shared with an affiliate, including paying for office space and services perfonned by any 

employee of any affiliate, (xx) use separate stationery, invoices, and checks bearing its own 

name, (xxi) not pledge its assets for the benefit of any other Person, (xxii) hold itself out as a 

separate identity, (xxiii) correct any kno\vn misunderstanding regarding its separate identity and 

not identify itself as a division of any other Person, and (xxiv) maintain adequate capital in light 

ofits contemplated business operations. 

(b) MERS agrees that in no event shall MERS' status as mortgagee of record with 

respect to any MERS Designated Mortgage Loan confer upon MERS any rights or obligations as 

an owner of any MERS Designated Mortgage Loan or the servicing rights related thereto, and 

MERS will not exercise such rights unless directed to do so by Senior Rights Holder. 

8. Covenants of the Manager and the Servicer. 

(a) The Servicer represents that it is and covenants that it will remain a member of 

MERS in good standing. The Manager covenants that if it causes the Company to be designated 

as the "investor" with respect to any MERS Designated Mortgage Loan as provided in Section 3, 

it shall cause the Company to become a member ofMERS in good standing and remain a 

member ofMERS in good standing so long it is designated as the "investor" with respect to such 

MERS Designated Mortgage Loans. 

(b) Each of the Manager and the Servicer hereby covenants and agrees with each 

Rights Holder and each other that, with respect to each MERS Designated Mortgage Loan, it will 

not identify any party except the Company or the Servicer in the "investor" field and will not 

identify any party except the PMN Agent or Initial Member, as applicable, in accordance with 

Section 3, in the "interim funder" field on the MERS® System; provided, that upon the 

Company becoming a member ofMERS in good standing, the Manager shall cause the 

Company to be identified in the "investor" field on the MERS® System. 

(c) The Manager or the Servicer will provide each Rights Holder with MERS 

Identification Numbers for each MERS Designated Mortgage Loan. 

9. No Adverse Interest of the Electronic Agent or MERS. 

By execution of this Agreement, the Electronic Agent and MERS each represents and 

warrants that it currently holds, and during the existence of this Agreement shall hold, no adverse 

interest, by way of security or otherwise, in any MERS Designated Mortgage Loan. The MERS 

Designated Mortgage Loans shall not be subject to any security interest, lien or right to set-offby 

the Electronic Agent, MERS, or any third party claiming through the Electronic Agent or MERS, 

CADC/RADC Venture 2011-l Structmed TransHction 

Flcctrnn1c Tracking t\greement 7 

'2 


FXECUTIO"J VloRSlO~ 
and neither the Electronic Agent nor MERS shall pledge, encumber, hypothecate, transfer, 

dispose of, or otherwise f:,'Tant any third party interest in, the MERS Designated Mortgage Loans. 

10. Indemnification of the Rights Holder. 

The Electronic Agent agrees to indemnify and hold each Rights Holder and its designees 

harmless against any and all liabilities, obligations, losses, damages, penalties, actions, 

judgments, suits, costs, expenses or disbursements, including reasonable attorneys' fees, that 

such Rights I I older may sustain arising out of any breach by the Electronic Agent of this 

Agreement, the Electronic Agent's negligence, bad faith or willful misconduct, its failure to 

comply with any Rights Holder's instructions hereunder (for which appropriate evidence of any 

applicable written consent ofthe Senior Rights Holder to such instructions shall have been 

delivered to the Electronic Agent) or to the extent caused by delays or failures arising out ofthe 

inability ofsueh Rights Holder or the Electronic Agent to access information on the MERS® 

System. The foregoing indemnification shall survive any termination or assignment of this 

Agreement. 

II. Reliance of the Electronic Agent. 

(a) In the absence of bad faith on the part of the Electronic Agent, the Electronic 

Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions 

expressed therein, upon any request, instruction, certificate or other document furnished to the 

Electronic Agent, reasonably believed by the Electronic Agent to be genuine and to have been 

signed or presented by the proper party or parties and conforming to the requirements of this 

Agreement. 

(b) Notwithstanding any contrary information which may be delivered to the 

Electronic Agent by the Manager or the Servicer, the Electronic Agent may conclusively rely on 

any information or Notice of Default delivered by any Rights Holder, and the Manager and the 

Servicer shall indemnify and hold the Electronic Agent harmless for any and all claims asserted 

against it for any actions taken in good faith by the Electronic Agent in connection with the 

delivery of such information or Notice of Default. 

12. Fees. 

It is understood that the Electronic Agent or its successor will charge such fees and 

expenses for its services hereunder as set forth in a separate agreement between the Electronic 

Agent and the Manager. The Electronic Agent shall give prompt written notice of any 

disciplinary action instituted with respect to the Manager's failure to pay any fees required in 

connection with its use of the MERS® System, and will give written notice to each Rights 

Holder at least thirty (30) days prior to any revocation of the Servicer's membership and, if 

applicable in accordance with Section 3, the Company's membership, in the MERS® System. 

13. Resignation of the Electronic Agent; Termination. 

(a) Each Rights Holder has entered into this Agreement with the Electronic Agent 

and MERS in reliance upon the independent status of the Electronic Agent and MERS, and the 

CAOC/Rt\DC Venture 2011·1 Structured Transactmn 

Electronic Trackmg Agreement 8 

" EXECUTION VERSION 
representations as to the adequacy of their facilities, personnel, records and procedures, its 

integrity, reputation and financial standing, and the continuance thereof. Neither the Electronic 

Agent nor MERS shall assign this Agreement or the responsibilities hereunder or delegate their 

rights or duties hereunder (except as expressly disclosed in writing to, and approved by, each 

Rights Holder) or any portion hereof or sell or othen.visc dispose of all or substantially all ofits 

property or assets without providing each Rights Holder with at least sixty (60) days' prior 

written notice thereof. 

(b) Neither the Electronic Agent nor MERS shall resign from the obligations and 

duties hereby imposed on them except by mutual consent of the Electronic Agent, MERS and 

each Rights Holder, or upon the determination that the duties of the Electronic Agent and MERS 

hereunder arc no longer permissible under applicable law and such incapacity carmot be cured by 

the Electronic Agent and MERS. Any such determination permitting the resignation of the 

Electronic Agent and MERS shall be evidenced by an Opinion of Counsel to such effect 

delivered to each Rights Holder, which Opinion of Counsel shall be in form and substance 

acceptable to each Rights Holder. No such resignation shall become effective until the 

Electronic Agent and MERS have delivered to the Senior Rights Holder all of the Assignments 

of Mortgage, in blank, in recordable form but umecorded for each MERS Designated Mortgage 

Loan identified by the Senior Rights Holder. 

14. Removal of the Electronic Agent. 

(a) The Senior Rights Holder or the Manager, with or without cause with respect to 

the performance of the Electronic Agent under this Agreement, may remove and discharge the 

Electronic Agent and MERS from the performance of its duties under this Agreement with 

respect to some or all of the :rvfERS Designated Mortgage Loans by written notice from the 

Senior Rights Holder or the Manager, as applicable, to the other parties hereto. 

(b) In the event oftermination of this Agreement, at Manager's sole cost and expense 

(except for termination pursuant to delivery of a Notice of Default or termination by the 

Electronic Agent pursuant to Section 16) the Electronic Agent shall follow the instructions of 

Senior Rights Holder for the disposition of the documents in its possession pursuant to this 

Agreement, and deliver to Senior Rights Holder an Assignment of Mortgage, in blank, in 

recordable form but unrecorded for each MERS Designated Mortgage Loan identified by Senior 

Rights Holder. Notwithstanding the foregoing, in the event that Senior Rights Holder or the 

Manager terminates this Agreement with respect to some, but not all, of the MERS Designated 

Mortgage Loans, this Agreement shall remain in full force and effect with respect to any MERS 

Designated Mortgage Loans for which this Agreement is not terminated hereunder. 

Notwithstanding any termination of this Agreement, the provisions of Section 10 shall survive 

any termination. 

15. Notices. 

All vvritten communications hereunder shall be delivered, by ovemight courier, to the 

Electronic Agent and/or the Rights Holder and/or the Manager and/or the Servicer as indicated 

on the signature page hereto, or at such other address as designated by such party in a written 

CAOC/R.o\IX' Venture 20ll·l Structured Trnn>actirm 

[le~tromc Tracking Agreement 9

,, 

EXEC\!T!Ol\ VFRSION 
notice to the other parties. All such communications shall be deemed to have been duly given 

upon receipt (or refusal thereof), in each case given or addressed as aforesaid. 

16. Term of Agreement. 

(a) This Agreement shall continue to be in e!Tect until terminated by the Manager or 

Senior Rights Holder in accordance with Section 14(a) or the Electronic Agent sending written 

notice to the other parties of this Agreement at least thirty (30) days prior to said termination. 

(b) Upon the termination ofthis Agreement by the Electronic Agent or the 

termination of this Agreement by Senior Rights Holder for cause as provided in Section 14( a), 

the Electronic Agent shall, at the Electronic Agent's sole cost and expense, execute and deliver 

to Senior Rights Holder or its designee an Assignment of Mortgage with respect to each MERS 

Designated Mortgage Loan identified by Senior Rights Holder, in blank, in recordable form but 

unrecorded. In the event that this Agreement is terminated by the Manager or Senior Rights 

Holder without cause as provided in Section 14(a), the duties of the Electronic Agent in the 

preceding sentence shall be at the sole cost and expense of the Manager. In addition, Senior 

Rights Holder and the Electronic Agent may, at the sole option of Senior Rights Holder, and the 

Manager and the Electronic Agent may, at the sole option of:Manager, enter into a separate 

agreement which shall be mutually acceptable to the respective parties with respect to any or all 

of the :NIERS Designated Mortgage Loans with respect to which this Agreement is terminated. 

17. Authorizations. 

Any of the persons whose signatures and titles appear on Exhibit A hereto are authorized, 

acting singly, to act for the Right~ Holder, the :Manager, the Servicer, the Electronic Agent or 

MERS, as the case may be, under this Agreement. The parties may change the information on 

Exhibit A hereto from time to time but each ofthe parties shall be entitled to rely conclusively on 

the then current Exhibit A until receipt of a superseding exhibit. 

18. Amendments. 

This Agreement may be amended from time to time only by written agreement signed by 

each Rights Holder, the Manager, the Servicer, the Electronic Agent and MERS. 

19. Severability. 

If any provision ofthis Agreement is declared invalid by any court of competent 

jurisdiction, such invalidity shall not affect any other provision, and this Agreement shall be 

enforced to the fullest extent required by law. 

20. Bintling Effect. 

This Agreement shall be binding and inure to the benefit ofthe parties hereto and their 

respective succe::>sors and a~signs. 

CADC/RADC Venture 20! 1-! Struclmed Transaction 

Flcclrc>nic Tracking Agreement 10 

" EXECUTION VERSION 
21. Governing Law. 

THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND 

GOVERNED BV THE LAW OF THE COMMONWEALTH OF VIRGINIA. 

EACH RIGHTS HOLDER (OTHER THAN THE FDIC IN ANY OTHER 

CAPACITY), THE MANAGER, THE SERVICER, THE ELECTRONIC AGENT AND 

MERS EACH IRREVOC ABL V AGREES THAT ANV ACTION OR PROCEEDING 

ARISING OUT OF OR IN ANV MANNER RELATING TO THIS AGREEMENT MAY 

BE BROUGHT IN ANY COURT OF THE COMMONWEALTH OF VIRGINIA, OR IN 

THE U.S. DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA, AND BY 

Tflll EXECUTION AND DELIVERY OF THIS AGREEMENT EXPRESSLY AND 

IRREVOCABLY ASSENT AND SUBMIT TO THE NONEXCLUSIVE JURISDICTION 

OF ANV SUCH COURTS IN ANY SUCH ACTION OR PROCEEDING. 

22. Waiver ofJury Trial. 

EACH OF THE RIGHTS HOLDERS, THE MANAGER, THE SERVICER, THE 

ELECTRONIC AGENT AND MERS EACH IRREVOCABLY AGREES TOWAIVE ITS 

RIGHT TO A JURY TRIAL IN ANY ACTION OR PROCEEDING AGAINST IT 

ARISING OUT OF, OR RELATED IN ANV MANNER TO, TfiiS AGREEMENT OR 

ANY RELATED AGREEMENT. 

23. Execution. 

This Agreement may be executed in one or more counterparts and by the different parties 

hereto on separate counterparts, each of which, when so executed, shall be deemed to be an 

original; such counterparts, together, shall constitute one and the same agreement. 

24. Cumulative Rights. 

The rights, powers and remedies of the Electronic Agent, MERS, each Rights Holder, the 

Manager and the Servicer under this Agreement shall be in addition to all rights, powers and 

remedies given to the Electronic Agent, MERS, the Manager, the Servicer and such Rights 

Holder by virtue of any statute or rule of law, or any other agreement, all of which rights, powers 

and remedies shall be cumulative and may be exercised successively or concurrently without 

impairing such Rights Holder's rights in the Mortgage Loans. 

25. Status of Electronic Agent. 

Nothing herein contained shall be deemed or constmed to create a partnership or joint 

venture between the parties hereto, and the services of the Electronic Agent and MERS shall be 

rendered as independent contractors for the Rights Holders, the Manager and the Scrvicer. Other 

than the obligations of the Electronic Agent and MERS expressly set forth herein, the Electronic 

Agent and MERS shaJI have no pov..'er or authority to act as agent for any Rights Holder, the 

Manager or the Servicer pursuant to any grant of authority made under or pursuant to this 

Agreement. 

CADCIRADC Venture 2011-1 Structured Transaction 

Electronic fracking Agreement II 

" EXFCUTJON VER~IO~ 
IN WITNESS WHEREOF, each Rights Holder, the Manager, the Servicer, the Electronic 

Agent and MERS have duly executed this Agreement as of the date first above written. 

FEDERAL DEPOSIT INSURANCE 

CORPORATION, as receiver for the Failed 

Banks, as Initial Member 

By: 

Name: Heidi Silverberg 

Title: Senior Capital Markets Specialist 

FEDERAL DEPOSIT INSURANCE 

CORPORATION, as receiver for the Failed 

Banks, as P:MN Agent 

By: 

Name: Heidi Silverberg 

Title: Senior Capital Markets Specialist 

Address for Notices: 

Assistant Director- Structured Transactions 

Federal Deposit Insurance Corporation 

550 17th Street, NW (Room F-7015) 

Washington, D.C. 20429-0002 

Attention: Ralph Malami 

E-mail Address: rmalami@fdic.gov 

with a copy to: 

Supervisory Counsel 

FDIC Legal Division 

Litigation and Resolutions Branch, Receivership 

Section 

Special Issues Unit 

3501 Fairfax Drive (Room D-7102) 

Arlington, Virginia 22226 

Attention: Kathleen Russo 

E-mail Address: krusso@fdic.gov 

CADCIRADC Vemure 201 1-1 Structured Transaction 

Uectronic Trad:mg Agreement 

" EXECUTION VERSION 

[Signature Page tu Electronic Tra~kmg Agreement] 
Acorn Loan Portfolio Private Owner VI, 


LLC, a Delaware limited liability company, 


as the Manager 


By: Acorn Loan Acquisition Venture VT, L.P., 


its managing member 


By:______________ 


Name: 


Title: Authorized Signatory 


Nam By:__e_:______________________________ 

Title: Authorized Signatory 

Address for Notices: 

Acorn Loan Portfolio Private Owner VI, 

LLC 

c/o Sabat Financial Group, L.P. 

4675 MacArthur Court, Suite 1550 

Newport Beach, CA 92660 

Attention: R. Patterson Jackson 

with a copy to: 

Paul Hastings LLP 

515 South Flow·er Street, 25th Floor 

Los Angeles, CA 90071 

Attention: Robert M. Keane and Philip N. 

Feder 

E-mail Address: 

and 

CADC!RADC Venture 2011-1 5tructured Transaction 

Electronic 'fr<1~king Agreement 

FXFCL' riON VERSI0:-.1 

[Signature Page to Llect1 onic Tracking Agreement) 
Sahal Financial Group, L.P., a Delaware 

limited partnership, as the Serviccr 

By: Saba! Financial Group GP, LLC 

a Delaware limited liability company 

its General Partner 

By:___________ 

Name:____________ 

Its: ____________ 

Address for Notices: 

Saba\ Financial Group, L.P. 

482 N. Rosemead Blvd., Suite 103 

Pasadena, CA 91 I 07 

Email: 

with a copy to: 

Saba! Financial Group, LP. 

201 W. Mitchell Street, Suite 121 

Petoskey, MI 49770 

CADC/RADC Venture 2011·1 ~tmctured Trunsuetion 

Electromc Tracking Agreement 

EXECU I !ON VERSION 

[S1gna1ur~ Page to E!~ctronic "lrackmg Agreement] 
MERSCORP, INC., 

as Electronic Agent 

By: 

Name: 

Title: 

Address for Notices: 

1818 Library Street 

Suite 300 

Reston. VA 20190 

Attention: 

MORTGAGE ELECTRONIC 

REGISTRATION SYSTEMS, INC., 

as MERS 

By: 

Name: 

Title: 

Address for Notices: 

1818 Library Street 

Suite 300 

Reston. VA 20190 

Attention: 

C ADC/RADC Venture 20! 1-1 Structured Trunsactinn 

Electronic cl rackmg Agreement 

EXEt:tJTION VERSION 

1Signature Page to Fkctronic Ttackmg Agreement] 
------- ------

EXHIBIT A 

LIST OF AUTHORIZED PERSONS 

RIGHTS HOLDER AUTHORIZATIONS: 

Any of the persons whose signatures and titles appear below, or attached hereto, are authorized, 

acting singly, to act for the PMN Agent as Rights Holder under this Agreement: 

By: By: By: 

Name: Ralph A. Malami Name: Heidi Silverberg Name: 

Assistant Director, Senior Capital 

Title: Structured Transactions Title: Markets Srccialist Title: 

Any of the persons whose signatures and titles appear below, or attached hereto, are authorized, 

acting singly, to act for the Initial Member as Rights Holder under this Agreement; provided, 

however that the authority of such persons is junior and subordinate to the person authorize3 to 

act for the P:MN Agent as Rights Holder listed above, until such time as MERS and the 

Electronic Agent receive the P:MN Agent Notice (as defined in this Agreement). 

By: By: By: 

Name: Ralph A. Malami Name: Heidi Silverberg Nmne: __________________ 

Assistm1t Director, Senior Capital 

Title: Structured Transactions Title: ~M=ar~k=e~ts~S~p~e=c~ia~h=·s~t___ Title: 

MANAGER AUTHORTZATTONS: 

Any of the following persons whose signatures and titles appear below, or attached hereto, are 

authorized, acting singly, to act for the Manager under this Agreement: 

By: ------­By: -----­By: 

Name: R. Patterson Jackson Name: Brian Laibow Name: Maureen Connaughton 

Title: Authorized Signatory Title: Authorized Signatory Title: Authorized Signato!2'..___ 

By: 

Name: Mark Jacobs 

CADC/RADC Venlun: 20! J.j Structured Transaction 

J:lectmnic Tracking Agreem~nl 

'2 

EXECUTION VFR~ION 

A-I 
------- ------

Title: Aut~orized Signatory 


SERVICER AUTIIORIZATIONS: 


Any ofthe persons whose signatures anU titles appear below, or attached hereto, are authorized, 


acting singly, to act for the Servicer under this Agreement: 

By: ~~~~~~~-By: ~~~~~~~By: 

Name: R. Patterson Jackson Name: Vartan Dcrbedrossian Name: Maureen Connaughton 

Title: _______Title: ________ Title: 

ELECTRONIC AGENT AUTHORIZATIONS: 

Any of the persons whose signatures and titles appear below, or attached hereto, are authorized, 

acting singly, to act for the Electronic Agent under this Agreement 

By: Ily: -~~~~~_By: 

Name: _________Name: _________ Name: _________ 


Title: _________Title: -------~Title: 

MERS AUTHORIZATIONS: 

Any ofthe persons whose signatures and titles appear below, or attached hereto, arc authorized, 

acting singly, to act for "MERS under this Agreement: 

By: By: By: 

Name: __________ Name: _________ Name: _________ 

Title: _________Title: ________ Title: 

CADCIRAOC Venture 20 l J-I Structured Transaction 

Flcctronlc Tmckmg Agreement 

EXCCU " l JON VFRSTON 

A-2 

EXHIBIT B 


MERS PROCEDURES MANUAL 


The MERS Procedures Manual shall be found on the MERS website at: http://www.mersinc.org 

CADC/RADC Venture 21Jl l-1 Structured rransaction 

Electronic Tracking Agrecmem 

EXECUTION VERSION 

B-1 


v.2 
EXHIBITC 

NOTICE OF DEFAULT 

~~~~~~-'-

Attention: 

MERSCORP, Inc. 

1818 Library Street, Suite 300 

Reston, VA 20190 

Ladies and Gentlemen: 

Please be advised that this Notice of Default is being issued pursuant to Section 4(b) of that 

certain Electronic Tracking Agreement (the ''Electronic Tracking Agreement"), dated as of 

August 24, 2011, by and among (a) Acorn Loan Portfolio Private Owner VI, LLC, a Delaware 

limited liability company (the "Manager"), (b) Saba! Financial Group, L.P., a Delaware limited 

partnership (the "Servicer"), (c) MERSCORP, Inc. (the "Electronic Agent"), (d) Mortgage 

Electronic Registration Systems, Inc. ("MERS"), (e) the Federal Deposit Insurance Corporation 

(in any capacity, the "FDIC"), as Receiver ("Receiver") for the Failed Banks (including its 

successors and assigns thereto), as Initial Member, and (f) the FDIC, as Receiver, as PMN Agent 

pursuant to the Reimbursement, Security and Guaranty Agreement (including its successors and 

assigns thereto). The Affected Loans are listed on the attached Schedule I (including the 

mortgage identification numbers). Accordingly, the Electronic Agent shall not accept 

instructions from the Manager, the Servicer or any party other than the undersigned Rights 

Holder (and, as applicable, any other Rights Holder) with respect to such Mortgage Loans, until 

otherwise notified by the undersigned Rights Holder. 

Any tenus used herein and not otherwise defined shall have such meaning specified in the 

Electronic Tracking Agreement. 

By: ___________~ 

Title:~----------

CADC/RADC Venture 2011-1 Structured Transaction 

Electronic'] racking Agreement 

'.2 

lXECUTION VERSION 

C-1 

Schedule l 

AFFECTED LOANS 


CADCIRADC Venture 2011-l Structured Transaction 

Electronic Trackmg Agreement 

" 1-'XFClJTlON VERSION 

C-2 

EXHTBIT D 

FORM OF MERS LIMITED POWER OF ATTORNEY 

MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., a Delaware corporation 

("MERS") and a wholly owned subsidiary ofMERSCORP, Inc., a Delaware corporation 

("MERSCORP"), hereby appoints the attached list of persons in Schedule A as Attorneys-inFact ("Agents") forMERS for the limited purpose of executing documents and taking certain 

other actions as set forth below for those certain loans (the "MERS Designated Mortgage 

Loans") secured by mortgages or deeds of trusts held by MERS as mortgagee or beneficiary in a 

nominee capacity pursuant to that certain Electronic Tracking Agreement dated as of August 24, 

2011 (the ''Agreement") among Acorn Loan Portfolio Private Owner VI, LLC, Sabal financial 

Group, L.P., MERS, MERSCORP and the Federal Deposit Insurance Corporation (in any 

capacity, the "FDIC"), as receiver ("Receiver") for the Failed Banks listed or otherwise 

referenced on Schedule B (including its successors and assigns thereto), as initial member 

pursuant to the LLC Operating Agreement referred to in the Agreement (the "Initial Member"), 

and as PMN agent pursuant to the Reimbursement, Security and Guaranty Agreement referred to 

in the Agreement (including its successors and assigns thereto) (the "PMN Agent"), in each case 

as Rights I lolder ("Rights Holder"). 

Limited Power of Attorney Actions: 

(1) release the lien of any MERS Designated Mortgage Loan registered on the MERS® 

System that is shown to be registered to the Receiver; 

(2) assign the lien of any MERS Designated Mortgage Loan naming MERS as the mortgagee 

when the Receiver is also the current promissory note~ holder, or if the MERS Designated 

Mortgage Loan is registered on the MERS® System, is shown to be registered to the 

Receiver; 

(3) execute any and all documents necessary to foreclose (or post-foreclosure, to sell to 

another entity) any property securing any MERS Designated Mortgage Loan registered on 

the MERS® System that is shov.m to be registered to the Receiver, including but not limited 

to (a) substitution oftrustee on Deeds ofTrust, (b) Trustee's Deeds upon sale on behalf of 

MERS, (c) Affidavits of Non-military Status, (d) Affidavits of Judgment, (e) Affidavits of 

Debt, (f) quitclaim deeds, (g) Affidavits regarding lost promissory notes, and (h) 

endorsements of promissory notes to VA or HUDon behalf ofMERS as a required part of 

the claims process; 

(4) take any and all actions and execute all documents necessary to protect the interest of the 

Receiver, the beneficial owner of the MERS Designated Mortgage Loans, or MERS, in any 

bankruptcy proceeding regarding a MERS Designated Mortgage Loan registered on the 

MERS® System that is shown to be registered to the Receiver. including but not limited to: 

(a) executing Proof<:i of Claim and Affidavits of Movant under 11 U.S.C. Sec. 501~502, 

Bankruptcy Rule 3001~3003, and applicable local bankruptcy rules, (b) entering a Notice of 

CADCiRADC Vcnt<nc 2011·1 Stwcturcd Transaction 

Electronic Tracking Agreemem 

'2 

EXEetn ION Vf:RSJON 

D-1 

Appearance, (c) voting for a trustee of the estate of the debtor, (d) voting for a conunittee of 

creditors, (c) attending the meeting of creditors of the debtor, or any adjournment thereat: 

and voting on behalf of the Receiver, the beneficial owner of the MERS Designated 

Mortgage Loans, or MERS. on any question that may be lawfully submitted before creditors 

in such a meeting, (f) completing, executing, and returning a ballot accepting or rejecting a 

plan, and (g) executing reaffirmation agreements; 

(5) take any and all actions and execute all documents necessary to refinance, subordinate, 

amend, or modify any and all MERS Designated Mortgage Loans registered on the MERS® 

System that is shown to be registered to the Receiver; and 

(6) endorse checks made payable to Mortgage Electronic Registration Systems, Inc., to the 

Receiver that arc received by the Receiver for payment on any MERS Designated Mortgage 

Loan registered on the MERS® System that is shown to be registered to the Receiver. 

For purposes of clarification, references herein to any MERS Designated Mortgage Loan shown 

to be registered to the Receiver shall be deemed to include, without limitation, any such MERS 

Designated Mortgage Loan for which the Receiver, in any capacity, is designated in the MERS® 

System as the "servicer", "investor", "interim funder" or "warehouse/gestation lender". 

Agent(s) shall have full power and authority to act on behalf ofMERS in these limited matters. 

This power and authority shall authorize Agent(s) to exercise all ofMERS legal rights and 

powers, including all rights and powers that MERS may acquire in the future with regard to the 

MERS Designated Mortgage Loans. 

This Limited Power of Attorney shall be construed narrowly as a limited power of attorney. The 

description of specific powers above is intended to limit or restrict the powers granted in this 

Limited Power of Attorney. 

This Limited Power of Attorney shall become effective immediately upon execution and shall 

expire (i) upon the termination or earlier repudiation (by the Receiver under 12 O.S.C. § 182l(e)) 

of the Agreement, and (ii) as to any Agent(s), at such time as such Agent is no longer an 

employee or agent of the FDIC. This Limited Power of Attorney may be revoked by MERS 

and/or MERSCORP by providing written notice to Agent(s), but only at a time after all of the 

MERS Designated Mortgage Loans have been transferred by MERS to the Receiver or a third 

party or parties designated by the Receiver. 

Dated August 24, 20 II. 

Mortgage Electronic Registration Systems, Inc., 

a Delaware Corporation 

By:________ 

Name: _________ 

Title: Vice President 

C'ADC!RADC Ventur~ 20 II~ I Slru~tured Tmnsa~tiun 

Electronic Tracking Agr~em~m 

'·' EXFCUTID:-.1 VERS!O~ 

D-2 

SCHEDULE A 


Federal Deposit Insurance Corporation, in its separate capacities as Receiver, as Initial 


Member, and in its corporate capacity as the PMN Agent, in each case as Rights Holder 


List of Agents for Mortgage Electronic Registration Systems, Inc. 


Ralph A. Malami 


Heidi Silverberg 


William P. Stewart 


James M. Elliot 


Jocelyn M. Spector 


Parichart Thepvongs 


CADC/RADC Venture 2011-1 Structured Transaction 

Uecuonic Tracking Agrcemem 

,, 

EXECUTION VERSION 

D-3 

SCHEDULER 

List of the Failed Banks 

CADC/RADC Venture 2011-l, LLC Structured Transaction 

Bank Name State Fund Closing Date 

Irwin Union Bank & Trust Co. IN 10120 September 18, 2009 


Hillcrest Bank Florida FL 10131 October 23, 2009 


Lakeside Community Bank MJ 10215 April 16,2010 


Wheatland Bank II 10224 April23, 2010 


First National Bank GA 10251 June25,2010 


Ideal Federal Savings Bank MD 10257 July 9, 2010 


Southwest USA Bank NV 10267 July 23. 2010 


The Cowlitz Bank WA 10275 July 30, 20 I 0 


Ravenswood Bank IL 10276 August 6, 20 10 


Maritime Savings Bank WI 10291 September 17, 2010 


Shoreline Bank WA 10295 October 1, 20 I 0 


Wakulla Bank FL 10296 October 1, 20 I 0 


Premier Bank MO 10297 October 15, 2010 


First Arizona Savings A FSB AZ 10306 October 22, 20 I 0 


First Banking Center WI 10315 November 19,2010 


Earthstar Bank PA 10317 December 10,2010 


Enterprise Banking Co. GA 10329 January 21,2011 


American Trust Bank GA 10336 February 4, 2011 


Charter Oak Bank CA 10343 February 18, 20 II 


Warren Bank MI 10125 October 2, 2009 


AmTrust Bank OH 10155 December 4, 2009 


Florida Community Bank FL 10181 January 29,2010 


Waterfield Bank MD 10190 March 5, 2010 


Centennial Bank UT 10193 March 5, 2010 


Bank Of Hiawassee GA 10202 March 19,2010 


City Bank WA 10212 April16,2010 


Riverside National Bank of Florida FL 10216 Aprill6,2010 


CF Bancorp MI 10226 April 30, 2010 


The Bank Of Bonifay FL 10234 May 7, 2010 


The Gordon Bank GA 10305 October 22,2010 


CADC/RADC Venture 201 1-1 Strucrurcd Tran~acunn 

Electronic rrac~mg Agrc~ment 

\' 2 

EXECUTION Vt:'RSIOl\' 

D-4 

ACKNOWLEDGMENT 

STATE OF VIRGINIA § 

§ 

COUNTY OFFAIR FAX § 

This instrument was acknowledged before me on the_ day of by , a 

duly authorized representative of Mortgage Electronic Registration Systems, Inc., a Delaware 

corporation, on behalf of said corporation. 

Notary Public, State of Virginia 

CADC/RADC Vc~turc 201 1-1 Structured Transaction 

Flcctwnic "]racking Agr~cmcnt 

d 

FXFC\JTTON VLRSION 

D-5 

SCHEDULE2 

SERVICING OBLIGATIONS 

The Servicer shall, in addition to the matters provided for in the Servicing Agreement, perform 

the servicing responsibilities specifically set forth below. These services responsibilities shall, 

unless otherwise provided herein or otherwise designated by the Manager, be perfotmed in 

accordance with the Servicing Standard: 

I. 	General Loan Servicing of all Assets 

• 	 Board Loans onto loan servicing system and maintain transaction histories. 

• 	 Calculate principal and interest payments and all other amounts due and payable under 

the Loan documents and invoice (or provided via web interface) non-delinquent 

Borrowers fOr payment (or via web) on a monthly basis from and afler the relevant 

Servicing Transfer Date(s). 

• 	 Record changes in principal and other outstanding balances as necessary to reflect 

additional funding advances, capitalization of advances for Borrower expenses, 

modifications of amounts due pursuant to executed legal documents, partial payments or 

pre-payments and/or other changes or corrections as directed from time-to-time by 

written authorization from the Manager. 

• 	 Update billing records and generate Borrower statements I invoices. 

• 	 Provide assistance in connection with the closing of the transfer of any Loans or related 

'assets, including assisting in the recording of assignments of the Loans, the endorsement 

of notes and the issuance of title insurance policies, as requested. 

• 	 Generate servicing transfer letters, monthly payment invoicing on non-delinquent 

accounts, escrow analysis on escrowed Loans, payoff/estoppel letters and other standard 

correspondence as required to meet the Servicer obligations in this Schedule 2. 

• 	 Monitor and track required insurance coverage and obtain force placed policies where 

needed and substituting each of the Manager and the Company as a loss-payee on all 

Loan related insurance on the underlying collateral. 

• 	 Process requests such as payoff quotes, prepayment calculations, Loan histories, etc. 

• 	 Provide inquiry access at all times to Loan servicing system(s) or equivalent for Loan and 

underlying collateral information maintained thereon and provide dedicated inbound tollfree number for Borrower inquiries and contact. 

• Monitor collection of all required monetary payments and disburse in accordance with 

documents. 

SCHEDULE 2 

J.FtiAI. US W~OXR42416.1 
• 	 Ensure that Loan payments are processed in a timely manner for the correct amounts and 

in accordance with appropriate Loan documentation. 

• 	 Monitor and track Loan cash flows along with the payment and compliance of real estate 

taxes, HOA fees, insurance, ground lease and other type payments. 

• 	 Process protective advances where needed to include payment of HOA fees or real estate 

taxes (unless protective advance is counter to agreed strategy for Loan). 

• 	 Administer escrow and reserve accounts as required under the Loan documents. 

• 	 Provide Cash Remittance Reporting. 

• 	 Participate in MERS registration process on applicable assets. 

• 	 Generate yearly l 098 and 1099 statements and other government reporting as required. 

• 	 Identify assets likely to have environmental issues and ensure reports are available for 

each asset. 

• 	 Manage Loan and collateral documentation including possible storage m electronic 

library. 

• 	 Provide Loan level reporting monthly, annually and at such other times and in such form 

and manner as reasonably requested from time to time by the Manager (in electronic as 

well as hard copy to the extent practical) including but not limited to: 

o 	 Monthly electronic report on the Loans detailing collections, disbursements, 

funding advances, payoffs, modifications, write-offs and transfers of Loans to 

real estate O\vned and such other information readily available as shall be 

requested by the Manager. 

o 	 Loan trial balance as of the end of each month providing outstanding balances 

for all amounts due from Borrowers including a detail of all cash transactions 

and other account adjustments that occurred for each Borrower during the 

month. 

• 	 Provide the Manager access to, and training with respect to, Loan serv1cmg, asset 

management and document management system(s) and, to the extent required, providing 

licenses to the Manager related thereto. 

• 	 Promptly notify the Manager if a claim is made by any Borrower, guarantor or any third 

party with respect to any Loan. Unless otherwise directed by the Manager in V.'Titing, 

arrange for and supervise the defense of such claim (with legal counsel approved by the 

Manager) ::md the Manager may, at any time, a~sume direct control and supervision of 

~uch defense. 

SCHEDULE 2 

LEGAL..US_ W # 68842416. I 
• 	 Promptly notify the Manager of any event, circumstance, correspondence or other 

communication or occurrence of which it receives knowledge which affects in any 

material way any Loan or related asset (including, without limitation, any default under 

any Loan documents or any casualty to or condemnation of any real property or any 

property securing any Loan) or the ability to perfotm its obligations hereunder. 

II. OC\'cloping Business Plans 

• 	 Business Plans shall be developed and prepared by the officers and employees of the 

Scrviccr, subject to the approval of the Manager, in accordance with the following 

schedule: 

(i) 	 a draft Borrower-Business Level Business Plan for each of the fifteen (15) 

Assets identified by the FDIC within forty-five ( 45) days of the Closing; 

(ii) 	 a draft Borrower-Business Level Business Plan for each of the remaining 

Assets held by the Company within ninety (90) days of the Closing; 

(iii) 	 a draft of the Consolidated Business Plan covering all Assets within 

seventy-five (75) days of the Closing; 

(iv) 	 updates to the Business Plans referred to in clauses (i) and (iii) above, as 

required by the FDIC, no later than forty-five (45) days prior to the date of 

required submission to the FDIC; and 

(v) 	 a draft of a semi-annual business plan for the Servicer, the Manager and 

each Asset serviced by the Servicer semi-annually no later than May 30 

(projected to be current as of June 30 of such year) and November 30 

(projected to be current as of December 31 of such year) of each year (or, 

if the FDIC requires submission by any other date, no later than fortyfive (45) days prior to such date). 

• 	 The Servicer shall revise or prepare a substitute Business Plan for any Business Plan 

prepared in accordance with the above, upon the occurrence of a material change to the 

applicable Asset or the Company, as the case may be, or upon the request of the Manager 

and submit such revised or substitute Business Plan for the Manager's approval. 

• 	 Each Business Plan shall set forth a permissible range of deviation for compliance with 

the tenns of such Business Plan by the Servicer thereunder. No Business Plan may be 

modified, amended, supplemented, updated or replaced without the approval of the 

Manager. Notwithstanding anything to the contraiJ' in this Agreement, the Servicer shall 

implement such Business Plans and shall not take any action or provide any services 

except in strict accordance \Vith the Business Plans. ff no Business Plan is adopted, the 

Servicer shall take .such actions or provide such services to perform its services 

responsibilities hereunder as directed hy the Manager. 

Ill. Performing Loan Asset Management 

SCHEDUI,E 2 

LEGAL L'S W # 68R4l416 I 
• 	 Establish and maintain appropriate I3oiTower and other relationships. Document all 

Borrower contact in centralized CRlvt sy::>tem. 

• 	 Monitor and enforce Loan covenants as required under the Loan documents. 

• 	 Maintain records on Loan system(s) of all known underlying collateral that is security for 

the Loans being serviced and ensure that, within sixty (60) days of the date on which a 

Loan is boarded, all Uniform Commercial Code (UCC) filings required to maintain 

perfection in any underlying collateral are properly maintained. 

• 	 Make timely payments for any other expense to be paid on behalf of a Borrower on any 

underlying collateral deemed a property protection advance, subject to a Manager's 

approval process to be established by mutual agreement of the Manager and the Servicer. 

• 	 Review operating statements including analysis of revenue, expenses, net operating 

income, net cash flow, debt service coverage ratios and occupancy and monitor on a Loan 

level all such expenses and disbursements made for future billing or recovery from 

Borrower. 

• 	 Monitor performance through comparison of Actual ver::;us Budget and Undenvriting 

with inquiries about discrepancies. 

• 	 Provide quarterly credit memorandum which includes collateral valuation, cash flow 

analysis, market study and asset status comments in a standardized format. 

• 	 Perform mmual property inspections, or more frequently if consistent with a Business 

Plan or approved by the Manager. 

• 	 Proactively identify performing assets that are likely to become nonperforming and 

escalate to the Manager for intervention. 

IV. Construction and Development Loan Asset Management 

• 	 Review project budget to monitor that the project is progressing on time, on budget and 

lien free. 

• 	 Perform draw review and administration prior to making recommendation for funding. 

Confirm ::;atisfaction of all conditions precedent to draw including receipt of title updates, 

consultant reports, and appropriate lien waivers. 

• 	 Review and verify draw package and invoices, review budget reallocations, costs spent to 

date, and confirm remaining funds available, on a line by line basis, are sufficient to 

cover remaining project costs. 

• 	 Identify and resolve entitlement and permitting issues. 

SCliEDULE2 

LEGAL US W # 68842416.1 
• 	 Order independent third party progress inspections (subject to the Manager's approval 

with respect to out-of-pocket costs of ordering such inspections to the extent not provided 

for in a Business Plan) on a routine basis to confirm construction is progressing according 

to the plans and specifications. 

• 	 If warranted, order independent third party cost to complete analyses when budget 

insufficiency is suspected or known. 

V. 	 Residential I Commercial Sellout Loan Asset Management 

• 	 Prepare detailed sales activity reports. 

• 	 Monitor compliance of Borrowers with Loan documentation to ensure proper distribution 

of net sales proceeds. 

• 	 Coordinate full and partial collateral releases. 

• 	 Address HOA and commercial association issues including insurance. 

VI. Non-Performing Loan Asset Management 

• 	 Complete a review of the Loan documents and assets to identify potential enforcement 

rights and remedies. Review guarantees to assess Borrower's potential liability, 

analyzing historic Loan payments and cash usages from property, and working with 

coW1sel on documents to preserve rights including pre-negotiation agreement, default 

letter, non-waiver letter, etc. 

• 	 Complete a valuation of the asset and project cash flows. Perform scenario analysis of 

potential exit strategies including an assessment of guarantor support and financial 

condition. 

• 	 Initiate and complete pre-foreclosure assessments ofnon-perfom1ing Loans including: 

o Estimate of collateral value 

o Evaluation of environment concerns 

o Determination of costs 

o Assessment of altemative to Foreclosure such as DIL 

o Determine the ability to pursue guarantors and the I ikely results ofsuch pursuit 

o Develop foreclosure bidding strategy 

o Generated required Notices to all parties: 

• Notice oflntent to Foreclose (NOI) 

SCHEDULE2 

LEGAL L'S W # 68842416 l 
• 	 Notice of Default (NOD) 

o Attorney Selection 

• 	 Inform the Manager in writing promptly upon learning of the occurrence of (a) any 

material default W1der any performing Loan (including, without limitation, any payment 

default or any default entitling the lender under the Loan to accelerate the indebtedness 

outstanding under the Loan) and (b) any material default (other than any payment 

default) under any non-performing Loan. Propose in writing a workout plan within 

thirty (30) days thereafter, which shall incorporate the Servicer's recommendation 

regarding engagement of legal counsel, enforcement of rights and remedies, workout 

strategy and any other actions necessary to the ultimate resolution of the Loan, and in 

consultation with the Servicer, the Manager shall determine a resolution strategy which 

shall be incorporated into the work out plan. 

• 	 Implement approved workout plan through negotiation of any settlement or modifications 

with the Borrower, engaging counsel in the preparation of forbearance agreements or 

modifications, managing approved remedy enforcement action (subject to the Manager's 

approval pursuant to the paragraph above) including foreclosure or pursuit of guarantors, 

developing strategies to deal with assets in bankruptcy, identifying Loan sale 

opportunities and handling Loan sale process. 

• 	 Notwithstanding anything in this Agreement to the contrary, unless specifically and 

expressly consented to by the Manager in writing or provided for in a Business Plan, the 

Serviccr shall not cause or conduct any foreclosure sale of any property securing a Loan, 

or caw~e, conduct or agree to any transaction transferring any property in lieu of 

foreclosure, without first obtaining the written consent of the Manager to all of the 

material terms and conditions of such foreclosure sale or transaction in lieu of foreclosure 

(including without limitation the sale date, sale terms and bidding strategy with respect to 

any foreclosure sale). 

• 	 Notwithstanding anything in this Agreement to the contrary, the Servicer shall not take, 

and shall ensure that any subcontractor does not take, any action or series of actions prior 

to foreclosure with respect to any property securing any Loan that would cause the 

.Manager or the Company or its owners (i) to become liable under any applicable 

environmental laws, (ii) to be considered to be a "mortgagee in possession" of such 

property, or (iii) to be considered to be an "owner" or '"operator" of such property within 

the meaning of CERCLA or any comparable federal, state or local Jaw, or a "discharger" 

or "responsible party" thereunder. 

• 	 Update/maintain servicing system to reflect any changes to the Loan based on 

modifications or forbearance agreements. 

• 	 Identify and address any construction related issues. 

• 	 Perform any necessary property preservation/maintenance activities necessary to protect 

and secure collateral. 

SCHEDULE 2 

LLCiAL US_W!1688424161 
VII. REO Asset Management and Disposition 

• Create Business/Marketing Plan and Exit Strategy based on assessment of asset's highest 

and best use, stage of completion and market conditions. 

• 	 Install new property management, leasing, marketing and construction teams, including 

negotiation of appropriate agreements. 

• 	 Continue property preservation and maintenance activities. 

• 	 Complete an analysis to determine if best execution is to sell asset "as is" or make 

repairs, complete constmction, etc. 

• 	 Resolve any accoW1ts payable matters. 

• 	 Coordinate government or related items including issues related to liens, entitlements, 

permits, code compliance, ADA, eminent domain issues, etc. 

• 	 Supervising and managing any construction and improvements with regard to any REO 

property, including supervision of contractors, review of draw requests and confirmation 

that \Vork is proceeding in accordance with plan specifications. 

• 	 Initiate selection process and select broker. Execute listing agreement. 

• 	 Manage asset disposition including pre-marketing, market outreach, negotiation period, 

due diligence/inspection period and closing. 

• 	 Manage list price adjustments accordingly based on market conditions and salability of 

asset. 

• 	 Complete sale of asset with appropriate release documentation and reporting. 

Any other services which are reasonably inferable from any of the services listed herein. 

The Sen'icer shall execute and deliver such instruments and take such actions as the Manager 

may, from time to time, reasonably request in order to perform such obligations set forth above, 

to effectuate the purpose and to carry out the terms of this Agreement and/or the Company's and 

the Manager's reporting and other obligations relating to the servicing of the Loans and assets 

under the Company's LLC Operating Agreement and any other documents entered into by the 

Manager or its Affiliates relating thereto. 

Nothing in this Schedule 2 or else\vhere in this Agreement shall restrict the Manager from 

performing any servicing functions (acting in the role of serviccr, sub-servicer or otherwise). 

SCHEDULE2 

LFGIIL_LJ,<;_W # Ol\1\42416_1 
SCHEDULE3 

REIMBURSEMENT OF SERVICER ADVANCES 

Scrviccr shall have no obligation to advance any funds to pay for any expenses or obligations of 

any Borrower, the Company or the Manager or to pay for any Servicing Expenses, including, 

without limitation, any Servicer Advances, or Funding Draws. Any and all such draws, advances 

and expenses will only be incurred at such time as Manager has provided the funds to incur such 

expenses and/or to make such advances, unless otherwise, and in a marmer, mutually agreed to 

by Manager and Servicer. 

In no event shall the Serviccr receive any reimbursement or other compensation with respect to 

Excluded Expenses. 

SCHEDULE 3 

JFGAL CS W#688424161 
SCHEDULE4 

FORM OF ELECTRONIC REPORT ON THE LOANS AND COLLAlERAL 

Servicing Electronic Report Fields 

Data to be provided in excel or other standard electronic fOrmat. 

Loan Specific: 

• Loan Number 

• Loan Classification (Perfonning, Non-Performing, OREO) 

• Original Loan Amt 

• Unpaid Principal Balance 

• Current Rate 

• Margin 

• Index 

• Ceiling 

• Floor 

• Term 

• Interest Only (YIN) 

• Amortizing (YIN) 

• Note Date 

• Maturity Date 

• Paid To Date 

• Next Due 

o Accrual (YIN) 

• Percent Owned 

• Date of Last Disbursement 

• Last Disbursement Amt 

• Charge Offs or SVA's 

Collateral Specific: 

• Property Street 

• Property City 

• Property State 

• Property Zip 

• Original Appraisal Amt 

• Original Appraisal Date 

• Updated Appraisal Amt 

• Updated Appraisal Date 

o Updated LTV 

• Lien Position 

• Jr Lien Amt 

• Foreclosure (YIN) 

• Property Taxes Current (YIN) 

• Property Taxes Due 

SCHEDULE4 

LEGAL_US_ W # 68842416. I 
• Percent Complete 

• Cost to Complete (if applicable) 

• Cost to Complete Date Estimated (if applicable) 

• Environmental Risk (YIN) 

Borrower Specific: 

• Borrower Name 

• Original Credit Score 

• Original Credit Score Date 

• Updated Credit Score 

• Updated Credit Score Date 

• Bankruptcy (YIN) 

OREO Specific: 

• Date OREO 

• Book Value 

• Net Book Value 

• For Sale (YIN) 

• Listing Date 

• Listing Amt 

• OtTer (YIN) 

• oner Amt 

• Offer Date 

• OtTer Accepted (YIN) 

• Est Closing Date 

• Sold Date 

• Sold Amt or Net Sales Price 

SCHEDULE 4 

I,FGAL l}S Wli68842416.1 
SCHEDULES 


TERMINATION WITHOUT CAUSE 


( l) The Manager may terminate this Agreement for any reason (or for no reason); provided, that 

the Manager must provide thirty (30) days written Termination Notice to the Servicer and 

the Scrvicer an · termination fee 

agree,mr,nt goverrniing fees, sub-asset manager fees and 

other third party fees in accordance with the terms thereof not later than five (5) Business Days 

following receipt of the Termination Notice from the Manager. To the extent that the Servicer is 

obligated to pay any such sub~servicer fees, sub-asset manager fees and other third-party fees, 

notwithstanding the delivery of notice of termination as required by the preceding sentence, 

during the two (2) month period follo'Wing the termination date, the Manager shall pay to the 

Servicer the amount of such sub-serviccr fees, sub-asset manager fees and other third-party fees 

actually paid by the Servicer with respect to such two (2) month period. The termination fee 

hereunder shall be payable by the Manager in two (2) monthly payments beginning on the 

termination date. 

(2) Notwithstanding anything to the contrary in this Agreement or elsewhere, in addition to and 

without limitation of any other rights at law or equity and in addition to and without limitation of 

the Manager's rights under Sections 7.2 and 7.3 of this Agreement, the Manager shall have the 

same rights under Section 7.2(a)(i), (ii) and/or (iii) upon the occurrence of any of the following 

matters (determined by the Manager in its sole discretion), whether or not the same constitute a 

Default, and the Servicer hereby agrees and consents thereto, including without limitation its 

immediate and automatic termination under this Agreement upon written election by the 

Manager in connection with any such occurrence and without the requirement of any further 

notice or cure rights, and in no event shall any such termination constitute a termination ''without 

cause": 

R. Patterson Jackson ceases to devote substantially all of his business time and attention 

to the performance of his duties for the Serviccr (other than as a result of his death or disability) 

and a replacement for R. Patterson Jackson who is acceptable to the Manager (as determined in 

its sole discretion) has not been hired by the Servicer within sixty (60) days thereof. 

In no event shall the Manager's failure to exercise, or delay in exercising, any of its rights under 

this Agreement, any document governing the Manager or otherwise, constitute a waiver of any 

such rights, whether with respect to then-current, past or future matters. 

SCHEDULE 5 

LEGAL_l:S_W II 68842416. I 
SCHEDULE6 

BUSINESS PLAN SCHEDULE 

Serviccr agrees to prepare and deliver to the Manager, and thereafter to periodically update, the 

Business Plans, Borrower-Business Relationship Business Plans and Consolidated Business 

Plans, and otherwise to cooperate with the Manager and take such actions as the Manager may, 

from time to time, reasonably request in order to prepare, deliver and update the Business Plans, 

Borrower-Business Relationship Business Plans and Consolidated Business Plans in accordance 

with the terms of Item 2 on Schedule 2 hereof and as required by Section 7.7 of the LLC 

Operating Agreement and Section 5.2(h) ofthe Servicing Agreement. 

SCHEDULE6 

LEGAL US W 1168842416.!