EXECUTION COPY 


REIMBURSEMENT AND SECURITY AGREEMENT 


BY AND BETWEEN 


FRANKLIN VENTURE, LLC 


AND 


FEDERAL DEPOSIT INSURANCE CORPORATION 


Dated as ofSeptember 30, 2009 

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TABLE OF CONTENTS 


Article I Definitions................................................................................................................1 


Section 1.1 Definitions ..................................................................................................1 


Article II Reimbursement ........................................................................................................7 


Section 2.1 Reimbursement ...........................................................................................8 


Section 2.2 Obligations Absolute ..................................................................................8 


Article III Security Interest .......................................................................................................8 


Section 3.1 Granting of Security Interest ......................................................................8 


Section 3.2 Retention ofCertain Rights ...................................................................... 1 0 


Section 3.3 Loan Defaults; Acquisition of Collateral... .............................. : ................ 11 


Section 3.4 Continuing Security Interest .....................................................................12 


Section 3.5 Destruction ofCollateral .......................................................................... 12 


Section 3.6 Releases of Loan Collateral ......................................................................12 


Section 3.7 Financing Statements .........................:·......................................................12 


Section 3.8 Power ofAttorney ....................................................................................13 


Article IV Events OfDefault ..................................................................................................13 


Section 4.1 Events ofDefault ...................................................................................... 13 


Article V Remedies................................................................................................................15 


Section 5.1 Remedies..................................................................................................15 


Section 5.2 Application ofProceeds ................................................... : ........................ 17 


Section 5.3 Sale ofCollateral. .....................................................................................17 


Section 5.4 No Impairment ofAction .........................................................................18 


Section 5.5 Remedies Cumulative; Waiver .................................................................18 


Section 5.6 Waiver of Certain Rights and Remedies ..................................................18 


Article VI Representations And Warranties ............................................................................18 


Section 6.1 Representations and Warranties ................................................................18 


Article VII COVENANTS .......................................................................................................20 


Section 7.1 Debtor Accounts .......................................................................................20 


Section 7.2 Debtor Status; Licensing ..........................................................................20 


Section 7.3 LLC Operating Agreement .......................................................................20 


Section 7.4 Custodian ................................................................................................. .20 


Section 7.5 Compliance with Law ...............................................................................21 


Section 7.6 Servicer.....................................................................................................21 


Section 7.7 MERS® Member ......................................................................................21 


Section 7.8 Certain Restrictions ..................................................................................21 


Section 7.9 Change in Jurisdiction, Name, Location or Identity .................................21 


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Section 7.10 Payment ofPrincipal and Interest on Purchase Money Note; 


Reimbursement of Secured Party .............................................................22 


Section 7.14 Debtor's Duty To Advise Secured Party; Delivery of Certain 


Section 7.11 Protection ofCollateral; Further Assurances ............................................22 


Section 7.12 Books and Records; Reports; Certifications; Audits ................................22 


Section 7.13 Recovery of Expenses; Interest; Working Capital Advances ...................24 


Notices ......................................................................................................24 


Section 7.15 Payment ofPurchase Money Note Guaranty Fee ..... : ............................... 25 


Article VIII Secured Party Consent; Limits On Liability ..........................................................25 


Section 8.1 Secured Party Consent; Limits On Liability .............................................25 


Section 8.2 Limitation ofLiability..............................................................................26 


Article IX Release Of Collateral .............................................................................................27 


Article X LIQUIDATION OF LOANS AND ACQUIRED COLLATERAL ......................27 


Section 10.1 Rights to Liquidate Loans and Acquired Collateral ................................ .27 


Section 10.2 Exercise ofRights to Liquidate Loans and Acquired Collateral ..............27 


Article XI Miscellaneous ........................................................................................................28 


Section 11.1 Attomey-In-Fact ...................................................................................... .28 


Section 11.2 No Petition ................................................................................................28 


Section 11.3 Reimbursement of Expenses ....................................................................28 


Section 11.4 · Termination of Security Interest ...............................................................28 


Section 11.5 Indemnification........................................................................................ .29 


Section 11.6 Governing Law ........................................................................................ .30 


Section 11.7 Jurisdiction; Venue and Service ...............................................................31 


. The Debtor, for itself and its Affiliates, hereby irrevocably and unconditionally: .........31 


Section 11.8 Waiver of Jury ..........................................................................................31 


Section 11.9 Notices ......................................................................................................31 


Section 11.10 Assigmnent ...............................................................................................33 


Section 11.11 Entire Agreement ......................................................................................33 


Section 11.12 Amendments and Waivers ........................................................................33 


Section 11.13 Reinstatement ...........................................................................................33 


Section 11.14 Interpretation; No Presumption ............................................................... .34 


Section 11.15 Severability.............................................................................................. .34 


Section 11.16 Survival.................................................................................................... .34 


Section 11.17 No Third Party Beneficiaries ................................................................... .34 


Section 11.18 Counterparts; Facsimile Signatures ..........................................................35 


Attachments 

Exhibit A Form OfElectronic Tracking Agreement 

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REIMBURSEMENT AND SECURITY AGREEMENT 

TillS REIMBURSEMENT AND SECURITY AGREEMENT, effective as of September 

30, 2009 (this "Agreement"), is entered into by and between FRANKLIN VENTURE, LLC, a 

Delaware limited liability company ("Debtor") and FEDERAL DEPOSIT INSURANCE 

CORPORATION, acting in its corporate capacity ("Secured Party"). 

WHEREAS, pursuant to that certain Loan Contribution and Sale Agreement, dated as of 

September 30, 2009 (the "Contribution Agreement"), between Debtor and Federal Deposit 

Insurance Corporation, as Receiver for Franklin Bank, S.S.B. (in such capacity, "Receiver"), 

Receiver has transferred certain assets to Debtor, partly as a sale and partly as a capital 

contribution, and in return for said assets Debtor has issued to Receiver a Purchase Money Note, 

dated of even date herewith, in the principal face amount of $727,770,000 (the "Purchase 

Money Note"); and 

WHEREAS, to provide support for the payment and performance ofDebtor's obligations 

under the Purchase Money Note, Secured Party and Receiver have entered into that certain 

Guaranty Agreement, dated as of September 30, 2009 (the "Purchase Money Note Guaranty"); 

and 

WHEREAS, in connection with the foregoing, Debtor has agreed to provide Secured 

Party with the collateral identified herein in order to induce Secured Party to enter into the 

Purchase Money Note Guaranty and to secure Debtor's obligation to reimburse Secured Party for 

any payments made by Secured Party thereunder; 

NOW, THEREFORE, in consideration of the promises contained herein and for other 

good and valuable consideration, the receipt and adequacy of which are hereby aclmowledged, 

Debtor and Secured Party agree as follows: 

ARTICLE I 


Definitions 


Section 1.1 Definitions. Unless otherwise defined herein, capitalized terms 

used in this Agreement have the meanings provided in, or by reference in, the Contribution 

Agreement. The following terms shall have the following meanings: 

"Acceptable Rating" shall mean (i) a rating of "Strong" by Standard and Poor's 

Ratings Service, a division of The McGraw-Hill Companies, Inc., (ii) the applicable "Level 1" 

servicer rating for residential mortgage servicers by Fitch, Inc., or (iii) a rating of "SQl" by 

Moody's Investors Service. 

"Acquired Collateral" shall mean Loan Collateral to which title is acquired by or 

on behalf of Debtor or any Ownership Entity by foreclosure, by deed in lieu of foreclosure, by 

power of sale or by sale pursuant to the Uniform Commercial Code, . in any such case in 

accordance with the Loan Documents and in connection with performance by Debtor of its 

obligations and duties under this Agreement 

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"Agreement" shall mean this Reimbursement and Security Agreement, as the 

same may be amended, modified or otherwise supplemented from time to time. 

"Borrower" shall mean the borrower or any other obligor with respect to a Loan. 

"Change of Control" shall mean, with respect to the Managing Member, any 

Person who does not Control the Managing Member as of the date of this Agreement obtaining 

Control ofthe Managing Member. 

"Collateral" shall have the meaning given in Section 3.1 ofthis Agreement. 

"Collection Account" shall have the meaning given in the LLC Operating 

Agreement. 

"Control" when used with respect to any specified Person shall mean the 

possession, direct or indirect, ofthe power to direct or cause the direction ofthe management and 

policies of such Person, whether through the ownership of voting securities or interests, by 

contract or otherwise. 

"Custodial and Paving Agency Agreement" shall mean the Custodial and 

Paying Agency Agreement dated as of the date hereof, between Debtor, Secured Party and the 

Custodian, as amended, supplemented or restated from time to time, and shall include any 

substantially similar agreement entered into by Debtor, Secured Party and any new or successor 

Custodian in accordance with the LLC Operating Agreement. 

"Custodian and Paying Agent Report" shall have the meaning given in the 

Custodial and Paying Agency Agreement. 

"Custodial Documents" shall have the meaning gtven m the Custodial and 

Paying Agency Agreement. 

"Custodian" shall mean Citibank, N.A., a national banking association, and any 

successor custodian that is a Qualified Custodian. 

"Debt" of any Person shall mean (a) all indebtedness of such Person for borrowed 

money, (b) all obligations of such Person for the deferred purchase price of property or services 

(excluding trade payables arising in the ordinary course of business), (c) all obligations of such 

Person evidenced by notes, bonds, debentures or other similar instrmnents, (d) all indebtedness 

created or arising under any conditional sale or other title retention agreement with respect to 

property acquired by such Person (even though the rights and remedies of the seller or lender 

under such agreement in the event of default are limited to repossession or sale ofsuch property), 

(e) all obligations of such Person as lessee under leases that have been or should be, in 

accordance with GAAP, recorded as capital leases, or (f) all indebtedness or obligations of others 

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of the kinds referred to in clauses (a) through (e) above in respect of which such Person has 

entered into or issued any Guarantee. 

"Debtor Accounts" shall mean, collectively, the Collection Account, the 

Liquidity Reserve Account, the Distribution Account and the Escrow Accounts. 

"Determination Date" shall have the meaning given in the Custodial and Paying 

Agency Agreement. 

"Distribution Account" shall have the meamng giVen in the Custodial and 

Paying Agency Agreement. 

"Distribution Date" shall have the meaning given in the Custodial and Paying 

Agency Agreement. 

"Distribution Date Report" shall have the meaning given in the Custodial and 

Paying Agency Agreement. 

"Due Period" shall have the meaning given in the Custodial and Paying Agency 

Agreement. 

"Electronic Tracking Agreement" shall mean an agreement in the form of 

Exhibit A. 

"Escrow Accounts" shall have the meaning given in the Servicing Agreement. 

"Event of Default" shall mean each of the "Events of Default" described in 

Section 4 ofthis Agreement. 

"Final Distribution" shall mean the distribution of all remaining Loan Proceeds 

in accordance with the terms ofthe Custodial and Paying Agency Agreement after liquidation of 

all ofthe Loans and related Loan Collateral. 

"Guarantee" shall mean, with respect to any particular indebtedness or other 

obligation, (a) any direct or indirect guarantee thereof by a Person other than the obligor with 

respect to such indebtedness or other obligation or any transaction or arrangement intended to 

have the effect of directly or indirectly guaranteeing such ind.ebtedness or other obligation, 

including without limitation any agreement by a Person other than the obligor with respect to 

such indebtedness or other obligation (i) to pay or purchase such indebtedness or other obligation 

or to advance or supply funds for the payment or purchase of such indebtedness or other 

obligation, (ii) to purchase, sell or lease (as lessee or lessor) property of, to purchase or sell 

services from or to, to supply funds to or in any other manner invest in, the obligor with respect 

to such indebtedness or other obligation (including any agreement to pay for property or services 

of the obligor irrespective of whether such property is received or such services are rendered), 

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primarily for the purpose of enabling the obligor to make payment of such indebtedness or other 

obligation or to assure the holder or other obligee of such indebtedness or other obligation 

against loss, or (iii) otherwise to assure the obligee of such indebtedness or other obligation 

against loss with respect thereto, or (b) any grant (or agreement in favor of the obligee of such 

indebtedness or other obligation to grant such obligee, under any circumstances) by a Person 

other than the obligor with respect to such indebtedness or other obligation of a security interest 

in, or other Lien on, any property or other interest of such Person, whether or not such other 

Person has not assumed or become liable for the payment of such indebtedness or other 

obligation. 

"Guaranteed Obligations" shall have the meaning given in the Purchase Money 

Note Guaranty. 

"Indemnified Parties" shall have the meaning given in Section 11.5(a) of this 

Agreement. 

"Insolvency Event" shall mean, with respect to any specified Person, the 

occurrence of any ofthe following events: 

(a) the specified Person makes an assigmnent for the benefit of 

creditors; 

(b) the specified Person files a voluntary petition for relief in any 

Insolvency Proceeding; 

(c) the specified Person is adjudged bankrupt or insolvent or there is 

entered against the specified Person an order for relief in any Insolvency Proceeding; 

(d) the specified Person files a petition or answer seeking for the 

specified Person any reorganization, arrangement, composition, readjustment, liquidation, 

dissolution, or similar relief under any Law; 

(e) the specified Person seeks, consents to, or acquiesces in the 

appointment of a trustee, receiver or liquidator of the specified Person or of all or any 

substantial part ofthe specified Person's properties; 

(f) the specified Person files an answer or other pleading admitting or 

failing to contest the material allegations of a petition filed against the specified Person in 

any proceeding described in clauses (a) through (e); 

(g) the specified Person becomes unable to pay its obligations as they 

become due; or 

(h) within ninety (90) days of any proceeding against the specified 

Person seeking reorganization, arrangement, composition, readjustment, liquidation, 

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dissolution or similar relief under any Law if the proceeding has not been dismissed, or 

within ninety (90) days after the appointment of a trustee, receiver or liquidator for the 

specified Person or all or any substantial part of the specified Person's properties without 

the specified Person's agreement or acquiescence, which appointment is not vacated or 

stayed, or if the appointment is stayed, for ninety (90) days after the expiration of the stay 

if the appointment is not vacated. 

"Insolvency Proceeding" shall mean any proceeding under Title 11 of the United 

States Code (11 U.S.C. §§101, et seq.) or any proceeding under the Law of any jurisdiction 

involving any reorganization, arrangement, composition, readjustment, liquidation, dissolution, 

or similar relief. 

"Liquidity Reserve Account" shall have the meanmg gJ.Ven m the LLC 

Operating Agreement. 

"Loan Collateral" shall have the meaning assigned to the term "Collateral" in the 

Contribution Agreement. 

"Loan Parity Obligation" shall have the meaning given in the Purchase Money 

Note Guaranty. 

"Losses" shall have the meaning given in Section 11.5(a) ofthis Agreement. 

"Managing Member" shall have the meaning given in the LLC Operating 

Agreement. 

"Maturity Date" shall have the meaning given in the Purchase Money Note. 

"MERS®" shall mean Mortgage Electronic Registration Systems, Incorporated. 

"MERS® System" shall mean the MERSCORP, Inc., mortgage electronic 

registry system, as more particularly described in the MERS® Procedures Manual (a copy of 

which is attached as an exhibit to the Electronic Tracking Agreement). 

"Monthly Report" shall have the meaning given m the LLC Operating 

Agreement. 

"NY UCC" shall mean the Uniform Commercial Code as in effect on the date 

hereofin the State ofNew York, as amended from time to time, and any successor statute. 

"Ownership Entity" shall have the meaning given in Section 3 .3(b) of this 

Agreement. 

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"Paying Agent" shall have the meaning gwen m the Custodial and Paying 

Agency Agreement. 

"Perfection Requirement" shall have the meaning given in Section 6.l(e) ofthis 

Agreement. 

"Proceedings" shall mean any suit in equity, action at law or other judicial or 

administrative proceeding. 

"Purchase Money Note Guaranty Fee" shall have the meaning given in Section 

7.15 ofthis Agreement. 

"Qualified Custodian" shall mean any Person that (i) is a bank, trust company or 

title insurance company subject to supervision and examination by any federal or state regulatory 

authority, (ii) is experienced in providing services of the type required to be performed by the 

Custodian under the Custodial and Paying Agency Agreement, (iii) is qualified and licensed to 

do business in each such jurisdiction to the extent required unless and to the extent the failure to 

be so qualified or licensed will not have a material adverse effect on the Custodian or the ability 

of the. Custodian to perform its obligations under the Custodial and Paying Agency Agreement, 

(iv) is not prohibited from exercising custodial powers in any jurisdiction in which the Custodial 

Documents are or will be held, (v) has combined capital and surplus of at least $50,000,000 as 

reported in its most recent report of condition, (vi) has the facilities to safeguard the Loan 

Documents and other Custodial Documents as required by the Custodial and Paying Agency 

Agreement, (vii) is not an Affiliate of the Debtor or the Servicer, and (viii) is acceptable to and 

approved by Secured Party (such approval not to be unreasonably withheld, delayed or 

conditioned). 

"Qualified Servicer" shall mean any Person that (i) is properly licensed and 

qualified to conduct business in each jurisdiction in which such licenses and qualifications to 

conduct business are necessary for the servicing of the Loans and management of the Loan 

Collateral, (ii) is a member of MERS®, (iii) has the management capacity and experience to 

service loans of the type held by Debtor, especially performing and non-performing residential 

loans, including the number and types ofloans serviced, and the ability to track, process and post 

payments, and to furnish tax reports to borrowers, and (iv) either (x) has an Acceptable Rating as 

a mortgage loan servicer or special servicer or (y) is acceptable to and approved by Secured 

Party in its sole discretion. 

"REO Property" shall mean real property to which title is acquired by or on 

behalf of the Debtor by foreclosure, by deed in lieu of foreclosure, by power of sale or by sale 

pursuant to the Uuiform Commercial Code, in any such case, in accordance with the Loan 

Documents and in connection with the performance by the Debtor of its obligations and duties 

under the LLC Operating Agreement. · 

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"Secured Obligations" shall have the meaning grven m Section 3.1 of this 

Agreement. 

"Servicer" shall have the meaning given in the Custodial and Paying Agency 

Agreement. 

"Servicing Agreement" shall have the meamng giVen m the Custodial and 

Paying Agency Agreement. 

"Servicing Obligations" shall have the meanmg given m the Servicing 

Agreement. 

"Servicing Standard" shall have the meaning given in the Servicing Agreement. 

"Single Purpose Entitv" shall mean a corporation or limited liability company 

that (a) is organized under the laws of any state of the United States or the District of Columbia, 

(b) has no material assets other than the Loans and any Acquired Collateral, its right, title and 

interest in, to and under the LLC Operating Agreement and the other instruments contemplated 

by this Agreement, (c) is not engaged in any significant business operations except its ownership 

of the Loans and any Acquired Collateral and the conduct of its business pursuant to the LLC 

Operating Agreement, (d) does or causes to be done all things necessary to preserve and keep in 

full force and effect its existence, rights (charter and statutory) and franchises, (e) at all times 

holds itself out to the public as a legal entity separate from any other Person (including any 

Mfiliate), (f) except as expressly contemplated hereby or by the Ancillary Documents, does not 

commingle its assets with assets of any other Person, (g) conducts its business in its own name 

and strictly complies with all organizational formalities to maintain its separate existence, (h) 

maintains an arm's length relationship with any Affiliate upon terms that are commercially 

reasonable and on terms no less favorable to it than could be obtained in a comparable arm's 

length transaction with an unrelated Person, and (i) has no Debt. 

"Site Assessment" shall have the meaning given m Section 3.3(b) of this 

Agreement. 

"Successor Servicer" shall have the meaning given in Section S.l(a)(vi) of this 

Agreement. 

"Third Partv Claims" shall have the meaning given in Section ll.S(a) of this 

Agreement. 

"Uniform Commercial Code" shall mean the Uniform Commercial Code as in 

effect in any applicable jurisdiction, as amended from time to time. 

ARTICLE II 


Reimbursement 


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Section 2.1 Reimbursement. Debtor agrees to pay to Secured Party (i) on the 

Distribution Date following any payment by Secured Party with respect to the Guaranteed 

Obligations, the amount of such payment (provided, that any such payment by Secured Party 

occurring after the Determination Date immediately preceding such Distribution Date shall be 

payable on the second Distribution Date following such payment); and (ii) interest on any 

portion of such amount remaining unpaid by Debtor under clause (i) of this Section 2.1 for each 

day unpaid, from the date the. payment with respect to the Guaranteed Obligations is made by 

Secured Party until such payment is reimbursed in full (after as well as before judgment), 

payable in accordance with Section 5.1 of the Custodial and Paying Agency Agreement, at a rate 

per annum equal to 4.250%. All payments by Debtor to Secured Party hereunder shall be made 

free and clear of set-off or counterclaim in lawful currency of the United States and in 

immediately available funds. 

Section 2.2 Obligations Absolute. The obligations of Debtor under this 

Agreement shall be absolute, unconditional and irrevocable, and shall be discharged strictly in 

accordance with the terms set forth herein, under all circumstances whatsoever, including, 

without limitation, the following circumstances: 

(a) any Jack of validity or enforceability of this Agreement, the Purchase 

Money Note, the Purchase Money Note Guaranty, or any other agreement or instrument relating 

thereto; 

(b) any amendment or waiver of or any consent to departure from all or anY of 

the provisions of this Agreement, the Purchase Money Note or the Purchase Money Note 

Guaranty; 

(c) the existence of any claim, setoff, defense or other right which Debtor may 

have at any time against Secured Party, Receiver or any other person or entity, whether in 

cormection with this Agreement, the Purchase Money Note, or any unrelated transaction; 

(d) payment by Secured Party under the Purchase Money Note Guaranty 

against demand of Receiver that does not comply with the terms of the Purchase Money Note 

Guaranty; and 

(e) any other act or omission to act or delay of any kind by Secured Party or 

any other Person or any other event or circumstance whatsoever that might, but for the 

provisions of this Section, constitute a legal or equitable discharge of or defense to the Debtor's 

obligations hereunder. 

ARTICLE III 


Security Interest 


Section 3.1 Granting of Security Interest. To secure Debtor's payment and 

performance of Debtor's obligations under this Agreement, as such may be amended from time 

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to time, which obligations are expressly intended to include any and all obligations that may be 

created or modified in connection with the amendment of this Agreement, the Purchase Money 

Note Guaranty or any Ancillary Document (the "Secured Obligations"), Debtor hereby 

transfers, assigns, sets over, conveys and grants to Secured Party, subject to the terms of this 

Agreement and the Purchase Money Note (and any substitute purchase money notes that may be 

issued), a continuing security interest in, lien on and right of setoff against all of its right, title 

and interest in and to the following property, regardless ofwhether such property is in the future 

subdivided into one or more groups to separately secure the Debtor's obligations hereunder (the 

"Collateral"): 

(a) the Loans, including all future advances made with respect thereto; 

(b) the Loan Documents; 

(c) all amounts payable to Debtor under the Loan Documents and all 

obligations owed to Debtor in connection with the Loans and the Loan Documents; 

(d) all Loan Collateral; 

(e) all claims, suits, causes of action and any other right of Debtor, whether 

known or unknown, against a Borrower, any Guarantor or other obligor or any oftheir respective 

Affiliates, agents, representatives, contractors, advisors or any other Person arising under or in 

connection with the Loans or the Loan Documents or that is in any way based on or related to 

any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims 

and all other claims at law or in equity arising under or in connection with the Loan Documents 

or the transactions related thereto or contemplated thereby; 

(f) all cash, securities and other property received or applied by or for the 

account of Debtor under the Loans, including all distributions received through redemption, 

consummation of a plan ofreorganization, restructuring, liquidation or otherwise of a Borrower, 

Guarantor or other obligor under or with respect to the Loans, and any securities, interest, 

dividends or other property that may be distributed or collected with respect to any of the 

foregoing; 

(g) the Debtor Accounts and any other accounts established by Debtor 

pursuant to the Custodial and Paying Agency Agreement, and all amounts on deposit therein; 

(h) all Ownership Entities; 

(i) all ofDebtor's right, title and interest in and to all insurance policies; 

G) all ofDebtor's General Intangibles (as defined in the NY UCC); and 

(k) any and all distributions on, or proceeds or products of or with respect to, 

any ofthe foregoing, and the rights to receive such proceeds thereof. 

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This grant of a security interest in the Collateral is expressly intended to remain in full force and 

effect from the date hereof until the Secured Obligations, as such may be modified in connection 

with the amendment of this Agreement, the Purchase Money Note Guaranty or any Ancillary 

Document, have been satisfied in full. 

All of the Notes and other Custodial Documents shall be held by the Custodian as set forth in 

Section 7.4 (except and to the extent the same are permitted to be removed from the Custodian's 

possession as provided in the Custodial and Paying Agency Agreement). The Secured Party 

shall retain possession of the Notes and other Custodial Documents with respect to the Loans 

until such time as Debtor retains the Custodian pursuant to the provisions of Section 7.4 and, at 

such time, shall cause the Custodian to take possession of the Notes and other Custodial 

Documents with respect to the Loans on behalf of Secured Party. Debtor shall deliver to Secured 

Party, (i) for each Loan, an allonge, endorsed in blank, and executed by Debtor, and (ii) for each 

Loan that is not registered on the MERS® System, a Mortgage Assignment, in blank, and 

executed by Debtor. Such allonges and Mortgage Assignments shall be held by the Custodian 

with the Notes and other Custodial Documents. Reasonable and customary expenses paid to 

third parties actually incurred by the Debtor in preparing and delivering such allonges and 

Mortgage Assignments shall constitute Pre-Approved Charges for purposes of the Custodial and 

Paying Agency Agreement, provided that any such expenses with respect to an allonge or a 

Mortgage Assignment that is not properly prepared and delivered to the Custodian within six 

months of the Closing Date shall not constitute Pre-Approved Charges for purposes of the 

Custodial and Paying Agency Agreement. Secured Party may use the allonge to effect the 

endorsement of a Note or the Mortgage Assignment to effect the assignment of a mortgage to 

Secured Party at any time if an Event of Default occurs and is continuing. Debtor shall also 

execute and deliver to Secured Party, and cause the Servicer to execute and deliver to Secured 

Party, the Electronic Tracking Agreement. Debtor shall be designated as the "investor" with 

respect to the Loans on the MERS® System, the Servicer shall be designated as the "servicer" 

with respect to the Loans on the MERS® System, and Secured Party shall be designated as the 

"interim funder" with respect to the Loans on the MERS® System. No other Person shall be 

identified on the MERS® System as having any interest in any· of the Loans. Debtor shall 

provide Secured Party with such reports from the MERS® System as Secured Party, from time 

to time, may request, including to allow Secured Party 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. Without limiting the 

foregoing, upon the request of Secured Party, Debtor 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 Secured Party and, if 

requested by Secured Party, 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 its 

instructions. 

Section 3.2 Retention of Certain Rights. So long as Secured Party has not 

exercised remedies with respect to the Collateral under this Agreement (upon the occurrence and 

continuance of an Event of Default), Debtor reserves all rights with respect to the Collateral, 

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including all rights to use, apply, modify, dispose of or otherwise deal with such Collateral 

(except as limited by the LLC Operating Agreement, the Contribution Agreement and the 

Servicing Agreement and the Custodial and Paying Agency Agreement). 

Section 3.3 Loan Defaults; Acquisition ofCollateral. 

(a) Discretion of Debtor in Responding to Defaults of Borrower. Upon the 

occurrence of an event of default under any of the Loan Documents, but subject to the other 

terms and conditions of this Agreement, Debtor shall cause to be determined the response to such 

default and course of action with respect to such default, including (i) the selection of attorneys 

to be used in connection with any action, whether judicial or otherwise, to protect the respective 

interests of Debtor and Secured Party in the Loan and the Collateral, (ii) the declaration and 

recording of a notice of such default and the acceleration of the maturity of the Loan, (iii) the 

institution of proceedings to foreclose the Loan Documents securing the Loan pursuant to the 

power of sale contained therein or through a judicial action, (iv) the institution of proceedings 

against any Guarantor, (v) the acceptance of a deed in lieu offoreclosure, (vi) the purchase ofthe 

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

property Collateral at a Uniform Commercial Code sale, and (vii) the institution or continuation 

ofproceedings to obtain a deficiency judgment against such Borrower or any Guarantor. 

(b) Acquisition of Collateral. Nothing in this Section 3.3 or anything else in 

this Agreement shall be deemed to affirmatively require Debtor to cause to be acquired all or any 

portion of any Collateral with respect to which there exists any Enviromnental Hazard. Prior to 

acquisition of title to any Collateral (whether by foreclosure, deed in lieu of foreclosure, by 

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

cause to be commissioned with respect to such Collateral either (i) a Transaction Screen Process 

consistent with ASTM Standard E 1528-06, by an enviromnental professional or (ii) such other 

site inspections and assessments by a Person who regularly conducts enviromnental audits using 

customary industry standards as would customarily be undertaken or obtained by a prudent 

lender in order to ascertain whether there are any actual or threatened Enviromnental Hazards (a 

"Site Assessment"), and the cost of such Site Assessment shall be reimbursable as if it were a 

Servicing Expense as long as the costs for such Site Assessment were not paid to any Affiliate of 

Debtor, or any Affiliate of any Servicer or subservicer. Iftitle to any Collateral with respect to 

which there exists any Enviromnental Hazard is to be acquired by foreclosure, by deed in lieu of 

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

title to such Collateral shall be taken and held in the name of a limited liability company or such 

other entity that is a Single Purpose Entity as Debtor may choose (the "Ownership Entity"), 

whether already in existence or formed . by Debtor for such purpose, provided that each 

Ownership Entity may only hold title to a single property constituting Collateral with respect to 

which there exists any Enviromnental Hazard. ·Debtor or its wholly-owned subsidiary or 

Affiliate shall be the sole managing member of any Ownership Entity. No certificates shall be 

issued evidencing any membership interests in any Ownership Entity. The purposes of the 

Ownership Entity shall be to hold the Acquired Collateral pending sale, to complete construction 

of such Collateral and to operate the Collateral as efficiently as possible in order to minimize 

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financial loss to Debtor and Secured Party and to sell the Acquired Collateral as promptly as 

practicable in a way designed to minimize financial loss to Debtor and Secured Party. 

(c) REO Property. If title to any REO Property is to be acquired by Debtor by 

foreclosure, by deed in lieu of foreclosure, by power of sale or by sale pursuant to the Uniform 

Commercial Code, or otherwise, title to such REO Property shall be taken and held in the name 

of an Ownership Entity, whether already in existence or formed by Debtor for such purpose. 

Debtor or its wholly-owned subsidiary or Affiliate shall be the sole managing member of any 

Ownership Entity. No certificates shall be issued evidencing any membership interests in any 

Ownership Entity. The purposes of the Ownership Entity shall be to hold the REO Property 

pending sale, to complete construction of such REO Property and to operate the REO Property as 

efficiently as possible in order to minimize financial loss to Debtor and Secured Party and to sell 

the REO Property as promptly as practicable in a way designed to minimize financial loss to 

Debtor and Secured Party. Notwithstanding anything to the contrary contained herein, the 

Ownership Entity shall be a pass-through entity with no entity-level income tax obligations. 

Section 3.4 Continuing Security Interest. This Agreement shall create a 

continuing security interest in any and all of the Collateral, and shall remain in full force and 

effect until the termination of the Purchase Money Note Guaranty in accordance with its terms 

and the satisfaction and discharge of all Secured Obligations in full. It is the intent ofDebtor and 

Secured Party to create a continuing, perfected first priority security interest in the Collateral. 

The release of the security interest in any or all of the Collateral, the taking or acceptance of 

additional security, or the resort by Secured Party to any security it may have in any order it may 

deem appropriate, shall not affect the liability of any person or entity on the Secured Obligations 

secured hereby or the security interest and Lien granted hereby. 

Section 3.5 Destruction of Collateral. No injury to, or loss or destruction of, 

the Collateral or any part thereof shall relieve Debtor of any of its obligations hereunder or any 

ofthe Secured Obligations. 

Section 3.6 Releases of Loan Collateral. Debtor is authorized to cause the 

release or assignment of any Lien granted to or held by Debtor on any Loan Collateral, solely to 

the extent necessary, (a) upon a final, nonappealable order of a court of competent jurisdiction 

permitting or directing disposition thereof, (b) upon payment of any Loan in full and satisfaction 

in full of all of the secured obligations with respect to a Loan or upon receipt of a discounted 

payoff as payment in full of a Loan, (c) as is necessary in connection with the foreclosure on a 

Mortgaged Property, acceptance of a deed in lieu thereof or modification or restructuring of the 

terms thereof, or (d) in connection with Debtor's sale of a Loan or any Loan Collateral, provided, 

that the proceeds of such sale or disposition are applied in accordance with the priority of 

payments set forth in Section 5.1 of the Custodial and Paying Agency Agreement and the other 

terms thereof. 

Section 3.7 Financing Statements. Debtor hereby irrevocable authorizes, and 

ratifies and retroactively authorizes any filing made on or prior to the date hereof, the filing, at 

any time and from time to time, of any financing statements or continuation statements, and 

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amendments to such financing statements or any similar document in such jurisdictions and with 

such filing offices as Secured Party may determine are necessary or advisable to perfect the 

security interest granted to it hereunder. Such financing statements shall describe the Collateral 

in substantially the same manner as described herein or in any other manner as Secured Party 

may determine is necessary, advisable or prudent to ensure the perfection of the security interest 

in the Collateral granted to Secured Party herein pursuant to the terms hereof. 

Section 3.8 Power of Attorney. Debtor hereby irrevocably appoints Secured 

Party its lawful attorney-in-fact, with full authority in the place and stead of Debtor and in the 

name ofDebtor, Secured Party or otherwise, and with full power of substitution in the premises 

(which power of attorney, being coupled with an interest, is irrevocable for so long as this 

Agreement shall be in effect), from time to time in Secured Party's discretion, following a failure 

by Debtor to promptly satisf'y its obligations under Section 3.1 or Section 3.2 ·Of the Contribution 

Agreement as it relates to the transfer and/or recording of any of the Transfer Documents or any 

other relevant matter set forth therein, to execute all relevant Transfer Documents and other 

documents as may be reasonably necessary to satisfY the transfer and recording obligations of 

Debtor under Section 3.1 and Section 3.2 ofthe Contribution Agreement. 

ARTICLE IV 


Events Of Default 


Section 4.1 Events of Default. Any one of the following events (whatever the 

reason for such Event of Default and whether it shall be voluntary or involuntary or be effected 

by operation of law or pursuant to anyjudgment, decree or order of any court or any order, rule 

or regulation of any administrative or governmental body) shall constitute an "Event ofDefault" 

hereunder: 

(a) any amount payable under Section 2.1 of this Agreement (including 

interest accrued through and including the Determination Date immediately preceding the 

Distribution Date on which such amount becomes payable) or under Section 7.15 of this 

Agreement (including interest accrued through and including the Determination Date 

immediately preceding the Distribution Date on which such amount becomes payable) is not 

paid in full for any three (3) Distribution Dates occurring in a twelve (12) month period; or 

(b) any failure of Debtor to pay in full on any three (3) Distribution Dates 

occurring in a twelve (12) month period the interest accrued on the Purchase Money Note 

through and including the Determination Date immediately preceding each such Distribution 

Date; or 

(c) the occurrence of any Insolvency Event (without any cure period other 

than as may be provided for in the definition ofInsolvency Event) with respect to (i) Debtor, (ii) 

the Managing Member or (iii) the Servicer; or 

(d) any failure ofManaging Member to cause to be made any payment of any 

Working Capital Advance (as defined in the LLC Operating Agreement) or any Servicing 

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Expense pursuant to Section S.l(b) and Section 12.7, respectively, of the LLC Operating 

Agreement, which failure .continues imremedied for a period of sixty ( 60) days after the date on 

which written notice of such failure requiring the same to be remedied shall have been given to 

Debtor; or 

(e) the failure of Debtor or the Managing Member to comply in any material 

respect with and enforce the provisions of the LLC Operating Agreement, which continues 

unremedied for a period of sixty (60) days after the date on which written notice of such failure 

requiring the same to be remedied shall have been given to Debtor; or 

(f) the occurrence of either (i) a failure by the Servicer to perform in any 

material respect its obligations under the Servicing Agreement, which continues unremedied for 

a period of sixty (60) days after the date on which written notice of such failure requiring the 

same to be remedied shall have been given by Debtor to the Servicer or by Secured Party to 

Debtor, or (ii) a failure by Debtor to replace the Servicer upon the occurrence of either an Event 

of Default under this Agreement as a result of the Servicer' s acts or omissions or a material 

breach of or event of default under the Servicing Agreement by the Servicer, in either case which 

continues unremedied for a period of sixty ( 60) days after the date on which written notice of 

such failure requiring the same to be remedied shall have been given to Debtor; or 

(g) the failure ofDebtor to comply in any material respect with its obligations 

under the Servicing Agreement or the Custodial and Paying Agency Agreement (including any 

failure to pay fees or expenses due thereunder by Debtor) which, in either case, remains 

unremedied for a period of sixty (60) days after the date on which written notice of such failure 

requiring the same to be remedied shall have been given to Debtor; or 

(h) there shall be a change in the Managing Member or there shall occur a 

Change of Control with respect to the Managing Member without the consent of Secured Party; 

or 

(i) the failure of the Managing Member to remit or cause to be remitted all 

Loan Proceeds to the Paying Agent as and when required; or 

G) any material breach of a representation or warranty made by Debtor in this 

Agreement, which remains unremedied for a period of sixty (60) days after the date on which 

written notice of such breach requiring the same to be remedied shall have been given to Debtor; 

or 

(k) any payment by Secured Party ofthe Loan Parity Obligation; or 

(1) any other failure (other than those specified in any of Sections 4.l(a) 

through 4.0l(k)) on the part of Debtor duly to observe or perform in any material respect any 

other covenants or agreements on the part ofDebtor contained in this Agreement (including any 

obligations imposed upon any Servicer or subservicer), which continues unremedied for a period 

of sixty ( 60) days after the date on which written notice of such failure requiring the same to be 

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remedied shall have been given to Debtor; provided, however, that in the case of a failure that 

cannot be cured within sixty (60) days, the cure period shall be extended for an additional sixty 

(60) days if Debtor can demonstrate to the reasonable satisfaction of Secured Party that Debtor is 

diligently pursuing remedial action. 

ARTICLE V 

Remedies 

Section 5.1 Remedies. 

(a) If an Event of Default shall have occurred and be continuing, Secured 

Party may do one or more ofthe following: 

(i) cause the Holder (as defined in the Purchase Money Note) to 

declare the Purchase Money Note to be immediately due and payable, by a notice in 

writing to Debtor, and upon any such declaration the unpaid principal amount of the 

Purchase Money Note, together with accrued and unpaid interest thereon through the date 

of acceleration, shall become immediately due and payable; provided, however, that with 

respect to an Event ofDefault under Section 4.1 ( c )(i), the unpaid principal amount of and 

accrued interest on the Purchase Money Note shall automatically become immediately 

due and payable; 

(ii) institute Proceedings for the collection of all amounts then payable 

by Debtor under this Agreement, whether by declaration or otherwise, and all amounts 

payable under the Servicing Agreement, enforce any judgment obtained, and collect from 

Debtor moneys adjudged due; 

(iii) institute Proceedings from time to time for the complete or partial 

foreclosure ofthis Agreement with respect to the Collateral; 

(iv) exercise any remedies of a secured party under the NY UCC and 

take any other appropriate action to protect and enforce the rights and remedies of 

Secured Party; 

(v) sell the Collateral or any portion thereof or rights or interest 

therein; 

(vi) upon notice in writing to Debtor (effective at such time as is 

specified in such notice), act on behalf of Debtor to terminate the Servicer (and any 

subservicers) and cause Debtor to enter into a new Servicing Agreement with a servicer 

(a "Successor Servicer") selected by Secured Party (in its sole and absolute discretion); 

(vii) upon notice in writing to Debtor (effective at such time as is 

specified in such notice), cause Debtor to terminate the existing Managing Member and 

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appoint a new Managing Member selected by Secured Party (in its sole and absolute 

discretion); and 

(viii) institute Proceedings from time to time for the complete or partial 

foreclosure of any equity interests in Debtor that have been pledged to Secured Party 

pursuant to the LLC Operating Agreement to secure Debtor's obligations hereunder, 

(b) Appointment of Successor Servicer. If Secured Party exercises its right to 

act on behalf of Debtor to appoint a Successor Servicer, the costs and expenses associated with 

such Successor Servicer (including any servicing fees) shall be borne by Debtor (and not Secured 

Party), and no termination or other fee shall be due to Debtor or the Servicer or any subservicer 

in connection with or as a result of any such action. All authority and power of Debtor to act 

with respect to the terminated Servicer shall pass to and be vested in Secured Party under this 

Section 5 and, without limitation, Secured Party is hereby authorized and empowered, as 

attorney-in-fact or otherwise, to execute and deliver, on behalf of and at the expense of Debtor, 

any and all documents and other instruments and to do or take any and all acts necessary or 

appropriate to effect the termination of the Servicer and the replacement of the Servicer with a 

Successor Servicer. 

(c) Cooperation To Facilitate Transfer. In any event, if a Servicer or 

subservicer is terminated pursuant to the provisions of this Section 5, Debtor shall, and shall 

cause any Servicer (and any subservicer) to, provide Secured Party and any successor Servicer in 

a timely manner with all documents, records and data (including electronic documents, records 

and data) requested by Secured Party or any successor Servicer to enable it and any successor 

Servicer to assume the responsibilities as servicer, and to cooperate with Secured Party in 

effecting the termination of any Servicer (or subservicer), including (i) the transfer within one (1) 

Business Day of all cash amounts which, at the time, shall be or should have been credited to the 

Collection Account (as defined in the Servicing Agreement) or are thereafter received with 

respect to any Loans or Acquired Collateral, and (ii) the transfer of all lockbox accounts with 

respect to which payments or other amounts with respect to the Loans are directed or the 

redirection of all such payments and other amounts to such account as Secured Party may 

specify, and (iii) the assignment to Secured Party ofthe right to access all such lockbox accounts, 

the Debtor Accounts and any other account into which Loan Proceeds or Borrower escrow 

payments are deposited or held; provided, that the documents, records and data delivered by the 

Servicer (and any subservicer) to Secured Party and any successor Servicer pursuant to this 

Section 5.l(c) shall be limited to those documents in such Servicer's possession at the time of 

such transfer or which the Servicer acquires thereafter and shall not include or be deemed to 

include any documents, records or data in the possession ofthe Custodian. Debtor shall be liable 

for all costs and expenses incurred by Secured Party (A) associated with the complete transfer of 

the servicing data, (B) associated with the completion, correction or manipulation of servicing 

data as may be required to correct errors or insufficiencies in the servicing data to enable Secured 

Party and any successor Servicer (and subservicers) to service the Loans and Acquired Collateral 

properly and effectively, and (C) to retain and maintain the services of a Successor Servicer (and 

any subservicers ). Within a reasonable time after receipt of a written request of Debtor for the 

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same, Secured Party shall provide reasonable documentation evidencing such costs and 

expenses. 

Section 5.2 Application of Proceeds. If Secured Party collects any money or 

property pursuant to Section 5.1 of this Agreement, it shall pay out the money in the order set 

forth in Section 5.1 (b) ofthe Custodial and Paying Agency Agreement, notwithstanding anything 

in the Purchase Money Note, the Purchase Money Note Guaranty, the Servicing Agreement or 

the Contribution Agreement to the contrary. 

Section 5.3 Sale ofCollateral. 

(a) The power to effect any sale or other disposition (a "Sale") of any portion 

of the Collateral shall not be exhausted by any one or more Sales as to any portion of the 

Collateral remaining unsold, but shall continue unimpaired until the entire Collateral shall have 

been sold or all Secured Obligations shall have been paid. Secured Party may from time to time 

postpone any public Sale by public armouncement made at the time and place of such Sale. 

Secured Party hereby expressly waives its right to any amount fixed by law as compensation for 

any Sale. 

(b) In connection with a Sale of all or any portion of the Collateral: 

(i) Secured Party may bid for and purchase the property offered for 

sale, and upon compliance with the terms of sale may hold, retain and possess and 

dispose of such property, without further accountability; 

(ii) Secured Party may bid for and acquire the property offered for 

Sale in connection with any Sale thereof, and, subject to any requirements of, and to the 

extent permitted by, applicable Law in connection therewith, may purchase all or any 

portion of the Collateral in a private sale, and, in lieu of paying cash therefor, may make 

settlement for the purchase price by crediting the gross Sale price against the sum of (A) 

the amount which would be distributable to Secured Party as a result of such Sale in 

accordance with Section 5.2 on the Distribution Date next succeeding the date of such 

Sale and (B) the expenses of the Sale and of any Proceedings in connection therewith 

which are reimbursable to it; 

(iii) Secured Party shall execute and deliver an appropriate instrument 

of conveyance prepared by the Servicer transferring its interest in any portion of the 

Collateral in connection with a Sale thereof; 

(iv) Secured Party is, pursuant to Section 11.1 of this Agreement, 

appointed the agent and attorney-in-fact of Debtor to transfer and convey its interest in 

any portion of the Collateral in connection with a Sale thereof, and to take all action 

necessary to effect such Sale; and 

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(v) no purchaser or transferee at such a Sale shall be bound to 

ascertain Secured Party's authority, inquire into the satisfaction of any conditions 

precedent or see to the application of any moneys. 

Section 5.4 No Impairment of Action. Secured Party's right to seek and 

recover judgment under this Agreement shall not be affected by the seeking, obtaining or 

application of any other relief under or with respect to this Agreement. Neither the Lien of this 

Agreement nor any rights or remedies of Secured Party shall be impaired by the recovery of any 

judgment by Secured Party against Debtor or by the levy of any execution under such judgment 

upon any portion of the Collateral or upon any of the assets of Debtor. Any money or property 

collected by Secured Party shall be applied in accordance with Section 5.2. 

Section 5.5 Remedies Cumulative; Waiver. Secured Party's rights under this 

Agreement shall be in addition to, and not in limitation or exclusion of, any other rights and 

remedies that it may have (whether by operation oflaw, in equity, under contract or otherwise) 

and without prejudice and in addition to any right of setoff, recoupment, combination of 

accounts, Lien or other right to which it is at any time entitled. Secured Party may enforce any 

of its remedies under this Agreement successively or concurrently in its sole discretion. No 

delay or failure on the part of Secured Party to exercise any right or remedy to which it may 

become entitled hereunder upon a Event of Default shall constitute abandonment or waiver of 

any such right and Secured Party shall be entitled to exercise such right or remedy at any time 

during the continua.Ii.ce of aEvent ofDefault. 

Section 5.6 Waiver of Certain Rights and Remedies. To the extent permitted 

under applicable Law, Debtor hereby waives all rights and remedies of a debtor or grantor under 

the NY DCC or other applicable Law, and all formalities prescribed by law relative to the sale or 

disposition of the Collateral (other than notice of sale and any other formalities expressly 

provided in this Agreement), after the occurrence. and during the continuation of an Event of 

Default and, except as otherwise set forth herein, all other rights and remedies of Debtor with 

respect thereto. 

ARTICLE VI 


Representations And Warranties 


Section 6.1 Representations and Warranties. Debtor hereby represents and 

warrants to Secured Party as of the date hereof and at all times while the Secured Obligations 

remain unsatisfied and undischarged in full, that: 

(a) This Agreement is a legal, valid and binding obligation of Debtor, 

enforceable against Debtor in accordance with its terms, except as may be limited by applicable 

bankruptcy, insolvency, reorganization, moratorium or other similar laws; · 

(b) There is no pending or, to the knowledge ofDebtor, threatened action, suit 

or proceeding affecting Debtor before any court or other Governmental Authority or any 

arbitrator that may adversely affect the grant by Debtor, or the perfection, ofthe security interest 

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purported to be created hereby in the Collateral, or the exercise by Secured Party of any of its 

rights or remedies hereunder; 

(c) Debtor is and will be at all times the sole and exclusive owners of, or 

otherwise have and will have rights in, the Collateral free and clear of any Lien. No effective 

fmancing statement or other instrument similar in effect covering all or any part ofthe Collateral 

· is on file in any recording or filing office; 

(d) The transactions provided for herein (i) have been duly authorized by all 

requisite limited liability company action, and (ii) do not and will not (A) violate (1) any 

applicable provision of any Law or of the certificate of formation or operating agreement of 

Debtor, (2) any order of any Governmental Authority or arbitrator or (3) any material provision 

of any indenture or any agreement or other instrument to which Debtor is a party or by which it 

or the Collateral is or may be bound, (B) be in conflict with, result in a breach of or constitute 

(alone or with notice or lapse of time or both) a default under any such indenture or agreement or 

other instrument, (C) result in the creation or imposition of any security interest in or Lien upon 

the Collateral (other than security interest and Lien created thereon under this Agreement) or (D) 

require the consent of any party for the granting ofthe security interest created hereby; 

(e) No authorization or approval or other action by, and no notice to or filing 

with, any Governmental Authority or other regulatory body, or any other Person, is required on 

the date hereof for (i) the due execution, delivery and performance by Debtor ofthis Agreement, 

(ii) the grant by Debtor ofthe security interest purported to be created hereby in the Collateral or 

(iii) the exercise by Secured Party of any ofits rights and remedies hereunder. No authorization 

or approval or other action by, and no notice to or filing with, any Governmental Authority or 

other regulatory body, or any other Person, is required for the perfection of the security interest 

purported to be created hereby in the Collateral, except for (A) the filing of a UCC-1 financing 

statement properly describing the Collateral and identifying Debtor and Secured Party in the 

applicable jurisdiction required pursuant to the Uniform Commercial Code, (B) execution and 

delivery by the Custodian of a Custodial and Paying Agency Agreement containing an 

acknowledgment by the Custodian that it holds possession of the Custodial Documents for the 

Secured Party's benefit, and (C)- the taking of any action required to maintain continuing 

perfection with respect to proceeds which cannot be perfected by the filing of financing 

statements under the Uniform Commercial Code (subclauses (A), (B) and (C), each a 

"Perfection Requirement" and collectively, the "Perfection Requirements"); and 

(f) This Agreement creates a legal, valid and enforceable security interest in 

favor of Secured Party in the Collateral, as security for the Secured Obligations. The compliance 

with the Perfection Requirements will result in the perfection of such security interests. After 

compliance with the Perfection Requirements, such security interests, including in the case of 

Collateral in which Debtor obtains rights after the date hereof, will be perfected, first priority 

security interests. Such Perfection Requirements and all other action necessary or desirable to 

perfect and protect such security interest have been duly made or taken, except for the other 

filings and recordations and actions described in Section 6.l(e) above. 

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ARTICLE VII 


COVENANTS 


Section 7.1 Debtor Accounts. Debtor shall establish and maintain with the 

Paying Agent the Debtor Accounts (excluding the Escrow Accounts which shall be established 

and maintained by the Servicer). 

Section 7.2 Debtor Status; Licensing. Debtor shall, at all times, constitute a 

limited liability company organized under the laws of the State of Delaware and a Single 

Purpose Entity. As soon as reasonably practical after the Effective Date Debtor shall apply for 

and, thereafter, use its reasonable best efforts to obtain, as quickly as possible, and maintain all 

such licenses as are required to conduct its business, including qualifications to conduct business 

in jurisdictions other than Delaware and licenses to purchase, own or service the Loans, if the 

failure to so obtain such licenses would reasonably be expected to result in the imposition of 

fines, penalties or other liabilities on Debtor, claims and defenses being asserted against Debtor 

(including counterclaims and defense asserted by Borrowers), or materially adversely affect 

Debtor or Debtor's ability to foreclose on the Collateral securing or otherwise realize the ·full 

value of any Loan or Acquired Collateral. 

Section 7.3 LLC Operating Agreement. Debtor (a) shall at all times have in 

effect and be subject to the LLC Operating Agreement, (b) except as is otherwise expressly 

permitted therein, shall amend the LLC Operating Agreement only with the prior written 

approval of Secured Party, and (c) shall not enter into or allow itself to become subject to any 

other constituent documents inconsistent with any terms ofthe LLC Operating Agreement. 

Section 7.4 Custodian. Debtor shall retain Custodian and shall enter into and 

at all times be a party to a Custodial and Paying Agency Agreement with Custodian. Custodian 

shall at all times have custody and possession of the Notes and other Custodial Documents. At 

no time shall Debtor have more than one Custodian. The fees and expenses paid to the 

Custodian shall be no more than market rates and the Custodian shall be terminable by Secured 

Party upon no more than thirty (30) days notice without cause thereunder. In the event that 

Debtor (or any Servicer or subservicer) removes any Notes or other Custodial Documents from 

the possession of the Custodian (which shall be done only in accordance with the Custodial and 

Paying Agency Agreement), (a) any loss or destruction of or damage to such Notes or Custodial 

Documents shall be the liability of Debtor (who, along with the Servicer and any subservicer 

shall be responsible for safeguarding such Notes and Custodial Documents), and (b) such Notes 

shall be returned to the Custodian within the time provided under the Uniform Commercial Code 

to maintain Secured Party's perfection thereof by possession. If any Notes or other Custodial 

Documents are removed in connection with the modification or restructuring of a Loan, the 

modified or restructured Notes and other Custodial Documents removed in connection therewith 

shall be returned to the Custodian as soon as possible following the completion of the 

restructuring or modification (and, in any event, in accordance with clause (b) ofthe immediately 

preceding sentence). Debtor shall ensure that Secured Party receives a copy of each demand, 

notice or other communication given under the Custodial and Paying Agency Agreement at the 

time that such notice or other communication is given thereunder. 

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Section 7.5 Compliance with Law. Debtor shall, at all times, comply with 

applicable Law in connection with the performance ofits obligations under this Agreement. 

Section 7.6 Servicer. Debtor shall at all times cause the Servicing Obligations 

to be performed by a Servicer or a subservicer, each ofwhich shall be a Qualified Servicer. 

Section 7.7 MERS® Member. Debtor shall become a member ofMERS® on 

or before the initial Servicing Transfer Date and, for so long as this Agreement is in effect, 

maintain itself as a MERS® member in good standing (including paying all dues and other fees 

required to maintain its membership and complying with MERS® policies and procedures). 

Debtor shall give prompt written notice to Secured Party of any disciplinary action instituted 

with respect to its failure to pay any fees required in connection with its use of the MERS® 

System or otherwise comply with any MERS® policies or procedures. 

Section 7.8 Certain Restrictions. Debtor shall not: 

(a) at any time, without limiting its obligation to constitute a Single Purpose 

Entity, incur any Debt (other than the Debt evidenced by the Purchase Money Note and 

permitted advances by the Private Owner (as defined in the LLC Operating Agreement) under 

the LLC Operating Agreement); 

(b) dissolve or liquidate at any time prior to such time as Debtor makes the 

Final Distribution and this Agreement is terminated; 

(c) (i) file a voluntary petition for bankruptcy, (ii) file a petition or answer 

seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or 

similar relief under any Law, (iii) make an assignment for the benefit of creditors, (iv) seek, 

. consent or acquiesce 	in the appointment of a trustee, receiver or liquidator or of all or any 

substantial part of its properties, (v) file an answer or other pleading admitting or failing to 

contest the material allegations of (A) a petition filed against it in any proceeding described in 

clause (i) through (iv), or (B) any order adjudging it a bankrupt or insolvent or for relief against 

it in any bankruptcy or insolvency proceeding, or (vi) allow itself to become unable to pay its 

obligations as they become due or allow the sum of its debts to be greater than all ofits property, 

at a fair valuation; or 

(d) place or permit (voluntarily or involuntarily) any Lien to be placed on any 

of the Collateral (other than the security interest granted to Secured Party hereunder), and shall 

not take any action to interfere with Secured Party's rights as a secured party with respect to the 

Collateral. 

Section 7.9 Change in Jurisdiction, Name, Location or Identitv. Debtor agrees 

to notify Secured Party promptly in writing of any change (a) in the jurisdiction in which it is 

organized, (b) in its company name, (c) in the location of its principal place ofbusiness, or (d) in 

its federal taxpayer identification number. Debtor agrees not to effect or permit any change 

referred to in the preceding sentence unless all filings have been made under the Uniform 

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Commercial Code or otherwise that are required in order for Secured Party to continue following 

such change to have a valid, legal and perfected first priority security interest in the Collateral to 

the extent a security interest therein may be perfected by filing pursuant to the Uniform 

Commercial Code. 

Section 7.10 Pavment of Principal and Interest on Purchase Money Note; 

Reimbursement of Secured Party. Debtor will duly and punctually pay, or cause the 

Paying Agent to pay, the principal of and interest on the Purchase Money Note in accordance 

with the terms of the Purchase Money Note, this Agreement, the Servicing Agreement and the 

Custodial and Paying Agency Agreement and from moneys on deposit in the Distribution 

Account. On each Distribution Date, Debtor will direct the Paying Agent to distribute amounts 

on deposit in the Distribution Account to Secured Party in payment of any amounts owed by 

Debtor to Secured Party under this Agreement, subject to the priority of payments set forth· in 

Section 5.1 ofthe Custodial and Paying Agency Agreement and the other terms thereof. 

Section 7.11 Protection ofCollateral; Further Assurances. From time to time, at 

its cost and expense, Debtor promptly shall execute and deliver all further instruments and 

documents, and take all further action, that may be necessary, or that Secured Party may 

reasonably request, in order to perfect, to ensure the continued perfection of, and to protect the 

assigmnent and security interest granted or intended to be granted hereby or to enable Secured 

Party to exercise and enforce its rights and remedies hereunder with respect to any Collateral. 

Section 7.12 Books and Records; Reports; Certifications; Audits. 

(a) Maintenance of Books and Records. Debtor shall cause to be kept and 

maintained (including by the Servicer, any subservicer and any Ownership Entity and including 

records transferred by Receiver to Debtor in connection with its conveyance of the Loans to 

Debtor under the Contribution Agreement), at all times, at Debtor's principal place ofbusiness, a 

complete and accurate set of files, books and records regarding the Collateral, and Debtor's and 

Secured Party's interests in the Collateral, including records relating to the Debtor Accounts and 

the disbursement of all Loan Proceeds. This obligation to maintain a complete and accurate set 

of records shall encompass all files in Debtor's custody, possession or control pertaining to the 

Collateral, including all original and other documentation pertaining to the Collateral, all 

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

Debtor's (and Servicer's) internal memoranda pertaining to the Collateral. 

(b) Retention of Books and Records. Debtor shall cause all such books and 

records to be maintained and retained until the date that is the later of ten (1 0) years after the 

Effective Date or three (3) years after the date on which the Final Distribution is made. All such 

books and records shall be available during such period for inspection by Secured Party or its 

representatives (including any Governmental Authority) and agents at the principal office of 

Debtor at all reasonable times during business hours on any Business Day (or, in the case of any 

such inspection after the term hereof, at such other location as is provided by notice to Secured 

Party), in each instance upon 2 Business Days' prior notice to Debtor. Upon request by Secured 

Party, Debtor, at the sole cost and expense of Secured Party, shall promptly send copies (the 

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number of copies of which shall be reasonable) of such books and records to Secured Party. 

Debtor shall provide Secured Party with reasonable advance notice of Debtor's intention to 

destroy or dispose of any documents or files relating to the Loans and, upon the request of 

Secured Party, shall allow Secured Party, at its own expense, to recover the same from Debtor. 

(c) Monthly Reports. For each Due Period, Debtor shall cause to be furnished 

to Secured Party (i) the Monthly Report with respect to the relevant Due Period, and (ii) the 

related Distribution Date Report with respect to such Due Period, which report shall specify the 

amounts and recipients of all funds to be distributed by the Paying Agent on the relevant 

Distribution Date. Debtor shall cause the Monthly Report and related Distribution Date Report 

to be provided to Secured Party: (x) with respect to any Due Period prior to and including the 

Due Period in which the last Servicing Transfer Date occurs, on the date that is two (2) Business 

Days prior to the applicable Distribution Date, and (y) with respect to any Due Period 

commencing after the Due Period in which the last Servicing Transfer Date occurs, on or prior to 

the fifteenth (15th) day of the month immediately following the applicable Determination Date 

(or if the fifteenth (15th) day is not a Business Day, then the first Business Day thereafter). 

Following receipt by the Paying Agent of the Monthly Report and the Distribution Date Report 

with respect to a given Due Period, the Paying Agent shall prepare and deliver the Custodian and 

Paying Agent Report with respect to such Due Period in accordance with the terms of the 

Custodial and Paying Agency Agreement. Each ofthe Monthly Report and the Distribution Date 

Report shall be certified by the chief financial officer (or an equivalent officer) ofthe Managing 

Member. The Monthly Report shall also include a certification of the Managing Member that all 

withdrawals by the Managing Member from the Collection Account during such Due Period 

were made in accordance with the terms ofthe LLC Operating Agreement and the Custodial and 

Paying Agency Agreement. 

(d) Annual Compliance Certificates. Debtor shall, and shall cause the 

Servicer and any subservicer to deliver to Secured Party, on or before March 15 of each year, 

commencing in the year 2010, an officer's certificate stating, as to the signer thereof, that (i) a 

review of such party's activities during the preceding calendar year (or portion thereof) and of its 

performance under this Agreement (or the Servicing 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 the Servicing 

Agreement) in all material respects throughout such year or portion thereof or, ifthere has been a 

failure to fulfill any such obligation in any material respect, specifying each such failure and the 

nature and status thereof. In the event the Servicer or any subservicer was terminated, resigned 

or otherwise performed in such capacity for only part of a year, such party shall provide an 

officer's certificate pursuant to this Section 7.12(d) with respect to such portion ofthe year. 

(e) Annual Compliance Report. On or before March 15 of each year, 

commencing in the year 2010, Debtor shall cause the Servicer and any subservicer, at its own 

expense or the expense of the Managing Member, to provide a report prepared by a nationally 

recognized firm of independent certified public accountants to the effect that, with respect to the 

most recently ended fiscal year, such firm has examined certain records and documents relating 

to compliance with the servicing requirements in the Servicing Agreement and that, on the basis 

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of such examination conducted substantially in compliance with either the Uniform Single 

Attestation Program for Mortgage Bankers or an attestation report satisfying the requirements of 

Item 1122 of Regulation AB, such firm is of the opinion that Debtor or the Servicer's or any 

subservicer' s activities have been conducted in compliance with this Agreement and the 

Servicing Agreement, as applicable (including, to the extent applicable, Regulation AB), or that 

such examination has disclosed no material items of noncompliance except for (i) such 

exceptions as such firm believes to be immaterial, and (ii) such other exceptions as are set forth 

in the report. 

(f) Audits. Until the later ofthe date that is ten (10) years after the Effective 

Date and the date that is three (3) years after the Final Distribution, Debtor shall, and shall cause 

the Servicer and any subservicer to, (i) provide any representative of Secured Party (including 

any Government Authority), during normal business hours and on reasonable notice, with access 

to all of the books . of account, reports and records relating to the Collateral, the Servicing 

Obligations, the Debtor Accounts, or any other matters relating to this Agreement or the rights or 

obligations hereunder, (ii) permit such representatives to make copies of and extracts from the 

same, (iii) allow Secured Party to cause such books to be ..audited by accountants selected by 

Secured Party, and (iv) allow Secured Party's representatives to discuss Debtor's and the 

Servicer's or subservicer's affairs, finances and accounts, as they relate to the Loans, the 

Collateral, the Servicing Obligations, the Debtor Accounts, or any other matters relating to this 

Agreement or the rights or obligations hereunder, with its officers, directors, employees, 

accountants (and by this provision Debtor hereby authorizes such accountants to discuss such 

affairs, finances and accounts with such representatives), the Servicer, any subservicer, and 

attorneys. Any expense incurred by Secured Party and any reasonable out-of-pocket expense 

incurred by Debtor in connection with the exercise by Secured Party of its rights in this Section 

7.12(£) shall be borne by Secured Party; provided, however, that any expense incident to the 

exercise by Secured Party of its rights pursuant to this Section 7 .12(£) as a result of or during the 

continuance of an Event ofDefault shall in all cases be borne by the Managing Member. 

Section 7.13 Recovery of Expenses; Interest; Working Capital Advances. 

Debtor shall cause commercially reasonable efforts to be used to recover from Borrowers and 

Guarantors those Servicing Expenses and Reimbursable Advances which such Borrowers or 

Guarantors are obligated to pay. No SerVicing Expenses shall bear interest chargeable in any 

way to Secured Party. Debtor shall make Working Capital Advances (as defined in the LLC 

Operating Agreement) as required in Section 12.7 ofthe LLC Operating Agreement. 

Section 7.14 Debtor's Duty To Advise Secured Party; Delivery of Certain 

Notices. In addition to such other reports and access to records and reports as are 

required to be provided to Secured Party hereunder, Debtor shall cause to be delivered to 

Secured Party such information relating to the Collateral, Debtor and the Servicer and any 

subservicer as Secured Party may reasonably request from time to time and, in any case, shall 

ensure that Secured Party is promptly advised, in writing, of any matter of which Debtor, the 

Servicer or any subservicer becomes aware relating to the Loans, the Collateral, the Debtor 

Accounts, or any Borrower or Guarantor that materially and adversely affects the interests of 

Secured Party hereunder. Without limiting the generality ofthe foregoing, Debtor shall cause to 

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be delivered to Secured Party information indicating any possible Environmental Hazards with 

respect to any Collateral. To the extent Secured Party requests information which is dependent 

upon obtaining such information from a Borrower, Guarantor or other third party, Debtor shall 

cause to be made commercially reasonable efforts to obtain such information but it shall not be a 

breach by Debtor of this Agreement if Debtor fails to cause such information to be provided to 

Secured Party because a Borrower, Guarantor or other Person has failed to provide such 

information after such efforts have been made. 

Section 7.15 Pavment of Purchase Money Note Guaranty Fee. In consideration 

of Secured Party guaranteeing certain obligations of Debtor under the Purchase Money Note 

pursuant to the Purchase Money Note Guaranty, Debtor shall pay to Secured Party a fee (the 

"Purchase Money Note Guaranty Fee") payable monthly in arrears on each Distribution Date 

so long as the Purchase Money Note remains outstanding, equal to one-twelfth (1112th) of 1.00 

percent (1.00%) multiplied by the outstanding principal amount of the Purchase Money Note as 

of the day immediately preceding such Distribution Date, subject to the priority of payments set 

forth in Section 5.1 of the Custodial and Paying Agency Agreement and the other terms thereo£ 

Any portion of the Purchase Money Note Guaranty Fee that is not paid when due shall accrue 

interest for each day unpaid, from the Distribution Date such amount becomes payable until it is 

paid in full (after as well as before judgment), at a rate per aunum equal to 4.250%, payable in 

accordance with Section 5.1 ofthe Custodial and Paying Agency Agreement. 

ARTICLE VIII 

Secured Party Consent; Limits On Liability 

Section 8.1 Secured Partv Consent; Limits On Liabilitv. Notwithstanding 

anything to the contrary contained in this Agreement, Debtor shall not permit to be taken any of 

the following actions without the prior written consent of Secured Party, which may be withheld 

or conditioned in Secured Party's sole and absolute discretion: 

(a) the sale or other transfer of any Collateral (or any portion thereof) to any 

Mfiliate of Debtor, the Servicer or any subservicer, or any Affiliate ·of the Servicer or any 

subservicer; 

(b) the payment of any fees to, or entering into any transaction with, any 

Mfiliate ofDebtor, except as permitted by the LLC Operating Agreement; 

(c) the financing of the sale or other transfer of any Collateral (or any portion 

thereof); 

(d) the sale of any Collateral (or any portion thereof) that provides for any 

recourse against Secured Party; 

(e) any disbursement of any funds in any of the Debtor Accounts other than in 

accordance with the provisions ofthe Custodial and Paying Agency Agreement; 

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(f) Debtor's ceasing to be a member in good standing ofMERS®; 

(g) other than capitalizing accrued and unpaid interest, other amounts 

permitted to be capitalized pursuant to the Loan Modification Program (as defined in the 

Servicing Agreement), Servicing Expenses and Reimbursable Advances, advancing additional 

funds that would increase the Unpaid Principal Balance; 

(h) reimbursement for any expense or cost incurred (or paid) to any Affiliate 

ofDebtor or any Affiliate of.the Servicer or any subse!Vicer; 

(i) any amendment or modification to, or waiver of, any terms of the 

Servicing Agreement that relate to the manner in which the Servicer services the Loans, 

including, without limitation, the Servicing Obligations and the Servicing Standard; 

G) the termination and replacement ofthe Servicer; or 

(k) taking any action to conduct a Bulk Sale (as defined in the LLC Operating 

Agreement) during the 24 month period commencing on the date ofthis Agreement. 

Section 8.2 Limitation ofLiability. 

(a) Secured Party Liability Generally. Neither Secured Party nor any of its 

Affiliates, nor any of their respective officers, directors, employees, partners, principals or 

agents, including the Servicer and any subservicer, shall be liable for any action taken or omitted 

to be taken by them or any one of them under this Agreement or in connection with any 

Collateral or any portion thereof, except for any act or omission constituting (i) gross negligence, 

bad faith or willful misconduct (including any act or omission constituting theft, embezzlement, 

breach of trust or violation of any Law) or (ii) a material breach ofthis Agreement. In the event 

Secured Party exercises its rights pursuant to Section 5 of this Agreement, neither Secured Party 

nor any of its Affiliates, nor any of their respective officers, directors, employees, partners, 

principals or agents, including the Servicer and any subservicer, shall be liable for any action 

taken or omitted to be taken by them or any one ofthem under this Agreement or in connection 

with any Collateral or any portion thereof, except for any act or omission constituting willful 

misconduct. 

(b) Reliance on Notices, etc. Neither Debtor nor Secured Party shall incur 

any liability to the other by acting in good faith upon any notice, consent, certificate or other 

instrument or writing (including telegram, cable, telex or telecopy) that is reasonably believed by 

Debtor or Secured Party, as applicable, to be genuine and to have been signed or sent by the 

proper party and that on its face is properly executed. 

(c) No Consequential Damages. Regardless of the legal theory upon which 

any claim by or against Debtor or Secured Party is based, including any claim based on contract, 

tort, strict liability, or fraud, neither Secured Party nor Debtor shall be liable for, or may recover 

from the other, any amounts other than actual losses, costs and expenses (including reasonable 

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attorneys' fees and litigation and similar costs to pursue such recovery) incurred by the party 

asserting the claim. Without limiting the foregoing, neither party shall be liable for, or entitled to 

recover from the other party, any consequential, special, indirect, punitive, treble, nominal or 

exemplary damages, business interruption costs or expenses, or damages for lost profits, 

operating losses or lost investment opportunity (regardless of whether any such damages are 

characterized as direct or indirect), each of which is and all of which are hereby excluded by 

agreement of Secured Party and Debtor, regardless of whether the party against whom such 

damages may be claimed has been advised of the possibility of any such damages, unless (in 

each case) such losses are incurred by the party asserting the claim as a direct result of a claim 

asserted against such party by a tbird party. For purposes of this Section 8.2, the following 

claims shall not constitute claims asserted by a third party: (i) with respect to Debtor, any claims 

asserted by (A) the Servicer or any subservicer, (B) any Affiliate of Debtor or the Servicer or 

any subservicer; and (C) any officer, director, employee, partner, principal or agent ofDebtor or 

the Servicer or any subservicer, or any Mfiliate ofDebtor or the Servicer or any subservicer; and 

(ii) with respect to Secured Party, any claims asserted by any Mfiliate or officer, director, 

employee, partner, principal or agent of Secured Party or any Affiliate. 

ARTICLE IX 


Release Of Collateral 


Secured Party hereby release and discharges its Lien on any Collateral, solely to 

the extent necessary, (a) upon a final, nonappealable order of a court of competent jurisdiction 

permitting or directing disposition thereof, (b) upon payment of any Loan in full and satisfaction 

in full of all of the secured obligations with respect to a Loan or upon receipt of a discounted 

payoff as payment in full of a Loan, (c) as is necessary in connection with the foreclosure on a 

Mortgaged Property, acceptance of a deed in lieu thereof or modification or restructuring of the 

terms thereof, or (d) in connection with Debtor's sale of a Loan or any Collateral, provided, that 

the proceeds of such sale or disposition are applied in accordance with the priority of payments 

set forth in Section 5.1 of the Custodial and Paying Agency Agreement and the other terms 

thereof. 

ARTICLE X 

LIQUIDATION OF LOANS AND ACQUIRED COLLATERAL 

Section 10.1 Rights to Liquidate Loans and Acquired Collateral. Secured Party 

shall have the right, exercisable in its sole and absolute discretion, to require the liquidation and 

sale, for cash consideration, of any remaining Loans and Acquired Collateral held by Debtor or 

any Ownership Entity at any time after the date that is six ( 6) months prior to the Maturity Date. 

Section 10.2 Exercise ofRights to Liquidate Loans and Acquired Collateral. In 

order to exercise its rights under this Section 1 0.2, Secured Party shall give notice in writing to 

the Custodian and Debtor, setting forth the date by which the remaining Loans and Acquired 

Collateral are to be liquidated by Secured Party. Debtor shall, and shall cause the Custodian to, 

. cooperate and assist Secured Party with any and all aspects of the liquidation of the remaining 

Loans and Acquired Collateral to the extent reasonably requested by Secured Party. In the event 

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Debtor or any Affiliate thereof desires to bid to acquire the remaining Loans and Acquired 

Collateral, then Secured Party shall be entitled to liquidate the remaining Loans and Acquired 

Collateral in its discretion. ln the event Secured Party undertakes to liquidate the remaining 

Loans and· Acquired Collateral pursuant to this Section 10.2, the Loan Proceeds shall be applied 

on the Distribution Date following any such liquidation in accordance with the priority of 

payments set forth in Section 5.1 of the Custodial and Paying Agency Agreement and the other 

terms thereof; provided, however, that notwithstanding such priority of payments, no portion of 

the Loan Proceeds shall be paid pursuant to Sections 5.l(a)(viii) or 5.1(b)(iv) of the Custodial 

and Paying Agency Agreement until the Purchase Money Note has been repaid in full. 

ARTICLE XI 


Miscellaneous 


Section 11.1 Attomey-ln-Fact. Debtor hereby constitutes and appoints Secured 

Party the true and lawful attorney-in-fact of Debtor, with full power and authority in the place 

and stead of Debtor and in the name of Debtor, Secured Party or otherwise, subject to the terms 

of this Agreement and applicable Law, to enforce all rights, interests and remedies of Debtor 

with respect to the Collateral, provided that Secured Party shall not exercise any of the 

aforementioned rights unless a Event of Default of the Secured Obligations has occurred and is 

continuing. This power of attorney is a power coupled with an interest and shall be irrevocable 

until the termination ofthis Agreement in accordance with the terms hereof; provided further that 

nothing in this Agreement shall prevent Debtor from, prior to the exercise by Secured Party of 

any of the aforementioned rights, utilizing the Collateral to transact Debtor ordinary course 

business operations. 

Section 11.2 No Petition. Secured Party hereby covenants and agrees that it will 

not at any time institute against Debtor, or join in any institution against Debtor of, any 

bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding, or other 

proceedings under any United States federal or state bankruptcy or similar law in connection 

with any obligation relating to the Purchase Money Note or this Agreement. 

Section 11.3 Reimbursement of Expenses. Except as prohibited by Law, if·at 

any time Secured Party employs counsel in connection with the creation, perfection, 

preservation, or release of the security interest of Secured Party in the Collateral or the 

enforcement of any of Secured Party's rights or remedies hereunder, all of Secured Party's 

attorneys' fees arising from such services and all other expenses, costs, or charges relating 

thereto shall become part of the Secured Obligations secured hereby and be paid by.Debtor on 

demand. 

Section 11.4 Termination of Security lnterest. Upon the satisfaction and 

discharge in full of the Secured Obligations, the security interest and all other rights granted 

hereby shall terminate and all rights to the Collateral shall revert to Debtor. Upon any such 

satisfaction, and discharge of the Secured Obligations, Secured Party (a) upon the written request 

ofDebtor shall promptly execute and deliver all such documentation, Uniform Commercial Code 

termination statements and instruments as are necessary to release the Liens created pursuant to 

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8529770.5 
this Agreement and to terminate this Agreement, and (b) agrees, at the reasonable request of 

Debtor, to furnish, execute and deliver such documents, instruments, certificates, notices or 

further assurances as Debtor may reasonably request as necessary or desirable to effect such 

termination and release, all at Debtor's sole cost and expense. 

Section 11.5 Indemnification. 

(a) Debtor shall indemnify and hold harmless Secured Party and Secured 

Party's Affiliates, and their respective officers, directors, employees, partners, principals, agents 

and contractors (the "Indemnified Parties") from and against any losses, damages, liabilities, 

costs and expenses (including reasonable attorneys' fees and litigation and similar costs, and 

other out-of-pocket expenses incurred in investigating, defending, asserting or preparing the 

defense or assertion of any of the foregoing), deficiencies, claims, interest, awards, judgments, 

penalties and fmes (collectively, "Losses") arising out of or resulting from (i) any breach by 

Debtor or any of its Mfiliates or any of their respective officers, directors, employees, partners, 

principals, agents or contractors (including the Servicer and any subservicer) of any of their 

respective obligations under or covenants or agreements contained in this Agreement or the 

Servicing Agreement (including any claim asserted by Secured Party against Debtor to enforce 

its rights pursuant to Section 5), or any third-party allegation or claim based upon facts alleged 

that, if true, would constitute such a breach, or (ii) any gross negligence, bad faith or willful 

misconduct (including any gross negligence, bad faith or willful misconduct of the Servicer or 

any subservicer and including any act or omission constituting theft, embezzlement, breach of 

trust or violation of any Law). Such indemnity shall survive the termination ofthis Agreement. 

In order for an Indemnified Party to be entitled to any indemnification provided for under this 

Agreement in respect of, arising out of or involving a Loss or a claim or demand made by any 

Person against the Indemnified Party (a "Third Partv Claim"), such Indemnified Party shall 

deliver notice thereof to Debtor promptly after receipt by such Indemnified Party of written · 

notice ofthe Third Party Claim, describing in reasonable detail the facts giving rise to any claim 

for indemnification hereunder, the amount of such claim (if known) and such other information 

with respect thereto as is available to the Indemnified Party and as Debtor may reasonably 

request. The failure or delay to provide such notice, however, shall not release Debtor from any 

of its obligations under this Section 11.5 except to the extent that it is materially prejudiced by 

such failure or delay. 

(b) Iffor any reason the indemnification provided for herein is unavailable or 

insufficient to hold harmless the Indemnified Parties, Debtor shall contribute to the amount paid 

or payable by the Indemnified Parties as a result ofthe Losses ofthe Indemnified Parties in such 

proportion as is appropriate to reflect the relative fault of the Indemnified Parties, on the one 

hand, and Debtor (including the Servicer and any subservicer), on the other hand in connection 

with a breach ofDebtor's obligations under this Agreement. 

(c) If Debtor confirms in writing to the Indemnified Party within fifteen 

(15) days after receipt of a Third Party Claim Debtor's responsibility to indemnify and hold 

harmless the Indemnified Party therefor, Debtor may elect to assume control over the 

compromise or defense ofsuch Third Party Claim at Debtor's own expense and by Debtor's own 

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8529770.5 
counsel, 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 

Indemnified Party's own expense to assist in the handling (but not control the defense) of any 

Third Party Claim; (ii) Debtor shall keep the Indemnified Party advised of all material events 

with respect to any Third Party Claim; (iii) Debtor 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 any Indemnified Party or any of its or his Affiliates; and 

(iv) Debtor will not, without the prior written consent of each Indemnified Party, settle or 

compromise or consent to the entry of any judgment in any pending or threatened action in 

respect ofwhich 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 Debtor to satisfy the full amount of the liability in connection with such Third Party 

Claim and includes an unconditional release of the Indemnified Party from all liability arising 

out of such Third Party Claim. 

(d) Notwithstanding anything contained herein to the contrary, Debtor 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 Debtor 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 Debtor 

(or any Affiliate) and the Indemnified Party are named as parties and either Debtor (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 ofinterest between such parties may exist in respect of such action; 

and (iii) any matter that raises or implicates any issue relating to any power, right or obligation of 

the FDIC under any Law. If Debtor elects not to assume the compromise or defense against the 

asserted liability, fails to timely and properly notify the Indemnified Party of its election as 

herein provided, or, at any time after assuming such defense, fails to diligently defend against 

such Third Party Claim in good faith, the Indemnified Party may pay, compromise or defend 

against such asserted liability (but Debtor shall nevertheless be required to pay all Losses 

incurred by the Indemnified Party in connection with such defense, settlement or compromise). 

In connection with any defense of a Third Party Claim (whether by Debtor or the Indemnified 

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. 

Section 11.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED 

BY AND CONSTRUED IN ACCORDANCE WITH FEDERAL LAW BUT IF FEDERAL 

LAW DOES NOT PROVIDE A RULE OF DECISION, IT SHALL BE GOVERNED BY AND 

CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, 

EXCLUDING ANY CONFLICT OF LAWS RULE OR PRINCIPLE THAT MIGHT REFER 

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THE GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW 

OF ANOTHER JURISDICTION. Nothing in this Agreement shall require any unlawful action 

or inaction by any party hereto. 

Section 11.7 Jurisdiction; Venue and Service. The Debtor, for itself and its 

Affiliates, hereby irrevocably and unconditionally: 

(a) (i) agrees that any suit, action or proceeding instituted against it by any 

other party with respect to this Agreement may be instituted, and that any suit, action or 

proceeding by it against any other party with respect to this Agreement shall be instituted, only 

in the Supreme Court ofthe State ofNew York, County ofNew York, or the U.S. District Court 

for the Southern District of New York or the United States District Court for the District of 

Columbia (and appellate courts from any of the foregoing) as the party instituting such suit, 

action or proceeding may in his or its sole discretion elect, (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 11. 7(a) may be effected by the mailing of copies thereof by 

registered or certified mail; postage prepaid, to Debtor at its address for notices pursuant to 

Section 11.9 (with copies to such other Persons as specified therein); provided, however, that 

nothing contained in this Section 11.7 shall affect the ability of Debtor 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 11.7(a), (ii) waives any claim that any such suit, action or 

proceeding brought in any such court has been brought in an inconvenient forum and (iii) agrees 

not to plead or claim either ofthe foregoing; and 

(d) agrees that nothing contained in this Section 11.7 shall be construed to 

constitute consent to jurisdiction by the Initial Member, the Failed Bank or the FDIC in any 

capacity or a limitation on any removal rights the FDIC, in any capacity, may have. 

Section 11.8 Waiver ofJurv. EACH OF THE DEBTOR AND THE SECURED 

PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT 

MAY HA VB TO A TRIAL BY JURY OF ANY DISPUTE ARISING OUT OF OR RELATING 

TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED 

BEFORE A JUDGE SITTING WITHOUT A JURY. 

Section 11.9 Notices. All notices, requests, demands, and other 

communications required or permitted to be given or delivered under or by reason of the 

provisions of this Agreement shall be in writing and shall be given by certified or registered 

Franklin- Reimbursement and Security Agreement 

31 

8529770.5 
mail, postage prepaid, or delivered by hand or by nationally recognized air courier service, 

directed to the address ofsuch Person set forth below: 

Address for notices or co=unications to Debtor: 

If to Debtor before Closing: 

Senior Capital Markets Specialist 


c/o Federal Deposit Insurance Corporation 


550 17'h Street, NW (Room F-7026) 


Washington, D.C. 20429-0002 


Attention: Timothy A. Kruse 


Tel: (202) 898-6832 


with a copy to: 

Senior Counsel 

FDIC Legal Division 

Litigation and Resolutions Branch, Receivership Section 

Special Issues Unit 

3501 Fairfax Drive (Room E-7056) 

Arlington, Virginia 22226 

Attention: David Gearin 

Tel: (703) 562-2430 

Ifto Debtor after Closing: 

Franklin Venture, LLC 


4282 North Freeway 


Fort Worth, Texas 76137 


Attention: Dennis G. Stowe 


Tel: (817) 321-6001 


with a copy to: 

K&L Gates LLP 


1601 K Street, N.W. 


Washington, D.C. 20006 


Attention: Phillip J. Kardis, II 


Tel: (202) 778-9401 


Address for notices or co=unications to Secured Party: 

Director, Division ofFinance 


c/o Federal Deposit Insurance Corporation 


Franklin- Reimbursement and Security Agreement 

32 

8529770.5 
3501 Fairfax Drive (Room VS-4088) 

·Arlington, Virginia 22226 

Attention: Bret D. Edwards 

Tel: (703) 562-6101 

with a copy to: 

Senior Counsel 

FDIC Legal Division 

Litigation and Resolutions Branch, Receivership Section 

Special Issues Unit 

3501 Fairfax Drive (Room E-7056) 

Arlington, Virginia 22226 

Attention: David Gearin 

Tel: (703) 562-2430 

Any such notice shall become effective when received (or receipt is refused) by the addressee, 

provided that any notice or communication that is received (or refused) other than during regular 

business hours of the recipient shall be deemed to have been given at the opening ofbusiness on 

the next Business Day of the recipient. From time to time, any Person may designate a new 

address for purposes of notice hereunder by notice to such effect to the other Persons identified 

above. 

Section 11.1OAssignment. This AgreeJTlent shall inure to the benefit of and be 

binding on and enforceable against successors and assigns of Debtor and Secured Party; 

provided, that, Debtor shall not assign its rights hereunder in whole or in part without the prior 

written consent of Secured Party. 

Section 11.11 Entire Agreement. This Agreement contains the entire agreement 

between Debtor and Secured Party with respect to the subject matter hereof and supersedes any 

and all other prior agreements, whether oral or written. 

Section 11.12 Amendments and Waivers. No provision of this Agreement may 

be amended or waived except in writing executed by all ofthe parties to this Agreement. 

Section 11.13 Reinstatement. This Agreement shall continue to be effective or 

be automatically reinstated, as the case may be, if at any time payment pursuant to this 

Agreement is rescinded or must otherwise be restored or returned upon the insolvency, 

bankruptcy, reorganization, liquidation of Debtor or upon the dissolution of, or appointment of 

any intervenor or conservator or, or trustee or similar official for, Debtor or any substantial part 

of Debtor's assets, or otherwise, all as though such payments had not been made, and Debtor 

shall pay Secured Party on demand all reasonable costs and expenses (including reasonable fees 

of counsel) incurred by Secured Party in connection with such rescission or restoration. 

Franklin- Reimbursement and Security Agreement 

33 

8529770.5 
Section 11.14 Intemretation; No Presumption. Headings are intended solely for 

convenience of reference and shall not affect the meaning or interpretation of the provisions of 

this Agreement. The word "including" does not limit the preceding words or terms. A reference 

to any party hereto includes such party's successors and permitted assigns. The words "hereof," 

"herein" and "hereunder" and words of similar import when used in this Agreement refer to this 

Agreement as a whole and not to any particular provision of this Agreement. This Agreement 

shall be constmed fairly as to each party hereto and if at any time any such term or condition is 

desired or required to be interpreted or constmed, 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 11.15 Severability. Any provJSlon 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 

circumstances, 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 unenforceability in such jurisdiction shall not invalidate 

or render unenforceable such provision in any other jurisdiction; and (iii) without limitation of 

clauses (i) or (ii), such ineffectiveness shall not invalidate any ofthe remaining provisions ofthis 

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 without limitation, 

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 11.15 is intended to, or shall, limit (1) 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 

ofSection 11.7. 

Section 11.16 Survival. All obligations made herein shall survive the execution 

and delivery of this Agreement. Except as otherwise provided in this Agreement or implied by 

applicable law, the obligations of Debtor set forth in this Agreement shall terminate only upon 

the satisfaction and discharge in full ofthe Secured Obligations. 

Section 11.17 No Third Party Beneficiaries. This Agreement is made for the 

sole benefit .of Secured Party and Debtor and their respective successors and permitted assigns, 

and no other Person or Persons (including Borrowers or any co-lender or other Person with any 

Franklin- Reimbursement and Security Agreement 

34 

8529770.5 
interest in or liability under any of the Loans) shall have any rights or remedies under or by 

reason ofthis Agreement. 

Section 11.18 Countemarts; Facsimile Signatures. This Agreement may be 

executed in two (2) 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 sigued and delivered by facsimile or other electronic means, 

shall be treated in all mauner and respects as an original agreement and shall be considered to 

have the same binding legal effect as if it were the original sigued version thereof delivered in 

person. No siguatory to this Agreement shall raise the use of a facsimile machine or other 

electronic means to deliver a siguature or the fact that any siguature or agreement was 

transmitted or communicated 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. 

[Remainder of Page Intentionally Left Blank] 

Franklin -Reimbursement and Security Agreement 

35 

8529770.5 
IN WITNESS WHEREOF, the parties hereto, by their officers duly authorized, intending to 

legally bound, have caused this Agreement to be duly executed. 

FRANKLIN VENTURE, LLC 

By: 	 Federal Deposit Insurance Corporation as 

Receiver fi 

By:

Name: 

{' lin Bank, S.S.B. 

__-*~-+~-----------­

Title: Att 

FEDERAL DEPOSIT INSURANCE 

CORPO TION, in its corporate capacity 

Franklin- Reimbursement and Security Agreement 

EXHIBIT A 


FORM OF ELECTRONIC TRACKING AGREEMENT 


[Attached] 


Franklin- Reimbursement and Security Agreement 

A-1 

8529770.5 
EXECUTION COPY 

ELECTRONIC TRACKING AGREEMENT 


BYANDAMONG 


FEDERAL DEPOSIT INSURANCE CORPORATION, 


RESIDENTIAL CREDIT SOLUTIONS, INC., 


MERSCORP, INC. 


AND 


MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. 


Dated as of September 30,2009 

Franklin~ Electronic Tracking Agreement 

8493663.4 
ELECTRONIC TRACKING AGREEMENT 

THIS ELECTRONIC TRACKlNG AGREEMENT (this "Agreement") is made and 

entered into as of September 30, 2009 by and among the Federal Deposit Insurance Corporation 

(in any capacity, the "FDIC"), in its corporate capacity as the Secured Party (as defmed below), 

Residential Credit Solutions, Inc. (the "Servicer"), MERSCORP, Inc. (the "Electronic Agent") 

and Mortgage Electronic Registration Systems, Inc. ("MERS"). 

WHEREAS, RCS Franklin Venture LLC, the sole member ofthe Company (as defined 

below), and the Servicer have entered into that certain Servicing Agreement, dated as of 

September 30, 2009 (the "Servicing Agreement"), pursuant to which, among other things, the 

Servicer is responsible for servicing the Mortgage Loans; and 

WHEREAS, pursuant to the Reimbursement and Security Agreement (the 

"Reimbursement and Security Agreement") dated as ofSeptember 30, 2009, by and between 

the Company, and the FDIC in its corporate capacity as the secured party (the "Secured Party"), 

the Company has pledged the Mortgage Loans to the Secured Party and the Secured Party will 

have a first priority security interest in the Mortgage Loans; and 

WHEREAS, the Servicer and the Secured Party desire to continue to have the Mortgage 

Loans registered on the MERS® System (defined below) such that the mortgagee ofrecord 

under each Mortgage (defined below) shall be identified as MERS. 

NOW, THEREFORE, the parties, intending to be legally bound, agree as follows: 

1. Definitions. 

Capitalized terms used in this Agreement shall have the meanings assigned to them 

below. 

"Affected Loans" shall have the meaning assigned to such term in Section 4(b). 

"Agreement" shall have the meaning assigned to such term in the preamble. 

"Assignment of Mortgage" shall mean, with respect to any Mortgage, an assignment of 

the Mortgage, notice oftransfer or equivalent instrument in recordable form, sufficient under the 

laws ofthe jurisdiction wherein the related mortgaged property is located to effect the 

assignment ofthe Mortgage upon recordation. 

"Company" shall mean Franklin Venture, LLC. 

"Electronic Agent" shall have the meaning given in the preamble. 

"Event of Default" shall mean an Event ofDefault as defined in the Servicing 

Agreement. 

"FDIC" shall have the meaning given in the preamble. 

Franklin- Electronic Tracking Agreement 1 8493663.4 
"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 oftrust securing a Mortgage Note. 

"Mortgage Loan" shall mean each mortgage loan that is pledged to the Secured Party 

pursuant to the Reimbursement and Security Agreement and that is, as ofthe date hereof, eligible 

to be registered on the MERS® System. 

"Mortgage Note" shall mean a promissory note or other evidence ofindebtedness of the 

obligor thereunder, representing a Mortgage Loan, and secured by the related Mortgage. 

"Notice of Default" shall mean a notice from the Secured Party that an Event ofDefault 

has occurred and is continuing. 

"Opinion of Counsel" shall mean a written opinion of counsel in form and substance 

reasonably acceptable to the Secured Party. 

"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). 

"Reimbursement and Securitv Agreement" shall have the meaning given in the 

recitals. 

"Servicing Agreement" shall have the meaning given in the recitals. 

"Secured Partv" shall have the meaning given in the recitals. 

"Servicer" shall have the meaning given in the preamble. 

2. Appointment ofthe Electronic Agent. 

(a) The Secured Party and the Servicer, by execution and delivery ofthis Agreement, 

each does hereby appoint MERSCORP, Inc. 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 with the Secured Party and the Servicer, subject to the terms ofthis Agreement, to 

perform the services set forth herein, and (ii) accepts its appointment as the Electronic Agent. 

Franklin- Electronic Tracking'Agreement 2 

8493663.4 
3. 	 Designation ofMERS as Mortgagee of Record; Designation ofInvestor and Servicer of 

Record in MERS. 

The Servicerrepresents, 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, 

the mortgagee ofrecord, as nominee for the Company, with respect to the pledged Mortgage 

Loans in accordance with the MERS Procedures Manual and (b) it has designated or will 

promptly designate the Company as the "investor" and the Servicer as the "servicer" in the 

MERS® System for each such pledged Mortgage Loan (each pledged Mortgage Loan so 

designated is a "MERS Designated Mortgage Loan") and the Secured Party as the "interim 

funder" on the MERS® System with respect to each MERS Designated Mortgage Loan. 

4. 	 Obligations of the Electronic Agent. 

(a) The Electronic Agent shall ensure that MERS, as the mortgagee ofrecord 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 ofDefault, in the form ofExhibit C, from the Secured 

Party in which the Secured Party shall identify the MERS Designated Mortgage Loans with 

respect to which the Servicer's right to act as servicer or subservicer thereof has been terminated 

by the Secured Party (the "Affected Loans"), the Electronic Agent shall modify the investor 

fields and/or servicer fields to reflect the investor and/or servicer on the MERS® System as the 

Secured Party or the Secured Party's designee with respect to such Affected Loans. Following 

such Notice ofDefault, the Electronic Agent shall follow the instructions of the Secured Party 

with respect to the Affected Loans, without further consent ofthe Servicer, and shall deliver to 

the Secured Party 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 the Secured Party. 

(c) Upon the Secured Party's request and instructions, and at the Servicer' s sole cost 

and expense, the Electronic Agent shall deliver to the Secured Party or the Secured Party's 

designee an Assignment ofMortgage from MERS, in blank, in recordable form but unrecorded 

with respect to each Affected Loan; provided, however, that the Electronic Agent shall not be 

required to comply with the foregoing unless the costs of doing so shall be paid by the Servicer 

or a third party. 

(d) The Electronic Agent shall promptly notify the Secured Party and the Servicer if 

it has actual knowledge that any mortgage, pledge, lien, security interest or other charge or 

encumbrance exists with respect to any ofthe Mortgage Loans. Upon the reasonable request of 

the Secured Party or the Servicer, the Electronic Agent shall review the "investor" and "interim 

frroder" fields and shall notify the Secured Party if any Person other than the Company is 

identified in the "investor'' field or if any Person is identified in the "interim frroder" field. 

Franklin -Electronic Tracking Agreement 3 8493663.4 
(e) In the event that (i) the Secured Party, the Company, 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 ofthis 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 ofthe Secured Party, 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, ifrequested by the Secured Party, shall change the information in the 

"interim funder" field in accordance with the Secured Party's instructions. 

(g) MERS, as mortgagee ofrecord 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 ofthe Servicer. 

(h) MERS shall cause certain officers or other representatives ofthe Secured Party to 

be appointed officers or agents ofMERS with respect to the MERS Designated Mortgage Loans, 

with the power to wield all of the powers specified in the form of corporate resolution or power 

of attorney used to appoint such officer or agent, substantially in the forms attached hereto as 

Exhibits D-1 and D-2. 

5. Access to lnformation. 

Upon the Secured Party's request, the Electronic Agent shall furnish to the Secured Party 

or its respective auditors information 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 ofthe Electronic Agent and MERS. 

The Electronic Agent and MERS hereby represent and warrant as ofthe date hereof that: 

(a) each ofthe 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 

ofthis 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 ofthis Agreement; 

Franklin- Electronic Tracking Agreement 4 8493663.4 
(c) this Agreement has been duly executed and delivered on behalfofthe 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); 

(d) the Electronic Agent and MERS will m;rintain 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 ofthe insurer shall be 

furnished to the Secured Party upon request and shall contain a statement ofthe insurer that such 

insurance will not be terminated prior to thirty (30) days' written notice to the Secured Party. 

7. Covenants ofMERS. 

(a) MERS shall (i) not incur any indebtedness other than in the ordinary course ofits 

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 

subsidiaries, (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 all ofits assets in its own name, (ix) conduct its own business in its own 

name, (x) pay its own liabilities and expenses only out ofits 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 be available in an 

arm's length transaction with a Person that is not an affiliate, (xiii) pay the salaries ofits own 

employees from its own funds, (xiv) maintain a sufficient number of employees in light ofits 

contemplated business operations, (xv) not guarantee or become obligated for the debts of any 

other Person, (xvi) not hold out its credit as beihg available to satisfy the obligation of any other 

Person, (xvii) not acquire the obligations or securities ofits affiliates or owners, including 

partners, members or shareholders, as appropriate, (xviii) not make loans to any other Person or 

buy or hold evidence ofindebtedness 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 performed 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) coi;rect any known 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 ofrecord 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 the Secured Party. 

Franklin- Electronic Tracking Agreement 5 

8493663.4 
8. Covenants ofthe Servicer. 

(a) The Servicer covenants with respect to itself that it is a member ofMERS in good 

standing. 

(b) The Servicer hereby covenants and agrees with the Secured Party and each other 

that, with respect to each MERS Designated Mortgage Loan, it will not identify any party except 

the Company in the "investor" field and will not identify any party except the Secured Party in 

the "interim funder" field on the MERS® System. 

(c) The Servicer will provide the Secured Party with MERS Identification Numbers 

for each MERS Designated Mortgage Loan. 

9. No Adverse Interest ofthe Electronic Agent or MERS. 

By execution ofthis Agreement, the Electronic Agent and MERS each represents and 

warrants that it currently holds, and during the existence ofthis Agreement shall hold, no adverse 

interest, by way ofsecurity 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, 

and neither the Electronic Agent nor MERS shall pledge, encumber, hypothecate, transfer, 

dispose of, or otherwise grant any third party interest in, the MERS Designated Mortgage Loans. 

10. Indemnification ofthe Secured Partv. 

The Electronic Agent agrees to indemnify and hold the Secured Party 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 the 

Secured Party may sustain arising out of any breach by the Electronic Agent ofthis Agreement, 

the Electronic Agent's negligence, bad faith or willful misconduct, its failure to comply with the 

Secured Party's instructions hereunder or to the extent caused by delays or failures arising out of 

the inability ofthe Secured Party or the Electronic Agent to access information on the MERS® 

System. The foregoing indemnification shall survive any termination or assignment ofthis 

Agreement. 

11. Reliance ofthe Electronic Agent. 

(a) In the absence ofbad faith on the part ofthe Electronic Agent, the Electronic 

Agent may conclusively rely, as to the truth ofthe statements and the correctness ofthe 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 ofthis 

Agreement. 

(b) Notwithstanding any contrary information which may be delivered to the 

Electronic Agent by the Servicer, the Electronic Agent may conclusively rely on any information 

or Notice ofDefault delivered by the Secured Party, and the Servicer shall indemnify and hold 

the Electronic Agent harmless for any and all claims asserted against it for any actions taken in 

Franklin- Electronic Tracking Agreement 6 

8493663.4 
good faith by the Electronic Agent in connection with the delivery ofsuch information or Notice 

ofDefault. 

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 Servicer. The Electronic Agent shall give prompt written notice of any 

disciplinary action instituted with respect to the Servicer' s failure to pay any fees required in 

connection with its use of the MERS® System, and will give written notice to the Secured Party 

at least thirty (30) days prior to any revocation of the Servicer' s membership in the MERS® 

System. 

13. Resignation ofthe Electronic Agent; Termination. 

(a) The Secured Party has entered into this Agreement with the Electronic Agent and 

MERS in reliance upon the independent status ofthe Electronic Agent and MERS, and the 

representations as to the adequacy oftheir 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, the 

Secured Party) or any portion hereof or sell or otherwise dispose of all or substantially all ofits 

property or assets without providing the Secured Party 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 ofthe Electronic Agent, MERS and the 

Secured Party, or upon the determination that the duties ofthe Electronic Agent and MERS 

hereunder are no longer permissible under applicable law and such incapacity carmot be cured by 

the Electronic Agent and MERS. Any such determination permitting the resignation ofthe 

Electronic Agent and MERS shall be evidenced by an Opinion ofCounsel to such effect 

delivered to the Secured Party, which Opinion ofCounsel shall be in form and substance 

acceptable to the Secured Party. No such resignation shall become effective until the Electronic 

Agent and MERS have delivered to the Secured Party all ofthe Assignments ofMortgage, in 

blank, in recordable form but unrecorded for each MERS Designated Mortgage Loan identified 

by the Secured Party as the Secured Party's collateral. 

14. Removal ofthe Electronic Agent. 

(a) The Secured Party, with or without cause, may remove and discharge the 


Electronic Agent and MERS from the performance ofits duties under this Agreement with 


respect to some or all ofthe MERS Designated Mortgage Loans by written notice from the 


· Secured Party to the other parties hereto. 

(b) In the event oftermination ofthis Agreement~ at the Servicer' s sole cost and 

expense (except as provided in Section 16), the Electronic Agent shall follow the instructions of 

the Secured Party for the disposition ofthe documents in its possession pursuant to this 

Franklin~ Electronic Tracking Agreement 7 

8493663.4 
Agreement, and deliver to the Secnred Party. an Assignment ofMortgage, in blank, in recordable 

form but unrecorded for each MERS Designated Mortgage Loan identified by the Secnred Party 

as the Secnred Party's collateral. Notwithstanding the foregoing, in the event that the Secnred 

Party terminates this Agreement with respect to some, but not all, ofthe 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 ofthis Agreement, the provisions of Section 10 shall survive 

any termination. 

15. Notices. 

All written communications hereunder shall be delivered, by overnight courier, to the 

Electronic Agent and/or the Secnred Party and/or the Servicer as indicated on the signature page 

hereto, or at such other address as designated by such party in a written 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 ofAgreement. 

(a) This Agreement shall continue to be in effect until terminated by the Secnred 

Party or the Electronic Agent sending written notice to the other parties ofthis Agreement at 

least thirty (30) days prior to said termination. 

(b) Upon the termination ofthis Agreement by the Electronic Agent or the 

termination ofthis Agreement by the Secnred Party for cause as provided above, the Electronic 

Agent shall, at the Electronic Agent's sole cost and expense, execute and deliver to the Secnred 

Party or its designee an Assignment ofMortgage with respect to each MERS Designated 

Mortgage Loan identified by the Secnred Party, in blank, in recordable form but unrecorded. In 

the event that this Agreement is terminated by the Secnred Party without cause, the duties ofthe 

Electronic Agent in the preceding sentence shall be at the sole cost and expense ofthe Servicer. 

In addition, the Secnred Party and the Electronic Agent may, at the sole option ofthe Secnred 

Party, enter into a separate agreement which shall be mutually acceptable to the parties with 

respect to any or all ofthe MERS Designated Mortgage Loans with respect to which this 

Agreement is terminated. 

17. Authorizations. 

Any ofthe persons whose signatures and titles appear on Exhibit A hereto are authorized, 

acting singly, to act for the Secnred Party, 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 cnrrent 

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 

the Secnred Party, the Servicer, the Electronic Agent and MERS. 

Franklin- Electronic Tracking Agreement 8 

8493663.4 
19. Severability. 

Ifany 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. Binding Effect. 

This Agreement shall be binding and inure to the benefit of the parties hereto and their 

respective successors and assigns. 

21. Governing Law. 

THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND 

GOVERNED BY THE LAW OF THE COMMONWEALTH OF VIRGINIA. 

THE SECURED PARTY (OTHER THAN THE FDIC IN ANY OTHER 

CAPACITY), THE SERVICER, THE ELECTRONIC AGENT AND MERS EACH 

IRREVOCABLY AGREES THAT ANY ACTION OR PROCEEDING ARISING OUT OF 

OR IN ANY 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 THE 

EXECUTION AND DELIVERY OF THIS AGREEMENT EXPRESSLY AND 

IRREVOCABLY ASSENT AND SUBMIT TO THE NONEXCLUSIVE JURISDICTION 

OF ANY SUCH COURTS IN ANY SUCH ACTION OR PROCEEDING. 

22. Waiver ofJurv Trial. 

THE SECURED PARTY, THE SERVICER, THE ELECTRONIC AGENT AND 

MERS EACH IRREVOCABLY AGREES TO WAIVE ITS RIGHT TO A JURY TRIAL 

IN ANY ACTION OR PROCEEDING AGAINST IT ARISING OUT OF, OR RELATED 

IN ANY MANNER TO, THIS 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 ofwhich, 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 ofthe Electronic Agent, MERS, the Secured Party, the 

Servicer under this Agreement shall be in addition to all rights, powers and remedies given to the 

Electronic Agent, MERS, the Servicer, and the Secured Party by virtue of any statute or rule of 

law, or any other agreement, all ofwhich rights, powers and remedies shall be cumulative and 

Franklin- Electronic Tracking Agreement 9 8493663.4 
may be exercised successively or concurrently without impairing the Secured Party's rights in 

the Mortgage Loans. 

25. Status ofElectronic Agent. 

Nothing herein contained shall be deemed or construed to create a partnership or joint 

venture between the parties hereto, and the services ofthe Electronic Agent and MERS shall be 

rendered as independent contractors for the Secured Party, the Servicer. Other than the 

obligations ofthe Electronic Agent and MERS expressly set forth herein, the Electronic Agent 

and MERS shall have no power or authority to act as agent for the Secured Party or the Servicer 

pursuant to any grant of authority made under or pursuant to this Agreement. 

[Remainder ofPage Intentionally Left Blank] 

Franklin- Electronic Tracking Agreement 10 8493663.4 
IN WITNESS WHEREOF, the Secured Party, the Servicer, the Electronic Agent and 

MERS have duly executed this Agreement as ofthe date first above written. 

FEDERAL DEPOSIT INSURANCE 

CORPORATION, in its corporate capacity 

By: 

Name: 

Title: 

Address for Notices: 

Director, Division ofFinance 

c/o Federal Deposit Insurance Corporation 

550 17th Street, NW (Room VS-4088) 

Arlington, Virginia 2226 · 

Attention: Bret D. Edwards 

Tel: (703) 562-6101 

with a copy to: 

Senior Counsel 

FDIC Legal Division 

Litigation and Resolutions Branch, Receivership 

Section 

Special Issues Unit 

3501 Fairfax Drive (Room E-7056) 

Arlington, Virginia 22226 

Attention: David Gearin 

Tel: (703) 562-2430 

Franklin - Electronic Tracking Agreement 
RESIDENTIAL CREDIT SOLUTIONS, 

INC. 

By: 

Name: 

Title: Authorized Signatory 

Address for Notices: 

Residential Credit Solutions, Inc. 

4282 North Freeway 

Fort Worth, Texas 76137 

Attention: Dennis G. Stowe 

Tel: (817) 321-6001 

with a copy to: 

K&L Gates LLP 

1601 K Street, N.W. 

Washington, D.C. 20006 

Attention: Phillip J. Kardis, II 

Tel: (202) 778-9401 

Franklin -Electronic Tracking Agreement 
MERSCORP, INC. 

By: 

Name: 

Title: 

Address for Notices: 

1818 Library Street 

Suite 300 

Reston, VA 20190 

Attention: c_______~ 

Tel: '---~----' 

MORTGAGE ELECTRONIC 

REGISTRATION SYSTEMS, INC. 

By: 

Name: 

Title: 

Address for Notices: 

1818 Library Street 

Suite 300 

Reston, VA 20190 

Attention: [ _______, 

Tel: .__ ______, 

Franklin - Electronic Tracking Agreement 
------- ----------------

EXHIBIT A 


LIST OF AUTHORIZED PERSONS 


SECURED PARTY AUTHORIZATIONS: 


Any ofthe persons whose signatures and titles appear below, or attached hereto, are authorized, 

acting singly, to act for the Secured Party under this Agreement: 

By: By: By: 

Name: Timothy A. Kruse Name: Herbert J. Held Name: WilliamP. Stewart 

Senior Capital Markets Senior Capital Markets 

Title: Specialist Title: Associate Director Title: Specialist 

SERVICER AUTHORIZATIONS: 


Any ofthe persons whose signatures and titles appear below, or attached hereto, are authorized, 


acting singly, to act for the Servicer under this Agreement: 


By: By: By: 


Name: Name: Name: 


Title: Title: Title: 


By: By: By: 


Name: Name: Name: 


Title: Title: Title: 


By: 


Name: 


Title: 


A-1 

------------------ ---------------

------------------

----------------- ----------------

------- ------- --------

----------------- ----------------

ELECTRONIC AGENT AUTHORIZATIONS: 


Any ofthe persons whose signatures and titles appear below, or attached hereto, are authorized, 


acting singly, to act for the Electronic Agent under this Agreement: 


By: By: By: 


Name: _________________ Name: _______________ Name: __________________ 


Title: Title: ________________ Title: 


MERS AUTHORIZATIONS: 


Any ofthe persons whose signatures and titles appear below, or attached hereto, are authorized, 


acting singly, to act forMERS under this Agreement: 


By: By: By: 


Name: Name: Name: 


Title: Title: Title: 


A-2 

EXHffiiTB 

MERSPROCEDURESMANUAL 

The MERS Procedures Manual shall be found on the MERS website at: http://www.mersinc.org 

B-1 

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 

September 30, 2009, by and among the Federal Deposit Insurance Corporation, in its corporate 

capacity (the "Secured Party"), Residential Credit Solutions, Inc. (the "Servicer"), 

MERSCORP, Inc. (the "Electronic Agent") and Mortgage Electronic Registration Systems, Inc. 

("MERS"). The Affected Loans are listed on the attached Schedule 1 (including the mortgage 

identification numbers). Accordingly, the Electronic Agent shall not accept instructions from the 

Servicer or any party other than the Secured Party with respect to such Mortgage Loans, until 

otherwise notified by the Secured Party. 

Any terms used herein and not otherwise defined shall have such meaning specified in the 

Electronic Tracking Agreement. 

By: ---~--------- Title: _____________ 

C-1 

EXHIBITD-1 

CORPORATE RESOLUTION 

26. 	 Be it Resolved that the list of candidates, attached on Schedule A, are employees of the Federal 

Deposit Insurance Corporation in its corporate capacity, as Secnred Party, a Member ofMortgage 

Electronic Registration Systems, Inc. (MERS) (the "Member"), and are hereby appointed as 

assistant secretaries and vice presidents of MERS, and, as such, are authorized to: 

{I) 	 release the lien of any mortgage loan registered on the MERS System that is shown to be registered to the 

Member; 

{2) 	 assign the lien of any mortgage loan naming MERS as the mortgagee when the Member is also the current 

promissory note-holder, or ifthe mortgage loan is registered on the MERS System, is shown to be 

registered to the Member; 

(3) 	 execute any and all documents necessary to foreclose upon the property securing any mortgage loan 

registered on the MERS System that is shown to be registered to the Member, including but not limited to 

(a) substitution oftrustee on Deeds ofTrost, (b) Trustee's Deeds upon sale on behalf ofMERS, (c) 

Affidavits ofNon-military Status, (d) Affidavits of Judgment, (e) Affidavits ofDebt, (f) quitclaim deeds, 

(g) Affidavits regarding lost promissory notes, and (h) endorsements ofpromissory notes to VA or HUD on 

behalfofMERS as a required part ofthe claims process; 

(4) 	 take auy aud all actions and execute all documents necessary to protect the interest ofthe Member, the 

beneficial owner of such mortgage loan, or MERS in any bankruptcy proceeding regarding a loan 

registered on the MERS System that is shown to be registered to the Member, including but not limited to: 

(a) executing Proofs ofClaim and Affidavits ofMovant under II U.S.C. Sec. 501-502, Bankruptcy Rule 

3001-3003, and applicable local bankruptcy rules, (b) entering a Notice ofAppearance, (c) vote for a 

nustee ofthe estate ofthe debtor, (d) vote for a committee of creditors, (e) attend the meeting of creditors 

ofthe debtor, or any adjourrunent thereof, and vote on behalf ofthe Member, the beneficial owner ofsuch 

mortgage loan, or MERS, on any question that may be lawfully submitted before creditors in such a · 

meeting, {f) complete, execute, and return a ballot acceptiog or rejectiog a plan, and (g) execute 

reaffirmation agreements; 

(5) 	 take any and all actions and execute all documents necessary to refinance, subordinate, amend or modify 

any mortgage loan registered on the MERS System that is shown to be registered to the Member. 

(6) 	 endorse checks made payable to Mortgage Electronic Registration Systems, Inc. to the Member that are 

received by the Member for payment on any mortgage loan registered on the MERS System that is shown 

to be registered to the Member; 

(7) 	 take any such actions and execute such documents as may be necessary to fulfill the Member's servicing 

obligations to the beneficial owner of such mortgage loan (including mortgage loans that are removed from 

the MERS System as a result ofthe transfer thereof to a non-member ofMERS). 

I, , being the Comorate Secretarv of Mortgage Electronic Registration Systems, Ioc., hereby 

certify that the foregoing is a nne copy of a Resolution duly adopted by the Board of Directors of said corporation 

effective as of the __ day of , 200 _ which is in full force and effect on this date and does not 

conflict with the Certificate oflnc;orporation or By-Laws of said corporation. 

________,Secretary 

D-1 
Schedule A 

Federal Deposit Insurance Corporation, in its corporate capacity, as Secured Party 


(Org #_____---' 


Mortgage Registration Systems, Inc. 


Certifying Officers 


D-2 

EXHIBITD-2 


MERS LIMITED POWER OF ATTORNEY 


MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., a Delaware corporation 

("MERS") and a wholly owned subsidiary of MERSCORP, Inc., a Delaware corporation 

("MERSCORP"), hereby appoints the list of persons attached on Schedule B as Attorneys-inFact (each an "Agent") for MERS for the limited purpose of executing documents and taking 

certain other actions as set forth below for those certain loans (the "Loans") secured by 

mortgages or deeds of trusts held by MERS as mortgagee or beneficiary in a nominee capacity 

for Residential Credit Solutions, Inc. (Org Id ("Servicer") and the Federal 

Deposit Insurance Corporation, in its corporate capacity ("Secured Party"). 

Limited Power ofAttorney Actions: 

(1) 	 release the lien of any Loan registered on the MERS® System that is shown to be 

registered to Secured Party; 

(2) 	 assign the lien of any Loan naming MERS as the mortgagee when Secured Party is 

also the current promissory note-holder, or if the Loan is registered on the MERS® 

System, is shown to be registered to Secured Party; 

(3) 	 execute any and all documents necessary to foreclose (or post-foreclosure, to sell to 

another entity) any property securing any Loan registered on the MERS® System that 

is shown to be registered to Secured Party, including but not limited to (a) 

substitution of trustee on Deeds of Trust, (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 HOD on behalf of MERS as a 

required part ofthe claims process; 

(4) 	 take any and all actions and execute all documents necessary to protect the interest of 

Secured Party, the beneficial owner of the Loans, or MERS, in any banlcruptcy 

proceeding regarding a Loan registered on the MERS® System that is shown to be 

registered to Secured Party, including but not limited to: (a) executing Proofs of 

· 	Claim and Affidavits of Movant under 11 U.S.C. Sec. 501-502, Banlcruptcy Rule 

3001-3003, and applicable local banlcruptcy rules, (b) entering a Notice of 

Appearance, (c) voting for a trustee of the estate of the debtor, (d) voting for a 

committee of creditors, (e) attending the meeting of creditors of the debtor, or any 

adjourmnent thereof, and voting on behalf of Secured Party, the beneficial owner of 

the 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; 

D-2-1 

-----------------------

(5) 	· take any and all actions and execute all documents necessary to refmance, 

subordinate, amend, or modify any and all_ Loans registered on the MERS® System 

that is shown to be registered to Secured Party; and 

(6) 	 endorse checks made payable to Mortgage Electronic Registration Systems, Inc., to 

Secured Party that are received by Secured Party for payment on any Loan registered 

on the MERS® System that is shown to be registered to Secured Party. 

Agent shall have full power and authority to act on behalf of MERS in these limited matters. 

This power and authority shall authorize Agent to exercise all ofMERS legal rights and powers, 

including all rights and powers that MERS may acquire in the future with regard to the Loans. 

This Limited Power of Attorney shall be construed narrowly as a limited power of attorney. The 

description of specific powers above is intende<\ to limit or restrict the powers granted in this 

Limited Power ofAttorney. 

This Limited Power of Attorney shall become effective immediately upon execution and shall 

expire (i) upon the termination or earlier repudiation (by the Federal Deposit Corporation in its 

corporate capacity under 12 U.S.C. § 182l(e)) of the Electronic Tracking Agreement, dated 

September 30, 2009 by and among the Federal Deposit Insurance Corporation, in its corporate 

capacity, as the Secured Party, Franklin Venture, LLC, Residential Credit Solutions, Inc., 

MERSCORP, Inc. and MERS, and (ii) as to any Agent, at such time as such Agent is no longer 

an employee or agent of Secured Party. This Limited Power of Attorney may be revoked by 

MERS and/or MERSCORP by providing written notice to Agent, but only at a time after all of 

the Loans have been transferred by MERS to Secured Party or a third party or parties designated 

by Secured Party. 

Dated ______, 20 . 

Mortgage Electronic Registration Systems, Inc., 

a Delaware Corporation 

By: 

Corporate Secretary 

D-2-2 

ScheduleB 

Federal Deposit Insurance Corporation, in its corporate capacity, as Secured Party 

(Org #_________; 

Mortgage Registration Systems, Inc. 

Certifying Officers 

D-2-3 

ACKNOWLEDGMENT 


STATE OF VIRGINIA § 

§ 

COUNTY OFFAIRFAX § 

This instrument was acknowledged before me on the __ day of----:----=-' 20_, by 

::--------::----:=--::-'' a duly authorized representative of Mortgage Electronic Registration 

Systems, Inc., a Delaware corporation, on behalf of said corporation. 

Notary Public, State ofVirginia 

D-2-4