SFR2010~3 

EXECUTION COPY 

AMENDED AND RESTATED 


LIMITED LIABILITY COMPANY OPERATING AGREEMENT 


2010~3 SFR VENTURE, LLC 


Dated as of November 30,2010 


FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
TABLE OF CONTENTS 


ARTICLE I Certain Defmitions ................................................................................................ 2 


1.1 Definitions........................................................................................................ 2 


1.2 Construction................................................................................................... 11 


ARTICLE II Organization of the Company ............................................................................. 12 


2.1 Formation; Continuation and Admission of Members..................................... 12 


2.2 Name.............................................................................................................. 13 


2.3 Organizational Contributions and Related Actions .......................................... 13 


2.4 Registered Office; Chief Executive Office ...................................................... 13 


2.5 Purpose; Duration ........................................................................................... 13 


2.6 Single Purpose Entity; Limitations on Company's Activities .......................... 14 


2.7 Ratification of Certain Actions ....................................................................... 16 


ARTICLE III Management and Operations of the Company ................................................... 17 


3.1 Management of the Company's Affairs .......................................................... 17 


3.2 Removal ofthe Manager.................................................................................. 18 


3.3 Employees and Services ................................................................................. 19 


3.4 Restrictions on Manager and Private Owner ................................................... 19 


3.5 Related Party Agreements .............................................................................. 21 


3.6 Real Property .................................................................................................. 21 


3.7 Custodian and Paying Agent ........................................................................... 21 


3.8 Relationships with Borrowers, etc ................................................................... 22 


3.9 No Conflicting Obligations ............................................................................. 22 


3.10 Compliance with Law ..................................................................................... 22 


3.11 No Bankruptcy Filing ..................................................................................... 22 


3.12 No Liens ......................................................................................................... 22 


3.13 Remedies Upon an Event of Default; Security Interest .................................... 23 


3 .14 Purchase Right of the Initial Member ............................................................. 26 


3.15 No ERISA Plan Assets ................................................................................... 28 


ARTICLE IV Membership Interests; Rights and Duties of, and Restrictions on, 


Members ........................................................................................................ 28 


4.1 General........................................................................................................... 28 


4.2 LLC Interests .................................................................... :········ ..··················· 29 


4.3 Filings; Duty ofMembers to Cooperate .......................................................... 29 


4.4 Certain Restrictions and Requirements ........................................................... 30 


4.5 Liability of the Initial Member ........................................................................ 30 


4.6 Indemnification.............................................................................................. 31 


ARTICLE V Capital Contributions; Liquidity Account; Special Reserve Account; 


Excess Liquidity Advance; Interest Reserve Account ..................................... 34 


5.1 Capital Contributions ...................................................................................... 34 


5.2 Liquidity Account. ................................ : ......................................................... 35 


FDIC SFR 2010.3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
TABLE OF CONTENTS 

(Continued) 

5.3 Special Reserve Account. ............................................................................... 35 , 


5.4 Excess Liquidity Advances ............................................................................. 35 


5.5 Interest Reserve Account ................................................................................ 36 


ARTICLE VI Capital Accounts; Allocations; Priority ofPayments; Distributions ................... 36 


6.1 Capital Accounts ............................................................................................ 36 


6.2 Allocations to Capital Accounts ...................................................................... 36 


6.3 Tax Allocations .............................................................................................. 38 


6.4 Determinations by Tax Matters Member. ........................................................ 39 


6.5 Priority ofPayments ....................................................................................... 40 


6.6 Distributions................................................................................................... 40 


ARTICLE VII Accounting, Reporting and Taxation ............................................................... 41 


7.1 Fiscal Year .................................................................. ; .................................. 41 


7.2 Maintenance ofBooks and Records ................................................................ 41 


7.3 Financial Statements ....................................................................................... 43 


7.4 Additional Reporting and Notice Requirements .............................................. 43 


7.5 Designation of Tax Matters Member .............................................................. 46 


7.6 Tax Information .............................................................................................. 46 


7.7 Business Plan ................................................................................................. 4 7 


ARTICLE VIIT Restrictions on Disposition ofLLC Interests .................................................. 48 


8.1 Limitations on Disposition ofLLC Interests ................................................... 48 


8.2 Change of Control .......................................................................................... 48 


8.3 Additional Provisions Relating to Permitted Dispositions ........... , ................... 49 


8.4 Effect of Permitted Dispositions ..................................................................... 49 


8.5 Effect of Prohibited Dispositions .................................................................... 50 


8.6 Distributions After Disposition ....................................................................... 50 


8.7 Transfers by the Initial Member ......................................................... :······· ..... 51 


8.8 Resignation; Dissolution ................................................................................. 51 


8.9 Applicable Law Withdrawal ........................................................................... 51 


ARTICLE IX Dissolution and Winding-Up ofthe Company................................................... 52 


9.1 Dissolution ..................................................................................................... 52 


9.2 Winding-Up Procedures ................................................................................. 52 


9.3 Termination of the Company .......................................................................... 53 


ARTICLE X Qualified Transferees ......................................................................................... 54 


10.1 Qualified Transferees ..................................................................................... 54 


ARTICLE XI Manager Liability ........ , ..................................................................................... 57 


11.1 Liability ofthe Manager ................................................................................. 57 


ii 


FDIC SFR 2010-3 (Final} 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
TABLE OF CONTENTS 

(Continued) 

Page 

ARTICLE XII Servicing of Mortgage Loans .......................................................................... 58 


12.1 Servicing........................................................................................................ 58 


12.2 Servicing Standard ......................................................................................... 62 


12.3 Servicing of Mortgage Loans .......................................................................... 64 


12.4 Removal ofthe Servicer................................................................................. 68 


12.5 Interim Management Fee and Interim Servicing Fee; Management Fee .......... 72 


12.6 Servicing Expenses ......................................................................................... 72 


12.7 Use ofMortgage Loan Proceeds ..................................................................... 72 


12;8 Collection Account ......................................................................................... 74 


12.9 Distribution Account ...................................................................................... 74 


12.10 Interest Reserve Account. ............................................................................... 74 


12.11 Liquidity Account. .......................................................................................... 75 


12.12 Certain Servicing and Mortgage Loan Administration Decisions .................... 76 


12.13 Management and Disposition of Underlying Collateral.. ................................. 76 


12.14 Acquisition ofUnderlying Collateral. ............................................................. 76 


12.15 Administration ofREO Properties .................................................................. 77 


12.16 Releases of Underlying Collateral.. ................................................................. 79 


12.17 Clean-Up Call Rights ...................................................................................... 80 


12.18 Certain Transfer Obligations ........................................................................... 80 


ARTICLE Xlll Miscellaneous ................................................................................................ 81 


13.1 Waiver of Rights of Partition and Dissolution ................................................. 81 


13.2 Entire Agreement; Other Agreements ............................................................. 81 


13 .3 Third Party Beneficiaries ................................................................................ 81 


13.4 Expenses ........................................................................................................ 82 


.13.5 Waivers and Amendments .............................................................................. 82 


13.6 Notices ........................................................................................................... 84 


13.7 Counterparts; Facsimile Signatures ................................................................. 85 


13.8 Successors and Assigns .................................................................................. 86 


13.9 Compliance With Law; Severability ............................................................... 86 


13.10 Power of Attorney .......................................................................................... 87 


13.11 Governing Law ...........................................................•................................... 87 


13.12 Jurisdiction; Venue and Service ...................................................................... 87 


13.13 Waiver of Jury Trial ....................................................................................... 89 


ANNEX I Member Schedule .......................................................................................... .I-1 


EXHIBIT A Certificate of Formation ............................................................................... A-1 


EXHIBITB Information, Form of Monthly Report .......................................................... B-1 


EXHIBITC Form of Assignment and Assumption Agreement.. ....................................... C-1 


lll 

FDIC SFR2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
TABLE OF CONTENTS 

(Continued) 

EXIDBITD Form ofLetter of Credit ............................................................................... D-1 


iv 

FDIC SFR2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
2010-3 SFR VENTURE LLC 


AMENDED AND RESTATED 


LIMITED LIABILITY COMPANY OPERATING AGREEMENT 


THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATING 

AGREEMENT (as the same may be amended or modified from time-to-time in accordance with 

the terms hereof, this "Agreement"), is made and entered into as of the 30th day ofNovember, 

2010, by and among the Initial Member, the Private Owner, and the Company. 

WHEREAS, the FDIC has separately been appointed receiver for each of the Failed 

Banks; and 

WHEREAS, on November 23, 2010, the Initial Member formed the Company as a 

Delaware limited liability company and was admitted as its initial, and sole, member (owning a 

·one hundred percent (100%) limited liability company interest), and the Initial Member and the 

Company have entered into that certain Limited Liability Company Operating Agreement dated 

as of November 23, 2010 (the "Original LLC Operating A2reement") as the initial "limited 

liability company agreement" (as such term is defmed in the Act) ofthe Company; 

WHEREAS, the Initial Member and the Company have entered into the Contribution 

Agreement dated as of the Closing Date pursuant to which (i) the Initial Member has sold in part 

and (as the sole member-of the Company at the time) contributed in part to the Company, and the 

Company purchased from the Initial Member, all ofthe Initial Member's right, title and interest 

in and to the Mortgage Loans, and assumed the Obligations (as defined in the Contribution 

Agreement), (ii) the Company executed and delivered to the Initial Member the Purchase Money 

Note for the benefit of the Initial Member; and (iii) the Purchase Money Note Guarantor 

guaranteed payment of principal on the Purchase Money Note pursuant to the terms of the 

Guaranty Agreement, and obtained a security interest in the Mortgage Loans and Underlying 

Collateral under the Reimbursement and Security Agreement; 

WHEREAS, following closing of the transactions contemplated by the Contribution 

Agreement and the execution of the Original LLC Operating Agreement, the Initial Member 

agreed, pursuant to the terms of the Transferred LLC Interest Sale Agreement, to sell to the 

Private Owner, effective as of the Closing Date an LLC Interest representing a forty percent 

(40)% equity interest in the Company; 

WHEREAS, after giving effect to the transactions contemplated by the. Transferred LLC 

Interest Sale Agreement, as ofthe Closing Date the Initial Member and Private Owner will own 

all the issued and outstanding limited liability company interests in the Company; 

WHEREAS, the parties desire to amend and restate the Original LLC Operating 

Agreement in its entirety in order to reflect the admission of the Private Owner as a Member of 

the Company and to set forth the terms and conditions on which the Company shall be owned 

and operated; 

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FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
NOW, THEREFORE, in consideration of the premises and the other covenants and 

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

sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 

ARTICLE I 


Certain Definitions 


1.1 Definitions. This Agreement constitutes the "limited liability company 

agreement" (as such term is defined in the Act) ofthe Company. For purposes ofthis Agreement, 

certain terms used in this Agreement shall have the meaning and definitions set forth in that 

certain Agreement of Common Definitions dated as of the Closing Date. In addition, for 

purposes of this Agreement, the following terms shall have the meanings and definitions 

hereinafter respectively set forth. 

"Act" shall mean the Delaware Limited Liability Company Act, 6 Del. C. §§ 18­

101 et seq. 

"Adjusted Capital Account Deficit" means, with respect to any Member, the 

deficit balance, if any, in such Member's Capital Account as of the end of the relevant Fiscal 

Year, after giving effect to the following adjustments: 

(A) Credit to such Capital Account any amounts that such Member is 

obligated to restore .or is deemed to be obligated to restore pursuant to Treasury 

Regulations Sections 1.704-2(g)(l) and 1.704-2(i)(5); and 

(B) Debit to such Capital Account the items described in Treasury Regulations 

Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6). The 

foregoing definition of Adjusted Capital Account Deficit is intended to comply with the 

provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted 

consistently therewith. 

"A2:reement" shall have the meaning given in the preamble. 

"Book Value" shall mean, (i) with respect to contributed property, the initial Fair 

Market Value of such property, and (ii) with respect to any other Company asset, the adjusted 

basis of such asset for federal income tax purposes; provided. however, that the Book Values of 

all Company assets shall be adjusted to equal their respective Fair Market Values, in accordance 

with the rules set forth in Section 1.704-1(b)(2)(iv)(f) of the Treasury Regulations, except as 

otherwise provided herein, immediately prior to: (a) the date of the acquisition of any additional 

LLC Interest by any new or existing Member in exchange for more than a de minimis Capital 

Contribution; (b) the date of the actual distribution of more than a de minimis amount of 

Company property (other than a pro rata distribution) to a Member in connection with the 

redemption of all or part of such Member's LLC Interest; or (c) the date ofthe actual liquidation 

of the Company within the meaning of Section 1.704-1 (b )(2)(ii)(g) of the Treasury Regulations; 

and provided further, that adjustments pursuant to clauses (a) and (b) above shall be made only if 

the Tax Matters Member reasonably determines, after consultation with the Initial Member, that 

such adjustments are necessary or appropriate to reflect the relative economic interests of the 

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FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
Members. The Book Value of any Company Property distributed to any Member shall be 

adjusted immediately prior to such distribution to equal its Fair Market Value as of such date. 

"Business" shall mean the acquisition of the Mortgage Loans pursuant to the 

Contribution Agreement and the ownership, servicing, administration, management and 

liquidation ofthe Mortgage Loans .. 

"Buy-Out" the purchase of the Private Owner's LLC Interest by the Initial 

Member pursuant to Section 3.14(a). 

"Buy-Out Closing" shall have the meaning given in Section 3 .1..4Cal. 

"Buy-Out Closing Date" shall have the meaning given in Section 3.14(b). 

"Buy-Out Notice" shall have the meaning given in Section 3.14ful. 

"Buv-Out Valuation Date" shall have the meaning given in Section 3.14(a). 

"Capital Account" shall mean the capital account of a Member related to such 

Member's outstanding LLC Interests, as adjusted to account for allocations ofNet Income (and 

items thereof) and Net Loss (and items thereof), and contributions and distributions relating to 

such LLC Interests, as provided in greater detail in Section 6.2 and elsewhere in this Agreement. 

"Capital Contribution" shall mean a contribution to the capital ofthe Company 

made, deemed to be made, or to be made pursuant to the Original LLC Operating Agreement, the 

Contribution Agreement, or this Agreement. 

"Certificate" shall have the meaning given in Section 2__._lial. 

"Clean-up Call" shall have the meaning set forth in Section 12.17. 

"Closing" shall mean the consummation of the transactions contemplated in the 

Transferred LLC Interest Sale Agreement. 

"Company Property" shall mean all property, whether real or personal, tangible 

or intangible, owned by the Company, including the Mortgage Loans contributed or sold by the 

Initial Member pursuant to the Contribution Agreement. 

"Contract for Deed" shall mean an executory contract with a third party to 

convey real property to such third party upon payment of the amounts set forth therein and/or the 

performance of any other obligations described therein, including any installment land contract. 

"Covered Persons" shall have the meaning given in Section 4.6(f). 

"Damages" shall mean any and all damages, disbursements, suits, claims, 

liabilities, obligations, judgments, fines, penalties, charges, amounts paid in settlement, costs and 

expenses (including, without limitation, attorneys' fees and expenses) arising out of or related to 

litigation and interest on any of the foregoing. 

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FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
"!!£Ill" of any Person shall mean (i) all indebtedness of such Person for borrowed 

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

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

Person evidenced by notes, bonds, debentures or other similar instruments, (iv) 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), 

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

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

others of the kinds referred to in clauses (i) through (v) above in respect of which such Person 

has entered into or issued any Guarantee. 

"Direct Owner" shall mean, with respect to any Person, any other Person who 

has any direct ownership interest in such Person. 

"Disposition" shall mean any sale, assignment, alienation, gift, exchange, 

conveyance, transfer, pledge, hypothecation, granting of a security interest or other disposition or 

attempted disposition whatsoever, in each case, whether voluntary or involuntary, and including 

any ofthe foregoing by operation of Law (including any merger into, or any consolidation with, 

any other Person). For the avoidance of doubt, it is understood and agreed that a statutory 

conversion of a Person into another form of Person does not constitute a Disposition. The term 

"Dispose" shall mean to make or consummate a "Disposition." 

"Dispute Resolution Procedure" shall mean the following procedure solely for 

the purpose of determining a particular amount: 

Each Member shall submit to the other, within five (5) Business Days of referral 

to this procedure, its proposed amount. If either Member fails to submit such a proposal within 

such time period, then the amount shall be the single proposal provided. lfthe higher of the two 

proposals is not greater than 110% of the lower proposal, then the amount" shall be the average of 

such two proposals. If the higher of such two proposals is greater than 110% of the lower 

amount then the Members shall, within seven (7) days of their submission of such proposals, 

jointly select a nationally recognized investment banking frrm which shall, within fifteen (15) 

days of its appointment, select the proposed amount previously submitted by the Members 

pursuant to this procedure that in its opinion more closely reflects the amount being determined 

as described in the Agreement, and the proposal thus selected shall be considered the amount for 

purposes ofthe Agreement. lfthe Members fail to agree on such investment banking firm within 

such seven-day period, then each Member shall nominate, within such seven-day period, a 

nationally recognized investment banking firm that is not an Affiliate thereof and the investment 

banking frrm that is to make such determination shall be chosen by the two nominated frrms 

promptly after the expiration of such seven-day period; provided, that if either Member shall fail 

to nominate such an investment banking frrm within such seven-day period, such determination 

shall be made by the investment banking frrm nominated by the other Member. The fees ofthe 

selected investment-banking firm shall be paid in the manner provided in the Agreement. Any 

determination of any amount made by any investment-banking frrm selected in accordance with 

4 

FDIC SFR20J0-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
this procedure shall be fmal and binding on the Members and, without limitation of the 

foregoing, may be enforced by any court having jurisdiction in the premises. 

"Dissolution Event" shall mean, with respect to any specified Person, (i) in the 

case of a specified Person that is a partnership or limited partnership or a limited liability 

company, the dissolution and commencement of winding up of such partnership, limited 

partnership or limited liability company, (ii) in the case of a specified Person that is a 

corporation, the filing of a certificate of dissolution, or its equivalent, for the corporation or the 

revocation of its charter and the expiration of ninety (90) days after the date of notice to the 

corporation ofrevocation without a reinstatement of its charter, and (iii) in the case of any other 

specified entity, the termination of such entity. For the avoidance of doubt, it is understood and 

agreed that a statutory conversion of a Person into another form of Person does not constitute a 

"Dissolution Event." 

"Embargoed Person" shall mean any person subject to trade restrictions under 

United States Law, including, without limitation, the International Emergency Economic Powers 

Act, 50 U.S.C. §§1701, et seq., the Trading With the Enemy Act, 50 U.S.C. §§ App. 1, et seq., 

any foreign assets control regulations of the United States Treasury Department (31 C.F.R., 

Subtitle B, Chapter V, as amended), or any enabling legislation or regulations promulgated 

thereunder or any executive order relating thereto (including Executive Order 13224 of 

September 21, 2001 Blocking Property and Prohibiting Transactions With Persons Who 

Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) or 31 C.F.R. 

§594.101, et seq.) with the result that a purchase of assets or any other transaction entered into 

with respect to any assets (including, without limitation, any investment in any structured 

transaction), wheth~r directly or indirectly, is prohibited by or in violation of law. 

"Events of Default" shall mean any one of the following events (whatever the 

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

by operation of Law or pursuant to any judgment, decree or order of any court or any order, rule 

or regulation of any administrative or governmental body): 

(a) the receipt by the Company of notice from the Collateral Agent that an 


Event of Default under and as defined in the Reimbursement and Security Agreement has 


occurred and is continuing beyond any applicable notice and cure periods; 


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

than as may be provided for in the definition oflnsolvency Event) (i) with respect to any ofthe 

Company, the Private Owner, the Manager or any oftheir Affiliates; or (ii) with respect to any 

Servicer or any Subservicer or any Affiliate ofthe foregoing; provided, that such Insolvency 

Event under this clause (ii) (that is not otherwise an Insolvency Event under clause (i) hereof) 

shall not be an Event of Default hereunder (but shall in all events be a default under the applicable 

Servicing Agreement or Subservicing Agreement) so long as the Manager shall have fully 

replaced (or caused the replacement of) such affected Servicer or Subservicer within thirty (30) 

· days after the occurrence of such Insolvency Event; 

5 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
(c) any failure ofthe Company to pay any Servicing Expense when due in 

accordance with Section 12.6 of this Agreement, which failure continues unremedied for a period 

ofthirty (30) days; or 

(d) the failure of the Company or the Private Owner (for the avoidance of 

doubt, in any capacity, including as a Member and/or as a Manager) to comply in any material 

respect with or enforce the provisions ofthis Agreement or the Servicing Agreement; or 

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

material respect its obligations under the Servicing Agreement or (ii) a failure by the Manager (in 

its individual capacity) to replace the Servicer upon the occurrence of either an Event ofDefault 

under the Reimbursement and Security Agreement as a result ofthe Servicer's acts or omissions 

or a material breach of or event of default under the Servicing Agreement by the Servicer; 

(f) the failure of the Manager (in any capacity) to comply in any material 

respect with its obligations under the Servicing Agreement or the Company to comply in any 

material respect with its obligations under the Custodial and Paying Agency Agreement (including 

any failure to pay fees or expenses due thereunder); 

(g) there shall be a change in the Private Owner or the Manager or there shall 

occur a Change of Control with respect to the Private Owner, the Manager (other than as 

expressly permitted pursuant to Section 8.2) or any Restricted Servicer Change ofControl; 

provided, that, any such Restricted Servicer Change of Control shall not be an Event of Default 

hereunder (but shall in all events be an event of default under the applicable Servicing Agreement) 

so long as the Manager shall have fully replaced (or caused the replacement of) such affected 

Servicer within thirty (30) days after the occurrence of such Restricted Servicer Change of 

Control; 

(h) the failure ofthe Company to remit or cause to be remitted all Mortgage 

Loan Proceeds to the Paying Agent as and when required or the failure ofthe Company to make 

any other payments required hereunder at the time required; 

(i) any failure by an Issuing Bank to comply with any terms, agreements or 

conditions of any Qualifying Letter of Credit; 

(j) any payments by the Secured Parties ofthe Loan Parity Obligation; 

(k) the failure ofthe Company or the Private Owner to cause the liquidation 

ofthe Mortgage Loans upon the exercise of a Clean-Up Call pursuant to Section 12.17; 

(1) the material breach by the Private Owner or the Company of any 

representation or warranty in the Reimbursement and Security Agreement or the failure ofthe 

Company or Private Owner to comply in any material respect with other material covenants in the 

Reimbursement and Security Agreement; 

(m) the failure of the Company to pay, when due, the Purchase Money Notes; 

or 

6 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 


Pool Nos. 24020 and 24021 


13235439.7 
(n) the failure of the Company to pay interest in full on the Purchase Money 

Notes for any three (3) Distribution Dates occurring in a twelve (12) month period. 

"Fair Market Value" shall mean, with respect to any asset ori a given date, the 

gross fair market value of such asset, unreduced by any liability, on such date as determined in 

good faith by the Manager after consultation with the Initial Member or, in the case of a BuyOut, in accordance with Section 3.14(b) below; provided, however, that the initial Fair Market 

Value for each Mortgage Loan shall be the value thereof as set forth on the Mortgage Loan 

Value Schedule and, provided, further, that the parties hereto acknowledge and agree that, as of 

the Closing Date, the Fair Market Value ofthe Capital Contribution made by the Initial Member 

shall be based on the Transferred LLC Interest Sale Price, as set forth in the Transferred LLC 

Interest Sale Agreement, and such Fair Market Value shall be utilized for determining the initial 

Capital Accounts ofthe Members as of the Closing Date. 

"Fiscal Year" shall have the meaning given in Section 7 .1. 

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

obligation, (i) 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 indebtedness or other obligation, 

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

such indebtedness or other obligation (A) 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, (B) 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), 

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 (C) otherwise to assure the obligee of such indebtedness or other obligation 

against loss with respect thereto, or (ii) 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. 

"Incentive Threshold" shall have the meaning given in Section 6.6(b)Civ). 

"Incentive Threshold Base Amount" shall have the meaning given m· 

Section 6.6(b)Civ)(A). 

"Incentive Threshold Event" shall have the meaning given in Section 6.6(b)(iii). 

"Indemnified Parties" shall have the meaning give in Section 4.6(a). 

7 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
"Initial Member Capital Contribution" shall have the meanmg given in 

Section 2.3(a)(i). 

"Issuing Bank'' shall mean, with respect to any Qualifying Letter of Credit, the 

applicable issuing banlc 

"LC Reissuance/Extension Failure" shall mean, with respect to any Qualifying 

Letter of Credit, (i) any failure of the Issuing Bank to be and remain a Qualified Issuer, or (ii) 

any failure of such Qualifying Letter of Credit to be automatically renewed (for an additional 

year) at least sixty (60) days prior to the then-scheduled expiration of such Qualifying Letter of 

Credit, or the receipt by the Initial Member of any notice to the effect that such Qualifying Letter 

ofCredit will not be automatically renewed (for such additional one year period), in each case 

unless, within ten (10) days of the occurrence of such failure or the Initial Member's receipt of 

such notice, as the case may be, the Private Owner shall have fully replaced such Qualifying 

Letter of Credit with a new Qualifying Letter of Credit issued by a Qualified Issuer (conforming 

to all of the requirements set forth in this Agreement with respect to Qualifying Letters of Credit) 

or otherwise provided Qualifying Cash Collateral in the full undrawn face amount of such 

Qualifying Letter of Credit. 

"LLC Interest" means, with respect to any particular Member, (i) the entire 

limited liability company interest in the Company of such Member, including such Member's 

rights to share in the income, gain, loss, deductions and credits of, and the right to receive 

distributions from, the Company, (ii) all other rights, benefits and privileges enjoyed by such 

Member (under the Act, this Agreement or otherwise) in its capacity as a Member, including 

rights to vote, consent and approve, and (iii) all other rights, benefits, privileges and claims 

(whether known or unknown) of such Member under, or arising under, this Agreem~nt. For 

purposes of clarification, references in this Agreement to the term "limited liability company 

interest" shall mean a "limited liability company interest" as such term is defined in the Act. 

"Losses" shall have the meaning given in Section 4.6(a). 

"Members" shall mean (i) the Person from time-to-time constituting the "Initial 

Member" in accordance with this Agreement, and (ii) from and after the Closing Date, the 

Person from time-to-time constituting the "Private Owner" in accordance with this Agreement, 

in each case so long as such Person remains a member of the Company. For purposes of 

clarification, references in this Agreement to the term "member" (lowercase) shall mean a 

"member" as such term is defined in the Act. 

"Member Schedule" shall mean the schedule attached hereto (and hereby 

incorporated in this Agreement) as Annex I, as amended, restated, supplemented or otherwise 

modified from time-to-time. · 

"Monthly Adiusted Annualized Yield" is equal to 1.8769 percent. The Monthly 

Adjusted Annualized Yield is derived as follows: (1 +Annualized Yield Threshold) 1112 - 1 or (1 

+ 0.25)1112 -1, where the Annualized Yield Threshold is 25%. 

8 

FDIC SFR 2010-3 (Final} 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
"Net Income and Net Loss" shall mean, for each Fiscal Year or other period, the 

taxable income or loss of the Company, or particular items thereof, determined in accordance 

with the accounting method used· by the Company for federal income tax purposes with the 

following adjustments: (a) all items of income, gain, loss, ·deduction or expense specially 

allocated pursuant to this Agreement (including pursuant to Sections 6.2(b)(i) through .{iy)) shall 

not be 'taken into account in computing such taxable income or loss; (b) any income of the 

Company that is exempt from federal income taxation and not otherwise taken into account in 

computing the taxable income of the Company shall be added to such taxable income or loss; 

(c) if the Book Value of any asset differs from its adjusted tax basis for federal income tax 

purposes, any gain or loss resulting from a disposition of such asset shall be calculated with 

reference to such Book Value; (d) upon an adjustment to the Book Value of any asset pursuant to 

the definition of Book Value, the amount of the adjustment shall be included as gain or loss in 

computing such Net Income or Net Loss; (e) if the Book Value of any asset differs from its 

adjusted tax basis for federal income tax. purposes, the amount of depreciation, amortization or 

cost recovery deductions with respect to such asset for purposes of determining Net Income or 

Net Loss shall be an amount which bears the same ratio to such Book Value as the federal 

income tax depreciation, amortization or other cost recovery deductions bears to such adjusted 

tax basis (provided that if the federal income tax depreciation, amortization or other cost 

recovery deduction is zero, the Tax Matters Member may use any reasonable method for 

purposes of determining depreciation, amortization or other cost recovery deductions in 

calculating Net Income or Net Loss); and (f) except for items in (a) above, any expenditures of 

the Company not deductible in computing taxable income or loss, not properly capitalizable and 

not otherwise taken into account in computing Net Income or Net Loss pursuant to this 

definition, shall be treated as deductible items. 

"Original LLC Operating Agreement" shall have the meaning given in the 

preamble. 

"Permitted Disposition" shall have the meaning given in .Section 8.1. 

"Plan Asset Regulation" shall have the meaning given in Section lO.l(r). 

"Previously Approved Matters".shall have the meaning given in Section 2.7. 

"Private Owner Oblintions" shall have the meanfug given in Section 3.1..3.hl. 

"Property" shall mean any property contributed to, acquired by or otherwise 

owned by the Company, including, without limitation, any real or personal, tangible or intangible 

property, including but not limited to any legal or equitable interest in such property, ownership 

interests in entities owning real or personal property, and money. 

"Purchaser Eligibility Certification" means, (i) with respect to the Private 

Owner, any Purchaser Eligibility Certification delivered by the Private Owner (or its Affiliates) 

to the Receiver in· connection with the transactions contemplated in this Agreement and the 

Ancillary Documents including the Purchaser Eligibility Certifications delivered by the Private 

Owner to the Receiver, and, (ii) with respect to any Permitted Disposition (and the applicable 

transferee in connection therewith), a purchaser eligibility certification in substantially the form 

9 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
of the Purchaser Eligibility Certification referenced in item (i), with such changes as the Initial 

Member may require based on changes to such form of Purchaser Eligibility Certification as 

maintained by the FDIC. 

"Qualified Issuer" means any FDIC-insured depository institution that is "well 

capitalized" as defined in 12 U.S.C. § 1831o (b)(1)(A), is in the business of issuing letters of 

credit and maintains offices in either or both ofNew York City, NY and Washington, DC, where 

presentation and drawings on such letters of credit can be duly made. 

"Qualifying Cash Collateral" shall have the meaning given in Section 3.13(d). 

"Qualified Transferee" shall have the meaning given in Section 10.1. 

"Qualifying Letter of Credit" means an irrevocable standby letter of credit, in an 

amount at least equal to the Required LOC Special Reserve Amount, substantially in the form of 

Exhibit D hereto (or in such other form as may be acceptable to, and approved in writing by, the 

Initial Member), duly issued by an Issuing Bank that is, as of the date of issuance thereof, a 

Qualified Issuer and delivered to the Initial Member, drawable at such Issuing Bank's offices in 

New York City, NY or Washington, DC, and having an initial term of one year with automatic 

renewals thereafter (without amendment except for extension of the then current expiry date by 

an additional year) until the Initial Member has delivered written notice to the Issuing Bank to 

the effect that such Qualifying Letter of Credit is being released in its entirety. 

"Related Party Agreement" shall have the meaning given in Section 3.5. 

"Secured Assets" shall mean shall mean (x) all right, title and interest of the 

Initial Member in and to the Special Reserve Account (and all funds therein and related rights 

thereto as more specifically described in the Account Control Agreement related to the Special 

Reserve Account), (y) the LLC Interest held by Private Owner and all other rights of the Private 

Owner (in any capacity) under this Agreement and the Ancillary Documents (including rights to 

any distributions or payments on account of any Excess Liquidity Advances made by or on 

behalf of the Private Owner), and (z) all proceeds of any of the foregoing at any time (including 

distributions thereon or other income in respect thereof). 

"Site Assessment" shall have the meaning given in Section 12.14_lcl. 

"Subsidiary" shall mean, with respect to any specified Person, each of (i) any 

other Person not less than a majority of the overall economic equity in which is owned, directly 

or indirectly through one of more intermediaries, by such specified Person, and (ii) without 

limitation of clause (i), any other Person who or which, directly or indirectly through one or 

more intermediaries, is Controlled by such specified Person (it being understood with respect to 

clause (i) that a pledge for collateral security purposes of an equity interest in a Person shall not 

be deemed to affect the ownership of such equity interest by the pledgor so long as such pledgor 

continues to be entitled, in all material respects, to all the income with respect to such equity 

interest). 

10 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
"Successor" shall mean, (i) with respect to a Member, any future Member which 

is a direct or indirect transferee (whether by Permitted Disposition, merger, consolidation or 

otherwise) of the LLC Interest of such Member; (ii) with respect to any former Member, the 

current Member which is the direct or indirect transferee (whether by Permitted Disposition, 

merger, consolidation or otherwise) of the LLC Interest of such former Member and (iii) with 

respect to the Initial Member, any Person that is a direct or indirect transferee (whether by 

Disposition, merger, consolidation or otherwise) of any of the Initial Member's rights or interests 

under this Agreement or any other Ancillary Document. 

"Tax" shall mean any federal, state, county, local, or foreign tax, charge, fee, 

levy, duty, or other assessment, including any income, gross receipts, transfer, recording, capital, 

withholding, property, ad valorem, or other tax or governmental fee of any kind whatsoever, 

imposed or required to be withheld by any governmental authority having jurisdiction over the 

assessment, determination, collection, or other imposition of any Tax, including any interest, 

penalties and additions imposed thereon or with respect thereto. 

"Tax Allocation Report" shall have the meaning given in Section 7 .6(b ). 

"Tax Matters Member" shall have the meaning given in Section 7.5. 

"Third Party Claim" shall have the meaning given in Section 4.6(a). 

"Threshold Increase Amount" as of any Distribution Date shall be equal to the 

product of(a) the Incentive Threshold as ofthe preceding Distribution Date (or, in the case ofthe 

frrst Distribution Date, the Closing Date) and (b) the Monthly Adjusted Annualized Yield. 

"Treasury Ree:ulations" shall mean the regulations promulgated by the United 

States Department of the Treasury pursuant to and in respect of provisions of the Code, and all 

references to sections of the Treasury Regulations shall include any corresponding provision or 

provisions of succeeding, substitute, proposed or final Treasury Regulations. 

"Unreimbursable Expense" shall have the meaning given in Section 4.6(e). 

"i" shall mean lawful currency ofthe United States ofAmerica. 

1.2 Construction.Captions. Paragraph titles or captions contained in this Agreement 

are inserted only as a matter of convenience and for reference and in no way define, limit, extend 

or describe the scope of this Agreement or the intent of any provisions hereof. All Section and 

paragraph references contained herein shall refer to this Agreement unless otherwise specified. 

(b) References to Persons Exclusive. References to "Affiliates" or 

"Subsidiaries" of a specified Person refer to, and include, only other Persons which from time-totime constitute "Affiliates" or "Subsidiaries," as the case may be, of such specified Person, and do 

not include, at any particular time, other Persons that may have been, but at such time have ceased 

to be, "Affiliates," or "Subsidiaries," as the case may be, ofsuch specified Person, except to the 

extent that any such reference specifically provides otherwise. A reference to a Member or other 

Person, in and of itself, does not, and shall not be deemed to, refer to or include any other Person 

11 

FDIC SFR 2010-3 (Final) 

A&R Limited Li~bility Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
having an interest in a Member or other Person (such as, without limitation, any stockholder or 

member of or partner in a Member, or other Person). 

(c) Use of"Or." The term "or" is not exclusive. 

(d) References to Laws. A reference in this Agreement to a Law includes any 

amendment, modification or replacement to such Law. 

(e) Use ofAccounting Terms. Accounting terms used herein shall have the 

meanings assigned to them by GAAP applied on a consistent basis by the accounting entity to 

which they refer. · 

(f) References to Documents. References to any document, instrument or 

agreement (i) shall be deemed to include all appendices, exhibits, schedules and other attachments 

~hereto and all documents, instruments or agreements issued or executed in replacement thereof, 

and (ii) shall mean such document, instrument or agreement, or replacement thereof, as amended, 

modified and supplemented from time-to-time in accordance with its terms and as the same is in 

effect at any given time. 

(g) Use of"Herein." Unless otherwise specified, the words "hereof," "herein" 

and "hereunder" and words of similar import when used in this Agreement shall refer to this 

Agreement as a whole and not to any particular provision ofthis Agreement. 

(h) Use of"Including." The words "include" and "including" and words of 

similar import when used in this Agreement are not limiting and shall be construed to be followed 

by the words ''without limitation," whether or not they are in fact followed by such words. 

(i) Use of"During." The word "during" when used in this Agreement with 

respect to a period oftime shall be construed to mean commencing at the beginning ofsuch period 

and continuing until the end of such period. 

ARTICLED 


Organization of tbe Company 


2.1 Formation; Continuation and Admission ofMembers. 

(a) On November 23,2010, the Receiver caused the Certificate ofFormation 

ofthe Company, in the form attached as Exhibit A hereto (the "Certificate"), to be filed in the 

office ofthe Secretary of State ofthe State ofDelaware. The Certificate shall not be amended 

except to change the registered agent or office ofthe Company. 

(b) The Company shall continue as a limited liability company under the Act 

and in accordance with the further terms and provisions ofthis Agreement. 

(c) The Initial Member previously was, and the Private Owner hereby agrees 

to be, and is, admitted as a member of the Company such that, as of the Closing Date, the Initial 

Member and the Private Owner are the sole members ofthe Company. Until the Company is 

12 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
dissolved pursuant to Section 9.1, and subject to the rights of the Initial Member under Section 

13.5, the Company shall at all times have two, and only two, members. 

2.2 Name. 

(a) The name ofthe Company shall be 2010-3 SFR Venture, LLC. 

(b) The Business shall be conducted only under the name of the Company or 

such other name or names that comply with applicable Law as the Members may select from timeto-time. 

2.3 Organizational Contributions and Related Actions. 

(a) Prior to the execution of this Agreement, pursuant to the terms of the 

Contribution Agreement, the Initial Memberl 

(i) made a Capital Contribution to the Company in the form of certain 

Mortgage Loans (the "Initial Member Capital Contribution"); and 

(ii) sold and assigned to the Company, and the Company purchased 

from the Initial Member, Mortgage Loans (other than that portion of the Mortgage 

Loans comprising the Initial Member Capital Contribution) and assumed the 

Obligations (as defined in the Contribution Agreement) in exchange for the 

Purchase Money Note. 

(b) Upon the consummation of the transactions contemplated in 

Section 2.3(a) and prior to the occurrence of the Incentive Threshold Event as described in Section 

6.6(b)(iii), the Private Owner shall own forty percent (40%) ofthe issued and outstanding LLC 

Interests and the Initial Member shall own sixty percent (60%) of such LLC Interests. Following 

the occurrence of the Incentive Threshold Event, the Private Owner shall own thirty percent 

(30%) ofthe issued and outstanding LLC Interests and the Initial Member shall own seventy 

percent (70%) of such LLC Interests. 

2.4 Registered Office; Chief Executive Office. The Company shall maintain a 

registered office and registered agent in Delaware to the extent required by the Act, which office 

and agent shall be as determined by the Manager from time-to-time and which shall be set forth 

in the Certificate. Initially (and until otherwise determined by the Manager), the registered office 

in Delaware shall be, and the name and address of the Company's registered agent in Delaware 

shall be, as specified in the Certificate as originally filed, which may be amended by the 

Manager from time-to-time as necessary to correctly reflect the name and address of the 

Company's registered agent. The chief executive office of the Company shall be located at 5032 

Parkway Plaza Boulevard, Charlotte, NC 28217, or such other place as shall be determined by 

the Manager from time-to-time. 

2.5 Purpose: Duration. 

13 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
(a) The purpose of the Company is to engage in and conduct the Business, 

directly or, to the extent specifically authorized in this Agreement, indirectly through other 

Persons. The Company shall not form or have any Subsidiaries other than Ownership Entities or 

as otherwise authorized in or pursuant to this Agreement. The Company shall have all powers 

necessary, desirable or convenient, or which the Manager deems necessary, desirable or 

convenient, and may engage in any and all activities necessary, desirable or convenient, or which 

the Manager deems necessary, desirable or convenient, to accomplish the purposes of the 

Company or consistent with the furtherance thereof. 

(b) Subject to Section 9.1, the Company shall continue in existence 

perpetually. 

2.6 Single Pur.pose Entity; Limitations on Company's Activities. Except to the extent 

expressly permitted by this Agreement or the Ancillary Documents, the following shall govern 

for so long as the Company is in existence: 

(a) Subject to Section 9.1, the Manager shall cause the Company to do or 

cause to be done all things necessary to preserve and keep in full force and effect its existence, 

rights (charter and statutory) and franchises, and the Manager also shall cause the Company to: 

(i) maintain financial statements separate from any Affiliate; 

provided, however, that each Ownership Entity shall be consolidated in the 

financial statements of the Company; and provided, further, that the assets, 

liabilities and results of operations of the Company may be included in the 

canso lidated financial statements of its parent or ultimate parent in accordance 

withGAAP; 

(ii) at all times hold itself out to the public as a legal entity separate 

from the Members and any other Person; 

(iii) file its own tax returns, as may be required under applicable Law, 

and pay any taxes so required to be paid under applicable Law; 

(iv) except as contemplated hereby or by the Ancillary Documents, 

segregate its assets and not commingle its assets with assets of any other Person; 

(v) conduct the Business in its own name and strictly comply with all 

organizational formalities to maintain its separate legal existence; 

(vi) pay its own liabilities only out of its own funds; 

(vii) maintain an arm's length relationship with any Affiliate upon 

terms that are commercially reasonable andthat are no less favorable to the 

Company than could be obtained in a comparable arm's length transaction with an 

unrelated Person; 

14 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
(viii) subject at all times to Section 3.3, pay the salaries of its own 

employees, if any, and maintain, or cause to be maintained, a sufficient number of 

employees, if any, in light of its contemplated business operations; 

(ix) allocate, fairly and reasonably, shared expenses, including any 

overhead for shared office space; 

(x) use separate stationery, invoices and checks; 

(xi) correct any known misunderstanding regarding its separate 

identity; and 

(xii) maintain adequate capital in light of its contemplated business 

purpose, transactions and liabilities, if any. 

(b) Neither the Manager nor the Private Owner may cause or permit a 

Dissolution Event or an Insolvency Event to occur with respect to the Company or any of its 

Subsidiaries to which the Initial Member has not provided its written consent, and neither the 

Manager nor the Private Owner may, without the written consent of the Initial Member, cause or 

permit the Company or any of its Subsidiaries to: 

(i) except as contemplated hereby or by the Ancillary Documents, 

hold out its credit or assets as being available to satisfy the obligations of others, 

or become bound by any Guarantee of, or otherwise obligate itself with respect to, 

the Debts of any other Person, including any Affiliate; 

(ii) except as contemplated hereby or by the Ancillary Documents, 

including the Purchase Money Note, the Purchase Money Note Guaranty, and the 

Reimbursement and Security Agreement, pledge its assets for the benefit of any 

other Person, make any loans or advances to any other Person, or encumber or 

permit any Lien to be placed on the Mortgage Loans, the Underlying Collateral, 

or the proceeds therefrom; provided that the Company may invest its funds in 

interest bearing accounts held by any bank that is not its Affiliate and otherwise in 

accordance with the terms of this Agreement and the Paying Agency and 

Custodial Agreement and make advances in accordance with Article XII; 

(iii) own any assets, or engage in any business, unrelated to the 

Business; 

(iv) incur, create or assume any Debt other than the Purchase Money 

Note, any Excess Liquidity Advance or as otherwise expressly permitted hereby 

or by the Ancillary Documents to which the Initial Member is a party; 

(v) make or permit to remain outstanding any loan or advance to, or 

own or acquire any stock or securities of, any Person (other than an Ownership 

Entity), except that the Company may invest in those investments permitted under 

the Ancillary Documents and may make any advance required or expressly 

15 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
permitted to be made pursuant to any provisions of Article XII or the Ancillary 

Documents and permit the same to remain outstanding in accordance with such 

provisions; 

(vi) except as specifically permitted in this Agreement, acquire any 

LLC Interest (or any portion of any LLC Interest); 

(vii) consolidate or merge with or into any other Person, convert into 

any other type of Person (including into a limited liability company organized 

under the Laws of a jurisdiction other than the State of Delaware), transfer, 

domesticate or continue the Company or any Subsidiary ofthe Company pursuant 

to Section 18-213 of the Act, or take any other action for which the consent of 

some or all of the members of a limited liability company is (unless otherwise 

provided in the limited liability company agreement of such limited liability 

company) required by the Act; 

(viii) convey or transfer its properties and assets as an entirety or 

substantially as an entirety to any Person, transfer its ownership interests, or 

engage in any dissolution or liquidation, except in each case to the extent such 

activities are expressly permitted pursuant to any provision ofthis Agreement or 

the Ancillary Documents (and subject to obtaining any approvals required 

hereunder or thereunder, as applicable); 

(ix) except as contemplated or permitted by this Agreement, form, 

acquire or, subject to the second proviso of the defmition of Ownership Entity, 

hold any Subsidiary other than an Ownership Entity or form any trust for the 

purpose of holding Mortgage Loans for the benefit of the Company; or 

(x) breach or violate any representation, warranties, covenants or 

agreements contained in any ofthe Ancillary Documents. 

(c) The failure of the Company, any Member and/or the Manager to comply 

with any ofthe foregoing covenants or any other covenants contained in this Agreement shall not 

affect the status of the Company as a separate legal entity or the limited liability of the Members. 

2.7 Ratification of Certain Actions. Prior to the Closing Date, the Company 

previously approved (a) each of the Ancillary Documents, (b) the issuance of the LLC Interests, 

and (c) the taking of all action reasonably necessary to effect the foregoing approvals, including 

without limitation the execution and performance of this Agreement and the Ancillary 

Documents (the "Previously Approved Matters"). The Previously Approved Matters, and all 

actions taken by the Company in furtherance of the Previously Approved Matters, are hereby 

ratified, approved and confirmed in their entirety by each Member and the Manager is hereby 

authorized and directed to execute and deliver, for and on behalf of the Company, any and all · 

documents as may now or hereafter be reasonably required in order to effect the Previously 

Approved Matters. 

16 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
ARTICLE Ill 


Management and Operations of the Company 


3.1 Management ofthe Company's Affairs. 

(a) Subject to the terms and conditions of this Agreement, the management of 

the Company shall be vested exclusively in the Person appointed from time-to-time hereunder as 

the "Manager" ofthe Company (the "Manager"), which Manager may, but is not required to be, a 

Member. Effective as ofthe Closing Date, the Private Owner is hereby appointed as the Manager. 

Subject to the terms and conditions ofthis Agreement, the Manager shall have full and exclusive 

power and discretion to, and shall, manage the business and affairs ofthe Company in accordance 

with this Agreement. The Private Owner may not resign as Manager, may not Dispose of or 

delegate, in whole or in part, its rights, responsibilities or duties as Manager to any other Person, 

and shall serve as Manager until such time as (i) the Private Owner's LLC Interest is Disposed of 

in accordance with the terms ofthis Agreement and the transferee is admitted asa member ofthe 

Company and Successor to the Private Owner, in which case the transferee Member shall, 

effective upon such Disposition, be appointed as the "Manager" to the extent the Private Owner 

held such role immediately prior to such Disposition, (ii) the Private Owner is removed as 

Manager by the Initial Member or the Purchase Money Note Guarantor and replaced in 

accordance with Section 3.2 or Section 12.4 below; or (iii) the Company is dissolved, and the. 

business and affairs ofthe Company are wound up, in accordance with the terms of this 

Agreement. The Manager shall devote such time to the affairs of the Company as is necessary to 

manage the Company as set forth in this Agreement. Without limitation ofthe foregoing, the 

Manager shall cooperate with the Tax Matters Member in all respects as reasonably requested by 

the Tax Matters Member, from time-to-time, in connection with the Tax Matters Member's 

performance of its obligations under this Agreement. The Private Owner (and any Successor to 

the Private Owner) hereby expressly acknowledges that (x) as it relates to its role as the Manager, 

this Agreement constitutes a personal services contract between the Private Owner and the 

Company, and (y) except as may otherwise expressly be specified herein, it shall not be entitled to 

any salary, fees, reimbursement of costs or expenses, or other compensation with respect to its 

service as Manager hereunder (including with respect to the Manager's Mortgage Loan servicing 

and management obligations under Article XID. 

(b) Except as otherwise specifically provided in this Agreement and without 

limitation ofthe powers expressly granted to the Manager under any other provision of this 

Agreement, the authority, duties (including fiduciary duties) and functions ofthe Manager shall be 

identical to the authority, duties (including fiduciary duties) and functions ofthe board of directors 

and the officers of a corporation organized under the Delaware General Corporation Law (and not 

electing to be governed by subchapter XIV thereof). The Manager shall have no authority to take 

or authorize the taking of any action in contravention of any express term ofthis Agreement. 

(c) No Person dealing with the Company or the Manager shall be required to 

determine, and any such Person may conclusively assume and rely upon, the authority ofthe 

Manager to execute any instrument or make any undertaking on behalf ofthe Company. No 

Person dealing with the Company or the Manager shall be required to determine any facts or 

circumstances bearing upon the existence of such authority. Without limitation ofthe foregoing, 

17 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
any Person dealing with the Company or the Manager is entitled to rely upon a certificate signed 

by the Manager as to: 

(i) the identity ofthe Members; 

(ii) the existence or non-existence of any fact or facts that constitute a 

condition precedent to acts by the Manager or are in any other manner germane to 

the affairs of the Company; 

(iii) the identity ofPersons who are authorized to execute and deliver 

any instrument or document of or on behalf of the Company; or 

(iv) any act or failure to act by the Company or any other matter 

whatsoever involving the Company or the Members. 

(d) Notwithstanding anything to the contrary contained in this Agreement, the 

parties hereto acknowledge and agree that: 

(i) nothing contained in this Agreement creates any fiduciary duty on 

the part ofthe Initial Member; 

(ii) the Private Owner and the Company each hereby expressly waives 

any fiduciary duties that may otherwise be deemed to be owed by the Initial 

Member to the Private Owner or the Company; and 

(iii) the Initial Member shall be entitled to act and exercise any right of 

approval or consent that it has under this Agreement in its interest, in its sole and 

absolute discretion, without regard to and against the interests of the Private 

Owner or the Company. 

(e) Unless and to the extent reimbursement is due under an express provision 

hereof or pursuant to a Related Party Agreement or any Ancillary Document, the Company shall 

not be liable for, and the Manager shall not seek reimbursement from the Company or any 

Member for, any expenses or costs incurred after the formation of the Company by the Manager 

and/or its Affiliates on behalf ofor for the benefit of the Company. 

(f) This Section 3.1 is subject to any express requirement of direct Initial 

Member consent set forth elsewhere in this Agreement, including in Sections 2.6(b), 3.4, 3.8, 8.1, 

8.2, 8.8(a), 9.1, 12.3(h), 12.7(b), 12.12, 12.15(c), 13.5 and 13.12. Any purported action by the 

Company or the Manager requiring the consent of the Initial Member under this Agreement shall 

be null and void ab initio unless and until the Initial Member's consent is obtained. 

3.2 Removal of the Manager. Upon an Event of Default (and so long as the Private 

Owner is then the Manager), the Initial Member or the Purchase Money Note Guarantor, ifthe 

Purchase Money Note is outstanding, may remove the Private Owner as the Manager and 

appoint a successor Manager in the sole and absolute discretion of the Initial Member or the 

Purchase Money Note Guarantor in accordance with Section 12.4, whereupon such successor 

18 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
Manager shall immediately succeed to all, or such portion as the Initial Member or the Purchase 

Money Note Guarantor and successor Manager agree, of the rights, powers, duties and 

obligations of the "Manager" hereunder, and the predecessor Manager shall promptly take such 

actions as may be reasonably, requested by the Initial Member or the Purchase Money Note 

Guarantor to facilitate the transition to such successor Manager. 

3.3 Employees and Services. After the Closing Date, the Manager shall cause to be 

made available to the Company, from time-to-time, employees, facilities and support services in 

a manner and to an extent reasonably required for it to fulfill its duties and obligations as 

Manager and for the day-to-day operation of the Business, including the Manager's employees, 

facilities and support services. If necessary to meet the foregoing requirements, the Manager 

shall enter into contractual arrangements to secure employees, facilities and support services 

from third parties (including its Affiliates); provided, however, that the Manager shall at all times 

provide for the servicing of the Mortgage Loans through a Servicer under contract with the 

Manager (in its individual capacity) in accordance with Article XII and the safekeeping of the 

Notes and other Mortgage Loan Documents by a Custodian under contract with the Company in 

accordance with the provisions of Section 3.7 below. Notwithstanding anything to the contrary 

contained in this Section 3.3, (a) the Company shall not have any employees, (b) no employees 

of the Manager or any third party (including any Affiliate) shall be deemed to be employees of 

the Company, (c) any contractual relationships entered into by the Manager to provide 

employees, facilities or support services to the Company shall be relationships between the third 

parties (or Affiliates) and the Manager (and not the Company) and shall not relieve such 

Manager of its obligations or any liability hereunder and (d) no expenses incurred to secure or 

maintain employees, facilities or support services shall be an expense of the Company unless the 

same is expressly reimbursable by the Company pursuant to the provisions of Article XII below 

or is otherwise expressly set forth in this Agreement or in any Ancillary Documents to be an 

expense of the Company. 

3.4 Restrictions on Manager and Private Owner. Neither the Private Owner nor, 

notwithstanding any delegation of authority to it hereunder, the Manager may or shall in any 

event (x) do, or cause the Company to do, any act or take, or cause the Company to take, any 

action in contravention of any Law, or (y) take any ofthe following actions on behalf of, or with 

respect to, the Company, or otherwise cause the Company to take any ofthe following actions, in 

the case of all of the foregoing without the prior written approval ofthe Initial Member and, until 

the satisfaction in full of the Purchase Money Note, the Purchase Money Note Guarantor, which 

approval may be withheld or conditioned in the Initial Member's and the Purchase Money Note 

Guarantor's sole and absolute discretion: 

(i) admitting additional or substitute members of the Company, except 

in accordance with Article VIII; 

(ii) changing the legal form of the Company to other than a limited 

liability company; 

(iii) taking any action that would cause the Company to be treated as 

other than a partnership for federal tax purposes; 

19 

FDIC SFR 2010-3 (Final) 

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Pool Nos. 24020 and 24021 

13235439.7 
(iv) taking any action that would make it impossible to carry on the 

ordinary business of the Company; 

· (v) conducting a Bulk Sale; 

(vi) incurring any liability on behalf of the Company (other than 

liabilities to trade creditors in the ordinary course of the Business and such other 

liabilities as may be permitted by this Agreement or any Ancillary Document); 

(vii) possessing or transferring Company Property for other than 

Company purposes; 

(viii) taking any action that would require the Company to register as an 

"investment company" (as defined in the Investment Company Act); 

(ix) selling or otherwise transferring any Mortgage Loan, Underlying 

Collateral or Acquired Property (or any portion thereof) to the Manager, the 

Private Owner, any Servicer, any Subservicer, or any Affiliate of any ofthe 

foregoing or of the Company; 

(x) fmancing the sale or other transfer of any Mortgage Loan, 

Underlying Collateral or Acquired Property (or any portion thereof); 

(xi) selling any Mortgage Loan, Underlying Collateral or Acquired 

Property (or any portion thereof) in a transaction that provides for any recourse or 

repurchase obligations against the Company, the Initial Member or the FDIC, in 

any capacity, or against the LLC Interest held by the Initial Member or any share 

ofthe Mortgage Loan Proceeds allocable to the Initial Member; 

(xii) disbursing, or causing the disbursement of, funds from the 

Collection Account, the Distribution Account, the Special Reserve Account, the 

Liquidity Account or other accounts created under this Agreement, the Custodial 

and Paying Agency Agreement or any Servicing Agreement other than in 

accordance with (and without violation of any requirement contained in) the 

provisions of this Agreement, the Custodial and Paying Agency Agreell!ent, the 

applicable Servicing Agreement and the Reimbursement and Security Agreement; 

(xiii) advancing additional funds that would increase the Unpaid 

Principal Balance of any Mortgage Loan except as required pursuant to the 

Mortgage Loan Documents, including, but not limited to Funding Draws, or for 

permitted Servicing Expenses consistent with the Servicing Standard; 

(xiv) except as otherwise permitted pursuant to the terms of this 

Agreement, reimbursing the Manager for any expense or cost incurred (or paid) to 

any Affiliate of any ofthe Company, the Private Owner or the Manager, the 

Servicer or any Subservicer; 

20 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
(xv) taking any action or omitting to take any action that causes the 

Company to breach any representation, warranty, covenant or other agreement 

contained herein or in any Ancillary Document; or · 

(xvi) taking any action for which the consent of some or all ofthe 

members of a limited liability company is (unless otherwise provided in the 

limited liability company agreement of such limited liability company) required 

by the Act. 

3.5 Related Partv Agreements. Neither the Company nor any of its Subsidiaries shall 

enter into any current or future· contract, agreement, commitment, arrangement or transaction 

(including any agreement to sell Company Property, incur any Debt or become bound by any 

Guarantee of any obligations) with or for the benefit of, or pay any fee to, the Private Owner or 

any Affiliate of the Company or the Private Owner (a "Related Party Agreement"), except for 

the Purchase Money Note or as may otherwise be expressly provided herein or in any Ancillary 

Document to which the Initial Member is a party or as may be approved by both Members. 

3.6 Real Property. The Company shall not take title in its own name to any REO 

Property, and any ownership of any such REO Property shall be governed by Section 12.15 and 

the relevant terms of the Servicing Agreement. 

3. 7 Custodian and Paying Agent. The Manager shall cause the Company to retain 

and enter into and, at all times, be a party to a written custodial agreement with a document 

custodian that is a Qualified Custodian and Paying Agent and approved by the Initial Member, 

and such Custodian shall at all times have custody and possession of the Notes and other 

Custodial Documents, unless released to the Servicer in accordance with the Custodial and 

Paying Agency Agreement. The Manager shall also cause the Company to retain and enter into 

and, at all times, be a party to a written paying agency agreement with a paying agent selected by 

the Company, which Paying Agent shall receive and distribute Mortgage Loan Proceeds in 

accordance with the applicable Custodial and Paying Agency Agreement. Except as may be 

determined by the Initial Member in connection with an exercise of its rights under Section 0 

below, the Custodian and the Paying Agent shall be the same; and the custodial and paying 

agency functions shall be performed on the terms set forth in a Custodial and Paying Agency 

Agreement that is acceptable to the Initial Member. At no time shall the Company have more 

than· one Custodian or one Paying Agent. The fees and expenses paid to the Custodian and 

Paying Agent shall be no more than market rates and the Custodian and Paying Agent shall be 

terminable by the Company, the Collateral Agent, or the Purchase Money Notes Guarantor upon 

no more than thirty (30) days notice provided by any of them, without cause under the Custodial 

and Paying Agency Agreement. In the event that the Manager removes, or causes the Company 

(or any Servicer) to remove, any Notes or other Custodial Documents from the possession ofthe 

Custodian (which shall be done only in accordance with the relevant Custodial and Paying 

Agency Agreement or Servicing Agreement), (i) any loss or destruction of or damage to such 

Notes or Custodial Documents shall be the personal liability ofthe Manager (who, along with the 

relevant Servicer(s), shall be responsible for safeguarding such Notes and Custodial Documents), 

and (ii) such Notes shall be returned to the Custodian within the time provided under the 

applicable Uniform Commercial Code to maintain the perfection ofthe secured party's security 

21 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
interest therein by possession. If any Notes or other Custodial Documents are removed in 

connection with the modification, restructuring or foreclosure of a Mortgage Loan, the modified 

or restructured Notes or other Custodial Documents removed in connection therewith shall be 

returned to the Custodian as soon as possible following the completion of the restructuring, 

modification or foreclosure (and, in any event, in accordance with clause (ii) ofthe immediately 

preceding sentence). Notwithstanding the foregoing, if any Notes or other Custodial Documents 

are retained by the applicable court, such Notes and other Custodial Documents shall be returned 

to the Custodian as soon as possible after they are released by such court. The Manager shall 

ensure that the Initial Member 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. 

3.8 Relationships with Borrowers, etc. Except as otherwise consented to by the Initial 

Member, neither the Private Owner nor the Manager shal~ at any time, (a) be an Affiliate of or a 

partner or joint venturer with any Borrower, (b) be an agent of any Borrower, or allow any 

Borrower to be an agent of the Manager or the Company, or (c) except as is otherwise 

contemplated by the Company's ownership ofthe Mortgage Loans and its right to hold Acquired 

Property, have any interest whatsoever in any Borrower, Obligor or other obligor with respect to 

any Mortgage Loan or any ofthe Underlying Collateral. 

3.9 No Conflicting Obligations. The Manager shall cause the Company to comply 

with the Ancillary Documents in accordance with their terms, and shall not, at any time, enter 

into or become a party to any agreement that would conflict with the terms ofthis Agreement. 

3.10 Compliance with Law. The Manager shall, and shall cause the Company to, at all 

times, comply with applicaple Law in connection with the performance or exercise of its rights, 

powers, duties or obligations under this Agreement, be duly authorized and qualified to transact 

any and all business to be conducted by it in any state in which a Mortgaged Property is located 

and comply with the doing business laws of any such state, to the extent necessary to ensure its 

ability to manage the Mortgage Loans in accordance with the terms of this Agreement and to 

perform any of its other obligations under this Agreement in accordance with the terms hereof. 

3.11 No Bankruptcy Filing. Neither the Manager nor the Private Owner may cause or 

permit the Company to: (a) file a voluntary petition for bankruptcy, (b) file a petition or answer 

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

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

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

substantial part of its properties, (e) file an answer or other ph~ading admitting or failing to 

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

clause (a) through (d), or (ii) any order adjudging it a bankrupt or insolvent or for relief against it 

in any bankruptcy or Insolvency Proceeding, or (f) allow itself to become unable to pay its 

obligations as they become due. 

3.12 No Liens. The Manager shall not cause the Company to place, or voluntarily 

permit to be placed, any Lien on any of the Mortgage Loans, the Underlying Collateral, the 

Mortgage Loan Documents, or the Mortgage Loan Proceeds, except, in the case of Underlying 

22 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
Collateral, such Liens caused or permitted by the Manager (i) as permitted under the Mortgage 

Loan Documents where the applicable Borrower is not in default thereunder and (ii) as permitted 

by the terms ofthe Reimbursement and Security Agreement; and the Manager shall not take any 

action to interfere with the Collateral Agent's rights as a secured party with respect to Mortgage 

Loans, the Underlying Collateral and the Mortgage Loan Proceeds. 

3.13 Remedies Upon an Event ofDefault; Security Interest. 

(a) Upon the occurrence of an Event ofDefault, in addition to all other 

remedies available hereunder or under the Ancillary Documents upon such an Event ofDefault, 

the Initial Member shall be entitled to: 

(i) remove the Private Owner as the Manager pursuant to Sections 3.2 

and 12.4; 

(ii) remove. the Private Owner as a Member; 

(iii) purchase (or cause a designee to purchase) the LLC Interest ofthe 

Private Owner pursuant to Section 3 .14; 

(iv) designate itself or any applicable transferee Member as the 

Manager hereunder; and/or 

(v) with or without notice to or demand upon the Private Owner 

(except as may be required by Law), exercise any or all rights and remedies with 

respect to the Secured Assets (as defmed below) and any Qualifying Letter of 

Credit, specifically including the right (A) to foreclose on the LLC Interest held 

by the Private Owner and transfer such LLC Interest to a third party (or the Initial 

Member); (B) to draw upon any or all Qualifying Letters of Credit, by presenting 

to the applicable Issuing Bank one or more drafts or demands and any other 

necessary documents, and to receive (in a lump sum or in several sums from timeto-time at the sole and absolute discretion ofthe Initial Member) any or all 

amounts available for drawing under each such Qualifying Letter of Credit, Letter 

ofCredit Option and/or (C) to exercise any rights under the Account Control 

Agreement related to the Special Reserve Account (or otherwise) with respect to 

the Special Reserve Account, including the right to assume exclusive control over 

the Special Reserve Account and to cause the funds therein to be remitted (in a 

lump sum or in several sums from time-to-time at the sole and absolute discretion 

ofthe Initial Member) to or at the direction ofthe Initial Member, and to cause 

the funds therein to be remitted in a lump sum or in several sums from time-totime at the sole and absolute discretion ofthe Initial Member to or at the direction 

ofthe Initial Member. The removal ofthe Private Owner as Member shall be 

subject to Section 8.4. 

(b) For the avoidance of doubt, in the event that the Initial Member 

determines to exercise its remedies against any Secured Assets or any Qualifying Letter of Credit, 

it shall have the absolute right to deduct from the proceeds of such exercise of remedies (including 

.23 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
proceeds of any foreclo"sure sale with respect to the LLC Interests, any drawing on a Qualifying 

Letter of Credit and any funds on deposit in the Special Reserve Account), any Losses arising out 

ofor resulting from such Event ofDefault incurred by the Indemnified Parties, all costs and 

expenses (including, without limitation, attorneys' fees and disbursements) incurred by the Initial 

Member in connection with enforcing its rights and remedies hereunder and under the Ancillary 

Documents and any Private Owner Obligations (as defined below) then due and payable (in each 

case in such order as the Initial Member may determine in its sole and absolute discretion); 

·provided that the Initial Member may, in its sole and absolute discretion, hold any such proceeds 

as additional security for any existing or future Private Owner Obligations. Without limitation of 

the foregoing, in no event shall the Initial Member have any obligation (but it shall at all times 

have the right in its sole and absolute discretion) to use or apply any proceeds of the Secured 

Assets toward payment of any Private Owner Obligations owing to the Company (whether or not 

the same are due and payable), and the Private Owner shall remain fully obligated to pay and 

perform all such Private Owner Obligations owing to the Company notwithstanding any such 

election by the Initial Member to so refrain from applying such proceeds toward payment of the 

same; and, in the event that, for any reason any such proceeds of the Secured Assets are used for 

payment of any Private Owner Obligations owing to the Company, any and all rights of the 

Private Owner to payments, reimbursements or distributions from the Company on account of any 

such payment to the Company (including rights to any repayment of any deemed Excess Liquidity 

Advances, to the extent any such proceeds are used to fund the same), shall be considered as part 

ofthe Secured Assets and shall, to the extent paid or payable by the Company, be paid directly to 

the Initial Member (and the Initial Member shall have the right to direct the Paying Agent to so 

remit to the Initial Member any applicable distributions or payments by the Paying Agent with 

respect thereto) to be held and applied by the Initial Member as part of the proceeds of the 

Secured Assets (as collateral for the Private Owner Obligations). Any Secured Assets or proceeds 

thereof as held by the Initial Member may be commingled with the Initial Member's own funds, 

without any need to pay interest or income thereon. Upon indefeasible payment and performance 

in full of all ofthe Private Owner.Obligations (following the dissolution ofthe Company), any 

remaining unapplied proceeds (from an exercise of remedies by the Initial Member against the 

rights of the Private Owner to the Secured Assets or any Qualifying Letter of Credit) so held by 

the Initial Member, shall be released to the Private Owner (or such other Person as may have 

applicable rights therein in accordance with applicable law). In any event, the Private Ownershall 

remain liable for any deficiency in payment of the Private Owner Obligations. 

(c) This Agreement shall constitute a security agreement under applicable 

Law for the benefit of the Initial Member and, in furtherance thereof, the Private Owner (in all of 

its capacities) and the Company (as applicable) shall be deemed to have granted, and each does 

hereby grant, to the Initial Member, for itself (and its assignees) and for the benefit of the 

Company and the Indemnified Parties, a valid and contiiming first priority lien on and security 

interest in all of the Private Owner's and the Company's right, title and interest in, to and under, 

the Secured Assets, whether now owned or existing, or hereafter acquired and arising in, to· and 

under the Secured Assets and all of the proceeds of the foregoing for the benefit ofthe Initial 

Member and its assignees, as security for the payment and performance (when due) by the Private 

Owner (including in its roles as Manager and Tax Matters Member) of its duties, liabilities and 

obligations under this Agreement and the Ancillary Documents and the compliance by the Private 

Owner (including as Manager and Tax Matters Member) with the terms and conditions of this 

24 

FDIC SFR2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
Agreement and the Ancillary Documents (collectively, the "Private Owner Oblh!ations"). For 

the avoidance of doubt, the parties acknowledge that the Secured Assets are not, pursuant to the 

foregoing, collateral for the separate payment obligations of the Company except to the extent 

that, pursuant to this Agreement or the Ancillary Documents, the Private Owner, in any capacity, 

is required to pay (or advance applicable funds to pay) or otherwise bear such obligations (and in 

such case, such Secured Assets secure such obligations ofthe Private Owner to the Company and, 

if applicable, the Initial Member and the Indemnified Parties only, and not any such separate 

obligations of the Company to any other Persons), such that the Secured Assets do not secure the 

Company's payment obligations under the Purchase Money Notes. 

(d) The Private Owner shall deliver to the Initial Member on the Closing Date 

and at all times thereafter cause to be maintained additional collateral (the "Additional Security") 

consisting of (a) cash and any interest earned thereon (and Permitted Investments with respect 

thereto) in the Special Reserve Account, including any amounts drawn on any Qualifying Letter 

ofCredit, in an aggregate amount at least equal to the Required Cash Special Reserve Amount 

("Qualifying Cash Collateral") and (b) undrawn (and available) amounts under one or more 

Qualifying Letters of Credit in an aggregate amount at least equal to the Required LOC Special 

Reserve Amount. The Initial Member shall have the unilateral right to draw on any such 

Qualifying Letter of Credit and to provide instructions to the Paying Agent for the disposition of 

the Qualifying Cash Collateral in the Special Reserve Account, in each case without any 

requirement for any further consent, confirmation or instructions from the Private Owner; 

provided, however, that as between the Initial Member and the Private Owner (and without 

creating any right or obligation ofthe Paying Agent or any Issuing Bank to refuse to honor, or 

inquire as to the accuracy or sufficiency of, any applicable instructions from the Initial Member), 

the Initial Member agrees that (i) it shall not exercise such rights to so draw on any such 

Qualifying Letter of Credit unless there shall have occurred an Event ofDefault (whether or not 

relating to any Qualifying Letter of Credit) or an LC Reissuance/Extension Failure (with respect 

to such Qualifying Letter of Credit), and (ii) it shall not exercise such rights to so unilaterally 

direct the disposition of the Qualifying Cash Collateral from the Special Reserve Account unless 

there shall have occurred an Event ofDefault. 

(e) On the Closing Date, the Manager shall cause the Company to establish 

the Special Reserve Account with the Paying Agent. 

(f) Upon the occurrence of any LC Reissuance/Extension Failure, the Initial 

Member shall have the right (but not the obligation) to draw on all or any part of the undrawn 

amount of any Qualifying Letter of Credit subject to such LC Reissuance/Extension Failure; and 

in such case the funds received by the Initial Member as a result ofany such draw shall be 

deposited in the Special Reserve Account and such LC Reissuance/Extension Failure shall not be 

deemed an Event of Default hereunder, in each case only so long as (i) there shall not have 

occurred any Event of Default (other than such LC Reissuance/Extension Failure) and (ii) upon 

such deposit in the Special Reserve Account (of the funds received by the Initial Member from 

such draw), the aggregate amount of the such deposit shall be in an amount notless than Required 

LOC Special Reserve Amount. 

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FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
(g) The Private Owner hereby authorizes the filing by the Initial Member and 

its assignees of such financing or continuation statements in such jurisdictions as the Initial 

Member or its assignees deem appropriate (in their sole and absolute discretion) to perfect and 

continue their first priority lien and security interest with respect to the Secured Assets, including 

the Special Reserve Account. The Private Owner shall deliver to the Initial Member an 

assignment and assumption agreement with respect to the LLC Interest held by it, in the form 

attached hereto as Exhibit C, endorsed in blank, and executed by the Private Owner. The Initial 

Member may use the assignment and assumption agreement to effect the assignment ofthe LLC 

Interest held by the Private Owner at any time if an Event of Default occurs and is continuing. 

The Initial Member's election to exercise any remedy under this Section 3.13 shall in no way limit 

Initial Member's rights under any Ancillary Document. 

(h) After all ofthe obligations secured by the Secured Assets have been 


indefeasibly paid and performed in full (following the dissolution of the Company), the Initial 


Member shall, upon the request of Private Owner, release any then outstanding Qualifying Letter 


of Credit and consent to the termination ofthe Special Reserve Account. 


(i) The Initial Member's rights and remedies under this Agreement, any 

Ancillary Document or otherwise are cumulative and may be exercised singularly (and in such 

order as the Initial Member may determine in its sole and absolute discretion) or concurrently. 

Neither any failure nor delay on the part oflnitial Member to exercise any other right or remedy 

shall operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy 

preclude any other or further exercise thereof or of any other right or remedy· howsoever arising. 

In no event shall the Initial Member have any obligation to seek or exhaust any particular remedy 

prior to exercising any other remedy, and the Private Owner hereby waives any and all right to 

·require the marshalling of assets in connection with any exercise by the Initial Member of its 

remedies hereunder or under any Ancillary Document. Under no circumstances shall the Initial 

Member be deemed or construed to have waived its right to draw upon any Qualifying Letter of 

Credit, to proceed against the Special Reserve Account, to foreclose upon the LLC Interest ofthe 

Private Owner or to exercise any of its other rights or remedies unless such waiver is in writing 

and executed by a duly authorized representative of Initial Member. A waiver of any right or 

remedy on any one occasion shall not operate as a waiver of such right or remedy on any future 

occasion or as a waiver of any other right or remedy. 

3.14 Purchase Right of the Initial Member. Without prejudice to the rights of the 

Initial Member to foreclose on the LLC Interest of the Private Owner in accordance with Section 

3.13: 

· (a) Upon the occurrence and during the continuance of an Event ofDefault, 

the Initial Member may at any time, by notice (a "Buy-Out Notice") to the Private Owner, 

elect to purchase or cause one or more designees to purchase, the Private Owner's LLC Interest 

for an amount, payable in cash, equal to (x) the fair market value of such LLC Interest 

(determined, if necessary, in accordance with Section 3 .14(b )Civ)} as of a date (the "Buy-Out 

Valuation Date") selected by the Initial Member in its discretion between the date of the Buy-Out 

Notice and the closing of such purchase (the "Buy-Out Closing"), less (y) any amounts owed by 

the Private Owner pursuant Section 3.14(b)(v), and less (z) any distributions paid by the Company 

26 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 


Pool Nos. 24020 and 24021 


13235439.7 

to or for the account ofthe Private Owner between the date ofthe Buy-Out Valuation Date and the 

Buy-Out Closing. 

(b) Ifthe Private Owner receives a Buy-Out Notice, the Buy-Out Closing 

shall be consummated as follows: 

(i) The Buy-Out Closing shall be held at the principal offices of the 

Company on a day selected by the Initial Member, which day shall, subject to 

Section 3 .14(b )(iv ), be no later than six months after the Buy-Out Notice was 

delivered to the Private Owner or at such other place or on such other date as the 

parties may agree (the "Buy-Out Closing Date"). 

(ii) The Initial Member shall purchase (and/or cause one or more 

designees to purchase in the aggregate) all but not less than all ofthe Private 

Owner's LLC Interest for the consideration set forth in Section 3 .14(a), and 

against delivery of such consideration, the Private Owner shall deliver all such 

documents and instruments as are necessary to transfer to the Initial Member 

(and/or its designee(s)), and in any event shall be deemed to have transferred, and 

to have represented and warranted to the Initial Member (and/or its designee(s)) 

that it has transferred, to the Initial Member (and/or its designee(s)), good title to 

(and, in any event, all right, title and interest ofthe Private Owner in and to) the 

entire LLC Interest of the Private Owner, free and clear of all Liens other than 

those created by this Agreement. 

(iii) The Private Owner shall obtain all material consents, approvals or 

waivers (including expiration or termination of a specified waiting period) of any 

Governmental Authority or Person that may be required in connection with the 

purchase and sale ofthe Private Owner's LLC Interest (other than any such 

consent, approval or waiver which has, ifpermitted by Law, been waived by the 

Initial Member). 

(iv) In the event of the delivery of a Buy-Out Notice, the Members 

shall attempt to agree on the Fair Market Value ofthe Private Owner's LLC 

Interest as ofthe Buy-Out Valuation Date. Ifthe Members are unable to agree on 

such value within fifteen (15) days after the date of delivery ofthe Buy-Out 

Notice (or, if sooner, by the Buy-Out Closing Date), then such value shall be 

determined immediately thereafter in accordance with the Dispute Resolution 

Procedure, and, if applicable, the Buy-Out Closing Date shall be delayed until 

such date (after completion ofthe applicable valuation) as may be selected by the 

Initial Member. For the avoidance of doubt, in no event shall the right under this 

Section 3.14 or any valuation resulting from a Dispute Resolution Procedure 

create any obligation with respect to, or otherwise limit the rights ofthe Initial 

Member in connection with, any concurrent or subsequent foreclosure (or sale) of 

the Private Owner's LLC Interest pursuant to Section 3.13 and/or exercise of 

relevant rights under the Uniform Commercial Code or otherwise, and the Private 

Owner acknowledges and agrees that any foreclosure and sale pursuant to Section 

27 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 


Pool Nos. 24020 and 24021 


13235439.7 
3.13 and relevant rights under the Uniform Commercial Code or otherwise may 

result in a sale price for the LLC Interest that is significantly lower than a BuyOut Purchase Price potentially (or having actually been) determined pursuant to 

this Section. 

(v) All out-of-pocket costs and expenses incurred by the Initial 

Member in connection with the exercise of its rights under this Section 3.14 and 

the sale ofthe LLC Interest of the Private Owner (including fees of any 

investment banking firm retained in connection with the Dispute Resolution 

Procedure and legal fees and expenses incurred in connection with obtaining any 

necessary consents, approvals or waivers (including expiration or termination of a 

specified waiting period) ofGovernmental Authorities) shall be home by the 

Private Owner and may be deducted from the purchase price otherwise payable by 

the Initial Member (or its designee( s)) for the Private Owner's LLC Interest. 

(c) The failure ofthe Initial Member to exercise its rights under this Section 

3.14 in connection with any Event of Default shall in no way affect or limit the exercise of such 

rights in connection with any other Event of Default by the Private Owner. 

(d) At any time prior to the Buy-Out Closing, the Initial Member may elect 

not to proceed with the Buy-Out Closing (without any liability or further obligation with respect 

thereto), and the Private Owner shall remain responsible for amounts owed under Section 

3.14{b)(v) notwithstanding any such election by the Initial Member. 

(e) Any distributions payable by the Company to the Private Owner after the 

Buy-Out Valuation Date shall, at the option of the Initial Member, be paid to and held by the 

Initial Member (or, if permitted by the Paying Agent, held by the Paying Agent in the Distribution 

Account) and, at the Buy-Out Closing or a reasonable time thereafter, be released to the Private 

Owner less, without duplication, any amounts owed by the Private Owner pursuant to this 

Agreement (including costs and expenses pursuant to Section 3.14(b)(v)). For the avoidance of 

doubt, neither the Initial Member nor the Paying Agent shall have any obligation to segregate, or 

pay interest or other income in respect of, any sums held pursuant to this Section 3.14(e). 

3.15 No ERISA Plan Assets. The Manager shall use its reasonable best efforts to 

ensure that the Company's assets are not deemed to be "plan assets" within the meaning of 

Section 3(42) of ERISA and the Plan Asset Regulation. 

ARTICLE IV 


Membership Interests; Rights and Duties of, and Restrictions on, Members 


4.1 General. The membership of the Company shall consist of the Members listed 

from time-to-time in the Annex I (the Member Schedule), and such substituted Members as may 

be admitted to the Company pursuant to Article VIII. The Manager shall cause Annex I (the 

Member Schedule) to be amended from time-to-time to reflect the admission of any additional 

Members, Capital Contributions of the Members, the issuance of additional limited liability 

company interests, transfers of LLC Interests, repurchases, redemptions or cancellations of LLC 

28 

FDIC SFR 201 0-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
Interests, the cessation or withdrawal of a Member for any reason or the receipt by the Company 

of notice of any change of name or address of a Member. 

4.2 LLC Interests. 

(a) Creation and Issuance. The Company is authorized to issue solely th~ 

LLC Interests provided for in this Agreement, and the Company may not hereafter create or issue 

any other limited liability company interest, provided that nothing in this sentence restricts the 

Dispositio11 of any outstanding LLC Interest by any Member (which matter is governed by Article 

VIII). The '(;E)mpany' s LLC Interests shall be uncertificated. The LLC Interests shall have the 

relative rights, powers, duties and obligations specified in this Section 4.2. As of the Closing 

Date, LLC Interests are owned by the Initial Member and the Private Owner, as set forth in the 

Annex I (Member Schedule). Other than as set forth in this Agreement, each LLC Interest shall 

be identical in all respects to each other outstanding LLC Interest. 

(b) Distributions. Subject to Section 6.6, distributions to the holders ofLLC 

Interests shall be made as provided in Section 6.6(b) and Section 9.2. 

(c) No Retirement Fund or Conversion. The LLC Interests shall not be 

subject to the operation of a retirement or sinking fund to be applied to the purchase or redemption 

thereof for retirement and shall not be convertible into any other class of limited liability company 

interests. 

(d) Voting Rights. Except to the extent otherwise required by the Act or 

expressly provided in this Agreement, the holders ofLLC Interests shall be entitled to vote on all 

matters upon which Members have the right to vote as set forth in this Agreement or provided in 

the Act. Except as expressly set forth elsewhere in this Agreement (including Section 3.1 and 

Section 3.4), the voting rights of each holder ofLLC Interests shall be based on such holder's 

Percentage Interest. 

4.3 Filings; Duty ofMembers to Cooperate. The Manager shall promptly cause to be 

executed, delivered, filed, recorded or published, as appropriate, and the Private Owner will, as 

requested by the Manager from time-to-time but at the sole expense ofthe Manager, execute and 

deliver, (a) allcertificates, documents and other instruments that the Manager deems necessary 

or appropriate to form, qualify or continue the existence or qualification of the Company as a 

limited liability company in the State ofDelaware or as a foreign limited liability company in all 

other jurisdictions in which the Company may, or may desire to, conduct business or own 

Company Property, (b) any amendment to the Certificate or any instrument described in clause 

(a) required because of, or in order to effectuate, an amendment to this Agreement, or any 

change in the membership of the Company, in accordance with the terms hereof, (c) all 

certificates, documents and other instruments (including conveyances and a certificate of 

cancellation) that the Manager deems necessary or appropriate to reflect the dissolution and· 

liquidation of the Company pursuant to the terms of this Agreement, and (d) such other 

certificates, documents and other instruments as are required by Law or by any Governmental 

Authority to be executed by them in connection with the Business as conducted or proposed to 

be conducted by the Company from time-to-time. As soon as reasonably practical after the date 

29 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
hereof, the Manager shall, cause the Company to 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 

the Business, including qualifications to conduct business in jurisdictions other than Delaware 

and licenses to purchase, own or manage the Mortgage 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 the Company, claims and defenses being asserted against the Company (including 

counterclaims and defenses asserted by Borrowers under the Mortgage Loans), or materially 

adversely affectthe Company or the Company's ability to foreclose on the Underlying Collateral 

securing or otherwise realize the full value of any Mortgage Loan or Acquired Property. The 

cost of licensing, filing and similar fees paid to authorities in connection with obtaining and 

maintaining applicable licenses or registrations for the Company and reasonable attorneys fees 

incurred in connection therewith are Reimbursable Company Administrative Expenses. 

4.4 Certain Restrictions and Requirements. 

(a) No Member may use or possess Company Property other than for a 

Company purpose, except as provided under license or other contractual arrangements. No 

Member shall have authority to bind, or otherwise to act on behalf of: the Company except 

pursuant to authority expressly granted herein or pursuant to authority granted by the Manager in 

accordance with the terms hereof. 

(b) From and after the Closing Date, no Person may or shall be admitted as a 

member of the Company except pursuant to and in accordance with Article VIII hereof. 

(c) Each Member, other than the Initial Member, shall at all times meet the 

qualifications of a Qualified Transferee. 

4.5 Liability of the Initial Member. Neither the Initial Member nor any of its 

Affili~;ttes, nor any officer, director, stockholder, member, manager, employee, agent or assign of 

the Initial Member or any of its Affiliates (all of the foregoing, collectively, the "Related 

Persons"), shall be liable, responsible or accountable, whether directly or indirectly, in contract 

or tort or otherwise, to the Company, any other Person in which the Company has a direct or 

indirect interest or any Member (or any Affiliate of any of the foregoing), for any Damages 

asserted against, suffered or incurred by the Company, any Person in which the Company has a 

direct or indirect interest or any Member (or any Affiliate of any of the foregoing) arising out of: 

relating to or in connection with any act or failure to act pursuant to this Agreement or otherwise 

with respect to: · 

(a) the management or conduct of the business and affairs of the Company or 

any Person in which the Company has a direct or indirect interest or any oftheir respective 

Affiliates (including, without limitation, actions taken or not taken by any Related Person as an 

officer or director of any Person in which the Company has a direct or indirect interest or any 

Affiliates of such Person); 

(b) the offer and sale of limited liability company interests in the Company 

(including the LLC Interests) or the issuance of the Purchase Money Note; and 

30 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
(c) the management or conduct of the business and affairs of any Related 

Person insofar as such business or affairs relate to the Company or any Person in which the 

Company has a direct or indirect interest or to any Member in its capacity as such, including, all: 

(i) activities in the conduct of the Business, and 

(ii) activities in the conduct of other business engaged in by any 

Related Person which might involve a conflict of interest vis-a-vis the Company 

or any Person in which the Company has a direct or indirect interest or any 

Member (or any oftheir respective Affiliates) or in which any Related Person 

realizes a profit or has an interest; 

except, in each case, Damages resulting from acts or omissions of such Related Person which 

were taken or omitted which constituted fraud, gross negligence, willful misconduct, or an 

intentional material breach of this Agreement or any Ancillary Document. 

4.6 Indemnification. 

(a) The Private Owner shall indemnify, defend and hold harmless the Initial 

Member and the Initial Member's Affiliates, and their respective officers, directors, stockholders, 

members, managers, employees, partners, principals, agents, assigns and contractors (all ofthe 

foregoing, collectively, 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 ofthe foregoing), deficiencies, claims, interest, awards, 

judgments, penalties and fmes (collectively, "Losses"), arising out of or resulting from (i) any 

breach after the Closing Date, by (x) the Company (during any period when the Private Owner is 

the Manager, the Private Owner (in any capacity, including as Manager) or any oftheir respective 

Affiliates or (y) any ofthe respective officers, directors, employees, partners, principals, agents or 

contractors of any Person described in sub-clause (x), ofthe obligations ofthe Company or the 

Private Owner (in any capacity, including as the Manager) under, or any other covenants, 

agreements or other terms and conditions contained in, this Agreement or any Ancillary 

Document (including Losses relating to (1) the Company's obligations with respect to litigation 

referred to in Section 4.5 ofthe Contribution Agreement to the extent provided therein, (2) the 

Company's obligations under Section 3.1 and 3.2 ofthe Contribution Agreement (including all 

costs and expenses of the Initial Member in completing any applicable transfers pursuant to 

exercise of rights under such section), and (3) any claim asserted by the Initial Member against the 

Company or the Private Owner (in any capacity, including as the Manager) to enforce its rights 

hereunder or by any third party), or any third-party allegation or claim based upon facts alleged 

that, iftrue, would constitute such a breach; (ii) any gross negligence, bad faith or willful 

misconduct (including any act or omission constituting theft, embezzlement, breach oftrust or 

violation of any Law) on the part of any Person described in sub-clause (i)(x) or (i)(y); or (iii) any 

Losses with respect to which the Initial Member was released, or with respect to which the 

Company should have obtained a release from the applicable Borrowers or other Obligors, in 

accordance with Section 4.17(b) ofthe Contribution Agreement. Such indemnity shall survive the 

termination ofthis Agreement. In order for an Indemnified Party to be entitled to any 

31 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
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 Party, 

Claim"), such Indemnified Party shall deliver notice thereof to the Private Owner promptly after 

receipt by such Indemnified Party ofwritten 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 the Private Owner may reasonably request. The failure or delay to 

provide such notice, however, shall not release the Private Owner from any of its obligations 

under this Section 4.6 except to the extent that it is materially prejudiced by such failure or delay. 

The Private Owner acknowledges and agrees that it shall have no recourse against the Company 

for any amounts the Private Owner is required to pay pursuant to this Section 4.6. For the 

purposes ofthis Section 4.6, the term "Initial Member" shall be deemed to include any Person at 

any time constituting the "Initial Member" hereunder (other than for purposes ofthis Section 4.6) 

and (without limitation ofthe foregoing) any Person at any time holding all or any portion ofthe 

LLC Interest initially held by the Initial Member immediately after the Closing, in each case even 

if such Person has since ceased to be a member ofthe Company or to hold any limited liability 

company interest in the Company. 

(b) Iffor any reason the indemnification provided for herein is unavailable or 

insufficient to hold harmless the Indemnified Parties, the Private Owner 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 the Private Owner (in any capacity, including as the Manager) (including any 

Servicer or Subservicer), on the other hand, in connection with the matters that are the subject of 

such Losses. 

(c) Ifthe Private Owner confirms in writing to the Indemnified Party within 

fifteen (15) days after receipt of a Third Party Claim the Private Owner's responsibility to 

indemnify and hold harmless the Indemnified Party therefor, the Private Owner may elect to 

assume control over the compromise or defense of such Third Party Claim at the Private Owner's 

own expense and by the Private Owner's own 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) the Private Owner shall 

keep the Indemnified Party advised of all material events with respect to any Third Party Claim; 

(iii) the Private Owner shall obtain the prior written approval ofthe 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 reliefbeing 

imposed upon the Indemnified Party or any of its Affiliates; and (iv) the Private Owner will not, 

without the prior written consent ofthe 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 the Private Owner to satisfy 

the full amount ofthe liability in connection with such Third Party Claim and includes an 

unconditional release of such Indemnified Party from all liability arising out of such Third Party 

Claim. 

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FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 


Pool Nos. 24020 and 24021 


13235439.7 
(d) Notwithstanding anything contained herein to the contrary, the Private 

Owner shall not be entitled to control (and if the Indemnified Party so desires, it shall have sole 

control over) the defense, settlement, adjustment or compromise of (but the Private Owner shall 

nevertheless be required to pay all Losses incurred by the Indemnified Party in connection with 

such defense, settlement or compromise): (i) any Third Party Claim that seeks an order, injunction 

or other equitable relief against the Indemnified Party or any of its Affiliates; (ii) any action in 

which both the Private Owner (in any capacity, including as the Manager) or any Affiliate ofthe 

Private Owner, on one hand, and the Indemnified Party, on the other hand, are named as parties 

and either the Private Owner (or such Affiliate) or the Indemnified Party determines with advice 

of counsel that there may be one or more legai defenses available to it that are different from or 

additional to those available to the other party or that a conflict of interest between such parties 

may exist in respect of such action; and (iii) any matter that raises or implicates any issue relating 

to any power, right or obligation of the FDIC under any Law. Ifthe Private Owner 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 the Private Owner 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 the Private Owner or the Indemnified Party), all ofthe 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. 

(e) In the event the Company is reimbursed for or uses the Liquidity Account 

or Excess Liquidity Advances to pay costs or expenses ofthe type referred to in clause (v) or (vi) 

ofthe definition of Servicing Expenses and it is subsequently determined that the Company was 

not entitled to reimbursement for (or to use the Liquidity Account or Excess Liquidity Advances 

to pay) all or any portion ofsuch costs and expenses because the Company did not satisfy the 

requirements of Section 4.6(c) or clause (v) of the definition of Servicing Expenses (such costs 

and expenses, the "Unreimbursable Expenses"), the Manager shall, in addition to any other 

Losses for which the Manager may be liable with respect to the claim to which such costs and 

expenses relate, reimburse the cost of such Unreimbursable Expenses to the Collection Account, 

except to the extent such Unreimbursable Expenses were funded through Excess Liquidity 

Advances that remain outstanding (in which case the portion of any such outstanding Excess 

Liquidity Advance that was so used for Unreimbursable Expenses shall itself become 

unreimbursable and be deemed forgiven with no further right of the Manager to collect or receive 

the same). Any such reimbursement by the Manager pursuant to the foregoing shall be as follows: 

within ten (10) Business Days after written demand therefor from either Member, the Manager 

shall transfer into the Collection Account by wire transfer of immediately available funds the 

amount of such Unreimbursable Expenses plus simple interest at five (5) %per annum from the 

date ofthe demand to the date of the payment to the Collection Account. 

(f) The Company shall indemnify, defend and hold harmless each Member 

and each Member's respective officers, directors, employees and members (all of the foregoing 

33 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 


Pool Nos. 24020 and 24021 


13235439.7 
collectively, the "Covered Persons") for any Losses incurred by such Covered Person by reason 

of a Third Party Claim relating to any act or omission by or of such Covered Person in connection 

with the exercise or performance of the rights, powers, responsibilities and obligations of such 

Covered Person (or, if such Covered Person is other than a Member, ofthe Member in respect of 

which such Covered Person so constitutes a Covered Person) regarding the Company except for 

(i) any Third Party Claim or Loss resulting from fraud, gross negligence, willful misconduct or an 

intentional breach ofthis Agreement or any Ancillary Document by such Covered Person (or if 

such Covered Person is other than a Member, by the Member in respect ofwhich such Covered 

Person so constitutes a Covered Person), and (ii) in the case of the Private Owner (in any capacity, 

including as the Manager), (x) any claim or demand by any Servicer or Subservicer (or, for the 

avoidance of doubt, any Loss arising out of or related to such claim or demand) and (y) any Third 

Party Claim or Loss that is in whole or in part covered by or subject to an indemnification 

obligation ofthe Private Owner (in any capacity, including as the Manager) under any provision 

ofthis Agreement or any Ancillary Document, including the foregoing provisions of Section 

4.6(a). 

(g) Tax Liability ofOwnership Entity. Notwithstanding anything to the 

contrary contained herein, if any Ownership Entity is not a pass-through entity with no entitylevel income tax obligations, distributions to the Initial Member pursuant to Section 6.6 (including 

for the purposes of Section 9.2(c)) shall be allocated before accrual or payment of any income tax 

payable by such Ownership Entity, and the Private Owner (or its successors or assigns) shall 

indemnify and hold harmless the Initial Member from and against any liability for any income 

taxes payable by the Ownership Entity. 

(h) Offsets. Without limiting any other rights ofthe Initial Member 

hereunder, in the event the Initial Member exercises any rights or remedies as a result of or in 

connection with a breach hereunder or the occurrence of an Event ofDefault (including relating to 

a breach of Section 4.6), all 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 claim) incurred by the Initial Member with respect 

thereto may be offset by the Initial Member against any payment or distribution otherwise payable 

to the Private Owner (including the Management Fee), whether in its capacity as a Member or as 

the Manager (in each case except to the extent such breach or Event of Default is attributable 

exclusively to a Manager having been appointed by the Initial Member following removal of the 

Private Owner in such capacity, or to any applicable Servicer (and its Subservicers) having been 

engaged by the Initial Member, the Company or the applicable replacement Manager following 

such removal ofthe Private Owner as Manager, in each case that is not an Affiliate ofthe Private 

Owner). 

ARTICLE V 


Capital Contributions; Liquidity Account; Special Reserve Account; Excess Liquidity 


Advance; Interest Reserve Account 


5.1 Capital Contributions. 

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FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
(a) Members' Contribution. Pursuant to the Contribution Agreement, the 

Initial Member made a Capital Contribution to the Company in an amount equal to the Initial 

Member Capital Contribution. In connection with the Transferred LLC Interest Sale Agreement, 

Private Owner acquired from the Initial Member the Transferred LLC Interest representing a forty 

percent ( 40)% equity interest in the Company in exchange for the Transferred LLC Interest Sale 

Price. After giving effect to the foregoing transactions, the respective Capital Accounts ofthe 

Initial Member and the Private Owner as ofthe Closing Date are as set forth in the Annex I (the 

Member Schedule). 

(b) From and after the Closing Date, the Members shall have no obligation to 

make any additional Capital Contributions to the Company. 

5.2 Liquidity Account. The Manager shall cause the Company to fund the Liquidity 

Account in accordance with the provisions of Section 12.11 hereof. 

5.3 Special Reserve Account. 

(a) Establishment ofthe Special Reserve Account. On the Closing Date, the 

Manager shall cause the Company to establish the Special Reserve Account with the Paying 

Agent for the exclusive purpose of holding Qualifying Cash Collateral (including in the form of 

any proceeds from a drawing on a Qualifying Letter of Credit at any time deposited in the Special 

Reserve Account in accordance herewith). The Special Reserve Account (and all funds and 

financial assets therein) shall be subject to the security interest granted herein pursuant to the 

terms ofthis Agreement, the Custodial and Paying Agency Agreement and the related Account 

Control Agreement. 

(b) Funding the Special Reserve Account. The Private Owner shall (a) 

deposit on the Closing Date the Required Cash Special Reserve Amount into the Special Reserve 

Account and (b) post a Letter of Credit upon which the Company may draw to fund the Special 

Reserve Account upon the occurrence of an Event ofDefault. 

(c) Use of the Special Reserve Account. Upon the occurrence of an Event of 

Default, the Initial Member may direct the Company to withdraw funds from the Special Reserve 

Account to pay for any Company expenses in connection with such Event ofDefault and as 

otherwise determined in the sole and absolute discretion ofthe Initial Member. 

(d) Permitted Investments. Funds on deposit in the Special Reserve Account 

shall be invested in Permitted Investments in accordance with this Agreement and the Custodial 

and Paying Agency Agreement; provided, that all such Permitted Investments shall remain in the 

Special Reserve Account as Qualifying Cash Collateral, and in no event shall the Private Owner 

have any right or authority to withdraw any funds from such Special Reserve Account. 

5.4 Excess Liquidity Advances. In the event there are insufficient available funds in 

the Collection Account and also insufficient available funds in the Liquidity Account (including 

by a permitted release of such funds to the Collection Account or as otherwise permitted in the 

Custodial and Paying Agency Agreement) to pay any Operating Expenses, then the Manager 

shall, except as otherwise provided in Section 12.6, make an advance to the Company (an 

35 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 


Pool Nos. 24020 and 24021 


13235439.7 
"Excess Limrldity Advance") to be used by the Company for payment of such permitted (or 

required, as applicable) Operating Expenses. No Excess Liquidity Advance shall accrue any 

interest thereon. Excess Liquidity Advances shall be repaid in accordance Section 3.1 of the 

Custodial and Paying Agency Agreement. Excess Liquidity Advances shall be deposited into the 

Collection Account for disbursement therefrom for the payment of permitted Operating 

Expenses for which such Excess Liquidity Advance is being made. Furthermore, to the extent 

multiple Operating Expenses (payment of which is permitted to be made using such Excess 

Liquidity Advance) are outstanding, any funding or use by the Manager of Excess Liquidity 

Advances for payment of all or any ofthe same shall follow the relevant priorities as set forth in 

the Priority of Payments and in Section 3.1 of the Custodial and Paying Agency Agreement, as 

applicable. All Excess Liquidity Advances, together with a detailed statement ofthe sources and 

uses thereof (which shall be broken out by the reimbursable and unreimbursable portions 

thereof), shall be reflected in the Monthly Report with respect to the calendar month during 

which the relevant Excess Liquidity Advance was made. The Manager may not assign, sell, 

transfer, participate, pledge, or hypothecate, in whole or in part, its interest in any Excess 

Liquidity Advances without the prior written consent of the Initial Member and, for so long as 

any Purchase Money Note remains outstanding, the Purcha.Se Money Guarantor. 

5.5 Interest Reserve Account. The Manager shall cause the Company to fund the 

Interest Reserve Account in accordance with the provisions of Section 12.10 hereof. 

ARTICLE VI 


Capital Accounts; Allocations; Priority of Payments; Distributions 


6.1 Capital Accounts. A Capital Account shall be established and maintained for 

each Member to which shall be credited the Capital Contributions made by such Member and 

such Member's allocable share of Net Income (and items thereof), and from which shall be 

deducted distributions to such Member of cash or other Property and such Member's allocable 

share ofNet Loss (and items thereof). As to the Private Owner, the initial Capital Account shall 

correspond to that portion ofthe Capital Account of the Initial Member that is attributable to the 

Transferred LLC Interest (as defmed in the Transferred LLC Interest Sale Agreement) acquired 

by the Private Owner pursuant to the Transferred LLC Interest Sale Agreement. A Member's 

Capital Account also shall be adjusted for items specially allocated to such Member under this 

Article VI. The Capital Accounts of the Members generally shall be adjusted and maintained in 

accordance with Treasury Regulations Section 1.704-1(b)(2)(iv); provided, however, that such 

adjustments to,· and maintenance of, the Capital Accounts shall not adversely affect the manner 

in which distributions are to be made to the Members under Section 6.6. 

6.2 Allocations to Capital Accounts. Allocation ofNet Income and Net Loss shall be 

made as provided in this Article VI. 

(a) Except as otherwise provided in this Agreement, Net Income and Net Loss 

(and, to the extent necessary, individual items of income, gain, loss, deduction or credit) ofthe 

Company shall be allocated among the Members in a manner such that, after giving effect to the 

36 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
special allocations set forth in Section 6.2(b), the Capital Account balance of each Member, 

immediately after making such allocation, is, as nearly as possible, equal to (i) the distributions 

that would be made to such Member pursuant to Section 6.6 ifthe Company were dissolved, its 

affairs wound up and its assets sold for cash equal to their Book Value, all Company liabilities 

were satisfied (limited with respect to each nonrecourse liability to the Book Values ofthe assets 

securing such liability), and the net assets of the Company were distributed, in accordance with 

Section 9.2{c), to the Members immediately after making such allocation, minus (ii) such 

Member's share of"partnership minimum gain" and "partner nonrecourse debt minimum gain" 

(as such terms are used in Treasury Regulations Section 1.704-2), computed immediately prior to 

the hypothetical sale of assets. 

(b) Allocations in Special Circumstances. The following special allocations 

shall be made in the following order: 

(i) Minimum Gain Chargeback. Notwithstanding any other provision 

ofthis Article VI, if there is a net decrease in minimum gain (as it corresponds to 

the definition of "partnership minimum gain" in Treasury Regulations 

Section 1.704-2(b)(2) and (d)) during any Fiscal Year, the Members shall be 

specially allocated items ofCompany income and gain for such Fiscal Year (and, 

if necessary, subsequent Fiscal Years) in an amount equal to the portion of such 

Member's share of the net decrease in minimum gain, determined in accordance 

with Treasury Regulations Section 1.704-2(t) and (g). This Section 6.2{b){i) is 

intended to comply with the "minimum gain charge back" requirement in such 

section of the Treasury Regulations and shall be interpreted consistently 

therewith. 

(ii) Member Minimum Gain Chargeback. Notwithstanding any other 

provision ofthis Article VI other than 6.2(b )(i), if there is a net decrease in 

minimum gain attributable to a Member nonrecourse debt (as it corresponds to the 

defmition of "partnership nonrecourse debt minimum gain" in Treasury 

Regulations Section 1.704-2(i)) during any Fiscal Year, each Member shall be 

specially allocated items ofCompany income and gain for such Fiscal Year (and, 

if necessary, subsequent Fiscal Years) in an amount equal to the portion of such 

Member's share ofthe net decrease in such minimum gain attributable to such 

Member's nonrecourse debt, determined in accordance with Treasury Regulations 

Section 1.704-2(i). This Section 6.2(b)(ii) is intended to comply with the "partner 

minimum gain charge back" requirement in such section of the Treasury 

Regulations and shall be interpreted consistently therewith. 

(iii) Qualified Income Offset. In the event any Member, for any reason, 

. whether expected or not, has an Adjusted Capital Account Deficit, items of 

Company income and gain shall be specially allocated to each such Member in an 

amount and manner sufficient to eliminate, to the extent required by the Treasury 

Regulations, such Adjusted Capital Account Deficit as quickly as possible, 

provided that an allocation pursuant to this Section 6.2{b)(iii) shall be made only 

if and to the extent that such Member would have such Adjusted Capital Account 

37 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 


Pool Nos. 24020 and 24021 


13235439.7 
Deficit after all other allocations provided for in Section 6.2 have been tentatively 

made as if this Section 6.2(b)(iii) were not in this Agreement. This 

Section 6.2(b)(iii) is intended to comply with the "qualified income offset" 

provisions in Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be 

interpreted consistently therewith. 

(iv) Nonrecourse Deductions. Any nonrecourse deductions attributable 

to a Member nonrecourse debt (as described in Treasury Regulations 

Section 1.704-2(i)) shall be allocated to the Member who bears the economic risk 

of loss with respect to such nonrecourse debt. Otherwise, nonrecourse deductions 

shall be allocable in accordance with the Members' respective Percentage 

Interests. 

(v) Loss Allocation Limitation. No allocation ofNet Loss (or any item 

thereof) shall be made to any Member to the extent that such allocation would 

create or increase a Member's Adjusted Capital Account Deficit. .If, in the 

allocation ofNet Loss (or any item thereof), less than all Members would have an 

Adjusted Capital Account Deficit as a result of such allocation, then any Net Loss 

(or item there'of) not allocable to any such Member(s) as a result of such 

limitation shall be allocated (subject to such limitation) to the other Member so as 

to allocate the maximum permissible Net Loss to each Member under Treasury 

Regulation Section 1.704-1 (b )(2)(ii)( d). 

(vi) Curative Allocations. The allocation provisions ofthis 

Section 6.2(b) are intended to comply with certain requirements ofthe Treasury 

Regulations. Notwithstanding any other provisions ofthis Article VI, any 

allocation effected pursuant to this Section 6.2(b) shall be taken into account in 

allocating Net Income and Net Loss among the Members such that the cumulative 

effect of all such allocations achieves the fundamental purpose of Section 6.2(a), 

so that the Capital Account balances correspond to the amounts distributable to 

the Members. 

(c) Transfer of or Change in LLC Interests. The Tax Matters Member is 

authorized to adopt any convention or combination of conventions likely to be .upheld for federal 

income tax purposes regarding the allocation of items of Company income, gain, loss, deduction 

and expense with respect to a transferred LLC Interest. A transferee of an LLC Interest in the 

Company shall succeed to the Capital Account ofthe transferor Member to the extent it relates to 

the transferred LLC Interest. · 

6.3 Tax Allocations. 

(a) General Rules. Except as otherwise provided in Section 6.3(b), for each 

Fiscal Year, items of Company income, gain, loss, deduction and expense shall be allocated, for 

federal, state and local income tax purposes among the Members in the same manner as the Net 

Income (and items thereof) or Net Loss (and items thereof) ofwhich such items are components 

were allocated pursuant to Section 6.2. 

38 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
(b) Section 704(c) ofthe Code. Income, gains, losses and deductions with 

respect to any property (other than cash) contributed or deemed contributed to the capital ofthe 

Company shall, solely for income tax purposes, be allocated among the Members so as to take 

account of any variation between the adjusted basis of such property to the Company for federal 

income tax purposes and its Fair Market Value at the time ofthe contribution or deemed 

contribution in accordance with Section 704( c) ofthe Code and the Treasury Regulations 

promulgated thereunder. Such allocations shall be made in such manner and utilizing such 

permissible tax elections as determined in good faith by the Tax Matters Member, following 

consultation with the Initial Member. In the event of a revaluation ofProperty pursuant to the 

definition ofBook Value, subsequent allocations ofincome, gains, losses or deductions with 

respect to such Property shall take account of any variation between the Book Value and Fair 

Market Value of such Property, as so determined from time-to-time, in accordance with 

Section 704(c) ofthe Code and the Treasury Regulations promulgated thereunder. Such 

allocations shall be made in such manner and utilizing such permissible tax elections as 

determined in good faith by the Tax Matters Member, following consultation with the Initial 

Member. For the avoidance of doubt, any losses recognized by the Company that are attributable 

to property acquired by the Company pursuant to the Contribution Agreement and that are 

deferred pursuant to Section 707(b)(l) or Section 267(a) of the Code shall, solely for income tax 

purposes, be allocated to the Initial Member. 

(c) Capital Accounts Not Affected. Allocations pursuant to this Section 6.3 

are solely for federal, state and local tax purposes and shall not affect, or in any way be taken into 

account in computing, any Member's Capital Account or allocable share ofNet Income (or items 

thereof) or Net Loss (or items thereof). 

(d) Tax Allocations Binding. The Members acknowledge that they are aware 

ofthe tax consequences ofthe allocations made by this Section 6.3 and hereby agree to be bound 

by the provisions ofthis Section 6.3 in reporting their respective shares of items of Company 

income, gain, loss, deduction and expense. 

6.4 Determinations by Tax Matters Member. All matters concerning the computation 

of Capital Accounts, the allocation of items of Company income, gain, loss, deduction and 

expense and the adoption of any accounting procedures not expressly provided for by the terms 

of this Agreement shall be determined by the Tax Matters Member in good faith, following 

consultation with the Initial Member. Following such consultation, such determinations shall be 

final and conclusive as to all the Members. Without in any way limiting the scope of the 

foregoing, if and to the extent that, for income tax purposes, any contribution to or distribution 

by the Company or any payment by any Member or by the Company is recharacterized, the Tax 

Matters Member may, in good faith following consultation with the Initial Member, specially 

allocate items of Company income, gain, loss, deduction or expense and/or make correlative 

adjustments to the Capital Accounts of the Members in a manner so that the net amount of 

income, gain, loss, deduction and expense realized by each relevant party (after taking into 

account such special allocations) and the net Capital Account balances of the Members (after 

taking into account such special allocations and adjustments) shall, as nearly as possible, achieve 

the fundamental purpose of Section 62U!l, such that the Capital Account balances correspond to 

the amounts distributable to the Members, as if such recharacterization had not occurred. 

39 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 


Pool Nos. 24020 and 24021 


13235439.7 
6.5 Priority of Payments. Each calendar month the amounts deposited in the 

Distribution Account under the Custodial and Paying Agency Agreement shall be distributed by 

the Paying Agent in the order of the Priority ofPayments. · 

6.6 Distributions. 

(a) No Right to Withdraw. No Member shall have the right to withdraw 

capital or demand or receive distributions or other returns of any amount in its Capital Account, 

except as expressly provided in this Agreement. 

(b) Ordinary Distributions. 

(i) Timing. Amounts available for distribution to the Members with 

respect to their respective LLC Interests, if any, shall be distributed to the 

Members on a monthly basis by the Paying Agent out of the Distribution Account 

in the manner set forth in the Custodial and Paying Agency Agreement. 

(ii) [Reserved]: 

(iii) Incentive Threshold Event. The "Incentive Threshold Event" 

shall occur as of a Distribution Date if (A) the aggregate distributions made to the 

Private Owner pursuant to the Priority ofPayments as of such Distribution Date is 

equal to or greater than the product of two and the Incentive Threshold Base 

Amount, and (B) the Incentive Threshold as of such Distribution Date is equal to 

zero. 

(iv) Incentive Threshold. The "Incentive Threshold" shall be 

determined as follows: 

(A) as of the Closing Date, the Incentive Threshold shall be 

equal to the sum of (a) the Transferred LLC Interest Sale Price, (b) the 

amount funded by the Private Owner into the Interest Reserve Account 

pursuant to Section 12.10 and (c) the amount funded by the Private 

Owner into the Liquidity Account pursuant to Section 12.11, the 

"Incentive Threshold Base Amount"); and 

(B) as of any Distribution Date, the Incentive Threshold shall 

be an amount equal to (1) the sum of(i) the Incentive Threshold as of the 

preceding Distribution Date (or, in the case of the first Distribution Date, 

the Closing Date), and (ii) the Threshold Increase Amount, minus (2) the 

aggregate distributions made to the Private O'Yfier pursuant to the Priority 

of Payments on such Distribution Date; provided, that, if, as of any 

Distribution Date, the amount referred to in clause (B)(2) of Section 

6.6(b)Civ) is greater than the amount referred to in clause (B)(1) of Section 

6.6(b)(iv), then the Incentive Threshold shall be deemed to be zero for 

such Distribution Date and all s.ubsequent Distribution Dates. 

40 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 


Pool Nos. 24020 and 24021 


13235439.7 

(c) Restrictions on Distributions. The foregoing provisions ofthis Article VI 

to the contrary notwithstanding, no distribution shall be made if such distribution would violate 

any contract or agreement to which the Company is then a party or any Law or directive of any 

Governmental Authority then applicable to the Company. 

(d) Withholding. Notwithstanding any other provision of this Agreement, the 

Manager is authorized to take any action that it determines to be necessary or appropriate to cause 

the Company to comply with any foreign or United States federal, state or local withholding 

requirement with respect to any allocation, payment or distribution by the Company to any 

Member or other Person. All amounts so withheld shall be treated as distributions to the 

applicable Members under the applicable provisions ofthis Agreement. If any such withholding 

requirement with respect to any Member exceeds the amount distributable to such Member under 

the applicable provisions ofthis Agreement, or if any such withholding requirement was not 

satisfied with respect to any amount previously allocated or distributed to such Member, such 

Member and any successor or as.signee with respect to such Member's LLC Interest here "by agrees 

to indemnify and hold harmless the Manager and the Company for such excess amount or such 

withholding requirement, as the case may be. 

(e) Record Holders. Any distribution ofProperty, whether pursuant to this 

Article VI or otherwise, shall be made only to Persons that, according to the books and records of 

the Company, were the holders of record of LLC Interests on the date determined by the Manager 

as ofwhich the Members are entitled to any such distribution. 

(f) Final Distribution. The Final Distribution following the dissolution ofthe 

Company shall be made in accordance with the provisions of Section 9.2. 

ARTICLE VII 


Accounting, Reporting and Taxation 


7.1 Fiscal Year. The books and records of the Company shall be kept on an accrual 

basis and the fiscal year ofthe Company shall commence on January 1 and end on December 31 

(the "Fiscal Year"). 

7.2 Maintenance ofBooks and Records. 

(a) Maintenance of Books and Records. At all times during the continuance 

ofthe Company, the Manager shall cause to be kept and maintained (including by the Servicer 

and any Ownership Entity and including records transferred by the Receiver to the Company in 

connection with its conveyance of the Mortgage Loans to the Company under the Contribution 

Agreement), at all times, at the Company's chief executive office referred to in Section 2.4, a 

complete and accurate set of files, books and records regarding the Mortgage Loans and the 

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

Mortgage Loans and the Underlying Collateral, including records relating to the Collection 

Account, the Escrow Accounts, the Liquidity Account, the Special Reserve Account and the 

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

set of records shall encompass all files in the Manager's or Company's custody, possession or 

control pertaining to the Mortgage Loans and the Underlying Collateral, including (except as 

41 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 


Pool Nos. 24020 and 24021 


13235439.7 
·required to be held by the Custodian pursuant to the Custodial and Paying Agency Agreement) all 

original and other documentation pertaining to the Mortgage Loans and the Underlying Collateral, 

all documentation relating to items ofincome and expense pertaining to the Mortgage Loans and 

the Underlying Collateral, and all ofthe Manager's (and each Servicer's and Subservicer's) 

internal memoranda pertaining to the Mortgage Loans and the Underlying Collateral. The books 

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

ofthe Company are executed in accordance with the general or specific authorization ofthe 

Manager consistent with the provisions ofthis Agreement; and (b) transactions of the Company 

are recorded in such form and manner as will: (i) permit preparation of federal, state and local 

income and franchise tax returns and information returns in accordance with this Agreement and 

as required by Law; (ii) permit preparation ofthe Company's financial statements in accordance 

with GAAP and as otherwise set forth herein and the provisions of the reports required to be 

provided hereunder; and (iii) maintain accountability for the Company's assets. 

(b) Retention ofBooks and Records. The Manager shall cause all such books 

and records to be maintained and retained until the date that is the later often (10) years after the 

Closing Date and 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 the Initial Member, the 

FDIC or any oftheir respective representatives (including any Governmental Authority) and 

agents at the Company's chief executive office referred to in Section 2.4 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 the Initial Member and the FDIC), in 

each instance upon two (2) Business Days' prior notice to the Manager. Upon request by the 

Initial Member or the FDIC, the Manager shall promptly.~end copies (the number of copies of 

which shall be reasonable) of such books and records to such requesting Person or its designee. 

The Manager shall provide the Initial Member and the FDIC with reasonable advance notice of 

the Manager's intention to destroy or dispose of any documents or files relating to the Mortgage 

Loans and, upon the request ofthe Initial Member or the FDIC, shall allow such requesting Person 

to recover the same (or copies thereof) from the Company and in the case both the Initial Member 

and the FDIC so request the same, the FDIC shall have the right to recover such documents or 

files, but the Initial Member shall have the right to make copies ofsuch applicable documents or 

files so long as such copies are made while such documents files remain with the Manager or the 

Company (and prior to recovery ofthe same by the FDIC). The Manager shall also maintain 

complete and accurate records reflecting the status oftaxes, ground leases or other recurring 

charges which could become a Lien on any Underlying Collateral. Any expense incurred by the 

Initial Member or the FDIC and any reasonable out-of-pocket expense incurred by the Company 

in connection with the exercise by the Initial Member or the FDIC of its respective rights in this 

Section 7 .2(b) to recover or make (or otherwise receive) copies of books, records, documents or 

files shall be home by such Person so exercising such rights; provided, however, that any expense 

incident to the exercise of such rights pursuant to this Section 7 .2(b) as a result ofor during the 

continuance of an Event of Default shall in all cases be borne by the Private Owner (except to the 

extent such Event of Default is attributable exclusively to a Manager having been appointed by 

the Initial Member following removal of the Private Owner in such applicable capacity, or to any 

applicable Servicer (and its Subservicers) having been engaged by the Initial Member, the 

Company or the applicable replacement Manager following such removal of the Private Owner as 

Manager, in each case that is not an Affiliate ofthe Private Owner). 

42 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 


Pool Nos. 24020 and 24021 


13235439.7 
7.3 Financial Statements. 

(a) Annual Financial Statements. As soon as practicable following, but no 

later than ninety (90) days immediately after, the end of each Fiscal Year (commencing with 

respect to the 2010 Fiscal Year), the Manager shall prepare and deliver to the Initial Member an 

audited consolidated balance sheet of the Company and the Ownership Entities as at the end of 

such Fiscal Year, and audited consolidated statements of operations and cash flow ofthe 

Company and the Ownership Entities for such Fiscal Year, each prepared in accordance with 

GAAP and accompanied by the Accountants' report thereon, which shall be certified in the 

customary manner by the Accountants. 

(b) Quarterly Financial Information. As soon as practicable following, but no 

later than thirty (30) days immediately after, the end of each quarter of each Fiscal Year (other 

than the last quarter of such Fiscal Year, and commencing with the calendar quarter ending on or 

about March 30, 2011), the Manager shall prepare and deliver to the Initial Member an unaudited 

consolidated balance sheet of the Company and the Ownership Entities as at the end of such 

calendar quarter, and unaudited consolidated statements of operations and cash flow of the 

Company and the Ownership Entities for such calendar quarter (and, for the first such report, also 

covering the period from the Closing Date through the end of such calendar quarter), each 

prepared-in accordance with GAAP. 

7.4 Additional Reporting and Notice Requirements. 

(a) Manager's Duty to the Initial Member and the Secured Parties;_Delivery 

of Certain Notices. In addition to such other reports and access to books, records and reports as 

are required to be provided under this Agreement, the Manager shall cause to be delivered to the 

Initial Member and the Purchase Money Note Guarantor such information as,is specified in 

Exhibit B (in addition to the Monthly Report) and such other information relating to the Mortgage 

Loans, the Underlying Collateral, the Company, the Servicers and any Subservicers as Initial 

Member or the Purchase Money Note Guarantor may reasonably request from time-to-time and, in 

any case, shall ensure that Initial Member and the Purchase Money Note Guarantor are promptly 

advised, in writing, of any matter of which the Manager, any Servicer or any Subservicer becomes 

aware relating to the Mortgage Loans, the Underlying Collateral, the Collection Account, the 

Escrow Accounts, the Liquidity Account, the Special Reserve Account or any Borrower or 

Obligor that materially and adversely affects the interests of the Initial Member hereunder or the 

Secured Parties. Without limiting the generality of the foregoing, the Manager shall cause to be 

delivered to the Initial Member and the Purchase Money Note Guarantor information indicating 

any possible Environmental Hazards with respect to any Underlying Collateral. To the extent that 

the Initial Member or the Purchase Money Note Guarantor requests information which is 

dependent upon obtaining such information from a Borrower, Obligor or other third party, the 

Manager shall cause to be made commercially reasonable efforts to obtain such information but it 

shall not be a breach by the Manager of this Agreement if the Manager fails to cause such 

information to be provided to the Initial Member or the Purchase Money Note Guarantor because 

a Borrower, Obligor or other Person has failed to provide such information after such efforts have 

been made. 

43 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
(b) Monthly Reports. On or prior to the fifth Business Day immediately 

preceding the Distribution Date for each month, commencing on the Distribution Date following 

the calendar month in which the Closing Date occurs, the Company shall deliver or cause the 

Manager to deliver to the Paying Agent, the Initial Member and the Purchase Money Notes 

Guarantor the Monthly Report with respect to the relevant Due Period, which Monthly Report 

shall include the Distribution Date Report specifying the amounts and recipients of all funds to be 

distributed by the Paying Agent on such Distribution Date; provided, however, that (unless the 

Company and the Initial Member agree otherwise) the Initial Member will prepare and deliver to 

the Paying Agent and the Purchase Money Note Guarantor the Monthly Report (including the 

Distribution Date Report) on behalf ofthe Company for all Due Periods ending on or before 

February 28, 2011. Following receipt by the Paying Agent ofthe Monthly Report (including 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 ofthe Custodial and Paying Agency Agreement. Each Monthly Report (including 

the Distribution Date Report) prepared and delivered by the Manager shall be certified by the 

chieffinancial officer (or an equivalent officer) of the Manager. Each Monthly Report prepared 

and delivered by the Manager shall also include a certification ofthe Manager that all withdrawals 

by the Manager from the Collection Account during such Due Period were made in accordance 

with the terms ofthis Agreement and the Custodial and Paying Agency Agreement. 

(c) Annual Compliance Certificates. The Manager shall, and shall cause the 

Servicer and each Subservicer to, deliver to the Initial Member and the Purchase Money Note 

Guarantor, on or before March 15 of each year, commencing in the year 2011, an officer's 

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

the Manager, for the avoidance ofdoubt in any capacity under this Agreement) during the 

preceding calendar year (or other applicable period as set forth below in this Section 7ACc)) and of 

its performance under this Agreement (or, as applicable, the Servicing Agreement or any 

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

such officer's knowledge and belief, based on such review, such party (in the case ofthe Manager, 

for the avoidance of doubt in any capacity under this Agreement) has fulfilled all of its obligations 

under this Agreement (or, as applicable, the Servicing Agreement or Subservicing Agreement) in 

all material respects throughout such year (or other applicable period as set forth below in this 

Section 7.4(c)) 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. The first such officer's certificate 

shall, with respect to any Mortgage Loan, shall cover the period commencing on the Closing Date 

(and with respect to each Mortgage Loan, including relevant information with respect thereto for 

the period commencing on the Servicing Transfer Date for such Mortgage Loan) and continuing 

through the end ofthe 2010 calendar year. In the event a Servicer or any Subservicer was 

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

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

Mortgage Loan, on the applicable Servicing Transfer Date through the end ofthe 2010 calendar 

year), such party shall provide an officer's certificate pursuant to this Section 7~ with respect 

to such portion ofthe year (or other applicable period). 

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

commencing in the year 2011, the Manager shall cause each Servicer and Subservicer, each at its 

44 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 


Pool Nos. 24020 and 24021 


13235439.7 
own expense, to provide a report prepared by a nationally recognized fmn of independent certified 

public accountants to the effect that, with respect to the most recently ended Fiscal Year,. such 

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

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

in compliance with either the Uniform Single Attestation Program for Mortgage Bankers or Item 

1122 ofRegulation AB, such firm is ofthe opinion that the Manager's or its Servicers' or 

Subservicers' activities have been conducted in compliance with this Agreement (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. 

(e) Audits. Until the later ofthe date that is ten ( 1 0) years after the Closing 

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

cause the Servicer and each Subservicer to, (i) provide any representative of the Initial Member 

(including any Governmental Authority), during normal business hours and on reasonable notice, 

with access to all ofthe books of account, reports and records relating to the Mortgage Loans or 

any Underlying Collateral, the Servicing Obligations, the Collection Account, the Escrow 

Accounts, the Liquidity Account, the Special Reserve Account, any account created under the 

Servicing Agreement, disbursements under the Custodial and Paying Agency Agreement, 

distributions hereunder or any other matters relating to this Agreement or the rights or obligations 

hereunder or under the Ancillary Documents; (ii) permit such representatives to make copies of 

and extracts from the same, (iii) allow Initial Member to cause such books to be audited by 

accountants selected by the Initial Member, and (iv) allow Initial Member's representatives to 

discuss the Company's, the Manager's, any Servicer's and any Subservicer's affairs, fmances and 

accounts, as they relate to the Mortgage Loans, the Underlying Collateral, the Servicing 

Obligations, the Collection Account, the Escrow Accounts, the Liquidity Account, the Special 

Reserve Account or any other matters relating to this Agreement, the Ancillary Documents, or the 

rights or obligations hereunder and thereunder, with its officers, directors, employees, accountants 

(and by this provision the Company and the Manager hereby authorizes such accountants to 

discuss such affairs, finances and accounts with such representatives), Servicers and Subservicers, 

and attorneys. Any expense incurred by the Initial Member and any reasonable out-of-pocket 

expense incurred by the Company in connection with the exercise by the Initial Member of its 

rights in this Section 7.4(e) shall be borne by the Initial Member; provided, however, that any 

expense incident to the exercise by the Initial Member of its rights pursuant to this Section 7.4(e) 

as a result of or during the continuance of an Event of Default shall in all cases be borne by the 

Private Owner (except to the extent such Event of Default is attributable exclusively to a Manager 

having been appointed by the Initial Member following removal of the Private Owner in such 

capacity, or to any applicable Servicer (and its Subservicers) having been engaged by the Initial 

Member, the Company or the applicable replacement Manager following such removal ofthe 

Private Owner as Manager, in each case that is not an Affiliate ofthe Private Owner). 

(f) In addition to the foregoing, the Manager shall provide or cause to be 

provided to the Initial Member, all reports, information (financial or otherwise), certificates and 

other documents required to be provided by the Company pursuant to the Reimbursement and 

Security Agreement, and by the Servicer under the Servicing Agreement. 

45 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
(g) The rights afforded to the Members under this Section 7.4 are in addition 

to, and not in limitation of, the rights ofthe Members under Section 18-305(a) of the Act. Section 

18-305(c) of the Act shall not apply in relation to the Initial Member. 

7.5 Designation of Tax Matters Member. The Private Owner is hereby designated as 

the "Tax Matters Member" under Section 6231 (a )(7) of the Code and under other similar Laws 

of other relevant jurisdictions, to manage, in consultation with the Initial Member, administrative 

tax proceedings conducted at the Company level by the Internal Revenue Service or other tax 

authorities with respect to Company matters. Each Member expressly consents to such 

designation and agrees that, upon the request of the Tax Matters Member, it will execute,, 

acknowledge, deliver, file and record at the appropriate public offices such documents as may be 

necessary or appropriate to evidence such consent. The Tax Matters Member is specifically 

directed and authorized to take whatever steps the Tax Matters Member in its sole and absolute 

discretion deems necessary or desirable to perfect such designation, including, without 

limitation, filing any forms or documents with the Internal Revenue Service (or other tax 

authorities) and taking such other action as may from time-to-time be required under the Code, 

Treasury Regulations or other Laws. The Tax Matters Member shall keep the other Members 

fully informed as to any tax audits of the Company, including promptly providing the other 

Members with copies of any correspondence from any taxing authority and permitting the other 

Member to participate in any conferences or meetings with any taxing authority and in any 

subsequent administrative or judicial proceedings. The Tax Matters Member shall have the 

authority, following consultation with the Initial Member, to make any tax elections on behalf of 

the Company permitted to be made, including the election pursuant to Section 754, under any 

section ofthe Code or the Treasury Regulations promulgated thereunder or under other Laws. In 

the event the Company may be deemed to be a "small partnership" as described in 

Section 623l(a)(1)(B), each Member consents to the Company's electing to be treated as a 

partnership to which the provisions of Code Section 6221 et. seq. apply (thereby electing to have 

Code Section 6231(a)(l)(B)(i) not apply). The Initial Member may, at any time following the 

occurrence and during the continuation of an Event ofDefault, remove the Private Owner as the 

Tax Matters Member, appoint itself (or any other willing Member at the time) as the Tax Matters 

Member, and serve (or cause such other Member to so serve) in such capacity; provided that 

such removal shall not relieve the Private Owner as Tax Matters Member of any obligations or 

liabilities under this Agreement or any Ancillary Document arising, relating to, occurring, or 

required to have been paid or performed by, the Private Owner as Tax Matters Member in its 

capacity as such. 

7.6 Tax Information. 

(a) Within ninety (90) days after the end of each Fiscal Year, the Tax Matters 

Member shall send, or cause to be sent to, each Person who was a Member at any time during the 

Fiscal Year then ended a Schedule K-1 and such Company tax information as the Tax Matters 

Member reasonably believes shall be necessary for the preparation by such Person of its United 

States federal, state and local tax returns in accordance with any Law. The Tax Matters Member 

may, at its option and with prior notice to the Initial Member, extend the date when such Schedule 

K-1 is due by a period no longer than forty-five ( 45) days prior to the extended due date of the 

federal tax return for such Fiscal Year. Such information shall include a statement showing such 

46 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
Person's share of distributions, income, gain, loss, deductions and expenses and other relevant 

items of the Company for such Fiscal Year. Promptly upon the request of any Member (or any 

former Member, for tax years during which such Person was a Member), the Tax Matters Member 

will furnish to such Member (or former Member): 

(i) United States federal, state and local income tax returns or 

information returns, if any, filed by the Company; and 

(ii) at the sole cost and expense of the requesting Member, such other 

information as such Member may reasonably request for the purpose of applying 

for refunds of withholding taxes. 

(b) For each Due Period, no later than three Business Days prior to the 

Distribution Date, the Company shall prepare and deliver or cause the Manager to prepare and 

deliver to the Initial Member a report which shall specify the information with respect to each 

Mortgage Loan that is sold or otherwise disposed of by the Company so as to enable the Company 

(and each Member) to comply with allocation provisions of Section 704(c) of the Code, as 

determined as of the close of business on the applicable Determination Date and certified by an 

Authorized Representative (who shall be the chief financial officer (or an equivalent officer)) of 

the Company (the "Tax Allocation Report"). Such report shall be delivered with the Schedule 

K-1s provided for in Section 7.6(a). 

7.7 Business Plan. As promptly as possible, but in no event later than 120 days after 

the Closing Date, the Manager shall deliver to the Initial Member a written plan (a "Business 

Plan") detailing the strategy to be used by it to manage and dispose of the assets of the Company 

including all of the Mortgage Loans and for achieving the Company's purposes with respect 

thereto, in conformity with the Servicing Standard, based, to the extent appropriate, on 

information gathered by the Company with respect to the Mortgage Loans. The Manager shall 

meet with the Initial Member as reasonably requested by the Initial Member from time-to-time 

during the thirty (30) Business Days following the Initial Member's receipt of the Business Plan, 

to review and discuss such Business Plan, including changes thereto suggested by the Initial 

Member. Within thirty (30) Business Days following expiration of such review period, the 

Manager shall deliver to the Initial member a final version of the Business Plan reflecting such 

changes as the Manager considers to be appropriate in light of its discussions with the Initial 

Member during such review period. The Manager shall thereafter review and revise the 

Business Plan as the circumstances may require, and in any event provide periodic updates to 

such Business Plan to the Initial Member, commencing in January 31 of2012, and on an annual 

basis thereafter, with each such periodic update to de delivered as part of the Monthly Reports 

due at such time pursuant to Section 7.4(b). Upon reasonable notice by the Initial Member, the 

Company shall make its personnel who are familiar with the Business Plan available during 

normal business hours for the purposes of discussing the Business Plan with representatives of 

the Initial Member and responding to questions therefrom. 

(a) The Business Plan will set forth a strategy for the disposition ofthe 

Mortgage Loans addressed thereby, which strategy may consist of one or more ofthe following: 

(i) the pay-off ofMortgage Loans at a discount; (ii) modifications of the related Note and/or 

47 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
Mortgage, including reductions in the Mortgage Loan interest rate, reductions in the principal 

balance and rescheduling of principal payments; (iii) foreclosure upon the related Underlying 

Collateral(or acquisition thereofby deed in lieu offa>reclosure) and subsequent sale thereof; (iv) 

assumptions of Mortgage Loans by new Borrowers; (v) repairs to Underlying Collateral; with a 

view towards selling such Underlying Collateral or the Mortgage Loan secured thereby; (vi) sale 

of a Mortgage Loan, either singly or in pools, before or after restructuring; and (vii) any other 

method ofwork-out, rehabilitation and disposition consistent with the Servicing Standard and 

other general duties ofthe Company specified in this Agreement. 

(b) The Business Plan will set forth a strategy for the disposition of any 

Acquired Property, which strategy may consist of one or more ofthe following: (i) the sale or 

leasing of the Acquired Property in whole or in parts, or in pools; (ii) making repairs to and, if 

applicable, completion of construction of the Acquired Property or making changes to the 

Acquired Property so that it may be used for uses other than its current use, with a view toward 

selling the Acquired Property; (iii) rehabilitation or improvement and, if applicable, completion of 

construction ofthe Acquired Property, with a view toward selling the Acquired Property; (iv) 

continued leasing or sales activity with respect to the Acquired Property available for leasing or 

sale (in whole or in part) at the time it is transferred to an Ownership Entity; and (v) maintenance, 

landscaping and general upkeep of the Acquired Property. 

(c) The Business Plan shall include projected financial statements, including 

statements of income, assets, and cash flows for the Company. Projected cash flows must carry 

through to the termination date ofthe Company, providing monthly projections for the first 24 

months and quarterly projections thereafter. The cash flow projections must reflect gross 

projected cash inflows, cash outflows, and net funds distributable to the Members. 

ARTICLE VIII 


Restrictions on Disposition of LLC Interests 


8.1 Limitations on Disposition ofLLC Interests. Except as otherwise provided in this 

Article VIII, the Private Owner shall not, directly or indirectly, Dispose of or permit to be 

Disposed of, all or any part of its LLC Interest or any ofits rights or interests under this 

Agreement, provided, however that the Private Owner may make a direct, outright transfer of its 

entire (but not less than its entire) LLC Interest if, and only if, (a) (i) the transferee is a single 

Person that is a Qualified Transferee, (ii) such transferee delivers to the Initial Member a 

Purchaser Eligibility Certification and the representations and warranties made by such 

transferee therein shall be true and correct both before and after giving effect to such transfer of 

the LLC Interest, and (iii) the Private Owner first obtains the prior written consent ofthe Initial 

Member and if a Purchase Money Note is outstanding, the Purchase Money Note Guarantor, to 

such transfer, or (b) such Disposition is done by or at the direction of the Initial Member 

pursuant to Sections 3.13 or 3.14. The Private Owner shall not Dispose ofless than all of its 

LLC Interest. Transfers by the Private Owner satisfying the foregoing criteria are hereinafter 

referred to as "Permitted Dispositions." 

8.2 Change ofControl. The Private Owner shall not permit any Change of Control to 

occur with respect to the Private Owner unless (i) it first obtains the prior written consent ofthe 

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Initial Member, and if a Purchase Money Note is outstanding, the Purchase Money Note 

Guarantor, and (ii) following such Change of Control, the Private Owner would be a Qualified 

Transferee. Without limitation ofthe preceding sentence, the Private Owner shall provide the 

Initial Member, and if a Purchase Money Note is outstanding, the Purchase Money Note 

Guarantor, with immediate notice at the address specified in Section 13.6, ofthe occurrence of 

any Change ofControl with respect to the Private Owner. Furthermore, the Private Owner may 

not directly or indirectly sell or pledge (or engage in any transaction with a similar effect) any 

interest in the Private Owner's LLC Interest without the prior written consent ofthe Initial 

Member, and if a Purchase Money Note is outstanding, the Purchase Money Note Guarantor. 

8.3 Additional Provisions Relating to Permitted Dispositions. Except as otherwise 

expressly provided in this Section 8.3, the following provisions shall apply to each Permitted 

Disposition under this Article VIII: 

(a) In the event the Private Owner proposes to make a Permitted Disposition, 

the Private Owner shall be required to pay any and all filing and recording fees, fees of counsel 

and accountants and other out-of-pocket costs and expenses reasonably incurred by the Initial 

Member and/or the Company in connection with such Permitted Disposition. 

(b) The transferee in a Permitted Disposition shall deliver to the Company, 

with a copy to the Initial Member, an agreement, in form and substance reasonably satisfactory to 

the Initial Member, by which such transferee shall (i) agree to become a party to and be bound by 

this Agreement as the "Private Owner," (ii) agree (if the transferor Member, prior to such transfer, 

also was the Manager) to be appointed as the "Manager", and without limitation of the generality 

ofthe foregoing, agree to be bound by the other terms of Section 8.4 hereof, (iii) assume and 

agree to perform when due all ofthe obligations ofthe Private Owner and the Manager (ifthe 

transferor Member, prior to such transfer, also was the Manager) under this Agreement, and 

(iv) represent and warrant that it complies with the requirements set forth in Article X. 

(c) In connection with each Permitted Disposition, the Private Owner and the 

transferee shall deliver to the Company and the Initial Member such other documents and 

instruments as the Initial Member reasonably may request and which are required to effect the 

Permitted Disposition and to substitute the transferee as a Member. 

8.4 Effect ofPermitted Dispositions. 

(a) Upon consummation of any Permitted Disposition: 

(i) the transferee shall be admitted as a member ofthe Company and 

be deemed to be a party to this Agreement as the "Private Owner" and, ifthe 

transferor Member, prior to such transfer, also was the Manager, such transferee 

shall be appointed as the Manager (in the place ofthe transferor Member); 

(ii) the transferred LLC Interest shall continue to be subject to all the 

provisions of this Agreement, and the transferee Member shall have the same 

status as the Private Owner had at the time of consummation of such Permitted 

Disposition and, without limiting the generality ofthe foregoing, any outstanding 

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breach, misrepresentation, violation or default (with respect to this Agreement or 

any Ancillary Document) by any direct or indirect predecessor to the transferee as 

the Member, or by any Affiliate of any such predecessor Member, shall be 

deemed to constitute an outstanding breach, misrepresentation, violation or 

default as the case may be, by the transferee Member; and 

(iii) subject to Section 8.4(b) and the last sentence ofSection 13.8, the 

transferor Member shall cease to be a member of the Company (and accordingly, 

except as expressly otherwise provided in Section 8.4(b) or the last sentence of 

Section 13.8, shall cease to be responsible for the payment or performance of any 

ofthe obligations or liabilities under this Agreement of the Private Owner, in any 

capacity hereunder). 

(b) No Permitted Disposition (and no resulting withdrawal or resignation of 

the transferor Member from the Company) shall: 

(i) relieve the transferor Member of any of the obligations or 

liabilities of the transferor Member, in any capacity, under this Agreement or any 

Ancillary Document required to have been paid or performed prior to the 

consummation ofsuch Permitted Disposition (or of any liability it may have 

arising out of any breach, misrepresentation, violation or default by the transferor 

Member prior to such consummation); 

(ii) result in the termination of, relieve the transferor Member (or any 

of its Affiliates) of, or otherwise affect, any ofthe obligations or liabilities of the 

transferor Member, in any capacity, or its Affiliates under, any Related Party 

Agreement (such Related Party Agreements to continue in effect in accordance 

with their respective terms), except to the extent expressly provided in such 

Related Party Agreement; or 

(iii) dissolve the Company. 

8.5 Effect of Prohibited Dispositions. Any attempted or purported Disposition ofthe 

LLC Interest of the Private Owner (or any portion thereof) not strictly in accordance with the 

terms ofthis Agreement shall be void ab initio and ofno force or effect whatsoever. The Private 

Owner shall not be entitled, and hereby specifically waives any right, to receive Company 

distributions during (i) the period between any attempted or purported Disposition of the LLC 

Interest of the Private Owner (or any portion thereof) not strictly in accordance with the terms of 

this Agreement and the express rescission of such attempted or purported Disposition by the 

Private Owner and(ii) during any period when a Member is in violation of Section 8.2, provided 

that all such omitted Company distributions shall (subject to Section 8.6) be made to the Private 

Owner (without interest) forthwith after the end of the relevant suspension period. 

8.6 Distributions After Disposition. Distributions with respect to an LLC Interest 

made on or after the effective date of the Permitted Disposition of such LLC Interest shall be 

made to the transferee Member with respect to such LLC Interest, regardless of when such 

distributions accrued on the books of the Company. 

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8.7 Transfers by the Initial Member. Notwithstanding anything to the contrary 

contained in this Agreement, except as provided by applicable Law, there shall be no restriction 

on the Initial Member's ability to Dispose of the LLC Interest held by it, directly or indirectly, to 

any Person and the Private Owner shall have no right to purchase or right-of-first-refusal in 

connection with any such sale; provided, that, the Initial Member may not assign the consent and 

voting rights associated with its LLC Interest in the Company to more than one Person (for the 

avoidance of doubt, except as expressly provided above, the foregoing restriction shall not 

otherwise limit the Initial Member's right to Dispose of any interest associated with its LLC 

Interest in the Company) and provided, further, that in the event the Initial Member determines 

to sell the LLC Interest held by it through an auction process, the Private Owner shall be entitled 

to participate in such auction on the same terms that apply generally to other participants in the 

auction. At the election of the Person then constituting the "Initial Member" under this 

Agreement, the transferee in any direct Disposition of any portion ofthe LLC Interest of the 

Initial Member shall, upon delivery to the Company, with a copy to the Private Owner, of an 

agreement by which such transferee shall agree to become a party to and be bound by this 

Agreement as the "Initial Member," be admitted as a member of the Company and be deemed to 

be a party to this Agreement as the "Initial Member", and thereupon, subject to the last sentence 

of Section 13.8, the transferor Member shall cease to be a member ofthe Company (and 

accordingly, except as expressly otherwise provided in the last sentence of Section 13.8, shall 

cease to be responsible for the payment or performance of any ofthe obligations or liabilities 

under this Agreement of the Initial Member). 

8.8 Resignation: Dissolution. 

(a) The Private Owner shall not withdraw or resign from the Company, except 

(i) in connection with a Permitted Disposition made in accordance with the applicable provisions 

ofthis Article VIII or (ii) with the prior written consent of the Initial Member. 

(b) The Private Owner covenants that it shall not allow a Dissolution Event to 

occur with respect to itself. 

(c) Section 18-304 ofthe Act shall not apply to the Company. Nothing in this 

Section 8.8(c) shall limit the terms of Section 9.1 hereof. 

(d) Except as is otherwise expressly provided in this Agreement, no Member 

shall be entitled to receive any payment pursuant to Section 18-604 of the Act. 

8.9 Applicable Law Withdrawal. If, as a result of applicable Law, the ownership of 

an LLC Interest by a Member becomes illegal or is likely to become illegal or the applicable 

Law more likely than not requires divestiture of such Member's LLC Interest, or the applicable 

Law requires the Company to register as an investment company under the Investment Company 

Act, then the Manager and the Member shall use their respective commercially reasonable efforts 

to avoid a violation of any such applicable Law by a Member or the need for the Company to 

register as an investment company. These steps may include, depending on the provisions of 

such applicable Law, (i) arranging for the sale of the Member's LLC Interestto a third party 

upon terms reasonably satisfactory to the Member in a transaction that complies with Articles 

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VIII and X; (ii) making any appropriate applications to the relevant Goveinmental Authority, 

(iii) prohibiting such Member from making further Capital Contributions, and converting its 

LLC Interest into a special interest with no voting or similar rights but with only an economic 

right (identical to its prior rights as a Member), or (iv) permitting the Member to withdraw from 

the Company in exchange for a "payment" to such Member equal to the value of its LLC Interest 

at the time ofwithdrawal, such value to be determined by a third party appraiser mutually 

agreeable to the Manager and all Members. The aforesaid "payment" shall be made in cash 

unless the Manager determines that the payment in cash would be economically detrimental to 

the Company, in which case such payment may be made in kind, subject to the applicable Law. 

The timing of any such withdrawal must be mutually agreeable to the Member and the Manager 

taking proper account ofthe effective date ofthe applicable Law or registration requirement that 

is the basis for the withdrawal or other remedy provided herein and the need of the Manager for a 

reasonable period oftime to find a solution to the illegality or requirement for divestiture or 

registration. Such illegality, divestiture or registration requirement must be established by (x) an 

opinion of counsel (which counsel shall be reasonably satisfactory to the Manager and the Initial 

Member) substantially to the effect that the ownership ofthe LLC Interest more likely than not· 

will result in such illegality or requirement for registration or divestiture or (y) upon a ruling or 

order from a Governmental Authority. 

ARTICLE IX 


Dissolution and Winding-Up ofthe Company 


9.1 Dissolution. A dissolution ofthe Company shall take place upon the frrst to occur 

ofthe following: 

(a) the agreement by all Members to dissolve the Company (it being 

understood and agreed that neither Member, acting alone, shall have the right unilaterally to 

dissolve the Company); 

(b) the sale of all or substantially all ofthe Company Property (other than 

cash and cash equivalent instruments), including as an entirety or substantially as an entirety; or 

(c) notice to such effect to the Private Owner from the Initial Member at any 

time after the occurrence of a Dissolution Event or an Insolvency Event with respect to the Private 

Owner or any Person that Controls the Private Owner; or 

(d) exercise ofthe Clean-Up Call and liquidation of all remaining Mortgage 

Loans and Acquired Property ofthe Company in accordance with Section 12.17. 

9.2 Winding-Up Procedures. If a dissolution of the Company pursuant to Section 9.1 

occurs, subject to the Company's compliance with its obligation under the other agreements to 

which it is a party, the other terms and conditions ofthis Agreement or the Ancillary Documents, 

the Manager shall proceed as promptly as practicable to wind up the affairs ofthe Company in 

an orderly and businesslike manner. A final accounting shall be made by the Manager. As part 

ofthe winding up ofthe affairs ofthe Company, the following steps will be taken: 

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(a) The assets of the Company shall be sold except to the extent that some or 


all ofthe assets of the Company are retained by the Company for distribution to the Members as 


hereinafter provided. 


(b) The Company shall comply with Section 18-804(b) ofthe Act. 

(c) Distributions of the assets ofthe Company after a dissolution ofthe 


Company shall be conducted as follows: 


(i) frrst, to creditors, but excluding Members who are creditors {other 

than the Initial Member, to the extent it continues to hold the Purchase Money 

Note), to the extent otherwise permitted by Law (and, to the extent permitted, in 

accordance with the Priority ofPayments), in satisfaction of liabilities ofthe 

Company (whether by payment or the making of reasonable provision for 

payment thereof); 

(ii) second, to Members or former Members who are creditors, to the 

extent otherwise permitted by Law, in satisfaction of liabilities ofthe Company 

(whether by payment or the making ofreasonable provision for payment thereof) 

other than liabilities for which reasonable provision for payment has been made 

and liabilities for distributions to Members and former Members under 

Section 18-601 of the Act; 

(iii) third, to Members and former Members in satisfaction of liabilities 

(ifany) for distributions under Section 18-601 ofthe Act; and 

(iv) finally, to the Members in the manner set forth in Section 6.6(b). 

(d) Upon dissolution, the Manager, may, with the consent of all Members, 

(i) liquidate all or a portion of the Company assets and apply the proceeds of such liquidation in 

the manner set forth in Section 9.2(c) and/or (ii) hire independent appraisers to appraise the value 

. ofthe Company assets not sold or otherwise disposed of or determine the Fair Market Value of 

such assets, and allocate any unrealized gain or loss determined by such appraisal to the Members' 

respective Capital Accounts as though the properties in question had been sold on the date of 

distribution and, after giving effect to any such adjustment, distribute said assets in the manner set 

forth in Section 9.2(c), provided that the Manager shall in good faith attempt to liquidate sufficient 

Company assets to satisfy in cash the debts and liabilities described in Section 9.2. If a Member 

shall, upon the advic~ of counsel, determine that there is a reasonable likelihood that any 

distribution in kind of an asset would cause such Member to be in violation of any Law, such 

Member and the Manager shall each use its best efforts to make alternative arrangements for the 

sale or transfer into an escrow account of any such distribution on mutually agreeable terms. 

9.3 Termination ofthe Company. 

Upon the dissolution of the Company and the completion of the winding up 

process set forth in Section 9.2, the Manager (or such other Person or Persons as the Act may 

require or permit) shall cause the cancellation of the Certificate and any filings made as provided 

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in clause (c) of Section 4.3 and shall take (or cause to be taken) such other actions as may be 

necessary to terminate the Company. 

ARTICLE X 


Qualified Transferees 


10.1 Qualified Transferees. Each Member, other than the Initial Member (including, 

for the avoidance of doubt, the Initial Member's Successors and transferees), shall at all times be 

in compliance with the following (and any proposed transferee of any LLC Interest in 

compliance with the following shall be deemed a "Qualified Transferee"): 

(a) Organization; Good Standing; Licenses. Such Member (i) is a Single 

Purpose Entity duly organized, validly existing and in good standing under the Laws ofthe state 

of its organization, (ii) has qualified or will qualify to do business as a foreign corporation, 

partnership or other entity and will remain so qualified, and is and will remain in good standing, in 

each jurisdiction in which the character of its properties or the nature of its activities makes such 

qualification necessary and in which failure to so qualify would have a material adverse effect 

upon such Member or its ability to perform its obligations hereunder, (iii) has full power to own 

its property, to carry on its business as presently conducted, and to enter into and perform its 

obligations under this Agreement, (iv) has all licenses or other governmental approvals necessary 

to perform its obligations hereunder; (v) except with respect to the Private Owner either (y) has a 

net worth calculated in accordance with GAAP of not less than $5,000,000, excluding the value of 

the LLC Interest of such Member or (z) holds demand notes in the aggregate principal amount of 

$5,000,000 from its Specified Parents, and (vi) in the case ofthe Private Owner, as ofthe Closing 

Date, is wholly owned and Controlled by its Specified Parent. 

(b) Authorization; No Violation. The execution and delivery by such Member. 

ofthis Agreement and the consummation ofthe transactions contemplated hereby have been duly 

and validly authorized by all necessary action. Neither the execution and delivery of this 

Agreement, nor the consummation ofthe transactions herein contemplated, nor compliance with 

the provisions hereof, will conflict with or result in a breach of, or constitute a default under, 

(i) any ofthe provisions of any Law binding on such Member or its properties, (ii) the constituent 

documents of such Member, or (iii) any ofthe provisions of any indenture, mortgage, contract or 

other instrument to which such Member is a party or by which it is bound or result in the creation 

or imposition of any Lien upon any of its property pursuant to the terms of any such indenture, 

mortgage, contract or other instrument. 

(c) Governmental Approvals. All actions, approvals, consents, waivers, 

exemptions, variances, franchises, orders, permits, authorizations, rights and licenses required to 

be taken, given or obtained, as the case may be, by or from any Governmental Authority or 

agency that are necessary in connection with the execution and delivery by such Member ofthis 

Agreement and the consummation ofthe transactions contemplated hereby and the performance of 

its obligations hereunder, have been duly taken, given or obtained, as the case may be, are in full 

force and effect, are not subject to any pending proceedings or appeals (administrative, judicial or 

otherwise) and either the time within which any appeal therefrom may be taken or review thereof 

may be obtained has expired or no review thereof may be obtained or appeal therefrom taken. 

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(d) No Litigation. On the date such Member becomes a party to this 

Agreement, there is no action, suit, proceeding or investigation pending or threatened against such 

Member before any Governmental Authority. 

(e) No Violation ofOrders, Decrees, etc. Such Member is not in default with 

respect to any order or decree of any Governmental Authority or any Law. 

(f) Third Party Consents. No consents, approvals, waivers or notifications of 

stockholders, creditors, lessors or other nongovernmental persons are required to be obtained by 

such Member in connection with the execution and delivery ofthis Agreement and the 

consummation of all the transactions herein contemplated and the performance of its obligations 

hereunder. 

(g) Owners Accredited Investors. All ofthe equity owners of such Member 

are "accredited investors," as that term is defined in Rule 501 urtder the Securities Act. 

(h) Knowledge and Experience. Such Member, either by itself or through its 

advisers and principals, has such knowledge and experience in the origination, servicing, sale 

and/or purchase ofperforming and non-performing or distressed loans, and loans secured by· 

residential and commercial properties, as well as financial and business matters, as to enable such 

Member to utilize the information made available to it with respect to the LLC Interest acquired 

by it and the Mortgage Loans to evaluate the merits and risks of a purchase ofthe LLC Interest 

acquired by it and, indirectly, the Mortgage Loans, and to make an informed decision with respect 

thereto. 

(i) Economic Risks. Such Member acknowledges, understands and 

represents that it is able to bear the economic risks associated with the acquisition and ownership 

ofthe LLC Interest acquired by it and, indirectly, the Mortgage Loans, including the risk of a total 

loss of its investment in the Company and, indirectly, the Mortgage Loans and/or the risk that it 

may be required to hold the LLC Interest and, indirectly, the Mortgage Loans for an indefinite 

period oftime. 

G) No Representations. Such Member hereby acknowledges that, except as is 

otherwise expressly provided in this Agreement, the Transferred LLC Interest Sale Agreement, or 

the Contribution Agreement, none ofthe Initial Member or the FDIC or any Affiliate of either, or 

any oftheir respective officers, directors, employees, agents or contractors, makes or has made 

any representation or warranty regarding the Company, the LLC Interest or the Mortgage Loans 

or the value of any Underlying Collateral. 

(k) Due Diligence. Such Member acknowledges and agrees that, whether or 

not information is available with respect to the LLC Interest or the Mortgage Loans and whether 

or not it chooses to review any information that is or was made available to it regarding the LLC 

Interest or the Mortgage Loans, such Member, by itself or through its advisers or principals, has 

the ability and shall be responsible for making its own independent investigation and evaluation of 

the LLC Interest and the Mortgage Loans and the economic, credit or other risks involved in an 

acquisition ofthe LLC Interest and, indirectly, the Mortgage Loans. Except as is otherwise 

expressly provided in this Agreement, none of the Initial Member or the FDIC or any Affiliate of 

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either, or any oftheir respective officers, directors, employees, agents or contractors, makes or has 

made any representation or warranty as to the completeness or accuracy ofany information 

provided. 

(1) No Securities. Such Member acknowledges and agrees that (i) neither the 

offer nor the sale ofthe LLC Interest.(and, indirectly, the Mortgage Loans) is intended to 

constitute an offer or sale of a "security" within the meaning ofthe Securities Act or any 

applicable federal or state securities Laws, (ii) no inference that any ofthe LLC Interest or the 

Mortgage Loans is a "security" under such federal or state securities Laws shall be drawn from 

any ofthe certifications, representations or warranties made by any Person in this Agreement, 

(iii) it is not contemplated that any filing will be made with the Securities and Exchange 

Commission or pursuant to the "Blue Sky'' or securities Laws of any jurisdiction, and (iv) if any 

ofthe LLC Interest or the Mortgage Loans is a security, such may not be resold or otherwise 

transferred by such Member except in accordance with any and all applicable securities and Blue 

Sky Laws. 

(m) Resales. Such Member is acquiring the LLC Interest (and, indirectly, the 

Mortgage Loans) for its own account and. not with a view toward resale in a distribution within the 

meaning ofthe Securities Act. 

(n) Resales in Compliance with Law. Such Member will not (i) offer, pledge, 

sell or otherwise dispose ofthe LLC Interest (or any interest therein) or any Mortgage Loan (or 

any interest therein or evidence thereof) to, or (ii) solicit any offer to buy or accept a transfer, 

pledge or other disposition ofthe LLC Interest (or any interest therein) or any Mortgage Loan (or 

any interest therein or evidence thereof) from, or (iii) otherwise approach or negotiate with respect 

to the LLC Interest (or any interest therein) or any Mortgage Loan (or any interest therein or 

evidence thereof) with, any person or entity in any manner, or take any other action, that would 

(A) not comply with Article VIII, or (B) render the transfer to such Member ofthe LLC Interest or 

any interest in any Mortgage Loan a violation of any Law relating to the issuance, regulation, 

registration or disposition of securities, nor will it so act, nor will it authorize any person or entity 

to so act, in any manner with respect to the LLC Interest (or any interest therein) or any Mortgage 

Loan (or interest therein or evidence thereof). 

(o) Acguisition in Compliance with Law. Such Member's acquisition ofthe 

LLC Interest and the resulting indirect investment in the Mortgage Loans will comply with all 

applicable Laws, including any and all Laws and/or restrictions imposed on resale ofthe LLC 

Interest and the Mortgage Loans by federal and state securities or Blue Sky Laws. 

(p) Independent Evaluation. Such Member has made an independent 

evaluation of the Company and its assets (including the Mortgage Loans and related Mortgage 

Loan files and/or any electronic data made available to it pertaining to the Mortgage Loans held 

by the Company). Such Member also has conducted such other investigations as it deems 

appropriate, including searches ofUniform Commercial Code, title, court, bankruptcy and other 

public records. Such Member agrees and represents that it is entering into this Agreement solely 

on the basis of its own investigations and its judgment as to the value of the LLC Interest and the 

nature, validity, enforceability, collectability and value of the Mortgage Loans and all other facts 

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material to their ownership, including with respect to the legal matters and risks relating to the 

collection and enforcement, and the performance of any obligations under any of the Mortgage 

Loans in any jurisdiction. Such Member further acknowledges that no officer, director, employee, 

agent, representative or contractor of the Initial Member or any of its Affiliates has been 

authorized to make any statements or representations other than those specifically contained in · 

this Agreement or the Contribution Agreement. 

(q) Embargoed Person. Such Member certifies, represents and warrants that 

(a) no consideration that such Member or any of its Affiliates contributes hereunder or under the 

Ancillary Documents in connection with any transaction regarding any assets will have been 

derived from or related to any activity that is deemed criminal under United States Law; 

(ii) neither it nor any of its Affiliates or Direct Owners is an Embargoed Person; (iii) neither it nor 

any of its Affiliates or Direct Owners engages in any dealings or transactions, or is otherwise 

"associated with" (as defined in 31 C.F.R. 594.101, et seq.), any Embargoed Person; and (iv) if 

and to the extent such Member or any of its Affiliates are required by Law to maintain an antimoney laundering compliance program under applicable anti-money laundering Laws and 

regulations, including without limitation, the Uniting and Strengthening America by Providing 

Appropriate Tools Required to Intercept and Obstruct Terrorism Act of2001 (Public Law 107­

56)) such compliance programs are currently being maintained. For purposes ofthe foregoing 

certifications, representations and warranties, such certifications, representations and warranties 

shall be based upon a due inquiry and investigation; provided, however, that for purposes of 

determining whether any ofthe same with respect to indirect ownership are true, the undersigned 

shall not be required to make an investigation into the ownership of publicly-traded securities 

(including securities of open-end investment companies registered under the Investment Company 

Act of 1940, as amended) or the ownership of assets by a collective investment fund that holds 

assets for employee benefit plans or retirement arrangements. 

(r) ERISA Plan Asset. The assets of such Member (including any successor to 

or transferee of such Member) are not deemed to be "plan assets" within the meaning of Section 

3(42) ofERISA and the "plan asset" regulations set forth in 29 C.F.R. Section 2510.3-101 as 

promulgated under ERISA, modified to the extent applicable by Section 3(42) ofERISA (the 

"Plan Asset Regnlation"). 

(s) Purchase Eligibility. Each of such Members and any Person that, together 

with its Affiliates, directly or indirectly holds 25% or more of the equity interests of such Member 

is and remains capable oftruthfully making the representations and warranties in the Purchaser 

Eligibility Certification. 

(t) Qualified Purchaser. Such Member is a "qualified purchaser" within the 

meaning of Section 3( c )(7) ofthe Investment Company Act. 

ARTICLE XI 


Mana2er Liability 


11.1 Liability of the Manager. 

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(a) Except as otherwise specifically provided in this Agreement (including in 

the-other subsections ofthis Section 11.1), the duties (including fiduciary duties) and obligations 

owed to the Company and Initial Member by the Manager shall be as provided in Section 3.1 (b) 

hereo£ 

(b) The Manager may rely, and shall be protected in acting or refraining from 

acting, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, 

consent, order, bond, debenture or other paper or document reasonably believed by it to be 

genuine and to have been signed or presented by the proper party or parties. 

(c) The Manager may consult with legal counsel, accountants, appraisers, 

management consultants, investment bankers and other consultants and advisers selected by it, 

and any act taken or omitted to be taken in reliance upon the opinion of such Persons as to matters 

that the Manager reasonably believes to be within such Person's professional or expert 

competence shall be conclusively presumed to have been done or omitted in good faith and in 

accordance with such opinion. 

(d) The Manager shall not be liable to the Company or the Members for its 

good faith reliance on the provisions ofthis Agreement. 

(e) The limitations and exculpation afforded by each provision ofthis 

Section 11.1 are cumulative and not exclusive. Nothing in this Section 11.1 is intended, or shall 

be deemed, to permit conduct that would otherwise constitute misappropriation of a trade secret of 

the Company under applicable Law or conduct that, even disregarding the terms hereof otherwise 

would be actionable by the Company or any Member. 

ARTICLE XII 


Servicing of Mortgage Loans 


12.1 Servicing. 

(a) Ap_pointment and Acceptance as Servicer. Effective as ofthe Closing 

Date, but subject to Section 3.3 ofthe Contribution Agreement (with which the Manager agrees to 

comply as though such provision was set forth herein), the Manager is hereby appointed (and 

hereby accepts the appointment) with full authority and responsibility, in its own name, to act as 

the servicer for the Mortgage Loans and any Underlying Collateral. Until such time as the 

Company is dissolved and liquidated pursuant to Article IX, and except as otherwise provided in 

Section 12.4 and subject to the interim servicing being provided by the Initial Member pursuant to 

Section 3.3 ofthe Contribution Agreement, the Manager shall, with respect to each Mortgage 

Loan, from and after the Servicing Transfer Date with respect thereto, be responsible for (and 

hereby assumes responsibility for) servicing, administering, managing and disposing of the 

Mortgage Loans and the Underlying Collateral in accordance with the Servicing Standard set forth 

in Section 12.2 and in the Servicing Agreement and the other provisions of this Article XII, 

including the provisions of Section 12.3 (which require that servicing be performed through one 

or more Qualified Servicers). Without in any way limiting the foregoing, but subject to 

Section 3.3 ofthe Contribution Agreement, the Manager shall cause the Mortgage Loans 

(including, for all purposes under this Article XII, the related Underlying Collateral) to be 

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A&R Limited Liability Company Operating Agreement 


Pool Nos. 24020 and 24021 


13235439.7 . 

serviced as follows: (a) such Mortgage Loan shall, except as provided in the immediately 

following subsection (b), be serviced by the Servicer(s) appointed in accordance with Section 12.3 

below, and (b) following the replacement ofthe Servicer as a result of an Event ofDefault, the 

Mortgage Loans shall be serviced by the Servicer appointed by the Initial Member in accordance 

with Section 12.4 below. All servicing ofMortgage Loans following the Closing Date shall be 

performed in accordance with the terms ofthe Contribution Agreement and this Article XII. 

(b) Servicing and Subservicing Agreement Requirements. Except as is 

otherwise agreed in writing by the Initial Member, each Servicing Agreement (and any 

Subservicing Agreement with any Subservicer) shall, among other things, 

(i) provide for the servicing of the Mortgage Loans and management 

ofthe Underlying Collateral by the Servicer (or Subservicer) in accordance with 

the Servicing Standard and the other terms ofthis Agreement; 

(ii) . be terminable upon no more than thirty (30) days prior notice if an 

Event ofDefault or any default under the Servicing Agreement (or Subservicing 

Agreement) has occurred; 

(iii) provide that the Manager (in its individual capacity) and the Initial 

Member (and, in the case of any Subservicing Agreement, the Servicer) shall be 

entitled to exercise termination rights under the relevant Servicing Agreement or 

Subservicing Agreement (it being understood that the Initial Member shall only 

exercise such termination rights as contemplated or permitted in this Agreement); 

(iv) provide that the Servicer (or any Subservicer) and the Manager (in 

its individual capacity) acknowledge that the Servicing Agreement (or 

Subservicing Agreement) constitutes a personal services agreement between the 

Manager (in its individual capacity) and the Servicer (or between the Servicer and 

the Subservicer, as applicable); 

(v) provide that (A) each ofthe Company, the Purchase Money Note 

Guarantor, (if any Purchase Money Note is outstanding) and the FDIC are third 

party beneficiaries thereunder to the extent of any rights expressly granted to such 

Person under the Servicing Agreement or Subservicing Agreement and is entitled 

to enforce the Servicing Agreement or Subservicing Agreement, as applicable, 

with respect to such rights, (B) the Initial Member and, in the case of any 

Subservicing Agreement, the Manager (in its individual capacity) is a third party 

beneficiary thereunder; and further provide that in no event shall any amendment 

or waiver to any such Servicing Agreement or Subservicing Agreement limit or 

affect any rights of any such third party beneficiary thereunder without the 

express written consent of such third party beneficiary; 

(vi) provide that (A) upon the removal ofthe Private Owner as the 

Manager or the occurrence of an Event ofDefault, the Initial Member (and any 

successor Manager) may exercise all ofthe rights ofthe Manager thereunder and 

cause the termination or assignment of the same to any other Person, without 

59 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 


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!3235439.7 

penalty or payment of any fee, and (B) upon the occurrence of any default under 

the Servicing Agreement, the Initial Member (and any successor Manager) may 

exercise all ofthe rights of (1) the Manager under such Servicing Agreement and 

cause the termination or assignment ofthe same to any other Person, without 

penalty or payment of any fee, and (2) the Servicer under the Subservicing 

Agreement and cause the termination or assignment ofthe Subservicing 

Agreement to any other Person, without penalty or payment of any fee (it being 

understood that the Initial Member shall only exercise the foregoing rights as 

contemplated or permitted in this Agreement); 

(vii) provide that the Initial Member, the Manager, the Purchase Money 

Note Guarantor (if a Purchase Money Note is outstanding) and the Company (and 

each of their respective representatives) shall each have access to and the right to 

review, copy and audit the books and records of each Servicer and any 

Subservicers and that all Servicers and all Subservicers shall make available their 

respective officers, directors, employees, accountants and attorneys to answer the 

Initial Member's, the Manager's, the Purchase Money Note Guarantor's and the 

Company's (and each oftheir respective representatives') questions or to discuss 

any matter relating to the Servicer's or Subservicer's affairs, finances and 

accounts, as they relate to the Mortgage Loans, the Underlying Collateral, the 

Collection Account or any other accounts established or maintained pursuant to 

this Agreement, the Custodial and Paying Agency Agreement, the Servicing 

Agreement or any Subservicing Agreement, or any matters relating to the 

Servicing Agreement or any Subservicing Agreement or the rights or obligations 

thereunder; 

(viii) provide that all Mortgage Loan Proceeds are to be deposited into 

the Collection Account on a daily basis (without reduction or setoff) within two 

Business Days of receipt and that under no circumstances are funds, other than 

Mortgage Loan Proceeds and interest and earnings thereon and the proceeds of 

Excess Liquidity Advances to be commingled in the Collection Account; 

(ix) provide that the Servicer or Subservicer shall not sell, transfer or 

assign its rights under the Servicing Agreement or Subservicing Agreement, as 

applicable, other than Servicer's rights to delegate to Subservicers certain 

responsibilities thereunder as and to the extent permitted by this Agreement, and 

that any prohibited sale, transfer or assignment shall be void ab initio; 

(x) provide that (A) the Servicer or Subservicer consents to the 

immediate termination ofthe Servicer or Subservicer, as applicable, upon the 

occurrence of a termination event under the Servicing or Subservicing 

Agreement, as applicable, and upon the occurrence of any Insolvency Event with 

respect to the Servicer or Subservicer or any oftheir respective Related Parties, as 

applicable, and (B) the occurrence of any Restricted Servicer Change of Control 

with respect to the Servicer or of any Insolvency Event with respect to the 

Servicer or Subservicer or any Related Party thereof constitutes a default under 

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13235439.7 
the Servicing or Subservicing Agreement, as applicable; provided, that, in the 

case ofthe Servicing Agreement, the occurrence of an Insolvency Event with 

respect to a Subservicer or Related Party thereof (which is not an Related Party of 

the Servicer) may, at the election ofthe Manager, be subject to a cure period of 

not more than thirty (30) days for replacement ofthe affected Subservicer (in a 

manner that will permit the Manager to comply with its obligations hereunder); 

(xi) provide that there shall be no right of setoff on the part ofthe 

Servicer or Subservicer against the Mortgage Loan Proceeds (or the Company); 

(xii) provide for such other matters as are necessary or appropriate to 

ensure that the Servicer or Subservicer is obligated to comply with the Servicing 

Obligations ofthe Manager hereunder; 

(xiii) provide a full release and discharge of the Initial Member, the 

Company, the Existing Servicers, the FDIC, in relation to any particular Mortgage 

Loan, the relevant Failed Bank and any predecessor-in-interest thereof, any 

Ownership Entities existing as ofthe applicable SerVicing Transfer Date, and all 

oftheir respective officers, directors, employees, agents, attorneys, contractors 

and representatives, and all of their respective successors, assigns and Affiliates 

(but excluding, in all cases, the Manager (in its individual capacity)) (any such 

Person, a ''Prior Servicer'' and collectively, the "Prior Servicers"), from any and 

all claims (including any counterclaim or defensive claim), demands, causes of 

action, judgments or legal proceedings and remedies ofwhatever kind or nature 

that the Servicer had, has or might have in the future, whether known or 

unknown, which are related in any manner whatsoever to the servicing ofthe 

Mortgage Loans by the Prior Servicers prior to the applicable Servicing Transfer 

Date (other than due to gross negligence, violation of law or willful misconduct of 

such Prior Servicer); 

(xiv) provide that, to the extent required under Section 12.3(g), that all . 

Mortgage Loans registered on the MERS® System shall remain registered unless 

default, foreclosure or similar legal or MERS requirements dictate otherwise; 

(xv) provide that the Servicer or Subservicer shall immediately notify 

the Manager and the Initial Member upon becoming aware of any Subservicer or 

any Affiliate ofthe Servicer or of any Subservicer at any time, (A) being or 

becoming a partner or joint venturer with any Borrower or Obligor, (B) being or 

becoming an agent of any Borrower or Obligor, or allowing any Borrower or 

Obligor to be an agent of such Servicer or any Subservicer or of any Affiliate of 

the Servicer or any Subservicer, or (C) having any interest whatsoever in any 

Borrower or Obligor; 

(xvi) provide that the Servicer shall immediately notify the Manager and 

the Initial Member ofthe occurrence of any Change of Control with respect to the 

Servicer; and 

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13235439.7 
(xvii) not conflict with the Servicing Standard or any other terms or 

provisions ofthis Agreement, the Custodial and Paying Agency Agreement or any 

ofthe other Ancillary Documents insofar as such other terms or provisions hereof 

or thereof are required to be imposed by the Manager (in its individual capacity) 

on the Servicer (or Subservicers) in the Servicing Agreement (or Subservicing 

Agreements). Nothing contained in any Servicing Agreement or any 

Subservicing Agreement shall alter any obligation ofthe Manager under this 

Agreement and, in the event of any inconsistency between the Servicing 

Agreement (or any Subservicing Agreement) and the terms ofthis Agreement, 

among the Parties to this Agreement the terms of this Agreement shall control. 

12.2 Servicing Standard. The Manager shall perform the Servicing Obligations: (i) in 

the best interests and for the benefit ofthe Initial Member and the Company, (ii) in accordance 

with the terms ofthe Mortgage Loans (and related Mortgage Loan Documents), (iii) in 

accordance with the terms of this Agreement and the other Ancillary Documents, (iv) in 

accordance with all applicable Law, and (v) to the extent consistent with the foregoing terms, in 

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

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

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

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

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

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

each Mortgage Loan and related Underlying Collateral, in the absence of a customary and usual 

standard of practice, the Company shall comply with the applicable Fannie Mae Guidelines, if 

any, with respect to similar loans and properties in similar situations. The Manager shall cause 

its Servicing Obligations with respect to the Mortgage Loans and the Underlying Collateral to be 

performed without regard to (w) any relationship that the Company, the Manager, or any 

Servicer or Subservicer, or any oftheir respective Affiliates may have to any Borrower, Obligor 

or other obligor, or any oftheir respective Affiliates, including any other banking or lending 

relationship, (x) the Company's, the Manager's, or any Servicer's or Subservicer's, obligation to 

make disbursements and advances with respect to the Mortgage Loans and Underlying 

Collateral, (y) any relationship that the Servicer or any Subservicer may have to each other or to 

the Company, the Manager or any oftheir respective Affiliates, or any relationship that any of 

their respective Affiliates may have to the Company, the Manager or any of their respective 

Affiliates (other than the contractual relationship evidenced by this Agreement or the Servicing 

Agreement or any Subservicing Agreement), and (z) the Manager's, or any Servicer's or 

Subservicer's, right to receive compensation (including the Management Fee and any Interim 

Management Fee) for its services under this Agreement, the Servicing Agreement or any 

Subservicing Agreement. Without limiting the generality ofthe foregoing, the Manager's 

Servicing Obligations hereunder shall include the following: 

(a) discharging in a timely manner each and every obligation which the 

Mortgage Loan Documents provide is to be performed by the lender thereunder, on its own behalf 

and on behalf of the Company and the Initial Member and in the case ofREO Property, which the 

Mortgage Loan Documents that were applicable to the Underlying Collateral before it became 

REO Property provided were to be performed by the borrower thereunder in respect of such 

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Underlying Collateral (not including payment of debt service under the applicable Mortgage Loan 

Documents), together with such additional obligations as are required of the Company under this 

Agreement or the Servicing Agreement in respect of such REO Property; 

(b) incurring costs (including Servicing Expenses and Pre-Approved 

Changes) in accordance with the provisions of the Mortgage Loan Documents, and in the case of 

REO Property, in accordance with the Mortgage Loan Documents that were applicable to the 

REO Property before it became an REO Property (not including payment of debt service under the 

applicable Mortgage Loan Documents) and otherwise in accordance with the Reimbursement and 

Security Agreement; 

(c) causing to be maintained for the Underlying Collateral (including any 

Acquired Property) with respect to each Mortgage Loan with respect to which an Ownership 

Entity or the Borrower has failed to maintain required insurance with extended coverage as is 

customary in the area in which the Underlying Collateral is located and in such amounts and with 

such deductibles ~s the Manager may, in the exercise of its reasonable discretion, determine are 

prudent and as required under this Agreement and the Reimbursement and Security Agreement; 

(d) ensuring compliance with the terms and conditions of each insurer under 

any hazard policy and preparing and presenting claims under any policy in a timely fashion in 

accordance with the terms of the policy; 

(e) supervising and coordinating the construction, ownership, management, 

leasing and preservation of the Acquired Property as well as all other matters involved in the 

administration, preservation and ultimate disposition of the Acquired Property as would be taken 

by a prudent asset manager managing properties similar to the Acquired Property and as required 

ofthe Company under this Agreement, and the Reimbursement and Security Agreement; 

(f) administering the making of advances to Borrowers under the Mortgage 

Loans pursuant to and in accordance with the provisions herein and in the Custodial and Paying 

Agency Agreement governing the making ofFunding Draws; 

(g) to the extent consistent with the foregoing, seeking to maximize the timely 

and complete recovery ofprincipal and interest on the Mortgage Loans and otherwise to maximize 

the value of the Mortgage Loans and the Underlying Collateral; 

(h) except as otherwise set forth in this Agreement, making decisions under, 

and enforcing and performing in accordance with, the Mortgage Loan Documents all loan 

administration, inspections, review offinancial data and other matters involved in the servicing, 

administration and management of the Mortgage Loans and the Underlying Collateral; 

(i) ensuring that all filings required to maintain perfection in any Underlying 

Collateral remain up to date and in force, including Uniform Commercial Code financing 

statements; 

G) ensuring that each Borrower (or in the case of REO Property, the 

applicable Ownership Entity) is diligently performing all applicable construction work using all 

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Pool Nos. 24020 and 24021 


13235439.7 
commercially reasonable efforts in accordance with the requirements of the applicable Mortgage 

Loan Documents (in the case of REO Property) and herein; and 

(k) providing the Servicers and Subservicers with copies of such Ancillary 

Documents (or portions thereof) as are necessary for the Servicers or Subservicers to be familiar 

with in order to perform their respective obligations provided for in this Agreement, the Servicing 

Agreements or the Subservicing Agreements, as applicable. 

12.3 Servicing of Mortgage Loans. 

(a) Appointment of the Servicers. The Manager (in its individual capacity) 

has entered into one or more Servicing Agreements dated the date hereof to provide for the 

servicing and administration and management of the Mortgage Loans and Underlying Collateral 

by one or more Qualified Servicers named therein (each, together with other Qualified Servicers, a 

"Servicer"). Each Servicer, at all times during which it acts as Servicer, shall continue to satisfy 

the defmition of Qualified Servicer. With respect to the Interim Servicing Period, and subject to 

the provisions of Section 3.3 ofthe Contribution Agreement, each Mortgage Loan shall at all 

times be serviced (and any Underlying Collateral managed) by or through at least one Servicer 

(including any Subservicers engaged by the Servicer as permitted hereunder) and the performance 

of all day-to-day Servicing Obligations of the Manager shall be conducted by or through one or 

more Servicers (including any Subservicers permitted hereunder). Subject to the other terms and 

conditions of this Agreement, any Servicer may be an Affiliate ofthe Private Owner or of the 

Manager. Each Servicer may engage or retain one or more Subservicers, including Affiliates of 

the Private Owner or of the Manager, to perform certain of its duties under the Servicing 

Agreement, as it may deem necessary and appropriate, by entering into a Subserviting Agreement 

with each such Subservicer, provided that any Subservicer meets (and at all times continues to 

meet) the requirements set forth in the definition of Qualified Servicer and the terms ofthe 

applicable Subservicing Agreement comply with the terms of this Agreement and the applicable 

Servicing Agreement. The costs and fees of the Servicers (and any Subservicers) shall be borne 

exclusively by the Manager in its individual capacity without any right of reimbursement from the 

Company or the Initial Member (it being understood that the Manager will receive the Interim 

Management Fee and the Management Fee, as applicable, in accordance with Section 12.5 

hereof). Under no circumstances shall the Manager transfer, or permit to be transferred, to any 

Servicer or any other Person any ownership interest in the servicing to the Mortgage Loans or any 

right to transfer or sell the servicing to the Mortgage Loans (other than in connection with the sale 

of any Mortgage Loan), and no Servicer shall be permitted to assign, pledge or otherwise transfer 

to any Subservicer or other Person or purport to assign, pledge or otherwise transfer any interest in 

the servicing to the Mortgage Loans (other than in connection with the sale of any Mortgage 

Loan), and any purported assignment, pledge or other transfer in violation ofthis provision shall 

be void ab initio and of no effect. 

(b) Manager Liable for Servicer and Subservicers. Notwithstanding anything 

to the contrary contained herein, the use of any Servicer or any Subservicer shall not release the 

Manager from any of its Servicing Obligations or other obligations under this Agreement, and the 

Manager shall remain responsible and liable for all acts and omissions of each Servicer and each 

Subservicer as fully as if such acts and omissions were those of the Manager. All actions of each 

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FDIC SFR 2010-3 (Final) 

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Pool Nos. 24020 and 24021 

13235439.7 
Servicer or any Subservicer performed pursuant to the Agreement or any Subservicing Agreement 

shall be performed as an agent ofthe Manager or, in the case of Subservicers, the Servicer. 

(c) Copies ofthe Servicing and Subservicing Agreements. Copies of all fully 

executed Servicing Agreements and Subservicing Agreements, including all supplements and 

amendments thereto, shall be provided to the Initial Member and the Purchase Money Note 

Guarantor if any ·Purchase Money Note is outstanding promptly after execution. 

(d) Regulation AB Requirements. The Manager shall cause each Servicer to 

(A) have in place policies and procedures to comply with the provisions of Section 1122(d)(l)(i) 

through (iv) of Regulation AB, (B) comply with the provisions of Sections 1122(d)(2)(i) through 

(vii), 1122(d)(3)(i) through (iv), and 1122(d)(4)(i) through (xv) ofRegulation AB (regardless of 

whether any such requirements apply, by their terms, only to companies registered or required to 

file reports with the Securities and Exchange Commission) and (C)complies with any other rules 

promulgated by the Securities and Exchange Commission or the FDIC relating to servicer 

obligations in connection with securitizations. 

(e) The Manager shall cause each Servicer to ensure that each Subservicer (A) 

has in place policies and procedures to comply with the provisions of Section 1122(d)(l)(i) 

through (iv) of Regulation AB, and (B) complies with the provisions of Sections 1122( d)(2)(i) 

through (vii), 1122(d)(3)(i) through (iv), and 1122(d)(4)(i) through (xv) ofRegulation AB 

(regardless of whether any such requirements apply, by their terms, only to companies registered 

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

(f) Servicer and Subservicer Fees. No Servicer or Subservicer shall be paid 

any fees or indemnified out of any Mortgage Loan Proceeds (or funds in the Collection Account, 

the Liquidity Account, the Special Reserve Account or any other Company account), it being 

understood that all fees and related costs of liabilities of the Servicers and Subservicers shall be 

the sole responsibility ofthe Manager (without any right of reimbursement from the Company or 

the Initial Member). 

(g) Fidelity Bond: E&O Insurance. The Manager, Servicer and each 

Subservicer shall maintain insurance coverage having such limits as described below: Such 

insurance coverage shall, unless otherwise indicated below, name the Company and the Purchase 

Money Note Guarantor as an insured: 

(i) Errors & Omissions Liability with limits ofnot less than 

$10,000,000 per claim and $10,000,000 in the aggregate. The Manager shall be 

notified immediately upon the reduction of or potential reduction of 50% ofthe 

limits applicable to the Servicer and each Subservicer. The Manager may require 

that the Servicer and each Subservicer purchase additional coverage to provide 

full coverage to the required limits as stated above. "Potential reduction of 50%" 

shall mean any knowledge by the Servicer or Subservicer, as applicable, that a 

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

policy would reduce the limits by 50%. 

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13235439.7 
(ii) Directors & Officers Liability with limits of not less than 

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

(iii) Crime Insurance or a Fidelity Bond in an amount ofnotless than 

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

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

coverage. Such coverage shall insure all employees or any other persons 

authorized by Servicer or Subservicer to handle any funds, money, documents and 

papers relating to any Mortgage Loan, and shall protect the Servicer or 

Subservicer, as applicable, against losses arising out of theft, embezzlement, 

fraud, misplacement, and other similar causes. Each Member ofthe Company 

and the Purchase Money Note Guarantor shall each be named as a loss payee with 

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

applicable Servicing Agreement or Subservicing Agreement. 

(iv) As to the Company, the Manager shall obtain General Liability 

Insurance with limits of not less than $1,000,000 per occurrence and $2,000,000 

in the aggregate, including coverage for products/completed operations, 

advertising and personal injury. All Members ofthe Company shall be named as 

additional insureds. The policy shall include a Waiver of Subrogation in favor of 

the Manager and the Company. 

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

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

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

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

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

include a Waiver of Subrogation in favor ofthe Manager and the Company. 

(vii) Umbrella Liability in an amount of not less than $10,000,000 per 

each occurrence and in the aggregate. 

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

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

notice of cancellation of thirty (30) days, except for non-payment of premium whereby a ten 

(1 0) day notice of cancellation is acceptable. The applicable insurance certificates shall show 

each ofthe Manager, the Purchase Money Note Guarantor and the Company, as the case may 

be, as certificate holder, or as otherwise designated by the language in clauses (i)-(vii) above. 

The Manager shall provide (or shall cause each Servicer and Subservicer to provide) the 

Purchase Money Note Guarantor, and the Initial Member with certificates evidencing all 

such policies on the Closing Date (and, with respect to each Mortgage Loan, on or before the 

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

Date thereafter, and otherwise upon request of the Purchase Money Note Guarantor, or the 

Initial Member. Copies of fidelity bonds and insurance policies required to be maintained 

pursuant to this Section 12.3Cg) shall be made available to the Purchase Money Note 

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13235439.7 
Guarantor, and the Initial Member or their respective representatives on the Closing Date 

(and, with respect to each Mortgage Loan, on or before the applicable Servicing Transfer 

Date with respect thereto), and shall otherwise be made available to any ofthe Purchase 

Money Note Guarantor, and the Initial Member and their respective representatives upon 

request. 

(h) MERS Requirements. In the event that any ofthe Mortgage Loans are 

registered on the MERS® System, and unless and until no Mortgage Loan so remains registered 

on the MERS® System in accordance herewith, (i) the Manager shall cause the Servicer to be (or 

become) a member of MERS on or before the initial Servicing Transfer Date, and 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), and (ii) the 

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

and execute and deliver on behalf ofthe Company (including, as applicable, on behalf ofthe 

Manager, in turn on behalf ofthe Company) any and all instruments of assignment and other 

comparable instruments with respect to such assignment or re-recording of a mortgage securing a 

Mortgage Loan in the name ofMERS, solely as nominee for the Company and its successors and 

assigns. With respect to each Mortgage Loan that is registered on the MERS® System, (A) the 

Servicer shall be designated as the "servicer" and the Company shall be designated as the 

"investor" with respect to such Mortgage Loan, and, if applicable, the Manager may cause or 

permit an applicable Subservicer to be designated as the "subservicer'' with respect to such 

Mortgage Loan (provided, that the Manager may, as determined in accordance with the Servicing 

Standard and so long as each applicable designee is and remains a MERS member in good 

standing, (i) designate the Company as the "investor'' with respect to any such Mortgage Loan, 

and (ii) designate the Manager as the "servicer'' with respect to any such Mortgage Loan, in which 

case the Servicer shall be designated as the "subservicer" with respect thereto), and (B) no other 

Person shall be identified on the MERS® System as having any interest in such Mortgage Loan 

unless otherwise consented to by the Initial Member (or required pursuant to the Electronic 

Tracking Agreement). All Mortgage Loans registered on the MERS® System shall remain 

registered on the MERS® System unless default, foreclosure or similar legal or MERS 

requirements dictate otherwise; provided, however, that if the Manager determines, in accordance 

with the Servicing Standard and other applicable provisions herein and in the Ancillary 

Documents, to remove any or all such Mortgage Loans so registered with MERS from the 

MERS® System, the Manager shall have the right to cause such removal so long as, with respect 

to any such Mortgage Loan to be so removed, (A) the applicable mortgage·(or other Underlying 

Collateral Document) and rights to Underlying Collateral for such Mortgage Loan that are so 

registered in the name ofMERS are duly transferred and assigned to the Company (with all 

applicable recordings or filings with respect thereto being duly made) so as to cause the Company 

to have the full benefit of its applicable security (or other) interest in all such Underlying 

Collateral, (B) for any such removal occurring on or before the applicable Servicing Transfer 

Date, the same is accomplished in accordance with the applicable requirements (and delivery of 

the applicable notice) in Section 3.l(c) ofthe Contribution Agreement, and (C) for any such 

removal prior to the Purchase Money Note Maturity Date, the Company shall have duly delivered 

to the Collateral Agent such documents and otherwise taken such actions (including execution and 

recordation of applicable assignments in accordance with the Reimbursement and Security 

Agreement), in each case so as to cause all such Underlying Collateral to be and remain subject to 

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13235439.7 
the first priority security interest granted under the Reimbursement and Security Agreement. The 

Servicer shall provide the Manager and the Initial Member with such reports from the MERS® 

System as the Manager or the Initial Member, from time-to-time, may request, including to allow 

the Manager and the Initial Member to verify the Persons identified on the MERS® System as 

having any interest in· any ofthe Mortgage Loans and to confirm that the Mortgage Loans required 

to be registered on the MERS® System are so registered. For so long as any Mortgage Loans 

remain registered with MERS, the same shall be subject to an Electronic Tracking Agreement in 

the form ofExhibit B to the Servicing Agreement, and, to the extent any such Mortgage Loans are 

so registered with MERS as ofthe Closing Date, the Servicer, the Manager, the Collateral Agent 

and the Initial Member shall execute such Electronic Tracking Agreement on the Closing Date 

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

or the Initial Member, the Servicer shall cause MERS to run a query with respect to any and all 

specified fields on the MERS® System with respect to any or all ofthe Mortgage Loans registered 

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

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

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

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

instructions. 

12.4 Removal ofthe Servicer. 

(a) Removal ofthe Servicer. Upon the occurrence of an Event ofDefault, in 

addition to any other rights it may have pursuant to this Agreement, any Ancillary Document or 

applicable Law (including the Uniform Commercial Code), whether at law or in equity and 

whether pursuant to statute or regulation or otherwise, the Initial Member shall have the right to 

take, in the Initial Member's sole and absolute discretion and the Manager's expense, one or more 

ofthe following actions: (i) upon notice in writing to the Manager (effective at such time as is 

specified in such notice), to act on behalf ofthe Manager (in its individual capacity) to terminate 

the existing Servicer (and any Subservicers) and to cause the Manager (in its individual capacity) 

to enter into a new Servicing Agreement with a servicer (a "successor Servicer") selected by the 

Initial Member (in its sole and absolute discretion), and (ii) upon notice in writing to the Manager 

(effective at such time as is specified in such notice), to remove the Private Owner as the Manager 

and appoint a successor Manager (which successor Manager may be the Initial Member) in the 

sole and absolute discretion ofthe Initial Member, whereupon (without limitation of Section 

13.5), such successor Manager shall immediately succeed to all, or such portion as the Initial 

Member and successor Manager agree, of the rights and obligations of the Private Owner as the 

Manager ofthe Company, and, in such case, the Initial Member shall further have the right (A) to 

terminate the Servicer (in its sole and absolute discretion), and cause or permit the successor 

Manager selected by the Initial Member (and/or the Company directly, as determined by the 

Initial Member in its sole and absolute discretion) to enter into a Servicing Agreement with a 

successor Servicer, such Servicing Agreement to be between the applicable successor Manager 

(and/or the Company) and the successor Servicer chosen by the Initial Member, or (B) to retain 

the existing Servicer and cause or permit the successor Manager (and/or the Company directly, as 

determined by the Initial Member in its sole and absolute discretion) to enter into a new Servicing 

Agreement between such successor Manager (and/or the Company) and the Servicer (or to effect 

an assignment of the existing Servicing Agreement from the existing Manager (in its individual 

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A&R Limited Liability Company Operating Agreement 


Pool Nos. 24020 and 24021 


13235439.7 
capacity) to such successor Manager (and/or the Company). None Of the Initial Member, any 

successor Manager or the Company shall have any obligation to assume any obligations or 

liabilities ofthe removed Manager (in its individual capacity) under or in connection with any 

Servicing Agreement. Notwithstanding the foregoing, the Initial Member shall not exercise its 

right to terminate a Servicer that is not an Affiliate ofthe Manager or ofthe Private Owner in the 

absence of (1) an Event ofDefault attributable in whole or in part to the failure by the Servicer or 

any of its Subservicers to perform any material obligation under its applicable Servicing 

Agreement or Subservicing Agreement, (2) an Event of Default as described in clause (b) or 

clause (g) ofthe definition thereof with respect to the Servicer or any Related Party thereof or any 

of its Subservicers or any Related Party thereof, (3) an Event ofDefault resulting from the failure 

ofthe Servicer or any of its Subservicers at any time to meet the criteria of a Qualified Servicer, 

(4) an Event of Default as described in clause (e) ofthe defmition thereof, to the extent relating to 

such Servicer or any of its Subservicers, or (5) any other Event of Default that consists of a breach 

of a servicing obligation under this Agreement. Subject to the foregoing, the Manager hereby 

consents to the immediate termination ofthe Servicer upon the occurrence of any Event of 

Default. For the avoidance of doubt, the rights ofthe Initial Member in this Section 12.4 are in 

addition to, and can be exercised independently ofthe rights ofthe Initial Member in Sections 3.2, 

3.13, and 3.14; and in any event all rights and remedies ofthe Initial Member under this 

Agreement with respect to or following an Event ofDefault shall be cumulative, and any or all 

thereof may be exercised instead of or in addition to each other or any other remedies available to 

the Initial Member, whether under this Agreement, any Ancillary Document or otherwise. 

Notwithstanding the foregoing, if any Purchase Money Notes is outstanding, the Purchase Money 

Note Guarantor shall have the same rights under this Section 12.4(a) as the Initial Member. 

(b) Appointment of Successor Servicer. Ifthe Initial Member or the Purchase 

Money Note Guarantor exercises its right to act on behalf ofthe Manager, in its individual 

capacity, to appoint a successor Servicer, the costs and expenses associated with such successor 

Servicer (including any servicing fees) shall be borne by the Manager (and not the Company or 

the Initial Member), and no termination or other fee shall be due to the Manager or the Servicer or 

any Subservicer in connection with or as a result of any such action; provided, that, ifthe Initial 

Member or the Purchase Money Note Guarantor has also exercised its right to remove the 

Manager (such that such removed Manager no longer has rights to the Management Fee), then, 

with respect to servicing fees of such successor Servicer (but not costs and expenses in connection 

with the replacement of the Servicer with such successor Servicer) such removed Manager shall 

be responsible only for the portion of such fees that, as of any particular Distribution Date, are in 

excess ofthe Management Fee payabl~ to the successor Manager on such Distribution Date. 

(c) Removal ofthe Manager: Management Fee. Ifthe Initial Member 

exercises its right pursuant to this Section 12.4 to remove the Private Owner as the Manager and 

appoint a successor Manager, (i) the successor Manager selected by the Initial Member shall 

immediately succeed to all, or such portion as the Initial Member and successor Manager agree, of 

the rights and obligations of the Private Owner as the Manager ofthe Company, and all references 

in this Agreement to the Private Owner, in its capacity as Manager of the Company, shall be 

deemed to be references to the successor Manager so appointed by the Initial Member, (ii) without 

limitation of Section 13.5, the Initial Member shall have the right to determine, in its sole and 

absolute discretion, the extent, terms and conditions ofthe appointment of any such successor 

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13235439.7 
Manager, including as to compensation (whether from the Initial Member or the Company), 

indemnification by the Company, term of appointment and removal rights, in each case without 

the necessity for any consent from the Private Owner or any other Person, and (iii) the successor 

Manager appointed by the Initial Member shall be entitled to be paid the Management Fee (or 

such portion thereof as the Initial Member and the successor Manager agree) in accordance with 

the terms ofthis Agreement and the Custodial and Paying Agency Agreement. The removal of 

the Private Owner as the Manager shall not relieve the Private Owner of (x) any ofthe liabilities 

and/or obligations ofthe Private Owner as Manager to the extent required under the terms of this 

Agreement to have been paid and/or performed prior to such removal or (y) any liability the 

Private Owner may have arising out of any act or omission by the Private Owner as Manager. No 

successor to the Private Owner as Manager shall have any liability or obligation for any ofthe 

matters described in clause (x) or (y) ofthe preceding sentence, except as may be otherwise 

specified pursuant to any modification to this Agreement pursuant to Section 13.5. In connection 

with any such removal ofthe Manager, the Initial Member and any successor Manager selected by 

the Initial Member are each hereby authorized and empowered, as attorney-in-fact or otherwise, to 

execute and deliver, on behalf of and at the expense ofthe removed Manager (in its individual 

capacity), any and all documents and other instruments and to do or take any and all acts 

necessary or appropriate to effect the termination and replacement of such Manager and the 

Servicer and, in the event the Initial Member decides to retain a new Servicer, to enter into a new 

Servicing Agreement between the successor Manager (and/or the Company) and the Servicer or to 

effectan assignment of the existing Servicing Agreement from the removed Manager (in its 

individual capacity) to the successor Manager (and/or the Company). Notwithstanding the 

foregoing, if the Purchase Money Note is outstanding, the Purchase Money Note Guarantor shall 

have the same rights under this Section 12.4(c) as the Initial Member. 

(d) Cooperation To Facilitate Transfer. In the event any ofthe Manager, a 

Servicer or a Subservicer is terminated pursuant to the provisions ofthis Article XII, the Manager 

(in its individual capacity) shall, and shall cause any Servicer, and any Subservicer, to, provide the 

Initial Member and any successor Manager or Servicer in a timely manner with all documents, 

records and data (including electronic documents, records and data) requested by the Initial 

Member or any successor Manager or Servicer to enable such Person to assume the 

responsibilities as Manager under this Agreement and any applicable Servicing Agreement, and to 

cooperate with the Initial Member in effecting the termination of any Servicer or Subservicer or 

the Manager's rights as "Manager" under this Agreement, including, in each case subject to 

applicable requirements in the Custodial and Paying Agency Agreement and the Reimbursement 

and Security Agreement, (x) the transfer within one (1) Business Day to such account as the Initial 

Member may specify of all cash amounts which, at the time, shall be or should have been credited 

to the Collection Account or are thereafter received with respect to any Mortgage Loans or 

Acquired Property, and (y) the transfer of alllockbox accounts with respect to which payments or 

other amounts with respect to the Mortgage Loans are directed or the redirection of all such 

payments and other amounts to such account as the Initial Member may specify, and (z) the 

assignment to the Initial Member (or the applicable successor Manager or Servicer as indicated by 

the Initial Member) ofthe right to access all such lockbox accounts, the Collection Account and 

any other account into which Mortgage Loan Proceeds or Borrower escrow payments are 

deposited or held. The Manager, in its individual capacity, shall be liable for all costs and 

expenses incurred by the Initial Member or the Company (x) associated with the complete transfer 

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FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 


Pool Nos. 24020 and 24021 


13235439.7 
ofthe servicing data, (y) 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 the 

Initial Member and any successor Manager and successor Servicer (and Subservicers) to service 

the Mortgage Loans and Acquired Property properly and effectively, and (z) to retain and 

maintain the services of a successor Manager and/or successor Servicer (and any Subservicers), it 

being understood that, as to the compensation to be paid to the successor Manager (and servicing 

fees due and payable to any Servicer or Subservicer engaged by or through such successor 

Manager), the removed Manager shall be responsible only for the portion of such compensation 

and fees that, as of any particular Distribution Date, are in e~cess ofthe Management Fee payable 

to the successor Manager on such Distribution Date. Within a reasonable time after receipt of a 

written request ofthe Manager (in its individual capacity) for the same, the Initial Member shall 

provide reasonable documentation evidencing such costs and expenses, but the Initial Member's 

right to reimbursement of such costs and expenses (and to exercise offset rights under Section 

4.6(h) on account thereof) shall not be subject to or contingent upon the provision of such 

documentation. 

(e) Power ofAttorney. The Company hereby irrevocably constitutes and 

appoints the Initial Member and any officer or agent thereof, with full power of substitution, as its 

true and lawful attorney-in-fact for the purposes ofthis Agreement and allowing the Initial 

Member to perfect, preserve the validity, perfection and priority of, and enforce any Lien granted 

by this Agreement and, after the occurrence and during the continuance of any Event ofDefault, 

to exercise its rights, remedies and powers and privileges under this Agreement. This appointment 

as attorney-in-fact is irrevocable and coupled with an interest until this Agreement is terminated 

and the security interests created hereby are released. Without limiting the generality of the 

foregoing, but subject at all times to the rights of a secured party under the Reimbursement and 

Security Agreement, the Initial Member shall be entitled under this Section 12.4(e) to do any of 

the following if an Event ofDefault has occurred and is continuing: (i) ask, demand, collect, sue 

for, recover, receive and give receipt and discharge for amounts due and to become due under and 

in respect of any or all ofthe Mortgage Loans; (ii) file any claims or take any action or proceeding 

in any court of law or equity that the Initial Member may reasonably deem necessary or advisable 

for the collection or other enforcement of all or any part ofthe Mortgage Loans, defend any suit, 

action or proceeding brought against the Company with respect to any Mortgage Loan, and settle, 

compromise or adjust any such suit, action or proceeding; (iii) execute, in connection with any 

sale or disposition ofthe Mortgage Loans, any endorsements, assignments, bills of sale or other 

instruments of conveyance or transfer with respect to all or any part ofthe Mortgage Loans; 

(iv) enforce the rights of the Company under any provision of any Servicing Agreement to the 

extent permitted thereunder and under the terms ofthis Agreement; (v) pay or discharge taxes and 

Liens levied or placed on the Mortgage Loans; (vi) generally, sell, transfer, pledge and make any 

agreement with respect to or otherwise deal with any ofthe Mortgage Loans as fully and 

completely as though the Initial Member were the absolute owner thereof for all purposes; and 

(vii) do, at the Initial Member's option and the Company's expense, at any time and from time-totime, all acts and things that the Initial Member reasonably deems necessary to protect, preserve, 

or realize upon the Mortgage Loans and the Initial Member's security interests in any Secured 

Assets and to effect the intent ofthis Agreement, all as fully and effectively as the Company 

might do. Anything in this Section 12~ to the contrary notwithstanding, the Initial Member 

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Pool Nos. 24020 and 24021 

13235439.7 
agrees that it shall not exercise any right under the power of attorney provided for in this 

Section 12.4(e) unless an Event of Default shall have occurred and be continuing. 

12.5 Interim Management Fee and lnteri.ril Servicing Fee; Management Fee. For each 

Due Period, (a) with respect to any Mortgage Loan for which the Servicing Transfer Date has not 

occurred as of the first day of such Due Period, the Company shall pay the Interim Management 

Fee to the Manager and the Interim Servicing Fee to the Initial Member, and (b) for each 

Mortgage Loan for which the Servicing Transfer Date has occurred as of(or occurs on) the first 

day ofsuch Due Period, the Company shall pay the Management Fee to the Manager. Each such 

payment of any Interim Servicing Fee, Interim Management Fee and Management Fee shall be 

made in the manner described in the Custodial and Paying Agency Agreement (and, as 

applicable, on the Distribution Date with respect to the applicable Due Period). In the event the 

Manager is removed and replaced by the Initial Member or the Purchase Money Note Guarantor 

in accordance with Section 12.4 above, the Management Fee and Interim Management Fee shall 

thereafter be payable to the Initial Member or successor Manager, as determined by the Initial 

Member or the Purchase Money Note Guarantor pursuant to such Section 12.4. 

12.6 Servicing Expenses. Subject to Section 3.3 ofthe Contribution Agreement (with 

respect to the Interim Servicing Period), from and after the Closing Date (and, with respect to 

each Mortgage Loan, from and after the Servicing Transfer Date with respect thereto), the 

Manager shall cause the Company to pay, from available Company funds (in the Collection 

Account, the Liquidity Account or any other applicable Company account the funds of which 

may be used for such purpose or otherwise through Excess Liquidity Advances funded by the 

Manager) all amounts due as Servicing Expenses (or, as applicable, Pre-Approved Charges) in a 

timely manner, and in each case in accordance with the applicable requirements set forth in the 

Custodial and Paying Agency Agreement (and, as applicable, the Contribution Agreement); 

provided, however, that anything to the contrary herein or in any Ancillary Document 

notwithstanding, the Manager shall not have an obligation to fund Excess Liquidity Advances for 

purposes of the payment by the Company of (i) any Pre-Approved Charges, or (ii) any specific 

Servicing Expense relating to a Mortgage Loan to the extent that the Manager has reasonably 

determined in accordance with the Servicing Standard that such Servicing Expense, if so paid, 

when combined with all unreimbursed previous Servicing Expenses, Funding Draws and PreApproved Charges with respect to such Mortgage Loan (and any remaining amounts owing to 

the Initial member with respect to its servicing of such Mortgage Loans during the Interim 

Servicing Period pursuant to Sections 2.3, 2.4 and liofthe Contribution Agreement), would not 

ultimately be recoverable from the Mortgage Loan Proceeds for such Mortgage Lo·an. All 

Servicing Expenses (and Excess Liquidity Advances for the funding of the same) shall be 

reimbursed in accordance with the Custodial and Paying Agency Agreement. 

12.7 Use ofMortgage Loan Proceeds. 

(a) Permitted Payments. Subject to Section 12.7(b), each month the Mortgage 

Loan Proceeds shall be utilized and distributed in the manner set forth in the Custodial and Paying 

Agency Agreement fo Hawing receipt by the Paying Agent from the Manager of the Distribution 

Date Report required to be provided under Section 7 ..4.!.hl. 

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Pool Nos. 24020 and 24021 

13235439.7 
(b) Costs That Are Not Reimbursable. Notwithstanding anything else to the 

contrary contained herein or in any Ancillary Document, without the prior written consent ofthe 

Initial Member (which may be withheld in the Initial Member's sole and absolute discretion), in 

no event may the Manager deduct, from the Mortgage Loan Proceeds, or otherwise use Mortgage 

Loan Proceeds (or funds otherwise on deposit in the Collection Account, Liquidity Account or 

any other applicable Company account) to reimburse itself or any Servicer or Subservicer or pay 

for, any ofthe following (all ofwhich shall be borne by the Manager in its individual capacity) 

(collectively, the "Excluded Expenses"): 

(i) any expenses or costs that are not incurred in accordance with the 

Servicing Standard or, to the extent applicable, the Fannie Mae Guidelines; 

(ii) any expenses or costs that are paid to any Affiliate ofthe Manager 

or the Company, or any Affiliate of any Servicer or any Subservicer; provided, 

Excluded Expenses under this clause (ii) do not include amounts payable to the 

Servicer pursuant to the Servicing Agreement or to any Subservicer pursuant to 

any Subservicing Agreement that would be deemed Excluded Expenses under this 

clause (ii) solely as a result of such Servicer or Subservicer being an Affiliate of 

the Manager or the Company, so long as such amounts would otherwise constitute 

Servicing Expenses but for application ofthis clause (ii); 

(iii) any fees or other compensation to or expenses of financial 

advisers, except to the extent the same are incurred as brokerage fees or sales 

commissions incurred (x) to market or sell the Mortgage Loans or any Acquired 

Property in a Bulk Sale, the terms ofwhich Bulk Sale (including the financial 

adviser's or broker's fees) are approved in advance by the Initial Member); and 

(y) in connection with the marketing or sale of any Acquired Property (including 

any REO Property) or any portion thereof on an individual basis; 

(iv) any fine, tax or other penalty, late fee, service charge, interest or 

similar charge, costs to release Liens or any other costs or expenses (including 

legal fees and expenses) incurred by or on behalf of the Company or any Manager 

(in its capacity as such or in its individual capacity) as a result ofthe Company's 

or any Manager's or the Servicer's or any Subservicer's failure to service any 

Mortgage Loan or Underlying Collateral properly in accordance with the 

applicable Mortgage Loan Documents, this Agreement, the Servicing Agreement, 

any Subservicing Agreement or otherwise, or failure to make a payment in a 

timely manner, or failure otherwise to act in a timely manner; 

(v) any interest on any amounts paid by any Person with respect to any 

Servicing Expenses or Pre-Approved Charges; 

(vi) any overhead or administrative costs (whether or not attributable to 

the servicing, the subservicing or the management of any Mortgage Loan) 

incurred by the Company, any Manager or any other Person (including any travel 

expenses and any expenses incurred by any Manager, the Company or any· 

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A&R Limited Liability Company Operating Agreement 


Pool Nos. 24020 and 24021 


13235439.7 
Servicer or Subservicer to comply with Section 4.3, Section 7.2, Section 7.3, 

Section 7.4 and Section 7.5) in each case other than Reimbursable Company 

Administrative Expenses; 

(vii) any servicing, management or similar fees paid to the Servicer, any 

Subservicer or any other Person; 

(viii) any expenses incurred by the Company, the Manager or any other 

Person (x) to become a MERS member or to maintain the Company, the Manager 

or such other Person as a MERS member in good standing, or (y) to remove any 

Mortgage Loan from the MERS® System in connection with any voluntary 

removal by or at the direction of the Manager (as permitted in Section 12.3(g) 

hereof), it being understood that any such removal dictated by default, foreclosure 

or similar legal or MERS requirements shall not be considered a voluntary 

removal for purposes ofthis clause; or 

(ix) any amounts subject to the indemnity obligations ofthe Private 

Owner under Section 4.6 ofthis Agreement or ofthe Servicer under Section 8.2 

ofthe Servicing Agreement. 

12.8 Collection Account. On the Closing Date, the Manager shall cause the Company 

to establish and maintain the Collection Account with the Paying Agent in accordance with the 

Custodial and Paying Agency Agreement. The Collection Account (and all funds therein) shall 

be subject to the security interest granted under the Reimbursement and Security Agreement and 

to the Account Control Agreement under the Custodial and Paying Agency Agreement. 

12.9 Distribution Account. On the Closing Date, the Manager shall cause the 

Company to establish the Distribution Account with the Paying Agent in accordance with the 

Custodial and Paying Agency Agreement. The Distribution Account (and all funds therein) shall 

be subject to the security interest granted under the Reimbursement and Security Agreement and 

to the Account Control Agreement under the Custodial and Paying Agency Agreement. 

12.10 Interest Reserve Account. 

(~) Establishment of Interest Reserve Account. On the Closing Date, the 

Manager shall cause the Compariy to establish the Interest Reserve Account with the Paying 

Agent for the exclusive purpose of (a) making interest payments on the Purchase Money Notes, to 

the extent there are insufficient funds in the Distribution Account to make such payments on any 

Distribution Date, and (b) to reimburse the Purchase Money Notes Guarantor for any payments 

pursuant to the Purchase Money Notes Guaranty in accordance with the terms hereof and the 

Custodial and Paying Agency Agreement. The Interest Reserve (and all funds therein) shall be 

subject to the security interest granted under the Reimbursement and Security Agreement and to 

the Account Control Agreement under the Custodial and Paying Agency Agreement. 

(b) Funding the Interest Reserve Account. On the Closing Date, the Initial 

Member and the Private Owner shall deposit into the Interest Reserve Account, pro rata based on 

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FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
their" respective Percentage Interests, an amount equal to the Interest Reserve Target Amount as of 

the Closing Date. 

(c) Use ofthe Interest Reserve Account. The Manager or the Initial Member 

(in relation to its interim servicing obligations) may direct the Company to withdraw funds from 

the Interest Reserve Account only to make payments in accordance with Section 3.4 ofthe 

Custodial and Paying Agency Agreement. The Manager shall not permit withdrawals from the 

Interest Reserve Account for any other purpose; provided, that in connection with the Final 

Distribution, the Paying Agent shall allocate and distribute the funds on deposit in the Interest 

Reserve Account in accordance with, and subject to, the terms ofthe Custodial and Paying 

Agency Agreement. 

(d) Permitted Investments. Funds in the Interest Reserve Account shall be 

invested in Permitted Investments in accordance with the Custodial and Paying Agency 

Agreement. 

12.11 Liquidity Account. 

(a) Establishment ofLiquidity Account. On the Closing Date, the Manager 

shall cause the Company to establish the Liquidity Account with the Paying Agent for the 

exclusive purpose of holding a reserve to cover Operating Expenses to the same extent, and in the 

same order ofpriority, as are applicable to Mortgage Loan Proceeds in accordance with the terms 

hereof and the Custodial and Paying Agency Agreement. The Liquidity Account (and all funds 

therein) shall be subje<;t to the security interest granted under the Reimbursement and Security 

Agreement and to the Account Control Agreement under the Custodial and Paying Agency 

Agreement. 

(b) Funding the Liquidity Account. On the Closing Date, the Initial Member 

and the Private Owner shall deposit into the Liquidity Account, pro rata based on their respective 

Percentage Interests, an amount equal to the Liquidity Account Cap as ofthe Closing Date. 

(c) Use ofthe Liquidity Account. The Manager or the Initial Member (in 

relation to its interim servicing obligations) may direct the Company to withdraw funds from the 

Liquidity Account only to cover Operating Expenses in accordance with Section 3.5 ofthe 

Custodial and Paying Agency Agreement or as otherwise agreed to 'with the Initial Member. The 

Manager shall not permit withdrawals from the Liquidity Account for any other purpose; 

provided, that in connection with the Final Distribution the Paying Agent shall allocate and 

distribute the funds on deposit in the Liquidity Account in accordance with, and subject to, the 

terms ofthe Custodial and Paying Agency Agreement. With respect to any Mortgage Loan, on 

the Servicing Transfer Date, the Initial Member shall be reimbursed from the Liquidity Account 

or ifthere are not sufficient funds on deposit in the Liquidity Account, through Excess Liquidity 

Advances, for an amount equal to all Operating Expenses (and any advance of the Initial Member 

that is reimbursable pursuant to the Contribution Agreement) paid by it at any time after the CutOffDate and on or before such Servicing Transfer Date (to the extent the same have not been 

otherwise reimbursed pursuant to the Contribution Agreement or Custodial and Paying Agency 

Agreement). 

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Pool Nos. 24020 and 24021 


13235439.7 
(d) Permitted Investments. Funds in the Liquidity Account shall be invested 

in Permitted Investments in accordance with the Custodial and Paying Agency Agreement. 

12.12 Certain Servicing and Mortgage Loan Administration Decisions. The Manager 

shall have full power and authority, acting alone or through any Servicer or Subservicer, to cause 

to be done any and all things in connection with the servicing and administration of the Mortgage 

Loans that the Manager may deem necessary or desirable, and cause to be made all servicing 

decisions in its reasonable discretion, subject to its obligation to comply with the Servicing 

Standard and other applicable provisions herein and in the Ancillary Documents. Upon the 

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

other terms and conditions of this Agreement (including the Servicing Standard), the Manager 

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 interests of the Company in the Mortgage Loan and 

the Underlying Collateral, (ii) the declaration and recording of a notice of such default and the 

acceleration ofthe maturity ofthe Mortgage Loan, (iii) the institution ofproceedings to foreclose 

the Mortgage Loan Documents securing the Mortgage Loan pursuant to the power of sale 

contained therein or through a judicial action, (iv) the institution of proceedings against any 

Obligor, (v) the acceptance of a deed in lieu of foreclosure, (vi) the purchase of the real property 

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

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

continuation of proceedings to obtain a deficiency judgment against such Borrower or any 

Obligor. Notwithstanding any provision to the contrary herein, the Manager shall not, and shall 

not cause any Servicer or Subservicer to, take any action that is inconsistent with or prohibited 

by the terms of the Reimbursement and Security Agreement or the Custodial and Paying Agency 

Agreement without the prior written consent ofthe Initial Member. 

12.13 Management and Disposition ofUnderlying Collateral. Subject to the other terms 

and conditions of this Agreement (including the Servicing Standard), and the Reimbursement 

and Security Agreement, the Manager shall have full power and authority, acting alone. or 

through any Servicer and any Subservicer, to cause to be done any and all things in connection 

with the Manager's management of any Underlying Collateral or Acquired Property, that the 

Manager may deem necessary or desirable, and cause to be made all asset management decisions 

in its reasonable discretion. Notwithstanding the foregoing, prior to the acquisition of any 

Underlying Collateral that constitutes real property by foreclosure, acceptance of a deed in lieu 

of foreclosure or through a short sale, the Manager, acting alone or through any Servicer or 

Subservicer, shall determine the Net Fair Value of such Underlying Collateral and, subsequent to 

the purchase at a foreclosure sale or upon acceptance of such deed in lieu of foreclosure, shall 

thereafter cause such Underlying Collateral to be held on the books ofthe Company at such Net 

Fair Value. 

12.14 Acquisition ofUnderlying Collateral. 

(a) Iftitle to any Underlying Collateral that constitutes real property is to be 

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

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

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FDIC SFR 2010-3 (Final) 

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Pool Nos. 24020 and 24021 

13235439.7 
name of an Ownership Entity; provided, however, that for any REO Property with respect to 

which there exists a physical condition, including, by way of example, an Environmental Hazard, 

which may subject the Company, the Manager or the Initial Member to liability, a separate 

Ownership Entity will hold title to each such REO Property. 

(b) Nothing in this Article XII or anything else in this Agreement shall be 

deemed to affrrmatively require the Manager to cause the Company to acquire all or any portion 

of anyREO Property with respect to which there exists any Environmental Hazard. Except as 

otherwise directed by the Manager, the Manager shall not permit the Servicer or any Subservicer 

to acquire or otherwise cause the Company or any subsidiary or other entity in which the 

Company owns any interest to acquire all or any portion of any Underlying Collateral having any 

actual or threatened Environmental Hazard known to the Manager by foreclosure, deed in lieu of 

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

(c) Prior to acquisition oftitle to any commercial REO Property (whether by 

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

Commercial Code, or otherwise), the Manager shall, and prior to the acquisition oftitle to any 

residential REO Property (whether by foreclosure, deed in lieu of foreclosure, by power of sale or 

by sale pursuant to the Uniform Commercial Code, or otherwise), the Manager may cause to be 

commissioned with respect to such REO Property either (i) a Transaction Screen Process 

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

site inspections and assessments by a Person who regularly conducts environmental 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 Environmental Hazards (a "Site 

Assessment"), and the cost of such Site Assessment shall be deemed to be a Servicing Expense as 

long as the costs for such Site Assessment were not paid to any Affiliate of the Manager, or any 

Affiliate ofthe Servicer or any Subservicer. 

(d) The Company shall be the sole member of any Ownership Entity. The 

purposes of each Ownership Entity shall be to hold the REO Property pending sale, to complete 

construction of such Underlying Collateral and to operate the Underlying Collateral as efficiently 

as possible in order to minimize financial loss to the Company, and the Purchase Money Note 

Guarantor and to sell the REO Property as promptly as practicable in a way designed to minimize 

fmancialloss to the Company, and the Purchase Money Note Guarantor~ 

12.15 Administration of REO Properties. The following terms and conditions shall be 

binding on the Company and the Ownership Entities (and on the Manager's performance of its 

obligations hereunder) with respect to any REO Properties, in addition to any other terms and 

conditions concerning the same subject matter set forth in this Agreement and any of the other 

Ancillary Documents: 

(a) Insurance. With respect to each REO Property, the Manager shall cause 

the applicable Ownership Entity to maintain, with financially sound and reputable insurers, 

insurance (including, as applicable, public liability insurance, property insurance, flood insurance, 

boiler and machinery insurance, business interruption or rent insurance and other insurance), in 

such amounts, with such deductibles, covering such risks and otherwise on such terms and 

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conditions, in each case as are customarily maintained by property owners for other real property 

and structures similar to such REO Property in the area in which such REO Property is located, all 

as determined by the Manager in accordance with the Servicing Standard and the provisions of 

this Agreement and the Ancillary Documents. All insurance policies shall name the Collateral 

Agent, the Manager and the Company as an additional insured, loss payee or mortgagee 

thereunder, as applicable, as its interest may appear. Each policy shall provide that such policy 

may not be cancelled or materially changed except upon thirty (30) days' prior written notice to 

the Company and to the Collateral Agent, and shall further provide that no act or thing done by 

the applicable Ownership Entity shall invalidate any policy as against the Collateral Agent. 

(b) Leasing Covenants. With respect to·each REO Property, the Manager 

shall cause the applicable Ownership Entity to (i) perform the obligations that such Ownership 

Entity is required to perform under the leases to which it is a party in all material respects and (ii) 

enforce, in accordance with commercially reasonable practices for properties similar to the 

applicable REO Property, the material obligations to be performed by the tenants under such 

leases. 

(c) Zoning. The Manager shall not permit any Ownership Entity to initiate or 

consent to any zoning reclassification of any portion ofthe REO Property owned by such 

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

could result in such use (taking into account any applicable variance obtained in accordance with 

the Servicing Standard) becoming a non-conforming use under any zoning ordinance or any other 

applicable land use law, rule or regulation, without the prior consent ofthe Initial Member and the 

Collateral Agent. 

(d) No Joint Assessment. The Manager shall not permit any Ownership 

Entity to suffer, permit or initiate the joint assessment of REO Property (i) with any other real 

property constituting a tax lot separate from such REO Property, or (ii) with any portion of an 

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

whereby the lien of any taxes which may be levied against such personal property shall be 

assessed or levied or charged to such REO Property. 

(e) Maintenance, Repairs and Alterations. From and after the completion of 

any buildings or other improvements at an REO Property, the Manager shall cause the applicable 

Ownership Entity to maintain such REO Property in a good and safe condition and repair (subject 

to such alterations as the Manager may from time-to-time determine to be appropriate in 

accordance with the Servicing Standard and applicable requirements herein and in the Ancillary 

Documents) and in accordance with applicable Law. 

(f) Property Management. All property managers with respect to any REO 

Property shall, in their respective property management agreements or by separate agreement, 

subordinate their rights under such agreements (including their right to receive management fees) 

to the rights and interest of the Collateral Agent under the applicable REO Property (as defined in 

the Reimbursement and Security Agreement). 

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(g) Ground Leases. With respect to any REO Property that is leased under a 

ground or other lease (in each case, a "ground lease"), the Manager shall cause the applicable 

Ownership Entity to (i) pay all rents and other sums required to be paid by the tenant under and 

pursuant to the provisions of the applicable ground lease as and when such rent or other charge is 

payable, and (ii) diligently and timely perform and observe all of the terms, covenants and 

conditions binding on the tenant under the ground lease. The Manager shall not permit the 

applicable Ownership Entity to subordinate or consent to the subordination of any ground lease to 

any mortgage, lease or other interest on or in the ground lessor's interest in the applicable REO 

Property without the prior consent ofthe Collateral Agent unless such subordination is required 

under the provisions of such ground lease. 

(h) Additional Construction Covenants. In the event the Manager elects to 

fund the construction ofthe REO Property (pursuant to Funding Draws for such purpose), then the 

Manager shall cause each Ownership Entity to pursue with diligence the construction of the REO 

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

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

requirements ofLaw, all restrictions, covenants and easements affecting such REO Property, and 

all applicable governmental approvals, (ii) in substantial compliance with the plans and 

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

Manager in its business judgment exercised in accordance with the Servicing Standard and 

applicable provisions in this Agreement and the Ancillary Documents, (iii) in a good and 

workmanlike manner and free of defects, (iv) in a manner such that such REO Property remains 

free from any Liens, claims or assessments (actual or contingent) for any material, labor or other 

item furnished in connection therewith and (v) in conformance with the requirements for Funding 

Draws. 

(i) REO Propertv Generally. Notwithstanding any other provision ofthis 

Section 12.15 to the contrary, (i) in operating, managing, leasing or disposing of any REO 

Property, the Manager shall act in the best interests of the Company, and the members and 

creditors ofthe Company (including the FDIC in its various capacities) and in accordance with the 

Servicing Standard, and (ii) without relieving the Manager ofany obligation elsewhere in this 

Agreement or any Ancillary Document, the Manager shall not be required to act in accordance 

with a specific provision ofthis Section 12.15 if such action is (A) not in the best interests of 

Company and the members and creditors ofthe Company (including the FDIC in its various 

capacities), as determined by the Manager in the exercise of its reasonable discretion, or (B) not in 

accordance with the Servicing Standard. 

(j) Reports. The Manager shall furnish to the Initial Member and the 

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

the REO Property as the Initial Member or the Collateral Agent shall reasonably request. 

12.16 Releases of Underlying Collateral. The Manager is authorized to cause the 

release or assignment of any Lien granted to or held by the Company on any Underlying 

Collateral upon payment of any Mortgage Loan in full and satisfaction in full of all of the 

secured obligations with respect to a Mortgage Loan, upon receipt of a discounted payoff as 

payment in full of a Mortgage Loan, or upon a sale of the Mortgage Loan to any Person, in each 

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case as and to the extent permitted hereunder and under the Reimbursement and Security 

Agreement 

12.17 Clean-Up Call Rights. 

(a) If, and only if, all amounts owing under the Purchase Money Note have 

paid in full, and all reimbursement and other obligations to the FDIC under the Reimbursement 

and Security Agreement have been satisfied in full, each of the Initial Member and the Purchase 

Money Notes Guarantor shall have the right, exercisable in its sole and absolute discretion, to 

require the liquidation and sale, for cash consideration, of any remaining Mortgage Loans and 

Acquired Property held by the Company or any Ownership Entity (the "Clean-Up Call") at any 

time after the earlier to occur of (i) the tenth (1Oth) anniversary of the Closing Date and (ii) the 

date on which the then Unpaid Principal Balance is ten percent ( 10%) or less of the Unpaid 

Principal Balance as of the Cut-Off Date as set forth on the Mortgage Loan Schedule. 

(b) In order to exercise its rights under this Section 12.17, the Initial Member 

and Purchase Money Notes Guarantor shall give notice in writing to the Manager, setting forth the 

date by which the remaining Mortgage Loans and Acquired Property are to be liquidated py the 

Company, which date shall be no less than 150 calendar days after the date of such notice. 

(c) The Manager shall proceed expeditiously to cause to be commenced the 

liquidation of the remaining Mortgage Loans and Acquired Property by means ofsealed bid sales 

to Persons other than Affiliates of the Company, the Servicer or any Subservicer, or Affiliates of 

the Servicer or any Subservicer. The selection of any financial adviser or other Person, broker or 

sales agent retained for the liquidation of the remaining Mortgage Loans and Acquired Property 

pursuant to this Section 12.17 shall be subject to the prior approval ofthe Initial Member, such 

approval not to be unreasonably withheld, delayed or conditioned as long as the fees to be charged 

by such financial adviser or other Person, broker or sales agent are reasonable and such Person is 

not an Affiliate ofthe Manager or any Servicer or Subservicer. In the event the remaining 

Mortgage Loans and Acquired Property are not liquidated by the date specified in the notice 

prqvided by the Initial Member pursuant to Section 12.17(b), the Initial Member shall be entitled 

to liquidate the remaining Mortgage Loans and Acquired Property in its sole and absolute 

discretion and the Manager shall, and shall cause the Company to, cooperate and assist with such 

liquidation to the extent reasonably requested by the Initial Member. In the event the Manager or 

any Affiliate thereof desires to bid to acquire the remaining Mortgage Loans and Acquired 

Property, then the Initial Member shall be entitled to liquidate the remaining Mortgage Loans and 

Acquired Property in its discretion. In the event the Initial Member undertakes to liquidate the 

remaining Mortgage Loans and Acquired Property pursuant to this Section 12.17(c), all costs and 

expenses incurred by it shall be deducted from the Mortgage Loan Proceeds and retained by the 

Initial Member and the remaining Mortgage Loan Proceeds shall be distributed in accordance with 

Section 9.2. 

12.18 Certain Transfer Obligations. Without limitation of other obligations of the 

Manager with respect to the Contribution Agreement, the Manager agrees to cause the Company 

to comply with its obligations under the Contribution Agreement with respect to preparing, 

furnishing, executing and recording transfer documents with respect to the Mortgage Loans 

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(including special warranty deeds to convey the real property subject to any Contract for Deed 

and any Acquired Property to the Company). Any title curative work with respect to such real 

property, ifrequired, shall be at the Company's sole cost and expense. 

ARTICLE XIII 


Miscellaneous 


13.1 Waiver of Rights of Partition and Dissolution. Each Member (other than the 

Initial Member) hereby irrevocably waives all rights it may have at any time to maintain any 

action for division or sale of the Company Property as now or hereafter permitted under any 

applicable Law. Each Member (other than the Initial Member) hereby waives and renounces its 

rights to seek a court decree of dissolution or to seek the appointment of a court receiver for the 

Company as now or hereafter permitted under any applicable Law. 

13.2 Entire A__.greement; Other Agreements. 

(a) This Agreement, together with the Annexes and Exhibits hereto and the 

Ancillary Documents (and any other agreements expressly contemplated hereby or thereby), 

constitutes the entire agreement and understanding, and supersedes all other prior agreements and 

understandings, both written and oral, between the Members or their respective Affiliates or any 

ofthem and the Company with respect to the subject matter hereof; provided, that any 

Confidentiality Agreement between the FDIC and the Private Owner or any Affiliates of the 

Private Owner (including by way ofjoinder) with respect to the transaction that is the subject of 

this Agreement and the Ancillary Documents shall remain in full force and effect to the extent 

provided therein, except that the Company's rights under Article VI ofthe Contribution 

Agreement shall not be deemed a repurchase option for purposes of Section 2 ofany such 

Confidentiality Agreement. The Members acknowledge that certain agreements or other 

instruments are being (or were) executed by the Company, the Members and/or Affiliates ofthe 

Members simultaneously or otherwise in connection with the execution ofthis Agreement and 

that notwithstanding anything to the contrary contained in the foregoing sentence ofthis 

Section 13.2. such agreements shall be effective and binding on the parties thereto in accordance 

with the terms thereof. 

(b) By executing this Agreement, the Manager agrees to be bound by the 

terms of the Ancillary Documents pursuant to which the Manager is expressly required to take or 

omit from taking certain actions, as in each case, with the same effect as ifthe Manager were a 

party to such Ancillary Document. 

13.3 Third Party Beneficiaries. Each of the FDIC and the Purchase Money Note · 

Guarantor, is hereby constituted an express third party beneficiary ofthis Agreement with 

respect to those provisions ofthis Agreement which expressly grant rights to such Person, and, 

as such, each is entitled to enforce such provisions ofthis Agreement as if such Person were a 

party hereto; provided that, upon occurrence ofthe Purchase Money Note MaturityDate (and 

subject to any rights ofthe Purchase Money Note Guarantor that, by their terms or nature, 

survive such date), the Purchase Money Note Guarantor shall cease to have any of the specified 

rights set forth herein with respect to consents/approvals, exercise remedies following an Event 

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ofDefault and receipt ofreports and other information with respect to the continued operation of 

the Business, in each case (i) to the extent relating exclusively to the period following such 

Purchase Money Note Maturity Date, and (ii) except as to imy rights or remedies relating to (or 

the exercise or non-exercise ofwhich rights or remedies would affect) the repayment ofthe 

Purchase Money Note in accordance with the terms hereof and ofthe Ancillary Documents, as 

determined by the Purchase Money Note Guarantor in its sole and absolute discretion. Each 

Person ceasing to constitute the "Initial Member" under this Agreement (as a result of a 

Disposition of its LLC Interest) shall remain a third-party beneficiary ofthis Agreement with 

respect to Section 4.6 and, as such is entitled to enforce Section 4.6 as if such Person remained a 

party hereto. For the avoidance of doubt, in furtherance and without limitation ofthe preceding 

sentence, each Person comprising the "Initial Member" pursuant to the last sentence of Section 

4.6(a) may enforce the provisions of Section 4.6 with respect to itself and/or any other 

Indemnified Party(ies) in relation to itself (in its own name and/or in the name of and/or 

otherwise on behalf of such other Indemnified Party(ies) ). Subject to Section 11.1 and to the 

immediately preceding sentence, (i) this Agreement is for the benefit solely of, and shall inure 

solely to the benefit of, the Members and the Company, and (ii) this Agreement is not 

enforceable by any Person (including any creditor ofthe Company or of any Member) other than 

the Members and the Company. 

13.4 Expenses. Except as may otherwise be expressly provided herein or in any 

Ancillary Document, each Member shall pay its own expenses (including legal, accounting 

investment banker, broker or finder's fees) incident to the negotiation and execution ofthis 

Agreement and the Ancillary Documents, the consummation ofthe transactions contemplated by 

Section 2.3 hereof and the performance of its obligations hereunder. 

13.5 Waivers and Amendments. 

(a) This Agreement may be amended or modified, and the terms hereof may 

be waived, only by a written instrument signed by all Members, provided, that, following an 

Event ofDefault, from time-to-time this Agreement may be amended or modified and/or the terms 

hereofmay be waived, in each case, by a written instrument signed only by the Initial Member as 

long as such amendment, modification or waiver would not (i) adversely affect the Private 

Owner's or the Company's limited liability status; (ii) adversely affect the Private Owner's share 

ofthe Company's distributions, income, gains or losses; (iii) impose on the Private Owner any 

additional obligations or (iv) amend Section 3.13 or this Section 13.5; provided further, that in no 

event shall any amendment, modification or waiver limit or otherwise adversely affect the rights 

expressly granted in this Agreement to (x) any Person comprising the "Initial Member" pursuant 

to the last sentence of Section 4.6(a) (and/or any other Indemnified Party(ies) in relation to such 

Person) without the express written consent of such Person so comprising the "Initial Member" or 

(y) a third party beneficiary ofthis Agreement (to the extent such third party beneficiary is, and 

remains, a third party beneficiary pursuant to Section 13.5 above) without the express written 

consent of such third party beneficiary. Except where a specific period for action or inaction is 

provided herein, no failure on the part of a Member to exercise, and no delay on the part of a 

Member in exercising, any right, power or privilege hereunder shall operate as a waiver thereof; 

nor shall any waiver on the part of such Member of any such right~ power or privilege, or any 

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single or partial exercise of any such right, power or privilege, preclude any other or further 

exercise thereof or the exercise of any other right, power or privilege. 

(b) Notwithstanding anything to contrary contained elsewhere in this 

Agreement (including without limitation the foregoing Section 13.5(a) or in any Ancillary 

Document, but subject to the restrictions in Section 8.4 ofthe Contribution Agreement and 

Section 2.8 ofthe Custodial and Paying Agency Agreement, as applicable), in order to facilitate 

the possible restructuring and or sale ofthe Purchase Money Note (or any reissuance, 

restructuring or sale of any such Purchase Money Note to be issued pursuant to Section 2.8 ofthe 

Custodial and Paying Agency Agreement), the FDIC, without the consent of the Private Owner or 

the Company, may at any time that the FDIC is the holder of 100 percent of any Purchase Money 

Note or beneficial interest therein cause the Company to replace or reissue the such Purchase 

Money Note (or any promissory note reissued in respect thereof) and make related changes, 

modifications or amendments to this Agreement and the Ancillary Documents, in each case 

subject to the applicable limitations set forth in Section 8.4 ofthe Contribution Agreement and 

Section 2.8 ofthe Custodial and Paying Agency Agreement, as the case may be; provided, 

however, no such change, amendment or modification shall adversely affect in any material 

respect (i) the amount or timing of any payments or distributions to the Private Owner or any 

permitted successor or assign pursuant to the Priority ofPayments (or its share of the Company's 

distributions, income, gains or losses in accordance herewith), or (ii) any other rights or 

obligations of, or the need for any advances, contributions or payments from, the Private Owner or 

its Affiliates or any permitted successor or assign pursuant to this Agreement or any Ancillary 

Document or otherwise. Prior to effecting any such changes, amendments or modifications, the 

FDIC shall notify each ofthe Private Owner and the Company of any such contemplated changes, 

amendments or modifications, and each ofthe Private Owner and the Company agrees that it will 

cooperate in good faith with the FDIC in effecting all such changes, amendments or 

modifications. 

(c) Notwithstanding anything to contrary contained elsewhere in this 

Agreement (including without limitation the foregoing Section 13.5(a) or in any Ancillary 

Document), this Agreement may be amended or modified by a written instrument signed only by 

the Initial Member to the extent determined by the Initial Member in good faith to be necessary or 

desirable in order to facilitate any Disposition by the Initial Member of only a portion of its 

Interest, or a Disposition by the Initial Member of its entire Interest to more than one Person, 

including to provide for more than two Persons being members of the Company, provided that no 

such amendment or modification shall (i) adversely affect the Private Owner's or the Company's 

limited liability status; (ii) adversely affect the Private Owner's share ofthe Company's 

distributions, income, gains or losses; (iii) impose on the Private Owner any additional obligations 

or (iv) amend Section 3.13 (other than to the extent that such amendment or modification amends 

or modifies which member or members ofthe Company shall constitute the "Initial Member" 

hereunder) or this Section 13.5. 

(d) Reasonable attorneys fees actually incurred in connection with the 

preparation of legal opinions and the review of certificates, closing documents and any 

amendments to this Agreement or any Ancillary Documents requested or required by the Initial 

Member or the Purchase Money Note Guarantor in connection with the replacement or reissuance 

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and sale ofthe Purchase Money Notes shall constitute Reimbursable Company Administrative 

Expenses. For the avoidance ofdoubt, no legal fees or expenses associated with changes, 

clarifications or amendments to documents requested by the Private Owner shall constitute 

Reimbursable Company Administrative Expenses. 

13.6 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 mail, postage prepaid, by delivery by 

hand or by nationally recognized courier service, or by electronic mail (followed up by a hard 

copy delivered through an alternate manner permitted under this Section 13.6), in each case 

mailed or delivered to the applicable address or electronic mail address specified in, or in the 

manner provided in, this Section 13.6. All such notices, requests, demands and other 

communications shall be deemed to be given or made upon the earlier to occur of (i) actual 

receipt (or refusal thereof) by the relevant party hereto and (ii) (A) if delivered by hand or by 

nationally recognized courier service, when signed for (or refused) by or on behalf of the 

relevant party hereto, and (B) if delivered by electronic mail (which form of delivery is subject to 

the provisions of this paragraph), when delivered and capable of being accessed from the 

recipient's office computer, provided that any notice, request, demand or other communication 

that is received other than during regular business hours of the recipient shall be deemed to have 

been given at the opening of business on the next business day of the recipient. In no event shall 

a voice mail message be effective as a notice, communication or confirmation hereunder. From 

time-to-time, any party may designate a new address for purposes of notice to it hereunder by 

notice to such effect to the other parties hereto in the manner set forth in this Section 13.6. 

If to the Company, to: 

2010-3 SFR Venture, LLC 


5032 Parkway Plaza Blvd. 


Charlotte, NC 28217 


with a copy to: 

Phillip Kardis, II 

K&L Gates LLP 

1601 K Street, NW 

W DC20006 

E-mail: 

Telephone 

Facsimile No. 

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If to the Initial Member, to: 

Assistant Director Structured Transactions 

c/o Federal Deposit Insurance Corporation 

550 17th Street, NW (Room F-7014) 

Washington, D.C. 20429-0002 

Attention: Ralph Malami 

Email Address: RMalami@fdic.gov 

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, VA 22226 

Attention: David Gearin 

Email Address: DGearin@fdic.gov 

If to the Private. Owner (including in its role as Manager and/or Tax Matter 

Member), to: 

SFR 201 0-3 Acquisition LLC 

5032 Parkway Plaza Blvd. 

Charlotte, NC 28217 

Attention: Peter ~cr1ancut:10 

with a copy to: 

Phillip Kardis, II 

K&L Gates LLP 

1601 K Street, NW 

W DC 20006 

13.7 Counter.parts: Facsimile Signatures. 

(a) This Agreement may be executed in any number of counterparts, each of 

which shall be an original and all ofwhich shall together constitute one and the same instrument. 

It shall not be necessary for any counterpart to bear the signature of all parties hereto. 

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(b) This Agreement and any amendments hereto, to the extent signed and 

delivered by facsimile or other electronic means, shall be treated in all manner and respects as an 

original agreement and shall be considered to have the same binding legal effect as if it were the 

original signed version thereof delivered in person. No signatory to this Agreement shall raise the 

use of a facsimile machine or other electronic means to deliver a signature or the fact that any 

signature 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. 

13.8 Successors and Assigns. Except as otherwise specifically provided in this 

Agreement (including in Article VIII), this Agreement shall be binding upon and inure to the 

benefit of the Members and the Company and their respective Successors and assigns. Without 

limitation of Section 8.4, this Agreement, as in effect on the date that any particular Person shall 

cease to be Member, shall continue to bind such Person in relation to the period during which it 

was Member. 

13.9 Compliance With Law; Severability. 

(a) Compliance With Law. Except as otherwise specifically provided herein, 

each party to this Agreement shall obey and comply with all applicable Laws, as they may pertain 

to such party's performance of its obligations hereunder. 

(b) Severability. Any provision ofthis 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 of the remaining provisions ofthis Agreement. Without limitation ofthe 

preceding sentence, it is the intent ofthe parties to this Agreement that in the event that in any 

court proceeding, such court determines that any provision ofthis Agreement is prohibited or 

unenforceable in any jurisdiction (because ofthe duration or scope (geographic or otherwise) of 

such provision, or for any qther 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 13.9(b) 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 of Section 13.11. 

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13.10 PowerofAttorney. 

(a) The Private Owner does hereby constitute and appoint the Manager as its 

true and lawful representative and attorney-in-fact, in its name, place and stead to make, execute, 

sign, acknowledge, deliver or file any certificate, document or other instrument that the Private 

Owner is required to execute and deliver pursuant to clause (a), (b), (c) or (d) ofSection 4.3 

hereof. The foregoing notwithstanding, the Manager shall not have any right, power or authority 

to amend or modify this Agreement. The power of attorney granted hereby is coupled with an 

interest andshall (i) survive and not be affected by the subsequent death, incapacity, disability, 

dissolution, termination or bankruptcy ofthe Private Owner granting the same or the transfer of all 

or any portion ofthe Private Owner's LLC Interest and (ii) extend to the Private Owner's 

Successors, assigns and legal representatives. 

(b) The Company hereby grants to the Manager a limited power of attorney to 

execute all documents on its behalf in accordance with the Servicing Standard set forth above and 

as may be necessary to effectuate the Manager's obligations under Article XII until such time as 

the Company revokes said limited power of attorney. Revocation ofthe limited power of attorney. 

shall take effect upon (i) the receipt by the Manager ofwritten notice thereof from the Initial 

Member, or (ii) removal ofthe Manager in accordance with the terms ofthis Agreement; 

provided, however, in the event of such removal, the power of attorney granted hereunder shall 

thereafter automatically be vested in the successor or replacement Manager appointed in 

accordance with this Agreement. 

13.11 Governing Law. TillS AGREEMENT IS GOVERNED BY AND SHALL BE 

CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE, 

EXCLUDING ANY CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT REFER 

THE GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW 

OF ANOTHER JURISDICTION. In the event of a direct conflict between the provisions ofthis 

Agreement and any mandatory, non-waivable provision of the Act, such provision of the Act 

shall control to the extent necessary to eliminate such direct conflict. Nothing in this Agreement 

shall require any unlawful action or inaction by any Person. 

13.12 Jurisdiction: Venue and Service. 

(a) Each ofthe Private Owner (for the avoidance of doubt, in any capacity, 

including as a Member and/or as the Manager) and the Company, in each case on behalf of itself 

and its Affiliates, hereby irrevocably and unconditionally: 

(i) consents to the jurisdiction ofthe United States District Court for 

the Southern District ofNew York and to the jurisdiction ofthe United States 

District Court for the District of Columbia for any suit, action or proceeding 

against it (in the case ofthe Private Owner and for the avoidance of doubt, in any 

capacity, including as a Member and/or as the Manager) or any of its Affiliates 

commenced by the Initial Member arising out of, relating to, or in connection 

with this Agreement or any Ancillary Document, and waives any right to: 

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(A) remove or transfer such suit, action or proceeding to any 

other court.or dispute-resolution forum (other than the Court in which the 

Initial Member files the action, suit or proceeding) without the consent of 

the Initial Member; 

(B) assert that venue is improper in either the United States 

District Court for the Southern District ofNew York or the United States 

District Court for the District of Columbia; or 

(C) assert that the United States District Court for the Southern 

District ofNew York or the United States District Court for the District of 

Columbia is an inconvenient forum. 

(ii) consents to the jurisdiction ofthe Chancery Court ofthe State of 

Delaware for any suit, action or proceeding against it (in the case ofthe Private 

Owner and for the avoidance of doubt, in any capacity, including as a Member 

and/or as the Manager) or any of its Affiliates commenced by the Initial Member 

arising out of, relating to, or in connection with this Agreement or any Ancillary 

Document, and waives any right to: 

(A) remove or transfer such suit, action or proceeding to any 

other court or dispute-resolution forum without the consent of the Initial 

Member); 

(B) assert that venue is improper in the Chancery Court of the 

State of Delaware; or 

(C) assert that the Chancery Court of the State of Delaware is 

an inconvenient forum. 

(iii) agrees to bring any suit, action or proceeding by it (in the case of 

the Private Owner and for the avoidance of doubt, in any capacity, including as a 

Member and/or as the Manager) or any of its Affiliates against the Initial Member 

arising out of, relating to, or in connection with this Agreement or any Ancillary 

Document in only the United States District Court for the Southern District of 

New York or the United States District Court for the District of Columbia, and 

waives any right to remove or transfer such suit, action or proceeding to any other 

court or dispute-resolution forum without the consent ofthe Initial Member, and 

agrees to consent thereafter to transfer ofthe suit, action or proceeding to either 

the United States District Court for the Southern District ofNew York or the 

United States District Court for the District ofColumbia at the option of the Initial 

Member; and 

(iv) agrees, ifthe United States District Court for the Southern District 

ofNew York and the United States District Court for the District of Columbia 

both lack jurisdiction to hear a suit, action or proceeding falling within 

Section 13.12(a)(iii), to bring that suit, action or proceeding in only the Chancery 

88 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
Court of the State of Delaware, and waives any right to remove or transfer such 

suit, action or proceeding to any other court or dispute-resolution forum without 

the consent ofthe Initial Member. 

(b) Each ofthe Private Owner (in anycapacity, including as a Member and/or 

as the Manager) and the Company, in each case on behalfofitselfand its Affiliates, hereby 

irrevocably and unconditionally agrees that any final judgment entered against it in any suit, 

action or proceeding falling within Section 13.12(a) may be enforced in any court of competent 

jurisdiction; 

(c) Subject to the provisions of Section 13.12(d), each ofthe Private Owner 

(in any capacity, including as a Member and/or as the Manager) and the Company, in each case on 

behalf ofitself and its Affiliates, and the Initial Member, hereby irrevocably and unconditionally 

agrees that service of all writs, process and summonses in any suit, action or proceeding pursuant 

to Section 13.12(a) or Section 13.12(b) may be effected by the mailing of copies thereof by 

registered or certified mail, postage prepaid, to it at its address for notices pursuant to Section 13.6 

(with copies to such other Persons as specified therein); provided, however, that nothing contained 

in this Section 13.12(c) shall affect the right of any party to serve process in any other manner 

permitted by Law; 

(d) Nothing in this Section 13.12 shall constitute consent to jurisdiction in any 

court by the FDIC (in any capacity, including as the Initial Member), other than as expressly 

provided in Section 13.12(a)(iii) and Section 13.12(a)(iv), or in any way limit the FDIC's (in any 

capacity, including as the Initial Member) right to remove, transfer, seek to dismiss, or otherwise 

respond to any suit, action, or proceeding against it (in any capacity, including as the Initial 

Member) in any forum. 

13.13 Waiver of Junr_ Trial. EACH OF THE PRIVATE OWNER AND THE 

COMPANY, FOR ITSELF AND ITS AFFILIATES, AND THE INITIAL MEMBER, HEREBY 

IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A 

TRIAL BY JURY OF ANY DISPUTE ARISING OUT OF OR RELATING TO THIS 

AGREEMENT OR THE ANCILLARY DOCUMENTS AND AGREES THAT ANY SUCH 

DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY. 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

89 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 
TN WITNESS WHEREOF. the parties have caused this Agreement to be executed by 

their respective officers or agents thereunto duly authorized on the date first above written. 

FEDERAL DEPOSI'J' INSURANCE CORPORATION, 

IN ITS SEPARATE CAPACffiES AS RECEIVER 

FOR EACH OF mE FAILED BANKS, as Initial 

Member 

By: 

Title: Attorney-in-Fact 

2010-3 SFR VENTURE, LLC 

By: 	 Federal Deposit Insurance Corporation, in its 

separate capacities as receiver for each of the Failed 

Banks 

By: 

Name: Ralph Malami 

Title: Attorney-in-Fact 

SFR 2010-3 ACQUISITION LLC, as Private Owner 

By: 	 RoundPoint SFR 2010-3 Acquisition LLC, its 

managing member 

By: 


Name: 


Title: 


FDIC 2010-3 

... mended and Restated l.tmitcd Liatnhty Company Opi:raltng Agreement 
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by 

their respective officers or agents thereunto duly authorized on the date first above written. 

FEDERAL DEPOSIT INSURANCE CORPORATION, 

IN ITS SEPARATE CAPACITIES AS RECEIVER 

FOR EACH OF THE FAILED BANKS, as Initial 

Member 

By: 

Name: Ralph Malami 

Title: Attorney-in-Fact 

2010-3 SFR VENTURE, LLC 

By: 	 Federal Deposit Insurance Corporation, in its 

separate capacities as receiver for each of.the Failed 

Banks 

By: 

Name: Ralph Malami 

Title: Attorney-in-Fact 

FDIC 2010-3 

Amended and Restated Limited Liability Company Operating Agreement 
Annex I 


Member Schedule 


Member Percentage Interests Capital Contributions 

Initial Member 60% $65,026,640.51 1 

Private Owner 40% $43,351,093.68:l 

1 Equal to the sum of(a) $63,330,799.00 (the value ofthe Initial Member's LLC Interest as ofthe Closing Date), (b) 

$791,632.50 (the Initial Member's Interest Reserve Account contribution) and (c) $904,209.01 (the Initial 

Member's Liquidity Account contribution). 

2 Equal to the sum of (a) $42,220,532.67 (the amount paid for Private Owners's LLC Interest), (b) $527,755.00 (the 

Private Owner's Interest Reserve Account contribution) and (c) $602,806.01 (the Private Owner's Liquidity 

Account contribution). 

Il-l 

FDIC SFR2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 11129/2010 9:08PM 
EXHIBIT A 

FORM OF 

CERTIFICATE OF FORMATION 


OF 


2010-3 SFR VENTURE, LLC 


Pursuant to and in accordance with the provisions of Section 18-201 of the 

Delaware Limited Liability Company Act, the undersigned hereby certifies that: 

FIRST, the name of the limited liability company is 2010-3 SFR VENTURE, 

LLC (the "Company"). 

SECOND, the address of the registered office of the Company in the State of 

Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of 

New Castle. The name of the registered agent at such address is The Corporation Trust 

Company. 

IN WITNESS WHEREOF, the undersigned has executed this Certificate of 

Formation of the Company on this[_] day of[ ], 2010. 

By: _____________________________ 

Name: [ 1 

Title: Authorized Person 

A-1 


FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 11129/2010 9:08PM 
EXHIBIT B 


INFORMATION; FORM OF MONTHLY REPORT 


[Attached] 

B-1 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 11/30/2010 12:58 PM 
CASHFLOW AND DISTRIBUTION REPORT 

[insert date] 

COLLECTIONS 

( +) Pnncipal collections 

(+) ·Interest collections 

(+) .Loan sale proceeds, including short sales 

(+) .Mortgage insurance claim proceeds 

(+) REO liquidation proceeds 

(+) Servicing Expenses Recovered 

( +) ·Other Loan Proceeds (including late fees and penalties) 

(+) :Any payments made pursuant to Article VI of the Reimbursement 

.and Security Agreement 

(+) Indemnity Payments made under Custodial Agreement 

(+) Interest and earnings from Collection Account 

GROSS COLLECTIONS 

(+) 

(+) 

(+) 

·Otheu1eDosits to Collection AcCOunt 

Transferred from Liquidity Account to pay Operating Expenses 

Excess Liquidity Advances made by Manager 

Excess Interest Reserve Amount- required release of funds from Interest Reserve 

Account 

(+) Transferred from the Interest Reserve Account for PMN interest shortfall or Guaranty 

payment 

GROSS FUNDS AVAILABLE 

(-) 

(-) 

(-) 

(-) 

·Less authorized disbursements from Collection Account 

Servicing Expenses paid 

Pre-Approved Charges 

Funding Draws 

Reimbursement of Excess Liquidity Advances made by Manager 

NET FUNDS AVAILABLE 

Required Liquidity Account release to/( replenishment from) the Collection Account, 

on Business Day immediately preceding the Distribution Date 

FUNDS DUE TO DISTRIBUTION ACCOUNT 

Distributions pursuant to Priority ofPayments In the Custodial Agreement 

.Custodian and Paying Agent Fees and Expenses (and any indemnity 

payments under Section 13.1 (a) of Custodial Agreement) 

·Interim Servicing Fee to Initial Member 

Interim Management Fee to Manager 

:Management Fee to Manag~r 

Purchase Money Note Guaranty Fee 

·Interest due on Purchase Money Note 

·Reimbursement due Note Guarantor 

Interest Reserve Account Deposit Amount 

Principal due on Purchase Money Note 

. TOTAL DISTRIBUTIONS DUE 

(1) 

(1) 

(2) 

(3) 

(3) 

NET DISTRIBUTABLE CASH TO MEMBERS (if positive) $ 
CASHFLOW AND DISTRIBUTION REPORT 

DISTRIBUTION TO MEMBERS 

Distribution to Initial Member (pro rata at respective LLC interest) $ - .. Distribution to Private Owner (pro rata at respective LLC interest) - TOTAL DISTRIBUTIONS TO MEMBERS $ -

INTERIM SERVICING FEE CALCULATION 

Adjusted UPB, begmning of Due Period (with respect to each Mortgage Loan for 

which the Servicing Transfer Date has not occurred as of first day in Due Period} 

:Times Interim servicing fee rate 

Times number of days in Due Period/360 

$ -

0.25% 

- Interim Servicing Fee due to Initial Member $ -

INTERIM MANAGEMENT FEE CALCULATION 

Adjusted UPB. beginning of Due Period (with respect to each Mortgage Loan for 

which the Servicing lransfer Date has not occurred as of first day in Due Period) 

Times Management Fee rate 

Times number of days in Due Period/360 

Interim Management Fee calculation 

Less: Interim Servicing Fee to Initial Member 

Interim Management Fee due to Manager $ 

0.50% 

-

-

-

-

MANAGEMENT FEE_CALCULA TION 

Adjusted UPB, as of first day of Due Period (with respect to each Mortgage Loan for 

which the Servicing Transfer Date has occurred as of first day in Due Period) $ - . Times Management Fee rate 0.50% 

Times number of days in Due Period/360 - Management Fee due to Manager $ -

(1) Applicable only to the Interim Servicing Period with respect to each Mortgage Loan. Includes any deferred 

and unpaid fees from previous Due Periods. 

(2) Applicable to Due Periods following the Interim Servicing Period with respect to each Mortgage Loan. 

Includes any deferred and unpaid fees from previous Due Periods. 

(3) Applicable only if Purchase Money Notes are guaranteed by FDIC Corporate at some. later date. 

ALLOCATION OF INTEREST AND PRINCIPAL PRQCEEDS 

Part 1- Calculation of amount ~'{.able for items In Section 5.1£bl£1! through £vill of 


the Custodial Agreement 


Gross Collections $ ­ Less Principal collections ­ . Less Loan Sale proceeds, including short sales ­ . Less Mortgage insurance claim pro~eds ­ . Less .REO liquiclation pro~eds ­ . Excess Liquidity Advan~s made.by.. Manag.er ­ Required Liquidity Account release (on Business Day prior to Distribution Date) .. ­ Transferred from Interest Reserve Account ­ Interest Proceeds available ­

Items PaY!!ble first from Inter§§! Proceeds, then Princi11al Proceeds 

Payable pursuant to Section 3. 1 of the Custodial Agreement: 

Servic1ng Expenses - Pre-Approved Charges - Excess Liquidity Advances made by Manager - On Business day prior to Distribution Date: 

Re_g_uired Liquidity Account replenishment -
CASHFLOW AND DISTRIBUTION REPORT 

Payable pursuant to Section 5.1(b) of the Custodial Agreement: 

Custodian and Pay1ng Agent Fees 

Interim SeNic~ng Fee to Initial Member 

Interim Management Fee to Manager 

Management Fee to Manager 

.Purchase Money Note Guaranty Fee 

Interest due on Purchase Money Note 

Reimbursement due Note Guarantor 

Interest Rese!Ve Account Deposit Amount 

· Subtotal, amounts due from t"nterest Proceeds 

Excess (Shortfalf) before Recategorized Interest Proceeds 

Less: Recategorized Interest Proceeds with respect to Prior Distribution Dates (up 

to amount of Excess Interest on previous row) 

Remaining Interest Proceeds $ 

Part II· Allocation 

Pnncipal collections on loans 

. Loan Sale proceeds, including short sales $ 

Mortgage insurance claim proceeds 

REO liquidation proceeds 

Less Funding Draws 

Principal Proceeds Available 

(-) Shortfall in Interest Proceeds for current Due Period (current period Recategorized 

Interest Proceeds) 

(+) Recategorized Interest Proceeds, with respect to any prior Distribution Date 

Net Pnncipal Proceeds for Allocation (not less than zero) ;:;.$______ 

Principal due on Purchase Money Note, until Notes reduced to zero · · .... $--~---

Recategorlzed Interest Proceeds 

. Recategorized Interest Proceeds, with respect to any prior Distribution Date $ 

(·) Excess Interest Proceeds for current Due Period, up to amount of Recategorized 

Interest Proceeds 

(+) Interest Shortfall for current Due Period, up to amount of Principal Proceeds 

Available 

Recategorized Interest Proceeds after this Distribution $ 
LOAN AND REO MONTHLY ROLLFORWARD REPORT 

{Insert Month and Year} 

For the Period from 

[Insert Date Range) 

LOANS #ASSETS AMOUNT 

Unpaid principal balance, [insert date) $ 


(-) Payments received (regular and curtailments) 


(-) Paid-in-fullloans 


(-) :Short sale proceeds 


(~) :Mortgage insurance proceeds 


(-) UPB, transfers to REO 


(+) Balance capitalized on loan modifications 


(+) Commitments funded 

(-) Principal charge-offs 

Unpaid principal balance, [insert date) $ 

REO #ASSETS AMOUNT 

UPB of REO properties, [insert date) $ 

(+) UPB on REO transfers in 

(+) Capitalized post-acquisition costs 

(-) Net liquidation proceeds 

(+/-)·Realized Gain (losses) 

UPB of REO properties, [insert date) $ (1) 

Total Assets, end of Due Period ---- $ 

(1) With respect to Acquired Property (REO), the Unpaid Principal Balance (UPB) is equal to 

the Net Fair Value (estimated sales price less cost to sell) of the Acquired Property, per the 

A reement of Common Definitions. 
SERVICING EXPENSES 

Monthly Roll Forward 

[insert dote] 

Balance, [insert datej $ 

Escrow 

Advance§ 

$ 

Other 

Recoverable 

Servicing 

Advan!;es 

$ 

(1) 

Total 

Recoverable 

Servicing 

Advan!<eS 

Non-Recoverable 

!;;~Denses Pa~ 

Total 

Servicing 

EXR!!!!!! P!i~ 

(+) 

(·) 

Payments/Advances 

Advance Recovenes 

$ 

. Balance, (tnsert date} $ 

(2) 

$ 

(2) 

$ 

(1) 	 Servicing Expenses. as defined in the LLC Operating Agreement, are authorized to be patd by 

withdrawal of funds from the Collection Account. For reporting purposes, Servicing Expenses 

may be broken out fnto additional and/or different fields at the discretion of the Manager. sufficient 

.to determine the appropriateness of the payments under the defimt1on of Servicing Expenses. 

(2) 	·Loan servicing system should include fields to capture and report balances in each category, 

and the category totals should agree to asset-level detail tapes provided by the Manager 

·as of each month-end.· · · 
LIQUIDITY ACCOUNT 

Monthly Roll Forward 


[insert date] 


Balance after activity for previous Due Period 	 $ 

(+) . Interest and earnings on Liquidity Account 

Transfers to Collection Account: 

H .Payment of Operating Expenses 	 (1) 

(-) Release of excess funds at the time of the Final Distribution 


Balance, as of the Determination Date 


(+/-) 	Replenishment (release) of Liquidity Account from/(to) Collection 


Account (on the Business Day immediately prior to the Distribution 


Date) 


Balance, after replenishment (release) for current Due Period .$ 

(1) Operating Expenses means any Servicing Expenses or Pre-Approved Charges. 

Liquidity Account Cap 

UPB of the Mortgage Loans as of the Determination Date (last day 

~~~~) $ 

Times 0.25% 0.25% 

Liquidity Account Cap $ 

Calcu!atlon of Required Llguidi!I Ac!(ount Replenishment (Releasel 

. Liquidity Account Cap $ 


Liquidity Account Balance prior to replenishment (release) 


Required Liquidity Account replenishment (release) $ 

EXCESS LIQUIDITY ADVANCES 

· Monthly Roll Forward 

[Insert date] 

Balance, after activity for previous Due Period 

·Advanced by Manager to Collection Account for 

.payments: 

(+), Servicing Expenses 

(+). Pre-Approved Charges 

(-) Reimbursements from Cash Flow 

Balance, after activity for current Due Period 

$ 

..;.$_____ 

Special Reserve Account 

Monthly Roll Forward 

[Insert date] 

. Balance, beginning of Due Period 

(+). Procee~s from draw on Letter of Credit 

(-) Payment of expenses in connection with Event 

of Default 

Balance, end of Due Period 

$ 

$ 

Funding Draws 

Monthly Report 

[insert date] 

·Loan Number I Purpose of Funding Draw 

$ 

Amount of 

Funding Draw 

Current 

UPB 

Unfunded 

Commitment 

Date of 

Draw 

Total Funding Draws for current Due Period $ 
ADDITIONAL SECURITY REPORT 

[insert date] 

Amount ofAddltlonal Security (in each case as of the end of the Due Period) 

Undrawn Amount under Qualifying Letters of Credit: $ 

[and/or] 

Balance in Private Owner Pledged Account $ 

Additional Security amount equal to or in excess of $_____? YES/NO 

In the event of any Additional Security consisting of a Qualifying Letter of 

Cred.it, for each such Qualifying Letter of Credit: 


A Capital category of Issuing Bank as of the end of the Due Period 


pursuant to the standards in 12 U.S.C. § 1831o {b)(1), or applicable 


replacement legislation: 


B. Is such Issuing Bank a Qualified Issuer? YES/NO 
PURCHASE MONEY NOTE 

Monthly Roll Forward 

[insert date] 

.Purchase Monex Note MonthiX Roll 

(+) Note balance, previous Distnbution Date 

(·) Principal payments from current distributions 

' 

Note· NG 

Maturity [insert ~ate) 

$ . 

-

Purchase Money Note balance, as of current Distribution Date $ . 

Calculation of Interest Due on Purchase Monex Note 

Purchase Money Note balance on Determination Date $ . 

Interest Rate 

Accrual Period (#days), 30/360 basis 

[insert rate) 

Interest due on Purchase Money Note $ -

(+) 

{+) 

(+) 

Interest Reserve Account MonthlY Roll 

Balance after activity for previous Due Period 

Deposit from Initial Member at clos1ng 

Deposit from Private OWner at closing 

Interest and earnings on Interest Reserve Account 

Balance, as of Determination Date 

$ . 

. 

. 

. 

. 

(+) 

(-) 

(-) 

(-) 

Interest Reserve Deposit Amount from current distributions 

Excess Interest Reserve Amount • release to Collection Account 

Interest payment shortfall due on Purchase Money Notes 

Reimbursement due Note Guarantor 

. 

-

. 

. 

. Balance, after activity for current Due Period $ . 

Calc!J!Iatlon of Interest Rese!')!e Deeoslt Amount 

..PMN balance as of the last day of the Due Period 

. Times Purchase Money Note Interest Rate 

Interest Reserve Target [A} 

$ 

$ 

. 

[insert rate] 

-

Interest Reserve Account Balance as of the Determination Date 

Required Interest Reserve Account replenishment (release) 

(B) 

[AJ· [BJ $ 

-

. 

Interest Reserve Deposit Amount • replenishment pursuant to cash 

waterfall, on Distribution Date 

Excess Interest Reserve Amount - release to Collection Account 

$ 

$ 

. 

. 

AQ,I1,1/cable onl't, if Purchase Mone't. Note§. are guaranteed b'l, FDIC Comorate at SQme later date 

Calculation of Note Guarantv Fee 

Purchase Money Note balance on Determination Date $ 

Purchase Money Note Guaranty Fee Rate 

Times 1/12 

:Note Guaranty Fee due. ;ji 

. 

1% 

1/12 

. 

(+): 

Note Guarantor Payments 

Balance, beginning of Due Period 

(+) Draws, current month 

(-) Repayments, current month 

Balance end of Due Period 

$ 

$ 

. 

. 

. 

. 
INCENTIVE THRESHOLD TRACKING REPORT 

{insert date] 

Aggregate Cash Distributions to Private Owner, as of preceding Distribution Date $ ­ {+) Current month distribution to Private Owner pursuant to Priority of Payments ­

Aggregate Cash Distributions to Private Owner, as of the current Distribution Date 	 $ .

Incentive Threshold Base Amount 

Transferred LLC Interest Sale Price . 

Required Special Reserve Amount [Pre-funded option] . 

$ .

INCENTIVE THRESHOLD EVENT 

Occurs as of a Distribution Date if: 

(a) 	.the aggregate distributions made to the Private Owner pursuant to the Priority of 

Payments are equal to or greater than 2 times the Incentive Threshold Base Amount and 

(b) :the Incentive Threshold as of such Distribution Date is equal to zero. 

Aggregate cash distributions to Private Owner $ ­ Incentive Threshold Base Amount * 2 ­

Distributions Remaining . to Incentive Threshold Event 	 $ 

Incentive Threshold, as of the preceding Distribution Date $ . (+) Threshold Increase Amount (1 .8769% per month) . 

(.) Current distributions to Private Owner pursuant to the Priority of Payments . 

Incentive Threshold, as of the current Distribution Date 	 $ ­

Incentive Threshold Event met? 	 YIN 
OTHER REPORTS 

Withdrawals from Collection Account 

Manager hereby certifies that all withdrawals by the Manager from the Collection Account during the 

relevant Due Period were made in accordance with the terms of the Amended and Restated Limited 

Liability Company Operating Agreement and the Custodial Agreement: YIN 

Delinquency Report 

# and $ by delinquency classification: Current, 30-59 days, 60-89 days, 90+ days, in foreclosure, in 

bankruptcy, REO 

Breakout of> 60 day delinquencies by collateral type,# and$ 

Breakout of> 60 day delinquencies by state, # and $ 

REO Report 

Listing of REO properties held to include original loan number, date of ownership, description, collateral 

type, address, UPB (of the loan prior to foreclosure), net book value, listing date, estimated sale date, 

appraisal amount, original list price. current list price, cumulative Servicing Expenses allocable. broker 

name. and comments 

Modification Report 

Listing of loans modified. to include borrower name, loan balance and terms before modification, Joan 

balance and terms after modification. Show amounts of principal forgiven, ifany, and principal 

forbearance amounts, if any. 

Liquidation Report 

Listing of loans and REO properties liquidated, to include borrower name, UPB, net liquidation proceeds, . 

cumulative Servicing Expenses, realized loss amount 

Short Sale Report 

Listing of loans for which short sales were accepted, to include borrower name, UPB. payoff accepted, 

realized loss amount 

Judgment Report 

Listing of Judgments obtained, to include borrower name, Judgment amount, current month and 

cumulative payments received, remaining balance 
OTHER REPORTS 

Significant Litigation Report 

Company and/or Servicer with respect to assets subject to this Agreement, the actions taken to defend 

such claim, and an estimate of the projected exposure for: a) any claim in which the Company or Servicer 

expects to incur more than $10,000 in Servicing Expenses to defend such claim, b) any claim in which 

multiple plaintiffs have joined in filing an action against the Company and/or Servicer or the same law 

firm has filed individual claims on behalf of more than one plaintiff, and c) any claim(s) regardless of the 

dollar amount naming: (i) any Failed Bank, or (ii) FDIC (in any capacity) as defendant(s). Activity 

should be updated quarterly. 

Environmental Exposure Report 

Provide a report identifYing any assets in which the Site Assessment identified an Environmental Hazard 

together with information on the nature of the hazard, additional tests performed, and the cost of 

correc.ting the hazard identified in the Site Assessment. 

Bank Statements 

For accounts held at the Custodian, provide bank statements showing activity and ending balance for the 

current Due Period. 

MONTHLY LOAN-LEVEL DETAIL REPORTS 

Monthly Loan Trial Balance and Activity Report 

PROVIDE A MONTHLY LOAN-LEVEL REPORT 


IN EXCEL WITH THE FOLLOWING FIELDS: 


Current Loan Number 


Prior Servicer Loan Number 


P&l Constant 


Note Rate 


Next Due or Paid-Thru Date 


Payoff Date (if applicable) 


Principal Balance, end of prior month 


Principal collections - regular 


Principal collections - payoffs 


Principal proceeds - loan sales 


Principal Write-Off Amount 


Other Non-Cash Principal Adjustment 


Transfer to REO 


Principal Balance, end of current month 


Escrow balance 


Other Advances Balance 

Interest collections - regular 

Interest collections - payoffs 

·Interest collections - loan sales 
OTHER REPORTS 

Non-Cash Interest Adjustment 


Late Charges 


Pre-Payment Penalty Paid 


Other Fee Income 


Servicing Svstem Data Download- To Initial Member 

Provide a monthly loan-level data download using the LLC data specification and template published by 


the FDIC for LLC reporting. This specification and template may be modified from time to time by the 


Initial Member. 


The LLC data specification and template may be accessed at the following link: 


http://www.fdic.gov/banklindividual/failed/lossshare/index LLC v1.0.html 

SEMIANNUAL REPORT- TO INITIAL MEMBER (in January and July ofeach year, commencing 

January 2011) 

Projected Cash Flows 

Excel model of projected cash flows by month, as of June 30 and December 31 of each year, in format 

substantially consistent with the Cashtlow and Distribution Report included in this Monthly Report. 

ANNUAL REPORT- TO INITIAL MEMBER (in April ofeach year, commencing April 2011) 

Business Plan 

Updated Business Plan. as required pursuant to Section 7. 7 of the Amended and Restated Limited 

Liability Company Agreement. 

AS AVAILABLE- TO INITIAL MEMBER 

Custodial Report or an updated Loan Schedule and Exception List (in each case as defined in the 

Custodial Agreement) from the Custodian/Paying Agent, as provided to the Company. 
EXHIBITC 

FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT 

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement") is 

made and entered into as of L_] by and between [_j, a [_j ("Transferor"), and [_j, 

a [_j ("Transferee"). 

RECITALS 

WHEREAS, the Transferor, is the owner of a limited liability company membership 

interest (the "LLC Interest") in 2010-3 SFR Venture, LLC, a Delaware limited liability 

company (the "Company"); 

WHEREAS, the LLC Interest represents a [_] percent ([_j%) "Percentage 

Interest" in the Company (as defined in that certain Amended and Restated Limited Liability 

Company Operating Agreement, effective as of[_], 2010, by and among the Federal Deposit 

Insurance Corporation, in its capacity as receiver for the Failed Banks defined therein (the 

"Initial Member"), Transferor and the Company (the "LLC O~ting Agreement")); 

WHEREAS, the ownership and other rights associated with the LLC Interest are set forth 

in the LLC Operating Agreement; 

WHEREAS, pursuant to Section 3.13 of the LLC Operating Agreement, Transferor 

granted the Initial Member a first priority security interest in the LLC Interest in order to secure 

certain obligations of Transferor as more fully described in the LLC Operating Agreement; 

WHEREAS, an Event of Default (as defined in the LLC Operating Agreement) has 

occurred and is continuing, and the Initial Member has elected, pursuant to the LLC Operating 

Agreement, to foreclose on its security interest in the LLC Interest and effect the assignment 

contemplated hereby; 

NOW THEREFORE, in consideration of the mutual agreements contained herein and in 

the LLC Operating Agreement, and for other good and valuable consideration, the receipt and 

sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the 

parties hereto agree as follows: 

1. Assignment and AssumJrtion. Transferor hereby assigns and transfers the LLC 

Interest to Transferee, and Transferee hereby accepts and assumes the LLC Interest and agrees to 

be bound by the LLC Operating Agreement, as amended from time-to-time, to the extent it 

relates to such LLC Interest. 

2. Counterparts. This Agreement may be executed in two or more counterparts, all 

ofwhich shall be considered one and the same agreement and shall become effective when one 

C-1 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 11/29/2010 9:08PM 
or more counterparts have been signed by each of the parties and delivered (including by 

telecopy) to the other party. 

3. No Third Party Beneficiaries. This Agreement shall inure to the benefit of the 

parties hereto and their respective successors and permitted assigns. This Agreement is not 

intended to confer upon any other person any rights or remedies hereunder. 

4. Governing Law. The laws of the State of Delaware will govern the validity, 

performance and enforcement of this Agreement, without giving effect to the principles of 

conflict of laws of the State of Delaware or any other jurisdiction. 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement 

effective as of the date first above written. 

TRANSFEROR: 

[__] 

By:[__] 

Name:[__] 

Title:[__] 

TRANSFEREE: 

[__] 

By:[__] 

Name:[_] 

Title:[__] 

C-2 


FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 I l/29/2010 9:08PM 
-----

----------

FORM OF LETTER OF CREDIT 


(Bank Letterhead Stationery) 


Federal Deposit Insurance Corporation, in its capacity as Initial Member (as defined below) 


[Manager, Capital Markets & Resolutions 


c/o Federal Deposit Insurance Corporation 


550 17th Street, NW (Room F-7014) 


Washington, D.C. 20429-0002 


Attention: [ ] 


Email Address: 


Tel: ____ 


Fax: 
------' 

RE: Irrevocable Transferable Letter ofCredit No. for 

U.S.$ , Dated 

Gentlemen: 

We hereby issue our irrevocable transferable Letter ofCredit No.-------­

(this "Letter of Credit") in favor ofFederal Deposit Insurance Corporation (in any capacity, the 

"FDIC"), as receiver for the Failed Banks identified in the LLC Operating Agreement defined 

below, as the Initial Member under such LLC Operating Agreement (including its successors, 

and its assigns as provided herein, the "Initial Member"), for the account of[_________, 

(the "Private Owner"). 

This Letter of Credit is issued pursuant to the Amended and Restated Limited Liability 

Company Operating Agreement dated as of , 2010 (as amended or otherwise 

modified from time-to-time, the "LLC Operating Agreement"), by and among , LLC 

(the "Company"), the Private Owner and the Initial Member. 

We undertake to honor from time-to-time your draft or drafts presented to us in 

accordance herewith not exceeding in the aggregate U.S. Dollars 

(U.S.$ . All drafts hereunder (i) must be marked "Drawn under irrevocable 

transferable Letter of Credit No. , dated ", (ii) must be 

accompanied by a typewritten statement signed by a purportedly authorized representative of the 

Initial Member stating that an "Event ofDefault" or "LC Reissuance/Extension Failure" has 

occurred under (and as defined in) the LLC Operating Agreement, and (iii) shall, unless payment 

is to be made at sight, include the wire transfer instructions for remittance by us ofthe amount of 

such draft. 

Presentation of drafts drawn hereunder, together with the required statement and 

applicable wire transfer instructions, may be made at any time on or before the expiry date 

hereof(i) by physical presentation ofsuch draft at, or overnight delivery ofsuch draft to, our 

offices located at [include address in New York City or 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 11/29/2010 9:08PM 
Washington, D.C.], [or (ii) by telecopier (at telecopier number L_) ___ 

Attention: ,] without further need of documentation. Presentation having been so made 

at or before 12:00 noon (New York, New York time) on anyday other than a Saturday, Sunday 

or other day on 'Vhich all commercial banks in [New York, New York/ Washington, D.C.] are 

authorized or required by law to be closed ("Banking Day") shall result in payment to the Initial 

Member in accordance herewith on the same date. Drafts presented after 12:00 noon (New 

York, New York time) or on any day other than a Banking Day, shall result in payment to the 

Initial Member in accordance herewith on the next Banking Day. 

This Letter ofCredit shall expire at 5:00p.m. (New York, New York time) on the date 

that occurs one year after the date hereof; provided, however, that this Letter of Credit will 

automatically extend without amendment for additional periods of one year each (in each case 

commencing from the expiry date hereof as then in effect), unless we elect not to renew this 

Letter ofCredit and deliver to the Initial Member written notice of such election at least sixty 

(60) days prior to any such expiry date. Any such notice shall be in writing and shall be 

delivered in hand with receipt acknowledged, or by certified mail (return receipt requested), to 

the Initial Member at its address set forth above (or to such other address for any such notices 

which the Initial Member may hereafter specify in a written notice delivered to the undersigned)._ 

Partial and multiple drafts are permitted, and the amount ofthis Letter of Credit will be 

reduced by each such draft honored. 

All our charges (inCluding wire transfer fees in connection with any payments by us 

hereunder) are for the account of the Private Owner, and in no event shall any such charges 

reduce the amount of any draft or payment hereunder.· 

We agree that we shall have no duty or right to inquire as to the basis upon which the 

Initial Member has determined to present to us any draft under this Letter of Credit. We hereby 

waive any defense based upon any allegation of fraud. 

This Letter of Credit is transferable to any transferee who has succeeded you as the Initial 

Member under the LLC Operating Agreement, and may be successively transferred. Any transfer 

request must be effected by presenting to us the attached form of Attachment I signed by the 

transferor and the transferee together with the original Letter ofCredit. Upon our endorsement 

of such transfer, the transferee instead of the transferor shall, without necessity of further action, 

be entitled to all the benefits of and rights under this Letter of Credit in the transferor's place; 

provided that, in such case, any drafts ofthe Initial Member to be provided hereunder shall be 

signed by one who states therein that he is a duly authorized officer or agent of the transferee. 

Except as otherwise expressly stated herein, this Letter of Credit is subject to the 

International Standby Practices, International Chamber of Commerce Publication No. 590, 

including any amendments, modifications or revisions thereof (the "ISP 98"). As to matters not 

covered by the ISP 98, and to the extent not inconsistent with the ISP 98, this Letter of Credit 

shall be governed by and construed in accordance with the laws ofthe State ofNew York, 

D-2 

FDIC SFR 20 I 0-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 11/29/2010 9:08PM 
---------------------

----------------------

including without limitation the Uniform Commercial Code as in effect in the State ofNew 

York, without regard to principals of conflict of laws. 

All of the terms and conditions ofthis Letter of Credit are contained herein and shall not 

be altered except by reduction in the amount ofthis Letter ofCredit due to corresponding 

payments in like amount in compliance with the aforementioned terms. Except as otherwise 

expressly set forth herein, there are no conditions to this Letter ofCredit. 

Very truly yours, 

By: 

Name: 

Title: 

D-3 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 11/29/2010 9:08PM 
ATTACHMENT I TO LETTER OF CREDIT 


REQUEST FOR TRANSFER 

[Insert Bank Name and Address] 

RE: Irrevocable Transferable Letter of Credit No. [,_____.] for 

U.S.$[ ], Dated[. _________, 

Gentlemen: 

Reference is made to that certain irrevocable transferable Letter of Credit No . 

..__________., dated (the "Letter of Credit"), issued by you in favor of 

.______,] (the "Transferor"), for the account of [ ] (the "Private Owner"). 

The Transferor has transferred and assigned (and hereby confirms to you said transfer and 

assignment) all of its rights in and under the Letter ofCredit to [name ofTransferee] (the 

"Transferee") and confirms that the Transferor no longer has any rights under or interest in the 

Letter of Credit. 

The Letter of Credit is returned herewith and we request that you issue an irrevocable 

transferable letter of credit in the name ofthe Transferee and providing for notices to be sent to 

the Transferee at the address set forth below and in all other respects identical to the Letter of 

Credit. 

Transferee hereby certifies that it is a duly authorized transferee under the terms of the Letter of 

Credit and is accordingly entitled, upon presentation ofthe drafts (and applicable items) called 

for therein, to receive payment thereunder. 

Notices under the Letter of Credit should be sent to the Transferee as follows: [Name], 

[Address], [Attention: ], Email: [ ], Fax: ], Tel: [ ]. 

[NAME OF TRANSFEROR] 

By____________________ 


[Name and Title of Authorized 


Representative of Transferor] 


[NAME OF TRANSFEREE] 

By_______________ 


[Name and Title of Authorized 


Representative ofTransferee] 


D-4 

FDIC SFR 2010-3 (Final) 

A&R Limited Liability Company Operating Agreement 

Pool Nos. 24020 and 24021 

13235439.7 11/29/2010 9:08PM