Multibank Structured Transaction 2009-1 RES-ADC 

Execution Version 

REIMBURSEMENT, SECURITY AND GUARANTY AGREEMENT 

BY AND AMONG 

MULTIBANK 2009-1 RES-ADC VENTURE, LLC, 

EACH OTHER GRANTOR FROM TIME TO TIME PARTY HERETO, 

FEDERAL DEPOSIT INSURANCE CORPORATION,
 

IN ITS CORPORATE CAPACITY AS PURCHASE MONEY NOTES GUARANTOR,
 

FEDERAL DEPOSIT INSURANCE CORPORATION, 

AS RECEIVER FOR VARIOUS FAILED FINANCIAL INSTITUTIONS LISTED ON 

SCHEDULE 1 HERETO, 

AS COLLATERAL AGENT,
 

AND 

FEDERAL DEPOSIT INSURANCE CORPORATION, 

AS RECEIVER FOR VARIOUS FAILED FINANCIAL INSTITUTIONS LISTED ON 

SCHEDULE 1 HERETO, 

AS INITIAL MEMBER 

Dated as of February 9, 2010 

Multibank Structured Transaction 2009-1 RES-ADC 

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TABLE OF CONTENTS
 
 

ARTICLE I Definitions ...................................................................................................... 2 

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

Section 1.2 Other Interpretive Provisions.................................................................... 15 

ARTICLE II Reimbursement............................................................................................ 16 

Section 2.1 Reimbursement ......................................................................................... 16 

Section 2.2 Obligations Absolute ................................................................................ 17 

ARTICLE III Security Interest ......................................................................................... 17 

Section 3.1 Granting of Security Interest..................................................................... 17 

Section 3.2 Underlying Loan Defaults; Acquisition of Collateral............................... 19 

Section 3.3 Continuing Security Interest ..................................................................... 20 

Section 3.4 Destruction of Collateral........................................................................... 21 

Section 3.5 Releases of Underlying Collateral ............................................................ 21 

Section 3.6 Financing Statements ................................................................................ 21 

Section 3.7 Power of Attorney..................................................................................... 21 

ARTICLE IV Events of Default ....................................................................................... 22 

Section 4.1 Events of Default ...................................................................................... 22 

ARTICLE V Remedies 24 

Section 5.1 Remedies................................................................................................... 24 

Section 5.2 Application of Proceeds............................................................................ 26 

Section 5.3 Sale of Collateral....................................................................................... 26 

Section 5.4 No Impairment of Action .......................................................................... 27 

Section 5.5 Remedies Cumulative; Waiver ................................................................. 27 

Section 5.6 Waiver of Certain Rights and Remedies................................................... 27 

ARTICLE VI Guaranty28 

Section 6.1 Guaranty.................................................................................................... 28 

Section 6.2 Right of Contribution................................................................................ 28 

Section 6.3 No Subrogation ......................................................................................... 29 

Section 6.4 Amendments, etc. with Respect to the Secured Obligations .................... 29 

Section 6.5 Guaranty Absolute and Unconditional...................................................... 29 

Section 6.6 Reinstatement............................................................................................ 30 

Section 6.7 Payments ................................................................................................... 30 

Section 6.8 Information ............................................................................................... 31 

ARTICLE VII Representations And Warranties .............................................................. 31 

Section 7.1 Representations and Warranties................................................................ 31 

ARTICLE VIII Covenants................................................................................................ 32 

Section 8.1 Debtor Accounts ....................................................................................... 32 

Section 8.2 Grantor Status; Licensing ......................................................................... 32 

Section 8.3 LLC Operating Agreement ....................................................................... 33 

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Section 8.4 Custodian/Paying Agent ........................................................................... 33 

Section 8.9 Payment of Principal on Purchase Money Notes; Reimbursement 

Section 8.17 Debtor’s Duty To Advise Collateral Agent and Purchase Money 

Section 8.5 Compliance with Law ............................................................................... 33 

Section 8.6 Servicer ..................................................................................................... 34 

Section 8.7 Certain Restrictions................................................................................... 34 

Section 8.8 Change in Jurisdiction, Name, Location or Identity ................................. 34 

of Collateral Agent.................................................................................... 34 

Section 8.10 Protection of Collateral; Further Assurances ............................................ 35 

Section 8.11 Guaranties and Mortgages. ....................................................................... 35 

Section 8.12 Additional Grantors. ................................................................................. 36 

Section 8.13 Transaction with Affiliates. ...................................................................... 36 

Section 8.14 Books and Records; Reports; Certifications; Audits. ............................... 36 

Section 8.15 Insurance ................................................................................................... 40 

Section 8.16 Recovery of Expenses; Interest................................................................. 40 

Notes Guarantor; Delivery of Certain Notices.......................................... 41 

Section 8.18 Administration of REO Properties............................................................ 41 

Section 8.19 Payment of Purchase Money Notes Guaranty Fee. .................................. 41 

ARTICLE IX Required Consent; Limits Liability ........................................................... 42 

Section 9.1 Required Consents; Limits Liability ......................................................... 42 

Section 9.2 Limitation of Liability............................................................................... 43 

ARTICLE X Release of Collateral ................................................................................... 44 

ARTICLE XI Liquidation of Underlying Loans and Acquired Property ......................... 44 

Section 11.1 Rights to Liquidate Underlying Loans and Collateral .............................. 44 

Section 11.2 Exercise of Rights to Liquidate Underlying Loans and Collateral ........... 44 

ARTICLE XII Collateral Agent........................................................................................ 45 

Section 12.1 Appointment and Authorization of Collateral Agent................................ 45 

Section 12.2 Delegation of Duties ................................................................................. 45 

Section 12.3 Liability of Collateral Agent ..................................................................... 46 

Section 12.4 Reliance by Collateral Agent .................................................................... 46 

Section 12.5 Liability of Collateral Agent ..................................................................... 46 

Section 12.6 Successor Collateral Agent ....................................................................... 47 

ARTICLE XIII Miscellaneous.......................................................................................... 47 

Section 13.1 Attorney-in-Fact........................................................................................ 47 

Section 13.2 No Petition ................................................................................................ 47 

Section 13.3 Reimbursement of Expenses..................................................................... 48 

Section 13.4 Termination of Security Interest ............................................................... 48 

Section 13.5 Indemnification......................................................................................... 48 

Section 13.6 Governing Law ......................................................................................... 50 

Section 13.7 Jurisdiction, Venue and Service................................................................ 50 

Section 13.8 Waiver of Jury........................................................................................... 52 

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Section 13.9 Notices ...................................................................................................... 52 

Section 13.10 Assignment ............................................................................................... 53 

Section 13.11 Entire Agreement ...................................................................................... 53 

Section 13.12 Amendments and Waivers ........................................................................ 54 

Section 13.13 Confidentiality .......................................................................................... 54 

Section 13.14 Reinstatement............................................................................................ 54 

Section 13.15 Interpretation; No Presumption................................................................. 54 

Section 13.16 Severability ............................................................................................... 55 

Section 13.17 Survival..................................................................................................... 55 

Section 13.18 No Third Party Beneficiaries .................................................................... 55 

Section 13.19 Counterparts; Facsimile Signatures .......................................................... 55 

Schedule 1 List of Various Failed Financial Institutions 

Schedule 2 Underlying Loan Schedule 

Exhibit A Joinder Agreement 

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REIMBURSEMENT, SECURITY AND GUARANTY AGREEMENT
 

THIS REIMBURSEMENT, SECURITY AND GUARANTY AGREEMENT, effective 

as of the 9th day of February, 2010 (this “Agreement”), is entered into by and among 

MULTIBANK 2009-1 RES-ADC VENTURE, LLC, a Delaware limited liability company 

(“Debtor”), each of the other entities that becomes a party hereto pursuant to Section 8.12 

(collectively, the “Subsidiary Grantors,” and each individually, a “Subsidiary Grantor”; the 

Subsidiary Grantors together with Debtor, collectively, the “Grantors,” and each individually, a 

“Grantor”), FEDERAL DEPOSIT INSURANCE CORPORATION (acting in any capacity, the 

“FDIC”), acting in its corporate capacity (“Purchase Money Notes Guarantor”), the FDIC, as 

Receiver for various failed financial institutions listed on Schedule 1 hereto (in such capacity, the 

“Receiver”), as Collateral Agent for the Secured Parties (as defined below) (in such capacity, 

together with any successor collateral agent, the “Collateral Agent”), and, solely for purposes of 

Sections 4.1(a), 4.1(e), 4.1(j), 5.1(a)(vi) – (ix), 5.1(b), 5.1(c), 5.5, 8.14 (c) – (h), 9.1, 11.1, 11.2 

and 13.6 – 13.19, the FDIC, as Receiver, as Initial Member under the LLC Operating Agreement 

referred to below (in such capacity, the “Initial Member”). 

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

the date hereof (the “Contribution Agreement”), between Debtor and the Receiver, the 

Receiver has transferred all of its right, title and interest in and to the Underlying Loans (as such 

term is defined below), including equity interests in Ownership Entities and certain REO 

Property (as each such term is defined below), to Debtor partly as a sale and partly as a capital 

contribution, and in consideration for the transfer of the Underlying Loans to the Debtor to the 

extent such transfer constitutes a sale, Debtor has issued to Receiver one or more Purchase 

Money Notes, dated as of the date hereof, in the aggregate principal face amount of 

$441,698,466.00.00 (the “Purchase Money Notes”); 

WHEREAS, to provide support for the payment and performance of Debtor’s obligations 

under the Purchase Money Notes, Purchase Money Notes Guarantor and the Receiver have 

entered into that certain Guaranty Agreement, dated as of the date hereof (the “Purchase Money 

Notes Guaranty”); 

WHEREAS, in connection with the foregoing, each Grantor has agreed to (a) provide 

Collateral Agent, for the benefit of the Secured Parties, with the collateral identified in this 

Agreement and (b) guaranty payment of the Secured Obligations (as such term is defined below) 

in order to induce the Purchase Money Notes Guarantor to enter into the Purchase Money Notes 

Guaranty and to secure Debtor’s obligation to reimburse Purchase Money Notes Guarantor for 

any payments made by Purchase Money Notes Guarantor thereunder; 

NOW, THEREFORE, in consideration of the promises contained in this Agreement and 

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

acknowledged, each Grantor, the Purchase Money Notes Guarantor, the Collateral Agent and the 

Initial Member agree as follows: 

Multibank Structured Transaction 2009-1 RES-ADC 

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ARTICLE I
 

Definitions
 

Section 1.1 Definitions. 

(a) Unless otherwise defined herein, capitalized terms used in this Agreement 

have the meanings provided in, or by reference in, the Contribution Agreement as in effect on the 

date hereof. The following terms have the following meanings: 

“Acceptable Rating” means (i) a rating of “Average (Select Servicer 

List)” for construction loan servicers by Standard and Poor’s Ratings Service, a division of The 

McGraw-Hill Companies, Inc., (ii) a rating of “Acceptable” or “Proficient” (or better) for 

construction loan servicers by Fitch, Inc., or (iii) a rating of “Approved” or “Average” (or better) 

for construction loan servicers by Moody’s Investors Service. 

“Account Control Agreement” means one or more Account Control 

Agreements among Debtor, the Custodian/Paying Agent and the Secured Party entered into in 

accordance with the Custodial and Paying Agency Agreement. 

“Acquired Property” means (i) the Underlying Collateral to which title is 

or, prior to the Closing Date, was acquired by or on behalf of the Debtor or any Ownership 

Entity, any Failed Bank or the Receiver by foreclosure, by deed in lieu of foreclosure, by power 

of sale or by sale pursuant to the Uniform Commercial Code; (ii) the equity interests in the 

Ownership Entities; and (iii) the assets held directly or indirectly by the Ownership Entities. 

“Affiliate” means, with respect to any specified Person, (i) any other 

Person directly or indirectly Controlling or Controlled by or under common Control with such 

specified Person, (ii) any Person owning or Controlling ten percent (10%) or more of the 

outstanding voting securities, voting equity interests, or beneficial interests of the Person 

specified, (iii) any officer, director, general partner, managing member, trustee, employee or 

promoter of the Person specified or any Immediate Family Member of such officer, director, 

general partner, managing member, trustee, employee or promoter, (iv) any corporation, 

partnership, limited liability company or trust for which any Person referred to in clause (ii) or 

(iii) acts in that capacity, or (v) any Person who is an officer, director, general partner, managing 

member, trustee or holder of ten percent (10%) or more of the outstanding voting securities, 

voting equity interests or beneficial interests of any Person described in clauses (i) through (iv); 

provided, however, (I) with respect to the Private Owner (in any capacity), in addition to the 

foregoing, each Affiliate of Rialto Capital Management, LLC, a Delaware limited liability 

company, shall be deemed to be an “Affiliate” of the Private Owner, and (II) none of the Initial 

Member, the Purchase Money Notes Guarantor, the Collateral Agent or any Affiliate (for this 

purpose determined disregarding clauses (ii), (iii) and (iv) of this definition (including in the 

context of clause (v) of this definition) and disregarding the Company and any Person Controlled 

by the Company) of any of the foregoing shall be deemed to be an “Affiliate” of Debtor or any 

Subsidiary Grantor or of any Affiliate of Debtor or any Subsidiary Grantor. 

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“Agreement” means this Reimbursement, Security and Guaranty 

Agreement. 

“Allonge” has the meaning given in Section 3.1 of this Agreement. 

“Ancillary Documents” means the LLC Operating Agreement, the 

Servicing Agreement (including the Electronic Tracking Agreement), one or more Account 

Control Agreements, the Contribution Agreement, the Transferred LLC Interest Sale Agreement, 

the Purchase Money Notes (and any promissory note reissued in respect thereof pursuant to 

Section 2.8 of the Custodial and Paying Agency Agreement), the Purchase Money Notes 

Guaranty and the Custodial and Paying Agency Agreement, in each case once executed and 

delivered, and any and all other agreements and instruments executed and delivered in 

connection with the Closing and the transactions contemplate thereby. 

“Assignment of Mortgage” means, with respect to each Underlying 

Loan, a collateral assignment of the mortgage, deed of trust, trust deed or deed to secure debt 

securing such Underlying Loan (each an “Underlying Mortgage”) or an assignment in blank of 

such Underlying Mortgage, in each case in form suitable for recording in the appropriate public 

records and otherwise in form reasonably satisfactory to the Collateral Agent. 

“Business Plan” has the meaning given in the LLC Operating Agreement. 

“Change of Control” has the meaning given in the LLC Operating 

Agreement. 

“Closing” means the consummation of the transactions contemplated in 

the Transferred LLC Interest Sale Agreement. 

“Closing Date” has the meaning given in the LLC Operating Agreement. 

“Collateral” has the meaning given in Section 3.1 of this Agreement. 

“Collateral Agent” has the meaning given in the introductory paragraph 

to this Agreement. 

“Collateral Documents” means, collectively, this Agreement, the 

Account Control Agreements, the REO Mortgages, the Custodial and Paying Agency Agreement 

and each of the other agreements, instruments or documents that creates or purports to create a 

Lien or guaranty in favor of the Collateral Agent for the benefit of the Secured Parties. 

“Collection Account” has the meaning given in the Custodial and Paying 

Agency Agreement. 

“Contract for Deed” has the meaning given in the Contribution 

Agreement. 

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“Contribution Agreement” has the meaning given in the recitals to this 

Agreement. 

“Control” when used with respect to any specified Person means the 

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

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

contract or otherwise. 

“Controlling Party” means the Purchase Money Notes Guarantor. 

“Custodial and Paying Agency Agreement” means the Custodial and 

Paying Agency Agreement dated as of the date hereof, among Debtor, the Custodian/Paying 

Agent, the Purchase Money Notes Guarantor and the Collateral Agent and shall include any 

substantially similar agreement entered into by Debtor, the Purchase Money Notes Guarantor 

and the Collateral Agent and any new or successor Custodian/Paying Agent in accordance with 

the LLC Operating Agreement. 

“Custodial Documents” has the meaning set forth in the Custodial and 

Paying Agency Agreement. 

“Custodian/Paying Agent” means Wells Fargo Bank, N.A., a national 

banking association, and any successor custodian/paying agent that is a Qualified Custodian. 

“Cut-Off Date” has the meaning given in the LLC Operating Agreement. 

“Debtor” has the meaning given in the introductory paragraph to this 

Agreement. 

“Debtor Accounts” means, collectively the Collection Account, the 

Distribution Account, the Defeasance Account and the Working Capital Reserve Account. 

“Debtor Relief Laws” means Title 11 of the United States Code (11 

U.S.C. §§101, et seq.), and all other liquidation, conservatorship, bankruptcy, assignment for the 

benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or 

similar debtor relief Laws of the United States or other applicable jurisdictions from time to time 

in effect and affecting the rights of creditors generally. 

“Default” means any event or condition that constitutes an Event of 

Default or that, with the giving of any notice, the passage of time, or both, would constitute an 

Event of Default. 

“Defeasance Account” has the meaning given in the Custodial and Paying 

Agency Agreement. 

“Deficiency Balances” has the meaning given in the Contribution 

Agreement. 

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“Determination Date” has the meaning given in the Custodial and Paying 

Agency Agreement. 

“Discretionary Funding Advances” has the meaning given in the 

Custodial and Paying Agency Agreement. 

“Distribution Account” has the meaning given in the Custodial and 

Paying Agency Agreement. 

“Distribution Date” has the meaning given in the Custodial and Paying 

Agency Agreement. 

“Electronic Tracking Agreement” has the meaning given in the 

Custodial and Paying Agency Agreement. 

“Environmental Hazard” means the presence at, in or under any 

Underlying Collateral (whether held in fee simple or subject to a ground lease or otherwise, and 

including any improvements whether by buildings or facilities, and any personal property, 

fixtures, leases and other property or rights pertaining thereto), of any “hazardous substance,” as 

such term is defined in Section 101(14) of the Comprehensive Environmental Response, 

Compensation and Liability Act of 1980, 42 U.S.C. §9601(14), or any petroleum (including 

crude oil or any fraction thereof that is liquid at standard conditions of temperature and pressure), 

at a level or in an amount that requires remediation or abatement pursuant to applicable Law. 

“Event of Default” means each of the “Events of Default” described in 

Section 4.1 of this Agreement. 

“Excess Working Capital Advances” has the meaning given in the 

Custodial and Paying Agency Agreement. 

“Failed Bank” and “Failed Banks” have the meanings given in the 

Contribution Agreement. 

“FDIC” has the meaning given in the introductory paragraph to this 

Agreement. 

“Final Distribution” means the distribution of all remaining Underlying 

Loan Proceeds in accordance with the terms of the Custodial and Paying Agency Agreement 

after liquidation of all of the Underlying Loans and related Underlying Collateral (including 

Acquired Property). 

“Governmental Authority” has the meaning given in the LLC Operating 

Agreement. 

“Grantor” and “Grantors” have the meanings set forth in the 

introductory paragraph of this Agreement. 

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“Guaranty” means, with respect to any particular indebtedness or other 

obligation, (i) any direct or indirect guaranty 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 guarantying 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. 

“Guaranteed Obligations” has the meaning given in the Purchase Money 

Notes Guaranty. 

“Immediate Family Member” means, with respect to any individual, his 

or her spouse, parents, parents-in-law, grandparents, descendants, nephews, nieces, brothers, 

sisters, brothers-in-law, sisters-in-law, children (whether natural or adopted), children-in-law, 

stepchildren, grandchildren and grandchildren-in-law. 

“Indebtedness” means, as applied to any Person, without duplication, (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 of such property), (v) all obligations of such Person as lessee 

under leases that have been or should be, in accordance with GAAP, recorded as capitalized 

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 Guaranty. 

“Indemnified Parties” has the meaning given in Section 13.5(a) of this 

Agreement. 

“Initial Member” has the meaning given in the introductory paragraph to 

this Agreement. 

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“Insolvency Event” means, with respect to any specified Person, the 

occurrence of any of the following events: 

creditors; 

(i) the specified Person makes an assignment for the benefit of 

any Insolvency Proceeding; 

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

(iii) the specified Person is adjudged bankrupt or insolvent or 

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

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

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

dissolution, or similar relief under any Law; 

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

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

part of the specified Person’s properties; 

(vi) the specified Person files an answer or other pleading 

admitting or failing to contest the material allegations of a petition filed against the specified 

Person in any proceeding described in clauses (i) through (v) above; 

(vii) the specified Person becomes unable to pay its obligations 

(other than, with respect to Debtor, the Purchase Money Notes, unless a Purchase Money Notes 

Trigger Event has occurred and is continuing and is not cured within ten (10) Business Days) as 

they become due or the sum of such specified Person’s debt is greater than all of such Person’s 

property at a fair valuation; or 

(viii) at least sixty (60) days have passed following the 

commencement of any proceeding against the specified Person seeking reorganization, 

arrangement, composition, readjustment, liquidation, dissolution or similar relief under any Law, 

and such proceeding has not been dismissed, or at least sixty (60) days have passed following the 

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

part of the specified Person’s properties without the specified Person’s agreement or 

acquiescence, and such appointment has not been vacated or stayed, or if such appointment has 

been stayed, at least sixty (60) days have passed following the expiration of the stay if such 

appointment has not been vacated. 

“Insolvency Proceeding” means any proceeding under Title 11 of the 

United States Code (11 U.S.C. §§101, et seq.) or any proceeding under any other Debtor Relief 

Law. 

“Intellectual Property” means all United States or foreign intellectual 

and similar property of every kind and nature, including, without limitation, inventions, designs, 

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patents, copyrights, trademarks, trade secrets, confidential or proprietary and technical and 

business information, know-how, show-how or other data or information, software and databases 

and all embodiments or fixations thereof and related documentation, registrations and franchises, 

and any license of any of the foregoing, and all additions, improvements and accessions to, and 

books and records describing or used in connection with, any of the foregoing and all rights to 

sue at law or in equity for any infringement or other violation thereof, including the right to 

receive all proceeds and damages therefrom. 

“Law” has the meaning given in the LLC Operating Agreement. 

“Lien” has the meaning given in the LLC Operating Agreement. 

“LLC Operating Agreement” means the Amended and Restated Limited 

Liability Company Operating Agreement by and among the Initial Member, the Private Owner 

and Debtor dated as of the date hereof. 

“Loan Participation” means any loan identified on the Loan Schedule 

that is subject to a shared credit, participation, co-lending or similar inter-creditor agreement 

under which the Initial Member or the Failed Bank was, or the Debtor is, the lead or agent 

financial depository institution or otherwise managed or held the credit or sold participations, or 

under which the Initial Member or the Failed Bank was, or the Debtor is, a participating financial 

depository institution or purchased participations in a credit managed by another Person. 

“Loan Participation Agreement” means an agreement under which a 

Failed Bank or the Receiver was and, after the Closing Date, Debtor is the lead or agent financial 

depository institution or otherwise managed or held a shared credit or sold participations, or 

pursuant to which a Failed Bank or the Receiver was and, after the Closing Date, Debtor is a 

participating financial depository institution or purchased participations in a credit managed by 

another Person. 

“Loan Schedule” means Schedule 2 to this Agreement. 

“Losses” has the meaning given in Section 13.5(a) of this Agreement. 

“Manager” has the meaning given in the LLC Operating Agreement. 

“MERS Registered Mortgage” means any Underlying Loan that is 

registered in the MERS System as of the date of this Agreement. 

“MERS System” has the meaning given in the LLC Operating 

Agreement. 

“Modification” means any extension, renewal, substitution, replacement, 

supplement, amendment or modification of any agreement, certificate, document, instrument or 

other writing, whether or not contemplated in the original agreement, document or instrument. 

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“NY UCC” means the Uniform Commercial Code as in effect on the date 

hereof in the State of New York, as amended from time to time, and any successor statute. 

“Ownership Entity” means a Single Purpose Entity that is a Subsidiary 

(as defined in the LLC Operating Agreement) of Debtor, whether contributed by the Initial 

Member on the Closing Date or formed or acquired by Debtor thereafter; provided, however, 

that, with respect to any entity transferred to Debtor on the Closing Date pursuant to the 

Contribution Agreement that is not a Single Purpose Entity as of such date, any such entity shall 

be deemed to be an Ownership Entity; provided further, however, that, Debtor shall take all 

necessary and appropriate actions to cause such entity to become a Single Purpose Entity as 

promptly as possible after the Closing. 

“Parent Guaranty” has the meaning given in the LLC Operating 

Agreement. 

“Perfection Requirement” has the meaning given in Section 7.1(e) of 

this Agreement. 

“Private Owner” means RL RES 2009-1 Investments, LLC and any 

successor and/or assign of such entity pursuant to the LLC Operating Agreement. 

“Proceedings” means any suit in equity, action at law or other judicial or 

administrative proceeding. 

“Purchase Money Notes” or “Purchase Money Note” has the meaning 

given in the recitals to this Agreement and shall include any promissory note issued to refinance 

a Purchase Money Note in accordance with Section 2.8 of the Custodial and Paying Agency 

Agreement. 

“Purchase Money Notes Guarantor” has the meaning given in the 

introductory paragraph to this Agreement. 

“Purchase Money Notes Guaranty” has the meaning given in the recitals 

to this Agreement. 

“Purchase Money Notes Trigger Event” means an event that shall be 

deemed to have occurred if, as of any time during the periods set forth below, (a) the total 

amount then on deposit in the Defeasance Account (without giving effect to any net losses 

thereon arising from the investment of such amounts in accordance with the Custodial and 

Paying Agency Agreement), plus the sum of the aggregate amount from the Defeasance Account 

previously paid by the Company to all Holders (as such term is defined in the Custodial and 

Paying Agency Agreement) to repay any Purchase Money Note and the aggregate amount 

previously paid to the Purchase Money Notes Guarantor to reimburse Purchase Money Notes 

Guarantor for payments it has made under the Purchase Money Notes Guaranty, divided by (b) 

the original aggregate principal amount of the Purchase Money Notes, as of the Closing Date is 

less than: 

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Third (3rd) anniversary of the Closing Date or any time 

thereafter before the fourth (4th) anniversary of the Closing Date: 25% 

Fourth (4th) anniversary of the Closing Date or any time 

thereafter before the fifth (5th) anniversary of the Closing Date: 40% 

Fifth (5th) anniversary of the Closing Date or any time 

thereafter before the sixth (6th) anniversary of the Closing Date: 50% 

Sixth (6th) anniversary of the Closing Date or any time 

thereafter before the seventh (7th) anniversary of the Closing Date: 75% 

Seventh (7th) anniversary of the Closing Date or any time 

thereafter before the eighth (8th) anniversary of the Closing Date: 100% 

“Qualified Custodian” means any Person that (i) is a bank, trust company 

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

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

performed by the Custodian/Paying Agent under the Custodial and Paying Agency Agreement, 

(iii) is qualified and licensed to do business in each such jurisdiction to the extent required unless 

and to the extent the failure to be so qualified or licensed will not have a material adverse effect 

on the Custodian/Paying Agent or the ability of the Custodian/Paying Agent to perform its 

obligations under the Custodial and Paying Agency Agreement, (iv) is not prohibited from 

exercising custodial powers in any jurisdiction in which the Custodial Documents are or will be 

held, (v) has combined capital and surplus of at least $50,000,000 as reported in its most recent 

report of condition, (vi) has the facilities to safeguard the Underlying Loan Documents and other 

Custodial Documents as required by the Custodial and Paying Agency Agreement, (vii) is not an 

Affiliate of the Debtor or the Servicer and (viii) is acceptable to and approved by Collateral 

Agent (such approval not to be unreasonably withheld, delayed or conditioned). 

“Qualified Servicer” means any Person that (i) is properly licensed and 

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

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

Underlying Collateral and the Acquired Property, (ii) has the management capacity and 

experience to service loans of the type held by the Grantors, especially performing and nonperforming construction loans secured by multi-family residential properties or commercial 

properties, as applicable, including the number and types of loans serviced, and the ability to 

track, process and post payments, to furnish tax reports to borrowers, to monitor construction, 

and to approve and disburse construction draws, and (iii) either (A) has an Acceptable Rating or 

(B) is acceptable to and approved by the Initial Member and the Collateral Agent, each in its sole 

discretion. 

“Receiver” has the meaning given in the introductory paragraph to this 

Agreement. 

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“Related Agreement” means (i) any agreement, document or instrument 

(other than the Underlying Note and Underlying Collateral Documents) relating to or evidencing 

any obligation to pay or securing any Underlying Loan (including any equipment lease, letter of 

credit, bankers’ acceptance, draft, system confirmation of transaction, loan history, affidavit, 

general collection information, and correspondence and comments relating to any obligation), 

(ii) any agreement relating to the construction, ownership, operation, management, sale or 

leasing of real property or rights in or to any real property (including leases, property or asset 

management agreements, brokerage agreements, service contracts, and concession agreements, 

license agreements or other agreements granting rights of occupancy or use) related specifically 

only to the Underlying Collateral or Acquired Property or any of them, (iii) any collection or 

contingency fee, and tax and other service agreements (including those referred to in Section 4.2 

of the Contribution Agreement) that are specific only to the Underlying Loans (or any of them) 

and that are assignable, (iv) any letter of assurance, letter of credit or similar instrument 

evidencing an obligation of any Ownership Entity or the Initial Member that was issued for the 

benefit of any Person and relates in any way to an Underlying Loan or the acquisition, 

development or construction of any project with respect to which the proceeds of such 

Underlying Loan were used or were intended to be used and (v) any interest rate swap 

arrangement between the Underlying Borrower and any Failed Bank, the Initial Member or the 

Debtor (in each case as the applicable lender, agent or other creditor under the Underlying Loan) 

that relates to any Underlying Loan. 

“Related Entities” has the meaning given in Section 13.5(a) of this 

Agreement. 

“REO Mortgage” means, with respect to each REO Property, a mortgage, 

deed of trust, trust deed or deed to secure debt securing the Secured Obligations in form suitable 

for recording in the appropriate public records and otherwise in form and substance satisfactory 

to the Collateral Agent (which REO Mortgage may, if the Underlying Mortgage on the 

applicable REO Property has not been discharged and if the Collateral Agent agrees, consist of 

such Underlying Mortgage, as assigned to the Collateral Agent and including such modifications 

thereto as the Collateral Agent may require). 

“REO Property” means any real property (and related personal property) 

included in the Acquired Property. 

“Sale” has the meaning given in Section 5.3 of this Agreement. 

“Secured Obligations” means the Guaranteed Obligations and all 

obligations of Grantors pursuant to this Agreement (including specifically the obligations 

pursuant to Sections 2.1 and 8.9). 

“Secured Parties” means, collectively, the Collateral Agent, each coagent or sub-agent appointed by the Collateral Agent from time to time pursuant to this 

Agreement and the Purchase Money Notes Guarantor. 

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“Servicer” has the meaning given in the Custodial and Paying Agency 

Agreement. 

“Servicing Agreement” has the meaning given in the Custodial and 

Paying Agency Agreement. 

“Servicing Expenses” has the meaning given in the LLC Operating 

Agreement. 

“Servicing Obligations” has the meaning given in the LLC Operating 

Agreement. 

“Servicing Standard” has the meaning given in the LLC Operating 

Agreement. 

“Single Purpose Entity” means 

(i) with respect to an Ownership Entity, a limited liability 

company that (A) is organized under the laws of any state of the United States or the District of 

Columbia, (B) the equity of which is uncertificated, (C) has no material assets other than 

Acquired Property, (D) is not engaged in any significant business operations except in 

connection with its ownership and operation of Acquired Property and conducted pursuant to the 

terms of this Agreement and the Ancillary Documents; (E) does or causes to be done all things 

necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) 

and franchises, (F) at all times holds itself out to the public as a legal entity separate from any 

other Person (including any Affiliate), (G) except as expressly contemplated by this Agreement, 

or the Ancillary Documents, does not commingle its assets with assets of any other Person, (H) 

conducts its business in its own name and strictly complies with all organizational formalities to 

maintain its separate existence, (I) maintains an arm’s length relationship with any Affiliate upon 

terms that are commercially reasonable and on terms no less favorable to it than could be 

obtained in a comparable arm’s length transaction with an unrelated Person, (J) has no Debt 

other than as expressly permitted by the Ancillary Documents and (K) except as otherwise 

consented to in writing by the Initial Member, is a pass-through entity for tax purposes; 

(ii) with respect to Debtor, a limited liability company that (A) 

is organized under the laws of Delaware, (B) the equity of which is uncertificated, (C) has no 

material assets other than the Underlying Loans, including Underlying Collateral and Ownership 

Entities, and its rights, title and interest in, to, and under the LLC Operating Agreement and the 

Ancillary Documents, (D) is not engaged in any significant business operations except in 

connection with the Underlying Loans, including the Underlying Collateral and Ownership 

Entities and conducted in accordance with the terms of the LLC Operating Agreement and the 

Ancillary Documents, (E) does or causes to be done all things necessary to preserve and keep in 

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

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

Affiliate), (G) except as expressly contemplated by the LLC Operating Agreement or by any 

other Ancillary Documents, does not commingle its assets with assets of any other Person, (H) 

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conducts its business in its own name and strictly complies with all organizational formalities to 

maintain its separate existence, (I) maintains an arm’s length relationship with any Affiliate upon 

terms that are commercially reasonable and on terms no less favorable to it than could be 

obtained in a comparable arm’s length transaction with an unrelated Person other than as 

expressly provided by the LLC Operating Agreement and the Ancillary Documents, (J) has no 

Debt other than as provided in the LLC Operating Agreement and the Ancillary Documents and 

(K) except as otherwise consented to in writing by the Initial Member, is a pass-through entity 

for tax purposes. 

“Site Assessment” has the meaning given in Section 3.2(b) of this 

Agreement. 

“Subservicer” has the meaning given in the LLC Operating Agreement. 

“Subservicing Agreement” has the meaning given in the LLC Operating 

Agreement. 

“Subsidiary Grantor” and “Subsidiary Grantors” have the meanings 

given in the introductory paragraph to this Agreement. 

“Successor Servicer” has the meaning given in Section 5.1(a)(vi) of this 

Agreement. 

“Third Party Claims” has the meaning given in Section 13.5(a) of this 

Agreement. 

“Transfer Documents” has the meaning given in the Contribution 

Agreement. 

“Transferred LLC Interest Sale Agreement” means the Limited 

Liability Company Interest Sale and Assignment Agreement by and among the Private Owner, 

the Receiver and the Initial Member dated as of the date hereof. 

“Underlying Borrower” means the borrower with respect to an 

Underlying Loan. 

“Underlying Collateral” means any and all real or personal property, 

whether tangible or intangible or mixed, securing or pledged to secure an Underlying Loan, 

including (i) any account, equipment, guaranty or contract right, equity, partnership or other 

interest that is the subject of any Underlying Collateral Document and (ii) as the context requires, 

Acquired Property, whether or not expressly specified. 

“Underlying Collateral Document” means any pledge agreement, 

security agreement, personal, corporate or other guaranty, deed of trust, deed to secure debt, trust 

deed, mortgage, contract for the sale of real property, assignment, collateral agreement, stock 

power or other agreement or document of any kind, whether an original or a copy, whether 

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similar to or different from those enumerated, (i) securing in any manner the performance or 

payment by any Underlying Borrower or any Underlying Obligor of its obligations or the 

obligations of any other Underlying Borrower or any Underlying Obligor pursuant to any of the 

Underlying Loans or the Underlying Notes evidencing the Underlying Loans or (ii) evidencing 

ownership of any Acquired Property. 

“Underlying Loan” means any loan, Loan Participation, Ownership 

Entity (including any cash and cash equivalents held directly or indirectly by such Ownership 

Entities) or Acquired Property listed on the Loan Schedule, and any loan into which any listed 

loan or Loan Participation is refinanced or modified, and includes with respect to each such loan, 

Loan Participation, Ownership Entity, Acquired Property or other related asset or any Related 

Agreement: (i) any obligation evidenced by an Underlying Note; (ii) all rights, powers or Liens 

of Debtor or any Ownership Entity in or under the Underlying Collateral and Underlying 

Collateral Documents and in and to Acquired Property (including all Ownership Entities and 

REO Property held by an Ownership Entity); (iii) all rights of Debtor or any Ownership Entity 

pursuant to any Contract for Deed and in or to the real property that is subject to any such 

Contract for Deed; (iv) all rights of Debtor or any Ownership Entity pursuant to any lease and in 

or to the related leased property; (v) all rights to causes of action, lawsuits, judgments, claims 

and demands of any nature available to or being pursued by or for the benefit of Debtor or any 

Ownership Entity with respect to the Underlying Loans, the Underlying Collateral or the 

ownership, use, function, value of or other rights pertaining thereto, whether arising by way of 

counterclaim or otherwise, other than any claims retained by the Initial Member pursuant to 

Section 2.7 of the Contribution Agreement; (vi) all guaranties, warranties, indemnities and 

similar rights in favor of Debtor or any Ownership Entity with respect to any of the Underlying 

Loans; (vii) all rights of Debtor or any Ownership Entity pursuant to the Related Agreements; 

and (viii) all rights of Debtor or any Ownership Entity to any Deficiency Balances. 

“Underlying Loan Documents” means all documents, agreements, 

certificates, instruments and other writings (including all Underlying Collateral Documents) now 

or hereafter executed by or delivered or caused to be delivered by any Underlying Borrower, any 

Underlying Obligor or any other obligor evidencing, creating, guarantying or securing, or 

otherwise executed or delivered in respect of, all or any part of an Underlying Loan or any 

Acquired Property or evidencing any transaction contemplated thereby (including, for this 

purpose, title insurance policies and endorsements thereto), and all Modifications thereto. 

“Underlying Loan Proceeds” has the meaning given the term “Loan 

Proceeds” in the LLC Operating Agreement. 

“Underlying Mortgage” has the meaning specified in the definition of 

“Assignment of Mortgage.” 

“Underlying Mortgaged Property” means any underlying real property 

constituting part of the Underlying Collateral for any Underlying Loan, whether held in fee 

simple estate or subject to a ground lease or otherwise, and whether or not improved by buildings 

or facilities, and any personal property, fixtures, leases and other property or rights pertaining 

thereto. 

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“Underlying Note” means each note or promissory note, lost instrument 

affidavit, loan agreement, shared credit or Loan Participation Agreement, intercreditor 

agreement, reimbursement agreement, any other evidence of indebtedness of any kind, or any 

other agreement, document or instrument evidencing an Underlying Loan, and all Modifications 

to the foregoing. 

“Underlying Obligor” means (i) any guarantor of all or any portion of 

any Underlying Loan or all or any of any Underlying Borrower’s obligations set forth and 

described in the Underlying Loan Documents or (ii) any other Person (other than the Underlying 

Borrower, the Debtor and any administrative or other agent) that is obligated pursuant to the 

Underlying Loan Documents with respect to an Underlying Loan, and shall include the guarantor 

pursuant to any completion guaranty or similar document. 

“Uniform Commercial Code” means the Uniform Commercial Code as 

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

“Unpaid Principal Balance” has the meaning given in the LLC Operating 

Agreement. 

“Working Capital Reserve Account” has the meaning given in the 

Custodial and Paying Agency Agreement. 

(b) UCC Terms. The following terms have the meanings given to them in the 

UCC and terms used herein without definition that are defined in the UCC have the meanings 

given to them in the UCC (such meanings to be equally applicable to both the singular and plural 

forms of the terms defined): “account”, “chattel paper”, “commercial tort claim”, “deposit 

account”, “equipment”, “fixture”, “general intangible”, “goods”, “instruments”, “inventory”, 

“investment property”, “letter-of-credit right”, “proceeds”, “security” and “supporting 

obligation”. 

Section 1.2 Other Interpretive Provisions. With reference to this Agreement and each 

other Collateral Document, unless otherwise specified herein or in such other Collateral 

Document: 

(a) References to “Affiliates” include, with respect to any specified Person, 

only such other Persons which from time to time constitute “Affiliates” 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” of such specified Person, except to the extent that any such 

reference specifically provides otherwise. 

(b) The term “or” is not exclusive. 

(c) A reference to a Law includes any amendment, modification or 

replacement to such Law. 

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(d) References to any document, instrument or agreement (including this 

Agreement) (a) shall be deemed to include all appendices, exhibits, schedules and other 

attachments thereto and all documents, instruments or agreements issued or executed in 

replacement thereof, and (b) shall mean such document, instrument or agreement, or replacement 

thereto, 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. 

(e) Unless otherwise specified, the words “hereof,” “herein” and “hereunder” 

and words of similar import shall refer to this Agreement as a whole and not to any particular 

provision of this Agreement. 

(f) The words “include” and “including” and words of similar import 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. 

(g) The word “during” when used with respect to a period of time shall be 

construed to mean commencing at the beginning of such period and continuing until the end of 

such period. 

(h) Unless the context otherwise requires, singular nouns and pronouns when 

used herein shall be deemed to include the plural and vice versa and impersonal pronouns shall 

be deemed to include the personal pronoun of the appropriate gender. 

ARTICLE II
 

Reimbursement
 

Section 2.1 Reimbursement. In accordance with Section 8.9, Debtor agrees to pay to 

the Purchase Money Notes Guarantor (a) on the Distribution Date following any payment by 

Purchase Money Notes Guarantor with respect to the Guaranteed Obligations, the amount of 

such payment (provided, however, that any such payment by the Purchase Money Notes 

Guarantor occurring after the Determination Date immediately preceding such Distribution Date 

shall be payable on the second Distribution Date following such payment); and (b) for any day 

on which a Purchase Money Notes Trigger Event is continuing, interest on an amount equal to 

the lesser of (i) the amount, if any, necessary to be added to the Defeasance Account (without 

giving effect to any net losses thereon arising from the investment of such amounts in 

accordance with the Custodial and Paying Agency Agreement) to cure the Purchase Money 

Notes Trigger Event and (ii) any amount remaining unpaid by Debtor under clause (i) of this 

Section 2.1 for each day unpaid, from the occurrence of a Purchase Money Notes Trigger Event 

until the earlier of (I) the day such Purchase Money Notes Trigger Event is cured and (II) the day 

all amounts owing to the Purchase Money Notes Guarantor under clause (i) of this Section 2.1 

are reimbursed in full (both before and after judgment), payable in accordance with Section 5.1 

of the Custodial and Paying Agency Agreement at a rate per annum equal to 90-day LIBOR + 

3.00% (calculated on an actual/360 day basis). All payments by Debtor to the Purchase Money 

Notes Guarantor hereunder shall be made free and clear of set-off or counterclaim in lawful 

currency of the United States and in immediately available funds. 

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Section 2.2 Obligations Absolute. The obligations of Debtor pursuant to this 

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

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

without limitation, the following circumstances: 

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

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

thereto; 

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

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

Guaranty; 

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

have at any time against Purchase Money Notes Guarantor, Receiver or any other Person, 

whether in connection with this Agreement, any Purchase Money Note, or any unrelated 

transaction; 

(d) payment by the Purchase Money Notes Guarantor pursuant to the 

Purchase Money Notes Guaranty against demand of the Receiver that does not comply with the 

terms of the Purchase Money Notes Guaranty; and 

(e) any other act or omission to act or delay of any kind by the Purchase 

Money Notes Guarantor or any other Person or any other event or circumstance whatsoever that 

might, but for the provisions of this Section, constitute a legal or equitable discharge of or 

defense to Debtor’s obligations hereunder. 

ARTICLE III
 

Security Interest
 

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

performance of the Secured Obligations and each Subsidiary Grantor’s guaranty of payment of 

the Secured Obligations, each Grantor hereby transfers, assigns, sets over, conveys, mortgages 

and grants to the Secured Parties, subject to the terms of this Agreement and the Purchase Money 

Notes (and any substitute purchase money notes that may be issued), a continuing security 

interest in, lien on and right of setoff against all of its right, title and interest in and to all 

accounts, chattel paper, deposit accounts, documents (as defined in the UCC), equipment, 

fixtures, general intangibles, Intellectual Property, instruments, Insurance, inventory, investment 

property, letter-of-credit rights, money (as defined in the UCC) and other personal property and 

any supporting obligations related thereto, in each case, whether now owned or hereafter 

acquired, regardless of whether such property is in the future subdivided into one or more groups 

to separately secure the Debtor’s and each Subsidiary Grantor’s obligations hereunder, including: 

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

thereto; 

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(b) the Underlying Loan Documents; 

(c) all amounts payable to such Grantor pursuant to the Underlying Loan 

Documents and all obligations owed to such Grantor in connection with the Underlying Loans 

and the Underlying Loan Documents; 

(d) all Underlying Collateral, including all Acquired Property; 

(e) all claims, suits, causes of action and any other right of such Grantor, 

whether known or unknown, against an Underlying Borrower, any Underlying Obligor or other 

obligor or any of their respective Affiliates, agents, representatives, contractors, advisors or any 

other Person arising under or in connection with the Underlying Loans or the Underlying Loan 

Documents or that is in any way based on or related to any of the foregoing, including contract 

claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity 

arising under or in connection with the Underlying Loan Documents or the transactions related 

thereto or contemplated thereby ; 

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

account of such Grantor under the Underlying Loans, including all distributions received through 

redemption, consummation of a plan of reorganization, restructuring, liquidation or otherwise of 

an Underlying Borrower, Underlying Obligor or other obligor under or with respect to the 

Underlying Loans, and any securities, interest, dividends or other property that may be 

distributed or collected with respect to any of the foregoing; 

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

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

provided, however, that the security interest in, lien on and right of setoff against the Defeasance 

Account and all amounts on deposit therein shall only secure the payment and performance of 

the Guaranteed Obligations; 

(h) the equity interests in all Ownership Entities; 

(i) all of such Grantor’s right, title and interest in and to all insurance 

policies; and 

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

any of the foregoing, and the rights to receive such proceeds and products (all of the foregoing 

property described in this Section 3.1, the “Collateral”). 

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

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

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

Document, have been satisfied in full. 

All of the Underlying Notes and other Custodial Documents shall be held by the 

Custodian/Paying Agent as set forth in Section 8.4 (except and to the extent the same are 

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permitted to be removed from the Custodian/Paying Agent’s possession as provided in the 

Custodial and Paying Agency Agreement). The Collateral Agent shall retain possession of the 

Underlying Notes and other Custodial Documents with respect to the Underlying Loans until 

such time as Debtor retains the Custodian/Paying Agent pursuant to the provisions of Section 8.4 

and, at such time, shall cause the Custodian/Paying Agent to take possession of the Underlying 

Notes and other Custodial Documents with respect to the Underlying Loans on behalf of 

Collateral Agent. Debtor shall deliver to the Collateral Agent within sixty (60) days after the 

Closing Date, (x) for each Underlying Loan, an allonge, endorsed in blank, and executed by 

Debtor (an “Allonge”), and (y) for each Underlying Loan, a Mortgage Assignment, in blank, and 

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

Custodian/Paying Agent with the Underlying Notes and other Custodial Documents. Reasonable 

and customary expenses paid to third parties actually incurred by the Debtor in preparing and 

delivering such allonges and Mortgage Assignments shall constitute Pre-Approved Charges for 

purposes of the Custodial and Paying Agency Agreement. The Collateral Agent may use the 

allonge to effect the endorsement of an Underlying Note or the Mortgage Assignment to effect 

the assignment of a mortgage to the Collateral Agent at any time if an Event of Default occurs 

and is continuing. Notwithstanding anything in this Agreement to the contrary, if the Company 

(acting by and through the Manager in accordance with the applicable provisions of the LLC 

Operating Agreement) elects to remove any MERS Registered Mortgage from the MERS System 

in accordance with the LLC Operating Agreement and the Contribution Agreement, then the 

Company must execute and deliver to the Collateral Agent or the Custodian/Paying Agent, as the 

case might be, the Allonge and Mortgage Assignment described above in this Section 3.1 

promptly after the removal of such MERS Registered Mortgage from the MERS System and take 

such other action so as to cause such MERS Registered Mortgage and all Underlying Collateral 

relating to such MERS Registered Mortgage to be and remain subject to the first priority security 

granted pursuant to this Agreement. 

Section 3.2 Underlying Loan Defaults; Acquisition of Collateral. 

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

Upon the occurrence of an event of default under any of the Underlying Loan Documents, but 

subject to the other terms and conditions of this Agreement, Debtor shall cause to be determined 

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

selection of attorneys to be used in connection with any action, whether judicial or otherwise, to 

protect the respective interests of Debtor and the Collateral Agent in the applicable Underlying 

Loan and the Underlying Collateral, (ii) the declaration and recording of a notice of such default 

and the acceleration of the maturity of the Underlying Loan, (iii) the institution of proceedings to 

foreclose the Underlying Loan Documents securing the Underlying Loan pursuant to the power 

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

any Underlying 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 

Underlying Borrower or any Underlying Obligor. 

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(b) Acquisition of Collateral. Nothing in this Section 3.2 or anything else in 

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

or any portion of any Underlying Collateral with respect to which there exists any Environmental 

Hazard. Prior to acquisition of title to any Underlying Collateral (whether by foreclosure, deed 

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

otherwise), Debtor shall cause to be commissioned with respect to such Underlying Collateral 

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 reimbursable as if it were a Servicing Expense as long as the costs for such 

Site Assessment were not paid to any Affiliate of Debtor, or any Affiliate of any Servicer or 

subservicer. If title to any Underlying Collateral with respect to which there exists any 

Environmental Hazard is to be acquired by foreclosure, by deed in lieu of foreclosure, by power 

of sale or by sale pursuant to the Uniform Commercial Code, or otherwise, title to such 

Underlying Collateral shall be taken and held in the name of an Ownership Entity, whether 

already in existence or formed by Debtor for such purpose, provided that each Ownership Entity 

may only hold title to a single property constituting Underlying Collateral with respect to which 

there exists any Environmental Hazard. The purposes of the Ownership Entity shall be to hold 

the Acquired Property pending sale, to complete construction of such Acquired Property and to 

operate the Acquired Property as efficiently as possible in order to minimize financial loss to 

Debtor and Collateral Agent and to sell the Acquired Property as promptly as practicable in a 

way designed to minimize financial loss to Debtor and the Collateral Agent, in each case, in 

conformity with any applicable Business Plan. 

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

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

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

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

Debtor shall be the sole member of any Ownership Entity. The purposes of the Ownership 

Entity shall be to hold the REO Property pending sale, to complete construction of such REO 

Property and to operate the REO Property as efficiently as possible in order to minimize 

financial loss to Debtor and the Collateral Agent and to sell the REO Property as promptly as 

practicable in a way designed to minimize financial loss to Debtor and the Collateral Agent, in 

each case, in conformity with any applicable Business Plan. 

Section 3.3 Continuing Security Interest. This Agreement shall create a continuing 

security interest in any and all of the Collateral and shall remain in full force and effect until the 

termination of the Purchase Money Notes Guaranty in accordance with their respective terms 

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

Grantor and the Collateral Agent to create a continuing, perfected first priority security interest 

in the Collateral for the benefit of the Secured Parties. The release of the security interest in any 

or all of the Collateral, the taking or acceptance of additional security, or the resort by the 

Collateral Agent to any security it may have in any order it may deem appropriate, shall not 

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affect the liability of any Person on the Secured Obligations secured hereby or the security 

interest and Lien granted hereby (other than in respect of the released Collateral). 

Section 3.4 Destruction of Collateral. No injury to, or loss or destruction of, the 

Collateral or any part thereof shall relieve any Grantor of any of its obligations hereunder or any 

of the Secured Obligations. 

Section 3.5 Releases of Underlying Collateral. Each Grantor is authorized to cause 

the release or assignment of any Lien granted to or held by such Grantor on any Underlying 

Collateral, solely to the extent necessary, (a) upon a final, nonappealable order of a court of 

competent jurisdiction permitting or directing disposition thereof, (b) upon payment of any 

Underlying Loan in full and satisfaction in full of all of the secured obligations with respect to an 

Underlying Loan or upon receipt of a discounted payoff as payment in full of an Underlying 

Loan, (c) as is necessary in connection with the foreclosure on a Mortgaged Property, acceptance 

of a deed in lieu thereof or modification or restructuring of the terms thereof, (d) in connection 

with such Grantor’s sale of an Underlying Loan or any Underlying Collateral or (e) in the case of 

condominium units, individual land parcels and similar portions of the Underlying Collateral, as 

are permitted in, and to the extent required by, the applicable Underlying Loan Documents; 

provided, however, that any such transaction is consistent with the Business Plan and the 

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

forth in Section 5.1 of the Custodial and Paying Agency Agreement and the other terms thereof. 

Section 3.6 Financing Statements. Each Grantor hereby irrevocably authorizes, and 

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

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

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

such filing offices as the Collateral Agent may determine are necessary or advisable to perfect 

the security interest granted to it hereunder. Such financing statements may indicate the 

Collateral as all assets of such Grantor or words of similar effect as being of any equal or lesser 

scope or with greater detail or in any other manner as the Collateral Agent may determine is 

necessary, advisable or prudent to ensure the perfection of the security interest in the Collateral 

granted to Collateral Agent herein pursuant to the terms hereof. 

Section 3.7 Power of Attorney. Each Grantor hereby irrevocably appoints the 

Collateral Agent its lawful attorney-in-fact, with full authority in the place and stead of such 

Grantor and in the name of such Grantor, the Collateral Agent or otherwise, and with full power 

of substitution in the premises (which power of attorney, being coupled with an interest, is 

irrevocable for so long as this Agreement shall be in effect), from time to time in the Collateral 

Agent’s discretion, following a failure by Debtor to satisfy promptly its obligations pursuant to 

Section 3.1, Section 3.2, Section 4.10 or Section 4.11 of the Contribution Agreement as it relates 

to the preparing, furnishing, executing and/or recording of all relevant Transfer Documents and 

other documents as might be reasonably necessary to satisfy the transfer and recording 

obligations of the Company pursuant to Section 3.1, Section 3.2, Section 4.10 or Section 4.11, to 

execute, furnish and record all relevant Transfer Documents and other documents as might be 

reasonably necessary to satisfy such transfer and recording obligations of Debtor. 

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ARTICLE IV
 

Events of Default
 

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

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

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

or regulation of any administrative or governmental body) shall constitute an “Event of Default” 

hereunder: 

(a) the receipt by the Company or Private Owner or Manager, as 

applicable, from the Initial Member of notice of the occurrence of an “Event of Default” 

(pursuant to and as defined in the LLC Operating Agreement); or 

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

other than as may be provided for in the definition of Insolvency Event) (i) with respect to any of 

the Debtor or the Private Owner; or (ii) with respect to any Servicer (or any Subservicer); 

provided, that such Insolvency Event under this clause (ii) (that is not otherwise an Insolvency 

Event under clause (i) above) shall not be an Event of Default pursuant to this Agreement (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; or the occurrence of any Dissolution Event with respect to the Private Owner; or 

(c) any failure of Debtor to pay any Servicing Expense when due, 

which failure continues unremedied for a period of thirty (30) days or more after the date on 

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

Debtor; or 

(d) the failure of Debtor or the Manager to comply in any material 

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

unremedied for a period of thirty (30) days or more after the date on which written notice of such 

failure requiring the same to be remedied shall have been given to the Manager (in any capacity); 

or 

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

any material respect its obligations pursuant to the Servicing Agreement, which continues 

unremedied for a period of thirty (30) days after the date on which written notice of such failure 

requiring the same to be remedied shall have been given by the Initial Member or the Manager to 

the Servicer or by the Purchase Money Notes Guarantor to Debtor, or (ii) a failure by the 

Manager (in its individual capacity) to replace the Servicer upon the occurrence of either an 

Event of Default pursuant to this Agreement as a result of the Servicer’s acts or omissions or a 

material breach of or event of default pursuant to the Servicing Agreement by the Servicer, in 

either case which continues unremedied for a period of thirty (30) days or more after the date on 

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

the Manager (in any capacity); or 

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

material respect with its obligations pursuant to the Servicing Agreement or Debtor to comply in 

any material respect with its obligations pursuant to the Custodial and Paying Agency 

Agreement (including any failure to pay fees or expenses due thereunder) which, in either case, 

remains unremedied for a period of thirty (30) days or more after the date on which written 

notice of such failure requiring the same to be remedied shall have been given to the Manager (in 

any capacity) or Debtor, as applicable; or 

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

there shall occur a Change of Control with respect to the Manager or the Private Owner, in either 

case without the consent of the Purchase Money Notes Guarantor; or 

(h) the failure of the Manager to remit or cause to be remitted all 

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

(i) any material breach of a representation or warranty made by 

Debtor in this Agreement, which remains unremedied for a period of thirty (30) days or more 

after the date on which written notice of such breach requiring the same to be remedied shall 

have been given to Debtor; or 

(j) the failure of Debtor or the Manager to cause the liquidation of the 

Underlying Loans and any Acquired Property in accordance with Section 11.2 upon the exercise 

of the rights of Initial Member and the Purchase Money Notes Guarantor in Section 11.1; or 

(k) any failure by Debtor to cause the payment of any fees and 

expenses of the Custodian/Paying Agent when due, which failure continues unremedied for a 

period of thirty (30) days or more after the date on which written notice of such failure requiring 

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

(l) any failure by Debtor to cause any Discretionary Funding 

Advances to be repaid in full to the extent Underlying Loan Proceeds from the applicable 

Underlying Loan are available for such repayment; or 

(m) the occurrence of a Purchase Money Notes Trigger Event unless 

such Purchase Money Notes Trigger Event is cured within ten (10) Business Days; or 

(n) any other failure (other than those specified in any of subsections 

(a) through (m) above) on the part of Debtor duly to observe or perform in any material respect 

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

any obligations imposed upon any Servicer or subservicer but excluding any failure to pay any 

amount payable pursuant to Section 2.1), which continues unremedied for a period of thirty (30) 

days or more after the date on which written notice of such failure requiring the same to be 

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

cannot be cured within thirty (30) days, the cure period shall be extended for an additional thirty 

(30) days if Debtor can demonstrate to the reasonable satisfaction of the Purchase Money Notes 

Guarantor that Debtor is diligently pursuing remedial action. 

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ARTICLE V
 

Remedies
 

Section 5.1 Remedies. 

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

(i) The Purchase Money Notes Guarantor may cause the Holders (as 

such term is defined in each Purchase Money Note) to declare the Purchase Money Notes to be 

immediately due and payable, by a notice in writing to Debtor, and upon any such declaration the 

unpaid principal amount of each Purchase Money Note, together with all other accrued and 

unpaid amounts in respect thereof through the date of acceleration, shall become immediately 

due and payable; provided, however, that with respect to an Event of Default under Section 

4.1(b)(i), the unpaid principal amount of and such amounts in respect of each Purchase Money 

Notes shall automatically become immediately due and payable; 

(ii) The Purchase Money Notes Guarantor may institute Proceedings 

for the collection of all amounts then payable by Debtor pursuant to Section 2.1 of this 

Agreement and the Collateral Agent may institute Proceedings for the collection of all other 

amounts then payable by Debtor pursuant to this Agreement, whether by declaration or 

otherwise, enforce any judgment obtained, and collect from Debtor moneys adjudged due; 

(iii) The Collateral Agent may institute Proceedings from time to time 

for the complete or partial foreclosure of the Collateral or collateral pursuant to any other 

Collateral Document; 

(iv) The Collateral Agent may exercise any remedies of a secured party 

under the NY UCC and take any other appropriate action to protect and enforce the rights and 

remedies of the Collateral Agent; 

(v) The Collateral Agent may sell the Collateral or any portion thereof 

or rights or interest therein; 

(vi) If an “Event of Default” pursuant to and as defined in the LLC 

Operating Agreement has occurred, the Purchase Money Notes Guarantor may direct the Initial 

Member to exercise its right, and Initial Member shall exercise such right, pursuant to the LLC 

Operating Agreement to terminate the Servicer (and any subservicers) and cause the Manager to 

enter into a new Servicing Agreement with a servicer (a “Successor Servicer”) selected by the 

Initial Member (in its sole and absolute discretion); 

(vii) If an “Event of Default” pursuant to and as defined in the LLC 

Operating Agreement has occurred, the Purchase Money Notes Guarantor may direct the Initial 

Member to exercise its right, and Initial Member shall exercise its right, pursuant to the LLC 

Operating Agreement to terminate the existing Manager and appoint a new Manager selected by 

the Initial Member (in its sole and absolute discretion); 

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(viii) The Initial Member may institute Proceedings from time to time 

for the complete or partial foreclosure of any Equity Interests in Debtor that have been pledged 

to Initial Member pursuant to the LLC Operating Agreement to secure Debtor’s obligations 

thereunder; 

(ix) If an “Event of Default” pursuant to and as defined in the LLC 

Operating Agreement has occurred, the Purchase Money Notes Guarantor may direct the Initial 

Member to exercise its right, and the Initial Member shall exercise its right, pursuant to the LLC 

Operating Agreement, to require the Private Owner to sell its equity interest to the Initial 

Member or its designee for fair market value in accordance with Section 3.14 of the LLC 

Operating Agreement; 

(x) The Collateral Agent may institute Proceedings for the collection 

of all amounts then payable pursuant to the Parent Guaranty for the enforcement of any judgment 

and for the collection of any monies adjudged due pursuant to the Parent Guaranty; and 

(xi) The Collateral Agent may institute Proceedings for the collection 

of all amounts then payable by any Subsidiary Grantor pursuant to Article VI of this Agreement 

for the enforcement of any judgment and for the collection from such Subsidiary Grantor of any 

monies adjudged due. 

(b) Appointment of Successor Servicer. If the Initial Member exercises its 

right to appoint a Successor Servicer pursuant to Section 5.1(a)(vi), the costs and expenses 

associated with such Successor Servicer (including any servicing fees) shall be borne by the 

Manager (and not Initial Member or Debtor), and no termination or other fee shall be due to 

Manager or the Servicer or any subservicer in connection with or as a result of any such action. 

All authority and power of the Manager to act with respect to the terminated Servicer shall pass 

to and be vested in the Initial Member pursuant to this Article 5 and, without limitation, the 

Initial Member is hereby authorized and empowered, as attorney-in-fact or otherwise, to execute 

and deliver, on behalf of and at the expense of the Manager, any and all documents and other 

instruments and to do or take any and all acts necessary or appropriate to effect the termination 

of the Servicer and the replacement of the Servicer with a Successor Servicer. 

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

subservicer is terminated pursuant to the provisions of this Article 5, Manager shall, and shall 

cause any Servicer (and any subservicer) to, provide the Initial Member and the Purchase Money 

Notes Guarantor and any successor Servicer in a timely manner with all documents, records and 

data (including electronic documents, records and data) requested by the Initial Member, the 

Purchase Money Notes Guarantor or any Successor Servicer to enable it and any Successor 

Servicer to assume the responsibilities as servicer, and to cooperate with the Initial Member and 

the Purchase Money Notes Guarantor in effecting the termination of any Servicer (or 

subservicer), including (i) the transfer within one (1) Business Day of all cash amounts that, at 

the time, shall be or should have been credited to the Collection Account or are thereafter 

received with respect to any Underlying Loans or Acquired Property, (ii) the transfer of all 

lockbox accounts with respect to which payments or other amounts with respect to the 

Underlying Loans are directed or the redirection of all such payments and other amounts to such 

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account as the Initial Member or the Purchase Money Notes Guarantor might specify, and (iii) 

the assignment to Collateral Agent of the right to access all such lockbox accounts, the Debtor 

Accounts and any other account into which Underlying Loan Proceeds or Underlying Borrower 

escrow or other payments are deposited or held; provided, however, that the documents, records 

and data delivered by the Servicer (and any subservicer) to the Initial Member and the Purchase 

Money Notes Guarantor and any successor Servicer pursuant to this Section 5.1(c) shall be 

limited to those documents in such Servicer’s possession at the time of such transfer or which the 

Servicer acquires thereafter and shall not include or be deemed to include any documents, 

records or data in the possession of the Custodian/Paying Agent. The Manager shall be liable for 

all costs and expenses incurred by the Initial Member, the Purchase Money Notes Guarantor and 

the Collateral Agent (I) associated with the complete transfer of the servicing data, (II) 

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 Collateral Agent and any 

successor Servicer (and subservicers) to service the Underlying Loans and Acquired Property 

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

(and any subservicers). Within a reasonable time after receipt of a written request of the 

Manager for the same, the Initial Member, the Purchase Money Notes Guarantor and the 

Collateral Agent shall provide reasonable documentation evidencing such costs and expenses. 

Section 5.2 Application of Proceeds. If the Collateral Agent collects any money or 

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

forth in Section 5.1 of the Custodial and Paying Agency Agreement, notwithstanding anything in 

any Purchase Money Note, the Purchase Money Notes Guaranty, the Servicing Agreement or the 

Contribution Agreement to the contrary; provided, however, that if the Collateral Agent collects 

any money or property pursuant to Section 5.1 of this Agreement in respect of the Defeasance 

Account, it shall pay out the money pursuant to directions received from the Purchase Money 

Notes Guarantor. 

Section 5.3 Sale of Collateral. 

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

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

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

been sold or all Secured Obligations shall have been paid. The Collateral Agent from time to 

time may postpone any public Sale by public announcement made at the time and place of such 

Sale. Collateral Agent hereby expressly waives its right to any amount fixed by law as 

compensation for any Sale. 

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

(i) The Collateral Agent may bid for and purchase the property 

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

dispose of such property, without further accountability; 

(ii) The Collateral Agent may bid for and acquire the property offered 

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

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

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

purchase price by crediting the gross Sale price against the sum of (A) the amount which would 

be distributable to the Collateral Agent as a result of such Sale in accordance with Section 5.2 on 

the Distribution Date next succeeding the date of such Sale and (B) the expenses of the Sale and 

of any Proceedings in connection therewith which are reimbursable to it; 

(iii) The Collateral Agent shall execute and deliver an appropriate 

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

Collateral in connection with a Sale thereof; 

(iv) The Collateral Agent is, pursuant to Section 13.1 of this 

Agreement, appointed the agent and attorney-in-fact of each Grantor to transfer and convey its 

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

necessary to effect such Sale; and 

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

ascertain the Collateral Agent’s authority, inquire into the satisfaction of any conditions 

precedent or see to the application of any monies. 

Section 5.4 No Impairment of Action. The Collateral Agent’s right to seek and 

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

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

Agreement nor any rights or remedies of the Collateral Agent shall be impaired by the recovery 

of any judgment by Collateral Agent against any Grantor or by the levy of any execution under 

such judgment upon any portion of the Collateral or upon any of the assets of such Grantor. Any 

money or property collected by Collateral Agent shall be applied in accordance with Section 5.2. 

Section 5.5 Remedies Cumulative; Waiver. Each of the Collateral Agent’s, the 

Purchase Money Notes Guarantor’s and the Initial Member’s rights pursuant to this Agreement 

shall be in addition to, and not in limitation or exclusion of, any other rights and remedies that it 

may have (whether by operation of law, in equity, under contract or otherwise) and without 

prejudice and in addition to any right of setoff, recoupment, combination of accounts, Lien or 

other right to which it is at any time entitled. Each of the Collateral Agent, the Purchase Money 

Notes Guarantor and the Initial Member may enforce any of its remedies pursuant to this 

Agreement successively or concurrently in its sole discretion. No delay or failure on the part of 

the Collateral Agent, the Purchase Money Notes Guarantor or the Initial Member to exercise any 

right or remedy to which it may become entitled hereunder upon an Event of Default shall 

constitute abandonment or waiver of any such right and the Collateral Agent, the Purchase 

Money Notes Guarantor or the Initial Member shall be entitled to exercise such right or remedy 

at any time during the continuance of a Event of Default. 

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

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

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

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

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

Default and, except as otherwise set forth herein, all other rights and remedies of such Grantor 

with respect thereto. 

ARTICLE VI
 

Guaranty
 

Section 6.1 Guaranty. 

(a) Each Grantor hereby, jointly and severally, unconditionally and 

irrevocably, guaranties to the Collateral Agent, for the benefit of the Secured Parties and their 

respective successors, indorsees, transferees and assigns, the prompt and complete payment and 

performance by Debtor when due (whether at the stated maturity, by acceleration or otherwise) 

of the Secured Obligations. 

(b) Anything herein or in any other Ancillary Document to the contrary 

notwithstanding, the maximum liability of each Grantor hereunder and under the Ancillary 

Documents shall in no event exceed the amount which can be validly guarantied by such 

Grantor, if any, under applicable federal and state laws relating to the insolvency of debtors 

(after giving effect to the right of contribution established in Section 6.2 of this Agreement). 

(c) Each Grantor agrees that the Secured Obligations may at any time and 

from time to time exceed the amount of the liability of such Grantor hereunder without impairing 

the guaranty contained in this Section 6.1 or affecting the rights and remedies of the Secured 

Parties pursuant to this Agreement. 

(d) The guaranty contained in this Section 6.1 shall remain in full force and 

effect until the termination of this Agreement, notwithstanding that from time to time prior 

thereto Debtor may be free from any Secured Obligations. 

(e) No payment made by Debtor, any Grantor, any other guarantor or any 

other Person or received or collected by the Secured Parties from Debtor, any Grantor, any other 

guarantor or any other Person by virtue of any action or proceeding or any set-off or 

appropriation or application at any time or from time to time in reduction of or in payment of the 

Secured Obligations shall be deemed to modify, reduce, release or otherwise affect the liability 

of any Grantor pursuant to this Agreement, which shall remain, notwithstanding any such 

payment (other than any payment made by such Grantor in respect of the Secured Obligations or 

any payment received or collected from such Grantor in respect of the Secured Obligations), 

liable for the Secured Obligations up to the maximum liability of such Grantor pursuant to this 

Agreement until the termination of this Agreement. 

Section 6.2 Right of Contribution. Each Grantor hereby agrees that to the extent that a 

Grantor shall have paid more than its proportionate share of any payment made hereunder, such 

Grantor shall be entitled to seek and receive contribution from and against any other Grantor 

hereunder which has not paid its proportionate share of such payment. Each Grantor’s right of 

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contribution shall be subject to the terms and conditions of Section 6.3. The provisions of this 

Section 6.2 shall in no respect limit the obligations and liabilities of any Grantor to the Secured 

Parties, and each Grantor shall remain liable to the Secured Parties for the full amount guarantied 

by such Grantor pursuant to this Agreement. 

Section 6.3 No Subrogation. Notwithstanding any payment made by any Grantor 

hereunder or any set-off or application of funds of any Grantor by the Secured Parties, no 

Grantor shall be entitled to be subrogated to any of the rights of the Secured Parties against 

Debtor or any other Grantor or any collateral security or guaranty or right of offset held by any 

Secured Party for the payment of the Secured Obligations, nor shall any Grantor seek or be 

entitled to seek any contribution or reimbursement from Debtor or any other Grantor in respect 

of payments made by such Grantor hereunder, until the termination of this Agreement. If any 

amount shall be paid to any Grantor on account of such subrogation, contribution or 

reimbursement rights at any time when all of the Secured Obligations shall not have been paid in 

full, such amount shall constitute Underlying Loan Proceeds and shall be held by such Grantor in 

trust for the Secured Parties, segregated from other funds of such Grantor, and shall, immediately 

upon receipt by such Grantor, be deposited into the Collection Account, to be applied in 

accordance with the Priority of Payments (as such term is defined in the Custodial and Paying 

Agency Agreement). 

Section 6.4 Amendments, etc. with Respect to the Secured Obligations. Each 

Grantor shall remain obligated pursuant to this Agreement notwithstanding that, without any 

reservation of rights against any Grantor and without notice to or further assent by any Grantor, 

any demand for payment of any of the Secured Obligations made by the Collateral Agent or the 

Purchase Money Notes Guarantor may be rescinded by such Person and any of the Secured 

Obligations continued, and the Secured Obligations, or the liability of any other Person upon or 

for any part thereof, or any collateral security or guaranty therefor or right of offset with respect 

thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, 

accelerated, compromised, waived, surrendered or released by the Collateral Agent or the 

Purchase Money Notes Guarantor, and the Purchase Money Notes Guaranty, any Purchase 

Money Notes and the other Ancillary Documents and any other documents executed and 

delivered in connection therewith may be amended, modified, supplemented or terminated, in 

whole or in part, as the Collateral Agent or the Purchase Money Notes Guarantor may deem 

reasonably advisable from time to time, and any collateral security, guaranty or right of offset at 

any time held by the Collateral Agent for the payment of the Secured Obligations may be sold 

(in the case of any such collateral security), exchanged, waived, surrendered or released. The 

Collateral Agent shall not have any obligation to protect, secure, perfect or insure any Lien at 

any time held by it as security for the Secured Obligations or for the guaranty contained in this 

Article VI or any property subject thereto. 

Section 6.5 Guaranty Absolute and Unconditional. Each Grantor waives any and all 

notice of the creation, renewal, extension or accrual of any of the Secured Obligations and notice 

of or proof of reliance by the Collateral Agent upon the guaranty contained in this Article VI or 

acceptance of the guaranty contained in this Article VI; the Secured Obligations, and any of 

them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, 

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extended, amended, modified or waived, in reliance upon the guaranty contained in this Article 

VI and the grant of the security interests pursuant to Section 3.1; and all dealings between Debtor 

and any of the Grantors, on the one hand, and the Collateral Agent, on the other hand, likewise 

shall be conclusively presumed to have been had or consummated in reliance upon the guaranty 

contained in this Article VI and the grant of the security interests pursuant to Section 3.1. Each 

Grantor waives diligence, presentment, protest, demand for payment and notice of default or 

nonpayment to or upon Debtor or any of the Grantors with respect to the Secured Obligations. 

Each Grantor understands and agrees that the guaranty contained in this Article VI and the grant 

of the security interests pursuant to Section 3.1 shall be, and shall be construed to be, a 

continuing, absolute and unconditional guaranty of payment and performance without regard to 

(a) the validity or enforceability of the Purchase Money Notes Guaranty, any Purchase Money 

Notes or any other Ancillary Document, any of the Secured Obligations or any other collateral 

security therefor or guaranty or right of offset with respect thereto at any time or from time to 

time held by the Collateral Agent, for the benefit of the Secured Parties, (b) any defense, set-off 

or counterclaim (other than a defense of payment or performance) which may at any time be 

available to or be asserted by Debtor or any other Person against the Collateral Agent, or (c) any 

other circumstance whatsoever (with or without notice to or knowledge of Debtor or such 

Grantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of 

Debtor for the Secured Obligations, or of such Grantor under the guaranty contained in this 

Article VI and the grant of the security interests pursuant to Section 3.1, in bankruptcy or in any 

other instance. When making any demand hereunder or otherwise pursuing its rights and 

remedies hereunder against any Grantor, the Collateral Agent may, but shall be under no 

obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may 

have against Debtor, any Grantor or any other Person or against any collateral security or 

guaranty for the Secured Obligations or any right of offset with respect thereto, and any failure 

by the Collateral Agent to make any such demand, to pursue such other rights or remedies or to 

collect any payments from Debtor, any Grantor or any other Person or to realize upon any such 

collateral security or guaranty or to exercise any such right of offset, or any release Debtor, any 

Grantor or any other Person or any such collateral security, guaranty or right of offset, shall not 

relieve any Grantor of any obligation or liability hereunder, and shall not impair or affect the 

rights and remedies, whether express, implied or available as a matter of law, of the Collateral 

Agent against any Grantor. For the purposes of this Agreement, “demand” shall include the 

commencement and continuance of any legal proceedings. 

Section 6.6 Reinstatement. The guaranty contained in this Article VI shall continue to 

be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of 

any of the Secured Obligations is rescinded or must otherwise be restored or returned by the 

Collateral Agent upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of 

Debtor or any Grantor, or upon or as a result of the appointment of a receiver, intervenor or 

conservator of, or trustee or similar officer for, Debtor or any Grantor or any substantial part of 

its property, or otherwise, all as though such payments had not been made. 

Section 6.7 Payments. Each Grantor hereby guaranties that payments pursuant to this 

Article VI will constitute Underlying Loan Proceeds and will be deposited into the Collection 

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Account, to be applied in accordance with the Priority of Payments (as defined in the Custodial 

and Paying Agency Agreement). 

Section 6.8 Information. Each Grantor assumes all responsibility for being and 

keeping itself reasonably informed of Debtor’s and each other Grantor’s financial condition and 

assets, and of all other circumstances bearing upon the risk of nonpayment of the Secured 

Obligations and the nature, scope and extent of the risks that such Grantor assumes and incurs 

hereunder, and agrees that neither the Collateral Agent nor any other Secured Party will have any 

duty to advise such Grantor of information known to it or any of them regarding such 

circumstances or risks. 

ARTICLE VII
 

Representations And Warranties
 

Section 7.1 Representations and Warranties. Each Grantor hereby represents and 

warrants to the Purchase Money Notes Guarantor and the Collateral Agent as of the date hereof 

and at all times while the Secured Obligations remain unsatisfied and undischarged in full, that: 

(a) This Agreement has been duly executed by such Grantor and constitutes a 

legal, valid and binding obligation of such Grantor, enforceable against such Grantor in 

accordance with its terms, except as such enforceability may be limited by Debtor Relief Laws 

and by general principles of equity; 

(b) There are no actions, suits, proceedings, claims or disputes pending or, to 

the knowledge of the Manager or such Grantor, threatened in writing, at law, in equity, in 

arbitration or before any Governmental Authority affecting such Grantor or any of its properties 

or revenues that may adversely affect the grant by such Grantor, or the perfection, of the security 

interest purported to be created hereby in the Collateral, or the exercise by the Collateral Agent 

or the Purchase Money Notes Guarantor of any of its rights or remedies hereunder; 

(c) The Grantors are and will be at all times the sole and exclusive owners of, 

or otherwise have and will have rights in, the Collateral free and clear of any Lien other than 

Liens in favor of the Collateral Agent and other Liens expressly permitted pursuant to the 

Ancillary Documents. No effective financing statement or other instrument similar in effect 

covering all or any part of the Collateral (except in favor of the Collateral Agent) is on file in any 

recording or filing office; 

(d) The transactions provided for in this Agreement (i) have been duly 

authorized by all requisite limited liability company action, and (ii) do not and will not (A) 

violate (1) any applicable provision of any Law or of the certificate of formation or operating 

agreement of such Grantor, (2) any order of any Governmental Authority or arbitrator or (3) any 

material provision of any indenture or any agreement or other instrument to which such Grantor 

is a party or by which it or the Collateral is or may be bound, (B) be in conflict with, result in a 

breach of or constitute (alone or with notice or lapse of time or both) a default pursuant to any 

such indenture or agreement or other instrument, (C) result in the creation or imposition of any 

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security interest in or Lien upon the Collateral (other than the security interest and Lien created 

thereon pursuant to this Agreement) or (D) require the consent of any party for the granting of 

the security interest created hereby; 

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

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

the date hereof for (i) the due execution, delivery and performance by such Grantor of this 

Agreement, (ii) the grant by such Grantor of the security interest purported to be created hereby 

in the Collateral or (iii) the exercise by the Collateral Agent or the Purchase Money Notes 

Guarantor of any of its rights and remedies hereunder. No authorization or approval or other 

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

or any other Person, is required for the perfection of the security interest purported to be created 

hereby in the Collateral, except for (A) the filing of a UCC-1 financing statement properly 

describing the Collateral and identifying such Grantor and Collateral Agent in the applicable 

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

the Account Control Agreements pursuant to the Uniform Commercial Code, (C) execution and 

delivery by the Custodian/Paying Agent of the Custodial and Paying Agency Agreement 

containing an acknowledgment by the Custodian/Paying Agent that it holds possession of the 

Custodial Documents for the Collateral Agent’s benefit, and (D) the taking of any action 

required to maintain continuing perfection with respect to proceeds which cannot be perfected by 

the filing of financing statements under the Uniform Commercial Code (subclauses (A), (B), (C) 

and (D), each a “Perfection Requirement” and collectively, the “Perfection Requirements”); 

and 

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

favor of the Collateral Agent, for the benefit of the Secured Parties, in the Collateral, as security 

for the Secured Obligations. The compliance with the Perfection Requirements will result in the 

perfection of such security interests. After compliance with the Perfection Requirements, such 

security interests, including in the case of Collateral in which such Grantor obtains rights after 

the date hereof, will be perfected, first priority security interests. Such Perfection Requirements 

and all other action necessary or desirable to perfect and protect such security interest have been 

duly made or taken, except for the other filings and recordations and actions described in Section 

7.1(e) above. 

ARTICLE VIII
 

Covenants
 

Section 8.1 Debtor Accounts. Debtor shall establish and maintain with the 

Custodian/Paying Agent the Debtor Accounts (excluding the Escrow Accounts, which shall be 

established and maintained by the Servicer). 

Section 8.2 Grantor Status; Licensing. Debtor shall, at all times, constitute a limited 

liability company organized under the laws of the State of Delaware and a Single Purpose Entity. 

Each Subsidiary Grantor shall at all times be a Single Purpose Entity. As soon as reasonably 

practical after the Closing Date, Debtor (on its own behalf or, if applicable, on behalf of the 

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Ownership Entities which hold Acquired Property) shall apply for and, thereafter, use its 

reasonable best efforts to obtain as quickly as possible, and maintain, all such licenses as are 

required to conduct its business, including qualifications to conduct business in jurisdictions 

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

applicable, operate, manage, lease and dispose of Acquired Property, if the failure to so obtain 

such licenses would reasonably be expected to result in the imposition of fines, penalties or other 

liabilities on Debtor, claims and defenses being asserted against Debtor (including counterclaims 

and defense asserted by Underlying Borrowers), or materially adversely affect Debtor or 

Debtor’s ability to foreclose on the Underlying Collateral securing or otherwise realize the full 

value of any Underlying Loan or Acquired Property. 

Section 8.3 LLC Operating Agreement. Debtor (a) shall at all times have in effect and 

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

therein, shall not amend or modify in any material respect the LLC Operating Agreement 

without the prior written approval of the Purchase Money Notes Guarantor, and (c) shall not 

enter into or allow itself to become subject to any other constituent documents inconsistent with 

any terms of the LLC Operating Agreement. 

Section 8.4 Custodian/Paying Agent. Debtor shall retain the Custodian/Paying Agent 

and shall enter into and at all times be a party to a Custodial and Paying Agency Agreement with 

the Custodian/Paying Agent. The Custodian/Paying Agent at all times shall have custody and 

possession of the Underlying Notes and other Custodial Documents to the extent required 

pursuant to the Custodial and Paying Agency Agreement. At no time shall Debtor have more 

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

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

Purchase Money Notes Guarantor upon no more than thirty (30) days notice without cause 

thereunder. In the event that Debtor (or any Servicer or subservicer) removes any Underlying 

Notes or other Custodial Documents from the possession of the Custodian/Paying Agent (which 

shall be done only in accordance with the Custodial and Paying Agency Agreement), (a) any loss 

or destruction of or damage to such Underlying Notes or Custodial Documents shall be the 

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

safeguarding such Underlying Notes and Custodial Documents), and (b) such Underlying Notes 

shall be returned to the Custodian/Paying Agent within the time provided under the Uniform 

Commercial Code to maintain the Collateral Agent’s perfection thereof by possession. If any 

Underlying Notes or other Custodial Documents are removed in connection with the 

modification or restructuring of an Underlying Loan, the modified or restructured Underlying 

Notes and other Custodial Documents removed in connection therewith shall be returned to the 

Custodian/Paying Agent as soon as possible following the completion of the restructuring or 

modification (and, in any event, in accordance with clause (b) of the immediately preceding 

sentence). Debtor shall ensure that the Purchase Money Notes Guarantor receives a copy of each 

demand, notice or other communication given pursuant to the Custodial and Paying Agency 

Agreement at the time that such notice or other communication is given thereunder. 

Section 8.5 Compliance with Law. Each Grantor shall, at all times, comply with 

applicable Law in connection with the performance of its obligations pursuant to this Agreement. 

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Section 8.6 Servicer. Debtor shall at all times cause the Servicing Obligations to be 

performed by a Servicer or a subservicer, each of which shall be a Qualified Servicer. 

Section 8.7 Certain Restrictions. Debtor shall not: 

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

Entity, incur any Indebtedness (other than the Excess Working Capital Advances, Discretionary 

Funding Advances and Indebtedness evidenced by the Purchase Money Notes and pursuant to 

this Agreement); 

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

Final Distribution and this Agreement is terminated; 

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

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

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

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

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

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

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

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

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

at a fair valuation; or 

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

of the Collateral (other than the security interest granted to Collateral Agent hereunder and Liens 

expressly permitted pursuant to the Ancillary Documents), and shall not take any action to 

interfere with Collateral Agent’s rights as a secured party with respect to the Collateral. 

Section 8.8 Change in Jurisdiction, Name, Location or Identity. Each Grantor agrees 

to provide the Collateral Agent with not less than ten (10) days’ prior written notice of any 

change (a) in the jurisdiction in which it is organized, (b) in its company name, (c) in the location 

of its principal place of business, or (d) in its federal taxpayer identification number. Each 

Grantor agrees not to effect or permit any change referred to in the preceding sentence unless all 

filings have been made under the Uniform Commercial Code or otherwise that are required in 

order for the Collateral Agent to continue following such change to have a valid, legal and 

perfected first priority security interest in the Collateral to the extent a security interest therein 

may be perfected by filing pursuant to the Uniform Commercial Code. 

Section 8.9 Payment of Principal on Purchase Money Notes; Reimbursement of 

Collateral Agent. Debtor will duly and punctually pay, or cause the Custodian/Paying Agent to 

pay, the principal of the Purchase Money Notes in accordance with the terms of the Purchase 

Money Notes, this Agreement and the Custodial and Paying Agency Agreement and from 

moneys on deposit in the Defeasance Account. On each Distribution Date, Debtor will direct the 

Custodian/Paying Agent to distribute amounts on deposit in the Distribution Account to 

Collateral Agent in payment of any amounts owed by Debtor to Purchase Money Notes 

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Guarantor or Collateral Agent pursuant to this Agreement, subject to the priority of payments set 

forth in Section 5.1 of the Custodial and Paying Agency Agreement and the other terms thereof. 

Section 8.10 Protection of Collateral; Further Assurances. From time to time, at its cost 

and expense, each Grantor promptly shall execute and deliver all further instruments and 

documents, and take all further action, that may be necessary, or that Collateral Agent may 

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

assignment and security interest granted or intended to be granted hereby or to enable Collateral 

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

Section 8.11 Guaranties and Mortgages. If any Subsidiary (as such term is defined in 

the LLC Operating Agreement) of Debtor acquires any REO Property after the Closing Date, 

then, within fifteen (15) Business Days after the foreclosure, conveyance in lieu of foreclosure or 

other event that resulted in such property becoming REO Property, Debtor promptly shall cause 

such Subsidiary to execute and deliver to the Collateral Agent (in addition to the Joinder 

Agreement provided for in Section 8.12) an REO Mortgage with respect to such REO Property 

in favor of the Collateral Agent for the benefit of the Secured Parties in form and substance 

satisfactory to the Collateral Agent (which mortgage shall (a) secure all of the Secured 

Obligations (or, in jurisdictions with a mortgage recording tax that would be payable on the full 

amount of the Secured Obligations, such portion or components of the Secured Obligations as 

the Collateral Agent shall reasonably require), (b) provide for a release price (or, in the case of 

REO Property consisting of condominiums or cooperative units or separate land parcels, release 

prices for individual units or parcels) based on the Business Plan or otherwise satisfactory to the 

Collateral Agent and (c) shall contain such other provisions (in addition to those included in the 

Underlying Loan Documents) as the Collateral Agent shall require in light of the particular 

nature or characteristics of such REO Property). Such REO Mortgage shall be accompanied by 

such related documentation and deliveries as the Collateral Agent reasonably may request, each 

in form and substance satisfactory to the Collateral Agent, including, without limitation, opinions 

of counsel, lender’s policies of title insurance (together with all endorsements thereto reasonably 

required by the Collateral Agent, including endorsements with respect to future advances), 

amendments to the Ancillary Documents deemed necessary or advisable by the Collateral Agent 

to reflect the particular nature and characteristics of the REO Property in question and the 

requirements of local law and such additional items as an institutional lender would customarily 

require in a construction or permanent, as applicable, loan transaction involving a property 

similar to such REO Property (all of the foregoing to be in form and substance satisfactory to the 

Collateral Agent). Such REO Mortgage shall be duly recorded or filed in such manner and in 

such places as are required by applicable law to establish, perfect, preserve and protect the Liens 

in favor of the Collateral Agent granted pursuant to such REO Mortgage, and all taxes, fees and 

other charges payable in connection therewith shall be paid in full. The cost of preparing, 

negotiating and recording such REO Mortgage (including mortgage recording taxes) and the 

costs associated with such additional documentation and deliverables shall be Servicing 

Expenses. At Debtor’s request, the Collateral Agent shall prepare and deliver to Debtor a form 

of REO Mortgage that (with such modifications as the Collateral Agent shall agree to in its sole 

discretion) shall serve as a model for subsequent REO Mortgages (subject to changes necessary 

or advisable, in the Collateral Agent’s judgment, to reflect local law and the particular nature and 

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characteristics of the REO Property in question). Notwithstanding anything to the contrary 

contained in the foregoing, with respect to Acquired Property consisting of REO Property on the 

date hereof, Debtor shall deliver (and/or shall cause the applicable Ownership Entity to deliver) 

to the Collateral Agent the REO Mortgages and other items required to be delivered pursuant to 

this Section 8.11 within thirty (30) days after the Closing Date. 

Section 8.12 Additional Grantors. If Debtor shall form any Subsidiary, Debtor shall 

cause such Subsidiary to become a Subsidiary Grantor pursuant to this Agreement, such 

Subsidiary shall execute and deliver to Collateral Agent a Joinder Agreement substantially in the 

form of Exhibit A and shall thereafter for all purposes be a party hereto and have the same rights, 

benefits and obligations as a Grantor party hereto on the Closing Date. Each Grantor expressly 

agrees that its obligations arising hereunder shall not be affected or diminished by the addition or 

release of any other Grantor hereunder, nor by any election of the Collateral Agent not to cause 

any Subsidiary (as defined in the LLC Operating Agreement) of Debtor to become a Grantor 

hereunder. This Agreement shall be fully effective as to any Grantor that is or becomes a party 

hereto regardless of whether any other Person becomes or fails to become or ceases to be a 

Grantor hereunder. 

Section 8.13 Transaction with Affiliates. No Grantor shall enter into any transaction 

with any Affiliate, except as expressly permitted pursuant to Section 3.5 of the LLC Operating 

Agreement, without the prior written consent of the Collateral Agent. 

Section 8.14 Books and Records; Reports; Certifications; Audits. 

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

maintained (including by the Servicer and any Ownership Entity and including records 

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

and any Acquired Property to Debtor pursuant to the Contribution Agreement), at all times, at 

Debtor’s chief executive office, a complete and accurate set of files, books and records regarding 

the Collateral, the Underlying Loans, the Underlying Collateral and the Acquired Property and 

Debtor’s, any Ownership Entity’s and the Collateral Agent’s interests in the Collateral, the 

Underlying Loans, the Underlying Collateral and the Acquired Property, including records 

relating to the Debtor Accounts and the disbursement of all Underlying Loan Proceeds. This 

obligation to maintain a complete and accurate set of records shall encompass all files in 

Debtor’s custody, possession or control pertaining to the Collateral, the Underlying Loans, the 

Underlying Collateral and the Acquired Property, including (except as required to be held by the 

Custodian/Paying agent pursuant to the Custodial and Paying Agency Agreement) all original 

and other documentation pertaining to the Collateral, the Underlying Loans, the Underlying 

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

pertaining to the Collateral, the Underlying Loans, the Underlying Collateral and the Acquired 

Property, and all of Debtor’s (and the Servicer’s and each subservicer’s) internal memoranda 

pertaining thereto. The books of account shall be maintained in a manner that provides sufficient 

assurance that: (i) transactions of Debtor are executed in accordance with the general or specific 

authorization of the Manager consistent with the provisions of the LLC Operating Agreement 

and the other Ancillary Documents; and (ii) transactions of Debtor are recorded in such form and 

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manner as will (A) permit preparation of federal, state and local income and franchise tax returns 

and information returns in accordance with the LLC Operating Agreement and the other 

Ancillary Documents and as required by Law; (B) permit preparation of Debtor’s financial 

statements in accordance with GAAP and as otherwise set forth in the LLC Operating 

Agreement and the other Ancillary Documents; and (C) maintain accountability for Debtor’s 

assets. 

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

records to be maintained and retained until the date that is the later of ten (10) years after the 

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

books and records shall be available during such period for inspection by the Collateral Agent or 

the Purchase Money Notes Guarantor or their respective representatives (including any 

Governmental Authority) and agents at the chief executive office of Debtor at all reasonable 

times during business hours on any Business Day (or, in the case of any such inspection after the 

term hereof, at such other location as is provided by notice to the Collateral Agent and the 

Purchase Money Notes Guarantor), in each instance upon not less than two (2) Business Days’ 

prior notice to Debtor unless an Event of Default shall have occurred and be continuing. Upon 

request by the Collateral Agent or the Purchase Money Notes Guarantor, Debtor, at the sole cost 

and expense of the Collateral Agent or the Purchase Money Notes Guarantor, as the case might 

be, promptly shall send copies (the number of copies of which shall be reasonable) of such books 

and records to the Collateral Agent or the Purchase Money Notes Guarantor. Debtor shall 

provide the Collateral Agent and the Purchase Money Notes Guarantor with reasonable advance 

notice of Debtor’s intention to destroy or dispose of any documents or files relating to the 

Underlying Loans and, upon the request of the Collateral Agent or the Purchase Money Notes 

Guarantor, shall allow such Person, at its own expense, to recover the same from Debtor. 

(c) Reporting. 

(i) As soon as practicable following, but no later than ninety (90) days 

immediately after, the end of each Fiscal Year (as such term is defined in the LLC Operating 

Agreement) (commencing with respect to the 2010 Fiscal Year), Debtor shall deliver, subject to 

the provisions of subsection (h) below, to each of the Initial Member, the Collateral Agent and 

the Purchase Money Notes Guarantor an audited consolidated balance sheet of Debtor and its 

Subsidiaries as at the end of such Fiscal Year, and audited consolidated statements of operations 

and cash flow of Debtor and its Subsidiaries for such Fiscal Year, each prepared in accordance 

with GAAP and accompanied by the Accountants’ (as such term is defined in the LLC Operating 

Agreement) report thereon, which shall be certified in the customary manner by the Accountants. 

(ii) 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 31, 2010), 

Debtor shall deliver, subject to the provisions of subsection (h) below, to the Initial Member, the 

Collateral Agent and the Purchase Money Notes Guarantor an unaudited consolidated balance 

sheet of Debtor and its Subsidiaries as at the end of such calendar quarter and an unaudited 

consolidated statements of operations and cash flow of Debtor and its Subsidiaries for such 

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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. 

(iii) Debtor shall cause to be delivered, subject to the provisions of 

subsection (h) below, to the Initial Member, the Collateral Agent and the Purchase Money Notes 

Guarantor such information as is specified in Exhibit B of the LLC Operating Agreement and 

such other information relating to the Underlying Loans, the Underlying Collateral, the Debtor, 

the Servicers and any Subservicers as the Initial Member, the Collateral Agent or the Purchase 

Money Notes Guarantor reasonably might request from time to time and, in any case, shall 

ensure that the Initial Member, the Collateral Agent and the Purchase Money Notes Guarantor 

are promptly advised, in writing, of any matter of which the Manager, any Servicer or any 

Subservicer becomes aware relating to the Underlying Loans, the Underlying Collateral, the 

Collection Account, the Escrow Accounts, the Working Capital Reserve Account, the 

Defeasance Account (as such terms are defined in the LLC Operating Agreement), or any 

Underlying Borrower or Underlying Obligor that materially and adversely affects the interests of 

the Initial Member, the Collateral Agent, the Purchase Money Notes Guarantor or of any secured 

party under this Agreement. 

(d) Monthly Reports. Debtor shall cause to be furnished to each of the Initial 

Member, the Collateral Agent and the Purchase Money Notes Guarantor on or prior to the 

fifteenth (15th) day of each month (or if the fifteenth (15th) day is not a Business Day, then the 

first Business Day thereafter), commencing on the fifteenth (15th) day of the first month 

following the calendar month in which the Initial Servicing Transfer Date (as such term is 

defined in the LLC Operating Agreement) occurs (and with respect to each Underlying Loan, 

including relevant information with respect thereto for all periods from and after the Servicing 

Transfer Date for such Underlying Loan), (i) the Monthly Report (as such term is defined in the 

LLC Operating Agreement) with respect to the relevant Due Period (as such term is defined in 

the LLC Operating Agreement) and (ii) the related Distribution Date Report (as such term is 

defined in the LLC Operating Agreement) with respect to such Due Period, which report shall 

specify the amounts and recipients of all funds to be distributed by the Paying Agent (as such 

term is defined in the LLC Operating Agreement) on the relevant Distribution Date. Each of the 

Monthly Report and the Distribution Date Report shall be certified by the chief financial officer 

(or an equivalent officer) of the Manager. The Monthly Report shall also include a certification 

of the Manager that all withdrawals by the Manager from the Collection Account during such 

Due Period were made in accordance with the terms of this Agreement and the Custodial and 

Paying Agency Agreement. Debtor shall also cause to be furnished to each of the Initial 

Member, the Collateral Agent and the Purchase Money Notes Guarantor the Custodian and 

Paying Agent Report in accordance with the terms of the Custodial and Paying Agency 

Agreement. 

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

Servicer and any subservicer to deliver to the Initial Member, the Collateral Agent and the 

Purchase Money Notes 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 during the preceding calendar year (or portion thereof) and of its performance pursuant 

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to 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 has fulfilled all of its obligations pursuant to this 

Agreement (or, as applicable, the Servicing Agreement or any subservicing agreement) in all 

material respects throughout such year or portion thereof or, if there has been a failure to fulfill 

any such obligation in any material respect, specifying each such failure and the nature and status 

thereof. The first such officer’s certificate shall cover, with respect to any Underlying Loan, the 

period commencing on the Closing Date (and with respect to each Underlying Loan, including 

relevant information with respect thereto for the period commencing on the Servicing Transfer 

Date for such Underlying Loan) and continuing through the end of the 2010 calendar year. In 

the event the Servicer or any subservicer was terminated, resigned or otherwise performed in 

such capacity for only part of a year, such party shall provide an officer’s certificate pursuant to 

this Section 8.14(e) with respect to such portion of the year. 

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

commencing in the year 2011, Debtor shall cause the Servicer and any subservicer, at its own 

expense or the expense of the Manager, to provide to the Initial Member, the Collateral Agent 

and the Purchase Money Notes Guarantor the annual reports (including the independent 

accountant report) for the prior Fiscal Year (or other applicable period as set forth below) 

required under Section 1122 of Regulation 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) with respect to the relevant servicing criteria provisions of Section 

1122 (d)(l) of Regulation AB that are applicable to the servicing being conducted under the LLC 

Operating Agreement (and the Servicing Agreement). The first such reports shall cover the 

period commencing on the Closing Date (and for each Underlying Loan, covering the period 

from the applicable Servicing Transfer Date) and continuing through the end of the 2010 Fiscal 

Year. 

(g) Audits. Until the later of the date that is ten (10) years after the Closing 

Date or the date that is three (3) years after the Final Distribution (as such term is defined in the 

LLC Operating Agreement), Debtor shall, and shall cause the Servicer and any subservicer to (i) 

provide any representative of the Initial Member, the Collateral Agent or the Purchase Money 

Notes Guarantor (including any Government Authority), during normal business hours and on 

reasonable notice, with access to all of the books of account, reports and records relating to the 

Collateral, the Underlying Collateral, the Servicing Obligations, the Debtor Accounts, 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 the Initial Member, the Collateral Agent and the Purchase Money Notes 

Guarantor to cause such books to be audited by accountants selected by the Initial Member, the 

Collateral Agent or the Purchase Money Notes Guarantor and (iv) allow representatives of the 

Initial Member, the Collateral Agent or the Purchase Money Notes Guarantor to discuss Debtor’s 

and the Servicer’s or subservicer’s affairs, finances and accounts, as they relate to the Collateral, 

the Underlying Loans, the Underlying Collateral (including Acquired Property), the Servicing 

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

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

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

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

attorneys. Any expense incurred by the Initial Member, the Collateral Agent or the Purchase 

Money Notes Guarantor and any reasonable out-of-pocket expense incurred by Debtor in 

connection with the exercise by the Initial Member, the Collateral Agent or the Purchase Money 

Notes Guarantor of its rights in this Section 8.14(g) shall be borne by such party; provided, 

however, that any expense incident to the exercise by the Initial Member, the Collateral Agent or 

the Purchase Money Notes Guarantor of its rights pursuant to this Section 8.14(g) as a result of 

or during the continuance of an Event of Default shall be borne in all cases 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 any subservicers) having been engaged by the Initial Member, the 

Debtor or the applicable replacement Manager following such removal of the Private Owner as 

Manager, in each case that is not an Affiliate of the Private Owner). 

(h) No Duplicate Reports. Notwithstanding any provision in subsections (c) 

through (f) above to the contrary, the Debtor (i) shall not be required to deliver duplicate copies 

of the reports as described in such subsections to the Receiver, so long as the Receiver is acting 

in dual capacities as both the Initial Member and the Collateral Agent and (ii) shall only be 

required to deliver one copy of each such report addressed to the Receiver with a notation on the 

envelope that such report is being delivered to the Receiver in its dual capacities as both the 

Initial Member and the Collateral Agent. 

Section 8.15 Insurance. 

(a) Debtor shall cause insurance coverage to be maintained for the Underlying 

Collateral and Acquired Property from an insurer (unless provided for in the then-applicable 

Business Plan) reasonably acceptable to the Purchase Money Notes Guarantor for any Asset with 

respect to which the Underlying Borrower has failed to maintain required fire, hurricane, flood 

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

or Acquired Property is located and in such amounts and with such deductibles as, from time to 

time, are approved by the Purchase Money Notes Guarantor (unless provided for in the thenapplicable Business Plan). 

(b) All such insurance shall (i) provide that no cancellation, material reduction 

in amount or material change in coverage thereof shall be effective until at least thirty (30) days 

after receipt by the Collateral Agent of written notice thereof, (ii) with respect to any policy 

insuring a Grantor or Collateral, name the Collateral Agent as additional insured on behalf of the 

Secured Parties (in the case of liability insurance) or loss payee (in the case of property 

insurance). 

Section 8.16 Recovery of Expenses; Interest. Debtor shall cause commercially 

reasonable efforts to be used to recover from Underlying Borrowers and Underlying Obligors 

those Servicing Expenses that such Underlying Borrowers or Underlying Obligors are obligated 

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to pay. No Servicing Expenses shall bear interest chargeable in any way to the Collateral Agent 

or the Purchase Money Notes Guarantor. 

Section 8.17 Debtor’s Duty To Advise Collateral Agent and Purchase Money Notes 

Guarantor; Delivery of Certain Notices. In addition to such other reports and access to records 

and reports as are required to be provided to the Collateral Agent and the Purchase Money Notes 

Guarantor hereunder, Debtor shall cause to be delivered to the Collateral Agent or the Purchase 

Money Notes Guarantor such information relating to the Underlying Loans, the Collateral, the 

Acquired Property, Debtor and the Servicer and any subservicer as the Collateral Agent or the 

Purchase Money Notes Guarantor may reasonably request from time to time and, in any case, 

shall ensure that the Collateral Agent and the Purchase Money Notes Guarantor are promptly 

advised, in writing, of any matter of which Debtor, the Servicer or any subservicer becomes 

aware relating to the Underlying Loans, the Collateral, the Acquired Property, the Debtor 

Accounts or any Underlying Borrower or Underlying Obligor that materially and adversely 

affects the interests of the Collateral Agent or the Purchase Money Notes Guarantor hereunder. 

Without limiting the generality of the foregoing, Debtor shall cause to be delivered to the 

Collateral Agent and the Purchase Money Notes Guarantor information indicating any possible 

Environmental Hazards with respect to any Collateral or Underlying Collateral and any notice or 

report provided to Debtor or the Manager pursuant to Section 5.5 of the Servicing Agreement as 

in effect on the date hereof. To the extent the Collateral Agent requests information that is 

dependent upon obtaining such information from an Underlying Borrower, Underlying Obligor 

or other third party, Debtor shall cause to be made commercially reasonable efforts to obtain 

such information but it shall not be a breach by Debtor of this Agreement if Debtor fails to cause 

such information to be provided to Collateral Agent because an Underlying Borrower, 

Underlying Obligor or other Person (other than the Servicer or any subservicer) has failed to 

provide such information after such efforts have been made. 

Section 8.18 Administration of REO Properties. Notwithstanding any other provision 

of this Agreement to the contrary, in operating, managing, leasing or disposing of any REO 

Property, Debtor and the Manager shall act in the best interests of Debtor and the members and 

creditors of Debtor (including the FDIC in its various capacities) in accordance with the 

Servicing Standards pursuant to the LLC Operating Agreement, in accordance with the specific 

provisions of the LLC Operating Agreement relating to REO Properties and in general 

conformance with the Business Plan. Debtor shall furnish to the Collateral Agent such reports 

regarding the operation, management, leasing or disposition of any REO Property as the 

Collateral Agent reasonably shall request. 

Section 8.19 Payment of Purchase Money Notes Guaranty Fee. In consideration of the 

Purchase Money Notes Guarantor agreeing to guaranty certain obligations of Debtor pursuant to 

the Purchase Money Notes in accordance with the Purchase Money Notes Guaranty, the 

Receiver, for and on behalf of Debtor, shall pay to the Purchase Money Notes Guarantor on the 

Closing Date a fee equal to 3% of the aggregate original principal amount of the Purchase 

Money Notes (the “Purchase Money Notes Guaranty Fee”). To effect reimbursement and 

repayment of the Purchase Money Notes Guaranty Fee to the Receiver, the Purchase Money 

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Notes Guaranty Fee will be added to the aggregate principal amount of the Purchase Money 

Notes and paid by Debtor when and as it satisfies the Purchase Money Notes. 

ARTICLE IX
 

Required Consent; Limits Liability
 

Section 9.1 Required Consents; Limits Liability. Notwithstanding anything to the 

contrary contained in this Agreement (other than the last sentence of this Section 9.1 and Section 

9.3), Debtor shall not permit to be taken any action enumerated in Section 6.1 of the Servicing 

Agreement, any action described in the LLC Operating Agreement as requiring the consent of 

the Initial Member and/or the Purchase Money Notes Guarantor, as applicable (including but not 

limited to the actions enumerated in Section 3.4, the last sentence of Section 5.3(b) and Section 

8.1 of the LLC Operating Agreement) or any action enumerated below without the prior written 

consent of the Initial Member and, until the Purchase Money Notes Defeasance Date, the 

Purchase Money Notes Guarantor, which consent may be withheld or conditioned in the 

Collateral Agent’s sole and absolute discretion: 

(a) any amendment or modification to, or waiver of, any terms of the LLC 

Operating Agreement that relate to the manner in which the Servicer services the Underlying 

Loans or Acquired Property, including, without limitation, the Servicing Obligations and the 

Servicing Standard; 

(b) the replacement of the Servicer; 

(c) the payment of any fees to, or entering into any transaction with, any 

Affiliate of Debtor or Private Owner or Servicer or any subservicer, except as expressly 

contemplated by the Ancillary Documents; 

(d) any amendment, modification to or change in any material respect, or 

provide a material waiver of any provision of, the Organization Documents of Debtor; 

(e) any Change of Control; 

(f) [Intentionally Omitted]; 

(g) incur, create or assume any Indebtedness other than in respect of the 

Purchase Money Notes, this Agreement, the Discretionary Funding Advances and Excess 

Working Capital Advances. 

Notwithstanding the foregoing, Debtor may permit to be taken any action enumerated in 

clause (ii), (v) or (viii) (with respect to waivers and decisions) of Section 6.1(g) of the Servicing 

Agreement without the Collateral Agent’s approval if such action or the subject matter thereof is 

not material to the value of the Underlying Loan or Underlying Collateral in question or to the 

interests of the Secured Parties. 

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Section 9.2 Limitation of Liability. 

(a) Liability Generally. Neither the Collateral Agent, the Purchase Money 

Notes Guarantor nor any other Secured Party nor any of their respective Affiliates, nor any of 

their respective officers, directors, employees, partners, principals or agents, including the 

Servicer and any subservicer, shall be liable for any action taken or omitted to be taken by them 

or any one of them under this Agreement or in connection with any Collateral or any portion 

thereof, except for any act or omission constituting gross negligence, bad faith or willful 

misconduct (including any act or omission constituting theft, embezzlement, breach of trust or 

violation of any Law). In the event the Collateral Agent, the Purchase Money Notes Guarantor 

or any Secured Party exercises its rights pursuant to Article 5 of this Agreement, none of the 

Collateral Agent, the Purchase Money Notes Guarantor or any Secured Party, nor any of their 

respective Affiliates, nor any of their respective officers, directors, employees, partners, 

principals or agents, including the Servicer and any subservicer when acting as an agent of any 

of the foregoing, shall be liable for any action taken or omitted to be taken by them or any one of 

them pursuant to this Agreement or in connection with any Collateral or any portion thereof, 

except for any act or omission constituting willful misconduct. 

(b) Reliance on Notices, etc. Neither Debtor nor the Collateral Agent or the 

Purchase Money Notes Guarantor shall incur any liability to the other by acting in good faith 

upon any notice, consent, certificate or other instrument or writing (including telegram, cable, 

telex or telecopy) that is reasonably believed by Debtor or the Collateral Agent or the Purchase 

Money Notes Guarantor as applicable, to be genuine and to have been signed or sent by the 

proper party and that on its face is properly executed. 

(c) No Consequential Damages. Regardless of the legal theory upon which 

any claim by or against Debtor or the Collateral Agent or the Purchase Money Notes Guarantor 

is based, including any claim based on contract, tort, strict liability, or fraud, none of the 

Collateral Agent or the Purchase Money Notes Guarantor or Debtor shall be liable for, or may 

recover from the other, any amounts other than actual losses, costs and expenses (including 

reasonable attorneys’ fees and litigation and similar costs to pursue such recovery) incurred by 

the party asserting the claim. Without limiting the foregoing, neither party shall be liable for, or 

entitled to recover from the other party, any consequential, special, indirect, punitive, treble, 

nominal or exemplary damages, business interruption costs or expenses, or damages for lost 

profits, operating losses or lost investment opportunity (regardless of whether any such damages 

are characterized as direct or indirect), each of which is and all of which are hereby excluded by 

agreement of the Collateral Agent, the Purchase Money Notes Guarantor and Debtor, regardless 

of whether the party against whom such damages may be claimed has been advised of the 

possibility of any such damages, unless (in each case) such losses are incurred by the party 

asserting the claim as a direct result of a claim asserted against such party by a third party. For 

purposes of this Section 9.2, the following claims shall not constitute claims asserted by a third 

party: (i) with respect to Debtor, any claims asserted by (A) the Servicer or any subservicer, (B) 

any Affiliate of Debtor or the Servicer or any subservicer, and (C) any officer, director, 

employee, partner, principal or agent of Debtor or the Servicer or any subservicer, or any 

Affiliate of Debtor or the Servicer or any subservicer; and (ii) with respect to Collateral Agent, 

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any claims asserted by any Affiliate or officer, director, employee, partner, principal or agent of 

the Collateral Agent, the Purchase Money Notes Guarantor or any Affiliate of any of them. 

ARTICLE X
 

Release of Collateral
 

The Purchase Money Notes Guarantor hereby authorizes the Collateral Agent to, and 

Collateral Agent agrees that it shall, release its Lien on any Collateral, solely to the extent 

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

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

satisfaction in full of all of the secured obligations with respect to an Underlying Loan or upon 

receipt of a discounted payoff as payment in full of an Underlying Loan, (c) as is necessary in 

connection with the foreclosure on an Underlying Mortgaged Property, acceptance of a deed in 

lieu thereof or modification or restructuring of the terms thereof, or (d) in connection with 

Debtor’s sale of an Underlying Loan or any Collateral to the extent permitted under the Ancillary 

Documents, provided, that the proceeds of such sale or disposition are applied in accordance 

with the priority of payments set forth in Section 5.1 of the Custodial and Paying Agency 

Agreement and the other terms thereof. 

ARTICLE XI
 

Liquidation of Underlying Loans and Acquired Property
 

Section 11.1 Rights to Liquidate Underlying Loans and Collateral. Each of the Initial 

Member and, so long as any Purchase Money Note is outstanding and not fully discharged, 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 

Underlying Loans, other Collateral or Acquired Property held by Debtor or any Ownership 

Entity at any time after the earlier to occur of (a) the seventh anniversary of the Closing Date or 

(b) 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 Loan Schedule. 

Section 11.2 Exercise of Rights to Liquidate Underlying Loans and Collateral. In order 

to exercise its rights under Section 11.1, the Initial Member or, so long as any Purchase Money 

Note is outstanding and not fully discharged, the Purchase Money Notes Guarantor shall give 

notice in writing to the Collateral Agent, the Custodian/Paying Agent and Debtor (with copies 

thereof to the Initial Member or the Purchase Money Notes Guarantor, as applicable), setting 

forth the date by which the remaining Underlying Loans, other Collateral or Acquired Property 

are to be liquidated by the Collateral Agent. Debtor shall, and shall cause the Custodian/Paying 

Agent to, cooperate and assist the Collateral Agent with any and all aspects of the liquidation of 

the remaining Underlying Loans, other Collateral and Acquired Property to the extent reasonably 

requested by the Collateral Agent. In the event Debtor or any Affiliate thereof desires to bid to 

acquire the remaining Underlying Loans, other Collateral or Acquired Property, then the 

Collateral Agent shall be entitled to liquidate the remaining Underlying Loans, other Collateral 

and Acquired Property in its discretion. In the event the Collateral Agent undertakes to liquidate 

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the remaining Underlying Loans, other Collateral or Acquired Property pursuant to this Section 

11.2, the proceeds thereof shall be applied on the Distribution Date following any such 

liquidation in accordance with the priority of payments set forth in Section 5.1 of the Custodial 

and Paying Agency Agreement and the other terms thereof; provided, however, that, 

notwithstanding such priority of payments, no portion of such proceeds shall be paid pursuant to 

Section 5.1(a)(vii) of the Custodial and Paying Agency Agreement until the Secured Obligations 

have been repaid in full. 

ARTICLE XII
 

Collateral Agent
 

Section 12.1 Appointment and Authorization of Collateral Agent. The Purchase Money 

Notes Guarantor hereby irrevocably appoints, designates and authorizes the Receiver to act as 

the Collateral Agent pursuant to this Agreement to act as the agent of (and to hold any security 

interest created by the Collateral Documents for and on behalf of or on trust for) the Purchase 

Money Notes Guarantor and each other Secured Party for purposes of acquiring, holding and 

enforcing any and all Liens on the Collateral granted by any Grantor to secure any of the Secured 

Obligations, together with such powers and discretion as are reasonably incidental thereto. In 

this capacity, the Collateral Agent (and any co-agents, sub-agents and attorneys-in-fact appointed 

by the Collateral Agent for purposes of holding or enforcing any Lien on the Collateral (or any 

portion thereof) granted pursuant to the Collateral Documents, or for exercising any rights and 

remedies thereunder at the direction of the Collateral Agent), shall be entitled to the benefits of 

all provisions of this Article XII as though such co-agents, sub-agents and attorneys-in-fact were 

the Collateral Agent hereunder. Notwithstanding any provision to the contrary contained 

elsewhere herein or in any other Ancillary Document, the Collateral Agent shall have no duties 

or responsibilities, except those expressly set forth herein, nor shall the Collateral Agent have or 

be deemed to have any fiduciary relationship with any Secured Party or participant of a Secured 

Party, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall 

be read into this Agreement or any other Ancillary Document or otherwise exist against the 

Collateral Agent. Without limiting the generality of the foregoing sentence, the use of the term 

“agent” herein and in the other Ancillary Documents with reference to the Collateral Agent is not 

intended to connote any fiduciary or other implied (or express) obligations arising under agency 

doctrine of any applicable Law. Instead, such term is used merely as a matter of market custom, 

and is intended to create or reflect only an administrative relationship between independent 

contracting parties. 

Section 12.2 Delegation of Duties. The Collateral Agent may execute any of its duties 

under this Agreement or any other Collateral Document (including for purposes of holding or 

enforcing any Lien on the collateral (or any portion thereof) granted under the Collateral 

Documents or of exercising any rights and remedies thereunder) by or through agents, subagents, employees or attorneys-in-fact as shall be deemed necessary by the Collateral Agent and 

shall be entitled to advice of counsel and other consultants or experts concerning all matters 

pertaining to such duties. The Collateral Agent shall not be responsible for the negligence or 

misconduct of any agent or sub-agent or attorney-in-fact that it selects in the absence of gross 

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negligence or willful misconduct (as determined in the final judgment of a court of competent 

jurisdiction). 

Section 12.3 Liability of Collateral Agent. Neither the Collateral Agent, nor any of its 

Affiliates or officers, directors, employees, agents, sub-agents or attorneys-in-fact of any of them 

shall (a) be liable for any action taken or omitted to be taken by any of them under or in 

connection with this Agreement or any other Ancillary Document or the transactions 

contemplated hereby (except for its own gross negligence or willful misconduct, as determined 

by the final judgment of a court of competent jurisdiction, in connection with its duties expressly 

set forth herein), or (b) be responsible in any manner to any Secured Party for any recital, 

statement, representation or warranty made by any Grantor or any officer thereof, contained 

herein or in any other Ancillary Document, or in any certificate, report, statement or other 

document referred to or provided for in, or received by the Collateral Agent under or in 

connection with, this Agreement or any other Ancillary Document, or the validity, effectiveness, 

genuineness, enforceability or sufficiency of this Agreement or any other Ancillary Document, 

or the perfection or priority of any Lien or security interest created or purported to be created 

under the Collateral Documents, or for any failure of any Grantor or any other party to any 

Ancillary Document to perform its obligations hereunder or thereunder. 

Section 12.4 Reliance by Collateral Agent. 

(a) The Collateral Agent shall be entitled to rely, and shall be fully protected 

in relying, upon any writing, communication, signature, resolution, representation, notice, 

consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, electronic 

mail message, statement or other document or conversation believed by it to be genuine and 

correct and to have been signed, sent or made by the proper Person or Persons, and upon advice 

and statements of legal counsel (including counsel to Debtor), independent accountants and other 

experts selected by the Collateral Agent. The Collateral Agent shall be fully justified in failing 

or refusing to take any action under any Collateral Document unless it shall first receive such 

advice or concurrence of the Controlling Party as it deems appropriate. The Collateral Agent 

shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement 

or any other Collateral Document in accordance with a request or consent of the Controlling 

Party and such request and any action taken or failure to act pursuant thereto shall be binding 

upon all the Secured Parties. 

(b) The Purchase Money Notes Guarantor, by its execution of this Agreement, 

shall be deemed to have consented to, approved or accepted or to be satisfied with, each 

document or other matter required to be consented to or approved by or acceptable or 

satisfactory to the Collateral Agent unless the Collateral Agent shall have received notice from 

Purchase Money Notes Guarantor prior to the proposed Closing Date specifying its objection 

thereto. 

Section 12.5 Liability of Collateral Agent. The Collateral Agent shall not be deemed to 

have knowledge or notice of the occurrence of any Default or Event of Default, unless the 

Collateral Agent shall have received written notice from a Grantor or any Secured Party referring 

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to this Agreement, describing such Default or Event of Default and stating that such notice is a 

“notice of default.” The Collateral Agent will notify the Purchase Money Notes Guarantor of its 

receipt of any such notice. The Collateral Agent shall take such action with respect to any Event 

of Default as may be directed by the Controlling Party in accordance with Article V; provided, 

however, that unless and until the Collateral Agent has received any such direction, the 

Collateral Agent may (but shall not be obligated to) take such action, or refrain from taking such 

action, with respect to such Event of Default as it shall deem advisable or in the best interest of 

the Secured Parties. 

Section 12.6 Successor Collateral Agent. 

The Collateral Agent may resign as the Collateral Agent upon thirty (30) days’ notice to 

the Purchase Money Notes Guarantor and Debtor; provided, however, that the prior written 

consent of the Purchase Money Notes Guarantor and Debtor will be required prior to the 

effectiveness of any such resignation. If Collateral Agent resigns under this Agreement, the 

Controlling Party, with the written consent of Debtor, shall appoint a successor collateral agent 

for the Secured Parties. If no successor collateral agent is appointed prior to the effective date of 

the resignation of the Collateral Agent, the retiring Collateral Agent may appoint, after 

consulting with the Purchase Money Notes Guarantor and Debtor, a successor collateral agent. 

Upon the acceptance of its appointment as successor collateral agent hereunder, the Person 

acting as such successor agent shall succeed to all the rights, powers and duties of the retiring 

Collateral Agent and the term “Collateral Agent” shall mean such successor collateral agent, and 

the retiring Collateral Agent’s appointment, powers and duties as the Collateral Agent shall be 

terminated. 

ARTICLE XIII
 

Miscellaneous
 

Section 13.1 Attorney-in-Fact. Each Grantor hereby constitutes and appoints the 

Collateral Agent the true and lawful attorney-in-fact of such Grantor, with full power and 

authority in the place and stead of such Grantor and in the name of such Grantor, Collateral 

Agent or otherwise, subject to the terms of this Agreement and applicable Law, to enforce all 

rights, interests and remedies of such Grantor with respect to the Collateral; provided, however, 

that the Collateral Agent shall not exercise any of the aforementioned rights unless an Event of 

Default has occurred and is continuing. This power of attorney is a power coupled with an 

interest and shall be irrevocable until the termination of this Agreement in accordance with the 

terms hereof; provided, however, that nothing in this Agreement shall prevent such Grantor 

from, prior to the exercise by the Collateral Agent of any of the aforementioned rights, utilizing 

the Collateral to transact Grantor ordinary course business operations. 

Section 13.2 No Petition. Each of the Collateral Agent and the Purchase Money Notes 

Guarantor hereby covenants and agrees that it will not at any time institute against Debtor, or 

join in any institution against Debtor of, any bankruptcy, reorganization, arrangement, 

insolvency or liquidation proceeding, or other proceedings under any United States federal or 

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state bankruptcy or similar law in connection with any obligation relating to any Purchase 

Money Note, the Purchase Money Notes Guaranty or this Agreement. 

Section 13.3 Reimbursement of Expenses. Except as prohibited by Law, if at any time 

the Collateral Agent or the Purchase Money Notes Guarantor employs counsel in connection 

with the creation, perfection, preservation, or release of the security interest of the Collateral 

Agent in the Collateral or the enforcement of any of the Collateral Agent’s, or the Purchase 

Money Notes Guarantor’s rights or remedies hereunder, all of the Collateral Agent’s and the 

Purchase Money Notes Guarantor’s attorneys’ fees arising from such services and all other 

expenses, costs, or charges relating thereto shall become part of the Secured Obligations secured 

hereby and be paid by Debtor on demand. 

Section 13.4 Termination of Security Interest. Upon the satisfaction and discharge in 

full of the Secured Obligations, the security interest and all other rights granted hereby shall 

terminate and all rights to the Collateral shall revert to Debtor. Upon any such satisfaction, and 

discharge of the Secured Obligations, the Collateral Agent (a) upon the written request of Debtor 

shall promptly execute and deliver all such documentation, Uniform Commercial Code 

termination statements and instruments as are necessary to release the Liens created pursuant to 

this Agreement and to terminate this Agreement, and (b) agrees, at the reasonable request of 

Debtor, to furnish, execute and deliver such documents, instruments, certificates, notices or 

further assurances as Debtor may reasonably request as necessary or desirable to effect such 

termination and release, all at Debtor’s sole cost and expense. 

Section 13.5 Indemnification. 

(a) Each Grantor shall indemnify and hold harmless the Collateral Agent, the 

Purchase Money Notes Guarantor and each of their respective Affiliates, and their respective 

officers, directors, employees, partners, principals, agents and contractors (the “Indemnified 

Parties”), from and against any losses, damages, liabilities, costs and expenses (including 

reasonable attorneys’ fees and litigation and similar costs, and other out-of-pocket expenses 

incurred in investigating, defending, asserting or preparing the defense or assertion of any of the 

foregoing), deficiencies, claims, interest, awards, judgments, penalties and fines (collectively, 

“Losses”) arising out of or resulting from (i) any breach by any Grantor or any of its Affiliates or 

any of their respective officers, directors, employees, partners, principals, agents or contractors 

(including the Servicer and any subservicer) (collectively, “Related Entities”) of any of their 

respective obligations under or covenants or agreements contained in this Agreement, the 

Collateral Documents or the Servicing Agreement (including any claim asserted by the Collateral 

Agent, the Purchase Money Notes Guarantor against Debtor to enforce its rights pursuant to 

Article 5), or any third-party allegation or claim based upon facts alleged that, if true, would 

constitute such a breach, or (ii) any gross negligence, bad faith or willful misconduct of any of 

the Related Entities (including any act or omission constituting theft, embezzlement, breach of 

trust or violation of any Law). Such indemnity shall survive the termination of this Agreement. 

In order for an Indemnified Party to be entitled to any indemnification provided for under this 

Agreement in respect of, arising out of or involving a Loss or a claim or demand made by any 

Person against the Indemnified Party (a “Third Party Claim”), such Indemnified Party shall 

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deliver notice thereof to Debtor promptly after receipt by such Indemnified Party of written 

notice of the Third Party Claim, describing in reasonable detail the facts giving rise to any claim 

for indemnification hereunder, the amount of such claim (if known) and such other information 

with respect thereto as is available to the Indemnified Party and as Debtor may reasonably 

request. The failure or delay to provide such notice, however, shall not release any Grantor from 

any of its obligations under this Section 13.5 except to the extent that it is materially prejudiced 

by such failure or delay. 

(b) If for any reason the indemnification provided for herein is unavailable or 

insufficient to hold harmless the Indemnified Parties, Debtor shall contribute to the amount paid 

or payable by the Indemnified Parties as a result of the Losses of the Indemnified Parties in such 

proportion as is appropriate to reflect the relative fault of the Indemnified Parties, on the one 

hand, and Debtor or any Subsidiary Grantor (including the Servicer and any subservicer), on the 

other hand in connection with a breach of Debtor’s or any Subsidiary Grantor’s obligations under 

this Agreement. 

(c) If Debtor confirms in writing to the Indemnified Party within fifteen (15) 

days after receipt of a Third Party Claim Debtor’s responsibility to indemnify and hold harmless 

the Indemnified Party therefor, Debtor may elect to assume control over the compromise or 

defense of such Third Party Claim at Debtor’s own expense and by Debtor’s own counsel, which 

counsel must be reasonably satisfactory to the Indemnified Party; provided, however, that (i) the 

Indemnified Party may, if such Indemnified Party so desires, employ counsel at such 

Indemnified Party’s own expense to assist in the handling (but not control the defense) of any 

Third Party Claim; (ii) Debtor shall keep the Indemnified Party advised of all material events 

with respect to any Third Party Claim; (iii) Debtor shall obtain the prior written approval of the 

Indemnified Party before ceasing to defend against any Third Party Claim or entering into any 

settlement, adjustment or compromise of such Third Party Claim involving injunctive or similar 

equitable relief being imposed upon any Indemnified Party or any of its or his Affiliates; and (iv) 

no Grantor will, without the prior written consent of each Indemnified Party, settle or 

compromise or consent to the entry of any judgment in any pending or threatened action in 

respect of which indemnification may be sought hereunder (whether or not any such Indemnified 

Party is a party to such action), unless such settlement, compromise or consent by its terms 

obligates such Grantor to satisfy the full amount of the liability in connection with such Third 

Party Claim and includes an unconditional release of the Indemnified Party from all liability 

arising out of such Third Party Claim. 

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

Debtor shall not be entitled to control (and if the Indemnified Party so desires, it shall have sole 

control over) the defense, settlement, adjustment or compromise of (but Debtor shall 

nevertheless be required to pay all Losses incurred by the Indemnified Party in connection with 

such defense, settlement or compromise): (i) any Third Party Claim that seeks an order, 

injunction or other equitable relief against the Indemnified Party or any of its Affiliates; (ii) any 

action in which both Debtor or any Subsidiary Grantor (or any Affiliate) and the Indemnified 

Party are named as parties and either Debtor or such Subsidiary Grantor (or such Affiliate) or the 

Indemnified Party determines with advice of counsel that there may be one or more legal 

49 

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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. If Debtor elects not to assume the compromise or defense against the asserted 

liability, fails to timely and properly notify the Indemnified Party of its election as herein 

provided, or, at any time after assuming such defense, fails to diligently defend against such 

Third Party Claim in good faith, the Indemnified Party may pay, compromise or defend against 

such asserted liability (but Debtor shall nevertheless be required to pay all Losses incurred by the 

Indemnified Party in connection with such defense, settlement or compromise). In connection 

with any defense of a Third Party Claim (whether by Debtor, a Subsidiary Grantor or the 

Indemnified Party), all of the parties hereto shall, and shall cause their respective Affiliates to, 

cooperate in the defense or prosecution thereof and to in good faith retain and furnish such 

records, information and testimony, and attend such conferences, discovery proceedings, 

hearings, trials and appeals, as may be reasonably requested by a party hereto in connection 

therewith. 

Section 13.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY 

AND CONSTRUED IN ACCORDANCE WITH FEDERAL LAW BUT IF FEDERAL LAW 

DOES NOT PROVIDE A RULE OF DECISION, IT SHALL BE GOVERNED BY AND 

CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, 

EXCLUDING ANY CONFLICT OF LAWS RULE OR PRINCIPLE THAT MIGHT REFER 

THE GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW 

OF ANOTHER JURISDICTION. NOTHING IN THIS AGREEMENT SHALL REQUIRE 

ANY UNLAWFUL ACTION OR INACTION BY ANY PARTY TO THIS AGREEMENT. 

Section 13.7 Jurisdiction, Venue and Service. 

(a) Each Grantor, for itself and its Affiliates, hereby irrevocably and 

unconditionally: 

(i) consents to the jurisdiction of the United States District Court for the 

Southern District of New York and to the jurisdiction of the United States District Court for the 

District of Columbia for any suit, action or proceeding against it or any of its Affiliates 

commenced by the Collateral Agent, the Purchase Money Notes Guarantor or the Initial Member 

arising out of, relating to, or in connection with this Agreement or any other Ancillary 

Document, and waives any right to: 

(A) remove or transfer such suit, action or proceeding to any 

court or dispute-resolution forum other than the court in which the Collateral Agent, the 

Purchase Money Notes Guarantor or the Initial Member, as applicable, files the suit, action or 

proceeding without the consent of the Collateral Agent, the Purchase Money Notes Guarantor or 

the Initial Member, as applicable; 

(B) assert that venue is improper in the United States District 

Court for the Southern District of New York or the United States District Court for the District of 

Columbia; or 

50 

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(C) assert that the United States District Court for the Southern 

District of New York or the United States District Court for the District of Columbia is an 

inconvenient forum. 

(ii) consents to the jurisdiction of the Supreme Court of the State of 

New York for any suit, action or proceeding against it or any of its Affiliates commenced by the 

Collateral Agent, the Purchase Money Notes Guarantor or the Initial Member arising out of, 

relating to, or in connection with this Agreement or any other Ancillary Document (other than 

the LLC Operating Agreement), and waives any right to: 

(A) remove or transfer such suit, action or proceeding to any 

other court or dispute-resolution forum without the consent of the Collateral Agent, the Purchase 

Money Notes Guarantor or the Initial Member, as applicable; 

(B) assert that venue is improper in the Supreme Court of the 

State of New York; or 

(C) assert that the Supreme Court of the State of New York is 

an inconvenient forum. 

(iii) agrees to bring any suit, action or proceeding by any Grantor or its 

Affiliates against the Collateral Agent, the Purchase Money Notes Guarantor or the Initial 

Member arising out of, relating to, or in connection with this Agreement or any Ancillary 

Document in only either the United States District Court for the Southern District of New York 

or the United States District Court for the District of Columbia, and waives any right to remove 

or transfer such suit, action or proceeding to any other court or dispute-resolution forum without 

the consent of the Collateral Agent, the Purchase Money Notes Guarantor or the Initial Member, 

as applicable, and agrees to consent thereafter to transfer of the suit, action or proceeding to 

either the United States District Court for the Southern District of New York or the United States 

District Court for the District of Columbia at the option of the Collateral Agent, the Purchase 

Money Notes Guarantor or the Initial Member, as applicable; and 

(iv) agrees, if the United States District Court for the Southern District 

of New York and the United States District Court for the District of Columbia both lack 

jurisdiction to hear a suit, action or proceeding falling within Section 13.7(a)(iii), to bring that 

suit, action or proceeding in only the Supreme Court of the State of New York, and waives any 

right to remove or transfer such suit, action or proceeding to any other court or dispute-resolution 

forum without the consent of the Collateral Agent, the Purchase Money Notes Guarantor or the 

Initial Member, as applicable. 

(b) Each Grantor, on behalf of itself and its Affiliates, hereby irrevocably and 

unconditionally agrees that any final judgment entered against it in any suit, action or proceeding 

falling within Section 13.7(a) may be enforced in any court of competent jurisdiction; 

(c) Subject to the provisions of Section 13.7(d), each Grantor, on behalf of 

itself and its Affiliates, Collateral Agent, Purchase Money Notes Guarantor and Initial Member 

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hereby irrevocably and unconditionally agrees that service of all writs, process and summonses 

in any suit, action or proceeding pursuant to Section 13.7(a) or Section 13.7(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 13.9 (with copies to such other Persons as specified 

therein); provided, however, that nothing contained in this Section 12.3(c) shall affect the right 

of any party to serve process in any other manner permitted by Law; 

(d) Nothing in this Section 13.7 shall constitute consent to jurisdiction in any 

court by the FDIC, other than as expressly provided in Section 13.7(a)(iii) and Section 

13.7(a)(iv), or in any way limit the FDIC’s right to remove, transfer, seek to dismiss, or 

otherwise respond to any suit, action, or proceeding against it in any forum. 

Section 13.8 Waiver of Jury. EACH GRANTOR (ON BEHALF OF ITSELF AND IT 

AFFILIATES), THE COLLATERAL AGENT, THE PURCHASE MONEY NOTES 

GUARANTOR 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 AND AGREES 

THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT 

A JURY. 

Section 13.9 Notices. All notices, requests, demands, and other communications 

required or permitted to be given or delivered under or by reason of the provisions of this 

Agreement shall be in writing and shall be mailed or delivered to the applicable address or 

electronic mail address of the parties specified below for such Person or to such other address or 

electronic mail address as shall be designated by such party in a notice to the other parties. All 

such notices and other communications shall be deemed to be given or made upon the earlier to 

occur of (i) actual receipt (or refusal thereof) by the relevant party hereto and (ii) (A) if delivered 

by hand or by nationally recognized courier service, when signed for (or refused) by or on behalf 

of the relevant party hereto; (B) if delivered by mail, four (4) Business Days after deposit in the 

mails, postage prepaid; and (C) if delivered by electronic mail, when delivered. In no event shall 

a voice mail message be effective as a notice, communication or confirmation hereunder. 

Address for notices or communications to Debtor and any Subsidiary Grantor: 

Multibank 2009-1 RES-ADC Venture, LLC 

700 NW 107 Avenue, Suite 400 

Miami, Florida 33172 

Attention: Thekla Blaser Salzman 

E-Mail Address: Thekla.Salzman@rialtocapital.com 

52 

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468-003/AGR/2390415.6 
 


 

with a copy to: 

Bilzin Sumberg Baena Price & Axelrod LLP 

200 South Biscayne Boulevard, Suite 2500 

Miami, Florida 33131-5340 

Attention: Alan Axelrod 

E-Mail Address: AAxelrod@bilzin.com 

Address for notices or communications to any of the Collateral Agent, the Initial 

Member and the Purchase Money Notes Guarantor: 

Manager, Capital Markets & Resolutions 

c/o Federal Deposit Insurance Corporation 

550 17th Street, NW (Room F-7014) 

Washington, D.C. 20429-0002 

Attention: Ralph Malami
 

E-Mail 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, Virginia 22226 

Attention: David Gearin 

E-Mail Address: DGearin@fdic.gov 

Section 13.10 Assignment. This Agreement shall inure to the benefit of and be binding 

on and enforceable against successors and assigns of each Grantor, the Collateral Agent, the 

Purchase Money Notes Guarantor and the Initial Member; provided, however, that no Grantor 

shall assign its rights hereunder in whole or in part without the prior written consent of the 

Collateral Agent and the Purchase Money Notes Guarantor. 

Section 13.11 Entire Agreement. This Agreement contains the entire agreement among 

the Grantors, the Collateral Agent, the Purchase Money Notes Guarantor and the Initial Member 

with respect to the subject matter hereof and supersedes any and all other prior agreements, 

whether oral or written, provided that any Confidentiality Agreement between the FDIC and 

the Private Owner or any Affiliates of the Private Owner (including by way of joinder) 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 Debtor’s rights 

under Article VI of the Contribution Agreement shall not be deemed a repurchase option for 

purposes of Section 2 of any such Confidentiality Agreement. 

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Section 13.12 Amendments and Waivers. No provision of this Agreement may be 

amended or waived except in writing executed by all of the parties to this Agreement, except for 

Article II, any provision of which may be amended and waived in writing executed by Debtor 

and Purchase Money Notes Guarantor. 

Section 13.13 Confidentiality. Each Grantor shall keep confidential and shall not 

divulge to any party, without the prior written consent of the Collateral Agent, the Purchase 

Money Notes Guarantor and the Initial Member, any information pertaining to this Agreement, 

the Underlying Loans or any Underlying Borrower or the Underlying Collateral thereunder, 

except as required pursuant to this Agreement and except to the extent that it is necessary and 

appropriate for such Grantor to do so in working with legal counsel, auditors, taxing authorities, 

regulatory authorities or any other Governmental Authority; provided, however, that, to the 

extent that disclosure should be required by law, rule, regulation (including any securities listing 

requirements or the requirements of any self-regulatory organization), subpoena, or in 

connection with any legal or regulatory proceeding (including in connection with or pursuant to 

any action, suit, subpoena, arbitration or other dispute resolution process or other legal 

proceedings, whether civil or criminal, and including before any court or administrative or 

legislative body), such Grantor will use all reasonable efforts to maintain confidentiality and will 

(unless otherwise prohibited by law) notify the Collateral Agent, the Purchase Money Notes 

Guarantor and the Initial Member within one (1) Business Day after its knowledge of such 

legally required disclosure so that the Collateral Agent, the Purchase Money Notes Guarantor 

and/or the Initial Member may seek an appropriate protective order. Notice shall be by 

telephone, by email and in writing. In the absence of a protective order or waiver, such Grantor 

may make such required disclosure if, in the written opinion of its outside counsel (which 

opinion shall be provided to the Collateral Agent, the Purchase Money Notes Guarantor and the 

Initial Member prior to disclosure pursuant to this Section 13.13), failure to make such disclosure 

would subject such Grantor to liability for contempt, censure or other legal penalty or liability. 

Section 13.14 Reinstatement. This Agreement shall continue to be effective or be 

automatically reinstated, as the case may be, if at any time payment pursuant to this Agreement 

is rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, 

reorganization, liquidation of any Grantor or upon the dissolution of, or appointment of any 

intervenor or conservator or, or trustee or similar official for, any Grantor or any substantial part 

of any Grantor’s assets, or otherwise, all as though such payments had not been made, and 

Debtor shall pay the Collateral Agent or the Purchase Money Notes Guarantor on demand all 

reasonable costs and expenses (including reasonable fees of counsel) incurred by the Collateral 

Agent or the Purchase Money Notes Guarantor in connection with such rescission or restoration. 

Section 13.15 Interpretation; No Presumption. Headings are intended solely for 

convenience of reference and shall not affect the meaning or interpretation of the provisions of 

this Agreement. This Agreement shall be construed fairly as to each party hereto and if at any 

time any such term or condition is desired or required to be interpreted or construed, no 

consideration shall be given to the issue of who actually prepared, drafted or requested any term 

or condition of this Agreement or any agreement or instrument subject hereto. 

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Section 13.16 Severability. Any provision of this Agreement that is prohibited or 

unenforceable in any jurisdiction shall be ineffective, but such ineffectiveness shall be limited as 

follows: (a) 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; (b) without limitation of clause (a), 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 (c) without limitation of clauses (a) 

or (b), such ineffectiveness shall not invalidate any of the remaining provisions of this 

Agreement. Without limitation of the preceding sentence, it is the intent of the parties to this 

Agreement that in the event that in any court proceeding, such court determines that any 

provision of this Agreement is prohibited or unenforceable in any jurisdiction (because of the 

duration or scope (geographic or otherwise) of such provision, or for any other reason) such 

court shall have the power to, and shall, (p) 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 (q) enforce such 

provision, as so modified pursuant to clause (p), in such proceeding. Nothing in this Section 

13.16 is intended to, or shall, limit (x) the ability of any party to this Agreement to appeal any 

court ruling or the effect of any favorable ruling on appeal or (y) the intended effect of Section 

13.6. 

Section 13.17 Survival. All obligations made herein shall survive the execution and 

delivery of this Agreement. Except as otherwise provided in this Agreement or implied by 

applicable law, the obligations of each Grantor set forth in this Agreement shall terminate only 

upon the satisfaction and discharge in full of the Secured Obligations. 

Section 13.18 No Third Party Beneficiaries. This Agreement is made for the sole benefit 

of the Collateral Agent, the Purchase Money Notes Guarantor, the Secured Parties and the 

Grantors and their respective successors and permitted assigns, and no other Person or Persons 

(including Underlying Borrowers or any co-lender or other Person with any interest in or liability 

under any of the Underlying Loans) shall have any rights or remedies under or by reason of this 

Agreement. 

Section 13.19 Counterparts; Facsimile Signatures. This Agreement may be executed in 

two (2) or more counterparts, each of which shall be deemed an original but all of which together 

shall constitute but one and the same agreement. This Agreement and any amendments hereto, 

to the extent 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 

55 

Multibank Structured Transaction 2009-1 RES-ADC 

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468-003/AGR/2390415.6 
 

the use of a facsimile machine or other electronic means as a defense to the formation or 

enforceability of a contract and each such Person forever waives any such defense. 

[Remainder of Page Intentionally Left Blank] 

56 

Multibank Structured Transaction 2009-1 RES-ADC 

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468-003/AGR/2390415.6 
IN WITNESS WHEREOF, the parties hereto, by their officers duly authorized, 

intending to legaiJy bound, have caused this Agreement to be duly executed. 

MULTIBANK 2009-1 RES-ADC VENTURE, LLC 

By: 	 RL RES 2009-1 Investments, LLC, 

as Manager 

By:._--::-::----:-o<:::-::----=-___,.,......:--­

Name: Jeffrey P. ruasaelf---....-' 

Title: ChiefExecutive Officer 

FEDERAL DEPOSIT INSURANCE 

CORPORA.TION, as Purchase Money Notes 

Guarantor 

By: ______________________________ 

Name: Ronald Sommers 

Title: Attorney-in-Fact 

FEDERAL DEPOSIT INSURANCE 

CORPORATION, as receiver for various failed 

fmancial institutions listed on Schedule I hereto, as 

Collateral Agent 

By;_.---------------------------­

Name: Ronald Sommers 

Title: Attorney-in-Fact 

[Signature Pages to Reimbursement, Security and Guaranty Agreement] 

Muluhank Structured Transaction 2009-1 RES~AOC 

Rcunburscmcnt, Security nnd Guaranty Al!r~cmcnt 

·lflll·003/ACiR/1J'J041 5 
----------

IN WITNESS WHEREOF, the parties hereto, by their officers duly authorized, 

intending to legally bound, have caused this Agreement to be duly executed. 

MULTIBANK 2009-1 RES-ADC VENTURE, LLC 

By: 	 RL RES 2009-1 Investments, LLC, 

as Manager 

By: __________________________ 

Name: Jeffrey P. Krasnoff 

Title: Chief Executive Officer 

FEDERAL DEPOSIT INSURANCE 

CORPORATION, as Purchase Money Notes 

Guarantor 

-~ ---'-­ Name: Ronald Sommers 


Title: Attorney-in-Fact 


FEDERAL DEPOSIT INSURANCE 

CORPORATION, as receiver for various failed 

financial institutions listed on Schedule I hereto, as 

Collateral Agent 

--- :--=----­--\ Name: Ronald Sommers 


Title: Attorney-in-Fact 


[Signature Pages to Reimbursement, Security and Guaranty Agreement] 

\lullibank Structured Transaction 2009-1 RES-ADC 

Rcombursemcnt Security and Guaranty Agreement 

'16S-OG3ir\GRi2390415 
FEDERAL DEPOSIT INSURANCE 

CORPORATION, as receiver for Various failed 

financial institutions listed on Schedule 1 hereto, as 

Initial Member, solely for purposes of Sections 

4.1 (a), 4.1 (e), 4.1 (j ), 5.1 (a)( vi)- (ix), 5.1 (b), 5.1 (c), 

5.5, 8.14(c)- (h), 9.1, II. I, 11.2 and 13.6-13.19 

By~ 

Name: Ronald Sommers 

Title: Attorney-in-Fact 

!Signature Pages tD K.:imburscmenl. Security and Ciuaranty /\grcementj 

\1uiflhank \IP.kiur...:J !Jan.. ~H.:IItHl ~O(il)-1!{!·.\-.-\lX 

i~cm1bur'L'ilh."ni.. \c,:tJnt~" ;mJ (•uaranr~ :'\gn.:t:mt:n! 

·U>~-O(H: ,\(ii<.·2 ·;9()-l: 5 
 


 


 

SCHEDULE 1
 

LIST OF VARIOUS FAILED FINANCIAL INSTITUTIONS
 

Bank Name City State Fund Closing Date 

Columbian Bank and Trust Topeka KS 10011 August 22, 2008 

Integrity Bank Alpharetta GA 10012 August 29, 2008 

Silver State Bank Henderson NV 10013 September 5, 2008 

Alpha Bank and Trust Alpharetta GA 10018 October 24, 2008 

Freedom Bank Bradenton FL 10019 October 31, 2008 

Security Pacific Bank Los Angeles CA 10020 November 7, 2008 

Franklin Bank, SSB Houston TX 10021 November 7, 2008 

The Community Bank Loganville GA 10022 November 21, 2008 

First Georgia Community Bank Jackson GA 10025 December 5, 2008 

Sanderson State Bank Sanderson TX 10026 December 12, 2008 

Haven Trust Bank Duluth GA 10027 December 12, 2008 

Bank of Clark County Vancouver WA 10029 January 16, 2009 

1st Centennial Bank Redlands CA 10030 January 23, 2009 

MagnetBank Salt Lake City UT 10031 January 30, 2009 

Ocala National Bank Ocala FL 10032 January 30, 2009 

FirstBank Financial Services McDonough GA 10036 February 6, 2009 

Cornbelt Bank and Trust Pittsfield IL 10037 February 13, 2009 

Riverside Bank of the Gulf Coast Cape Coral FL 10038 February 13, 2009 

Silver Falls Bank Silverton OR 10041 February 20, 2009 

FirstCity Bank Stockbridge GA 10047 March 20, 2009 

Omni National Bank Atlanta GA 10048 March 27, 2009 

Integrity Bank Jupiter FL 10095 July 31, 2009 

Schedule 1-1 

Multibank Structured Transaction 2009-1 RES-ADC 

Reimbursement, Security and Guaranty Agreement 

468-003/AGR/2390415.6 
 


 


 

SCHEDULE 2
 

UNDERLYING LOAN SCHEDULE
 

OMITTED

Schedule 2-1 

Multibank Structured Transaction 2009-1 RES-ADC 

Reimbursement, Security and Guaranty Agreement 

468-003/AGR/2390415.6 
 

EXHIBIT A 

FORM OF JOINDER AGREEMENT 

THIS JOINDER AGREEMENT, dated as of _________ __, 20__, is delivered 

pursuant to Section 8.12 of the Reimbursement, Security and Guaranty Agreement, dated as of 

February 9, 2010, by and among Multibank 2009-1 RES-ADC Venture, LLC, a Delaware 

limited liability company, each of the other entities that becomes a party thereto pursuant to 

Section 8.12 thereof, Federal Deposit Insurance Corporation, acting in its corporate capacity, 

Federal Deposit Insurance Corporation, as Receiver for various failed financial institutions listed 

on Schedule 1 hereto (in such capacity, the “Receiver”), as Collateral Agent for the Secured 

Parties, and, solely for purposes of Sections 4.1(e), 4.1(j), 5.1(a)(vi) – (ix), 5.1(b), 5.1(c), 5.5, 

11.1, 11.2 and 13.6 – 13.19 thereof, Federal Deposit Insurance Corporation, as Receiver, as 

Initial Member under the LLC Operating Agreement (the “Reimbursement, Security and 

Guaranty Agreement”). Capitalized terms used herein without definition are used as defined in 

the Reimbursement, Security and Guaranty Agreement. 

By executing and delivering this Joinder Agreement, the undersigned, as provided 

in Section 8.12 of the Reimbursement, Security and Guaranty Agreement, hereby becomes a 

party to the Reimbursement, Security and Guaranty Agreement as a Grantor thereunder with the 

same force and effect as if originally named as a Grantor therein and, without limiting the 

generality of the foregoing, as collateral security for the prompt and complete payment and 

performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured 

Obligations of the undersigned, hereby mortgages, pledges and hypothecates to the Collateral 

Agent for the benefit of the Secured Parties, and grants to the Collateral Agent for the benefit of 

the Secured Parties a lien on and security interest in, all of its right, title and interest in, to and 

under the Collateral of the undersigned and expressly assumes all obligations and liabilities of a 

Grantor thereunder. The undersigned hereby agrees to be bound as a Grantor for the purposes of 

the Reimbursement, Security and Guaranty Agreement. 

The undersigned hereby represents and warrants that each of the representations 

and warranties contained in Article VII of the Reimbursement, Security and Guaranty 

Agreement applicable to it is true and correct in all material respects with respect to it on and as 

the date hereof as if made on and as of such date. 

Multibank Structured Transaction 2009-1 RES-ADC 

Reimbursement, Security and Guaranty Agreement 

468-003/AGR/2390415.6 
 

IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to 

be duly executed and delivered as of the date first above written. 

[ADDITIONAL GRANTOR] 

By: 

Name: 

Title: 

ACKNOWLEDGED AND AGREED as of the date 

first above written: 

FEDERAL DEPOSIT INSURANCE 

CORPORATION, as receiver for various failed 

financial institutions listed on Schedule 1 to the 

Reimbursement, Security and Guaranty Agreement, 

as Collateral Agent 

By: _________________________________________ 

Name: 

Title: 

A-2 

Multibank Structured Transaction 2009-1 RES-ADC 

Reimbursement, Security and Guaranty Agreement 

468-003/AGR/2390415.6