Multibank Structured Transaction 2010-1 RADC/CADC

 EXECUTION COPY 

LIMITED LIABILITY COMPANY INTEREST
 

SALE AND ASSIGNMENT AGREEMENT
 

by and among
 

MREC FUNDING, LLC,
 

FEDERAL DEPOSIT INSURANCE CORPORATION,
 

AS RECEIVER OF THE VARIOUS FAILED FINANCIAL INSTITUTIONS
 

LISTED ON SCHEDULE I HERETO
 

and
 

2010-1 RADC/CADC VENTURE, LLC
 

Dated as of August 26, 2010 

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LIMITED LIABILITY COMPANY INTEREST
	

SALE AND ASSIGNMENT AGREEMENT
	

THIS LIMITED LIABILITY COMPANY INTEREST SALE AND 

ASSIGNMENT AGREEMENT (this “Agreement”) is made as of August 26, 2010, by 

and among MREC Funding, LLC, a limited liability company organized and existing 

under the laws of Delaware (the “Private Owner”), and the Federal Deposit Insurance 

Corporation (in any capacity, the “FDIC”), as receiver for each of the various failed 

financial institutions listed on Schedule I hereto (including its successors and assigns 

thereto, the “Initial Member”), and 2010-1 RADC/CADC Venture, LLC, a limited 

liability company organized and existing under the laws of Delaware (the “Company”). 

Capitalized terms used and not defined in this Agreement shall have the respective 

meanings set forth in the Agreement of Common Definitions (as hereinafter defined). 

RECITALS 

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

various failed financial institutions listed on Schedule I hereto (individually or 

collectively, the “Failed Banks”); and 

WHEREAS, the Initial Member formed the Company by causing the Certificate 

of Formation of the Company to be filed with the Secretary of State of the State of 

Delaware on August 16, 2010, holds the sole limited liability company interest in the 

Company, and has entered into the Original LLC Operating Agreement; and 

WHEREAS, the parties to this Agreement, together with certain additional 

parties, have entered into the Agreement of Common Definitions – 2010-1 RADC/CADC 

Venture, LLC dated as of the date hereof (the “Agreement of Common Definitions”); 

WHEREAS, pursuant to the Contribution Agreement, the Initial Member has 

contributed in part and sold in part to the Company all of the Initial Member’s right, title 

and interest in and to the Assets; and 

WHEREAS, after conducting a sealed bid sale for a forty percent (40%) LLC 

Interest (the “Transferred LLC Interest”), the FDIC selected Mariner Real Estate 

Partners, LLC (the “Sponsor”) as the successful bidder pursuant to the bid form 

submitted by it (the “Bid Form”) and, in accordance with the instructions governing the 

sealed bid sale, the Sponsor has deposited $5,212,088.83 (the “Earnest Money 

Deposit”) with the FDIC; and 

WHEREAS, following its selection as the successful bidder, the Sponsor formed 

the Private Owner as a Qualified Transferee; and 

WHEREAS, the Initial Member desires to transfer the Transferred LLC Interest to 

the Private Owner (upon which the Initial Member will retain a sixty percent (60%) LLC 

Interest) and enter into the LLC Operating Agreement in the form attached hereto as 

Exhibit A, and the Private Owner desires to acquire the Transferred LLC Interest and 

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enter into the LLC Operating Agreement; and 

WHEREAS, the Initial Member and the Private Owner desire, as capital 

contributions to the Company pro rata in accordance their proportionate LLC Interests 

(after giving effect to the transfer of the Transferred LLC Interest), to fund the Working 

Capital Reserve with an aggregate amount of $3,000,000.00 (such sum, the “WCR 

Account Deposit”); 

WHEREAS, the Initial Member’s pro rata share of such WCR Account Deposit is 

$1,800,000.00 (the “Initial Member WCR Account Deposit”) and Private Owner’s pro 

rata share of such WCR Account Deposit is $1,200,000.00 (the “Private Owner WCR 

Account Deposit”); 

WHEREAS, the Initial Member desires to fund the Initial Member Development 

Funding Account with an aggregate amount of $10,424,177.65 (such sum, the “Initial 

Member Development Funding Account Deposit”), for the purposes and uses as forth 

in the LLC Operating Agreement; 

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

and agreements hereinafter contained, and for other good and valuable consideration the 

receipt and sufficiency of which are hereby acknowledged, the Initial Member, the 

Private Owner and the Company hereby agree as follows: 

1. Sale and Assignment; Purchase Price; Funding of Working Capital 

Reserve; Closing. 

(a) Sale and Assignment. Subject to the terms and conditions of this 

Agreement, the Initial Member hereby sells to the Private Owner, and the Private Owner 

hereby purchases from the Initial Member, all of the Initial Member’s right, title and 

interest in and to the Transferred LLC Interest for a purchase price of $52,120,888.26 

(the “Transferred LLC Interest Sale Price”). On the date hereof, in satisfaction of its 

obligation to pay the Transferred LLC Interest Sale Price, the Private Owner shall (i) 

remit to the Initial Member, by wire transfer of immediately available funds, to such 

account as the Initial Member may direct in writing, an amount (the “Purchase Price 

Payment”) equal to the positive difference (if any) between (x) the Transferred LLC 

Interest Sale Price and (y) the sum of (A) the Earnest Money Deposit, (B) the Initial 

Member WCR Account Deposit, and (C) the Initial Member Development Funding 

Account Deposit, and (ii) (x) remit, on behalf of the Initial Member, by wire transfer of 

immediately available funds, (A) an amount equal to the Initial Member WCR Account 

Deposit to the Paying Agent for credit to the Working Capital Reserve Account, and (B) 

an amount equal to the Initial Member Development Funding Account Deposit to the 

Paying Agent for credit to the Initial Member Development Funding Account, and (y) 

remit, on its own behalf, by wire transfer of immediately available funds, an amount 

equal to the Private Owner WCR Account Deposit to the Paying Agent for credit to the 

Working Capital Reserve Account. 

(b) Closing Procedure. Upon (i) the receipt by the Initial Member of 

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(x) the Purchase Price Payment, (y) evidence of the establishment of the Working Capital 

Reserve Account in accordance with the provisions of Section 3.6 of the Custodial and 

Paying Agency Agreement and the Initial Member Development Funding Account in 

accordance with Section 3.4 of the Custodian and Paying Agency Agreement, and (z) 

confirmation of receipt by the Paying Agent of each of the Initial Member WCR Account 

Deposit, the Private Owner WCR Account Deposit and the Initial Member Development 

Funding Account Deposit, (ii) the delivery of the executed LLC Operating Agreement by 

the parties thereto (as required by Section 2), (iii) the delivery of the Additional Security 

(as required by Section 3), (iv) the delivery of the completed Asset Value Schedule, in 

the form attached hereto as Exhibit B allocating the Transferred LLC Interest Sale Price 

among the Assets (the “Asset Value Schedule”), which shall be appended to the 

Contribution Agreement as the Asset Value Schedule thereunder, (v) the delivery of the 

executed Transferee Acknowledgment and Certification, in the form attached hereto as 

Exhibit C, and (vi) the delivery of the executed Joinder and Consent Agreement, in the 

form attached hereto as Exhibit D, the sale and assignment of the Transferred LLC 

Interest to the Private Owner and the closing of the other transactions contemplated 

hereby (collectively, the “Closing”) shall be effective. 

2. LLC Operating Agreement. Contemporaneously with the execution and 

delivery of this Agreement, the Private Owner shall execute and deliver to the Company 

and the Initial Member the LLC Operating Agreement. 

3. Additional Security. Contemporaneously with the execution of this 

Agreement and the LLC Operating Agreement, the Private Owner shall, pursuant to the 

applicable provisions in the LLC Operating Agreement and the Custodial and Paying 

Agency Agreement, establish the Private Owner Pledged Account and deliver (or cause 

to be delivered) to the Initial Member the Additional Security, in the form of a Qualifying 

Letter of Credit, in an amount not less than $5,000,000. 

4. Representations and Warranties of Private Owner. The Private Owner 

hereby represents and warrants separately to each of the Initial Member and the Company 

as follows: 

(a) The Private Owner is a “Qualified Transferee,” as such term is 

defined in the LLC Operating Agreement, and as such, represents and warrants that each 

item included in such definition is true and correct in all respects as of the date hereof as 

if set forth herein. 

(b) All information and documents provided to the Initial Member or 

its agents by or on behalf of the Private Owner or any Affiliate thereof (including the 

Sponsor) in connection with this Agreement and the transactions contemplated hereby, 

including, but not limited to, the Purchaser Eligibility Certification, the Bid Certification, 

the Structured Transaction Qualification Request, the Bidder Qualification Request and 

the Confidentiality Agreement, are true and correct in all respects as of the date hereof 

and do not fail to state any fact necessary to make the information contained therein not 

misleading. 

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5. Exclusivity of Representations. THE TRANSFERRED LLC 

INTEREST IS SOLD “AS IS” AND “WITH ALL FAULTS,” WITHOUT ANY 

REPRESENTATION, WARRANTY, GUARANTY OR RECOURSE WHATSOEVER, 

INCLUDING AS TO ITS VALUE (OR THE VALUE, COLLECTABILITY OR 

CONDITION OF THE LOANS HELD BY THE COMPANY OR ANY OF THE 

COLLATERAL FOR SUCH LOANS), FITNESS FOR ANY PARTICULAR 

PURPOSE, MERCHANTABILITY, FITNESS FOR A SPECIFIC PURPOSE OR ANY 

OTHER MATTER, WHETHER EXPRESS OR IMPLIED OR BY OPERATION OF 

LAW OR OTHERWISE, AND THE INITIAL MEMBER SPECIFICALLY 

DISCLAIMS ANY WARRANTY, GUARANTY OR REPRESENTATION, ORAL OR 

WRITTEN, PAST OR PRESENT, EXPRESS OR IMPLIED, CONCERNING THE 

TRANSFERRED LLC INTEREST, THE LOANS, OR THE COLLATERAL 

SECURING THE LOANS. 

6. Assignment. This Agreement and all of the provisions hereof shall be 

binding upon and inure to the benefit of the parties hereto and their respective heirs (in 

the case of any individual), successors and permitted assigns; provided, however, that the 

Private Owner may not assign this Agreement or any of its rights, interests or obligations 

hereunder. Any purported assignment or delegation in violation of this Agreement shall 

be null and void ab initio. 

7. Beneficiaries. This Agreement shall inure to the benefit of, and may be 

enforced by, the Initial Member, the Private Owner and the Company and their respective 

successors and assigns. Except for the FDIC (in its corporate capacity), which shall be 

considered a third party beneficiary to this Agreement, there shall be no other third party 

beneficiaries hereunder. 

8. Waivers and Amendments. No amendment or waiver of any provision 

of this Agreement shall be effective unless the same shall be in writing and executed by 

the Initial Member, the Private Owner, the Company and the FDIC (in its corporate 

capacity). 

9. Failure to Consummate Transaction. If for any reason, without fault of 

the Initial Member, the Private Owner fails to consummate the purchase of the 

Transferred LLC Interest, upon the terms and conditions set forth in this Agreement, the 

Initial Member’s liquidated damages, and sole and exclusive remedy, shall be to retain 

the Earnest Money Deposit. The Private Owner and the Initial Member agree that the 

failure or refusal of the Initial Member to alter or modify, in any way, the terms or 

conditions of this Agreement, the LLC Operating Agreement or any Transaction 

Document shall not constitute fault on the part of the Initial Member. The Private Owner 

shall not be liable for any of the foregoing damages if the Private Owner is forced to 

withdraw its bid made pursuant to the Bid Form after award as the result of a supervisory 

directive given by the FDIC or any other federal or state financial regulatory agency, 

provided that the Initial Member shall be satisfied that such supervisory directive is 

legally effective. In such event, the Initial Member shall refund the Earnest Money 

Deposit. 

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10. Governing Law. EACH PARTY TO THIS AGREEMENT AGREES 

AND ELECTS THAT, IN ACCORDANCE WITH SECTION 5-1401 OF THE 

GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, THIS 

AGREEMENT IS TO 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, AND EACH PARTY TO THIS AGREEMENT 

UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT 

THAT THE LAWS OF ANY OTHER JURISDICTION GOVERN THIS 

AGREEMENT. Nothing in this Agreement shall require any unlawful action or inaction 

by any party hereto. 

11. Jurisdiction; Venue and Service. 

(a) Each of the Private Owner and the Company, in each case on 

behalf of 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 Initial Member arising out of, relating to, or in 

connection with this Agreement or any Transaction 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 Initial Member 

files the action, suit or proceeding) without the consent of the Initial Member; 

(B) assert that venue is improper in either the United 

States District Court for the Southern District of New York or the United States District 

Court for the District of Columbia; or 

(C) assert that the United States District Court for the 

Southern District of New York or the United States District Court for the District of 

Columbia is an inconvenient forum; 

(ii) consents to the jurisdiction of the Supreme Court of the 

State of New York, County of New York, for any suit, action or proceeding against it or 

any of its Affiliates commenced by the Initial Member arising out of, relating to, or in 

connection with this Agreement or any Transaction 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 Initial Member); 

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(B) assert that venue is improper in the Supreme Court 

of the State of New York, County of New York; or 

(C) assert that the Supreme Court of the State of New 

York, County of New York is an inconvenient forum; 

(iii) agrees to bring any suit, action or proceeding by it or any of 

its Affiliates against the Initial Member arising out of, relating to, or in connection with 

this Agreement or any Transaction Document (other than the LLC Operating Agreement) 

in only the United States District Court for the Southern District of New York or the 

United States District Court for the District of Columbia, and waives any right to remove 

or transfer such suit, action or proceeding to any other court or dispute-resolution forum 

without the consent of the Initial Member, 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 Initial Member; 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 11(a)(iii), 

to bring that suit, action or proceeding in only the Supreme Court of the State of New 

York, County of New York, and waives any right to remove or transfer such suit, action 

or proceeding to any other court or dispute-resolution forum without the consent of the 

Initial Member. 

(b) Each of the Private Owner and the Company, in each case 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 

11(a) may be enforced in any court of competent jurisdiction. 

(c) Subject to the provisions of Section 11(d), each of the Private 

Owner and the Company, in each case on behalf of itself and its Affiliates, and the Initial 

Member, hereby irrevocably and unconditionally agrees that service of all writs, process 

and summonses in any suit, action or proceeding pursuant to Section 11(a) or Section 

11(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 11 (with copies to such 

other Persons as specified therein); provided, however, that nothing contained in this 

Section 11(c) shall affect the right of any party to serve process in any other manner 

permitted by Law. 

(d) Nothing in this Section 11 shall constitute consent to jurisdiction in 

any court by the FDIC, other than as expressly provided in Section 11(a)(iii) and Section 

11(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 the FDIC in any forum. 

12. Waiver of Jury Trial. EACH OF THE PRIVATE OWNER AND THE 

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COMPANY, FOR ITSELF AND ITS AFFILIATES, AND THE INITIAL MEMBER, 

HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT 

MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING OUT OF OR 

RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE 

SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY. 

13. Notices. All notices, requests, demands and other communications 

required or permitted to be given or delivered under or by reason of the provisions of this 

Agreement shall be in writing and shall be given by certified or registered mail, postage 

prepaid, by delivery by hand or by nationally recognized courier service, or by electronic 

mail, in each case mailed or delivered to the applicable address or electronic mail address 

specified in, or in the manner provided in, this Section 13 below. All such notices, 

requests, demands and other communications shall be deemed to be given or made upon 

the earlier to occur of (i) actual receipt (or refusal thereof) by the relevant party hereto 

and (ii) (A) if delivered by hand or by nationally recognized courier service, when signed 

for (or refused) by or on behalf of the relevant party hereto; (B) if delivered by mail, 

when delivered (or refused), and (C) if delivered by electronic mail (which form of 

delivery is subject to the provisions of this paragraph), when delivered and capable of 

being accessed from the recipient’s office computer, provided that any notice, request, 

demand or other communication that is received other than during regular business hours 

of the recipient shall be deemed to have been given at the opening of business on the next 

business day of the recipient. In no event shall a voice mail message be effective as a 

notice, communication or confirmation hereunder. From time to time, any party may 

designate a new address for purposes of notice to it hereunder by notice to such effect to 

the other parties hereto in the manner set forth in this Section 13. 

If to the Initial Member, to: 

Assistant Director, Structured Deals
	

Federal Deposit Insurance Corporation
	

550 17th Street, NW (Room F-7014)
	

Washington, D.C. 20429-0002
	

Attention: Ralph Malami
	

Email Address: rmalami@fdic.gov
	

with a copy to: 

Senior Counsel 

FDIC Legal Division 

Litigation and Resolutions Branch, Receivership Section 

Special Issues Unit 

3501 Fairfax Drive (Room E-7056) 

Arlington, Virginia 22226 

Attention: David Gearin 

Email Address: dgearin@fdic.gov 

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If to the Private Owner or to the Company, to: 

2010-1 RADC/CADC Venture, LLC 

4200 W. 115th Street, Suite 100 

Leawood, Kansas 66211 

E-mail Addresses: 

with a copy to: 

Greenberg Traurig, LLP 

1750 Tysons Boulevard, Suite 1200 

McLean, Virginia 22102 

E-mail Address: 

Attention: Ryan Anderson and Kirk Lambright 

Attention: Thomas Galli, Shareholder 

14. Counterparts; Facsimile Signatures. This Agreement may be executed 

in any number of counterparts, each of which shall be an original and all of which shall 

together constitute one and the same instrument. It shall not be necessary for any 

counterpart to bear the signature of all parties hereto. This Agreement and any 

amendments hereto, to the extent signed and delivered by facsimile or other electronic 

means, shall be treated in all manner and respects as an original agreement and shall be 

considered to have the same binding legal effect as if it were the original signed version 

thereof delivered in person. No signatory to this Agreement shall raise the use of a 

facsimile machine or other electronic means to deliver a signature or the fact that any 

signature or agreement was transmitted or communicated through the use of a facsimile 

machine or other electronic means as a defense to the formation or enforceability of a 

contract and each such Person forever waives any such defense. 

15. Headings. Paragraph titles or captions contained in this Agreement are 

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

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

Section and paragraph references contained herein shall refer to Sections and paragraphs 

in this Agreement unless otherwise specified. 

16. Compliance with Law; Rules of Construction. Except as otherwise 

specifically provided herein, each party to this Agreement shall, at its own cost and 

expense, obey and comply with all Laws, as they may pertain to such party’s 

performance of its obligations hereunder. Section 1.2 of the Contribution Agreement 

(Construction) is hereby incorporated by reference into this Agreement. 

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SCHEDULE I
	

List of Failed Financial Institutions
	

Bank Name City State Fund Closing Date 

IndyMac Bank, FSB Pasadena CA 10007 July 11, 2008 

First Georgia Community Bank Jackson GA 10025 December 5, 2008 

Bank of Clark County Vancouver WA 10029 January 16, 2009 

Haven Trust Bank Duluth GA 10027 December 12, 2008 

First City Bank Stockbridge GA 10047 March 20, 2009 

New Frontier Bank Greeley CO 10050 April 10, 2009 

American Southern Bank Kennesaw GA 10053 April 24, 2009 

First Bank of Beverly Hills Calabasas CA 10054 April 24, 2009 

First Bank of Idaho Ketchum ID 10055 April 24, 2009 

Michigan Heritage Bank Farmington 

Hills 

MI 10056 April 24, 2009 

America West Bank Layton UT 10057 May 1, 2009 

Citizens Community Bank Ridgewood NJ 10058 May 1, 2009 

Silverton Bank Atlanta GA 10059 May 1, 2009 

Westsound Bank Bremerton WA 10060 May 8, 2009 

Bank of Lincolnwood Lincolnwood IL 10064 June 5, 2009 

Community Bank of West 

Georgia 

Villa Rica GA 10068 June 26, 2009 

First State Bank of Altus Altus OK 10093 July 31,2009 

Integrity Bank Jupiter FL 10095 July 31, 2009 

Community Bank of Nevada Las Vegas NV 10100 August 14, 2009 

Union Bank Chandler AZ 10102 August 14, 2009 

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