LIMITED LIABILITY COMPANY INTEREST 

SALE AND ASSIGNMENT AGREEMENT 

THIS LIMITED LIABILITY COMPANY SALE AND ASSIGNMENT 

AGREEMENT (this “Agreement”) is made as of February 5, 2009, by Stearns SPV I, 

LLC, a limited liability company organized and existing under the laws of Delaware 

(“Transferee”), Federal Deposit Insurance Corporation (“FDIC”) as receiver 

(“Receiver” or Initial Member”) for First National Bank of Nevada (“Failed Bank”), 

and FNBN-RESCON I LLC, a limited liability company organized and existing under the 

laws of Delaware (the “Company”). 

RECITALS 

WHEREAS, on July 25, 2008, the FDIC was appointed Receiver for the Failed 

Bank; and 

WHEREAS, the Receiver formed the Company and holds the sole membership 

interest in the Company (the “LLC Interest”); and 

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

and Assignment Agreement dated of even date hereof (the “Contribution Agreement”), 

pursuant to which Initial Member has transferred to the Company, as a capital 

contribution, all of the Receiver’s right, title and interest in and to the Loans (as defined 

therein) described in Attachment A thereto; and 

WHEREAS, pursuant to the Participation and Servicing Agreement dated of even 

date hereof (the “Participation Agreement”) between the Company and Initial Member, 

the Company has issued to Initial Member a participation interest in the Loans; and 

WHEREAS, after conducting a sealed bid sale for the LLC Interest, the Receiver 

selected Stearns Bank, N.A. as the successful bidder (“Successful Bidder”) pursuant to 

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

sealed bid sale (the “Bid Instructions”), the Successful Bidder has formed Transferee as 

a Qualified Transferee and deposited $3,220,800.00 (the “Earnest Money Deposit”) 

with Initial Member; and 

WHEREAS, Initial Member desires to transfer the LLC Interest to Transferee in 

compliance with Article VIII of the Limited Liability Company Operating Agreement 

between the Company and Initial Member dated of even date hereof (the “LLC 

Agreement”), and this Agreement is being entered into and delivered to the Company 

pursuant to Section 8.3(b) of the LLC Agreement; 

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

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

FNBN RESCON I LLC – Interest Sale Agmt 
receipt and sufficiency of which are hereby acknowledged, Initial Member and 

Transferee hereby agree as follows: 

1. Sale and Assignment; Closing; Post-Closing Adjustment. 

(a) On the terms and subject to the conditions set forth in this 

Agreement, Initial Member hereby sells to Transferee, and Transferee hereby purchases 

from Initial Member, all of Initial Member’s right, title and interest in and to the LLC 

Interest for a purchase price of $32,208,800.00 (the “Purchase Price”). On the date 

hereof, in satisfaction of its obligation to pay the Purchase Price, Transferee shall remit to 

Initial Member, by wire transfer of immediately available funds, to such account as Initial 

Member may direct in writing, an amount equal to the positive difference (if any) 

between the Purchase Price and the Earnest Money Deposit (the “Purchase Price 

Payment”). 

(b) Upon (i) the receipt by Initial Member of the Purchase Price 

Payment, (ii) the delivery of the executed joinder (as required by Section 4) and Guaranty 

(as required by Section 5), (iii) delivery of the completed Loan Value Schedule, in the 

form attached as Exhibit C, which shall be appended to the Contribution Agreement as 

the Loan Value Schedule thereunder, and (iv) the delivery of the executed Transferee 

Acknowledgment and Certification, in the form attached as Exhibit D, the sale and 

assignment of the LLC Interest to Transferee and the closing of the other transactions 

contemplated hereby shall be effective. 

(c) By its execution and delivery of this Agreement, the Transferee 

hereby joins in and agrees to be bound by the terms and conditions of the Contribution 

Agreement as the “LLC Interest Transferee” thereunder, and Initial Member and the 

Company hereby acknowledge and agree to the Transferee’s joinder thereto. 

2. Transferee Bound by LLC Agreement. Transferee hereby 

unconditionally and irrevocably confirms and agrees to be bound by the provisions of and 

comply with each and every one of the covenants, agreements, obligations and duties of a 

Member contained in the LLC Agreement, including without limitation the restrictions on 

ownership and transfer set forth in Article VIII of the LLC Agreement, all as fully and to 

the same extent as if Transferee had originally executed the LLC Agreement as the initial 

member thereof, and to be bound by all waivers made and consents given by Initial 

Member with respect to any matter set forth therein. 

3. Withdrawal of Initial Member. Initial Member hereby withdraws and 

resigns from the Company and is hereby released from its liabilities and ceases to be 

bound by its obligations as a Member of the Company, including without limitation any 

liabilities or obligations arising under or with respect to the LLC Agreement. 

4. Joinder to LLC Agreement. Contemporaneously with the execution and 

delivery of this Agreement, Transferee shall execute and deliver to the Company a 

joinder to the LLC Agreement in the form attached hereto as Exhibit A. 

FNBN RESCON I LLC – Interest Sale Agmt 

12372863.2 
5. Guaranty. Contemporaneously with the execution and delivery of this 

Agreement, Transferee shall cause to be delivered to Initial Member and the Company a 

guaranty in the form attached hereto as Exhibit B, duly executed by the Guarantor named 

therein. 

6. Representations and Warranties of Transferee. Transferee hereby 

represents and warrants to Initial Member and to the Company as follows: 

(a) Transferee is a “Qualified Transferee,” as such term is defined in 

the LLC 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 Initial Member or its 

agents by or on behalf of Transferee or the Successful Bidder in connection with this 

Agreement and the transactions contemplated hereby, including, but not limited to, the 

Purchaser Eligibility Certification, the Bid Certification, the 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. 

7. Exclusivity of Representations. EXCEPT FOR SUCH 

REPRESENTATIONS AND WARRANTIES AS ARE OTHERWISE EXPRESSLY 

PROVIDED IN THIS AGREEMENT, THE LLC INTEREST IS SOLD “AS IS” AND 

“WITH ALL FAULTS,” WITHOUT ANY REPRESENTATION, WARRANTY OR 

RECOURSE WHATSOEVER, INCLUDING AS TO ITS VALUE (OR THE VALUE, 

COLLECTIBILITY OR CONDITION OF THE LOANS HELD BY THE COMPANY), 

FITNESS FOR ANY PARTICULAR PURPOSE, MERCHANTABILITY OR ANY 

OTHER WARRANTY, EXPRESS OR IMPLIED, AND INITIAL MEMBER 

SPECIFICALLY DISCLAIMS ANY WARRANTY, GUARANTY OR 

REPRESENTATION, ORAL OR WRITTEN, PAST OR PRESENT, EXPRESS OR 

IMPLIED, CONCERNING THE LLC INTEREST OR THE LOANS, OR THE 

COLLATERAL SECURING THE LOANS. 

8. 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 

Transferee 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. 

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

enforced by, Initial Member, Transferee and the Company and their respective successors 

and assigns. There shall be no third party beneficiaries hereunder. 

10. 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 

Initial Member, Transferee and the Company. 

FNBN RESCON I LLC – Interest Sale Agmt 

12372863.2 
11. Failure to Consummate Transaction. If for any reason, without fault of 

Initial Member, Transferee fails to consummate the purchase of the LLC Interest, upon 

the terms and conditions set forth in this Agreement, Initial Member’s liquidated 

damages, and sole and exclusive remedy, shall be to retain the Earnest Money Deposit. 

Transferee and Initial Member agree that the failure or refusal of Initial Member to alter 

or modify, in any way, the terms or conditions of this Agreement, the Participation 

Agreement or any Ancillary Document shall not constitute fault on the part of Initial 

Member. Transferee shall not be liable for any of the foregoing damages if Transferee is 

forced to withdraw its Bid after award as the result of a supervisory directive given by the 

FDIC or any other federal or state financial regulatory agency, provided that Initial 

Member shall be satisfied that such supervisory directive is legally effective. In such 

event, Initial Member shall refund the Earnest Money Deposit. 

12. Governing Law. THIS AGREEMENT IS GOVERNED BY AND 

SHALL BE 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. 

13. Submission to Jurisdiction; Waivers. Each of Transferee and the 

Company hereby irrevocably and unconditionally: 

(a) (i) agrees that any suit, action or proceeding against it or any of its 

Affiliates by the other party arising out of or relating to or in connection with this 

Agreement may be instituted, and that any suit, action or proceeding it or any of its 

Affiliates against any other party arising out of or relating to or in connection with this 

Agreement shall be instituted only, in the Supreme Court of the State of New York, 

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

York or the United States District Court for the District of Columbia (and appellate courts 

from any of the foregoing), (ii) consents and submits, for itself and its property, to the 

jurisdiction of such courts for the purpose of any such suit, action or proceeding instituted 

against it, and (iii) agrees that a final judgment in any such suit, action or proceeding 

shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or 

in any other manner provided by law; 

(b) agrees that service of all writs, process and summonses in any suit, 

action or proceeding pursuant to Section 13(a) may be effected by the mailing of copies 

thereof by registered or certified mail, postage prepaid, to it at its address for notices 

pursuant to Section 15, such service to become effective 30 days after such mailing, 

provided that nothing contained in this Section 13(b) shall affect the right of any party to 

serve process in any other manner permitted by law; 

(c) (i) waives any objection which it may now or hereafter have to the 

laying of venue of any suit, action or proceeding arising out of or relating to this 

Agreement brought in any court specified in Section 13(a), (ii) waives any claim that any 

such suit, action or proceeding brought in any such court has been brought in an 

inconvenient forum, and (iii) agrees not to plead or claim either of the foregoing; and 

FNBN RESCON I LLC – Interest Sale Agmt 

12372863.2 
(d) agrees that nothing contained in this Section 13 shall be construed 

as a consent to jurisdiction by the Initial Member, the Failed Bank, or the FDIC in any 

capacity, or a limitation on any removal rights the FDIC, in any capacity, may have. 

14. EACH OF TRANSFEREE, THE COMPANY AND INITIAL MEMBER 

WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE 

ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY ANCILLARY 

DOCUMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED 

BEFORE A JUDGE SITTING WITHOUT A JURY. 

15. 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, or, delivered by hand or by nationally recognized air courier service, in any case, 

directed to the address of such Person set forth below: 

If to Initial Member, to: 

Manager, Capital Markets & Resolutions 

Federal Deposit Insurance Corporation 

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

Washington, D.C. 20429-0002 

Attention: Ralph Malami
 

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 

If to Transferee, to: 

Stearns SPV I, LLC 

4191 2nd Street South 

St. Cloud, MN 56301 

Attention: Norman C. Skalicky 

with a copy to: 

Lindquist and Vennum
 

4200 IDS Center 

80 South 8th Street 

Minneapolis, MN 55402 

FNBN RESCON I LLC – Interest Sale Agmt 

12372863.2 
Attention: Scott Coleman 

If to the Company, to: 

Manager, Capital Markets & Resolutions 

Federal Deposit Insurance Corporation 

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

Washington, D.C. 20429-0002 

Attention: Ralph Malami
 

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 

Any such notice shall become effective when received (or receipt is refused) by the 

addressee, provided that any notice or communication that is received (or refused) other 

than during regular business hours of the recipient shall be deemed to have been given at 

the opening of business on the next Business Day of the recipient. From time to time, 

any Person may designate a new address for purposes of notice hereunder by notice to 

such effect to the other Persons identified above. 

16. 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. 

17. Certain Defined Terms. Capitalized terms used and not defined in this 

Agreement shall have the respective meanings set forth in the LLC Agreement. 

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FNBN RESCON I LLC – Interest Sale Agmt 

12372863.2 
 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly 

executed as of the date first written above. 

TRANSFEREE: 

STEARNS SPV I, LLC, a Delaware 

limited liability company 

By: ______________________________ 

Name: Norman C. Skalicky 

Title: President 

INITIAL MEMBER: 

FEDERAL DEPOSIT INSURANCE 

CORPORATION AS RECEIVER FOR 

FIRST NATIONAL BANK OF NEVADA 

By: 

Name: Ralph Malami 

Title: Attorney-in-Fact 

COMPANY: 

FNBN-RESCON I LLC, a Delaware 

limited liability company 

By: Federal Deposit Insurance Corporation 

as Receiver for First National Bank of 

Nevada 

By: 

Name: Ralph Malami 

Title: Attorney-in-Fact 

FNBN RESCON I LLC – Interest Sale Agmt 

12372863.2 
 

 

Exhibit A 

Form of Joinder 

MEMBER SIGNATURE PAGE 

By its execution and delivery of this signature page, the undersigned hereby joins 

in and agrees to be bound by the terms and conditions of the Limited Liability Company 

Operating Agreement of FNBN-RESCON I LLC dated as of February 5, 2009 (the “LLC 

Agreement”) as the sole “Member” thereunder and authorizes this signature page to be 

attached to the LLC Agreement or counterparts thereof. 

Member: 

STEARNS SPV I, LLC, a Delaware 

limited liability company 

By: ______________________________ 

Name: Norman C. Skalicky 

Title: President 

Date: February 5, 2009 

Address: 

Stearns SPV I, LLC 

4191 2nd Street South 

St. Cloud, MN 56301 

Attention: Norman Skalicky 

Facsimile No.: 320-258-4851 

With a copy to: 

Lindquist and Vennum 

4200 IDS Center 

80 South 8th Street 

Minneapolis, MN 55402 

Attention: Scott Coleman 

FNBN RESCON I LLC – Interest Sale Agmt 

12372863.2 
Exhibit B 

Form of Guaranty 

FNBN RESCON I LLC – Interest Sale Agmt 

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Exhibit C 

Form of Loan Value Schedule 

Loan Number Loan Value 

FNBN RESCON I LLC – Interest Sale Agmt 

12372863.2 
 

 

Exhibit D 

Form of Acknowledgment and Certification 

Transferee Acknowledgment and Certification 

Reference is made to the Limited Liability Company Interest Sale and 

Assignment Agreement dated February 5, 2009 (the “Sale Agreement”) by and among 

Stearns SPV I, LLC (the “Transferee”), the Federal Deposit Insurance Corporation as 

Receiver for First National Bank of Nevada (the “Receiver”) and FNBN-RESCON I 

LLC (the “Company”). Capitalized terms used, and not otherwise defined, in this 

Acknowledgement and Certification have the meanings given in the Sale Agreement. 

The undersigned, Transferee, hereby acknowledges and certifies to the Receiver 

that it has read and understands, and is prepared to cause the Company to comply with, 

the obligations imposed upon the Company under the Participation Agreement, the 

Contribution Agreement and the Ancillary Documents (as defined in the Contribution 

Agreement). Without limiting the foregoing, and subject to the provisions of the 

Contribution Agreement and the Ancillary Documents, the Transferee is aware of and 

prepared to cause the Company to comply with the obligations (i) to remove the Receiver 

and First National Bank of Nevada (the “Failed Bank”) as a party to any litigation or 

actions with respect to the loans (as defined in the Contribution Agreement) and to 

substitute the Company as the real party-in-interest in any such litigation or actions prior 

to the Servicing Transfer Date (as defined in the Contribution Agreement) and (ii) to take 

all actions necessary to file, prior to the Servicing Transfer Date, (x) proofs of claims in 

pending bankruptcy cases involving any Loans for which the Receiver or the Failed Bank 

has not already filed a proof of claim, and (y) all documents required by Rule 3001(e)(2) 

of the Federal Rules of Bankruptcy Procedure and to take all such similar actions as may 

be required in any relevant jurisdiction in any pending bankruptcy or insolvency case or 

proceeding in such jurisdiction involving any Loans in order to evidence and assert the 

Company’s rights. 

Attached hereto is a list of litigation (the “List”) with respect to the Loans. The 

undersigned acknowledges that the Receiver makes no representation or warranty as to 

the completeness or accuracy of the List or the information contained or referred to 

therein. 

STEARNS SPV I, LLC, a Delaware 

limited liability company 

By: ______________________________ 

Name: Norman C. Skalicky 

Title: President 

FNBN RESCON I LLC – Interest Sale Agmt 

12372863.2 
SCHEDULE I TO TRANSFEREE ACKNOWLEDGEMENT AND 

CERTIFICATION 

LIST OF LITIGATION 

FNBN RESCON I LLC – Interest Sale Agmt 

12372863.2