EXECUTION COPY 


SERVICING AGREEMENT 


BY AND BETWEEN 


RCS FRANKLIN VENTURE LLC 


AND 


RESIDENTIAL CREDIT SOLUTIONS, INC. 


Dated as ofSeptember 30,2009 


Franklin -Servicing Agreement 

8535953.4 
TABLE OF CONTENTS 


ARTICLE I DEFINITIONS AND CONSTRUCTION ...................................................................1 


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


ARTICLE II SERVICING OBLIGATIONS OF THE SERVICER ..............................................10 


Section 2.1 


Section 2.4 


Section 2.5 
 Registration with MERS® .........................................................................11 


...................................................................................12 


....................................................................................... 12 


..........................................................................................12 


Section 2.9 


Section 2.6 
 Collection Account. 

Section 2.7 
 Escrow Accounts 

Section 2.8 
 Other Accounts 

Section2.2 


Section 2.3 


Limited Power ofAttorney ........................................................................ 1 0 


Servicing Fee .............................................................................................10 


Section 2.10 
 Expenses ....................................................................................................13 


.....................................................................13 


.......................................................................13 


Section 2.11 
 Insured or Guaranteed Loans 

Section 2.12 
 Loan Modification Program 

Appointment and Acceptance as Servicer ................................................. 1 0 


Servicing Standard ..................................................................................... 1 0 


Maintenance ofInsurance Policies; Errors and Omissions and 


Fidelity Coverage .......................................................................................12 


ARTICLE III LOAN DEFAULTS; ACQUISITION OF COLLATERAL ...................................13 


Section 3.1 Delinquency Control ..................................................................................13 


Section 3.2 Discretion ofthe Servicer in Responding to Defaults ofBorrower. ......... .l4 


Section 3.3 Acquisition of Acquired Collatera1 ............................................................14 


ARTICLE IV SUBSERVICING ...................................................................................................14 


Section 4.1 
 Retention of Subservicer............................................................................14 


.....................................................15 


................................................................17 


Section 4.4 


....................................................................17 


Section 4.2 
 Subservicing Agreement Requirements 

Section 4.3 
 Servicer Liable for Subservicers 

Section 4.5 
 Regulation AB Requirements 

Managing Member Approval Required ..................................................... !? 


ARTICLE V REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE 


SERVICER ....................................................................................................................................17 


Section 5.1 


Section 5.2 
 Reporting, Books and Records and Compliance Covenants .....................18 


.........................................................................................................20 


.....................................................................................................21 


...........................21 


........................................................................................21 


Section 5.3 
 Audits 

Section 5.4 
 No Liens 

Section 5.5 
 Servicer's Duty to Advise; Delivery ofCertam Notices 

Section 5.6 
 Notice ofBreach 

Representations and Warranties ................................................................. !? 


ARTICLE VI SECURED PARTY AND INITIAL MEMBER CONSENT .................................21 


Section 6.1 Actions Requiring Secured Party and Initial Member Consent .................21 


Section 6.2 Amendments, Modification and Waivers ..................................................22 


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ARTICLE Vll DEFAULTS; TERMINATION; TERMINATION WITHOUT CAUSE .............22 


Section 7.1 Defaults ......................................................................................................22 


Section 7.2 Termination with Cause .............................................................................23 


Section 73 Termination without Cause ....................................................................... .24 


Section 7.4 Effective Date ............................................................................................25 


Section 7.5 Accounting.................................................................................................25 


ARTICLE Vill INDEPENDENCE OF PARTIES; INDEMNIFICATION ..................................26 


Section 8.1 Independence ofParties .............................................................................26 


Section 8.2 Indemnification ..........................................................................................26 


Section 8.3 Procedure for Indemnification ...................................................................26 


ARTICLE IX NOTICES ................................................................................................................27 


ARTICLE X GOVERNING LAW; JUR1SDICTION ...................................................................28 


Section 10.1 Governing Law ..........................................................................................28 


Section 10.2 Jurisdiction; Venue and Service .................................................................28 


Section 10.3 Waiver ofJury Trial... ................................................................................ 29 


ARTICLE XI MISCELLANEOUS ...............................................................................................29 


Section 11.1 No Assignment by Servicer; No Transfer of Ownership Interests in 


Servicing Rights ........~ ................................................................................29 


Section 11.2 Legal Fees ..................................................................................................30 


Section 11.3 Entire Agreement .......................................................................................30 


Section 11.4 Counterparts; Facsimile Signatures ....................... : ................................... 30 


Section 11.5 Headings ................................................................................................... .30 


Section 11.6 Construction.............................................................................................. .30 


Section 11.7 Compliance with Law ................................................................................31 


Section 11.8 Severability ................................................................................................31 


Section 11.9 Third Party Beneficiaries .......................................................................... .32 


Section 11.10 Protection ofConfidential Information ......................................................32 


Section 11.11 Time of Essence .........................................................................................32 


Section 11.12 No Presumption ........................................................................................ .32 


Section 11.13 No Right of Setoff..................................................................................... .32 


Section 11.14 Release ofInitial Member and Prior Servicers ......................................... .32 


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Exhibits 

Exhibit A 

ExhibitB 

Exhibit C 

Schedules 

Schedule 1 

Schedule 2 

Schedule 3 

Schedule4 

Schedule 5 

SCHEDULES AND EXHffiiTS 

Loan Schedule 

Electronic Tracking Agreement 

Loan Modification Program 

Fee Schedule 

Servicing Obligations 

Reimbursement of Servicer Advances 

Form ofElectronic Report on the Loans and Collateral 

Termination Without Cause 

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Ill 

8535953.4 
SERVICING AGREEMENT 

THIS SERVICING AGREEMENT (as the same shall be amended or supplemented, this 

"Agreement") is made and entered into as ofthe 30th day of September, 2009 (the "Effective 

Date''), by and between RCS Franklin Venture LLC, a Delaware limited liability company 

(including its successors and assigns, the "Managing Member"), and Residential Credit 

Solutions, Inc., a Delaware corporation (including those ofits successors and assigns as are 

expressly permitted pursuant to this Agreement, the "Servicer"). 

RECITALS 

WHEREAS, Franklin Ventures, LLC (the "Company') owns the Loans (as defmed 

below) described on the Loan Schedule attached hereto as Exhibit A (the "Loan Schedule"); and 

WHEREAS, the Managing Member is the managing member ofthe Company and is 

obligated to service and manage the Loans and related Collateral (as defined below) pursuant to 

that certain Aillended and Restated Limited Liability Company Operating Agreement dated as of 

the Closing Date (the "LLC Operating Agreement"), by and between the Company, the 

Managing Member and the Federal Deposit Insurance Corporation, as receiver (''Receiver'') for 

Franklin Bank, S.S.B., including its successors and assigns (the "Initial Member"); and 

WHEREAS, the Managing Member and the Servicer desire that the Servicer service and 

administer the Loans and Collateral on behalf of.the Company and ·the Managing Member in a 

marmer that is, at all times, consistent with the requirements ofthis Agreement; 

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

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

sufficiency ofwhich are hereby acknowledged, the Managing Member and the Servicer hereby 

agree as follows: 

ARTICLE I 

DEFINITIONS AND CONSTRUCTION 

Section 1.1 Definitions. For purposes of this Agreement, the following terms shall 

have the meanings and definitions hereinafter respectively set forth. 

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

Service, a division ofThe McGraw-Hill Companies, Inc., (ii) the applicable "Levell" servicer 

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

Investors Service. 

"Acquired Collateral'' shall mean property to which title is acquired by foreclosure, by 

deed in lieu offoreclosure, by power ofsale or by sale pursuant to the Uniform Commercial 

Code, in any such case in accordance with the Loan Documents and this Agreement. 

"Affiliate" shall mean, 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 (1 0%) or more ofthe outstanding voting 

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securities, voting equity interests, or beneficial interests ofthe Person specified, (iii) any officer, 

director, general partner, managing member, trustee, employee or promoter ofthe Person 

specified or any Immediate Family Member ofsuch 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 ofthe outstanding voting securities, voting equity interests or beneficial 

interests of any Person described in clauses (i) through (iv); provided, however, that, for 

purposes ofthis Agreement, neither the Initial Member nor the Secured Party shall be deemed to 

be an Affiliate ofthe Company or of any Affiliate ofthe Company. For the purposes ofthis 

definition, the term "control" (including the phrases "controlled by" and "under common 

control with") when used with respect to any specified Person means the possession, direct or 

indirect, ofthe power to direct or cause the direction ofthe management and policies of such 

Person, whether through the ownership of voting securities or interests, by contract or otherwise. 

"Agreement" shall have the meaning given in the preamble. 

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

"Bulk Sale" shall mean the sale or other disposition, in a single transaction or series of 

related transactions, of(i) Loans having an aggregate Unpaid Principal Balance of$20,000,000 

or more as ofthe time of such sale or disposition or (ii) Collateral or Acquired Collateral having 

an aggregate value of $10,000,000 or more (based on the most recent appraisal or broker price 

opinion) as ofthe time ofsuch sale or disposition. 

"Business Day" shall mean any day except a Saturday, Sunday or other day on which 

commercial banks in Washington, D.C. or United States federal government offices are required 

or authorized by Law to close. 

"Closing Date" shall mean September 30, 2009. 

"Collateral" shall mean any and all real or personal property, whether tangible or 

intangible, securing or pledged to secure a Loan, including any account, equipment, guarantee or 

contract right, or other interest that is the subject of any Collateral Document, and as the context 

requires, includes Acquired Collateral, whether or not expressly so specified. 

"Collateral Document" shall mean any pledge agreement, security agreement, personal 

. or corporate guaranty, deed oftrust, deed, mortgage, contract for the sale ofreal property, 

assigrunent, collateral agreement or other agreement or document of any kind, whether an 

original or a copy, whether similar to or different from those enumerated, (i) securing in any 

manner the performance or payment by any Borrower ofits obligations or the obligations of any 

other Borrower under any ofthe Loans or the Notes evidencing the Loans or (ii) evidencing any 

Acquired Collateral. 

"Contribution Agreement" shall mean the Contribution and Sale Agreement dated as 

ofthe Closing Date between the Initial Member and the Company. 

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"Collection Account" shall mean the Collection Account established by the Company 

pursuant to the Custodial and Paying Agency Agreement dated as ofthe Closing Date between 

the Company and the Custodian. 

"Company" shall have the meaning given in the recitals of this Agreement. 

"Custodian" shall mean Citibank, N.A., or any successor thereto as the Company's 

custodian. 

"Cut-Off Date" shall mean July 31,2009. 

"Default" shall have the meaning given in Section 7 .1. 

"Eligible Account" shall mean a segregated trust or custodial account or accounts 

established and maintained with and Eligible Institution, each ofwhich shall be entitled for the 

benefit of the Company and the Secured Party as required by Article II. 

"Eligible Institution" shall mean a Person that is not an Affiliate ofthe Managing 

Member and that is a federally insured depository institution that is well capitalized; provided 

that an Affiliate ofthe Managing Member may be deemed to be an Eligible Institution ifthe 

Secured Party provides a written consent, which consent may be withdrawn bythe Secured Party 

upon written notification to the Managing Member, in which case such Affiliate ofthe Managing 

Member shall no longer constitute an Eligible Institution as ofthe receipt ofsuch notice and any 

accounts maintained pursuant to this Agreement at such institution shall be moved to an Eligible 

Institution within three (3) Business Days after the receipt ofsuch notice. 

"Effective Date" shall have the meaning given in the preamble. 

"Electronic Report" shall have the meaning given in Section 5.2(e). 

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

Exhibit B. 

"Environmental Hazard" shall mean the presence at, in or under any real property 

constituting part of the Collateral (whether held in·fee simple estate or subject toa 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 defined in Section 101(14) ofthe 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 oftemperature 

and pressure), at a level or in an amount that requires remediation or abatement under applicable 

environmental Law. 

"Escrow Account" shall have the meaning given in Section 2. 7. 

"Escrow Advance" shall mean any advance made to pay taxes or insurance premiums or 

any other cost or expense that, but for a shortfall in the Borrower's Escrow Account, is payable 

using funds iiJ. the Borrower's Escrow Account. 

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"Excluded Expenses" shall mean fees, costs, expenses or indemnified amounts that: 

(a) are not incurred in accordance with the Servicing Standard; 

(b) are paid to any Affiliate ofthe Company, or any Affiliate ofthe Servicer 

or any Subservicer; 

(c) are incurred by the Servicer or any other Person to become a MERS® 

member or to maintain the Servicer or such Person as a MERS® member in good standing; 

(d) are incurred to pay compensation to or expenses of financial advisers, 

except to the extent the same are incurred as to pay brokerage fees or sales commissions incurred 

to market or sell the Loans or any Acquired Collateral in a bulk sale the terms ofwhich bulk sale 

(including the financial adviser's or broker's fees or sales commissions) are approved in advance 

by the Initial Member and the Secured Party; 

(e) are incurred to pay any fine, tax or other penalty, late fee, service charge, 

interest or similar charge, costs to release Liens or any other costs or expenses (including legal 

fees and expenses) incurred by or on behalf ofthe Servicer or any Subservicer as a result of the 

Servicer' s or any Subservicer' s failure to service any Loan or Collateral properly in accordance 

with the applicable Loan Documents, this Agreement, any Subservicing Agreement or otherwise, 

or failure to make a payment in a timely manner, or failure otherwise to act in a timely manner; 

(f) are incurred to pay any interest on any Servicing Advances or any 

advances made by any Subservicer; 

(g) constitute or are incurred to pay any overhead or administrative costs 

incurred by the Servicer or any other Person (including any expenses incurred to comply with 

Section 5 .2); 

(h) are incurred by the Servicer or any Person to comply with the Loan 

Modification Program; or 

(i) are incurred to pay any servicing, management or similar fees paid to any 

Subservicer or any other Person. 

"Failed Bank" shall mean Franklin Bank, S.S.B. 

"Fannie Mae" shall mean the Federal National Mortgage Association ofthe United 

States or any successor thereto. 

"Fannie Mae Guidelines" shall mean those guidelines governing reimbursement of costs 

and expenses by Fannie Mae with respect to residential loans owned or securitized by Fannie 

Mae, as in effect on the date on which an expense or cost is incurred. 

"Fee Schedule" shall mean Schedule I, as the same may be amended from time to time 

by the Managing Member and the Servicer without the consent ofthe Secured Party or the Initial 

Member. 

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8535953.4 
"FDIC" shall mean the Federal Deposit Insurance Corporation, in any capacity. 

"Governmental Authoritv" shall mean any United States or non-United States national, 

federal, state, local, municipal or provincial or international government or any political 

subdivision of any governmental, regulatory or administrative authority, agency or commission, 

or judicial or arbitral body. 

"Group of Loans" shall mean all Loans that, as ofthe Cut-OffDate, are serviced by the 

same Existing Servicer (as defined in the Contribution Agreement). 

"Guarantor" shall mean any guarantor of all or any portion of any Loan or all or any of 

any Borrower's obligations set forth and described in the Loan Documents. 

"Guidelines" shall mean (i) the Statement on Loss Mitigation Strategies for Servicers of 

Residential Mortgages (September 2007), issued by the federal financial institutions regulatory 

agencies and the Conference of State Bank Supervisors, (ii) the Statement on Working with 

Mortgage Borrowers (April2007), issued by the federal financial institutions regulatory 

agencies, and (iii) any amendments, supplements or successors to either ofthe foregoing. 

"HAMP" shall mean the Home Affordable Mortgage Program promulgated by the 

United States Department ofthe Treasury, as in effect from time to time, as more fully described 

in Exhibit C. 

"Immediate Family Member" shall mean, 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. 

"Indemnified Parties" shall have the meaning given in Section 8.2. 

"Initial Member" shall have the meaning given in the recitals ofthis Agreement. 

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

any ofthe following events: 

(1) the specified Person makes an assignment for the benefit of creditors; 

Proceeding; 

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

(3) the specified Person is adjudged bankrupt or insolvent or there is entered 

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

(4) 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; 

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8535953.4 
(5) the specified Person seeks, consents to, or acquiesces in the appointment 

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

specified Person's properties; 

(6) 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 (!)through (5); 

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

due; or 

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

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

similar relief under any Law ifthe proceeding has not been dismissed, or within ninety (90) days 

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

. substantial part ofthe specified Person's properties without the specified Person's agreement or 

acquiescence, which appointment is not vacated or stayed, or ifthe appointment is stayed, for 

ninety (90) days after the expiration ofthe stay ifthe appointment is not vacated, 

"Insolvency Proceeding" shall mean any proceeding under Title 11 ofthe United States 

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

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

relief. 

"Interest Rate" shall mean the rate at which the outstanding principal balance of a Loan 

bears .interest, as more particularly set forth in aNote, including, without limitation, the rate of 

any default interest, if applicable. 

"LLC Operating Agreement" shall have the meaning given in the recitals ofthis 

Agreement. 

"Law" shall mean any applicable statute, law, ordinance, regulation, rule, code, 

injunction, judgment, decree or order (including any executive order) of any Governmental 

Authority. 

"Lien" shall mean any pledge, security interest, charge, restriction on or condition to 

transfer, voting or exercise or enjoyment of any right or beneficial interest, option, right of first 

refusal and any other lien, claim or encumbrance of any nature whatsoever. 

"Loan" shall mean any loan or Loan Participation listed on the Loan Schedule and any 

loan into which any such listed loan or Loan Participation is refinanced, and includes with 

respect to each such loan or Loan Participation: (i) any obligation evidenced by a Note; (ii) all 

rights,. powers or Liens ofthe Company in or under the Collateral Documents; (iii) any contract 

for deed or installment land contract and the real property which is subject to any such contract 

for deed or installment land contract; (iv) any lease and the related leased property; and (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 ofthe Initial Member with respect to the Loans, the Collateral 

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

Franklin - Servicing Agreement 

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8535953.4 
way of counterclaim or otherwise, other than any claims retained by the Initial Member pursuant 

to the Contribution Agreement; and (vi) all guaranties, warranties, indemnities and similar rights 

in favor ofthe Initial Member with respect to any ofthe Loans. 

"Loan Collections" shall mean all of the following (excluding amounts received with 

respect to any Loan prior to the Servicing Transfer Date with respect to such Loan): (i) any and 

all proceeds (net of such proceeds as are payable to others under any Loan Participation 

Agreement) with respect to any or all of the Loans and any or all ofthe Collateral, including 

principal, interest, default interest, prepayment fees, premiums and charges, extension and exit 

fees, late fees, assumption fees, other fees and charges, insurance proceeds and condemnation 

payments (or any portion thereof) that are not used and disbursed to repair, replace or restore the 

related Collateral in accordance with the terms ofthe Loan Documents, (ii) any and all proceeds 

from sales or other dispositions of any or all of the Loans or the Collateral, (iii) any proceeds 

from making a draw under any Jetter of credit or certificate of deposit held with respect to any 

Loan, provided that such draw is permitted by the terms ofthe Loan Documents, (iv) any 

recoveries from Borrowers or Guarantors of any kind or nature with respect to the Loans, (v) any 

investor incentive fees received by the Company under any Loan Modification Program (but not 

any incentive fees payable to servicers under any Loan Modification Program), and (vi) any · 

interest or other earnings accrued and paid on any ofthe amounts described in the foregoing 

clauses (i) through (v) while held in the Collection Account or any Other Account. 

"Loan Documents" shall mean all documents, agreements, certificates, instruments and 

other writings (including all Collateral Documents) now or hereafter executed by or delivered or 

caused to be delivered by any Borrower, any Guarantor or any other obligor evidencing, 

creating, guaranteeing or securing, or otherwise executed or delivered in respect of, all or any 

part of a.Loan or any Acquired Collateral or evidencing any transaction contemplated thereby, 

and all Modifications thereto. 

"Loan Modification Program" shall mean the Joan modification program that meets the 

criteria described in Exhibit C, or any other or additional loan modification program (i) that may 

be required by the FDIC upon written notice to the Cqmpany or (ii) as proposed by the Company 

with respect to a group ofLoans with similar characteristics, if approved in writing by the FDIC. 

"Loan Participation" shall mean any asset subject to a shared credit, participation or 

similar inter-creditor agreement under which the Failed Bank or the Receiver was the lead or 

agent fmancial depository institution or otherwise managed or held the credit or sold 

participations, or under which the Failed Bank or the Receiver was a participating financial 

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

"Loan Participation Agreement" shall mean an agreement under which the Failed Bank 

or the Receiver was the lead or agent financial depository institution or otherwise managed or 

held a shared credit or sold participations, or under which the Failed Bank or the Receiver was a 

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

another Person. 

"Loan Schedule" shall have the meaning given in the recitals ofthis Agreement. 

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8535953.4 
"Managing Member" shall have the meaning given in the preamble. 

"MERS®" shall mean Mortgage Electronic Registration Systems, Incorporated, or any 

successor thereto. 

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

system, as more particularly described in the MERS® Procedures Manual (a copy ofwhich is 

attached as an exhibit to the Electronic Tracking Agreement). 

"Modification" shall mean 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. 

"Note" shall mean each note or promissory note, lost instrument affidavit, loan 

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

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

agreement, document or instrument evidencing a Loan, and all Modifications to the foregoing. 

"Other Accounts" shall have the meaning given in Section 2.8. 

"Person" shall mean any individual, corporation, partnership (general or limited), limited 

liability company, limited liability partnership, firm, joint venture, association, joint-stock 

company, trust, estate, unincorporated organization, governmental or regulatory body or other 

entity. 

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

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

business are necessary for the servicing ofthe Loans and management ofthe Collateral and the 

Acquired Collateral, (ii) is a member ofMERS®, (iii) has the management capacity and 

experience to service loans ofthe type held by the Company, especially performing and nonperforming residential loans, including the number and types of!oans serviced, and the ability to 

track, process and post payments, and to furnish tax reports to borrowers, and (iv) either (x) has 

an Acceptable Rating as a mortgage loan servicer or special servicer or (y) is acceptable to and 

approved by the Secured Party and the Initial Member in their sole discretion. 

"Receiver" shall have the meaning given in the recitals ofthis Agreement. 

"Regulation AB" shall mean the regulations at 17 C.P.R. §§229.1100, et seq., as the 

same may be amended from time to time. 

"Secured Partv" shall mean the FDIC as secured party under the Reimbursement and 

Security Agreement dated as ofthe Closing Date between the FDIC and the Company. 

"Securitv Agreement" shall mean the Security and Reimbursement Agreement dated as 

ofthe Closing Date between the Company and the FDIC. 

"Servicer" shall have the meaning given in the preamble. 

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8535953.4 
"Servicer Advances" shall mean advances made by or on behalf ofthe Servicer to fund 

Servicing Expenses. 

"Servicing Expenses" shall mean all customary and reasonable out-of-pocket fees, costs, 

expenses and indemnified amounts incurred in connection with servicing the Loans and the 

Acquired Collateral, including (i) any and all out-of-pocket fees, costs, expenses and indemnified 

amounts which a Borrower is obligated to pay to any Person or to reimburse to the lender 

pursuant to the applicable Note or any other Loan Documents, including Escrow Advances, 

(ii) any and all reasonable out-of-pocket expenses necessary to protect or preserve the value of 

the Collateral or the priority ofthe Liens and security interests created by the Loan Documents 

relating thereto, including taxes, insurance premiums (including forced place insurance 

premiums), payment of ground rent, the costs ofprevention ofwaste, repairs and maintenance, 

foreclosure expenses and legal fees and expenses relating to foreclosure or other litigation with 

respect to the Loans, (iii) any and all direct expenses related to the preservation, operation, 

demolition, management and sale ofthe Acquired Collateral (including real estate brokerage 

fees), and (iv) to the extent not covered by any of clauses (i) through (iii), legal fees and 

expenses (including judgments, settlements and reasonable attorneys fees) incurred by the 

Servicer in its defense of claims asserted against the Company that relate to one or more Loans, 

and (x) arise out ofthe acts or omissions ofthe Failed Bank or the Receiver in connection with 

the origination or servicing ofsuch Loans prior to the Servicing Transfer Date for such Loans, or 

(y) allege, as the basis for such claims, any act or omission ofthe Company (or the Managing 

Member under the LLC Operating Agreement or the Servicer hereunder) and such claims are 

decided (and there are final non appealable orders) in favor ofthe Company (or the Managing 

Member under the LLC Operating Agreement or the Servicer hereunder); provided, however, 

that Servicing Expenses shall not include Excluded Expenses. 

"Servicing Fee" shall have the meaning given in Section 2.3. 

"Servicing Obligations" shall have the meaning given in Section 2.4. 

"Servicing Standard" shall have the meaning given in Section 2.4. 

"Servicing Transfer Date" shall mean, with respect to a given Loan, the date on which 

the transfer ofthe Loan seivicing records for such Loan to the Servicer' s system ofrecord is 

completed and the Servicer begins to service such Loan, determined in accordance with the 

Contribution Agreement. 

"Site Assessment" shall have the meaning given in Section 3.3. 

"Specified Date" shall mean the 151

h day of each month, or such other day as is agreed 

to by the Servicer and the Managing Member, provided, however, that, in any case, ifsuch day is 

not a Business Day, the Specified Date shall be the immediately preceding Business Day. 

"Subservicer" shall have the meaning given in Section 4.1. 

"Subservicing Agreement" shall have the meaning given in Section 4.2. 

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8535953.4 
"Termination Notice" shall mean any written notice oftermination required pursuant to 

Article VII. 

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

any applicable jurisdiction, as amended from time to time. 

"Unpaid Principal Balance" shall mean, at any time, (i) when used in connection with 

multiple Loans, an amount equal to the aggregate then outstanding principal balance ofsuch 

Loans, and (ii) when used with respect to a single Loan, an amount equal to the then outstanding 

principal balance ofsuch Loan. For this purpose, in the case of a Loan for which some or all of 

the related Collateral has been converted to Acquired Collateral, until such time as the Acquired 

Collateral (or any portion thereof) is liquidated, the unpaid principal balance of such Loan shall 

be deemed to equal the sum of(i) the unpaid principal balance of such Loan (adjusted pro rata 

for partial collateral sales, debt forgiveness or retained indebtedness) at the time at which such 

Loan was converted to Acquired Collateral plus (ii) any outstanding balance remaining on such 

Loan which is evidenced by a modification agreement or a replacement or successor promissory 

note executed by the Borrower. 

ARTICLE II 

SERVICING OBLIGATIONS OF THE SERVICER 

Section 2.1 Appointment and Acceptance as Servicer. Effective as ofthe date hereof; 

the Managing Member appoints the Servicer to service, administer, manage and dispose ofthe 

Loans and the Collateral on behalf of and as an agent ofthe Managing Member. 

Section 2.2 Limited Power ofAttorney. The Managing Member hereby grants to the 

Servicer a limited power of attorney to execute all documents on its behalfin accordance with 

the Servicing Standard set forth below and as may be necessary to effectuate the Servicer' s 

obligations under this Agreement until such time as the Managing Member revokes said limited 

power of attorney.· Revocation ofthe limited power of attorney shall take effect upon: (i) the 

receipt by the Servicer ofwritten notice thereof from or on behalf ofthe Managing Member, or 

(ii) termination ofthis Agreement pursuant to Article VII. 

Section 2.3 Servicing Fee. As consideration for servicing the Loans and the 

Collateral, for each month during the term ofthis Agreement and commencing on or after the 

initial Servicing Transfer Date, the s·ervicer shall be paid such monthly servicing fee as is set 

forth on the Fee Schedule, payable on the Business Day next succeeding the Distribution Date 

(as defined in the LLC Operating Agreement) with respect to such month (the "Servicing Fee"). 

Section 2.4 Servicing Standard. The Servicer shall take such actions and perform such 

duties in connection with the servicing, administration, management and disposition of the Loans 

and Collateral as are set forth on Schedule 2, as the same may be amended from time to time by 

the Managing Member and the Servicer without the consent of the Secured Party or the Initial 

Member (the "Servicing Obligations"). The Servicer shall perform its Servicing Obligations (i) 

in the best interests and for the benefit of the Secured Party and the Company, (ii) in accordance 

with the terms ofthe Loans (and related Loan Documents), (iii) in accordance with the terms of 

this Agreement (including this Article ID, (iv) in accordance with all applicable Law, (v) with 

Franklin- Servicing Agreement 

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respect to all Loans, in compliance with the Guidelines, to the extent applicable, and the Loan 

Modification Program and, (vi) to the extent consistent with the foregoing terms, in the same 

manner in which a prudent servicer would service and administer similar loans and in which a 

prudent servicer would manage and administer similar properties for its own portfolio or for 

other Persons, whichever standard is higher, but using no less care and diligence than would be 

customarily employed by a prudent servicer following customary and usual standards ofpractice 

ofprudent mortgage lenders, loan servicers and asset managers servicing, managing and 

administering similar loans and properties on an arms' length basis, provided that in the absence 

of a customary and usual standard ofpractice, the Servicer shall comply with the Fannie Mae 

Guidelines applicable to similar loans or properties in similar situations (the requirements in 

clauses (i) through (vi) collectively, the "Servicing Standard"). In addition, the Servicer shall 

perform its Servicing Obligations without regard to (a) any relationship that the Servicer, the 

Company, the Managing Member or any Subservicer or any oftheir respective Affiliates may 

have to any Borrower, Guarantor or other obligor or any oftheir respective Affiliates, including 

any other banking or lending relationship, (b) the Company's, the Managing Member's the 

Servicer's, or any Subservicer's, obligation to make disbursements and advances with respect to 

the Loans and the Collateral, (c) any relationship that the Servicer or any Subservicer may have 

to each other or to the Company, the Managing Member or any oftheir respective Affiliates, or 

any relationship that any oftheir respective Affiliates may have to the Company, the Managing 

Member or any oftheir respective Affiliates (other than the contractual relationship evidenced by 

this Agreement or any Subservicing Agreement), and (d) the Servicer's or any Subservicer's 

right to receive compensation (including the Servicing Fee) for its services under this Agreement 

or any Subservicing Agreement. 

Section 2.5 Registration with MERS®. The Servicer shall register any Loan on the 

MERS® System and execute and deliver on behalf ofthe Company any and all instruments of 

assigmnent and other comparable instruments with respect to such assigmnent or re-recording of 

a mortgage securing a Loan in the name ofMERS®, solely as nominee for the Company and its 

successors and assigns. The Company shall be designated as the "investor" and the Managing 

Member as "servicer" with respect to the Loans on the MERS® System, and the Servicer shall 

be designated as the "subservicer" with respect to the Loans on the MERS® System. No other 

Person shall be identified on the MERS® System as having any interest in any ofthe Loans. 

The Loans shall remain registered on the MERS® System unless default, foreclosure or similar 

legal or MERS® requirements dictate otherwise. The Servicer shall provide the Company, the 

Managing Member and the Secured Party with such reports from the MERS® System as the 

Company, the Managing Member or the Secured Party, from time to time, may request, 

including to allow the Company, the Managing Member and the Secured Party to verify the 

Persons identified on the MERS® System as having any interest in any ofthe Loans and to 

confirin that the Loans required to be registered on the MERS® System are so registered. the 

Servicer shall also execute and deliver to the Managing Member and the Secured Party the 

Electronic Tracking Agreement. Without limiting the foregoing, upon the request ofthe 

Managing Member or the Secured Party, the Servicer shall cause MERS® to run a query with 

respect to any and all specified fields on the MERS® System with respect to any or all of the 

Loans registered on the MERS® System and provide the results to the Managing Member and 

the Secured Party and, ifrequested by the Managing Member or the Secured Party, shall cause 

MERS® to change the information in such fields, to the extent MERS® will do so in accordance 

with its policies and procedures, to reflect its instructions. 

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Section 2.6 Collection Account. 

(a) The Servicer shall deposit into the Collection Account all Loan 

Collections on a daily basis (without deduction or setoff as provided in Section 11.13 hereof) 

within two Business Days after receipt thereof. Except as otherwise directed by the Managing 

Member, the Servicer shall not cause or allow funds from any other source (other than interest or 

earnings on the Loan Collections) to be commingled in the Collection Account. 

(b) Except as otherwise directed by the Managing Member, any and all 

amounts on deposit in (or that are required to have been deposited into) the Collection Account 

(including interest and earnings thereon) shall be withdrawn and disbursed strictly in accordance 

with this Agreement; provided, however, that ifthe Servicer or any Subservicer erroneously 

deposits any amounts into the Collection Account, it may withdraw such erroneously deposited 

amount. 

(c) Except as otherwise directed by the Managing Member, any and all 

required to be remitted by the Servicer to the Collection Account under this Agreement shall be 

remitted by wire transfer, in immediately available funds. 

(d) The Collection Account (and all funds therein) will be subject to an 

account control agreement among the Company, the Secured Party and the Custodian. 

Section 2.7 Escrow Accounts. Except as otherwise directed by the Managing 

Member,.the Servicer shall establish and maintain one or more Eligible Accounts, each ofwhich 

shall be held in trust for the benefit ofthe Company and the Secured Party (each, an "Escrow 

Account"). Except as otherwise directed by the Managing Member, the Servicer shall deposit 

into the applicable Escrow Account on a daily basis all collections from the Borrowers for the 

payment oftaxes, assessments, hazard insurance premiums, and comparable items for the 

account ofthe Borrowers, and the Servicer shall pay to the Borrowers interest on funds in 

Escrow Accounts to the extent required by Law. 

Section 2.8 Other Accounts. At the direction ofthe Managing Member, the Servicer 

shall establish and maintain such other Eligible Accounts as may be directed by the Managing 

Member, each ofwhich shall be held in. trust for the benefit ofthe Company and the Secured 

Party, and shall be funded and disbursed only in accordance with such instructions as are 

provided by the Managing Member ("Other Accounts"). 

Section 2.9 Maintenance ofInsurance Policies; Errors and Omissions and Fidelitv 

Coverage. 

(a) The Servicer and each Subservicer shall cause insurance coverage to be 

maintained for the Collateral (including any Acquired Collateral) from an insurer reasonably 

acceptable to the Managing Member for each Loan with respect to which the Borrower has failed 

to maintain required insurance, fire, hurricane, flood and hazard insurance with extended 

coverage as is customary in the area in which the Collateral is located and in such amounts and 

with such deductibles as, from time to time, is directed by the Managing Member. 

Franklin - Servicing Agreement 

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8535953.4 
(b) The Servicer and each Subservicer shall at all times maintain in effect a 

blanket fidelity bond and an errors and omissions insurance policy affording, in each case, 

coverage with respect to all officers, directors, employees and other Persons acting on behalfof 

the Servicer or the Subservicer, as applicable, and covering errors and omissions in the 

performance ofthe Servicer's, or the Subservicer's, as applicable, obligations under this 

Agreement or any Subservicing Agreement. The errors and omissions insurance policy and the 

fidelity bond shall be, at all times,· in such form and amount that would meet the requirements, as 

amended from time to time, ofFannie Mae ifFannie Mae were the purchaser ofthe Loans. The 

Servicer and each Subservicer shall provide the Managing Member with certificates evidencing 

such coverage. 

(c) Copies offidelity bonds and insurance policies required to be maintained 

pursuant to this Section 2.9 shall be made available to the Managing Member and its 

representatives upon request. 

Section 2.10 Expenses. Except as otherwise directed by the Managing Member, the 

Servicer shall use its reasonable best efforts to recover from Borrowers and Guarantors all 

Servicing Expenses that are Servicer Advances. All such Servicing Expenses not recovered from 

Borrowers or Guarantors and all other Servicer Advances shall be reimbursed only in accordance 

with the terms set forth on Schedule 3, as the same may be amended from time to time by the 

Managing Member and the Servicer with the consent ofthe Secured Party but without the 

consent ofthe Initial Member. In the event the Servicer is reimbursed for any expense that is 

not, or cannot be documented as, a Servicer Advance, in the reasonable determination ofthe 

Managing Member, the Servicer shall be obligated to refund such amounts to the Company on 

the Specified Date immediately following the Servicer' s receipt ofnotice from the Managing 

Member requesting the same. No Servicer Advances shall bear interest chargeable in any way to 

the Company or deductible from any Loan Collections. 

Section 2.11 Insured or Guaranteed Loans. If any Loans being serviced pursuant to this 

Agreement are insured or guaranteed by any Governmental Authority, the Servicer 

acknowledges and agrees that, ifthe Managing Member so directs pursuant to the Servicing 

Obligations with respect to such Loans, it shall take any and all actions as may be necessary to 

insure such insurance or guarantees remain in full force and effect. The Servicer acknowledges 

and agrees that, upon assumption ofthe Servicing Obligations with respect to the Loans pursuant 

to this Agreement, it agrees to fulfill all ofthe Company's obligations under the contracts of 

insurance or guaranty. 

Section 2.12 Loan Modification Program. The Servicer shall at its expense take any 

and all steps as may be necessary to qualify for, and to maintain its qualification for, the Loan 

Modification Program. The Servicer shall be entitled to retain for its own account any servicer 

incentive fees paid to it pursuant to the RAMP, if applicable. · 

ARTICLE III 

LOAN DEFAULTS; ACQUISITION OF COLLATERAL 

Section 3.1 Delinquency Control. Except as otherwise directed by the Managing 

Member, the Servicer shall maintain a collection department that substantially complies with the 

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Servicing Standard and protect the Company's and the Secured Party's interests in the Loans in 

accordance with the Servicing Standard with Borrowers who are delinquent or in default. 

Section 3.2 Discretion ofthe Servicer in Responding to Defaults ofBorrower. Upon 

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

terms and conditions ofthis Agreement, including the Servicing Obligations ofthe Servicer and 

such direction as the Managing Member may otherwise provide that is consistent with the 

Servicer' s compliance with the Servicing Standard, the Servicer shall cause to be determined the 

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

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

protect the respective interests ofthe Company and the Secured Party in the Loan and the 

Collateral, (b) the declaration and recording of a notice of such default and the acceleration of 

the maturity ofthe Loan, (c) the institution ofproceedings to foreclose the Loan Documents 

securing the Loan pursuant to the power ofsale contained therein or through a judicial action, (d) 

the institution ofproceedings against any Guarantor, (e) the acceptance of a deed in lieu of 

foreclosure, (f) the purchase ofthe real property Collateral at a foreclosure sale or trustee's sale 

or the purchase ofthe personal property Collateral at a Uniform Commercial Code sale, and (g) 

the institution or continuation ofproceedings to obtain a deficiency judgment against such 

Borrower or any Guarantor and the collection of such judgment. 

Section 3.3 Acquisition of Acquired Collateral. Any acquisition of Collateral shall 

conform with the terms and conditions ofthis Agreement (including the Servicing Obligations of 

the Servicer). With respect to any Loan as to which the Servicer has received actual notice of, or 

has actual !mow ledge of, any Environmental Hazard with respect to the related Collateral, the 

Servicer shall immediately provide written notice of same to the Managing Member. In addition, 

ifthe Managing Member so directs, prior to the acquisition oftitle to any Collateral, the Servicer 

shall cause to be commissioned with respect to such Collateral (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"). Except as is otherwise directed by the Managing Member, the Servicer or 

any Subservicer shall not acquire or otherwise cause the Company or any other ownership entity 

to acquire all or any portion of any Collateral having any actual or threatened Environmental 

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

Commercial Code or otherwise. 

ARTICLE IV 

SUBSERVICING 

Section 4.1 Retention of Subservicer. The Servicer may engage or retain one or more 

subservicers, including Affiliates ofthe Managing Member or ofthe Servicer (individually and 

collectively, "Subservicer''), as it may deem necessary and appropriate, provided that any 

Subservicer meets the requirements set forth in clause (i) and, to the extent applicable to the 

services to be performed by such Subservicer, clauses (ii) and (iii) ofthe definition ofQualified 

Servicer. 

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8535953.4 
Section 4.2 Subservicing Agreement Requirements. Any subservicing agreement with 

any Subservicer ("Subservicing Agreement") shall, among other things: 

(a) provide for the servicing ofthe Loans and management ofthe Collateral 

by the Subservicer in accordance with the Servicing Standard and the other terms ofthis 

Agreement; 

(b) · be terminable upon no more than thirty (30) days prior notice in the event 

of any Default under this Agreement or a default under the Subservicing Agreement as set forth 

in Section 4.2(n) below; 

(c) provide that the Servicer as well as the Managing Member, the Secured 

Party and the Initial Member shall each be entitled to exercise termination rights thereunder; 

(d) provide that the Subservicer and the Servicer acknowledge that the 

Subservicing Agreement constitutes a personal services agreement between the Servicer and the 

Subservicer; 

(e) provide that each of the Managing Member, the Secured Party, the Initial 

Member and the Company is a third party beneficiary thereunder and entitled to enforce the 

Subservicing Agreement; 

(f) provide that (i) upon a Default under this Agreement, the Secured Party 

and, with the consent of the Secured Party, the Initial Member (and, in the case of clause (B) 

below, the Managing Member) may each exercise all ofthe rights of (A) the Managing Member 

under this Agreement and cause the termination or assigrnnent of this Agreement to any other 

Person, without penalty or payment of any fee, and (B) the Servicer under any or or all ofthe 

Sub servicing Agreements entered into by the Servicer and cause the termination or assigrnnent 

ofthe same to any other Person, without penalty or payment of any fee, and (ii) upon a default 

under any Subservicing Agreement, provide that the Secured Party and, with the consent ofthe 

Secured Party, the Managing Member and the Initial Member may each exercise all ofthe rights 

ofthe Servicer under such Subservicing Agreement and cause the termination or assigrnnent of 

any such Sub servicing Agreement to any other Person, without penalty or payment of any fee; 

(g) provide that the Managing Member, the Secured Party and the Initial 

Member (and each oftheir respective representatives) shall each have access to and the right to 

review, copy and audit the. books and records ofthe Subservicer and that the Subservicer shall 

make available its officers, directors, employees, accountants and attorneys to the Managing 

Member, the Secured Party and the Initial Member (and each oftheir respective representatives) 

to answer questions or to discuss any matter relating to the Subservicer' s affairs, finances and 

accounts, as they relate to the Loans, the Collateral, the Servicing Obligations, the Collection 

Account, the Escrow Accounts or any Other Accounts established or maintained pursuant to this 

Agreement or the Subservicing Agreement or any matters relating to this Agreement or the 

Sub servicing Agreement or the rights or obligations thereunder; 

(h) provide that all Loan Collections are to be deposited into the Collection 

Account on a daily basis (without reduction or setoff as provided in Section 11.13 hereof) within 

two Business Days after receipt thereof and that under no circumstances are any funds, other 

Franklin - Servicing Agreement 

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8535953.4 
than Loan Collections and interest and earnings thereon, to be deposited into the Collection 

Account; 

(i) provide that the Subservicer shall not transfer or assign its rights under .the 

Sub servicing Agreement with the Servicer and that any prohibited transaction shall be void ab 

initio; 

G) provide that all ofthe Loans shall be registered on the MERS® System 

(where applicable) unless default, foreclosure or similar legal or MERS® requirements dictate 

otherwise; 

(k) provide that the Subservicer consents to the immediate termination ofthe 

Subservicer pursuant to Section 7.2 ofthis Agreement; 

(I) provide that there shall be no right ofsetoff on the part ofthe Subservicer, 

(m) provide for such other matters as are necessary or appropriate to ensure 

that the Subservicer is obligated to comply with the Servicing Obligations ofthe Servicer 

hereunder in the conduct of such matters as are delegated to the Subservicer, 

(n) (i) contain default provisions that relate to the actions ofthe Subservicer 

that parallel the provisions of Sections 7.1(a), .(hl, W,@, ID ill, ®and (i) ofthis Agreement, 

and (ii) provide that each ofthe Secured Party and, with the consent ofthe Secured Party, the 

Initial Member has the right (x) to terminate the Subservicing Agreement by providing written 

notice upon the occurrence of any such default (except that, with respect to default under the 

provision that parallels Section 7 .1( c), only with respect to the provisions that parallel Sections 

22ffi and .(g} that shall be referred to therein), without any cure period other than as may be 

provided for in the default provisions that parallel provisions in Section 7.1, and upon the 

occurrence of any Default under any ofSections 7.l(a), .(hl, W (but, with respect to a Default 

under clause if)_, only with respect to Sections 5.2(f) and .(g} referred to therein),@,~, ffi, ® 

or (i) ofthis Agreement, and (y) otherwise to enforce the rights ofthe Servicer under the 

Subservicing Agreement; 

(o) provide that (i) the Subservicer consents to its immediate termination 

under the Subservicing Agreement upon a Default under Section 7.1 (b) ofthis Agreement and 

upon the occurrence of any Insolvency Event with respect to the Subservicer or any ofits 

Affiliates, and (ii) the occurrence of any Insolvency Event with respect to the Subservicer or any 

Affiliate thereof constitutes a default under the Subservicing Agreement; and 

(p) provide a full release and discharge ofthe Initial Member, the Company 

and any predecessor servicer, and all oftheir respective officers, directors, employees, agents, 

attorneys, contractors and representatives, and all oftheir respective successors and assigns and 

Affiliates (but excluding, in all cases, the Managing Member), from any and all claims 

(including any counterclaim or defensive claim), demands, causes of action, judgments or legal 

proceedings and remedies ofwhatever kind or nature that the Subservicer had, has or might have 

in the future, whether known or unknown, which are related in any manner whatsoever to the 

servicing ofthe Loans by the Initial Member or such other predecessor servicer prior to the 

Franklin - Servicing Agreement 

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8535953.4 
applicable Servicing Transfer Date (other than due to gross negligence or willful misconduct of 

the Initial Member or other predeccessor servicer). 

Section 4.3 Servicer Liable for Subservicers. Notwithstanding anything to the 

contrary contained herein, the use of any Subservicer shall not release the Servicer from any of 

its Servicing Obligations or other obligations under this Agreement, and the Servicer shall 

remain responsible and liable for all acts and omissions of each Subservicer as fully as ifsuch 

acts and omissions were those ofthe Servicer. All actions of any Subservicer performed 

pursuant to the Subservicing Agreement with the Servicer shall be performed as an agent ofthe 

Servicer. No Subservicer shall be paid any fees or indenmified out of any Loan Collections. 

Section 4.4 Managing Member Approval Required. Each Sub servicing Agreement 

and all amendments and modifications thereto and the selection ofthe Subservicer, regardless of 

whether the Subservicer is an Affiliate ofthe Servicer, shall be subject to the prior written 

approval ofthe Managing Member (which approval shall not be unreasonably withheld, delayed 

or conditioned). A copy of all Subservicing Agreements, as executed and delivered and all 

amendments thereto, shall be provided to the Managing Member. 

Section 4.5 Regulation AB Requirements. The Servicer shall ensure, where 

applicable, that each Subservicer (A) has in place policies and procedures to comply with the 

provisions of Section 1122(d)(l)(i) through (iv) ofRegulation AB, and (B) complies with the 

provisions of Sections 1122( d)(2)(i) through (vii), 1122(d)(3)(i) through (iv), and 1122( d)( 4)(i) 

through (xv) ofRegulation AB (regardless ofwhether any such requirements apply, by their 

terms, only to companies registered or required to file reports with the Securities and Exchange 

Commission). 

ARTICLEV 

REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SERVICER 

Section 5.1 Representations and Warranties. The Servicer hereby makes the following 

representations and warranties as ofthe date hereof: 

(a) The Servicer (i) is a corporation duly organized, validly existing and in 

good standing under the laws ofthe State ofDelaware, (ii) has qualified or will qualifY to 

transact business as a foreign entity and will remain so qualified, in the state or states and other 

jurisdictions where the Loans or the nature ofthe Servicer' s activities under this Agreement 

makes such qualification necessary; (iii) has all licenses and other governmental approvals 

necessary to carry on its business as now being conducted and to perform its obligations 

hereunder; and (iv) has established and shall maintain its principal place ofbusiness in the 

United States. 

(b) The Servicer has all requisite power, authority and legal right to service 

each Loan, and to execute, deliver and perform, and to enter into and consummate the 

transactions contemplated by, this Agreement, and this Agreement has been duly authorized by 

all requisite corporate action on the part ofthe Servicer. 

(c) This Agreement and all agreements contemplated hereby to which the . 


Servicer is or will be a party constitute the valid, legal, binding and enforceable obligations of 


Franklin- Servicing Agreement 

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8535953.4 
the Servicer, except as such enforcement may be limited by bankruptcy, insolvency, 

reorganization or other similar laws affecting the enforcement of creditors' rights generally, and 

by general principles of equity (regardless ofwhether such enforcement is considered in a 

proceeding in equity or at law); and all requisite corporate action has been taken by the Servicer 

to make this Agreement and all agreements contemplated hereby to which the Servicer is or will 

be a party valid and binding upon the Servicer in accordance with their terms and conditions, 

(d) The Persons executing this Agreement on behalf ofthe Servicer are duly 

authorized to do so. 

(e) The execution and delivery of this Agreement by the Servicer, the 

servicing ofthe Loans and the Collateral under this Agreement, the consummation of any other 

ofthe transactions contemplated by this Agreement, and the fulfilhnent of or compliance with 

the terms hereof are in the ordinary course ofbusiness ofthe Servicer and (i) will not result in a 

breach of any term or provision of the articles or charter or bylaws or other organizational 

·documents ofthe Servicer; (ii) conflict with, result in a breach, violation or acceleration of, or 

result in a default (or an event which, with notice or lapse oftime, or both, would constitute a 

default) under the terms of any agreement or other instrument to which the Servicer is a party or 

by which it may be bound; or (iii) constitute a violation of any Law applicable to the Servicer, 

and the Servicer is not in breach or violation of any agreement or instrument, or in violation of 

any Law of any Govermnental Authority having jurisdiction over it which breach or violation 

may impair the Servicer' s ability to perform or meet any ofits obligations under this Agreement. 

(f) No litigation is pending or threatened against the Servicer that would 

prohibit the Servicer from entering into this Agreement or is likely to materially and adversely 

affect either the ability of the Servicer to perform its obligations under this Agreement or the 

financial condition ofthe Servicer. 

(g) Any consent, approval, authorization or order of any Governmental 

Authority required for the execution, delivery and performance by the Servicer of or compliance 

by the Servicer with this Agreement or the consummation ofthe transactions contemplated by 

this Agreement has been obtained and is effective. 

(h) Neither the Servicer nor any Subservicer or their respective Affiliates 

shall, at any time, (i) be a partner or joint venturer with any Borrower, (ii) be an agent of any 

Borrower, or allow any Borrower to be an agent ofthe Servicer or any Subservicer, or (iii) have 

any interest whatsoever in any Borrower, Guarantor or other obligor with respect to any Loan or 

any ofthe Collateral. 

(i) The Servicer is, and all times so long as this Agreement is in effect shall 

remain, a Qualified Servicer. 

Section 5.2 Reporting, Books and Records and Compliance Covenants. The Servicer 

covenants to the Managing Member as follows: 

(a) The Servicer shall be responsible for submitting all Internal Revenue 

Service information returns related to the Loans for all applicable periods commencing with the 

initial Servicing Transfer Date. Information returns include reports on Forms 1098 and 1099 and 

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8535953.4 
any other reports required by Law. The Servicer shall be responsible for submitting all 

information returns required under applicable Law of any foreign Governmental Authority, to 

the extent such are required to be filed by the Company under such Law, relating to the Loans, 

for the calendar or tax year in which the Effective Date falls and thereafter. 

(b) The Servicer shall cause to be kept and maintained (including by any 

Subservicer and including records transferred by the Managing Member to the Servicer), at all 

times, at the Servicer's principal place ofbusiness, a complete and accurate set offiles, books · 

and records regarding the Loans and the Collateral, and the Company's interests in the Loans and 

the Collateral, including records relating to the Collection Account and any Other Accounts 

maintained in connection with the Loans and Servicer Advances. 

(c) The Servicer shall cause all such books and records to be maintained and 

retained until the date that is the later of ten (1 0) years after the Effective Date of this Agreement 

or three (3) years after the date on which the final Loan Collections are distributed to the 

Company, which date shall be established by notice to the Servicer from the Managing Member . 

All such books and records shall be available during such period for inspection by the Managing 

Member, the Secured Party and the Initial Member (and their respective representatives, 

including any applicable Governmental Authority) at all reasonable times during business hours 

on any Business Days (or, in the case of any such inspection after the term hereof, at such other 

location as is provided by notice to the Managing Member, the Secured Party and the Initial 

Member, as applicable), in each instance upon two (2) Business Days' prior notice to the 

Servicer. Upon request by the Managing Member, the Servicer; at the sole cost and expense of 

the Managing Member, shall promptly send copies (the number of copies ofwhich shall be 

reasonable) ofsuch books and records to the Managing Member. The Servicer shall provide the 

Managing Member with reasonable advance notice <:if the Servicer's intention to destroy or 

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

Member, shall allow the Managing Member, at its own expense, to recover the same from the 

Servicer. The Servicer shall also maintain complete and accurate records reflecting the status of 

taxes, ground rents and other recurring charges generally accepted by the mortgage servicing 

industry, which would become a Lien on the security property. 

(d) The covenants set forth in Section 5 .2(b) and W above to maintain a 

complete and accurate set ofrecords shall encompass all files in the Servicer' s custody, 

possession or control pertaining to the Loans and the Collateral, including all original and other 

documentation pertaining to the Loans and the Collateral, all documentation relating to items of 

income and expense pertaining to the Loans and the Collateral, and all ofthe Servicer' s (and 

Subservicer' s) internal memoranda pertaining to the Loans and the Collateral. 

(e) The Servicer shall cause to be furnished to the Managing Member, each 


month on the Specified Date, commencing the first month following the initial Servicing 


Transfer Date, a monthly Electronic Report on the Loans and Collateral containing such 


information and substantially in the form set forth on Schedule 4, as the same may be amended 


from time to time by the Managing Member and the Servicer with the consent ofthe Secured 


Party but without the consent ofthe Initial Member (the "Electronic Report"). The Electronic 


Report shall include, but not be limited to, the information required for the Managing Member 


to prepare, in accordance with the LLC Operating Agreement, the "Distribution Date Report" 


Franklin- Servicing Agreement 

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8535953.4 
arid the "Monthly Report" (each as defined in the LLC Operating Agreement), to the extent such 

information is reasonably available to the Servicer. 

(f) The Servicer shall deliver, and shall cause each Subservicer to deliver to 

the Managing Member, on or before March 1 o'h ·of each year, or such other day as the Managing 

Member and the Servicer may agree, commencing in the year 2010, an officer's certificate 

stating, as to the signer thereof, that (i) a review of such party's activities during the preceding 

calendar year (or portion thereof) and ofits performance under this Agreement (or, as applicable, 

any Sub servicing Agreement) has been made under such officer's supervision, and (ii) to the best 

of such officer's knowledge and belief, based on such review, such party has fulfilled all ofits 

obligations under this Agreement (or, as applicable, 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. 

In the event any Subservicer was terminated, resigned or otherwise performed in such capacity 

for only part of a year, such party shall provide such annual compliance certificate with respect 

to such portion ofthe year. 

(g) On or before March 1Oth of each year, or such other day as the Managing 

Member and the Servicer agree, commencing in the year 2010, the Servicer shall, and shall cause 

each Subservicer to, each at its own expense or the expense ofthe Managing Member, provide a 

report prepared by a nationally recognized firm ofindependent certified public accountants to the 

effect that, with respect to the most recently ended fiscal year, such firm has examined certain 

records and documents relating to compliance with the servicing requirements in this Agreement 

and that, on the basis of such examination conducted substantially in compliance with either the 

Uniform Single Attestation Program for Mortgage Bankers or item 1122 ofRegulation AB, such 

firm is ofthe opinion that the Servicer (or Subservicer' s) activities have been conducted in 

compliance with this Agreement (including, to the extent applicable, Regulation AB), or that 

such exan:iination has disclosed no material items ofnoncompliance except for (i) such 

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

in the report. 

Section 5.3 Audits. Until the later ofthe date that is ten (10) years after the Effective 

Date and the date that is three (3) years after the date on which the final Loan Collections are 

distributed to the Company, which date shall be established by notice to the Servicer from the 

Managing Member, the Servicer shall, and shall cause each Subservicer to, (a) provide the 

Managing Member, the Secured Party and the Initial Member and their respective 

representatives (including any Governmental Authority), during normal business hours and on 

reasonable notice, with access to and the right to review all ofthe books of account, reports and 

records relating to the Loans or any Collateral, the Servicing Obligations, the Collection 

Account, the Escrow Accounts, any Other Accounts or any matters relating to this Agreement or 

the rights or obligations hereunder, (b) permit such representatives to make copies of and 

extracts from the same, (c) allow the Managing Member, the Secured Party and the Initial 

Member to cause such books to be audited by accountants selected by the Managing Member, 

the Secured Party or the Initial Member, as applicable, and (d) allow the Managing Member, the 

Secured Party and the Initial Member to discuss the Servicer' s and Subservicer' s affairs, finances 

and accounts, as they relate to the Loans, the Collateral, the Servicing Obligations, the Collection 

Account, the Escrow Accounts, and any Other Accounts or any other matters relating to this 

Franklin - Servicing Agreement 

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8535953.4 
Agreement or the rights or obligations hereunder, with its officers, directors, employees, 

accountants (and by this provision the Servicer hereby authorizes such accountants to discuss 

such affairs, finances and accounts with such representatives), Subservicers, and attorneys. 

Section 5.4 No Liens. The Servicer shall not place or permit (voluntarily or 

involuntarily) any Lien to be placed on any ofthe Loans, the Collateral, the Loan Documents or 

the Loan Collections, and shall not take any action to interfere with the Secured Party's rights as 

a secured party with respect to the Loans, the Collateral and the Loan Collections. 

Section 5.5 Servicer's Dutv to Advise; Delivery of Certain Notices. In addition to 

such other reports and access to records and reports as are required to be provided to the 

Managing Member, the Secured Party and the Initial Member hereunder, the Servicer shall cause 

to be delivered to the Managing Member, the Secured Party and the Initial Member, such 

information relating to the Loans, the Collateral, the Servicer and any Subservicer as the 

Managing Member, the Secured Party or the Initial Member may reasonably request from time 

to time and, in any case, shall ensure that the Managing Member, the Secured Party and the 

Initial Member are promptly advised, in writing, of any matter ofwhich the Servicer or 

Subservicer becomes aware relating to the Loans, any ofthe Collateral, the Collection Account, 

Escrow Accounts, any Other Accounts or any Borrower or Guarantor that materially and 

adversely affects the interests ofthe Company, the Secured Party or the Initial Member. Without 

limiting the generality ofthe foregoing, the Servicer shall immediately notify the Managing 

Member, the Secured Party and the Initial Member of any claim, threatened claim or litigation 

against the Managing Member arising out of any Loan and shall cause to be delivered to the 

Managing Member, the Secured Party and the Initial Member information indicating any 

possible Environmental Hazard with respect to any Collateral. 

Section 5.6 Notice ofBreach. The Servicer shall inunediately notify the Managing 

Member, the Secured Party and the Initial Member of any failure or anticipated failure on its part 

to observe and perform any warranty, representation, covenant or agreement required to be 

observed and performed by it as the Servicer. 

ARTICLE VI 

SECURED PARTY AND INITIAL MEMBER CONSENT 

Section 6.1 Actions Requiring Secured Partv and Initial Member Consent. 

Notwithstanding anything to the contrary contained in this Agreement, neither the Managing 

Member nor the Servicer shall perruit to be taken any ofthe following actions without the prior 

written consent ofthe Secured Party and the Initial Member, which may be withheld or 

conditioned in the sole and absolute discretion ofthe Secured Party and the Initial Member, 

respectively: 

(a) a Bulk Sale occurring during the 24-month period commencing on the 

Closing Date; 

(b) the sale or other transfer of any Loan or Collateral (or any portion thereof) 

to any Affiliate ofthe Company, the Servicer, any Mfiliate ofthe Servicer, any Subservicer, or 

any Mfiliate of any Subservicer; 

Franklin - Servicing Agreement 

21 

8535953.4 
(c) the financing ofthe sale or other transfer of any Loans, Collateral or 

Acquired Collateral (or any portion thereof); 

. (d) the sale of any Loan or Collateral (or any portion thereof) that provides for 

any recourse against the Company or the Initial Member or any share of the Loan Collections 

allocable to the Initial Member; 

(e) any disbursement of any funds in the Collection Account or any Other 

Accounts other than in accordance with the provisions ofthis Agreement; 

(f) where applicable the Servicer or any Subservicer ceases to be a member in 

good standing ofMERS®; 

(g) other than capitalizing accrued and unpaid interest and other amounts 

permitted to be capitalized pursuant to the Loan Modification Program, and Servicing Advances, 

advancing additional funds that would increase the Unpaid Principal Balance; or 

(h) reimbursement for any expense or cost incurred (or paid) to any Affiliate 

ofthe Company, any Affiliate ofthe Servicer or any Affiliate of any Subserv:lcer. 

Section 6.2 Amendments, Modification and Waivers. No provision ofthis Agreement 

may be amended, modified or waived except in writing executed by the Managing Member and 

the Servicer, and each such amendment and modification shall be subject to the prior written 

consent ofthe Secured Party and, except for those provisions that may be amended without the 

Initial Member's consent, as and to the extent expressly provided in this Agreement, the Initial 

Member (which consent, in the case ofthe Initial Member, shall not be uureasonably withheld, 

delayed or conditioned). Whenever a consent ofthe Secured Party or the Initial Member is · 

required under this Agreement, such consent may be given or withheld in the sole and absolute 

discretion of such Person, except, in the case ofthe Initial Member, to the extent expressly 

provided otherwise in this Agreement. 

ARTICLE VII 

DEFAULTS; TERMINATION; TERMINATION WITHOUT CAUSE 

Section 7.1 Defaults. A default ("Default") means the occurence of: 

(a) any failure by the Servicer to remit to the Company or deposit in the 

Collection Account, the Escrow Accounts or any Other Accounts any amount required to be so 

remitted or deposited under the terms ofthis Agreement; or 

(b) any Insolvency Event (without any cure period other than as may be 

provided for in the definition ofInsolvency Event) with respect to the Servicer or any Affiliate 

therof, or any Subservicer or any Affiliate thereof; or 

(c) any failure by the Servicer to duly perform its obligations in (i) Section 


5.2(e), which failure continues unremedied for a period of five (5) days, or such other period as 


the Managing Member and the Servicer agree, after the date on which written notice ofsuch 


failure, requiring the same to be remedied, shall have been given by the Managing Member or 


Franklin - Servicing Agreement 

22 

8535953.4 
the Secured Party to the Servicer, or (ii) Section 5 .2(f) or~, which failure continues 

unremedied for a period oftwenty-five (25) days, or such other period as the Managing Member, 

the Secured Party and the Servicer agree, after the date on which written notice ofsuch failure, 

requiring the same to be remedied, shall have been given by the Managing Member or the 

Secured Party to the Servicer; or 

(d) any failure by the Servicer at any time (i) to comply with its obligation to 

be a Qualified Servicer and to renew or maintain any permit or license necessary to carry out its 

responsibilities under this Agreement in compliance with Law, or (ii) to cause each Subservicer 

to meet the applicable characteristics of a Qualified Servicer as required under Section 4.1 and to 

renew or maintain any permit or license necessary to carry out its responsibilities under any 

Sub servicing Agreement, which, in the case of either (i) or (ii), continues unremedied for a 

period ofthirty (30) days after the date on which written notice ofsuch failure requiring the same 

to be remedied shall have been given by the Managing Member or the Secured Party to the 

Servicer; or 

(e) the occurrence of any event of default or material breach by the Servicer 

under this Agreement, which continues unremedied for a period ofthirty (30) days after the date 

on which written notice ofsuch failure requiring the same to be remedied shall have been given 

by the Managing Member or the Secured Party to the Servicer; or 

(f) any failure by the Servicer to cause any Subservicer to comply with the 

terms ofits Subservicing Agreement with the Servicer, the occurrence of a default or material 

breach by any Subservicer under its Subservicing Agreement or the failure by the Servicer to 

replace any Subservicer upon the occurrence of any such everit in accordance with the terms 

goveruing material breach or default under the applicable Subservicing Agreement; or 

(g) any other failure (other than those specified in any of Sections 7.l(a) 

through ill) by the Servicer duly to observe or perform in any material respect any other 

covenants or agreements on the part ofthe Servicer contained in this Agreement or to perform 

any Servicing Obligation in compliance with the Servicing Standard, and such failure continues 

unremedied for a period ofthirty (30) days, or such other period as the Managing Member, the 

Secured Party and the Servicer agree, after the date on which written notice of such failure, 

requiring the same to be remedied, shall have been given by the Managing Member or the 

Secured Party to the Servicer; provided, however, that in the case of a failure that cannot be 

cured within thirty (30) days (or such other period as the Managing Member, the Secured Party 

and the Servicer agree), the cure period shall be extended for an additional thirty (30) -days ifthe 

Servicer can demonstrate to the reasonable satisfaction ofthe Managing Member and the 

Secured Party that the Servicer is diligently pursuing remedial action; or 

(h) the occurrence of any "Event ofDefault," as defmed in the LLC Operating 

Agreement; or 

(i) the occurrence of any "Event ofDefault," as defined in the Security 

Agreement 

Section 7.2 Termination with Cause. 

Franklin - Servicing Agreement 

23 

8535953.4 
(a) Upon the occurrence of any Default pursuant to this Agreement (without 

any cure period other than as may be provided for in Section 7.1 above), the Managing Member, 

in addition to any other rights the Managing Member may have pursuant to this Agreement, at 

law (including the Uniform Commercial Code), or in equity, including injunctive relief, specific 

performance or otherwise, may terminate this Agreement by providing a Termination Notice to 

the Servicer. 

(b) Upon the occurrence of a Default pursuant to any ofSections 7J(a), .(Q1 

{91 @1 {cl, ill, .® or (i) (but with respect to a Default under clause{£}, only with respect to 

Sections 5.2(f) and .{g)_ referred to therein), or ofthis Agreement (in each case, without any cure 

period other than as may be provided for in Section 7.1 above), the Secured Party or, with the 

consent of the Secure Party, the Initial Member, in addition to any other rights the Secured Party 

or the Initial Member may have at law or equity, including injunctive relief, specific performance 

or otherwise, may (i) terminate this Agreement by providing a Termination Notice to the 

Servicer, (ii) terminate the Sub servicing Agreements by providing a written termination notice to 

the Subservicers, and (iii) otherwise enforce this Agreement, in any case, without penalty or 

payment or any fee. 

(c) The Servicer hereby consents to its immediate termination under this 

Agreement by the Secured Party or, with the consent ofthe Secured Party, the Initial Member 

upon a Default under Section 7.1 (b) ofthis Agreement. 

(d) Upon a default or failure ofthe Managing Member to perform its 

obligations under this Agreement in a material manner, including but not limited to, the failure of 

the Managing Member to pay to the Servicer the Servicing Fee in full and timely, the Servicer, in 

addition to any other rights it may have pursuant to this Agreement, at law or in equity, may 

terminate this Agreement by providing a Termination Notice to the Managing Member, with a 

copy to the Secured Party and the Initial Member. The Termination Notice shall set forth with 

specificity the nature ofthe default or failure to perform ofthe Managing Member and provide 

the Managing Member with no less than thirty (30) days to cure any such default or failure to 

perform. In the event that the default or failure to perform is not cured within thirty (30) days 

from the date of the Termination Notice, the Servicer shall provide a second Termination Notice 

to the Managing Member with a copy to the Secured Party and the Initial Member, which second 

Termination Notice shall be prominently labeled as the "Second Termination Notice". Such 

Second Termination Notice shall confirm to the Managing Member that the Servicer shall 

continue to perform the Servicing Obligations under this Agreement until the earlier to occur of 

(i) ninety (90) days after the delivery ofthe Second Termination Notice to the Managing 

Member, the Secured Party and the Initial Member, or (ii) the transfer ofthe Servicing 

Obligations to a successor Servicer. The duty of the Servicer to continue to perform the 

Servicing Obligations as provided in the Second Termination Notice is contingent upon the 

timely and full paymentofthe Servicing Fee to the Servicer during such period~ Servicer shall 

cooperate fully and completely with the transition ofthe Servicing Obligations to a successor 

Servicer in order to assure an orderly transfer. 

Section 7.3 Termination without Cause. 

Franklin - Servicing Agreement 

24 

8535953.4 
(a) The Managing Member may at any time, without cause but with the 

consent ofthe Secured Party, terminate this Agreement, upon providing a Termination Notice to 

the Servicer, but only as and in accordance with the provisions set forth on Schedule 5, as the 

same may be amended from time to time by the Managing Member and the Servicer with the 

Secured Party's but without the Initial Member's consent. 

(b) The Servicer may at any time after the first anniversary ofthe Effective 

Date and thereafter, without cause, terminate this Agreement. No termination ofthis Agreement 

by Servicer shall be effective unless the Servicer delivers to the Managing Member, with a copy 

to the Secured Party and the Initial Member, a Termination Notice, which for the purpose ofthis 

Section 7 .3(b) shall be a notice of Servicer's intent to terminate this Agreement. Such 

Termination Notice shall be provided at least sixty (60) days prior to any date specified by the 

Servicer as the date oftermination ofServicer's Obligations under this Agreement. 

Notwithstanding the foregoing, such Termination Notice shall not be effective unless the 

Termination Notice contains confirmation ofthe intent and obligation ofthe Servicer to continue 

to perform its Servicing Obligations until the earlier of(i) ninety (90) days after the Termination 

Notice is given or (ii) such other date on which the Servicing Obligations are transferred to a 

successor Servicer in an orderly manner. Servicer shall cooperate fully and completely with the 

transition ofthe Servicing Obligations to a successor Servicer in order to assure an orderly 

transfer. The Servicer issuing the Termination Notice shall be liable for all costs associated with 

the transfer of Servicing Obligations to the successor Servicer, including but not limited to the 

costs oftransporting the servicing files and the provision of any notices to Borrowers. 

Section 7.4 Effective Date. Termination as specified in this Article VII shall be 

effective at such time as is specified in the Termination Notice. In the event ofsuch termination, 

all authority and power ofthe Servicer under this Agreement, whether with respect to the Loans 

or otherwise, shall pass to and be vested in the Managing Member, the Initial Member or the 

successor servicer as designated by (i) the Secured Party or (ii) with the consent ofthe Secured 

Party, the Managing Member in the case oftermination by the Managing Member, or as 

designated solely by the Initial Member in the case oftermination by the Initial Member. The 

Servicer agrees to cooperate with the Managing Member, the Secured Party, the Initial Member 

and such successor servicer with respect to the timely and orderly transition ofits obligations 

under this Agreement. The Servicer shall be liable for all obligations ofthe Servicer that have 

accrued under this Agreement or at Law prior to such termination. 

Section 7.5 Accounting. Upon termination ofthis Agreement as set forth herein, the 

Servicer shall, unless otherwise directed by the Secured Party, account for and turn over to the 

Managing Member or its designee funds collected under the terms ofthis Agreement. The 

Servicer shall provide written notice in conformance with all applicable Law to the Borrowers to 

indicate that their Loans will henceforth be serviced by the Managing Member, the Initial 

Member or any successor servicer designated by either the Secured Party or, with its consent, by 

the Managing Member or the Initial Member, as the case may be, and transfer its duties as the 

Servicer to either the Managing Member, the Initial Member or any successor Servicer as 

applicable. 

Franklin- Servicing Agreement 

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8535953.4 
ARTICLE VIII 

INDEPENDENCE OF PARTIES; INDEMNIFICATION 

Section 8.1 Ind~endence ofParties. The Servicer shall have the status of, and act as, 

an independent contractor. Nothing herein contained shall be construed to create a partnership or 

joint venture or any similar relationship between the Managing Member and the Servicer. 

Section 8.2 Indemnification. The Servicer agrees to indemnifY, defend and hold 

harmless the Company, the Managing Member, the Secured Party, the Initial Member and each 

oftheir respective Affiliates, directors, officers, employees and agents and each of their 

respective successors and assigns (the "Indemnified Parties") from and against any and all 

claims, demands, suits, actions, proceedings, assessments, losses, costs, expenses (including 

attorneys' fees), damages and liabilities of any kind or nature whatsoever directly or indirectly 

resulting from or arising out of or related to (i) any inaccuracy in any ofthe Servicer' s warranties 

or representations contained in this Agreement, (ii) any failure by the Servicer to observe or 

perform any or all of the Servicer' s covenants, agreements or warranties contained in this 

Agreement, (iii) any act taken by the Servicer purportedly pursuant to a power of attorney 

granted by the Managing Member which act results in a claim related to the unlawful use of such 

power of attorney, or (iv) failure by the Servicer or ljlly Subservicer to discharge obligations on 

any Collateral relating to taxes, ground rents or other such recurring charges generally accepted 

by the mortgage servicing industry, which would become a Lien on the Collateral. The Servicer 

shall immediately notifY the Indemnified Party if a claim is made with respect to this Agreement 

or any Loans or Collateral, assume (with prior consent ofthe Indemnified Party) the defense of 

any such claim and pay all expenses in connection therewith, including attorneys' fees, and 

promptly pay, discharge and satisfy any judgment or decree which may be entered against it or 

any Indemnified Party in respect of such claim. No expenses incurred by the Servicer or any 

Subservicer in connection with its obligations under this Section 8.2 shall constitute a Servicer 

Advance. The Servicer shall follow any reasonable written instructions received from the 

Indemnified Party in connection with such claims, it being understood that the Indemnified Party 

shall have no duty to monitor or give instructions with respect to such claims. 

Section 8.3 Procedure for Indemnification. Promptly upon receipt ofwritten riotice of 

any claim, in respect ofwhich indemnity may be sought pursuant to the terms ofthis Agreement, 

the Indemnified Party will use its best efforts to notifY the Servicer in writing thereof in 

sufficient time for the Servicer to respond to such claim. Except to the extent that the Servicer is 

prejudiced thereby, the failure ofthe Indemnified Party to promptly notifY the Servicer of any 

such claim shall not relieve the Servicer from any liability which it may have to the Indemnified 

Party in connection therewith. Ifany claim shall be asserted or commenced against the 

Indemnified Party, the Servicer will be entitled to participate therein, and to the extent it may 

wish to assume the defense, conduct or settlement thereof, it shall be entitled to do so with 

counsel reasonably satisfactory to the Indemnified Party; provided, however, that in the event the 

Servicer fails, in the reasonable judgment ofthe Indemnified Party, vigorously to defend or 

pursue or attempt to settle such claim, the Managing Member shall have the right to assume the 

conduct, defense or settlement thereof, provided that the Managing Member shall obtain the 

prior written approval ofthe Indemnified Party before ceasing to defend against any claim or 

entering into any settlement, adjustment or compromise of such claim involving injunctive or 

similar equitable reliefbeing imposed upon any Indemnified Party or any of its Affiliates. After 

Franklin - Servicing Agreement 

26 

8535953.4 
notice from the Servicer to the Managing Member ofits election to assume the defense, conduct 

or settlement thereof, the Servicer will not be liable to the Managing Member for any legal or 

other expenses consequently incurred by the Managing Member in connection with the defense, 

conduct or settlement thereof 

ARTICLE IX 

NOTICES 

All notices, requests, demands, and other communications required or permitted to be 

given or delivered under or by reason ofthe provisions ofthis Agreement shall be in writing and 

shall be given by registered or certified mail (postage prepaid and return receipt requested) or 

delivered by hand or by a nationally recognized air courier service, directed to the address of 

such Person set forth below: 

Ifto the Managing Member: RCS Franklin Venture LLC 

4282 North Freeway 

Fort Worth, Texas 76137 

Attention: Dennis G. Stowe 

Tel: (817) 321-6001 

with a copy to: K&L Gates LLP 

1601 K Street, N.W. 

Washington, D.C. 20006 

Attention: Phillip J. Kardis, II 

Tel: (202) 778-9401 

Ifto the Initial Member: Senior Capital Markets Specialist 

c/o Federal Deposit Insurance Corporation 

550 17'h Street, NW (F-7026) 

Washington, D.C. 20429-0002 

Attention: Timothy A. Kruse 

Tel: (202) 898-6832 

with a copy to: Senior Counsel 

FDIC Legal Division 

Litigation and Resolutions Branch, Receivership Section 

Special Issues Unit 

3501 Fairfax Drive (Room E-7056) 

Arlington, Virginia 22226 

Attention: David Gearin 

Tel: (703) 562-2430 

Ifto the Secured Party: Director, Division ofFinance 

c/o Federal Deposit Insurance Corporation 

3501 Fairfax Drive (Room VS-4088) 

Arlington, Virginia 2226 

Attention: Bret D. Edwards 

Franklin - Servicing Agreement 

27 

8535953.4 
Tel: (703) 562-6101 

with a copy to: Senior Counsel 

FDIC Legal Division 

Litigation and Resolutions Branch, Receivership Section 

Special Issues Unit 

3501 Fairfax Drive (Room E-7056) 

Arlington, Virginia 22226 

Attention: David Gearin 

Tel: (703) 562-2430 

Ifto the Servicer: Residential Credit Solutions, Inc. 

4282 North Freeway 

Fort Worth, Texas 76137 

Attention: Dennis G. Stowe 

Tel: (817) 321-6001 

with a copy to: K&L Gates LLP 

1601 K Street, N.W. 

Washington, D.C. 20006 

Attention: Phillip J. Kardis, II 

Tel: (202) 778-9401 

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 ofthe recipient shall be deemed to have been given at the opening ofbusiness on 

the next Business Day ofthe recipient. From time to time, any Person may designate a new 

address for purposes ofnotice hereunder by notice to such effect to the other Persons identified 

above. 

ARTICLE X 

GOVERNING LAW; JURISDICTION 

Section 10.1 Governing Law. THIS AGREEMENT 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 hereto. 

Section 10.2 Jurisdiction; Venue and Service. Each ofthe parties hereto, for itself and 

each ofits Affiliates, hereby irrevocably and unconditionally: 

(a) agrees that any suit, action or proceeding instituted against it by any other 

party with respect to this Agreement may be instituted, and that any suit, action or proceeding 

instituted by it against any other party with respect to this Agreement shall be instituted, only in 

Franklin - Servicing Agreement 

28 

8535953.4 
the Supreme Court ofthe State ofNew York, County ofNew York, or the U.S. District Court for 

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

Columbia (and appellate courts from any ofthe foregoing), (ii) consents and submits, for itself 

and its property, to the jurisdiction ofsuch courts for the purpose of any such suit, action or 

proceeding instituted against it by any other party and (iii) agrees that a final judgment in any 

such suit, action or proceeding shall be conclusive and may be enforced in other jurisdictions by 

suit on the judgment or in any other manner provided by Law; 

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

or proceeding pursuant to Section 1 0.2(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 Article IX 

(with copies to such other Persons as specified therein); provided, however, that nothing 

contained in this Section 1 0.2(a) shall affect the ability of any party to be served process in any 

other manner permitted by Law; · 

(c) (i) waives any objection that it may now or hereafter have to the laying of 

venue of any suit, action or proceeding arising out of or relating to this Agreement brought in 

any court specified in Section 1 0.2(a), (ii) waives any claim that any such suit, action or 

proceeding brought in any such court has been brought in an inconvenient forum and (iii) agrees 

not to plead or claim either ofthe foregoing; and 

(d) agrees that nothing contained in this Section 10.2 shall be construed to 

constitute consent to jurisdiction by the Failed Bank or the FDIC, in any capacity, or a limitation 

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

Section 10.3 Waiver ofJurv Trial. EACH OF THE P ARTlES HERETO, FOR ITSELF 

AND EACH OF ITS AFFILIATES, HEREBY IRREVOCABLY AND UNCONDITIONALLY 

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

ARISING OUT OF OR RELATING TO TillS AGREEMENT AND AGREES THAT ANY 

SUCH DISPUTE SHALL BE TRlED BEFORE A JUDGE SITTING WITHOUT A JURY. 

ARTICLE XI 

MISCELLANEOUS 

Section 11.1 No Assignment by Servicer; No Transfer ofOwnership Interests in 

Servicing Rights. 

(a) The Servicer hereby acknowledges that this Agreement constitutes a 

personal services agreement between the Managing Member and the Servicer. The Servicer 

shall not assign any rights or obligations hereunder to any other Person other than as is expressly 

provided in this Agreement. Any purported sale, sub-participation or assignment or delegation 

in violation ofthis Section 11.1(a) shall be void ab initio and ofno force or effect whatsoever. 

(b) Under no circumstances shall the Servicer transfer to any Subservicer or 

any other Person any ownership interest in the servicing of the Loans or any right to transfer or 

sell the servicing to the Loans (other than in connection with the sale of any Loan). The Servicer 

shall not assign, pledge or otherwise transfer or purport to assign, pledge or otherwise transfer 

any interest to any Person in the servicing ofthe Loans (other than in connection with the sale of 

Franklin - Servicing Agreement 

29 

8535953.4 
any Loan). Any purported assignment, pledge, delegation or other transfer in violation ofthis 

Section 11.1 (b) shall be void ab initio and ofno force or effect whatsoever. 

Section 11.2 Legal Fees. No party to this Agreement shall be responsible for the 

payment ofthe legal fees or expenses incurred by the other party hereto in connection with the 

negotiation and execution ofthis Agreement or any subsequent modifications or supplements 

hereto. 

Section 11.3 Entire Agreement. This Agreement contains the entire agreement between 

the Managing Member and the Servicer and supersedes any and all other prior agreements, 

whether oral or written, with respect to the subject matter hereof. 

Section 11.4 Counterparts; Facsimile Signatures. This Agreement may be executed in 

two (2) or more counterparts, each ofwhich shall be deemed an original but all ofwhich 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 ifit 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. 

Section 11.5 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 ofthis 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. 

Section 11.6 Construction. This Agreement shall be construed and interpreted in 

accordance with the following: 

(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" ofsuch 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. 

(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 

Franklin - Servicing Agt:eement 

30 

8535953.4 
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 ofsimilar import shall refer to this Agreement as a whole and not to any particular 

provision ofthis Agreement. 

(f) The words "include" and "including" and words ofsimilar 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 oftime shall be 

construed to mean commencing at the beginning ofsuch 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 ofthe appropriate gender. 

Section 11.7 Compliance with Law ..Except as otherwise specifically provided herein, 

each party to this Agreement shall, at its own cost and expense, obey and comply with all 

applicable Laws, as they may pertain to such party's performance ofits obligations hereunder. 

Section 11.8 Severabilitv. Any provision ofthis Agreement which is prohibited or 

unenforceable in any jurisdiction shall be ineffective, but such ineffectiveness shall be limited as 

follows: (i) if such provision is prohibited or unenforceable in such jurisdiction only as to a 

particular Person or Persons and/or under any particular circumstance or circumstances, such 

provision shall be ineffective, but only in such jurisdiction and only with respect to such 

particular Person or Persons and/or under such particular circumstance or circumstances, as the 

case may be; (ii) without limitation of clause (i), such provision shall in any event be ineffective 

only as to such jurisdiction and only to the extent ofsuch prohibition or unenforceability, and 

such prohibition or unenforceability in such jurisdiction shall not invalidate or render 

unenforceable such provision in any other jurisdiction; and (iii) without limitation of clauses (i) 

or (ii), such ineffectiveness shall not invalidate any ofthe remaining provisions ofthis 

Agreement. Without limitation ofthe preceding sentence, it is the intent ofthe parties to this 

Agreement that in the event that in any court proceeding, such court determines that any 

provision ofthis Agreement is prohibited or unenforceable in any jurisdiction (because ofthe 

duration or scope (geographic or otherwise) ofsuch provision, or for any other reason) such 

court shall have the power to, and shall, (x) modifY such provision (including without limitation, 

to the extent applicable, by limiting the duration or scope ofsuch provision and/or the Persons 

against whom, and/or the circumstances under which, such provision shall be effective in such 

jurisdiction) for purposes ofsuch proceeding to the minimum extent necessary so that such 

provision, as so modified, may then be enforced in such proceeding and (y) enforce such 

provision, as so modified pursuant to clause (x), in such proceeding. Nothing in this 

Section 11.8 is intended to, or shall, limit (1) the ability of any party to this Agreement to appeal 

any court ruling or the effect of any favorable ruling on appeal or (2) the intended effect of · 

Section 10.1. 

Franklin - Servicing Agreement 

31 

8535953.4 
Section 11.9 Third Party Beneficiaries. The Company, the Secured Party and the Initial 

Member shall be and are hereby designated as third party beneficiaries under this Agreement 

and, as such, each ofthe Secured Party and, with the Secured Party's consent, each ofthe 

Company and the Initial Member is entitled to enforce this Agreement as if such Person were a 

party hereto. Notwithstanding the foregoing, neither the Secured Party, the Company nor the 

Initial Member shall have any obligation to undertake any ofthe duties ofthe Managing Member 

hereunder and shall have no liability whatsoever to the Servicer, any Subservicer or any other 

party related to this Agreement. There shall be no other third party beneficiaries. The rights of 

the Secured Party as a third party beneficiary hereunder, including any requirement that any 

action hereunder is subject to the consent ofthe Secured Party, shall terminate at such time as the 

Secured Party notifies the Servicer that the secured obligations thereunder have been paid in full, 

but shall be reinstated in the event that the Secured Party notifies the Servicer that the Security 

Agreement has been reinstated in accordance with its terms. 

Section 11.10 Protection of Confidential Information. The Servicer shall keep 

confidential and shall not divulge to any party, without the Managing Member's prior written 

consent, any information pertaining to the LLC Operating Agreement, the Loans or any 

Borrower or the Collateral thereunder, except as required pursuant to this Agreement and except 

to the extent that it is necessary and appropriate for the Servicer to do so in working with legal 

counsel, auditors, taxing authorities, regulatory authorities or other Governmental Authority or in 

accordance with the Servicing Standard. 

Section 11.11 Time ofEssence. Time is hereby declared to be ofthe essence of this 

Agreement and of every part hereof. 

Section 11.12 No Presumption. 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 ofwho actually prepared, drafted or 

requested any term or condition ofthis Agreement or any agreement or instrument subject 

hereto. 

Section 11.13 No Right ofSetoff. The Servicer hereby waives any and all rights it may 

otherwise have (whether by contract or operation ofLaw or otherwise) to any setoff, offset, 

counterclaim or deduction (or to assert any claim for any setoff, offset counterclaim or 

deduction) against the Loan Collections. 

Section 11.14 Release ofInitial Member and Prior Servicers. The Servicer hereby 

releases and discharges the Initial Member and any predecessor servicer, and all oftheir 

respective officers, directors, employees, agents, attorneys, contractors and representatives, and 

all oftheir respective successors and assigns and Affiliates (but excluding, in all cases, the 

Managing Member), from any and all claims (including any counterclaim or defensive claim), 

demands, causes of action, judgments or legal proceedings and remedies ofwhatever kind or 

nature that the Servicer had, has or might have in the future, whether known or unknown, which 

are related in any marmer whatsoever to that servicing ofthe Loans or Collateral by the Initial 

Member or such other predecessor servicer prior to the applicable Servicing Transfer Date for 

the Loans in question (other than due to gross negligence or willful misconduct ofthe Initial 

Member or other predeccessor servicer). 

Franklin - Servicing Agreement 

32 

8535953.4 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed 

as of the day and year first above written. 

RCS FRANKLIN VENTURE LLC 

By: Residential Credit Solutions, Inc., its sole 

Member 

By 

Name: 

1

Lg

Title: 

RESIDENTIAL CREDIT SOLUTIONS, INC. 

By: 

Name: ~ Title: 

Franklin- Servicing Agreement 

EXHIBIT A 


LOAN SCHEDULE 

The Loan Schedule is separately being acknowledged and delivered on the Closing Date 

by the Initial Member, the Company and the Managing Member. 

Franklin - Servicing Agreement 

A-1 

8535953.4 

EXHIBITB 


ELECTRONIC TRACKING AGREEMENT 


[Attached] 

Franklin - Seryicing Agreement 

B-1 

8535953.4 
EXECUTION COPY 


ELECTRONIC TRACKING AGREEMENT 


BY AND AMONG 


FEDERAL DEPOSIT INSURANCE CORPORATION, 


RESIDENTIAL CREDIT SOLUTIONS, INC., 


MERSCORP, INC. 


AND 

MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. 

Dated as of September 30,2009 

Franklin- Electronic Tracking Agreement 

8493663.4 
ELECTRONIC TRACKING AGREEMENT 

THIS ELECTRONIC TRACKING AGREEMENT (this "Agreement") is made and 

entered into as of September 30, 2009 by and among the Federal Deposit Insurance .Corporation 

{in any capacity, the "FDIC"), in its corporate capacity as the Secured Party (as defined below), 

Residential Credit Solutions, Inc. (the "Servicer"), MERSCORP, Inc. (the "Electronic Agent") 

and Mortgage Electronic Registration Systems, Inc. ("MERS"). 

WHEREAS, RCS Franklin Venture LLC, the sole member ofthe Company (as defined 

below), and the Servicer have entered into that certain Servicing Agreement, dated as of 

September 30, 2009 (the "Servicing Agreement"), pursuant to which, among other things, the 

Servicer is responsible for servicing the Mortgage Loans; and 

WHEREAS, pursuant to the Reimbursement and Security Agreement (the 

"Reimbursement and Security Agreement") dated as of September 30, 2009, by and between 

the Company, and the FDIC in its corporate capacity as the secured party (the "Secured Party"), 

the Company has pledged the Mortgage Loans to the Secured Party and the Secured Party will 

have a first priority security interest in the Mortgage Loans; and 

WHEREAS, the Servicer and the Secured Party desire to continue to have the Mortgage 

Loans registered on the MERS® System (defmed below) such that the mortgagee ofrecord 

under each Mortgage (defined below) shall be identified as MERS. 

NOW, THEREFORE, the parties, intending to be legally bound, agree as follows: 

1. Definitions. 

Capitalized terms used in this Agreement shall have the meanings assigned to them 

below. 

"Affected Loans" shall have the meaning assigned to such term in Section 4(b). 

"Agreement" shall have the meaning assigned to such term in the preamble. 

"Assignment of Mortgage" shall mean, with respect to any Mortgage, an assignment of 

the Mortgage, notice oftransfer or equivalent instrument in recordable form, sufficient under the 

laws ofthe jurisdiction wherein the related mortgaged property is located to effect the 

assignment ofthe Mortgage upon recordation. 

"Company" shall mean Franklin Venture, LLC. 

"Electronic Agent" shall have the meaning given in the preamble. 

"Event of Default" shall mean an Event ofDefault as defined in the Servicing 

Agreement. 

"FDIC" shall have the meaning given in the preamble. 

Franklin- Electronic Tracking Agreement I .8493663.4 
"MERS" shall have the meaning given in the preamble. 


"MERS Designated Mortgage Loan" shall have the meaning given in Section 3. 


"MERS Procedures Manual" shall mean the MERS Procedures Manual attached as 


Exhibit B hereto, as it may be amended from time to time. 

"MERS® System" shall mean the Electronic Agent's mortgage electronic registry 

system, as more particularly described in the MERS Procedures Manual. 

"Mortgage" shall mean a lien, mortgage or deed of trust securing a Mortgage Note. 

"Mortgage Loan" shall mean each mortgage loan that is pledged to the Secured Party 

pursuant to the Reimbursement and Security Agreement and that is, as ofthe date hereof, eligible 

to be registered on the MERS® System. 

"Mortgage Note" shall mean a promissory note or other evidence ofindebtedness ofthe 

obligor thereunder, representing a Mortgage Loan, and secured by the related Mortgage. 

"Notice of Default" shall mean a notice from the Secured Party that an Event of Default 

has occurred and is continuing. 

"Opinion of Counsel" shall mean a written opinion of counsel in form and substance 

reasonably acceptable to the Secured Party. 

"Person" shall mean any individual, corporation, company, voluntary association, 

partnership, joint venture, limited liability company, trust, unincorporated association or 

govermnent (or any agency, instrumentality or political subdivision thereof). 

"Reimbursement and Securitv Agreement" shall have the meaning given in the 

recitals. 

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

"Secured Party" shall have the meaning given in the recitals. 

"Servicer" shall have the meaning given in the preamble. 

2. Appointment of the Electronic Agent. 

(a) The Secured Party and the Servicer, by execution and delivery ofthis Agreement, 

each does hereby appoint MERSCORP, Inc. as the Electronic Agent, subject to the terms ofthis 

Agreement, to perform the obligations set forth herein. 

(b) MERSCORP, Inc., by execution and delivery ofthis Agreement, does hereby 

(i) agree with the Secured Party and the Servicer, subject to the terms ofthis Agreement, to 

perform the services set forth herein, and (ii) accepts its appointment as the Electronic Agent. 

Franklin- Electronic Tracking Agreement · 2 8493663.4 
3. 	 Designation ofMERS as Mortgagee ofRecord; Designation of Investor and Servicer of 

Record in MERS. 

The Servicer represents, warrants and covenants that (a) it has designated or shall 

designate MERS as, and has taken or will take such action as is necessary to cause MERS to be, 

the mortgagee ofrecord, as nominee for the Company, with respect to the pledged Mortgage 

Loans in accordance with the MERS Procedures Manual and (b) it has designated or will 

promptly designate the Company as the "investor" and the Servicer as the "servicer" in the 

MERS® System for each such pledged Mortgage Loan (each pledged Mortgage Loan so 

designated is a "MERS Designated Mortgage Loan") and the Secured Party as the "interim 

funder" on the MERS® System with respect to each MERS Designated Mortgage Loan. 

4. 	 Obligations ofthe Electronic Agent. 

(a) The Electronic Agent shall ensure that MERS, as the mortgagee ofrecord under 

each MERS Designated Mortgage Loan, shall promptly forward all properly identified notices 

MERS receives in such capacity to the person or persons identified in the MERS® System as the 

servicer as well as, if a subservicer is identified in the MERS® System, the subservicer for such 

MERS Designated Mortgage Loan. 

(b) Upon receipt of a Notice ofDefault, in the form ofExhibit C, from the Secured 

Party in which the Secured Party shall identifY the MERS Designated Mortgage Loans with 

respect to which the Servicer' s right to act as servicer or subservicer thereof has been terminated 

by the Secured Party (the "Affected Loans"), the Electronic Agent shall modifY the investor 

fields and/or servicer fields to reflect the investor and/or servicer on the MERS® System as the 

Secured Party or the Secured Party's designee with respect to such Affected Loans. Following 

such Notice ofDefault, the Electronic Agent shall follow the instructions of the Secured Party 

with respect to the Affected Loans, without further consent ofthe Servicer, and shall deliver to 

the Secured Party any documents and/or information (to the extent such documents or 

information are in the possession or control ofthe Electronic Agent) with respect to the Affected 

Loans requested by the Secured Party. 

(c) Upon the Secured Party's request and instructions, and at the Servicer's sole cost 

and expense, the Electronic Agent shall deliver to the Secured Party or the Secured Party's 

designee an Assignment ofMortgage from MERS, in blank, in recordable form but unrecorded 

with respect to each Affected Loan; provided, however, that the Electronic Agent shall not be 

required to comply with the foregoing unless the costs of doing so shall be paid by the Servicer 

or a third party. 

(d) The Electronic Agent shall promptly notifY the Secured Party and the Servicer if 

it has actual knowledge that any mortgage, pledge, lien, security interest or other charge or 

encumbrance exists with respect to any ofthe Mortgage Loans. Upon the reasonable request of 

the Secured Party or the Servicer, the Electronic Agent shall review the "investor" and "interim 

funder" fields and shall notifY the Secured Party if any Person other than the Company is 

identified in the "investor" field or if any Person is identified in the "interim funder'' field. 

Franklin -Electronic Tracking Agreement 3 . 8493663.4 
(e) In the event that (i) the Secured Party, the Company, the Servicer, the Electronic 

Agent or MERS shall be served by a third party with any type oflevy, attachment, writ or court 

order with respect to any MERS Designated Mortgage "Loan or (ii) a third party shall institute 

any court proceeding by which any MERS Designated Mortgage Loan shall be required to be 

delivered otherwise than in accordance with the provisions ofthis Agreement, the Electronic 

Agent shall promptly deliver or cause to be delivered to the other parties to this Agreement 

copies of all court papers, orders, documents and other materials concerning such proceedings. 

(f) Upon the request ofthe Secured Party, the Electronic Agent shall run a query with 

respect to any and all specified fields with respect to any or all of the MERS Designated 

Mortgage Loans and, ifrequested by the Secured Party, shall change the information in the 

"interim funder" field in accordance with the Secured Party's instructions. 

(g) MERS, as mortgagee ofrecord for the MERS Designated Mortgage Loans, shall 

take all such actions as may be required by a mortgagee in connection with servicing the MERS 

Designated Mortgage Loans at the request of the applicable servicer identified on the MERS® 

System, including, but not limited to, executing and/or recording, any modification, waiver, 

subordination agreement, instrument of satisfaction or cancellation, partial or full release, 

discharge or any other comparable instruments, at the sole cost and expense ofthe Servicer. 

(h) MERS shall cause certain officers or other representatives ofthe Secured Party to 

be appointed officers or agents ofMERS with respect to the MERS Designated Mortgage Loans, 

with the power to wield all ofthe powers specified in the form of corporate resolution or power 

of attorney used to appoint such officer or agent, substantially in the forms attached hereto as 

Exhibits D-1 and D-2. 

5. Access to Information. 

Upon the Secured Party's request, the Electronic Agent shall furnish to the Secured Party 

or its respective auditors information in its possession with respect to the MERS Designated 

Mortgage Loans and shall permit them to inspect the Electronic Agent's and MERS' records 

relating to the MERS Designated Mortgage Loans at all reasonable times during regnlar business 

hours. 

6. Representations ofthe Electronic Agent and MERS. 

The Electronic Agent and MERS hereby represent and warrant as of the date hereofthat: 

(a) each of the Electronic Agent and MERS has the corporate power and authority . 

and the legal right to execute and deliver, and to perform its obligations under this Agreement, 

and has taken all necessary corporate action to authorize its execution, delivery and performance 

ofthis Agreement; 

(b) no consent or authorization of, filing with, or other act by or in respect of, any 

arbitrator or governmental authority and no consent of any other Person is required in connection 

with the execution, delivery, performance, validity or enforceability ofthis A;greement; 

Franklin -Electronic Tracking Agreement 4 

8493663.4 
(c) this Agreement has been duly executed and delivered on behalfofthe Electronic 

Agent and MERS and constitutes a legal, valid and binding obligation ofthe Electronic Agent 

and MERS enforceable in accordance with its terms, except as enforceability may be limited by 

bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of 

creditors' rights generally and by general principles of equity (whether enforcement is sought in 

proceedings in equity or at law); 

(d) the Electronic Agent and MERS will maintain at all times insurance policies for 

fidelity and errors and omissions in amounts of at least three million dollars ($3,000,000) and 

five million dollars ($5,000,000) respectively, and a certificate and policy ofthe insurer shall be 

furnished to the Secured Party upon request and shall contain a statement ofthe insurer that such 

insurance will not be terminated prior to thirty (30) days' written notice to the Secured Party. 

7. Covenants ofMERS. 

(a) MERS shall (i) not incur any indebtedness other than in the ordinary course ofits 

business, (ii) not engage in any dissolution, liquidation, consolidation, merger or sale of assets, 

(iii) not engage in any business activity in which it is not currently engaged, (iv) not take any 

action that might cause MERS to become insolvent, (v) not form, or cause to be formed, any 

subsidiaries, (vi) maintain books and records separate from any other Person, (vii) maintain its 

bank accounts separate from any other Person, (viii) not commingle its assets with those of any 

other Person and hold all ofits assets in its own name, (ix) conduct its own business in its own 

name, (x) pay its own liabilities and expenses only out ofits own funds, (xi) observe all 

corporate formalities, (xii) enter into transactions with affiliates only if each such transaction is 

intrinsically fair, commercially reasonable, and on the same terms as would be available in an 

arm's length transaction with a Person that is not an affiliate, (xiii) pay the salaries ofits own 

employees from its own funds, (xiv) maintain a sufficient number of employees in light ofits 

contemplated business operations, (xv) not guarantee or become obligated for the debts of any 

other Person, (xvi) not hold out its credit as being available to satisfy the obligation of any other 

Person, (xvii) not acquire the obligations or securities ofits affiliates or owners, including 

partners, members or shareholders, as appropriate, (xviii) not make loans to any other Person or 

buy or hold evidence ofindebtedness issued by any other Person (except for cash and 

investment-grade securities), (xix) allocate fairly and reasonably any overhead expenses that are 

shared with an affiliate, including paying for office space and services performed by any 

employee of any affiliate, (xx) use separate stationery, invoices, and checks bearing its own 

name, (xxi) not pledge its assets for the benefit of any other Person, (xxii) hold itself out as a 

separate identity, (xxiii) correct any known misunderstanding regarding its separate identity and 

not identifY itself as a division of any other Person, and (xxiv) maintain adequate capital in light 

ofits contemplated business operations. 

(b) MERS agrees that in no event shall MERS' status as mortgagee ofrecord with 

respect to any MERS Designated Mortgage Loan confer upon MERS any rights or obligations as 

an owner of any MERS Designated Mortgage Loan or the servicing rights related thereto, and 

MERS will not exercise such rights unless directed to do so by the Secured Party. 

Franklin - Electronic Tracking Agreement 5 

8493663.4 
8. Covenants ofthe Servicer. 

(a) The Servicer covenants with respect to itself that it is a member ofMERS in good 

standing. 

(b) The Servicer hereby covenants and agrees with the Secured Party and each other 

that, with respect to each MERS Designated Mortgage Loan, it will not identify any party except 

the Company in the "investor'' field and will not identify any party except the Secured Party in 

the "interim funder" field on the MERS® System. 

(c) The Servicer will provide the Secured Party with MERS Identification Numbers 

for each MERS Designated Mortgage Loan. 

9. No Adverse Interest ofthe Electronic Agent or MERS. 

By execution ofthis Agreement, the Electronic Agent and MERS each represents and 

warrants that it currently holds, and during the existence of this Agreement shall hold, no adverse 

interest, by way ofsecurity or otherwise, in any MERS Designated Mortgage Loan. The MERS . 

Designated Mortgage Loans shall not be subject to any security interest, lien or right to set-offby 

the Electronic Agent, MERS, or any third party claiming through the Electronic Agent or MERS, 

and neither the Electronic Agent nor MERS shall pledge, encumber, hypothecate, transfer, 

dispose of, or otherwise grant any third party interest in, the MERS Designated Mortgage Loans. 

10. Indemnification ofthe Secured Party. 

The Electronic Agent agrees to indemnify and hold the Secured Party and its designees 

hannless against any and all liabilities, obligations, losses, damages, penalties, actions, 

judgments, suits, costs, expenses or disbursements, including reasonable attorneys' fees, that the 

Secured Party may sustain arising out of any breach by the Electronic Agent ofthis Agreement, 

the Electronic Agent's negligence, bad faith or willful misconduct, its failure to comply with the 

Secured Party's instructions hereunder or to the extent caused by delays or failures arising out of 

the inability ofthe Secured Party or the Electronic Agent to access information on the MERS® 

System. The foregoing indemnification shall survive any termination or assignment ofthis 

Agreement. 

II. Reliance ofthe Electronic Agent. 

(a) In the absence ofbad faith on the part ofthe Electronic Agent, the Electronic 

Agent may conclusively rely, as to the truth ofthe statements and the correctness ofthe opinions 

expressed therein, upon any request, instruction, certificate or other document furnished to the 

Electronic Agent, reasonably believed by the Electronic Agent to be genuine and to have been 

signed or presented by the proper party or parties and conforming to the requirements ofthis 

Agreement. 

(b) Notwithstanding any contrary information which may be delivered to the 

Electronic Agent by the Servicer, the Electronic Agent may conclusively rely on any information 

or Notice ofDefault delivered by the Secured Party, and the Servicer shall indemnify and hold 

the Electronic Agent harmless for any and all claims asserted against it for any actions taken in 

Franklin- Electronic Tracking Agreement 6 8493663.4 
good faith by the Electronic Agent in connection with the delivery ofsuch information or Notice 

ofDefault. 

12. Fees. 

It is understood that the Electronic Agent or its successor will charge such fees and 

expenses for its services hereunder as set forth in a separate agreement between the Electronic 

Agent and the Servicer. The Electronic Agent shall give prompt written notice of any 

disciplinary action instituted with respect to the Servicer' s failure to pay any fees required in 

connection with its use ofthe MERS® System, and will give written notice to the Secured Party 

at least thirty (30) days prior to any revocation ofthe Servicer' s membership in the MERS® 

System. 

13. Resignation ofthe Electronic Agent; Termination. 

(a) The Secured Party has entered into this Agreement with the Electronic Agent and 

MERS in reliance upon the independent status ofthe Electronic Agent and MERS, and the 

representations as to the adequacy oftheir facilities, personnel, records and procedures, its 

integrity, reputation and fmancial standing, and the continuance thereof. Neither the Electronic 

Agent nor MERS shall assign this Agreement or the responsibilities hereunder or delegate their 

rights or duties hereunder (except as expressly disclosed in writing to, and approved by, the 

Secured Party) or any portion hereof or sell or otherwise dispose of all or substantially all ofits 

property or assets without providing the Secured Party with at least sixty ( 60) days' prior written 

notice thereof. 

(b) Neither the Electronic Agent nor MERS shall resign from the obligations and 

duties hereby imposed on them except by mutual consent ofthe Electronic Agent, MERS and the 

Secured Party, or upon the determination that the duties ofthe Electronic Agent and MERS 

hereunder are no longer permissible under applicable law and such incapacity cannot be cured by 

the Electronic Agent and MERS. Any such determination permitting the resignation of the 

Electronic Agent and MERS shall be evidenced by an Opinion ofCounsel to such effect 

delivered to the Secured Party, which Opinion of Counsel shall be in form and substance 

acceptable to the Secured Party. No such resignation shall become effective until the Electronic 

Agent and MERS have delivered to the Secured Party all ofthe Assignments of Mortgage, in 

blank, in recordable form but unrecorded for each MERS Designated Mortgage Loan identified 

by the Secured Party as the Secured Party's collateral. 

14. Removal ofthe Electronic Agent. 

(a) The Secured Party, with or without cause, may remove and discharge the 

Electronic Agent and MERS from the performance ofits duties under this Agreement with 

respect to some or all ofthe MERS Designated Mortgage Loans by written notice from the 

Secured Party to the other parties hereto. 

(b) In the event oftermination ofthis Agreement, at the Servicer' s sole cost and 

expense (except as provided in Section 16), the Electronic Agent shall follow the instructions of 

the Secured Party for the disposition ofthe documents in its possession pursuant to this 

Franklin- Electronic Tracking Agreement 7 8493663.4 
Agreement, and deliver to the Secured Party an Assignment ofMortgage, in blank, in recordable 

form but unrecorded for each MERS Designated Mortgage Loan identified by the Secured Party 

as the Secured Party's collateral. Notwithstanding the foregoing, in the event that the Secured 

Party terminates this Agreement with respect to some, but not all, ofthe MERS Designated 

Mortgage Loans, this Agreement shall remain in full force and effect with respect to any MERS 

Designated Mortgage Loans for which this Agreement is not terminated hereunder. 

Notwithstanding any termination ofthis Agreement, the provisions of Section 10 shall survive 

any termination. 

15. Notices. 

All written communications hereunder shall be delivered, by overnight courier, to the 

Electronic Agent and/or the Secured Party and/or the Servicer as indicated ort the signature page 

hereto, or at such other address as designated by such party in a written notice to the other 

parties. All such communications shall be deemed to have been duly given upon receipt (or 

refusal thereof), in each case given or addressed as aforesaid. 

16. Term ofAgreement. 

(a) This Agreement shall continue to be in effect until terminated by the Secured 

Party or the Electronic Agent sending written notice to the other parties of this Agreement at 

least thirty (30) days prior to said termination. 

(b) Upon the termination ofthis Agreement by the Electronic Agent or the 

termination ofthis Agreement by the Secured Party for cause as provided above, the Electronic 

Agent shall, at the Electronic Agent's sole cost and expense, execute and deliver to the Secured 

Party or its designee an Assignment ofMortgage with respect to each MERS Designated 

Mortgage Loan identified by the Secured Party, in blank, in recordable form but unrecorded. In 

the event that this Agreement is terminated by the Secured Party without cause, the duties ofthe 

Electronic Agent in the preceding sentence shall be at the sole cost and expense ofthe Servicer. 

In addition, the Secured Party and the Electronic Agent may, at the sole option ofthe Secured 

Party, enter into a separate agreement which shall be mutually acceptable to the parties with 

respect to any or all ofthe MERS Designated Mortgage Loans with respect to which this 

Agreement is terminated. 

17. Authorizations. 

Any ofthe persons whose signatures and titles appear on Exhibit A hereto are authorized, 

acting singly, to act for the Secured Party, the Servicer, the Electronic Agent or MERS, as the 

case may be, under this Agreement. The parties may change the information on Exhibit A hereto 

from time to time but each ofthe parties shall be entitled to rely conclusively on the then current 

Exhibit A until receipt of a superseding exhibit. 

18. Amendments. 

This Agreement may be amended from time to time only by written agreement signed by 

the Secured Party, the Servicer, the Electronic Agent and MERS. 

Franklin- Electronic Tracking Agreement 8 

8493663.4 
19. Severability. 

If any provision ofthis Agreement is declared invalid by any court of competent 

jurisdiction, such invalidity shall not affect any other provision, and this Agreement shall be 

enforced to the fullest extent required by law. 

20. Binding Effect. 

This Agreement shall be binding and inure to the benefit ofthe parties hereto and their 

respective successors and assigns. 

21. Governing Law. 

TillS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND 

GOVERNED BY THE LAW OF THE COMMONWEALTH OF VIRGINIA. 

THE SECURED PARTY (OTHER THAN THE FDIC IN ANY OTHER 

CAPACITY), THE SERVICER, THE ELECTRONIC AGENT AND MERS EACH 

IRREVOCABLY AGREES THAT ANY ACTION OR PROCEEDING ARISING OUT OF 

OR IN ANY MANNER RELATING TO TillS AGREEMENT MAY BE BROUGHT IN 

ANY COURT OF THE COMMONWEALTH OF VIRGINIA, OR IN THE U.S. 

DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA, AND BY THE 

EXECUTION AND DELIVERY OF THIS AGREEMENT EXPRESSLY AND 

IRREVOCABLY ASSENT AND SUBMIT TO THE NONEXCLUSIVE JURISDICTION 

OF ANY SUCH COURTS IN ANY SUCH ACTION OR PROCEEDING. 

22. Waiver ofJurv Trial. 

THE SECURED PARTY, THE SERVICER, THE ELECTRONIC AGENT AND 

MERS EACH IRREVOCABLY AGREES TOWAIVE ITS RIGHT TO A JURY TRIAL 

IN ANY ACTION OR PROCEEDING AGAINST IT ARISING OUT OF, OR RELATED 

IN ANY MANNER TO, TillS AGREEMENT OR ANY RELATED AGREEMENT. 

23. Execution. 

This Agreement may be executed in one or more counterparts and by the different parties 

hereto on separate counterparts, each ofwhich, when so executed, shall be deemed to be an 

original; such counterparts, together, shall constitute one and the same agreement. 

24. Cumulative Rights. 

The rights, powers and remedies of the Electronic Agent, MERS, the Secured Party, the 

Servicer under this Agreement shall be in addition to all rights, powers and remedies given to the 

Electronic Agent, MERS, the Servicer, and the Secured Party by virtue of any statute or rule of 

law, or any other agreement, all ofwhich rights, powers and remedies shall be cumulative and 

Franklin- Electronic Tracking Agreement 9 8493663.4 
may be exercised successively or concurrently without impairing the Secured Party's rights in 

the Mortgage Loans. 

25. Status ofElectronic Agent. 

Nothing herein contained shall be deemed or construed to create a partnership or joint 

venture between the parties hereto, and the services of the Electronic Agent and MERS shall be 

rendered as independent contractors for the Secured Party, the Servicer. Other than the 

obligations ofthe Electronic Agent and MERS expressly set forth herein, the Electronic Agent 

and MERS shall have no power or authority to act as agent for the Secured Party or the Servicer 

pursuant to any grant of authority made under or pursuant to this Agreement. 

[Remainder ofPage Intentionally Left Blank} 

Franklin- Electronic Tracking Agreement 10 

8493663.4 
IN WITNESS WHEREOF, the Secured Party, the Servicer, the Electronic Agent and 

MERS have duly executed this Agreement as of the date first above written. 

FEDERAL DEPOSIT INSURANCE 

CORPORATION, in its corporate capacity 

By: 

Name: 

Title: 

Address for Notices: 

Director, Division ofFinance 

c/o Federal Deposit Insurance Corporation 

550 17th Street, NW (Room VS-4088) 

Arlington, Virginia 2226 

Attention: Bret D. Edwards 

Tel: (703) 562-6101 

with a copy to: 

Senior Counsel 

FDIC Legal Division 

Litigation and Resolutions Branch, Receivership 

Section 

Special Issues Unit 

3501 Fairfax Drive (Room E-7056) 

Arlington, Virginia 22226 

Attention: David Gearin 

Tel: (703) 562-2430 

Franklin- Electronic Tracking Agreement 
RESIDENTIAL CREDIT SOLUTIONS, 

INC. 

By: 

Name: 

Title: Authorized Signatory 

Address for Notices: 

Residential Credit Solutions, Inc. 


4282 North Freeway 


Fort Worth, Texas 76137 


·Attention: Dennis G. Stowe 

Tel: (817) 321-6001 

with a copy to: 

K&L Gates LLP 


1601 K Street, N.W. 


Washington, D.C. 20006 


Attention: Phillip J. Kardis, ll 


Tel: (202) 778-9401 


Franklin- Electronic Tracking Agreement 
MERSCORP, INC. 

By: 

Name: 

Title: 

Address for Notices: 

1818 Library Street 

Suite 300 

Reston, VA 20190 

Attention: '--------' 

Tel: ,__ ______J 

MORTGAGE ELECTRONIC 

REGISTRATION SYSTEMS, INC. 

By: 

Name: 

Title: 

Address for Notices: 

1818 Library Street 

Suite 300 

Reston, VA 20190 

Attention: [ ______j 

Tel: [ _____j 

Franklin- Electronic Tracking Agreement 
------------------ ----------------

EXHIBIT A 


LIST OF AUTHORIZED PERSONS 


SECURED PARTY AUTHORIZATIONS: 


Any ofthe persons whose signatures and titles appear below, or attached hereto, are authorized, 

acting singly, to act for the Secured Party under this Agreement: 

By: By: By: 

Name: Timothy A. Kruse Name: Herbert J. Held Name: William P. Stewart 

Title: 

Senior Capital Markets 

Specialist Title: Associate Director Title: 

Senior Capital Markets 

Specialist 

SERVICER AUTHORIZATIONS: 

Any ofthe persons whose signatures and titles appear below, or attached hereto, are authorized, 


acting singly, to act for the Servicer under this Agreement: 


By: By: By: 


Name: Name: Name: 


Title: Title: Title: 


By: By: By: 


Name: Name:· Name: 


Title: Title: Title: 


By: 


Name: 


Title: 


A-1 

------------------ ----------------

------------------ ----------------

------------------ ----------------

------------------ ----------------

ELECTRONIC AGENT AUTHORIZATIONS: 


Any ofthe persons whose signatures and titles appear below, or attached hereto; are authorized, 


acting singly, to act for the Electronic Agent under this Agreement: 


By: By: By: 


Name: Name: Name: 
 ----------~------ ---------------- ----------------­

Title: Title: Title: 

MERS AUTHORIZATIONS: · 


Any ofthe persons whose signatures and titles appear below, or attached hereto, are authorized, 


acting singly, to act for MERS under this Agreement: 


By: By: By: 


Name: _________________ Name: ________________ Name: __________________ 


Title: Title: Title: 


A-2 

EXHIBITB 

MERSPROCEDURESMANUAL 

The MERS Procedures Manual shall be found on the MERS website at: http://www.mersinc.org 

B-1 

--------------------------

EXHIBITC 


NOTICE OF DEFAULT 

'-­

Attention: 

MERSCORP, Inc. 

1818 Library Street, Suite 300 

Reston, VA 20190 

Ladies and Gentlemen: 

Please be advised that this Notice of Default is being issued pursuant to Section 4(b) of that 

certain Electronic Tracking Agreement (the "Electronic Tracking Agreement"), dated as of 

September 30, 2009, by and among the Federal Deposit Insurance Corporation, in its corporate 

capacity (the "Secured Party"), Residential Credit Solutions, Inc. (the "Servicer"), 

MERSCORP, Inc. (the "Electronic Agent") and Mortgage Electronic Registration Systems, Inc. 

("MERS"). The Affected Loans are listed on the attached Schedule 1 (including the mortgage 

identification numbers). Accordingly, the Electronic Agent shall not accept instructions from the 

Servicer or any party other than the Secured Party with respect to such Mortgage Loans, until 

otherwise notified by the Secured Party. 

Any terms used herein and not otherwise defined shall have such meaning specified in the 

Electronic Tracking Agreement. 

By: _____________ 

Title: 

C-1 


0 
EXHIBITD-1 

CORPORATE RESOLUTION 

26. 	 Be it Resolved that the list of candidates, attached on Schedule A, are employees of the Federal 

Deposit Insurance Corporation in its corporate capacity, as Secured Party, a Member ofMortgage 

Electronic Registration Systems, Inc. (MERS) (the ''Member"), and are hereby appointed as 

assistant secretaries and vice presidents of MERS, and, as such, are authorized to: 

(I) 	 release the lien of any mortgage loan registered on the MERS System that is shown to be registered to the 

Member; 

(2) 	 assign the lien of any mortgage loan namiog MERS as the mortgagee when the Member is also the current 

promissory note-holder, or ifthe mortgage loan is registered on the MERS System, is shown to be 

registered to the Member; 

(3) 	 execute any and all documents necessary to foreclose upon the property securing any mortgage loan 

registered on the MERS System that is shown to be registered to the Member, including but not limited to 

(a) substitution oftrustee on Deeds ofTrust, (b) Trustee's Deeds upon sale on behalf ofMERS, (c) 

Affidavits ofNon-military Status, (d) Affidavits ofJudgment, (e) Affidavits ofDebt, {f) quitclaim deeds, 

(g) Affidavits regarding lost promissory notes, and (h) endorsements ofpromissory notes to VA or HUD on 

behalfofMERS as a required part ofthe claims process; 

(4) 	 take any and all actions and execute all documents necessary to protect the interest ofthe Member, the 

beneficial owner of such mortgage loan, or MERS in any bankruptcy proceeding regarding a loan 

· registered on the MERS System that is shown to be registered to the Member, including but not limited to: 

(a) executing Proofs ofClaim and Affidavits ofMovant under 11 U.S.C. Sec. 501-502, Bankruptcy Rule 

3001-3003, and applicable local bankruptcy rules, (b) entering a Notice ofAppearance, (c) vote for a 

trustee ofthe estate ofthe debtor, (d) vote for a committee of creditors, (e) attend the meeting of creditors 

ofthe debtor, or any adjourrnnent thereof, and vote on behalfofthe Member, the beneficial owner ofsuch 

mortgage loan, or MERS, on any question that may be lawfully submitted before creditors in such a 

meeting, (f) complete, execute, and return a ballot accepting or rejecting a plan, and (g) execute 

reaffirmation agreements; 

(5) 	 take any and all actions and execute all documents necessary to refinance, subordinate, amend or modify 

any mortgage loan registered on the MERS System that is shown to be registered to the Member. 

(6) 	 endorse checks made payable to Mortgage Electronic Registration Systems, Inc. to the Member that are 

received by the Member for payment on any mortgage loan registered on the MERS System that is shown 

to be registered to the Member; 

(7) 	 take any such actions and execute such documents as may be necessary to fulfill the Member's servicing 

obligations to the beneficial owner of such mortgage loan (including mortgage loans that are removed from 

the MERS System as a result ofthe transfer thereof to a non-member ofMERS). 

I, being the Coroorate Secretary of Mortgage Electronic Registration Systems, Inc., hereby 

certify that the foregoing is a true copy of a Resolution duly adopted by the Board of Directors of said corporation 

effective as of the __ day of 200 _ which is in full force and effect on this date and does not 

conflict with the Certificate oflncorporation or By-Laws of said corporation. 

________,, Secretary 

D-1 
Schedule A 

Federal Deposit Insurance Corporation, iu its corporate capacity, as Secured Party 

(Org #______J 

Mortgage Registration Systems, Inc. 


Certifying Officers 


D-2 

EXHIBITD-2 

MERS LIMITED POWER OF ATTORNEY 

MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., a Delaware corporation 

("MERS") and a wholly owned subsidiary of MERSCORP, Inc., a Delaware corporation 

("MERSCORP"), hereby appoints the list of persons attached on Schedule B as Attorneys-inFact (each an "Agent") for MERS for the limited purpose of executing documents and taking 

certain other actions as set forth below for those certain loans (the "Loans") secured by 

mortgages or deeds of trusts held by MERS as mortgagee or beneficiary in a nominee capacity 

for Residential Credit Solutions, Inc. (Org ld ("Servicer") and the Federal 

Deposit Insurance Corporation, in its corporate capacity ("Secured Party"). 

Limited Power of Attorney Actions: 

(1) 	 release the lien of any Loan registered on the MERS® System that is shown to be 

registered to Secured Party; 

(2) 	 assign the lien of any Loan naming MERS as the mortgagee when Secured Party is 

also the current promissory note-holder, or if the Loan is registered on the MERS® 

System, is shown to be registered to Secured Party; 

(3) 	 execute any and all documents necessary to foreclose (or post-foreclosure, to sell to 

another entity) any property securing any Loan registered on the MERS® System that 

is shown to be registered to Secured Party, including but not limited to (a) 

substitution of trustee on Deeds of Trust, (b) Trustee's Deeds upon sale on behalf of 

MERS, (c) Affidavits of Non-military Status, (d) Affidavits of Judgment, (e) 

Affidavits ofDebt, (f) quitclaim deeds, (g) Affidavits regarding lost promissory notes, 

and (h) endorsements of promissory notes to VA or HUD on behalf of MERS as a 

required part ofthe claims process; 

(4) 	 take any and all actions and execute all documents necessary to protect the interest of 

Secured Party, the beneficial owner of the Loans, or MERS, in any bankruptcy 

proceeding regarding a Loan registered on the MERS® System that is shown to be 

registered to Secured Party, including but not limited to: (a) executing Proofs of 

Claim and Affidavits of Movant under 11 U.S.C. Sec. 501-502, Bankruptcy Rule 

3001-3003, and applicable local bankruptcy rules, (b) entering a Notice of 

Appearance, (c) voting for a trustee of the estate of the debtor, (d) voting for a 

committee of creditors, (e) attending the meeting of creditors of the debtor, or any 

adjourmnent thereof, and voting on behalf of Secured Party, the beneficial owner of 

the Loans, or MERS, on any question that may be lawfully submitted before creditors 

in such a meeting, (f) completing, executing, and returning a ballot accepting or 

rejecting a plan, and (g) executing reaffirmation agreements; 

D-2-1 

-----------------

(5) take any and all actions and execute all documents necessary to refinance, 

subordinate, amend, or modifY any and all Loans registered on the MERS® System 

that is shown to be registered to Secured Party; and 

(6) 	 endorse checks made payable to Mortgage Electronic Registration Systems, Inc., to 

Secured Party that are received by Secured Party for payment on any Loan registered 

on the MERS® System that is shown to be registered to Secured Party. 

Agent shall have full power and authority to act on behalf of MERS in these limited matters. 

This power and authority shall authorize Agent to exercise all ofMERS legal rights and powers, · 

including all rights and powers that MERS may acquire in the future with regard to the Loans. 

This Linrited Power of Attorney shall be construed narrowly as a limited power of attorney. The 

description of specific powers above is intended to limit or restrict the powers granted in this 

Limited Power ofAttorney. 

This Limited Power of Attorney shall become effective immediately upon execution and shall 

expire (i) upon the termination or earlier repudiation (by the Federal Deposit Corporation in its 

corporate capacity under 12 U.S.C. § 182l(e)) of the Electronic Tracking Agreement, dated 

September 30, 2009 by and among the Federal Deposit Insurance Corporation, in its corporate 

capacity, as the Secured Party, Franklin Venture, LLC, Residential Credit Solutions, Inc., 

MERSCORP, Inc. and MERS, and (ii) as to any Agent, at such time as such Agent is no longer 

an employee or agent of Secured Party. This Limited Power of Attorney may be revoked by 

MERS and/or MERSCORP by providing written notice to Agent, but only at a time after all of 

the Loans have been transferred by MERS to Secured Party or a third party or parties designated 

by Secured Party. 

Dated ______, 20_. 

Mortgage Electronic Registration Systems, Inc., 

a Delaware Corporation 

By: 

Corporate Secretary 

D-2-2 

Schedule B 

Federal Deposit Insurance Corporation, in its corporate capacity, as Secured Party 

(Org#_______, 

Mortgage Registration Systems, Inc. 

Certifying Officers 

D-2-3 

ACKNOWLEDGMENT 


STATE OF VIRGINIA § 

§ 

COUNTY OFFAIRF AX § 

This instrument was acknowledged before me on the __ day of----:----::::' 20 , by 

a duly authorized representative of Mortgage Electronic Registration 

Systems, Inc., a Delaware corporation, on behalf of said corporation. 

Notary Public, State of Virginia 

D-2A 


EXHIBITC 

LOAN MODIFICATION PROGRAM 

The FDIC strongly encourages the Servicer to enroll in the HAMP Mortgage Loan Modification 

Program. The Loan Modification Program for the purpose ofthis Servicing Agreement shall 

mean the RAMP Mortgage Loan Modification Program described in (I) below; provided that, if 

the Servicer declines to enroll in the HAMP and provides reasonable justification for its decision 

to decline to do so, then the Servicer shall either follow the HAMP Guidelines described in (I) 

below with respect to the Loans, or shall follow the FDIC Mortgage Loan Modification Program 

described in (II) below, unless some other Mortgage Loan Modification Program is required or 

approved by the FDIC in accordance with the terms ofthe Servicing Agreement. 

I. RAMP MORTGAGE LOAN MODIFICATION PROGRAM 

On March 4, 2009, Treasury announced the Making Home Mfordable Modification Program 

(RAMP) guidelines to promote sustainable loan modifications for homeowners at risk oflosing 

their homes due to foreclosure. HAMP provides a detailed framework for servicers to modifY 

mortgages on owner-occupied residential properties and offers fmancial incentives to lenders and 

servicers that participate in the Program. The Program also provides financial incentives for 

homeowners whose mortgages are modified pursuant to Program guidelines to remain current on 

their mortgages after modification. 

The Servicer will take all steps to enroll in HAMP as promptly as possible, and will modifY 

qualifYing loans per the HAMP guidelines. The Servicer will comply with the Home Affordable 

Modification Guidelines as adopted on March 4, 2009, as modified and supplemented by 

Supplemental Directive 09-01, Introduction ofthe Home Mfordable Modification Program, 

Supplemental Directive 09-02, Fair Housing Obligations Under the Home Affordable 

Modification Program, and Supplemental Directive 09-03, Home Affordable Modification 

Program Trial Period Guidance and as further modified, supplemented or amended from time to 

time. Further details about HAMP, including program terms and borrower eligibility criteria, are 

available at https://www.hmpadmin.com. 

II. FDIC MORTGAGE LOAN MODIFICATION PROGRAM 

Objective 

The objective ofthis FDIC Mortgage Loan Modification Program ("Program") is to modifY the 

terms of certain residential mortgage loans so as to improve affordability, increase the 

probability ofperformance, allow borrowers to remain in their homes and increase the value of 

the loans to the FDIC and assignees. The Program provides for the modification of QualifYing 

Loans (as defined below) by reducing the borrower's monthly housing debt to income ratio 

(''DTI Ratio") to a target of31%, never to exceed 38%, at the time ofthe modification and 

eliminating adjustable interest rate and negative amortization features. 

Qualifying Mortgage Loans 

Franklin - Servicing Agreement 

C-1 

8535953.4 
In order for a mortgage loan to be a Qualifying Loan it must meet all ofthe following criteria, 

which must be confirmed by the lender: 

• 	 The collateral securing the mortgage loan is owner-occupied; and 

• 	 The mortgagor has a first priority lien on the collateral; and 

• 	 Either the borrower is at least 60 days delinquent or a default is reasonably 

foreseeable. 

Modification Process 

The lender shall undertake a review ofits mortgage loan portfolio to identify Qualifying Loans. 

For each Qualifying Mortgage Loan, the lender shall determine the net present value ("NPV") of 

the modified loan and, ifit will exceed the NPV ofthe foreclosed collateral upon disposition, 

then the Qualifying Loan shall be modified so as to reduce the borrower's monthly DTI Ratio to 

31% (or to the lowest DTI Ratio higher than 31%, but not to exceed 38%, resulting in a NPV 

exceeding the foreclosed collateral upon disposition) at the time ofthe modification. To achieve 

this, the lender shall use a combination ofinterest rate reduction, term extension and principal 

forbearance, as necessary. 

The borrower's monthly DTI Ratio shall be a percentage calculated by dividing the borrower's 

monthly housing payment (including principal, interest, taxes and insurance) by the borrower's 

monthly income. For these purposes, (1) the borrower's monthly income shall be the amount of 

. the borrower's (along with any co-borrowers') documented and verified gross monthly income, 

and (2) the borrower's monthly housing payment shall be the amount required to pay monthly 

principal and interest plus one-twelfth ofthe then current armual amount required to pay real 

property taxes and homeowner's insurance with respect to the collateral. 

In order to calculate the monthly principal payment, the lender shall capitalize to the outstanding 

principal balance ofthe Qualifying Loan the amount of all delinquent interest, delinquent taxes, 

past due insurance premiums, third party fees and (without duplication) escrow advances (such 

amount, the "Capitalized Balance"). 

In order to achieve the goal ofreducing the DTI Ratio to 31%, the lender shall take the following 

steps in the following order ofpriority with respect to each Qualifying Loan: 

1. Reduce the interest rate to the then current Freddie Mac Survey Rate for 30-year fixed 


rate mortgage loans, and adjust the term to 30 years. 


2. Ifthe DTI Ratio is still in excess o£31 %, reduce the interest rate further, but no lower 


than 3%, until the DTI ratio of 31% is achieved. 


3. Ifthe DTI Ratio is still in excess of31% after adjusting the interest rate to 3%, extend the 

remaining term ofthe loan by 10 years. 

4. Ifthe DTI Ratio is still in excess of31%, calculate a new monthly payment (the 


"Adjusted Payment Amount") that will result in the borrower's monthly DTI Ratio not 


exceeding 31%. After calculating the Adjusted Payment Amount, the lender shall bifurcate the 


Capitalized Balance into two portions -the amortizing portion and the non-amortizing portion. 


The amortizing portion ofthe Capitalized Balance shall be the mortgage amount that will fully 


Franklin- Servicing Agreement 

C-2 

8535953.4 
amortize over a 40-year term at an annual interest rate of3% and monthly payments equal to the 

Adjusted Payment Amount. The non-amortizing portion ofthe Capitalized Balance shall be the 

difference between the Capitalized Balance and the amortizing portion of the Capitalized 

Balance. The lender shall forbear on collecting the non-amortizing portion of the Capitalized 

Balance, and such amount shall be due and payable only upon the earlier of (i) maturity of the 

modified loan, (ii) a sale ofthe property or (iii) a pay-off or refinancing ofthe loan. No interest 

shall be charged on the non-amortizing portion ofthe Capitalized Balance, but repayment shall 

be secured by a first lien on the collateral. 

5. If, under any ofthe above steps, the NPV of a modification falls short of the NPV of the 

foreclosed collateral upon disposition, the DTI may be increased to the minimum level where the 

NPV ofthe modification exceeds the NPV ofthe foreclosed collateral upon disposition. 

However, under no circumstances will the DTI for the modification exceed 38%. 

At the end of the five (5) year period, the interest rate on the modified loan shall adjust to the 

Freddie Mac Survey Rate as ofthe date ofthe loan modification, but subject to an annual 

adjustment cap of one percent (I%) per year. At that time, the monthly amount due by the · 

borrower will also adjust to amortize fully the remaining Capitalized Balance (or, in any case in 

which the Capitalized Balance was bifurcated, the amortizing portion thereof) over the remaining 

term ofthe modified loan. 

Additional Modification Terms 

In connection with the modification of any QualifYing Loan, the following additional 

requirements shall apply. 

1. The lender shall not charge (and no borrower shall be required to pay) any modification, 

refinance or other similar fees or points in connection with the modification, nor shall any such 

fees, costs or charges be capitalized. 

2. Unpaid late fees and prepayment penalties otherwise chargeable to the borrower shall be 

waived. · 

3. Modified loans shall not include any prepayment penalties. 

4. The lender shall establish an escrow account for the payment offuture taxes and . . msurance premiums. 

Related Junior Lien Mortgage Loans 

In cases where the lender holds a junior lien mortgage loan that is collateralized by the same 

property that collateralizes a QualifYing Loan that is modified as described above, the junior lien 

mortgage loan shall also be modified to enhance overall affordability to the borrower. At a 

minimum, the lender shall reduce the interest rate on the junior lien mortgage loan to no more 

than 2% per annum. Further modifications may be made at the lender's discretion as needed to 

support affordability and performance ofthe modified first lien Qualifying Loan. 

Amendments 

Franklin - Servicing Agreement 

C-3 

8535953.4 
The Program may be modified either (i) by the FDIC, upon written notice to the lender of such 

modification, or (ii) as proposed by the lender with respect to a group ofloans with similar 

characteristics, if approved in writing by the FDIC. 

Franklin - Servicing Agreement 

C-4 

8535953.4 

SCHEDULE I 


FEE SCHEDULE 

The Servicing Fee payable to the Servicer shall be in an amount equal to the Management Fee 

(as defined in the LLC Operating Agreement) received by the Managing Member pursuant to the 

LLC Operating Agreement. 

Franklin - Servicing Agreement 

8535953.4 

SCHEDULE2 

SERVICING OBLIGATIONS 

The Servicer, as an independent contractor, shall service and administer the Loans and Collateral 

from and after the related Servicing Transfer Date, and shall have full power and authority, 

acting alone or through the utilization of a third party service provider (as provided in this 

Agreement), to do any and all things in connection with such servicing and administration which 

the Servicer may deem necessary or desirable, consistent with the terms ofthis Agreement and 

the Servicing Standard. The Servicer, unless otherwise agreed to by Servicer and Managing 

Member, shall be responsible for any and all acts of a third party service provider to which 

Servicer delegates its responsibilities under this Agreement, and the Servicer' s utilization of such 

third party service provider shall in no way relieve the liability ofthe Servicer under this 

Agreement. Without limiting the generality ofthe forgoing, Servicer shall not be responsible for 

the performance of any Custodian under the Custodial and Paying Agent Agreement, ofthe 

providers or tax or flood services, or imy third party service providers for acts prior to the 

Servicing Transfer Date. 

In servicing and administering the Loans and the Collateral, the Servicer shall employ the 

Servicing Standard and procedures, including conforming to the Guidelines and the Fannie Mae 

Guidelines, and except as is specifically provided otherwise in this Agreement, exercising the 

same care that it customarily employs and exercises in servicing and administering mortgage 

loans for its own account. The Servicer shall apply the Loan Modification Program, including 

any amendment, modification, supplement, or replacement thereto, in servicing the Loans. 

Without limiting the generality ofthe foregoing, the Servicer shall continue, and is hereby 

authorized and empowered, to execute and deliver on behalf of itself and the Managing Member, 

all instruments of satisfaction or cancellation, or ofpartial or full release, discharge and all other 

comparable instruments, with respect to the Loans and with respect to the mortgaged properties. 

In the event of any conflict among the Loan Modification Program, the. Guidelines, and/or the 

Fannie Mae Guidelines, the Loan Modification Program will govern the servicing, and to the 

extent not in conflict with the Loan Modification Program, the Guidelines will govern the 

servrcmg. 

Franklin - Servicing Agreement 

8535953.4 

SCHEDULE3 

REIMBURSEMENT OF SERVICER ADVANCES 

The Servicer shall submit to the Managing Member a daily loan level report providing the 

amount of Servicing Advances made by Servicer on the preceding Business Day. The Managing 

Member shall reimburse Servicer for such Servicing Advances on the same Business Day as· the 

receipt of such report; provided, however, ifthere are insufficient funds available in the 

Collection Account to reimburse the Servicer, the Managing Member shall reimburse Servicer 

on the next succeeding Business Day on which such funds are available. In addition, the 

Servicer shall provide a loan level report of each Servicing Advance Servicer made and each 

reimbursement received by Servicer during a Due Period with respect to each Loan. Upon 

receipt of such Due Period report, the Managing Member shall reimburse Servicer for any 

Servicing Advances unreimbursed during such Due Period within one (1) Business Day after 

receipt ofsuch report; provided, however, ifthere are insufficient funds available in the 

Collection Account to reimburse the Servicer, the Managing Member shall reimburse Servicer 

on the next succeeding Business Day on which such funds are available. 

Franklin - Servicing Agreement 

8535953.4 

SCHEDULE4 


FORM OF ELECTRONIC REPORT ON THE LOANS AND COLLATERAL 

The Form ofElectronic Report on the Loans and Collateral shall contain information fields 

identical to the information required to be contained in (i) the Distribution Date Report, as set 

forth in the Custodial and Paying Agency Agreement, and (ii) the Monthly Report, as set forth in 

the LLC Operating Agreement. 

Franklin- Servicing Agreement 

8535953.4 

SCHEDULES 

TERMINATION WITHOUT CAUSE 

None. 

Franklin -Servicing Agreement 

8535953.4