Multibank Structured Transaction 2010-1 CRE

EXECUTION COPY

REIMBURSEMENT, SECURITY AND GUARANTY AGREEMENT

BY AND AMONG

2010-1 CRE VENTURE, LLC,

EACH OTHER GRANTOR FROM TIME TO TIME PARTY HERETO,

FEDERAL DEPOSIT INSURANCE CORPORATION,
 

IN ITS CORPORATE CAPACITY AS PURCHASE MONEY NOTES GUARANTOR,
 

FEDERAL DEPOSIT INSURANCE CORPORATION,
 

AS RECEIVER FOR VARIOUS FAILED FINANCIAL INSTITUTIONS LISTED ON
 

SCHEDULE 1 HERETO,
 

AS COLLATERAL AGENT,
 

AND
 

FEDERAL DEPOSIT INSURANCE CORPORATION,
 

AS RECEIVER FOR VARIOUS FAILED FINANCIAL INSTITUTIONS LISTED ON
 

SCHEDULE 1 HERETO,
 

AS INITIAL MEMBER
 

Dated as of July 2, 2010
 

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TABLE OF CONTENTS
 

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

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

Section 1.2 Other Interpretive Provisions............................................................... 5
 

ARTICLE II Reimbursement ................................................................................................ 6
 

Section 2.1 Reimbursement .................................................................................... 6
 

Section 2.2 Obligations Absolute ........................................................................... 6
 

ARTICLE III Security Interest ............................................................................................... 7
 

Section 3.1 Granting of Security Interest................................................................ 7
 

Section 3.2 Loan Defaults; Acquisition of Collateral............................................. 9
 

Section 3.3 Continuing Security Interest .............................................................. 10
 

Section 3.4 Destruction of Collateral.................................................................... 10
 

Section 3.5 Releases of Collateral ........................................................................ 10
 

Section 3.6 Financing Statements......................................................................... 11
 

Section 3.7 Power of Attorney.............................................................................. 11
 

ARTICLE IV Events of Default ........................................................................................... 11
 

Section 4.1 Events of Default ............................................................................... 11
 

ARTICLE V Remedies........................................................................................................ 13
 

Section 5.1 Remedies............................................................................................ 13
 

Section 5.2 Application of Proceeds..................................................................... 16
 

Section 5.3 Sale of Collateral................................................................................ 16
 

Section 5.4 No Impairment of Action................................................................... 17
 

Section 5.5 Remedies Cumulative; Waiver .......................................................... 17
 

Section 5.6 Waiver of Certain Rights and Remedies............................................ 17
 

ARTICLE VI Guaranty......................................................................................................... 17
 

Section 6.1 Guaranty............................................................................................. 17
 

Section 6.2 Right of Contribution......................................................................... 18
 

Section 6.3 No Subrogation .................................................................................. 18
 

Section 6.4 Amendments, etc................................................................................ 19
 

Section 6.5 Guaranty Absolute and Unconditional............................................... 19
 

Section 6.6 Reinstatement..................................................................................... 20
 

Section 6.7 Payments............................................................................................ 20
 

Multibank Structured Transaction 2010-1 CRE

Reimbursement, Security and Guaranty Agreement

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Section 6.8 Information ........................................................................................ 20
 

ARTICLE VII Representations And Warranties.................................................................... 20
 

Section 7.1 Representations and Warranties......................................................... 20
 

ARTICLE VIII Covenants....................................................................................................... 22
 

Section 8.1 Debtor Accounts ................................................................................ 22
 

Section 8.2 Grantor Status; Licensing .................................................................. 22
 

Section 8.3 LLC Operating Agreement ................................................................ 22
 

Section 8.4 Custodian/Paying Agent .................................................................... 22
 

Section 8.5 Compliance with Law........................................................................ 23
 

Section 8.6 Servicer .............................................................................................. 23
 

Section 8.7 Certain Restrictions............................................................................ 23
 

Section 8.8 Change in Jurisdiction, Name, Location or Identity.......................... 24
 

Section 8.9 Payment of Principal on Purchase Money Notes;
 

Reimbursement of Collateral Agent .................................................. 24
 

Section 8.10 Protection of Collateral; Further Assurances..................................... 24
 

Section 8.11 Guaranties and Mortgages ................................................................. 24
 

Section 8.12 Additional Grantors ........................................................................... 25
 

Section 8.13 Transaction with Affiliates ................................................................ 25
 

Section 8.14 Books and Records; Reports; Certifications; Audits......................... 25
 

Section 8.15 Insurance ............................................................................................ 29
 

Section 8.16 Recovery of Expenses; Interest.......................................................... 30
 

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

Money Notes Guarantor; Delivery of Certain Notices...................... 30
 

Section 8.18 Administration of REO Properties..................................................... 30
 

Section 8.19 Payment of Purchase Money Notes Guaranty Fee ..................................... 31
 

ARTICLE IX Required Consent; Limits Liability ............................................................... 31
 

Section 9.1 Required Consents; Limits Liability.................................................. 31
 

Section 9.2 Limitation of Liability........................................................................ 32
 

ARTICLE X Release of Collateral...................................................................................... 33
 

ARTICLE XI Liquidation of Loans and Acquired Property ................................................ 33
 

Section 11.1 Rights to Liquidate Loans and Collateral .......................................... 33
 

Section 11.2 Exercise of Rights to Liquidate Loans and Collateral ....................... 33
 

ARTICLE XII Collateral Agent............................................................................................. 34
 

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Section 12.1 Appointment and Authorization of Collateral Agent......................... 34
 

Section 12.2 Delegation of Duties.......................................................................... 34
 

Section 12.3 Liability of Collateral Agent.............................................................. 35
 

Section 12.4 Reliance by Collateral Agent............................................................. 35
 

Section 12.5 Liability of Collateral Agent.............................................................. 35
 

Section 12.6 Successor Collateral Agent................................................................ 36
 

ARTICLE XIII Miscellaneous ................................................................................................ 36
 

Section 13.1 Attorney-in-Fact................................................................................. 36
 

Section 13.2 No Petition ......................................................................................... 36
 

Section 13.3 Reimbursement of Expenses.............................................................. 37
 

Section 13.4 Termination of Security Interest ........................................................ 37
 

Section 13.5 Indemnification.................................................................................. 37
 

Section 13.6 Governing Law .................................................................................. 39
 

Section 13.7 Jurisdiction, Venue and Service......................................................... 39
 

Section 13.8 Waiver of Jury.................................................................................... 41
 

Section 13.9 Notices ............................................................................................... 41
 

Section 13.10 Assignment ........................................................................................ 42
 

Section 13.11 Entire Agreement............................................................................... 42
 

Section 13.12 Amendments and Waivers................................................................. 42
 

Section 13.13 Confidentiality ................................................................................... 42
 

Section 13.14 Reinstatement..................................................................................... 43
 

Section 13.15 Interpretation; No Presumption.......................................................... 43
 

Section 13.16 Severability ........................................................................................ 43
 

Section 13.17 Survival.............................................................................................. 44
 

Section 13.18 No Third Party Beneficiaries............................................................. 44
 

Section 13.19 Counterparts; Facsimile Signatures ................................................... 44
 

Schedule 1 List of Various Failed Financial Institutions

Schedule 2 Loan Schedule

Exhibit A Joinder Agreement

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REIMBURSEMENT, SECURITY AND GUARANTY AGREEMENT
 

THIS REIMBURSEMENT, SECURITY AND GUARANTY AGREEMENT, effective

as of the 2nd day of July, 2010 (this “Agreement”), is entered into by and among 2010-1 CRE

VENTURE, LLC, a Delaware limited liability company (“Debtor”), each of the other entities

that becomes a party hereto pursuant to Section 8.12 (collectively, the “Subsidiary Grantors,”

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

collectively, the “Grantors,” and each individually, a “Grantor”), FEDERAL DEPOSIT

INSURANCE CORPORATION (acting in any capacity, the “FDIC”), acting in its corporate

capacity (“Purchase Money Notes Guarantor”), the FDIC, as Receiver for various failed

financial institutions listed on Schedule 1 hereto (in such capacity, the “Receiver”), as Collateral

Agent for the Secured Parties (as defined below) (in such capacity, together with any successor

collateral agent, the “Collateral Agent”), and, solely for purposes of Sections 4.1(e), 4.1(j),

5.1(a)(vi) – (ix), 5.1(b), 5.1(c), 5.5, 11.1, 11.2 and 13.6 – 13.19, the FDIC, as Receiver, as Initial

Member under the LLC Operating Agreement referred to below (in such capacity, the “Initial

Member”).

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

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

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

defined below), including equity interests in Ownership Entities and certain REO Property (as

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

and in consideration for the transfer of the Loans to the Debtor to the extent such transfer

constitutes a sale, Debtor has issued to Receiver one or more Purchase Money Notes, dated as of

the date hereof, in the aggregate principal face amount of $562,965,000 (the “Purchase Money

Notes”);

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

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

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

Notes Guaranty”);

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

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

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

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

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

any payments made by Purchase Money Notes Guarantor thereunder;

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

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

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

Initial Member agree as follows:

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ARTICLE I
 

Definitions
 

Section 1.1 Definitions.

(a) For purposes of this Agreement, the following terms shall have the

meanings set forth below. Any other defined terms used herein but not defined herein shall have

the meanings set forth in the Agreement of Common Definitions, dated as of July 2, 2010,

between the Initial Member, the Company, the Private Owner, the Bank, the Collateral Agent

and the Purchase Money Notes Guarantor.

“Agreement” means this Reimbursement, Security and Guaranty

Agreement.

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

“Assignment of Mortgage” means, with respect to each Loan, a collateral

assignment of the mortgage, deed of trust, trust deed or deed to secure debt securing such Loan

(each an “Mortgage”) or an assignment in blank of such Mortgage, in each case in form suitable

for recording in the appropriate public records and otherwise in form reasonably satisfactory to

the Collateral Agent.

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

to this Agreement.

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

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

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

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

“Controlling Party” means the Purchase Money Notes Guarantor.

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

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

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

Agreement.

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

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

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

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

Event of Default.

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

Section 4.1 of this Agreement.

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

introductory paragraph of this Agreement.

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

obligation, (i) any direct or indirect guaranty thereof by a Person other than the obligor with

respect to such indebtedness or other obligation or any transaction or arrangement intended to

have the effect of directly or indirectly guarantying such indebtedness or other obligation,

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

such indebtedness or other obligation (A) to pay or purchase such indebtedness or other

obligation or to advance or supply funds for the payment or purchase of such indebtedness or

other obligation, (B) to purchase, sell or lease (as lessee or lessor) property of, to purchase or sell

services from or to, to supply funds to or in any other manner invest in, the obligor with respect

to such indebtedness or other obligation (including any agreement to pay for property or services

of the obligor irrespective of whether such property is received or such services are rendered),

primarily for the purpose of enabling the obligor to make payment of such indebtedness or other

obligation or to assure the holder or other obligee of such indebtedness or other obligation

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

against loss with respect thereto, or (ii) any grant (or agreement in favor of the obligee of such

indebtedness or other obligation to grant such obligee, under any circumstances) by a Person

other than the obligor with respect to such indebtedness or other obligation of a security interest

in, or other Lien on, any property or other interest of such Person, whether or not such other

Person has not assumed or become liable for the payment of such indebtedness or other

obligation.

“Indebtedness” means, as applied to any Person, without duplication, (i)

all indebtedness of such Person for borrowed money, (ii) all obligations of such Person for the

deferred purchase price of property or services (excluding trade payables arising in the ordinary

course of business), (iii) all obligations of such Person evidenced by notes, bonds, debentures or

other similar instruments, (iv) all indebtedness created or arising under any conditional sale or

other title retention agreement with respect to property acquired by such Person (even though the

rights and remedies of the seller or lender under such agreement in the event of default are

limited to repossession or sale of such property), (v) all obligations of such Person as lessee

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

leases, or (vi) all indebtedness or obligations of others of the kinds referred to in clauses (i)

through (v) above in respect of which such Person has entered into or issued any Guaranty.

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

Agreement.

“Intellectual Property” means all United States or foreign intellectual

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

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

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

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

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

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

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

receive all proceeds and damages therefrom.

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

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

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

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

this Agreement.

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

administrative proceeding.

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

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

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

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

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

previously paid by the Company (excluding any payments made under the Purchase Money

Notes Guaranty) to all Holders (as such term is defined in the Custodial and Paying Agency

Agreement) to repay any Purchase Money Note and the aggregate amount previously paid to the

Purchase Money Notes Guarantor to reimburse Purchase Money Notes Guarantor for payments

it has made under the Purchase Money Notes Guaranty, divided by (b) the original aggregate

principal amount of the Purchase Money Notes, as of the Closing Date is less than:

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

thereafter before the fifth (5th) anniversary of the Closing Date: 25%

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

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

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

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

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

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

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

Agreement.

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

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

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

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

Property has not been discharged and if the Collateral Agent agrees, consist of such Mortgage, as

assigned to the Collateral Agent and including such modifications thereto as the Collateral Agent

may require).

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

“Secured Obligations” means the Guaranteed Obligations and all

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

pursuant to Sections 2.1 and 8.9).

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

Agreement and the Purchase Money Notes Guarantor.

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

Agreement.

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

given in the introductory paragraph to this Agreement.

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

Agreement.

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

Agreement.

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

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

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

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

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

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

obligation”.

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

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

Document:References to “Affiliates” include, with respect to any specified Person, only such

other Persons which from time to time constitute “Affiliates” of such specified Person, and do

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

ceased to be, “Affiliates” of such specified Person, except to the extent that any such reference

specifically provides otherwise.

(b) The term “or” is not exclusive.

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

replacement to such Law.

(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

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thereto, as amended, modified and supplemented from time to time in accordance with its terms

and as the same is in effect at any given time.

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

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

provision of this Agreement.

(f) The words “include” and “including” and words of similar import are not

limiting, and shall be construed to be followed by the words “without limitation,” whether or not

they are in fact followed by such words.

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

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

such period.

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

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

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

ARTICLE II
 

Reimbursement
 

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

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

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

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

Guarantor occurring after the Determination Date immediately preceding such Distribution Date

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

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

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

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

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

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

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

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

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

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

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

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

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

currency of the United States and in immediately available funds.

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

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

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

without limitation, the following circumstances:

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

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

thereto;

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

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

Guaranty;

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

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

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

transaction;

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

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

terms of the Purchase Money Notes Guaranty; and

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

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

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

defense to Debtor’s obligations hereunder.

ARTICLE III
 

Security Interest
 

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

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

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

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

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

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

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

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

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

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

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

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

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

(b) the Loan Documents;

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

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

(d) all Collateral, including all Acquired Property;

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

whether known or unknown, against an Borrower, any Obligor or other obligor or any of their

respective Affiliates, agents, representatives, contractors, advisors or any other Person arising

under or in connection with the Loans or the Loan Documents or that is in any way based on or

related to any of the foregoing, including contract claims, tort claims, malpractice claims,

statutory claims and all other claims at law or in equity arising under or in connection with the

Loan Documents or the transactions related thereto or contemplated thereby;

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

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

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

an Borrower, Obligor or other obligor under or with respect to the Loans, and any securities,

interest, dividends or other property that may be distributed or collected with respect to any of

the foregoing;

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

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

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

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

the Guaranteed Obligations;

(h) the equity interests in all Ownership Entities;

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

policies; and

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

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

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

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

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

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

Document, have been satisfied in full.

All of the Notes and other Custodial Documents shall be held by the Custodian/Paying Agent as

set forth in Section 8.4 (except and to the extent the same are permitted to be removed from the

Custodian/Paying Agent’s possession as provided in the Custodial and Paying Agency

Agreement). The Collateral Agent shall retain possession of the Notes and other Custodial

Documents with respect to the Loans until such time as Debtor retains the Custodian/Paying

Agent pursuant to the provisions of Section 8.4 and, at such time, shall cause the

Custodian/Paying Agent to take possession of the Notes and other Custodial Documents with

respect to the Loans on behalf of Collateral Agent. Debtor shall deliver to the Collateral Agent

within sixty (60) days after the Closing Date, (x) for each Loan, an allonge, endorsed in blank,

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

blank, and executed by Debtor. Such Allonges and Mortgage Assignments shall be held by the

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

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

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

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

Allonge to effect the endorsement of an Note or the Mortgage Assignment to effect the

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

continuing. Notwithstanding anything in this Agreement to the contrary, if the Company (acting

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

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

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

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

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

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

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

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

pursuant to this Agreement.

Section 3.2 Loan Defaults; Acquisition of Collateral.

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

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

terms and conditions of this Agreement, Debtor shall cause to be determined the response to such

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

to be used in connection with any action, whether judicial or otherwise, to protect the respective

interests of Debtor and the Collateral Agent in the applicable Loan and the Collateral, (ii) the

declaration and recording of a notice of such default and the acceleration of the maturity of the

Loan, (iii) the institution of proceedings to foreclose the Loan Documents securing the Loan

pursuant to the power of sale contained therein or through a judicial action, (iv) the institution of

proceedings against any Obligor, (v) the acceptance of a deed in lieu of foreclosure, (vi) the

purchase of the real property Collateral at a foreclosure sale or trustee’s sale or the purchase of

the personal property Collateral at a Uniform Commercial Code sale, and (vii) the institution or

continuation of proceedings to obtain a deficiency judgment against such Borrower or any

Obligor.

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

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

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

Prior to acquisition of title to any Collateral (whether by foreclosure, deed in lieu of foreclosure,

by power of sale or by sale pursuant to the Uniform Commercial Code, or otherwise), Debtor

shall cause to be commissioned with respect to such Collateral either (i) a Transaction Screen

Process consistent with ASTM Standard E 1528-06, by an environmental professional or (ii)

such other site inspections and assessments by a Person who regularly conducts environmental

audits using customary industry standards as would customarily be undertaken or obtained by a

prudent lender in order to ascertain whether there are any actual or threatened Environmental

Hazards (a “Site Assessment”), and the cost of such Site Assessment shall be reimbursable as if

it were a Servicing Expense as long as the costs for such Site Assessment were not paid to any

Affiliate of Debtor, or any Affiliate of any Servicer or Subservicer. If title to any Collateral with

respect to which there exists any Environmental Hazard is to be acquired by foreclosure, by deed

OHS East:160711170.11 9
in lieu of foreclosure, by power of sale or by sale pursuant to the Uniform Commercial Code, or

otherwise, title to such Collateral shall be taken and held in the name of an Ownership Entity,

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

Ownership Entity may only hold title to a single property constituting Collateral with respect to

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

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

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

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

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

conformity with any applicable Business Plan.

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

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

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

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

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

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

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

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

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

each case, in conformity with any applicable Business Plan.

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

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

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

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

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

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

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

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

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

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

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

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

of the Secured Obligations.

Section 3.5 Releases of Collateral. Each Grantor is authorized to cause the release or

assignment of any Lien granted to or held by such Grantor on any Collateral, solely to the extent

necessary, (a) upon a final, nonappealable order of a court of competent jurisdiction permitting

or directing disposition thereof, (b) upon payment of any Loan in full and satisfaction in full of

all of the secured obligations with respect to an Loan or upon receipt of a discounted payoff as

payment in full of an Loan, (c) as is necessary in connection with the foreclosure on a Mortgaged

Property, acceptance of a deed in lieu thereof or modification or restructuring of the terms

thereof, (d) in connection with such Grantor’s sale of an Loan or any Collateral or (e) in the case

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

permitted in, and to the extent required by, the applicable Loan Documents; provided, however,

OHS East:160711170.11 10
that any such transaction is consistent with the Business Plan and the proceeds of such sale or

disposition are applied in accordance with the priority of payments set forth in Section 5.1 of the

Custodial and Paying Agency Agreement and the other terms thereof.

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

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

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

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

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

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

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

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

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

granted to Collateral Agent herein pursuant to the terms hereof.

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE IV
 

Events of Default
 

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

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

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

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

hereunder:

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

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

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

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

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

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

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

Insolvency Event under clause (i) above) shall not be an Event of Default pursuant to this

OHS East:160711170.11 11
Agreement (but shall in all events be a default under the applicable Servicing Agreement or

Subservicing Agreement) so long as the Manager shall have fully replaced (or caused the

replacement of) such affected Servicer or Subservicer within thirty (30) days after the occurrence

of such Insolvency Event; or the occurrence of any Dissolution Event with respect to the Private

Owner; or

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

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

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

Debtor; or

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

respect with the provisions of the LLC Operating Agreement, which continues unremedied for a

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

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

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

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

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

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

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

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

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

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

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

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

the Manager (in any capacity); or

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

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

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

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

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

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

any capacity) or Debtor, as applicable; or

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

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

Owner, in either case without the consent of the Purchase Money Notes Guarantor; or

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

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

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

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

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

have been given to Debtor; or

OHS East:160711170.11 12
(j) the failure of Debtor or the Manager to cause the liquidation of the

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

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

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

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

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

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

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

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

for such repayment; or

(m) any failure or cessation of the Private Owner to satisfy the

requirements of clause (v) of Section 10.1(a) of the LLC Operating Agreement, which failure or

cessation continues for a period of thirty (30) days; or

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

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

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

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

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

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

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

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

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

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

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

Guarantor that Debtor is diligently pursuing remedial action; or

(p) failure of the Private Owner to maintain cash and/or cash

equivalents in an amount equal to or exceeding $7,500,000 or, if applicable, failure of the issuer

of the Qualifying Letter of Credit or Satisfactory Equity Commitment Letter to comply with its

terms.

ARTICLE V
 

Remedies
 

Section 5.1 Remedies.

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

(i) The Purchase Money Notes Guarantor shall, upon the occurrence

of such Event of Default, notify the Custodian/Paying Agent thereof, and Purchase Money Notes

Guarantor may in its sole discretion cause the Holders (as defined in each Purchase Money Note)

to declare the applicable Class (as defined in the Custodial and Paying Agency Agreement) of

OHS East:160711170.11 13
Purchase Money Notes to be immediately due and payable, by a notice in writing to Debtor and

Custodian/Paying Agent, and upon any such declaration the unpaid principal amount of such

Class of Purchase Money Notes, together with all other accrued and unpaid amounts in respect

thereof through the date of acceleration, shall become immediately due and payable; provided,

however, that with respect to an Event of Default under Section 4.1(b)(i)(A), the unpaid principal

amount of, and such amounts in respect of, each Purchase Money Note shall automatically

become immediately due and payable;

(ii) The Purchase Money Notes Guarantor may institute Proceedings

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

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

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

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

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

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

Collateral Document;

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

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

remedies of the Collateral Agent;

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

or rights or interest therein;

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

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

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

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

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

Initial Member (in its sole and absolute discretion);

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

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

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

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

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

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

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

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

thereunder;

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

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

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

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

OHS East:160711170.11 14
Member or its designee for fair market value in accordance with Section 3.14 of the LLC

Operating Agreement;

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

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

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

monies adjudged due; and

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

Operating Agreement has occurred, the Purchase Money Notes Guarantor may draw on the

Qualifying Letter of Credit or the Satisfactory Equity Commitment Letter, or exercise its rights

to the Private Owner Pledged Account.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

the Purchase Money Notes Guarantor in effecting the termination of any Servicer (or

Subservicer), including (i) the transfer within one (1) Business Day of all cash amounts that, at

the time, shall be or should have been credited to the Collection Account or are thereafter

received with respect to any Loans or Acquired Property, (ii) the transfer of all lockbox accounts

with respect to which payments or other amounts with respect to the Loans are directed or the

redirection of all such payments and other amounts to such account as the Initial Member or the

Purchase Money Notes Guarantor might specify, and (iii) the assignment to Collateral Agent of

the right to access all such lockbox accounts, the Debtor Accounts and any other account into

which Loan Proceeds or Borrower escrow or other payments are deposited or held; provided,

however, that the documents, records and data delivered by the Servicer (and any Subservicer) to

the Initial Member and the Purchase Money Notes Guarantor and any successor Servicer

pursuant to this Section 5.1(c) shall be limited to those documents in such Servicer’s possession

at the time of such transfer or which the Servicer acquires thereafter and shall not include or be

deemed to include any documents, records or data in the possession of the Custodian/Paying

Agent. The Manager shall be liable for all costs and expenses incurred by the Initial Member,

OHS East:160711170.11 15
the Purchase Money Notes Guarantor and the Collateral Agent (I) associated with the complete

transfer of the servicing data, (II) associated with the completion, correction or manipulation of

servicing data as may be required to correct errors or insufficiencies in the servicing data to

enable the Collateral Agent and any successor Servicer (and Subservicers) to service the Loans

and Acquired Property properly and effectively, and (III) to retain and maintain the services of a

Successor Servicer (and any Subservicers). Within a reasonable time after receipt of a written

request of the Manager for the same, the Initial Member, the Purchase Money Notes Guarantor

and the Collateral Agent shall provide reasonable documentation evidencing such costs and

expenses.

Section 5.2 Application of Proceeds. If the Collateral Agent collects any money or

property pursuant to Section 5.1 of this Agreement, it shall pay out the money in the order set

forth in Section 5.1 of the Custodial and Paying Agency Agreement, notwithstanding anything in

any Purchase Money Note, the Purchase Money Notes Guaranty, the Servicing Agreement or the

Contribution Agreement to the contrary; provided, however, that if the Collateral Agent collects

any money or property pursuant to Section 5.1 of this Agreement in respect of the Defeasance

Account, it shall pay out the money pursuant to directions received from the Purchase Money

Notes Guarantor.

Section 5.3 Sale of Collateral.

(a) The power to effect any sale or other disposition (a “Sale”) of any portion

of the Collateral shall not be exhausted by any one or more Sales as to any portion of the

Collateral remaining unsold, but shall continue unimpaired until the entire Collateral shall have

been sold or all Secured Obligations shall have been paid. The Collateral Agent from time to

time may postpone any public Sale by public announcement made at the time and place of such

Sale. Collateral Agent hereby expressly waives its right to any amount fixed by law as

compensation for any Sale.

(b) In connection with a Sale of all or any portion of the Collateral:

(i) The Collateral Agent may bid for and purchase the property

offered for sale, and upon compliance with the terms of sale may hold, retain and possess and

dispose of such property, without further accountability;

(ii) The Collateral Agent may bid for and acquire the property offered

for Sale in connection with any Sale thereof, and, subject to any requirements of, and to the

extent permitted by, applicable Law in connection therewith, may purchase all or any portion of

the Collateral in a private sale, and, in lieu of paying cash therefor, may make settlement for the

purchase price by crediting the gross Sale price against the sum of (A) the amount which would

be distributable to the Collateral Agent as a result of such Sale in accordance with Section 5.2 on

the Distribution Date next succeeding the date of such Sale and (B) the expenses of the Sale and

of any Proceedings in connection therewith which are reimbursable to it;

(iii) The Collateral Agent shall execute and deliver an appropriate

instrument of conveyance prepared by the Servicer transferring its interest in any portion of the

Collateral in connection with a Sale thereof;

OHS East:160711170.11 16
(iv) The Collateral Agent is, pursuant to Section 13.1 of this

Agreement, appointed the agent and attorney-in-fact of each Grantor to transfer and convey its

interest in any portion of the Collateral in connection with a Sale thereof, and to take all action

necessary to effect such Sale; and

(v) No purchaser or transferee at such a Sale shall be bound to

ascertain the Collateral Agent’s authority, inquire into the satisfaction of any conditions

precedent or see to the application of any monies.

Section 5.4 No Impairment of Action. The Collateral Agent’s right to seek and

recover judgment pursuant to this Agreement shall not be affected by the seeking, obtaining or

application of any other relief under or with respect to this Agreement. Neither the Lien of this

Agreement nor any rights or remedies of the Collateral Agent shall be impaired by the recovery

of any judgment by Collateral Agent against any Grantor or by the levy of any execution under

such judgment upon any portion of the Collateral or upon any of the assets of such Grantor. Any

money or property collected by Collateral Agent shall be applied in accordance with Section 5.2.

Section 5.5 Remedies Cumulative; Waiver. Each of the Collateral Agent’s, the

Purchase Money Notes Guarantor’s and the Initial Member’s rights pursuant to this Agreement

shall be in addition to, and not in limitation or exclusion of, any other rights and remedies that it

may have (whether by operation of law, in equity, under contract or otherwise) and without

prejudice and in addition to any right of setoff, recoupment, combination of accounts, Lien or

other right to which it is at any time entitled. Each of the Collateral Agent, the Purchase Money

Notes Guarantor and the Initial Member may enforce any of its remedies pursuant to this

Agreement successively or concurrently in its sole discretion. No delay or failure on the part of

the Collateral Agent, the Purchase Money Notes Guarantor or the Initial Member to exercise any

right or remedy to which it may become entitled hereunder upon an Event of Default shall

constitute abandonment or waiver of any such right and the Collateral Agent, the Purchase

Money Notes Guarantor or the Initial Member shall be entitled to exercise such right or remedy

at any time during the continuance of a Event of Default.

Section 5.6 Waiver of Certain Rights and Remedies. To the extent permitted under

applicable Law, each Grantor hereby waives all rights and remedies of a debtor or grantor under

the NY UCC or other applicable Law, and all formalities prescribed by law relative to the sale or

disposition of the Collateral (other than notice of sale and any other formalities expressly

provided in this Agreement), after the occurrence and during the continuation of an Event of

Default and, except as otherwise set forth herein, all other rights and remedies of such Grantor

with respect thereto.

ARTICLE VI
 

Guaranty
 

Section 6.1 Guaranty.

(a) Each Grantor hereby, jointly and severally, unconditionally and

irrevocably, guaranties to the Collateral Agent, for the benefit of the Secured Parties and their

respective successors, indorsees, transferees and assigns, the prompt and complete payment and

OHS East:160711170.11 17
performance by Debtor when due (whether at the stated maturity, by acceleration or otherwise)

of the Secured Obligations.

(b) Anything herein or in any other Ancillary Document to the contrary

notwithstanding, the maximum liability of each Grantor hereunder and under the Transaction

Documents shall in no event exceed the amount which can be validly guarantied by such

Grantor, if any, under applicable federal and state laws relating to the insolvency of debtors

(after giving effect to the right of contribution established in Section 6.2 of this Agreement).

(c) Each Grantor agrees that the Secured Obligations may at any time and

from time to time exceed the amount of the liability of such Grantor hereunder without impairing

the guaranty contained in this Section 6.1 or affecting the rights and remedies of the Secured

Parties pursuant to this Agreement.

(d) The guaranty contained in this Section 6.1 shall remain in full force and

effect until the termination of this Agreement, notwithstanding that from time to time prior

thereto Debtor may be free from any Secured Obligations.

(e) No payment made by Debtor, any Grantor, any other guarantor or any

other Person or received or collected by the Secured Parties from Debtor, any Grantor, any other

guarantor or any other Person by virtue of any action or proceeding or any set-off or

appropriation or application at any time or from time to time in reduction of or in payment of the

Secured Obligations shall be deemed to modify, reduce, release or otherwise affect the liability

of any Grantor pursuant to this Agreement, which shall remain, notwithstanding any such

payment (other than any payment made by such Grantor in respect of the Secured Obligations or

any payment received or collected from such Grantor in respect of the Secured Obligations),

liable for the Secured Obligations up to the maximum liability of such Grantor pursuant to this

Agreement until the termination of this Agreement.

Section 6.2 Right of Contribution. Each Grantor hereby agrees that to the extent that a

Grantor shall have paid more than its proportionate share of any payment made hereunder, such

Grantor shall be entitled to seek and receive contribution from and against any other Grantor

hereunder which has not paid its proportionate share of such payment. Each Grantor’s right of

contribution shall be subject to the terms and conditions of Section 6.3. The provisions of this

Section 6.2 shall in no respect limit the obligations and liabilities of any Grantor to the Secured

Parties, and each Grantor shall remain liable to the Secured Parties for the full amount guarantied

by such Grantor pursuant to this Agreement.

Section 6.3 No Subrogation. Notwithstanding any payment made by any Grantor

hereunder or any set-off or application of funds of any Grantor by the Secured Parties, no

Grantor shall be entitled to be subrogated to any of the rights of the Secured Parties against

Debtor or any other Grantor or any collateral security or guaranty or right of offset held by any

Secured Party for the payment of the Secured Obligations, nor shall any Grantor seek or be

entitled to seek any contribution or reimbursement from Debtor or any other Grantor in respect

of payments made by such Grantor hereunder, until the termination of this Agreement. If any

amount shall be paid to any Grantor on account of such subrogation, contribution or

reimbursement rights at any time when all of the Secured Obligations shall not have been paid in

OHS East:160711170.11 18
full, such amount shall constitute Loan Proceeds and shall be held by such Grantor in trust for

the Secured Parties, segregated from other funds of such Grantor, and shall, immediately upon

receipt by such Grantor, be deposited into the Collection Account, to be applied in accordance

with the Priority of Payments (as such term is defined in the Custodial and Paying Agency

Agreement).

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

shall remain obligated pursuant to this Agreement notwithstanding that, without any reservation

of rights against any Grantor and without notice to or further assent by any Grantor, any demand

for payment of any of the Secured Obligations made by the Collateral Agent or the Purchase

Money Notes Guarantor may be rescinded by such Person and any of the Secured Obligations

continued, and the Secured Obligations, or the liability of any other Person upon or for any part

thereof, or any collateral security or guaranty therefor or right of offset with respect thereto, may,

from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated,

compromised, waived, surrendered or released by the Collateral Agent or the Purchase Money

Notes Guarantor, and the Purchase Money Notes Guaranty, any Purchase Money Notes and the

other Transaction Documents and any other documents executed and delivered in connection

therewith may be amended, modified, supplemented or terminated, in whole or in part, as the

Collateral Agent or the Purchase Money Notes Guarantor may deem reasonably advisable from

time to time, and any collateral security, guaranty or right of offset at any time held by the

Collateral Agent for the payment of the Secured Obligations may be sold (in the case of any such

collateral security), exchanged, waived, surrendered or released. The Collateral Agent shall not

have any obligation to protect, secure, perfect or insure any Lien at any time held by it as

security for the Secured Obligations or for the guaranty contained in this Article VI or any

property subject thereto.

Section 6.5 Guaranty Absolute and Unconditional. Each Grantor waives any and all

notice of the creation, renewal, extension or accrual of any of the Secured Obligations and notice

of or proof of reliance by the Collateral Agent upon the guaranty contained in this Article VI or

acceptance of the guaranty contained in this Article VI; the Secured Obligations, and any of

them, shall conclusively be deemed to have been created, contracted or incurred, or renewed,

extended, amended, modified or waived, in reliance upon the guaranty contained in this Article

VI and the grant of the security interests pursuant to Section 3.1; and all dealings between Debtor

and any of the Grantors, on the one hand, and the Collateral Agent, on the other hand, likewise

shall be conclusively presumed to have been had or consummated in reliance upon the guaranty

contained in this Article VI and the grant of the security interests pursuant to Section 3.1. Each

Grantor waives diligence, presentment, protest, demand for payment and notice of default or

nonpayment to or upon Debtor or any of the Grantors with respect to the Secured Obligations.

Each Grantor understands and agrees that the guaranty contained in this Article VI and the grant

of the security interests pursuant to Section 3.1 shall be, and shall be construed to be, a

continuing, absolute and unconditional guaranty of payment and performance without regard to

(a) the validity or enforceability of the Purchase Money Notes Guaranty, any Purchase Money

Notes or any other Ancillary Document, any of the Secured Obligations or any other collateral

security therefor or guaranty or right of offset with respect thereto at any time or from time to

time held by the Collateral Agent, for the benefit of the Secured Parties, (b) any defense, set-off

or counterclaim (other than a defense of payment or performance) which may at any time be

available to or be asserted by Debtor or any other Person against the Collateral Agent, or (c) any

OHS East:160711170.11 19
other circumstance whatsoever (with or without notice to or knowledge of Debtor or such

Grantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of

Debtor for the Secured Obligations, or of such Grantor under the guaranty contained in this

Article VI and the grant of the security interests pursuant to Section 3.1, in bankruptcy or in any

other instance. When making any demand hereunder or otherwise pursuing its rights and

remedies hereunder against any Grantor, the Collateral Agent may, but shall be under no

obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may

have against Debtor, any Grantor or any other Person or against any collateral security or

guaranty for the Secured Obligations or any right of offset with respect thereto, and any failure

by the Collateral Agent to make any such demand, to pursue such other rights or remedies or to

collect any payments from Debtor, any Grantor or any other Person or to realize upon any such

collateral security or guaranty or to exercise any such right of offset, or any release Debtor, any

Grantor or any other Person or any such collateral security, guaranty or right of offset, shall not

relieve any Grantor of any obligation or liability hereunder, and shall not impair or affect the

rights and remedies, whether express, implied or available as a matter of law, of the Collateral

Agent against any Grantor. For the purposes of this Agreement, “demand” shall include the

commencement and continuance of any legal proceedings.

Section 6.6 Reinstatement. The guaranty contained in this Article VI shall continue to

be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of

any of the Secured Obligations is rescinded or must otherwise be restored or returned by the

Collateral Agent upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of

Debtor or any Grantor, or upon or as a result of the appointment of a receiver, intervenor or

conservator of, or trustee or similar officer for, Debtor or any Grantor or any substantial part of

its property, or otherwise, all as though such payments had not been made.

Section 6.7 Payments. Each Grantor hereby guaranties that payments pursuant to this

Article VI will constitute Loan Proceeds and will be deposited into the Collection Account, to be

applied in accordance with the Priority of Payments (as defined in the Custodial and Paying

Agency Agreement).

Section 6.8 Information. Each Grantor assumes all responsibility for being and

keeping itself reasonably informed of Debtor’s and each other Grantor’s financial condition and

assets, and of all other circumstances bearing upon the risk of nonpayment of the Secured

Obligations and the nature, scope and extent of the risks that such Grantor assumes and incurs

hereunder, and agrees that neither the Collateral Agent nor any other Secured Party will have any

duty to advise such Grantor of information known to it or any of them regarding such

circumstances or risks.

ARTICLE VII
 

Representations And Warranties
 

Section 7.1 Representations and Warranties. Each Grantor hereby represents and

warrants to the Purchase Money Notes Guarantor and the Collateral Agent as of the date hereof

and at all times while the Secured Obligations remain unsatisfied and undischarged in full, that:

OHS East:160711170.11 20
(a) This Agreement has been duly executed by such Grantor and constitutes a

legal, valid and binding obligation of such Grantor, enforceable against such Grantor in

accordance with its terms, except as such enforceability may be limited by Debtor Relief Laws

and by general principles of equity;

(b) There are no actions, suits, proceedings, claims or disputes pending or, to

the knowledge of the Manager or such Grantor, threatened in writing, at law, in equity, in

arbitration or before any Governmental Authority affecting such Grantor or any of its properties

or revenues that may adversely affect the grant by such Grantor, or the perfection, of the security

interest purported to be created hereby in the Collateral, or the exercise by the Collateral Agent

or the Purchase Money Notes Guarantor of any of its rights or remedies hereunder;

(c) The Grantors are and will be at all times the sole and exclusive owners of,

or otherwise have and will have rights in, the Collateral free and clear of any Lien other than

Liens in favor of the Collateral Agent and other Liens expressly permitted pursuant to the

Transaction Documents. No effective financing statement or other instrument similar in effect

covering all or any part of the Collateral (except in favor of the Collateral Agent) is on file in any

recording or filing office;

(d) The transactions provided for in this Agreement (i) have been duly

authorized by all requisite limited liability company action, and (ii) do not and will not (A)

violate (1) any applicable provision of any Law or of the certificate of formation or operating

agreement of such Grantor, (2) any order of any Governmental Authority or arbitrator or (3) any

material provision of any indenture or any agreement or other instrument to which such Grantor

is a party or by which it or the Collateral is or may be bound, (B) be in conflict with, result in a

breach of or constitute (alone or with notice or lapse of time or both) a default pursuant to any

such indenture or agreement or other instrument, (C) result in the creation or imposition of any

security interest in or Lien upon the Collateral (other than the security interest and Lien created

thereon pursuant to this Agreement) or (D) require the consent of any party for the granting of

the security interest created hereby;

(e) No authorization or approval or other action by, and no notice to or filing

with, any Governmental Authority or other regulatory body, or any other Person, is required on

the date hereof for (i) the due execution, delivery and performance by such Grantor of this

Agreement, (ii) the grant by such Grantor of the security interest purported to be created hereby

in the Collateral or (iii) the exercise by the Collateral Agent or the Purchase Money Notes

Guarantor of any of its rights and remedies hereunder. No authorization or approval or other

action by, and no notice to or filing with, any Governmental Authority or other regulatory body,

or any other Person, is required for the perfection of the security interest purported to be created

hereby in the Collateral, except for (A) the filing of a UCC-1 financing statement properly

describing the Collateral and identifying such Grantor and Collateral Agent in the applicable

jurisdiction required pursuant to the Uniform Commercial Code, (B) execution and delivery of

the Account Control Agreements pursuant to the Uniform Commercial Code, (C) execution and

delivery by the Custodian/Paying Agent of the Custodial and Paying Agency Agreement

containing an acknowledgment by the Custodian/Paying Agent that it holds possession of the

Custodial Documents for the Collateral Agent’s benefit, and (D) the taking of any action

required to maintain continuing perfection with respect to proceeds which cannot be perfected by

OHS East:160711170.11 21
the filing of financing statements under the Uniform Commercial Code (subclauses (A), (B), (C)

and (D), each a “Perfection Requirement” and collectively, the “Perfection Requirements”);

and

(f) This Agreement creates a legal, valid and enforceable security interest in

favor of the Collateral Agent, for the benefit of the Secured Parties, in the Collateral, as security

for the Secured Obligations. The compliance with the Perfection Requirements will result in the

perfection of such security interests. After compliance with the Perfection Requirements, such

security interests, including in the case of Collateral in which such Grantor obtains rights after

the date hereof, will be perfected, first priority security interests. Such Perfection Requirements

and all other action necessary or desirable to perfect and protect such security interest have been

duly made or taken, except for the other filings and recordations and actions described in Section

7.1(e) above.

ARTICLE VIII
 

Covenants
 

Section 8.1 Debtor Accounts. Debtor shall establish and maintain with the

Custodian/Paying Agent the Debtor Accounts (excluding the Escrow Accounts, which shall be

established and maintained by the Servicer).

Section 8.2 Grantor Status; Licensing. Debtor shall, at all times, constitute a limited

liability company organized under the laws of the State of Delaware and a Single Purpose Entity.

Each Subsidiary Grantor shall at all times be a Single Purpose Entity. As soon as reasonably

practical after the Closing Date, Debtor (on its own behalf or, if applicable, on behalf of the

Ownership Entities which hold Acquired Property) shall apply for and, thereafter, use its

reasonable best efforts to obtain as quickly as possible, and maintain, all such licenses as are

required to conduct its business, including qualifications to conduct business in jurisdictions

other than Delaware and licenses to purchase, own or service the Loans and, if applicable,

operate, manage, lease and dispose of Acquired Property, if the failure to so obtain such licenses

would reasonably be expected to result in the imposition of fines, penalties or other liabilities on

Debtor, claims and defenses being asserted against Debtor (including counterclaims and defense

asserted by Borrowers), or materially adversely affect Debtor or Debtor’s ability to foreclose on

the Collateral securing or otherwise realize the full value of any Loan or Acquired Property.

Section 8.3 LLC Operating Agreement. Debtor (a) shall at all times have in effect and

be subject to the LLC Operating Agreement, (b) except as is otherwise expressly permitted

therein, shall not amend or modify in any material respect the LLC Operating Agreement

without the prior written approval of the Purchase Money Notes Guarantor, and (c) shall not

enter into or allow itself to become subject to any other constituent documents inconsistent with

any terms of the LLC Operating Agreement.

Section 8.4 Custodian/Paying Agent. Debtor shall retain the Custodian/Paying Agent

and shall enter into and at all times be a party to a Custodial and Paying Agency Agreement with

the Custodian/Paying Agent. The Custodian/Paying Agent at all times shall have custody and

possession of the Notes and other Custodial Documents to the extent required pursuant to the

OHS East:160711170.11 22
Custodial and Paying Agency Agreement. At no time shall Debtor have more than one

Custodian/Paying Agent. The fees and expenses paid to the Custodian/Paying Agent shall be no

more than market rates and the Custodian/Paying Agent shall be terminable by the Purchase

Money Notes Guarantor upon no more than thirty (30) days notice without cause thereunder. In

the event that Debtor (or any Servicer or Subservicer) removes any Notes or other Custodial

Documents from the possession of the Custodian/Paying Agent (which shall be done only in

accordance with the Custodial and Paying Agency Agreement), (a) any loss or destruction of or

damage to such Notes or Custodial Documents shall be the liability of Debtor (who, along with

the Servicer and any Subservicer shall be responsible for safeguarding such Notes and Custodial

Documents), and (b) such Notes shall be returned to the Custodian/Paying Agent within the time

provided under the Uniform Commercial Code to maintain the Collateral Agent’s perfection

thereof by possession. If any Notes or other Custodial Documents are removed in connection

with the modification or restructuring of an Loan, the modified or restructured Notes and other

Custodial Documents removed in connection therewith shall be returned to the Custodian/Paying

Agent as soon as possible following the completion of the restructuring or modification (and, in

any event, in accordance with clause (b) of the immediately preceding sentence). Debtor shall

ensure that the Purchase Money Notes Guarantor receives a copy of each demand, notice or other

communication given pursuant to the Custodial and Paying Agency Agreement at the time that

such notice or other communication is given thereunder.

Section 8.5 Compliance with Law. Each Grantor shall, at all times, comply with

applicable Law in connection with the performance of its obligations pursuant to this Agreement.

Section 8.6 Servicer. Debtor shall at all times cause the Servicing Obligations to be

performed by a Servicer or a Subservicer, each of which shall be a Qualified Servicer.

Section 8.7 Certain Restrictions. Debtor shall not:

(a) at any time, without limiting its obligation to constitute a Single Purpose

Entity, incur any Indebtedness (other than the Excess Working Capital Advances, Discretionary

Funding Advances and Indebtedness evidenced by the Purchase Money Notes and pursuant to

this Agreement);

(b) dissolve or liquidate at any time prior to such time as Debtor makes the

Final Distribution and this Agreement is terminated;

(c) (i) file a voluntary petition for bankruptcy, (ii) file a petition or answer

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

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

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

substantial part of its properties, (v) file an answer or other pleading admitting or failing to

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

clause (i) through (iv), or (B) any order adjudging it a bankrupt or insolvent or for relief against

it in any bankruptcy or insolvency proceeding, or (vi) allow itself to become unable to pay its

obligations as they become due or allow the sum of its debts to be greater than all of its property,

at a fair valuation; or

OHS East:160711170.11 23
(d) place or permit (voluntarily or involuntarily) any Lien to be placed on any

of the Collateral (other than the security interest granted to Collateral Agent hereunder and Liens

expressly permitted pursuant to the Transaction Documents), and shall not take any action to

interfere with Collateral Agent’s rights as a secured party with respect to the Collateral.

Section 8.8 Change in Jurisdiction, Name, Location or Identity. Each Grantor agrees

to provide the Collateral Agent with not less than ten (10) days’ prior written notice of any

change (a) in the jurisdiction in which it is organized, (b) in its company name, (c) in the location

of its principal place of business, or (d) in its federal taxpayer identification number. Each

Grantor agrees not to effect or permit any change referred to in the preceding sentence unless all

filings have been made under the Uniform Commercial Code or otherwise that are required in

order for the Collateral Agent to continue following such change to have a valid, legal and

perfected first priority security interest in the Collateral to the extent a security interest therein

may be perfected by filing pursuant to the Uniform Commercial Code.

Section 8.9 Payment of Principal on Purchase Money Notes; Reimbursement of

Collateral Agent. Debtor will duly and punctually pay, or cause the Custodian/Paying Agent to

pay, the principal of the Purchase Money Notes in accordance with the terms of the Purchase

Money Notes, this Agreement and the Custodial and Paying Agency Agreement and from

moneys on deposit in the Defeasance Account. On each Distribution Date, Debtor will direct the

Custodian/Paying Agent to distribute amounts on deposit in the Distribution Account to

Collateral Agent in payment of any amounts owed by Debtor to Purchase Money Notes

Guarantor or Collateral Agent pursuant to this Agreement, subject to the priority of payments set

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

Section 8.10 Protection of Collateral; Further Assurances. From time to time, at its cost

and expense, each Grantor promptly shall execute and deliver all further instruments and

documents, and take all further action, that may be necessary, or that Collateral Agent may

reasonably request, in order to perfect, to ensure the continued perfection of, and to protect the

assignment and security interest granted or intended to be granted hereby or to enable Collateral

Agent to exercise and enforce its rights and remedies hereunder with respect to any Collateral.

Section 8.11 Guaranties and Mortgages. If any Subsidiary (as such term is defined in

the LLC Operating Agreement) of Debtor acquires any REO Property after the Closing Date,

then, within fifteen (15) Business Days after the foreclosure, conveyance in lieu of foreclosure or

other event that resulted in such property becoming REO Property, Debtor promptly shall cause

such Subsidiary to execute and deliver to the Collateral Agent (in addition to the Joinder

Agreement provided for in Section 8.12) an REO Mortgage with respect to such REO Property

in favor of the Collateral Agent for the benefit of the Secured Parties in form and substance

satisfactory to the Collateral Agent (which mortgage shall (a) secure all of the Secured

Obligations (or, in jurisdictions with a mortgage recording tax that would be payable on the full

amount of the Secured Obligations, such portion or components of the Secured Obligations as

the Collateral Agent shall reasonably require), (b) provide for a release price (or, in the case of

REO Property consisting of condominiums or cooperative units or separate land parcels, release

prices for individual units or parcels) based on the Business Plan or otherwise satisfactory to the

Collateral Agent and (c) shall contain such other provisions (in addition to those included in the

Loan Documents) as the Collateral Agent shall require in light of the particular nature or

OHS East:160711170.11 24
characteristics of such REO Property). Such REO Mortgage shall be accompanied by such

related documentation and deliveries as the Collateral Agent reasonably may request, each in

form and substance satisfactory to the Collateral Agent, including, without limitation, opinions

of counsel, lender’s policies of title insurance (together with all endorsements thereto reasonably

required by the Collateral Agent, including endorsements with respect to future advances),

amendments to the Transaction Documents deemed necessary or advisable by the Collateral

Agent to reflect the particular nature and characteristics of the REO Property in question and the

requirements of local law and such additional items as an institutional lender would customarily

require in a construction or permanent, as applicable, loan transaction involving a property

similar to such REO Property (all of the foregoing to be in form and substance satisfactory to the

Collateral Agent). Such REO Mortgage shall be duly recorded or filed in such manner and in

such places as are required by applicable law to establish, perfect, preserve and protect the Liens

in favor of the Collateral Agent granted pursuant to such REO Mortgage, and all taxes, fees and

other charges payable in connection therewith shall be paid in full. The cost of preparing,

negotiating and recording such REO Mortgage (including mortgage recording taxes) and the

costs associated with such additional documentation and deliverables shall be Servicing

Expenses. At Debtor’s request, the Collateral Agent shall prepare and deliver to Debtor a form

of REO Mortgage that (with such modifications as the Collateral Agent shall agree to in its sole

discretion) shall serve as a model for subsequent REO Mortgages (subject to changes necessary

or advisable, in the Collateral Agent’s judgment, to reflect local law and the particular nature and

characteristics of the REO Property in question). Notwithstanding anything to the contrary

contained in the foregoing, with respect to Acquired Property consisting of REO Property on the

date hereof, Debtor shall deliver (and/or shall cause the applicable Ownership Entity to deliver)

to the Collateral Agent the REO Mortgages and other items required to be delivered pursuant to

this Section 8.11 within thirty (30) days after the Closing Date.

Section 8.12 Additional Grantors. If Debtor shall form any Subsidiary, Debtor shall

cause such Subsidiary to become a Subsidiary Grantor pursuant to this Agreement, such

Subsidiary shall execute and deliver to Collateral Agent a Joinder Agreement substantially in the

form of Exhibit A and shall thereafter for all purposes be a party hereto and have the same rights,

benefits and obligations as a Grantor party hereto on the Closing Date. Each Grantor expressly

agrees that its obligations arising hereunder shall not be affected or diminished by the addition or

release of any other Grantor hereunder, nor by any election of the Collateral Agent not to cause

any Subsidiary (as defined in the LLC Operating Agreement) of Debtor to become a Grantor

hereunder. This Agreement shall be fully effective as to any Grantor that is or becomes a party

hereto regardless of whether any other Person becomes or fails to become or ceases to be a

Grantor hereunder.

Section 8.13 Transaction with Affiliates. No Grantor shall enter into any transaction

with any Affiliate, except as expressly permitted pursuant to Section 3.5 of the LLC Operating

Agreement, without the prior written consent of the Collateral Agent.

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

(a) Maintenance of Books and Records. Debtor shall cause to be kept and

maintained (including by the Servicer and any Ownership Entity and including records

OHS East:160711170.11 25
transferred by the Receiver to Debtor in connection with its conveyance of the Loans and any

Acquired Property to Debtor pursuant to the Contribution Agreement), at all times, at Debtor’s

chief executive office, a complete and accurate set of files, books and records regarding the

Collateral, the Loans, the Collateral and the Acquired Property and Debtor’s, any Ownership

Entity’s and the Collateral Agent’s interests in the Collateral, the Loans, the Collateral and the

Acquired Property, including records relating to the Debtor Accounts and the disbursement of all

Loan Proceeds. This obligation to maintain a complete and accurate set of records shall

encompass all files in Debtor’s custody, possession or control pertaining to the Collateral, the

Loans, the Collateral and the Acquired Property, including (except as required to be held by the

Custodian/Paying agent pursuant to the Custodial and Paying Agency Agreement) all original

and other documentation pertaining to the Collateral, the Loans, the Collateral and the Acquired

Property, all documentation relating to items of income and expense pertaining to the Collateral,

the Loans, the Collateral and the Acquired Property, and all of Debtor’s (and the Servicer’s and

each Subservicer’s) internal memoranda pertaining thereto. The books of account shall be

maintained in a manner that provides sufficient assurance that: (i) transactions of Debtor are

executed in accordance with the general or specific authorization of the Manager consistent with

the provisions of the LLC Operating Agreement and the other Transaction Documents; and (ii)

transactions of Debtor are recorded in such form and manner as will (A) permit preparation of

federal, state and local income and franchise tax returns and information returns in accordance

with the LLC Operating Agreement and the other Transaction Documents and as required by

Law; (B) permit preparation of Debtor’s financial statements in accordance with GAAP and as

otherwise set forth in the LLC Operating Agreement and the other Transaction Documents; and

(C) maintain accountability for Debtor’s assets.

(b) Retention of Books and Records. Debtor shall cause all such books and

records to be maintained and retained until the date that is the later of ten (10) years after the

Closing Date or three (3) years after the date on which the Final Distribution is made. All such

books and records shall be available during such period for inspection by the Collateral Agent or

the Purchase Money Notes Guarantor or their respective representatives (including any

Governmental Authority) and agents at the chief executive office of Debtor at all reasonable

times during business hours on any Business Day (or, in the case of any such inspection after the

term hereof, at such other location as is provided by notice to the Collateral Agent and the

Purchase Money Notes Guarantor), in each instance upon not less than two (2) Business Days’

prior notice to Debtor unless an Event of Default shall have occurred and be continuing. Upon

request by the Collateral Agent or the Purchase Money Notes Guarantor, Debtor, at the sole cost

and expense of the Collateral Agent or the Purchase Money Notes Guarantor, as the case might

be, promptly shall send copies (the number of copies of which shall be reasonable) of such books

and records to the Collateral Agent or the Purchase Money Notes Guarantor. Debtor shall

provide the Collateral Agent and the Purchase Money Notes Guarantor with reasonable advance

notice of Debtor’s intention to destroy or dispose of any documents or files relating to the Loans

and, upon the request of the Collateral Agent or the Purchase Money Notes Guarantor, shall

allow such Person, at its own expense, to recover the same from Debtor.

(c) Reporting.

(i) As soon as practicable following, but no later than ninety (90) days

immediately after, the end of each Fiscal Year (as such term is defined in the LLC Operating

OHS East:160711170.11 26
Agreement) (commencing with respect to the 2010 Fiscal Year), Debtor shall deliver, subject to

the provisions of subsection (h) below, to each of the Initial Member, the Collateral Agent and

the Purchase Money Notes Guarantor an audited consolidated balance sheet of Debtor and its

Subsidiaries as at the end of such Fiscal Year, and audited consolidated statements of operations

and cash flow of Debtor and its Subsidiaries for such Fiscal Year, each prepared in accordance

with GAAP and accompanied by the Accountants’ (as such term is defined in the LLC Operating

Agreement) report thereon, which shall be certified in the customary manner by the Accountants.

(ii) As soon as practicable following, but no later than forty-five (45)

days immediately after, the end of each quarter of each Fiscal Year (other than the last quarter of

such Fiscal Year, and commencing with the calendar quarter ending on or about March 31,

2010), Debtor shall deliver, subject to the provisions of subsection (h) below, to the Initial

Member, the Collateral Agent and the Purchase Money Notes Guarantor an unaudited

consolidated balance sheet of Debtor and its Subsidiaries as at the end of such calendar quarter

and an unaudited consolidated statements of operations and cash flow of Debtor and its

Subsidiaries for such calendar quarter (and, for the first such report, also covering the period

from the Closing Date through the end of such calendar quarter), each prepared in accordance

with GAAP.

(iii) Debtor shall cause to be delivered, subject to the provisions of

subsection (h) below, to the Initial Member, the Collateral Agent and the Purchase Money Notes

Guarantor such information as is specified in Exhibit B of the LLC Operating Agreement and

such other information relating to the Loans, the Collateral, the Debtor, the Servicers and any

Subservicers as the Initial Member, the Collateral Agent or the Purchase Money Notes Guarantor

may reasonably request from time to time and, in any case, shall ensure that the Initial Member,

the Collateral Agent and the Purchase Money Notes Guarantor are promptly advised, in writing,

of any matter of which the Manager, any Servicer or any Subservicer becomes aware relating to

the Loans, the Collateral, the Collection Account, the Escrow Accounts, the Working Capital

Reserve Account, the Defeasance Account (as such terms are defined in the LLC Operating

Agreement), or any Borrower or Obligor that materially and adversely affects the interests of the

Initial Member, the Collateral Agent or of any secured party under this Agreement. In addition

to such other reports as are required to be provided under this Agreement, the Debtor (x) shall

cause to be delivered to the Initial Member, the Collateral Agent and the Purchase Money Notes

Guarantor such information relating to compliance by the Private Owner with the requirements

of clause (v) of Section 10.1(a) of the LLC Operating Agreement, as the Initial Member, the

Collateral Agent or the Purchase Money Notes Guarantor may reasonably request from time to

time and, (y) in any case, shall (in good faith) immediately advise, in writing, the Initial Member,

the Collateral Agent and the Purchase Money Notes Guarantor of (i) any capital contribution to

the Private Owner under a Qualifying Letter of Credit or Satisfactory Equity Commitment Letter

or (ii) any failure or cessation of the Private Owner to satisfy the requirements of clause (v) of

Section 10.1(a) of the LLC Operating Agreement, provided that any failure of the Debtor to so

provide such immediate notice under this clause (y) shall not be deemed a breach of this

Agreement so long as the relevant information with respect thereto is included in the applicable

Monthly Report for the period including the date on which such capital contribution or failure

occurred (so long as such Monthly Report is timely delivered in accordance herewith).

OHS East:160711170.11 27
(d) Monthly Reports. Debtor shall cause to be furnished to each of the Initial

Member, the Collateral Agent and the Purchase Money Notes Guarantor on or prior to the

fifteenth (15th) day of each month (or if the fifteenth (15th) day is not a Business Day, then the

first Business Day thereafter), commencing on the fifteenth (15th) day of the first month

following the calendar month in which the Initial Servicing Transfer Date (as such term is

defined in the LLC Operating Agreement) occurs (and with respect to each Loan, including

relevant information with respect thereto for all periods from and after the Servicing Transfer

Date for such Loan), (i) the Monthly Report (as such term is defined in the LLC Operating

Agreement) with respect to the relevant Due Period (as such term is defined in the LLC

Operating Agreement) and (ii) the related Distribution Date Report (as such term is defined in

the LLC Operating Agreement) with respect to such Due Period, which report shall specify the

amounts and recipients of all funds to be distributed by the Paying Agent (as such term is defined

in the LLC Operating Agreement) on the relevant Distribution Date. Each of the Monthly

Report and the Distribution Date Report shall be certified by the chief financial officer (or an

equivalent officer) of the Manager. The Monthly Report shall also include a certification of the

Manager that all withdrawals by the Manager from the Collection Account during such Due

Period were made in accordance with the terms of this Agreement and the Custodial and Paying

Agency Agreement. Debtor shall also cause to be furnished to each of the Initial Member, the

Collateral Agent and the Purchase Money Notes Guarantor the Custodian and Paying Agent

Report in accordance with the terms of the Custodial and Paying Agency Agreement.

(e) Annual Compliance Certificates. Debtor shall, and shall cause the

Servicer and any Subservicer to deliver to the Initial Member, the Collateral Agent and the

Purchase Money Notes Guarantor on or before March 15 of each year, commencing in the year

2011, an officer’s certificate stating, as to the signer thereof, that (i) a review of such party’s

activities during the preceding calendar year (or portion thereof) and of its performance pursuant

to this Agreement (or, as applicable, the Servicing Agreement or any Subservicing Agreement)

has been made under such officer’s supervision, and (ii) to the best of such officer’s knowledge

and belief, based on such review, such party has fulfilled all of its obligations pursuant to this

Agreement (or, as applicable, the Servicing Agreement or any Subservicing Agreement) in all

material respects throughout such year or portion thereof or, if there has been a failure to fulfill

any such obligation in any material respect, specifying each such failure and the nature and status

thereof. The first such officer’s certificate shall cover, with respect to any Loan, the period

commencing on the Closing Date (and with respect to each Loan, including relevant information

with respect thereto for the period commencing on the Servicing Transfer Date for such Loan)

and continuing through the end of the 2010 calendar year. In the event the Servicer or any

Subservicer was terminated, resigned or otherwise performed in such capacity for only part of a

year, such party shall provide an officer’s certificate pursuant to this Section 8.14(e) with respect

to such portion of the year.

(f) Annual Compliance Report. On or before March 15 of each year,

commencing in the year 2011, Debtor shall cause the Servicer and any Subservicer, at its own

expense or the expense of the Manager, to provide to the Initial Member, the Collateral Agent

and the Purchase Money Notes Guarantor the annual reports (including the independent

accountant report) for the prior Fiscal Year (or other applicable period as set forth below)

required under Section 1122 of Regulation AB (regardless of whether any such requirements

apply, by their terms, only to companies registered or required to file reports with the Securities

OHS East:160711170.11 28
and Exchange Commission) with respect to the relevant servicing criteria provisions of Section

1122 (d)(l) of Regulation AB that are applicable to the servicing being conducted under the LLC

Operating Agreement (and the Servicing Agreement). The first such reports shall cover the

period commencing on the Closing Date (and for each Loan, covering the period from the

applicable Servicing Transfer Date) and continuing through the end of the 2010 Fiscal Year.

(g) Audits. Until the later of the date that is ten (10) years after the Closing

Date or the date that is three (3) years after the Final Distribution (as such term is defined in the

LLC Operating Agreement), Debtor shall, and shall cause the Servicer and any Subservicer to (i)

provide any representative of the Initial Member, the Collateral Agent or the Purchase Money

Notes Guarantor (including any Government Authority), during normal business hours and on

reasonable notice, with access to all of the books of account, reports and records relating to the

Collateral, the Collateral, the Servicing Obligations, the Debtor Accounts, or any other matters

relating to this Agreement or the rights or obligations hereunder or under the Transaction

Documents, (ii) permit such representatives to make copies of and extracts from the same, (iii)

allow the Initial Member, the Collateral Agent and the Purchase Money Notes Guarantor to

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

Agent or the Purchase Money Notes Guarantor and (iv) allow representatives of the Initial

Member, the Collateral Agent or the Purchase Money Notes Guarantor to discuss Debtor’s and

the Servicer’s or Subservicer’s affairs, finances and accounts, as they relate to the Collateral, the

Loans, the Collateral (including Acquired Property), the Servicing Obligations, the Debtor

Accounts or any other matters relating to this Agreement, the Secured Obligations or the rights

or obligations hereunder, with its officers, directors, employees, accountants (and by this

provision Debtor hereby authorizes such accountants to discuss such affairs, finances and

accounts with such representatives), the Servicer, any Subservicer, and attorneys. Any expense

incurred by the Initial Member, the Collateral Agent or the Purchase Money Notes Guarantor

and any reasonable out-of-pocket expense incurred by Debtor in connection with the exercise by

the Initial Member, the Collateral Agent or the Purchase Money Notes Guarantor of its rights in

this Section 8.14(g) shall be borne by such party; provided, however, that any expense incident

to the exercise by the Initial Member, the Collateral Agent or the Purchase Money Notes

Guarantor of its rights pursuant to this Section 8.14(g) as a result of or during the continuance of

an Event of Default shall be borne in all cases by the Private Owner (except to the extent such

Event of Default is attributable exclusively to a Manager having been appointed by the Initial

Member following removal of the Private Owner in such capacity, or to any applicable Servicer

(and any Subservicers) having been engaged by the Initial Member, the Debtor or the applicable

replacement Manager following such removal of the Private Owner as Manager, in each case

that is not an Affiliate of the Private Owner).

(h) No Duplicate Reports. Notwithstanding any provision in subsections (c)

through (f) above to the contrary, the Debtor (i) shall not be required to deliver duplicate copies

of the reports as described in such subsections to the Receiver, so long as the Receiver is acting

in dual capacities as both the Initial Member and the Collateral Agent and (ii) shall only be

required to deliver one copy of each such report addressed to the Receiver with a notation on the

envelope that such report is being delivered to the Receiver in its dual capacities as both the

Initial Member and the Collateral Agent.

Section 8.15 Insurance.

OHS East:160711170.11 29
(a) Debtor shall cause insurance coverage to be maintained for the Collateral

and Acquired Property from an insurer (unless provided for in the then-applicable Business Plan)

reasonably acceptable to the Purchase Money Notes Guarantor for any Asset with respect to

which the Borrower has failed to maintain required fire, hurricane, flood and hazard insurance

with extended coverage as is customary in the area in which the Collateral or Acquired Property

is located and in such amounts and with such deductibles as, from time to time, are approved by

the Purchase Money Notes Guarantor (unless provided for in the then-applicable Business Plan).

(b) All such insurance shall (i) provide that no cancellation, material reduction

in amount or material change in coverage thereof shall be effective until at least thirty (30) days

after receipt by the Collateral Agent of written notice thereof, (ii) with respect to any policy

insuring a Grantor or Collateral, name the Collateral Agent as additional insured on behalf of the

Secured Parties (in the case of liability insurance) or loss payee (in the case of property

insurance).

Section 8.16 Recovery of Expenses; Interest. Debtor shall cause commercially

reasonable efforts to be used to recover from Borrowers and Obligors those Servicing Expenses

that such Borrowers or Obligors are obligated to pay. No Servicing Expenses shall bear interest

chargeable in any way to the Collateral Agent or the Purchase Money Notes Guarantor.

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

Guarantor; Delivery of Certain Notices. In addition to such other reports and access to records

and reports as are required to be provided to the Collateral Agent and the Purchase Money Notes

Guarantor hereunder, Debtor shall cause to be delivered to the Collateral Agent or the Purchase

Money Notes Guarantor such information relating to the Loans, the Collateral, the Acquired

Property, Debtor and the Servicer and any Subservicer as the Collateral Agent or the Purchase

Money Notes Guarantor may reasonably request from time to time and, in any case, shall ensure

that the Collateral Agent and the Purchase Money Notes Guarantor are promptly advised, in

writing, of any matter of which Debtor, the Servicer or any Subservicer becomes aware relating

to the Loans, the Collateral, the Acquired Property, the Debtor Accounts or any Borrower or

Obligor that materially and adversely affects the interests of the Collateral Agent or the Purchase

Money Notes Guarantor hereunder. Without limiting the generality of the foregoing, Debtor

shall cause to be delivered to the Collateral Agent and the Purchase Money Notes Guarantor

information indicating any possible Environmental Hazards with respect to any Collateral or

Collateral and any notice or report provided to Debtor or the Manager pursuant to Section 5.5 of

the Servicing Agreement as in effect on the date hereof. To the extent the Collateral Agent

requests information that is dependent upon obtaining such information from an Borrower,

Obligor or other third party, Debtor shall cause to be made commercially reasonable efforts to

obtain such information but it shall not be a breach by Debtor of this Agreement if Debtor fails to

cause such information to be provided to Collateral Agent because an Borrower, Obligor or other

Person (other than the Servicer or any Subservicer) has failed to provide such information after

such efforts have been made.

Section 8.18 Administration of REO Properties. Notwithstanding any other provision

of this Agreement to the contrary, in operating, managing, leasing or disposing of any REO

Property, Debtor and the Manager shall act in the best interests of Debtor and the members and

creditors of Debtor (including the FDIC in its various capacities) in accordance with the

OHS East:160711170.11 30
Servicing Standards pursuant to the LLC Operating Agreement, in accordance with the specific

provisions of the LLC Operating Agreement relating to REO Properties and in general

conformance with the Business Plan. Debtor shall furnish to the Collateral Agent such reports

regarding the operation, management, leasing or disposition of any REO Property as the

Collateral Agent reasonably shall request.

Section 8.19 Payment of Purchase Money Notes Guaranty Fee. In consideration of the

Purchase Money Notes Guarantor agreeing to guaranty certain obligations of Debtor pursuant to

the Purchase Money Notes in accordance with the Purchase Money Notes Guaranty, the

Receiver, for and on behalf of Debtor, shall pay to the Purchase Money Notes Guarantor on the

Closing Date a fee equal to 3.2% of the aggregate original principal amount of the Purchase

Money Notes (the “Purchase Money Notes Guaranty Fee”). To effect reimbursement and

repayment of the Purchase Money Notes Guaranty Fee to the Receiver, the Purchase Money

Notes Guaranty Fee will be added to the aggregate principal amount of the Purchase Money

Notes and paid by Debtor when and as it satisfies the Purchase Money Notes.

ARTICLE IX
 

Required Consent; Limits Liability
 

Section 9.1 Required Consents; Limits Liability. Notwithstanding anything to the

contrary contained in this Agreement (other than the last sentence of this Section 9.1), Debtor

shall not permit to be taken any action enumerated in Section 6.1 of the Servicing Agreement,

any action described in the LLC Operating Agreement as requiring the consent of the Initial

Member and/or the Purchase Money Notes Guarantor, as applicable (including but not limited to

the actions enumerated in Section 3.4, the last sentence of Section 5.3(b) and Section 8.1 of the

LLC Operating Agreement) or any action enumerated below without the prior written consent of

the Initial Member and, until the Purchase Money Notes Defeasance Date, the Purchase Money

Notes Guarantor, which consent may be withheld or conditioned in the Collateral Agent’s sole

and absolute discretion:

(a) any amendment or modification to, or waiver of, any terms of the LLC

Operating Agreement that relate to the manner in which the Servicer services the Loans or

Acquired Property, including, without limitation, the Servicing Obligations and the Servicing

Standard;

(b) the replacement of the Servicer;

(c) the payment of any fees to, or entering into any transaction with, any

Affiliate of Debtor or Private Owner or Servicer or any Subservicer, except as expressly

contemplated by the Transaction Documents;

(d) any amendment, modification to or change in any material respect, or

provide a material waiver of any provision of, the Organization Documents of Debtor;

(e) any Change of Control;

(f) [Intentionally Omitted];

OHS East:160711170.11 31
(g) incur, create or assume any Indebtedness other than in respect of the

Purchase Money Notes, this Agreement, the Discretionary Funding Advances and Excess

Working Capital Advances.

Notwithstanding the foregoing, Debtor may permit to be taken any action enumerated in

Section 6.1(g) of the Servicing Agreement without the Initial Member’s, the Purchase Money

Notes Guarantor’s or the Collateral Agent’s approval, as applicable.

Section 9.2 Limitation of Liability.

(a) Liability Generally. Neither the Collateral Agent, the Purchase Money

Notes Guarantor nor any other Secured Party nor any of their respective Affiliates, nor any of

their respective officers, directors, employees, partners, principals or agents, including the

Servicer and any Subservicer, shall be liable for any action taken or omitted to be taken by them

or any one of them under this Agreement or in connection with any Collateral or any portion

thereof, except for any act or omission constituting gross negligence, bad faith or willful

misconduct (including any act or omission constituting theft, embezzlement, breach of trust or

violation of any Law). In the event the Collateral Agent, the Purchase Money Notes Guarantor

or any Secured Party exercises its rights pursuant to Article V of this Agreement, none of the

Collateral Agent, the Purchase Money Notes Guarantor or any Secured Party, nor any of their

respective Affiliates, nor any of their respective officers, directors, employees, partners,

principals or agents, including the Servicer and any Subservicer when acting as an agent of any

of the foregoing, shall be liable for any action taken or omitted to be taken by them or any one of

them pursuant to this Agreement or in connection with any Collateral or any portion thereof,

except for any act or omission constituting willful misconduct.

(b) Reliance on Notices, etc. Neither Debtor nor the Collateral Agent or the

Purchase Money Notes Guarantor shall incur any liability to the other by acting in good faith

upon any notice, consent, certificate or other instrument or writing (including telegram, cable,

telex or telecopy) that is reasonably believed by Debtor or the Collateral Agent or the Purchase

Money Notes Guarantor as applicable, to be genuine and to have been signed or sent by the

proper party and that on its face is properly executed.

(c) No Consequential Damages. Regardless of the legal theory upon which

any claim by or against Debtor or the Collateral Agent or the Purchase Money Notes Guarantor

is based, including any claim based on contract, tort, strict liability, or fraud, none of the

Collateral Agent or the Purchase Money Notes Guarantor or Debtor shall be liable for, or may

recover from the other, any amounts other than actual losses, costs and expenses (including

reasonable attorneys’ fees and litigation and similar costs to pursue such recovery) incurred by

the party asserting the claim. Without limiting the foregoing, neither party shall be liable for, or

entitled to recover from the other party, any consequential, special, indirect, punitive, treble,

nominal or exemplary damages, business interruption costs or expenses, or damages for lost

profits, operating losses or lost investment opportunity (regardless of whether any such damages

are characterized as direct or indirect), each of which is and all of which are hereby excluded by

agreement of the Collateral Agent, the Purchase Money Notes Guarantor and Debtor, regardless

of whether the party against whom such damages may be claimed has been advised of the

possibility of any such damages, unless (in each case) such losses are incurred by the party

OHS East:160711170.11 32
asserting the claim as a direct result of a claim asserted against such party by a third party. For

purposes of this Section 9.2, the following claims shall not constitute claims asserted by a third

party: (i) with respect to Debtor, any claims asserted by (A) the Servicer or any Subservicer, (B)

any Affiliate of Debtor or the Servicer or any Subservicer, and (C) any officer, director,

employee, partner, principal or agent of Debtor or the Servicer or any Subservicer, or any

Affiliate of Debtor or the Servicer or any Subservicer; and (ii) with respect to Collateral Agent,

any claims asserted by any Affiliate or officer, director, employee, partner, principal or agent of

the Collateral Agent, the Purchase Money Notes Guarantor or any Affiliate of any of them.

ARTICLE X
 

Release of Collateral
 

The Purchase Money Notes Guarantor hereby authorizes the Collateral Agent to, and

Collateral Agent agrees that it shall, release its Lien on any Collateral, solely to the extent

necessary, (a) upon a final, nonappealable order of a court of competent jurisdiction permitting

or directing disposition thereof, (b) upon payment of any Loan in full and satisfaction in full of

all of the secured obligations with respect to an Loan or upon receipt of a discounted payoff as

payment in full of an Loan, (c) as is necessary in connection with the foreclosure on an

Mortgaged Property, acceptance of a deed in lieu thereof or modification or restructuring of the

terms thereof, or (d) in connection with Debtor’s sale of an Loan or any Collateral to the extent

permitted under the Transaction Documents, provided, that the proceeds of such sale or

disposition are applied in accordance with the priority of payments set forth in Section 5.1 of the

Custodial and Paying Agency Agreement and the other terms thereof.

ARTICLE XI
 

Liquidation of Loans and Acquired Property
 

Section 11.1 Rights to Liquidate Loans and Collateral. Each of the Initial Member and,

so long as any Purchase Money Note is outstanding and not fully discharged, the Purchase

Money Notes Guarantor shall have the right, exercisable in its sole and absolute discretion, to

require the liquidation and sale, for cash consideration, of any remaining Loans, other Collateral

or Acquired Property held by Debtor or any Ownership Entity at any time after the earlier to

occur of (a) the seventh anniversary of the Closing Date or (b) the date on which the then Unpaid

Principal Balance is ten percent (10%) or less of the Unpaid Principal Balance as of the Cut-Off

Date as set forth on the Loan Schedule.

Section 11.2 Exercise of Rights to Liquidate Loans and Collateral. In order to exercise

its rights under Section 11.1, the Initial Member or, so long as any Purchase Money Note is

outstanding and not fully discharged, the Purchase Money Notes Guarantor shall give notice in

writing to the Collateral Agent, the Custodian/Paying Agent and Debtor (with copies thereof to

the Initial Member or the Purchase Money Notes Guarantor, as applicable), setting forth the date

by which the remaining Loans, other Collateral or Acquired Property are to be liquidated by the

Collateral Agent. Debtor shall, and shall cause the Custodian/Paying Agent to, cooperate and

assist the Collateral Agent with any and all aspects of the liquidation of the remaining Loans,

other Collateral and Acquired Property to the extent reasonably requested by the Collateral

OHS East:160711170.11 33
Agent. In the event Debtor or any Affiliate thereof desires to bid to acquire the remaining Loans,

other Collateral or Acquired Property, then the Collateral Agent shall be entitled to liquidate the

remaining Loans, other Collateral and Acquired Property in its discretion. In the event the

Collateral Agent undertakes to liquidate the remaining Loans, other Collateral or Acquired

Property pursuant to this Section 11.2, the proceeds thereof shall be applied on the Distribution

Date following any such liquidation in accordance with the priority of payments set forth in

Section 5.1 of the Custodial and Paying Agency Agreement and the other terms thereof;

provided, however, that, notwithstanding such priority of payments, no portion of such proceeds

shall be paid pursuant to Section 5.1(a)(vii) of the Custodial and Paying Agency Agreement until

the Secured Obligations have been repaid in full.

ARTICLE XII
 

Collateral Agent
 

Section 12.1 Appointment and Authorization of Collateral Agent. The Purchase Money

Notes Guarantor hereby irrevocably appoints, designates and authorizes the Receiver to act as

the Collateral Agent pursuant to this Agreement to act as the agent of (and to hold any security

interest created by the Collateral Documents for and on behalf of or on trust for) the Purchase

Money Notes Guarantor and each other Secured Party for purposes of acquiring, holding and

enforcing any and all Liens on the Collateral granted by any Grantor to secure any of the Secured

Obligations, together with such powers and discretion as are reasonably incidental thereto. In

this capacity, the Collateral Agent (and any co-agents, sub-agents and attorneys-in-fact appointed

by the Collateral Agent for purposes of holding or enforcing any Lien on the Collateral (or any

portion thereof) granted pursuant to the Collateral Documents, or for exercising any rights and

remedies thereunder at the direction of the Collateral Agent), shall be entitled to the benefits of

all provisions of this Article XII as though such co-agents, sub-agents and attorneys-in-fact were

the Collateral Agent hereunder. Notwithstanding any provision to the contrary contained

elsewhere herein or in any other Ancillary Document, the Collateral Agent shall have no duties

or responsibilities, except those expressly set forth herein, nor shall the Collateral Agent have or

be deemed to have any fiduciary relationship with any Secured Party or participant of a Secured

Party, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall

be read into this Agreement or any other Ancillary Document or otherwise exist against the

Collateral Agent. Without limiting the generality of the foregoing sentence, the use of the term

“agent” herein and in the other Transaction Documents with reference to the Collateral Agent is

not intended to connote any fiduciary or other implied (or express) obligations arising under

agency doctrine of any applicable Law. Instead, such term is used merely as a matter of market

custom, and is intended to create or reflect only an administrative relationship between

independent contracting parties.

Section 12.2 Delegation of Duties. The Collateral Agent may execute any of its duties

under this Agreement or any other Collateral Document (including for purposes of holding or

enforcing any Lien on the collateral (or any portion thereof) granted under the Collateral

Documents or of exercising any rights and remedies thereunder) by or through agents, subagents, employees or attorneys-in-fact as shall be deemed necessary by the Collateral Agent and

shall be entitled to advice of counsel and other consultants or experts concerning all matters

pertaining to such duties. The Collateral Agent shall not be responsible for the negligence or

OHS East:160711170.11 34
misconduct of any agent or sub-agent or attorney-in-fact that it selects in the absence of gross

negligence or willful misconduct (as determined in the final judgment of a court of competent

jurisdiction).

Section 12.3 Liability of Collateral Agent. Neither the Collateral Agent, nor any of its

Affiliates or officers, directors, employees, agents, sub-agents or attorneys-in-fact of any of them

shall (a) be liable for any action taken or omitted to be taken by any of them under or in

connection with this Agreement or any other Ancillary Document or the transactions

contemplated hereby (except for its own gross negligence or willful misconduct, as determined

by the final judgment of a court of competent jurisdiction, in connection with its duties expressly

set forth herein), or (b) be responsible in any manner to any Secured Party for any recital,

statement, representation or warranty made by any Grantor or any officer thereof, contained

herein or in any other Ancillary Document, or in any certificate, report, statement or other

document referred to or provided for in, or received by the Collateral Agent under or in

connection with, this Agreement or any other Ancillary Document, or the validity, effectiveness,

genuineness, enforceability or sufficiency of this Agreement or any other Ancillary Document,

or the perfection or priority of any Lien or security interest created or purported to be created

under the Collateral Documents, or for any failure of any Grantor or any other party to any

Ancillary Document to perform its obligations hereunder or thereunder.

Section 12.4 Reliance by Collateral Agent.

(a) The Collateral Agent shall be entitled to rely, and shall be fully protected

in relying, upon any writing, communication, signature, resolution, representation, notice,

consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, electronic

mail message, statement or other document or conversation believed by it to be genuine and

correct and to have been signed, sent or made by the proper Person or Persons, and upon advice

and statements of legal counsel (including counsel to Debtor), independent accountants and other

experts selected by the Collateral Agent. The Collateral Agent shall be fully justified in failing

or refusing to take any action under any Collateral Document unless it shall first receive such

advice or concurrence of the Controlling Party as it deems appropriate. The Collateral Agent

shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement

or any other Collateral Document in accordance with a request or consent of the Controlling

Party and such request and any action taken or failure to act pursuant thereto shall be binding

upon all the Secured Parties.

(b) The Purchase Money Notes Guarantor, by its execution of this Agreement,

shall be deemed to have consented to, approved or accepted or to be satisfied with, each

document or other matter required to be consented to or approved by or acceptable or

satisfactory to the Collateral Agent unless the Collateral Agent shall have received notice from

Purchase Money Notes Guarantor prior to the proposed Closing Date specifying its objection

thereto.

Section 12.5 Liability of Collateral Agent. The Collateral Agent shall not be deemed to

have knowledge or notice of the occurrence of any Default or Event of Default, unless the

Collateral Agent shall have received written notice from a Grantor or any Secured Party referring

to this Agreement, describing such Default or Event of Default and stating that such notice is a

OHS East:160711170.11 35
“notice of default.” The Collateral Agent will notify the Purchase Money Notes Guarantor of its

receipt of any such notice. The Collateral Agent shall take such action with respect to any Event

of Default as may be directed by the Controlling Party in accordance with Article V; provided,

however, that unless and until the Collateral Agent has received any such direction, the

Collateral Agent may (but shall not be obligated to) take such action, or refrain from taking such

action, with respect to such Event of Default as it shall deem advisable or in the best interest of

the Secured Parties.

Section 12.6 Successor Collateral Agent.

The Collateral Agent may resign as the Collateral Agent upon thirty (30) days’ notice to

the Purchase Money Notes Guarantor and Debtor; provided, however, that the prior written

consent of the Purchase Money Notes Guarantor and Debtor will be required prior to the

effectiveness of any such resignation. If Collateral Agent resigns under this Agreement, the

Controlling Party, with the written consent of Debtor, shall appoint a successor collateral agent

for the Secured Parties. If no successor collateral agent is appointed prior to the effective date of

the resignation of the Collateral Agent, the retiring Collateral Agent may appoint, after

consulting with the Purchase Money Notes Guarantor and Debtor, a successor collateral agent.

Upon the acceptance of its appointment as successor collateral agent hereunder, the Person

acting as such successor agent shall succeed to all the rights, powers and duties of the retiring

Collateral Agent and the term “Collateral Agent” shall mean such successor collateral agent, and

the retiring Collateral Agent’s appointment, powers and duties as the Collateral Agent shall be

terminated.

ARTICLE XIII
 

Miscellaneous
 

Section 13.1 Attorney-in-Fact. Each Grantor hereby constitutes and appoints the

Collateral Agent the true and lawful attorney-in-fact of such Grantor, with full power and

authority in the place and stead of such Grantor and in the name of such Grantor, Collateral

Agent or otherwise, subject to the terms of this Agreement and applicable Law, to enforce all

rights, interests and remedies of such Grantor with respect to the Collateral; provided, however,

that the Collateral Agent shall not exercise any of the aforementioned rights unless an Event of

Default has occurred and is continuing. This power of attorney is a power coupled with an

interest and shall be irrevocable until the termination of this Agreement in accordance with the

terms hereof; provided, however, that nothing in this Agreement shall prevent such Grantor

from, prior to the exercise by the Collateral Agent of any of the aforementioned rights, utilizing

the Collateral to transact Grantor ordinary course business operations.

Section 13.2 No Petition. Each of the Collateral Agent and the Purchase Money Notes

Guarantor hereby covenants and agrees that it will not at any time institute against Debtor, or

join in any institution against Debtor of, any bankruptcy, reorganization, arrangement,

insolvency or liquidation proceeding, or other proceedings under any United States federal or

state bankruptcy or similar law in connection with any obligation relating to any Purchase

Money Note, the Purchase Money Notes Guaranty or this Agreement.

OHS East:160711170.11 36
Section 13.3 Reimbursement of Expenses. Except as prohibited by Law, if at any time

the Collateral Agent or the Purchase Money Notes Guarantor employs counsel in connection

with the creation, perfection, preservation, or release of the security interest of the Collateral

Agent in the Collateral or the enforcement of any of the Collateral Agent’s, or the Purchase

Money Notes Guarantor’s rights or remedies hereunder, all of the Collateral Agent’s and the

Purchase Money Notes Guarantor’s attorneys’ fees arising from such services and all other

expenses, costs, or charges relating thereto shall become part of the Secured Obligations secured

hereby and be paid by Debtor on demand.

Section 13.4 Termination of Security Interest. Upon the satisfaction and discharge in

full of the Secured Obligations, the security interest and all other rights granted hereby shall

terminate and all rights to the Collateral shall revert to Debtor. Upon any such satisfaction, and

discharge of the Secured Obligations, the Collateral Agent (a) upon the written request of Debtor

shall promptly execute and deliver all such documentation, Uniform Commercial Code

termination statements and instruments as are necessary to release the Liens created pursuant to

this Agreement and to terminate this Agreement, and (b) agrees, at the reasonable request of

Debtor, to furnish, execute and deliver such documents, instruments, certificates, notices or

further assurances as Debtor may reasonably request as necessary or desirable to effect such

termination and release, all at Debtor’s sole cost and expense.

Section 13.5 Indemnification.

(a) Each Grantor shall indemnify and hold harmless the Collateral Agent, the

Purchase Money Notes Guarantor and each of their respective Affiliates, and their respective

officers, directors, employees, partners, principals, agents and contractors (the “Indemnified

Parties”), from and against any losses, damages, liabilities, costs and expenses (including

reasonable attorneys’ fees and litigation and similar costs, and other out-of-pocket expenses

incurred in investigating, defending, asserting or preparing the defense or assertion of any of the

foregoing), deficiencies, claims, interest, awards, judgments, penalties and fines (collectively,

“Losses”) arising out of or resulting from (i) any breach by any Grantor or any of its Affiliates or

any of their respective officers, directors, employees, partners, principals, agents or contractors

(including the Servicer and any Subservicer) (collectively, “Related Entities”) of any of their

respective obligations under or covenants or agreements contained in this Agreement, the

Collateral Documents or the Servicing Agreement (including any claim asserted by the Collateral

Agent, the Purchase Money Notes Guarantor against Debtor to enforce its rights pursuant to

Article V), or any third-party allegation or claim based upon facts alleged that, if true, would

constitute such a breach, or (ii) any gross negligence, bad faith or willful misconduct of any of

the Related Entities (including any act or omission constituting theft, embezzlement, breach of

trust or violation of any Law). Such indemnity shall survive the termination of this Agreement.

In order for an Indemnified Party to be entitled to any indemnification provided for under this

Agreement in respect of, arising out of or involving a Loss or a claim or demand made by any

Person against the Indemnified Party (a “Third Party Claim”), such Indemnified Party shall

deliver notice thereof to Debtor promptly after receipt by such Indemnified Party of written

notice of the Third Party Claim, describing in reasonable detail the facts giving rise to any claim

for indemnification hereunder, the amount of such claim (if known) and such other information

with respect thereto as is available to the Indemnified Party and as Debtor may reasonably

request. The failure or delay to provide such notice, however, shall not release any Grantor from

OHS East:160711170.11 37
any of its obligations under this Section 13.5 except to the extent that it is materially prejudiced

by such failure or delay.

(b) If for any reason the indemnification provided for herein is unavailable or

insufficient to hold harmless the Indemnified Parties, Debtor shall contribute to the amount paid

or payable by the Indemnified Parties as a result of the Losses of the Indemnified Parties in such

proportion as is appropriate to reflect the relative fault of the Indemnified Parties, on the one

hand, and Debtor or any Subsidiary Grantor (including the Servicer and any Subservicer), on the

other hand in connection with a breach of Debtor’s or any Subsidiary Grantor’s obligations under

this Agreement.

(c) If Debtor confirms in writing to the Indemnified Party within fifteen (15)

days after receipt of a Third Party Claim Debtor’s responsibility to indemnify and hold harmless

the Indemnified Party therefor, Debtor may elect to assume control over the compromise or

defense of such Third Party Claim at Debtor’s own expense and by Debtor’s own counsel, which

counsel must be reasonably satisfactory to the Indemnified Party; provided, however, that (i) the

Indemnified Party may, if such Indemnified Party so desires, employ counsel at such

Indemnified Party’s own expense to assist in the handling (but not control the defense) of any

Third Party Claim; (ii) Debtor shall keep the Indemnified Party advised of all material events

with respect to any Third Party Claim; (iii) Debtor shall obtain the prior written approval of the

Indemnified Party before ceasing to defend against any Third Party Claim or entering into any

settlement, adjustment or compromise of such Third Party Claim involving injunctive or similar

equitable relief being imposed upon any Indemnified Party or any of its or his Affiliates; and (iv)

no Grantor will, without the prior written consent of each Indemnified Party, settle or

compromise or consent to the entry of any judgment in any pending or threatened action in

respect of which indemnification may be sought hereunder (whether or not any such Indemnified

Party is a party to such action), unless such settlement, compromise or consent by its terms

obligates such Grantor to satisfy the full amount of the liability in connection with such Third

Party Claim and includes an unconditional release of the Indemnified Party from all liability

arising out of such Third Party Claim.

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

Debtor shall not be entitled to control (and if the Indemnified Party so desires, it shall have sole

control over) the defense, settlement, adjustment or compromise of (but Debtor shall

nevertheless be required to pay all Losses incurred by the Indemnified Party in connection with

such defense, settlement or compromise): (i) any Third Party Claim that seeks an order,

injunction or other equitable relief against the Indemnified Party or any of its Affiliates; (ii) any

action in which both Debtor or any Subsidiary Grantor (or any Affiliate) and the Indemnified

Party are named as parties and either Debtor or such Subsidiary Grantor (or such Affiliate) or the

Indemnified Party determines with advice of counsel that there may be one or more legal

defenses available to it that are different from or additional to those available to the other party

or that a conflict of interest between such parties may exist in respect of such action; and (iii) any

matter that raises or implicates any issue relating to any power, right or obligation of the FDIC

under any Law. If Debtor elects not to assume the compromise or defense against the asserted

liability, fails to timely and properly notify the Indemnified Party of its election as herein

provided, or, at any time after assuming such defense, fails to diligently defend against such

Third Party Claim in good faith, the Indemnified Party may pay, compromise or defend against

OHS East:160711170.11 38
such asserted liability (but Debtor shall nevertheless be required to pay all Losses incurred by the

Indemnified Party in connection with such defense, settlement or compromise). In connection

with any defense of a Third Party Claim (whether by Debtor, a Subsidiary Grantor or the

Indemnified Party), all of the parties hereto shall, and shall cause their respective Affiliates to,

cooperate in the defense or prosecution thereof and to in good faith retain and furnish such

records, information and testimony, and attend such conferences, discovery proceedings,

hearings, trials and appeals, as may be reasonably requested by a party hereto in connection

therewith.

Section 13.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY

AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK,

EXCLUDING ANY CONFLICT OF LAWS RULE OR PRINCIPLE THAT MIGHT REFER

THE GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW

OF ANOTHER JURISDICTION. NOTHING IN THIS AGREEMENT SHALL REQUIRE

ANY UNLAWFUL ACTION OR INACTION BY ANY PARTY TO THIS AGREEMENT.

Section 13.7 Jurisdiction, Venue and Service.

(a) Each Grantor, for itself and its Affiliates, hereby irrevocably and

unconditionally:

(i) consents to the jurisdiction of the United States District Court for the

Southern District of New York and to the jurisdiction of the United States District Court for the

District of Columbia for any suit, action or proceeding against it or any of its Affiliates

commenced by the Collateral Agent, the Purchase Money Notes Guarantor or the Initial Member

arising out of, relating to, or in connection with this Agreement or any other Ancillary

Document, and waives any right to:

(A) remove or transfer such suit, action or proceeding to any

court or dispute-resolution forum other than the court in which the Collateral Agent, the

Purchase Money Notes Guarantor or the Initial Member, as applicable, files the suit, action or

proceeding without the consent of the Collateral Agent, the Purchase Money Notes Guarantor or

the Initial Member, as applicable;

(B) assert that venue is improper in the United States District

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

Columbia; or

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

District of New York or the United States District Court for the District of Columbia is an

inconvenient forum.

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

New York for any suit, action or proceeding against it or any of its Affiliates commenced by the

Collateral Agent, the Purchase Money Notes Guarantor or the Initial Member arising out of,

relating to, or in connection with this Agreement or any other Ancillary Document (other than

the LLC Operating Agreement), and waives any right to:

OHS East:160711170.11 39
(A) remove or transfer such suit, action or proceeding to any

other court or dispute-resolution forum without the consent of the Collateral Agent, the Purchase

Money Notes Guarantor or the Initial Member, as applicable;

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

State of New York; or

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

an inconvenient forum.

(iii) agrees to bring any suit, action or proceeding by any Grantor or its

Affiliates against the Collateral Agent, the Purchase Money Notes Guarantor or the Initial

Member arising out of, relating to, or in connection with this Agreement or any Ancillary

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

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

or transfer such suit, action or proceeding to any other court or dispute-resolution forum without

the consent of the Collateral Agent, the Purchase Money Notes Guarantor or the Initial Member,

as applicable, and agrees to consent thereafter to transfer of the suit, action or proceeding to

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

District Court for the District of Columbia at the option of the Collateral Agent, the Purchase

Money Notes Guarantor or the Initial Member, as applicable;

(iv) agrees, if the United States District Court for the Southern District

of New York and the United States District Court for the District of Columbia both lack

jurisdiction to hear a suit, action or proceeding falling within Section 13.7(a)(iii), to bring that

suit, action or proceeding in only the Supreme Court of the State of New York, and waives any

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

forum without the consent of the Collateral Agent, the Purchase Money Notes Guarantor or the

Initial Member, as applicable; and

(v) agrees that any final judgment entered against it in any suit, action

or proceeding falling within Section 13.7(a) may be enforced in any court of competent

jurisdiction.

(b) Each Grantor, on behalf of itself and its Affiliates, hereby irrevocably and

unconditionally agrees that any final judgment entered against it in any suit, action or proceeding

falling within Section 13.7(a) may be enforced in any court of competent jurisdiction;

(c) Subject to the provisions of Section 13.7(d), each Grantor, on behalf of

itself and its Affiliates, Collateral Agent, Purchase Money Notes Guarantor and Initial Member

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

in any suit, action or proceeding pursuant to Section 13.7(a) or Section 13.7(b) may be effected

by the mailing of copies thereof by registered or certified mail, postage prepaid, to it at its

address for notices pursuant to Section 13.9 (with copies to such other Persons as specified

therein); provided, however, that nothing contained in this Section 12.3(c) shall affect the right

of any party to serve process in any other manner permitted by Law;

OHS East:160711170.11 40
(d) Nothing in this Section 13.7 shall constitute consent to jurisdiction in any

court by the FDIC, other than as expressly provided in Section 13.7(a)(iii) and Section

13.7(a)(iv), or in any way limit the FDIC’s right to remove, transfer, seek to dismiss, or

otherwise respond to any suit, action, or proceeding against it in any forum.

Section 13.8 Waiver of Jury. EACH GRANTOR (ON BEHALF OF ITSELF AND IT

AFFILIATES), THE COLLATERAL AGENT, THE PURCHASE MONEY NOTES

GUARANTOR AND THE INITIAL MEMBER HEREBY IRREVOCABLY AND

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

ANY DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT AND AGREES

THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT

A JURY.

Section 13.9 Notices. All notices, requests, demands, and other communications

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

Agreement shall be in writing and shall be mailed or delivered to the applicable address or

electronic mail address of the parties specified below for such Person or to such other address or

electronic mail address as shall be designated by such party in a notice to the other parties. All

such notices and other communications shall be deemed to be given or made upon the earlier to

occur of (i) actual receipt (or refusal thereof) by the relevant party hereto and (ii) (A) if delivered

by hand or by nationally recognized courier service, when signed for (or refused) by or on behalf

of the relevant party hereto; (B) if delivered by mail, four (4) Business Days after deposit in the

mails, postage prepaid; and (C) if delivered by electronic mail, when delivered. In no event shall

a voice mail message be effective as a notice, communication or confirmation hereunder.

Address for notices or communications to Debtor and any Subsidiary Grantor:

2010-1 CRE Venture, LLC
 

2450 Broadway, 6th Floor
 

Santa Monica, CA 90404
 

Attention: Paul Fuhrman
 

Email Address:
 

with a copy to:

Colony Capital, LLC
 

660 Madison Avenue
 

New York, NY 10065
 

Attention: Ron Sanders
 

Email Address:
 

Address for notices or communications to any of the Collateral Agent, the Initial

Member and the Purchase Money Notes Guarantor:

Manager, Capital Markets & Resolutions
 

c/o Federal Deposit Insurance Corporation
 

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

OHS East:160711170.11 41
Washington, D.C. 20429-0002
 

Attention: Ralph Malami
 

Email Address: RMalami@fdic.gov
 

with a copy to:

Senior Counsel

FDIC Legal Division

Litigation and Resolutions Branch, Receivership Section

Special Issues Unit

3501 Fairfax Drive (Room E-7056)

Arlington, Virginia 22226

Attention: David Gearin

Email Address: DGearin@fdic.gov

Section 13.10 Assignment. This Agreement shall inure to the benefit of and be binding

on and enforceable against successors and assigns of each Grantor, the Collateral Agent, the

Purchase Money Notes Guarantor and the Initial Member; provided, however, that no Grantor

shall assign its rights hereunder in whole or in part without the prior written consent of the

Collateral Agent and the Purchase Money Notes Guarantor.

Section 13.11 Entire Agreement. This Agreement contains the entire agreement among

the Grantors, the Collateral Agent, the Purchase Money Notes Guarantor and the Initial Member

with respect to the subject matter hereof and supersedes any and all other prior agreements,

whether oral or written, provided that any Confidentiality Agreement between the FDIC and

the Private Owner or any Affiliates of the Private Owner (including by way of joinder) with

respect to the transaction that is the subject of this Agreement and the Transaction

Documents shall remain in full force and effect to the extent provided therein, except that the

Debtor’s rights under Article VI of the Contribution Agreement shall not be deemed a repurchase

option for purposes of Section 2 of any such Confidentiality Agreement.

Section 13.12 Amendments and Waivers. No provision of this Agreement may be

amended or waived except in writing executed by all of the parties to this Agreement, except for

Article II, any provision of which may be amended and waived in writing executed by Debtor

and Purchase Money Notes Guarantor.

Section 13.13 Confidentiality. Each Grantor shall keep confidential and shall not

divulge to any party, without the prior written consent of the Collateral Agent, the Purchase

Money Notes Guarantor and the Initial Member, any information pertaining to this Agreement,

except as required pursuant to this Agreement and except to the extent that it is necessary and

appropriate for such Grantor to do so in working with legal counsel, auditors, taxing authorities,

regulatory authorities or any other Governmental Authority; provided, however, that, to the

extent that disclosure should be required by law, rule, regulation (including any securities listing

requirements or the requirements of any self-regulatory organization), subpoena, or in

connection with any legal or regulatory proceeding (including in connection with or pursuant to

any action, suit, subpoena, arbitration or other dispute resolution process or other legal

proceedings, whether civil or criminal, and including before any court or administrative or

OHS East:160711170.11 42
legislative body), such Grantor will use all reasonable efforts to maintain confidentiality and will

(unless otherwise prohibited by law) notify the Collateral Agent, the Purchase Money Notes

Guarantor and the Initial Member within one (1) Business Day after its knowledge of such

legally required disclosure so that the Collateral Agent, the Purchase Money Notes Guarantor

and/or the Initial Member may seek an appropriate protective order. Notice shall be by

telephone, by email and in writing. In the absence of a protective order or waiver, such Grantor

may make such required disclosure if, in the written opinion of its outside counsel (which

opinion shall be provided to the Collateral Agent, the Purchase Money Notes Guarantor and the

Initial Member prior to disclosure pursuant to this Section 13.13), failure to make such disclosure

would subject such Grantor to liability for contempt, censure or other legal penalty or liability.

Section 13.14 Reinstatement. This Agreement shall continue to be effective or be

automatically reinstated, as the case may be, if at any time payment pursuant to this Agreement

is rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy,

reorganization, liquidation of any Grantor or upon the dissolution of, or appointment of any

intervenor or conservator or, or trustee or similar official for, any Grantor or any substantial part

of any Grantor’s assets, or otherwise, all as though such payments had not been made, and

Debtor shall pay the Collateral Agent or the Purchase Money Notes Guarantor on demand all

reasonable costs and expenses (including reasonable fees of counsel) incurred by the Collateral

Agent or the Purchase Money Notes Guarantor in connection with such rescission or restoration.

Section 13.15 Interpretation; No Presumption. Headings are intended solely for

convenience of reference and shall not affect the meaning or interpretation of the provisions of

this Agreement. This Agreement shall be construed fairly as to each party hereto and if at any

time any such term or condition is desired or required to be interpreted or construed, no

consideration shall be given to the issue of who actually prepared, drafted or requested any term

or condition of this Agreement or any agreement or instrument subject hereto.

Section 13.16 Severability. Any provision of this Agreement that is prohibited or

unenforceable in any jurisdiction shall be ineffective, but such ineffectiveness shall be limited as

follows: (a) if such provision is prohibited or unenforceable in such jurisdiction only as to a

particular Person or Persons and/or under any particular circumstance or circumstances, such

provision shall be ineffective, but only in such jurisdiction and only with respect to such

particular Person or Persons and/or under such particular circumstance or circumstances, as the

case may be; (b) without limitation of clause (a), such provision shall in any event be ineffective

only as to such jurisdiction and only to the extent of such prohibition or unenforceability, and

such prohibition or unenforceability in such jurisdiction shall not invalidate or render

unenforceable such provision in any other jurisdiction; and (c) without limitation of clauses (a)

or (b), such ineffectiveness shall not invalidate any of the remaining provisions of this

Agreement. Without limitation of the preceding sentence, it is the intent of the parties to this

Agreement that in the event that in any court proceeding, such court determines that any

provision of this Agreement is prohibited or unenforceable in any jurisdiction (because of the

duration or scope (geographic or otherwise) of such provision, or for any other reason) such

court shall have the power to, and shall, (p) modify such provision (including without limitation,

to the extent applicable, by limiting the duration or scope of such provision and/or the Persons

against whom, and/or the circumstances under which, such provision shall be effective in such

jurisdiction) for purposes of such proceeding to the minimum extent necessary so that such

OHS East:160711170.11 43
provision, as so modified, may then be enforced in such proceeding and (q) enforce such

provision, as so modified pursuant to clause (p), in such proceeding. Nothing in this Section

13.16 is intended to, or shall, limit (x) the ability of any party to this Agreement to appeal any

court ruling or the effect of any favorable ruling on appeal or (y) the intended effect of Section

13.6.

Section 13.17 Survival. All obligations made herein shall survive the execution and

delivery of this Agreement. Except as otherwise provided in this Agreement or implied by

applicable law, the obligations of each Grantor set forth in this Agreement shall terminate only

upon the satisfaction and discharge in full of the Secured Obligations.

Section 13.18 No Third Party Beneficiaries. This Agreement is made for the sole benefit

of the Collateral Agent, the Purchase Money Notes Guarantor, the Secured Parties and the

Grantors and their respective successors and permitted assigns, and no other Person or Persons

(including Borrowers or any co-lender or other Person with any interest in or liability under any

of the Loans) shall have any rights or remedies under or by reason of this Agreement.

Section 13.19 Counterparts; Facsimile Signatures. This Agreement may be executed in

two (2) or more counterparts, each of which shall be deemed an original but all of which together

shall constitute but one and the same agreement. This Agreement and any amendments hereto,

to the extent signed and delivered by facsimile or other electronic means, shall be treated in all

manner and respects as an original agreement and shall be considered to have the same binding

legal effect as if it were the original signed version thereof delivered in person. No signatory to

this Agreement shall raise the use of a facsimile machine or other electronic means to deliver a

signature or the fact that any signature or agreement was transmitted or communicated through

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

enforceability of a contract and each such Person forever waives any such defense.

[Remainder of Page Intentionally Left Blank]

OHS East:160711170.11 44



SCHEDULE 1

LIST OF VARIOUS FAILED FINANCIAL INSTITUTIONS

Bank Name City State Fund Closing Date

Silver State Bank Henderson NV 10013 September 5, 2008

First Georgia Community

Bank Jackson GA 10025 December 5, 2008

Bank of Clark County Vancouver WA 10029 January 16, 2009

Ocala National Bank Ocala FL 10032 January 30, 2009

First City Bank Stockbridge GA 10047 March 20, 2009

Omni National Bank Atlanta GA 10048 March 27, 2009

New Frontier Bank Greeley CO 10050 April 10, 2009

American Southern Bank Kennesaw GA 10053 April 24, 2009

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

First Bank of Idaho Ketchum ID 10055 April 24, 2009

Michigan Heritage Bank Farmington Hills MI 10056 April 24, 2009

America West Bank Layton UT 10057 May 1, 2009

Citizens Community Bank Ridgewood NJ 10058 May 1, 2009

Silverton Bank Atlanta GA 10059 May 1, 2009

Westsound Bank Bremerton WA 10060 May 8, 2009

Bank of Lincolnwood Lincolnwood IL 10064 June 5, 2009

Community Bank of West

Georgia Villa Rica GA 10068 June 26, 2009

Integrity Bank Jupiter FL 10095 July 31, 2009

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

Community Bank of Arizona Phoenix AZ 10101 August 14, 2009

Union Bank Chandler AZ 10102 August 14, 2009

Corus Bank Chicago IL 10117 September 11, 2009

Schedule 1-1

OHS East:160711170.11
SCHEDULE 2
 

UNDERLYING LOAN SCHEDULE

[To Be Attached]

Schedule 2-1
 

OHS East:160711170.11
EXHIBIT A

FORM OF JOINDER AGREEMENT

THIS JOINDER AGREEMENT, dated as of _________ __, 20__, is delivered

pursuant to Section 8.12 of the Reimbursement, Security and Guaranty Agreement, dated as of

the 2nd day of July, 2010, by and among 2010-1 CRE Venture, LLC, a Delaware limited liability

company, each of the other entities that becomes a party thereto pursuant to Section 8.12 thereof,

Federal Deposit Insurance Corporation, acting in its corporate capacity, Federal Deposit

Insurance Corporation, as Receiver for various failed financial institutions listed on Schedule 1

hereto (in such capacity, the “Receiver”), as Collateral Agent for the Secured Parties, and, solely

for purposes of Sections 4.1(e), 4.1(j), 5.1(a)(vi) – (ix), 5.1(b), 5.1(c), 5.5, 11.1, 11.2 and 13.6 –

13.19 thereof, Federal Deposit Insurance Corporation, as Receiver, as Initial Member under the

LLC Operating Agreement (the “Reimbursement, Security and Guaranty Agreement”).

Capitalized terms used herein without definition are used as defined in the Reimbursement,

Security and Guaranty Agreement.

By executing and delivering this Joinder Agreement, the undersigned, as provided

in Section 8.12 of the Reimbursement, Security and Guaranty Agreement, hereby becomes a

party to the Reimbursement, Security and Guaranty Agreement as a Grantor thereunder with the

same force and effect as if originally named as a Grantor therein and, without limiting the

generality of the foregoing, as collateral security for the prompt and complete payment and

performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured

Obligations of the undersigned, hereby mortgages, pledges and hypothecates to the Collateral

Agent for the benefit of the Secured Parties, and grants to the Collateral Agent for the benefit of

the Secured Parties a lien on and security interest in, all of its right, title and interest in, to and

under the Collateral of the undersigned and expressly assumes all obligations and liabilities of a

Grantor thereunder. The undersigned hereby agrees to be bound as a Grantor for the purposes of

the Reimbursement, Security and Guaranty Agreement.

The undersigned hereby represents and warrants that each of the representations

and warranties contained in Article VII of the Reimbursement, Security and Guaranty

Agreement applicable to it is true and correct in all material respects with respect to it on and as

the date hereof as if made on and as of such date.

OHS East:160711170.11
IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to

be duly executed and delivered as of the date first above written.

[ADDITIONAL GRANTOR]

By:

Name:

Title:

ACKNOWLEDGED AND AGREED as of the date

first above written:

FEDERAL DEPOSIT INSURANCE

CORPORATION, as receiver for various failed

financial institutions listed on Schedule 1 to the

Reimbursement, Security and Guaranty Agreement,

as Collateral Agent

By: _________________________________________

Name: Ralph Malami

Title: Attorney-in-Fact

A-2

OHS East:160711170.11