Execution Version 

AMENDED AND RESTATED 

LIMITED LIABILITY COMPANY OPERATING AGREEMENT 

SIG RCRS C MF 2023 VENTURE LLC 

Dated as of December 15, 2023 

SIG RCRS C MF 2023 Venture LLC 

Amended and Restated LLC Operating Agreement 

Version 08-2022 (Standard) 
 

TABLE OF CONTENTS 

Page 

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

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

1.2. Construction .............................................................................................................2 

ARTICLE II Organization of the Company...............................................................................2 

2.1. Formation; Continuation and Admission of Members ............................................2 

2.2. Name........................................................................................................................2 

2.3. Organizational Contributions and Related Actions .................................................3 

2.4. Registered Office; Chief Executive Office ..............................................................3 

2.5. Purpose; Duration ....................................................................................................3 

2.6. Special Purpose Entity; Limitations on Company’s Activities................................3 

2.7. Ratification of Certain Actions ................................................................................6 

ARTICLE III Management and Operations of the Company......................................................6 

3.1. Management of the Company’s Affairs...................................................................6 

3.2. Removal of Manager................................................................................................8 

3.3. Employees and Services ..........................................................................................8 

3.4. Restrictions on Manager and Private Owner ...........................................................9 

3.5. Related Party Agreements......................................................................................12 

3.6. Real Property .........................................................................................................12 

3.7. Custodian and Paying Agent..................................................................................12 

3.8. Relationships with Borrowers, etc .........................................................................13 

3.9. No Conflicting Obligations....................................................................................13 

3.10. Compliance with Law............................................................................................13 

3.11. No Bankruptcy Filing ............................................................................................14 

3.12. No Liens.................................................................................................................14 

3.13. Remedies Upon a Default or Event of Default; Security Interest..........................14 

3.14. Put/Call Right of Initial Member ...........................................................................22 

3.15. No ERISA Plan Assets...........................................................................................24 

ARTICLE IV Membership Interests; Rights and Duties of, and Restrictions on, 

Members............................................................................................................24 

4.1. General...................................................................................................................24 

4.2. LLC Interests .........................................................................................................24 

4.3. Filings; Duty of Members to Cooperate ................................................................25 

4.4. Certain Restrictions and Requirements..................................................................26 

4.5. No Fiduciary Duties or Liability of Initial Member ..............................................26 

4.6. Indemnification......................................................................................................27 

ARTICLE V Capital Contributions; Excess Working Capital Advances ................................31 

5.1. Initial Capital Contributions ..................................................................................31 

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5.2. Capital Contributions for Working Capital Reserve Account ...............................32 

5.3. Capital Contributions for Capital Improvement Account......................................32 

5.4. [Intentionally Omitted] ..........................................................................................32 

5.5. Excess Working Capital Advances........................................................................32 

ARTICLE VI Capital Accounts; Allocations; Priority of Payments; Distributions ..................33 

6.1. Capital Accounts....................................................................................................33 

6.2. Allocations to Capital Accounts ............................................................................33 

6.3. Tax Allocations......................................................................................................35 

6.4. Determinations by Tax Representative..................................................................36 

6.5. Priority of Payments ..............................................................................................36 

6.6. Distributions...........................................................................................................37 

ARTICLE VII Accounting, Reporting, Taxation, Business Plans and Verification...................38 

7.1. Fiscal Year .............................................................................................................38 

7.2. Maintenance of Books and Records ......................................................................38 

7.3. Financial Statements ..............................................................................................38 

7.4. Additional Reporting and Notice Requirements; Audits.......................................38 

7.5. Designation of Tax Representative........................................................................39 

7.6. Tax Information .....................................................................................................39 

7.7. Business Plans........................................................................................................40 

7.8. Supplemental Plans for Risk Category C/D Loans (Strategic Plan 

Reports and Critical Strategy Resolution Business Plans) ....................................43 

7.9. Changes to Business Plans and Supplemental Plans .............................................44 

7.10. Initial Member Engagement of Contractors ..........................................................44 

ARTICLE VIII Restrictions on Disposition of Private Owner Interest .......................................44 

8.1. Limitations on Disposition of Private Owner Interest ...........................................44 

8.2. Change of Control..................................................................................................45 

8.3. Additional Provisions Relating to Permitted Dispositions ....................................45 

8.4. Effect of Permitted Dispositions............................................................................46 

8.5. Effect of Prohibited Dispositions...........................................................................47 

8.6. Distributions After Disposition..............................................................................47 

8.7. Transfers by Initial Member ..................................................................................47 

8.8. Resignation; Dissolution........................................................................................48 

8.9. Applicable Law Withdrawal..................................................................................48 

ARTICLE IX Dissolution and Winding-Up of the Company ...................................................49 

9.1. Dissolution .............................................................................................................49 

9.2. Winding-Up Procedures.........................................................................................49 

9.3. Termination of the Company.................................................................................52 

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9.4. Post-Termination Matters ......................................................................................52 

ARTICLE X Qualified Transferees..........................................................................................53 

10.1. Qualified Transferees.............................................................................................53 

ARTICLE XI Manager Liability................................................................................................57 

11.1. Liability of Manager ..............................................................................................57 

ARTICLE XII Servicing of Assets .............................................................................................57 

12.1. Servicing ................................................................................................................57 

12.2. [Intentionally Omitted] ..........................................................................................58 

12.3. Servicing of Assets ................................................................................................58 

12.4. Removal of Servicer, Subservicers and JDC Contractors .....................................60 

12.5. Interim Management Fee and Interim Servicing Fee; Management Fee...............64 

12.6. Working Capital Expenses.....................................................................................66 

12.7. Deposit and Use of Asset Proceeds .......................................................................67 

12.8. Collection Account ................................................................................................68 

12.9. Distribution Account..............................................................................................68 

12.10. [Intentionally Omitted] ..........................................................................................68 

12.11. Working Capital Reserve Account ........................................................................68 

12.12. [Intentionally Omitted] ..........................................................................................70 

12.13. Capital Improvement Account...............................................................................70 

12.14. Uses of Company Funds; Development ................................................................70 

12.15. Certain Servicing and Asset Administration Decisions.........................................70 

12.16. Management and Disposition of Collateral ...........................................................71 

12.17. [Intentionally Omitted] ..........................................................................................71 

12.18. [Intentionally Omitted] ..........................................................................................71 

12.19. Releases of Collateral ............................................................................................71 

12.20. Clean-Up Call Rights.............................................................................................71 

12.21. Certain Transfer Obligations..................................................................................72 

12.22. Seller Financing .....................................................................................................72 

12.23. Use of the FDIC's Name and FDIC Legal Powers ................................................72 

ARTICLE XIII Miscellaneous .....................................................................................................73 

13.1. Common Terms .....................................................................................................73 

13.2. Waiver of Rights of Partition and Dissolution.......................................................74 

13.3. Entire Agreement; Other Agreements ...................................................................74 

13.4. Third Party Beneficiaries .......................................................................................74 

13.5. Expenses ................................................................................................................75 

13.6. Waivers and Amendments .....................................................................................75 

13.7. Successors and Assigns..........................................................................................76 

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13.8. Power of Attorney..................................................................................................76 

13.9. Governing Law ......................................................................................................76 

13.10. Jurisdiction; Venue and Service.............................................................................77 

13.11. Private Owner Acknowledgement .........................................................................77 

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ANNEX I Member Schedule ..............................................................................................I-1 

ANNEX II Reporting and Access Schedule........................................................................II-1 

ANNEX III Insurance Schedule ......................................................................................... III-1 

ANNEX IV Servicing Addendum ......................................................................................IV-1 

ANNEX V Permitted Capital Improvement Addendum.................................................... V-1 

EXHIBIT A Certificate of Formation................................................................................... A-1 

EXHIBIT B Form of Monthly Report...................................................................................B-1 

EXHIBIT C Form of Assignment and Assumption Agreement ...........................................C-1 

EXHIBIT D Form of Letter of Credit................................................................................... D-1 

EXHIBIT E Form of Assignment of JDC Agreement ..........................................................E-1 

EXHIBIT F Form of Cash Flow Projections........................................................................F-1 

EXHIBIT G Form of Post-Termination LPOA.................................................................... G-1 

EXHIBIT H Form of Loan Performance Report.................................................................. H-1 

EXHIBIT I Loan Criteria Matrix ..........................................................................................I-1 

EXHIBIT J Form of Strategic Plan Report ...........................................................................J-1 

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SIG RCRS C MF 2023 VENTURE LLC 

AMENDED AND RESTATED 

LIMITED LIABILITY COMPANY OPERATING AGREEMENT 

THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATING 

AGREEMENT (as the same may be amended or modified from time to time in accordance with 

the terms hereof, this “Agreement”), is made and entered into as of the 15th day of December, 

2023, by and among the Federal Deposit Insurance Corporation in its capacity as the Receiver (the 

“Initial Member”), Sig-23 Private Owner LLC, a Delaware limited liability company (the 

“Private Owner”), and SIG RCRS C MF 2023 Venture LLC, a Delaware limited liability 

company (the “Company”). 

WHEREAS, on December 4, 2023, the Initial Member formed the Company as a Delaware 

limited liability company and was admitted as its initial, and sole, member (owning a 100.0% 

limited liability company interest), and the Initial Member and the Company entered into the 

Original LLC Operating Agreement; 

WHEREAS, pursuant to the Transfer Agreement, the Initial Member (as the Transferor) 

has contributed to the Company, and the Company accepted such contribution from the Initial 

Member, all of the Initial Member’s right, title and interest in and to the Assets, and assumed the 

Obligations; 

WHEREAS, following the execution of the Original LLC Operating Agreement and the 

closing of the transactions contemplated by the Transfer Agreement, the Initial Member agreed, 

pursuant to the terms of the Private Owner Interest Sale Agreement, to sell to the Private Owner, 

effective as of the Closing Date, an LLC Interest representing a 5.0% equity interest in the 

Company; 

WHEREAS, after giving effect to the transactions contemplated by the Private Owner 

Interest Sale Agreement, as of the Closing Date the Initial Member and the Private Owner will 

own all the issued and outstanding limited liability company interests in the Company; 

WHEREAS, the Manager has agreed to cause the Company to establish the Working 

Capital Reserve Account to provide the Company with capital to fund Working Capital Expenses, 

and the Private Owner and the Initial Member have agreed to initially fund the Working Capital 

Reserve Account; 

WHEREAS, the Manager has agreed to cause the Company to establish the Capital 

Improvement Account for purposes of holding funds for Permitted Capital Improvements, and the 

Private Owner and the Initial Member have agreed to initially fund the Capital Improvement 

Account; and 

WHEREAS, the parties desire to amend and restate the Original LLC Operating Agreement 

in its entirety in order to reflect the admission of the Private Owner as a member of the Company 

and to set forth the terms and conditions on which the Company will be owned and operated; 

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NOW, THEREFORE, in consideration of the premises and the other covenants and 

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

sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 

ARTICLE I 

Certain Definitions 

1.1. Definitions. This Agreement constitutes the “limited liability company agreement” 

(as such term is defined in the Act) of the Company. For purposes of this Agreement, all terms 

used in this Agreement (including in the preamble and recitals hereto), that are defined in, or by 

reference in, that certain Agreement of Common Terms and Definitions dated as of the date hereof 

among the parties hereto and certain others (as the same may be amended from time to time) (the 

“Agreement of Common Terms and Definitions”), and are not otherwise defined herein, have 

the meanings and definitions given, or referred to, in the Agreement of Common Terms and 

Definitions. 

1.2. Construction. The Rules of Construction apply to this Agreement. 

ARTICLE II 

Organization of the Company 

2.1. Formation; Continuation and Admission of Members. 

(a) On December 4, 2023, the Receiver caused the Certificate of Formation of 

the Company, in the form attached as Exhibit A hereto (the “Certificate”), to be filed in the office 

of the Secretary of State of the State of Delaware. The Certificate may not be amended except to 

change the registered agent or office of the Company. 

(b) The Company will continue as a limited liability company under the Act 

and in accordance with the further terms and provisions of this Agreement. 

(c) The Initial Member previously was, and the Private Owner hereby agrees 

to be, and is, admitted as a member of the Company such that, as of the Closing Date, the Initial 

Member and the Private Owner are the only members of the Company. Until the Company is 

dissolved pursuant to Section 9.1, and subject to the rights of the Initial Member under 

Section 13.6(c), the Company must at all times have two, and only two, members. 

2.2. Name. 

(a) The name of the Company is SIG RCRS C MF 2023 Venture LLC. 

(b) The Business will be conducted only under the name of the Company or 

such other name or names that comply with applicable Law as the Members may select from time 

to time. 

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2.3. Organizational Contributions and Related Actions. 

(a) Prior to the execution of this Agreement, pursuant to, and as set forth in, the 

Transfer Agreement, the Initial Member (as the Transferor) made a Capital Contribution to the 

Company in the form of an undivided interest in each Asset (the “Initial Member Capital 

Contribution”). 

(b) Contemporaneously with the execution of this Agreement, pursuant to the 

terms of the Private Owner Interest Sale Agreement, the Private Owner is acquiring from the Initial 

Member a 5.0% limited liability company interest in the Company for the Private Owner Interest 

Sale Price in accordance with the terms thereof. 

(c) Upon the consummation of the transactions contemplated in Sections 2.3(a) 

and (b), the Private Owner will own a 5.0% limited liability company interest in the Company and 

the Initial Member will own a 95.0% limited liability company interest in the Company. 

2.4. Registered Office; Chief Executive Office. The Company must maintain a 

registered office and registered agent in Delaware to the extent required by the Act, which office 

and agent will be as determined by the Manager from time to time and which will be set forth in 

the Certificate. Initially (and until otherwise determined by the Manager), the registered office in 

Delaware will be, and the name and address of the Company’s registered agent in Delaware will 

be, as specified in the Certificate as originally filed, which may be amended by the Manager from 

time to time as necessary to correctly reflect the name and address of the Company’s registered 

agent. The chief executive office of the Company will be located at 220 East 42nd Street, 16th 

Floor, New York, New York 10017, or such other place in the continental United States as may 

be determined by the Manager from time to time. 

2.5. Purpose; Duration. 

(a) The sole purpose of the Company is to engage in and conduct the Business, 

directly or, to the extent specifically authorized in this Agreement, indirectly through other 

Persons. The Company shall not form or have any Subsidiaries other than Ownership Entities or 

as otherwise authorized in this Agreement. The Company will have all powers necessary, 

desirable or convenient, or which the Manager deems necessary, desirable or convenient, and may 

engage in any and all activities necessary, desirable or convenient, or which the Manager deems 

necessary, desirable or convenient, in each case to accomplish the purposes of the Company or 

consistent with the furtherance thereof. 

(b) Subject to Section 9.1, the Company will continue in existence perpetually. 

2.6. Special Purpose Entity; Limitations on Company’s Activities. Except to the extent 

expressly permitted by this Agreement or the other Transaction Documents, the following will 

govern for so long as the Company is in existence: 

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(a) Subject to Section 9.1, the Manager must cause the Company to do or cause 

to be done all things necessary to preserve and keep in full force and effect its existence, rights 

(charter and statutory) and franchises, and the Manager also must cause the Company to: 

(i) maintain financial statements separate from any Affiliate; provided, 

however, that each Ownership Entity and TRS Entity will be consolidated in the financial 

statements of the Company; and provided, further, that the assets, liabilities and results of 

operations of the Company may be included in the consolidated financial statements of its parent 

or ultimate parent in accordance with GAAP; 

(ii) at all times hold itself out to the public as a legal entity separate from 

the Members and any other Person; 

(iii) file its own Tax returns, as may be required under applicable Law, 

and pay any Taxes so required to be paid under applicable Law; 

(iv) pay its own liabilities only out of its own funds; 

(v) allocate, fairly and reasonably, shared expenses, including any 

overhead for shared office space; 

(vi) use separate stationery, invoices and checks; 

(vii) correct any known misunderstanding regarding its separate identity; 

(viii) maintain adequate capital in light of its contemplated business 

purpose, transactions and liabilities, if any; and 

(ix) at all times constitute a Special Purpose Entity. 

(b) Neither the Manager nor the Private Owner may cause or permit a 

Dissolution Event or an Insolvency Event to occur with respect to the Company or any of its 

Subsidiaries to which the Initial Member has not provided its prior written consent, and neither the 

Manager nor the Private Owner may, without the prior written consent of the Initial Member, cause 

or permit the Company or any of its Subsidiaries to: 

(i) except as contemplated hereby or by the other Transaction 

Documents, hold out its credit or assets as being available to satisfy the obligations of others, or 

become bound by any Guarantee of, or otherwise obligate itself with respect to, the Debts of any 

other Person, including any Affiliate; provided, that, where reasonably required in the best interest 

of the Company (and consistent with the Servicing Standard), the Manager may cause the 

Company to Guarantee obligations of any Ownership Entity and any Ownership Entity to 

Guarantee obligations of a TRS Entity, so long as the Manager delivers to the Initial Member both 

(x) prior written notice setting forth in reasonable detail the proposed Guarantee and reasons for 

the same and (y) a copy of such Guarantee promptly following the same being granted; 

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(ii) except as contemplated hereby or by the other Transaction 

Documents, pledge its assets for the benefit of any other Person, make any loans or advances to 

any other Person, or encumber or permit any Lien (other than Permitted Liens) to be placed on the 

Assets, the Collateral, or the proceeds therefrom; provided that, the Company may (x) invest its 

funds in interest bearing accounts held by any bank that is not its Affiliate and otherwise in 

accordance with the terms of this Agreement and the Custodial and Paying Agency Agreement 

and (y) make advances in accordance with Article XII (and, as applicable, the Servicing 

Addendum and the Permitted Capital Improvement Addendum); 

(iii) own any assets, or engage in any business, unrelated to the Business; 

(iv) incur, create or assume any Debt other than any Excess Working 

Capital Advance or as otherwise expressly permitted hereby or by the other Transaction 

Documents to which the Initial Member is a party; 

(v) make or permit to remain outstanding any loan or advance to, or own 

or acquire any stock or securities of, any Person (other than an Ownership Entity or, subject to 

Section 5.2(g) of the Servicing Addendum, a TRS Entity), except that the Company may invest in 

those investments permitted under the Transaction Documents and may make any advance 

required or expressly permitted to be made pursuant to any provisions of this Agreement (including 

Article XII, the Servicing Addendum and the Permitted Capital Improvement Addendum) or the 

other Transaction Documents and permit the same to remain outstanding in accordance with such 

provisions; 

(vi) acquire any LLC Interest (or any portion of any LLC Interest); 

(vii) consolidate or merge with or into any other Person, convert into any 

other type of Person (including into a limited liability company organized under the Laws of a 

jurisdiction other than the State of Delaware), transfer, domesticate or continue the Company or 

any Subsidiary of the Company pursuant to § 18-213 of the Act, or take any other action for which 

the consent of some or all of the members of a limited liability company is (unless otherwise 

provided in the limited liability company agreement of such limited liability company) required 

by the Act; 

(viii) convey or transfer its properties and assets as an entirety or 

substantially as an entirety to any Person, transfer its ownership interests, or engage in any 

dissolution or liquidation, except in each case to the extent such activities are expressly permitted 

pursuant to any provision of this Agreement or the other Transaction Documents (and subject to 

obtaining any approvals required hereunder or thereunder, as applicable); 

(ix) except as contemplated or permitted by this Agreement, form, 

acquire or hold any Subsidiary other than an Ownership Entity or TRS Entity or form any trust for 

the purpose of holding Assets for the benefit of the Company; 

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(x) enter into any Modification of, or breach or violate any 

representation, warranty, covenant or agreement contained in, any Transaction Document; or 

(xi) take or fail to take any other action under the Transaction 

Documents requiring written consent of the Initial Member without obtaining such prior written 

consent. 

(c) The failure of the Company, any Member or the Manager to comply with 

any of the foregoing covenants or any other covenants contained in this Agreement will not affect 

the status of the Company as a separate legal entity or the limited liability of the Members. 

2.7. Ratification of Certain Actions. Prior to the Closing Date, the Company previously 

approved (i) each of the Transaction Documents, (ii) the issuance of the LLC Interests, and (iii) the 

taking of all action reasonably necessary to effect the foregoing approvals, including the execution 

and performance of this Agreement and the other Transaction Documents (the “Previously 

Approved Matters”). The Previously Approved Matters, and all actions taken by the Company 

in furtherance of the Previously Approved Matters, are hereby ratified, approved and confirmed in 

their entirety by each Member and the Manager is hereby authorized and directed to execute and 

deliver, for and on behalf of the Company, any and all documents as may now or hereafter be 

reasonably required in order to effect the Previously Approved Matters. 

ARTICLE III 

Management and Operations of the Company 

3.1. Management of the Company’s Affairs. 

(a) Subject to the terms and conditions of this Agreement, the management of 

the Company will be vested exclusively in the Person appointed from time to time hereunder as 

the “Manager” of the Company (the “Manager”), which Manager may, but is not required to, be 

a Member. Effective as of the Closing Date, the Private Owner is hereby appointed as the 

Manager. Subject to the terms and conditions of this Agreement, the Manager will have full and 

exclusive power and discretion to, and will, manage the business and affairs of the Company in 

accordance with this Agreement. The Private Owner may not resign as the Manager, may not 

Dispose of or delegate, in whole or in part, its rights, responsibilities or duties as the Manager to 

any other Person, and will serve as Manager until such time as (i) the Private Owner Interest is 

Disposed of in accordance with the terms of this Agreement and the transferee is admitted as a 

member of the Company and Successor to the Private Owner, in which case the transferee Member 

will, effective upon such Disposition, be appointed as the “Manager” to the extent the Private 

Owner held such role immediately prior to such Disposition; (ii) the Private Owner is removed as 

Manager by the Initial Member and replaced in accordance with Section 3.2 or Section 12.4 below; 

or (iii) the Company is dissolved, and the business and affairs of the Company are wound up, in 

accordance with the terms of this Agreement, with the Manager having fully and finally performed 

its obligations in relation thereto. The Manager must devote such time to the affairs of the 

Company as is necessary to manage the Company as set forth in this Agreement. Without 

limitation of the foregoing, the Manager must cooperate with the Tax Representative in all respects 

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as reasonably requested by the Tax Representative from time to time, in connection with the Tax 

Representative’s performance of its obligations under this Agreement. The Private Owner hereby 

expressly acknowledges that (x) as it relates to its role as the Manager, this Agreement constitutes 

a personal services contract between the Private Owner and the Company, and (y) except as may 

otherwise be expressly specified herein, it will not be entitled to any salary, fees, reimbursement 

of costs or expenses, or other compensation with respect to its service as the Manager hereunder 

(including with respect to the Manager’s Servicing obligations under Article XII (and the Servicing 

Addendum)). 

(b) Except as otherwise specifically provided in this Agreement and without 

limitation of the authority, duties (including fiduciary duties) and functions of the Manager 

expressly specified under any other provision of this Agreement, the authority, duties (including 

fiduciary duties) and functions of the Manager will be identical to the authority, duties (including 

fiduciary duties) and functions of the board of directors and the officers of a corporation organized 

under the Delaware General Corporation Law (and not electing to be governed by subchapter XIV 

thereof). The Manager will have no authority to take or authorize the taking of any action in 

contravention of any express term of this Agreement. 

(c) No Person dealing with the Company or the Manager will be required to 

determine, and any such Person may conclusively assume and rely upon, the authority of the 

Manager to execute any instrument or make any undertaking on behalf of the Company. No Person 

dealing with the Company or the Manager will be required to determine any facts or circumstances 

bearing upon the existence of such authority. Without limitation of the foregoing, any Person 

dealing with the Company or the Manager is entitled to rely upon a certificate signed by the 

Manager as to: 

(i) the identity of the Members; 

(ii) the existence or non-existence of any fact or facts that constitute a 

condition precedent to acts by the Manager or are in any other manner germane to the affairs of 

the Company; 

(iii) the identity of Persons who are authorized to execute and deliver 

any instrument or document of or on behalf of the Company; or 

(iv) any act or failure to act by the Company or any other matter 

whatsoever involving the Company or the Members. 

(d) Notwithstanding anything to the contrary contained in this Agreement, the 

parties hereto acknowledge and agree that: 

(i) nothing contained in this Agreement creates any fiduciary duty or 

similar obligation owed by or on behalf of the Initial Member; 

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(ii) each of the Private Owner and the Company hereby expressly 

waives any fiduciary duties that may otherwise be deemed to be owed by the Initial Member to 

the Private Owner or the Company; and 

(iii) the Initial Member will be entitled to act and exercise any right of 

approval or consent that it has under this Agreement in its interest, in its sole and absolute 

discretion, without regard to and against the interests of the Private Owner or the Company. 

(e) Unless and to the extent reimbursement is due under an express provision 

hereof or of another Transaction Document or pursuant to a Related Party Agreement permitted 

pursuant to Section 3.5, the Company will not be liable for, and the Manager, the Private Owner 

and their respective Affiliates shall not seek reimbursement from the Company or any Member 

(other than, as to any such Member that is an Affiliate of the Person so seeking reimbursement, as 

may separately be agreed by such Member, without recourse to or reimbursement from the 

Company) for, any expenses or costs incurred after the formation of the Company by the Manager, 

the Private Owner or their respective Affiliates on behalf of or for the benefit of the Company. 

(f) This Section 3.1 is subject to any express requirement of direct Initial 

Member consent set forth elsewhere in this Agreement, including in Sections 2.6, 3.4, 3.8, 3.13, 

5.2, 5.3, 5.5, 8.1, 8.2, 8.8(a), 9.1, 12.1, 12.7(d), 12.11(b), 12.13, 12.14, 12.22, 13.6, and 13.10 

hereof, and Sections 2.2, 2.5, 4 and 5.4 of the Servicing Addendum. Any purported action by the 

Company or the Manager requiring the consent of the Initial Member under this Agreement will 

be null and void ab initio unless and until the Initial Member’s prior written consent is obtained. 

3.2. Removal of Manager. Upon an Event of Default (and so long as the Private Owner 

is then the Manager), the Initial Member may remove the Private Owner as the Manager and 

appoint a successor Manager in its sole discretion in accordance with Section 12.4, whereupon 

such successor Manager will immediately succeed to all, or such portion as the Initial Member and 

successor Manager agree, of the rights, powers, duties and obligations of the “Manager” hereunder, 

and the predecessor Manager must promptly take such actions as may be reasonably requested by 

the Initial Member to facilitate the transition to such successor Manager. 

3.3. Employees and Services. After the Closing Date, the Manager must cause to be 

made available to the Company, from time to time, employees, facilities and support services in a 

manner and to an extent reasonably required for it to fulfill its duties and obligations as the 

Manager and for the day-to-day operation of the Business. If necessary to meet the foregoing 

requirements, the Manager must enter into contractual arrangements to secure employees, facilities 

and support services from third parties (including its Affiliates); provided, however, that the 

Manager must at all times provide for the Servicing (other than Asset Management retained by the 

Manager in accordance with Section 12.3(b) or engagement of a JDC Contractor in accordance 

with Section 12.3(c)) to be conducted through the Servicer under contract with the Manager (in its 

individual capacity) in accordance with Article XII and the Servicing Addendum and the 

safekeeping of the Notes and other Asset Documents by a Custodian under contract with the 

Company in accordance with the provisions of Section 3.7 below. Notwithstanding anything to 

the contrary contained in this Section 3.3, (i) the Company shall not have any employees, (ii) no 

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employees of the Manager or any third party (including any Affiliate of the Manager) will be 

deemed to be employees of the Company, (iii) any contractual relationships entered into by the 

Manager to provide employees, facilities or support services to the Company shall be relationships 

between the third parties (or Affiliates and the Manager) and the Manager (and not the Company) 

and shall not relieve the Manager of its obligations or any liability hereunder, and (iv) no expenses 

incurred to secure or maintain employees (or independent contractors performing relevant services 

for the day-to-day operation of the Company in lieu of performance of the same by such 

employees), facilities or support services will be an expense of the Company unless the same is 

expressly reimbursable by the Company pursuant to the provisions of Article XII (and the 

Servicing Addendum) or is otherwise expressly set forth in this Agreement or in any other 

Transaction Documents to be an expense of the Company. 

3.4. Restrictions on Manager and Private Owner. Neither the Private Owner nor, 

notwithstanding any delegation of authority to it hereunder, the Manager may or will in any event 

(x) do, or cause the Company to do, any act or take, or cause the Company to take, any action in 

contravention of any Law, or (y) take any of the following actions on behalf of, or with respect to, 

the Company, or otherwise cause the Company to take any of the following actions (or, as to clause 

(xvi) below, take, or permit or suffer any other applicable Person to take, any action set forth 

therein), in the case of all of the foregoing without the prior written approval of the Initial Member, 

which approval may be withheld or conditioned in the sole and absolute discretion of the Initial 

Member: 

(i) admitting additional or substitute members of the Company, except 

in accordance with Article VIII; 

(ii) changing the legal form of the Company to other than a limited 

liability company; 

(iii) taking any action that would cause the Company to be treated as 

other than a partnership for federal income tax purposes; 

(iv) taking any action that would make it impossible to carry on the 

ordinary business of the Company; 

(v) selling or otherwise transferring (or permitting a Borrower or 

Obligor to sell or otherwise transfer) to any Person that is not a Permitted Buyer, (A) during a 

period of 2 years from the Closing Date, any Loan, or (B) during a period of 5 years from the 

Closing Date, (1) any Loan that, as of the date of such sale or transfer or at any time during the 

preceding two year period, is or was classified either as Risk Category C or D Loan, or (2) any 

Risk Category C or D Acquired REO Property, provided, that the restriction contained in this 

clause (B) will, as to any such Risk Category C or D Acquired REO Property, cease to apply (in 

advance of the expiration of such 5 year period) if (and only when) (x) a Capital Improvement 

Plan with respect to such Acquired REO Property is approved and the corresponding Permitted 

Capital Improvements contemplated in such Capital Improvement Plan are completed or (y) the 

Manager determines that the relevant deficiencies that resulted in such Acquired REO Property 

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failing to have a Risk Category A/B can be corrected or resolved with the permitted use of 

Servicing Expenses, and thereafter all work and/or actions are completed (with the use of 

Servicing Expenses) in a manner determined by the Manager, in accordance with the Servicing 

Standard, to be sufficient to correct or resolve such deficiencies; 

(vi) incurring any liability on behalf of the Company (other than 

liabilities to trade creditors in the ordinary course of the Business and such other liabilities as may 

be permitted by this Agreement or any other Transaction Document); 

(vii) possessing or transferring Company Property for other than 

Company purposes; 

(viii) taking any action that would require (or refusing to take any action 

where the result of such refusal would so require) the Company to register as an “investment 

company” (as defined in the Investment Company Act); 

(ix) selling or otherwise transferring (or permitting the sale or other 

transfer by a Borrower or Obligor of) any Asset, Collateral or Acquired Property (or any portion 

thereof) to the Manager, the Private Owner, the Servicer, any Subservicer or any Affiliate (other 

than the Company or an Ownership Entity) of any of the foregoing or of the Company; 

(x) except as expressly permitted pursuant to Section 12.22, financing 

(or accepting consideration other than cash payable in full, subject to customary post-closing 

purchase price adjustments and prorations, at the closing of) the sale or other transfer of any Asset, 

Collateral or Acquired Property (or any portion thereof); 

(xi) selling any Asset, Collateral or Acquired Property (or any portion 

thereof) in a transaction that provides for any recourse against the Company, the Initial Member 

or the FDIC, in any capacity, or against the LLC Interest held by the Initial Member or any share 

of the Asset Proceeds allocable to the Initial Member, other than contractual obligations solely of 

the Company with respect to customary post-closing purchase price adjustments and prorations; 

(xii) disbursing, or causing the disbursement of, funds from the 

Collection Account, the Distribution Account, the Working Capital Reserve Account, the Capital 

Improvement Account or other accounts created under this Agreement, the Custodial and Paying 

Agency Agreement or any Servicing Agreement other than in accordance with (and without 

violation of any requirement contained in) the provisions of this Agreement, the Custodial and 

Paying Agency Agreement, and the applicable Servicing Agreement; 

(xiii) advancing additional funds that would increase the Unpaid Principal 

Balance of any Asset other than (A) Required Funding Draws, (B) Permitted Capital Improvement 

Expenses, or (C) Servicing Expenses to the extent that capitalizing such Servicing Expenses is 

permitted (or with respect to Acquired Property would have been permitted prior to the conversion 

of the Loan to Acquired Property) under the applicable Asset Documents; 

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(xiv) reimbursing the Manager for any expense or cost incurred by (or 

paid by) any Affiliate of any of the Company, the Private Owner or the Manager, the Servicer or 

any Subservicer (provided that this clause (xiv) does not prohibit reimbursing the Manager for 

Servicing Expenses or Pre-Approved Charges solely as a result of the Manager being an Affiliate 

of the Company, the Servicer or any Subservicer); 

(xv) taking any action or omitting to take any action that causes the 

Company to breach any representation, warranty, covenant or other agreement contained herein or 

in any other Transaction Document (for avoidance of doubt, nothing in this clause (xv) will require 

the Private Owner or the Manager to make any capital contribution or advances which are not 

otherwise required of it under the express terms of this Agreement or any other Transaction 

Document); 

(xvi) other than through the Company (and the Ownership Entities), 

acquiring (or permitting or suffering any Specified Parent, or any Affiliate of any of the Company, 

the Manager, the Private Owner or any Specified Parent to acquire) any interest whatsoever in or 

relating to any Asset or Collateral (including, in the case of any Loan Participation, any interest in 

the underlying loan or collateral with respect thereto); 

(xvii) taking any action for which the consent of some or all of the 

members of a limited liability company is (unless otherwise provided in the limited liability 

company agreement of such limited liability company) required by the Act; 

(xviii) accepting any assets (including any additional collateral) other than 

cash and Permitted Investments as payment or consideration for any amendment, compromise, 

settlement, partial payment or payment in full of any Loan or other payment obligation owing to 

the Company or any Ownership Entity in respect of the Assets; 

(xix) opening or maintaining (for the Company or any Ownership Entity) 

any bank account other than (A) the Accounts required or expressly permitted to be maintained 

with the Paying Agent pursuant to terms of this Agreement and the Paying Agency Agreement, 

(B) the Ownership Entity Accounts in accordance with Section 5 of the Servicing Addendum, (C) 

applicable Escrow Accounts as required or permitted pursuant to Transaction Documents, and (D) 

subject to compliance with the requirements in the proviso below, accounts (1) acquired by an 

applicable Ownership Entity in connection with the foreclosure or other exercise of remedies with 

respect to Collateral, and (2) that are local operating accounts opened in the name of the Ownership 

Entity that will contain only funds derived from the Acquired Property held by such Ownership 

Entity to the extent reasonably determined by the Manager to be necessary, in accordance with the 

Servicing Standard, and in the best interests of the Company; provided, that for any account opened 

or acquired pursuant to the forgoing clause (D) (and as a condition to the same being permitted 

thereunder), (1) the Manager must provide notice to the Initial Member promptly upon acquiring 

or opening such account including the purpose of the account, (2) the Manager must provide 

monthly statements with respect to such account so long as such account remains open, (3) all 

Asset Proceeds in such account must be remitted to the Collection Account in accordance with 

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Section 12.7, and (4) if and when reasonably practicable, the Manager must replace such account 

with an Ownership Entity Account; or 

(xx) during a period of 5 years after the Closing Date, offering or 

agreeing to any principal forgiveness (including any discounted payoff) in connection with any 

Risk Category C or D Loan, other than pursuant to the Loan Modification Program. 

3.5. Related Party Agreements. Neither the Company nor any of its Subsidiaries shall 

enter into any Related Party Agreement, except as may otherwise be expressly provided herein or 

in any other Transaction Document to which the Initial Member is a party or as may be approved 

by both Members. 

3.6. Real Property. The Company shall not take title in its own name to any Acquired 

REO Property, and any acquisition or ownership of any such Acquired REO Property will be 

subject to Section 5 of the Servicing Addendum and the relevant terms of the Servicing Agreement. 

3.7. Custodian and Paying Agent. The Manager must cause the Company to retain and 

enter into and, at all times, be a party to a written custodial agreement with a Custodian (as selected 

by the Company in accordance herewith), and such Custodian will at all times have custody and 

possession of the Notes and other Custodial Documents (subject to the applicable provisions herein 

and in such custodial agreement with respect to the release thereof). The Manager must also cause 

the Company to retain and enter into and, at all times, be a party to a written paying agency 

agreement with a Paying Agent (as selected by the Company in accordance herewith), which 

Paying Agent will receive and distribute Asset Proceeds in accordance with such paying agency 

agreement. Such Custodian and Paying Agent must be (and remain) a Qualified Custodian and 

Paying Agent acceptable to and approved by the Initial Member, such approval not to be 

unreasonably withheld, delayed or conditioned. Except as may be determined by the Initial 

Member in connection with an exercise of its rights under Section 13.6 below, the Custodian and 

the Paying Agent shall be a single (and the same) Person; and the custodial and paying agency 

functions shall be performed on the terms set forth in the Custodial and Paying Agency Agreement 

(which shall be in a form acceptable to the Initial Member). At no time shall the Company have 

more than one Custodian or one Paying Agent, who may be (and, to the extent specified in the 

preceding sentence, shall be) the same Person. The fees and expenses paid to the Custodian and 

Paying Agent shall be no more than market rates and the Custodian and Paying Agent may be 

terminated by the Company upon no more than thirty days notice provided to such Custodian and 

Paying Agent, without cause under the Custodial and Paying Agency Agreement. For purposes 

of clarification, the parties acknowledge that, as of the Closing Date, the Custodial and Paying 

Agency Agreement delivered on the Closing Date is acceptable to the Initial Member, including 

as to the fees and expenses expressly set forth therein. In the event that the Manager removes, or 

causes the Company (or the Servicer or any Subservicer) to remove, any Notes or other Custodial 

Documents from the possession of the Custodian (which may be done only in accordance with the 

relevant Custodial and Paying Agency Agreement), (i) any loss or destruction of or damage to 

such Notes or Custodial Documents will be the personal liability of the Manager (who, along with 

the relevant Servicer or Subservicer(s), will be responsible for safeguarding such Notes and 

Custodial Documents when not in possession of the Custodian), and (ii) such Notes must be 

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returned to the Custodian within the time provided under the applicable Uniform Commercial 

Code to maintain the perfection of the secured party’s security interest therein by possession. If 

any Notes or other Custodial Documents are removed in connection with the modification, 

restructuring or foreclosure of a Loan, the modified or restructured Notes and other Custodial 

Documents removed in connection therewith must be returned to the Custodian as soon as possible 

following the completion of the restructuring, modification or foreclosure (and, in any event, in 

accordance with clause (ii) of the immediately preceding sentence). Notwithstanding the 

foregoing, if any Notes or other Custodial Documents are retained by the applicable court, the 

Manager must request that the court return (and must cause to be so returned) such Notes and other 

Custodial Documents to the Custodian as soon as possible after they are released by such court. 

The Manager must (i) ensure that the Initial Member receives a copy of each demand, notice or 

other communication given by the Manager (including by the Manager on behalf of the Company) 

under the Custodial and Paying Agency Agreement at the time that such notice or other 

communication is given thereunder and (ii) require that a copy of each demand, notice or other 

communication given to the Manager (including to the Manager as the manager of the Company) 

under the Custodial and Paying Agency Agreement is to be given to the Initial Member at the time 

that such notice or other communication is given thereunder. 

3.8. Relationships with Borrowers, etc. Except as otherwise expressly consented to in 

writing by the Initial Member (and subject in such case to the terms and conditions of any such 

express consent), none of the Private Owner, the Manager or any Affiliate of either shall, at any 

time, (i) be an Affiliate of or a partner or joint venturer with any Borrower or Obligor, (ii) be an 

agent of any Borrower or Obligor, or allow any Borrower or Obligor to be an agent of the Manager 

or the Company, or (iii) except as is otherwise contemplated by the Company’s ownership of the 

Assets and its right to hold (including through Ownership Entities) Acquired Property, have any 

interest whatsoever in any Borrower, Obligor or other obligor with respect to any Asset or any of 

the Collateral. If at any time any relationship or interest described in the foregoing sentence exists 

with respect to any Loan (or related Collateral) or Acquired Property, then, except as otherwise 

expressly provided in the applicable Initial Member consent (if any) and without limitation of any 

other rights or remedies of the Initial Member if such consent was not obtained, the Initial Member 

will have the right, in its sole discretion, to (a) in the case of a Loan, require the Private Owner to 

cause (and make or cause to be made available to the applicable Borrower sufficient funds for) 

such Loan to be repaid in full in cash, without discount, waiver or use of Asset Proceeds or 

Company funds, within thirty days after the date on which the Initial Member provides written 

notice to the Private Owner requiring such repayment, and/or (b) in the case of a Loan or Acquired 

Property, impose such restrictions on authority of the Manager, the Servicer or any Subservicer 

with respect to such Asset as may be determined appropriate by the Initial Member. 

3.9. No Conflicting Obligations. The Manager must cause the Company to comply with 

the Transaction Documents in accordance with their terms, and shall not, at any time, enter into or 

become a party to any agreement that would conflict with the terms of this Agreement. 

3.10. Compliance with Law. The Manager must, and must cause the Company to, at all 

times, (i) comply with applicable Law in connection with the performance or exercise of its rights, 

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powers, duties or obligations under this Agreement, and (ii) without limiting the generality of 

clause (i) and subject to Section 4.3, be duly authorized and qualified to transact any and all 

business to be conducted by it in any state in which an Asset is located and comply with the doing 

business Laws of any such state, in each case described in this clause (ii) to the extent necessary 

to ensure its ability to manage the Assets in accordance with the terms of this Agreement and to 

perform any of its other obligations under this Agreement in accordance with the terms hereof. 

3.11. No Bankruptcy Filing. Neither the Manager nor the Private Owner may cause or 

permit the Company to: (i) file a voluntary petition for bankruptcy, (ii) file a petition or answer 

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

receivership 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 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 (x) a petition filed against it in any proceeding described in clauses 

(i) through (iv), or (y) any order adjudging it bankrupt or insolvent or for relief against it in any 

bankruptcy or Insolvency Proceeding, (vi) allow itself to become unable to pay its obligations as 

they become due, or (vii) institute any proceedings to set aside or void any transfer of an interest 

in property (or to recover the value thereof) or other transaction on the grounds that such transfer 

or other transaction constituted a fraudulent conveyance or a preferential transfer (or on similar 

grounds). 

3.12. No Liens. The Manager shall not (i) cause the Company to place or (ii) permit 

(voluntarily or involuntarily) to be placed, or to exist, any Lien on any of the Assets, the Collateral, 

the Asset Documents, or the Asset Proceeds, except for Permitted Liens. 

3.13. Remedies Upon a Default or Event of Default; Security Interest. 

(a) Upon the occurrence of an Event of Default, in addition to all other remedies 

available hereunder or under the other Transaction Documents upon such an Event of Default, the 

Initial Member is entitled to (in each case as determined by the Initial Member in its sole and 

absolute discretion): 

(i) remove the Private Owner as the Manager or Servicer (and exercise 

other remedies with respect to the Servicing Agreement, any Subservicing Agreement and any 

JDC Agreement) pursuant to Sections 3.2 and 12.4; 

(ii) remove the Private Owner as a Member, subject, if applicable, to 

Section 8.4; 

(iii) purchase (or cause a designee to purchase) the Private Owner 

Interest pursuant to Section 3.14; 

(iv) cause the Private Owner to purchase the Initial Member Interest 

pursuant to Section 3.14; 

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(v) designate itself or any applicable transferee Member as the Manager 

hereunder; and/or 

(vi) with or without notice to or demand upon the Private Owner (except 

as may be required by Law), exercise any or all rights and remedies with respect to the Secured 

Assets and any Qualifying Letter of Credit as may be available under the Transaction Documents, 

applicable Law (including the UCC) or otherwise, specifically including the right (A) to foreclose 

on the Private Owner Interest and transfer such Private Owner Interest to a third party (it being 

agreed that none of the Private Owner, the Manager or any of their Affiliates are permitted to 

participate in any sale of the Private Owner Interest without the prior written consent of the Initial 

Member), (B) to draw upon any Qualifying Letter of Credit, by presenting to the applicable Issuing 

Bank one or more drafts or demands and any other necessary documents, and to receive (in a lump 

sum or in several sums from time to time at the sole discretion of the Initial Member) any or all 

amounts available for drawing under such Qualifying Letter of Credit, (C) to exercise any rights 

under the Private Owner Pledged Account Control Agreement, including the right to assume 

exclusive control over the Private Owner Pledged Account and to cause the funds therein to be 

remitted (in a lump sum or in several sums from time to time at the sole discretion of the Initial 

Member) to or at the direction of the Initial Member, or (D) to cause any or all distributions (or 

other amounts) payable to the Private Owner (including as Manager) pursuant to the Transaction 

Documents to be suspended or remitted to or otherwise at the direction of the Initial Member (and 

deliver to the Paying Agent one or more PO/Manager Distribution Instructions with respect 

thereto). 

(b) Furthermore, upon the occurrence of any Default, whether or not the same 

constitutes an Event of Default, the Initial Member is entitled to (as determined by the Initial 

Member in its sole and absolute discretion) cause any or all distributions (or other amounts) 

payable to the Private Owner (including as Manager) pursuant to the Transaction Documents to 

be suspended or remitted to or otherwise at the direction of the Initial Member for payment of (or 

to be held pending such payment of) Private Owner Obligations pursuant to the terms hereof (and 

the Initial Member has the right to deliver to the Paying Agent one or more PO/Manager 

Distribution Instructions with respect thereto). 

(c) The Initial Member has the right to apply any or all proceeds of the Secured 

Assets or any Qualifying Letter of Credit to payment of the Private Owner Obligations in such 

order, and with such priority, as the Initial Member may determine in its sole discretion. For the 

avoidance of doubt, in the event that the Initial Member determines to exercise its remedies against 

any Secured Assets or any Qualifying Letter of Credit, it will have the absolute right to deduct 

from the proceeds of such exercise of remedies (including proceeds of any foreclosure sale with 

respect to the Private Owner Interest, any drawing on a Qualifying Letter of Credit and any receipt 

of funds from the Private Owner Pledged Account), (i) any Losses arising out of or resulting from 

any Default or Event of Default incurred by the Indemnified Parties, together with all costs and 

expenses (including attorneys’ fees and disbursements) incurred by the Initial Member in 

connection with enforcing its rights and remedies hereunder and under the other Transaction 

Documents, and (ii) any Private Owner Obligations then due and payable (all of the foregoing in 

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each case in such order as the Initial Member may determine in its sole discretion); provided that 

the Initial Member may, in its sole discretion, hold any such proceeds as additional security for 

any existing or future (including contingent) Private Owner Obligations. Without limitation of the 

foregoing, in no event will the Initial Member have any obligation (but it will at all times have the 

right in its sole discretion) to use or apply any proceeds of the Secured Assets toward payment of 

any Private Owner Obligations owing to the Company or any Indemnified Party other than the 

Initial Member (whether or not the same are due and payable), and the Private Owner will remain 

fully obligated to pay and perform all such Private Owner Obligations owing to the Company and 

each such Indemnified Party notwithstanding any such election by the Initial Member to so refrain 

from applying such proceeds toward payment of the same; and, in the event that, for any reasons 

any such proceeds of the Secured Assets are used for payment of any Private Owner Obligations 

owing to the Company, any and all rights of the Private Owner to payments, reimbursements or 

distributions from the Company on account of any such payment to the Company (including rights 

to any repayment of any deemed Excess Working Capital Advances, to the extent any such 

proceeds are used to fund the same), will be considered as part of the Secured Assets and will, to 

the extent paid or payable by the Company, be paid directly to the Initial Member (and the Initial 

Member will have the right to direct the Paying Agent to so remit to the Initial Member any 

applicable distributions or payments by the Paying Agent with respect thereto) to be held and 

applied by the Initial Member as part of the proceeds of the Secured Assets (as collateral for the 

Private Owner Obligations). Any Secured Assets or proceeds thereof as held by the Initial Member 

may be commingled with the Initial Member’s own funds, without any need to pay interest or 

income thereon. Any remaining unapplied proceeds (from an exercise of remedies by the Initial 

Member against the rights of the Private Owner to the Secured Assets or any Qualifying Letter of 

Credit) so held by the Initial Member will be released in accordance with Section 3.13(i) below. 

In any event, the Private Owner will remain liable for any deficiency in payment of the Private 

Owner Obligations. 

(d) This Agreement constitutes a security agreement under applicable Law for 

the benefit of the Initial Member and, in furtherance thereof, the Private Owner (in all of its 

capacities) and the Company (as applicable) will be deemed to have granted, and each does hereby 

grant, to the Initial Member, for itself (and its assignees) and for the further benefit of the 

Indemnified Parties, a valid and continuing first priority Lien on and security interest in all of the 

Private Owner’s right, title and interest, whether now owned or existing, or hereafter acquired or 

arising, in, to or under the Secured Assets, as security for the payment and performance (when 

due) by the Private Owner (including in its roles as the Manager and the Tax Representative) of 

the Private Owner Obligations. For the avoidance of doubt, the parties acknowledge that the 

Secured Assets are not, pursuant to the foregoing, collateral for the separate payment obligations 

of the Company except to the extent that, pursuant to this Agreement or the other Transaction 

Documents, the Private Owner, in any capacity, is required to pay (or advance applicable funds to 

pay) or otherwise bear such obligations (and in such case, such Secured Assets secure such separate 

obligations of the Private Owner). The Private Owner represents, warrants and covenants that it 

owns, and will at all times own, the Secured Assets free and clear of any Liens (other than the Lien 

created hereby), and, upon the filing of a UCC financing statement with respect thereto, as 

applicable, the Initial Member will have a perfected and continuing first priority Lien on and 

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security interest in the Secured Assets (whether now owned or existing, or hereafter acquired or 

arising), as security for the payment and performance (when due) by the Private Owner (including 

in its roles as the Manager and the Tax Representative) of the Private Owner Obligations. 

(e) As additional security for the Private Owner Obligations (and, as applicable, 

as part of the Secured Assets), the Private Owner must deliver on the Closing Date, and at all times 

thereafter cause to be maintained, the Additional Security. In the event that the Private Owner 

determines to fulfill its obligation, either in part or in whole, to provide the Additional Security by 

issuance of a Qualifying Letter of Credit, the Private Owner must cause the issuance and delivery 

to the Initial Member, on the Closing Date, of a single Qualifying Letter of Credit. The Private 

Owner may, on one occasion (and only on one occasion, except as otherwise expressly permitted 

in the definition of LC Reissuance/Extension Failure under the circumstances specified therein), 

make a one-time substitution of either of the forms (whether it be Cash Collateral or a Qualifying 

Letter of Credit) of the Additional Security by substituting, as the case may be, either (x) a 

Qualifying Letter of Credit for Qualifying Cash Collateral, or (y) Qualifying Cash Collateral for a 

Qualifying Letter of Credit; provided, however, that at all times the amount of the Additional 

Security is equal to or greater than the Private Owner Pledged Amount; and provided, further, 

however, the Private Owner must pay to the Initial Member the Additional Security Substitution 

Fee (as a condition to the exercise of such right to make such substitution) and will further solely 

be responsible for any incurred costs of the Initial Member or the Company associated with any 

such substitution of the form of the Additional Security as referenced in this sentence. The Initial 

Member will have the unilateral right to draw on any such Qualifying Letter of Credit and to 

provide instructions to the Paying Agent for the disposition of any Qualifying Cash Collateral, in 

each case without any requirement for any further consent, confirmation or instructions from the 

Private Owner; provided, however, that as between the Initial Member and the Private Owner (and 

without creating any right or obligation of the Paying Agent or any Issuing Bank to refuse to honor, 

or inquire as to the accuracy or sufficiency of, any applicable instructions from the Initial Member), 

the Initial Member agrees that (i) it will not exercise such rights to so draw on any such Qualifying 

Letter of Credit unless there shall have occurred an Event of Default (whether or not relating to 

any Qualifying Letter of Credit) or an LC Reissuance/Extension Failure (with respect to such 

Qualifying Letter of Credit), and (ii) it will not exercise such rights to so unilaterally direct the 

disposition of the Qualifying Cash Collateral from the Private Owner Pledged Account unless 

there shall have occurred an Event of Default. 

(f) On the Closing Date (and whether or not the Private Owner has elected to 

provide the Additional Security in the form of Qualifying Cash Collateral), the Private Owner must 

establish the Private Owner Pledged Account with the Paying Agent for the exclusive purpose of 

holding Qualifying Cash Collateral (including in the form of any proceeds from a drawing on a 

Qualifying Letter of Credit at any time deposited in the Private Owner Pledged Account in 

accordance herewith). The Private Owner Pledged Account (and all funds and financial assets 

therein) will be subject to the security interest granted herein for the benefit of the Initial Member 

pursuant to the terms of this Agreement, the Custodial and Paying Agency Agreement and the 

Private Owner Pledged Account Control Agreement. Funds in the Private Owner Pledged Account 

may be invested at the direction of the Private Owner from time to time in Permitted Investments 

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in accordance with the Custodial and Paying Agency Agreement; provided, however, that the 

Private Owner is authorized to instruct the Custodian and Paying Agent to release to the Private 

Owner that portion of the proceeds in the Private Owner Pledged Account which exceeds the 

required Private Owner Pledged Amount, all in accordance with Section 3.9(b) of the Custodial 

and Paying Agency Agreement. Conversely, it is understood and agreed that, pursuant to the first 

sentence of Section 3.13(e), if, at any time, the sum of (x) the aggregate undrawn (and available) 

amounts under the Qualifying Letter of Credit, if any, plus (y) the balance, if any, of the Qualifying 

Cash Collateral, is less than the Private Owner Pledged Amount, an Event of Default shall exist 

and (without limitation of the foregoing) the Private Owner immediately must cure such Event of 

Default by depositing with the Paying Agent Qualifying Cash Collateral in the amount of the 

difference between the Private Owner Pledged Amount and the sum of (x) and (y). 

(g) Upon the occurrence of any LC Reissuance/Extension Failure, the Initial 

Member will have the right (but not the obligation) to draw on all or any part of the undrawn 

amount of the Qualifying Letter of Credit subject to such LC Reissuance/Extension Failure; and 

the funds received by the Initial Member as a result of any such draw will be deposited in the 

Private Owner Pledged Account (and thereby will become Qualifying Cash Collateral) and such 

LC Reissuance/Extension Failure will not be deemed an Event of Default hereunder, in each case 

only so long as (i) there shall not have occurred any Event of Default (other than such LC 

Reissuance/Extension Failure), (ii) the Private Owner Pledged Account shall then be and remain 

open and subject to the Private Owner Pledged Account Control Agreement, (iii) upon such deposit 

in the Private Owner Pledged Account (of the funds received by the Initial Member from such 

draw), the aggregate amount of the Additional Security (disregarding such Qualifying Letter of 

Credit) shall be in an amount not less than the Private Owner Pledged Amount, and (iv) the Private 

Owner shall have paid to the Initial Member the Additional Security Substitution Fee in connection 

with the resulting substitution of such Qualifying Letter of Credit (or applicable undrawn amounts 

thereunder) with Qualifying Cash Collateral (which Additional Security Substitution Fee will be 

deemed due and payable upon the occurrence of such LC Reissuance/Extension Failure), it being 

understood that, in the event the foregoing conditions are not satisfied, the Initial Member will 

have the right to hold and apply such funds pursuant to Section 3.13(c) above. 

(h) The Private Owner hereby authorizes the filing by the Initial Member and 

its assignees of such UCC financing or continuation statements in such jurisdictions as the Initial 

Member or its assignees deem appropriate (in their sole and absolute discretion) to perfect and 

continue their first priority Lien and security interest with respect to the Secured Assets. The 

Private Owner must deliver to the Initial Member an assignment and assumption agreement with 

respect to the Private Owner Interest, in the form attached hereto as Exhibit C, endorsed in blank, 

and executed by the Private Owner. The Initial Member may use the assignment and assumption 

agreement to effect the assignment of the Private Owner Interest at any time if an Event of Default 

occurs and is continuing. 

(i) After the later to occur of (i) the third anniversary following the Final 

Distribution, and (ii) the final resolution of any claims asserted prior to such third anniversary 

following the Final Distribution, with indefeasible payment and performance of all of the 

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obligations secured by the Additional Security and any other Secured Assets to the satisfaction of 

the Initial Member, the Initial Member will, upon the request and at the expense of the Private 

Owner, (w) release the security interest granted hereunder in the Secured Assets (and consent to 

the filing of any applicable UCC terminations), (x) release any then outstanding Qualifying Letter 

of Credit, (y) consent to the termination of the Private Owner Pledged Account Control 

Agreement, and (z) release to the Private Owner (or such other Person as may have applicable 

rights therein in accordance with applicable Law) any remaining unapplied proceeds then held by 

the Initial Member pursuant to Section 3.13(c) above. In no event will any such release of the 

security interest in the Secured Assets operate to release the Private Owner from any of its 

continuing obligations (including in respect of continuing indemnities) under the Transaction 

Documents. 

(j) The Initial Member's rights and remedies under this Agreement, any other 

Transaction Document or otherwise are cumulative and may be exercised singularly (and in such 

order as the Initial Member may determine in its sole discretion) or concurrently. Neither any 

failure nor delay on the part of the Initial Member to exercise any other right or remedy will operate 

as a waiver thereof, nor will any single or partial exercise of any right or remedy preclude any 

other or further exercise thereof or of any other right or remedy howsoever arising. In no event 

will the Initial Member have any obligation to seek or exhaust any particular remedy prior to 

exercising any other remedy, and the Private Owner hereby waives any and all right to require the 

marshaling of assets in connection with any exercise by the Initial Member of its remedies 

hereunder or under any other Transaction Document. Under no circumstances will the Initial 

Member be deemed or construed to have waived its right to draw upon any Qualifying Letter of 

Credit, to proceed against the Private Owner Pledged Account, to foreclose upon the Private 

Owner Interest or to exercise any of its other rights or remedies unless such waiver is in writing 

and executed by a duly authorized representative of the Initial Member. A waiver of any right or 

remedy on any one occasion will not operate as a waiver of such right or remedy on any future 

occasion or as a waiver of any other right or remedy. 

(k) As used herein, “Event of Default” means any one of the following events 

(whatever the reason for such Event of Default and whether it is voluntary or involuntary or 

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): 

(i) [intentionally omitted]; 

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

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

Company, the Private Owner, any Specified Parent of the Private Owner or any Person that 

Controls, or any Person directly or indirectly holding any Ownership Interest in (or otherwise 

Controlling) the Private Owner that is Controlled by, any Specified Parent of the Private Owner; 

or (B) with respect to the Servicer (or any Subservicer or JDC Contractor); provided that, if such 

Servicer (or Subservicer or JDC Contractor) is not an Affiliate of the Private Owner, then such 

Insolvency Event pursuant to this clause (B) will not be an Event of Default hereunder so long as 

the Manager shall have fully replaced (or caused the replacement of) such affected Servicer (or 

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Subservicer or JDC Contractor) within thirty days after the occurrence of such Insolvency Event; 

or 

(iii) the occurrence of any Dissolution Event with respect to (A) the 

Private Owner or (B) with respect to the Servicer (or any Subservicer or JDC Contractor); provided 

that, if such Servicer (or Subservicer or JDC Contractor) is not an Affiliate of the Private Owner, 

then such Dissolution Event under this clause (B), will not be an Event of Default hereunder so 

long as the Manager shall have fully replaced (or caused the replacement of) such affected Servicer 

(or Subservicer or JDC Contractor) within thirty days after the occurrence of such Dissolution 

Event; or 

(iv) any failure of the Company to pay any Working Capital Expense 

when due in accordance with Section 12.6 of this Agreement, which failure continues unremedied 

for a period of thirty 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 to the Company; or 

(v) any failure in any material respect of the Company or the Private 

Owner (in any capacity, including as a Member or as the Manager) to perform any of its obligations 

under, or otherwise to comply with and observe any provision of, this Agreement or any other 

Transaction Document, in each case which continues unremedied for a period of thirty 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 FDIC, in any applicable capacity), the Custodian or the Paying 

Agent, as applicable, to the Company or the Private Owner (in any capacity), as applicable; or 

(vi) the occurrence of either (x) any failure in any material respect by the 

Servicer, any Rated Subservicer or any JDC Contractor to perform any of its obligations under, or 

otherwise to comply with and observe any provision of, the Servicing Agreement, applicable 

Subservicing Agreement or applicable Assignment of JDC Agreement, as the case may be, which 

continues unremedied for a period of thirty 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, Rated Subservicer or JDC Contractor, or (y) a failure by the Manager (in 

its individual capacity) to replace (or, as applicable, cause the replacement of) the Servicer, any 

Rated Subservicer or any JDC Contractor upon the occurrence of a material breach by the Servicer, 

such Rated Subservicer or such JDC Contractor of, or an occurrence of a “Default” under (and as 

defined in), the Servicing Agreement, applicable Subservicing Agreement or applicable 

Assignment of JDC Agreement, which continues unremedied for a period of thirty 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 to the Manager (in any capacity); or 

(vii) any representation, warranty, certification or other written statement 

of fact made by or on behalf of the Private Owner (in any capacity, including as a Member or as 

the Manager) in any Transaction Document or in any written statement or certificate at any time 

delivered pursuant to or in connection with any Transaction Document (including any reporting 

pursuant to the Reporting and Access Schedule), shall be false or incorrect in any material respect 

when made and such state of facts remains unremedied for a period of thirty days or more after the 

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date on which written notice of such state of facts requiring the same to be remedied shall have 

been given to the Private Owner (in any capacity); or 

(viii) there shall be any breach (or, for the avoidance of doubt, any 

attempted or purported Disposition that, but for Section 8.5 of this Agreement, would have 

constituted a breach) of Section 8.1 or 8.2 or any Restricted Servicer Change of Control; provided, 

that, if the applicable Servicer (or Subservicer) is not an Affiliate of the Private Owner, then such 

Restricted Servicer Change of Control shall not be an Event of Default hereunder (but will in all 

events be an event of 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 days after the occurrence of such Restricted 

Servicer Change of Control; or 

(ix) any failure of the Company to remit or cause to be remitted all Asset 

Proceeds to the Paying Agent (or to the applicable Company Account maintained with the Paying 

Agent) as and when required; or 

(x) at any time, there shall exist any PO Owner that has not executed 

and delivered (to each of the “Beneficiaries” named therein) a PO Owner Undertaking; or 

(xi) [intentionally omitted]; or 

(xii) (A) the failure, of the Private Owner, at any time, for any reason or 

to any extent, to maintain in full the Additional Security (other than the as a result of the Issuing 

Bank ceasing to be a Qualified Issuer), (B) the occurrence of any LC Reissuance/Extension Failure 

or (C) if applicable, any failure, at any time, for any reason or to any extent, by an Issuing Bank to 

comply with any terms, agreements or conditions of any Qualifying Letter of Credit; or 

(xiii) any breach of Section 10.1(s) of this Agreement, which breach 

continues unremedied for a period of thirty days or more after the date on which written notice of 

such breach requiring the same to be remedied shall have been given by the Initial Member to the 

Private Owner or otherwise shall have been given to the Private Owner; or 

(xiv) [intentionally omitted]; 

(xv) any failure, in any respect, on the part of the Company (or any 

Ownership Entity or TRS Entity), the Manager, the Servicer or any Subservicer to (A) obtain or 

maintain in effect any insurance policy or fidelity bond required pursuant to the Insurance 

Schedule; or (B) deliver copies of the initial insurance policies and fidelity bonds or thereafter 

complete any applicable Insurance Modifications identified in an Insurance Deficiency Notice, in 

each case within the applicable time frames specified in the Insurance Schedule; or 

(xvi) any failure by the Company (or the Manager on behalf of the 

Company) to liquidate the Assets by the due date specified in an applicable notice provided by the 

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Initial Member pursuant to Section 12.20(b) in connection with an exercise of the Clean-Up Call; 

or 

(xvii) any failure in any material respect of the Company or the Private 

Owner (in any capacity, including as a Member or as the Manager) to perform any of its obligations 

under, or otherwise to comply with and observe any provision of, Article IX hereof. 

3.14. Put/Call Right of Initial Member. Without prejudice to the rights of the Initial 

Member to foreclose on the Private Owner Interest in accordance with Section 3.13(a)(vi): 

(a) Upon the occurrence of an Event of Default, the Initial Member may at any 

time, by notice to the Private Owner (a “Put/Call Notice”), elect to (x) purchase (or cause one or 

more designees to purchase) the Private Owner Interest (“Call Event”) or (y) cause the Private 

Owner to purchase the Initial Member Interest (“Put Event”), for an amount, payable in cash, 

equal to: 

(i) with respect to a Call Event, (x) the fair market value of such Private 

Owner Interest (determined, if necessary, in accordance with Section 3.14(b)(iv)), less (y) any 

amounts owed by the Private Owner pursuant to Section 3.14(b)(v), and less (or plus) (z) the excess 

(or deficiency), for the period between the date of the Put/Call Notice and the consummation of 

the Put/Call Closing, of (A) all distributions paid by the Company to or for the account of the 

Private Owner, including distributions pursuant to Section 6.6 and principal payments received by 

or on behalf of the Private Owner in respect of Excess Working Capital Advances, over (or below) 

(B) all Excess Working Capital Advances made by or on behalf of the Private Owner; and 

(ii) with respect to a Put Event, (x) the fair market value of such Initial 

Member Interest (determined, if necessary, in accordance with Section 3.14(b)(iv)), plus (y) any 

amounts owed by the Private Owner pursuant to Section 3.14(b)(v), and less (or plus) (z) the excess 

(or deficiency), for the period between the date of the Put/Call Notice and the consummation of 

the Put/Call Closing, of all distributions paid by the Company to or for the account of the Initial 

Member, including distributions pursuant to Section 6.6. 

(b) The closing of a Put Event or a Call Event (the “Put/Call Closing”) will 

occur on a date selected by the Initial Member in its discretion that is no less than ten (10) and no 

more than thirty days after the earlier of the Members (i) reaching agreement on the value of the 

Private Owner Interest and the Initial Member Interest, and (ii) the Initial Member delivery to the 

Private Owner of a copy of the valuation report that determines the fair market value of the Private 

Owner Interest and the Initial Member Interest pursuant to the Valuation Procedure (the “Put/Call 

Closing Date”). Simultaneously with (or in lieu of, in the case of a termination of the Put/Call 

Notice) the delivery of the valuation report, the Initial Member will notify the Private Owner of 

the Initial Member’s election, in its sole discretion, to consummate a Put Event or a Call Event, or 

to terminate the Put/Call Notice. The Put/Call Closing will occur as follows: 

(i) The Put/Call Closing will be held at the principal offices of the 

Company on the Put/Call Closing Date. 

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(ii) On such Put/Call Closing Date: 

(A) with respect to a Call Event, the Initial Member must 

purchase (or cause one or more designees to purchase in the aggregate) all of the of the 

Private Owner Interest for the consideration set forth in Section 3.14(a)(i), and upon 

delivery of such consideration, the Private Owner must deliver all such documents and 

instruments as are reasonably necessary to transfer to the Initial Member (or its designee(s)) 

all right, title and interest of the Private Owner in and to the entire Private Owner Interest, 

free and clear of all Liens other than those created by this Agreement and the Transaction 

Documents; and 

(B) with respect to a Put Event, the Private Owner must purchase 

all of the Initial Member Interest for the consideration set forth in Section 3.14(a)(ii), and 

upon delivery of such consideration, the Initial Member will deliver all such documents 

and instruments as are reasonably necessary to transfer to the Private Owner all right, title 

and interest of the Initial Member in and to the entire Initial Member Interest. 

(iii) The Private Owner must obtain all material consents, approvals or 

waivers (including expiration or termination of a specified waiting period) of any Governmental 

Authority or Person that may be required in connection with the purchase and sale of the Private 

Owner Interest or the Initial Member Interest, as applicable, (other than any such consent, approval 

or waiver which has, if permitted by Law, been waived by the Initial Member). 

(iv) In the event of the delivery of a Put/Call Notice, the Members will 

attempt to agree on the fair market value of the Private Owner Interest and the Initial Member 

Interest, as applicable, as of the date of the Put/Call Notice. If the Members are unable to agree 

on such value within fifteen days after the date of delivery of the Put/Call Notice, then such value 

will be determined immediately thereafter in accordance with the Valuation Procedure, and, if 

applicable, the Put/Call Closing Date will be delayed until such date (after completion of the 

applicable valuation) as may be selected by the Initial Member. 

(v) All out-of-pocket costs and expenses incurred by the Initial Member 

and the Company in connection with the exercise of the Initial Member’s rights under this Section 

3.14 and the sale of the Private Owner Interest by the Private Owner or the Initial Member Interest 

by the Initial Member, as applicable, (including any legal fees and expenses incurred in connection 

with obtaining any necessary consents, approvals or waivers (including expiration or termination 

of a specified waiting period) of Governmental Authorities) will be borne by the Private Owner 

and, in the event of a Put/Call Closing, will (x) with respect to a Call Event, be deducted from the 

purchase price otherwise payable by the Initial Member (or its designee(s)) for the Private Owner 

Interest and (y) with respect to a Put Event, be added to the purchase price otherwise payable to 

the Initial Member for the Initial Member Interest; provided, however, that the Company will pay 

the fees and expenses incurred for the independent appraiser retained in connection with the 

Valuation Procedure. The Private Owner will pay all such costs and expenses to be borne by the 

Private Owner pursuant to the foregoing even if the Initial Member elects to terminate the Put/Call 

Notice instead of proceeding with the Put/Call Closing. 

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(c) The failure of the Initial Member to exercise its rights under this Section 

3.14 in connection with any Event of Default in no way affects or limits the exercise of such rights 

in connection with any other Event of Default by the Private Owner. 

(d) Without limitation of the rights of the Initial Member under Section 3.13, 

the Initial Member may, in connection with any such Call Event or Put Event, also cause (and 

instruct the Paying Agent to so cause) any distributions payable by the Company to the Private 

Owner to be paid to and held by the Initial Member (or, if permitted by the Paying Agent, held by 

the Paying Agent in the Distribution Account) and applied to amounts owing by the Private Owner 

hereunder. At the Put/Call Closing or a reasonable time thereafter, and so long as the Private 

Owner has duly paid and performed all its obligations with respect thereto and has paid all other 

outstanding Private Owner Obligations, any remaining such withheld distributions (not otherwise 

applied to amounts owing by the Private Owner) will be released to the Private Owner. For the 

avoidance of doubt, neither the Initial Member nor the Paying Agent will have any obligation to 

segregate, or pay interest or other income in respect of, any sums held pursuant to this Section 

3.14(d). 

3.15. No ERISA Plan Assets. The Manager must use its best efforts to ensure that the 

Company’s assets are not deemed to be ERISA Plan Assets. 

ARTICLE IV 

Membership Interests; Rights and Duties of, and Restrictions on, Members 

4.1. General. The membership of the Company will consist of the Members listed from 

time to time in the schedule attached hereto as Annex I (which is hereby incorporated in this 

Agreement), as amended, restated, supplemented or otherwise modified from time to time as in 

accordance herewith (the “Member Schedule”). The Manager must cause the Member Schedule 

to be amended from time to time to reflect (to the extent relevant, in accordance with the terms 

hereof) the admission of any additional or substitute Members, additional Capital Contributions of 

the Members, the issuance of additional limited liability company interests, transfers of limited 

liability company interests in the Company, repurchases, redemptions or cancellations of limited 

liability company interests in the Company, the cessation or withdrawal of a Member for any 

reason or the receipt by the Company of notice of any change of name or address of a Member. 

4.2. LLC Interests. 

(a) Creation and Issuance. The Company is only authorized to issue the limited 

liability company interests that exist as of the date hereof, and the Company may not hereafter 

create or issue any additional limited liability company interest; provided, that nothing in this 

sentence restricts the Disposition of any outstanding LLC Interest by any Member (which matter 

is governed by Article VIII). The Company’s LLC Interests will be uncertificated. As of the 

Closing Date, the limited liability company interests in the Company are owned by the Initial 

Member and the Private Owner, as set forth in the Member Schedule. 

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(b) Distributions. Subject to Section 6.6, distributions to the holders of limited 

liability company interests in the Company shall be made as provided in Sections 6.6(b) and 9.2. 

(c) No Retirement Fund or Conversion. The limited liability company interests 

in the Company will not be subject to the operation of a retirement or sinking fund to be applied 

to the purchase or redemption thereof for retirement and will not be convertible into any other 

class of limited liability company interests. 

(d) Voting Rights. Except to the extent otherwise required by the Act or 

expressly provided in this Agreement, the holders of the limited liability company interests in the 

Company will be entitled to vote on all matters upon which the Members have the right to vote as 

set forth in this Agreement or provided in the Act. Except as expressly set forth elsewhere in this 

Agreement (including Sections 3.1 and 3.4), the voting rights of each holder of a limited liability 

company interest in the Company will be based on such holder’s Percentage Interest. 

4.3. Filings; Duty of Members to Cooperate. The Manager must promptly cause to be 

executed, delivered, filed, recorded or published, as appropriate, and the Private Owner will, as 

requested by the Manager from time to time, execute and deliver, (i) all certificates, documents 

and other instruments that the Manager deems necessary or appropriate to form, qualify or continue 

the existence or qualification of the Company as a limited liability company in the State of 

Delaware or as a foreign limited liability company in all other jurisdictions in which the Company 

may, or may desire to, conduct business or own Company Property, and to form, qualify or 

continue the existence or qualification of each Ownership Entity in each applicable jurisdiction 

where it so may, or may desire to, conduct business or own its applicable Acquired Property, 

(ii) any amendment to the Certificate or any instrument described in clause (i) required because 

of, or in order to effectuate, an amendment to this Agreement, or any change in the membership 

of the Company or any Ownership Entity, in accordance with the terms hereof, (iii) all certificates, 

documents and other instruments (including conveyances and a certificate of cancellation) that the 

Manager deems necessary or appropriate to reflect the dissolution and liquidation of the Company 

and the Ownership Entities pursuant to the terms of this Agreement, and (iv) such other 

certificates, documents and other instruments as are required by Law or by any Governmental 

Authority to be executed by them in connection with the Business as conducted or proposed to be 

conducted by the Company and any Ownership Entity from time to time. As soon as reasonably 

practicable after the date hereof (and as to any applicable Ownership Entity, as soon as reasonably 

practicable following formation thereof, and in all events in accordance with applicable Law), the 

Manager must cause the Company and each Ownership Entity to apply for, and thereafter use its 

best efforts to obtain, as quickly as possible, and maintain, all such licenses as are required to 

conduct the Business as conducted by the Company or such Ownership Entity, including 

qualifications to conduct business in jurisdictions other than Delaware and licenses to purchase, 

own or manage the Assets (so purchased, owned, operated or managed by the Company or such 

Ownership Entity), if the failure to so obtain such licenses would reasonably be expected to (a) 

result in the imposition of fines, penalties or other liabilities on the Company or any such 

Ownership Entity, (b) result in claims and defenses being asserted against the Company or any 

such Ownership Entity (including counterclaims and defenses asserted by any Borrower under the 

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Assets), or (c) materially adversely affect the Company or any such Ownership Entity, the ability 

of the Company or any such Ownership Entity to foreclose on the Collateral securing any Loan or 

the ability of the Company or any such Ownership Entity to otherwise realize the full value of any 

Asset or Acquired Property. 

4.4. Certain Restrictions and Requirements. 

(a) No Member may use or possess Company Property other than for a 

Company purpose, except as provided under license or other contractual arrangements. No 

Member will have authority to bind, or otherwise to act on behalf of, the Company except pursuant 

to authority expressly granted herein or pursuant to authority granted by the Manager in accordance 

with the terms hereof. 

(b) From and after the Closing Date, no Person may or will be admitted as a 

member of the Company except pursuant to and in accordance with Article VIII hereof. 

(c) Each Member, other than the Initial Member (and its Related Persons), must 

at all times meet the qualifications of a Qualified Transferee. 

4.5. No Fiduciary Duties or Liability of Initial Member. Nothing in this Agreement is 

intended to create, or creates, any fiduciary duty of the Initial Member (or any other Initial Member 

Related Person) to the Company or the Private Owner (and, without limitation of the foregoing, to 

the extent that, but for this sentence, any such fiduciary duty otherwise would exist (including by 

operation of Law), the Company and the Private Owner irrevocably and unconditionally waive 

any such fiduciary duty). In furtherance and not in limitation of the preceding sentence, neither 

the Initial Member nor any other Initial Member Related Person will be liable, responsible or 

accountable, whether directly or indirectly, in contract or tort or otherwise, to the Company, any 

other Person in which the Company has a direct or indirect interest or any Member (or any Affiliate 

of any of the foregoing), for any Losses asserted against, suffered or incurred by the Company, 

any Person in which the Company has a direct or indirect interest or any Member (or any Affiliate 

of any of the foregoing) arising out of, relating to or in connection with this Agreement or any act 

or failure to act pursuant to this Agreement, or otherwise with respect to: 

(i) the management or conduct of the business and affairs of the 

Company or any Person in which the Company has a direct or indirect interest or any of their 

respective Affiliates (including actions taken or not taken by any Initial Member Related Person 

as an officer or director of any Person in which the Company has a direct or indirect interest or 

any Affiliates of such Person); 

(ii) the offer and sale of limited liability company interests in the 

Company (including the LLC Interests); or 

(iii) the management or conduct of the business and affairs of any Initial 

Member Related Person insofar as such business or affairs relate to the Company or any Person in 

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which the Company has a direct or indirect interest or to any Member (or any of its Affiliates), 

including all: 

(x) activities in the conduct of the Business, and 

(y) activities in the conduct of other business engaged in by any 

Initial Member Related Person which might involve a conflict of interest vis-à-vis the Company 

or any Person in which the Company has a direct or indirect interest or any Member (or any of 

their respective Affiliates) or in which any Initial Member Related Person realizes a profit or has 

an interest; 

except, in each case, that this sentence does not apply to Losses resulting from acts or omissions 

of such Initial Member Related Person which were taken or omitted which constituted fraud, gross 

negligence, willful misconduct, or an intentional material breach of this Agreement or any other 

Transaction Document. 

4.6. Indemnification. 

(a) The Private Owner must indemnify and hold harmless the Initial Member, 

the Transferor and the FDIC, and their respective Related Persons (all of the foregoing, 

collectively, the “Indemnified Parties”), from and against any and all Losses whatsoever directly 

or indirectly resulting from, connected with, arising out of or related to (i) any breach of or 

inaccuracy in any of the representations or warranties of the Private Owner (in any capacity, 

including as the Manager) contained in this Agreement or any other Transaction Document, (ii) 

any failure, by (x) the Company (during any period when the Private Owner is the Manager, and 

subject to the clarification set forth below in this Section 4.6(a)), the Private Owner (in any 

capacity, including as the Manager) or any of their respective Affiliates or (y) any Related Person 

of any Person described in sub-clause (x), to perform the obligations of the Company or the Private 

Owner (in any capacity, including as the Manager) under, or otherwise to comply with and observe 

the provisions of, this Agreement or any other Transaction Document (including Losses relating 

to (1) the Company’s obligations under Section 4.5 of the Transfer Agreement to the extent 

provided therein, (2) the Company’s obligations under Sections 3.1 and 3.2 of the Transfer 

Agreement (including all costs and expenses of the Receiver in completing any applicable transfers 

pursuant to exercise of rights under such section), (3) any claim asserted by the Initial Member 

against the Company or the Private Owner (in any capacity, including as the Manager) to enforce 

its rights hereunder, or (4) any claim against, or liability of, the Company or any Ownership Entity 

arising following the dissolution and termination of the Company), or any third party allegation or 

claim based upon facts alleged that, if true, would constitute such a failure, (iii) any gross 

negligence, bad faith or willful misconduct (including any act or omission constituting theft, 

embezzlement, breach of trust or violation of any Law) on the part of any Person listed or described 

in sub-clause (ii)(x) or (ii)(y), (iv) any Losses with respect to which the Receiver was released, or 

with respect to which the Company should have obtained a release from the applicable Borrowers 

or other Obligors, in accordance with Section 4.17 of the Transfer Agreement, (v) with respect to 

any period when the Private Owner is the Manager, the events and circumstances (and Losses) 

described in clauses (iii) and (iv) of Section 7.5(a) of the Transfer Agreement, (vi) any Obligations 

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attributable to acts or omissions of the Private Owner (or any of its Related Persons) occurring 

prior to the Closing Date to the extent such actions or omissions would have subjected the Private 

Owner to the indemnification provisions herein had the same occurred on or after the Closing Date, 

or (vii) any failure, at any time, of the Company, any Ownership Entity, the Manager, the Servicer 

or any Subservicer to obtain and maintain applicable insurance in accordance with the Insurance 

Schedule, including any such Losses that would have been covered by applicable required 

insurance had the same been in place in accordance with such Insurance Schedule. The Private 

Owner’s obligation under this Section 4.6(a) shall survive the termination of this Agreement and, 

with respect to any Indemnified Party, such Indemnified Party otherwise ceasing to constitute a 

party to or third party beneficiary of this Agreement. Each Indemnified Party must deliver notice, 

of any claim or demand made by any Person against such Indemnified Party for which such 

Indemnified Party may seek indemnification under this Section 4.6(a) (a “Third Party Claim”), 

to the Private Owner promptly after receipt by such Indemnified Party of written notice of the 

Third Party Claim, describing such Third Party Claim in reasonable detail. The failure or delay to 

provide such notice, however, will not release the Private Owner from any of its obligations under 

this Section 4.6 except to the extent that it is materially prejudiced by such failure or delay. 

The Private Owner acknowledges and agrees that it will have no recourse (including on 

account of the provisions of Section 7.5 of the Transfer Agreement) against the Company for any 

amounts the Private Owner is required to pay pursuant to this Section 4.6. For the purposes of this 

Section 4.6, the term “Initial Member” will be deemed to include any Person at any time 

constituting the “Initial Member” under this Agreement (even if such Person has ceased to be the 

“Initial Member” under this Agreement) and (without limitation of the foregoing) any Person at 

any time holding all or any portion of the LLC Interest initially held by the Initial Member 

immediately after the Closing, in each case even if such Person has since ceased to be a member 

of the Company or to hold any limited liability company interest in the Company. 

For purposes of clarification, with respect solely to the obligations of the Private Owner 

under this Section 4.6(a) in connection with a breach by the Company (during any period when 

the Private Owner is the Manager), the Private Owner will not be responsible for any Losses arising 

out of or resulting from any failure by the Company to pay its separate payment obligations, to the 

extent that all of the following are satisfied: (1) such failure is the result of the Company having 

insufficient available funds notwithstanding the Servicing and the management of the Company 

by the Manager (and, as applicable, the Servicer and any Subservicers) in accordance with this 

Agreement and the other Transaction Documents (including through exercise of any discretionary 

authority with respect to incurrence of payment obligations and maintenance and application of 

applicable reserves in a manner so as to reasonably avoid any such breach), (2) such failure and 

resulting Losses are not attributable in whole or in part to any breach (or other action or omission 

in violation of the Servicing Standard or any provision of this Agreement or any other Transaction 

Document) by the Private Owner (in any capacity, including as Manager) or any of its Affiliates 

(other than the Company), or by any of the respective Related Persons of any of the foregoing, and 

(3) the Private Owner (in any capacity) is not required to pay (or advance applicable funds to the 

Company for payment of) or otherwise bear such payment obligations pursuant to the terms of this 

Agreement or any other Transaction Document. 

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(b) If for any reason the indemnification provided for herein is unavailable or 

insufficient to hold harmless the Indemnified Parties, the Private Owner must 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 the Private Owner (in any capacity, including as the Manager) and its 

Affiliates (other than the Company), and the respective Related Persons of any of the foregoing, 

on the other hand, in connection with the matters that are the subject of such Losses. 

(c) If the Private Owner confirms in writing to the Indemnified Party within 

fifteen days after receipt of a Third Party Claim the Private Owner’s responsibility to indemnify 

and hold harmless the Indemnified Party therefor, the Private Owner may elect to assume control 

over the compromise or defense of such Third Party Claim at the Private Owner’s sole expense 

and with counsel selected by the Private Owner, which counsel must be reasonably satisfactory to 

the Indemnified Party, provided 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) the Private Owner must keep the Indemnified 

Party advised of all material events with respect to any Third Party Claim; (iii) the Private Owner 

must 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 the Indemnified 

Party or any of its Affiliates; and (iv) the Private Owner will not, without the prior written consent 

of the 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 the Private Owner to satisfy the full amount of the 

liability in connection with such Third Party Claim and includes an unconditional release of such 

Indemnified Party from all liability arising out of such Third Party Claim. 

(d) Notwithstanding anything contained herein to the contrary, the Private 

Owner will not be entitled to control (and if the Indemnified Party so desires, it will have sole 

control over) the defense, settlement, adjustment or compromise of (but the Private Owner will 

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 the Private Owner (in any capacity, including as the Manager) or any Affiliate of the 

Private Owner, on one hand, and the Indemnified Party, on the other hand, are named as parties 

and either the Private Owner (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. In addition to the foregoing, if the 

Private Owner elects not to assume the compromise or defense of any Third Party Claim, 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 

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faith, the Indemnified Party may pay, settle, compromise or defend against such Third Party Claim 

(but the Private Owner will nevertheless be required to pay all Losses incurred by the Indemnified 

Party in connection with such payment, settlement, compromise or defense). In connection with 

any defense of a Third Party Claim (whether by the Private Owner or the Indemnified Party), all 

of the parties hereto must, and must 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. 

(e) In the event the Company is reimbursed for or uses the Working Capital 

Reserve or Excess Working Capital Advances to pay costs or expenses of the type referred to in 

clause (d) or (e) of the definition of Servicing Expenses and it is subsequently determined that the 

Company was not entitled to reimbursement for (or to use the Working Capital Reserve or Excess 

Working Capital Advances to pay) all or any portion of such costs and expenses because the 

Company did not satisfy the requirements of such clause (d) or clause (e), as applicable, of the 

definition of Servicing Expenses (such costs and expenses, the “Unreimbursable Expenses”), the 

Manager must, in addition to any other Losses for which the Manager may be liable with respect 

to the claim to which such costs and expenses relate, reimburse the cost of such Unreimbursable 

Expenses to each Member based on such Member’s Percentage Interest as set forth below, except 

to the extent such Unreimbursable Expenses were funded through Excess Working Capital 

Advances that remain outstanding (in which case the portion of any such outstanding Excess 

Working Capital Advance that was so used for Unreimbursable Expenses will itself become 

unreimbursable and be deemed forgiven with no further right of the Manager to collect or receive 

the same). Any such reimbursement by the Manager pursuant to the foregoing will be as follows: 

within ten Business Days after written demand therefor from either Member, the Manager will pay 

each Member by wire transfer of immediately available funds to an account specified by each 

Member an amount equal to such Member’s Percentage Interest (as of the later of (x) the date of 

such demand or (y) the date of such payment) multiplied by the amount of all such Unreimbursable 

Expenses. 

(f) The Company must indemnify and hold harmless each Member and each 

Member’s respective officers, directors, employees and members (all of the foregoing collectively, 

the “Covered Persons”) for any Losses incurred by such Covered Person by reason of a third 

party claim against such Covered Person (other than, for the avoidance of doubt, a claim by a 

Related Person of such Covered Person (or, if such Covered Person is other than a Member, by a 

Related Person of the Member in respect of which such Covered Person constitutes a Covered 

Person)) relating to any act or omission by or of such Covered Person in connection with the 

exercise or performance of the rights, powers, responsibilities and obligations of such Covered 

Person (or, if such Covered Person is other than a Member, of the Member in respect of which 

such Covered Person so constitutes a Covered Person) regarding the Company except for (i) any 

such third party claim, or Loss, resulting from fraud, gross negligence, willful misconduct or an 

intentional breach of this Agreement or any other Transaction Document by such Covered Person 

(or if such Covered Person is other than a Member, by the Member in respect of which such 

Covered Person so constitutes a Covered Person), and (ii) in the case of the Private Owner (in any 

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capacity, including as the Manager), (x) any claim or demand by the Servicer or Subservicer (or, 

for the avoidance of doubt, any Losses arising out of or related to such claim or demand) and (y) 

any such third party claim, or Loss, that, in whole or in part and directly or indirectly, results from, 

is connected with, arises out of or relates to any of the matters described in clauses (i) through (vii) 

of Section 4.6(a). 

(g) Tax Liability of Ownership Entity. Notwithstanding anything to the 

contrary contained herein, if any Ownership Entity other than a TRS Entity is not a pass-through 

entity with no entity-level income tax obligations, distributions to the Initial Member pursuant to 

Section 6.6 (including for the purposes of Section 9.2(c)) will be allocated before accrual or 

payment of any income tax payable by such Ownership Entity, the amount of such accrual or 

payment shall be deemed distributed to the Private Owner pursuant to Section 6.6, and the Private 

Owner (or its successors or assigns) must indemnify and hold harmless the Initial Member from 

and against any liability for any income taxes payable by the Ownership Entity; provided, 

however, that the foregoing special allocation and indemnity will not apply if (i) the Private Owner 

(and each of its successors and assigns) has taken all steps necessary to secure pass-through 

treatment of the Ownership Entity and (ii) the liability for income taxes payable by the Ownership 

Entity arises solely as a result of a change in Law applicable to pass-through entities occurring 

after the date hereof and not as a result of action (or inaction) by the Private Owner (or its 

successors or assigns). 

(h) Offsets. Without limiting any other rights of the Initial Member hereunder, 

in the event the Initial Member exercises any rights or remedies as a result of or in connection with 

a breach hereunder or the occurrence of a Default or Event of Default (including relating to a 

breach of Section 4.6), all 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 claim) incurred by the Initial Member with respect 

thereto may be recovered by the Initial Member by the turnover to the Initial Member of an equal 

amount of any payment or distribution otherwise payable to the Private Owner (including any 

Interim Management Fee or the Management Fee), whether in its capacity as a Member or as the 

Manager (in each case except to the extent such breach or 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 of its Subservicers) having 

been engaged by the Initial Member, the Company or the applicable replacement Manager 

following such removal of the Private Owner as the Manager, in each case that is not an Affiliate 

of the Private Owner). The Private Owner and the Company must cooperate with the Initial 

Member to effect any such turnover. 

ARTICLE V 

Capital Contributions; Excess Working Capital Advances 

5.1. Initial Capital Contributions. Pursuant to the Transfer Agreement, the Initial 

Member (as the Transferor) made a Capital Contribution to the Company in an amount equal to 

the Initial Member Capital Contribution. In connection with the Private Owner Interest Sale 

Agreement, the Private Owner acquired from the Initial Member the Private Owner Interest 

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representing a 5% equity interest in the Company in exchange for the Private Owner Interest Sale 

Price. After giving effect to the foregoing transactions, (and to the Capital Contributions 

referenced in Section 5.2 below), the respective Capital Accounts of the Initial Member and the 

Private Owner as of the Closing Date are as set forth in Annex I (the Member Schedule). From 

and after the Closing Date (and except as provided in Sections 5.2 and 5.3 below), the Members 

will have no obligation to make any additional Capital Contributions to the Company. 

5.2. Capital Contributions for Working Capital Reserve Account. On the Closing Date, 

the Initial Member and the Private Owner must fund, as Capital Contributions to the Company, 

the Working Capital Reserve Account in accordance with the provisions of Section 12.11 hereof 

and Section 1 of the Private Owner Interest Sale Agreement, which funds will be used for payment 

of Working Capital Expenses in accordance with such Section 12.11 and as otherwise permitted 

pursuant to the Custodial and Paying Agency Agreement. 

5.3. Capital Contributions for Capital Improvement Account. Capital Contributions by 

the Members in connection with the funding of the Capital Contribution Account on the Closing 

Date are as set forth in Section 2(b) of the Permitted Capital Improvement Addendum attached 

hereto as Annex V (and references in the Transaction Documents to this Section 5.3 will be deemed 

to include such Section 2(b) of the Permitted Capital Improvement Addendum). 

5.4. [Intentionally Omitted]. 

5.5. Excess Working Capital Advances. In the event that there are insufficient funds in 

the Collection Account, and insufficient available funds in the Working Capital Reserve Account 

(including, as applicable, by a permitted release of such funds to the Collection Account or as 

otherwise permitted in the Custodial and Paying Agency Agreement) to pay any Working Capital 

Expenses, then the Manager must, except as otherwise provided in Section 12.6, make an advance 

of its own funds to the Company to be used by the Company for payment of such permitted (or 

required, as applicable) Working Capital Expenses (any such advance to the Company, an “Excess 

Working Capital Advance”). No Excess Working Capital Advance will accrue any interest 

thereon. Excess Working Capital Advances will be repaid in accordance with Section 5.1 of the 

Custodial and Paying Agency Agreement. To the extent multiple Working Capital Expenses 

(payment of which is permitted to be made using such Excess Working Capital Advance) are 

outstanding, any funding or use by the Manager of Excess Working Capital Advances for payment 

of all or any of the same will follow the relevant priorities (as among such Working Capital 

Expenses) as set forth, first, in Section 3.1(b)(i) of the Custodial and Paying Agency Agreement, 

and, second, in the Priority of Payments, as applicable. All Excess Working Capital Advances, 

together with a detailed statement of the sources and uses thereof (which will be broken out by the 

reimbursable and unreimbursable portions thereof), must be reflected in the Monthly Report with 

respect to the Due Period during which (or, as applicable, the Distribution Date for which) the 

relevant Excess Working Capital Advance was made. The Manager may not Dispose of its interest 

in any Excess Working Capital Advances without the consent of the Initial Member. Excess 

Working Capital Advances will not be regarded as additional Capital Contributions. 

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ARTICLE VI 

Capital Accounts; Allocations; Priority of Payments; Distributions 

6.1. Capital Accounts. A Capital Account will be established and maintained for each 

Member to which will be credited the Capital Contributions made by such Member and such 

Member’s allocable share of Net Income (and items thereof), and from which will be deducted 

distributions to such Member of cash or other Company Property and such Member’s allocable 

share of Net Loss (and items thereof). As to the Private Owner, the initial Capital Account will 

correspond to that portion of the Capital Account of the Initial Member that is attributable to the 

Private Owner Interest acquired by the Private Owner pursuant to the Private Owner Interest Sale 

Agreement, together with the Private Owner WCR Account Deposit made pursuant to the Private 

Owner Interest Sale Agreement. A Member’s Capital Account also will be adjusted for items 

specially allocated to such Member under this Article VI. The Capital Accounts of the Members 

generally will be adjusted and maintained in accordance with Treasury Regulations § 1.704-

1(b)(2)(iv); provided, however, that such adjustments to, and maintenance of, the Capital Accounts 

will not adversely affect the manner in which distributions are to be made to the Members under 

Section 6.6. 

6.2. Allocations to Capital Accounts. Allocation of Net Income and Net Loss will be 

made as provided in this Article VI. 

(a) General Allocation Rules. Except as otherwise provided in this Agreement, 

Net Income and Net Loss (and, to the extent necessary, individual items of income, gain, loss, 

deduction or credit) of the Company will be allocated among the Members in a manner such that, 

after giving effect to the special allocations set forth in Section 6.2(b), the Capital Account balance 

of each Member, immediately after making such allocation, is, as nearly as possible, equal to (i) 

the distributions that would be made to such Member pursuant to Section 6.6 if the Company were 

dissolved, its affairs wound up and its assets sold for cash equal to their Book Value, all Company 

liabilities were satisfied (limited with respect to each nonrecourse liability to the tax basis of the 

assets securing such liability), and the net assets of the Company were distributed, in accordance 

with Section 9.2(c), to the Members immediately after making such allocation, minus (ii) such 

Member’s share of “partnership minimum gain” and “partner nonrecourse debt minimum gain” 

(as such terms are used in Treasury Regulations § 1.704-2), computed immediately prior to the 

hypothetical sale of assets. 

(b) Allocations in Special Circumstances. The following special allocations 

will be made in the following order: 

(i) Minimum Gain Chargeback. Notwithstanding any other provision 

of this Article VI, if there is a net decrease in minimum gain (as it corresponds to the definition of 

“partnership minimum gain” in Treasury Regulations §§ 1.704-2(b)(2) and (d)) during any Fiscal 

Year, the Members will be specially allocated items of Company income and gain for such Fiscal 

Year (and, if necessary, subsequent Fiscal Years) in an amount equal to the portion of such 

Member’s share of the net decrease in minimum gain, determined in accordance with Treasury 

Regulations §§ 1.704-2(f) and (g). This Section 6.2(b)(i) is intended to comply with the “minimum 

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gain chargeback” requirement in such section of the Treasury Regulations and will be interpreted 

consistently therewith. 

(ii) Member Minimum Gain Chargeback. Notwithstanding any other 

provision of this Article VI other than Section 6.2(b)(i), if there is a net decrease in minimum gain 

attributable to a Member nonrecourse debt (as it corresponds to the definition of “partnership 

nonrecourse debt minimum gain” in Treasury Regulations § 1.704-2(i)) during any Fiscal Year, 

each Member will be specially allocated items of Company income and gain for such Fiscal Year 

(and, if necessary, subsequent Fiscal Years) in an amount equal to the portion of such Member’s 

share of the net decrease in such minimum gain attributable to such Member’s nonrecourse debt, 

determined in accordance with Treasury Regulations § 1.704-2(i). This Section 6.2(b)(ii) is 

intended to comply with the “partner minimum gain chargeback” requirement in such section of 

the Treasury Regulations and will be interpreted consistently therewith. 

(iii) Qualified Income Offset. In the event any Member, for any reason, 

whether expected or not, has an Adjusted Capital Account Deficit, items of Company income and 

gain will be specially allocated to each such Member in an amount and manner sufficient to 

eliminate, to the extent required by the Treasury Regulations, such Adjusted Capital Account 

Deficit as quickly as possible, provided that an allocation pursuant to this Section 6.2(b)(iii) will 

be made only if and to the extent that such Member would have such Adjusted Capital Account 

Deficit after all other allocations provided for in this Section 6.2 have been tentatively made as if 

this Section 6.2(b)(iii) were not in this Agreement. This Section 6.2(b)(iii) is intended to comply 

with the “qualified income offset” provisions in Treasury Regulations § 1.704-1(b)(2)(ii)(d) and 

will be interpreted consistently therewith. 

(iv) Nonrecourse Deductions. Any nonrecourse deductions attributable 

to a Member nonrecourse debt (as described in Treasury Regulations § 1.704-2(i)) will be allocated 

to the Member who bears the economic risk of loss with respect to such nonrecourse debt. 

Otherwise, nonrecourse deductions will be allocable in accordance with the Members’ respective 

Percentage Interests. 

(v) Loss Allocation Limitation. No allocation of Net Loss (or any item 

thereof) may be made to any Member to the extent that such allocation would create or increase a 

Member’s Adjusted Capital Account Deficit. If, in the allocation of Net Loss (or any item thereof), 

less than all Members would have an Adjusted Capital Account Deficit as a result of such 

allocation, then any Net Loss (or item thereof) not allocable to any such Member(s) as a result of 

such limitation will be allocated (subject to such limitation) to the other Member so as to allocate 

the maximum permissible Net Loss to each Member under Treasury Regulation § 1.704-

1(b)(2)(ii)(d). 

(vi) Curative Allocations. The allocation provisions of this 

Section 6.2(b) are intended to comply with certain requirements of the Treasury Regulations. 

Notwithstanding any other provisions of this Article VI, any allocation effected pursuant to this 

Section 6.2(b) shall be taken into account in allocating Net Income and Net Loss among the 

Members such that the cumulative effect of all such allocations achieves the fundamental purpose 

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of Section 6.2(a), so that the Capital Account balances correspond to the amounts distributable to 

the Members. 

(c) Allocations in the Event of Disallowed Deductions. In the event that any 

fees, interest or other amounts paid to a Member or an Affiliate of a Member pursuant to this 

Agreement or any other agreement between the Company and such Member or Affiliate providing 

for the payment of such amounts, and deducted by the Company, whether in reliance upon §§ 162, 

163, 707(a) or 707(c) of the Code or otherwise, are disallowed as deductions to the Company on 

its federal income tax return for the fiscal year in or with respect to which such amounts are paid 

and are treated instead as Company distributions, then: 

(i) the Net Income or Net Loss, as the case may be, for the fiscal year 

in or with respect to which such fees, interest or other amounts were paid will be increased or 

decreased, as the case may be, by the amount of such fees, interest or other amounts that are 

disallowed and treated as Company distributions; and 

(ii) there will be allocated to the Member who received (or whose 

Affiliate received) such payments an amount of gross income for the fiscal year in or with respect 

to which such fees, interest or other amounts were paid an amount equal to such fees, interest or 

other amounts that are so disallowed and treated as Company distributions. 

(d) Transfer of or Change in LLC Interests. The Tax Representative is 

authorized to adopt any convention or combination of conventions likely to be upheld for federal 

income tax purposes regarding the allocation of items of Company income, gain, loss, deduction 

and expense with respect to a transferred LLC Interest. A transferee of an LLC Interest in the 

Company will succeed to the Capital Account of the transferor Member to the extent it relates to 

the transferred LLC Interest. 

6.3. Tax Allocations. 

(a) General Rules. Except as otherwise provided in Section 6.3(b), for each 

Fiscal Year, items of Company income, gain, loss, deduction and expense will be allocated, for 

federal, state and local income tax purposes among the Members in the same manner as the Net 

Income (and items thereof) or Net Loss (and items thereof) of which such items are components 

were allocated pursuant to Section 6.2. 

(b) § 704(c) of the Code. Income, gains, losses and deductions with respect to 

any property (other than cash) contributed or deemed contributed to the capital of the Company 

will, solely for income tax purposes, be allocated among the Members so as to take account of any 

variation between the Company’s adjusted basis of such property, with respect to each member of 

the Company, for federal income tax purposes and its Fair Market Value at the time of the 

contribution or deemed contribution in accordance with § 704(c) of the Code and the Treasury 

Regulations promulgated thereunder. Such allocations will be made in such manner and utilizing 

such permissible tax elections as determined in good faith by the Tax Representative following 

consultation with the Initial Member. In the event of a revaluation of Company Property pursuant 

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to the definition of Book Value, subsequent allocations of income, gains, losses or deductions with 

respect to such Company Property will take account of any variation between the Book Value and 

Fair Market Value of such Company Property, as so determined from time to time, in accordance 

with § 704(c) of the Code and the Treasury Regulations promulgated thereunder. Such allocations 

will be made in such manner and utilizing such permissible tax elections as determined in good 

faith by the Tax Representative following consultation with the Initial Member. 

(c) § 707(b) of the Code. Any losses realized by the Initial Member (including 

as the Transferor) with respect to any property (other than cash) sold or deemed sold to the 

Company at Closing pursuant to the Transfer Agreement and that are deferred pursuant to § 

707(b)(1) or § 267(a) of the Code may be allocated and used by the Company in accordance with 

applicable tax rules upon its subsequent disposition of such property. 

(d) Capital Accounts Not Affected. Allocations pursuant to this Section 6.3 are 

solely for federal, state and local tax purposes and will not affect, or in any way be taken into 

account in computing, any Member’s Capital Account or allocable share of Net Income (or items 

thereof) or Net Loss (or items thereof). 

(e) Tax Allocations Binding. The Members acknowledge that they are aware 

of the tax consequences of the allocations made by this Section 6.3 and hereby agree to be bound 

by the provisions of this Section 6.3 in reporting their respective shares of items of Company 

income, gain, loss, deduction and expense, unless otherwise required by a final “determination” 

(within the meaning of Section 1313(a) of the Code). 

6.4. Determinations by Tax Representative. All matters concerning the computation of 

the Capital Accounts, the allocation of items of Company income, gain, loss, deduction and 

expense and the adoption of any accounting procedures not expressly provided for by the terms of 

this Agreement will be determined by the Tax Representative in good faith, following consultation 

with the Initial Member. Following such consultation, such determinations will be final and 

conclusive as to all the Members. Without in any way limiting the scope of the foregoing, if and 

to the extent that, for income tax purposes, any contribution to or distribution by the Company or 

any payment by any Member or by the Company is recharacterized, the Tax Representative may, 

in good faith following consultation with the Initial Member, specially allocate items of Company 

income, gain, loss, deduction or expense and make correlative adjustments to the Capital Accounts 

of the Members in a manner so that the net amount of income, gain, loss, deduction and expense 

realized by each relevant party (after taking into account such special allocations) and the net 

Capital Account balances of the Members (after taking into account such special allocations and 

adjustments) will, as nearly as possible, achieve the fundamental purpose of Section 6.2(a), such 

that the Capital Account balances correspond to the amounts distributable to the Members, as if 

such recharacterization had not occurred. 

6.5. Priority of Payments. On each Distribution Date the amounts deposited in the 

Distribution Account under the Custodial and Paying Agency Agreement (or, following the Final 

Monthly Distribution, applicable amounts from the Working Capital Reserve) will be distributed 

by the Paying Agent in the order of the Priority of Payments; provided, however, that for the 

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avoidance of doubt, to the extent amounts are available for distribution to the Members with 

respect to their respective LLC Interests (such available amounts, the “Distributable Cash”), such 

Distributable Cash will be distributed to the Members in accordance with Section 6.6 below. 

6.6. Distributions. 

(a) No Right to Withdraw. No Member will have the right to withdraw capital 

or demand or receive distributions or other returns of any amount in its Capital Account, except as 

expressly provided in this Agreement. 

(b) Ordinary Distributions. 

(i) Timing. Distributable Cash, if any, will be distributed to the 

Members on each Distribution Date by the Paying Agent in the manner set forth in the Custodial 

and Paying Agency Agreement; provided, however, that the Manager must instruct the Paying 

Agent as to how such distributions are to be allocated as between the Initial Member and the 

Private Owner based on Section 6.6(b)(ii) below (which instructions will be included in one or 

more reports to be provided to Paying Agent in accordance with Section 7.4 (and Section 3(b) of 

the Reporting and Access Schedule). 

(ii) Distributions of Distributable Cash. Each distribution of 

Distributable Cash will be made to the Members as follows: 95.0% to the Initial Member and 

5.0% to the Private Owner. 

(c) [Intentionally Omitted]. 

(d) Restrictions on Distributions. The foregoing provisions of this Article VI 

to the contrary notwithstanding, the Company will not make (and the Manager will not make or 

permit) any distribution in violation of any contract or agreement to which the Company is then a 

party, any Law or any directive of any Governmental Authority, and by providing the relevant 

instructions to the Paying Agent for each distribution, the Manager will be deemed to have certified 

to each of the Paying Agent and the Initial Member that such distribution complies with the 

foregoing. 

(e) Withholding. Notwithstanding any other provision of this Agreement, the 

Manager is authorized to take any action that it determines to be necessary or appropriate to cause 

the Company to comply with any foreign or United States federal, state or local withholding 

requirement with respect to any allocation, payment or distribution by the Company to any 

Member or other Person or transfer of an LLC Interest. All amounts so withheld will be treated 

as distributions to the applicable Members under the applicable provisions of this Agreement. If 

any such withholding requirement with respect to any Member exceeds the amount distributable 

to such Member under the applicable provisions of this Agreement, or if any such withholding 

requirement was not satisfied with respect to any amount previously allocated or distributed to 

such Member, such Member and any successor or assignee with respect to such Member’s LLC 

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Interest hereby agrees to indemnify and hold harmless the Manager and the Company for such 

excess amount or such withholding requirement, as the case may be. 

(f) Record Holders. Any distribution of Company Property, whether pursuant 

to this Article VI or otherwise, will be made only to Persons that, according to the books and 

records of the Company, were the holders of record of LLC Interests on the date determined by 

the Manager as of which the Members are entitled to any such distribution. 

(g) Liquidation Distributions. The Final Monthly Distribution and all further 

distributions through and including the Final Distribution will be made in accordance with the 

provisions of Section 9.2. 

ARTICLE VII 

Accounting, Reporting, Taxation, Business Plans and Verification 

7.1. Fiscal Year. The books and records of the Company shall be kept on an accrual 

basis and the fiscal year of the Company will commence on January 1 and end on December 31 of 

each year; provided that (x) the first fiscal year of the Company will begin on the date of the 

formation of the Company and end on December 31, 2023, and (y) the last fiscal year of the 

Company will end on the date the Company is dissolved pursuant to Section 9.1. 

7.2. Maintenance of Books and Records. The Manager must cause the Company to 

maintain, retain, and allow access to books and records in accordance with, and must otherwise 

comply with the provisions set forth in, Section 1 of the Reporting and Access Schedule, which 

Section 1 is hereby incorporated by reference. 

7.3. Financial Statements. The Manager must prepare and deliver (or cause applicable 

preparation and delivery of) the financial statements and other items required by, and must 

otherwise comply with the provisions set forth in, Section 2 of the Reporting and Access Schedule, 

which Section 2 is hereby incorporated by reference. 

7.4. Additional Reporting and Notice Requirements; Audits. The Manager must 

prepare and deliver (or cause applicable preparation and delivery of) the reports, certificates, 

notices, and other information required by, must, and must cause the Servicer, each Subservicer 

and each JDC Contractor to, grant to the Initial Member (and other applicable Persons) the audit 

and inspection rights in accordance with, and must otherwise comply with the provisions set forth 

in, Section 3 of the Reporting and Access Schedule, which Section 3 is hereby incorporated by 

reference. In addition to the foregoing, the Manager must provide or cause to be provided to the 

Initial Member, all reports, information (financial or otherwise), certificates and other documents 

required to be provided by the Servicer under the Servicing Agreement. All rights of the Initial 

Member pursuant to the foregoing are in addition to, and not in limitation of, the rights of the 

Members under § 18-305(a) of the Act. § 18-305(c) of the Act will not apply in relation to the 

Initial Member. 

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7.5. Designation of Tax Representative. The Private Owner is hereby designated as the 

partnership representative (the “Tax Representative”) under § 6223(a) of the Code and under 

other similar Laws of other relevant jurisdictions, to manage, in consultation with the Initial 

Member, administrative tax proceedings conducted at the Company level by the Internal Revenue 

Service or other Tax authorities with respect to Company matters. Each Member expressly 

consents to such designation and agrees that, upon the request of the Tax Representative, it will 

execute, acknowledge, deliver, file and record at the appropriate public offices such documents as 

may be necessary or appropriate to evidence such consent. Except as otherwise provided herein, 

the Tax Representative is specifically directed and authorized to take whatever steps the Tax 

Representative in its sole and absolute discretion deems necessary or desirable to perfect such 

designation, including filing any forms or documents with the Internal Revenue Service (or other 

Tax authorities) and taking such other action as may from time to time be required under the Code, 

Treasury Regulations or other Laws. The Tax Representative must keep the Members fully 

informed as to any Tax audits of the Company, including promptly providing the Members with 

copies of any correspondence from any Taxing authority, providing the Members with a 

reasonable opportunity to review and comment on any written submission to be provided to a Tax 

authority in connection with any audit, examination or other administrative or judicial proceeding, 

and permitting the Members to participate in any conferences or meetings with any Taxing 

authority and in any subsequent administrative or judicial proceedings. Except as otherwise 

provided herein, the Tax Representative will have the authority, following consultation with the 

Initial Member, to make any Tax elections on behalf of the Company permitted to be made, 

including the election pursuant to § 754, under any section of the Code or the Treasury Regulations 

promulgated thereunder or under other Laws. In the event the Company is eligible under Code § 

6221(b) to elect out of the partnership level audit rules, the Tax Representative must make such 

election and take such further action as may be required to avoid application of the partnership 

level audit rules under Subchapter C of Chapter 63 of the Code. If the Company is not eligible to 

elect out of the partnership level audit rules, then, unless the Initial Member and the Private Owner 

mutually agree otherwise in writing, the Tax Representative must timely elect under Code § 

6226(a) to issue to each Member, former Member and the IRS a statement of any adjustments to 

the Company’s income, gain, loss, deduction or credit allocable to such Member or former 

Member and no liability arising out of any adjustment will be paid by the Company. The Initial 

Member may, at any time following the occurrence and during the continuation of an Event of 

Default, remove the Private Owner as the Tax Representative, appoint itself (or any other willing 

Member at the time) as the Tax Representative, and serve (or cause such other Member to so serve) 

in such capacity; provided that such removal will not relieve the Private Owner as Tax 

Representative of any obligations or liabilities under this Agreement or any other Transaction 

Document arising out of, relating to, occurring in connection with, or required to have been paid 

or performed by, the Private Owner as the Tax Representative in its capacity as such. 

7.6. Tax Information. 

(a) Within ninety days after the end of each Fiscal Year, the Tax Representative 

must send, or cause to be sent to, each Person who was a Member at any time during the Fiscal 

Year then ended a Schedule K-1 and such Company tax information as the Tax Representative 

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reasonably believes will be necessary for the preparation by such Person of its United States 

federal, state and local tax returns in accordance with any Law. Such information will include a 

statement showing such Person’s share of distributions, income, gain, loss, deductions and 

expenses and other relevant items of the Company for such Fiscal Year. Promptly upon the request 

of any Member (or any former Member, for tax years during which such Person was a Member), 

the Tax Representative will furnish to such Member (or former Member): 

(i) United States federal, state and local income tax returns or 

information returns, if any, filed by the Company; and 

(ii) at the sole cost and expense of the requesting Member, such other 

information as such Member may reasonably request for the purpose of applying for refunds of 

withholding taxes. 

(b) The Manager must prepare and deliver, or cause the Company to prepare 

and deliver, together with delivery to the Initial Member of the annual financial statements 

pursuant to Section 7.3 (and Section 2(a) of the Reporting and Access Schedule), a report which 

specifies, for each Due Period and for such annual reporting period, the information with respect 

to each Asset that is sold or otherwise disposed of by the Company so as to enable the Company 

(and each Member) to comply with allocation provisions of § 704(c) of the Code, as determined 

as of the close of business on the applicable Determination Date and certified by an authorized 

representative (who must be the chief financial officer (or an equivalent officer)) of the Company. 

7.7. Business Plans. As promptly as possible, but in no event later than the time periods 

set forth herein (and, as applicable, with current information as of the month most recently ended 

prior to delivery thereof) the Manager must deliver to the Initial Member written plans detailing 

the strategy to be used by it in managing and disposing of the Assets (and the Ownership Entities) 

for achieving the Company’s purposes with respect thereto, in conformance with the Servicing 

Standard, based, to the extent appropriate, on information gathered by the Company with respect 

to the Assets (each, together with any updates thereto, a “Business Plan”), which will include 

(i) individual Business Plans (each, a “Borrower-Business Relationship Business Plan”) for 

each of the five largest Borrower-business relationships based on their Unpaid Principal Balance 

as of the Cut-Off Date (determined by aggregating the Loans of Borrower and Obligors under 

common Control or that otherwise are Affiliates of each other), and (ii) a consolidated Business 

Plan covering all Assets (with the Borrower-Business Relationship Business Plans being 

integrated therein) (a “Consolidated Business Plan”). Such initial Borrower-Business 

Relationship Business Plans must be delivered not more than one hundred eighty days after the 

Closing Date, and such initial Consolidated Business Plan must be delivered not more than one 

hundred eighty days after the Closing Date. With respect to the first such Borrower-Business 

Relationship Business Plans and Consolidated Business Plan, the Manager must meet with the 

Initial Member as reasonably requested by the Initial Member from time to time during the thirty 

Business Days following the Initial Member’s receipt of the same, or such later date as requested 

by the Initial Member, to review and discuss such Borrower-Business Relationship Business Plans 

and Consolidated Business Plan, including changes thereto suggested by the Initial Member. 

Within thirty Business Days following expiration of such review period, the Manager will deliver 

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to the Initial Member a final version of such Borrower-Business Relationship Business Plans and 

Consolidated Business Plan reflecting such changes as the Manager considers to be appropriate in 

light of its discussions with the Initial Member during such review period. The Manager must 

thereafter review and revise each Business Plan as the circumstances may require, and in any event 

provide periodic updates to such Business Plans (and for each such update to the BorrowerBusiness Relationship Business Plans, the same must cover the five largest Borrower-business 

relationships based on their Unpaid Principal Balance as of the time of such update) to the Initial 

Member, in January (current as of December 31 of the immediately preceding year) and July 

(current as of June 30 of such year) of each year, commencing in January of 2025 and continuing 

until Final Monthly Distribution, with each such periodic update to be delivered as part of the 

Monthly Reports due at such time pursuant to Section 7.4 (and Section 3(b) of the Reporting and 

Access Schedule). In connection with and following the Final Monthly Distribution, each Monthly 

Report will include an applicable update as to any relevant information that would otherwise be 

included in an update to the Consolidated Business Plan (and no separate update to the 

Consolidated Business Plan will be required). With respect to each such Business Plan (including 

any update thereto or to relevant information therein pursuant to any Monthly Report), upon 

reasonable notice by the Initial Member, the Company must make its personnel who are familiar 

with such Business Plans available during normal business hours for the purposes of discussing 

such Business Plans with representatives of the Initial Member and responding to questions 

therefrom (and, as applicable, revising the same to reflect such changes as the Manager considers 

to be appropriate in light of such discussions with the Initial Member). 

(a) Each Business Plan (including any update thereto) will set forth a strategy 

(consistent with any restrictions set forth in this Agreement and the other Transaction Documents, 

except to the extent that this Agreement or any such other Transaction Document, as the case may 

be, expressly contemplates that such Business Plan (including any update thereto) may propose 

deviations from any such restriction) for the disposition of the Assets addressed thereby which 

strategy may consist of one or more of the following: (i) the permitted pay-off of Assets at a 

discount; (ii) modifications of the related note or mortgage, including reductions in the mortgage 

loan interest rate, reductions in the principal balance and rescheduling principal payments; (iii) 

foreclosure upon the related Collateral (or acquisition thereof by deed in lieu of foreclosure) and 

subsequent sale thereof; (iv) assumptions of Assets by new borrowers; (v) repairs to and, if 

applicable, completion of construction of the related Collateral, with a view towards selling such 

Collateral or the Asset secured thereby; (vi) sale of an Asset, either singly or in pools, before or 

after restructuring; and (vii) any other method of work-out, rehabilitation and disposition 

consistent with the Servicing Standard and other general duties of the Manager specified in this 

Agreement. For any Loan for which a Strategic Plan Report is required, such strategy must include 

a detailed description of contemplated or proposed steps to improve the Risk Category of such 

Loan pursuant to the Loan Criteria Matrix. 

(b) Each Business Plan (including any update thereto) will set forth a strategy 

(consistent with any restrictions set forth in this Agreement and the other Transaction Documents, 

except to the extent that this Agreement or any such other Transaction Document, as the case may 

be, expressly contemplates that such Business Plan (including any update thereto) may propose 

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deviations from any such restriction) for the disposition of each related Acquired Property which 

strategy may consist of one or more of the following: (i) the sale or leasing of the Acquired 

Property in whole or in parts, or in pools; (ii) making repairs to, the rehabilitation or improvement 

of, and, if applicable, the completion of construction of, the Acquired Property, or making changes 

to the Acquired Property so that it may be used for uses other than its current use, with a view 

toward selling the Acquired Property; (iii) continued leasing or sales activity with respect to the 

Acquired Property available for leasing or sale (in whole or in part) at the time it is transferred to 

an Ownership Entity; and (iv) maintenance, landscaping and general upkeep of the Acquired 

Property. To the extent any such Business Plan (and related strategy) includes any permitted 

construction or development to be funded by the Company (other than pursuant to Required 

Funding Draws) (including, if applicable, through Permitted Capital Improvement Expenses, such 

Business Plan (and any update thereto) must include a description of such construction or 

development in reasonable detail (including the related budget and timeline). For avoidance of 

doubt, in no event will delivery of any information pursuant to a Business Plan, Strategic Plan 

Reports or Critical Strategy Resolution Business Plan (or any update to any of the foregoing) be 

deemed to constitute delivery or approval with respect to any Capital Improvement Plan. 

(c) Each Business Plan (including any update thereto) must contain the 

Company's estimate (or determination, as applicable) of (i) the gross and net amount that is 

recoverable with respect to each related Asset (including, with respect to all related Acquired 

Property, the then Net Fair Value thereof), (ii) with respect to all Acquired Property and Mortgaged 

Property included in any Asset covered by such Business Plan, in the event such Acquired Property 

or Mortgaged Property includes more than one parcel of real property (or would otherwise 

potentially be sold by the Company in severable parts), the then projected Release Price for each 

such parcel (or other severable part) of such Acquired Property and Mortgaged Property, and (iii) 

projected Working Capital Expenses, Permitted Capital Improvement Expenses and any other 

permitted expenditures or contingent liabilities with respect to each such Asset (including any 

Acquired Property), and, in each case including in reasonable detail the manner of calculation of 

each of the foregoing. The Consolidated Business Plan (including any update thereto) must 

include projected financials including statements of income, assets, and cash flows for the 

Company (and, for purposes of clarification, the information required pursuant to the immediately 

preceding sentence both with respect to each Asset (on an Asset-by-Asset basis) and with respect 

to all Assets on a consolidated basis). Such cash flow projections must, for the Consolidated 

Business Plan and each update thereto, include an Excel model of projected cash flows (in the 

form set forth in Exhibit F hereto, and as may be updated from time to time pursuant to Section 

7.7(f) of this Agreement), as of June 30 and December 31 of each year (or, in the case of the initial 

Consolidated Business Plan, as of the date of preparation and delivery thereof) and covering the 

period through the fifth anniversary of the Closing Date (or with respect to any update thereto, any 

later date representing the Manager’s then reasonably expected projection as to the date upon 

which the Final Distribution will occur), on a monthly basis for the upcoming twenty-four months 

and not less than a quarterly basis thereafter, including projected cash inflows (including projected 

Asset Proceeds and Excess Working Capital Advances), projected cash outflows (including 

projected Servicing Expenses, Required Funding Draws and other Working Capital Expenses, 

Capital Improvement Advances and other Permitted Capital Improvement Expenses (and related 

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drawings from the Capital Improvement Account)), projected Working Capital Reserve levels, 

projected Capital Improvement Fund levels, and the amount and allocation of any projected 

distributions to the Initial Member and the Private Owner. 

(d) Each update to a Business Plan must include descriptions and explanations 

for the largest variances to the previously reported corresponding Business Plan. Variance 

explanations must include changes in capital expenditures for Acquired Property, protective 

advances, internal rates of return, strategy for the disposition of the Assets, actual principal and 

interest income and other collection proceeds, cash flows, projected distributions to the Members, 

and other changes in strategy or other relevant matters as compared to the previously reported 

corresponding Business Plan. 

(e) Each Business Plan (including any update thereto) will set forth the policies, 

practices and guidelines with respect to when (including how frequently) site inspections (of 

Mortgaged Property and Acquired REO Property) will be conducted, the procedures to be followed 

in conducting site inspections and the manner in which the results of site inspections are to be 

documented (including standard forms to be used in connection with such documentation). 

(f) Each Business Plan (including any update thereto) will set forth (i) the 

organizational structure of the Manager and its Affiliates, and (ii) the policies and procedures of 

the Manager and its Affiliates regarding the manner in which the strategies set forth in the Business 

Plan, and the determinations described in Section 1(a)(ii) of the Reporting and Access Schedule, 

are determined, made, internally approved and implemented. 

7.8. Supplemental Plans for Risk Category C/D Loans (Strategic Plan Reports and 

Critical Strategy Resolution Business Plans). 

(a) For any Loan that, as of any date of required delivery of Business Plans (or 

any update thereto) has either a C or a D Risk Category, the Manager must deliver to the Initial 

Member, together with the delivery of the Business Plans (and each update thereto) as set forth in 

Section 7.7 above, a written report (or update, as the case may be) for such Loan (each one, a 

“Strategic Plan Report”), in the form attached hereto as Exhibit J, describing, among other 

matters, strategies to improve the Risk Category of such Loan pursuant to the Loan Criteria Matrix, 

which strategies may include, among others, loan modifications pursuant to the Loan Modification 

Program and Capital Improvement Advances. 

(b) For any Loan that is (as of the Closing Date) or becomes (after the Closing 

Date) a Risk Category D Loan and thereafter continues to have such D Risk Category for a period 

of 12 months or more, the Manager must deliver, no later than 60 days following the expiration of 

such 12 month period, and thereafter (for so long as it is a D Asset) semiannually together with (or 

as a separate part of) the updated Business Plans, a specific plan (“Critical Strategy Resolution 

Business Plan”) for such D Loan containing detailed strategies and actions to be adopted by the 

Manager to enhance the performance and/or maximize the value of such Loan (which may include 

the sale of such Loan to a Permitted Buyer in accordance with the Transaction Documents). 

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7.9. Changes to Business Plans and Supplemental Plans. The Initial Member has the 

right from time to time after the Closing Date to prescribe a form, or to update (and otherwise 

modify) the form, of any component of (or information to be included in) the Business Plan 

(including the form of cash flow projections attached hereto as Exhibit F), Strategic Plan Report 

and Critical Strategy Resolution Business Plan in such manner as determined appropriate by the 

Initial Member in its sole discretion, in each case by delivery of written notice to the Manager 

including or attaching the applicable form (new, updated or otherwise modified) or other changes 

(or otherwise setting forth a link to the applicable website including such form (new, updated or 

otherwise modified) or changes, or with respect to the cash flow projections, indicating that the 

same is available at the applicable website specified in or pursuant to Exhibit F hereto, or in any 

such case making the same available by such other means as may be applicable in connection with 

engagement or use of a Reporting Service pursuant to Section 6 of the Reporting and Access 

Schedule), at least three months prior to the effective date (as selected by the Initial Member) of 

such update (or modification). 

7.10. Initial Member Engagement of Contractors. The Initial Member retains the right, 

in its sole discretion, to engage any one or more (a) Verification Contractors in accordance with 

the terms set forth in Section 5 of the Permitted Capital Improvement Addendum, (b) Reporting 

Services in accordance with the terms set forth in Section 6 of the Reporting and Access Schedule, 

and (c) additional third party contractors to assist the Initial Member in the exercise of its rights 

(including oversight of the Private Owner and the Manager in performance of their respective 

obligations) and performance of its obligations under the Transaction Documents. Each of the 

Company, the Manager and the Private Owner will, to the extent set forth, and subject to any 

limitations on authority so set forth, by the Initial Member in its sole discretion in an applicable 

notice identifying any such contractor and its applicable authority, cooperate with such contractor 

(as a representative and designee of the Initial Member), including in granting to such contractor 

all access and rights to copies available to the Initial Member (and any representative or designee 

thereof) under the Reporting and Access Schedule and any other applicable provisions of the 

Transaction Documents. Allocation of costs and expenses (and any reimbursement or indemnity 

in respect thereof) in connection with any such engagement by the Initial Member and cooperation 

by the Company, the Private Owner and the Manager as applicable will be based on the provisions 

of the Transaction Documents applicable to the exercise by the Initial Member of the rights (or 

obligations, as the case may be) being performed with use of such contractor. 

ARTICLE VIII 

Restrictions on Disposition of Private Owner Interest 

8.1. Limitations on Disposition of Private Owner Interest. Except as otherwise provided 

in this Article VIII, the Private Owner shall not, and may not, Dispose of all or any part of the 

Private Owner Interest; provided, however, that the Private Owner may (A) make a direct, outright 

transfer of its entire (but not less than its entire) Private Owner Interest if, and only if, (i) (x) the 

transferee is a single Person that is a Qualified Transferee, (y) such transferee delivers to the Initial 

Member a Purchaser Eligibility Certification and the representations and warranties made by such 

transferee therein shall be true and correct both before and after giving effect to such transfer of 

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the Private Owner Interest, and (z) the Private Owner first obtains the prior written consent of the 

Initial Member to such transfer, or (ii) such Disposition is done by or at the direction of the Initial 

Member pursuant to Section 3.13 or 3.14; provided, further, that it is understood that a direct or 

indirect Disposition of an interest of a third party in the Private Owner (i.e., as opposed to a 

Disposition of any nature by the Private Owner itself) does not violate this sentence (it being 

further understood that such transaction might nevertheless violate other provisions of the 

Transaction Document (such as for example Section 8.2 or 10.1 hereof), and (B) make a direct 

outright transfer of its right to receive the Interim Management Fee or Management Fee payments 

as set forth in (and subject to) Section 12.5. Transfers of the entire Private Owner Interest 

satisfying the foregoing criteria/criteria set forth in clause (A) of the preceding sentence are 

hereinafter referred to as “Permitted Dispositions.” 

8.2. Change of Control. The Private Owner represents, warrants and covenants that no 

Change of Control will occur with respect to the Private Owner unless (i) it first obtains the prior 

written consent of the Initial Member, and (ii) following such Change of Control, the Private 

Owner would remain a Qualified Transferee. Without limitation of the preceding sentence, the 

Private Owner will provide the Initial Member with immediate notice at the address specified in 

the Notice Schedule of the occurrence of any Change of Control with respect to the Private Owner. 

8.3. Additional Provisions Relating to Permitted Dispositions. Except as otherwise 

expressly provided in this Section 8.3, the following provisions will apply to each Permitted 

Disposition: 

(a) In the event the Private Owner proposes to make a Permitted Disposition, 

the Private Owner will be required to pay any and all filing and recording fees, fees of counsel and 

accountants and other out-of-pocket costs and expenses reasonably incurred by the Initial Member 

and the Company in connection with such Permitted Disposition. 

(b) The transferee in a Permitted Disposition must deliver to the Company, with 

a copy to the Initial Member, an agreement, in form and substance reasonably satisfactory to the 

Initial Member, by which such transferee will (i) agree to become a party to and be bound by each 

of this Agreement, the Custodial and Paying Agency Agreement, the Agreement of Common 

Terms and Definitions, the Servicing Agreement (if such transferee is also the Manager, and 

unless, in connection with such Permitted Disposition, the Servicing Agreement is terminated in 

accordance with its terms with a full release of claims by the Servicer and any terminating 

Subservicer and with execution of a replacement Servicing Agreement with such Servicer or a 

replacement Servicer in a manner acceptable to the Initial Member), and each other Transaction 

Document to which the Private Owner is a party (including, if the transferor Member, prior to such 

transfer, also was the Manager, to which it is a party in its capacity as the Manager (or in its 

individual capacity)) as the “Private Owner” (or as the “Manager” as applicable), (ii) agree (if the 

transferor Member, prior to such transfer, also was the Manager) to be appointed as the “Manager”, 

and without limitation of the generality of the foregoing, agree to be bound by the other terms of 

Section 8.4 hereof, and (iii) assume and agree to perform when due all of the obligations of the 

“Private Owner” and (if the transferor Member, prior to such transfer, also was the Manager) the 

“Manager” under each of this Agreement, the Custodial and Paying Agency Agreement, the 

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Agreement of Common Terms and Definitions, the Servicing Agreement (or applicable 

replacement Servicing Agreement) and each other Transaction Document to which the Private 

Owner (including, if the transferor Member, prior to such transfer, also was the Manager, in its 

capacity as the Manager (or in its individual capacity)) is a party, and (iv) represent and warrant 

that it complies with the requirements set forth in Article X and make all the other representations 

and warranties as the “Private Owner” set forth in this Agreement. 

(c) In connection with each Permitted Disposition, the Private Owner and the 

transferee must deliver to the Company and the Initial Member such other documents and 

instruments as the Initial Member reasonably may request and which are required to effect the 

Permitted Disposition and substitute the transferee as a Member. 

8.4. Effect of Permitted Dispositions. 

(a) Upon consummation of any Permitted Disposition: 

(i) the transferee will be admitted as a member of the Company and be 

deemed to be a party to this Agreement as the “Private Owner” and, if the transferor Member, prior 

to such transfer, also was the Manager, such transferee will be appointed as the Manager (in the 

place of the transferor Member); 

(ii) the transferred LLC Interest will continue to be subject to all the 

provisions of this Agreement, and the transferee Member will have the same status as the Private 

Owner had at the time of consummation of such Permitted Disposition and, without limiting the 

generality of the foregoing, any outstanding breach, misrepresentation, violation or default (with 

respect to this Agreement or any other Transaction Document) by any direct or indirect predecessor 

to the transferee as the Member, or by any Affiliate of any such predecessor Member, will be 

deemed to constitute an outstanding breach, misrepresentation, violation or default as the case may 

be, by the transferee Member; and 

(iii) subject to Section 8.4(b) and the last sentence of Section 13.7, the 

transferor Member will cease to be a member of the Company (and accordingly, except as 

expressly otherwise provided in Section 8.4(b) or the last sentence of Section 13.7, will cease to 

be responsible for the payment or performance of any of the obligations or liabilities under this 

Agreement of the Private Owner, in any capacity hereunder). 

(b) No Permitted Disposition (and no resulting withdrawal or resignation of the 

transferor Member from the Company) will: 

(i) relieve the transferor Member of any of the obligations or liabilities 

of the transferor Member, in any capacity, under this Agreement or any other Transaction 

Document required to have been paid or performed prior to the consummation of such Permitted 

Disposition (or of any liability it may have arising out of any breach, misrepresentation, violation 

or default by the transferor Member prior to such consummation); 

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(ii) result in the termination of, relieve the transferor Member (or any of 

its Affiliates) of, or otherwise affect, any of the obligations or liabilities of the transferor Member, 

in any capacity, or its Affiliates under, any Related Party Agreement (such Related Party 

Agreements to continue in effect in accordance with their respective terms), except to the extent 

expressly provided in such Related Party Agreement; 

(iii) dissolve the Company; or 

(iv) relieve the transferor Member of any obligations, liabilities and 

indemnities required pursuant to Section 4.6 hereof. 

(c) The Initial Member, in its discretion, can waive any provision of Section 

8.3 or 8.4(a) in the context of a transfer of the Private Owner Interest pursuant to Section 3.13 or 

3.14. 

8.5. Effect of Prohibited Dispositions. Any attempted or purported Disposition of the 

Private Owner Interest (or any portion thereof) not strictly in accordance with the terms of this 

Agreement will be void ab initio and of no force or effect whatsoever. The Private Owner will not 

be entitled, and hereby specifically waives any right, to receive Company distributions during (i) 

the period between any attempted or purported Disposition of the Private Owner Interest (or any 

portion thereof) not strictly in accordance with the terms of this Agreement and the express 

rescission of such attempted or purported Disposition by the Private Owner and (ii) any period 

when the Private Owner is in violation of Section 8.2, provided that all such omitted Company 

distributions will (subject to Section 8.6) be made to the Private Owner (without interest) forthwith 

after the end of the relevant suspension period. The Initial Member will have the right to issue any 

applicable PO/Manager Distribution Instruction (and, in such case, will thereafter issue the 

applicable PO/Manager Distribution Reinstatement Notice following the end of the relevant 

suspension period) pursuant to Section 5.1(a) of the Custodial and Paying Agency Agreement in 

furtherance of the foregoing. 

8.6. Distributions After Disposition. Distributions with respect to an LLC Interest 

(including pursuant to Section 8.5) made on or after the effective date of the Permitted Disposition 

of such LLC Interest will be made to the transferee Member with respect to such LLC Interest, 

regardless of when such distributions accrued on the books of the Company. 

8.7. Transfers by Initial Member. 

(a) Notwithstanding anything to the contrary contained in this Agreement, 

except as provided by applicable Law, there will be no restriction on the Initial Member’s ability 

to Dispose of the Initial Member Interest, directly or indirectly, to any Person and the Private 

Owner will have no right to purchase or right-of-first-refusal in connection with any such sale; 

provided, however, that, the Initial Member may not assign the consent and voting rights 

associated with the Initial Member Interest to more than one Person (for the avoidance of doubt, 

except as expressly provided above, the foregoing restriction will not otherwise limit the Initial 

Member’s right to Dispose of any interest associated with the Initial Member Interest) and 

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provided, further, that in the event the Initial Member determines to sell the Initial Member Interest 

through an auction process, the Private Owner will be entitled to participate in such auction on the 

same terms that apply generally to other participants in the auction. At the election of the Person 

then constituting the “Initial Member” under this Agreement, the transferee in any direct 

Disposition of any portion of the Initial Member Interest will, upon delivery to the Company, with 

a copy to the Private Owner, of an agreement by which such transferee will agree to become a 

party to and be bound by this Agreement as the “Initial Member,” be admitted as a member of the 

Company and be deemed to be a party to this Agreement as the “Initial Member”, and thereupon, 

subject to last sentence of Section 13.7, the transferor Member will cease to be a member of the 

Company (and accordingly, except as expressly otherwise provided in last sentence of 

Section 13.7, will cease to be responsible for the payment or performance of any of the obligations 

or liabilities under this Agreement of the Initial Member). 

(b) [Intentionally Omitted]. 

(c) Anything in this Agreement (including Section 8.7(a)) to the contrary 

notwithstanding from and after the acquisition by the FDIC in its corporate capacity of the assets 

of the receivership of the Failed Bank, the FDIC in its corporate capacity as successor to the FDIC 

in its capacity as the receiver under such receivership, automatically and without any further act 

of the parties, will succeed to all of the rights, duties and obligations of the “Initial Member” 

hereunder. 

8.8. Resignation; Dissolution. 

(a) The Private Owner may not withdraw or resign from the Company, except 

(i) in connection with a Permitted Disposition made in accordance with the applicable provisions 

of this Article VIII or (ii) with the prior written consent of the Initial Member. 

(b) The Private Owner covenants that it will not allow a Dissolution Event to 

occur with respect to itself. 

(c) § 18-304 of the Act will not apply to the Company. Nothing in this 

Section 8.8(c) will limit the terms of Section 9.1 hereof. 

(d) Except as is otherwise expressly provided in this Agreement, no Member 

will be entitled to receive any payment pursuant to § 18-604 of the Act. 

8.9. Applicable Law Withdrawal. If, as a result of applicable Law, the ownership of an 

LLC Interest by a Member becomes illegal or is likely to become illegal or the applicable Law 

more likely than not requires divestiture of such Member’s LLC Interest, or the applicable Law 

would require the Company to register as an investment company under the Investment Company 

Act, then the Manager and such Member must use their respective commercially reasonable efforts 

to avoid a violation of any such applicable Law by such Member or the need for the Company to 

register as an investment company. These steps may include, depending on the provisions of such 

applicable Law, (i) arranging for the sale of the Member’s LLC Interest to a third party upon terms 

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reasonably satisfactory to the Member in a transaction that complies with Articles VIII and X, 

(ii) making any appropriate applications to the relevant Governmental Authority, (iii) prohibiting 

such Member from making further Capital Contributions, and converting its LLC Interest into a 

special interest with no voting or similar rights but with only an economic right (identical to its 

prior rights as a Member), or (iv) permitting the Member to withdraw from the Company in 

exchange for a “payment” to such Member equal to the value of its LLC Interest at the time of 

withdrawal, such value to be determined by a third party appraiser mutually agreeable to the 

Manager and all Members. The aforesaid “payment” must be made in cash unless the Manager 

determines that the payment in cash would be economically detrimental to the Company, in which 

case such payment may be made in kind, subject to the applicable Law. The timing of any such 

withdrawal must be mutually agreeable to the withdrawing Member and the Manager taking proper 

account of the effective date of the applicable Law or registration requirement that is the basis for 

the withdrawal or other remedy provided herein and the need of the Manager for a reasonable 

period of time to find a solution to the illegality or requirement for divestiture or renegotiation. 

Such illegality, divestiture or registration requirement must be established by (x) an opinion of 

counsel (which counsel must be reasonably satisfactory to the Manager and the Initial Member) 

substantially to the effect that the ownership of the LLC Interest more likely than not will result in 

such illegality or requirement for registration or divestiture or (y) a ruling or order from a 

Governmental Authority. 

ARTICLE IX 

Dissolution and Winding-Up of the Company 

9.1. Dissolution. A dissolution of the Company will take place upon (and only upon) 

the first to occur of the following: 

(a) the agreement by all Members to dissolve the Company (it being understood 

and agreed that neither Member, acting alone, will have the right unilaterally to dissolve the 

Company); 

(b) notice to such effect to the Private Owner from the Initial Member at any 

time after the occurrence of a Dissolution Event or an Insolvency Event with respect to the Private 

Owner or any Person that Controls the Private Owner; or 

(c) when determined appropriate by the Manager (in accordance with the 

Servicing Standard) after (i) the sale of substantially all the Company Property (other than cash 

and cash equivalents), or (ii) exercise of the Clean-Up Call and liquidation of all remaining Assets 

and Acquired Property of the Company in accordance with Section 12.20; provided, that, (x) at 

the time either of the events described in clauses (i) and (ii) occur, the Manager will, subject to 

applicable Law, immediately proceed with the winding-up procedures pursuant to Section 9.2 

below, and (y) such dissolution will occur prior to the Final Distribution. 

9.2. Winding-Up Procedures. If a dissolution of the Company pursuant to Section 9.1 

occurs (or to the extent otherwise required pursuant to Section 9.1(c)), subject to the Company’s 

compliance with its obligation under the other agreements to which it is a party, the other terms 

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and conditions of this Agreement or the other Transaction Documents, the Manager must proceed 

as promptly as advisable to wind up the affairs of the Company in an orderly and businesslike 

manner. The Manager will make a final accounting. As part of the winding-up of the affairs of 

the Company, the following steps will be taken: 

(a) The Company must comply with § 18-804(b) of the Act. In connection 

therewith, (i) the Manager will deliver to the Initial Member a relevant liability and reserve 

analysis, including, where appropriate, qualified independent third party analysis with respect to 

potential liabilities, and (ii) the Manager will provide (or make provision) for potential liabilities 

(including further anticipated Working Capital Expenses in connection with the retention of the 

Working Capital Reserve and dissolution and termination of the Company) by setting aside 

applicable reserves in the Working Capital Reserve. 

(b) The Manager will liquidate all the Company Property and apply the 

proceeds of such liquidation in the manner set forth in Section 9.2(c) except as provided for in 

Section 9.2(d). Any Ownership Entities not sold will be dissolved, wound up and terminated by 

the Manager as part of, and upon substantially the same terms as apply to, the dissolution, windingup and termination of the Company, including as to provision (in accordance with, and subject to 

applicable Law for such Ownership Entity) for contingent liabilities by the setting aside of reserves 

in the Working Capital Reserve. In connection with such liquidation, the Manager will fully and 

finally resolve all Loans and other Company Property, including (i) as to any Loan (and rights to 

any Deficiency Balance) that has not been so fully and finally resolved by way of a disposition or 

permitted distribution-in-kind, by completion of charge-offs (with issuance of any applicable IRS 

Form 1099), (ii) in respect of any recorded interests involving or otherwise running to the benefit 

of, or required pursuant to the Transaction Documents to have been transferred to, the Company 

or any Ownership Entity, with applicable duly recorded transfers, releases or terminations, as 

applicable, and (iii) closing of all Company Accounts (after all remaining funds therein have been 

liquidated), all in a manner that avoids any further obligations or required actions of the Company 

or any Ownership Entity following the termination of the Company pursuant to Section 9.3. 

(c) Distributions of the assets of the Company in connection with (or, as 

applicable pursuant to Section 9.1(c), in anticipation of) a dissolution of the Company will be 

conducted as follows: 

(i) first, to creditors, but excluding the Members who are creditors, to 

the extent otherwise permitted by Law (and, to the extent permitted, in accordance with the Priority 

of Payments), in satisfaction of liabilities of the Company (whether by payment or the making of 

reasonable provision for payment thereof); 

(ii) second, to the Members or former Members who are creditors, to 

the extent otherwise permitted by Law, in satisfaction of liabilities of the Company (whether by 

payment or the making of reasonable provision for payment thereof) other than liabilities for which 

reasonable provision for payment has been made and liabilities for distributions to the Members 

and former Members under § 18-601 of the Act; 

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(iii) third, to the Members and former Members in satisfaction of 

liabilities (if any) for distributions under § 18-601 of the Act; and 

(iv) finally, to the Members in the manner set forth in Section 6.6(b). 

(d) In connection with such winding-up and liquidation of the Company 

Property, the Manager can request the consent of the Initial Member to distribute certain Company 

Property in-kind in lieu of liquidating such Company Property. If the Initial Member consents to 

an in-kind distribution, the Manager will hire independent appraisers to appraise the value of 

Company Property that will be distributed in-kind to determine the Fair Market Value of such 

assets, and allocate any unrealized gain or loss determined by such appraisal to the Members’ 

respective Capital Accounts as though the properties in question had been sold on the date of 

distribution and, after giving effect to any such adjustment, distribute said assets in the manner set 

forth in Section 9.2(c). If a Member, upon the advice of counsel (obtained at its own expense), 

determines that there is a reasonable likelihood that any distribution-in-kind of an asset would 

cause such Member to be in violation of any Law, such Member and the Manager will each use its 

best efforts to make alternative arrangements for the sale or transfer into an escrow account of any 

such distribution-in-kind on mutually agreeable terms. 

(e) The Final Monthly Distribution will occur following the winding-up and 

liquidation (or applicable permitted distribution) of all remaining Company Property other than 

any applicable reserves to be held in the Working Capital Reserve pursuant to Section 9.2(a). The 

Final Distribution will occur on or after such Final Monthly Distribution, subject to and following 

the completion of the dissolution of the Company and the determination by the Manager that no 

remaining reserves are required to be held in the Working Capital Reserve pursuant to Section 

9.2(a). During the period following the Final Monthly Distribution and continuing until the Final 

Distribution, the Manager will, as and when appropriate as determined by the Manager in 

accordance with applicable Law, direct application of funds in the Working Capital Reserve (i) for 

payment of applicable amounts required to be paid by the Company, and (ii) to the extent of funds 

no longer required to be maintained in the Working Capital Reserve, for distributions, in each case 

in accordance with the priorities in Section 9.2(c). 

(f) In connection with any such winding-up of the Company and the making of 

the Final Monthly Distribution and each further distribution through and including the Final 

Distribution, the Manager will provide applicable instructions to the Paying Agent in accordance 

with the Custodial and Paying Agency Agreement, including instructions for establishing any 

reserves in the Working Capital Reserve, for making the Final Monthly Distribution (and 

transferring applicable funds to the Collection Account pursuant Section 3.6(d) of the Custodial 

and Paying Agency Agreement in connection therewith), and for making all payments and further 

distributions from the Working Capital Reserve through and including the Final Distribution. 

(g) Concurrently with the making of each of the Final Monthly Distribution and 

the Final Distribution, the Manager will provide to the Members a certificate, signed by an 

appropriate authorized officer of the Manager, certifying that (i) all Company Property (including 

all Assets and Ownership Entities) has been sold (or otherwise disposed of) or distributed (and, 

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that, in connection therewith, all remaining rights to any Loans not so disposed or distributed have 

been charged off, with issuance of applicable IRS Form 1099s, and that all recorded interests 

involving the Company or any Ownership Entity or otherwise running to the benefit of, or required 

pursuant to the Transaction Documents to have been transferred to, the Company or any 

Ownership Entity, have been appropriately assigned, released or terminated, as applicable, such 

that no further action of the Company will be required in respect of any such Loans or other 

Company Assets following the termination of the Company pursuant to Section 9.3), (ii) all 

required reserves have been established, and all amounts (other than, in the case of the Final 

Monthly Distribution, amounts appropriately held in the Working Capital Reserve) have been 

distributed, in each case accordance with this Article IX and applicable Law (including that the 

Company has fully complied with § 18-804(b) of the Act), and (iii) no assets (other than, as 

applicable, the Working Capital Reserve) remain owned by, or otherwise titled to, the Company. 

If requested by the Initial Member, the Manager will provide final financial statements in 

accordance with Section 2(c) of the Reporting and Access Schedule. 

9.3. Termination of the Company. Upon the dissolution of the Company and the 

completion of the winding-up process set forth in Section 9.2 and the making of the Final 

Distribution (with release of all remaining reserves for contingent liabilities), the Manager (or such 

other Person or Persons as the Act may require or permit) will (a) cause, when appropriate to do 

so under Delaware law, the cancellation of the Certificate and any filings required by clause (iii) 

of Section 4.3, and take (or cause to be taken) such other actions as may be necessary to terminate 

the Company, and (b) promptly upon the same becoming available, obtain and deliver to each of 

the Initial Member and the FDIC applicable evidence of such cancellation and termination, 

including a certified (by the Delaware Secretary of State) copy of the filed Certificate of 

Cancellation. 

9.4. Post-Termination Matters. Without limitation of the Manager’s indemnity 

obligations under Section 4.6, the Manager, at its sole cost and expense, will be responsible for, 

and must promptly resolve, any further obligations of the Company or any Ownership Entity that 

may exist or arise following, and notwithstanding, the winding up and termination of the Company 

pursuant to the foregoing provisions of this Article IX; provided, however, that in no event will 

the Company be reconstituted or revived without the express prior written consent of the Initial 

Member. In furtherance of and with respect to performance of its obligations under this 

Section 9.4, the Manager has caused the Company, in connection with execution and delivery of 

this Agreement, to appoint the Private Owner (including any applicable officer or agent thereof, 

with full power of substitution) as the Company’s continuing representative for resolving any such 

post-termination matters and performing any such post-termination obligations pursuant to a 

power of attorney (the “Post-Termination LPOA”), which Post-Termination LPOA will be in the 

form attached to this Agreement as Exhibit G (or such other form as agreed by the Manager, the 

Private Owner, and the Initial Member), and which Post-Termination LPOA will be irrevocable 

and coupled with an interest and will survive the termination of the Company. 

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ARTICLE X 

Qualified Transferees 

10.1. Qualified Transferees. The Private Owner (including, for the avoidance of doubt, 

its Successors), certifies, represents and warrants as follows, and covenants that it will at all times 

be in compliance with, and (without limitation of the foregoing) will not enter into any transaction, 

or take (or omit to take) any other action, that would result in it ceasing to be in compliance with, 

the following (and any proposed transferee of the Private Owner Interest in compliance with the 

following will be deemed a “Qualified Transferee”): 

(a) Organization; Good Standing; Licenses. Such Member (i) is a Special 

Purpose Entity duly organized, validly existing and in good standing under the Laws of the state 

of its organization, (ii) has qualified or will qualify to do business as a foreign corporation, 

partnership or other entity and will remain so qualified, and is and will remain in good standing, 

in each jurisdiction in which the character of its properties or the nature of its activities makes such 

qualification necessary and in which failure to so qualify would have a material adverse effect 

upon such Member or its ability to perform its obligations hereunder, (iii) has full power to own 

its property, to carry on its business as presently conducted, and to enter into and perform its 

obligations under this Agreement, and (iv) has all licenses or other governmental approvals 

necessary to perform its obligations hereunder. As of the Closing Date (or, in the case of any 

Successor to the Private Owner, as of the date such Member first became a Member of the 

Company), such Member is in compliance with Section 8.2 hereof. 

(b) Authorization; No Violation. The execution and delivery by such Member 

of this Agreement and the consummation of the transactions contemplated hereby have been duly 

and validly authorized by all necessary action. Neither the execution and delivery of this 

Agreement, nor the consummation of the transactions herein contemplated, nor compliance with 

the provisions hereof, will conflict with or result in a breach of, or constitute a default under, (i) any 

of the provisions of any Law binding on such Member or its properties, (ii) the constituent 

documents of such Member, or (iii) any of the provisions of any indenture, mortgage, contract or 

other instrument to which such Member is a party or by which it is bound or result in the creation 

or imposition of any Lien upon any of its property pursuant to the terms of any such indenture, 

mortgage, contract or other instrument. 

(c) Governmental Approvals. All actions, approvals, consents, waivers, 

exemptions, variances, franchises, orders, permits, authorizations, rights and licenses required to 

be taken, given or obtained, as the case may be, by or from any Governmental Authority or agency 

that are necessary in connection with the execution and delivery by such Member of this 

Agreement and the consummation of the transactions contemplated hereby and the performance 

of its obligations hereunder, have been duly taken, given or obtained, as the case may be, are in 

full force and effect, are not subject to any pending proceedings or appeals (administrative, judicial 

or otherwise) and either the time within which any appeal therefrom may be taken or review thereof 

may be obtained has expired or no review thereof may be obtained or appeal therefrom taken. 

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(d) No Litigation. On the date such Member becomes a party to this 

Agreement, there is no action, suit, proceeding or investigation pending or threatened against such 

Member before any Governmental Authority. 

(e) No Violation of Orders, Decrees, etc. Such Member is not in default with 

respect to any order or decree of any Governmental Authority or in violation of any Law. 

(f) Third Party Consents. No consents, approvals, or waivers of, or 

notifications to, stockholders, creditors, lessors or other nongovernmental Persons are required to 

be obtained or made by such Member in connection with the execution and delivery of this 

Agreement and the consummation of all the transactions herein contemplated and the performance 

of its obligations hereunder. 

(g) Owners Accredited Investors. All of the equity owners of such Member are 

“accredited investors,” as that term is defined in Rule 501 under the Securities Act. 

(h) Knowledge and Experience. Such Member, either by itself or through its 

advisors and principals, has such knowledge and experience in the origination, servicing, sale 

and/or purchase of performing and non-performing or distressed loans, including construction 

loans and loans secured by residential and commercial properties, as well as financial and business 

matters, as to enable such Member to utilize the information made available to it with respect to 

the LLC Interest acquired by it and the Assets to evaluate the merits and risks of a purchase of the 

Private Owner Interest and, indirectly, the Assets, and to make an informed decision with respect 

thereto. 

(i) Economic Risks. Such Member acknowledges, understands and represents 

that it is able to bear the economic risks associated with the acquisition and ownership of the 

Private Owner Interest and, indirectly, the Assets, including the risk of a total loss of its investment 

in the Company and, indirectly, the Assets and the risk that it may be required to hold the Private 

Owner Interest and, indirectly, the Assets for an indefinite period of time. 

(j) No Representations. Such Member hereby acknowledges that, except as is 

otherwise expressly provided in this Agreement, the Private Owner Interest Sale Agreement, or 

the Transfer Agreement, none of the Initial Member or the FDIC or any of their respective Related 

Persons, makes or has made any representation or warranty regarding the Company, the LLC 

Interests or the Assets or the value of any Collateral. 

(k) Due Diligence. Such Member acknowledges and agrees that, whether or 

not information is available with respect to the LLC Interests or the Assets and whether or not it 

chooses to review any information that is or was made available to it regarding the LLC Interests 

or the Assets, such Member, by itself or through its advisors or principals, has the ability and is 

and will remain responsible for making its own independent investigation and evaluation of the 

LLC Interests and the Assets and the economic, credit or other risks involved in an acquisition of 

the Private Owner Interest and, indirectly, the Assets. Except as is otherwise expressly provided 

in this Agreement, none of the Initial Member or the FDIC or any of their respective Related 

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Persons, makes or has made any representation or warranty as to the completeness or accuracy of 

any information provided. 

(l) No Securities. Such Member acknowledges and agrees that (i) the Private 

Owner Interest (and, indirectly, the Assets) is not intended to constitute and does not constitute a 

“security” within the meaning of the Securities Act, the Exchange Act, or any applicable federal 

or state securities Laws, (ii) no Private Owner Interest will be represented by any form of 

certificate or instrument, (iii) no Private Owner Interest will be redeemable, (iv) no Private Owner 

Interest is assignable or transferable except as expressly contemplated hereunder, (v) no inference 

that any of the LLC Interests or the Assets is a “security” under such federal or state securities 

Laws will be drawn from any of the certifications, representations or warranties made by any 

Person in this Agreement, (vi) it is not contemplated that any filing will be made with the Securities 

and Exchange Commission or pursuant to the “Blue Sky” or securities Laws of any jurisdiction, 

and (vii) if any of the LLC Interests or the Assets is deemed a security, such may not be resold or 

otherwise transferred by such Member except in accordance with any and all applicable securities 

and “Blue Sky” Laws. 

(m) Resales. Such Member is acquiring the Private Owner Interest (and, 

indirectly, the Assets) for its own account and not with a view toward resale in a distribution within 

the meaning of the Securities Act. 

(n) Resales in Compliance with Law. Such Member will not (i) offer, pledge, 

sell or otherwise Dispose of the Private Owner Interest (or any interest therein) or any Asset (or 

any interest therein or evidence thereof) to, (ii) solicit any offer to buy or accept a transfer, pledge 

or other Disposition of the Private Owner Interest (or any interest therein) or any Asset (or any 

interest therein or evidence thereof) from, or (iii) otherwise approach or negotiate with respect to 

the Private Owner Interest (or any interest therein) or any Asset (or any interest therein or evidence 

thereof) with, any Person in any manner, or take any other action, that would (A) not comply with 

Article VIII, or (B) render the transfer to such Member of the Private Owner Interest or any interest 

in any Asset a violation of any Law relating to the issuance, regulation, registration or disposition 

of securities, nor will it authorize any Person to so act, in any manner with respect to the Private 

Owner Interest (or any interest therein) or any Asset (or interest therein or evidence thereof). 

(o) Acquisition in Compliance with Law. Such Member’s acquisition of the 

Private Owner Interest and the resulting investment in the Assets will comply with all applicable 

Laws, including any and all Laws and restrictions imposed on resale of the Private Owner Interest 

and the Assets by federal and state securities or “Blue Sky” Laws. 

(p) Independent Evaluation. Such Member has made an independent 

evaluation of the Company and its assets (including the Assets and related Asset Files and any 

electronic data made available to it pertaining to the Assets held by the Company). Such Member 

also has conducted such other investigations as it deems appropriate, including searches of 

Uniform Commercial Code, title, court, bankruptcy, Tax, Lien and other public records. Such 

Member agrees and represents that it is entering into this Agreement solely on the basis of its own 

investigations and its judgment as to the value of the Private Owner Interest and the nature, 

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validity, enforceability, collectability and value of the Assets and all other facts material to their 

ownership, including the legal matters and risks relating to collection and enforcement, and the 

performance of any obligations under any of the Assets in any jurisdiction. Such Member further 

acknowledges that no Related Person of the Initial Member, or the FDIC has been authorized to 

make any statements or representations other than those specifically contained in this Agreement 

or the Transfer Agreement. Such Member has consulted with its own counsel, accountants and 

other advisors as to the legal, tax, business, financial and related aspects of its ownership of the 

LLC Interest and no representation, warranty or advice has been provided as to such matters by 

the Initial Member, the FDIC or any of their Related Persons. 

(q) Embargoed Person. (i) No consideration that such Member or any of its 

Affiliates contributes hereunder or under the other Transaction Documents in connection with any 

transaction regarding any assets has been derived from or related to any activity that is deemed 

criminal under United States Law; (ii) neither such Member nor any of its Affiliates or Direct 

Owners is an Embargoed Person; (iii) neither such Member nor any of its Affiliates or Direct 

Owners engages in any dealings or transactions, or is otherwise “associated with” (as defined in 

31 C.F.R. 594.316), any Embargoed Person; and (iv) if and to the extent such Member or any of 

its Affiliates is required by Law to maintain an anti-money laundering compliance program under 

applicable anti-money laundering Laws and regulations, including the Uniting and Strengthening 

America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 

2001 (Public Law 107-56), such compliance programs are currently being maintained. The 

foregoing certifications, representations and warranties are and will remain based upon a due 

inquiry and investigation; provided, however, that for purposes of determining whether any of the 

same with respect to indirect ownership are true, such Member will not be required to make an 

investigation into the ownership of publicly-traded securities (including securities of open-end 

investment companies registered under the Investment Company Act) or the ownership of assets 

by a collective investment fund that holds assets for employee benefit plans or retirement 

arrangements. 

(r) ERISA Plan Asset. The assets of such Member (including any successor to 

or transferee of such Member) are not deemed to be ERISA Plan Assets. 

(s) Purchaser Eligibility. Each of such Member and any Person that, together 

with its Affiliates, directly or indirectly holds twenty-five percent or more of the equity interests 

of such Member is and remains capable of truthfully making the representations and warranties in 

the Purchaser Eligibility Certification. 

(t) Qualified Purchaser. Such Member is a “qualified purchaser” within the 

meaning of § 3(c)(7) of the Investment Company Act. 

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ARTICLE XI 

Manager Liability 

11.1. Liability of Manager. 

(a) Except as otherwise specifically provided in this Agreement (including in 

the other subsections of this Section 11.1), the duties (including fiduciary duties) and obligations 

owed to the Company and the Initial Member by the Manager are as provided in Section 3.1(b) 

hereof. 

(b) The Manager may rely, and will be protected in acting or refraining from 

acting, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, 

consent, order, bond, debenture or other paper or document reasonably believed by it to be genuine 

and to have been signed or presented by the proper party or parties. 

(c) The Manager may consult with legal counsel, accountants, appraisers, 

management consultants, investment bankers and other consultants and advisors selected by it, 

and any act taken or omitted to be taken in reliance upon the opinion of such Persons as to matters 

that the Manager reasonably believes to be within such Person’s professional or expert competence 

will be conclusively presumed to have been done or omitted in good faith and in accordance with 

such opinion. 

(d) The Manager will not be liable to the Company or the Members for its good 

faith reliance on the provisions of this Agreement. 

(e) The limitations and exculpation afforded by each provision of this 

Section 11.1 are cumulative and not exclusive. Nothing in this Section 11.1 is intended, or will be 

deemed, to permit conduct that would otherwise constitute misappropriation of a trade secret of 

the Company under applicable Law or conduct that, even disregarding the terms hereof, otherwise 

would be actionable by the Company or any Member. 

ARTICLE XII 

Servicing of Assets 

12.1. Servicing. 

(a) Appointment and Acceptance as Servicer. Effective as of the Closing Date, 

but subject to Section 3.3 of the Transfer Agreement (with which the Manager agrees to comply) 

and the further obligations hereunder with respect to retention of the Servicer, the Manager is 

hereby appointed (and hereby accepts the appointment) with full authority and responsibility, in 

its own name, to act as the servicer for the Assets and any Collateral. Until such time as the 

Company is wound up pursuant to Section 9.2, and except as otherwise provided in Section 12.4 

and subject to the interim servicing being provided by or on behalf of the Initial Member (as the 

Transferor) pursuant to Section 3.3 of the Transfer Agreement, the Manager will, with respect to 

each Asset or Group of Assets, from and after the Closing Date, be responsible for (and hereby 

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assumes responsibility for) Servicing in accordance with the standards (collectively, the 

“Servicing Standard”) set forth in Section 1 of the Servicing Addendum attached hereto as Annex 

IV (and references in the Transaction Documents to this Article XII will be deemed to include 

such Servicing Addendum) and the terms set forth in Section 2 of the Servicing Addendum and 

elsewhere in this Article XII (such obligations in respect of Servicing referred to collectively 

herein as the “Servicing Obligations”). Without in any way limiting the foregoing, but subject to 

Section 3.3 of the Transfer Agreement and applicable rights of the Manager to perform Asset 

Management pursuant to Section 12.3(a) and engage a JDC Contractor pursuant to Section 12.3(c), 

the Manager must cause the Assets (including, for all purposes under this Article XII, the related 

Collateral) to be serviced as follows: (i) such Asset will, from and after the applicable Servicing 

Transfer Date (and continuing until the winding-up of the Company pursuant to Section 9.2), and 

except as provided in the immediately following clause (ii) or as otherwise expressly permitted by 

the Initial Member, be Serviced by or through the Servicer appointed in accordance with 

Section 12.3 below, and (ii) following the replacement of the Servicer as a result of an Event of 

Default, the Assets will be serviced by or through the Servicer appointed by the Initial Member in 

accordance with Section 12.4 below. All Servicing following the Closing Date must be performed 

in accordance with the terms of the Transfer Agreement and this Article XII. 

(b) [Intentionally Omitted]. 

12.2. [Intentionally Omitted]. 

12.3. Servicing of Assets. 

(a) Appointment of Servicer. The Manager (in its individual capacity) has 

entered into a Servicing Agreement dated the date hereof to provide for the Servicing by the 

Servicer named therein. Each Servicer, at all times during which it acts as Servicer, must satisfy 

(and continue to satisfy) the definition of Qualified Servicer. Subject to Section 12.3(b) below (as 

to Asset Management), Section 12.3(c) below (as to engagement of a JDC Contractor) and Section 

3.3 of the Transfer Agreement (with respect to the Interim Servicing Period), each Asset must at 

all times be Serviced, and the Servicing Obligations must be performed, by or through the Servicer 

(including any Subservicers engaged by the Servicer as permitted hereunder). Subject to the other 

terms and conditions of this Agreement, the Servicer may be an Affiliate of the Private Owner or 

of the Manager. The Servicer may engage or retain one or more Subservicers (and any Rated 

Subservicer may further engage or retain one or more Subservicers), including Affiliates of the 

Private Owner or of the Manager, to perform certain of its duties under the Servicing Agreement 

(or applicable Subservicing Agreement), as it may deem necessary and appropriate, by entering 

into a Subservicing Agreement with each such Subservicer, provided that any Subservicer meets 

(and at all times continues to meet) the requirements set forth in the definition of Qualified Servicer 

and the terms of the applicable Subservicing Agreement comply with the terms of the Servicing 

Agreement and this Agreement. The Servicing Agreement and each Subservicing Agreement must 

at all times meet the requirements set forth in Section 3 of the Servicing Addendum. The costs 

and fees of the Servicer (and any Subservicers) will be borne exclusively by the Manager in its 

individual capacity without any right of reimbursement from the Company or the Initial Member 

(it being understood that the Manager will have the applicable rights to receive, or, if applicable, 

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direct payment of, the Interim Management Fee and Management Fee in accordance with 

Section 12.5 hereof). Except as expressly permitted with respect to direction of payment of the 

Interim Management Fee and the Management Fee to the Servicer pursuant to Section 12.5, under 

no circumstances shall the Manager transfer, or permit to be transferred, to the Servicer or any 

other Person any ownership interest in any Servicing rights or any right to transfer or sell any 

Servicing rights, and no Servicer will be permitted to assign, pledge or otherwise transfer to any 

Subservicer or other Person or purport to assign, pledge or otherwise transfer any interest in any 

Servicing rights, and any purported assignment, pledge or other transfer in violation of this 

provision will be void ab initio and of no effect. 

(b) Manager Right to Conduct Asset Management. Notwithstanding the 

obligation to generally cause all Servicing to be performed by (or through) the Servicer, the 

Manager will have the right to retain (and not delegate to the Servicer) any or all Asset 

Management functions by expressly retaining such applicable Asset Management functions 

pursuant to the Servicing Agreement (including Schedule 2 thereto), with all Servicing other than 

such retained Asset Management being conducted by or through the Servicer. Any such Servicing 

(comprised entirely of Asset Management) not so delegated to the Servicer in accordance with the 

foregoing must be duly performed by the Manager itself (without further delegation, provided that 

an Affiliate of Manager may perform such functions on behalf of the Manager pursuant to 

arrangements consistent with the requirements of Section 3.3) in accordance with the Servicing 

Standard and the provisions herein and in the other Transaction Documents, with the Manager 

having all obligations (and with the same rights, benefits and protections to the Company, the 

Initial Member and any third party beneficiary hereof) as though the same were being conducted 

by the Servicer, such that the Manager, in performance of such Servicing must meet and comply 

with all qualifications (including qualification as a Qualified Servicer), requirements (including as 

to insurance) and obligations of the Servicer hereunder (including as to reporting and audit 

requirements), in all cases without any additional expense to the Company (including as to any 

applicable insurance, certifications or licenses so required to be obtained or maintained by the 

Manager as a result of the foregoing). 

(c) Right to Engage JDC Contractors. Notwithstanding the limitations herein 

with respect to Servicing being conducted by or through the Servicer, servicing of JDC Loans may 

be conducted through use of a JDC Contractor to the extent expressly permitted in Section 4 of the 

Servicing Addendum. 

(d) Manager Liable for Servicer, Subservicers and JDC Contractors. 

Notwithstanding anything to the contrary contained herein, the use of the Servicer (or any 

Subservicer or any JDC Contractor) will not release the Manager from any of its Servicing 

Obligations or other obligations under this Agreement, and the Manager will remain responsible 

and liable for all acts and omissions of the Servicer (and each Subservicer and JDC Contractor) as 

fully as if such acts and omissions were those of the Manager. All actions of the Servicer (or any 

Subservicer or JDC Contractor) performed pursuant to the Servicing Agreement (or any 

Subservicing Agreement or relevant subcontract with a JDC Contractor) will be performed as an 

agent of the Manager (and, as applicable with respect to any Subservicer or JDC Contractor not 

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engaged by the Manager, the Servicer or Subservicer having engaged such Subservicer or JDC 

Contractor). 

(e) Copies of Servicing and Subservicing Agreements. Copies of all fully 

executed Servicing Agreements and Subservicing Agreements, including all supplements and 

amendments thereto, must be provided to the Initial Member. 

(f) [Intentionally Omitted]. 

(g) Servicer and Subservicer Fees. No Servicer or Subservicer shall be paid 

any fees or indemnified out of any Asset Proceeds (or funds in any Company Account), it being 

understood that all fees and related costs or liabilities of the Servicer and Subservicers will be the 

sole responsibility of the Manager (in its individual capacity), without any right of reimbursement 

from the Company or the Initial Member (provided that this clause (g) does not prohibit 

reimbursement to the Manager (in its individual capacity) for Servicing Expenses or Pre-Approved 

Charges incurred by the Servicer or any Subservicer on behalf of the Manager (in its individual 

capacity), or payments of Servicing Expenses directly from Asset Proceeds to the extent expressly 

permitted pursuant to Section 12.7). 

(h) Insurance. The Servicer and each Subservicer must maintain (and, to the 

extent the Manager performs any Servicing functions pursuant to Section 12.3(b), the Manager 

must, at its sole cost and expense, itself maintain) applicable insurance as required pursuant to (and 

the Manager must otherwise comply, and cause the Company, each Ownership Entity, each 

Servicer and each Subservicer to comply, with applicable obligations set forth in) the Insurance 

Schedule (attached hereto as Annex III). 

12.4. Removal of Servicer, Subservicers and JDC Contractors. 

(a) Removal of Servicer, Subservicers or JDC Contractors. Upon the 

occurrence of an Event of Default, in addition to any other rights it may have pursuant to this 

Agreement, any other Transaction Document or applicable Law (including the Uniform 

Commercial Code), whether at Law or in equity and whether pursuant to statute or regulation or 

otherwise, the Initial Member will have the right to take, at the Initial Member’s option and the 

Manager’s expense, one or more of the following actions: (i) upon notice in writing to the Manager 

(effective at such time as is specified in such notice), to act on behalf of the Manager (in its 

individual capacity) to terminate the existing Servicer (and any Subservicers) and to cause the 

Manager (in its individual capacity) to enter into a new Servicing Agreement with a servicer (as a 

successor Servicer) selected by the Initial Member (in its sole and absolute discretion, and whether 

or not the same qualifies as a Qualified Servicer), (ii) upon notice in writing to the Manager 

(effective at such time as is specified in such notice), to remove the Private Owner as the Manager 

and appoint a successor Manager (which successor Manager may be the Initial Member) in the 

sole discretion of the Initial Member, whereupon (without limitation of Section 13.6), such 

successor Manager will immediately succeed to all, or such portion as the Initial Member and 

successor Manager agree, of the rights and obligations of the Private Owner as the Manager of the 

Company, and, in such case, the Initial Member will further have the right (A) to terminate the 

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Servicer and any or all Subservicers (in its sole and absolute discretion), and cause or permit the 

successor Manager selected by the Initial Member (and/or the Company directly, as determined 

by the Initial Member in its sole discretion) to enter into a Servicing Agreement with a successor 

Servicer, such Servicing Agreement to be between the applicable successor Manager (and/or the 

Company) and the successor Servicer chosen by the Initial Member, or (B) to retain the existing 

Servicer and cause or permit the successor Manager (and/or the Company directly, as determined 

by the Initial Member in its sole discretion) to enter into a new Servicing Agreement between such 

successor Manager (and/or the Company) and the Servicer (or to effect an assignment of the 

existing Servicing Agreement from the existing Manager (in its individual capacity) to such 

successor Manager (and/or the Company), and (iii) terminate any JDC Contractor and otherwise 

exercise any applicable rights and remedies under any Assignment of JDC Agreement. None of 

the Initial Member, any successor Manager or the Company will have any obligation to assume 

any obligations or liabilities of the removed Manager, Servicer or JDC Contractor under or in 

connection with any Servicing Agreement, Subservicing Agreement or JDC Agreement. 

Notwithstanding the foregoing, the Initial Member will not exercise its right to terminate the 

Servicer (including Subservicers and JDC Contractors engaged by or through such Servicer) or a 

JDC Contractor engaged by the Manager, in each case that is not an Affiliate of the Manager or of 

the Private Owner, in the absence of (1) an Event of Default attributable in whole or in part to the 

failure by the Servicer (or any Subservicer or JDC Contractor engaged by or through such Servicer) 

or such JDC Contractor engaged by the Manager, as applicable, to perform any material obligation 

under its applicable Servicing Agreement, Subservicing Agreement or JDC Agreement, (2) an 

Event of Default as described in any of clauses (ii), (iii) or (viii) of the definition thereof with 

respect to the Servicer (or, as applicable, any Subservicer or JDC Contractor engaged by or through 

the Servicer) or such JDC Contractor engaged by the Manager, (3) an Event of Default resulting 

from the failure of the Servicer or any of its Subservicers at any time to meet the criteria of a 

Qualified Servicer (it being understood that this clause (3) does not apply to JDC Contractors 

engaged by the Manager), (4) an Event of Default as described in clause (vi) of the definition 

thereof, to the extent relating to the Servicer (or any Subservicer or JDC Contractor engaged by or 

through the Servicer) or such JDC Contractor engaged by the Manager, (5) any other Event of 

Default that consists of a breach of a Servicing obligation under this Agreement, or (6) with respect 

to any JDC Contractor, in addition to the foregoing, any breach or default by such JDC Contractor 

under the applicable Assignment of JDC Agreement. Subject to the foregoing, the Manager hereby 

consents to the immediate termination of the Servicer, any Subservicer and any JDC Contractor 

upon the occurrence of any Event of Default. For the avoidance of doubt, the rights of the Initial 

Member in this Section 12.4 are in addition to, and can be exercised independently of the rights of 

the Initial Member in Sections 3.2, 3.13, and 3.14; and in any event all rights and remedies of the 

Initial Member under this Agreement with respect to or following an Event of Default are 

cumulative, and any or all thereof may be exercised instead of or in addition to each other or any 

other remedies available to the Initial Member, whether under this Agreement, any other 

Transaction Document or otherwise. 

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

to act on behalf of the Manager (in its individual capacity) to appoint a successor Servicer, the 

costs and expenses associated with such successor Servicer (including any Servicing fees) will be 

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borne by the Manager (in its individual capacity) (and not the Company or the Initial Member), 

and no termination or other fee will be due to the Manager (in any capacity) or the Servicer or any 

Subservicer or JDC Contractor in connection with or as a result of any such action; provided, 

however, that, if the Initial Member has also exercised its right to remove the Manager (such that 

such removed Manager no longer has rights to the Management Fee), then, with respect to 

Servicing fees of such successor Servicer (but not costs and expenses in connection with the 

replacement of the Servicer with such successor Servicer) such removed Manager will be 

responsible (in any capacity) only for the portion of such fees that, as of any particular Distribution 

Date, are in excess of the Management Fee payable to the successor Manager on such Distribution 

Date. 

(c) Removal of Manager; Management Fee. If the Initial Member exercises its 

right pursuant to this Section 12.4 to remove the Private Owner as the Manager and appoint a 

successor Manager, (i) the successor Manager selected by the Initial Member will immediately 

succeed to all, or such portion as the Initial Member and successor Manager agree, of the rights 

and obligations of the Private Owner as the Manager of the Company, and all references in this 

Agreement to the Private Owner, in its capacity as Manager of the Company, will be deemed to 

be references to the successor Manager so appointed by the Initial Member, (ii) without limitation 

of Section 13.6, the Initial Member will have the right to determine, in its sole discretion, the 

extent, terms and conditions of the appointment of any such successor Manager, including as to 

compensation (whether from the Initial Member or the Company), indemnification by the 

Company, term of appointment and removal rights, in each case without the necessity for any 

consent from the Private Owner or any other Person, and (iii) the successor Manager appointed by 

the Initial Member will be entitled to be paid the Interim Management Fee or Management Fee 

(or, in each case, such portion thereof as the Initial Member and the successor Manager agree) in 

accordance with the terms of this Agreement and the Custodial and Paying Agency Agreement. 

The removal of the Private Owner as the Manager will not relieve the Private Owner of (x) any of 

the liabilities or obligations of the Private Owner as Manager to the extent required under the terms 

of this Agreement to have been paid or performed prior to such removal or (y) any liability the 

Private Owner may have arising out of any act or omission by the Private Owner as Manager. No 

successor to the Private Owner as Manager will have any liability or obligation for any of the 

matters described in clause (x) or (y) of the preceding sentence, except as may be otherwise 

specified pursuant to any modification to this Agreement pursuant to Section 13.6. In connection 

with any such removal of the Manager, the Initial Member and any successor Manager selected by 

the Initial Member are each hereby authorized and empowered, as attorney-in-fact or otherwise, 

to execute and deliver, on behalf of and at the expense of the removed Manager (in its individual 

capacity), any and all documents and other instruments and to do or take any and all acts necessary 

or appropriate to effect the termination and replacement of such Manager and the Servicer and, in 

the event the Initial Member decides to retain a new Servicer, to enter into a new Servicing 

Agreement between the successor Manager (and/or the Company) and the Servicer or to effect an 

assignment of the existing Servicing Agreement from the removed Manager (in its individual 

capacity) to the successor Manager (and/or the Company). 

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(d) Cooperation to Facilitate Transfer. In the event any of the Manager, the 

Servicer or a Subservicer is terminated pursuant to the provisions of this Article XII, the Manager 

(in its individual capacity) must, and must cause the Servicer (and any Subservicer) to, provide the 

Initial Member and any successor Manager or Servicer in a timely manner with all documents, 

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

Member or any successor Manager or Servicer to enable such Person to assume the responsibilities 

as Manager under this Agreement and any applicable Servicing Agreement, and to cooperate with 

the Initial Member in effecting the termination of the Servicer (or any Subservicer) or the 

Manager’s rights as “Manager” under this Agreement, including, in each case subject to applicable 

requirements in the Custodial and Paying Agency Agreement, (x) the transfer within one Business 

Day to such account as the Initial Member may specify of all cash amounts which, at the time, are 

or should have been credited to the Collection Account or are thereafter received with respect to 

any Assets or Acquired Property, and (y) the transfer of all lockbox accounts with respect to which 

payments or other amounts with respect to the Assets are directed or the redirection of all such 

payments and other amounts to such account as the Initial Member may specify, and (z) the 

assignment to the Initial Member (or the applicable successor Manager or Servicer as indicated by 

the Initial Member) of the right to access all such lockbox accounts, the Collection Account and 

any other account into which Asset Proceeds or Borrower escrow payments are deposited or held. 

The Manager (in its individual capacity) will be liable for all costs and expenses incurred by the 

Initial Member or the Company (x) associated with the complete transfer of the Servicing data, 

(y) 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 Initial Member and 

any successor Manager and successor Servicer (and Subservicers) to service the Assets and 

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

successor Manager or successor Servicer (and any Subservicers), it being understood that, as to 

the compensation to be paid to the successor Manager (and Servicing fees due and payable to the 

Servicer or any Subservicer engaged by or through such successor Manager), the removed 

Manager will be responsible only for the portion of such compensation and fees that, as of any 

particular Distribution Date, are in excess of the Management Fee payable to the successor 

Manager on such Distribution Date. Within a reasonable time after receipt of a written request of 

the Manager (in its individual capacity) for the same, the Initial Member will provide reasonable 

documentation evidencing such costs and expenses, but the Initial Member’s right to 

reimbursement of such costs and expenses (and to exercise offset rights under Section 4.6(h) on 

account thereof) will not be subject to or contingent upon the provision of such documentation. 

(e) [Intentionally Omitted.] 

(f) Power of Attorney. The Company hereby irrevocably constitutes and 

appoints the Initial Member and any officer or agent thereof, with full power of substitution, as its 

true and lawful attorney-in-fact for the purposes of this Agreement and allowing the Initial 

Member to perfect, preserve the validity, perfection and priority of, and enforce any Lien granted 

by this Agreement and, after the occurrence and during the continuance of any Event of Default 

or any default under any other Transaction Document, to exercise its rights, remedies and powers 

and privileges under this Agreement. This appointment as attorney-in-fact is irrevocable and 

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coupled with an interest until this Agreement is terminated and the security interests created hereby 

are released. Without limiting the generality of the foregoing, the Initial Member will be entitled 

under this Section 12.4(f) to do any of the following if an Event of Default has occurred and is 

continuing: (i) ask, demand, collect, sue for, recover, receive and give receipt and discharge for 

amounts due and to become due under and in respect of any or all of the Assets; (ii) file any claims 

or take any action or proceeding in any court of law or equity that the Initial Member may 

reasonably deem necessary or advisable for the collection or other enforcement of all or any part 

of the Assets, defend any suit, action or proceeding brought against the Company with respect to 

any Asset, and settle, compromise or adjust any such suit, action or proceeding; (iii) execute, in 

connection with any sale or disposition of the Assets, any endorsements, assignments, deeds, bills 

of sale or other instruments of conveyance or transfer with respect to all or any part of the Assets; 

(iv) enforce the rights of the Company under any provision of any Servicing Agreement to the 

extent permitted thereunder and under the terms of this Agreement; (v) pay or discharge Taxes and 

Liens levied or placed on the Assets; (vi) generally, sell, transfer, pledge and make any agreement 

with respect to or otherwise deal with any of the Assets as fully and completely as though the 

Initial Member were the absolute owner thereof for all purposes; and (vii) do, at the Initial 

Member’s option and the Company’s expense, at any time and from time to time, all acts and 

things that the Initial Member reasonably deems necessary to protect, preserve, or realize upon the 

Assets and the Initial Member’s security interests in any Secured Assets and to effect the intent of 

this Agreement, all as fully and effectively as the Company might do. Anything in this Section 

12.4(f) to the contrary notwithstanding, the Initial Member agrees that it will not exercise any right 

under the power of attorney provided for in this Section 12.4(f) unless an Event of Default has 

occurred and is continuing. 

12.5. Interim Management Fee and Interim Servicing Fee; Management Fee. 

(a) Calculation and Payment. For each Due Period ending prior to the Final 

Monthly Distribution (and as determined separately for each Group of Assets), (i) with respect to 

any Group of Assets for which the Servicing Transfer Date has not occurred as of the first day of 

such Due Period, the Company will pay the Interim Management Fee to the Manager and the 

Interim Servicing Fee to the Initial Member, and (ii) for each Group of Assets for which the 

Servicing Transfer Date has occurred as of (or occurs on) the first day of such Due Period, the 

Company will pay the Management Fee to the Manager. Each such payment of any Interim 

Servicing Fee, Interim Management Fee and Management Fee will be made in the manner 

described in the Custodial and Paying Agency Agreement (and, as applicable, on the Distribution 

Date with respect to the applicable Due Period, provided, that to the extent there are insufficient 

funds in the Distribution Account to pay any applicable Management Fee or Interim Management 

Fee then payable (including on account of any prior deferred amounts), the amount of such 

deficiency will be added to the Management Fee or Interim Management Fee, as applicable, that 

is due on the next succeeding Distribution Date, without the accrual of interest and without the 

Company being deemed to be in breach of any obligation to pay any such Management Fee or 

Interim Management Fee, until all such fees so deferred and unpaid have been paid in full). 

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(b) Manager Right to Direct Payments; Removal of Manager. Subject to the 

foregoing requirements (and to all limitations on payments to the Manager, and rights of the Initial 

Member, as set forth in each of the Transaction Documents), the Manager may, by delivery of 

written notice to the Paying Agent (with a copy to the Initial Member) direct payment of all or any 

portion of the Interim Management Fee and the Management Fee to the Servicer if, and only for 

so long as, (i) there shall not have occurred and be continuing any Event of Default, or any 

Insolvency Event with respect to the Servicer, (ii) such Servicer is and remains an Affiliate of the 

Manager, (iii) such assignment is on fair terms and would not result in the Private Owner being in 

violation of any of its obligations under the Transaction Documents (including the obligation to 

be and remain a Special Purpose Entity), and (iv) such Servicer has no right (and expressly 

disclaims any such right) to enforce against the Paying Agent or the Company (or any Person other 

than the Manager) any such right granted by the Manager for the Servicer to so receive such 

payment of all or any portion of the Interim Management Fee or the Management Fee. 

Notwithstanding the foregoing, in the event the Manager is removed and replaced by the Initial 

Member in accordance with Section 12.4 above, the Management Fee and Interim Management 

Fee will thereafter be payable to the Initial Member or successor Manager, as determined by the 

Initial Member pursuant to such Section 12.4. 

(c) Sole Compensation of Manager. For avoidance of doubt (and without 

limitation of Servicing Expenses and Pre-Approved Charges expressly reimbursable pursuant to 

the Transaction Documents), the Management Fee and Interim Management Fee (to the extent that 

applicable duties are not performed by the Transferor during the Interim Servicing Period), as 

applicable, will be the exclusive compensation from the Company to the Manager for performance 

of all obligations of the Manager in connection with the administration and management of the 

Company, the Servicing of the Assets, and performance of Asset Management, including for (i) at 

the Manager’s own cost and expense (other than as to Reimbursable Company Administrative 

Expenses expressly payable to the Manager pursuant to the Transaction Documents and, for 

purposes of item (E) below, costs and expenses expressly payable by an applicable Beneficiary 

pursuant to the Reporting and Access Schedule), (A) making available to the Company applicable 

employees and other personnel, facilities, office equipment and support services pursuant to 

Section 3.3 hereof (including engaging any other Person for providing the same to the Company), 

(B) obtaining and maintaining all licenses and registrations, and taking all other required actions, 

with respect to the good standing, continuation and eventual dissolution of Company and each 

Ownership Entity pursuant to Section 4.3 and Article IX hereof, (C) with respect to any Manager 

that is also the Tax Representative, performing all obligations as such Tax Representative (it being 

understood that in no event will the Private Owner or any Manager receive any separate 

compensation for serving as the Tax Representative), (D) developing and updating all Business 

Plans, Capital Improvement Plans, Strategic Plan Reports, and Critical Strategy Resolution 

Business Plans, and otherwise monitoring the Assets (and monitoring any construction, 

renovation, development, exercise of remedies, foreclosure, disposition or other actions or events 

with respect to any Asset), and (E) complying with the Reporting and Access Schedule and all 

other reporting, accounting, audit and record maintenance requirements pursuant to the 

Transaction Documents, (ii) engaging and maintaining the Servicer, and paying or causing to be 

paid, at no cost to the Company or the Initial Member (and without any reimbursement from the 

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Company, the Initial Member or otherwise out of Asset Proceeds), all fees or other compensation 

payable to the Servicer or any Subservicer, (iii) obtaining and maintaining (or, as applicable, 

causing each Servicer and Subservicer to obtain and maintain), at no cost to the Company or the 

Initial Member (and without any reimbursement from the Company, the Initial Member or 

otherwise out of Asset Proceeds), all insurance required pursuant to Section 1 of the Insurance 

Schedule, (iv) performing (or causing to be performed) all Servicing and Asset Management 

required to be performed pursuant to this Article XII and other applicable provisions of the 

Transaction Documents, and (v) paying or causing to be paid, at no cost to the Company or the 

Initial Member (and without any reimbursement from the Company, the Initial Member or 

otherwise out of Asset Proceeds), all Excluded Expenses incurred by or through the Manager, the 

Private Owner, the Servicer, or any Subservicer or any JDC Contractor (including on behalf of the 

Company). 

12.6. Working Capital Expenses. Subject to Section 3.3 of the Transfer Agreement (with 

respect to the Interim Servicing Period, including as to any Interim Servicing Expenses), from and 

after the Closing Date (and, with respect to each Asset, from and after the Servicing Transfer Date 

with respect thereto), the Manager must cause the Company to pay, from available Company funds 

(in the Collection Account, the Working Capital Reserve Account or any other applicable 

Company Account the funds of which may expressly be used for such purpose, or otherwise 

through Excess Working Capital Advances funded by the Manager) all amounts due as Servicing 

Expenses (or, as applicable, Pre-Approved Charges), Required Funding Draws and other Working 

Capital Expenses in a timely manner, and in each case in accordance with applicable requirements 

set forth in the Custodial and Paying Agency Agreement (and, as applicable, the Transfer 

Agreement); provided, however, that anything to the contrary herein or in any other Transaction 

Document notwithstanding, the Manager will not have an obligation to fund Excess Working 

Capital Advances for purposes of the payment by the Company of (i) any Pre-Approved Charges, 

(ii) any Servicing Expenses (or Interim Servicing Expenses) consisting of amounts required for 

the Company to discharge the Obligations as they become due, or to make applicable 

indemnification or reimbursement payments owing by the Company to the Initial Member, the 

Transferor or any other Indemnified Party under the Transaction Documents, in each case to the 

extent such amounts would not constitute Servicing Expenses (or Interim Servicing Expenses) but 

for application of clause (f) of the definition of Servicing Expenses (or clause (f) of the definition 

of Interim Servicing Expenses), or (iii) any specific Servicing Expense relating to an Asset to the 

extent that the Manager has reasonably determined in accordance with the Servicing Standard that 

such Servicing Expense, if so paid, when combined with all unreimbursed previous Servicing 

Expenses, Permitted Capital Improvement Expenses, Required Funding Draws and Pre-Approved 

Charges with respect to such Asset (and any remaining Interim Servicing Expenses or other 

amounts owing to the Initial Member (including as Transferor) with respect to its Servicing of 

such Assets during the Interim Servicing Period pursuant to Sections 2.3, 2.4, 3.1 and 3.3 of the 

Transfer Agreement), would not ultimately be recoverable from the Asset Proceeds for such Asset. 

All Working Capital Expenses (and Excess Working Capital Advances for the funding of the 

same) will be reimbursed in accordance with the Custodial and Paying Agency Agreement. 

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12.7. Deposit and Use of Asset Proceeds. 

(a) Deposit Into Collection Account; Netting. The Manager will cause all Asset 

Proceeds to be deposited into the Collection Account within two Business Days of receipt (by or 

on behalf of the Company, the Manager, the Servicer, any Subservicer or any JDC Contractor), 

without reduction or setoff; provided, that, (i) the Manager may permit monthly deposits and 

netting of Asset Proceeds for payment of Servicing Expenses to the extent expressly allowed 

pursuant to Section 12.7(b) below, and (ii) the Manager, the Servicer and each Subservicer acting 

in accordance with the Servicing Standard may use Asset Proceeds (or permit such Asset Proceeds 

to be so used) prior to (or without, as applicable) the deposit of such amounts to the Collection 

Account (A) in the case of insurance or disposition proceeds relating to specific Collateral for a 

Loan, for the repair, restoration or replacement of such Collateral by the applicable Borrower or 

Obligor in accordance with the Asset Documents with respect to such Loan, and (B) in connection 

with a sale or other disposition of an Asset or an Ownership Entity, for payment of broker fees, 

escrow fees and other similar closing costs which are Servicing Expenses or Interim Servicing 

Expenses and appear on the HUD-1 settlement statement (or equivalent closing statement) for such 

specific sale or other disposition. 

(b) Monthly Deposit Into Collection Account. In connection with an Asset that 

is (i) Acquired REO Property with third party property management (engaged, as a Subservicer, 

in accordance with the Transaction Documents), (ii) Acquired Property leased to and operated by 

a TRS Entity, or (iii) a JDC Loan for which a JDC Contractor has been engaged, the Manager may, 

for that specific Asset and to the extent it determines that the same would be in the best interests 

of the Company in accordance with the Servicing Standard (and taking into account market 

practice), permit (x) the Asset Proceeds of such specific Asset to be deposited into the Collection 

Account within one month of the Manager’s, the Servicer’s, the Subservicer’s or the JDC 

Contractor’s receipt thereof, and (y) Servicing Expenses then due and payable with respect to such 

specific Asset to be paid directly from such Asset Proceeds by the Manager, the Servicer, the 

Subservicer or the JDC Contractor prior to remittance to the Collection Account (without any such 

Asset Proceeds being held longer than otherwise expressly permitted herein). 

(c) Reporting of Collection Account Remittance Exceptions. The Manager will 

provide written notice to the Initial Member each time the Manager permits a monthly deposit 

cycle pursuant to Section 12.7(b) above or the Manager (or the Servicer or any Subservicer) 

otherwise uses (or permits use of) Asset Proceeds pursuant to the proviso to Section 12.7(a) above, 

in each case setting forth the details thereof, and the Manager will certify that the Manager is and 

will remain in compliance with all reporting requirements with respect to all such Asset Proceeds. 

In addition, the Manager will include auditable details of any netting and use of Asset Proceeds 

under this Section 12.7 in the reporting provided pursuant to the Reporting and Access Schedule. 

(d) Costs That Are Not Reimbursable. Notwithstanding anything else to the 

contrary contained in any Transaction Document, without the prior written consent of the Initial 

Member (which may be withheld, conditioned or delayed in the Initial Member’s sole and absolute 

discretion), in no event may the Manager deduct from the Asset Proceeds, or otherwise use Asset 

Proceeds (or Company funds) to reimburse itself, the Servicer, any Subservicer or any JDC 

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Contractor or pay for, any Excluded Expenses (all of which must be borne by the Manager in its 

individual capacity). 

12.8. Collection Account. On the Closing Date, the Manager must cause the Company 

to establish the Collection Account with the Paying Agent in accordance with the Custodial and 

Paying Agency Agreement. Amounts in the Collection Account will be utilized only as expressly 

permitted or required herein or in the Custodial and Paying Agency Agreement. 

12.9. Distribution Account. On the Closing Date, the Manager must cause the Company 

to establish the Distribution Account with the Paying Agent in accordance with the Custodial and 

Paying Agency Agreement. 

12.10. [Intentionally Omitted]. 

12.11. Working Capital Reserve Account. 

(a) Establishment of Working Capital Reserve Account. On the Closing Date, 

the Manager must cause the Company to establish the Working Capital Reserve Account with the 

Paying Agent for the exclusive purpose of holding the Working Capital Reserve to cover (and 

maintain applicable reserves for payment of) Working Capital Expenses to the same extent, and in 

the same order of priority, as are applicable to Asset Proceeds in accordance with the terms hereof 

and the Custodial and Paying Agency Agreement (and, as of any date of determination, the amount 

of the Working Capital Reserve will be deemed to be the amount of the funds in such Working 

Capital Reserve Account). 

(b) Funding Working Capital Reserve. On the Closing Date, the Initial 

Member and the Private Owner will fund the Working Capital Reserve in an initial principal 

amount of the WCR Account Deposit as follows: the Initial Member will deposit cash in the 

amount of the Initial Member WCR Account Deposit, and the Private Owner will deposit cash in 

the amount of the Private Owner WCR Account Deposit, which deposits will be made in 

accordance with the applicable provisions of the Private Owner Interest Sale Agreement. On each 

Distribution Date following the Closing Date, the Company will, subject to the terms hereof and 

of the Custodial and Paying Agency Agreement, fund (or replenish, as applicable) the Working 

Capital Reserve to the extent of available Asset Proceeds (pursuant to the Priority of Payments and 

based on the then applicable Working Capital Reserve Target) so as to maintain appropriate 

Working Capital Reserve levels in accordance herewith. The Manager, in the exercise of its 

reasonable discretion and in accordance with the Servicing Standard and requirements in the 

Transaction Documents (including as to any then applicable Working Capital Reserve Floor), will 

determine the Working Capital Reserve Target from time to time (taking into account projected 

Working Capital Expenses, including reasonably required reserves for applicable contingent 

liabilities as to which applicable reserves should be maintained). From time to time, the Manager 

may, and must if required in accordance with the Servicing Standard (including for purposes of 

maintaining applicable reserves in compliance with Delaware law), submit to the Initial Member 

a written request for a change (either as a temporary or permanent increase or reduction) to the 

amount of the Working Capital Reserve Floor so as to permit the Company to maintain appropriate 

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levels for the Working Capital Reserve, taking into account the projected (or otherwise reasonably 

anticipated) Working Capital Expenses (including contingent liabilities as to which, in accordance 

with the Servicing Standard (including Delaware law), applicable reserves should be maintained). 

In connection with any such requested change to the Working Capital Reserve Floor, the Initial 

Member will have the right to receive (and the Manager must promptly comply with any 

reasonable request for) any additional relevant information as it may deem necessary or advisable 

for evaluating such request and related Working Capital Reserve levels (and compliance thereof 

with the requirements herein). Any such requested change to the Working Capital Reserve Floor 

shall be effective upon, and subject to, receipt by the Manager of an applicable express approval 

in writing from the Initial Member. The Working Capital Reserve Target shall be specified in 

each Monthly Report. In the case of each Monthly Report for all Due Periods ending prior to or 

during the calendar month in which the final Servicing Transfer Date occurs, the Manager shall 

inform the Initial Member, not later than the third Business Day prior to the Distribution Date in 

respect of such Due Period, of the Working Capital Reserve Target that should be specified in such 

Monthly Report. 

(c) Use of Working Capital Reserve. The Manager or (in relation to its interim 

Servicing rights or obligations) the Initial Member (including as Transferor) may direct the 

Company to withdraw funds from the Working Capital Reserve Account (including, as applicable, 

through release of such funds into the Collection Account) only to cover Working Capital 

Expenses in accordance with Section 3.6 of the Custodial and Paying Agency Agreement. The 

Manager shall not permit withdrawals from the Working Capital Reserve Account for any other 

purpose; provided, that, to the extent expressly permitted in the Custodial and Paying Agency 

Agreement or as otherwise required pursuant to Section 9.2 hereof, the Manager may or will, as 

applicable, cause the release of funds from the Working Capital Reserve Account (including for 

purposes of distributions to the Members) in accordance with, and subject to, the terms of the 

Custodial and Paying Agency Agreement and, as applicable, Section 9.2. With respect to any 

Group of Assets, on the Servicing Transfer Date, the Initial Member will be reimbursed from the 

Working Capital Reserve Account (including, as applicable, through release of such funds into the 

Collection Account) for an amount equal to all Working Capital Expenses paid by it (including as 

the Transferor) with respect to such Group of Assets at any time after the Cut-Off Date and on or 

before such Servicing Transfer Date (to the extent the same have not been otherwise reimbursed 

pursuant to the Transfer Agreement or Custodial and Paying Agency Agreement). 

(d) Changes Following Final Monthly Distribution. In connection with the 

Final Monthly Distribution, the Working Capital Reserve Target will be the amount determined 

by the Manager as the applicable amount to be maintained in the Working Capital Reserve 

pursuant to Section 9.2, and any excess amounts in the Working Capital Reserve will, prior to such 

Final Monthly Distribution, be transferred to the Collection Account pursuant to Section 3.6 of the 

Custodial and Paying Agency Agreement. Following the Final Monthly Distribution and 

continuing until the release of all remaining funds in the Working Capital Reserve and completion 

of the Final Distribution (if any), the Manager will, in connection with each Monthly Report (as 

the same may be adjusted for purposes of such period), set forth therein the applicable remaining 

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amount in the Working Capital Reserve, and all distributions and payments made from the 

Working Capital Reserve. 

(e) Permitted Investments. The Working Capital Reserve will be invested in 

Permitted Investments in accordance with the Custodial and Paying Agency Agreement. 

12.12. [Intentionally Omitted]. 

12.13. Capital Improvement Account. The Company Accounts will include a Capital 

Improvement Account, as further described and governed by the terms set forth in Section 2 of the 

Permitted Capital Improvement Addendum attached hereto as Annex V (and references in the 

Transaction Documents to this Section 12.13 will be deemed to include such Section 2 of the 

Permitted Capital Improvement Addendum). 

12.14. Uses of Company Funds; Development. Subject to the terms and conditions herein 

and in the other Transaction Documents, the Company must use Asset Proceeds, Excess Working 

Capital Advances, and funds in the Capital Improvement Account, the Working Capital Reserve 

Account, the Collection Account or any other Company Account solely for such purposes as are 

expressly permitted herein, in the Custodial and Paying Agency Agreement and in the other 

applicable Transaction Documents. Accordingly, except as may be required in connection with 

Required Funding Draws (and subject, as to Servicing Expenses, to clause (x) of the proviso 

appearing as the last paragraph of the definition of such term), Development of or with respect to 

any Asset (including by the Company, or by any Borrower using Funding Draws other than 

Required Funding Draws) with use of Company funds is limited to Permitted Capital 

Improvements, if any, expressly permitted and funded in accordance with the Permitted Capital 

Improvements Addendum attached hereto as Annex V (and references in the Transaction 

Documents to this Section 12.14 will be deemed to include such Permitted Capital Improvements 

Addendum). Any further Development with use of Company funds (including by the Company, 

or by any Borrower using Funding Draws other than Required Funding Draws) not expressly 

permitted pursuant to the foregoing will require the express prior written approval of the Initial 

Member (which approval may be granted or withheld in the sole discretion of the Initial Member), 

following a specific request from the Manager with respect thereto (which request must specify in 

reasonable detail the applicable requested expenses (including an applicable budget and timeline 

with respect thereto) and requested sources (including any applicable use of funds in the Collection 

Account, the Working Capital Reserve Account, the Capital Improvement Fund and any right or 

obligation to make Excess Working Capital Advances with respect thereto), and any such 

requested expenses and sources will be permitted only to the extent expressly set forth in the 

applicable written approval, if any, by the Initial Member. 

12.15. Certain Servicing and Asset Administration Decisions. The Manager will have full 

power and authority, acting alone or through the Servicer or any Subservicer or JDC Contractor, 

to cause to be done any and all things in connection with the Servicing that the Manager may deem 

necessary or desirable, and cause to be made all Servicing decisions in its reasonable discretion, 

subject to its obligation to comply with the Servicing Standard and other applicable provisions 

herein and in the other Transaction Documents. 

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12.16. Management and Disposition of Collateral. Subject to the other terms and 

conditions of this Agreement (including the Servicing Standard), the Manager will have full power 

and authority, acting alone or through the Servicer and any Subservicer, to cause to be done any 

and all things in connection with the Manager’s management of any Collateral or Acquired 

Property, that the Manager may deem necessary or desirable, and cause to be made all asset 

management decisions in its reasonable discretion. The acquisition, ownership, management and 

disposition of any such Acquired Property is subject to the terms set forth in Section 5 of the 

Servicing Addendum. 

12.17. [Intentionally Omitted]. 

12.18. [Intentionally Omitted]. 

12.19. Releases of Collateral. The Manager is authorized to cause the release or 

assignment of any Lien granted to or held by the Company on any Collateral upon payment of any 

Loan in full and satisfaction in full of all of the secured obligations with respect to a Loan, upon 

receipt of a permitted discounted payoff as payment in full of a Loan, or upon a sale of the Loan 

to any Person, in each case as and to the extent permitted hereunder. 

12.20. Clean-Up Call Rights. 

(a) The Initial Member will have the right, exercisable in its sole and absolute 

discretion, to require the liquidation and sale, for cash consideration, of any remaining Assets held 

by the Company or any Ownership Entity at any time after the earlier to occur of (i) the tenth 

anniversary of the Closing Date and (ii) the date on which the then Unpaid Principal Balance is 

10.0% or less of the Unpaid Principal Balance as of the Cut-Off Date as set forth on the Asset 

Schedule (such right to cause such liquidation and sale at such time, the “Clean-Up Call”). 

(b) In order to exercise its rights under this Section 12.20, the Initial Member 

must give notice in writing to the Manager, setting forth the date by which the remaining Assets 

are to be liquidated by the Company, which date must be no less than one hundred and fifty 

calendar days after the date of such notice. At its option, at any time in connection with or 

following the issuance of the Clean-Up Call Notice, and without limiting the exercise of the Initial 

Member’s rights under Section 3.13 following any Default or Event of Default (including the right 

to direct remittance of distributions to the Private Owner, whether or not the same have otherwise 

been withheld pursuant to this Section 12.20(b)), the Initial Member has the right to suspend or 

withhold any further distributions (and to notify the Paying Agent to suspend or withhold such 

distributions pursuant to Section 5.1(d) of the Custodial and Paying Agency Agreement) to the 

Members with respect to their respective LLC Interests (without affecting any distributions for 

payment or repayment, as applicable, of the Management Fee or Excess Working Capital 

Advances) until the Final Monthly Distribution or such earlier date as permitted by the Initial 

Member in its sole discretion. 

(c) The Manager will expeditiously cause the Company to sell or otherwise 

liquidate the remaining Assets. 

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12.21. Certain Transfer Obligations. Without limitation of other obligations of the 

Manager with respect to the Transfer Agreement, the Manager agrees to cause the Company to 

comply with its obligations under the Transfer Agreement with respect to preparing, furnishing, 

executing and recording transfer documents with respect to the Assets (including special warranty 

deeds to convey the real property subject to any contract for deed and any Acquired Property to 

the Company). Any title curative work with respect to such Assets will be at the Company’s sole 

expense, provided that, as set forth in Section 4.10 of the Transfer Agreement, such expense will 

constitute a Pre-Approved Charge. 

12.22. Seller Financing. Section 3.4(x) of this Agreement prohibits the extension by the 

Company, directly or indirectly, of seller financed loans (i.e., the seller accepts a secured 

promissory note in lieu of cash in payment of all or a portion of the sales price of Acquired 

Property) (“Seller Financed Loans”) to purchasers of any Asset, Collateral or Acquired Property 

(or any portion thereof) without the express prior written consent of the Initial Member, to be 

granted, withheld or conditioned it its sole and absolute discretion. Any request by the Manager 

for any such consent must identify all material terms and conditions of the proposed Seller 

Financed Loan, provide the form of Seller Financed Loan documents, and identify any other term 

or condition that the Initial Member may determine in its reasonable discretion is necessary for it 

to consider whether to approve such proposed Seller Financed Loan. Upon the provision of any 

Seller Financed Loan, the Manager must, or must cause the Company to, promptly deliver each 

original promissory note (with each Seller Financed Loan being duly evidenced by one or more 

original promissory notes) and the other original Seller Financed Loan documents to the 

Custodian. In the event the Company provides any Seller Financed Loans (or other financing) in 

violation of this Agreement (including the restriction in Section 3.4(x)), then, in addition to and 

without any limitation of any of the indemnification obligations under Section 4.6 or any of the 

other rights or remedies of the Initial Member, the Manager will be required to indemnify and 

make whole the Company and each Ownership Entity (and, without duplication, each Indemnified 

Party) for any Losses (including lost profits) they may incur in connection with such Seller 

Financed Loans (or other financing) or any failure of any borrower or other obligor to comply with 

any of its obligations thereunder, including any failure to pay principal or interest payable 

thereunder. 

12.23. Use of the FDIC's Name and FDIC Legal Powers. The Company must comply 

with, and the Manager must cause the Company to comply with, the following (with any failure 

to comply being subject to Section 7.4 of the Transfer Agreement, as if fully set forth herein, 

mutatis mutandis): 

(a) The Company will not use, or permit the use by its agents, successors or 

assigns or any Ownership Entity of, any name or combination of letters that is similar to "FDIC" 

or "Federal Deposit Insurance Corporation." The Company will not represent or imply, and will 

ensure that no Ownership Entity represents or implies, that it is affiliated with, authorized by or in 

any way related to the FDIC except that (i) the Company may reference the FDIC (including in 

litigation) in connection with ownership issues regarding the Company's acquisition, or the FDIC's 

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retention of assets or liabilities, and (ii) for so long as the FDIC is a Member of the Company, the 

Company may represent that fact. 

(b) (i) Subject to the terms of Section 12.23(b)(ii), the Company will not 

in any manner assert, plead, use or refer to or describe, and will ensure that no Ownership Entity, 

in any manner asserts, pleads, or uses, refers to or describes any FDIC Legal Power in any Action 

or in writing to any third party; provided, however, that this Section 12.23 does not preclude the 

assertion of, and the Company and the Ownership Entities may assert and claim the benefit of, the 

statute of limitations established under 12 U.S.C. §1821(d)(14) or any jurisdictional defect or lack 

of jurisdiction (including under 12 U.S.C. §1821(d)(13)(D)). 

(ii) The Company will not make, and will ensure that no Ownership 

Entity makes, any Interpretive Statement except in strict accordance with this Section 12.23(b). If 

the Company or any Ownership Entity desires to make an Interpretive Statement, the Company 

agrees that any such Interpretative Statement may be made only (A) upon (1) delivery of written 

notice of its desire to make such Interpretative Statement, including in such notice a draft of the 

Interpretative Statement and a corresponding legal analysis supporting the interpretations therein, 

to the FDIC no less than ten Business Days prior to the date upon which the Company proposes to 

make such Interpretative Statement, and (2) the receipt, prior to the Company or any Ownership 

Entity making such proposed Interpretive Statement, by the Company of the FDIC’s written 

consent thereto, which consent will not be withheld so long as the interpretation set forth in the 

proposed Interpretive Statement is, in the FDIC's sole and absolute discretion, consistent with the 

FDIC's interpretation, and (B) under the oversight, and at the direction of, the FDIC. 

(iii) The Company must, and must cause each Ownership Entity and 

counsel to the Company and or any Ownership Entity to: (A) comply in all respects with (1) all of 

the FDIC’s directions regarding any Interpretive Statement, and (2) all protocols, directives or 

interpretive memoranda issued from time to time by the FDIC, (and any amendment, modification 

or replacement thereof or successor thereto) that the FDIC has notified the Company in writing 

that must be complied with in connection with making an Interpretive Statement; and (B) with 

respect to any Action in which the Company or any Ownership Entity has made an Interpretive 

Statement, notify the FDIC (1) immediately of any judgment or significant order issued therein 

and (2) upon the FDIC’s request, of the status thereof. 

(c) For so long as the FDIC (in any capacity) is Initial Member, any notice to 

or consent by the FDIC pursuant to this Section 12.23 may be sent to and provided by, as 

applicable, the Initial Member. 

ARTICLE XIII 

Miscellaneous 

13.1. Common Terms. The Common Terms apply to this Agreement, except that (a) 

Sections 2.1(c) (Expenses), 2.1(d) (Binding Effect; Assignment), 2.1(i) (Entire Agreement), 2.1(k) 

(Amendments and Waivers) and 2.1(m) (Governing Law) of such Common Terms do not apply to 

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this Agreement, and (b) in the event of a conflict between any provision of the Common Terms 

and any provision in this Agreement, the terms of this Agreement will prevail. 

13.2. Waiver of Rights of Partition and Dissolution. Each Member (other than the Initial 

Member) hereby irrevocably waives all rights it may have at any time to maintain any action for 

division or sale of the Company Property as now or hereafter permitted under any applicable Law. 

Each Member (other than the Initial Member) hereby waives and renounces its rights to seek a 

court decree of dissolution or to seek the appointment of a court receiver for the Company as now 

or hereafter permitted under any applicable Law. 

13.3. Entire Agreement; Other Agreements. 

(a) This Agreement, together with the Annexes and Exhibits hereto and the 

other Transaction Documents (and any other agreements expressly contemplated hereby or 

thereby), constitutes the entire agreement and understanding, and supersedes all other prior 

agreements and understandings, both written and oral, between the Members or their respective 

Affiliates or any of them and the Company with respect to the subject matter hereof; provided, 

however, 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 other Transaction Documents (including each 

Confidentiality Agreement) will remain in full force and effect to the extent provided therein. The 

Members acknowledge that certain agreements or other instruments are being (or were) executed 

by the Company, the Members and/or Affiliates of the Members simultaneously or otherwise in 

connection with the execution of this Agreement and that notwithstanding anything to the contrary 

contained in the foregoing sentence of this Section 13.3, such agreements will be effective and 

binding on the parties thereto in accordance with the terms thereof. 

(b) By executing this Agreement, the Manager agrees to be bound by the terms 

of the Transaction Documents pursuant to which the Manager is expressly required to take or omit 

from taking certain actions, as in each case, with the same effect as if the Manager were a party to 

such Transaction Document. 

13.4. Third Party Beneficiaries. Each of the FDIC and the Receiver is hereby constituted 

an express third party beneficiary of this Agreement with respect to those provisions of this 

Agreement which expressly grant rights or benefits to such Person in accordance with Section 

2.1(p) of the Common Terms. Each Person ceasing to constitute the “Initial Member” under this 

Agreement (as a result of a Disposition of its LLC Interest) will remain a third party beneficiary 

of this Agreement with respect to Section 4.6 and, as such is entitled to enforce Section 4.6 as if 

such Person remained a party hereto. For the avoidance of doubt, in furtherance and without 

limitation of the preceding sentence, each Person comprising the “Initial Member” pursuant to the 

last sentence of the second paragraph of Section 4.6(a), and each other Indemnified Party (other 

than a Person that is an Indemnified Party solely by being a Related Person of another Indemnified 

Party), may enforce the provisions of Section 4.6 with respect to any Related Person in relation to 

itself (in its own name or in the name of or otherwise on behalf of such other Related Person). 

Subject to Section 11.1 and to the preceding provisions of this Section 13.4, (A) this Agreement is 

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for the benefit solely of, and will inure solely to the benefit of, the Members and the Company, 

and (B) this Agreement is not enforceable by any Person (including any creditor of the Company 

or of any Member) other than the Members and the Company. 

13.5. Expenses. Except as may otherwise be expressly provided herein or in any other 

Transaction Document, each Member will pay its own expenses (including legal, accounting 

investment banker, broker or finder’s fees) incident to the negotiation and execution of this 

Agreement and the other Transaction Documents, the consummation of the transactions 

contemplated by Section 2.3 hereof and the performance of its obligations hereunder. 

13.6. Waivers and Amendments. 

(a) This Agreement may be amended or modified, and the terms hereof may be 

waived, only by a written instrument signed by all Members; provided, however, that, following 

an Event of Default, from time to time this Agreement may be amended or modified, or the terms 

hereof may be waived, in each case, by a written instrument signed only by the Initial Member as 

long as such amendment, modification or waiver would not (i) adversely affect the Private Owner’s 

or the Company’s limited liability status; (ii) adversely affect the Private Owner’s share of the 

Company’s distributions, income, gains or losses; (iii) impose on the Private Owner any additional 

obligations or (iv) amend Section 3.13 or this Section 13.6; provided further, that in no event will 

any amendment, modification or waiver, limit or otherwise adversely affect the rights or benefits 

expressly granted in this Agreement to (x) any Person comprising the “Initial Member” pursuant 

to the last sentence of the second paragraph of Section 4.6(a) (or any other Related Persons in 

relation to such Person) without the express written consent of such Person so comprising the 

“Initial Member” or (y) a third party beneficiary of this Agreement (to the extent such third party 

beneficiary is, and remains, a third party beneficiary pursuant to Section 13.4 above and, as 

applicable, Section 2.1(p) of the Common Terms), or any Related Person in relation to such third 

party beneficiary, without the express written consent of such third party beneficiary. Except 

where a specific period for action or inaction is provided herein, no failure on the part of a Person 

to exercise, and no delay on the part of a Person in exercising, any right, power or privilege 

hereunder will operate as a waiver thereof; nor will any waiver on the part of such Person of any 

such right, power or privilege, or any single or partial exercise of any such right, power or 

privilege, preclude any other or further exercise thereof or the exercise of any other right, power 

or privilege. 

(b) [Intentionally Omitted.] 

(c) Notwithstanding anything to the contrary contained elsewhere in this 

Agreement (including the foregoing Section 13.6(a)) or in any other Transaction Document), this 

Agreement may be amended or modified by a written instrument signed only by the Initial Member 

to the extent determined by the Initial Member in good faith to be necessary or desirable in order 

to facilitate any Disposition by the Initial Member of only a portion of the Initial Member Interest, 

or a Disposition by the Initial Member of the entire Initial Member Interest to more than one 

Person, including to provide for more than two Persons being members of the Company, provided 

that no such amendment or modification shall (i) adversely affect the Private Owner’s or the 

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Company’s limited liability status; (ii) adversely affect the Private Owner’s share of the 

Company’s distributions, income, gains or losses; (iii) impose on the Private Owner any additional 

obligations or (iv) amend Section 3.13 (other than to the extent that such amendment or 

modification amends or modifies which member or members of the Company constitute the 

“Initial Member” hereunder) or this Section 13.6. 

13.7. Successors and Assigns. Except as otherwise specifically provided in this 

Agreement (including in Article VIII), this Agreement will be binding upon and inure to the 

benefit of the Members and the Company and their respective Successors and assigns. Without 

limitation of Section 8.4, this Agreement, as in effect on the date that any particular Person ceases 

to be Member, will continue to bind such Person in relation to the period during which it was 

Member. 

13.8. Power of Attorney. 

(a) The Private Owner does hereby constitute and appoint the Manager as its 

true and lawful representative and attorney-in-fact, in its name, place and stead to make, execute, 

sign, acknowledge, deliver or file any certificate, document or other instrument that the Private 

Owner is required to execute and deliver pursuant to clauses (i), (ii), (iii) or (iv) of Section 4.3 

hereof. The foregoing notwithstanding, the Manager does not have any right, power or authority 

to amend or modify this Agreement. The power of attorney granted hereby is coupled with an 

interest and will, unless revoked pursuant to Section 13.8(c), (i) survive and not be affected by the 

subsequent death, incapacity, disability, dissolution, termination or bankruptcy of the Private 

Owner granting the same or the transfer of all or any portion of the Private Owner Interest and 

(ii) extend to the Private Owner’s Successors, assigns and legal representatives. 

(b) The Company hereby grants to the Manager a limited power of attorney to 

execute all documents on its behalf in accordance with the Servicing Standard set forth above and 

as may be necessary to effectuate the Manager’s obligations under Article XII until such time as 

the Company revokes said limited power of attorney. 

(c) Revocation of any power of attorney granted pursuant to Section 13.8(a) or 

limited power of attorney granted pursuant to Section 13.8(b) will occur in the event of, and take 

effect upon, (i) the receipt by the Manager of written notice thereof from the Initial Member, or 

(ii) removal of the Manager in accordance with the terms of this Agreement; provided, however, 

in the event of such removal, any such power of attorney will thereafter automatically be vested in 

the successor or replacement Manager appointed in accordance with this Agreement. 

13.9. Governing Law. THIS AGREEMENT IS GOVERNED BY AND WILL BE 

CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, 

EXCLUDING ANY CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT REFER 

THE GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAWS 

OF ANOTHER JURISDICTION, AND EACH PARTY TO THIS AGREEMENT 

UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT 

THE LAWS OF ANY OTHER JURISDICTION GOVERN THIS AGREEMENT. In the event 

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of a direct conflict between the provisions of this Agreement and any mandatory, non-waivable 

provision of the Act, such provision of the Act will control to the extent necessary to eliminate 

such direct conflict. Nothing in this Agreement will require any unlawful action or inaction by 

any Person. 

13.10. Jurisdiction; Venue and Service. Section 2.1(l) (Jurisdiction and Venue) of the 

Common Terms is hereby incorporated by reference; provided, that for purposes of this 

Agreement, all references to the “Supreme Court of the State of New York” or “Supreme Court of 

the State of New York, County of New York” appearing in clauses (ii), (ii)(B), (ii)(C) and (iv) 

thereof will mean and refer to the “Chancery Court of the State of Delaware”. 

13.11. Private Owner Acknowledgement. Without in any way creating any enforceable 

right for the Private Owner (with any such right being expressly waived) or any other Person, the 

Private Owner hereby acknowledges that the Initial Member, in making determinations pursuant 

to or in connection with this Agreement and the other Transaction Documents, including as to 

exercising discretion or providing (or withholding) consents, may take into account such criteria 

and objectives as it determines in its sole discretion as relevant for its purposes, which may include 

maximizing Asset value, maximizing the preservation of the availability and affordability of 

residential real property for low-and-moderate-income individuals, and/or such other criteria as 

the Initial Member may so determine to be relevant. 

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Annex I 

Member Schedule 

Member Percentage Interests Capital Contributions 

to Working Capital 

Reserve Account 

Capital Contributions 

to Capital 

Improvement 

Account 

Initial Member 95% $204,489,896.02 $408,979,792.05 

Private Owner 5% $10,762,626.11 $21,525,252.21 

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Annex II 

Reporting and Access Schedule 

For purposes of the LLC Operating Agreement (and any incorporation of all or any portion 

of this Reporting and Access Schedule therein), references in this Annex II (i) to this “Agreement” 

mean and refer to the LLC Operating Agreement, (ii) to the “Applicable Agreements” mean and 

refer to the LLC Operating Agreement (or, as applicable, the Servicing Agreement or any 

Subservicing Agreement), (iii) to the “Beneficiaries” mean and refer to the Initial Member and the 

FDIC (and the term “Beneficiary” has a correlative meaning) or (iv) to an “Event of Default” mean 

and refer to an “Event of Default” as defined in the LLC Operating Agreement. 

1. Maintenance of Books and Records. 

(a) Maintenance of Books and Records. (i) At all times during the continuance 

of the Company (and thereafter, subject to Section 1(c) below), the Manager must cause to be kept 

and maintained in an accessible manner (including by the Servicer, any Subservicer, any JDC 

Contractor and any Ownership Entity and including records transferred by the Transferor to the 

Company in connection with its conveyance of the Assets to the Company under the Transfer 

Agreement), at all times, at the Company’s chief executive office referred to in Section 2.4 of the 

LLC Operating Agreement, a complete and accurate set of files, books and records regarding the 

Assets and the Collateral, and the Company’s and any Ownership Entity’s interests in the Assets 

and the Collateral, including the Company’s general ledger, records relating to each Company 

Account, the Escrow Accounts, the disbursement of all Asset Proceeds and all other amounts 

disbursed from any Company Account. This obligation to maintain a complete and accurate set 

of records encompasses all files in or subject to the Manager’s or the Company’s custody, 

possession or control pertaining to the Assets or the Collateral, including (except as required to be 

held by the Custodian pursuant to the Custodial and Paying Agency Agreement) all original and 

other documentation (or, to the extent any original documentation must be given to any other 

Person, copies of such original documentation) pertaining to the Assets, the Collateral, all 

documentation relating to items of income and expense pertaining to the Assets, or the Collateral, 

and all of the Manager’s (and the Servicer’s and any Subservicer’s and any JDC Contractor’s) 

internal memoranda pertaining to the Assets or the Collateral. The books of account must be 

maintained in a manner that, and the Manager must cause to be maintained a system of internal 

controls and procedures that, provides reasonable and sufficient assurance: (A) that transactions 

of the Company are executed in accordance with, and only in accordance with, the general or 

specific authorization of management of the Manager consistent with the provisions of the LLC 

Operating Agreement; (B) that transactions of the Company are recorded in such form and manner 

as will: (x) permit preparation of federal, state and local income and franchise tax returns and 

information returns in accordance with the LLC Operating Agreement and as required by Law; 

(y) permit preparation of the Company’s financial statements in accordance with GAAP and as 

otherwise set forth herein and the provisions of the reports required to be provided hereunder; and 

(z) maintain accountability for the Company’s assets, (C) regarding the prevention or timely 

detection of any unauthorized, and non-de minimis, acquisition, use or disposition of assets of the 

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Company or any Ownership Entity; and (D) that any material information regarding the business 

or affairs of the Company is accumulated, recorded, processed, summarized and reported to 

management of the Manager in a timely manner. For purposes of the preceding sentence 

“transactions of the Company” include (without limitation) all transfers of funds out of, into, or 

between, Accounts (to the extent that the Manager has discretion with respect thereto), including 

all determinations as to the amount of the Working Capital Reserve Target and Capital 

Improvement Fund Target, submissions of Capital Improvement Approval Requests, the making 

of any discretionary Excess Working Capital Advance, and the making of any sale or other 

Disposition of an Asset. 

(ii) Without limiting the generality of Section 1(a)(i) above, the 

obligation to cause to be kept and maintained a complete and accurate set of records as set forth in 

Section 1(a)(i) in any event will include the obligation to cause each of the following to be 

maintained (including by the Servicer or applicable Subservicers or JDC Contractors): (A)(x) 

accurate records reflecting the status of ground rents, Taxes, assessments, water rates, sewer rents, 

and other charges which are or may become a Lien upon any Acquired Property or Mortgaged 

Property (or any other Collateral) and the status of fire and hazard insurance coverage and all bills 

for the payment of such charges (including renewal premiums), and (y) with respect to any such 

Mortgaged Property (or other Collateral), accurate records, in reasonable detail, of all 

determinations as to whether (or not) to pay any of the foregoing on behalf of any Borrower, and 

the basis (and back-up documentation) for such determinations, (B) accurate records, in reasonable 

detail, of the results of site inspections of any Mortgaged Property or Acquired REO Property, 

(C) accurate records, in reasonable detail, of all determinations as to whether (or not) to transfer 

(or cause to be transferred) funds out of, into, or between, Accounts (to the extent that the Manager 

has discretion with respect thereto), including all determinations as to the amount of the Working 

Capital Reserve Target (and applicable determinations with respect to contingent liabilities and 

other projected expenditures for which applicable reserves should be maintained in the Working 

Capital Reserve) and Capital Improvement Fund Target, to submit a Capital Improvement 

Approval Request, or to make any discretionary Excess Working Capital Advance, and the basis 

(and back-up documentation) for all such determinations, (D) accurate records, in reasonable 

detail, of all determinations as to whether (or not) to effect any proposed sale or other Disposition 

of an Asset, and the basis (and back-up documentation) of such determination, (E) accurate 

records, in reasonable detail, of any determination described in (x) clause (ii) of the penultimate 

sentence of Section 5.3(b) of the Servicing Addendum or (y) Section 5.1(b) of the Servicing 

Addendum, including of the basis of any such determination, and (F) accurate records, in 

reasonable detail, of all other determinations that are material to the Company. 

(b) Retention of Books and Records. The Manager must cause all books and 

records required at any time to be kept or maintained pursuant to Section 1(a) above to be and 

remain property of the Company (and hereby acknowledges and agrees that the same will at all 

times be property of the Company), and to be maintained and retained until the date that is the later 

of six years after the Closing Date and three years after the Final Distribution. All such books and 

records (including any such books and records maintained by a Servicer, any Subservicer or any 

JDC Contractor, and any such books and records held or maintained on any applicable servicing 

system maintained by any such Person), must be available during such period for inspection by 

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each Beneficiary or any of its representatives (including any Governmental Authority) and agents 

at the Company’s chief executive office referred to in Section 2.4 of the LLC Operating Agreement 

at all reasonable times during business hours on any Business Day (or, in the case of any such 

inspection after the term of this Agreement, at such other location as is provided by notice to the 

Beneficiaries), in each instance upon two Business Days’ prior notice to the Manager. Upon 

request by any Beneficiary, the Manager must promptly send copies (the number of copies of 

which must be reasonable) of such books and records to such requesting Person or its designee. 

The Manager must provide each Beneficiary with reasonable advance notice of the Manager’s 

intention to destroy or dispose of any documents or files relating to the Assets and, upon the request 

of any Beneficiary, must allow such requesting Person to recover the same (or copies thereof) from 

the Company and in the case the FDIC (in any capacity) and any other Beneficiary (that is not the 

FDIC) so request the same, the FDIC will have the right to recover such documents or files, but 

any such other Beneficiary will have the right to make copies of such applicable documents or 

files so long as such copies are made while such documents or files remain with the Manager or 

the Company (and prior to recovery of the same by the FDIC). Any expense incurred by a 

Beneficiary and any reasonable out-of-pocket expense incurred by the Company in connection 

with the exercise by such Beneficiary of its respective rights in this Section 1(b) to recover or make 

(or otherwise receive) copies of books, records, documents or files will be borne by such Person 

so exercising such rights; provided, however, that any expense incident to the exercise of such 

rights pursuant to this Section 1(b) as a result of or during the continuance of an Event of Default 

will in all cases be borne by the Private Owner (except to the extent such Event of Default is 

attributable exclusively to a Manager having been appointed by such Beneficiary (in any capacity) 

following removal of the Private Owner in such applicable capacity, or to any applicable Servicer 

(and any of its Subservicers) or JDC Contractor having been engaged by such Beneficiary (in any 

capacity), the Company or the applicable replacement Manager following such removal of the 

Private Owner as the Manager, in each case that is not an Affiliate of the Private Owner). 

(c) Continuing Obligations Following Termination of the Company. The 

obligations in this Section 1 will survive the dissolution and termination of the Company pursuant 

to Article IX of the LLC Operating Agreement, for the remainder, if any, of the period specified 

in the first sentence of Section 1(b) above; provided that, with respect to any such period following 

the dissolution and termination of the Company, (i) the Manager, as part of its continuing 

obligations pursuant to Article IX of the LLC Operating Agreement, will be responsible for all 

obligations of both the Manager and the Company under this Section 1, and (ii) all files, books and 

records required pursuant to this Section 1 to be kept or maintained at the Company’s chief 

executive office will be kept or maintained by the Manager (on behalf the Company as so dissolved 

and terminated) at a location of the Manager or an Affiliate thereof in the United States having 

been notified reasonably in advance in writing to the Beneficiaries. 

2. Financial Statements. 

(a) Annual Financial Statements. As soon as practicable following, but no later 

than ninety days immediately after, the end of each Fiscal Year (commencing with respect to the 

2024 Fiscal Year), the Manager must prepare and deliver to each Beneficiary an audited 

consolidated balance sheet of the Company and the Ownership Entities as of the end of such Fiscal 

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Year, and audited consolidated statements of operations and cash flow of the Company and the 

Ownership Entities for such Fiscal Year, each prepared in accordance with GAAP and 

accompanied by the Accountants’ report and opinion thereon, which report and opinion must be 

prepared in accordance with generally accepted auditing standards and shall not be subject to any 

qualification or exception as to the scope of such audit. If not included in any such audited 

financial statements, the Manager must, together with the delivery of such audited financial 

statements, deliver to the Initial Member a separate schedule setting forth (separately) the value of 

each Loan and Acquired REO Property held by the Company or any Ownership Entity as of the 

end of the relevant Fiscal Year, in each case as reflected in (or otherwise consistent with) such 

audited financial statements. 

(b) Mid-Year Financial Information. As soon as practicable following, but no 

later than forty-five days immediately after, the end of the second quarter of each Fiscal Year 

(commencing with the two-quarter period ending on or about June 30, 2024), the Manager must 

prepare and deliver to each Beneficiary the unaudited consolidated balance sheet of the Company 

and the Ownership Entities as of the end of such two-quarter period, and unaudited consolidated 

statements of operations and cash flow of the Company and the Ownership Entities for such twoquarter period (for the first such report, also covering the period from the Closing Date through 

the end of such second quarter), each prepared in accordance with GAAP. 

(c) Final Audited Financial Statements. Upon request by the Initial Member in 

connection with the dissolution and termination of the Company pursuant to Article IX of the LLC 

Operating Agreement or any disposition by the Initial Member of its interests in the Company, the 

Manager will, within the applicable time frame requested by the Initial Member, prepare and 

deliver to the Initial Member, a final audited consolidated balance sheet of the Company and the 

Ownership Entities as of the applicable date selected by the Initial Member, and audited 

consolidated statements of operations and cash flow of the Company and the Ownership Entities 

for such period (without duplication of any period covered by any audited statements previously 

delivered pursuant to Section 2(a) above) requested by the Initial Member, each prepared in 

accordance with GAAP and accompanied by the Accountants’ report and opinion thereon, which 

report and opinion will be prepared in accordance with generally accepted auditing standards and 

will not be subject to any qualification or exception as to the scope of such audit. 

3. Additional Reporting and Notice Requirements. 

(a) Manager’s Duty to Initial Member; Delivery of Certain Notices. In addition 

to such other reports and access to books, records and reports as are required to be provided under 

this Agreement, the Manager must cause to be delivered to each Beneficiary such information as 

is specified in Exhibit B to the LLC Operating Agreement (in addition to the Monthly Report) and 

such other information relating to the Assets, the Collateral, the Company, the Servicer, any 

Subservicers and any JDC Contractors as such Beneficiary may reasonably request from time to 

time and, in any case, must ensure that each Beneficiary is promptly advised, in writing, of any 

matter of which the Manager, the Servicer, any Subservicer or any JDC Contractor becomes aware 

relating to the Assets, the Collateral, each Company Account, the Escrow Accounts, or any 

Borrower or Obligor that materially and adversely affects the interests of the Initial Member under 

any Transaction Document. Without limiting the generality of the foregoing, the Manager (i) must 

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cause to be delivered to each Beneficiary (w) information indicating any possible Environmental 

Hazards with respect to any Collateral, Acquired REO Property or other Assets, (x) information 

regarding any material contingent liability for which reserves should, in accordance with the 

Servicing Standard, be maintained by the Company or any Ownership Entity, (y) any notice or 

report provided to the Company or the Manager pursuant to Section 5.5 of the Servicing 

Agreement as in effect on the Closing Date (or pursuant to any other provision of the Servicing 

Agreement comparable to this Section 3(a)) and (z) such information and certificates (including 

officers’ certificates of the Private Owner) regarding compliance of the Private Owner with the 

requirements of Sections 8.2 and 10.1 of the LLC Operating Agreement as such Beneficiary may 

request from time to time, and (ii) in any event must immediately notify each Beneficiary in writing 

of any failure or cessation of the Private Owner to satisfy the requirements of Sections 8.2 and 

10.1 of the LLC Operating Agreement, provided that any failure of the Manager to so provide such 

immediate notice under this clause (ii) will 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 failure occurred (so long as such Monthly Report is timely 

delivered in accordance herewith). To the extent that any Beneficiary requests information which 

is dependent upon obtaining such information from a Borrower, Obligor or other third party, the 

Manager must cause to be made commercially reasonable efforts to obtain such information but it 

will not be a breach by the Manager of this Agreement if the Manager fails to cause such 

information to be provided to such Beneficiary because a Borrower, Obligor or other Person has 

failed to provide such information after such efforts have been made. 

(b) Monthly Reports. On or prior to the day which is five Business Days prior 

to the Distribution Date for each month (or other applicable Due Period), commencing on the 

Distribution Date following the calendar month in which the Closing Date occurs, the Manager 

must deliver or cause the Company to deliver to the Paying Agent and to each Beneficiary the 

Monthly Report (in the form set forth in Exhibit B to the LLC Operating Agreement, and as may 

be updated from time to time in accordance herewith) with respect to the relevant Due Period, 

which Monthly Report must include the Cash Flow and Distribution Report specifying the amounts 

and recipients of all funds to be distributed by the Paying Agent on such Distribution Date; 

provided, however, that (unless the Company and the Initial Member agree otherwise) the Initial 

Member (including as Transferor) will prepare and deliver to the Initial Member and to the Paying 

Agent each such Monthly Report (including a Cash Flow and Distribution Report) on behalf of 

the Company for all Due Periods ending on or before the last occurring Servicing Transfer Date 

(provided, further, however, that with respect to each such Monthly Report, the Manager must 

(with respect to information relating to all Groups of Assets other than those for which the Interim 

Servicing Period has not ended) cooperate with the Initial Member in preparing such Monthly 

Report or will provide to the Initial Member on a timely basis information needed to enable the 

Initial Member to prepare the Monthly Report). The Manager also must cause each Beneficiary 

to be furnished with the Custodian and Paying Agent Report in accordance with the terms of the 

Custodial and Paying Agency Agreement. Each Monthly Report (including the Cash Flow and 

Distribution Report) prepared and delivered by the Manager must be certified by the chief financial 

officer (or an equivalent officer) of the Manager. Each Monthly Report prepared and delivered by 

the Manager must also include a certification of the Manager that all withdrawals by the Manager 

from the Collection Account (or, following the Final Monthly Distribution, the Working Capital 

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Reserve) during such Due Period were made in accordance with the terms of the LLC Operating 

Agreement and the Custodial and Paying Agency Agreement. 

(c) Annual Compliance Certificates. The Manager must, and must cause the 

Servicer and any Subservicer to, deliver to each Beneficiary on or before March 15 of each year, 

commencing in the year 2025, an officer’s certificate stating, as to the signer thereof, that (i) a 

review of such party’s (in the case of the Manager, for the avoidance of doubt, in any capacity 

under this Agreement) activities during the preceding Fiscal Year (or other applicable period as 

set forth below in this Section 3(c)) and of its performance under the Applicable Agreements 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 (in the case of the Manager, for the avoidance of doubt, 

in any capacity under this Agreement) has fulfilled all of its obligations under the Applicable 

Agreements in all material respects throughout such year (or other applicable period as set forth 

below in this Section 3(c)) 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 must cover the period commencing on the Closing Date (and with respect to 

each Asset, must include relevant information with respect thereto for the period commencing on 

the Servicing Transfer Date for such Asset) and continuing through the end of the 2024 Fiscal 

Year. In the event the Servicer or any Subservicer was terminated, resigned or otherwise 

performed in such capacity for only part of a year (or other applicable period, as the case may be, 

with respect to the period commencing, with respect to any Asset, on the applicable Servicing 

Transfer Date through the end of the 2024 Fiscal Year), such party must provide an officer’s 

certificate pursuant to this Section 3(c) with respect to such portion of the year (or other applicable 

period). 

(d) Annual Compliance Report. On or before March 15 of each year, 

commencing in the year 2025, the Manager must (including by causing the Servicer and each 

Subservicer to) provide to each Beneficiary a report prepared by a nationally recognized firm of 

independent certified public accountants to the effect that, with respect to the prior Fiscal Year (or 

other applicable period as set forth below), such firm has examined certain records and documents 

relating to compliance with the servicing requirements in the LLC Operating Agreement and the 

Servicing Agreement and that, on the basis of such examination conducted substantially in 

compliance with either the Uniform Single Attestation Program for Mortgage Bankers or Item 

1122 of Regulation AB, such firm is of the opinion that the Manager’s or its Servicer’s or 

Subservicers’ activities have been conducted in compliance with the LLC Operating Agreement 

(including, to the extent applicable pursuant to Section 2.3 of the Servicing Addendum, Regulation 

AB) and the Servicing Agreement, or that such examination has disclosed no material items of 

noncompliance except for (i) such exceptions as such firm believes to be immaterial, and (ii) such 

other exceptions as are set forth in the report. The first such reports must cover the period 

commencing on the Closing Date (and with respect to each Asset, must include the relevant 

information with respect thereto for the period from the applicable Servicing Transfer Date) and 

continuing through the end of the 2024 Fiscal Year. 

(e) Audits. Until the later of the date that is six years after the Closing Date 

and the date that is three years after the Final Distribution, the Manager must, and must cause the 

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Servicer and each Subservicer and JDC Contractor to, (i) provide any representative of any 

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

reasonable notice, with access to all of the books of account, reports and records relating to the 

Assets, any Collateral, the Servicing Obligations, the Company Accounts, the Escrow Accounts, 

disbursements under the Custodial and Paying Agency Agreement, distributions hereunder or any 

other matters relating to, or the rights or obligations pursuant to, this Agreement or the other 

Transaction Documents; (ii) permit such representatives to make copies of and extracts from the 

same, (iii) allow each Beneficiary to cause such books to be audited by accountants selected by 

such Beneficiary, and (iv) allow each Beneficiary’s representatives to discuss the Company’s, the 

Manager’s the Servicer’s, any Subservicer’s and any JDC Contractor’s affairs, finances and 

accounts, as they relate to the Assets, the Collateral, the Servicing Obligations, the Company 

Accounts, the Escrow Accounts, the Capital Improvement Account, or any other matters relating 

to this Agreement, the other Transaction Documents, or the rights or obligations hereunder or 

thereunder, with the Company’s, the Manager’s, the Servicer’s, any Subservicer’s and any JDC 

Contractor’s officers, directors, employees, attorneys and accountants (and by this provision the 

Company and the Manager hereby irrevocably and unconditionally authorize the respective 

accountants of the Company, the Manager, the Servicer, any Subservicer and any JDC Contractor 

to discuss such affairs, finances and accounts with such representatives). Any expense incurred 

by any Beneficiary and any reasonable out-of-pocket expense incurred by the Company in 

connection with the exercise by such Beneficiary of its rights in this Section 3(e) will be borne by 

such Beneficiary; provided, however, that any expense incident to the exercise of such rights 

pursuant to this Section 3(e) as a result of or during the continuance of an Event of Default will in 

all cases be borne by the Private Owner (except to the extent such Event of Default is attributable 

exclusively to a Manager having been appointed by such Beneficiary (in any capacity) following 

removal of the Private Owner in such applicable capacity, or to any applicable Servicer (and any 

of its Subservicers or any JDC Contractors) having been engaged by such Beneficiary (in any 

capacity), the Company or the applicable replacement Manager following such removal of the 

Private Owner as the Manager, in each case that is not an Affiliate of the Private Owner). 

(f) Additional Periodic Reporting. The Manager and Private Owner, as 

applicable, will provide such further reports and information required pursuant to the Transaction 

Documents, including the following periodic reporting: 

(i) monthly statements with respect to bank accounts as required 

pursuant to Section 3.4(xix) of the LLC Operating Agreement; 

(ii) as the Tax Representative (as applicable), annual tax information 

and reporting required pursuant to Section 7.6 of the LLC Operating Agreement; 

(iii) Business Plans and related information and reports required 

pursuant to Section 7.7 of the LLC Operating Agreement; 

(iv) for all Due Periods ending prior to or during the calendar month in 

which the final Servicing Transfer Date occurs, Working Capital Reserve Target information 

required pursuant to the last sentence of Section 12.11(b) of the LLC Operating Agreement; 

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4. No Duplicate Reports. Notwithstanding any provision in this Annex II to the 

contrary, the Manager will not be required to deliver duplicate copies of the reports as described 

in this Annex II to the FDIC (in any capacity as a Beneficiary), so long as the FDIC (including, as 

applicable, as Receiver) is acting in its capacity as any such Beneficiary, and during any such 

period will only be required to deliver one copy of any such report addressed to the FDIC (in any 

such applicable capacity) with a clearly visible notation that such report is being delivered to the 

FDIC in its capacity as each such applicable Beneficiary. 

5. Changes Following Final Monthly Distribution. Notwithstanding anything to the 

contrary contained in this Annex II, for any period following the Final Monthly Distribution, the 

Initial Member, in its sole discretion, can waive any or all of the annual, semi-annual and quarterly 

reporting under Section 2(a), Section 2(b), Section 3(c) and Section 3(d) pursuant to such terms 

and conditions that may be established by the Initial Member. Furthermore, connection with the 

Final Monthly Distribution and for purposes of all distributions thereafter, (i) the form of Monthly 

Report will be adjusted by, or in a manner satisfactory to, the Initial Member so as to remove items 

that are no longer relevant and to appropriately cover the Working Capital Reserve and all 

payments and distributions relating thereto (including updates to the reserve analysis provided 

pursuant to Section 9.2(a) of the LLC Operating Agreement and projected timing for payments 

and distributions of remaining funds in the Working Capital Reserve), and (ii) such Monthly 

Report will be delivered in connection with each Distribution Date selected by the Manager but 

no less frequently than once every three months; and, for such purpose, in the event any Due 

Period, as based on such Distribution Dates so selected by the Manager, would exceed three 

months, such Due Period will be divided into separate Due Periods of not more than three months 

each for purposes of delivery of such Monthly Report (without affecting the timing of distributions 

or the Cash Flow and Distribution Report to be included for purposes of each Distribution Date). 

6. Reporting Service. 

(a) Engagement and Use of a Reporting Service. The Initial Member may, in 

its sole discretion, from time to time from and after the Closing Date engage, and thereafter 

continue to retain or replace, one or more Reporting Services selected by the Initial Member. In 

connection with any such engagement, the Initial Member (and each other applicable Beneficiary) 

may require that any or all reports and other information or notices required to be delivered to it 

pursuant to this Reporting and Access Schedule or any other provision in the Transaction 

Documents (including by any of the Company, the Manager, the Servicer, any Subservicer or any 

JDC Contractor), in each case as determined by such Beneficiary in its sole discretion (the 

“Applicable Reporting”), be delivered to or through use of such Reporting Service. Such 

engagement may further include (as determined by the Initial Member or such other Beneficiary) 

(i) use of a secure website, portal or other electronic means in connection with or for delivery of 

Applicable Reporting, (ii) use of specified software, formatting and procedures for gathering, 

organizing or transmitting Applicable Reporting, and (iii) subject to any applicable requirements 

in the Transaction Documents, changes to the form and content of any Applicable Reporting and 

means of delivery of notice of any such changes. 

(b) Delivery through Reporting Service. As to any Beneficiary, delivery of 

Applicable Reporting to a Reporting Service (without separate delivery to such Beneficiary 

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pursuant to the Notice Schedule, taking into account any updated instructions delivered by such 

Beneficiary pursuant thereto) will be deemed delivery to such Beneficiary if, and only to the extent, 

expressly agreed or instructed in writing by such Beneficiary in connection with the engagement 

or use of such Reporting Service. 

(c) Costs for Use of Reporting Service. The costs of the Initial Member for its 

engagement of a Reporting Service, including fees charged by such Reporting Service, will be 

borne by the Initial Member (without reimbursement from the Company); provided, however, that 

the Initial Member will have no obligation to reimburse the Company, the Manager, or any other 

Person for any costs and expenses in connection with the use of, or any transition to the use of, 

such Reporting Service. 

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Annex III 

Insurance Schedule 

1. General Insurance Coverages for Servicer, Subservicers and Manager. 

(a) The Manager, the Servicer and each Subservicer must, in each case at no 

cost or expense to the Company, maintain each of the following types of insurance coverage having 

minimum limits (and other applicable provisions) as described below: 

(i) Professional Liability: Professional Liability insurance policies 

(including Errors and Omissions/Miscellaneous Professional Liability/Bank Servicer Liability) 

covering all Servicing (and any other activities under the Transaction Documents) being conducted 

by such Person, including, as applicable, the management of the Company (or any Ownership 

Entity) and the Servicing of any Asset (including, in each case to the extent to be performed by 

such Person, record keeping, billing and disbursements of principal and interest, insurance 

premiums and taxes, determination of the depreciation amounts for leased property (but not for 

projections of or an appraisal for residual value of leased property) and any other professional loan 

services required to be performed under the Transaction Documents). Professional Liability 

policies will be written with the following minimum limits: 

o $10,000,000 per occurrence and $10,000,000 in the aggregate. 

In all events such Professional Liability insurance will, taking into account 

all insured party designations and exclusions, permit (or have the effect of permitting) each of the 

Company and the Initial Member to make claims thereunder on account of the Servicing covered 

thereby. 

The Manager must, and must cause each Servicer and Subservicer, as 

applicable, to notify the Company and the Initial Member in the event such Person is made aware 

of any fact or circumstance which has given rise, or could give rise, to a potential Professional 

Liability claim with respect to any Servicing being performed by such Person. 

The Manager and the Initial Member will each be notified immediately 

upon the reduction of or potential reduction of 50.0% of the limits, and each expressly reserves the 

right to require that the Servicer and each Subservicer (and the Manager, if applicable) purchase 

additional limits to equal or exceed the required limits as stated above. “Potential reduction of 

50.0%” will mean any knowledge by the Manager, the Servicer or such Subservicer, as applicable, 

that a claim or the sum of all claims, current or initiated after the effective date of the policy, would 

reduce the limits by 50.0%. 

The limits required above are minimum limits and not intended to restrict 

the liability of the Manager, the Servicer or any Subservicer under any Transaction Document. 

(ii) Directors and Officers Liability: Directors and Officers Liability 

coverage. Such policies will cover acts of the applicable Person so obtaining such insurance (and 

all past, present, and future directors, officers and employees, including outside consultants, 

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leased, temporary and part time employees), and be available to respond to any claims which may 

arise under (and with respect to all activities performed under) the Transaction Documents (or any 

applicable Subservicing Agreement). Such Directors and Officers Liability policies will be written 

with the following minimum limits: 

o $10,000,000 per occurrence and $10,000,000 in the aggregate. 

(iii) Crime Insurance/Fidelity Bond: Crime Insurance or a Fidelity Bond 

in an amount of not less than $10,000,000 per claim and $10,000,000 in the aggregate, covering 

employee theft, forgery and alteration, wire/funds transfer, computer fraud and client coverage, all 

for on or off premises exposure. Such coverage will insure all employees or any other Persons 

authorized to handle any funds, money, documents or papers relating to any Asset, and will protect 

against losses arising out of theft, embezzlement, fraud, misplacement, and other similar causes. 

The Company and the Manager (as to insurance obtained by the Servicer or any Subservicer), or 

the Company (as to insurance obtained by the Manager), shall each be named as either an 

additional insured or loss payee, as applicable, under any such Crime Insurance or Fidelity Bond 

with respect to claims arising out of the Assets (or, as applicable, the Assets subject to the 

applicable Servicing Agreement or Subservicing Agreement) and other applicable activities 

performed pursuant to the Transaction Documents. Such coverage will be endorsed to protect the 

interests of the Company and the Manager (where applicable), in the form of a third party client 

coverage endorsement or equivalent. 

(iv) Commercial General Liability: Commercial General Liability 

Insurance, including coverage for bodily injury (including coverage for death or mental anguish), 

Premises-Liability/Operations, Products-Completed Operations, Blanket Contractual Liability, 

Personal Injury and Broad form Property Damage, and including Cross Liability and Severability 

of Interests, with the following minimum limits: 

o $1,000,000 Each Occurrence 

o $2,000,000 General Aggregate 

o $1,000,000 Personal and Advertising Injury 

o $2,000,000 Products-Completed Operations Aggregate 

Coverage will apply to all operations of the applicable insured. The 

contractual liability insurance will include coverage sufficient to meet the indemnity obligations, 

where insurable, between all relevant parties. 

The Company, the Initial Member, and all other parties as may from time 

to time be designated by the Company, the Manager or the Initial Member, will each be added as 

an additional insured. Such Commercial General Liability Insurance will be primary and noncontributory with regard to any other insurance that may be available to the Company, the Manager 

or any such other additional insured. 

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(v) Auto: Auto Liability with a combined single limit of not less than 

$1,000,000 to provide coverage for any owned, hired, or non-owned vehicles. 

(vi) Workers’ Compensation: Workers’ Compensation Insurance in 

compliance with statutory requirements of the state(s) in which applicable employees reside, are 

hired, and in which the services are being performed and will apply to all persons employed by 

such Servicer or Subservicer or, with respect to the Manager, all persons otherwise made available 

by the Manager for performance of its Servicing and other applicable obligations under the 

Transaction Documents, as applicable. 

(vii) Employers Liability Insurance: Employer’s Liability Insurance in 

an amount not less than $500,000 each accident for bodily injury by accident, $500,000 each 

employee for bodily injury by disease, and $500,000 policy limit for bodily injury by disease, or 

such greater amount as may be required by umbrella policy to effect umbrella coverage. 

(viii) Employment Practices Liability: Employment Practices Liability 

Insurance in an amount not less than $1,000,000 covering third party liability actions brought 

against the Manager, the Company, the Servicer and such Subservicer, as applicable. 

(ix) Umbrella/Excess Liability: Umbrella/Excess Liability Insurance on 

a follow form basis with a per occurrence and annual aggregate limit of not less than $10,000,000. 

Coverage will be excess of Commercial General Liability (including products and completed 

operations coverage), Employers Liability Insurance and Auto Liability with such coverage being 

concurrent with and not more restrictive than underlying insurance. 

(x) Other Insurance: Such other insurance as it deems necessary for its 

own protection. Each of the Manager and the Initial Member reserves the right to require, on not 

less than thirty days’ prior notice (which notice will be deemed an Insurance Deficiency Notice), 

such other insurance or changes to existing insurance as may from time to time be reasonably 

prudent, taking into account the Servicing and other activities being performed and prudent market 

practices with respect to servicing of assets similar to the Assets and the performance of applicable 

activities (which other insurance or changes will be deemed required Insurance Modifications). 

The limits required above in this Section 1 are minimum limits and are not 

intended to restrict the liability of the Manager, the Servicer or any Subservicer under any 

Transaction Document. 

With respect to the Manager, all such insurance required herein will apply 

(and be required to be in place) for all Asset Management and other activities performed by the 

Manager under the Transaction Documents (including all activities in its role as “Manager” of the 

Company), and will cover all applicable Persons (including all directors, officers, employees or 

other personnel of any such Persons, as the case may be) performing such applicable Asset 

Management and other activities for or on behalf of the Manager. 

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Retroactive date on policies, if any, must be no later than the Closing Date 

(or as to any Servicing Agreement or Subservicing Agreement, the earlier of (x) the effective date 

of such Servicing Agreement or Subservicing Agreement, as applicable, and (y) the date of 

initiation of services). 

All such policies and fidelity bonds (as applicable) required by this Section 

1 must in all events be in such amounts (not less than the respective minimum amounts specified 

in this Section 1), covering such risks and otherwise on such terms and conditions, as determined 

in the reasonable judgment of the Manager to be prudent and in the best interests of the Company 

(and the Members) in accordance with the Servicing Standard, in all cases in a manner reasonably 

satisfactory to the Initial Member. 

Deductibles, if any, with respect to any such insurance policy or fidelity 

bond will be the sole responsibility of the insured (Manager, Servicer or Subservicer, or applicable 

other Person having obtained such insurance for the benefit of any of the foregoing, as the case 

may be). Without limitation of obligations (and liability) of the Manager, the Servicer or any 

Subservicer, the Manager (including the Private Owner, with respect to the period during which it 

is, or is required to be, the Manager) specifically agrees that it must pay, and cause each Servicer, 

Subservicer or other Person responsible for payment of any deductible with respect to any 

insurance or fidelity bond required to be maintained hereunder to so pay (and will otherwise itself 

timely pay in the event of a failure of the same to be paid by such Servicer, Subservicer or other 

Person), any applicable deductible under any such insurance or fidelity bond with respect to any 

claim asserted by or against (or Losses suffered by) any of the Company (including with respect 

to any Collateral) any Ownership Entity, the Initial Member or any other Indemnified Party (under 

the Transfer Agreement or the LLC Operating Agreement). For the avoidance of doubt, as to the 

Initial Member and the other Indemnified Parties under the LLC Operating Agreement, all such 

obligations of the Private Owner (including as Manager) are part of the Private Owner Obligations 

secured by the Secured Assets (and, in the event of any failure by the Private Owner (as Manager) 

to so timely pay, or cause to be paid, any such deductible, in addition to any other available remedy, 

the Initial Member will have the right, without notice, to pay (or cause to be paid) the same from 

the Secured Assets, including from any of the Additional Collateral or any distributions or other 

amounts payable to the Private Owner (including as Manager) with respect to the Private Owner 

Interest). 

2. Insurance With Respect to Assets. 

(a) From and after the Closing Date, the Company (and the Ownership Entities) 

must obtain and maintain (and the Manager must cause the Company and such Ownership Entities 

to obtain and maintain, including, as applicable, through the Servicer or applicable Subservicers) 

insurance covering the Loans and Collateral with respect to which any applicable Borrower or 

Obligor has failed to maintain applicable insurance (required under the applicable Asset 

Documents), in accordance with the further requirements herein. 

(b) From and after the Closing Date (and, as to any specific Acquired Property, 

the date the Company or an applicable Ownership Entity acquires title thereto), the Company (and 

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the Ownership Entities) must obtain and maintain (and the Manager must cause the Company and 

such Ownership Entities to obtain and maintain) insurance for Acquired Property, in accordance 

with the further requirements herein. 

(c) All such insurance pursuant to Sections 2(a) and 2(b) above will be in such 

amounts, with such deductibles, covering such risks and otherwise on such terms and conditions 

as determined in the reasonable judgment of the Manager to be prudent and in the best interests of 

the Company (and the Members) in accordance with the Servicing Standard (and any additional 

requirements as may be set forth in the Transaction Documents) in all cases in a manner reasonably 

satisfactory to the Initial Member. Without limitation of (and in each case determined in 

accordance with) the foregoing, such insurance will include, with respect to any such Acquired 

REO Property or real property Collateral, applicable commercial general liability insurance, 

property insurance, flood insurance, fire insurance, wind insurance, earthquake insurance, hazard 

insurance, terrorism insurance, boiler and machinery insurance, business interruption or rent 

insurance and other insurance, in each case as are customarily maintained by property owners for 

other real property and buildings similar to such Acquired REO Property or real property Collateral 

in the area in which such Acquired REO Property or real property collateral is located. 

(d) For any Acquired REO Property, such insurance will further include an 

owner’s title insurance policy, on the 2006 ALTA form or such other form approved in writing by 

the Initial Member, (i) insuring the deed, (ii) naming the applicable Ownership Entity, as insured, 

(iii) in an amount equal to the Net Fair Value of the Acquired REO Property, (iv) dated as of the 

date that such Acquired REO Property became an Acquired REO Property or, for any for any 

property constituting Acquired REO Property as of the Closing Date, as of a date within thirty 

days after the Closing Date, and (v) with such endorsements as are reasonably customary attached 

thereto. 

(e) Any such insurance required pursuant to this Section 2 will name (and all 

applicable property and liability certificates with respect thereto must show) the Manager and the 

Company (where the applicable Ownership Entity is the named insured) as an additional insured 

or loss payee, as applicable, as its interest may appear. 

3. General Requirements; Notices; Delivery of Certificates and Policies. 

(a) Each insurance policy or fidelity bond required pursuant to Sections 1 and 

2 above must (i) be written with carriers having a minimum insurer rating of A VIII from A.M. 

Best or A- from Standard & Poor’s (including, with respect to a carrier organized outside of the 

United States, an equivalent rating from an applicable A.M. Best or Standard & Poor’s affiliated 

entity having rated such insurance carrier), and, as to any such insurance under Section 2 above, 

with such carrier being authorized to do business in the state where the applicable property is 

located, (ii) provide (and the applicable certificate of insurance must so show) that it may not be 

cancelled or materially changed (other than to increase the coverage provided thereby) except upon 

thirty days’ prior written notice (except as to cancellation for non-payment of premium whereby a 

ten day prior written notice of cancellation is acceptable) to the Company (or the Manager), and 

(iii) be continuously in effect (including by renewals prior to expiration of the then issued 

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insurance policy or fidelity bond) from the Closing Date (as to any such insurance policy or fidelity 

bond required to be in place on the Closing Date) or such later date of issuance or renewal in 

accordance herewith. 

(b) All insurance required herein may be issued as blanket or master insurance 

policies (including with the applicable insured party being added to such blanket or master policies 

of such insured party’s Affiliates), in each case so long as at all times the coverages required herein 

(including taking into account any increases to limits as may be obtained from time to time for 

purposes of continued compliance) remain in place and reasonably available for purposes of the 

coverage required under this Insurance Schedule (taking into account the commensurate exposure 

under such policies and all claims thereunder that are not related to the Assets or applicable 

services being performed under the Transaction Documents), it being understood that dedicated 

limits will not be required. 

(c) All policies must be primary and without right of contribution from other 

insurance which may be available, must waive any right of set off, counterclaim or subrogation 

against the Manager (as to insurance obtained by any Person other than the Manager) and the 

Company (as to all such insurance), and must provide that the insurance will not be invalidated by 

any action or inaction by the applicable named insured(s) (including Manager, Servicer or any 

such Subservicer, as applicable). 

(d) The Manager must notify (or cause the Servicer and Subservicer to notify) 

the Initial Member immediately of the cancellation or material change, or the receipt of a notice 

of cancellation or material change, of any insurance policy or fidelity bond required to be 

maintained pursuant to this Insurance Schedule and the efforts made to obtain replacement 

coverage. 

(e) The Manager must, and must cause the Servicer and each Subservicer to (i) 

unless otherwise directed or consented to in writing by the Initial Member, pay or cause to be paid 

as they become due all premiums and related fees for the insurance required herein, and (ii) 

otherwise use commercially reasonable efforts to comply with all of the provisions of each such 

insurance policy affecting the Company or the Assets, and all of the requirements of the insurers 

thereunder applicable to the Company or the Assets. 

4. Delivery of Certificates and Policies; Corrections and Modifications. 

(a) Unless the Initial Member agrees to a different date, the Manager must 

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

(i) on (or before) the Closing Date (and, with respect to each Asset, on or before the applicable 

Servicing Transfer Date with respect thereto, or as to any Collateral or any Acquired Property 

acquired by the Company or any Ownership Entity after the Closing Date, upon such insurance 

being obtained in accordance herewith), certificates evidencing all insurance policies and fidelity 

bonds required to be maintained pursuant to this Insurance Schedule, and (ii) within forty-five 

days after the Closing Date (or such other required date of initial delivery of such certificates), 

copies of all such insurance policies and fidelity bonds (or such other evidence of insurance 

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satisfactory the Initial Member), all of which certificates, policies and fidelity bonds must be in 

form and substance satisfactory to the Initial Member. 

(b) Following the Closing Date (or other date of delivery of initial certificates 

and copies of insurance policies and fidelity bonds pursuant to Section 4(a) above), the Manager 

must (i) provide to the Initial Member certificates evidencing all insurance policies and fidelity 

bonds required to be maintained pursuant to this Insurance Schedule on each anniversary of the 

Closing Date and otherwise upon request of the Initial Member, and (ii) cause copies of each 

insurance policy and fidelity bond required to be maintained pursuant to this Insurance Schedule 

to be made available (and delivered, if requested) to the Initial Member, or its representatives, 

upon request. 

(c) Without limitation of any obligation of the Manager, the Servicer or any 

Subservicer with respect to the insurance required hereunder, the Initial Member will have the 

right, by delivery of written notice to the Manager (any such notice, an “Insurance Deficiency 

Notice”), to require applicable changes, corrections or updates to any insurance policy or fidelity 

bond delivered or required under this Insurance Schedule (collectively, “Insurance 

Modifications”), in each case limited to applicable changes, corrections or updates based on (and 

as determined by the Initial Member so as to cause such insurance or fidelity bond to be in 

compliance with) the terms hereof and of the Transaction Documents; provided, that with respect 

to any initial insurance policy or fidelity bond delivered pursuant to Section 4(a) above, and subject 

to the express rights with respect to updates or changes, such policy or fidelity bond will be deemed 

acceptable to and approved by the Initial Member except to the extent of Insurance Modifications 

identified in any Insurance Deficiency Notice delivered to the Manager within thirty days after 

such policy or fidelity bond was delivered to the Initial Member. With respect to any applicable 

Insurance Modification, the Manager must cause the same to be completed within thirty days 

following delivery to the Manager of the applicable Insurance Deficiency Notice first identifying 

such Insurance Modification (failure of which will be an Event of Default). 

(d) Without limitation of rights and remedies otherwise available under the 

Transaction Documents, in the event of any failure by the Manager to (i) complete (and cause the 

Servicer and any Subservicer to so complete) any applicable Insurance Modification, or (ii) deliver 

(and cause the Servicer and any Subservicer to so deliver) any applicable certificates or copies of 

any insurance policies or fidelity bond, in each case (for (i) and (ii) above) within the applicable 

time frame required pursuant to this Section 4, the Initial Member will have the right, by delivery 

of an applicable PO/Manager Distribution Instruction to the Paying Agent pursuant to Section 

5.1(a) of the Custodial and Paying Agency Agreement, to cause any or all (as set forth in such 

PO/Manager Distribution Instruction) distributions to the Manager (and to the Private Owner, in 

the event that it is, or is required to be, the Manager at such time) pursuant to the Custodial and 

Paying Agency Agreement (and any applicable provisions of the LLC Operating Agreement) to 

be withheld (and to accumulate, without any interest or other return) until such time as the Initial 

Member delivers to the Paying Agent an applicable PO/Manager Distribution Reinstatement 

Notice pursuant to Section 5.1(a) of the Custodial and Paying Agency so permitting reinstatement 

of such distributions. The Initial Member will have no obligation to deliver any such PO/Manager 

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Distribution Reinstatement Notice to the Paying Agent until all such Insurance Modifications have 

been completed or all such certificates or copies of insurance policies or fidelity bonds have been 

so delivered (and the same are deemed to comply with the applicable requirements with respect 

thereto, following review thereof and correction of any Insurance Modifications resulting from 

such review pursuant to Section 4(c) above), as the case may be, in each case to the satisfaction of 

the Initial Member. 

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Annex IV 

Servicing Addendum 

References in this Annex IV to this “Agreement” refer to the LLC Operating Agreement, 

and references herein to any specific section refer, unless otherwise specified, to such specific 

section of the LLC Operating Agreement. For purposes of the Transaction Documents, this Annex 

IV will be deemed incorporated into and a part of Article XII of the LLC Operating Agreement. 

1. Servicing Standard. The Manager must perform (or cause the performance of) the 

Servicing Obligations: (i) in the best interests and for the benefit of the Initial Member and the 

Company, (ii) subject to Section 5.4(h) of this Annex IV (to the extent applicable with respect to 

any Acquired REO Property), in accordance with the terms of the Assets (and related Asset 

Documents), (iii) in accordance with the terms of this Agreement and the other Transaction 

Documents, (iv) in accordance with all applicable Law, (v) with respect to potential principal 

reduction modifications to any Loan, taking into consideration (but without an obligation to 

implement) the Loan Modification Program (where applicable), and (vi) to the extent consistent 

with the foregoing terms, in the same manner in which a prudent servicer would service and 

administer similar loans and in which a prudent servicer would manage and administer similar 

properties for its own portfolio or for other Persons, whichever standard is higher, but using no 

less care and diligence than would be customarily employed by a prudent servicer following 

customary and usual standards of practice of prudent mortgage lenders, loan servicers and asset 

managers servicing, managing and administering similar loans and properties on an arms’ length 

basis; provided, however, that, with respect to each Asset and related Collateral, in the absence of 

a customary and usual standard of practice, the Company must comply with the applicable Fannie 

Mae Guidelines, if any, with respect to similar loans and properties in similar situations. The 

Manager must cause its Servicing Obligations with respect to the Assets and the Collateral to be 

performed without regard to (w) any relationship that the Company, the Manager the Servicer or 

any Subservicer, or any of their respective Affiliates, may have to any Borrower, Obligor or other 

obligor, or any of their respective Affiliates, including any other banking or lending relationship, 

(x) the obligations of any of the Company, the Manager, the Servicer or any Subservicer to make 

disbursements and advances with respect to the Assets and Collateral, (y) any relationship that the 

Servicer or any Subservicer may have to each other or to the Company, the Manager or any of 

their respective Affiliates, or any relationship that any of their respective Affiliates may have to 

the Company, the Manager or any of their respective Affiliates (other than the contractual 

relationship evidenced by this Agreement or the Servicing Agreement or any Subservicing 

Agreement), and (z) the right of any of the Manager, the Servicer or any Subservicer to receive 

compensation (including the Management Fee and any Interim Management Fee) for its services 

under this Agreement, the Servicing Agreement or any Subservicing Agreement. 

2. Servicing Obligations. 

2.1. Generally. The Manager’s Servicing Obligations include the following (together 

with the additional obligations of the Manager set forth in this Annex IV and elsewhere in the 

Transaction documents with respect to Servicing): 

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(a) discharging in a timely manner each and every obligation (i) which the 

Asset Documents provide is to be performed by the lender thereunder, on its own behalf and on 

behalf of the Company and the Initial Member and (ii) in the case of Acquired REO Property, 

which the Asset Documents that were applicable to the Collateral before it became Acquired REO 

Property provided were to be performed by the Borrower thereunder in respect of such Collateral 

(not including payment of debt service under the applicable Asset Documents and subject to the 

provisions of Section 5.4 of this Annex IV), in the case of each of (i) and (ii), together with such 

additional obligations as are required of the Company under this Agreement in respect of such 

Acquired REO Property; 

(b) incurring costs (including Servicing Expenses (or Interim Servicing 

Expenses) and Pre-Approved Charges) in accordance with (i) the provisions of the Asset 

Documents, or (ii) in the case of Acquired REO Property, the Asset Documents that were 

applicable to the Acquired REO Property before it became an Acquired REO Property (not 

including payment of debt service under the applicable Asset Documents and subject to the 

provisions of Section 5.4 of this Annex IV); 

(c) causing to be maintained with respect to the Assets (including any Collateral 

for which the Borrower has failed to maintain required insurance, and any Acquired Property), 

insurance as required under the Insurance Schedule; 

(d) diligently monitoring and seeking compliance with the terms and conditions 

of each insurer under any hazard policy and preparing and presenting claims under any policy in 

a timely fashion in accordance with the terms of the policy; 

(e) supervising and coordinating the construction, ownership, management, 

leasing and preservation of the Acquired Property as well as all other matters involved in the 

administration, preservation and ultimate disposition of the Acquired Property as would be taken 

by a prudent asset manager managing properties similar to the Acquired Property and as required 

of the Company under this Agreement; 

(f) administering the making of advances to Borrowers under Loans pursuant 

to and in accordance with the provisions herein and in the Custodial and Paying Agency 

Agreement governing the making of Funding Draws; 

(g) [intentionally omitted]; 

(h) except as otherwise set forth in this Agreement, making decisions under, 

and enforcing and performing in accordance with, the Asset Documents all loan administration, 

inspections, review of financial data and other matters involved in the Servicing; 

(i) ensuring that all filings required to maintain perfection in any Collateral 

remain up to date and in force, including Uniform Commercial Code financing statements; 

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(j) ensuring that each Borrower (or in the case of Acquired REO Property, the 

applicable Ownership Entity) is diligently performing all applicable construction or development 

work (including all applicable Permitted Capital Improvements, and all construction or 

development funded through Servicing Expenses in accordance with clause (x) of the proviso 

appearing as the last paragraph of the definition of “Servicing Expenses”) using all commercially 

reasonable efforts in accordance with the requirements of the applicable Asset Documents and of 

this Agreement; 

(k) providing the Servicer, any Subservicer and any JDC Contractor with 

copies of such Transaction Documents (or portions thereof) as are necessary for such Servicer, 

Subservicer or JDC Contractor to be familiar with in order to perform its respective obligations 

provided for in this Agreement, the Servicing Agreement, any Subservicing Agreement or any 

JDC Agreement (and related Assignment of JDC Agreement), as applicable; and 

(l) filing, or causing to be filed, on behalf of the Company all relevant tax forms 

in connection with the Servicing of the Assets, including any required filing of IRS Form 1099-A 

(in connection with any applicable acquisition or abandonment of Collateral) and IRS Form 1099-

C (in connection with any applicable cancellation of debt). 

2.2. Responsibility for Enforcement Determinations. Upon the occurrence of an event 

of default under any of the Asset Documents, but subject to the other terms and conditions of this 

Agreement (including the Servicing Standard and obligations with respect to releases pursuant to 

Section 2.6 of this Annex IV), the Manager will cause to be determined the response to such event 

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

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

interests of the Company in the Asset and the Collateral, (ii) the declaration and recording of a 

notice of such default and the acceleration of the maturity of the Asset, (iii) the institution of 

proceedings to foreclose under the Asset Documents securing the Asset pursuant to the power of 

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

proceedings against the Borrower or 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, (vii) the 

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

or any Obligor, and (ix) subject to the provisions herein, the engagement of any JDC Contractor 

to service a JDC Loan. Notwithstanding any provision to the contrary herein, the Manager shall 

not, and shall not cause the Servicer, any Subservicer or any JDC Contractor to, take any action 

that is inconsistent with or prohibited by the terms of the Custodial and Paying Agency Agreement, 

in each case without the prior written consent of the Initial Member. 

2.3. Regulation AB Requirements. The Manager must use commercially reasonable 

efforts to confirm, where applicable, that the Servicer (and any Subservicer) (i) has in place, 

policies and procedures instituted to monitor any performance or other triggers and events of 

default in accordance with the applicable Asset Documents and the Servicing Obligations (as 

generally required pursuant to §§ 1122(d)(1)(i) and (ii) of Regulation AB), and (ii) complies with 

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§§ 1122(d)(2)(i) through (vii), and §§ 1122(d)(4)(i) through (xiv) of Regulation AB, it being 

understood that any such requirements of Regulation AB referenced herein will be deemed 

applicable to the Servicing conducted under the Servicing Agreement (and under any Subservicing 

Agreement) regardless of whether such requirements apply, by their terms, only to companies 

registered or required to file reports with the Securities and Exchange Commission. 

2.4. Security of Customer Information. The Manager must comply, and ensure (or, as 

to any such Person that is not an Affiliate of the Manager or the Private Owner, use commercially 

reasonable efforts to ensure) that the Servicer, each Subservicer and each JDC Contractor comply, 

with all applicable Laws regarding the privacy and security of Customer Information. In 

furtherance of the foregoing, and in each case in accordance with applicable Law and prudent 

industry practices, the Manager must: 

(i) adopt, and ensure that the Servicer, each Subservicer and each JDC 

Contractor adopt reasonable and appropriate administrative, physical, and technical measures, to 

ensure and maintain the privacy and security of Customer Information; 

(ii) enter into and require the Servicer, each Subservicer and each JDC 

Contractor to enter into written obligations that ensure and maintain the privacy and security of 

Customer Information, including, at a minimum, that each Servicer, Subservicer or JDC 

Contractor maintain (A) a written information security program that includes appropriate policies, 

procedures and risk assessments that are reviewed at least annually, (B) appropriate security 

protections with respect to systems, servers, work stations, and mobile devices, including 

appropriate access controls that permit access to Customer Information only to authorized persons 

who reasonably require access for the performance of their applicable responsibilities, (C) 

appropriate policies, procedures, and employee training to protect against reasonably anticipated 

unauthorized uses and disclosures of Customer Information, (D) appropriate monitoring of 

systems and procedures to detect actual or attempted attacks on or intrusions into systems or 

servers containing Customer Information, including response programs that specify actions to be 

taken when unauthorized access to Customer Information is suspected or detected, and (E) 

appropriate procedures for the secure disposal or destruction of Customer Information; 

(iii) ensure, in the event of a Computer Security Incident at or affecting 

Customer Information maintained by the Manager, the Company, the Servicer, a Subservicer or a 

JDC Contractor, that such Person (A) notifies the Company (except when such Person is the 

Company) and each of the Private Owner and the Initial Member, within thirty-six hours of 

becoming aware of such Computer Security Incident, (B) complies with applicable notification 

laws or requirements, (C) investigates the Computer Security Incident and takes appropriate 

remedial actions, and (D) coordinates and cooperates with the Company, the Private Owner and 

the Initial Member to the extent applicable (including if requested by any such Person); 

(iv) ensure that any Customer Information transmitted electronically by 

it (or by the Servicer, a Subservicer or a JDC Contractor) is appropriately encrypted; and 

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(v) promptly make available to the Initial Member information 

regarding the policies and procedures for protection of Customer Information described in this 

Section 2.4 as requested by either of them from time to time. 

2.5. [Intentionally Omitted]. 

2.6. Required Releases as a Condition to Certain Actions. The Manager will not (and 

will ensure that none of the Company, the Servicer, each Subservicer and each JDC Contractor, 

will), renew, extend, renegotiate, compromise, settle or release any Note or Asset or any right of 

the Company with respect to the Assets, except upon payment in full thereof, unless the Borrower 

and all Obligors on said Note or Asset first release and discharge each of the Company, the FDIC, 

the Receiver (including as the Initial Member hereunder and the Transferor under the Transfer 

Agreement) and the Failed Bank, and their respective predecessors-in-interest, agents and assigns, 

from all claims, demands and causes of action that any such Borrower or Obligor may have against 

any such Person arising out of or resulting from any act or omission occurring prior to the date of 

such release. 

3. Servicing and Subservicing Agreements. 

3.1. Requirements for Servicing and Subservicing Agreements. Except as is otherwise 

agreed in writing by the Initial Member, each Servicing Agreement (and any Subservicing 

Agreement with any Subservicer) must, among other things, 

(a) provide for the Servicing by the Servicer (or any Subservicer) in accordance 

with the Servicing Standard and the other terms of this Agreement; 

(b) subject to clause (j) below with respect to immediate termination, be 

terminable upon no more than thirty days prior notice if an Event of Default or any default under 

the Servicing Agreement (or Subservicing Agreement) has occurred; 

(c) provide that the Manager (in its individual capacity) and the Initial Member 

(and, in the case of any Subservicing Agreement, the Servicer or applicable Subservicer having 

been engaged by the Servicer pursuant to a separate Subservicing Agreement, as the case may be) 

each will be entitled to exercise termination rights under the relevant Servicing Agreement or 

Subservicing Agreement (it being understood that the Initial Member may only exercise such 

termination rights as contemplated or permitted in this Agreement); 

(d) provide that the Servicer (or any Subservicer) and the Manager (in its 

individual capacity) acknowledge that the Servicing Agreement (or Subservicing Agreement) 

constitutes a personal services agreement between the Manager (in its individual capacity) and the 

Servicer (or between the Servicer or applicable Subservicer having been engaged by the Servicer 

pursuant to a separate Subservicing Agreement, as the case may be, and the Subservicer, as 

applicable); 

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(e) provide that (A) each of the Company and the FDIC are third party 

beneficiaries thereunder to the extent of any rights expressly granted to such Person under the 

Servicing Agreement or Subservicing Agreement and is entitled to enforce the Servicing 

Agreement or Subservicing Agreement, as applicable, with respect to such rights, and (B) the 

Initial Member and, in the case of any Subservicing Agreement, the Manager (in its individual 

capacity) is a third party beneficiary thereunder; and further provide that in no event will any 

amendment or waiver to any such Servicing Agreement or Subservicing Agreement limit or affect 

any rights of any such third party beneficiary thereunder without the express written consent of 

such third party beneficiary; 

(f) provide that (A) upon the removal of the Private Owner as the Manager or 

the occurrence of an Event of Default, the Initial Member (and any successor Manager) may 

exercise all of the rights of the Manager thereunder and cause the termination or assignment (from 

the Private Owner as the Manager) to any other Person of the same (or, in lieu of such assignment, 

and including in the event of any rejection by the Private Owner of the Servicing Agreement in 

connection with any Insolvency Proceeding, require the Servicer to enter into a new Servicing 

Agreement (on substantially the same terms and conditions as set forth in such Servicing 

Agreement) with such other Person), without penalty or payment of any fee, and (B) upon the 

occurrence of any “Default” under (and as defined in) the Servicing Agreement, the Initial Member 

(and any successor Manager) may exercise all of the rights of (1) the Manager (in its individual 

capacity) under such Servicing Agreement and cause the termination or assignment from the 

Manager (in its individual capacity) to any other Person of the same (or, in lieu of such assignment, 

and including in the event of any rejection by the Private Owner of the Servicing Agreement in 

connection with any Insolvency Proceeding, require the Servicer to enter into a new Servicing 

Agreement (on substantially the same terms and conditions as set forth in such Servicing 

Agreement) with such other Person), without penalty or payment of any fee, and (2) the Servicer 

under any Subservicing Agreement and cause the termination or assignment from the Servicer to 

any other Person of such Subservicing Agreement (or, in lieu of such assignment, and including 

in the event of any rejection by the Servicer of such Subservicing Agreement in connection with 

any Insolvency Proceeding, require the applicable Subservicer to enter into a new Subservicing 

Agreement (on substantially the same terms and conditions as set forth in such Subservicing 

Agreement) with such other Person), without penalty or payment of any fee (it being understood 

that the Initial Member may only exercise the foregoing rights as contemplated or permitted in this 

Agreement); 

(g) provide that the Initial Member, the Manager and the Company (and each 

of their respective representatives) will each have access to and the right to review, copy and audit 

the books and records of the Servicer and any Subservicers and that the Servicer and all 

Subservicers must make available their respective officers, directors, employees, accountants and 

attorneys to answer the Initial Member’s, the Manager’s and the Company’s (and each of their 

respective representatives’) questions or to discuss any matter relating to the Servicer’s or 

Subservicer’s affairs, finances and accounts, as they relate to the Assets, the Collateral, the 

Company Accounts or any other accounts established or maintained pursuant to this Agreement, 

the Custodial and Paying Agency Agreement, the Servicing Agreement or any Subservicing 

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Agreement, or any matters relating to the Servicing Agreement or any Subservicing Agreement or 

the rights or obligations thereunder; 

(h) provide that all Asset Proceeds are to be deposited into the Collection 

Account in accordance with Section 12.7 and that under no circumstances are funds, other than 

Asset Proceeds and interest and earnings thereon, transfers of funds from the Working Capital 

Reserve Account and the proceeds of Excess Working Capital Advances, to be commingled in the 

Collection Account; 

(i) provide that (A) the Servicer or any Subservicer shall not sell, transfer or 

assign its rights under the Servicing Agreement or Subservicing Agreement, as applicable, other 

than Servicer’s rights to delegate to Subservicers (or applicable Subservicer’s right to further 

delegate to another Subservicer) certain responsibilities thereunder and to engage (or permit 

Subservicers to engage) JDC Contractors, in each case as and to the extent permitted by this 

Agreement, and (B) any prohibited sale, transfer or assignment will be void ab initio; 

(j) provide that (A) the Servicer consents to the immediate termination of the 

Servicer upon the occurrence of any Insolvency Event with respect to the Servicer, (B) each 

Subservicer consents to the immediate termination of such Subservicer upon the occurrence of a 

termination event under the Servicing Agreement, and upon the occurrence of any Insolvency 

Event with respect to such Subservicer (or any Subservicer having been engaged by such 

Subservicer), (C) the occurrence of any Restricted Servicer Change of Control with respect to the 

Servicer (or any applicable Rated Subservicer) constitutes a default under the Servicing Agreement 

(and any applicable Subservicing Agreement with such Rated Subservicer) and (D) the occurrence 

of any Insolvency Event with respect to the Servicer or any Subservicer constitutes a default under 

the Servicing Agreement and the Subservicing Agreement, as applicable; provided, however, that, 

in the case of the Servicing Agreement, or a Subservicing Agreement with a Rated Subservicer, 

the occurrence of an Insolvency Event with respect to a Subservicer (which is not an Affiliate of 

the Servicer) may, at the election of the Manager, be subject to a cure period of not more than 

thirty days for replacement of the affected Subservicer (in a manner that will permit the Manager 

to comply with its obligations hereunder); 

(k) provide that, except as permitted by the Manager pursuant to Section 12.7, 

there will be no right of setoff on the part of the Servicer, any Subservicer or any JDC Contractor 

against the Asset Proceeds (or the Company); 

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

the Servicer or any Subservicer is obligated to comply with the Servicing Obligations of the 

Manager hereunder; 

(m) provide a full release and discharge of each Prior Servicer from any and all 

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

legal proceedings and remedies of whatever kind or nature that the Servicer (or any such 

Subservicer) had, has or might have in the future, whether known or unknown, which are related 

in any manner whatsoever to the Servicing by the Prior Servicers prior to the applicable Servicing 

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Transfer Date (other than due to gross negligence, violation of Law or willful misconduct of such 

Prior Servicer); 

(n) [intentionally omitted]; 

(o) provide that none of the Servicer, any Subservicer or any Affiliate of the 

Servicer or any Subservicer may at any time, (A) be or become a partner or joint venturer with any 

Borrower or Obligor, (B) be or become an agent of any Borrower or Obligor, or allow any 

Borrower or Obligor to be an agent of such Servicer or any Subservicer or of any Affiliate of the 

Servicer or any Subservicer, or (C) have any interest whatsoever in any Borrower or Obligor, and 

that the Servicer or Subservicer, as applicable, must immediately notify the Manager and the Initial 

Member upon becoming aware of the occurrence of any of the foregoing; 

(p) provide that the Servicer (and any Rated Subservicer) must immediately 

notify the Manager and the Initial Member of the occurrence of any Change of Control with respect 

to the Servicer (or any Rated Subservicer); 

(q) provide that, upon any sale of any Asset by the Company (including by the 

Servicer on behalf of the Manager on behalf of the Company) in accordance with the terms hereof, 

such Asset will prospectively cease to constitute an “Asset” for any purpose of the Servicing 

Agreement or Subservicing Agreement, as applicable, provided that the Servicer or Subservicer, 

as applicable, will not thereby be released from any liability or obligation thereunder with respect 

to such Asset in relation to the period prior to such sale; 

(r) not conflict with the Servicing Standard or any other terms or provisions of 

this Agreement, the Custodial and Paying Agency Agreement or any of the other Transaction 

Documents insofar as such other terms or provisions hereof or thereof are required to be imposed 

by the Manager (in its individual capacity) on the Servicer (or any Subservicers) in the Servicing 

Agreement (or Subservicing Agreements); 

(s) provide for protection of Customer Information consistent with prudent 

industry practices and the requirements of Section 2.4 of this Annex IV; and 

(t) in the event the Subservicer is a Rated Subservicer, include, for the benefit 

of the Manager and each third party beneficiary under the Servicing Agreement (including the 

Company and the Initial Member), an agreement of such Rated Subservicer to further comply with 

(and separately assume in favor of the Manager and each such third party beneficiary) all terms, 

conditions and obligations of the Servicer under the Servicing Agreement (including obligations 

in such Servicing Agreement with respect to maintenance of insurance, indemnity rights of the 

Indemnified Parties (as against such Rated Subservicer), and engagement of a Subservicer), in 

each case to the same extent as though such Rated Subservicer were executing the Servicing 

Agreement (as the “Servicer”) directly with the Manager. 

3.2. Relation to Manager Obligations. Nothing contained in any Servicing Agreement 

or any Subservicing Agreement will alter any obligation of the Manager under this Agreement 

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and, in the event of any inconsistency between the Servicing Agreement (or any Subservicing 

Agreement) and the terms of this Agreement, among the parties to this Agreement the terms of 

this Agreement will control. 

4. Engagement of JDC Contractors. 

4.1. Right to Engage JDC Contractors. The Manager may, to the extent it determines 

that an applicable engagement of a JDC Contractor is in the best interests of the Company and in 

accordance with the Servicing Standard, engage, or permit the Servicer or any Subservicer to so 

engage, a JDC Contractor to service (and provide related management, administration, debt 

cohesion and collection activities with respect to) any of the JDC Loans, in each case through a 

subcontract between, on the one hand, the Manager (in its individual capacity), the Servicer or 

such Subservicer, as applicable, and, on the other hand, such JDC Contractor (a “JDC 

Agreement”). 

4.2. Requirements for Engagement of JDC Contractors. Such JDC Contractor engaged 

pursuant to Section 4.1 above will not be deemed a “Servicer” or “Subservicer” under the 

Transaction Documents, but any such servicing through a JDC Contractor must comply with the 

terms and conditions of the Transaction Documents and the Servicing Obligations and Servicing 

Standard which would otherwise be applicable to the Manager (in respect of Asset Management), 

the Servicer or such Subservicer in respect of such servicing, subject to the following deviations 

and additional requirements: 

(a) the JDC Contractor need not be a Qualified Servicer, but the Manager, the 

Servicer or such Subservicer will exercise the same due diligence and same degree of care that a 

prudent lender or servicer would customarily use in vetting, selecting, retaining and contracting 

with Persons to perform similar services; 

(b) the Manager may permit the JDC Contractor (x) to remit Asset Proceeds in 

respect of such JDC Loan for deposit in the Collection Account on up to a monthly basis, and (y) 

to deduct Servicing Expenses for a JDC Loan from Asset Proceeds of such JDC Loan, in each case 

to the extent expressly permitted in Section 12.7; 

(c) title to the applicable JDC Loan may not be transferred to such JDC 

Contractor without the prior written consent of the Initial Member (except in the event of an actual 

sale of such JDC Loan in compliance with the requirements and restrictions in the Transaction 

Documents, including Sections 3.4(x) and 3.4(xi)); 

(d) the applicable JDC Agreement with such JDC Contractor must be subject 

to a fully executed Assignment of JDC Agreement in favor of the Initial Member; and the Manager 

will comply with, and will cause the JDC Contractor and, to the extent a party thereto, the Servicer 

and any Subservicer, to so comply with, all obligations under such Assignment of JDC Agreement; 

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(e) the Manager will provide prior written notice to the Initial Member of any 

such engagement, and, promptly following execution, deliver to the Initial Member a copy of the 

applicable JDC Agreement and related Assignment of JDC Agreement; 

(f) the Manager will (and, as applicable, will cause the Servicer or Subservicer 

having engaged such JDC Contractor to) promptly notify the Initial Member in writing of the 

occurrence of (A) any default under, or other termination of, such JDC Agreement, or (B) any 

breach (including any “Default” as defined in) the applicable Assignment of JDC Agreement; 

(g) the Manager, Servicer or Subservicer, as applicable, having engaged such 

JDC Contractor will cause all Servicing pursuant to such engagement to comply with the 

requirements set forth in the Reporting and Access Schedule (including as specified in Sections 1 

and 3 thereof with respect to JDC Contractors), and the reporting provided by such Manager, 

Servicer or Subservicer will cover the Servicing by such JDC Contractor (including auditable 

detail of any Asset Proceeds received by such JDC Contractor and any netting or other use thereof); 

and in connection therewith the Manager, Servicer or Subservicer, as applicable, will cause any 

annual compliance certificate provided by it pursuant to Section 3(c) of the Reporting Access 

Schedule to cover (or otherwise be accompanied by separate such compliance certificates from) 

such JDC Contractor (including in respect of its applicable Assignment of JDC Agreement); 

provided such JDC Contractor will not be required to deliver (or be covered by) any annual 

compliance report required pursuant to Section 3(d) of the Reporting and Access Schedule; and 

(h) the Insurance Schedule will not apply directly to such JDC Contractor; 

provided, that such JDC Contractor must maintain insurance consistent with market standards for 

prudent JDC Contractors, with such engagement of the JDC Contractor, taking into account such 

insurance and any applicable insurance maintained by the Manager, the Servicer or any applicable 

Subservicer, collectively covering all risks and potential liabilities in connection with engagement 

of such JDC Contractor in a manner no less favorable to the Company (and applicable Ownership 

Entities) than would be applicable if the services of such JDC Contractor were performed directly 

by the Manager, Servicer or applicable Subservicer so engaging such JDC Contractor. 

5. Acquired Property and Ownership Entities. 

5.1. Use of Ownership Entities. 

(a) The Company will form Ownership Entities for purposes of taking and 

holding title to Collateral. If title to any Collateral that constitutes real property is to be acquired 

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

Commercial Code, or otherwise, title to such Acquired REO Property must be taken and held in 

the name of one or more Ownership Entities; provided, however, that for any Acquired REO 

Property with respect to which there exists any Environmental Hazard, the Ownership Entity that 

holds such Acquired REO Property may hold title only to such Acquired REO Property (and no 

other Acquired REO Property). 

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(b) Each Ownership Entity will be wholly owned by the Company. The 

purposes of each Ownership Entity will be to hold Acquired Property pending sale, to complete 

applicable permitted construction of any such Acquired Property, to operate the Acquired Property 

as efficiently as possible in order to minimize financial loss to the Company and the Initial 

Member, and to sell the Acquired REO Property as promptly as practicable in a way designed to 

minimize financial loss to the Company and the Initial Member. 

(c) The Manager will cause each Ownership Entity to remain in compliance 

with the requirements herein for Ownership Entities. As appropriate with respect to any Company 

Account (other than the Distribution Account) and related obligations with respect thereto, the 

Manager will cause each Ownership Entity to either (i) use a sub-account of such Company 

Account or (ii) open a separate account in the name of such Ownership Entity (an “Ownership 

Entity Account”) with the Paying Agent. In addition, the Manager will (i) provide notice to the 

Initial Member of any such Ownership Entity Account prior to opening or otherwise causing such 

Ownership Entity to acquire the same, and (ii) cause each such Ownership Entity Account (or 

applicable sub-account), and all deposits and withdrawals with respect thereto, to at all times 

comply with all requirements in the Transaction Documents applicable to the Company Accounts 

(including as to reporting and timely deposits into the Collection Account and Distribution 

Account of all funds required to be deposited therein). Subject to the foregoing (and for purposes 

of determining compliance with the Transaction Documents), references to any Company Account 

will be deemed to include the applicable Ownership Entity Account (or sub-account) pursuant to 

the foregoing. 

5.2. Use of TRS Entities. With respect to any Acquired REO Property generating 

operating income, the Manager will, upon receipt of a specific written request from the Private 

Owner (with a copy having been delivered to the Initial Member), form an applicable Subsidiary 

of the Company intended to qualify as a taxable REIT subsidiary (a “TRS Entity”), for the sole 

purpose of leasing Acquired Property from an Ownership Entity and operating such property, 

subject to compliance with all of the following: 

(a) All obligations (including in respect of formation, authorizations, insurance, 

reporting, operation and dissolution) with respect to Ownership Entities will apply to such TRS 

Entity, and the Manager will cause such TRS Entity to be organized and operated in compliance 

with the terms of this Agreement and each other Transaction Document that relate to the 

Ownership Entities, except that each TRS Entity will (i) make a corporate tax election, and (ii) 

enter into a lease with an Ownership Entity, and (iii) be subject to any additional specific 

requirements for TRS Entities set forth in the Transaction Documents; 

(b) The Manager will provide written notice to the Initial Member at the time 

any TRS Entity is created that identifies the name of the TRS Entity and the Ownership Entity 

from which the TRS Entity will lease the Acquired Property, and encloses an organizational chart 

reflecting all the TRS Entities currently owned by the Company; 

(c) All costs and expenses (including without limitation legal, accounting, tax 

preparation, insurance and administrative costs and expenses and the federal, state and local taxes 

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related to the creation, existence, operation and tax election related to, arising out of or resulting 

from any TRS Entity and the lease of any Acquired Property from an Ownership Entity to a TRS 

Entity (the “TRS Costs”) will be paid by the applicable TRS Entity on or before the date such 

amounts are due; and as to any such TRS Costs: 

(i) the Private Owner will reimburse the Company (on account of the 

consolidated effect to the Company of such TRS Costs) for the full amount of such TRS Costs on 

or before the Distribution Date for the Due Period in which such TRS Costs were incurred (or in 

which the same where otherwise passed through to the Company taking into account any 

applicable permitted payment cycle or netting permitted pursuant to this Section 5 by (x) deducting 

such amounts from distributions to the Private Owner (in any capacity) on such Distribution Date 

(and such amounts so deducted will be deposited into the Collection Account by the Paying Agent), 

or (y) to the extent the amount of the distributions to be paid to the Private Owner are less than the 

amount due to be reimbursed, the Private Owner must make a payment to the Company to cover 

such shortfall (with deposit of such payment into the Collection Account) prior to the transfer of 

funds from the Collection Account to the Distribution Account for purposes of the distributions 

on such Distribution Date. The Private Owner agrees that neither the Company nor any Subsidiary 

thereof will have any obligation to return or repay any amounts paid by the Private Owner pursuant 

to the foregoing, and no such amounts paid by the Private Owner will constitute a Capital 

Contribution or otherwise affect the parties’ respective Capital Accounts; 

(ii) the reimbursement of the TRS Costs will be shown on the Custodial 

and Paying Agent Report and the Cash Flow and Distribution Report covering such period (in a 

below the line adjustment to distributions to the Private Owner, as to any amounts so paid from 

such distributions) in a manner reasonable satisfactory to the Initial Member; and 

(iii) if any TRS Costs are shown on the Cash Flow and Distribution 

Report, the Manager will provide auditable detail on such TRS Costs to the Private Owner at the 

time the Manager submits such Cash Flow and Distribution Report; 

(d) The Manager will promptly deliver copies of all tax returns and filings 

submitted for each TRS Entity with a reconciliation of the returns to the general ledger to the Initial 

Member or any of its designees or representatives at such party’s request; 

(e) The Private Owner and the Manager will, in addition to the information 

otherwise required pursuant to the Reporting and Access Schedule with respect to such TRS Entity 

(as an Ownership Entity), provide promptly any additional information reasonably requested by 

the Initial Member or any of its designees or representative related to the creation, use, status and 

costs of such TRS Entity, the lease and related organizational structure; 

(f) The Private Owner will indemnify and hold harmless the Company, each 

Ownership Entity and the Indemnified Parties from and against any costs or expenses, including 

without limitation, damages, suits, Liabilities, claims, administrative costs, attorney’s fees, 

accountant fees, tax preparation fees, insurance premiums, taxes, assessments or penalties related 

to, arising out of or resulting from the creation, existence, operation and tax election of the TRS 

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Entity and the lease of any Acquired Property from an Ownership Entity to a TRS Entity. The 

Private Owner will make any such indemnity payments (x) to the extent payable to the Company 

or any Ownership Entity, on or before the Distribution Date for the Due Period in which the 

applicable amounts were incurred or suffered by the Company or such Ownership Entity in the 

same manner (and with the same reporting) as the repayment of TRS Costs pursuant to Section 

5.2(c) of this Annex IV, and (y) to the extent payable to any Indemnified Party, promptly upon 

demand; 

(g) Each such TRS Entity will maintain Ownership Entity Accounts with the 

Paying Agent in its name (separate from the Company or any other Ownership Entity) meeting the 

requirements of Section 5.1(c) of this Annex IV; and 

(h) If any third party has a direct or indirect right or interest in an Acquired 

REO Property or Asset Proceeds pursuant to a Loan Participation Agreement, the Manager will 

ensure, at the Private Owner’s cost and expense, that no TRS Costs are inappropriately passed 

through to such third party and that the Company is complying with the Loan Participation 

Agreement. 

5.3. Acquisition of Collateral: Appraisals and Environmental Hazards. 

(a) In connection with any acquisition of title to Acquired Property by the 

Company (or any Ownership Entity) occurring after the Closing Date (by foreclosure, by deed in 

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

otherwise), the Company must obtain (or have obtained), during the period commencing six 

months prior to such acquisition and ending on the earlier of (i) sixty days after such acquisition 

or (ii) such earlier date as may be required in connection with the relevant exercise of remedies so 

as to comply with applicable Law and preserve rights to collect any Deficiency Balance), an 

updated Appraisal for determination of the Appraised Value (to serve as the basis for the initial 

Net Fair Value) of such Acquired Property. 

(b) Nothing in this Annex IV or anything else in the Agreement will be deemed 

to affirmatively require the Manager to cause the Company to acquire all or any portion of any 

Acquired REO Property with respect to which there exists any Environmental Hazard. Prior to 

acquisition of title (whether by foreclosure, deed in lieu of foreclosure, by power of sale or by sale 

pursuant to the Uniform Commercial Code, or otherwise) to any Acquired REO Property, the 

Manager must (or, with respect to any Acquired REO Property included in the SFR Assets, may, 

but will not be required to) (i) cause a Site Assessment to be conducted with respect to such 

Acquired REO Property; provided, that the Company (and the applicable Ownership Entity) may 

rely on a third party Site Assessment conducted within one year prior to acquiring title so long as 

the Company (and the applicable Ownership Entity) has obtained all relevant updates within one 

hundred and eighty days prior to acquiring title, and taken applicable further action, so as to be 

deemed to have satisfied, and such prior third party Site Assessment otherwise is permitted to be 

relied upon to satisfy, the United States Environmental Protection Agency’s “All Appropriate 

Inquiries” standards, set forth in 40 C.F.R. § 312, for meeting the “Bona Fide Prospective 

Purchaser” and “Innocent Purchaser” defenses under CERCLA, 42 U.S.C. §§ 9601, 9607, and (ii) 

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if the actions taken by the Manager pursuant to clause (i) will not suffice for the applicable 

Ownership Entity to be deemed, at the time of such acquisition of title, to have satisfied such “All 

Appropriate Inquiries” standards, make a determination specifically with respect to such Acquired 

REO Property that refraining from taking such other or further action as would so suffice to meet 

such “All Appropriate Inquiries” standards is in accordance with the Servicing Standard. The 

costs of any Site Assessment (or relevant updates) conducted or obtained pursuant to the foregoing 

will be deemed to be Servicing Expenses (or Interim Servicing Expenses) as long as such costs 

were not paid to any Affiliate of the Manager, or any Affiliate of the Servicer or any Subservicer. 

(c) With respect to any particular Acquired REO Property (to the extent 

consisting of real property), the Manager must, from and after the acquisition of title thereto by an 

Ownership Entity, take (or cause to be taken) such action as is necessary so that such Ownership 

Entity retains, with respect to such Acquired REO Property, the benefit of (i) the secured lender 

exemption under CERCLA, 42 U.S.C. § 9601, and (ii) to the extent that the Company or such 

Ownership Entity, as the case may be, had the benefit of either such defense at the time of such 

acquisition of title, the “Bona Fide Prospective Purchaser” or “Innocent Purchaser” defenses under 

CERCLA, 42 U.S.C. §§ 9601, 9607, in the case of each of (i) and (ii) unless and to the extent that 

the Manager makes a determination that refraining from taking such action is in accordance with 

the Servicing Standard, provided that this Section 5.3(c) will apply with respect to any Acquired 

REO Property included in the SFR Assets only if the Manager (or any Servicer or Subservicer) 

has reason to believe that an Environmental Hazard may exist with respect to such Acquired REO 

Property. 

5.4. Administration of Acquired REO Properties. The following terms and conditions 

will be binding on the Company and the Ownership Entities (and on the Manager’s performance 

of its obligations hereunder) with respect to any Acquired REO Properties, in addition to any other 

terms and conditions concerning the same subject matter set forth in this Agreement and any of 

the other Transaction Documents: 

(a) Insurance. With respect to each Acquired REO Property, the Manager must 

cause the applicable Ownership Entity to maintain the applicable insurance required pursuant to 

(and the Manager must otherwise comply, and case the applicable Ownership Entity to comply, 

with the obligations set forth in) the Insurance Schedule. 

(b) Leasing Covenants. With respect to each Acquired REO Property, the 

Manager must cause the applicable Ownership Entity to (i) perform the obligations that such 

Ownership Entity is required to perform under the leases to which it is a party in all material 

respects and (ii) enforce, in accordance with commercially reasonable practices for properties 

similar to the applicable Acquired REO Property, the material obligations to be performed by the 

tenants under such leases. 

(c) Zoning. The Manager shall not permit any Ownership Entity to initiate or 

consent to any zoning reclassification of any portion of the Acquired REO Property owned by such 

Ownership Entity, or use or permit the use of any portion of an Acquired REO Property in any 

manner that could result in such use (taking into account any applicable variance obtained in 

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accordance with the Servicing Standard) becoming a non-conforming use under any zoning 

ordinance or any other applicable land use Law, rule or regulation, without the prior consent of the 

Initial Member. 

(d) No Joint Assessment. The Manager shall not permit any Ownership Entity 

to suffer, permit or initiate the joint assessment of Acquired REO Property (i) with any other real 

property constituting a Tax lot separate from such Acquired REO Property, and (ii) with any 

portion of an Acquired REO Property which may be deemed to constitute personal property, or 

any other procedure whereby the Lien of any Taxes which may be levied against such personal 

property could be assessed or levied or charged to such Acquired REO Property. 

(e) Maintenance, Repairs and Alterations. From and after the completion of 

any buildings or other improvements at an Acquired REO Property, the Manager must cause the 

applicable Ownership Entity to maintain such Acquired REO Property in a good and safe condition 

and repair (subject to such alterations as the Manager may from time to time determine to be 

appropriate in accordance with the Servicing Standard and applicable requirements herein and in 

the other Transaction Documents) and in accordance with applicable Law. 

(f) Ground Leases. With respect to any Acquired REO Property that is leased 

under a Ground Lease, the Manager must cause the applicable Ownership Entity to (i) pay all rents 

and other sums required to be paid by the tenant under and pursuant to the provisions of the 

applicable Ground Lease as and when such rent or other charge is payable, and (ii) diligently and 

timely perform and observe all of the terms, covenants and conditions binding on the tenant under 

the Ground Lease. The Manager shall not permit the applicable Ownership Entity to subordinate 

or consent to the subordination of any Ground Lease to any mortgage, lease or other interest on or 

in the ground lessor’s interest in the applicable Acquired REO Property without the prior consent 

of the Initial Member unless such subordination is required under the provisions of such Ground 

Lease. 

(g) Additional Construction Covenants. In the event the Manager elects to 

cause the Company to fund any permitted construction with respect to Acquired REO Property, 

then the Manager must cause each applicable Ownership Entity to pursue with diligence the 

construction of the Acquired REO Property owned by such Ownership Entity (i) in accordance 

with the construction, construction management (if any) and all other material contracts relating 

to such construction, and all requirements of Law, all restrictions, covenants and easements 

affecting such Acquired REO Property, and all applicable governmental approvals, (ii) in 

accordance with all applicable requirements in the Permitted Capital Improvement Addendum, 

(iii) in a good and workmanlike manner and free of defects, (iv) in a manner such that such 

Acquired REO Property remains free from any Liens, claims or assessments (actual or contingent), 

in each case for any material, labor or other item furnished in connection therewith and (v) in 

conformance with the all other applicable requirements set forth herein and in the other Transaction 

Documents. 

(h) Acquired REO Property Generally. In operating, managing, leasing or 

disposing of any Acquired REO Property, the Manager will act in accordance with the Servicing 

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Standard and in the best interests of the Members and creditors of the Company (including the 

FDIC in its various capacities); and, in connection with its compliance with the foregoing, the 

Manager will not be required to act in accordance with Sections 5.4(b)-(f) above (or, subject to 

Section 5.4(i) below, an applicable Assumed Property Obligation) if such action (A) is not in the 

best interests of the Members and creditors of the Company (including the FDIC in its various 

capacities), as determined by the Manager in the exercise of its reasonable discretion or (B) 

otherwise violates the Servicing Standard; provided, the Manager will provide written notice to 

the Initial Member prior to any such permitted failure to act specifying the relevant requirements 

involved and reasons for the Manager so failing to act in accordance with the same. 

(i) Performance of Assumed Property Obligations and Resolution of Conflicts. 

The Manager will at all times cause the Company and each Ownership Entity to comply with all 

Assumed Property Obligations; provided, that, in the event compliance (by the Company or an 

applicable Ownership Entity) with any such Assumed Property Obligation would directly conflict 

with another requirement in the Transaction Documents (notwithstanding use of best efforts by 

the Private Owner, the Manager, the Servicer and any Subservicer, as applicable, to avoid such 

conflict and remain in compliance with the Transaction Documents): 

(i) the Manager will promptly notify the Initial Member of such conflict 

or potential conflict resulting from an Ownership Entity acquiring title to an Acquired Property; 

(ii) the Manager will not be required to comply with such Assumed 

Property Obligation if such non-compliance is permitted pursuant to the standard set forth in 

Section 5.4(h) above in this Annex IV; and 

(iii) if such conflict remains unresolved after application of the foregoing 

clause (ii), the following provisions will apply: 

(A) to the extent such Assumed Property Obligation requires 

Development not permitted by the Transaction Documents, the Manager will sell the Asset subject 

to the Assumed Property Obligations at issue or, if such a sale is not commercially feasible, (x) 

the Manager will provide to the Initial Member its recommended approach with respect to 

compliance with such Assumed Property Obligation, and (y) such Development will remain 

subject to the restrictions in the Transaction Documents (and to receipt of written consent of the 

Initial Member prior to the same being accomplished); 

(B) except as to any Development, so long as the Manager has 

timely provided such notice of the conflict, the Initial Member will be deemed to have provided 

its conditional consent to compliance by the Company and any such Ownership Entity with such 

Assumed Property Obligation (with waiver of such directly conflicting requirements); 

(C) any consent provided or deemed provided pursuant to this 

Section 5.4(i) is subject to the continuing right of the Initial Member to unilaterally modify the 

relevant conflicting requirements in the Transaction Documents or impose additional conditions 

with respect thereto in a manner consistent with the spirit and intent thereof (as determined by the 

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Initial Member), and compliance with such requirements and conditions, and the terms and timing 

determined by the Initial Member, will be a condition to the effectiveness or continued 

effectiveness, as applicable, of such consent or deemed consent (and waiver), and 

(D) in addition to the foregoing requirements, in the event such 

Assumed Property Obligation involves such Ownership Entity (or the Manager, the Servicer, any 

Subservicer or any JDC Contractor) handling Asset Proceeds (without remittance of the same to 

the Collection Account in the applicable period pursuant to Section 12.7) in a manner not otherwise 

expressly permitted pursuant to this Agreement or permitted in writing by the Initial Member, the 

Manager will cause such Asset Proceeds to be held subject to a control agreement in form and 

substance satisfactory to the Initial Member (providing access rights, including for direction of 

funds, to the Initial Member, in a manner so as to collectively provide substantially the same rights, 

control and access as would be the case if such funds were timely deposited into the Collection 

Account). 

(j) Reports. The Manager must furnish to the Initial Member such reports 

regarding the construction, leasing and sales efforts of or relating to the Acquired REO Property 

as the Initial Member may reasonably request. Without limitation of the foregoing, the Monthly 

Reports will include applicable reporting, in form and substance satisfactory to the Initial Member, 

with respect to all permitted construction or development with respect to any Acquired REO 

Property, including, as applicable, a tracking of progress of any such construction or development 

and use of funds with a comparison thereof to the approved Capital Improvement Plan (in the case 

of Permitted Capital Improvements) and any then applicable (including as updated) Business Plan, 

Strategic Plan Report and Critical Strategy Resolution Business Plan (in the case of any other 

permitted construction or development). 

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Annex V 

Permitted Capital Improvement Addendum 

1. Permitted Capital Improvements. The Company may, from time to time, with 

respect to any Mortgaged Property or Acquired REO Property included in the Assets, cause or 

permit specific property improvements or preservation (and incur related Permitted Capital 

Improvement Expenses, including making Capital Improvement Advances), in each case to the 

extent expressly set forth in a Capital Improvement Plan approved by the Initial Member and 

funded in accordance with this Annex V (such approved improvements or preservation pursuant 

to such Capital Improvement Plan, “Permitted Capital Improvements”), subject to the 

following: 

(a) Request and Approval of Capital Improvement Plans. So long as available 

funds remain in the Capital Improvement Account (which funds are not allocated to previously 

approved Permitted Capital Improvements) the Company may, based on determinations of the 

Manager and with the consent of the Private Owner, from time to time submit a request for 

approval by the Initial Member of proposed Permitted Capital Improvements of specific Assets. 

Any such request (a “Capital Improvement Approval Request”) must be in writing signed by 

each of the Manager and the Private Owner delivered to the Initial Member specifying in 

reasonable detail, for such Asset, the proposed Permitted Capital Improvements (including for any 

proposed Capital Improvement Advances or other proposed Permitted Capital Improvement 

Expenses, and material terms of any proposed Modifications to Asset Documents taking into 

account the Loan Modification Program), including attached thereto (i) the applicable Capital 

Improvement Plan for such proposed Permitted Capital Improvements, (ii) an updated Appraisal 

for the relevant Acquired REO Property or Mortgaged Property (as applicable), dated as of a date 

(and reflecting an Appraised Value) not more than 1 year prior to the date of initial delivery of 

such Capital Improvement Approval Request, and (iii) documents evidencing the registration of 

the corresponding Acquired REO Property or Mortgaged Property (as applicable) with the HPD. 

Within forty-five Business Days after receipt of a Capital Improvement Approval Request and 

related Capital Improvement Plan, the Initial Member in its sole discretion, may (i) approve the 

submitted Capital Improvement Plan, (ii) provide the Manager and Private Owner with a 

description of the changes required to obtain such approval, or (iii) indicate to the Manager and 

the Private Owner that the plan will not be approved (and a failure of the Initial Member to provide 

one of the foregoing responses within forty-five Business Days after receipt of the applicable 

Capital Improvement Plan will be deemed as such indication that the Capital Improvement Plan 

will not be approved). No Capital Improvement Plan may be modified without the approval of the 

Initial Member. 

(b) Right to Conduct Permitted Capital Improvements. Once a Capital 

Improvement Plan has been approved, the Company will be permitted, to the extent that allocated 

Company funds in the Capital Improvement Account are available for such purpose and subject to 

the terms herein, to make Capital Improvement Advances, incur expenses and hire subcontractors, 

as applicable, as necessary for the applicable Permitted Capital Improvements, up to the approved 

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amount and based on the approved schedule in such Capital Improvement Plan (and an amount of 

funds in the Capital Improvement Account equal to the amount so included in the approved budget 

will be deemed allocated for purposes of the applicable Permitted Capital Improvements, with 

withdrawal of such funds being subject to Section 2 below). 

(c) Treatment of Capital Improvement Advances. Each Capital Improvement 

Advance will, including for determinations of Unpaid Principal Balance, Loan Risk Category and 

Management Fees, be deemed a part of the specific Loan to which it relates (with such Loan being 

specifically referenced in the Capital Improvement Plan). Accordingly, any sale or other 

disposition of a Loan must include any outstanding (and not otherwise then being repaid in full or 

cancelled) Capital Improvement Advance made in connection with such Loan, and any such 

outstanding Capital Improvement Advance may not be sold or otherwise disposed separately from 

such Loan. Notwithstanding the foregoing, Capital Improvement Advances are subject to such 

separate reporting requirements as may apply from time to time pursuant to Section 4 below. 

2. Capital Improvement Account; Funding and uses of Capital Improvement Fund. 

(a) Establishment of Capital Improvement Account. On the Closing Date, the 

Manager will cause the Company to establish the Capital Improvement Account with the Paying 

Agent for the exclusive purpose of holding the Capital Improvement Fund in accordance with the 

requirements herein and in the Custodial and Paying Agency Agreement. 

(b) Initial Funding of Capital Improvement Account. On the Closing Date, the 

Initial Member and the Private Owner will fund, as Capital Contributions to the Company, the 

Capital Improvement Account in full amount of the Capital Improvement Account Deposit as 

follows: the Initial Member will deposit cash in the amount of the Initial Member Capital 

Improvement Account Deposit, and the Private Owner will deposit cash in the amount of the 

Private Owner Capital Improvement Account Deposit, which deposits will be made in accordance 

with the applicable provisions of the Private Owner Interest Sale Agreement. 

(c) Further Funding of Capital Improvement Account. On each Distribution 

Date following the Closing Date, the Company will, subject to the terms hereof and of the 

Custodial and Paying Agency Agreement, fund (or replenish, as applicable) the Capital 

Improvement Fund to the extent of available Asset Proceeds (pursuant to the Priority of Payments 

and based on the then applicable Capital Improvement Fund Target) so as to maintain appropriate 

Capital Improvement Fund levels in accordance herewith. The Manager, from time to time in the 

exercise of its reasonable discretion (taking into account projected Permitted Capital Improvement 

Expenses) and in accordance with the Servicing Standard and requirements in the Transaction 

Documents, (i) will determine the Capital Improvement Fund Target (to be not less than then then 

effective Capital Improvement Fund Floor), and (ii) may submit to the Initial Member a written 

request for a change (either as a temporary or permanent increase or reduction) to the amount of 

the Capital Improvement Fund Floor. In connection with any such determination of the Capital 

Improvement Fund Target or requested change to the Capital Improvement Fund Floor, the Initial 

Member will have the right to receive (and the Manager must promptly comply with any 

reasonable request for) any additional relevant information as it may deem necessary or advisable 

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for evaluating such request and related Capital Improvement Fund levels (and compliance thereof 

with the requirements herein). Any such requested change to the Capital Improvement Fund Floor 

will be effective upon, and subject to, receipt by the Manager of an applicable express approval in 

writing from the Initial Member. The Capital Improvement Fund Target will be specified in each 

Monthly Report. In the case of each Monthly Report for all Due Periods ending prior to or during 

the calendar month in which the final Servicing Transfer Date occurs, the Manager will inform the 

Initial Member, not later than the third Business Day prior to the Distribution Date in respect of 

such Due Period, of the Capital Improvement Fund Target that should be specified in such Monthly 

Report. 

(d) Use of Funds in the Capital Improvement Account. Funds in the Capital 

Improvement Account will be used exclusively to fund, on an Asset specific basis, Permitted 

Capital Improvements. Disbursement of the funds (allocated pursuant to Section 1(b) above) from 

the Capital Improvement Account to pay the applicable Permitted Capital Improvement Expenses 

will be made by the Paying Agent, upon the direction of the Manager on a monthly basis (with one 

collective disbursement of funds from the Capital Improvement Account each month with respect 

to each Capital Improvement Plan), subject in each case and to the applicable requirements in this 

Annex V (including specific Verification Contractor approval pursuant to Section 5 below) and in 

the Custodial and Paying Agency Agreement. 

(e) Release of Remaining Capital Improvement Fund. At such time as may be 

requested or approved in writing by the Initial Member following a determination by the Private 

Owner that no further Permitted Capital Improvement Expenses will reasonably occur with respect 

to the Assets, and otherwise upon the winding-up of the Company pursuant to Section 9.2 of the 

LLC Operating Agreement (whenever occurring) and prior to the Final Monthly Distribution, any 

remaining funds in the Capital Improvement Account will be released to the Distribution Account 

(or to the Collection Account for further transfer to the Distribution Account) for distribution 

pursuant to the Priority of Payments on the first occurring Distribution Date after such date, 

following which release the Manager will cause the Capital Improvement Account to be closed. 

In connection with, and to effect, such release, distribution and closing of the Capital Contribution 

Account, the Manager must provide timely instructions to the Paying Agent with respect thereto 

for distribution thereof in accordance with the foregoing and other applicable provisions in the 

Custodial and Paying Agency Agreement. Except as expressly permitted pursuant to the foregoing 

provisions of this Section 2 (and applicable provisions in the Custodial and Paying Agency 

Agreement), the Manager shall not cause or permit withdrawals from the Capital Improvement 

Account. 

3. Capital Improvement Advances and Related Modifications. In connection with, 

and for purposes of, any Permitted Capital Improvements with respect to a Loan, the Manager will 

determine, in accordance with the Servicing Standard (including in relation to the Loan 

Modification Program, where applicable), the terms of any Capital Improvement Advance to the 

Borrower and related Modifications to (including any applicable separate promissory notes or 

other new documents to form a part of) the Asset Documents for such Loan; provided that, in all 

events, the following will apply: 

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(a) such terms and Modifications must be consistent with the applicable 

approved Capital Improvement Plan, and, subject to the foregoing, with the Servicing Standard 

(including in relation to the Loan Modification Program, where applicable), and any then-existing 

Business Plan and, if applicable, Strategic Plan Report and Critical Strategy Resolution Business 

Plan for or covering such Loan, 

(b) the Manager must (as to Acquired REO Property) register (and thereafter 

maintain such registration), or (as to Mortgaged Property) cause the applicable Borrower to 

register, the corresponding Acquired REO Property or Mortgaged Property, as applicable, with the 

HPD (using for such purposes the following link: https://www.nyc.gov/site/hpd/services-andinformation/register-your-property.page); and, in respect of any Mortgaged Property, the 

corresponding Asset Documents must include a specific covenant from the applicable Obligors 

requiring such registration to be maintained so long as any portion of the applicable Loan 

(inclusive of any such Capital Improvement Advance) remains outstanding, 

(c) as a condition to the making of any Capital Improvement Advance, the 

Manager must include, or cause to be included in the corresponding Asset Documents, and 

thereafter enforce to the extent permissible under applicable law, specific representations, 

warranties and covenants from the applicable Obligors (including, if requested by the Initial 

Member, using specific representations, warranties, covenants and events of default required from 

time to time by the Initial Member) to the effect that no such Capital Improvement Advance (or 

related Permitted Capital Improvement) is intended to be used, whether by itself or in connection 

with other improvements or matters, to apply for or obtain an exemption from (or otherwise avoid 

applicability of), and no such Obligor will, for so long as any portion of the applicable Loan 

(inclusive of any such Capital Improvement Advance) remains outstanding, apply for or take any 

action, based in whole or in part on such Capital Improvement Advance (or related Permitted 

Capital Improvements), for the purpose of obtaining an exemption from (or otherwise avoiding 

applicability of), any Rent Stabilization or Rent Control regulation (including any such exemptions 

from, or removal from Rent Stabilization requirements of, the Emergency Tenant Protection Act 

as in effect from time to time) applicable to the Collateral securing the Loan, and 

(d) relevant decisions of the Manager with respect to use of the Capital 

Improvement Fund should take into account the purposes of such Capital Improvement Fund, 

which include (i) maximizing the value of the Assets and the Collateral, (ii) maximizing the 

preservation of the availability and affordability of residential real property for low-and-moderateincome individuals, and (iii) improving (or avoiding a deterioration in) the Risk Category 

classification of the Loans. 

4. Reporting. 

(a) Each Business Plan, Strategic Plan Report and Critical Strategy Resolution 

Business Plan prepared by the Manager is to include, in a manner consistent with the level of detail 

and type of information otherwise included therein, the Manager’s applicable determinations and 

plans regarding proposed or approved Permitted Capital Improvements. 

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(b) In each case to the extent requested by the Initial Member, reporting in 

respect of, or including specific balances, projections, performance or other information for, any 

Loan for which one or more Capital Improvement Advances have been made must separately track 

relevant information for (or report as though it were a separate Loan) each Capital Improvement 

Advance (or series of related Capital Improvement Advances pursuant to the same Capital 

Improvement Plan). 

5. Verification Contractor. The Initial Member has the right, in its sole discretion and 

at its own expense (but without an obligation to reimburse the Company for any expenses incurred 

by the Company), to retain a Verification Contractor (as selected by the Initial Member in its sole 

discretion), for the performance by such Verification Contractor of the services set forth with 

respect thereto in the Transaction Documents (and such related services as the Initial Member may 

request from time to time), including: 

(a) assisting the Initial Member in review of Business Plans, Loan Performance 

Reports, Monthly Reports, Strategic Plan Reports and Critical Strategy Resolution Business Plans 

(in each case, including any updates thereto) and provision of recommendations to the Company 

or the Initial Member with respect thereto (including for purposes of confirming or determining 

the Risk Category of each Loan and Acquired REO Property); and 

(b) with respect to Permitted Capital Improvements, 

(i) assisting the Initial Member in its review of any Capital 

Improvement Approval Request, including the Capital Improvement Plan attached thereto, and 

recommending whether such Capital Improvement Approval Request and related Capital 

Improvement Plan should be approved (it being understood that no such recommendation will be 

binding on the Initial Member), 

(ii) assisting the Initial Member in its review of reporting in respect of, 

or covering, such Permitted Capital Improvements and any related Capital Improvement 

Advances, 

Improvement Account, and 

(iii) assisting in connection with administration of the Capital 

(iv) verifying that all funds released from the Capital Improvement 

Account are used exclusively for the purposes described in the relevant approved Capital 

Improvement Plan (which verification may, as determined by the Initial Member or such 

Verification Contractor, require physical inspections to confirm completion of applicable items 

and, in connection with any Capital Improvement Advance, confirmation of satisfaction of 

applicable conditions, in each case in accordance with such approved Capital Improvement Plan), 

it being agreed that disbursement of funds from the Capital Improvement Account to pay the 

applicable Permitted Capital Improvement Expenses pursuant to Section 2(d) of this Annex V (and 

applicable provisions of the Custodial and Paying Agency Agreement) will be made by the Paying 

Agent (and the Manager will expressly so instruct the Paying Agent to make the same) subject to, 

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and only following, (A) in connection with any Capital Improvement Advance, evidence 

(including a certification by the Manager) of satisfaction of all conditions and requirements for the 

making of such Capital Improvement Advance, including under the corresponding Asset 

Documents governing the same (taking into account any specified waivers, deferrals or other 

Modifications agreed by the Manager under its relevant authority in respect of such Capital 

Improvement Advance), (B) in connection with any applicable work (including as may be required 

for the making of a Capital Improvement Advance), submission of invoices and other relevant 

evidence (including evidence of completion of applicable work) to the Verification Contractor, 

(C) completion by the Verification Contractor of any applicable physical inspections pursuant to 

the foregoing, and (D) authorization by the Verification Contractor for release (by the Paying 

Agent) of applicable funds from the Capital Improvement Account following the Verification 

Contractor’s review and verification with respect to the foregoing (including such further 

documents or evidence as may be requested by the Verification Contractor) and applicable 

compliance with the Capital Improvement Plan. 

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EXHIBIT A 

FORM OF CERTIFICATE OF FORMATION 

OF 

SIG RCRS C MF 2023 Venture LLC 

Pursuant to and in accordance with the provisions of § 18-201 of the Delaware Limited 

Liability Company Act, the undersigned hereby certifies that: 

FIRST, the name of the limited liability company is SIG RCRS C MF 2023 Venture LLC 

(the “Company”). 

SECOND, the address of the registered office of the Company in the State of Delaware is 

Corporation Service Company, 251 Little Falls Drive, in the City of Wilmington, County of New 

Castle. The name of the registered agent at such address is Corporation Service Company. 

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Formation of 

the Company on this 4th day of December, 2023. 

By:_______________________________________ 

Name: [_____________] 

Title: Authorized Person 

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EXHIBIT B

FORM OF MONTHLY REPORT

or such other email address as may be specified by the Initial Member for such

purposes pursuant to the Notice Schedule).

The form of Monthly Report includes the required information pursuant to the Initial Member’s

joint venture reporting requirements and, as of the Closing Date, is available at Venue’s virtual

data rooms website at the virtual data room titled “JVT – Community Preservation Corp”, under 

the name “Form of Monthly Reports SIG RCRS C MF 2023”, in the folder named “1 – SIG RCRS

C MF 2023”, subfolder “1.1 FDIC-MM”, to which the Manager acknowledges to have received 

access prior the date hereof; provided, that the Initial Member reserves the right to, from time to 

time, designate in writing any other website and/or virtual data room for making such form

available to the Manager. Requests to add or remove access for individuals must be submitted to 

the Initial Member by providing a name and email address for the individuals to 

Such form of Monthly Report (as so available as of the Closing Date and as it may be further

modified as provided herein) is deemed attached hereto and made a part hereof. 

Such form of Monthly Report, and means of delivery thereof, may be adjusted from time to time

after the Closing Date in accordance with Sections 3(b), 3(i), and 6 of the Reporting and Access

Schedule, including pursuant to changes to the reporting information and forms as may from time

to time be required pursuant to the foregoing website or otherwise in connection with any 

applicable use of a Reporting Service. 

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EXHIBIT C 

FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT 

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”) is made and 

entered into 

[____________

(“Transferee”). 

as

___

 of

] (“T

 ____________, 

ransferor”), and 

20__ by 

__________

and 

____

between

________, a 

 [_______________],

_________________

 a 

__ 

RECITALS 

WHEREAS, the Transferor is the owner of a limited liability company interest in SIG RCRS C 

MF 2023 Venture LLC a Delaware limited liability company (the “Company”); 

WHEREAS, such limited liability company interest represents a ___% “Percentage 

Interest” in the Company (as defined in that certain Amended and Restated Limited Liability 

Company Operating Agreement, effective as of December 15, 2023, by and among the Federal 

Deposit Insurance Corporation in its capacity as Receiver (as such term is defined in the 

Agreement of Common Terms and Definitions referred to therein) (the “Initial Member”), 

Transferor and the Company (the “LLC Operating Agreement”)); 

WHEREAS, the ownership and other rights associated with such limited liability company 

interest are set forth in the LLC Operating Agreement; 

WHEREAS, pursuant to Section 3.13 of the LLC Operating Agreement, Transferor granted 

the Initial Member a first priority security interest in the Private Owner Interest (as such term is 

defined in the Agreement of Common Terms and Definitions referred to in the LLC Operating 

Agreement) in order to secure certain obligations of Transferor as more fully described in the LLC 

Operating Agreement; 

WHEREAS, an Event of Default (as defined in the LLC Operating Agreement) has 

occurred and is continuing, and the Initial Member has elected, pursuant to the LLC Operating 

Agreement, to foreclose on its security interest in the Private Owner Interest and effect the 

assignment contemplated hereby; 

NOW THEREFORE, in consideration of the mutual agreements contained herein and in 

the LLC Operating Agreement, and for other good and valuable consideration, the receipt and 

sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the 

parties hereto agree as follows: 

1. Assignment and Assumption. Transferor hereby assigns and transfers the Private 

Owner Interest to Transferee, and Transferee hereby accepts and assumes the Private Owner 

Interest and agrees to be bound by the LLC Operating Agreement and the other Transaction 

Documents to which the Private Owner is a party, as amended from time to time, to the extent it 

relates to such Private Owner Interest. 

C-1 

SIG RCRS C MF 2023 Venture LLC 

Amended and Restated LLC Operating Agreement 

Version 08-2022 (Standard) 
 

 

 

 

 

 

 

 

______________________ 

2. Counterparts. This Agreement may be executed in two or more counterparts, all 

of which will be considered one and the same agreement and will become effective when one or 

more counterparts have been signed by each of the parties and delivered (including by telecopy) 

to the other party. 

3. No Third Party Beneficiaries. This Agreement will inure to the benefit of the 

parties hereto and their respective successors and permitted assigns. This Agreement is not 

intended to confer upon any other person any rights or remedies hereunder. 

4. Governing Law. The laws of the State of Delaware will govern the validity, 

performance and enforcement of this Agreement, without giving effect to the principles of conflict 

of laws of the State of Delaware or any other jurisdiction. 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement 

effective as of the date first above written. 

TRANSFEROR: 

[_______________] 

[By: [_______________], its [_______________]] 

By: ______________________ 

Name: 

Title: 

TRANSFEREE: 

By: ______________________ 

Name: 

Title: 

C-2 

SIG RCRS C MF 2023 Venture LLC 

Amended and Restated LLC Operating Agreement 

Version 08-2022 (Standard) 

 

 

 

 

 

 

 

 

 

 

 

 

 

made at sight, include the wire transfer instructions for remittance by us of the amount of such 

draft. 

Presentation of drafts drawn hereunder, together with the required statement and applicable 

wire transfer instructions, may be made at any time on or before the expiry date hereof [(i)] by 

physical presentation of such draft at, or overnight delivery of such draft to, our offices located at 

______________________________, Attention: [________] [include contact name and address 

in either New York City or Washington, D.C.]1

, [or] (ii) by facsimile (at facsimile number (___) 

______, Attention:________)] [or] [(iii) by email at ___________, Attention: __________]]

2

, 

without further need of documentation. Each such drawing should be accompanied by 

contemporaneous telephonic notification to the Attention of [_________] at [__________].] If we 

receive such documents at such office, all in conformity with the terms and conditions of this Letter 

of Credit, we will honor your draft on the second Business Day (as defined below) after receipt of 

such Drawing Request. [The original Letter of Credit, any amendments thereto and the originally 

signed Drawing Request on the Initial Member’s letterhead must be included in the documents 

presented hereunder in connection with any draft, it being agreed that such original Letter of Credit 

and all such amendments thereto so presented will be promptly returned to you (or, if presented in 

person, will remain with you after we have made a copy thereof at such time of presentation) in 

connection with any partial draw hereunder.] 

This Letter of Credit will expire at 5:00 p.m. (New York, New York time) on the date that 

occurs one year after the date hereof (or, if such date is not a Business Day, the immediately 

succeeding Business Day) (the “Expiration Date”); provided, however, that this Letter of Credit 

will be automatically extended without amendment for additional periods of one year each (in each 

case commencing from the expiry date hereof as then in effect), unless we elect not to extend this 

Letter of Credit and deliver to the Initial Member written notice of such election at least sixty days 

prior to any such Expiration Date. Any such notice must be in writing and must be delivered in 

hand with receipt acknowledged, or by certified mail (return receipt requested), to the Initial 

Member at its address set forth above (or to such other address for any such notices which Initial 

Member may hereafter specify in a written notice delivered to the undersigned). “Business Day” 

means any date other than a Saturday, Sunday or a day on which banks in the [State of New York] 

[District of Columbia][Other]3 are authorized or required by law to be closed, and a day on which 

payments can be effected on the Fedwire system (or any replacement thereto). 

1 Note for Execution: If applicable pursuant to clause (ii) of the definition of “Qualified Issuer” (and with the 

option for presentation by facsimile remaining in the Letter of Credit), a physical location in the United States outside 

of New York City or Washington, D.C. may be used. [This footnote should be deleted prior to execution.] 

2 Note for Execution: This sentence will be adjusted by the Initial Member based on whether fax or email (or 

other electronic) presentation of demand will be permitted. If either is permitted, the further bracketed sentence at the 

end of this paragraph (requiring delivery of originals) will be removed or appropriately modified. [This footnote 

should be deleted prior to execution.] 

3 Note for Execution: Select based on location of presentation. [This footnote should be deleted prior to 

execution.] 

D-2 

SIG RCRS C MF 2023 Venture LLC 

Amended and Restated LLC Operating Agreement 

Version 08-2022 (Standard) 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Partial and multiple drafts are permitted, and the amount of this Letter of Credit will be 

reduced by each such draft honored. 

All our charges (including wire transfer fees in connection with any payments by us 

hereunder and transfer charges in connection with a transfer of this Letter of Credit by the FDIC 

(in any capacity), as Initial Member, to a transferee thereof) are for the account of the Private 

Owner, and in no event will any such charges reduce the amount of any draft or payment 

hereunder[; provided, however, transfer charges in connection with a transfer of this Letter of 

Credit by any Initial Member other than the FDIC (in any capacity) to a transferee thereof will be 

for the account of such Initial Member or transferee]. 

We agree that we have no duty or right to inquire as to the basis upon which Initial Member 

has determined to present to us any draft under this Letter of Credit. 

This Letter of Credit is transferable in whole but not in part to any transferee who has 

succeeded you as the Initial Member under the LLC Operating Agreement, and may be 

successively transferred. Any transfer request must be effected by presenting to us the attached 

form of Attachment I signed by the transferor and the transferee together with the original Letter 

of Credit. Upon our endorsement of such transfer, the transferee instead of the transferor will, 

without necessity of further action, be entitled to all the benefits of and rights under this Letter of 

Credit in the transferor’s place; provided that, in such case, any drafts of the Initial Member to be 

provided hereunder must be signed by one who states therein that he is a duly authorized officer 

or agent of the transferee. For purposes of clarification, internal transfers within the FDIC (where 

following such transfer, the FDIC, in any capacity is to remain as the beneficiary of the Letter of 

Credit) will be effective without the need for notice or execution and delivery of any such request 

for transfer in the form of Attachment I hereto. 

Except as otherwise expressly stated herein, this Letter of Credit is subject to the 

International Standby Practices, International Chamber of Commerce Publication No. 590, 

including any amendments, modifications or revisions thereof (the “ISP 98”). As to matters not 

covered by the ISP 98, and to the extent not inconsistent with the ISP 98, this Letter of Credit will 

be governed by and construed in accordance with the laws of the State of New York, including 

without limitation the Uniform Commercial Code as in effect in the State of New York, without 

regard to principles of conflict of laws. 

All of the terms and conditions of this Letter of Credit are contained herein and may not be altered 

except by reduction in the amount of this Letter of Credit due to corresponding payments in like 

amount in compliance with the aforementioned terms. Except as otherwise expressly set forth 

herein, there are no conditions to this Letter of Credit. 

Very truly yours, 

D-3 

SIG RCRS C MF 2023 Venture LLC 

Amended and Restated LLC Operating Agreement 

Version 08-2022 (Standard) 
 

By: _________________________ 

Name:_______________________ 

Title: ________________________ 

D-4 

SIG RCRS C MF 2023 Venture LLC 

Amended and Restated LLC Operating Agreement 

Version 08-2022 (Standard) 
 

 

 

 

 

 

 

 

 

 

 

 

 

ATTACHMENT I TO LETTER OF CREDIT 

REQUEST FOR TRANSFER 

[Insert Bank Name and Address] 

RE: Irrevocable Transferable Letter of Credit No. [__________] for

 U.S.$[__________], Dated [____________________]. 

Gentlemen: 

Reference is made to that certain irrevocable transferable Letter of Credit No. 

[_________________], dated _________ (the “Letter of Credit”), issued by you in favor of 

[__________] (the “Transferor”), for the account of Sig-23 Private Owner LLC, (the “Private 

Owner”). 

The Transferor has transferred and assigned (and hereby confirms to you said transfer and 

assignment) all of its rights in and under the Letter of Credit to [name of Transferee] (the 

“Transferee”) and confirms that the Transferor no longer has any rights under or interest in the 

Letter of Credit. 

The Letter of Credit is returned herewith and we request that you issue an irrevocable transferable 

letter of credit in the name of the Transferee and providing for notices to be sent to the Transferee 

at the address set forth below and in all other respects identical to the Letter of Credit. 

Transferee hereby certifies that it is a duly authorized transferee under the terms of the Letter of 

Credit and is accordingly entitled, upon presentation of the drafts (and applicable items) called for 

therein, to receive payment thereunder. 

Notices under the Letter of Credit should be sent to the Transferee as follows: [Name], [Address], 

[Attention:_______], E-mail Address: [______], Fax: [________], Tel: [________]. 

[NAME OF TRANSFEROR] 

By_________________________ 

[Name and Title of Authorized 

Representative of Transferor] 

[NAME OF TRANSFEREE] 

By_________________________ 

[Name and Title of Authorized 

Representative of Transferee] 

D-5 

SIG RCRS C MF 2023 Venture LLC 

Amended and Restated LLC Operating Agreement 

Version 08-2022 (Standard) 
 

EXHIBIT E 

FORM OF ASSIGNMENT OF JDC AGREEMENT 

[see attached] 

E-1 

SIG RCRS C MF 2023 Venture LLC 

Amended and Restated LLC Operating Agreement 

Version 08-2022 (Standard) 
 

 

 

Execution Version 

ASSIGNMENT OF JDC AGREEMENT 

This ASSIGNMENT OF JDC AGREEMENT (this “Assignment”), dated as of [_______], 

20[__], is executed by and among (i) [_______] (“JDC Contractor”); (ii) [_______], a [_______] 

([“Subservicer”][“Servicer”][“Manager”] 1 or “Assignor”); [([iii]) [______], a [_______] 

(“Servicer”);] [([iv]) [______], a [_______] (“Manager”);] and ([vi]) the Federal Deposit Insurance 

Corporation (“FDIC”) as Initial Member (“Initial Member” ). Terms not otherwise defined in this 

Agreement have the meanings ascribed to such terms in that certain Agreement of Common Terms 

and Definitions dated as December 15, 2023 among SIG RCRS C MF 2023 Venture LLC 

(“Company”) and the other parties thereto, as amended or otherwise modified from time to time. 

RECITALS: 

A. WHEREAS, pursuant to the Amended and Restated Limited Liability Company 

Operating Agreement, dated as of December 15, 2023 (the “LLC Operating Agreement”), the 

Manager has agreed to service, administer, manage and dispose of the Assets (including the JDC 

Loans as defined below) for the Company; and 

[B. WHEREAS, pursuant to the Servicing Agreement, dated as of December 15, 2023 (the 

“Servicing Agreement”), between the Manager and the Servicer, the Servicer has agreed to service, 

administer, manage and dispose of certain of such Assets (including such JDC Loans) for the 

Company; and] 

[C. WHEREAS, pursuant to the Subservicing Agreement, dated as of [ ] (the 

“Subservicing Agreement”), between the Servicer and the Subservicer, the Subservicer has agreed 

to service, administer, manage and dispose of certain of such Assets (including such JDC Loans) for 

the Company; and] 

D. WHEREAS Assignor desires to subcontract certain of its duties with respect to certain 

Loans included in the Assets (“JDC Loans”) to the JDC Contractor, as evidenced by that certain 

[_____ Agreement] dated as of [_______] (to be effective as of the date this Assignment is fully 

executed by all parties hereto) entered into by the Manager and JDC Contractor (the “JDC 

Agreement”); and 

1 DRAFTING NOTES: 

 If Assignor is: 

o Subservicer: Select options for Subservicer; retain text in this color and this color. 

o Servicer: Select options for Servicer; delete all text highlighted in this color; retain text highlighted in this color; 

re-letter & number as necessary. 

o Manager: Select options for Manager; delete all text highlighted in this color and this color; re-letter & number 

as necessary. 

 If Manager is Assignor, in addition to the above: select “intentionally omitted” for Section 3; use singular option for all 

references to “Instructing Party(ies)” (with the same being the Initial Member); and delete all text highlighted in this color. 

SIG RCRS C MF 2023 Venture LLC 

Assignment of JDC Agreement 

Version 08-2022 
E. WHEREAS, pursuant to the Transaction Documents, the Assignor is required to enter into 

this Assignment to pledge the JDC Agreement to secure the performance by each of [the 

the “Instructing Parties”]) with this Assignment; and 

F. WHEREAS the JDC Contractor is willing (a) to consent to this Assignment, (b) to 

acknowledge the rights and authority of [the/each] Instructing Party upon a default by the Company 

or the Assignor under the Transaction Documents (or other “Default” as defined herein), (c) to perform 

its obligations under the JDC Agreement for [the/each] Instructing Party and (d) to permit [the/any] 

Instructing Party to terminate the JDC Agreement without liability. 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are 

hereby acknowledged, and intending to be legally bound, [Subservicer,] [Servicer,] Manager, Initial 

Member and JDC Contractor agree as follows: 

AGREEMENTS: 

1. Recitals. The recitals set forth above are incorporated herein by reference as if fully set 

forth in the body of this Assignment. 

2. Assignment. 

[Initial Member]

Assignor hereby transfers, assigns and sets over to [the] [Servicer][Manager] 

further transfers, assigns and sets over to Manager such right, title and interest.] [Manager further 

transfers, assigns and sets over to the Initial Member such right, title and interest.] JDC Contractor 

2 all right, title and interest of Assignor in and to the JDC Agreement. [Servicer 

Subservicer,][the Servicer,] the Manager and the Company of its respective obligations under the 

Transaction Documents, and in furtherance thereof, the Assignor agrees to provide the 

[Servicer,][Manager,] [and the] Initial Member ([each an][the] “Instructing Party” [and collectively 

hereby consents to [each of] the foregoing assignment[s]. [Each of] [t]he foregoing assignment[s] is 

being made as collateral security for the full payment and performance of Assignor’s [and each other 

assigning party’s] and the Company’s respective obligations under [the Subservicing Agreement,] 

[the Servicing Agreement,] [and] the Transaction Documents. Although it is the intention of the parties 

that [the/each] assignment hereunder is a present assignment, until the occurrence of a Default (and 

for such purpose, notice from [the/any] Instructing Party as to occurrence of the same will be deemed, 

as to the JDC Contractor, as conclusive evidence of such occurrence), Assignor may exercise all rights 

under the JDC Agreement except as otherwise provided in this Assignment. The foregoing 

assignment[s] will remain in effect as long as the Transaction Documents, or any part thereof, remain 

in effect but will automatically terminate upon full and final termination of all Transaction Documents 

and the dissolution and winding-up of the Company. 

3. [Priority of Interests. In the event that the JDC Contractor receives conflicting instructions 

from Instructing Parties, the JDC Contractor must follow the relevant instructions from the Instructing 

Party having greater priority (the Initial Member having greatest priority, followed [in order of 

priority] by [the Manager] [and then the Servicer]), and any exercise of rights by the Instructing Parties 

will also be governed by this order of priority.] As among the Instructing Parties, the security interest 

of each Instructing Party will also be ranked in the same priorities, such that the security interest of 

any Instructing Party is senior to that of each other Instructing Party having a lower priority and the 

2 Include reference to Initial Member in this sentence only if Assignor is the Manager. 

2 

SIG RCRS C MF 2023 Venture LLC 

Assignment of JDC Agreement 

Version 08-2022 
 

security interest of any Instructing Party is subordinate to that of any Instructing Party having a higher 

priority.] [intentionally omitted]3 

4. Representations and Warranties. Assignor and JDC Contractor represent and warrant to 

[the/each] Instructing Party that (a) the JDC Agreement is unmodified and is in full force and effect, 

(b) the JDC Agreement is a valid and binding agreement enforceable against the parties in accordance 

with its terms, (c) the JDC Agreement constitutes a personal services agreement between the Assignor 

(in its individual capacity) and the JDC Contractor, and (d) neither party is in default in performing 

any of its obligations under the JDC Agreement. Assignor further represents and warrants to [the/each] 

Instructing Party that it has not executed any prior assignment of the JDC Agreement, nor has it 

performed any acts or executed any other instrument which might prevent [the/any] Instructing Party 

from operating under any of the terms and conditions of this Assignment, or which would limit 

[the/any] Instructing Party in such operation. JDC Contractor further represents and warrants to 

[the/each] Instructing Party that JDC Contractor (1) has not assigned its interest in the JDC Agreement, 

(2) has no notice of any prior assignment, hypothecation or pledge of Assignor’s interest in the JDC 

Agreement, (3) as of the date hereof, has no counterclaim, right of set-off, defense or like right against 

Assignor, and (4) as of the date hereof, has been paid all amounts due under the JDC Agreement. 

5. Instructing Party Right to Cure. In the event of any default by Assignor under the JDC 

Agreement, [the/each] Instructing Party will have the right, but not the obligation, upon notice to JDC 

Contractor and Assignor (and each other Instructing Party) and until such default is cured, to cure any 

default and take any action under the JDC Agreement to preserve the same. Assignor hereby 

authorizes the JDC Contractor to accept the performance of [the/any] Instructing Party in such event, 

without question. [In the event more than one Instructing Party so elects to exercise such right to 

cure, the priority of interests as set forth in Section 3 will apply (such that the Instructing Party with 

highest priority will have the right to control any such cure or other action under the JDC Agreement).] 

6. Covenants. 

(a) Assignor Covenants. Assignor hereby covenants with [the/each] Instructing Party 

that, during the term of this Assignment: 

(1) Assignor will not assign Assignor’s interest in the JDC Agreement or any portion 

thereof. 

(2) Assignor will perform all obligations of Assignor under the JDC Agreement in 

accordance with the provisions thereof. 

(3) Assignor will promptly notify [the/each] Instructing Party of the occurrence of 

any Default. 

(b) JDC Contractor Covenants. The JDC Contractor hereby covenants with [the/each] 

Instructing Party that, during the term of this Assignment: 

(1) [The/Each] Instructing Party is a third party beneficiary under the JDC Agreement 

to the extent of any rights or benefits expressly granted to the Assignor thereunder, and 

3 [This section is not necessary if Manager is the Assignor]. 

3 

SIG RCRS C MF 2023 Venture LLC 

Assignment of JDC Agreement 

Version 08-2022 
[the/each] Instructing Party is entitled to enforce the JDC Agreement with respect to such 

rights and benefits[, respecting the priority of interests as set forth in Section 3]. 

(2) [The/Each] Instructing Party will have access to and the right to review, copy and 

audit the books and records of the JDC Contractor, and the JDC Contractor must make 

available its officers, directors, employees, accountants and attorneys to answer questions from 

[the/each] Instructing Party and its representatives or to discuss any matter relating to the JDC 

Contractor's affairs, finances and accounts, as they relate to the JDC Loans or any matters 

relating to the JDC Agreement or the rights or obligations thereunder. 

(3) The JDC Contractor will deposit all Asset Proceeds relating to the JDC Loans into 

the Collection Account no later than [the _____]4 day of the calendar month] which follows 

the receipt thereof [(as identified in Exhibit A hereto), excepting only that portion of the Asset 

Proceeds which the JDC Contractor is authorized to retain as payment for its services under 

the JDC Agreement]5

. 

(4) The JDC Contractor consents to the immediate termination by any Instructing Party 

of the JDC Agreement upon the occurrence of any Insolvency Event or Dissolution Event with 

respect to the JDC Contractor. 

(5) The JDC Contractor will provide written notice to [the/each] Instructing Party of 

the occurrence of any default by Assignor under the JDC Agreement, concurrently with or 

immediately following its delivery of notice (whether written or verbal) of the same to 

Assignor. 

7. Instructing Party Rights Upon a Default. Following the occurrence of any of (i) the 

removal of the Assignor as [Subservicer][Servicer][Manager]6

, (ii) the occurrence of any “Default” 

or “Event of Default” (howsoever defined) under [any of] [the Subservicing Agreement,] [the 

Servicing Agreement,] the LLC Operating Agreement, (iii) any misrepresentation in any material 

respect by Assignor or JDC Contractor hereunder, (iv) occurrence of any default by Assignor or JDC 

Contractor hereunder, or (iv) occurrence of any default by the JDC Contractor under the JDC 

Agreement (any of the foregoing, a “Default”), [the/each] Instructing Party [(respecting the priority 

of interests as set forth in Section 3)] and any successor to the Assignor as appointed by such 

Instructing Party pursuant to the Transaction Documents may exercise any one or more of the 

following remedies, in its sole discretion: 

(1) following delivery of written notice to Assignor or JDC Contractor, as applicable, 

exercise any or all of the rights of the Assignor under the JDC Agreement; and 

(2) by delivery of written notice to the JDC Contractor of its election to do so, further cause 

the termination or assignment of the JDC Agreement to any other person, in each case without cause 

or liability (or payment of any fee or penalty); provided, that [the/such] Instructing Party’s notice in 

respect of any such termination (other than in connection with an Insolvency Event or Dissolution 

Event with respect to the JDC Contractor) must specify the date of termination, which shall not be 

4 Manager to select appropriate time period based on Section 12.7 of LLC Operating Agreement. 5 Manager to determine any set-off (which may include Servicing Expenses) based on Section 12.7 of LLC Operating 

Agreement. 

6 Choose only the party that is the Assignor. 

4 

SIG RCRS C MF 2023 Venture LLC 

Assignment of JDC Agreement 

Version 08-2022 
less than thirty (30) days after the date of such notice (or such shorter period as may be applicable 

pursuant to the JDC Agreement to the extent such termination is pursuant to the enforcement by 

[the/such] Instructing Party of applicable termination rights in the JDC Agreement). 

As among Assignor and the Instructing Parties (and without creating any rights in favor of JDC 

Contractor) [the/each] Instructing Party may only exercise the foregoing rights as contemplated or 

permitted in the Transaction Documents. 

8. Books and Records. On the effective date of termination of the JDC Agreement, the JDC 

Contractor will turn over to Assignor or, at the request of [any/the] Instructing Party, to the Instructing 

Party [with the highest priority among those so requesting the same, if more than one], in a form and 

format usable by Assignor or [the/such] Instructing Party all books and records (electronic and 

otherwise) relating in any manner to the JDC Loans (copies of which may be retained by JDC 

Contractor, at JDC Contractor's expense), together with such authorizations and letters of direction 

addressed to borrowers and other parties as Assignor or [the/such] Instructing Party may reasonably 

require. JDC Contractor must cooperate in the transfer of its responsibilities under the JDC Agreement 

to the Assignor or [the/such] Instructing Party or its designees. A final accounting of unpaid fees (if 

any) due to the JDC Contractor under the JDC Agreement will be made within sixty (60) days after 

the effective date of termination, but neither the Company nor [any/the] Instructing Party will have 

any liability or obligation to the JDC Contractor for any such unpaid fees or other amounts payable 

under the JDC Agreement (it being understood that payment of the same will remain solely as an 

applicable obligation only of the Assignor). 

9. Notice. Subject to Section 11(d), 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 

must be in writing and must be delivered by electronic mail to the applicable electronic mail address 

specified for the relevant party in the signature pages hereto (or to such applicable updated electronic 

mail address as then in effect pursuant to this Section 9). All such notices, requests, demands and 

other communications to any such relevant party pursuant to the foregoing are to be deemed delivered 

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

when delivered; provided, however, that any notice, request, demand or other communication that is 

delivered to any such electronic mail address other than during regular business hours of the recipient 

will be deemed to have been delivered at the opening of business on the next Business Day of the 

recipient. In no event will a voice mail message or any electronic communication (other than as 

expressly provided pursuant to the foregoing) be effective as a notice, confirmation or other 

communication hereunder. From time to time, any party may designate a new address or electronic 

mail address for purposes of notice to it hereunder by notice to such effect to the other parties hereto 

in the manner set forth in this Section 9. Any required notice under this Assignment which does not 

specify how notices are to be given must be given in accordance with this Section 9. 

10. Counterparts. This Assignment may be executed in any number of counterparts, each of 

which will be considered an original for all purposes and all of which, when taken together, will 

constitute one and the same instrument. Transmission by telecopier, facsimile, e-mail, or other form 

of electronic transmission (including electronic document execution platforms such as DocuSign and 

Adobe Sign) of an executed counterpart of this Assignment will be deemed to constitute due and 

sufficient delivery of such counterpart. No signatory to this Assignment may raise the use of a 

telecopier machine, facsimile machine, e-mail, or other form of electronic transmission (including 

5 

SIG RCRS C MF 2023 Venture LLC 

Assignment of JDC Agreement 

Version 08-2022 
 

 

 

 

 

 

 

 

 

electronic document execution platforms such as DocuSign and Adobe Sign) for delivery of any 

counterpart of this Assignment as a defense to the formation or enforceability of this Assignment, and 

each such Person forever waives any such defense. 

11. Governing Law; Jurisdiction; Venue and Service. 

(a) THIS ASSIGNMENT IS GOVERNED BY AND IS TO BE CONSTRUED IN 

ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE, 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. 

In the event of a direct conflict between the provisions of this Assignment and any mandatory, nonwaivable provision of the Act, such provision of the Act will control to the extent necessary to 

eliminate such direct conflict. Nothing in this Agreement requires or will require any unlawful action 

or inaction by any Person. 

(b) Each of the parties hereto 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 commenced by the Initial Member arising out 

of, or relating to, or in connection with this Assignment, and waives any right to: 

(1) remove or transfer such suit, action or proceeding to any other court or 

dispute-resolution forum (other than the Court in which the Initial Member files the action, suit or 

proceeding) without the consent of the Initial Member; 

(2) assert that venue is improper in either the United States District Court 

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

or 

(3) 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 commenced by the Initial Member arising out of, relating to, 

or in connection with this Assignment and waives any right to: 

(1) remove or transfer such suit, action or proceeding to any other court or 

dispute-resolution forum without the consent of the Initial Member; 

(2) assert that venue is improper in the Supreme Court of the State of New 

York; or 

(3) 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 it against the Initial Member 

arising out of, relating to, or in connection with this Assignment in only the United States District 

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

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Columbia, and waives any right to remove or transfer such suit, action or proceeding to any other 

court or dispute-resolution forum without the consent of the Initial Member, and agrees to consent 

thereafter to transfer of the suit, action or proceeding to either the United States District Court for the 

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

option of the Initial Member; 

(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, 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 Initial Member; and 

(v) agrees, in any suit, action or proceeding that is brought in the Supreme Court 

of the State of New York for New York County in accordance with the above provisions, to request 

that such suit, action or proceeding be referred to the Commercial Division of such Court. 

(c) In connection with any enforcement hereof by the Initial Member (where such 

enforcement also includes enforcement of applicable provisions under the LLC Operating 

Agreement), the Manager further consents to the jurisdiction of the Chancery Court of the State of 

Delaware under the terms set forth in Section 13.10 of the LLC Operating Agreement. 

(d) Each of the Assignor [, the Servicer][, the Manager] and the JDC Contractor hereby 

further irrevocably and unconditionally agree that (i) any final judgment entered against it in any suit, 

action or proceeding may be enforced in any court of competent jurisdiction, (ii) except as provided 

below, service of all writs, process and summonses in any suit, action or proceeding 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 this Assignment (provided, however, that the foregoing shall not affect the right 

of any party to serve process in any other manner permitted by law), and (iii) any such service of writs, 

process or summonses in any suit, action or proceeding on FDIC (in any capacity) will be in 

accordance with requirements of applicable Law (including 12 CFR § 309.7(a)), with additional 

delivery of a copy of such writ, process or summons to the FDIC (in its applicable capacity(ies)) 

pursuant to the notice provisions in this Assignment. 

(e) Nothing in this Section 11 constitutes (i) consent to jurisdiction in any court by the 

FDIC (in any capacity), other than as expressly provided in Section 11(b)(iii) and Section 11(b)(iv), 

or (ii) a waiver or limitation of any provision in the Federal Deposit Insurance Act or other applicable 

law relating to commencement, jurisdiction, venue, limitations, administrative exhaustion, judicial 

review, removal, remand, continuation or enforcement (including as to limitations on attachment or 

execution upon assets in the possession of the FDIC) of actions by or against the FDIC (in any 

capacity), or in which the FDIC (in any capacity) is a party, including 12 U.S.C. § 1819(b), 1821(c), 

1821(d), and 1821(j). 

(f) EACH OF THE PARTIES HERETO, 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 ASSIGNMENT AND AGREES THAT 

ANY SUCH DISPUTE IS TO BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY. 

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12. Severability; Amendments. The invalidity or unenforceability of any provision of this 

Assignment shall not affect the validity or enforceability of any other provision of this Assignment, 

all of which will remain in full force and effect. This Assignment contains the complete and entire 

agreement among the parties as to the matters covered, rights granted and the obligations assumed in 

this Assignment. This Assignment may not be amended or modified except by written agreement 

signed by the parties hereto. 

13. Construction. 

(a) The captions and headings of the sections of this Assignment are for convenience only 

and will be disregarded in construing this Assignment. 

(b) Any reference in this Assignment to an “Exhibit” or “Schedule” or a “Section” or an 

“Article” will, unless otherwise explicitly provided, be construed as referring, respectively, to an 

exhibit or schedule attached to this Assignment or to a Section or Article of this Assignment. All 

exhibits and schedules attached to or referred to in this Assignment, if any, are incorporated by 

reference into this Assignment, 

(c) Reference in this Assignment to a statute or regulation will be construed as referring 

to that statute or regulation as amended from time to time. 

(d) Use of the singular in this Assignment includes the plural, and use of the plural includes 

the singular. 

(e) As used in this Assignment, the term “including” means “including, but not limited to” 

or “including, without limitation,” and is for example only and not a limitation. 

(f) Unless otherwise provided in this Assignment, if the approval of any Instructing Party 

is required for any matter hereunder, such approval may be granted or withheld in such Instructing 

Party’s sole and absolute discretion; however, any such granting or withholding of approval by any 

Instructing Party other than the Initial Member is subject to that Instructing Party’s obligations under 

the Transaction Documents. 

(g) Unless otherwise provided in this Assignment, if the designation, determination, 

selection, estimate, action or decision of any Instructing Party is required, permitted or contemplated 

hereunder, such designation, determination, selection, estimate, action or decision will be made in 

such Instructing Party’s sole and absolute discretion; however, any such designation, determination, 

selection, estimate, action or decision by any Instructing Party other than the Initial Member is subject 

to that Instructing Party’s obligations under the Transaction Documents. 

(h) All references in this Assignment to a separate instrument or agreement will include 

such instrument or agreement as the same may be amended or supplemented from time to time 

pursuant to the applicable provisions thereof. 

(i) “Instructing Party may” means at Instructing Party’s discretion, but not as an 

obligation. 

[Remainder of Page Intentionally Blank] 

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Assignment of JDC Agreement 

Version 08-2022 
IN WITNESS WHEREOF, [Manager][Servicer][Subservicer]7, the [Initial Member] and 

JDC Contractor have signed and delivered this Assignment or have caused this Assignment to be 

signed and delivered, each by its duly authorized representative. 

[Manager][Servicer][Subservicer]8 and Assignor: 

[________________] 

By: _________________________________ 

Name:_______________________________ 

Title:________________________________ 

Address: 

with copies to: 

7 Choose only the party that is the Assignor. 

8 Choose only the party that is the Assignor. 

[Signature Page to Assignment of JDC Agreement - Page 1 of [_]] 

SIG RCRS C MF 2023 Venture LLC 

Assignment of JDC Agreement 

Version 08-2022 
 

[Servicer]: 

[________________] 

By: _________________________________ 

Name:_______________________________ 

Title:________________________________ 

Address: 

with copies to: 

[Signature Page to Assignment of JDC Agreement - Page 2 of [_]] 

SIG RCRS C MF 2023 Venture LLC 

Assignment of JDC Agreement 

Version 08-2022 
 

[Manager]: 

[_________________] 

By: _________________________________ 

Name:_______________________________ 

Title:________________________________ 

Address: 

with copies to: 

[Signature Page to Assignment of JDC Agreement - Page 3 of [_]] 

SIG RCRS C MF 2023 Venture LLC 

Assignment of JDC Agreement 

Version 08-2022 

JDC Contractor: 

[___________] 

By: _________________________________ 

Name:_______________________________ 

Title:________________________________ 

Address: 

With a copy to: 

[Signature Page to Assignment of JDC Agreement - Page 5 of [_]] 

SIG RCRS C MF 2023 Venture LLC 

Assignment of JDC Agreement 

Version 08-2022 
Exhibit A 

Collection Account 

[Insert Collection Account wire transfer information prior to execution] 

SIG RCRS C MF 2023 Venture LLC 

Assignment of JDC Agreement 

Version 08-2022 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT F

FORM OF CASH FLOW PROJECTIONS

The form of cash flow projections includes the required information pursuant to the Initial

Member’s joint venture reporting requirements and, as of the Closing Date, is available at Venue’s 

virtual data rooms website at the virtual data room titled “JVT – Community Preservation Corp”, 

under the name “Form of Semi-Annual Reports SIG RSRC MF C 2023”, in the folder named “1

(or such other email address as may be specified by the Initial Member 

for such purposes pursuant to the Notice Schedule). 

– SIG RCRS C MF 2023”, subfolder “1.1 FDIC-MM”, to which the Manager acknowledges to

have received access prior to the date hereof; provided, that the Initial Member reserves the right

to, from time to time, designate in writing any other website and/or virtual data room for making 

such form available to the Manager. Requests to add or remove access for individuals must be

submitted to the Initial Member by providing a name and email address for the individuals to 

Such form of cash flow projections (as so available as of the Closing Date and as it may be further 

modified as provided herein) is deemed attached hereto and made a part hereof. 

Such form of cash flow projections, and means of delivery thereof, may be adjusted from time to

time after the Closing Date in accordance with Section 7.9 of the LLC Operating Agreement and

Section 6 of the Reporting and Access Schedule, including pursuant to changes to the reporting

information and forms as may from time to time be required pursuant to the foregoing website or

otherwise in connection with any applicable use of a Reporting Service. 

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EXHIBIT G 

FORM OF POST-TERMINATION LPOA 

LIMITED POWER OF ATTORNEY 

Dated as of [_______], 20[__] 

WHEREAS SIG RCRS C MF 2023 Venture LLC, a Delaware limited liability company (the 

“Company”), is subject to and is organized in accordance with the terms and conditions of that 

certain Amended and Restated Limited Liability Company Agreement dated as of the date of this 

Limited Power of Attorney by and among the Federal Deposit Insurance Corporation in its 

capacity as the Receiver (the “Initial Member”), Sig-23 Private Owner II LLC, a limited 

liability company organized under the laws of the State of Delaware (the “Private Owner”), and 

the Company (the “LLC Operating Agreement”); 

WHEREAS, in connection with the execution and delivery of the LLC Operating Agreement, 

the Private Owner is purchasing an equity interest in the Company pursuant to that certain Private 

Owner Interest Sale Agreement dated as of the date of this Limited Power of Attorney by and 

among the Private Owner, the Initial Member, and the Company; 

WHEREAS, pursuant to Section 9.4 of the LLC Operating Agreement, the Company is 

required to and desires to appoint the Private Owner as Attorney-in-Fact for the Company to 

resolve any obligations of the Company or any subsidiary of the Company that might exist or arise 

following, and notwithstanding, the winding up and termination of the Company pursuant to the 

terms and conditions of the LLC Operating Agreement; and 

WHEREAS the undersigned has full authority to execute this Limited Power of Attorney 

on behalf of the Company, 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of 

which is acknowledged, the Company makes, constitutes and appoints the Private Owner as its true 

and lawful Attorney-in-Fact, with full power and authority to act, as described in this Limited Power 

of Attorney, following the termination of the Company pursuant to the provisions of Article IX of the 

LLC Operating Agreement: 

1. To liquidate any remaining property contributed to, acquired by, or otherwise 

owned by the Company or any subsidiary of the Company, whether real or personal, 

tangible or intangible (including, without limitation, any legal or equitable interest 

in such property, ownership interests in entities owning real or personal property, 

and money), and including, without limitation, to resolve fully and finally all loans, 

including any loan (and rights to any related deficiency balance) that has not been 

so fully and finally resolved by way of a disposition or permitted distribution-inkind; 

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2. To close any remaining accounts of the Company or any subsidiary of the Company 

(after all remaining funds therein have been liquidated), all in a manner that avoids 

any further obligations or required actions of the Company or any subsidiary of the 

Company following the termination of the Company; 

3. To distribute any remaining assets or property of the Company or any subsidiary of 

the Company in accordance with the priorities set forth in Section 9.3 of the LLC 

Operating Agreement; 

4. To execute, acknowledge, seal and deliver on behalf of the Company or any 

subsidiary of the Company any and all deed of trust/mortgage note endorsements, 

assignments of deeds of trust/mortgages and other recorded instruments or 

documents, partial or total satisfactions/releases/reconveyances of deeds of 

trust/mortgages, UCC transfer or release documents, subordinations, tax authority 

notifications and declarations, deeds, bills of sale, and other instruments of sale, 

transfer, or conveyance, appropriately completed, with all ordinary or necessary 

endorsements, acknowledgments, affidavits, and supporting documents or 

instruments as might be necessary or appropriate to resolve fully and finally 

(whether by sale, transfer, liquidation, release, reconveyance, or otherwise) all 

property contributed to, acquired by, or otherwise owned by the Company or any 

subsidiary of the Company that has not been so fully and finally resolved; 

5. To take any and all actions not otherwise expressly authorized pursuant to any other 

paragraph of this Limited Power of Attorney necessary or appropriate pursuant to 

applicable law to complete to resolve fully and finally all property contributed to, 

acquired by, or otherwise owned by the Company or any subsidiary of the Company 

that has not been so fully and resolved; 

6. To take any and all actions not otherwise expressly authorized pursuant to any other 

paragraph of this Limited Power of Attorney necessary or appropriate pursuant to 

applicable law to complete the termination of the Company and any subsidiary of 

the Company and to cancel any certificate of organization or any other 

organizational document or instrument with respect to the Company or any 

subsidiary of the Company; and 

7. To engage in any and all acts, things, and activities that are related to, incidental or 

conducive, directly or indirectly, to the attainment of the foregoing objectives, 

including, but not limited to, obtaining the notarization of any documents or 

instruments, 

giving and granting unto said Attorney-in-Fact full power and authority to do and perform each 

and every act and thing whatsoever requisite, necessary and proper to be done in the performance 

of the above objectives to all intents and purposes as it might or could do if it were acting for itself 

with full power of substitution and revocation, hereby ratifying and confirming all that the named 

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Attorney-in-Fact lawfully does or causes to be done pursuant to or in accordance with this Limited 

Power of Attorney. 

This Limited Power of Attorney, and the appointment of the Private Owner as Attorneyin-Fact for the Company, are irrevocable and coupled with an interest, in full force and effect, 

unless the Private Owner no longer acts or serves as the Manager of the Company in accordance 

with the terms and conditions of the LLC Operating Agreement at any time prior to the termination 

of the Company pursuant to the provisions of Article IX of the LLC Operating Agreement, in which 

event this Limited Power of Attorney, and the appointment of the Private Owner as Attorney-inFact for the Company, automatically will cease and terminate (“LPOA Termination”). Any third 

party may rely upon this Limited Power of Attorney as evidence of the named Attorney-in-Fact’s 

authority to continue to exercise the powers granted pursuant to this Limited Power of Attorney 

unless a written instrument of LPOA Termination has been recorded in the public records of the 

State of Delaware, where this Limited Power of Attorney is to be recorded,4 or unless a third party 

has received actual notice of LPOA Termination. 

IN WITNESS WHEREOF, the Company by its duly authorized agent empowered to act 

on its behalf, has caused these presents to be executed and subscribed in its name this [__] day of 

[__], 20[__]. 

SIG RCRS C MF 2023 VENTURE LLC, 

a Delaware Limited Liability Company5 

By: [___________],a [___________], as 

Manager 

By: 

Name: 

Title: [Authorized Signatory] 

4 Note for Execution: This Limited Power of Attorney is to be recorded in the Delaware public records 

promptly after execution, using the appropriate form (see footnote 3). [This footnote to be deleted prior to execution.] 

5 Note for Execution: This Limited Power of Attorney is to be executed by the Manager on behalf of the 

Company. [This footnote to be deleted prior to execution.] 

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[Signed, sealed and delivered 

in the presence of 

By: 

Name: 

Witness 

By: 

Name: 

Witness]

6 

Note for Execution: If applicable based on FDIC determinations and intended use, this Limited Power of 

Attorney may be executed including the witnesses (in which case the bracketed witness signature blocks should be 

retained) and/or removing the witnesses (in which case the bracketed witness signature blocks should be removed). 

This Limited Power of Attorney may also be executed in any additional technical form that the FDIC believes to be 

appropriate at the time of execution.[This footnote should be deleted prior to execution.] 

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ACKNOWLEDGMENT 

STATE OF ) 

) ss: 

COUNTY OF ) 

The foregoing Limited Power of Attorney was acknowledged before me this [__] day of 

[__], 20[__], by [___________], in [his/her] capacity as [Authorized Signatory] of 

[___________],a [___________], in its capacity as Manager of SIG RCRS C MF 2023 Venture 

LLC, a Delaware limited liability company, as the free act and deed of the limited liability 

company. 

Notary Public 

[SEAL] My commission expires: 

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EXHIBIT H

FORM OF LOAN PERFORMANCE REPORT

The form of Loan Performance Report includes the required information pursuant to the Initial

Member’s joint venture reporting requirements and, as of the Closing Date, is available at Venue’s 

virtual data rooms website at the virtual data room titled “JVT – Community Preservation Corp”, 

in the folder named “1 – SIG RCRS C MF 2023”, subfolder “1.1 FDIC-MM”, to which the

Manager acknowledges to have received access prior to the date hereof; provided, that the Initial

Member reserves the right to, from time to time, designate in writing any other website and/or

virtual data room for making such form available to the Manager. Requests to add or remove

access for individuals must be submitted to the Initial Member by providing a name and email

address for the individuals to (or such other email address as may

be specified by the Initial Member for such purposes pursuant to the Notice Schedule). 

Such form of Loan Performance Report (as so available as of the Closing Date and as it may be

further modified as provided herein) is deemed attached hereto and made a part hereof. 

Such form of Loan Performance Report, and means of delivery thereof, may be adjusted from time

to time after the Closing Date in accordance with Sections 3(h) and (i) of the Reporting and Access

Schedule, including pursuant to changes to the reporting information and forms as may from time

to time be required pursuant to the foregoing website or otherwise in connection with any 

applicable use of a Reporting Service. 

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EXHIBIT I 

LOAN CRITERIA MATRIX 

Loan Criteria Matrix 

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EXHIBIT J

FORM OF STRATEGIC PLAN REPORT

(or such other email address as may be specified by the Initial Member for such

purposes pursuant to the Notice Schedule).

The form of Strategic Plan Report includes the required information pursuant to the Initial

Member’s joint venture reporting requirements and, as of the Closing Date, is available at Venue’s 

virtual data rooms website at the virtual data room titled “JVT – Community Preservation Corp”

in the folder named “1 – SIG RCRS C 2023”, to which the Manager acknowledges to have received

access prior the date hereof; provided, that the Initial Member reserves the right to designate in 

writing and, from time to time, any other website and/or virtual data room to make such form

available to the Manager. Requests to add or remove access for individuals must be submitted to 

the Initial Member by providing a name and email address for the individuals to 

Such form of Strategic Plan Report (as so available as of the Closing Date and as it may be further

modified as provided herein) is deemed attached hereto and made a part hereof. 

Such form of Strategic Plan Report, and means of delivery thereof, may be adjusted from time to

time after the Closing Date in accordance with Section 7.9 of the LLC Operating Agreement and

Section 6 of the Reporting and Access Schedule, including pursuant to changes to the reporting

information and forms as may from time to time be required pursuant to the foregoing website or

otherwise in connection with any applicable use of a Reporting Service. 

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