Transcription
SFG TransactionEXECUTION COPYAMENDED AND RESTATEDLIMITED LIABILITY COMPANY OPERATING AGREEMENT2010-1 SFG VENTURE LLCDated as ofMay 18, 2010Structured Transaction Commercial2010-l SFG LLCLimited Liability Company Operating AgreementWDC99 1841479-7.084080.0017
TABLE OF CONTENTSARTICLE I1.11.2Certain Definitions . 2Definitions .2Construction. 29ARTICLE II2.12.22.32.42.52.62.7Organization ofthe Company . 3DFormation; Continuation and Admission ofMembers. 30Name. 30Organizational Contributions and Related Actions . 30Registered Office; Chief Executive Office . 31Purpose; Duration. 31Single Purpose Entity; Limitations on Company's Activities . 32Ratification of Certain Actions . 34ARTICLE III3.13.23.33.43.53.63.7Management and Operations ofthe Company . 34Management of the Company's Affairs. 34Removal ofManager . 36Employees and Services . 36Restrictions on Manager and Private Owner . 37Related Party Agreements . 39Real Property . 39Custodian and Paying Agent . 39Relationships with Borrowers, etc . 40No Conflicting Obligations . 40Compliance with Law. 40No Bankruptcy Filing . 41No Liens . 41Remedies Upon an Event of Default; Security Interest . .41Purchase Right of Initial Member . .45No ERISA Plan Assets .473.83.93.103.113.123.133.143.15ARTICLE IV4.14.24.34.44.54.6ARTICLEV5.15.2Membership Interests; Rights and Duties of, and Restrictions on,Members . 47General. 47LLC Interests. 47Filings; Duty ofMembers to Cooperate .48Certain Restrictions and Requirements .48Liability of Initial Member . 48Indemnification.49Capital Contributions; Discretionary Funding Advance; Excess WorkingCapital Advance . 53Capital Contributions . 53Working Capital Reserve . 541Structured Transaction Commercial2010-1 SFG LLCLimited Liability Company Operating AgreementWDC99 1841479-7.084080.0017
TABLE OF CONTENTS(Continued)5.35.4Discretionary Funding Advance . 54Excess Working Capital Advances . 55ARTICLE VI6.16.26.36.46.56.6Capital Accounts; Allocations; Priority ofPayments; Distributions. 55Capital Accounts . 55Allocations to Capital Accounts . 56Tax Allocations. 57Determinations by Tax Matters Member. 58Priority of Payments . 59Distributions. 59ARTICLE VII7.17.27.37.47.57.67.7Accounting, Reporting and Taxation. 61Fiscal Year . 61Maintenance of Books and Records. 61Financial Statements . 63Additional Reporting and Notice Requirements . 63Designation ofTax Matters Member . 66Tax Information . 66Business Plans . 67ARTICLE VIII Restrictions on Disposition ofLLC Interests . 68Limitations on Disposition of LLC Interests . 688.1Change of Control . 698.28.3Additional Provisions Relating to Permitted Dispositions . 698.4Effect of Permitted Dispositions . 70Effect of Prohibited Dispositions . 708.58.6Distributions After Disposition . 71Transfers By Initial Member . 718.7Resignation; Dissolution. 718.88.9Applicable Law Withdrawal. 72ARTICLE IX9.19.29.3Dissolution and Winding-Up of the Company . 72Dissolution. 72Winding-Up Procedures . 73Termination of the Company. 74ARTICLE X10.1Qualified Transferees . 74Qualified Transferees . 74ARTICLE XI11.1Manager Liability . 77Liability of Manager. 77ARTICLE XII Servicing ofLoans . 78Servicing. 7812.111Structured Transaction Commercial 2010-1 SFG LLCLimited Liability Company Operating AgreementWDC99 1841479-7.084080.0017
TABLE OF icing Standard . 82Servicing of Loans. 84Removal of Servicer. 87Interim Management Fee and Interim Servicing Fee; Management Fee . 91Servicing Expenses . 91Use of Loan Proceeds. 91Collection Account . 93Distribution Account . 93Defeasance Account . 93Working Capital Reserve Account . 93Certain Servicing and Loan Administration Decisions . 93Management and Disposition ofUnderlying Collateral. . 94Acquisition ofUnderlying Collateral. 94Administration ofREO Properties . 95Releases ofUnderlying Collatera1 . 97Clean-Up Call Rights . 97Certain Transfer Obligations . 98ARTICLE 13.1213.13Miscellaneous . 98Waiver of Rights of Partition and Dissolution . 98Entire Agreement; Other Agreements . 98Third Party Beneficiaries . 99Expenses . 100Waivers and Amendments . 100Notices . 101Counterparts; Facsimile Signatures . ! 03Successors and Assigns . 103Compliance With Law; Severability. 103Power of Attorney. 104Governing Law . 104Jurisdiction; Venue and Service . 105Waiver of Jury Trial . 106ANNEX IMember Schedule . I -1EXHIBIT ACertificate of Formation . ;. A-1EXHIBITBInformation, Form of Monthly Report . B-1EXHIBITCForm of Assignment and Assumption Agreement . C-1EXHIBITDForm of Letter of Credit .D-1iiiStructured Transaction Commercial 20 I 0-l SFG LLCLimited Liability Company Operating AgreementWDC99 1841479-7.084080.0017
2010-1 SFG VENTURE LLCAMENDED AND RESTATEDLIMITED LIABILITY COMPANY OPERATING AGREEMENTTHIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATINGAGREEMENT (as the same may be amended or modified from time to time in accordance withthe terms hereof, this "Agreement"), is made and entered into as of the 18th day of May, 2010(the "Closing Date"), by and among the Federal Deposit Insurance Corporation (in any capacity,the "FDIC"), as the Receiver defined below (including its successors and assigns hereto, the"Initial Member"), Square Mile Lodging Recovery LLC, a Delaware limited liability company(the "Private Owner"), and 2010-1 SFG Venture LLC, a Delaware limited liability company(the "Company").WHEREAS, the FDIC has been appointed receiver (in such capacity, the "Receiver") forSilverton Bank, N.A., a failed fmancial institution (the "Failed Bank");WHEREAS, on May 6, 2010, the Initial Member formed the Company as a Delawarelimited liability company and was admitted as its initial, and sole, member (owning a onehundred percent (1 00%) limited liability company interests), and the Initial Member and theCompany entered into that certain Limited Liability Company Operating Agreement dated as ofMay 6, 2010 (the "Original LLC Operating Agreement") as the initial "limited liabilitycompany agreement" (as such term is defined in the Act) of the Company;WHEREAS, the Initial Member and the Company have entered into a Loan Contributionand Sale Agreement dated of even date herewith (the "Contribution Agreement") pursuant towhich (i) the Initial Member has sold in part and contributed in part, in each case to theCompany, and the Company purchased and accepted such contribution from the Initial Member,all of the Initial Member's right, title and interest in and to the Loans, and assumed theObligations (as defined in the Contribution Agreement), (ii) the Company has executed anddelivered to the Initial Member (as the sole member of the Company at such time) those certainPurchase Money Notes for the benefit of the Initial Member and dated the date herewith (the"Purchase Money Notes"); and (iii) the FDIC, in its corporate capacity (the "Purchase MoneyNotes Guarantor") guaranteed payment of principal on the Purchase Money Notes pursuant tothe terms of a Guaranty Agreement dated the date hereof between the FDIC, in its corporatecapacity, and the Initial Member (the "Purchase Money Notes Guaranty"), and obtained asecurity interest in the Loans and Underlying Collateral under the Reimbursement, Security andGuaranty Agreement;WHEREAS, the Initial Member has agreed to provide additional financing to theCompany in the maximum amount not to exceed 30,000,000 to enable the Company to fundWorking Capital Expenses in connection with the Loans (the "Revolver"), which funding shallbe provided pursuant to, and in accordance with, the terms of that Revolving Credit Agreementdated of even date herewith (the "Revolving Credit Agreement") between the Initial Member,as lender (in such capacity, the "Revolver Lender"), and the Company, as borrower, with therepayment obligations under the Revolver being secured by the assets of the Company pursuantto the Revolving Credit Agreement and the other Revolver Documents;1Structured Transaction Commercial2010-l SFG LLCLimited Liability Company Operating AgreementWDC99 1841479-7.084080.0017
WHEREAS, following closing of the transactions contemplated by the ContributionAgreement and the execution of the Original LLC Operating Agreement, the Initial Memberagreed, pursuant to the terms of that certain Limited Liability Company Interest Sale andAssignment Agreement dated of even date herewith (the "Transferred LLC Interest SaleAgreement"), to sell to the Private Owner, effective as of the Closing Date an LLC Interestrepresenting a forty percent (40%) equity interest in the Company;WHEREAS, after giving effect to the transactions contemplated by the Transferred LLCInterest Sale Agreement, as of the Closing Date, the Initial Member and the Private Owner willown all the issued and outstanding limited liability company interests in the Company;WHEREAS, upon the occurrence of the First Incentive Threshold Event, the PrivateOwner will own an LLC Interest representing a thirty-five percent (35%) equity interest in theCompany and the Initial Member will own an LLC Interest representing a sixty-five percent(65%) equity interest in the Company; and upon the occurrence of the Second IncentiveThreshold Event, the Private Owner will own an LLC Interest representing a thirty percent(30%) equity interest in the Company and the Initial Member will own an LLC Interestrepresenting a seventy percent (70%) equity interest in the Company; andWHEREAS, the parties desire to amend and restate the Original LLC OperatingAgreement in its entirety in order to reflect the admission of the Private Owner as a Member ofthe Company and to set forth the terms and conditions on which the Company shall be ownedand operated.NOW, THEREFORE, in consideration of the premises and the other covenants andconditions contained herein, and for other good and valuable consideration the receipt andsufficiency of which are hereby acknowledged, the parties hereto agree as follows:ARTICLE ICertain Definitions1.1Definitions. This Agreement constitutes the "limited liability companyagreement" (as such term is defmed in the Act) of the Company. For purposes of this Agreement,the following terms shall have the meanings and definitions hereinafter respectively set forth."Acceptable Rating" shall mean (i) a rating of "Average (Select Servicer List)"for construction loan servicers by Standard and Poor's Ratings Service, a division of TheMcGraw-Hill Companies, Inc., (ii) a rating of "Acceptable" for construction loan servicers byFitch, Inc., (iii) a rating of "Approved" for construction loan servicers by Moody's InvestorsService, or (iv) a rating that complies with the standards set forth in the definition of "QualifiedServicer"."Account Control Agreement" shall have the meaning given in the Custodialand Paying Agency Agreement."Accountants" shall mean the independent certified public accountants of theCompany.2Structured Transaction Commercial2010-l SFG LLCLimited Liability Company Operating AgreementWDC99 1841479-7.084080.0017
"Acquired Property" shall mean (i) Underlying Collateral to which title isacquired by or on behalf of the Company or any Ownership Entity, SFG, the Failed Bank or theReceiver by foreclosure, by deed in lieu of foreclosure, by power of sale or by sale pursuant tothe Uniform Commercial Code; (ii) the equity interests in the Ownership Entities and (iii) theassets held directly or indirectly by the Ownership Entities."Act" shall mean the Delaware Limited Liability Company Act, 6 DeL C. § § 18 101 et seq."Additional Security" shall have the meaning given in Section 3.13(d)."Adjusted Capital Account Deficit" means, with respect to any Member, thedeficit balance, if any, in such Member's Capital Account as of the end of the relevant FiscalYear, after giving effect to the following adjustments:(A)Credit to such Capital Account any amounts that such Member isobligated to restore or is deemed to be obligated to restore pursuant to TreasuryRegulations Sections 1.704-2(g)(l) and 1.704-2(i)(5); and(B)Debit to such Capital Account the items described in Treasury RegulationsSections 1.704-1(b)(2)(ii)(d)(4), 1.704-l(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6). Theforegoing definition of Adjusted Capital Account Deficit is intended with the provisionsof Treasury Regulations Section 1.704-l(b)(2)(ii)(d) and shall be interpreted consistentlytherewith."Affiliate" shall mean, with respect to any specified Person, (i) any other Persondirectly or indirectly Controlling or Controlled by or under common Control with such specifiedPerson, (ii) any Person owning or Controlling ten percent (10%) or more of the outstandingvoting securities, voting equity interests, or beneficial interests of the Person specified, (iii) anyofficer, director, general partner, managing member, trustee, employee or promoter of the Personspecified or any Immediate Family Member of such officer, director, general partner, managingmember, trustee, employee or promoter, (iv) any corporation, partnership, limited liabilitycompany or trust for which any Person referred to in clause (ii) or (iii) acts in that capacity, or(v) any Person who is an officer, director, general partner, managing member, trustee or holderof ten percent (10%) or more of the outstanding voting securities, voting equity interests orbeneficial interests of any Person described in clauses (i) through (iv); provided, however, thatnone of the Initial Member, the Revolver Lender (or any agent thereof) under the Revolver, thePurchase Money Notes Guarantor, the Collateral Agent or any Affiliate (for this purposedetermined disregarding clauses (ii), (iii) and (iv) of this definition (including in the context ofclause (v) of this definition) and disregarding the Company and any Person Controlled by theCompany) of any of the foregoing shall be deemed to be an "Affiliate" of the Company or of anyPerson Controlled by the Company."Agreement" shall have the meaning given in the preamble."Ancillary Documents" shall mean the Contribution Agreement, the ServicingAgreement (including the Electronic Tracking Agreement), the Custodial and Paying Agency3Structured Transaction Commercial2010-1 SFG LLCLimited Liability Company Operating AgreementWDC991841479-7.084080.0017
Agreement, the Revolver Documents, the Private Owner Pledged Account Control Agreement,any Qualifying Letter of Credit, one or more Account Control Agreements, the Purchase MoneyNotes (and any promissory note reissued in respect thereof pursuant to Section 2.8 of theCustodial and Paying Agency Agreement), the Purchase Money Notes Guaranty, theReimbursement, Security and Guaranty Agreement and the Transferred LLC Interest SaleAgreement, in each case once executed and delivered, and any and all other agreements andinstruments executed and delivered in connection with the Closing or the transactionscontemplated thereby."Book Value" shall mean, (i) with respect to contributed property, the initial FairMarket Value of such property, and (ii) with respect to any other Company asset, the adjustedbasis of such asset for federal income tax purposes; provided. however, that the Book Values ofall Company assets shall be adjusted to equal their respective Fair Market Values, in accordancewith the rules set forth in Section 1.704-l(b)(2)(iv)(f) of the Treasury Regulations, except asotherwise provided herein, immediately prior to: (a) the date of the acquisition of any additionalLLC Interest by any new or existing Member in exchange for more than a de minimis CapitalContribution; (b) the date of the actual distribution of more than a de minimis amount ofCompany property (other than a pro rata distribution) to a Member in connection with theredemption of all or part of such Member's LLC Interest; or (c) the date of the actual liquidationof the Company within the meaning of Section I.704-1 (b)(2)(ii)(g) of the Treasury Regulations;and provided further, that adjustments pursuant to clauses (a) and (b) above shall be made only ifthe Tax Matters Member reasonably determines, after consultation with the Initial Member, thatsuch adjustments are necessary or appropriate to reflect the relative economic interests of theMembers. The Book Value of any Company Property distributed to any Member shall beadjusted immediately prior to such distribution to equal its Fair Market Value as of such date."Borrower" shall mean any borrower with respect to any Loan."Bulk Sale" shall mean the sale or other disposition, in a single transaction or aseries of related transactions (and directly or indirectly), to a single buyer (or two (2) or morerelated buyers) of two (2) or more assets (consisting of Loans, including any separate REOProperty or other Acquired Property into which any Loan is converted) that (i) are not from asingle borrower relationship or (ii) otherwise do not involve (or are not secured by) items ofREO Property that are part of the same project and/or physically adjacent to one another;provided however, if multiple assets (including Loans) are marketed and offered at the sametime, and each such asset is marketed individually and offers are solicited with respect theretoindividually, the transaction will not be considered a Bulk Sale if multiple assets are sold to asingle buyer (or two (2) or more related buyers) provided that the single buyer's (or relatedbuyer's) overall price for such specific assets exceeds the aggregate value of the highestindividual prices offered by other buyers for each individual asset included in that specifictransaction (based on net cash proceeds to be received by the Company)."Business" shall mean the acquisition of the Loans pursuant to the ContributionAgreement and the ownership, servicing, administration, management and liquidation of theLoans and Acquired Properties.4Structured Transaction Cornmercial2010-l SFG LLCLimited Liability Company Operating AgreementWDC991841479-7.084080.00l7
"Business Day" shall mean any day except a Saturday, Sunday or other day onwhich commercial banks in Washington, D.C. or United States federal government offices arerequired or authorized by Law to close."Business Plan" shall have the meaning given in Section 7.7."Buy-Out Closing" shall have the meaning given in Section 3.14(a)."Buy-Out Closing Date" shall have the meaning given in Section 3 .14(b)(i)."Buy-Out Notice" shall have the meaning given in Section 3.14(a)."Buy-Out Valuation Date" shall have the meaning given in Section 3.14(a)."Capital Account" shall mean the capital account of a Member related to suchMember's outstanding LLC Interests, as adjusted to account for allocations ofNet Income (anditems thereof) and Net Loss (and items thereof), and contributions and distributions relating tosuch LLC Interests, as provided in greater detail in Section 6.2 and elsewhere in this Agreement."Capital Contribution" shall mean a contribution to the capital of the Companymade, deemed to be made, or to be made pursuant to the Original LLC Operating Agreement, theContribution Agreement, or this Agreement."Certificate" shall have the meaning given in Section 2.1Ca)."Change of Control" shall mean (a) with respect to the Private Owner, (i) thePrivate Owner's Specified Parent for any reason (x) failing or ceasing to Control the PrivateOwner or (y) failing or ceasing to own, beneficially and of record, and directly or indirectly(including through one or more Subsidiaries), at least fifty and one tenths percent (50.1 %) invalue of all of the equity interests in the Private Owner, or (ii) any Person other than the PrivateOwner's Specified Parent (and its wholly-owned Subsidiaries) at any time, when consideredtogether with all of such Person's Affiliates (excluding, as applicable, the Private Owner'sSpecified Parent and its wholly-owned subsidiaries), directly or indirectly acquiring or holding,ofrecord or beneficially, twenty-five percent (25%) in value of all ofthe equity interests in thePrivate Owner; and (b) with respect to the Servicer, (i) the Servicer's Specified Parent for anyreason (x) failing or ceasing to Control the Servicer or (y) failing or ceasing to own, beneficiallyand of record, and directly or indirectly (including through one or more Subsidiaries), at leastfifty and one tenths percent (50.1 %) in value of all of the equity interests in the Servicer, or (ii)without limitation of clause (i), in the event the Servicer is (or at the time it became the Servicer,was) an Affiliate ofthe Private Owner, any Change of Control ofthe Private Owner."Clean-up Call" shall have the meaning set forth in Section 12.17(a)."Closing" shall mean the consummation of the transactions contemplated in theTransferred LLC Interest Sale Agreement."Closing Date" shall have the meaning given in the preamble.5Structured Transaction Commercial2010-1 SFG LLCLimited Liability Company Operating AgreementWDC99 1841479-7.084080.0017
"Code" shall mean the United States Internal Revenue Code of 1986, as amended."Collateral Agent" shall mean the FDIC, in its capacity as the Collateral Agentunder (and as defined in) the Reimbursement, Security and Guaranty Agreement, and anysuccessor Collateral Agent thereunder."Collection Account" shall mean a segregated trust or custodial accountestablished and maintained at a branch of the Paying Agent (as the "Collection Account" definedtherein) in accordance with, and for the purposes set forth in,
Company entered into that certain Limited Liability Company Operating Agreement dated as of May 6, 2010 (the "Original LLC Operating Agreement") as the initial "limited liability company agreement" (as such term is defined in the Act) ofthe Company; WHEREAS, the Initial Member and the Company have entered into a Loan Contribution
