LIMITED LIABILITY COMPANY AGREEMENT OF STARWOOD COMMERCIAL MORTGAGE DEPOSITOR, LLC

LIMITED LIABILITY COMPANY AGREEMENT
OF
STARWOOD COMMERCIAL MORTGAGE DEPOSITOR, LLC

This Limited Liability Company Agreement (together with the schedules attached hereto, this “Agreement”) of Starwood Commercial Mortgage Depositor, LLC, a Delaware limited liability company (the “Company”), is entered into by Starwood Property Mortgage BC, L.L.C., a Delaware limited liability company, as the Member (the “Member”), and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the “Springing Member”), as the Springing Member (as defined on Schedule A attached hereto).  Capitalized terms used and not otherwise defined herein have the meanings set forth on Schedule A attached hereto.

RECITALS

WHEREAS, the Company was formed pursuant to a Certificate of Formation filed with the Secretary of State of the State of Delaware on April 15, 2013; and

WHEREAS, the Member and the Springing Member wish to enter into this Agreement to establish the rules and procedures that are to govern the business and affairs of the Company.

NOW, THEREFORE, BE IT RESOLVED, that the Member and the Springing Member, by execution of this Agreement and intending to be legally bound, hereby agree as follows:

member of the Company pursuant to Sections 21 and 22) (a “Member Cessation Event”), the Springing Member shall, without any action of any Person and simultaneously with the Member Cessation Event, automatically be admitted to the Company as a Special Member and shall continue the Company without dissolution.  The Special Member may not resign from the Company or transfer its rights as Special Member unless (1) a successor Special Member has been admitted to the Company as Special Member by executing a counterpart to this Agreement, and (2) such successor has also accepted its appointment as Independent Director pursuant to Section 10; provided, however, the Special Member shall automatically cease to be a member of the Company upon the admission to the Company of a substitute Member.  The Special Member shall be a member of the Company that has no interest in the profits, losses and capital of the Company and has no right to receive any distributions of Company assets.  Pursuant to Section 18-301 of the Act, the Special Member shall not be required to make any capital contributions to the Company and shall not receive a limited liability company interest in the Company.  The Special Member, in its capacity as the Special Member, may not bind the Company.  Except as required by any mandatory provision of the Act, the Special Member, in its capacity as Special Member, shall have no right to vote on, approve or otherwise consent to any action by, or matter relating to, the Company, including, without limitation, the merger, consolidation or conversion of the Company.  In order to implement the admission to the Company of the Special Member, the Springing Member shall execute a counterpart to this Agreement.  Prior to its admission to the Company as Special Member, the Springing Member shall not be a member of the Company.

Directors need not be a Member.  The initial Directors designated by the Member are listed on Schedule D attached hereto.

(i)

The Board may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the Directors of the Company.  The Board may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.

(ii)

In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member.

(iii)

Any such committee, to the extent provided in the resolution of the Board, and subject to, in all cases, Sections 9(j) and 10, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Company.  Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board.  Each committee shall keep regular minutes of its meetings and report the same to the Board when required.

(i)

This Section 9(j) is being adopted in order to comply with certain provisions required in order to qualify the Company as a “special purpose” entity.

(ii)

The Member shall not amend, alter, change or repeal the definition of “Independent Director” or Section 5(c), 5(d), 6(b), 7, 8, 9, 10, 16, 18, 19, 20, 21, 22, 23, 24, 25, or 30 or Schedule A of this Agreement (the “Special Purpose Provisions”) without the unanimous consent of the Directors, including the Independent Director.  Subject to this Section 9(j), the Member reserves the right to amend, alter, change or repeal any provision in this Agreement in accordance with Section 30.

(iii)

Notwithstanding any other provision of this Agreement or any provision of law that otherwise so empowers the Company, the Member or any other Person, none of the Member, the Board, any Officer or any other Person shall be authorized or empowered, nor shall they permit the Company to, and the Company shall not, without the prior unanimous written consent of the Member and the Independent Director, take any Insolvency Action or permit the Member or Board to take any Insolvency Action; provided, however, that, the Board shall not authorize the taking of any Insolvency Action unless there is at least one (1) Independent Director serving in such capacity.

(iv)

The Member and the Board shall 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.  The Member and the Board shall also cause the Company to conduct its business and operations in strict accordance and compliance with the following provisions such that the Company shall:

A.

remain solvent and pay its debts and liabilities (including overhead expenses) from its own assets as the same shall become due;

B.

comply with the provisions of its certificate of formation and this Agreement;

C.

do, or cause to be done, all things necessary to observe limited liability company formalities and to preserve its existence;

D.

maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates, its members and any other Person, and file its own tax returns (except to the extent consolidation is required or permitted under generally accepted accounting principles or as a matter of law);

E.

hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate), correct any known misunderstanding regarding its status as a separate entity, conduct business in its own name, not identify itself or any of its Affiliates as a division or part of the other and maintain and utilize separate stationery, invoices and checks;

F.

not own any property or any other assets other than the securities, cash and other assets incidental to the purposes described in Section 7;

G.

not engage in any business other than the origination, acquisition, ownership, financing and disposition of securities and/or other assets in connection with the purposes described in Section 7;

H.

not enter into any contract or agreement with any of its Affiliates, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’s length basis with Persons other than such Affiliate;

I.

not incur any indebtedness or obligation, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than in connection with the purposes described in Section 7;

J.

not make any loans or advances to any other Person, and shall not acquire obligations or securities of any member or Affiliate of any member or any other Person (other than in connection with the purposes described in Section 7);

K.

maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;

L.

not seek the dissolution, liquidation or winding up, in whole or in part, of the Company;

M.

not commingle its funds and other assets with those of any of its Affiliates or any other Person;

N.

maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any of its Affiliates or any other Person;

O.

not hold itself out to be responsible for the debts or obligations of any other Person; and

P.

not have any employees.

Company with respect to taking of, or otherwise voting on, any Insolvency Action; provided, that the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing.  No Independent Director of the Company may be removed or replaced without Cause.  No resignation or removal of an Independent Director, and no appointment of a successor Independent Director, shall be effective until such successor (x) shall have accepted his or her appointment as an Independent Director by a written instrument, which may be a counterpart signature page to the Management Agreement, and (y) shall have executed a counterpart to this Agreement as required by Section 5(c).  In the event of a vacancy in the position of Independent Director, the Member shall, as soon as practicable, appoint a successor Independent Director.  The Independent Director is a “manager” of the Company within the meaning of the Act; however, all right, power and authority of the Independent Director shall be limited to the extent necessary to exercise those rights and perform those duties specifically set forth in this Agreement.

Presidents, if any, shall perform such other duties and have such other powers as the Board may from time to time prescribe.

member of the Company or that causes the Member to cease to be a member of the Company (other than (1) upon an assignment by the Member of all of its limited liability company interest in the Company and the admission of the transferee pursuant to Sections 20 and 22 or (2) the resignation of the Member and the admission of an additional member of the Company pursuant to Sections 21 and 22, to the fullest extent permitted by law, the personal representative of such member is hereby authorized to, and shall, within ninety (90) days after the occurrence of the event that terminated the continued membership of such member in the Company, agree in writing (i) to continue the Company and (ii) to the admission of the personal representative or its nominee or designee, as the case may be, as a substitute member of the Company, effective as of the occurrence of the event that terminated the continued membership of the last remaining member of the Company or the Member in the Company.

25 and in Section 28 below, nothing in this Agreement shall be deemed to create any right in any Person (other than Covered Persons) not a party hereto, and this Agreement shall not be construed in any respect to be a contract in whole or in part for the benefit of any third Person.

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IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Limited Liability Company Agreement as of the 1st day of May, 2013.

	MEMBER:
	STARWOOD PROPERTY MORTGAGE BC, L.L.C.
	By:	/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
		Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
		Title:   Authorized Signatory

	SPRINGING MEMBER:
	/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
	Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇

SCHEDULE A
Definitions

The following terms used in this Agreement have the following meanings:

“Act” means the Delaware Limited Liability Company Act, as amended from time to time.

“Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling or Controlled by or under direct or indirect common Control with such Person.

“Agreement” means this Limited Liability Company Agreement of the Company, together with the schedules attached hereto, as amended, restated or supplemented or otherwise modified from time to time.

“Bankruptcy” means, with respect to any Person, if such Person (i) makes an assignment for the benefit of creditors, (ii) files a voluntary petition in bankruptcy, (iii) is adjudged a bankrupt or insolvent, or has entered against it an order for relief, in any bankruptcy or Insolvency Proceedings, (iv) files a petition or answer seeking for itself any reorganization, arrangement, composition, readjustment, liquidation or similar relief under any statute, law or regulation, (v) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against it in any proceeding of this nature, (vi) seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator of the Person or of all or any substantial part of its properties, or (vii) if one hundred-twenty (120) days after the commencement of any proceeding against the Person seeking reorganization, arrangement, composition, readjustment, liquidation or similar relief under any statute, law or regulation, if the proceeding has not been dismissed, or if within ninety (90) days after the appointment without such Person’s consent or acquiescence of a trustee, receiver or liquidator of such Person or of all or any substantial part of its properties, the appointment is not vacated or stayed, or within ninety (90) days after the expiration of any such stay, the appointment is not vacated.  The foregoing definition of “Bankruptcy” is intended to replace and shall supersede and replace the definition of “Bankruptcy” set forth in Sections 18-101(1) and 18-304 of the Act.

“Cause” means, with respect to an Independent Director, (i) acts or omissions by such Independent Director that constitute willful disregard of such Independent Director’s duties, (ii) such Independent Director has been indicted or convicted for any crime or crimes of moral turpitude or dishonesty or for any violation of any requirement of law (including under any law, treaty, rule, regulation, code, directive, policy, order or requirement or determination of an arbitrator or a court or other governmental authority whether now or hereafter enacted or in effect), (iii) such Independent Director no longer satisfies the requirements set forth in the definition of “Independent Director” or (iv) the fees charged for the services of such Independent Director are materially in excess of the fees charged by the other providers of Independent Directors listed in the definition of “Independent Director ”.

“Certificate of Formation” means the Certificate of Formation of the Company filed with the Secretary of State of the State of Delaware on April 15, 2013, as amended or amended and restated from time to time.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities or general partnership or managing member interests, by contract or otherwise.  “Controlling” and “Controlled” shall have correlative meanings.  Without limiting the generality of the foregoing, a Person shall be deemed to Control any other Person in which it owns, directly or indirectly, a majority of the ownership interests.

“Covered Persons” has the meaning set forth in Section 19(a).

“Directors” means the Persons elected to the Board from time to time by the Member, including the Independent Director, in their capacity as managers of the Company.  A Director is hereby designated as a “manager” of the Company within the meaning of Section 18-101(10) of the Act.

“Independent Director” means an individual who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional independent directors, another nationally-recognized company reasonably approved by the Member, in each case that is not an Affiliate of the Company and that provides professional independent directors and other corporate services in the ordinary course of its business, and which individual is duly appointed as an independent manager, member of the board of managers, or special member of such limited liability company and is not, and has never been, and will not while serving as Independent Director be, any of the following:

A natural person who otherwise satisfies the foregoing definition other than subparagraph (i) by reason of being the Independent Director of a special-purpose entity affiliated with the limited liability company in question shall not be disqualified from serving as an Independent Director of such limited liability company, provided that the fees that such natural person earns from serving as Independent Director of Affiliates of such the limited liability company in any given year constitute in the aggregate less than five percent of such natural person’s annual income for that year.  The same natural persons may not serve as Independent Directors of a corporation or limited liability company and, at the same time, serve as Independent Directors of an equityholder or member of such corporation or limited liability company.

“Insolvency Action” means, with respect to any Person, the taking by such Person of any action resulting in an Insolvency Event, other than solely under clause (g) of the definition thereof.

“Insolvency Event” means, with respect to any Person, (a) the filing of a decree or order for relief by a court having jurisdiction in the premises with respect to such Person or any substantial part of its assets or property in an involuntary case under any applicable Insolvency Law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its assets or property, or ordering the winding–up or liquidation of such Person’s affairs, and such decree or order shall remain unstayed and in effect for a period of thirty (30) days, (b) the commencement by such Person of a voluntary case under any applicable Insolvency Law now or hereafter in effect, (c) the consent by such Person to the entry of an order for relief in an involuntary case under any Insolvency Law, (d) the consent by such Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its assets or property, (e) the making by such Person of any general assignment for the benefit of creditors, (f) the admission in a legal proceeding of the inability of such Person to pay its debts generally as they become due, (g) the failure by such Person generally to pay its debts as they become due, or (h) the taking of action by such Person in furtherance of any of the foregoing.

“Insolvency Proceeding” means any case, action or proceeding before any court or other Governmental Authority relating to any Insolvency Event.

“Insolvency Laws” means Title 11 of the United States Code and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension of payments and similar debtor relief laws from time to time in effect affecting the rights of creditors generally.

“Management Agreement” means the agreement of the Member, Special Member and Directors in the form attached hereto as Schedule C.  The Management Agreement shall be deemed incorporated into, and a part of, this Agreement.

“Member” means Starwood Property Mortgage BC, L.L.C., as the initial member of the Company, and includes any Person admitted as an additional member of the Company or a substitute member of the Company pursuant to the provisions of this Agreement, each in its capacity as a member of the Company; provided, however, the term “Member” shall not include the Special Member.

“Person” means any individual, corporation, partnership, joint venture, limited liability company, limited liability partnership, association, joint stock company, trust, unincorporated organization, or other organization, whether or not a legal entity, and any governmental authority.

“Special Member” means, upon such person’s admission to the Company as a member of the Company pursuant to Section 5(c), a person acting as the Springing Member, in such person’s capacity as a member of the Company.  A Special Member shall only have the rights and duties expressly set forth in this Agreement.

“Springing Member” means a Person who is not a member of the Company but who has signed this Agreement in order that, upon the conditions described in Section 5(c), such Person can become the Special Member without any delay in order that at all times the Company shall have at least one member.

“Treasury Regulations” means the regulations promulgated by the U.S. Treasury Department pursuant to the Code.

B.	Rules of Construction

 

Definitions in this Agreement apply equally to both the singular and plural forms of the defined terms.  The words “include” and “including” shall be deemed to be followed by the phrase “without limitation.” The terms “herein,” “hereof and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Section, paragraph or subdivision.  The Section titles appear as a matter of convenience only and shall not affect the interpretation of this Agreement.  All Section, paragraph, clause, Exhibit or Schedule references not attributed to a particular document shall be references to such parts of this Agreement.

SCHEDULE B
Member

 

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	DIRECTORS:
	▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
	▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
	▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇

 

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