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EXHIBIT 10(c)
PLEDGE AND SECURITY AGREEMENT
This PLEDGE AND SECURITY AGREEMENT dated as of July 10, 1998
(as amended, supplemented or modified from time to time, this "Agreement")
between Source One Mortgage Services Corporation (the "Company") and The First
National Bank of Chicago, as collateral agent for the benefit of the Lenders
(the "Agent"). The Company is sometimes referred to herein as the "Assignor" and
the Agent is sometimes referred to herein as the "Assignee".
BACKGROUND
A. The Company is concurrently entering into that certain Revolving
Credit Agreement dated as of the date hereof with the financial institutions
named therein (the "Lenders") and the Agent, as administrative agent and
collateral agent (as amended, supplemented or modified from time to time, the
"Revolving Credit Agreement"), pursuant to which the Lenders shall make loans to
the Company.
B. In order to induce the Lenders to make loans under the Credit
Agreement, the Assignor has agreed to grant to the Assignee a security interest
for the benefit of the Lenders in and lien on a specified collateral account and
all of its contents to secure the payment and performance by the Company of the
"Secured Debt", as defined in the Credit Agreement (the "Secured Debt").
NOW, THEREFORE, the parties hereto, intending to be legally
bound hereby, agree as follows:
1. Security.
(a) The Assignor agrees to establish and maintain the
collateral account described below (the "Collateral Account") with Xxxxx & Co.
(the "Custodian", which term shall include any successors approved by the Agent
as the "Custodian" hereunder) in order to hold the property to serve as
collateral. As of the date of this Agreement, the FSA Common Stock (as defined
in the Credit Agreement) listed on Exhibit A has been deposited in the
Collateral Account. The Collateral Account shall be administered by the
Custodian subject to that certain Control Agreement of even date herewith (as
amended, supplemented, modified, restated or replaced, the "Control Agreement")
among the Assignor, the Assignee and the Custodian.
Name and Address
of Custodian Account No.
---------------- -----------
Xxxxx & Co. 32708669
Xxx Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
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(b) As security for the repayment of the Secured Debt, the
Assignor hereby assigns, pledges, transfers and sets over to the Assignee for
the benefit of the Lenders all of the Assignor's right, title and interest in
and to: (i) the Collateral Account; (ii) all collateral in the Collateral
Account and other amounts from time to time on deposit therein, including
without limitation all financial assets, funds, items, instruments, investments,
securities and other things of value at any time paid, deposited, credited to or
held in or in transit to the Collateral Account and all securities entitlements
arising with respect thereto; (iii) all cash and noncash proceeds thereof,
including without limitation dividends paid on the Collateral and all
investments made with the proceeds thereof; (iv) all cash, securities or other
property which may be or become payable or attributable to the Assignor on
account of any such Collateral, including any cash, securities or other property
payable or distributable on account of any cash dividend, stock redemption,
stock split, stock dividend or other dividend payable in property other than
cash and any cash payable upon the maturity of any debt security; (v) cash and
Cash Equivalents (as defined in the Credit Agreement) held by the Agent for the
benefit of the Lenders as security for the Secured Debt; and (vi) the Settlement
Account (as defined in the Credit Agreement) and all monies deposited therein
(collectively, the "Collateral"); provided, that the Custodian shall pay all
dividend payments received by it in respect of the Eligible Collateral deposited
in the Collateral Account to or at the direction of the Assignor upon the
Custodian's receipt thereof so long as the Agent shall not have given (and if
given, not have withdrawn) written notice to the Custodian that a Default (as
defined in the Credit Agreement) has occurred and is continuing or would occur
after giving effect to such dividend payment. Upon a release of Collateral at
the request of the Company in accordance with Section 4.5 of the Credit
Agreement the Agent shall direct the Custodian to release the applicable
Collateral to the Company. The Assignor will deliver to the Assignee any
certificates which the Assignor may receive representing any securities which
are subject to the Assignee's security interest, together with appropriate
"stock powers" or "bond powers" or other appropriate instruments of assignment.
2. Maintenance of Collateral Account. The Assignor will maintain the
Collateral Account and pay all fees and expenses related thereto, including fees
and expenses incurred by the Custodian in connection with its duties and
obligations related to the Collateral Account.
3. Perfection; Power of Attorney. The Assignor agrees (i) that it shall
have caused Financial Security Assurance Holdings, Ltd. ("FSA") to reissue the
FSA Common Stock which has been deposited into the Collateral Account in
uncertificated form through the Depositary Trust Company in the "street name" of
the Custodian prior to the effective date hereof, (ii) immediately to
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deliver to the Agent, or the Agent's nominee, all certificates, instruments or
other documents, if any, evidencing any of the Collateral which may at any time
come into the possession of the Assignor, (iii) to execute and deliver to the
Agent such financing statements as the Agent may reasonably request with respect
to the Collateral, (iv) to cause the Control Agreement to be executed and
delivered, (v) to cause the Custodian to make a notation on its records
indicating the security interest granted hereby, and (vi) to take such other
steps as the Agent may from time to time reasonably request to perfect the
Agent's security interest for the benefit of the Lenders in the Collateral under
applicable law. The Assignor further agrees to execute and deliver to the Agent
(i) undated stock powers in form and substance satisfactory to the Agent,
appropriately endorsed in blank, with respect to the Collateral and (ii) such
other documents of transfer as the Agent may from time to time request to enable
the Agent to transfer the Collateral into its name, the name of any other
Lender, or the name of their respective nominees (all of the foregoing are
hereinafter collectively referred to as the "Powers"). The Assignor further
agrees, at the request of the Agent, to use its best efforts to cause FSA to
issue, in substitution for existing certificates evidencing any of the
Collateral, one or more new certificates ("Substitute Certificates") intended to
evidence the Collateral evidenced by the certificates which are exchanged for
the Substitute Certificates, and the Assignor shall immediately thereafter
deliver such Substitute Certificates to the Agent, together with appropriate
Powers.
The Assignor hereby constitutes and appoints the Assignee as the
true and lawful attorney of the Assignor with full power of substitution, (a)
after the occurrence and continuation of a Default, to ask, demand, collect,
receive, receipt for, xxx for, and give acquittance for any and all amounts
which may be or become due and payable on the Collateral; (b) after the
occurrence and continuation of a Default, to execute any and all withdrawal
requests, receipts or other orders for the payment of money drawn on the
Collateral or the Collateral Account; (c) to endorse the name of the Assignor on
all instruments given in payment or in partial payment therefor and, after the
occurrence and continuation of a Default, to set-off or transfer the Collateral
or any portion thereof into the Assignee's own name or the name of its nominee;
(d) to execute instruments of assignment of any item of Collateral which is a
certificated security, including "stock powers" and "bond powers"; (e) to issue
any instruction or take any other action necessary to cause the Assignee's
security interest for the benefit of the Lenders in the Collateral to be
perfected; and (f) to file any claim or take any other action, either in its own
name or that of the Assignor, which the Assignee deems reasonably necessary to
protect and preserve its interest hereunder. All authorizations and agencies
herein contained or granted to the
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Assignee with respect to the Collateral are irrevocable and constitute powers
coupled with an interest.
4. Representations, Warranties and Covenants. The Assignor hereby
represents, warrants and covenants to the Assignee and the Lenders that: (a) it
owns and shall maintain the Collateral free and clear of any and all pledges,
liens, adverse claims, security interests or other encumbrances (referred to
herein collectively as "Encumbrances") except the security interest created
herein and shall neither transfer, sell, encumber or otherwise dispose of any of
the Collateral nor create, assume or permit to exist any Encumbrance upon the
Collateral except in accordance with the provisions of this Agreement; (b) the
execution, delivery and performance of this Agreement are within the Assignor's
corporate powers, are permitted in accordance with the terms of Assignor's
articles of incorporation and by-laws, have been duly authorized by all
necessary corporate action and will not violate any law, judgment or
governmental regulations, or violate, conflict with or constitute a breach or
default under any registration agreement, shareholder agreement or other
agreement (including without limitation any agreement with or relating to FSA)
which is binding upon or affects the Assignor or any of its property; (c) this
Agreement constitutes the legal, valid and binding obligation of the Assignor,
enforceable in accordance with its terms subject to any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and to general principles of equity; (d) the
Collateral which has been delivered to the Custodian and the Collateral and
other documentation delivered to the Assignee or the Custodian in connection
with this Agreement and the Control Agreement are genuine and in all respects
what they purport to be; (e) the FSA Common Stock which has been deposited in
the Collateral Account is genuine, free from transfer restrictions, duly and
validly authorized and issued, fully paid and non-assessable, (f) this Agreement
is effective to create a valid and continuing lien on and perfected, first
priority security interest in favor of the Assignee for the benefit of the
Lenders in all Collateral, which lien and security interest is prior to all
other Encumbrances; (g) the Collateral was continuously owned by either the
Assignor or Assignor's indirect parent, Fund American Holdings Enterprises, Inc.
or its subsidiaries, for the two (2) year period immediately prior to the date
hereof, such period having been computed in compliance with the requirements of
Rule 144(d) as promulgated by the SEC; (h) at the time the Collateral was
contributed to Assignor, Fund American Holdings Enterprises, Inc. or its
subsidiaries was not insolvent and had adequate capital to satisfy all of its
obligations, (i) the Collateral is freely transferable by the Assignee as
pledgee pursuant to the terms hereof free of any restrictions or conditions,
including without limitation any Federal or state securities laws or
regulations, the articles of incorporation or by-laws of FSA or any agreement
with FSA or any
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other shareholder of FSA; and (j) FSA is in compliance with all current public
information requirements of Rule 144(c) as promulgated by the SEC.
5. Remedies Upon a Default. Upon the occurrence and continuance of a
Default, the Assignee shall be entitled to deliver a "Notice of Exclusive
Control" pursuant to the Control Agreement and to exercise any or all of the
following remedies, and the Assignor shall observe and perform the following
provisions and obligations:
(a) The Assignee shall be entitled to receive the Collateral and any
interest, investment income or payments in respect of the Collateral, which
amounts may be applied by the Assignee to, and set off by the Assignee against,
the Secured Debt in such manner as the Assignee, in its sole discretion, may
determine, but subject to the terms of Section 10.4 of the Credit Agreement.
(b) The Assignee shall have all of the rights and remedies of a
secured creditor under the Uniform Commercial Code, as now and hereafter in
effect in the State of Illinois and in any other state whose laws may be
applicable with respect to the Collateral (the "Uniform Commercial Code"),
including, without limitation, the right to enforce or foreclose on its lien on
the Collateral, the right to withdraw and apply any or all amounts held in the
Collateral Account constituting Collateral to the Secured Debt, the right to
transfer any or all of the Collateral into the name of the Assignee or any
nominee of the Assignee and the right to sell, assign or otherwise dispose of
any or all of the Collateral at one or more private or public sales at which the
Assignee may bid and purchase any or all of the Collateral in its own name or
that of a nominee, free and clear of any equity of redemption which is hereby
waived and released. The Collateral may be sold for cash or other value in any
manner without demand, advertisement or notice, other than ten (10) days' prior
written notice of the time and place of any public sale or the time after which
any private sale may take place, given to the Assignor in the manner provided
herein, which notice is agreed to be reasonable. In view of the fact that
federal and state securities and insurance laws may impose certain restrictions
on the method by which a sale of the Collateral may be affected, the Assignor
agrees that the Agent may at any time permitted hereunder, attempt to sell all
or any part of the Collateral by means of a private placement, restricting the
bidders and prospective purchasers to those who are qualified and will represent
and agree that they are purchasing for investment only and not for distribution.
In so doing, the Agent may solicit offers to buy the Collateral, or any part
thereof, from a limited number of investors deemed by the Agent, in its
reasonable judgment, to be financially responsible parties who might be
interested in purchasing the Collateral, or any part
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thereof. If the Agent solicits such offers from not less than four such
investors, then the acceptance by the Agent of the highest offer obtained
therefrom shall be deemed to be a commercially reasonable method of disposing of
such Collateral. Agent shall be under no obligation to delay the sale of any of
the Collateral for the period of time necessary to permit Assignor to cause the
registration of securities for public sale under the Securities Act of 1933, as
amended, or under applicable state securities laws, even if Assignor would agree
to cause FSA to do so. Agent shall have the right upon any such public sale or
sales and, to the extent permitted by law, upon any such private sale or sales,
to purchase severally for the individual accounts of each of the Lenders the
whole or any part of said Collateral so sold (any such shares purchased from
time to time, the "Purchased Shares"), free of any right or equity of
redemption, which equity of redemption Assignor hereby waives and releases to
the extent permitted by applicable law. Any sale may be conducted by an
auctioneer or by an officer, attorney or agent of the Agent. The Assignee shall
apply the amounts withdrawn from or held in the Collateral Account including or
the net proceeds of any such sale, upon receipt, in the following order of
priorities:
(i) first, to the Agent in an amount sufficient to pay
in full the out-of-pocket expenses of the Agent in connection with such
sale, disposition or other realization, including all expenses,
liabilities and advances incurred or made by the Agent in connection
therewith, including reasonable attorneys' fees and expenses;
(ii) second, to the Assignee and the Lenders to payment
of the Secured Debt in accordance with the terms of the Credit
Agreement (including amounts which may be deposited in the Settlement
Account (as defined in the Credit Agreement)); and
(iii) finally, upon payment in full of all of the Secured
Debt, to Assignor or its representatives or to whomsoever may be
lawfully entitled to receive the same, or as a court of competent
jurisdiction may direct.
The Company shall remain liable to the Assignee and the Lenders for any
deficiency in payment of the Secured Debt remaining after any such application.
(c) Without limiting the generality of Section 5(b) or the
availability of any remedy, Assignor acknowledges that regulatory or other
concerns may require (or render it advisable for) Agent not to foreclose on all
of the Collateral at the same time. Agent shall have the right to foreclose on
any portion of the Collateral without limiting Agent's right to foreclose on all
or a part of the remaining Collateral at any time or from time to
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time in the future. To the extent permitted by applicable law, Assignor waives
the benefit of any statute or common law principle or decision which would
preclude or limit Agent's right to foreclose sequentially. Until the Secured
Debt has been repaid in full and all commitments under the Credit Agreement have
been terminated, this Agreement shall remain in full force and effect with
respect to any Collateral as to which Agent has not foreclosed.
(d) To the extent permitted by applicable law, the Assignor
hereby knowingly, voluntarily and intentionally waives or covenants not to
assert against the Assignee or any Lender any valuation, stay, appraisement,
extension or redemption laws which are now or hereafter may be in effect and
which, but for this Agreement, might be applicable to any application of amounts
of Collateral held in the Collateral Account or sale made under the judgment,
order or decree of any court, or privately under the power of sale conferred by
this Agreement or in respect of the Collateral.
(e) The Assignee and any person acting as its agent hereunder
shall not, under any circumstance or in any event whatsoever, be liable to the
Assignor for any acts or omissions or for any error of judgment or mistake of
fact or law, except for gross negligence or willful misconduct. Notwithstanding
the foregoing, it is understood that the Assignee is under no duty to take any
of the foregoing actions and that the Assignee shall have no duty as to the
collection or protection of the Collateral or any income therefrom or to
mitigate damages relating thereto and no further duty to preserve any rights
pertaining thereto.
(f) The Assignor shall, at the Assignee's request, assemble
all records related to the Collateral and make them available to the Assignee at
places which the Assignee may reasonably select, whether at the Assignee's
offices or elsewhere, and will make available to the Assignee all premises and
facilities of the Assignor for the purpose of inspecting all records related to
the Collateral.
(g) The Assignor shall indemnify and hold harmless the Agent,
the Lenders and each director, officer, employee, attorney and agent thereof (an
"Indemnitee") against any loss, cost, expense or damage resulting from any
claim, suit, action or proceeding against an Indemnitee arising out of the
liquidation of any of the Collateral, including the settlement, collection or
payment of any of the Collateral, or any instrument received in payment thereof,
except for any of the foregoing which results from the gross negligence or
willful misconduct of the Indemnitee. The terms of this Section 5(g) shall
survive termination of this Agreement and repayment of the Secured Debt.
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6. Limitation on Duties Regarding Collateral. The Assignee's sole duty
with respect to the Collateral, safekeeping and physical preservation of
documentation evidencing the Collateral in its possession shall be to deal with
it in the same manner as it deals with similar property for its own account.
Neither the Assignee nor any of its directors, officers, employees, attorneys or
agents shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so.
7. Further Actions. The Assignor hereby further agrees, at its own
expense, to execute and deliver, or cause to be executed and delivered, to the
Assignee all further documents and instruments, including without limitation,
Uniform Commercial Code financing statements and continuation statements, "stock
powers", "bond powers", other instruments of assignment and instructions and
perform all other acts which the Assignee may reasonably require in order to
protect the Collateral, perfect or further evidence the security interest herein
granted to the Assignee for the benefit of the Lenders or give effect to the
exercise of any of the Assignee's remedies hereunder. The Assignee may file any
financing statement to perfect its security interest for the benefit of the
Lenders signed by the Assignor or the Assignee alone.
8. Notices. All notices, consents and other communications required by
or given under this Agreement (other than notices to the Custodian, which shall
be given as provided in the Control Agreement) shall be in writing (transmitted
by telecopy or otherwise) and shall be given and shall be effective in the
manner provided in the Credit Agreement.
9. Direction to FSA. The Assignor hereby irrevocably directs and
authorizes FSA to remit all dividends and other distributions payable with
respect to the Collateral to the Assignee or the Custodian upon written
direction to such effect from the Assignee or the Custodian. Such dividends
and/or distributions remitted to the Assignee shall be applied to the Secured
Debt in accordance with the Credit Agreement. If Assignor shall receive any of
the foregoing Collateral, Assignor shall accept the same as agent for the
Lenders and hold the same in trust for the Lenders and deliver the same
forthwith to Assignee in the exact form received, with the endorsement of
Assignor when requested by Assignee and/or appropriate undated stock powers duly
executed in blank (all in form and substance satisfactory to the Assignee), to
be applied in accordance with the Credit Agreement. Any cash received upon or in
respect of the Collateral under this Section upon the reorganization,
liquidation or dissolution of FSA shall immediately be paid over to Assignee to
be held by the Assignee as Collateral for the Secured Debt or to be applied in
accordance with the Credit Agreement. All sums of money so paid or distributed
in respect of the Collateral that are received by Assignor shall, until paid or
delivered to the Assignee, be
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segregated from the other property or funds of Assignor and held by Assignor in
trust as additional collateral security for the Secured Debt. Assignor shall
give Assignee immediate notice of any such payment or distribution. The Assignor
shall not send to FSA or the Custodian, and FSA and the Custodian shall not
honor, any instructions contrary to those contained herein without the prior
written consent of the Required Lenders. Assignor will advise Assignee promptly,
in reasonable detail (including copies of any documents in question), of (i) any
lien, security interest, encumbrance or claim made or asserted against any of
the Collateral, (ii) any material change in the composition of the Collateral,
including information regarding the issuance or creation of new rights that
relate to the Collateral or FSA, (iii) the amendment or restatement in any
material respect of the Articles of Incorporation of FSA, the by-laws of FSA or
any registration agreement or other shareholders agreement regarding the
Collateral, including, to the fullest extent consistent with applicable Federal
and state securities laws, any proposed amendment of any such documents and (iv)
to the fullest extent consistent with applicable Federal and state securities
laws, the occurrence of any other event which might have a material adverse
effect on the value of the Collateral or on the security interests created
hereunder.
10. Miscellaneous.
(a) This Agreement shall remain in full force and effect and
continue to be effective should any petition be filed by or against the Assignor
for liquidation or reorganization, should the Assignor become insolvent or make
an assignment for the benefit of any creditor or creditors or should a receiver
or trustee be appointed for all or any significant part of the Assignor's
assets, and shall continue to be effective or be reinstated, as the case may be,
if at any time payment and performance of the Secured Debt, or any part thereof,
is, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee of the Secured Debt, whether as
a "voidable preference," "fraudulent conveyance," or otherwise, all as though
such payment or performance had not been made. In the event that any payment, or
any part thereof, is rescinded, reduced, restored or returned, the Secured Debt
shall be reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.
(b) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. This Agreement is to be read,
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construed and applied together with the other documents and instruments executed
in connection herewith which, taken together, set forth the complete
understanding and agreement of the Assignor and the Assignee with respect to the
matters referred to herein and therein.
(c) The representations, warranties and covenants set forth in
this Agreement (whether directly or by reference to another document) shall
survive the execution, delivery and termination of this Agreement.
(d) The Assignee shall not by any act, delay, omission or
otherwise be deemed to have waived any of its rights or remedies hereunder, and
no waiver shall be valid unless in writing, signed by the Assignee and then only
to the extent therein set forth. A waiver by the Assignee of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Assignee would otherwise have had on any future occasion. No
failure to exercise or delay in exercising, on the part of the Assignee, any
right, power or privilege hereunder, shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege hereunder
preclude any other or future exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies hereunder provided are
cumulative and may be exercised singly or concurrently and are not exclusive of
any rights and remedies provided by law. None of the terms or provisions of this
Agreement may be waived, altered, modified or amended except by an instrument in
writing, duly executed by the Assignee (acting with the requisite consent of the
Lenders to the extent required by the Credit Agreement) and the Assignor.
(e) All rights, remedies and powers provided in this Agreement
may be exercised only to the extent that the exercise thereof does not violate
any applicable provision of law, and all the provisions of this Agreement are
intended to be subject to all applicable mandatory provisions of law that may be
controlling and to be limited to the extent necessary so that they shall not
render this Agreement invalid, unenforceable, in whole or in part, or not
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entitled to be recorded, registered or filed under the provisions of any
applicable law.
(f) This Agreement shall continue in effect (notwithstanding
the fact that from time to time there may be no Secured Debt of the Assignor or
commitments therefor outstanding) until the payment in full of the Secured Debt
of the Assignor, the termination of all outstanding Advances and the termination
of all commitments of the Lenders under the Credit Agreement, at which time the
security interests granted hereby shall terminate and any and all rights to the
Collateral shall revert to the Assignor. Upon such termination, the Assignee
shall promptly return to the Assignor, at the Assignor's expense, such of the
Collateral held by the Assignee as shall not have been sold or otherwise applied
pursuant to the terms hereof. The Assignee will promptly execute and deliver to
the Assignor such other documents as the Assignor shall reasonably request to
evidence such termination.
(g) This Agreement and all obligations of the Assignor
hereunder shall be binding upon the successors and assigns of the Assignor and
shall, together with the rights and remedies of the Assignee hereunder, inure to
the benefit of the Assignee, all future holders of any instrument or agreement
evidencing any of the Secured Debt and its successors and assigns. No sales of
participations, other sales, agreements, transfers or other dispositions of any
agreement governing or instrument evidencing the Secured Debt or any portion
thereof or interest therein shall in any manner affect the security interest
granted to the Assignee hereunder. The Assignor may not assign, sell or
otherwise transfer any interest in or obligation under this Agreement.
(h) This Agreement may be executed in any number of separate
counterparts, each of which shall collectively and separately constitute one and
the same agreement.
(i) IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS AND DECISIONS OF THE STATE OF
MICHIGAN APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT
REGARD TO CONFLICTS OF LAWS PROVISIONS THEREOF), AND ANY APPLICABLE LAWS OF THE
UNITED STATES OF AMERICA. THE ASSIGNOR HEREBY CONSENTS AND AGREES THAT THE STATE
OR FEDERAL COURTS LOCATED IN THE STATE OF MICHIGAN SHALL HAVE JURISDICTION TO
HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE ASSIGNOR AND THE ASSIGNEE
PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OF THE OTHER DOCUMENTS AND INSTRUMENTS EXECUTED IN CONNECTION
HEREWITH; PROVIDED, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO
PRECLUDE THE ASSIGNEE FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY
OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
SECURED DEBT, OR TO
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ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE ASSIGNEE. THE ASSIGNOR
EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR
SUIT COMMENCED IN ANY SUCH COURT, AND THE ASSIGNOR HEREBY WAIVES ANY OBJECTION
WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR
FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
(j) EACH PARTY HERETO WAIVES ALL RIGHTS TO TRIAL BY JURY IN
ANY ACTION, SUIT OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED IN CONNECTION WITH, THIS AGREEMENT OR
THE TRANSACTIONS RELATED HERETO. THE ASSIGNOR WAIVES ANY RIGHT IT MAY HAVE TO
CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE PRECEDING SENTENCE ANY
SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN,
OR IN ADDITION TO, ACTUAL DAMAGES.
(k) The Assignor agrees to pay or reimburse the Assignee,
immediately upon demand at any time or times, for all reasonable expenses
incurred to perfect, protect and maintain continuously perfected the Assignee's
security interest for the benefit of the Lenders, and the priority thereof, in
the Collateral, or to preserve, protect, care for or insure any Collateral, or
in the taking, holding, preparing for sale, or other disposition, selling or
otherwise disposing of the Collateral, or any other action taken by the Assignee
to enforce or exercise its rights or remedies under this Agreement, including
without limitation, reasonable attorneys' fees, filing fees, documentary
recordation taxes, appraisal charges and storage costs.
(l) Assignee agrees that it will not originate any entitlement
orders concerning the Collateral Account unless a Default shall have occurred
and be continuing, in which event it will provide a copy of any such entitlement
orders to the Assignor as well.
IN WITNESS WHEREOF, the Assignor and the Assignee, intending
to be legally bound, have executed this Agreement as of the date and year first
written above.
SOURCE ONE MORTGAGE SERVICES
CORPORATION
By:
------------------------------
Name:
----------------------------
Title:
----------------------------
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13
THE FIRST NATIONAL BANK OF CHICAGO,
as Collateral Agent
By:
-------------------------------
Name:
-----------------------------
Title:
-----------------------------
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14
EXHIBIT A
DESCRIPTION OF COLLATERAL
3,460,200 shares of Common Stock of Financial Security Assurance
Holdings, Ltd., a New York corporation, having a par value of $0.01 per share,
together with any additional shares in FSA and any options or other rights with
respect to FSA to which the holder of such shares becomes entitled hereafter.
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