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Exhibit j.2*
CUSTODIAL AGREEMENT (this "Custodial Agreement") dated as of November
7, 1997, made by and among:
(i) ALLIED CAPITAL COMMERCIAL CORPORATION, a Maryland corporation, as a
Borrower and BUSINESS MORTGAGE INVESTORS, INC., a Maryland
corporation, as a Borrower (each a "Borrower", collectively, the
"Borrowers");
(ii) LASALLE NATIONAL BANK, as custodian for the Lender pursuant to the
Loan Agreement referred to below (in such capacity, the "Custodian");
and
(iii) XXXXXXX XXXXX MORTGAGE CAPITAL INC. (the "Lender").
RECITALS
The Borrowers and the Lender are parties to the Master Repurchase
Agreement, dated as of the date hereof (as amended, supplemented or otherwise
modified and in effect from time to time, the "Master Repurchase Agreement"),
pursuant to which the Lender has agreed, subject to the terms and conditions of
the Master Repurchase Agreement, to make revolving credit loans to the Borrowers
to finance Eligible Mortgage Loans (as defined therein) owned by the Borrowers.
It is a condition precedent to the effectiveness of the Loan
Agreement that the parties hereto execute and deliver this Custodial Agreement
to provide for the appointment of the Custodian as custodian hereunder.
Accordingly, the parties hereto agree as follows:
Section 1. Definitions.
Unless otherwise defined herein, capitalized terms when used herein
shall have their respective assigned meanings as set forth in the Loan
Agreement, and the following terms shall have the following meanings:
"Affiliate" shall mean with respect to any Person, any "affiliate" of
such Person as such term is defined in the United States Bankruptcy Code in
effect from time to time.
"Authorized Representative" shall have the meaning specified in
Section 18 hereof.
"Collateral Agent" shall mean the Person indicated in writing by the
Lender pursuant to delivery by the Lender to the Custodian of a Notice of
Collateral Agent in the form of Annex 13 hereto, or its successor in interest.
"Collateral Agent Termination" shall have the meaning specified in
Section 26 hereof.
"Custodial Delivery Failure" shall have the meaning specified in
Section 13 hereof.
"Custodial Identification Certificate" shall mean the certificate
executed by each Borrower in connection with the pledge of Eligible Mortgage
Loans to the Lender to be held by the Custodian pursuant to this Custodial
Agreement, a form of which is attached as Annex 3 hereto.
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"Exception" shall mean, with respect to any Mortgage Loan, any of the
following: (i) the variances from the requirements of Section 2 hereof with
respect to the Mortgage Files (giving effect to the Borrower's right to deliver
certified copies in lieu of original documents in certain circumstances), (ii) a
Mortgage Loan which has been pledged to the Lender under the Loan Agreement in
excess of 365 calendar days, (iii) a Mortgage Loan that has been released to the
Borrower pursuant to Section 5(a) hereof in excess of 14 calendar days, (iv) an
Eligible Mortgage Loan that has been released under any Transmittal Letter in
the form of Annex 11 and 12 hereto in excess of the time period stated in such
Transmittal Letter for release, and (v) any Mortgage Loan with respect to which
the Custodian receives written notice or has actual knowledge of a lien subject
or security interest in favor of a Person other than the Lender with respect to
such Mortgage Loan.
"MBS" shall have the meaning specified in Section 5(b)(ii) hereof.
"Mortgage File" shall mean, as to each Mortgage Loan, those documents
listed in Section 2 of this Custodial Agreement that are delivered to the
Custodian or which at any time come into the possession of the Custodian.
"Mortgage Loan Documents" shall mean, with respect to a Mortgage
Loan, the documents comprising the Mortgage File for such Mortgage Loan.
"Mortgage Loan Schedule" shall mean a list of Eligible Mortgage Loans
to be pledged pursuant to the Loan Agreement, attached to a Custodial
Identification Certificate, setting forth, as to each Eligible Mortgage Loan,
the applicable information specified on Annex 1 to this Custodial Agreement.
"Mortgage Loan Schedule and Exception Report" means a list of
Eligible Mortgage Loans delivered by the Custodian to the Lender on each
Business Day, reflecting the Mortgage Loans held by the Custodian for the
benefit of the Lender as of the close of business on the Business Day prior to
the date of delivery, which includes codes indicating any Exceptions with
respect to each Mortgage Loan listed thereon. Each Mortgage Loan Schedule and
Exception Report shall set forth (a) shall be in a form acceptable to Xxxxxxx
Xxxxx, (b) the Mortgage Loans being pledged to the Lender on any applicable
Funding Date as well as the Mortgage Loans previously pledged to the Lender and
held by the Custodian hereunder, and (c) all Exceptions with respect thereto,
with any updates thereto from the time last delivered.
"Notice of Collateral Agent" shall mean the written notice of the
security interest of a Collateral Agent in the form of Annex 13 hereto.
"Officer's Certificate" shall mean a certificate signed by a
Responsible Officer of the Person delivering such certificate and delivered as
required by this Custodial Agreement.
"Opinion of Counsel" shall mean a written opinion letter of counsel
in form and substance reasonably acceptable to the party receiving such opinion
letter.
"Pledgee" shall have the meaning specified in Section 25 hereof.
"Proceeds" shall mean whatever is receivable or received when
Collateral or proceeds are sold, collected, exchanged or otherwise disposed of,
whether such disposition is voluntary or involuntary, and includes, without
limitation, all rights to payment, including return premiums, with respect to
any insurance relating thereto.
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"Responsible Officer" shall mean, as to any Person, the chief
executive officer or, the Managing Member with respect to financial matters, the
chief financial officer of such person, and as to the Borrower, those authorized
Persons listed on Schedule 3 attached to the Loan Agreement as such schedule may
be modified from time to time.
"Review Procedures" shall have the meaning specified in Section 3(c)
hereof.
"Trust Receipt" shall mean a Trust Receipt in the form annexed hereto
as Annex 2 delivered to the Lender by the Custodian covering all of the Mortgage
Loans subject to this Agreement from time to time, as reflected on the Schedule
and Exception Report attached thereto in accordance with Section 3(e).
Section 2. Appointment of Custodian: Delivery of Asset File.
(a) By executing and delivering this Agreement, the Lender has
appointed the Custodian to act as agent and custodian for the exclusive benefit
of the Lender with respect to the Collateral. The Custodian hereby accepts such
appointment and agrees to maintain and hold all Collateral at any time delivered
to it as bailee and custodian for the exclusive benefit of the Lender and will
review all collateral files as outlined in Annex 4. The Custodian acknowledges
and agrees that the Custodian is acting and will act with respect to the
Collateral for the exclusive benefit of the Lender and is not, and shall not at
any time in the future be, subject with respect to the Collateral, in any manner
or to any extent, to the direction or control of the Borrower except as
expressly permitted hereby. The Custodian agrees to act in accordance with this
Agreement and in accordance with any written instructions from the Lender
delivered pursuant hereto consistent herewith. Under no circumstances shall the
Custodian deliver possession of Collateral to the Borrower or any Person other
than the Lender except in accordance with the express terms of this Agreement or
otherwise upon the written instruction of the Lender.
(b) No later than 12:00 p.m., New York City time, two (2) Business
Days prior to any Funding Date, the Borrower shall release to the Custodian the
following original documents pertaining to each Eligible Mortgage Loan to be
pledged to the Lender and included in the Borrowing Base on such Funding Date,
each of which Mortgage Loans shall be identified in a Mortgage Loan Schedule
delivered therewith, with a copy of such Mortgage Loan Schedule delivered to the
Lender (or, if another time is specified below for such release or delivery, at
such other time):
(I) With respect to each Eligible Mortgage Loan:
(a) The original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________ without recourse" and
signed in the name of the last endorsee (the "Last Endorsee") by
an authorized Person (in the event that the Mortgage Loan was
acquired by the Last Endorsee in a merger, the signature must be
in the following form: "[Last Endorsee], successor by merger to
[name of predecessor]"; in the event that the Mortgage Loan was
acquired or originated by the Last Endorsee while doing business
under another name, the signature must be in the following
form: "[Last Endorsee], formerly known as [previous name]").
(b) The original of the guarantee executed in connection with the
Mortgage Note (if any).
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(c) The original Mortgage with evidence of recording thereon, or a
copy thereof together with an Officer's Certificate of the title
company or recording office certifying that such represents a
true and correct copy of the original and that such original has
been submitted or promptly after closing will be submitted for
recordation in the appropriate governmental recording office of
the jurisdiction where the Mortgaged Property is located.
(d) The originals of all assumption, modification, consolidation or
extension agreements relating to the Mortgage with evidence of
recording thereon, or copies thereof together with an Officer's
Certificate of the title company or recording office certifying
that such represent true and correct copies of the originals and
that such originals have each been submitted or promptly after
closing will be submitted for recordation in the appropriate
governmental recording office of the jurisdiction where the
Mortgaged Property is located.
(e) The original Assignment of Mortgage in blank for each Mortgage
Loan, in form and substance acceptable for recording and signed
in the name of the Last Endorsee (in the event that the Mortgage
Loan was acquired by the Last Endorsee in a merger, the
signature must be in the following form: "[Last Endorsee],
successor by merger to [name of predecessor]"; in the event that
the Mortgage Loan was acquired or originated while doing
business under another name, the signature must be in the
following form: "[Last Endorsee], formerly known as [previous
name]").
(f) The originals of all intervening assignments of mortgage with
evidence of recording thereon, or copies thereof together with
an Officer's Certificate of the title company or recording
office certifying that such represent true and correct copies of
the originals and that such originals have each been submitted
or promptly after closing will be submitted for recordation in
the appropriate governmental recording office of the
jurisdiction where the Mortgaged Property is located.
(g) The (i) original attorney's opinion of title and abstract of
title or (ii) the original mortgagee title insurance policy, or
(iii) if the original mortgagee title insurance policy has not
been issued, the irrevocable commitment to issue the same.
(h) The original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage
Loan.
(i) The original assignment of leases and rents, if any, with
evidence of recording thereon, or a copy thereof together with
an Officer's Certificate of the title company or recording
office certifying that such copy represents a true and correct
copy of the original that has been or will, on the Funding Date
be submitted for recordation in the appropriate governmental
recording office of the jurisdiction where the Mortgaged
Property is located.
(j) The original assignment of assignment of leases and rents, if
any, from the Borrower in blank, in form and substance
acceptable for recording.
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(k) A copy of the UCC-1 Financing Statements, certified as true and
correct by the Borrower, and all necessary UCC-3 Continuation
Statements with evidence of filing thereon or copies thereof
certified by the Borrower to have been sent or promptly after
closing will be sent for filing, and UCC-3 Assignments executed
by the Borrower in blank, which UCC-3 Assignments shall be in
form and substance acceptable for filing.
(l) An environmental indemnity agreement (if any).
(m) An omnibus assignment in blank (if any).
(n) A disbursement letter from the Mortgagor to the original
mortgagee (if any).
(o) Mortgagor's certificate or title affidavit (if any).
(p) A survey of the Mortgaged Property (if any).
(q) A copy of the Mortgagor's Opinion of Counsel (if any).
(II) With Respect to all Asset Files:
From time to time, the Borrower shall forward to the Custodian
additional original documents or additional documents evidencing
any assumption, modification (subject to Xxxxxxx Xxxxx
approval), consolidation or extension of a Mortgage Loan
approved by the Borrower, in accordance with the terms of the
Loan Agreement, and upon receipt of any such other documents,
the Custodian shall hold such other documents as the Lender
shall request from time to time.
With respect to any documents which have been delivered or are
being delivered to recording offices for recording and have not
been returned to the Borrower in time to permit their delivery
hereunder at the time required, in lieu of delivering such
original documents, title company or recording office shall
deliver to Lender a true copy thereof with an Officer's
Certificate certifying that such copy is a true, correct and
complete copy of the original, which has been transmitted for
recordation. The Borrower shall deliver such original documents
to the Custodian promptly when they are received.
Section 3. Custodial Identification Certificate;
Mortgage Loan Schedule and Exception Report; Trust
Receipt.
(a) With respect to Eligible Mortgage Loans, no later than 10:00
a.m., New York City time, two (2) Business Days prior to each Funding Date, the
Borrower shall provide the Custodian with a Custodial Identification Certificate
and a related Mortgage Loan Schedule (such information contained on the Mortgage
Loan Schedule shall be delivered to the Custodian in computer-readable form)
with respect to the Eligible Mortgage Loans to be pledged to the Lender on such
Funding Date. If the Custodian has received such Custodial Identification
Certificate by the time set forth above, and has received a Mortgage File for a
Mortgage Loan identified on the Mortgage Loan Schedule attached thereto by 12:00
p.m.,
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New York City time two (2) Business Days prior to a Funding Date, then on such
Funding Date, the Custodian will deliver, via facsimile and by modem, no later
than 12:00 p.m., New York City time, to the Lender a Mortgage Loan Schedule and
Exception Report for each Mortgage Loan pledged hereunder on such date, with
Exceptions identified by the Custodian as current as of the date and time of
delivery of such Mortgage Loan Schedule and Exception Report.
(b) Notwithstanding and in addition to the foregoing, on each
Business Day, the Custodian shall deliver to the Borrower and the Lender, via
facsimile or modem, a Mortgage Loan Schedule and Exception Report, in each case
no later than 2:00 p.m., New York City time, which shall reflect the Exceptions
identified by the Custodian as of the close of business on the Business Day
prior to the date of delivery of the applicable Mortgage Loan Schedule and
Exception Report.
(c) Each Mortgage Loan Schedule and Exception Report shall list all
Exceptions using such codes as shall be in form and substance agreed to by the
Custodian and the Lender. The delivery of each Mortgage Loan Schedule and
Exception Report to the Lender shall be the Custodian's representation that,
other than the Exceptions listed as part of the Exception Report: (i) all
documents required to be delivered in respect of such Mortgage Loan pursuant to
Section 2 of this Custodial Agreement have been delivered and are in the
possession of the Custodian as part of the Mortgage File for such Mortgage Loan,
(ii) all such documents have been reviewed by the Custodian in accordance with
the review procedures attached hereto as Annex 4 (the "Review Procedures") and
appear on their face to be regular and to relate to such Mortgage Loan and to
satisfy the requirements set forth in Section 2 of this Custodial Agreement,
(iii) the amount of the Mortgage Note is the same as the amount specified on the
related Mortgage, and based upon a review of the Mortgage Note, items (a), (b),
(c), (d), (f), and (g) of Annex 1 as set forth in the Mortgage Loan Schedule
delivered by the Borrower to the Custodian are the same as shown in the Mortgage
Note and (iv) each Mortgage Loan identified on such Mortgage Loan Schedule and
Exception Report is being held by the Custodian as the bailee for the Lender
and/or its designees pursuant to this Agreement.
(d) In connection with a Mortgage Loan Schedule and Exception Report
delivered hereunder by the Custodian, the Custodian shall make no
representations as to and shall not be responsible to verify (i) the validity,
legality, enforceability, due authorization, recordability, sufficiency, or
genuineness of any of the documents contained in each Mortgage File or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan. Subject to the following sentence, the Borrower and the Lender hereby give
the Custodian notice that from and after the Funding Date, the Lender shall have
a security interest in each Mortgage Loan identified on a Mortgage Loan Schedule
and Exception Report until such time that the Custodian receives written notice
from the Lender that the Lender no longer has a security interest in such
Mortgage Loan (pursuant to Section 26 or otherwise). In the event that the
Lender does not make a Loan to the Borrower prior to 3:00 p.m., New York City
time, on such Funding Date, upon notice thereof from the Borrower, acknowledged
by the Lender, the Custodian shall hold or release to the Borrower, pursuant to
the Borrower's written instructions, the Mortgage Loans in respect of the
Mortgage Loan Schedule and Exception Report delivered by the Custodian on such
Funding Date. Each Mortgage Loan Schedule and Exception Report delivered to the
Lender by the Custodian, via facsimile or by modem, shall be deemed superseded
and canceled upon the delivery of a subsequent Mortgage Loan Schedule and
Exception Report.
(e) In addition to the foregoing, on the initial Funding Date, the
Custodian shall deliver to the Lender a Trust Receipt with a Mortgage Loan
Schedule and Exception Report attached thereto. Each Mortgage Loan Schedule and
Exception Report delivered by the Custodian to the Lender shall supersede and
cancel the Mortgage Loan Schedule and Exception Report previously delivered by
the Custodian to the Lender hereunder, and shall replace the then existing
Mortgage Loan Schedule and
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Exception Report to be attached to the Trust Receipt. Notwithstanding anything
to the contrary set forth herein, in the event that the Mortgage Loan Schedule
and Exception Report attached to the Trust Receipt is different from the most
recently delivered Mortgage Loan Schedule and Exception Report, then the most
recently delivered Mortgage Loan Schedule and Exception Report shall control and
be binding upon the parties hereto.
Section 4. Obligations of the Custodian.
(a) The Custodian shall maintain continuous custody of all items
constituting the Mortgage Files in secure facilities in accordance with
customary standards for such custody and shall reflect in its records the
interest of the Lender therein. Each Mortgage Note (and Assignment of Mortgage)
shall be maintained in fireproof facilities.
(b) With respect to the documents constituting each Mortgage File,
the Custodian shall (i) act exclusively as the bailee of, and custodian for, the
Lender, (ii) hold all documents constituting such Mortgage File received by it
for the exclusive use and benefit of the Lender, and (iii) make disposition
thereof only in accordance with the terms of this Custodial Agreement or with
written instructions furnished by the Lender; provided, however, that in the
event of a conflict between the terms of this Custodial Agreement and the
written instructions of the Lender, the Lender's written instructions shall
control.
(c) In the event that (i) the Lender, the Borrower or the Custodian
shall be served by a third party with any type of levy, attachment, writ or
court order with respect to any Mortgage File or any document included within a
Mortgage File or (ii) a third party shall institute any court proceeding by
which any Mortgage File or a document included within a Mortgage File shall be
required to be delivered otherwise than in accordance with the provisions of
this Custodial Agreement, the party receiving such service shall promptly
deliver or cause to be delivered to the other parties to this Custodial
Agreement copies of all court papers, orders, documents and other materials
concerning such proceedings. The Custodian shall, to the extent permitted by
law, continue to hold and maintain all the Mortgage Files that are the subject
of such proceedings pending a final, nonappealable order of a court of competent
jurisdiction permitting or directing disposition thereof. Upon final
determination of such court, the Custodian shall dispose of such Mortgage File
or any document included within such Mortgage File as directed by such court.
Expenses of the Custodian incurred as a result of such proceedings shall be
borne by the Borrower.
(d) The Lender hereby acknowledges that the Custodian shall not be
responsible for the validity and perfection of the Lender's security interest in
the Collateral hereunder, other than the Custodian's obligation to take
possession of Collateral as set forth in Section 2 hereof.
Section 5. Release of Collateral.
(a) From time to time until the Custodian is otherwise notified by
the Lender, which notice shall be given by the Lender only following the
occurrence of an Event of Default, the Custodian is hereby authorized upon
receipt of written request of the Borrower to release documentation relating to
Mortgage Loans in the possession of the Custodian to the Borrower, or its
designee, for the purpose of correcting documentary deficiencies relating
thereto against a Request for Release and Receipt executed by the Borrower and
consented to by the Lender, (not to exceed the lesser of 10 files or 2% of the
outstanding borrowings, subject to Xxxxxxx Xxxxx approval for amounts that
exceed the threshold) in the form of Annex 5-A hereto. The Borrower or its
designee shall return
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to the Custodian each document previously released from the Custodian's Mortgage
File within 14 calendar days of receipt thereof. The Borrower hereby further
represents and warrants to the Lender that any such request by the Borrower for
release of Collateral shall be solely for the purposes of correcting clerical or
other non-substantial documentation problems in preparation for returning such
Collateral to the Custodian for ultimate sale or exchange and that the Borrower
has requested such release in compliance with all terms and conditions of such
release set forth in the Loan Agreement. The Lender hereby acknowledges that the
Custodian's obligations with respect to any documents so released to the
Borrower or its designee pursuant to this Section 5(a) shall be limited to
recording the Custodian's receipt thereof upon the return of such documents to
the Custodian by the Borrower or its designee.
(b) (i) From time to time until otherwise notified by the Lender,
which notice shall be given by the Lender only following the occurrence of an
Event of Default, the Custodian is hereby authorized upon receipt of written
request of the Borrower and consent thereto by the Lender to release Mortgage
Files in the possession of the Custodian to a third-party purchaser or such
third party purchaser's custodian for the purpose of resale thereof against a
Request for Release executed by the Borrower in the form of Annex 5-B hereto. On
such Request for Release, the Borrower shall indicate the Mortgage Loans to be
sold, the amount of sale proceeds anticipated to be received, the date of such
anticipated sale, the name and address of the Person to whom the Mortgage Files
are to be delivered, and the preferred method of delivery.
(ii) Any transmittal of documentation for Mortgage Loans in the
possession of the Custodian in connection with the sale thereof to a third-party
purchaser will be under cover of a transmittal letter substantially in the form
attached hereto as Annex 11 duly completed by the Custodian and executed by the
Custodian. Any transmittal of documentation for Mortgage Loans in the possession
of the Custodian in connection with the shipment to a custodian or trustee in
connection with the formation of a mortgage pool supporting a mortgage-backed
security (an "MBS") will be under cover of a transmittal letter substantially in
the form attached hereto as Annex 11. It is acknowledged and agreed by the
parties hereto that the Custodian shall have no obligation to obtain written
acknowledgment of receipt from the addressee of any transmittal or other letter
sent by the Custodian hereunder. Promptly upon (x) the remittance by such
third-party purchaser of the full purchase price of the Mortgage Loan or (y) the
issuance of such MBS, the Lender shall notify the Custodian thereof.
(c) With the prior written consent of the Lender, in each case, the
Borrower may substitute for one or more Eligible Mortgage Loans constituting the
Collateral one or more substitute Eligible Mortgage Loans or obtain the release
of one or more Mortgage Loans constituting Collateral hereunder; provided that,
after giving effect to such substitution or release, the Secured Obligations
then outstanding shall not exceed the permitted amount, which determination
shall be made solely by the Lender. In connection with any such requested
substitution or release, the Borrower will provide notice to the Custodian and
the Lender no later than 3:00 p.m., New York City time, on the date of such
request, specifying the Mortgage Loans to be substituted for or released and the
substitute Mortgage Loans to be pledged hereunder in substitution therefor, if
any, and shall deliver with such notice a Custodial Identification Certificate
and a revised Mortgage Loan Schedule indicating any substitute Mortgage Loans.
The Custodian will effect the requested substitution or release no later than
5:00 p.m., New York City time, one Business Day following the day on which such
request was made after the Custodian has certified to the Lender on such
Business Day that the matters set forth in clauses (i) and (ii) of Section 3(c)
hereof with respect to any substitute Mortgage Loans are true and correct. Each
such substitution or release shall be deemed to be a representation and warranty
by the Borrower that any substitute Mortgage Loans are Eligible Mortgage Loans
and that after giving effect
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to such substitution or release, the Secured Obligations then outstanding shall
not exceed the Borrowing Base.
(d) So long as no Event of Default has occurred and is continuing
and margin requirements are satisfied, the Custodian and the Lender shall take
such steps as they may reasonably be directed from time to time by the Borrower
in writing, which the Borrower deems necessary and appropriate, to transfer
promptly and deliver to the Borrower any Mortgage File in the possession of the
Custodian relating to any Mortgage Loan previously included in the Borrowing
Base as an Eligible Mortgage Loan but which the Borrower, with the written
consent of the Lender, has notified the Custodian has ceased to be an Eligible
Mortgage Loan.
(e) Following notification by the Lender (which may be by facsimile)
to the Custodian that an Event of Default has occurred and is continuing, the
Custodian shall not release, or incur any liability to the Borrower or any other
Person for refusing to release, any item of Collateral to the Borrower or any
other Person without the express prior written consent and at the direction of
the Lender.
Section 6. Fees and Expenses of Custodian.
The Custodian shall charge such fees for its services under this
Custodial Agreement as are set forth in a separate agreement between the
Custodian and the Borrower, the payment of which fees, together with the
Custodian's expenses in connection herewith, shall be solely the obligation of
the Borrower.
Section 7. Removal or Resignation of Custodian.
(a) The Custodian may at any time resign and terminate its
obligations under this Custodial Agreement upon at least 60 days' prior written
notice to the Borrower and the Lender. Promptly after receipt of notice of the
Custodian's resignation, the Lender shall appoint, by written instrument, a
successor custodian, subject to written approval by the Borrower (which approval
shall not be unreasonably withheld). One original counterpart of such instrument
of appointment shall be delivered to each of the Borrower, the Custodian and the
successor custodian.
(b) The Lender, with the consent of the Borrower, upon at least 60
days' prior written notice to the Custodian and the Lender, may remove and
discharge the Custodian (or any successor custodian thereafter appointed) from
the performance of its obligations under this Custodial Agreement. Promptly
after the giving of notice of removal of the Custodian, the Lender shall
appoint, by written instrument, a successor custodian, subject to written
approval by the Borrower (which approval shall not be unreasonably withheld).
One original counterpart of such instrument of appointment shall be delivered to
each of the Lender, the Borrower, the Custodian and the successor custodian.
(c) In the event of any such resignation or removal, the Custodian
shall promptly transfer to the successor custodian, as directed in writing, all
the Mortgage Files being administered under this Custodial Agreement and, if the
endorsements on the Mortgage Notes and the Assignments of Mortgage have been
completed in the name of the Custodian, assign the Mortgages and endorse without
recourse the Mortgage Notes to the successor Custodian or as otherwise directed
by the Lender. The cost of the shipment of Mortgage Files arising out of the
resignation of the Custodian shall be at the expense of the Custodian; and any
cost of shipment arising out of the removal of the
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Custodian shall be at the expense of the Lender. The Borrower shall be
responsible for the fees and expenses of the successor custodian and the fees
and expenses for endorsing the Mortgage Notes and assigning the Mortgages to the
successor custodian if required pursuant to this paragraph.
Section 8. Examination of Mortgage Files.
Upon reasonable prior notice to the Custodian and at the Borrower's
expense, the Lender, the Borrower and each of their respective agents,
accountants, attorneys and auditors will be permitted during normal business
hours to examine the Mortgage Files, documents, records and other papers in the
possession of or under the control of the Custodian relating to any or all of
the Mortgage Loans.
Section 9. Insurance of Custodian.
At its own expense, the Custodian shall maintain at all times during
the existence of this Custodial Agreement and keep in full force and effect
fidelity insurance, theft of documents insurance, forgery insurance and errors
and omissions insurance. All such insurance shall be in amounts, with standard
coverage and subject to deductibles, all as is customary for insurance typically
maintained by banks which act as custodian of collateral substantially similar
to the Collateral. Upon request, the Lender shall be entitled to receive a
certificate of the respective insurer that such insurance is in full force and
effect.
Section 10. Representations and Warranties.
The Custodian represents and warrants to the Lender that:
(i) the Custodian has the corporate power and authority and the
legal right to execute and deliver, and to perform its obligations under,
this Custodial Agreement, and has taken all necessary corporate action to
authorize its execution, delivery and performance of this Custodial
Agreement;
(ii) no consent or authorization of, filing with, or other act by or
in respect of, any arbitrator or Governmental Authority and no consent of
any other Person (including, without limitation, any stockholder or
creditor of the Custodian) is required in connection with the execution,
delivery, performance, validity or enforceability of this Custodial
Agreement;
(iii) this Custodial Agreement has been duly executed and delivered on
behalf of the Custodian and constitutes a legal, valid and binding
obligation of the Custodian enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (whether
enforcement is sought in a proceeding in equity or at law); and
(iv) the Custodian is not an Affiliate of the Borrower.
Section 11. Statements.
Promptly following the request from time to time of the Lender or the
Borrower, the Custodian shall provide the Lender or the Borrower, as applicable,
with a list of all the Mortgage Loans for which the Custodian holds a Mortgage
File pursuant to this Custodial Agreement. Such list
-10-
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shall be in the form of a Mortgage Schedule and Exception Report. Upon the
reasonable prior written request of the Borrower or the Lender, the Custodian
shall make copies (at the expense of the Borrower) of any documents relating to
the Mortgage Loans pledged under the Loan Agreement for such requesting party.
Section 12. No Adverse Interest of Custodian.
By execution of this Custodial Agreement, the Custodian represents
and warrants that it currently holds, and during the existence of this Custodial
Agreement shall hold, no adverse interest, by way of security or otherwise, in
any Mortgage Loan, and hereby waives and releases any such interest which it may
have in any Mortgage Loan as of the date hereof. The Mortgage Loans shall not be
subject to any security interest, lien or right to set-off by Custodian or any
third party claiming through Custodian, and Custodian shall not pledge,
encumber, hypothecate, transfer, dispose of, or otherwise grant any third party
interest in, the Mortgage Loans.
Section 13. Indemnification of Custodian.
(a) The Borrower agrees to indemnify and hold the Custodian and its
directors, officers, agents and employees harmless against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever, including
reasonable attorney's fees, that may be imposed on, incurred by, or asserted
against it or them in any way relating to or arising out of this Custodial
Agreement or any action taken or not taken by it or them hereunder unless such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements (other than special, indirect, punitive or
consequential damages, which shall in no event be paid by the Custodian) were
imposed on, incurred by or asserted against the Custodian relating to or arising
out of a Custodial Delivery Failure or the Custodian's negligence, lack of good
faith or willful misconduct or breach of its obligations hereunder. The
foregoing indemnification shall survive any resignation or removal of the
Custodian or the termination or assignment of this Custodial Agreement.
(b) In the event that the Custodian fails to produce a Mortgage
Note, Assignment of Mortgage or any other document related to a Mortgage Loan
that was in its possession pursuant to Section 2 within two (2) Business Days
after required or requested by the Borrower or Lender (a "Custodial Delivery
Failure"), and provided that (i) Custodian previously delivered to the Lender a
Mortgage Loan Schedule and Exception Report which did not list such document as
an Exception on the related Funding Date; (ii) such document is not outstanding
pursuant to a Request for Release and Receipt in the form annexed hereto as
Annex 5-A; and (iii) such document was held by the Custodian on behalf of the
Borrower or Lender, as applicable, then the Custodian shall at its sole cost and
expense (a) with respect to any missing Mortgage Note, promptly deliver to the
Lender or Borrower upon request, a Lost Note Affidavit in the form of Annex 9
hereto and (b) with respect to any missing document related to such Mortgage
Loan, including but not limited to a missing Mortgage Note, (1) indemnify the
Borrower or Lender in accordance with Section 13 (c) below and, (2) at the
Lender's option, at any time the long term obligations of the Custodian are
rated below the second highest rating category of Xxxxx'x Investors Service,
Inc. or Standard and Poor's Ratings Group, a division of The XxXxxx-Xxxx, Inc.,
obtain and maintain an insurance bond in the name of the Lender, and its
successors in interest and assigns, insuring against any losses associated with
the loss of such document, in an amount equal to the then outstanding principal
balance of the related Mortgage Loan or such lesser amount requested by the
Lender in the Lender's sole discretion.
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12
(c) The Custodian agrees to indemnify and hold the Lender and
Borrower, and their respective designees harmless against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever (other than
special, indirect, punitive or consequential damages, which shall in no event be
paid by the Custodian as incurred) including reasonable attorney's fees, that
may be imposed on, incurred by, or asserted against it or them in any way
relating to or arising out of a Custodial Delivery Failure or the Custodian's
negligence, lack of good faith or willful misconduct or breach of its
obligations hereunder. The foregoing indemnification shall survive any
termination or assignment of this Custodial Agreement.
Section 14. Reliance of Custodian.
In the absence of bad faith on the part of the Custodian, the
Custodian may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any request, instruction,
certificate, opinion or other document furnished to the Custodian, reasonably
believed by the Custodian to be genuine and to have been signed or presented by
the proper party or parties and conforming to the requirements of this Custodial
Agreement; but in the case of any Mortgage Loan Document or other request,
instruction, document or certificate which by any provision hereof is
specifically required to be furnished to the Custodian, the Custodian shall be
under a duty to examine the same in accordance with the requirements of this
Custodial Agreement.
Section 15. Term of Custodial Agreement.
Promptly after written notice from the Lender of the termination of
the Loan Agreement and payment in full of all amounts owing to the Lender
thereunder and under the Note, the Custodian shall deliver all documents
remaining in the Mortgage Files to the Borrower, and this Custodial Agreement
shall thereupon terminate.
Section 16. Notices.
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given when received by the recipient party
at the address shown on its signature page hereto, or at such other addresses as
may hereafter be furnished to each of the other parties by like notice. The
Custodian's office is located at the address set forth on its signature page
hereto, and the Custodian shall notify the Lender and the Borrower if such
address should change.
Section 17. Governing Law.
This agreement shall be governed and construed in accordance with the
laws of the State of New York without giving effect to the conflict of laws
principles, thereof. Each party hereto agrees that (I) any dispute or
controversy arising out of or relating to this Agreement shall be submitted to
arbitration before the American Arbitration Association, (II) the arbitration
proceedings shall be conducted in New York, New York and (III) the decision of
the arbitrators shall be final and judgment may be entered on the award. In the
event that such arbitration is unavailable, each party hereto hereby (a) submits
to the jurisdiction of the United States Federal and New York State courts
situated in the City, County and State of New York, (b) agrees that any
litigation arising out of or relating to this Agreement shall be brought in such
courts and (c) waives trial by jury.
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Section 18. Authorized Representatives.
Each individual designated as an authorized representative of the
Lender or its successors or assigns, the Borrower and the Custodian,
respectively (an "Authorized Representative"), is authorized to give and receive
notices, requests and instructions and to deliver certificates and documents in
connection with this Custodial Agreement on behalf of the Lender, the Borrower
and the Custodian, as the case may be, and the specimen signature for each such
Authorized Representative, initially authorized hereunder, is set forth on
Annexes 6, 7 and 8 hereof, respectively. From time to time, the Lender, the
Borrower and the Custodian or their respective successors or permitted assigns
may, by delivering to the others a revised annex, change the information
previously given pursuant to this Section 18, but each of the parties hereto
shall be entitled to rely conclusively on the then current annex until receipt
of a superseding annex.
Section 19. Amendment.
This Custodial Agreement may be amended from time to time by written
agreement signed by the Borrower, the Lender and the Custodian.
Section 20. Cumulative Rights.
The rights, powers and remedies of the Custodian and the Lender under
this Custodial Agreement shall be in addition to all rights, powers and remedies
given to the Custodian and the Lender by virtue of any statute or rule of law,
the Loan Agreement or any other agreement, all of which rights, powers and
remedies shall be cumulative and may be exercised successively or concurrently
without impairing the Lender's security interest in the Collateral.
Section 21. Binding Upon Successors.
All rights and obligations of the Custodian and the Lender under this
Custodial Agreement shall inure to the benefit of and bind the Custodian and the
Lender and their successors and permitted assigns, and all rights and
obligations of the Borrower shall inure to the benefit of and bind its
successors and assigns.
Section 22. Entire Agreement; Severability.
This Custodial Agreement and the other Loan Documents contain the
entire agreement with respect to the Collateral among the Custodian, the Lender
and the Borrower. If any of the provisions of this Custodial Agreement shall be
held invalid or unenforceable, this Custodial Agreement shall be construed as if
not containing such provisions, and the rights and obligations of the parties
hereto shall be construed and enforced accordingly.
Section 23. Execution In Counterparts.
This Custodial Agreement may be executed in counterparts, each of
which when so executed shall be deemed to be an original and all of which when
taken together shall constitute one and the same agreement.
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Section 24. Tax Reports.
The Custodian shall not be responsible for the preparation or filing
of any reports or returns relating to federal, state or local income taxes with
respect to this Custodial Agreement, other than in respect of the Custodian's
compensation or for reimbursement of expenses.
Section 25. Hypothecating of the Mortgage Loans by the Lender.
Nothing in this Custodial Agreement shall preclude the lender from
engaging in repurchase transactions with the Mortgage Loans or otherwise
selling, transferring, pledging or hypothecating the Mortgage Loans (any such
repurchase transaction, sale, transfer, pledge or hypothecation being herein
referred to as an "Hypothecation"), but no such Hypothecation shall relieve the
Lender of its obligations to the related Borrower hereunder.
Section 26. Notice and Designation of Collateral Agent.
Notwithstanding anything to the contrary contained in this Agreement,
a Collateral Agent may be designated hereunder for the Mortgage Loans from time
to time subject to this Agreement by delivery to the Custodian of a Notice of
Collateral Agent. From and after the receipt by the Custodian of a Notice of
Collateral Agent as provided hereunder until a Collateral Agent Termination, (a)
this Section shall supersede Section 25, and (b) the Custodian shall promptly
xxxx its books and records to reflect that the Mortgage Loans are being held for
the benefit of the Collateral Agent as representative secured party of the
persons or entities to whom the obligations secured by such Mortgage Loans are
owed.
Upon the designation of a Collateral Agent, the Custodian shall
promptly deliver to the Collateral Agent a Trust Receipt and a Mortgage Loan
Schedule and Exception Report indicating that the Custodian is holding the
related Mortgage Loans for the benefit of the Collateral Agent as representative
secured party for Lender and the persons or entities to whom Lender owes the
obligations secured by such Mortgage Loans. The delivery of such Trust Receipt
and Mortgage Loan Schedule and Exception Report shall satisfy the requirements
of delivery thereof to the Lender hereunder so long as no Collateral Agent
Termination has occurred. Any amendments or modifications to such Trust Receipt
and Mortgage Loan Schedule and Exception Report shall be delivered to the
Collateral Agent. The Custodian is hereby notified of the security interest in
the Mortgage Loans of the Collateral Agent as representative secured party for
Lender and the persons or entities to whom Lender owes the obligations secured
by such Mortgage Loans.
The Custodian and the Borrower shall each treat the Collateral Agent
as the Lender under this Agreement in accordance with the provisions of this
Section. Without limiting the generality of the foregoing, upon receipt of
Notice of Collateral Agent from the then Lender and the Collateral Agent and
until receipt by the Custodian of Collateral Agent Termination, the Custodian
and the Borrower shall each report to and correspond and communicate with the
Collateral Agent and in all other regards treat the Collateral Agent as the
Lender hereunder with respect to the Mortgage Loans. Upon such Notice of
Collateral Agent, the Collateral Agent shall have all rights of the Lender to
enforce the covenants and conditions set forth in this Agreement with respect to
the Mortgage Loans, and the Custodian and the Borrower, respectively, shall each
follow the instructions of the Collateral Agent under this Agreement. The
Collateral Agent shall have the right to give any waivers or consents required
or allowed under this Agreement, and such waivers and consents shall be binding
upon the Lender and any party for whom the Collateral Agent acts as
representative secured party as if the
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Lender or such party had given the same. All amounts due the Lender under this
Agreement shall be remitted to the Collateral Agent in accordance with the
Collateral Agent's instructions.
The Custodian shall send all reports and like communications required
to be delivered to the Lender under this Agreement to the Collateral Agent. In
addition to all other obligations of the Custodian hereunder, upon the Notice of
Collateral Agent, the Custodian shall deliver to the Collateral Agent by
bulletin board, electronic mail or such other medium acceptable to the
Collateral Agent in its discretion, in a computer-readable format acceptable to
the Collateral Agent, (a) by 11:00 a.m., New York time on each Funding Date, the
Trust Receipt with respect to each Mortgage Loan with Exceptions identified by
the Custodian as of the Business Day prior to the date and time of delivery of
such Mortgage Loan Schedule and Exception Report and (b) by 12:00 noon, New York
time on each Business Day the Mortgage Loan Schedule and Exception Report with
respect to each Mortgage Loan with Exceptions identified by the Custodian as of
the Business Day prior to the date and time of delivery of such Mortgage Loan
Schedule and Exception Report. Unless the Collateral Agent otherwise requests in
writing, the information described herein shall be delivered in lieu of the
identical information required to be delivered to the Lender pursuant to this
Agreement.
The Custodian and the Borrower shall continue to deal with the
Collateral Agent and hold Mortgage Loans for the Collateral Agent in accordance
with the provisions of this Section unless and until the Custodian and the
Borrower each receives written notice from the Collateral Agent appointed
hereunder and the then current Lender under this Agreement (as evidenced by
delivery to the Custodian of executed Assignment and Assumption Agreements
showing a complete chain of assignment of this Agreement from the initial Lender
hereunder to the then current Lender) that the then current Lender has
terminated the Collateral Agent (such notice, the "Collateral Agent
Termination") Upon receipt of the Collateral Agent Termination, the Custodian
shall no longer remit reports to the Collateral Agent or hold Mortgage Loans for
the benefit of the Collateral Agent, but shall instead hold Mortgage Loans for
the benefit of the Lender. Upon the Collateral Agent Termination, a new
Collateral Agent may be designated in accordance with the provisions set forth
herein.
The Lender agrees to indemnify and hold the Custodian and each of its
directors, officers, agents and employees harmless against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements, including reasonable attorney's fees, that may
be imposed on, incurred by, or asserted against it or them in any way relating
to or arising out of any action taken or not taken by it or them in accordance
with the instructions of the Collateral Agent hereunder, unless (a) such
instructions from the Collateral Agent are inconsistent with the terms of this
Agreement or (b) such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements (other than special,
indirect, punitive or consequential damages, which shall in no event be paid by
the Custodian) were imposed on, incurred by or asserted against the Custodian
because of the breach by the Custodian of its obligations hereunder, which
breach was caused by negligence, lack of good faith or willful misconduct on the
part of the Custodian or any of its directors, officers, agents or employees.
Section 27. Joint and Several Liability. Borrower hereby acknowledges
and agrees that it shall be jointly and severally liable for all
representations, warranties, covenants, obligations and indemnities of the
Borrowers hereunder. Business Mortgage Investors, Inc. hereby acknowledges and
agrees that it shall be liable for all representations, warranties, covenants,
obligations and indemnities of the Borrowers hereunder only to the extent of its
pro rata portion of the Secured Obligations.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this Custodial Agreement was duly executed by the
parties hereto as of the day and year first above written.
ALLIED CAPITAL COMMERCIAL CORPORATION
By: /s/ XXXX X. XXXXXXXX
-----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
Address for Notices:
0000 X Xxxxxx, X.X.
0xx Xxxxx
Xxxxxxxxxx, X.X. 00000
Attention: Xx. Xxxx X. Xxxxxxxx
Telecopier No.: (000) 000-0000
Telephone No: (000) 000-0000
BUSINESS MORTGAGE INVESTORS, INC.
By: /s/ XXXX X. XXXXXXXX
-----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
Address for Notices:
0000 X Xxxxxx, X.X.
0xx Xxxxx
Xxxxxxxxxx, X.X. 00000
Attention: Xx. Xxxx X. Xxxxxxxx
Telecopier No.: (000) 000-0000
Telephone No: (000) 000-0000
17
LASALLE NATIONAL BANK
By: /s/ XXXXXXX XXXXXXX
-----------------------------
Name: Xxxxxxx Xxxxxxx
Title:
Address for Notices:
LaSalle National Bank
00 Xxxxxxxxx Xxxxx Xxxx.
Xxxxx 000
Xxx Xxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Mr. Xxxxxxx Xxxxxxx
Telephone No.: 000-000-0000
Telecopier No.: 847-427-
18
XXXXXXX XXXXX MORTGAGE CAPITAL INC.
By: /s/ XXXXX XXXXXXX
-----------------------------
Name: Xxxxx Xxxxxxx
Title:
Address for Notices:
Xx. Xxxxx Xxxxxxx
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Telephone No: 000-000-0000
Telecopier No: 000-000-0000
Additional Notices:
World Financial Center
Xxxxx Xxxxx, 0xx xxxxx, Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxx Xxxxxxxx
Telephone No.: 000-000-0000
Telecopier No.: 000-000-0000
19
Annex 1
to Custodial Agreement
Information to be provided with respect to
Eligible Mortgage Loans
For each Mortgage Loan, the Borrower shall provide the following
information:
(a) the mortgage loan identifying number;
(b) the mortgagor's name;
(c) the mortgaged property's xxxxxx xxxxxxx, xxxx, xxxxx and zip
code;
(d) the original balance;
(e) the current principal balance;
(f) the original mortgage interest rate;
(g) the original term;
(h) the remaining term;
(i) the date of the last payment made and the due date of such
payment; and
(j) the Collateral Value of such Mortgage Loan.
20
Annex 2
to Custodial Agreement
TRUST RECEIPT
Xxxxxxx Xxxxx Mortgage Capital Inc.
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Xx. Xxxxxx Xxxxxxxxxx
____________, 199_
Re: Custodial Agreement, dated as of August [___], 1997 (the "Custodial
Agreement"), among Allied Capital Commercial Corporation, as a
Borrower and Business Mortgage Investors, Inc., as a Borrower (each a
"Borrower", collectively, the "Borrowers"), LaSalle National Bank, as
Custodian, and Xxxxxxx Xxxxx Mortgage Capital Inc., as Lender.
Ladies and Gentlemen:
In accordance with the provisions of Section [3(e)] [26] of the
above-referenced Custodial Agreement (capitalized terms not otherwise defined
herein having the meanings ascribed to them in the Custodial Agreement), the
undersigned, as the Custodian, hereby certifies as to each Mortgage Loan
described in the attached Mortgage Loan Schedule and Exception Report all
matters (subject to the Exceptions listed therein) set forth in Section 3(c) of
the Custodial Agreement.
The delivery of the attached Mortgage Loan Schedule and Exception Report
evidences that (i) the Custodian has reviewed all documents required to be
delivered in respect of each Mortgage Loan listed herein pursuant to Section 2
and Annex 4 of the Custodial Agreement, and such documents other than the
Exceptions listed herein are in the possession of the Custodian as part of the
Mortgage File for such Mortgage Loan, (ii) the Custodian is holding each
Mortgage Loan identified on the Mortgage Loan Schedule and Exception Report,
pursuant to the Custodial Agreement, as the bailee of and custodian for [the
Lender] [_______________ [Name of Collateral Agent] as representative secured
party for the benefit of the Lender and the persons or entities to whom Lender
owes the obligations secured by such Mortgage Loans] and (iii) such documents
have been reviewed by the Custodian and appear on their face to be regular and
to relate to such Mortgage Loan and satisfy the requirements set forth in
Section 2 of the Custodial Agreement and the Review Requirements.
The Custodian makes no representations as to, and shall not be
responsible to verify, (i) the validity, legality, enforceability, due
authorization, recordability, sufficiency, or genuineness of any of the
documents contained in each Mortgage File or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
21
This Trust Receipt shall be deemed superseded and canceled upon the
issuance of a subsequent Trust Receipt to the Lender covering the Mortgage Loans
identified herein and the Lender shall thereupon promptly return this Trust
Receipt to the Custodian.
LASALLE NATIONAL BANK, Custodian
By:
-----------------------------
Name:
Title:
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Annex 3
to Custodial Agreement
CUSTODIAL IDENTIFICATION CERTIFICATE
On this _____ day of _____________ 199_, , under that certain
Custodial Agreement, dated as of ______, 199__ (the "Custodial Agreement"),
among ALLIED CAPITAL COMMERCIAL CORPORATION, as a Borrower and BUSINESS MORTGAGE
INVESTORS, INC., as a Borrower (each a "Borrower", collectively, the
"Borrowers"), LASALLE NATIONAL BANK, as Custodian, and XXXXXXX XXXXX MORTGAGE
CAPITAL INC., as Lender, the Borrowers do hereby instruct the Custodian to hold,
in its capacity as Custodian, the Mortgage Files with respect to the Mortgage
Loans listed on Attachment A hereto, which Mortgage Loans shall be subject to
the terms of the Custodial Agreement as of the date hereof.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Custodial Agreement.
IN WITNESS WHEREOF, the Borrowers have caused this Custodial
Identification Certificate to be executed and delivered by its duly authorized
officer as of the day and year first above written.
ALLIED CAPITAL COMMERCIAL CORPORATION
By:
-----------------------------
Name:
Title:
BUSINESS MORTGAGE INVESTORS, INC.
By:
-----------------------------
Name:
Title:
23
Attachment A
to Annex 3
to Custodial Agreement
PLEDGED MORTGAGE LOANS
[Attach appropriate Mortgage Loan Schedules]
24
Annex 4
to Custodial Agreement
REVIEW PROCEDURES
This Annex sets forth the Custodian's review procedures for each item
listed below delivered by the Seller pursuant to the Custodial Agreement (the
"Agreement") to which this Annex is attached. Capitalized terms used herein and
not defined herein shall have the meanings ascribed to them in the Agreement.
1. the Mortgage Note and the Mortgage each appear to bear an original
signature or signatures purporting to be the signature or signatures of the
Person or Persons named as the maker and Mortgagor or grantor, or in the case of
copies of the Mortgage permitted under Section 2 (I)(c) of the Agreement, that
such copies bear a reproduction of such signature;
2. the amount of the Mortgage Note is the same as the amount specified
on the related Mortgage;
3. the mortgagee is the same as the payee on the Mortgage Note
4. the Mortgage contains a legal description other than address, city
and state on the first page;
5. the notary section (acknowledgment) is present and attached to the
related Mortgage and is signed;
6. neither the original Mortgage Note, nor the copy of the Mortgage
delivered pursuant to the Agreement, nor the original Assignment of Mortgage
contain any notations on their face which appear in the good faith judgment of
the Custodian to evidence any claims, liens, security interests, encumbrances or
restrictions on transfer;
7. the Mortgage Note is endorsed in blank by the named holder or payee
thereof;
8. each original Assignment of Mortgage and any intervening assignment
of mortgage, if applicable, appears to bear the original signature of the named
mortgagee or beneficiary including any subsequent assignors (and any other
necessary party), as applicable, or in the case of copies permitted under
Section 2 (I)(f) of the Agreement, that such copies appear to bear a
reproduction of such signature of signatures and the Officer's Certificate of
the Borrower accompanying such copies appears to bear an original signature or a
reproduction of such signature, and the intervening assignments of mortgage
evidence an uninterrupted chain of assignment and transfer of the related
Mortgage from the originating Person to the borrower;
9. the date of each intervening assignment is on or after the date of
the related Mortgage and/or the immediately preceding assignment, as the case
may be;
10. the notary section (acknowledgment) is present and attached to each
intervening assignment and is signed; and
25
11. based upon a review of the Mortgage Note, items (a), (b), (c), (d),
(f), and (g) of Annex 1 as set forth in the Mortgage Loan Schedule delivered by
the Borrower to the Custodian are the same as shown in the Mortgage Note.
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Annex 5-A
to Custodial Agreement
Request for Release and Receipt
Date: __________, 19__
The undersigned, [ALLIED CAPITAL COMMERCIAL CORPORATION] [BUSINESS
MORTGAGE INVESTORS, INC.] (the "Borrower"), acknowledge receipt from LASALLE
NATIONAL BANK, acting as bailee of, and custodian for, (in such capacity, the
"Custodian") the exclusive benefit of XXXXXXX XXXXX MORTGAGE CAPITAL INC. (the
"Lender") (capitalized terms not otherwise defined herein are defined in that
certain Custodial Agreement, dated as of August [___], 1997 (the "Custodial
Agreement"), among Allied Capital Commercial Corporation, as a Borrower,
Business Mortgage Investors, Inc., as a Borrower, the Custodian, and the Lender,
of the following described documentation for the identified Mortgage Loan,
possession of which is entrusted to the Borrower solely for the purpose of
correcting documentary defects relating thereto:
Mortgagor Name Loan Number Note Amount Loan Document
It is hereby acknowledged that a security interest pursuant to the
Uniform Commercial Code in the Collateral hereinabove described and in the
proceeds of said Collateral has been granted to the Lender pursuant to the
Custodial Agreement.
In consideration of the aforesaid delivery by the Custodian, the
Borrower hereby agrees to hold said Collateral in trust for the Lender as
provided under and in accordance with all provisions of the Custodial Agreement
and to return said Collateral to the Custodian no later than the close of
business on the fourteenth day following the date hereof or, if such day is not
a Business Day, on the immediately preceding Business Day.
[ALLIED CAPITAL COMMERCIAL CORPORATION]
[BUSINESS MORTGAGE INVESTORS, INC.]
By:
-----------------------------
Name:
Title:
Documents returned to Custodian:
LASALLE NATIONAL BANK
By:
-------------------------------
Name:
Title:
Date:
-------------------------------
27
Annex 5-B
to Custodial Agreement
Request for Release
Date: __________, 19__
The undersigned, [ALLIED CAPITAL COMMERCIAL CORPORATION] [BUSINESS
MORTGAGE INVESTORS, INC.] (The "Borrower"), requests release from LASALLE
NATIONAL BANK, acting as agent, bailee and custodian (in such capacity
"Custodian") for the exclusive benefit of the lender (as that term and other
capitalized terms not otherwise defined herein are defined in that certain
Master Loan and Security Agreement (the "Security Agreement"), dated as of
August [__], 1997, among Allied Capital Commercial Corporation, as a Borrower,
Business Mortgage Investors, Inc., As a Borrower, and Xxxxxxx Xxxxx Mortgage
Capital Inc., As Lender, of the following described documentation for the
identified Mortgage Loans, possession of which shall be delivered to
____________________ (the "Approved Purchaser") in connection with the sale
thereof. The anticipated closing date for such sale is ______________ and the
anticipated purchase proceeds [MBS] shall equal: $__________________.
Mortgagor Name Loan Number Note Amount Loan Document
Delivered
Please send the referenced documentation to:
[NAME OF APPROVED PURCHASER ]
[ADDRESS]
[TELEPHONE]
[ATTENTION:]
28
Please deliver documents to the Approved Purchaser via
__________________, accompanied by a transmittal letter in the form of Annex
[11][12].
[ALLIED CAPITAL COMMERCIAL CORPORATION]
[BUSINESS MORTGAGE INVESTORS, INC.]
By:
--------------------------------------------------
Name:
Title:
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29
Annex 6
to Custodial Agreement
AUTHORIZED REPRESENTATIVES OF LENDER
Name Specimen Signature
------------------------- -------------------------
------------------------- -------------------------
------------------------- -------------------------
------------------------- -------------------------
------------------------- -------------------------
30
Annex 7
to Custodial Agreement
AUTHORIZED REPRESENTATIVES OF BORROWER
Name Specimen Signature
------------------------- -------------------------
------------------------- -------------------------
------------------------- -------------------------
------------------------- -------------------------
------------------------- -------------------------
31
Annex 8
to Custodial Agreement
AUTHORIZED REPRESENTATIVES OF CUSTODIAN
Name Specimen Signature
------------------------- -------------------------
------------------------- -------------------------
------------------------- -------------------------
------------------------- -------------------------
------------------------- -------------------------
32
Annex 9
to Custodial Agreement
FORM OF LOST NOTE AFFIDAVIT
I, as ___________________________ (title) of _______________________
(the "Custodian"), am authorized to make this Affidavit on behalf of the
Custodian. In connection with the administration of the Mortgage Loans held by
the Custodian on behalf of Xxxxxxx Xxxxx Mortgage Capital Inc. (the "Lender"),
_______________ (hereinafter called "Deponent"), being duly sworn, deposes and
says that:
1. Custodian's address is:
[CUSTODIAN'S Address]
2. Custodian previously delivered to the Lender an Asset Schedule
and Exception Report with respect to the Mortgage Note, executed by ____________
in favor of _______________ in the amount of $____________________ which did not
indicate such Mortgage Note is missing;
3. Such Mortgage Note and/or Assignment or Mortgage is not
outstanding pursuant to a Request for Release of Documents;
4. Aforesaid Mortgage Note and/or Assignment of Mortgage
(hereinafter called the "Original") has been lost;
5. Deponent has made or has caused to be made diligent search for
the Original and has been unable to find or recover same;
6. The Custodian was the Custodian of the Original at the time of
loss; and
7. Deponent agrees that, if said Original should ever come into
Custodian's possession, custody or power, Custodian will immediately and without
consideration surrender the Original to the Lender.
8. Attached hereto is a true and correct copy of (i) the Mortgage
Note, endorsed in blank by the Mortgagee, as provided by [BORROWER] or its
designee and (ii) the Mortgage which secures the Mortgage Note, which Mortgage
is recorded at ___________________
9. Deponent hereby agrees that the Custodian (a) shall indemnify
and hold harmless the Lender, its successors, and assigns, against any loss,
liability or damage, including reasonable attorney's fees, resulting from the
unavailability of any Originals, including but not limited to any loss,
liability or damage arising from (i) any false statement contained in this
Affidavit, (ii) any claim of any party that it has already purchased a mortgage
loan evidenced by the Originals or any interest in such mortgage loan, (iii) any
claim of any borrower with respect to the existence of terms of a Mortgage Loan
evidenced by the Originals, (iv) the issuance of new instrument in lieu thereof
and (v) any claim whether or not based upon or arising from honoring or refusing
to honor the Original when presented by anyone (items (i) through (iv) above are
hereinafter referred to as the "Losses") and (b) if required by any rating
agency in connection with placing such Originals into a structured and rated
33
transaction, shall obtain a surety bond from an insurer acceptable to the
applicable rating agency in an amount acceptable to such rating agency to cover
any Losses with respect to such Originals.
10. This Affidavit is intended to be relied on by the Lender, its
successors, and assigns and _______________________ represents and warrants that
it has the authority to perform its obligations under this Affidavit.
EXECUTED THIS ____ day of _______, 199_, on
behalf of the Custodian by:
-----------------------------------
Signature
-----------------------------------
Typed Name
On this _________ day of _______________________, 199_, before me
appeared ____________________________________________, to me personally know,
who being duly sworn did say that she/he is the ______________________________
of ______________________, and that said Affidavit of Lost Note was signed and
sealed on behalf of such corporation and said _____________________________
acknowledged this instrument to be the free act and deed of said corporation.
-------------------------------------
Notary Public in and for the
State of
----------------------------.
My Commission expires:
---------------.
-2-
34
Annex 10
to Custodial Agreement
NOTICE OF PLEDGE
[TO BE PROVIDED BY XXXXXXX XXXXX]
-3-
35
RIDER 14 A
Nothing in this custodial agreement shall preclude the lender from engaging in
repurchase transactions with the Mortgage Loans or otherwise selling,
transferring, pledging or hypothecating the Mortgage Loans (any such repurchase
transaction, sale, transfer, pledge or hypothecation being herein referred to as
an "Hypothecation"), but no such Hypothecation shall relieve the Lender of its
obligations to the related Borrower hereunder.
-4-
36
Annex 11
to Custodial Agreement
TRANSMITTAL LETTER
[Custodian Letterhead]
[Approved Purchaser]
--------------------------
--------------------------
Re:
------------------------------
Ladies and Gentlemen:
Attached please find those Mortgage Loans listed separately on the
attached schedule, which Mortgage Loans are owned by [ALLIED CAPITAL COMMERCIAL
CORPORATION] [BUSINESS MORTGAGE INVESTORS, INC.] (the "Borrower") and are being
delivered to you for purchase.
The Mortgage Loans comprise a portion of the "Collateral" under (and
as such term and capitalized terms not otherwise defined herein are defined in)
that certain Master Loan and Security Agreement (the "Security Agreement"),
dated as of August [__], 1997, among Allied Capital Commercial Corporation, as a
Borrower, Business Mortgage Investors, Inc., as a Borrower, and Xxxxxxx Xxxxx
Mortgage Capital Inc., as lender (the "Lender"). We are advised by Lender that
each of the Mortgage Loans is subject to a security interest in favor of the
Lender, which security interest shall be automatically released upon your
remittance of the full amount of the purchase price of such Mortgage Loan (as
set forth on the schedule attached hereto) by wire transfer to the following
account of the Borrower maintained with the Lender:
WIRE INSTRUCTIONS TO SETTLEMENT ACCOUNT:
[to be provided by the Lender]
We are advised by Lender that pending your purchase of each Mortgage
Loan and until payment therefor is received, the aforesaid security interest
therein will remain in full force and effect, and you shall hold possession of
such Collateral and the documentation evidencing same as custodian, agent and
bailee for and on behalf of the Lender. In the event that any Mortgage Loan is
unacceptable for purchase, return the rejected item directly to the Custodian at
its address set forth below. IN NO EVENT SHALL ANY MORTGAGE LOAN BE RETURNED TO,
OR SALES PROCEEDS REMITTED TO, THE BORROWER. The Mortgage Loan must be so
returned or sales proceeds remitted in full no later than ten (10) days from the
date hereof. If you are unable to comply with the above instructions, please so
advise the undersigned Custodian immediately.
NOTE: BY ACCEPTING THE MORTGAGE LOANS DELIVERED TO YOU WITH THIS
LETTER, YOU CONSENT TO BE THE CUSTODIAN, AGENT AND BAILEE FOR THE LENDER ON THE
TERMS DESCRIBED IN THIS LETTER. THE CUSTODIAN
-5-
37
REQUESTS THAT YOU ACKNOWLEDGE RECEIPT OF THE ENCLOSED MORTGAGE LOANS AND THIS
LETTER BY SIGNING AND RETURNING THE ENCLOSED COPY OF THIS LETTER TO THE
CUSTODIAN; HOWEVER, YOUR FAILURE TO DO SO DOES NOT NULLIFY SUCH CONSENT.
Very truly yours,
LASALLE NATIONAL BANK
as Custodian
By:
--------------------------------
Name:
Title:
Address:
----------------------
----------------------
RECEIPT ACKNOWLEDGED:
[APPROVED PURCHASER]
By
------------------------
Name:
Title:
Date:
--------------------
-6-
38
Annex 12
to Custodial Agreement
TRANSMITTAL LETTER
[Custodian Letterhead]
[Custodian/Trustee/Agency]
--------------------------
--------------------------
Re: Shipment of Mortgage Loans for Pool Formation
Ladies and Gentlemen:
Attached please find those Mortgage Loans listed separately on the
attached schedule, which are owned by [ALLIED CAPITAL COMMERCIAL CORPORATION]
[BUSINESS MORTGAGE INVESTORS, INC.] (the "Borrower") and are being delivered to
you, as custodian/trustee, for certification in connection with the formation of
a mortgage pool supporting the issuance of a mortgage-backed security (the
"MBS") described as follows:
----------------------------------.
The Mortgage Loans comprise a portion of the "Collateral" under (and
as such term and capitalized terms not otherwise defined herein are defined in)
that certain Master Loan and Security Agreement (the "Security Agreement"),
dated as of August [__] 1997, among Allied Capital Commercial Corporation, as a
Borrower, Business Mortgage Investors, Inc., as a Borrower, and Xxxxxxx Xxxxx
Mortgage Capital Inc., as lender (the "Lender"). We are advised that each of the
Mortgage Loans is subject to a security interest in favor of the Lender, which
security interest shall be automatically released upon the issuance and delivery
of the MBS to the Lender.
We are advised that pending issuance of the MBS, the aforesaid
security interest therein will remain in full force and effect, and you shall
hold possession of such Collateral and the documentation evidencing same as
custodian, agent and bailee for and on behalf of the Lender. In the event that
any Mortgage Loan is unacceptable for purchase, return the rejected item
directly to the Custodian at its address set forth below. IN NO EVENT SHALL ANY
MORTGAGE LOAN BE RETURNED TO, OR SALES PROCEEDS REMITTED TO, THE BORROWER. The
Mortgage Loan must be so returned or sales proceeds remitted in full no later
than [sixty (60)] days from the date hereof. If you are unable to comply with
the above instructions, please so advise the undersigned Custodian immediately.
NOTE: BY ACCEPTING THE MORTGAGE LOANS DELIVERED TO YOU WITH THIS
LETTER, YOU CONSENT TO BE THE CUSTODIAN, AGENT AND BAILEE FOR THE LENDER ON THE
TERMS DESCRIBED IN THIS LETTER. THE CUSTODIAN REQUESTS THAT YOU ACKNOWLEDGE
RECEIPT OF THE ENCLOSED MORTGAGE LOANS AND THIS LETTER BY SIGNING AND RETURNING
THE ENCLOSED COPY OF THIS LETTER TO THE CUSTODIAN; HOWEVER, YOUR FAILURE TO DO
SO DOES NOT NULLIFY SUCH CONSENT.
39
Very truly yours,
LASALLE NATIONAL BANK
as Custodian
By:
--------------------------------
Name:
Title:
Address:
----------------------
----------------------
RECEIPT ACKNOWLEDGED:
[CUSTODIAN/TRUSTEE]
By
------------------------
Name:
Title:
Date:
---------------------
40
Annex 13
to Custodial Agreement
____________, 199__
LaSalle National Bank
00 Xxxxxxxxx Xxxxx Xxxx.
Xxxxx 000
Xxx Xxxxx Xxxxxxx, Xxxxxxxx 00000
Attention:
------------------
Re: Notice of Collateral Agent under that certain Custodial
Agreement (the "Agreement"), dated as of August [__], 1997,
among Xxxxxxx Xxxxx Mortgage Capital Inc. ("MLMCI"), Allied
Capital Commercial Corporation, as a Borrower and Business
Mortgage Investors, Inc., as a Borrower (each a "Borrower",
collectively, the "Borrowers") and LaSalle National Bank (the
"Custodian")
Gentlemen and Mesdames:
In accordance with Section 26 of the Agreement, MLMCI hereby notifies
the Custodian that the Collateral Agent is [NAME OF COLLATERAL AGENT, Street
Address, City, State, ZIP Code, Facsimile number, Reference or Attention line]
and that the Collateral Agent has security interests in the Mortgage Loans as
representative secured party for the persons or entities to whom the obligations
secured by the Mortgage Loans are owed. Accordingly, the Custodian is hereby
instructed and authorized to xxxx its books and records that it holds such
Mortgage Loans for the benefit of the Collateral Agent as the representative
secured party for the benefit of such persons or entities, and for the
Collateral Agent unless and until it receives a Collateral Agent Termination in
accordance with Section 26 of the Agreement.
Capitalized terms not otherwise defined herein shall have the
respective meanings assigned to them in the Agreement.
Kindly acknowledge your receipt of this letter by signing and
returning one original counterpart to each of MLMCI and the Collateral Agent.
41
Very truly yours,
XXXXXXX XXXXX MORTGAGE CAPITAL INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
RECEIPT ACKNOWLEDGED:
LASALLE NATIONAL BANK
(Custodian)
By:
---------------------------
Name:
-------------------------
Title:
------------------------
The Collateral Agent named below hereby acknowledges that it has received a copy
of the Custodial Agreement and will assume all rights and duties of Lender under
the Custodial Agreement
[NAME OF COLLATERAL AGENT]
(Collateral Agent)
By:
---------------------------
Name:
-------------------------
Title:
------------------------
