NB CAPITAL CORPORATION
-- Company --
-- and --
NATIONAL BANK OF CANADA
-- Custodian --
-- and --
NATIONAL BANK OF CANADA
-- Servicer --
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CUSTODIAL AGREEMENT
Dated as of December 4, 1998
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CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT, dated as of December 4, 1998 (this
"Agreement"), by and between NB CAPITAL CORPORATION, a Maryland corporation,
having an office at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Company"),
NATIONAL BANK OF CANADA, a Canadian chartered bank, having an address at
National Bank Tower, 000 xx Xx Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxx X0X 0X0,
("Custodian"), and NATIONAL BANK OF CANADA, a Canadian chartered bank, having an
address at National Bank Tower, 000 xx Xx Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxx X0X
0X0 ("Servicer").
W I T N E S S E T H
WHEREAS, Company has made two (2) loans (the "Loans") to NB Finance,
Ltd., a Bermuda company ("Borrower"), pursuant to a Loan Agreement, dated as of
December 4, 1998 (the "Loan Agreement");
WHEREAS, as security for each such Loan, Borrower has assigned to
Company certain mortgage loans (and the real property securing such mortgage
loans) pursuant to and more particularly described in the applicable Mortgage
Loan Assignment Agreement, dated as of December 4, 1998, between NB Finance and
Company (collectively, the "Mortgage Loans");
WHEREAS, Servicer is to service the Mortgage Loans pursuant to a
Servicing Agreement dated as of September 3, 1997 as supplemented by the First
Supplemental Servicing Agreement dated as of December 4, 1998 by and between
Servicer and Company (the "Servicing Agreement");
WHEREAS, Custodian is a bank incorporated under the terms of the Bank
Act (Canada) (S.C. 1991, Chapter 46) and validly existing and in good standing
under the laws of and regulated by the laws of its jurisdiction of
incorporation, and is otherwise authorized to act as Custodian pursuant to this
Agreement; and
WHEREAS, Company desires to have Custodian take possession of the
Mortgage File (as defined below) as custodian of Company on December 4, 1998
(the "Delivery Date"), in accordance with the terms and conditions hereof.
Custodial Agreement
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NOW, THEREFORE, in consideration of the mutual undertakings herein
expressed, the parties hereto hereby agree as follows:
Section 1. Delivery of Mortgage File. (a) On the Delivery Date, Company
shall deliver, or cause to be delivered, to Custodian, or to the extent already
in possession of Custodian, Custodian shall continue to hold, the mortgage file
containing all the agreements, deeds and proceedings evidencing the Mortgage
Loans and the real property securing such Mortgage Loans, as well as any
architectural and engineering reports, title reports, surveys, insurance
policies and other information material with respect to the Mortgage Loans or
the real property securing the Mortgage Loans (the "Mortgage File"), to be held
on behalf of Company. Custodian's signature to this Agreement shall serve as an
acknowledgement of the receipt of the Mortgage File, subject to Section 1(b)
hereof.
(b) With respect to any documents that have been sent for recording by
Company on the Delivery Date, Company shall deliver or cause to be delivered
such original documents or acknowledgement copies thereof with evidence of
recording thereon to Custodian upon receipt and Custodian shall have no
responsibility for such recording. Custodian shall hold such original recorded
documents or acknowledgement copies delivered to it in trust for the benefit of
Company in accordance with the terms hereof.
Section 2. Obligations of Custodian. Custodian shall hold all documents
received by it constituting the Mortgage File and shall make disposition thereof
only in accordance with the instructions of Company and the terms of this
Agreement. The Mortgage File shall be appropriately marked and identified to
clearly reflect that such documents are held by Custodian, as agent on behalf of
Company.
Section 3. Release for Servicing. From time to time and as appropriate
for the foreclosure or other servicing of the Mortgage Loans, Custodian is
hereby authorized, to release to Servicer the Mortgage File or any document
contained in the Mortgage File. All documents so released to Servicer shall be
held by Servicer in trust and shall be returned to Custodian when Servicer's
need therefor in connection with such foreclosure or servicing no longer exists.
Upon the payment in full of all obligations under a Loan, Custodian shall, upon
receipt by Custodian of a request,
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promptly release the Mortgage File with respect to such Loan to Servicer to be
delivered to Borrower.
Section 4. Fees of Custodian. Custodian may charge such fees for its
services under this Agreement as are customary, the payment of which fees,
together with Custodian's expenses in connection herewith, shall be the
obligation of Company.
Section 5. Removal of Custodian. Company may upon at least 30 days'
notice remove and discharge Custodian from the performance of its duties under
this Agreement by written notice from Company to Custodian, with a copy to
Servicer. In the event of any such removal, Custodian shall promptly transfer to
Company, or as otherwise directed by the Company, the Mortgage File. Such
removal of Custodian shall not affect the obligations and duties of Servicer
under the Servicing Agreement.
Section 6. Insurance of Custodian. At its own expense, Custodian shall
maintain at all times during the existence of this Agreement and keep in full
force and effect such fidelity bonds and/or insurance policies in amounts, with
standard coverage and subject to deductibles, all as are customarily maintained
by banks which act as custodian and as required under the Servicing Agreement.
Section 7. Counterparts. For the purpose of facilitating the execution
of this Agreement as herein provided and for other purposes, this Agreement may
be executed in any number of counterparts, each of which counterparts shall be
deemed to be an original and all of such counterparts together shall constitute
and be one and the same instrument. Delivery of an executed counterpart of a
signature page to this Agreement by telecopier shall be effective as delivery of
a manually executed counterpart of this Agreement. Any delivery of a counterpart
signature by telecopier shall, however, be promptly followed by delivery of a
manually executed counterpart.
Section 8. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Province of Quebec and the
obligations, rights and remedies hereunder shall be determined in accordance
with the substantive laws of the Province of Quebec. Each of the parties hereto
irrevocably and unconditionally submits itself and its property, to the
non-exclusive jurisdiction of any provincial court of Canada, and any appellate
court thereof in any action or proceeding
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arising out of or relating to this Agreement, or for the recognition or
enforcement of any judgement, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such court. Each of the parties hereto
agrees that a final judgement in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgement
or in any other matter provided by law. Nothing in this Agreement shall affect
any right that any party may otherwise have to bring any action or proceeding
relating to this Agreement in the courts of any jurisdiction. Each of the
parties hereto irrevocably and unconditionally waives, to the fullest extent it
may legally and effectively do so, any objection they may now or hereafter have
to the laying of venue of any suit, action or proceeding arising out or relating
to this Agreement in any provincial court of Canada. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in such
court. Company hereby irrevocably appoints Montreal Trust, Place Montreal Trust,
0000 XxXxxx Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxx, Xxxxxx X0X 0X0 ("Company's Process
Agent"), as its agent to receive, on behalf of Company, service of copies of the
summons and complaint and any other process that may be served in any such
action or proceeding. Any such service may be made by mailing or delivering a
copy of such process, in care of Company at Company's Process Agent's above
address. Company hereby irrevocably authorizes and directs its agent to accept
such service on its behalf.
Section 9. Provisions Separable. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other provision or provisions may be invalid or unenforceable in whole or in
part.
Section 10. Termination by Custodian. Custodian may terminate its
obligations under this Agreement upon at least 30 days' notice to Company. Such
termination shall not affect the duties and obligations of Servicer under the
Servicing Agreement. Any termination by Custodian shall not be effective until a
successor custodian has been appointed and the Mortgage File has been
appropriately transferred.
Section 11. Term of Agreement. Unless terminated pursuant to Section 5
or Section 10 hereof, this Agreement shall terminate upon the final payment or
other liquidation of the Mortgage Loans, and the final remittance of all funds
due to
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Custodian. In such event, all documents remaining in the Mortgage File
shall be released in accordance with the written instructions of Company.
Section 12. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given when delivered
if personally delivered, mailed by certified or registered mail,
postage-prepaid, return receipt requested, or sent by overnight courier or
telecopied to the addresses set forth in the first paragraph of this Agreement
and in the event of Company, to the attention of Chief Financial Officer, in the
event of Servicer or Custodian, to the attention of Senior
Vice-President-Treasury and Financial Markets or such other address and persons
as may hereafter be furnished to the other parties by like notice.
Section 13. Successors and Assigns. This Agreement shall inure to the
benefit of the successors and permitted assigns of the parties hereto.
Section 14. Exculpation of Custodian. Neither Custodian nor any of its
directors, officers, agents, employees or "controlling persons" (within the
meaning of the Securities Act of 1933 (United States), as amended) shall be
liable for any action taken or omitted to be taken by it or them hereunder or in
connection herewith in good faith and believed by it or them to be within the
purview of this Agreement, except for its or their own negligence, lack of good
faith or willful misconduct. In no event shall Custodian or its directors,
officers, agents, employees or controlling persons be held liable for any
special, indirect or consequential damages resulting from any action taken or
omitted to be taken by it or them hereunder or in connection herewith in good
faith and reasonably believed by it or them to be within the purview of this
Agreement.
Section 15. Reliance of Custodian. In the absence of bad faith on the
part of Custodian, Custodian may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
request, instructions, certificate, opinion or other document furnished to
Custodian, reasonably believed by Custodian to be genuine and to have been
signed or presented by the proper party or parties and conforming to the
requirements of this Agreement.
Section 16. Entire Agreement. This Agreement and the Servicing
Agreement contain the entire agreement among the parties hereto with respect to
the subject matter
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hereof, and supersede all prior and contemporaneous agreements, understandings,
inducements and conditions, express or implied, oral or written of any nature
whatsoever with respect to the subject matter hereof. The express terms hereof
control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms hereof.
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IN WITNESS WHEREOF, Company, Servicer and Custodian have caused their names to
be duly signed hereto by their respective officers thereunto duly authorized,
all as of the date first above written.
COMPANY:
NB CAPITAL CORPORATION
By: /s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx, Vice-President
SERVICER:
NATIONAL BANK OF CANADA
By: /s/ Xxxxxxx Xxxx
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By: /s/ Xxxxxx Xxxxxxxx
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CUSTODIAN:
NATIONAL BANK OF CANADA
By: /s/ Xxxxxxx Xxxx
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By: /s/ Benois Xxxxxxxx
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