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EXHIBIT 10(d)
FOURTH AMENDED AND RESTATED
SECURITY AND COLLATERAL AGENCY AGREEMENT
THIS FOURTH AMENDED AND RESTATED SECURITY AND COLLATERAL AGENCY
AGREEMENT (the "Security Agreement") is made and dated as of July 10, 1998, by
and among SOURCE ONE MORTGAGE SERVICES CORPORATION, a Delaware corporation (the
"Company"), THE FIRST NATIONAL BANK OF CHICAGO, a national banking association,
acting in its capacity as administrative agent for the lenders from time to time
participating in the Credit Agreement (as defined below) (in such capacity, the
"Credit Agent"), and NATIONAL CITY BANK OF KENTUCKY, a national banking
association, as collateral agent for the Secured Parties (as defined below) (in
such capacity, the "Collateral Agent").
RECITALS
A. This Fourth Amended and Restated Security and Collateral Agency
Agreement amends and restates in its entirety that certain Third Amended and
Restated Security and Collateral Agency Agreement dated as of July 25, 1997 (the
"Third Amended Agreement"), by and among the parties hereto and certain
subsidiaries of the Company.
B. Pursuant to that certain Fourth Amended and Restated Revolving
Credit Agreement of even date herewith (the "Credit Agreement"), the Lenders
have agreed to extend credit to the Company on the terms and subject to the
conditions set forth therein. The Credit Agreement amends and restates in its
entirety that certain Third Amended and Restated Revolving Credit Agreement
dated as of July 25, 1997 by and among the Company, certain subsidiaries of the
Company, First Chicago and certain of the Lenders. Capitalized terms not
otherwise defined herein are used with the same meanings as in the Credit
Agreement.
C. Under the Credit Agreement, from and after the date hereof, no
further Advances will be made available to the Company's subsidiaries and no
Mortgage Loans owned by such subsidiaries shall constitute Collateral.
D. As a condition precedent to the effectiveness of the Credit
Agreement, the Credit Agent has required the execution and delivery of this
Security Agreement in order to, among other things, create a first priority
perfected security interest in the Collateral in favor of the Lenders, the
Non-Lender Balance Banks (to the extent of any Credit Indebtedness owed to such
Non-Lender Balance Banks), the Credit Agent and the Collateral Agent,
(collectively, the "Secured Parties") to secure payment of the Credit
Indebtedness (the "Secured Debt").
NOW, THEREFORE, in consideration of the above Recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
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AGREEMENTS
1. Appointment of Collateral Agent. Each Lender and Non-Lender Balance
Bank has, pursuant to the terms of the Credit Agreement, appointed the
Collateral Agent to act as secured party, agent, bailee and custodian for the
exclusive benefit of the Secured Parties with respect to the Collateral. The
Collateral Agent hereby accepts such appointment and agrees to maintain and
hold, or cause to be maintained and held, all Collateral at any time delivered
to it or any of its subagents as secured party, agent, bailee and custodian for
the exclusive benefit of the Secured Parties. The Collateral Agent and the
Company agree that the Collateral Agent is acting and will act with respect to
the Collateral for the exclusive benefit of the Secured Parties 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 Company
except as expressly permitted hereunder and under the other Credit Documents.
The Collateral Agent agrees to act in accordance with this Security Agreement
and in accordance with any written instructions properly delivered pursuant
hereto. Under no circumstances shall the Collateral Agent deliver, or cause to
be delivered, possession of Collateral to the Company except in accordance with
the express terms of this Security Agreement or the other Credit Documents.
2. Delivery and Categorization of Collateral.
(a) Mortgage Loans. The Company (the "Pledgor") shall deliver
Collateral Transmittals to the Collateral Agent from time to time identifying
Mortgage Loans that the Pledgor intends to include in Collateral by delivering
to the Collateral Agent the Required Mortgage Documents (as described on
Schedule A attached hereto) for such Mortgage Loans. Such delivery shall be made
prior to inclusion of such Mortgage Loans in Collateral, other than for AP
Mortgages identified in the Collateral Transmittal and covered by an AP Notice.
The Collateral Agent shall review the Required Mortgage Documents in accordance
with the review steps described on Exhibit 1 hereto.
(b) AP Notices. The Collateral Agent, upon receipt of a
Collateral Transmittal describing the AP Mortgages to be covered by an AP Notice
and an AP Notice as of that date, shall (subject to the eligibility requirements
set forth in the Credit Agreement) include such AP Mortgages as Eligible
Collateral in the Collateral Value Determination (as defined Paragraph 6(a)
below). The Pledgor shall deliver the Required Mortgage Documents for each such
AP Mortgage not later than the twelfth (12th) Business Day after the date such
AP Mortgage is first so included as an Eligible AP Mortgage, except that, with
respect to New York Consolidation Loans, the outside date shall be the
twenty-first (21st) calendar day thereafter. If the Required Mortgage Documents
for any AP
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Mortgage are not delivered by such applicable outside date, the Credit Agent or
the Collateral Agent may request that the Pledgor advise the Collateral Agent
and the Credit Agent in writing of the specific reason that such Required
Mortgage Documents were not delivered, and the Pledgor shall so advise the
Collateral Agent and the Credit Agent within 30 days after such request.
(c) Securities. The Pledgor may, from time to time, deliver
Securities to the Collateral Agent or an Approved MBS Custodian and shall
provide such evidence that such Securities are either (a) in a certificated
form, with the certificates evidencing such Securities being delivered to the
Collateral Agent or such Approved MBS Custodian, or (b) in book entry or
uncertificated form with evidence that the Collateral Agent or such Approved MBS
Custodian has been identified as the nominal owner of such Securities in the
records of a Federal Reserve Bank or other institution authorized by the
applicable Federal Agency to maintain ownership records in respect of such
Securities.
(d) Repurchased Agency Loans and Receivables. The Company
shall identify Repurchased Agency Loans and Receivables from time to time by
providing a list of such items to the Collateral Agent. Such list shall include
statements indicating (i) the identification number of each such Mortgage Loan,
(ii) its unpaid principal balance, (iii) the "paid-to" date for such Mortgage
Loan, (iv) the date on which such Mortgage Loan was purchased by the Company out
of the applicable pool, (v) whether or not such Mortgage Loan has been
reinstated and the payment defaults thereunder cured by the mortgagor, (vi) the
date on which any foreclosure sale with respect to such Mortgage Loan has
occurred, (vii) the status of the related claim against the VA or FHA or HUD,
and (viii) whether the borrower of the Mortgage Loan filed a voluntary
bankruptcy petition or had an involuntary bankruptcy petition filed against it
while the payments on such Mortgage Loan were past due. The Company shall
provide a weekly update of such information to the Collateral Agent by 5:00 p.m.
(Chicago time) on the first Business Day of each week with regard to any
Repurchased Agency Loans and Receivables previously identified as being included
in Collateral, which update shall be as of the close of business on Thursday of
the preceding week, and which information shall be used for Collateral Value
Determinations during the following week. The Collateral Agent shall have the
right at any time at the direction of the Aggregate Required Lenders, to require
the Company to submit all Required Mortgage Documents and item number 4 from the
Additional Required Mortgage Documents for any Repurchased Agency Loan and
Receivable then being included in Collateral, and the Collateral Agent shall
request the submission of such documents at the direction of the Credit Agent.
In addition, the Company shall provide, at the request of the Collateral Agent
or the Credit Agent, claim forms to FHA or VA or HUD for each such Repurchased
Agency Loan and Receivable,
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identifying the Collateral Agent as the "investor" thereunder so that any
payments made by FHA or VA or HUD with respect to such Mortgage Loan shall be
paid to the Collateral Agent rather than the Company. In addition, with respect
to those Repurchased Agency Loans and Receivables for which there has been a
foreclosure sale of the underlying property, the Credit Agent shall have the
right to require the Company to provide a new mortgage in favor of the
Collateral Agent on the real estate and improvements that previously secured
such Repurchased Agency Loan and Receivable, all in form satisfactory to the
Credit Agent and Collateral Agent and at the Company's sole cost and expense,
including the cost of recording such mortgage if required by the Credit Agent.
(e) Servicing Sale Receivables. The Company may, in connection
with a sale of Servicing Agreements from the Company to a Servicing Purchaser,
pledge the Servicing Sale Receivables due in connection with such sale to the
Collateral Agent as Collateral. If the Company so pledges Servicing Sale
Receivables to the Collateral Agent, the Company shall (i) deliver to the Credit
Agent and the Collateral Agent a complete executed copy of the related purchase
agreement and written confirmation from the Servicing Purchaser as to the amount
of such Pledged Servicing Sale Receivables, (ii) assign its rights to such
Pledged Servicing Sale Receivables to the Collateral Agent for the benefit of
the Secured Parties pursuant to an assignment in form and content satisfactory
to the Required Lenders, and (iii) cause the Servicing Purchaser of the
applicable sold Servicing Agreements to execute an agreement in form and content
satisfactory to the Required Lenders pursuant to which the Servicing Purchaser
shall agree to (A) pay such Pledged Servicing Sale Receivables directly to the
Collateral Agent for the benefit of the Secured Parties, and (B) provide
simultaneous written notice to the Credit Agent and the Collateral Agent of any
claims made against or notices given to the Company which would constitute an
offset to or reduction in the amount of such Pledged Servicing Sale Receivables.
(f) Identification of Collateral. All Mortgage Loans and
Securities at any time delivered to the Collateral Agent hereunder shall be held
by the Collateral Agent in a fire resistant vault, drawer or other suitable
depositary maintained in accordance with Federal Agency standards and controlled
solely by the Collateral Agent, conspicuously marked to show the respective
interests of the Secured Parties therein and not commingled with any other
assets or property of, or held by, the Collateral Agent. Accordingly, if
(pursuant to Paragraph 7(b) below) the Collateral Agent receives a shipping
request pursuant to which National City Bank of Kentucky is to retain physical
possession of the applicable Mortgage Loans or Securities as an agent for any
Person other than the Secured Parties, the Collateral Agent shall physically
separate such Mortgage Loans or Securities from the remainder of the
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Collateral and shall execute any transmittal letters required under Paragraph
7(b) below.
3. Grant of Security Interest. The Company hereby pledges, assigns and
grants to the Collateral Agent for the benefit of the Secured Parties, a first
priority security interest in the property described in Paragraph 4 below
(collectively and severally, the "Collateral"), to secure payment of the Secured
Debt. Furthermore, each AP Notice shall create a security interest in favor of
the Collateral Agent for the benefit of the Secured Parties in the AP Mortgages
identified therein. By delivering an AP Notice, the Company represents and
warrants that each AP Mortgage identified therein constitutes an Eligible AP
Mortgage. The Company agrees that while it is in possession of any Required
Mortgage Documents for an AP Mortgage, it will hold same in trust and as agent
and bailee for the Collateral Agent for the benefit of the Secured Parties,
without authority to make any other disposition thereof, or of the proceeds
thereof. The Company assumes the responsibility for loss or destruction of any
such Required Mortgage Documents until the same are delivered to the Collateral
Agent.
Unless so directed by the Credit Agent when an Event of Default has
occurred and is continuing, the Collateral Agent shall not record the assignment
of mortgage or deed of trust delivered in connection with any Pledged Mortgage.
4. Collateral. The Collateral shall consist of all right, title and
interest of the Company of every kind and nature, in and to all of the following
property, assets and rights of the Company wherever located, whether now
existing or hereafter arising, and whether now or hereafter owned or acquired by
or accruing or owing to the Company, and all proceeds and products thereof
(including all proceeds in the Settlement Account and Custodian Settlement
Accounts from time to time):
(a) all Pledged Mortgages;
(b) all Pledged Securities;
(c) any commitments or other agreements issued by any private
mortgage insurer or by the FHA or VA to insure or guarantee any Pledged
Mortgage;
(d) all commitments of FNMA, FHLMC or other Persons to purchase
Pledged Items from the Company or exchange Securities with the Company for
Pledged Items;
(e) any options to sell or purchase Securities, future contracts, or
any other interest rate protection products which directly or indirectly protect
the Company against reductions in
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value of such Pledged Items due to changes in mortgage interest
rates;
(f) the Settlement Account and any Custodian Settlement Accounts and
any amounts standing to the credit of the Settlement Account and any Custodian
Settlement Accounts then in existence with Approved MBS Custodians, as described
in Paragraph 7(c) of this Security Agreement;
(g) all VA Mortgage Loans or FHA Mortgage Loans (plus any REO or
accounts receivable from FHA or VA resulting therefrom, including guaranty
claims against VA and insurance claims against FHA or HUD) which are repurchased
by the Company from Security holders and pledged to the Collateral Agent as
security for the Secured Debt;
(h) all cash and Cash Equivalents held by the Credit Agent or
Collateral Agent as security for the Secured Debt;
(i) all Pledged Servicing Sale Receivables; and
(j) all property and proceeds related to the foregoing, including
without limitation, the right to service Pledged Mortgages while owned by the
Company, all files, surveys, certificates, correspondence, appraisals, computer
programs, tapes, disks, cards, accounting records and other records and data of
the Company related to the Pledged Mortgages, all accounts and general
intangibles of whatsoever kind so related and all documents or instruments
delivered to the Credit Agent or the Collateral Agent in respect of any Pledged
Item, including, without limitation, the right to receive all insurance proceeds
and condemnation awards which may be payable in respect of the premises
encumbered by any Pledged Mortgage.
5. Collateral Agent's Review of Collateral. Upon any receipt of Required
Mortgage Documents for any Mortgage Loan, the Collateral Agent shall review the
same and verify that:
(a) All Required Mortgage Documents relating to such Mortgage Loan
appear regular on their face (as determined by the Collateral Agent in its
reasonable discretion) and are in the Collateral Agent's possession; and
(b) The statements set forth on Exhibit 1 hereto are accurate and
complete in all material respects.
If the Collateral Agent notes any exception in the review described in
subparagraph (a) or (b) above or questions, in its reasonable discretion, the
genuineness, regularity, propriety, or accuracy of any item of Collateral, the
Collateral Agent shall not include such item as Eligible Collateral in its next
Collateral Value
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Determination (as defined in Paragraph 6(a) below) delivered to the Credit
Agent. In the event that the Pledgor has been requested by the Credit Agent or
the Collateral Agent to deliver the "Additional Required Mortgage Documents" (as
described on Schedule B attached hereto) with respect to any Mortgage Loan, the
Collateral Agent shall review and verify such Additional Required Mortgage
Documents consistent with the obligations of the Collateral Agent above.
6. Collateral Value Determination; Determination Assumptions.
(a) On each Business Day the Collateral Agent shall compute
the value of the Borrowing Base and notify the Credit Agent thereof (a
"Collateral Value Determination") by sending a facsimile copy or electronic
transmission of a report ("Borrowing Base Report") in the form of Schedule C
hereto (or such other form as may be mutually agreed to by the Collateral Agent
and the Credit Agent) prior to 11:00 a.m. (Chicago time). With respect to any
Required Mortgage Documents delivered to the Collateral Agent by 10:00 a.m.
(Chicago time) on any Business Day, the Collateral Agent shall review such
Required Mortgage Documents in the manner set forth in Paragraph 5 above in time
to include the related Mortgage Loans (to the extent they constitute Eligible
Collateral) in the Borrowing Base Report delivered at 11:00 a.m. (Chicago time)
on such Business Day. If the Company or the Credit Agent reasonably believes
that the value of the Borrowing Base has changed since the 11:00 Borrowing Base
Report, the Collateral Agent shall, at the request of the Company or the Credit
Agent made by facsimile prior to 2:00 p.m. (Chicago time) on any Business Day,
recompute the Borrowing Base and notify the Credit Agent thereof by telephone
and by a facsimile transmission of a Borrowing Base Report. Notwithstanding the
foregoing, so long as the security interest in the Collateral is abated as
described in Paragraph 8, the Company shall perform all of the obligations of
the Collateral Agent with respect to determining the Borrowing Base, and the
Collateral Agent shall have no duty to compute the Borrowing Base or submit
Borrowing Base Reports.
(b) In making any Collateral Value Determination or other
calculation involving a determination of the value of the Borrowing Base, the
Collateral Agent shall be permitted to rely, without independent investigation
of the correctness thereof, on:
(1) The information supplied by the Pledgor to the
Collateral Agent on the related Collateral Transmittal, with respect to
the net acquisition cost (including any discounts and excluding any
servicing released premium) of any Mortgage Loan, the unpaid principal
balance of any Mortgage Loan as of the Pledge Date therefor, and the
weighted average purchase price (expressed as a percentage of par)
committed to under
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those Approved Investor Commitments which could cover such
Mortgage Loan;
(2) The most recent information supplied by the
Company to the Collateral Agent with respect to (i) the number of days
by which payments on any Mortgage Loan constituting Collateral are past
due, (ii) the date of any foreclosure sale or transfer in lieu of
foreclosure with respect to a repurchased Mortgage Loan constituting a
Repurchased Agency Loan and Receivable, (iii) the date of any
reinstatement of any Repurchased Agency Loans and Receivables, (iv) the
value of any REO and accounts receivable (including proceeds of FHA
insurance or VA guaranties) acquired in connection with a foreclosure
sale or a transfer in lieu of foreclosure of Eligible Repurchased
Agency Loans and Receivables, and (v) whether the borrower of any
Mortgage Loan which is included in Repurchased Agency Loans and
Receivables filed a voluntary bankruptcy petition or had an involuntary
bankruptcy petition filed against it while the payments on such
Mortgage Loan were past due;
(3) The information supplied by the Company to the
Collateral Agent, whether written or in any other form acceptable to
the Collateral Agent, with respect to a determination as to whether
amounts received in the Settlement Account represent the purchase price
paid for a specific Mortgage Loan or Security and, consequently,
whether the Mortgage Collateral Value of such Mortgage Loan or MBS
Value of such Security should be removed from such calculation;
(4) The most recent information supplied by the
Credit Agent to the Collateral Agent with respect to (i) the amount of
the then current Aggregate Commitment, and (ii) the current balance in
the Settlement Account;
(5) The most recent information supplied by the
Company and the Servicing Purchaser(s) to the Collateral Agent with
respect to the amount of Servicing Sale Receivables; and
(6) Any information supplied by the Credit Agent, the
Company, or any other custodian of any of the Collateral, to the
Collateral Agent unless the Collateral Agent has actual knowledge that
such information is untrue or unreliable.
Furthermore, the Collateral Agent may rely on information
supplied by the Company with respect to the effect of the Borrowing Base
Sublimits on the value of the Borrowing Base attributable to Repurchased Agency
Loans and Receivables, which information shall be supplied by the Company on the
last Business Day of each week with respect to the value of the Borrowing Base
attributable to Repurchased Agency Loans and Receivables as of the close of the
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second to last Business Day of such week which information shall be used by
Collateral Agent beginning with the first Collateral Value Determination made
during the following week; provided, however, that the Collateral Agent shall
(on the last Business Day of each month) verify the accuracy of the information
supplied by the Company in the most recent report of such information and report
to the Credit Agent any discrepancies between such information as supplied by
the Company and such information as calculated by the Collateral Agent. The
information as calculated by the Collateral Agent shall be included in each
daily Borrowing Base Report until the Company again provides its next weekly
report of the value of the Borrowing Base attributable to Repurchased Agency
Loans and Receivables.
(c) The Collateral Agent is hereby authorized by the Credit
Agent to grant temporary waivers of strict compliance by the Company with the
eligibility requirements regarding qualification of any item of Collateral as
Eligible Collateral or with the Borrowing Base Sublimits when the Collateral
Agent deems it appropriate, in its sole discretion, (i) up to any amount for up
to three (3) Business Days, if the satisfaction of such eligibility requirements
or sublimits cannot be independently determined because of events beyond the
reasonable control of the Company (e.g. natural disasters, transmission
failures, etc.), provided that, if such determination cannot be made for more
than one (1) Business Day, the Company certifies in writing that all such
eligibility requirements and sublimits are in fact satisfied, or (ii) if the
aggregate amount of the portion of the Borrowing Base attributable thereto does
not exceed the lesser of (A) $25,000,000 or (B) five percent (5%) of the
Aggregate Commitment at any time; provided that the waivers permitted under this
clause (ii) shall be limited to waivers of Borrowing Base Sublimits and time
limitations set forth in the eligibility requirements (e.g. number of days
eligible in the Aggregate Borrowing Base, number of days out on Company Trust
Receipts, etc.); and further provided that in no event shall any Pledged
Mortgage be included as Eligible Collateral while such Pledged Mortgage is held
by the Company under a Company Trust Receipt if the Company has held such
Pledged Mortgage under a Company Trust Receipt for more than 21 days.
7. Handling of Collateral; Settlement Account.
(a) From time to time until otherwise notified in writing by
the Required Lenders, the Collateral Agent is hereby authorized to release
documentation relating to Mortgage Loans to the Company against a trust receipt
executed by the Company in the form of Exhibit 2 hereto. The Collateral Agent
will maintain all original trust receipts in a vault, drawer or other suitable
depositary with a one hour fire rating maintained in accordance with Federal
Agency requirements and controlled solely by Collateral Agent. The Company
hereby represents and warrants that
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any request by the Company for release of Collateral under this subparagraph (a)
shall be solely for the purposes of correcting clerical or other non-substantial
documentation problems in preparation of returning such Collateral to the
Collateral Agent for ultimate sale or exchange and that the Company has
requested such release in compliance with all terms and conditions of such
release set forth herein and in the Credit Agreement, including, without
limitation, Section 4.1(b)(iv) thereof.
(b) Prior to the occurrence of an Event of Default, upon
delivery by the Company to the Collateral Agent of a shipping request
substantially in the form of that attached hereto as Exhibit 3, the Collateral
Agent will transmit, or cause to be transmitted, Mortgage Loans and Securities
held by it or any Approved MBS Custodian as directed by the Company as follows:
(1) If the transmittal is of documentation for
Mortgage Loans or Securities in the possession of the Collateral Agent
or an Approved MBS Custodian in connection with the sale thereof to an
Approved Investor, such transmittal will be under cover of a
transmittal letter substantially in the form of that attached hereto as
Exhibit 4 (or such other form as may be approved by the Credit Agent or
required under any Federal Agency program pursuant to which the
relevant Mortgage Loans or Securities are being shipped), subject to
modification of such Exhibit 4 pursuant to Paragraph 7(g) hereof at the
request of the Agent.
(2) If the transmittal is of documentation for
Mortgage Loans or Securities in connection with the shipment to a
custodian or trustee in connection with the formation of a mortgage
pool supporting a Security (any such Security secured or otherwise
supported by any such Mortgage Loan or Security being referred to
herein as a "Warehouse-Related Security"), such transmittal will be
under cover of a transmittal letter substantially in the form of that
attached hereto as Exhibit 5 (or such other form as may be approved by
the Credit Agent or required if the Security is being issued under any
Federal Agency program), subject to modification of such Exhibit 5
pursuant to Paragraph 7(g) hereof at the request of the Agent, and, in
addition, will be conditioned upon the facts that:
(i) If the Warehouse-Related Security is
being issued under a Federal Agency program, there has been
delivered for the Warehouse-Related Security such form as may
be required under the Federal Agency program pursuant to which
such Warehouse-Related Security is being issued (which form
shall name the Collateral Agent or an Approved MBS Custodian
(as defined below) as the
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subscriber and the Person to whom the Warehouse-Related
Security is to be delivered);
(ii) If the Warehouse-Related Security is
being issued pursuant to a program other than a Federal Agency
program, there has been delivered to and acknowledged by the
trustee and collateral agent or custodian for the underlying
mortgage pool a letter in form acceptable to the Collateral
Agent;
(iii) The Person to whom such Warehouse-
Related Security is to be delivered upon issuance in
exchange for the Mortgage Loans or Securities being shipped
is either (a) a Person approved by the Collateral Agent and
the Credit Agent which has agreed to hold such
Warehouse-Related Security and the proceeds of any sale or
other disposition thereof as custodian, agent and bailee for
the benefit of the Secured Parties pursuant to a custodial
agreement substantially in the form of that attached hereto
as Exhibit 6 (a "Custodial Agreement"), (b) the Collateral
Agent or an Affiliate thereof or (c) such other Person as is
approved by the Collateral Agent and the Credit Agent (any
Person acting in such capacity being referred to herein as an
"Approved MBS Custodian");
(iv) There has been delivered to the
Approved MBS Custodian a letter in the form attached to the
Custodial Agreement (Exhibit A to Exhibit 6 hereto); and
(v) At the request of the Agent pursuant to
Paragraph 7(g) hereof, any Warehouse Related Security
delivered to the Collateral Agent or an Approved MBS Custodian
pursuant to subparagraphs (i) through (iv) shall be in a face
amount of not less than the amount of the Aggregate Borrowing
Base which is attributable to the Mortgage Loans so delivered
in exchange for such Warehouse Related Security.
In no event shall the Collateral Agent have any obligation to obtain written
acknowledgement of receipt from the addressee of any transmittal letter or other
communication sent by the Collateral Agent hereunder.
(c) All amounts payable on account of the sale of Pledged
Items (including, but not limited to, a sale pursuant to a repurchase agreement)
will be instructed to be paid directly by the purchaser to the Settlement
Account or, in the case of Pledged Securities delivered to an Approved MBS
Custodian, to a demand deposit account maintained with such Approved MBS
Custodian (a "Custodian Settlement Account") and, thereafter, to the Settlement
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Account as provided in the applicable Custodial Agreement. Pursuant to Paragraph
3 above the Company has granted a security interest in and lien upon the
Settlement Account and in all Custodian Settlement Accounts and in any and all
amounts at any time held therein as collateral security for the benefit of the
Secured Parties. This Paragraph 7(c) shall constitute notice to the Collateral
Agent and any Approved MBS Custodian of such security interest pursuant to the
Uniform Commercial Code of all relevant jurisdictions and any other law or
regulation requiring such notice. This Paragraph 7(c) shall further constitute
irrevocable notice to the Collateral Agent and any Approved MBS Custodian that
the accounts referred to in Paragraph 4(f) above are "no access" accounts to the
Company and the Collateral Agent except to the extent expressly permitted
hereunder. The Collateral Agent shall hold such security interest in and lien
upon the accounts referred to in Paragraph 4(f) above and all funds at any time
held therein for the benefit of the Secured Parties with all rights of a secured
party under the Uniform Commercial Code of all relevant jurisdictions.
(d) Prior to the occurrence of an Event of Default, the
Collateral Agent and any Approved MBS Custodian shall take such steps as they
may be reasonably directed from time to time by the Company in writing which are
not inconsistent with the provisions of this Security Agreement and the other
Credit Documents and which the Company deems necessary to enable the Company to
perform and comply with Approved Investor Commitments and with other agreements
for the sale or other disposition in whole or in part of Mortgage Loans and
Securities.
(e) The Collateral Agent may deliver any item of Collateral to
the Company or any other Person in accordance with the provisions of the Credit
Documents; provided, however, that the Collateral Agent shall not deliver and
shall incur no liability to the Company or any other Person for refusing to
deliver any item of Collateral to the Company or any other Person (other than
under existing Approved Investor Commitments) while an Event of Default exists
if the Collateral Agent has been directed to refrain from so delivering
Collateral by the Required Lenders.
(f) In addition to the releases of Collateral provided for in
subparagraphs (a)-(e) of this Paragraph 7, upon the request of the Company
delivered from time to time to the Credit Agent and the Collateral Agent, the
Collateral Agent shall, with the prior written approval of the Credit Agent,
release Collateral specified in such notice from the lien of this Security
Agreement. The Credit Agent shall give its approval of such release if, but only
if, (i) at the time of such release no Event of Default exists and no notice of
a Default has been issued that has not been cured, and (ii) any payment under
Section 2.14(a) of the Credit Agreement which may be required as a result of
such release has been made (or
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contemporaneously with such release shall be made) so that the release of such
Collateral will not create a violation of any Lending Sublimit or Borrowing Base
Sublimit, provided, however that, while an Event of Default exists or while a
notice of Default has been issued but not cured, the Collateral Agent may (A)
release pledged Cash Equivalents which are the subject of reverse repurchase
obligations in connection with the applicable reverse repurchase agreement, and
(B) release Pledged Items in connection with the sale of Pledged Items pursuant
to an existing Approved Investor Commitment if, in either case, the proceeds of
such repurchase or sale are deposited in the Settlement Account. The Collateral
Agent is authorized to execute and deliver to the Company, on behalf of the
Secured Parties, such UCC-3 partial release forms or other evidence as may be
required of any release permitted hereunder.
(g) Notwithstanding the provisions of Paragraph 7(b) above, at
the request of the Agent:
(i) The second sentence of the second full paragraph
of the form of whole loan sale transmittal letter attached
hereto as Exhibit 4 shall be deleted and replaced with the
following sentence:
"Each of the Mortgage Loans is subject to a security
interest in favor of National City Bank of Kentucky
(the "Collateral Agent") on behalf of the Secured
Parties, which security interest shall be
automatically released upon your remittance of an
amount equal to the greater of (1) the purchase price
for such Mortgage Loan (as set forth on the schedule
attached hereto), and (2) $__________, which is the
mortgage collateral value assigned by the Collateral
Agent to such Mortgage Loan. Such amount shall be
remitted by wire transfer to the following account:",
in which case the amount to be inserted in the blank in clause
two of such revised provision shall be an amount equal to the
amount of the Borrowing Base which is attributable to the
Mortgage Loans being delivered pursuant to the transmittal
letter;
(ii) The second sentence of the second full paragraph
of the form of warehouse related security transmittal letter
attached hereto as Exhibit 5 shall be deleted and replaced
with the following sentence:
"Each of the Mortgage Loans is subject to a security
interest in favor of National City Bank of Kentucky
(the "Collateral Agent") for the benefit
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of the Secured Parties, which security interest shall
be automatically released upon the issuance of the
Warehouse-Related Security in accordance with the
terms of the prescribed GNMA, FNMA or FHLMC form
enclosed herewith, which form shall name either the
Collateral Agent or another person designated by the
Collateral Agent as the person to whom the
Warehouse-Related Security is to be delivered and
require that the principal amount of the Warehouse
Related Security be in an amount not less than
$__________, which is the mortgage collateral value
assigned by the Collateral Agent to such Mortgage
Loan.",
in which case the amount to be inserted in the blank in such
revised provision shall be an amount equal to the amount of
the Borrowing Base which is attributable to the Mortgage Loans
being delivered pursuant to the transmittal letter.
The Agent may require that the above described modifications be made to all such
transmittal letters or only to transmittal letters to certain Approved Investors
designated by the Agent.
8. [Intentionally Omitted].
9. Reports. The Collateral Agent shall (a) deliver the Borrowing Base
Report at the times and in the manner set forth in Paragraph 6(a) above and (b)
deliver to the Credit Agent, the Company and any Lender which makes a written
request therefor, such other reports and information as any Lender may from time
to time reasonably request. In preparing any such reports the Collateral Agent
shall be entitled to rely, without independent investigation (other than the
review steps described on Exhibit 1 hereto), on information supplied to the
Collateral Agent by the Company.
10. No Reliance. The Collateral Agent shall not be responsible to any
Secured Party for any recitals, statements, representations or warranties
contained herein or in any other Credit Document; or for the execution,
effectiveness, genuineness, validity, enforceability, collectability, accuracy,
completeness or sufficiency of this Security Agreement or any other Credit
Document or instruments executed and delivered, or which could have been
executed or delivered, in connection with this Security Agreement or the other
Credit Documents, including, without limitation, the attachment, creation,
effectiveness or perfection of the security interests granted or purported to be
granted hereunder in and to the Collateral.
11. Costs and Expenses. The Collateral Agent shall notify the Company of
all extraordinary costs and expenses of the
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Collateral Agent directly relating to the Collateral Agent's performance of this
Security Agreement, and such extraordinary costs and expenses shall be paid
promptly by the Company or, if already paid by the Collateral Agent, the Company
promptly shall reimburse the Collateral Agent therefor. For the purposes of this
provision, extraordinary costs and expenses shall include all costs and expenses
incurred by the Collateral Agent in performance of this Security Agreement which
have not been factored into the computation of the Collateral Agent's fee (as
agreed upon between the Company and the Collateral Agent pursuant to a separate
agreement), including, without limitation, reasonable expenses of legal counsel
to the Collateral Agent to enforce the rights of the Collateral Agent hereunder.
12. Availability of Documents. The Secured Parties and their agents,
accountants, attorneys and auditors (each an "Inspecting Party") will be
permitted from time to time upon reasonable notice to the Collateral Agent and
the Company, and at such time as may be mutually acceptable to such Inspecting
Party, the Collateral Agent and the Company to examine (to the extent permitted
by applicable law) the files, documents, records and other papers in the
possession or under the control of the Collateral Agent relating to any or all
Collateral and to make copies thereof. Any such activity will be at the cost and
expense of the Secured Party requesting such access, except that following the
occurrence of an Event of Default, all reasonable out-of-pocket costs and
expenses associated with the exercise by the Credit Agent of its rights under
this Paragraph 12 shall be promptly paid by the Company upon demand of the
Credit Agent.
13. Representations and Warranties. The Company hereby represents and
warrants that: (a) it is the sole owner of the Collateral (or, in the case of
after-acquired Collateral, at the time the Company acquires rights in the
Collateral, will be the sole owner thereof), subject only to the rights of
Approved Investors under the Approved Investor Commitments; (b) except for
security interests in favor of the Collateral Agent for the benefit of the
Secured Parties hereunder, no Person has (or, in the case of after-acquired
Collateral, at the time the Company acquires rights therein, will have) any
right, title, claim or interest in, against or to the Collateral and, in any
event, so long as the Collateral Agent complies with the procedures relating to
possession of Collateral set forth in this Security Agreement, the Collateral
Agent shall have a perfected, first priority security interest therein for the
benefit of the Secured Parties; (c) no consent of any Person is required that
has not been obtained for the granting of the security interests provided for
herein, nor will any consent be required for the Collateral Agent to exercise
its rights under this Security Agreement in accordance with the terms of this
Security Agreement (except for consents to assignments of options, futures
contracts or other interest rate protection products in
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favor of the Secured Parties from the counterparties thereto, which consents
shall not be required to be obtained unless an Event of Default is continuing or
the Required Lenders request otherwise); (d) to the best of the Company's
knowledge, all information heretofore, herein or hereafter supplied to the
Collateral Agent or to any Lender by or on behalf of the Company with respect to
the Collateral is or will be accurate and complete; (e) the Approved Investor
Commitments covering such Collateral may be collaterally assigned to the
Collateral Agent as described herein; and (f) each Mortgage Loan and Security
is, at all dates included in the computation of the value of the Borrowing
Bases, Eligible Collateral.
14. Covenants of the Company. The Company hereby agrees: (a) to procure,
execute and deliver from time to time any endorsements, assignments, financing
statements and other writings deemed necessary or appropriate by the Collateral
Agent or the Credit Agent to perfect, maintain and protect the Collateral
Agent's security interest hereunder and the priority thereof and to deliver
promptly to the Collateral Agent all originals of any Collateral or proceeds
thereof consisting of chattel paper or instruments; (b) not to surrender or lose
possession of (other than to the Collateral Agent), sell, encumber, or otherwise
dispose of or transfer, any Collateral or right or interest therein other than
shipment of Mortgage Loans and Securities under Approved Investor Commitments
and as otherwise permitted under Paragraph 7 above and as otherwise permitted by
the Credit Agreement; (c) except as otherwise contemplated in any Custodial
Agreement, not to grant to any Federal Agency or Approved Investor any other
security interest in any Collateral, or otherwise acknowledge the creation of
any ownership rights of any Federal Agency or Approved Investor with respect to
any Collateral unless and until the Collateral Agent has received the proceeds
of such Collateral as described herein; (d) at all times to account fully for
and promptly to deliver to the Collateral Agent, in the form received, all
Collateral or proceeds thereof received, endorsed to the Collateral Agent or in
blank as appropriate and accompanied by such assignments and powers, duly
executed, as the Collateral Agent or the Credit Agent shall request, and until
so delivered all Collateral and proceeds thereof shall be held in trust for the
Collateral Agent for the benefit of the Secured Parties, separate from all other
property of the Company and identified as the property of the Collateral Agent
for the benefit of the Secured Parties; (e) to keep accurate and complete
records of the Collateral and at any reasonable time and at the Company's
expense, upon demand by the Collateral Agent or the Credit Agent, to exhibit to
and allow inspection of the Collateral and the records, reports and information
concerning the Collateral by the Collateral Agent or Credit Agent (or Persons
designated by the Collateral Agent or Credit Agent); (f) to keep the records
concerning the Collateral at the location(s) set forth in Paragraph 27 below and
not to remove the records from such
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location(s) without the prior written consent of the Collateral Agent and the
Credit Agent; (g) not to materially modify, compromise, extend, rescind or
cancel any deed of trust, mortgage, note or other document, instrument or
agreement connected with any Mortgage Loan pledged under this Security Agreement
or any document relating thereto or connected therewith or consent to a
postponement of strict compliance on the part of any party thereto with any term
or provision thereof in any material respect; (h) to keep the Collateral insured
against loss, damage, theft, and other risks customarily covered by insurance,
and such other risks as the Collateral Agent or the Credit Agent may request;
(i) to do all acts that a prudent investor would deem necessary or desirable to
maintain, preserve and protect the Collateral; (j) not knowingly to use or
permit any Collateral to be used unlawfully or in violation of any provision of
this Security Agreement, the Credit Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the Collateral; (k)
to pay (or require to be paid) prior to their becoming delinquent all taxes,
assessments, insurance premiums, charges, encumbrances and liens now or
hereafter imposed upon or affecting any Collateral except as otherwise permitted
in the Credit Agreement; (l) to notify the Collateral Agent and the Credit Agent
before any such change shall occur of any change in the Company's name, identity
or structure through merger, consolidation or otherwise; (m) to appear in and
defend, at the Company's cost and expense, any action or proceeding which may
affect its title to or the Collateral Agent's interest for the benefit of the
Secured Parties in the Collateral; and (n) to comply in all material respects
with all laws, regulations and ordinances relating to the possession, operation,
maintenance and control of the Collateral. Notwithstanding the foregoing, (1)
the requirements of clauses (g), (k) and (m) shall not apply to any Collateral
which is not required to be included in the computation of the value of any of
the Borrowing Base in order for the Company to be in compliance with the
requirements of the Credit Agreement unless failure to comply with the
requirements of said subparagraphs would have an adverse effect on the
Collateral which is included in such computation, and (2) the failure of the
Company to comply with its obligations under this Paragraph 14 with respect to
any Pledged Item shall cause such Pledged Item to cease to qualify as Eligible
Collateral.
15. Collection of Collateral Payments.
(a) The Company shall, at its sole cost and expense, use its
best efforts to obtain payment, when due and payable, of all sums due or to
become due with respect to any Collateral ("Collateral Payments" or a
"Collateral Payment"), consistent with all requirements of law and contractual
obligations binding upon the Company. Upon the request of the Collateral Agent
while an Event of Default exists, will notify and direct any party who is or
might become obligated to make any Collateral Payment, to make
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payment thereof to the Collateral Agent (or to the Company in care of the
Collateral Agent) at such address as the Collateral Agent may designate. The
Company will reimburse the Collateral Agent promptly upon demand for all
out-of-pocket costs and expenses, including reasonable attorneys' fees and
litigation expenses, incurred by the Collateral Agent in seeking to collect any
Collateral Payment.
(b) The Collateral Agent shall, promptly upon receipt of any
funds delivered from any Servicing Purchaser as full or partial payment of any
Pledged Servicing Sale Receivable, deposit such funds into the Collateral
Agent's Settlement Account and notify the Company of the receipt of such funds.
If the Collateral Agent receives any check from a Servicing Purchaser in payment
of Servicing Sale Receivables and such check contains a restrictive endorsement,
the Collateral Agent shall obtain the consent of the Company and the Credit
Agent before cashing any such check.
(c) Following the occurrence of an Event of Default, upon the
request of the Collateral Agent the Company will transmit and deliver to the
Collateral Agent, forthwith upon receipt and in the form received, all cash,
checks, drafts and other instruments for the payment of money (properly endorsed
where required so that such items may be collected by the Collateral Agent)
which may be received by the Company at any time as payment on account of any
Collateral Payment and if such request shall be made, until delivery to the
Collateral Agent, such items will be held in trust for the Collateral Agent for
the benefit of the Secured Parties and will not be commingled by the Company
with any of their other funds or property. Thereafter, the Collateral Agent is
hereby authorized and empowered to endorse the name of the Company on any check,
draft or other instrument for the payment of money received by the Collateral
Agent on account of any Collateral Payment if the Collateral Agent believes such
endorsement is necessary or desirable for purposes of collection.
(d) The Company hereby agrees to indemnify, defend and save
harmless the Collateral Agent and its agents, officers, employees and
representatives from and against all reasonable liabilities and expenses on
account of any adverse claim asserted against the Collateral Agent relating to
any moneys received by the Collateral Agent on account of any Collateral Payment
(other than as a direct result of the gross negligence or willful misconduct of
the Collateral Agent) and such obligation of the Company shall continue in
effect after and notwithstanding the discharge of the Credit Indebtedness and/or
the release of the security interest granted in Paragraph 3 above.
16. Authorized Action by Collateral Agent. The Company hereby
irrevocably appoints the Collateral Agent as its attorney-in-fact to do (but
the Collateral Agent shall not be
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obligated to and shall incur no liability to the Company or any Secured Party or
any other third party for failure so to do) at any time and from time to time at
the written request and direction, given while an Event of Default exists, of
the Required Lenders, any act which the Company is obligated by this Security
Agreement to do, and to exercise such rights and powers as the Company might
exercise with respect to the Collateral, including, without limitation, the
right to (a) collect by legal proceedings or otherwise and endorse, receive and
receipt for all dividends, interest, payments, proceeds and other sums and
property now or hereafter payable on or on account of the Collateral; (b)
insure, process, service and preserve the Collateral; (c) transfer the
Collateral to the Collateral Agent's own or its nominee's name; and (d) make any
compromise or settlement, and take any other action it deems advisable with
respect to the Collateral. Notwithstanding the preceding sentence, the
Collateral Agent shall endeavor to take only such actions with respect to the
Collateral as are consistent with general servicing of such Collateral and in
compliance with Federal Agency requirements; provided, however, that the
Collateral Agent shall not be liable to the Company for any actions taken by the
Collateral Agent absent gross negligence or willful misconduct. Notwithstanding
anything contained herein, in no event shall the Collateral Agent be required to
make any presentment, demand or protest, or give any notice, and the Collateral
Agent need not take any action to preserve any rights against any prior party or
any other person in connection with the Secured Debt or with respect to the
Collateral.
17. Default and Remedies.
(a) While an Event of Default exists under any Credit
Document, the Collateral Agent shall at the written request and direction of the
Required Lenders, without notice to or demand upon the Company: (a) foreclose or
otherwise enforce the Collateral Agent's security interest for the benefit of
the Secured Parties in the Collateral in any manner permitted by law or provided
for hereunder; (b) sell or otherwise dispose of the Collateral or any part
thereof at one or more public or private sales or at any broker's board or on
any securities exchange, whether or not such Collateral is present at the place
of sale, for cash or credit or future delivery and without assumption of any
credit risk, on such terms and in such manner as the Collateral Agent may
determine; (c) require the Company to assemble the Collateral and/or books and
records relating thereto and make such available to the Collateral Agent at a
place to be designated by the Collateral Agent; (d) enter into property where
any Collateral or books and records relating thereto are located and take
possession thereof with or without judicial process; and (e) prior to the
disposition of the Collateral, prepare it for disposition in any manner and to
the extent the Collateral Agent deems appropriate. Whether or not the Collateral
Agent exercises any right given pursuant to this
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Paragraph 17, upon the occurrence of any Event of Default, the Collateral Agent
on behalf of the Secured Parties shall have as to any Collateral all other
rights and remedies provided for herein and all rights and remedies of a secured
party under the Illinois Uniform Commercial Code and, in addition thereto and
not in lieu thereof, all other rights or remedies at law or in equity existing
or conferred upon the Collateral Agent on behalf of the Secured Parties by other
jurisdictions or other applicable law or given to the Collateral Agent on behalf
of the Secured Parties pursuant to any security agreement, other instrument or
agreement heretofore, now, or hereafter given as security for the Company's
obligations hereunder.
(b) The Collateral Agent is authorized, at any such sale, if
it deems it advisable so to do, to restrict the prospective bidders or
purchasers to Persons who will represent and agree that they are purchasing for
their own account, for investment, and not with a view to the distribution or
sale of any of the Collateral. Upon any sale or other disposition pursuant to
this Security Agreement, the Collateral Agent shall have the right to deliver,
assign and transfer to the purchaser thereof the Collateral or portion thereof
so sold or disposed of and all proceeds thereof shall be promptly distributed as
set forth in Paragraph 18 hereof. Each purchaser at any such sale or other
disposition shall hold the Collateral free from any claim or right of whatever
kind, including any equity or right of redemption of the Company, and the
Company specifically waives (to the extent permitted by law) all rights of
redemption, stay or appraisal which it has or may have under any rule of law or
statute now existing or hereafter adopted. The Collateral Agent shall give the
Company only such notice and shall publish such notice as may be required by the
Illinois Uniform Commercial Code or the Kentucky Uniform Commercial Code or by
other applicable law of the intention to make any such public or private sale or
sale at broker's board or on a securities exchange. Any such public sale shall
be held at such time or times within the ordinary business hours and at such
place or places permitted by the Illinois Uniform Commercial Code or the
Kentucky Uniform Commercial Code. At any such sale the Collateral may be sold in
one lot as an entirety or in separate parcels, as the Collateral Agent may
determine. The Collateral Agent may adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or place to which the
same may be so adjourned. In case of any sale of all or any part of the
Collateral on credit or for future delivery, (i) the Collateral so sold may be
retained by the Collateral Agent until the selling price is paid by the
purchaser thereof, (ii) none of the Secured Parties shall incur any liability in
case of the failure of such purchaser to take up and pay for the Collateral so
sold, and (iii) in case of any such failure, such Collateral may again be sold
as provided herein. Nothing contained in this
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Security Agreement shall prohibit any Lender or Lenders from purchasing the
Collateral at such sale.
18. Disposition of Proceeds.
"Net Proceeds" shall mean the proceeds realized upon the sale or
other disposition of any Collateral after deducting therefrom the payment of
the costs and expenses of such sale or disposition, including reasonable
compensation to the Collateral Agent's and Credit Agent's agents and counsel,
and all expenses, liabilities and advances made or incurred by any Secured Party
acting on instructions of the Required Lenders. All such costs and expenses
shall be deducted from the proceeds directly related thereto or, in the absence
of any such direct relationship, on a pro rata basis from all types of proceeds
recovered by the Collateral Agent. The total of all Net Proceeds for all
categories of Collateral is referred to as "Aggregate Net Proceeds." To the
extent the Credit Agent is holding any Net Proceeds (e.g. amounts held in the
Settlement Account), the Credit Agent shall notify the Collateral Agent of the
amount of such Net Proceeds in order to enable the Collateral Agent to calculate
the Aggregate Net Proceeds. The Collateral Agent shall distribute to the Credit
Agent for the benefit of the Lenders an amount equal to the Aggregate Net
Proceeds held by the Collateral Agent. The Credit Agent shall notify the
Collateral Agent in writing of the manner in which Aggregate Net Proceeds shall
be delivered to the Credit Agent (e.g. by providing wire transfer instructions).
19. Waiver. No Secured Party shall incur any liability as a result of
the sale of the Collateral, or any part thereof, at any public or private sale.
The Company hereby waives any claims it may have against any Secured Party
arising by reason of the fact that the price at which the Collateral may have
been sold at such private sale was less than the price which might have been
obtained at a public sale or was less than the aggregate amount of the Secured
Debt then outstanding.
20. The Collateral Agent
(a) Collateral Agent's Fee. Compensation of the Collateral
Agent for its services hereunder and reimbursement for any expenses incurred by
it in the performance of its duties hereunder shall be paid by the Company
pursuant to a separate written agreement between the Collateral Agent and the
Company.
(b) Actions by the Collateral Agent. The obligations of the
Collateral Agent hereunder are only those expressly set forth herein. The
Collateral Agent shall be entitled to (but shall not be obligated to) take or
refrain from taking any discretionary powers or actions under this Security
Agreement or any other Credit Document unless and until the Collateral Agent
shall have received
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the written direction to take or refrain from taking such action from the
Required Lenders. The Collateral Agent shall not be required to take any action
hereunder if it shall reasonably determine that by so doing it may incur
criminal or civil liability.
(c) Consultation with Experts. The Collateral Agent may
consult with legal counsel (who may be counsel for the Company), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with
the advice of such counsel, accountants or experts.
(d) Liability of Collateral Agent.
(1) Neither the Collateral Agent nor any of its directors,
officers, agents, or employees shall be liable for any action taken or
not taken by it in connection herewith (i) with the consent or at the
request of the Required Lenders or (ii) in the absence of its own gross
negligence or willful misconduct.
(2) The Collateral Agent shall not incur any liability by
acting in reliance upon any notice, consent, certificate, statement, or
other writing (which may be a bank wire, telex or similar writing) or
telephone communication believed by it to be genuine or, in the case of
a writing, to be signed by the proper party or parties.
(e) Indemnification. Subject to the limitations set forth
below, the Lenders shall indemnify the Collateral Agent (to the extent not
reimbursed by the Company) against any cost, expense (including reasonable
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from the Collateral Agent's gross negligence or willful
misconduct) that the Collateral Agent may suffer or incur in connection with
this Security Agreement or any action taken or omitted by the Collateral Agent
hereunder (the "Indemnified Amount"). Any Indemnified Amount due to the
Collateral Agent shall be paid by the Lenders pro rata in accordance with their
respective Commitment Percentages.
(f) Knowledge of Defaults. The Collateral Agent shall not be
deemed to have knowledge or notice of the occurrence of any Event of Default
unless the Collateral Agent has received notice from a Secured Party or the
Company referring to the Credit Agreement, this Security Agreement describing
such Event of Default and stating that such notice is a "Notice of Default."
Following receipt of a Notice of Default, the Collateral Agent shall assume that
the Event of Default is continuing until the Collateral Agent receives written
information to the contrary from the Credit Agent.
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(g) Reports. The Collateral Agent may, at its option with the
approval of the Company and the Credit Agent, alter the format of any report
required hereunder, provided such modified report contains the same information
previously furnished in the unmodified report.
(h) Other Transactions with Company. The Collateral Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of business with, the Company or any Subsidiary or Affiliate of the
Company as if it were not the Collateral Agent hereunder.
(i) Resignation/Removal. The Collateral Agent may resign at
any time by giving 90 days prior written notice thereof to the Credit Agent and
the Company. The Collateral Agent agrees to resign within 60 days after written
notice by the Company requesting the resignation of the Collateral Agent
provided that no Event of Default has occurred and is continuing at the time of
such request. In addition, in the event the Collateral Agent fails to perform
its obligations under this Security Agreement in any material manner and fails
to correct its performance within 30 days of receipt of written notice of such
failure given by the Credit Agent at the request of not less than the Required
Lenders, then the Collateral Agent may be removed upon 30 days written notice
given by the Credit Agent at the direction of not less than the Required
Lenders. Upon any such resignation or removal: (i) so long as there has not
occurred and is continuing an Event of Default, the Company shall appoint from
among the Lenders (which appointment shall be subject to the approval of the
Required Lenders, such approval not to be unreasonably withheld or delayed), a
successor agent for such Collateral Agent, and (ii) following the occurrence and
during the continuance of an Event of Default, the Required Lenders shall
appoint from among the Lenders, a successor agent for such Collateral Agent.
Following the appointment and acceptance of a successor Collateral Agent the
Credit Agent shall notify the Collateral Agent as to who the successor
Collateral Agent is and the Collateral shall be transferred to the new
Collateral Agent within 30 days after such acceptance. If the Company and/or the
Required Lenders, as applicable, are unable to agree on the appointment of a
successor agent prior to the expiration of any of the time periods set forth
above, the Credit Agent (or an Affiliate thereof designated by the Credit Agent)
shall be deemed a successor Collateral Agent until the appointment of and
acceptance by a different successor Collateral Agent, and the Collateral Agent
shall be permitted to transfer all the Collateral held by the Collateral Agent
to the Credit Agent (or an Affiliate thereof designated by the Credit Agent)
within 30 days after the of the applicable time period set forth above. Within
30 days after the appointment of a successor Collateral Agent and the
successor's acceptance of such appointment, that successor Collateral Agent
shall thereupon succeed to and become vested with
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all the rights, powers, privileges and duties of the retiring Collateral Agent,
and the retiring Collateral Agent shall be discharged from its duties and
obligations under this Security Agreement; provided, however, that the retiring
Collateral Agent shall not be discharged from any liability as a result of its
or its directors', officers', agents' or employees' gross negligence or willful
misconduct in connection with the performance of its duties and obligations
under this Security Agreement prior to the effective date of its resignation or
removal. Notwithstanding the foregoing, the Collateral Agent shall continue to
hold the Pledged Items and the security interest created hereunder for the
benefit of the Secured Parties until such Pledged Items and security interest
have been effectively transferred to the successor agent. After the resignation
or removal of any Collateral Agent hereunder, the provisions of this Security
Agreement shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was the Collateral Agent under this Security Agreement.
(j) Representations and Warranties. The Collateral Agent
hereby represents and warrants:
(1) The Collateral Agent is a national banking association
validly existing, in good standing and authorized to exercise
its powers, rights and privileges and is qualified to do
business in all jurisdictions where necessary, and has all
requisite power and authority to perform all of its
obligations under this Security Agreement;
(2) The execution, delivery and performance by the Collateral
Agent of this Security Agreement and all documents required
hereby to be executed by the Collateral Agent have been duly
authorized by all necessary corporate action and do not and
will not violate any existing provision of any law, rule,
regulation, order, writ, judgment, injunction, decree,
determination or award currently in effect having
applicability to the Collateral Agent; and
(3) This Security Agreement and all documents required hereby
to be executed by the Collateral Agent have been duly executed
and delivered by the Collateral Agent.
21. Confidentiality. The Collateral Agent agrees to take normal and
reasonable precautions and exercise due care to maintain the confidentiality of
all non-public information provided to it by the Company or by any other party
on the Company's behalf in connection with this Security Agreement or the Credit
Documents and agrees and undertakes that neither it nor any of its Affiliates
shall disclose any such information for any purpose or in any manner other than
pursuant to the terms contemplated by this
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Security Agreement or the Credit Documents. The Collateral Agent may disclose
such information (1) to any Secured Party, (2) at the request of any regulatory
authority or in connection with an examination of the Collateral Agent or any of
its Affiliates by any such authority, (3) pursuant to subpoena or other court
process, (4) when required to do so in accordance with the provisions of any
applicable law, (5) at the express direction of any other governmental authority
of any State of the United States of America or of any other jurisdiction in
which the Collateral Agent or any of its Affiliates conducts its business, (6)
to the Collateral Agent's or any of its Affiliates' independent auditors,
attorneys and other professional advisors, (7) if such information has become
public other than through disclosure by the Collateral Agent or any of its
Affiliates or any Lender, and (8) in connection with any litigation involving
the Collateral Agent or any of its Affiliates. Notwithstanding the foregoing,
the Company authorizes the Collateral Agent to disclose to any lending
institution proposed by the Company to become a Lender under the Credit
Agreement or any prospective or actual Participants such financial and other
information in its possession (i) which has been delivered to the Collateral
Agent pursuant to the Credit Documents or which has been delivered to the
Collateral Agent by the Company prior to entering into the Credit Documents or
(ii) which is reasonably necessary to effectuate the purposes of the Credit
Agreement and this Security Agreement, provided that unless otherwise agreed by
the Company, such lending institution or Participant shall agree in writing to
keep such information confidential to the same extent required of the Collateral
Agent hereunder.
22. Voting by Required Lenders.
In all cases in which this Security Agreement requires the consent,
approval or direction of the Required Lenders or all of the Lenders with respect
to any action, the Credit Agent shall be responsible for determining whether the
Required Lenders has given such consent, approval or direction and shall notify
the Collateral Agent thereof in writing. The Collateral Agent shall be entitled
to rely without independent verification upon the information supplied by the
Credit Agent with respect to any consent, approval or direction of the Required
Lenders (or all of the Lenders with respect to actions which require unanimous
approval of the Lenders).
23. Binding Upon Successors. All rights of the Collateral Agent and the
Secured Parties under this Security Agreement shall inure to the benefit of the
Collateral Agent and the Secured Parties and their successors and assigns, and
all obligations of the Company shall bind its successors and assigns; provided
that the Company shall not have the right to assign its rights or obligations
under this Security Agreement without the consent of all the Lenders.
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24. Entire Agreement; Severability. This Security Agreement contains the
entire security agreement and collateral agency agreement with respect to the
Collateral among Secured Parties and the Company and supersedes all prior
written or oral agreements and understandings relating thereto. All waivers by
the Company provided for in this Security Agreement have been specifically
negotiated by the parties with full cognizance and understanding of their
rights. If any of the provisions of this Security Agreement shall be held
invalid or unenforceable, this Security 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.
25. Choice of Law. This Security Agreement shall be construed in
accordance with and governed by the laws of the State of Illinois and, where
applicable and except as otherwise defined herein, terms used herein shall have
the meanings given them in the Illinois Uniform Commercial Code.
26. Place of Business; Records. The Company represents and warrants that
its principal place of business and chief executive office is at the address set
forth beneath its signature below, and that its books and records concerning the
Collateral are kept at its principal place of business and chief executive
office. The Company shall not change its principal place of business and chief
executive office without 30 days' prior written notice to the Credit Agent and
the Collateral Agent.
27. Notice. Except where instructions or notices are expressly authorized
elsewhere in this Security Agreement to be given by telephone or by other means
of transmission, all instructions, notices and other communications to be given
to any party hereto shall be in writing and shall be personally delivered or
sent by certified mail, postage prepaid, private delivery service or by
facsimile, and shall be deemed to be given for purposes of this Security
Agreement on the day (or at the time of day, if applicable) when actually
received by the intended party at its address or facsimile or telephone number
as set forth following its signature below (or as such party may specify to the
other parties in writing).
28. Modification of Agreement. No provisions of this Agreement may be
amended or waived (except for waivers expressly provided for hereunder) unless
such amendment or waiver is in writing and is signed by the Company, the
Collateral Agent if the rights or duties of the Collateral Agent are affected
thereby, and the Credit Agent on behalf of the Lenders. The Credit Agent shall
not consent to any such amendment or waiver without the prior written consent of
(i) each Lender if such amendment or waiver
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(1) would amend or waive the method of
calculating the Aggregate Borrowing Base; or
(2) releases any Collateral beyond the
releases expressly provided for herein or in the Credit
Agreement; or
(3) changes or waives any restriction on the
Company's ability to assign its rights or obligations under
any of the Credit Documents; or
(4) changes or waives any provision herein
regarding the indemnification of the Credit Agent, the
Collateral Agent or such Lender; or
(5) changes the definition of Required Lenders
or modifies any requirement for consent by all of the Lenders;
or
(6) changes or waives any provision herein
regarding the allocation among the Secured Parties of any
payments or proceeds received by the Collateral Agent
hereunder; or
(ii) the Required Lenders in the case of all other waivers or
amendments.
29. Consent of Jurisdiction.
THE COMPANY AND THE COLLATERAL AGENT EACH HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO ANY CREDIT DOCUMENTS AND EACH HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION THEY MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF THE CREDIT AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE
COMPANY OR THE COLLATERAL AGENT IN THE COURTS OF ANY OTHER JURISDICTION. ANY
JUDICIAL PROCEEDING BY THE COMPANY OR THE COLLATERAL AGENT AGAINST THE CREDIT
AGENT OR ANY LENDER OR ANY AFFILIATE OF THE CREDIT AGENT OR ANY LENDER
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTED WITH ANY CREDIT DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN
CHICAGO, ILLINOIS.
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30. Waiver of Jury Trial.
EACH PARTY TO THIS SECURITY AGREEMENT HEREBY WAIVES TRIAL BY
JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY CREDIT DOCUMENT OR THE RELATIONSHIP
ESTABLISHED THEREUNDER.
EXECUTED the day and year first above written.
SOURCE ONE MORTGAGE SERVICES CORPORATION
By:
-------------------------------------
Xxxxx X. Xxxxx
Vice President
Address for Notices:
00000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxxx, XX 00000-0000
Attn: Chief Financial Officer
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
and
Attn: Vice President/Treasury
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By:
-------------------------------------
Xxxxxx X. Xxxxxxxx
First Vice President
Address for Notices Regarding
Fundings:
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
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Address for Other Notices:
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Power
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
NATIONAL CITY BANK OF KENTUCKY, a
national banking association, as
Collateral Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address for notices:
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxx Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
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EXHIBITS AND SCHEDULES
TO
SECURITY AGREEMENT
SCHEDULE DOCUMENT
A Required Mortgage Documents
B Additional Required Mortgage Documents
C Form of Borrowing Base Report
EXHIBIT DOCUMENT
1 Required Review Steps
2 Form of Company Trust Receipt
3 Form of Shipping Request
4 Form of Whole Loan Sale Transmittal
Letter
5 Form of Warehouse-Related MBS Transmittal
6 Form of Custodial Agreement
7 Form of Collateral Transmittal - Initial
Mortgage Information
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SCHEDULE A
TO SECURITY AGREEMENT
REQUIRED MORTGAGE DOCUMENTS
1. Original of mortgage note executed in favor of the Company
(with a complete series of endorsements from the original
payee thereof, through any subsequent holders to the Company
if purchased by the Company) and endorsed by an authorized
signatory of the Company in blank.
2. Recorded Mortgage or deed of trust securing the above mortgage
note. In lieu of a recorded document, the Collateral Agent may
accept a copy certified as being out for recordation by the
escrow company, title insurance company, closing agent, or the
Company.
3. Assignment of the mortgage or deed of trust by an
authorized signatory of the Company in blank, in
recordable form and the original or a copy, certified as
being out for recordation by the records office or escrow
or title insurance company or the Company, of a proper
assignment or assignments of the related mortgage or deed
of trust from the original holder, through any subsequent
transferees, to the Company.
4. A copy, certified by the title insurance company or the
closing agent, of all applicable and necessary
powers-of-attorney and assumed name certificates.
5. For New York Consolidation Loans only, the original of the
prior mortgage note and a copy of the recorded original of the
prior mortgage which are being consolidated into the new
mortgage loan.
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SCHEDULE B
TO SECURITY AGREEMENT
ADDITIONAL REQUIRED MORTGAGE DOCUMENTS
1. The original recorded mortgage or deed of trust securing the
mortgage note.
2. Evidence of fire and extended coverage insurance in an amount
not less than the highest of the following: (a) the amount of
the Mortgage Loan, (b) 90% of the insurable value of the
improvements, and (c) an amount sufficient to prevent
co-insurance. The Collateral Agent reserves the right to
obtain a loss payable endorsement in its favor if it so
desires.
3. Evidence of Notice to Customer required by the federal
Truth-in-Lending Law and Federal Reserve Regulation Z.
4. In the case of an FHA mortgage note, an FHA insurance
certificate or a commitment to deliver such; in the case of a
VA mortgage note; a VA guaranty certificate or a commitment to
deliver such and in the case of a conventional mortgage note,
an appraisal.
5. In the case of a conventional mortgage note with a
loan-to-value ratio in excess of 80%, the applicable private
mortgage insurance policy.
6. A certified copy of the preliminary policy of or commitment
for title insurance insuring the mortgage or deed of trust as
a first lien on the property subject thereto written by a
title company and in amount and containing exceptions
satisfactory to the Collateral Agent.
7. Evidence of certificate of completion, as appropriate under
the circumstances.
8. Other documentation as the Collateral Agent may reasonably
deem appropriate, as well as documentation necessary to
fulfill requirements of the Approved Investor Commitments.
9. Such additional documents as may be necessary in the opinion
of the Collateral Agent to transfer to the Collateral Agent,
for the benefit of the Secured Parties, the title to any
Collateral pledged and/or hypothecated pursuant to the
Security Agreement.
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SCHEDULE C
TO SECURITY AGREEMENT
FORM OF BORROWING BASE REPORT
Date:_________________________
Reference is made to that certain Fourth Amended and Restated Revolving
Credit Agreement among the Company, The First National Bank of Chicago,
individually and as administrative agent, and the lenders named therein, dated
as of July 10, 1998 (the "Credit Agreement"). Capitalized terms not otherwise
defined herein are used with the same meanings as in the Credit Agreement.
BORROWING BASE:
Eligible Mortgage Loans
(Mortgage Collateral Value):
Eligible Delivered Mortgages $_______________
Eligible AP Mortgages $_______________
Total Pledged Mortgage Loans $_______________
Percentage Factor 98%
Eligible Pledged Securities $_______________
(MBS Value)
Percentage Factor 99%
Total Pledged Securities $_______________
(A) BORROWING BASE
FROM PLEDGED ITEMS $_______________
Eligible Repurchased
Agency Loans and Receivables $_______________
Percentage Factor 90%
(B) BORROWING BASE
FROM REPURCHASED AGENCY LOANS
AND RECEIVABLES $_______________
Eligible Servicing Sale Receivables $_______________
Percentage Factor 75%
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(C) BORROWING BASE
FROM ELIGIBLE SERVICING SALE
RECEIVABLES $_______________
(D) BALANCE IN SETTLEMENT ACCOUNT $_______________
(E) CASH AND CASH EQUIVALENTS $_______________
SUM OF (A) - (E) ABOVE $_______________
Reconciling Items:
Timing Difference $_______________
Loan Detail Difference $_______________
BORROWING BASE $_______________
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EXHIBIT 1
TO SECURITY AGREEMENT
REQUIRED REVIEW STEPS
1. All submitted documents, are consistent with the related
Collateral Transmittal as to borrower name, loan face amount,
loan type and the Company's loan number.
2. The note and mortgage/deed of trust each bears an original
signature or signatures which appear to be those of the person
or persons named as the maker and mortgagor/trustor, or, in
the case of a certified copy of the mortgage/deed of trust,
such copy bears what appears to be a reproduction of such
signature or signatures.
3. Except for (a) the endorsement to the Company of the note
in the event such loan was purchased by the Company and
(b) the endorsement in blank of the note by an authorized
signatory of the Company, neither the note, the
mortgage/deed of trust, nor the assignment(s) of the
mortgage/deed of trust contain any irregular writings
which appear on their face to affect the validity of any
such endorsement or to restrict the enforceability of the
document on which they appear.
4. The note is endorsed in blank by an authorized signatory of
the Company.
5. The assignment of the mortgage/deed of trust bears an original
signature of an authorized signatory of the Company.
6. Such other review steps as the Collateral Agent, in its sole
discretion, deems appropriate.
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EXHIBIT 2
TO SECURITY AGREEMENT
FORM OF COMPANY TRUST RECEIPT
_______________, 19__
The undersigned, SOURCE ONE MORTGAGE SERVICES CORPORATION, a Delaware
corporation (the "Company"), acknowledges receipt from NATIONAL CITY BANK OF
KENTUCKY, acting as agent, bailee and custodian (in such capacity "Collateral
Agent") for the exclusive benefit of the Secured Parties pursuant to the
Security Agreement (as those terms and capitalized terms not otherwise defined
herein are defined in that certain Fourth Amended and Restated Revolving Credit
Agreement dated as of July 10, 1998, among the Lenders, the Company and The
First National Bank of Chicago, as Agent) of the following described
documentation for the identified Mortgage Loans (the "Collateral Documents"),
possession of which is herewith entrusted to the Company solely for the purpose
of correcting documentary defects relating thereto:
Loan Document
Borrower Name Loan Number Note Amount Delivered
It is hereby acknowledged that a security interest pursuant to the
Illinois Uniform Commercial Code and the Kentucky Commercial Code in the
Collateral hereinabove described and in the proceeds of said Collateral has been
granted to Collateral Agent for the benefit of the Secured Parties pursuant to
the Security Agreement.
In consideration of the aforesaid delivery by Collateral Agent, the
Company hereby agrees to hold said Collateral in trust for Collateral Agent on
behalf of the Secured Parties as provided under and in accordance with all
provisions of the Security Agreement and to return said Collateral to Collateral
Agent no later than the close of business on the fifteenth calendar day
following the date hereof or, if such day is not a Business Day, on the
immediately succeeding Business Day. The Company represents and warrants that
the aforesaid delivery by the Collateral Agent shall not cause any violation of
any of the Borrowing Bases or any other provision of the Credit Agreement.
SOURCE ONE MORTGAGE SERVICES CORPORATION,
a Delaware corporation
By:________________________________
Name:______________________________
Title:_____________________________
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EXHIBIT 3
TO SECURITY AGREEMENT
FORM OF SHIPPING REQUEST
Date:_______________
National City Bank of Kentucky,
as Collateral Agent
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: ________________
This letter is to serve as authorization for you to endorse and ship the
following loans:
Loan Number Borrower Name Note Amount
to the following address under Commitment #__________ (the "Commitment") from an
Approved Investor as follows:
NAME:
ADDRESS:
ATTENTION:
Please endorse the notes as follows:
Please ship the loan documents either by ____________________ or by such other
courier service as we have designated to you as "approved". The courier shall
act as an independent contractor bailee acting solely on your behalf as
Collateral Agent for the Secured Parties (as defined in that certain Fourth
Amended and Restated Security and Collateral Agency Agreement dated as of July
10, 1998, as the same may be amended, extended or replaced from time to time),
but we acknowledge and agree that you are not responsible for any delays in
shipment caused by courier or any other actions or inactions of the courier,
including, without limitation, any loss of any loan documents; however, because
the Commitment expires on _______________, 199_, we ask that you deliver the
loan documents to the courier no later than _______________, 199_.
Please have the courier xxxx us by using our acct #__________. If you should
have any questions, or should feel the need for
-37-
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additional documentation, please do not hesitate to call
______________.
SOURCE ONE MORTGAGE SERVICES CORPORATION,
a Delaware corporation
By:________________________________
Name:______________________________
Title:_____________________________
-38-
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EXHIBIT 4
TO SECURITY AGREEMENT
(Direct Investor)
Date:____________
Name of Delivery Service:____________________________________
Airbill No.:____________________
FORM OF WHOLE LOAN SALE TRANSMITTAL LETTER
[LETTERHEAD OF COLLATERAL AGENT]
[Approved Investor]
_________________________
_________________________
Re: Source One Mortgage Services Corporation;
Sale of Mortgage Loans
Attached please find those Mortgage Loans listed separately on the
attached schedule, which Mortgage Loans are owned by SOURCE ONE MORTGAGE
SERVICES CORPORATION (the "Company") and are being delivered to you for
purchase.
The Mortgage Loans comprise a portion of the Collateral under (and as
the term "Collateral" and capitalized terms not otherwise defined herein are
defined in) that certain Fourth Amended and Restated Revolving Credit Agreement
dated as of July 10, 1998 by and among the Company, The First National Bank of
Chicago, as Agent, and the Lenders thereunder. Each of the Mortgage Loans is
subject to a security interest in favor of National City Bank of Kentucky (the
"Collateral Agent") on behalf of the Secured Parties 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:
WIRE INSTRUCTIONS TO SETTLEMENT ACCOUNT:
______________________________
______________________________
______________________________
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 Secured Parties. In the event any Mortgage Loan is unacceptable for
purchase, return the rejected item directly to the Collateral Agent at the
address set
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forth below. The Mortgage Loan must be so returned or sales proceeds remitted in
full no later than [forty-five (45) days][UNLESS DELIVERED TO A GOVERNMENT
HOUSING PROGRAM WHICH IS NOT A FEDERAL AGENCY] [seventy-five (75) days][IN THE
CASE OF DELIVERY TO A GOVERNMENT HOUSING WHICH IS NOT A FEDERAL AGENCY] from the
date hereof. In no event shall any Mortgage Loan be returned or sales proceeds
remitted to the Company. If you are unable to comply with the above
instructions, please so advise the undersigned immediately.
NOTE: BY ACCEPTING THE MORTGAGE LOANS DELIVERED TO YOU WITH THIS
LETTER, YOU CONSENT TO BE THE CUSTODIAN, AGENT AND BAILEE FOR THE SECURED
PARTIES ON THE TERMS DESCRIBED IN THIS LETTER. THE UNDERSIGNED, AS COLLATERAL
AGENT, 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
UNDERSIGNED; HOWEVER, YOUR FAILURE TO DO SO DOES NOT NULLIFY SUCH CONSENT.
Sincerely,
NATIONAL CITY BANK of KENTUCKY, as
Collateral Agent
By:________________________________
Title:_____________________________
Address: _________________________
_________________________
_________________________
-40-
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The undersigned Company agrees to and acknowledges the terms of this
letter and, notwithstanding any contrary understanding with or instructions to
you, the addressee of this letter, the Company instructs you to act according to
the instructions set forth in this letter. These instructions cannot be altered
except by written instructions executed by Collateral Agent. The Company and the
Collateral Agent agree that a counterpart facsimile of this letter executed by
the Company shall suffice as an original of the Company's agreement to and
acknowledgment of the terms of this letter.
SOURCE ONE MORTGAGE SERVICES CORPORATION,
a Delaware corporation
By:________________________________
Name:______________________________
Title:_____________________________
ACKNOWLEDGEMENT OF RECEIPT
[Approved Investor]
By:_______________________________
Name:_____________________________
Title:____________________________
Date:_____________________________
-41-
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EXHIBIT 5
TO SECURITY AGREEMENT
(Pool Formation)
FORM OF WAREHOUSE-RELATED SECURITY TRANSMITTAL LETTER
[COLLATERAL AGENT LETTERHEAD]
Date:____________________
[Certificating Custodian]
_________________________
_________________________
Re: Source One Mortgage Services Corporation;
Shipment of Mortgage Loans for Pool Formation
Attached please find those Mortgage Loans listed separately on the
attached schedule, which are owned by SOURCE ONE MORTGAGE SERVICES CORPORATION,
a Delaware corporation (the "Company") and are being delivered to you, as
custodian/trustee (the "Certificating Custodian"), for certification in
connection with the formation of a mortgage pool supporting the issuance of a
mortgage-backed security (the "Warehouse-Related Security") described as
follows: ______________________________.
The Mortgage Loans comprise a portion of the Collateral under (and as
the term "Collateral" and capitalized terms not otherwise defined herein are
defined in) that certain Fourth Amended and Restated Revolving Credit Agreement
dated as of July 10, 1998, by and among the Company, The First National Bank of
Chicago, as Agent, and the Lenders. Each of the Mortgage Loans is subject to a
security interest in favor of National City Bank of Kentucky ("Collateral
Agent") for the benefit of the Secured Parties, which security interest shall be
automatically released upon the issuance of the Warehouse-Related Security in
accordance with the terms of the prescribed GNMA, FNMA or FHLMC form enclosed
herewith.
Pending issuance of the Warehouse-Related Security, the aforesaid
security interest in each Mortgage Loan will remain in full force and effect,
and you shall hold such Collateral as custodian, agent and bailee for and on
behalf of the Secured Parties. In the event any Mortgage Loan is unacceptable
for pool formation, return the rejected item directly to the undersigned, as
Collateral Agent, at the address set forth below. Each Mortgage Loan must be so
returned or the Warehouse-Related Security issued no later than [forty-five (45)
days][UNLESS DELIVERED TO A GOVERNMENT HOUSING PROGRAM WHICH IS NOT A FEDERAL
AGENCY] [seventy-five (75) days][IN THE CASE OF DELIVERY TO A GOVERNMENT HOUSING
WHICH IS NOT A FEDERAL AGENCY] from the date hereof. In no event shall any
Mortgage Loan be returned or proceeds relating thereto be
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43
remitted to the Company. If you are unable to comply with the above
instructions, please so advise the undersigned immediately.
NOTE: BY ACCEPTING THE MORTGAGE LOANS DELIVERED TO YOU WITH THIS
LETTER, YOU CONSENT TO BE THE CUSTODIAN, AGENT AND BAILEE FOR THE SECURED
PARTIES ON THE TERMS DESCRIBED IN THIS LETTER. THE UNDERSIGNED, AS COLLATERAL
AGENT, 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
UNDERSIGNED; HOWEVER, YOUR FAILURE TO DO SO DOES NOT NULLIFY SUCH CONSENT.
Sincerely,
NATIONAL CITY BANK OF KENTUCKY, as
Collateral Agent
By:________________________________
Title:_____________________________
Address: _________________________
_________________________
_________________________
ACKNOWLEDGEMENT OF RECEIPT
[Certificating Custodian]
By:_______________________________
Name:_____________________________
Title_____________________________
Date:_____________________________
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EXHIBIT 6
TO SECURITY AGREEMENT
FORM OF CUSTODIAL AGREEMENT
(With Operating Instructions Attached)
_______________, 199_
_________________________
_________________________
_________________________
Re: Source One Mortgage Services Corporation
Ladies and Gentlemen:
The undersigned, National City Bank of Kentucky (the "Collateral
Agent") acts in the capacity as Collateral Agent pursuant to: (1) that certain
Fourth Amended and Restated Revolving Credit Agreement dated as of July 10, 1998
(as amended from time to time, the "Credit Agreement", and as capitalized terms
not otherwise defined herein are used with the same meaning as in the Credit
Agreement) by and among SOURCE ONE MORTGAGE SERVICES CORPORATION (the
"Company"), the lenders participating therein (collectively, the "Lenders"), and
the FIRST NATIONAL BANK OF CHICAGO, as agent for the Lenders (the "Credit
Agent"), and (2) that certain Fourth Amended and Restated Security and
Collateral Agency Agreement (as amended from time to time, the "Security
Agreement") dated concurrently therewith among the Collateral Agent, the Company
and the Credit Agent.
The Collateral Agent represents and confirms that it has the power and
authority under the Credit Agreement and the Security Agreement to execute this
Custodial Agreement. The Collateral Agent may execute any of its duties
hereunder by or through agents or attorneys-in-fact of whose appointment you
have been notified in writing.
The Collateral Agent hereby appoints you and you hereby accept
appointment to act as agent, custodian and bailee for the benefit of the Secured
Parties (as defined in the Security Agreement) (in such capacity, the "Approved
MBS Custodian"). In such capacity, you agree to accept delivery only on a free
basis of certain mortgage-backed securities delivered to you from time to time
identified in a letter in the form attached hereto as Exhibit A (all such
mortgage-backed securities delivered to you and so identified being referred to
herein as "Subject Securities"). This Custodial Agreement governs your rights
and responsibilities as Approved MBS Custodian with respect to all Subject
Securities.
-44-
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The Collateral Agent hereby directs you, as Approved MBS Custodian, to
hold or dispose of Subject Securities deposited with you only in accordance with
the instructions of a person described as an "Authorized Collateral Agent
Representative" on a schedule from time to time delivered to you by the
Collateral Agent (the initial list of such persons being attached hereto as
Schedule I) or otherwise as expressly permitted hereunder, including without
limitation the Company's right to direct the sale or disposition of the Subject
Securities as described in the following paragraph. You are authorized, directed
and instructed to act upon all instructions from persons reasonably believed by
you to be genuine and authorized. Any instruction given hereunder may, in your
discretion, be by telegraph, cable, facsimile or electronic communication which
is received by you.
All Subject Securities are to be held by you in a custodial account
(Account No. __________) maintained with you (the "MBS Custodial Account").
Unless and until you have received written notice to the contrary from the
Collateral Agent at the direction of the Required Lenders (which notice may be
by facsimile transmission) following an Event of Default, you may from time to
time deliver Subject Securities at the direction of the Company, to, but only
to, Approved Investors (as listed on a schedule of "Approved Investors"
delivered to you from time to time by an Authorized Collateral Agent
Representative) against payment of the purchase price therefor. Notwithstanding
the preceding sentence, even after your receipt of notice from the Collateral
Agent that an Event of Default exists, you may deliver Subject Securities at the
direction of the Company, but only to Approved Investors pursuant to
then-existing Approved Investor Commitments. The proceeds of the sale or other
disposition of all Subject Securities are to be held by you in an account
(Account No. __________) maintained with you (the "Custodian Settlement
Account") and transferred by the end of each Business Day to Account No.
19-19210 maintained in the Credit Agent's name at The First National Bank of
Chicago (the "Settlement Account") as follows:
______________________________
______________________________
______________________________
By executing this Custodial Agreement the Company confirms and the
Collateral Agent and the Company notify you that the Company has assigned and
granted to the Collateral Agent a security interest in and lien upon all now
existing and hereafter arising right, title and interest of the Company in the
MBS Custodial Account, the Custodian Settlement Account and the Settlement
Account and in any and all investments and proceeds at any time held therein.
-45-
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Unless and until you have received written notice from an Authorized
Collateral Agent Representative (which notice may be by facsimile transmission)
that there has occurred an Event of Default or Default, you may, at your
election, elect to make advances against Subject Securities held by you in the
MBS Custodial Account pending their sale and delivery to a purchaser thereof, in
accordance with a repo line of credit established between you and the Company;
provided, however, that: (1) any such repo line of credit shall be on terms and
conditions customary for similar lines of credit which you provide to customers,
including, without limitation, as to advance rate and interest charge; (2) all
advances to the Company under such repo line of credit (each, a "Repo Advance")
shall be transferred to the Custodian Settlement Account; and (3) you hereby
waive any and all rights of offset, counterclaim or other recoupment rights
which you may have with respect to any Repo Advance against the MBS Custodial
Account, the Custodian Settlement Account and any Subject Securities or proceeds
thereof at any time held therein (other than the Subject Securities which are
the subject of the Repo Advance). If, but only if and only to the extent there
has been transferred to the Custodian Settlement Account the proceeds of a given
Repo Advance, the rights of the Collateral Agent in the Subject Securities which
are the subject of the Repo Advance are hereby automatically subordinated to
your rights therein as collateral security for the repayment of such Repo
Advance, and upon receipt of such proceeds in the Settlement Account, such
rights of the Collateral Agent shall be automatically released.
You shall be under no duty to take or omit to take any action with
respect to Subject Securities, except as specifically set forth in this
Agreement and the Operating Instructions attached hereto as Exhibit B, unless
specifically otherwise directed by the Collateral Agent and agreed to by you in
writing. In the event that you shall be uncertain as to your duties or rights
hereunder, you shall be entitled to refrain from taking any action until you
shall be directed otherwise by an order of a court of competent jurisdiction. In
case you should agree to our request and on our behalf to appear in, prosecute
or defend any legal or equitable proceeding either in your own name or in the
name of your nominee, you shall first be indemnified to your satisfaction (other
than against your gross negligence and willful misconduct).
By accepting delivery of any Subject Security, you shall be deemed to
have agreed to hold such Subject Security as Approved MBS Custodian hereunder,
free and clear of all liens, claims, interests and rights of offset in your
favor or in favor of persons claiming through you, subject only to the rights
with respect to Repo Advances described above. Until you have been notified in
writing (including by telecopier) by an Authorized Collateral Agent
Representative of the occurrence of an Event of Default, you are hereby
authorized to return Subject Securities to the
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issuer/transfer agent therefor at the Company's written request in connection
with the reissuance thereof in smaller denominations; provided, however, that
any delivery of Subject Securities for reissuance shall be covered by a
transmittal letter or other written agreement instructing that the reissued
securities be returned directly to you. In this connection, we acknowledge
familiarity with the current securities industry practice of delivering physical
securities against later payment on the delivery date. Notwithstanding our
instructions to deliver Subject Securities against payment, you are authorized
to make delivery of such physical securities against a temporary receipt
(sometimes called a "window ticket") in lieu of payment. You agree to use your
best efforts to obtain payment therefor during the same business day, but we
confirm our assumption of all risks of payment for such deliveries. You may
accept certified checks in payment for Subject Securities delivered on the
Company's instruction and you shall not be responsible for the risks of
collectability of any such checks. YOU ARE HEREBY IRREVOCABLY INSTRUCTED BY THE
COMPANY AND THE COLLATERAL AGENT THAT ALL PROCEEDS RECEIVED FROM THE SALE OR
OTHER DISPOSITION OF SUBJECT SECURITIES AND ALL REPO ADVANCES, UNTIL OTHERWISE
NOTIFIED IN WRITING BY THE COLLATERAL AGENT, SHALL BE WIRED TO THE SETTLEMENT
ACCOUNT AS PROVIDED ABOVE.
You will provide to the Collateral Agent on a daily basis at or before
9:30 a.m. (Chicago time) a report of the prior day's activity with respect to
the MBS Custodial Account, the Custodian Settlement Account and Repo Advances
made by you hereunder.
You shall not be liable or accountable for any act or omission of
brokers, dealers or agents in connection with this Custodial Agreement. In
carrying out your duties hereunder, you may use such methods or agencies as you
determine in your sole discretion, including your own facilities.
You shall maintain regular business records documenting all
instructions transmitted to you through any authorized means and any response by
you. You are authorized to electronically record any telephone communications
with the Company or the Collateral Agent arising out of this Custodial
Agreement. Your records shall be determinative of the form, content and time of
all the Company's and Collateral Agent's instructions and any response from you.
The record of each instruction and any response thereto shall be retained by you
for at least ninety (90) days following the date of the instruction. Any claim
against you for failure to properly follow an instruction transmitted by the
Company or the Collateral Agent must be made in writing and received by you
within sixty (60) days after the date such instruction was received by you.
You shall give the Subject Securities that come into your possession
under this Custodial Agreement the same physical care and safeguards as are
afforded similar property owned by you;
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provided, however, your responsibility hereunder is limited to losses occasioned
directly by the gross negligence or willful misconduct of your employees, to the
extent of the market value of the Subject Securities at the date of the
discovery of such loss. With respect to any Subject Securities which you deliver
for us to a third party, and with respect to such delivery, you shall be deemed
no more than an "intermediary" as referenced in Section 8-306(3) of the New York
Uniform Commercial Code, and the only warranty given by you shall be the
warranty provided in said Section 8-306(3). In no event shall you be liable for
any indirect, special or consequential loss, even if you have been advised of
the possibility of such loss. You may, at your option, make arrangements for
insuring yourselves against loss from any cause, but you shall not be under any
obligation to insure for our benefit.
Except as expressly set forth above with respect to advances made by
you in connection with "late deliveries" and Repo Advances, none of the Subject
Securities held in the MBS Custodial Account, the funds held at any time in the
Custodian Settlement Account, the Subject Securities or any proceeds of the sale
or other disposition thereof will be subject to any right, charge, security
interest, lien, encumbrance or claim of any kind in your or your creditors'
favor. Any claims for the payment of fees with respect to the safe custody or
administration of Subject Securities or for compensation, expenses, commitments
made by you upon instructions of the Collateral Agent, reimbursement of taxes
incurred by you for the account of the Collateral Agent, any penalties incurred
by or levied or assessed against you resulting from the Collateral Agent's
improper or incorrect instructions, or other liabilities of the Collateral Agent
to you, and for indemnity against any claim or liability to which you are
subjected by reason of any registration of Subject Securities shall be
enforceable solely against the Company and none of the Collateral Agent, the
Credit Agent or any Secured Party shall have any responsibility therefor (except
to the extent any of the foregoing are due to the gross negligence or willful
misconduct of the Collateral Agent, the Credit Agent or any Secured Party, as
applicable). The Collateral Agent and the Company agree to make no claim against
you except for any such claims or liabilities arising, or claimed to have
arisen, as a result of your gross negligence or willful misconduct.
The Operating Instructions attached hereto are hereby made part hereof
and any and all capitalized terms defined herein shall have the same meaning
when used therein.
This Custodial Agreement contains the whole of the understanding
between you and the Collateral Agent concerning the subject matter hereof and no
provision hereof shall be modified or altered except in a writing signed by both
you and the Collateral Agent.
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This Custodial Agreement shall be governed by the laws of the State of
New York and shall be binding upon the Collateral Agent and upon its successors
and assigns and shall inure to your benefit and your successors and assigns and
shall be deemed continuing until terminated by either the Collateral Agent or
you upon at least sixty (60) days prior written notice to the other.
This letter is made in triplicate and will become an agreement between
you and the Collateral Agent upon your acceptance hereof in the space provided
below at your offices in the State of New York.
NATIONAL CITY BANK OF KENTUCKY, as
Collateral Agent
By:________________________________
Title:_____________________________
AGREED TO AND ACCEPTED:
_________________________,
as Approved MBS Custodian
By:______________________
Name:____________________
Title:___________________
ACKNOWLEDGEMENT AND AUTHORIZATION
The Company approves the foregoing Custodial Agreement and authorizes
the Approved MBS Custodian to act in accordance with the terms thereof. The
Company agrees to be bound by the terms of the Custodial Agreement (including
all Exhibits thereto) to the same extent as if a party thereto. The Company
agrees to indemnify the Approved MBS Custodian for, and hold the Approved MBS
Custodian harmless against, any loss, liability or expense in connection with,
arising out of or in any way related to the transaction contemplated and
relationship established by the Custodial Agreement, or any action or omission
by the Approved MBS Custodian in connection with the Custodial Agreement, or any
agent, broker or dealer employed by the Approved MBS Custodian hereunder,
including the reasonable costs and expenses incurred in defending any such claim
of liability, except that the Company shall not be liable for (i) any loss,
liability or expense that is determined by a judgment of a court of competent
jurisdiction that is binding on the Approved MBS Custodian, final and not
subject to review on appeal, to be the direct result of acts or omissions on the
Approved MBS
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Custodian's part constituting gross negligence or willful misconduct, or (ii)
any claim that is based on the Approved MBS Custodian's warranty as provided in
Section 8-306(3) of the New York Uniform Commercial Code.
SOURCE ONE MORTGAGE SERVICES CORPORATION,
a Delaware corporation
By:________________________________
Name:______________________________
Title:_____________________________
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EXHIBIT A
TO CUSTODIAL AGREEMENT
FORM OF LETTER TO APPROVED MBS CUSTODIAN
To: _________________________,
as Approved MBS Custodian
Re: Source One Mortgage Services Corporation;
Custodial and Collateral Agency Instructions
Ladies and Gentlemen:
Reference is made to the attached schedule relating to a
letter/certification to a transfer agent/trustee for the issuance of the
Security described more particularly therein, which Security is supported by a
pool of residential mortgage loans and/or mortgage-backed securities including
mortgage loans and/or mortgage-backed securities in which the undersigned as
collateral agent (in such capacity, the "Collateral Agent"), acting under that
certain Fourth Amended and Restated Security and Collateral Agency Agreement
dated as of July 10, 1998, as amended, extended or replaced from time to time,
holds a first priority perfected security interest. The attached schedule is (i)
Delivery Schedule Form 11705 in the case of GNMA Securities, (ii) Delivery
Schedule Form 996 in the case of FHLMC Securities, (iii) Delivery Schedule Form
2014 in the case of FNMA Securities, or (iv) a form containing substantially
similar information in the case of any other Securities. Pursuant to the
letter/certification, the transfer agent/trustee has been instructed to deliver
such Security to you. You are hereby notified that the Collateral Agent and the
Secured Parties named therein have a first perfected security interest in the
Security and in all proceeds of the sale or other disposition thereof and in all
accounts into which said proceeds may be deposited.
This letter will confirm your agreement to hold such Security as a
"Subject Security" under and on terms and conditions set forth more particularly
in that certain Custodial Agreement, dated as of _______________, 199_ between
you and the Collateral Agent.
Very truly yours,
NATIONAL CITY BANK OF KENTUCKY, as
Collateral Agent
By:________________________________
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The undersigned agree to and acknowledge the terms of this letter and,
notwithstanding any contrary understanding with or instructions to you, the
addressee of this letter, the undersigned instruct you to act according to the
instructions set forth in this letter. These instructions cannot be altered
except by written instructions executed by Collateral Agent.
SOURCE ONE MORTGAGE SERVICES CORPORATION,
a Delaware corporation
By:________________________________
Name:______________________________
Title:_____________________________
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EXHIBIT B
TO CUSTODIAL AGREEMENT
OPERATING INSTRUCTIONS
These Operating Instructions are attached to and made a part of the
Custodial Agreement between National City Bank of Kentucky and
___________________, dated as of _______________, 199_ (as amended from time to
time, the "Custodial Agreement"). Terms defined therein shall have their same
meanings when used herein.
1. From time to time GNMA, FNMA and FHLMC Subject Securities will be
issued at the request of the Company and credited to your account with the
Federal Reserve Bank of New York ("FRBNY") (in the case of FNMA and FHLMC
Subject Securities) or your account with the Participants Trust Company ("PTC")
(in the case of GNMA Subject Securities) (in each case, to be held by you for
the account of the Collateral Agent) in accordance with the Code of Federal
Regulations (in the case of FNMA and FHLMC Subject Securities) or the rules of
PTC (in the case of GNMA Subject Securities). Upon your receipt of confirmation
that such Subject Securities have been deposited into your account with FRBNY
(in the case of FNMA and FHLMC Subject Securities) or your account with PTC (in
the case of GNMA Subject Securities), you shall promptly issue to the Collateral
Agent and the Company your confirmation that (1) you have received such
confirmation of the Fedwire (in the case of FNMA and FHLMC Subject Securities,
which confirmation will include the number of Subject Securities deposited into
your account with FRBNY) or from PTC (in the case of GNMA Subject Securities),
(2) you have made appropriate entries on your books reflecting the interests of
the Company as beneficial owner and the Collateral Agent as secured party with
respect to such Subject Securities, and (3) there are no security interests or
any rights or claims of any third party in such Subject Securities in your favor
or known to you which have priority over the security interest of the Collateral
Agent in such Subject Securities. You shall be under no obligation to ensure or
verify that Securities identified in transmittal letters (in the form of Exhibit
A to the Custodial Agreement) are in fact credited to your account(s), but you
shall be obligated only to report your actual receipt of Subject Securities to
the Collateral Agent and the Company in accordance with the provision of this
Instruction 1.
2. With respect to the delivery or transfer of Subject Securities which
you hold for the account of the Collateral Agent, you are hereby authorized to
act only upon instructions from the Collateral Agent or, to the extent permitted
by the Custodial Agreement, by the Company. Upon notification to you by the
Collateral Agent at the direction of the Required Lenders following an "Event of
Default" under the Credit Agreement, no third party,
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including without limitation the Company, may direct you to make any delivery or
transfer of such Subject Securities other than Subject Securities to be
delivered pursuant to then-existing Approved Investor Commitments.
3. The proceeds of redemptions, collections and other receipts,
including dividend and interest income, shall be credited to the Custodial
Settlement Account upon collection or payment.
4. You are to notify the Collateral Agent and the Company upon receipt
of notice by you of any call for conversion, redemption, subscription rights or
similar proceeding affecting the Subject Securities held in the relevant account
(any of the foregoing being referred to herein as "Account Proceedings"), and
shall take such action in respect thereof as you may be directed in writing by
the Collateral Agent; provided, however, that you shall have no duty or
responsibility to notify the Company or the Collateral Agent of any Account
Proceedings which do not appear in The Wall Street Journal (New York Edition),
The Standard & Poor's Called Bond Record for Preferred Stocks, Financial Daily
Called Bond Service, The Xxxxxx Services or official notifications from the
Depository Trust Company or such other publications which you may deem
reasonable from time to time. All solicitation fees payable to you as agent in
connection with such event will be retained by you unless specifically agreed to
the contrary by you.
5. You are authorized and empowered in the name and on behalf of the
Collateral Agent and the Company to execute any certificates of ownership or
other reports which you are or may hereafter be required to execute and furnish
under any regulation of the Internal Revenue Service, or other authority of the
United States, insofar as the same are required in connection with any property
which is now or may hereafter be in your possession by virtue of the Custodial
Agreement and these Operating Instructions, claiming no exemptions on behalf of
the Collateral Agent or the Company. In the preparation of such reports, the
status of the Collateral Agent is to be described as a bank, trust company or
financial institution, as the case may be, domiciled in the United States. The
Collateral Agent agrees to notify you immediately in writing of any change in
such status.
6. All mail communications which are to be furnished or forwarded
hereunder to the Collateral Agent or the Company shall be addressed to such
party at the last address on your records, provided that in case you in your
sole discretion shall determine that an emergency exists, you may use such other
means of communication as you shall deem advisable.
7. You are under no duty to supervise, recommend or advise the
Collateral Agent relative to the investment, purchase, sale,
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retention or other disposition of any property held hereunder unless
specifically provided for by the Custodial Agreement.
8. With respect to any direction to receive securities in transactions
not placed through you, you shall have no duty or responsibility to advise the
Company of non-receipt, or to take any steps to obtain delivery of securities
from any brokers or dealers. All dealer concessions made to you will be retained
by you unless specifically agreed to the contrary by you.
9. Notwithstanding anything herein to the contrary, unless instructions
are received from the Collateral Agent, specifying a different destination than
the address listed on your records for the Collateral Agent, within ten (10)
days of the receipt of any termination notice, you shall have the right to
transfer all securities and other property held by you or any depositary in
connection with the Custodial Agreement or registered in your name to the
Collateral Agent at the address listed on your records.
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SCHEDULE I
TO CUSTODIAL AGREEMENT
AUTHORIZED COLLATERAL AGENT REPRESENTATIVES
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EXHIBIT 7
TO SECURITY AGREEMENT
COLLATERAL TRANSMITTAL -- INITIAL MORTGAGE INFORMATION
1. CUSTOMER NAME ______________________________
2. LOAN NUMBER _________________________________
3. MORTGAGOR ___________________________________
SURNAME ONLY
4. AP STATUS CODE _______________________________
5. DEPOSIT DATE _________________________________
6. ORIGINAL NOTE AMOUNT $_____________________
7. ACQUISITION COST $____________________________
8. TAKE-OUT VALUE $_____________________________
9. NOTE DATE OR CONVERSION DATE _____________
10. NOTE RATE ____________________________________
11. LOAN TYPE (i.e. a group category (e.g. GNMA 15, FNMA/FHLMC 30,
etc.) set forth on Exhibit F to the Credit Agreement)
______________________
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