CONSUMER PLEDGE AGREEMENT
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PRINCIPAL LOAN DATE MATURITY LOAN NO CALL / COLL INT. METHOD OFFICER INITIALS
$1,025,000.00 01-30-2002 01-29-2005 365/365
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References in the shaded area are for Lender's use only and do not limit the applicability of this
document to any particular loan or item.
Any item above containing ***** has been omitted due to text length limitations.
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GRANTOR: Xxxxx Xxxxxxx LENDER: Xxxxx Financial Corporation
00 Xxxxxxxxx Xxxxx Xxxxx Financial Corporation
Xxxxxxxx, XX 00000 000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
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THIS
CONSUMER PLEDGE AGREEMENT dated January 30, 2002, is entered into between
Xxxxx Xxxxxxx (referred to below as "I") and Xxxxx Financial Corporation
(referred to below as "Lender").
GRANT OF SECURITY INTEREST. To secure the Indebtedness described below
(including all obligations under the Note and this Agreement), I grant to Lender
a security interest in all of the Property described below. I understand that
the following statements set forth my responsibilities, as well as Lender's
rights concerning the Property. I agree as follows:
PROPERTY DESCRIPTION. The word "Property" as used in this Agreement means all of
my property (however owned if more than one), in the possession of Lender (or in
the possession of a third party subject to the control of Lender), whether
existing now or later and whether tangible or intangible in character, including
without limitation each and all of the following:
ALL SHARES OF THE COMMON STOCK OF XXXXX HOME EQUITY CORPORATION ("IHE")
BENEFICIALLY OWNED BY BORROWER, AND (II) ALL OF BORROWER'S RIGHT, TITLE AND
INTEREST IN, TO AND UNDER THAT CERTAIN SHAREHOLDER AGREEMENT AMONG
BORROWER, IHE AND LENDER DATED OCTOBER 8, 1996, AS AMENDED (THE
"SHAREHOLDER AGREEMENT").
In addition, the word "Property" includes all of my property (however owned), in
the possession of Lender (or in the possession of a third party subject to the
control of Lender), whether now or hereafter existing and whether tangible or
intangible in character, including without limitation each of the following:
(A) ALL PROPERTY TO WHICH LENDER ACQUIRES TITLE OR DOCUMENTS OF TITLE.
(B) ALL PROPERTY ASSIGNED TO LENDER.
(C) ALL PROMISSORY NOTES, BILLS OF EXCHANGE, STOCK CERTIFICATES, BONDS,
SAVINGS PASSBOOKS, TIME CERTIFICATES OF DEPOSIT, INSURANCE POLICIES, AND
ALL OTHER INSTRUMENTS AND EVIDENCES OF AN OBLIGATION.
(D) ALL RECORDS RELATING TO ANY OF THE PROPERTY DESCRIBED IN THIS PROPERTY
SECTION, WHETHER IN THE FORM OF A WRITING, MICROFILM, MICROFICHE, OR
ELECTRONIC MEDIA.
(E) ALL INCOME AND PROCEEDS FROM THE PROPERTY AS DEFINED HEREIN.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all my accounts with Lender (whether checking, savings, or
some other account). This includes all accounts I hold jointly with someone else
and all accounts I may open in the future. However, this does not include any
XXX or Xxxxx accounts, or any trust accounts for which setoff would be
prohibited by law. I authorize Lender, to the extent permitted by applicable
law, to charge or setoff all sums owing on the Indebtedness against any and all
such accounts.
REPRESENTATIONS AND PROMISES WITH RESPECT TO GRANTOR. I represent and promise to
Lender that my correct legal name and address is: Xxxxx Xxxxxxx, 00 Xxxxxxxxx
Xxxxx, Xxxxxxxx, XX 00000.
REPRESENTATIONS AND PROMISES WITH RESPECT TO THE PROPERTY. I represent and
promise to Lender that:
OWNERSHIP. I am the lawful owner of the Property. The Property is free of
all loans, liens, mortgages, and claims of others except for those I have
disclosed to Lender in writing, and which have been accepted by Lender,
prior to my signing of this Agreement.
RIGHT TO PLEDGE. I have the full right, power and authority to enter into
this Agreement and to grant a security interest in the Property to Lender.
DELIVERY OF PLEDGED PROPERTY. If I am unable to deliver any portion of the
Property to Lender at the time this Agreement is signed, or if I should
ever withdraw or obtain temporary possession of any of the Property while
this Agreement remains in effect, whether under a trust receipt or
otherwise, I agree to immediately deliver to Lender such Property or,
alternatively, such substitute or replacement Property that may be then
satisfactory to Lender.
NO FURTHER TRANSFER. I have not and will not sell, transfer, mortgage, or
otherwise dispose of any of my rights in the Property except as allowed in
this Agreement.
NO DEFAULTS. There are no defaults existing under the Property, and there
are no offsets or counterclaims to the same. I will strictly and promptly
do everything required of me under all the terms, conditions, promises, and
agreements contained in or relating to the Property.
VALIDITY; BINDING EFFECT. This Agreement is binding upon me and my
successors and assigns and is legally enforceable in accordance with its
terms.
CONSUMER PLEDGE AGREEMENT
(CONTINUED) PAGE 2
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FINANCING STATEMENTS. I authorize Lender to file a UCC-1 financing
statement, or alternatively, a copy of this Agreement to perfect Lender's
security interest. At Lender's request, I additionally agree to sign all
other documents that are necessary to perfect, protect, and continue
Lender's security interest in the Property. I will pay all filing fees,
title transfer fees, and other fees and costs involved unless prohibited by
law or unless Lender is required by law to pay such fees and costs. Lender
may sign and file financing statements without my signature, and I
irrevocably appoint Lender as my attorney-in-fact to execute financing
statements and documents of title in my name and to execute all documents
necessary to transfer title if there is a default. Lender may file a copy
of this Agreement as a financing statement. If I change my name or address,
or the name or address of any person granting a security interest under
this Agreement changes, I will promptly notify the Lender of such change.
LENDER'S RIGHTS AND OBLIGATIONS WITH RESPECT TO THE PROPERTY. Lender may hold
the Property until all indebtedness has been paid. Thereafter Lender may deliver
the Property to me or to any other owner of the Property. Lender will have the
following rights in addition to all other rights Lender may have by law:
MAINTENANCE AND PROTECTION OF PROPERTY. Lender may do such things as it
thinks necessary or desirable to protect, maintain, insure, store, or care
for the Property, including paying of any liens or claims against the
Property. This may include such things as hiring other people, such as
attorneys, appraisers or other experts. Lender may charge me for any cost
incurred in so doing. When applicable law provides more than one method of
perfection of Lender's security interest, Lender may choose the method(s)
to be used. If the Property consists of stock, bonds or other investment
property for which no certificate has been issued, I agree, at Lender's
request, either to request issuance of an appropriate certificate or to
give instructions on Lender's forms to the issuer, transfer agent, mutual
fund company, or broker, as the case may be, to record on its books or
records Lender's security interest in the Property.
INCOME AND PROCEEDS FROM THE PROPERTY. Lender may receive all Income and
Proceeds and add it to the Property held by Lender under this Agreement. If
I receive any Income and Proceeds from the Property, and if Lender requires
me to do so, I immediately will advise Lender. If Lender requests, I will
deliver the Income and Proceeds to Lender immediately upon my receipt in
the exact form received. Unless permitted by Lender, I will not mix the
Income and proceeds with any of my accounts or other property, and if
required by Lender, I will deliver the Income and Proceeds to Lender
whether the Income and Proceeds are an addition to, in discharge of, in
substitution of, or in exchange for any of the Property.
APPLICATION OF CASH. Lender, at its option, may apply any cash (whether
included in the Property or received as income or proceeds of a sale of any
of the Property) to the payment of part or all of the Indebtedness, whether
or not the Indebtedness is then due.
MODIFYING THE INDEBTEDNESS. Lender may (a) extend time for payment or other
performance, (b) grant a renewal or change, or (c) compromise or release
any obligation, with any one or more Borrowers, endorsers, or guarantors of
the Indebtedness, as Lender deems advisable, without obtaining my prior
written consent. No such act or failure to act will affect Lender's rights
against me or the Property.
ALL PROPERTY SECURES INDEBTEDNESS. All Property will be security for the
Indebtedness, whether the Property is located at one or more offices or
branches of Lender. This will be the case whether or not the office or
branch where I obtained my loan knows about the Property or relies upon the
Property as security.
COLLECTION OF PROPERTY. Lender at Lender's option may, but need not,
collect the Income and Proceeds directly from the Obligors. I authorize and
direct the Obligors, if Lender decides to collect the Income and Proceeds,
to pay and deliver to Lender all Income and Proceeds from the Property and
to accept Lender's receipt for the payments.
POWER OF ATTORNEY. I appoint Lender as my attorney-in-fact, with full power
to act for me. This power of attorney will remain in effect until all
Indebtedness is paid in full. Lender, as my attorney-in-fact, may among
other things (1) demand, collect, receive, receipt for, xxx and recover all
Income and Proceeds and other sums and other property which may now or
hereafter become due, owing or payable from the Obligors in accordance with
the terms of the Property; (2) execute, sign and endorse any and all
instruments, receipts, checks, drafts and warrants issued as Income and
Proceeds or in payment for the Property; (3) settle or compromise any and
all claims arising under the Property and, in my place and name, execute
and deliver its release and acquittance for me; (4) file any claim or
claims or take any action or institute or take part in any proceedings,
either in Lender's own name or in my name, or otherwise, which in Lender's
opinion may seem to be necessary or advisable; and (5) execute in my name
and deliver to the Obligors on my behalf, at the time and in the manner
specified by the Property, any necessary instruments or documents.
LENDER'S EXPENDITURES. If I fail (A) to keep the Property free of all taxes,
liens, security interests, encumbrances, and other claims, (B) to provide any
required insurance on the Property, or (C) to make repairs to the Property then
Lender may do so. If any action or proceeding is commenced that would materially
affect Lender's interests in the Property, then Lender on my behalf may, but is
not required to, take any action that Lender believes to be appropriate to
protect Lender's interests. All expenses incurred or paid by Lender for such
purposes will then bear interest at the rate charged under the Note from the
date incurred or paid by Lender to the date of repayment by me. All such
expenses will become a part of the Indebtedness and, at Lender's option, will
(A) be payable on demand; (B) be added to the balance of the Note and be
apportioned among and be payable with any installment payments to become due
during either (1) the term of any applicable insurance policy; or (2) the
remaining term of the Note; or (C) be treated as a balloon payment which will be
due and payable at the Note's maturity. The Agreement also will secure payment
of these amounts. The rights provided for in this paragraph shall be in addition
to any other rights or any remedies to which Lender may be entitled on account
of any default. Any such action by Lender shall not be construed as curing the
default so as to bar Lender from any remedy that it otherwise would have had.
LIMITATIONS ON OBLIGATIONS OF LENDER. Lender will use ordinary reasonable care
in the physical preservation and custody of the Property in Lender's possession,
but will have no other obligation to protect the Property or its value. Lender
will not be responsible for
CONSUMER PLEDGE AGREEMENT
(CONTINUED) PAGE 3
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(A) collecting or protecting any Income from the Property; (B) preserving rights
against parties to the Property or against third persons; (C) ascertaining any
maturities, calls, conversions, exchanges, offers, lenders, or similar matters
relating to any of the Property; or (D) informing me about any of these matters,
whether or not Lender has or is deemed to have knowledge of such matters. Except
as provided above, Lender will have no responsibility or liability whatsoever to
me or to anyone else for any deterioration or decrease in the value of the
Property.
DEFAULT. I will be in default if any of the following happens:
PAYMENT DEFAULT. I fail to make any payment when due under the
Indebtedness.
BREAK OTHER PROMISES. I break any promise made to Lender or fail to perform
promptly at the time and strictly in the manner provided in this Agreement
or in any agreement related to this Agreement.
FALSE STATEMENTS. Any representation or statement made or furnished to
Lender by me or on my behalf under this Agreement or the Related Documents
is false or misleading in any material respect, either now or at the time
made or furnished.
DEATH OR INSOLVENCY. I die or become incompetent or insolvent, a receiver
is appointed for any part of my property, I make an assignment for the
benefit of creditors, or any proceeding is commenced either by me or
against me under any bankruptcy or insolvency laws.
TAKING OF THE PROPERTY. Any creditor or governmental agency tries to take
any of the Property or any other of my property in which Lender has a lien.
This includes taking of, garnishing of or levying on my accounts with
Lender. However, if I dispute in good faith whether the claim on which the
taking of the Property is based is valid or reasonable, and if I give
Lender written notice of the claim and furnish Lender with monies or a
surety bond satisfactory to Lender to satisfy the claim, then this default
provision will not apply.
DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related Documents
ceases to be in full force and effect (including failure of any collateral
document to create a valid and perfected security interest or lien) at any
time and for any reason.
PROPERTY DAMAGE OR LOSS. The Property is lost, stolen, substantially
damaged, sold, or borrowed against.
EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with respect
to any guarantor, endorser, surety, or accommodation party of any of the
Indebtedness or any guarantor, endorser, surety, or accommodation party
dies or becomes incompetent, or revokes or disputes the validity of, or
liability under, any Guaranty of the Indebtedness. In the event of a death,
Lender, at its option, may, but shall not be required to, permit the
guarantor's estate to assume unconditionally the obligations arising under
the guaranty in a manner satisfactory to Lender, and, in doing so, cure any
Event of Default.
CURE PROVISIONS. If any default, other than a default in payment or failure
to satisfy Lender's requirement in the Insufficient Market Value of
Securities section is curable and if I have not been given a notice of a
breach of the same provision of this Agreement within the preceding twelve
(12) months, it may be cured (and no event of default will have occurred)
if I, after receiving written notice from Lender demanding cure of such
default: (1) cure the default within fifteen (15) days; or (2) if the cure
requires more than fifteen (15) days, immediately initiate steps which
Lender deems in Lender's sole discretion to be sufficient to cure the
default and thereafter continue and complete all reasonable and necessary
steps sufficient to produce compliance as soon as reasonably practical.
RIGHTS AND REMEDIES ON DEFAULT. If I am in default under this Agreement, Lender
may do any or all of the following:
ACCELERATE INDEBTEDNESS. Lender may, subject to any cure and notice
provisions required by law, declare all Indebtedness immediately due and
payable, without notice.
COLLECT THE PROPERTY. Collect any of the Property, and, at Lender's option
and to the extent permitted by applicable law, retain possession of the
Property while suing on the Indebtedness.
SELL THE PROPERTY. Sell the Property, at Lender's discretion, as a unit or
in parcels, at one or more public or private sales. Unless the Property is
perishable or threatens to decline speedily in value or is of a type
customarily sold on a recognized market, Lender shall give or mail to me,
and other persons as required by law, reasonable notice of the time and
place of any public sale, or of the time after which any private sale may
be made. I agree that any requirement of reasonable notice is satisfied if
Lender mails notice by ordinary mail addressed to me at the last address I
have given Lender in writing. I further agree that such notice is sent
within a reasonable time if it is sent at least ten (10) days in advance of
the time of sale or disposition, except as otherwise required by applicable
law. If public sale is held, there will be sufficient compliance with all
requirements of notice to the public by a single publication in any
newspaper of general circulation in the county where the Property is
located. The notice will set forth the time and place of sale and a brief
description of the property to be sold. Lender may be a purchaser at any
public sale. Under all circumstances, the Indebtedness will be repaid
without relief from any
Indiana or other valuation and appraisement laws.
RIGHTS AND REMEDIES WITH RESPECT TO INVESTMENT PROPERTY, FINANCIAL ASSETS
AND RELATED COLLATERAL. In addition to other rights and remedies granted
under this Agreement and under applicable law, Lender may exercise any or
all of the following rights and remedies: (1) register with any issuer or
broker or other securities intermediary any of the Property consisting of
investment property or financial assets (collectively herein, "investment
property") in Lender's sole name or in the name of Lender's broker, agent
or nominee; (2) cause any issuer, broker or other securities intermediary
to deliver to Lender any of the Property consisting of securities, or
investment property capable of being delivered; (3) enter into a control
agreement or power of attorney with any issuer or securities intermediary
with respect to any Property consisting of investment property, on such
terms as Lender may deem appropriate, in its sole discretion, including
without limitation, an agreement granting to Lender any of the rights
provided hereunder without further notice to or consent by me; (4) execute
any such control agreement on my behalf and in my name, and hereby
irrevocably appoint Lender as agent and attorney-in-fact, coupled with an
interest, for the
CONSUMER PLEDGE AGREEMENT
(CONTINUED) PAGE 4
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purpose of executing such control agreement on my behalf; (5) exercise any
and all rights of Lender under any such control agreement or power of
attorney; (6) exercise any voting, conversion, registration, purchase,
option, or other rights with respect to any Property; (7) collect, with or
without legal action, and issue receipts concerning any notes, checks,
drafts, remittances or distributions that are paid or payable with respect
to any Property consisting of investment property. Any control agreement
entered with respect to any investment property shall contain the following
provisions, at Lender's discretion. Lender shall be authorized to instruct
the issuer, broker or other securities intermediary to take or to refrain
from taking such actions with respect to the investment property as Lender
may instruct, without further notice to or consent by me. Such actions may
include without limitation the issuance of entitlement orders, account
instructions, general trading or buy or sell orders, transfer and
redemption orders, and stop loss orders. Lender shall be further entitled
to instruct the issuer, broker or securities intermediary to sell or to
liquidate any investment property, or to pay the cash surrender or account
termination value with respect to any and all investment property, and to
deliver all such payments and liquidation proceeds to Lender. Any such
control agreement shall contain such authorizations as are necessary to
place Lender in "control" of such investment collateral, as contemplated
under the provisions of the Uniform Commercial Code, and shall fully
authorize Lender to issue "entitlement orders" concerning the transfer,
redemption, liquidation or disposition of investment collateral, in
conformance with the provisions of the Uniform Commercial Code.
SELL SECURITIES. Sell any securities included in the Property in a manner
consistent with applicable federal and state securities laws. If, because
of restrictions under such laws, Lender is unable, or believes Lender is
unable, to sell the securities in an open market transaction, I agree that
Lender will have no obligation to delay sale until the securities can be
registered. Then Lender may make a private sale to one or more persons or
to a restricted group of persons, even though such sale may result in a
price that is less favorable than might be obtained in an open market
transaction. Such a sale will be considered commercially reasonable. If any
securities held as Property are "restricted securities" as defined in the
Rules of the Securities and Exchange Commission (such as Regulation D or
Rule 144) or the rules of state securities departments under state "Blue
Sky" laws, or if I or any other owner of the Property is an affiliate of
the issuer of the securities, I agree that neither I, nor any member of my
family, nor any other person signing this Agreement will sell or dispose of
any securities of such issuer without obtaining Lender's prior written
consent.
TRANSFER TITLE. Transfer title to the Property upon the sale of all or part
of the Property. For this purpose, I irrevocably appoint Lender as my
attorney-in-fact to execute such endorsements, assignments and instruments
in my name as Lender in Lender's judgment may think to be necessary or
reasonable.
OTHER RIGHTS AND REMEDIES. Exercise any or all of the rights and remedies
of a secured creditor under the provisions of the Uniform Commercial Code,
at law, in equity, or otherwise.
APPLICATION OF PROCEEDS. Apply any cash which is part of the Property or
Income or which is received from the collection or sale of the Property as
follows: (a) to reimbursement of Lender's expenses incurred in connection
with costs of securities registration or commissions incurred in connection
with a sale, and other costs of sale; (b) to the payment of the
Indebtedness; and (c) any excess funds to be paid to me or to any other
Borrower as our interests may appear. I agree, to the extent permitted by
law, to pay any deficiency remaining after application of the proceeds of
the Property to the Indebtedness.
ELECTION OF REMEDIES. All of Lender's rights and remedies will be
cumulative and may be exercised alone or together. An election by Lender to
choose any one remedy will not bar Lender from using any other remedy. If
Lender decides to spend money or to perform any of my obligations under
this Agreement, after my failure to do so, that decision by Lender will not
affect Lender's right to declare me in default and to exercise Lender's
remedies.
CONSENT TO JURISDICTION. If there is a legal dispute with respect to this Note,
I agree upon Lender's request to submit to the jurisdiction of the courts of
Xxxxxxxxxxx County, the State of
Indiana.
PROPERTY INCLUDES ADDITIONAL SHARES. For purposes hereof, and notwithstanding
the definitions set forth under the heading "Property Description" above or
under the definition of "Property" below, it is acknowledged and agreed that the
Property shall include all Shares (as defined in the Shareholder Agreement)
beneficially owned by Borrower from time to time (including any shares of
capital stock or other securities of IHE or any successor or assign of IHE that
are issued in respect of, in exchange for, or in substitution of, Shares
beneficially owned by Borrower from time to time by reason of any stock
dividend, stock split, reverse stock split, recapitalization, reclassification,
combination, merger, consolidation or otherwise, including any shares of capital
stock of Xxxxx Residual Holdings Corporation II or other entities to which
assets of IHE may be directly or indirectly assigned or distributed from time to
time in connection with any reorganization of Lender's home equity line of
business and IHE).
RIGHTS IN CONNECTION WITH SHARES. Without limiting the generality of any of the
foregoing provisions, it is agreed and acknowledged that Lender, in its capacity
as my attorney-in-fact, may execute such documents or instruments as Lender in
its judgment deems necessary or reasonable in connection with the issuance of
additional Shares to me, or a sale or transfer of the Shares following a
default, including without limitation one or more stock powers and any related
amendments to, or (in the case of a default) an instrument terminating, the
Shareholder Agreement.
TRANSFERS OF SHARES TO LENDER. Lender may, following a default (including
failure to pay upon final maturity), elect in its discretion to transfer the
Shares beneficially owned by Borrower to Lender itself or for Lender's own
account in full or partial satisfaction of all amounts due under the Note. In
the event of a transfer to Lender of such Shares, either under circumstances
described in the immediately preceding sentence or in the event of a mutually
agreed upon transfer by Borrower to Lender of Shares (it being understood that
Lender shall have no obligation to purchase Shares in the absence of such mutual
agreement), an amount equal to the Fair Market Value (as defined in the
Shareholder Agreement) of the Shares beneficially owned by Borrower shall be
applied against the amounts then due under the Note, and Borrower shall remain
responsible for any deficiency or amount remaining unpaid following such
application.
CONSUMER PLEDGE AGREEMENT
(CONTINUED) PAGE 5
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CONTINUING EFFECTIVENESS OF SHAREHOLDER AGREEMENT. Notwithstanding anything to
the contrary in the paragraph below under the heading "Amendments and
Interpretation," it is agreed and acknowledged that the Shareholder Agreement is
an additional agreement between the parties, the terms and conditions of which
remain in full force and effect following the date hereof (except as the same
may be subsequently amended, restated or modified in accordance with the terms
of the Shareholder Agreement or in connection with the exercise by Lender of any
of its rights hereunder following a default).
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
AMENDMENTS AND INTERPRETATION. (1) What is written in this Agreement is my
entire agreement with Lender concerning the Property. This Agreement may
not be changed except by another written agreement between us. (2) If more
than one person signs below, our obligations are joint and several. This
means that the words "I," "me," and "my" mean each and every person or
entity signing this Agreement, and that, if Lender brings a lawsuit, Lender
may xxx any one or more of us. I also understand Lender need not xxx
Borrower first, and that Borrower need not be joined in any lawsuit. (3)
The names given to paragraphs or sections in this Agreement are for
convenience purposes only. They are not to be used to interpret or define
the provisions of this Agreement. (4) I agree that this Agreement is the
best evidence of my agreements with Lender.
ATTORNEYS' FEES; EXPENSES. I agree to pay all of Lender's costs and
expenses, including Lender's attorneys' fees and Lender's legal expenses,
incurred in connection with the enforcement of this Agreement. Lender may
hire or pay someone else to help enforce this Agreement or to collect the
Indebtedness, and I shall pay the costs and expenses of such enforcement.
Costs and expenses include Lender's attorneys' fees and legal expenses
whether or not there is a lawsuit, including attorneys' fees and legal
expenses for bankruptcy proceedings (including efforts to modify or vacate
any automatic stay or injunction), appeals, and any anticipated
post-judgment collection services. I also shall pay all court costs, in
addition to all other sums provided by law. This Agreement also secures all
of these amounts.
CAPTION HEADINGS. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the provisions
of this Agreement.
GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND INTERPRETED IN
ACCORDANCE WITH FEDERAL LAW AND THE LAWS OF THE STATE OF
INDIANA. THIS
AGREEMENT HAS BEEN ACCEPTED BY LENDER IN THE STATE OF
INDIANA.
NOTICES. Any notice required to be given under this Agreement shall be
given in writing, and shall be effective when actually delivered, when
actually received by telefacsimile (unless otherwise required by law), when
deposited with a nationally recognized overnight courier, or, if mailed,
when deposited in the United States mail, as first class, certified or
registered mail postage prepaid, directed to the addresses shown near the
beginning of this Agreement. Any person may change his or her address for
notices under this Agreement by giving formal written notice to the other
person or persons, specifying that the purpose of the notice is to change
the person's address. For notice purposes, I agree to keep Lender informed
at all times of my current address. Unless otherwise provided or required
by law, if there is more than one Grantor, any notice given by Lender to
any Grantor is deemed to be notice given to all Grantors. It will be my
responsibility to tell the others of the notice from Lender.
NO WAIVER BY LENDER. I understand Lender will not give up any of Lender's
rights under this Agreement unless Lender does so in writing. The fact that
Lender delays or omits to exercise any right will not mean that Lender has
given up that right. If Lender does agree in writing to give up one of
Lender's rights, that does not mean I will not have to comply with the
other provisions of this Agreement. I also understand that if Lender does
consent to a request, that does not mean that I will not have to get
Lender's consent again if the situation happens again. I further understand
that just because Lender consents to one or more of my requests, that does
not mean Lender will be required to consent to any of my future requests. I
waive presentment, demand for payment, protest, and notice of dishonor. I
waive all rights of exemption from execution or similar law in the Property
(including without limitation, the homestead exemption), and I agree that
the rights of Lender in the Property under this Agreement are prior to my
rights while this Agreement remains in effect.
SEVERABILITY. If a court finds that any provision of this Agreement is not
valid or should not be enforced, that fact by itself will not mean that the
rest of this Agreement will not be valid or enforced. Therefore, a court
will enforce the rest of the provisions of this Agreement even if a
provision of this Agreement may be found to be invalid or unenforceable.
SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement
on transfer of my interest, this Agreement shall be binding upon and inure
to the benefit of the parties, their successors and assigns. If ownership
of the Property becomes vested in a person other than me, Lender, without
notice to me, may deal with my successors with reference to this Agreement
and the Indebtedness by way of forbearance or extension without releasing
me from the obligations of this Agreement or liability under the
Indebtedness.
TIME IS OF THE ESSENCE. Time is of the essence in the performance of this
Agreement.
DEFINITIONS. The following words shall have the following meanings when used in
this Agreement:
AGREEMENT. The word "Agreement" means this
Consumer Pledge Agreement, as
this
Consumer Pledge Agreement may be amended or modified from time to
time, together with all exhibits and schedules attached to this
Consumer
Pledge Agreement from time to time.
BORROWER. The word "Borrower" means Xxxxx Xxxxxxx, and all other persons
and entities signing the Note.
EVENT OF DEFAULT. The words "Event of Default" mean any of the events of
default set forth in this Agreement in the default section of this
Agreement.
CONSUMER PLEDGE AGREEMENT
(CONTINUED) PAGE 6
================================================================================
GRANTOR. The word "Grantor" means Xxxxx Xxxxxxx.
GUARANTY. The word "Guaranty" means the guaranty from guarantor, endorser,
surety, or accommodation party to Lender, including without limitation of
all or part of the Note.
INCOME AND PROCEEDS. The words "Income and Proceeds" mean all present and
future income, proceeds, earnings, increases, and substitutions from or for
the Property of every kind and nature, including without limitation all
payments, interest, profits, distributions, benefits, rights, options,
warrants, dividends, stock dividends, stock splits, stock rights,
regulatory dividends, subscriptions, monies, claims for money due and to
become due, proceeds of any insurance on the Property, shares of stock of
different par value or no par value issued in substitution or exchange for
shares included in the Property, and all other property I am entitled to
receive on account of such Property, including accounts, documents,
instruments, chattel paper, and general intangibles.
INDEBTEDNESS. The word "indebtedness" means the indebtedness evidenced by
the Note or Related Documents, including all principal and interest
together with all other indebtedness and costs and expenses for which I am
responsible under this Agreement or under any of the Related Documents.
LENDER. The word "Lender" means Xxxxx Financial Corporation, its successors
and assigns. The words "successors or assigns" mean any person or company
that acquires any interest in the Note.
NOTE. The word "Note" means the note or credit agreement dated January 30,
2002, in the principal amount of $1,025,000.00 from Xxxxx Xxxxxxx to
Lender, together with all renewals of, extensions of, modifications of,
refinancings of, consolidations of and substitutions for the note or credit
agreement.
OBLIGOR. The word "Obligor" means each and every person or company that is
obligated to pay money or to perform some other act under the Property such
as the person who pays dividends on stock.
PROPERTY. The word "Property" means all of my right, title and interest in
and to all the Property as described in the "Property Description" section
of this Agreement.
RELATED DOCUMENTS. The words "Related Documents" mean all promissory notes,
credit agreements, loan agreements, environmental agreements, guaranties,
security agreements, mortgages, deeds of trust, security deeds, collateral
mortgages, and all other instruments, agreements and documents, whether now
or hereafter existing, executed in connection with the Indebtedness.
I HAVE READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS CONSUMER PLEDGE AGREEMENT
AND AGREE TO ITS TERMS. THIS AGREEMENT IS DATED JANUARY 30, 2002.
GRANTOR:
X /s/ Xxxxx Xxxxxxx
---------------------------------------------
Xxxxx Xxxxxxx, Individually
================================================================================
STATE OF CALIFORNIA )
) SS:
COUNTY OF CONTRA COSTA )
Before me, a Notary Public, in and for said County and State, personally
appeared Xxxxx Xxxxxxx and acknowledged the execution of the foregoing
Agreement.
Dated this 30th day of January, 2002.
/s/ Xxxxxx Xxxxxx
--------------------------------------------------------
Signature
Xxxxxx Xxxxxx
--------------------------------------------------------
Printed Notary Public
My Commission Expires: 7/24/04
-------
County of Residence: CONTRA COSTA
------------
ADDENDUM TO CONSUMER PLEDGE AGREEMENT
In connection with the loan (the "Loan") made to me by Xxxxx Financial
Corporation ("IFC") evidenced by the Promissory Note dated January 30, 2002 and
secured by the Consumer Pledge Agreement dated the same date, of which this
Addendum forms a part (the "Agreement"), the undersigned hereby acknowledges the
following:
(A) In connection with efforts to reduce the concentration of residual
assets within its banking subsidiary in light of new regulatory
capital rules, IFC is considering a reorganization of subsidiaries
within its home equity line of business that hold residual assets
from previous securitization transactions.
(B) This reorganization will include the formation of one or more new
entities, including a company (currently in formation) to be known
as Xxxxx Residual Holdings Corporation II (such entity hereinafter
being referred to as "Newco").
(C) In connection with the reorganization, and in particular with the
formation of Newco, it is contemplated that I will be issued a
minority common equity interest in Newco in a proportionate amount
equal to my existing pro rata interest in Xxxxx Home Equity
Corporation.
(D) I acknowledge that the Loan is being made by IFC contingent upon
my agreement to pledge my interest in Newco in the same manner
that I have pledged my current interest in IFC's home equity line
of business, as presently constituted.
(E) In addition to setting forth our understanding with respect to the
foregoing, the undersigned and IFC desire to clarify the treatment
of transfers of Shares in accordance with the terms of the
Agreement.
Therefore, in consideration of the foregoing and for other good and valuable
consideration from IFC, the receipt and sufficiency of which are hereby
acknowledged, I hereby agree to the following:
1. The "Shares" and the "Property" referred to in, and covered by,
the Agreement will include any shares of capital stock of Newco or
other entities to which assets of IHE may be directly or
indirectly assigned or distributed from time to time in connection
with any reorganization of Lender's home equity line of business
and IHE.
2. In connection with the issuance to me of any shares of capital
stock of Newco at any time when the Loan is outstanding, I shall
execute such pledges, security agreements, stock powers or other
documents or instruments as are deemed necessary or appropriate by
IFC in order to establish and evidence my pledge of such shares
and my grant to IFC of a security interest in my right, title and
interest in, to and under any shareholder agreement among Newco,
IFC or me relating to the issuance and transfer of such shares.
3. For the avoidance of doubt, the undersigned agrees to the
following with respect to the provisions of the Agreement set
forth under the headings "Rights in Connection with Shares" and
"Transfers of Shares to Lender" (the "Transfer Provisions"):
a. Due to the absence of any market for the Shares, any transfer
of Shares by IFC as described in the Transfer Provisions,
including a transfer to itself or for its own account in full
or partial satisfaction of all amounts due under the Note and
any termination of the Shareholder Agreement in connection
with such transfer, shall be deemed to be commercially
reasonable for all purposes of
Indiana Code 26-1-9.1
("Article 9").
b. After a default, IFC shall have the right to effect a
transfer described in the Transfer Provisions of any or all
of the Shares beneficially owned by me, including, at IFC's
election, a transfer of only such number of Shares as is
necessary (based on their Fair Market Value) to satisfy the
amounts then due under the Note. In any case, the application
of an amount equal to the Fair Market Value of the Shares
against amounts due under the Note as described in the
Transfer Provisions shall be deemed a disposition of
collateral complying in all respects with Article 9. In
accordance with
Indiana Code 26-1-9.1-615(d), if IFC elects
to transfer a number of Shares whose Fair Market Value is
greater than the amounts then due under the Note, IFC shall
account to me and pay me for any surplus remaining following
such application. If the Fair Market Value of any transferred
Shares is less than the amounts then due under the Note, I
shall be liable for any deficiency or amount remaining unpaid
following such application.
c. Any surplus or deficiency remaining after a transfer of
Shares by IFC shall be calculated based on the Fair Market
Value of the Shares, and, notwithstanding a transfer of
Shares by IFC to itself or for its own account (or to an
affiliate), such value shall, for purposes of
Indiana Code
26-1-9.1-615(f), be deemed to be the amount that would have
been realized in a disposition complying with Article 9 to a
transferee other than IFC or an affiliate of IFC.
d. In light of the circumstances under which the Loan is being
made and the absence of a market for the Shares, the
foregoing provisions constitute reasonable and appropriate
standards by which to measure the fulfillment of the rights
and duties under the rules set forth in
Indiana Code
26-1-9.1-602.
e. Notwithstanding the Agreement's being referred to as a
"Consumer Pledge Agreement," it is understood and agreed that
the Loan is not, nor shall it be deemed to be, a consumer
goods transaction under Article 9.
2
4. This Addendum is incorporated into the Agreement by reference
and shall be considered an integral part thereof.
3
IN WITNESS WHEREOF, I have executed this Addendum this 30th day of
January, 2002.
/s/ Xxxxx Xxxxxxx
--------------------
Xxxxx Xxxxxxx
STATE OF CALIFORNIA )
) SS.
COUNTY OF CONTRA COSTA )
Before me, a Notary Public, in and for said County and State, personally
appeared Xxxxx Xxxxxxx and acknowledged the execution of the foregoing Addendum
to the Consumer Pledge Agreement.
Dated this 30th day of January, 2002.
/s/ Xxxxxx Xxxxxx
-------------------------------------------------
Signature
Xxxxxx Xxxxxx
-------------------------------------------------
Printed Notary Public
My Commission Expires: 7/24/04
County of Residence: Contra Costa
ACKNOWLEDGED AND AGREED:
XXXXX FINANCIAL CORPORATION
By: /s/ Xxxx Xxxxx
----------------------------------------
Its: Senior Vice President
---------------------------------------
4
