EXHIBIT 10.24
BANK AGENCY AGREEMENT
December 21, 1995
TO: The First National Bank of Chicago
One First Xxxxxxxx Xxxxx
Xxxx Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Ladies and Gentlemen:
This Letter Agreement, between you (collectively, the "Bank"), General
Manufactured Housing, Inc., a Georgia corporation (the "Company"), First Source
Financial LLP (the "Lender"), First Source Financial, Inc. (the "Servicer") and
Citicorp North America, Inc. (the "Agent") shall serve as instructions regarding
the operation and procedures for all lockboxes and bank accounts specifically
identified herein and any other lockboxes and bank accounts now or hereafter
maintained at the Bank by, or for the deposit, credit or custody of property of
the Company.
1. EFFECTIVENESS. This Agreement shall take effect immediately upon
the execution and delivery of this Agreement by each of the parties hereto.
2. LOCKBOX AND ACCOUNT IDENTIFICATION. This Agreement applies to
Lockbox No. 93541 at the Bank (the "Lockbox"), controlled disbursement zero
balance Account No. 94-18857 at the Bank (the "Operating Account"), and Master
Concentration Account No. 55-45021 (the "Master Account") at the Bank. The
Master Account, the Operating Account and all other bank accounts now or
hereafter maintained at the Bank by, or for the deposit, credit or custody of
property, of the Company are herein called the "Accounts".
3. SECURITY INTEREST: AGENCY. (a) The Company has granted, and does
hereby grant, to the Lender a continuing lien upon, and security interest in,
all funds, items, instruments, investments, securities and other things of value
at any time paid, deposited, credited or held (whether for collection,
provisionally or otherwise) in each Account and the Lockbox and all other
property of the Company from time to time in the possession or under the control
of, or in transit to the Bank or any agent, bailee or custodian therefor, and
all proceeds of all of the foregoing, including, without limitation, any of the
foregoing from time to time paid, deposited, credited or held in the Lockbox,
the Master Account or the Operating Account (collectively, the "Account
Collateral").
(b) The Lender hereby appoints the Bank as the Lender's pledgee-in-
possession for the Lockbox, the Accounts and all of the Account Collateral, and
the Bank by its execution and delivery of this Agreement hereby accepts such
appointment and agrees to be bound by the terms of this Agreement. The Company
hereby agrees to such appointment of the Bank and further agrees that the Bank,
on behalf of the Lender, shall be entitled to exercise, upon the instructions of
the Lender or the Servicer, acting in its capacity as agent on behalf of the
Lender, any and all rights which the Lender may have (i) under or in connection
with the Secured Credit Agreement dated as of December __, 1995 between the
Company and the Lender (the "Credit Agreement"), all promissory notes, all
agreements executed
pursuant to the Credit Agreement pursuant to which security interests and liens
are granted to the Lender, or (ii) under applicable law, in each case with
respect to the Lockbox, the Accounts, and all other collateral described in this
SECTION 3. The Bank agrees to take such action as shall from time to time be
specified in writing by the Lender or the Servicer, acting in its capacity as
agent on behalf of the Lender, to enable the Lender to exercise its rights and
remedies with respect to the lien and security interest described in this
SECTION 3.
(c) The Lender and the Servicer have entered into certain financing
arrangements with the Agent, and certain other financial institutions on whose
behalf the Agent is authorized to act (the "Financing"). As part of the
Financing, the Lender has granted to the Agent a continuing lien upon, and
security interest in, all of the Lender's interests in the property of the
Company, including, without limitation, all of the Lender's interest in the
Lockbox, the Accounts and the Account Collateral. The Agent holds its lien and
security interest described in this SECTION 3 on behalf of certain other "Senior
Creditors" (as such term is defined in the various agreements evidencing the
Financing) and as such, acts as the contractual representative for such Senior
Creditors. Each of the Lender, the Servicer and the Company hereby authorize the
Bank after it has received notice from the Agent that an Event of Termination
has occurred under the Financing, to take such action as shall from time to time
thereafter be specified in writing by the Agent to enable the Agent to exercise
its rights and remedies with respect to the lien and security interest granted
to the Agent as part of the Financing.
(d) Each of the Lender, the Servicer, the Company and the Bank hereby
agree that after the Bank has received notice from the Agent that an Event of
Termination has occurred (i) any instructions given to the Bank by the Agent
shall supersede those given by the Lender or the Servicer acting on the Lender's
behalf and (ii) the Bank shall not comply with any instructions given by the
Lender, the Servicer or the Company unless otherwise authorized to do so by the
Agent.
4. CONTROL OF LOCKBOX AND MASTER ACCOUNT. The Lockbox (and any
related post office boxes) and the Master Account shall be under the sole
dominion and control of the Servicer acting on the Lender's behalf, subject to
the rights of the Lender specified herein to direct the Bank, and shall be
maintained by the Bank in the name of "First Source Financial LLP Collateral
Account for General Manufactured Housing, Inc." Neither the Company nor any
other person or entity claiming by, through or under the Company shall have any
control over the use of, or any right to withdraw any amount from, the Lockbox
or the Master Account.
5. LOCKBOX AND ACCOUNT PROCEDURES. The Bank shall have exclusive and
unrestricted access to, and shall collect the mail addressed or delivered to,
the Lockbox (even though addressed to the Company) on each business day in
accordance with the Bank's regular collection schedule. The Bank shall follow
the following procedures with respect to items so collected from the Lockbox and
other deposited items:
(a) Open mail addressed or delivered to the Lockbox (even though
addressed to the Company) and endorse all items and remittances contained
therein for deposit in the Master Account and credit such items and
remittances to the Master Account.
(b) Apply and credit to the Master Account all wire transfers and ACH
entries directed to the Master Account and apply and credit for deposit to
the Master Account all checks and other items from time to
time tendered by the Company for deposit.
(c) It is understood and agreed that all such items and remittances
credited to the Master Account shall be subject to the usual terms and
conditions of the Bank in regard to deposits.
(d) Until the Lender or the Servicer acting on the Lender's behalf
provides notice to the Bank as to the occurrence of an Event of Default
under the Credit Agreement, on each business day determine the balance of
funds in the Master Account then deemed to be collected in accordance with
the Bank's customary availability schedule prior to 10:00 a.m. (Chicago
time) and:
(i) transfer automatically to the Operating Account an aggregate
amount equal to the amount of (A) all unpaid checks presented thereon
and not returned as of the preceding business day and (B) ACH credit
entries authorized by the Company, or, if less, the amount of such
collected funds on deposit in the Master Account. It is understood
that if funds in the Operating Account (including the proceeds of any
loans made pursuant to the Credit Agreement) are insufficient to pay
checks after transfer of funds from the Master Account pursuant to
this SECTION 3(D)(I), the Bank may, in its sole discretion, return
such checks unpaid.
(ii) transfer any balance of collected funds on deposit in the
Master Account after giving effect to the transfer described in the
preceding clause (i) to the Lender pursuant to such transfer
instructions as the Lender or the Servicer acting on behalf of the
Lender may from time to time give.
(e) In performing its obligations with respect to the Lockbox, the
Bank may discover from time to time remittances bearing restrictive
legends. Any such items discovered by the Bank shall be returned to the
Company unprocessed for further instructions (or, following the Bank's
receipt of any notice from the Lender or Servicer of any Event of Default
under the Credit Agreement, it shall forward such items to the Servicer,
or, following the Bank's receipt of any notice from the Agent of the
occurrence of any Event of Termination under the Financing, to such other
person or entity as the Agent may direct), PROVIDED, HOWEVER, that the Bank
shall have no responsibility for its failure to discover any items bearing
a restrictive legend, nor for the Bank's failure to determine in any manner
the correctness of any remittance. In addition, the Bank reserves the
right, should there be a question as to any particular item sent to the
Lockbox, to forward such item to the Company for inspection and
instructions before processing for deposit (except that after the Bank
receives any notice from the Lender or the Servicer of any Event of Default
under the Credit Agreement, it shall forward such items to the Servicer,
or, following the Bank's receipt of any notice from the Agent of the
occurrence of any Event of Termination under the Financing, to such other
person or entity as the Agent may direct).
(f) For items which were accepted for credit to the Master Account
and are later returned unpaid, the Bank shall re-present them through a
clearing channel selected by the Bank. If any such item is returned unpaid
a second time, the Bank shall debit the Master Account and return the item
to the Company. The Bank shall inform the Company, or, after notice of any
Event of Default, the Servicer, or, at any time, to the Agent if the Agent
so directs the Bank, of the particulars of such items.
(g) The Bank shall mail to the Company, via first class mail, all
documents (invoices, etc.) received with the remittances, together with a
credit advice and photocopies of checks deposited. Following the Bank's
receipt of any notice of the occurrence of any Event of Default under the
Credit Agreement, such documents shall be mailed to the Servicer and,
following the Bank's receipt of any notice from the Agent of the occurrence
of any Event of Termination under the Financing, such documents shall be
mailed to the Agent or such other person or entity as the Agent may direct.
(h) At the close of each banking day, the Bank shall mail to the
Company any checks, other evidence of payment, and any other mail that does
not appear to represent a remittance, except that checks not appearing to
represent remittances shall be mailed to the Servicer only after the Bank
receives any notice of any Event of Default under the Credit Agreement and,
following the Bank's receipt of any notice of the occurrence of any Event
of Termination under the Financing, such checks shall be mailed to the
Agent or such other person or entity as the Agent may direct.
(i) The Bank will adhere to the following procedures concerning
irregular items:
(i) The Bank will process those checks that lack a signature
and will inscribe the postmark date on those checks that arrive with
no date.
(ii) The Bank will return to the Company any checks postdated
three or more days, except that after the Bank receives any notice
from the Lender or the Servicer of any Event of Default, the Lender or
the Servicer, as the case be, may require the Bank to return such item
to it and after the Bank receives any notice from the Agent of the
occurrence of an Event of Termination, the Agent may require the Bank
to return such item to it or such other person or entity as the Agent
may direct. If a check carries and has violated the phrase "void after
x-number of days", or is dated over 6 months past, the check will be
returned to the Company.
(iii) If the numeric and written amounts of the check should
disagree and the amount cannot be verified from a supporting document,
the Bank will process the check for the written amount.
6. EVENTS OF DEFAULT AND TERMINATION. (a) At all times after the Bank's
receipt of any notice from the Lender or the Servicer of the occurrence of any
Event of Default under the Credit Agreement, the Bank shall follow the
instructions of the Lender and the Servicer as to the holding, investment and
transfer of all collected amounts from time to time on deposit in the Master
Account. In addition, the Company agrees that the Bank may act as the agent of
the Lender in exercising as to any funds or items from time to time in the
Lockbox or on deposit in any of the Accounts any rights of set-off provided by
applicable law or by the Credit Agreement. The Company agrees that the Bank
shall be entitled to rely, without independent investigation, on any statement
of the Lender or the Servicer to the effect that an Event of Default has
occurred and is continuing or to the effect that any exercise of set-off
requested by the Lender or the Servicer is permitted under applicable law or the
Credit Agreement.
(b) At all times after the Bank's receipt of notice from the Agent
that an Event of Termination under the Financing has occurred, the Bank shall no
longer follow any instructions given to the Bank by the Servicer or the Lender,
but shall act only upon the express instructions of the Agent. All of the rights
and remedies granted to the Lender or the Servicer hereunder shall immediately
upon such notice of an Event of Termination under the Financing become available
to the Agent at such time. Each of the Company, the Lender and the Servicer
agrees that the Bank shall be entitled to rely, without independent
investigation, on any statement of the Agent to the effect that an Event of
Termination has occurred and is continuing or to the effect that any exercise of
set-off requested by the Agent is permitted under applicable law or the
agreements executed and delivered in connection with the Financing.
7. STATEMENTS; INFORMATION. The Bank shall prepare monthly statements
of credits and debits to the Accounts in its standard forms and according to its
current practices and mail copies of such statements to such persons or
departments of the Company as the Company may designate from time to time and
mail one copy of any such statements prepared to the Servicer. In addition, the
Bank shall provide the Lender and the Servicer with such information with
respect to the Lockbox and the Accounts as the Lender or the Servicer may from
time to time reasonably request, and following notice from the Agent that an
Event of Termination under the Financing has occurred, such information as the
Agent shall reasonably request, and the Company hereby consents to such
information being provided to the Lender, the Servicer or the Agent, as the case
may be.
8. COMPENSATION.
(a) The Company hereby agrees to:
(i) pay to the Bank the Bank's usual and customary charges with
respect to the Lockbox, the Accounts, and all services performed for
the Company under this Agreement. It is understood that the Bank may
change these charges without prior notice. It is understood and agreed
that the Company shall be responsible for payment of these charges and
all other expenses related to the provision of services under this
Agreement. The Bank will send the Company an invoice detailing these
charges periodically and the Company shall pay the amount due within
thirty (30) days of receipt. In the event the Company fails to pay,
the Bank may exercise its right of set-off against the Accounts for
such amounts. In the event there are not sufficient funds in the
Accounts to pay these charges and expenses, the Lender agrees to pay
them within ten (10) business days of receipt of the Bank's written
notice to the Lender.
(ii) on and after the date a notice of an Event of Default is
given, provide the Servicer with a monthly statement showing the
invoices sent with respect to the Lockbox and the Accounts, the amount
thereof and whether or not such invoices have been paid as of the date
of such statement. After the Bank receives notice from the Agent that
an Event of Termination has occurred, such information shall be
provided to the Agent rather than the Servicer.
(b) The Bank shall notify the Servicer if the compensation provided
above in this SECTION 8 has not been paid by the Company. The Bank shall
not discontinue any service provided for in this Agreement unless thirty
(30) days shall have elapsed from the date
such notice is received by the Servicer and such compensation then shall
not have been paid. After the Bank receives notice from the Agent that an
Event of Termination has occurred, such notice shall be provided to the
Agent rather than the Servicer.
(c) The Company agrees to compensate the Bank for all services
provided to the Lender, the Servicer or the Agent under this Agreement.
Such services shall include, without limitation, action which the Bank
takes pursuant to the Lender's, Servicer's or Agent's request under SECTION
3. Such compensation shall be agreed upon from time to time by the Company
and the Bank, except where the charges are for services for which the Bank
has usual and customary charges, in which case such charges shall apply.
Payment shall be made by the Company, or as the case may be, by the Lender,
in accordance with the provisions of SECTION 8(A)(I).
9. EXCULPATION. The Bank undertakes to perform only such duties as are
expressly set forth herein. Notwithstanding any other provision of this
Agreement, it is agreed by the parties hereto that the Bank shall not be liable
for any action taken by it or any of its directors, officers, agents or
employees in accordance with this Agreement, including, without limitation, any
action so taken at the request of the Lender, the Servicer or the Agent, except
for the Bank's or such person's own gross negligence or willful misconduct. In
no event shall the Bank be liable for losses or delays resulting from computer
malfunction, interruption of communication facilities, labor difficulties or
other causes beyond the Bank's reasonable control or for indirect, special or
consequential damages.
10. IRREVOCABLE AGREEMENTS. Each of the Company, the Lender and the
Servicer acknowledges that the agreements made by it and the authorizations
granted by it herein are irrevocable and that the authorizations granted in
SECTIONS 3, 4, 5 and 6 are powers coupled with an interest.
11. SETOFF. (a) The Bank waives, with respect to all of its existing and
future claims against the Company or any affiliate thereof, all existing and
future rights of setoff and banker's liens against the Accounts, any Account
Collateral and any other items (and proceeds thereof) that come into its
possession in connection with the Accounts or the Lockbox, including, without
limitation, any failure of collection of any funds transferred to the Company,
PROVIDED, HOWEVER, that the Bank shall have the right to charge the Master
Account, without duplication, (i) for all items deposited therein which are
subsequently returned to the Bank unpaid and for any return charges payable by
the Bank under applicable law, and (ii) for all past due compensation and
expenses with respect to the Accounts as provided in SECTION 8(A)(I).
(b) If any available funds transferred from the Master Account
subsequently are not collected by the Bank for any reason whatsoever, the Bank
shall have recourse for reimbursement of such funds to the Company; and, if
reimbursement is not recovered from funds deposited in the Master Account or
from the Company within ten (10) business days after the Bank's delivery of a
written request for reimbursement to the Company, the Lender shall be
responsible for such reimbursement and shall reimburse the Bank within ten
business days of the Bank's written notice to the Lender.
12. MISCELLANEOUS. This Agreement shall be effective as provided in
SECTION 1 hereof. This Agreement shall supersede any other agreement relating to
the matters referred to herein. This Agreement constitutes the entire agreement
with respect to the services provided hereunder and is binding upon the parties
hereto and their respective successors and assigns
(including any trustee of the Company appointed or elected in any action under
the Bankruptcy Reform Act of 1978, as amended) and shall inure to their benefit.
The Lender is the current holder of all indebtedness secured by the security
interest and lien described in SECTION 3 but may, subject to the restrictions
set forth in the Secured Credit Agreement, in the future transfer, assign or
sell all or part of such indebtedness and, thus, the Lender acts herein as agent
for itself and any future holder of such indebtedness. The Agent holds its lien
and security interest described in SECTION 3 on behalf of certain other Senior
Creditors and as such, acts as the contractual representative for such Senior
Creditors. Neither this Agreement nor any provision hereof may be changed,
amended, modified or waived orally, but only by an instrument in writing signed
by the parties hereto, PROVIDED that such instrument need be signed only by the
Bank, the Lender, the Servicer and the Agent if it does not change any rights or
obligations of, or authorizations granted by, or protections given to, the
Company hereunder and notice thereof is provided by the Lender, the Servicer or
the Agent to the Company. This Agreement shall be governed by, and interpreted
in accordance with, the laws of the State of Illinois without reference to its
principles of conflicts of law. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement. All obligations and
rights of the parties hereto expressed herein shall be in addition to and not in
limitation of those provided by applicable law. This Agreement may be executed
in any number of counterparts which together shall constitute one and the same
instrument.
13. TERMINATION. This Agreement may be terminated by the Lender (or the
Servicer acting on behalf of the Lender) or the Bank upon 30 days' advance
written notice to the other parties hereto. All rights of the Bank under SECTION
8 and 9 for the period prior to any such termination shall survive such
termination. After this Agreement is terminated, the Bank may continue to
receive mail through the Lockbox. The Company or if an Event of Default has
occurred, the Lender, agrees to pay the Bank's usual and customary charges for
handling this mail.
14. NOTICES. All notices, requests or other communications required or
desired to be given to the Company, the Lender, the Servicer, the Agent or the
Bank hereunder shall be given in writing (including facsimile transmission or
similar writing) at the address or facsimile number specified below:
LENDER: First Source Financial LLP
c/o First Source Financial, Inc.
0000 Xxxx Xxxx Xxxx
0xx Xxxxx
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Loan Administration
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
SERVICER: First Source Financial, Inc.
0000 Xxxx Xxxx Xxxx
0xx Xxxxx
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Loan Administration
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
BANK: The First National Bank of Chicago
One First Xxxxxxxx Xxxxx
Xxxx Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Account Officer - Xxxxxx Silca
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
AGENT: Citicorp North America, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Corporate Asset Funding
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
COMPANY: General Manufactured Housing, Inc.
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
WITH A COPY TO: Strategic Investments & Holdings, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may change its address or facsimile number for notices hereunder by
notice to each other party hereunder. Each notice, request or other
communication shall be effective (a) if given by facsimile, when such facsimile
is transmitted to the facsimile number specified in this Section and
confirmation of receipt is made by the appropriate party, (b) if given by mail,
72 hours after such communication is deposited in the mails with registered
first class postage prepaid, addressed as aforesaid or (c) if given by any other
means, when delivered at the address specified in this Section.
15. ELIGIBILITY OF BANK. The Bank hereby represents and warrants to the
Lender, the Servicer and the Agent that the shareholder's equity of the Bank, as
at the date of the latest published quarterly financial statements of the Bank,
is at least $100,000,000. If the shareholders' equity of the Bank, as at the
date of any quarterly financial statements of the Bank published hereafter, is
less than $100,000,000, the Bank hereby agrees to promptly notify each of the
Lender and the Agent thereof.
16. RIGHTS OF AGENT. Notwithstanding anything to the contrary herein,
Agent shall (a) have no rights greater than the rights of Lender and Servicer
hereunder and (b) be bound by the terms and conditions of, and be subject to the
restrictions in, the Credit Agreement and the documents delivered pursuant
thereto, as if such Agent were the Lender thereunder.
17. RELATED DOCUMENTS. The Bank shall not be deemed to have any knowledge
(imputed or otherwise) of: (a) any of the terms or conditions of the Credit
Agreement or any document referred to therein or relating to any financing
arrangement among the Company or the Lender relating thereto (collectively,
"Related Documents"); (b) any occurrence or existence of an Event of Default
(other than as set forth in a notice of default); or (c) any other breach of any
term or condition of the Credit Agreement or any other Related Document; and
Bank has no obligation to inform any person of such breach or take any action in
connection with any of the foregoing, except such actions regarding the Accounts
and the Account Collateral as are specified in this Agreement. Bank is not
responsible for the effectiveness, enforceability, genuineness or validity of
the Credit Agreement or any other Related Document or the security interest
granted herein or therein or for the observance or performance of any of the
terms or conditions thereof.
18. FINANCING DOCUMENTS. The Bank shall not be deemed to have any
knowledge (imputed or otherwise) of: (a) any of the terms or conditions of the
documents executed in connection with the Financing or any document referred to
therein or relating to any financing arrangement among the Company, Lender or
the Agent relating thereto (the "Financing Documents"); (b) any occurrence or
existence of an Event of Termination (other than as set forth in a notice of
default); or (c) any other breach of any term or condition of the Financing
Documents; and Bank has no obligation to inform any person of such breach or
take any action in connection with any of the foregoing, except such actions
regarding the Accounts and the Account Collateral as are specified in this
Agreement. Bank is not responsible for the effectiveness, enforceability,
genuineness or validity of the Financing Documents or any security interest
granted herein or therein or for the observance or performance of any of the
terms or conditions thereof.
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ F. Xxxxx Xxxxxxx
-----------------------------------
Name: F. Xxxxx Xxxxxxx
-----------------------------------
Title: [illegible]
-----------------------------------
FIRST SOURCE FINANCIAL LLP
By: First Source Financial, Inc., its Agent/
Manager
By: /s/ Xxxxxx X. Xxxxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx, Esq.
Title: Vice President
FIRST SOURCE FINANCIAL, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxxxxx, Esq.
Title: Vice President
The First National Bank of Chicago
December 21, 1995
Page 2
CITICORP NORTH AMERICA, INC., as Agent
By: /s/ Xxxxxxx Xxxxx
------------------------------
Name: Xxxxxxx Xxxxx
------------------------------
Title: Vice President
------------------------------
Accepted and Agreed to as of
the date first above written:
GENERAL MANUFACTURED HOUSING, INC.
By: /s/ Xxxx X. Xxxxx
-------------------------------
Name: Xxxx X. Xxxxx
Title: President
