LOAN AGREEMENT
Dated as of December 4, 1998
Between
NB FINANCE, LTD.
as Borrower,
and
NB CAPITAL CORPORATION
as Lender
TABLE OF CONTENTS
Section Page
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
1.1. Certain Defined Terms..................................................1
1.2 Computation of Time Periods............................................5
1.3. Accounting Terms.......................................................5
ARTICLE 2
AMOUNT AND TERMS OF THE LOANS
2.1. The Loans..............................................................5
2.2. Use of Proceeds........................................................6
2.3. Repayment of Principal.................................................6
2.4. Prepayments............................................................6
2.5. Interest...............................................................7
2.6. Payments and Computations..............................................7
2.7. Security for the Loans.................................................7
2.8. Late Charge............................................................8
2.9. Taxes..................................................................8
2.10. Loan to Principal Ratio................................................8
ARTICLE 3
CONDITIONS OF LENDING
3.1. Conditions Precedent to Closing........................................9
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
4.1. Representations and Warranties of Borrower............................10
ARTICLE 5
COVENANTS OF BORROWER
5.1. Affirmative Covenants.................................................12
5.2. Negative Covenants....................................................12
5.3. Reporting Requirements................................................13
ARTICLE 6
EVENTS OF DEFAULT
6.1. Events of Default.....................................................13
ARTICLE 7
MISCELLANEOUS
7.1. Amendments, Etc.......................................................15
7.2. Notices, Etc..........................................................15
7.3. No Waiver; Remedies...................................................15
7.4. Costs, Expenses; Indemnity............................................15
7.5. Binding Effect........................................................16
7.6. Non Recourse..........................................................16
7.7. Execution in Counterparts.............................................16
7.8. Jurisdiction, Etc.....................................................17
7.9. Governing Law.........................................................17
7.10. Waiver of Jury Trial..................................................17
7.11. Compliance with Usury Laws............................................17
7.12. Exhibits..............................................................17
7.13. Further Assurances....................................................18
EXHIBITS
Exhibit A The Loans
Exhibit B Form of Note
Exhibit C-1 1998 Series 1 Mortgage Loans
Exhibit C-2 1998 Series 2 Mortgage Loans
Exhibit D Form of Mortgage Loan Assignment Agreement
Exhibit E Mortgage Loan Balances
LOAN AGREEMENT
LOAN AGREEMENT (this "Agreement") dated as of December 4, 1998
between NB FINANCE, LTD., a corporation organized under the laws of Bermuda
("Borrower"), and NB CAPITAL CORPORATION, a corporation organized under the laws
of Maryland (the "Lender").
All capitalized terms used herein shall have the respective
meanings set forth in Section 1.1 hereof.
WITNESSETH:
WHEREAS, Borrower intends to acquire from National Bank of
Canada the Mortgage Loans.
WHEREAS, Borrower has requested that Lender lend to Borrower
an aggregate amount of U.S.$55,716,723.74 in order to acquire such Mortgage
Loans.
WHEREAS, Lender has indicated its willingness to lend such
amount on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, the parties hereto hereby
agree as follows:
Article 1
Definitions and Accounting Terms
Section 1.1. Certain Defined Terms. As used in this Agreement,
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):
"1998 Series 1 Loan" means the loan in the original principal
amount as set forth on Exhibit A to be made by Lender to Borrower
pursuant to this Agreement evidenced by the applicable Note and secured
by the 1998 Series 1 Mortgage Loans (as well as the real property
securing such 1998 Series 1 Mortgage Loans) as more particularly
described in the 1998 Series 1 Mortgage Loan Assignment Agreement and
the other applicable Loan Documents.
"1998 Series 2 Loan" means the loan in the original principal
amount as set forth on Exhibit A to be made by Lender to Borrower
pursuant to this Agreement evidenced by the applicable Note and secured
by the 1998 Series 2 Mortgage Loans (as well as the real property
securing such 1998 Series 2 Mortgage Loans) as more particularly
described in the 1998 Series 2 Mortgage Loan Assignment Agreement and
the other applicable Loan Documents.
"1998 Series 1 Mortgage Loans" means the Mortgage Loans set
forth on Exhibit C-1 hereof.
"1998 Series 2 Mortgage Loans" means the Mortgage Loans set
forth on Exhibit C-2 hereof.
2
"1998 Series 1 Mortgage Loan Assignment Agreement" means that
certain mortgage loan assignment agreement substantially in the form of
Exhibit D, dated as of the date hereof, executed and delivered by
Borrower assigning the Mortgage Loans listed on Exhibit C-1, including
Borrower's interest in the real property securing those Mortgage Loans,
to Lender as security for the 1998 Series 1 Loan made to Borrower, as
the same may be amended, replaced, restated, supplemented or otherwise
modified from time to time.
"1998 Series 2 Mortgage Loan Assignment Agreement" means that
certain mortgage loan assignment agreement substantially in the form of
Exhibit D, dated as of the date hereof, executed and delivered by
Borrower assigning the Mortgage Loans listed on Exhibit C-2, including
Borrower's interest in the real property securing those Mortgage Loans,
to Lender as security for the 1998 Series 2 Loan made to Borrower, as
the same may be amended, replaced, restated, supplemented or otherwise
modified from time to time.
"1998 Series 1 Note" means that certain Note dated as of the
date hereof made by Borrower in favor of Lender evidencing the 1998
Series 1 Loan, as the same may be amended, replaced, restated,
supplemented or otherwise modified from time to time.
"1998 Series 2 Note" means that certain Note dated as of the
date hereof made by Borrower in favor of Lender evidencing the 1998
Series 2 Loan, as the same may be amended, replaced, restated,
supplemented or otherwise modified from time to time.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person.
For purposes of this definition, the term "control" (including the
terms "controlling", "controlled by" and "under common control with")
of a Person means the possession, direct or indirect, of the power to
vote 10% or more of the Voting Stock of such Person or to direct or
cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or
otherwise.
"Agreement" has the meaning specified in the first paragraph
of this Agreement.
"Borrower" has the meaning specified in the first paragraph of
this Agreement.
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in Maryland, Bermuda and Quebec.
"Closing Date" means the fourth (4th) day of December nineteen
hundred and ninety-eight (1998).
"Collateral" means all property referred to as "Collateral" in
the Collateral Documents and all other property that is or intended to
be subject to any Lien in favor of Lender.
"Collateral Documents" means, with respect to each Loan, the
applicable Mortgage Loan Assignment Agreement, and any other agreement
that creates or purports to create a Lien in favor of Lender to secure
such Loan and, collectively, all such agreements for all the Loans.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"Default Rate" has the meaning specified in Section 2.5(c).
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"Environmental Action" means any action, suit, demand, demand
letter, claim, notice of noncompliance or violation, notice of
liability or potential liability, investigation, proceeding, consent
order or consent agreement relating in any way to any Environmental
Law, any Environmental Permit or Hazardous Material or arising from
alleged injury or threat to health, safety or the environment,
including, without limitation, (a) by any governmental or regulatory
authority for enforcement, cleanup, removal, response, remedial or
other actions or damages and (b) by any governmental or regulatory
authority or third party for damages, contribution, indemnification,
cost recovery, compensation or injunctive relief.
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, decree or judicial or agency interpretation, policy or
guidance relating to pollution or protection of the environment,
health, safety or natural resources, including, without limitation,
those relating to the use, handling, transportation, treatment,
storage, disposal, release or discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval,
identification number, license or other authorization required under
any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of
1974 (United States), as amended from time to time, and the regulations
promulgated and rulings issued thereunder.
"Events of Default" has the meaning specified in Section 6.1.
"Excess Loan Amount" has the meaning specified in Section
2.10.
"Fiscal Year" means a fiscal year of Borrower ending on
October 31 in any calendar year or such other fiscal year as Borrower
may select from time to time in accordance with the terms of this
Agreement.
"GAAP" means generally accepted accounting principles
consistently applied and consistent with those applied in the
preparation of the financial statements referred to in Section 5.3.
"Hazardous Materials" means (a) refined petroleum products,
by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas
and (b) any other chemicals, materials or substances designated,
classified or regulated as hazardous or toxic or as a pollutant or
contaminant under any Environmental Law.
"Indemnified Party" has the meaning specified in Section
7.4(b).
"Interest Payment Date" means, with respect to each Loan and
with respect to each Interest Period, the fifteenth (15th) day of the
calendar month immediately following such Interest Period; provided,
however, that if such Interest Payment Date is not a Business Day, such
Interest Payment Date shall be the immediately succeeding Business Day.
"Interest Period" means with respect to each Loan, each
calendar month or portion thereof during the term of such Loan or, in
the case of the initial Interest Period, the Closing Date through the
last day of the calendar month in which the Closing Date occurs.
"Interest Rate" has the meaning specified in Section 2.5(b).
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"Internal Revenue Code" means the Internal Revenue Code of
1986 (United States), as amended from time to time, and the regulations
promulgated thereunder.
"Laws" means all present and future applicable laws, statutes,
codes, ordinances, orders, judgments, decrees, injunctions, rules,
regulations, determinations, awards and court orders of any federal,
state, local or foreign government, governmental authority, regulatory
agency or authority.
"Lender" has the meaning specified in the first paragraph of
this Agreement.
"Lien" means any lien, security interest, mortgage, deed of
trust, priority, negative pledge, charge, conditional sale, title
retention agreement, financial lease or other encumbrance or similar
right of others, or any agreement to give any of the foregoing.
"Loan" and "Loans" means, individually, the 1998 Series 1 Loan
or the 1998 Series 2 Loan, and collectively, the 1998 Series 1 Loan and
the 1998 Series 2 Loan.
"Loan Documents" means with respect to each Loan (i) this
Agreement, (ii) the applicable Note, (iii) the applicable Mortgage Loan
Assignment Agreement, (iv) the applicable Collateral Documents, (v)
powers of attorney dated the date hereof by Borrower appointing Lender
as its attorney-in-fact and (vi) any other written agreement, document
or instrument evidencing, securing or otherwise related to such Loan,
and, collectively, means all of the Loan Documents for all of the
Loans, in each case as amended or otherwise modified from time to time.
"Margin Stock" has the meaning specified in Regulation U.
"Material Adverse Change" means a change which results in a
Material Adverse Effect.
"Material Adverse Effect" means a material adverse effect on
(a) the rights and remedies of Lender under any Loan Document or (b)
the ability of Borrower to perform its obligations under any Loan
Document to which it is or is to be a party.
"Maturity Date" means with respect to each Loan, the date set
forth on Exhibit A, or such earlier date on which the final payment of
principal of the related Note becomes due and payable whether by
declaration, acceleration, or otherwise.
"Mortgage Loans" means, collectively, all mortgage loans
listed on Exhibit C-1 and Exhibit C-2.
"Mortgage Loan Assignment Agreements" means, collectively, the
1998 Series 1 Mortgage Loan Assignment Agreement and the 1998 Series 2
Mortgage Loan Assignment Agreement.
"Mortgage Loan File" means, with respect to each Mortgage
Loan, the loan documents pertaining to such Mortgage Loan and any
architectural and engineering report, title report, survey, insurance
policy and other information and materials with respect to the real
property securing such Mortgage Loan.
"Note" means, with respect to each Loan, a promissory note of
Borrower payable to the order of Lender, in substantially the form
attached hereto as Exhibit B evidencing the indebtedness of Borrower to
Lender resulting from such Loan made by Lender.
5
"Person" means an individual, partnership, corporation
(including a business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other
entity, or a government or any political subdivision or agency thereof.
"Regulation U" means Regulation U of the Board of Governors of
the United States Federal Reserve System, as in effect from time to
time.
"Subsidiary" of any Person means any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or
in which) more than 50% of (a) the issued and outstanding capital stock
having ordinary voting power to elect a majority of the Board of
Directors of such corporation (irrespective of whether at the time
capital stock of any other class or classes of such corporation shall
or might have voting power upon the occurrence of any contingency), (b)
the interest in the capital or profits of such partnership, joint
venture or limited liability company or (c) the beneficial interest in
such trust or estate is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person's other Subsidiaries.
"Taxes" has the meaning specified in Section 2.9(a).
"U.S. Dollar Equivalent" means the U.S. dollar equivalent of
any amount of money determined in Canadian dollars calculated by
reference to National Bank of Canada's spot mid-rate of exchange for
Canadian dollars against U.S. dollars at 11:00 a.m. (Eastern Standard
time) on any relevant day.
"Voting Stock" means the share capital or capital stock issued
by a corporation, or equivalent interests in any other Person, the
holders of which are ordinarily, in the absence of contingencies,
entitled to vote for the election of directors (or persons performing
similar functions) of such Person, even if the right so to vote has
been suspended by the happening of such a contingency.
Section 1.2. Computation of Time Periods. In this Agreement in
the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding".
Section 1.3. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP.
Article 2
Amount and Terms of the Loans
Section 2.1. The Loans.
(a) Subject to the terms and conditions set forth in this
Agreement, Lender hereby agrees to make the Loan to Borrower on the Closing
Date, which Loans are in the original principal amounts set forth on Exhibit A
and shall mature on the applicable Maturity Date as set forth on Exhibit A.
Borrower hereby agrees to accept the Loans on the Closing Date, subject to and
upon the terms and conditions set forth in this Agreement.
(b) Each Loan shall be recourse only to the Mortgage Loans
securing such Loan as provided in Section 7.6.
6
(c) Borrower may request and receive only one borrowing
hereunder with respect to each of the Loans and any amount borrowed and repaid
or prepaid hereunder in respect of any Loan may not be re-borrowed.
(d) Borrower's obligation to pay the principal of and interest
on each Loan shall be evidenced by a Note, duly executed and delivered by
Borrower on the Closing Date in the original principal amount of such Loan and
shall mature on the applicable Maturity Date. Each Note shall be payable as to
principal, interest and all other amounts due under the Loan Documents, as
specified in this Agreement, the applicable Note, and the other applicable Loan
Documents.
Section 2.2. Use of Proceeds. Borrower shall use the proceeds
of the Loans disbursed to it pursuant to Section 2.1 solely to acquire the
Mortgage Loans.
Section 2.3. Repayment of Principal. Subject to the provisions
of Section 2.4, Borrower shall repay to Lender the outstanding principal amount
on each Loan in full on the applicable Maturity Date.
Section 2.4. Prepayments.
(a) Voluntary. Other than the mandatory prepayments of
principal in accordance with Section 2.4(b), Borrower shall not have the right
to prepay (in whole or in part) any Loan.
(b) Mandatory.
(A) In the event of a payment of all or any portion of
principal on any Mortgage Loan (both scheduled payments or unscheduled mandatory
or voluntary prepayments), Borrower shall prepay, on the Interest Payment Date
immediately following the date of such repayment or prepayment, without premium,
the Loan secured by such Mortgage Loan in an amount equal to (i) the U.S. Dollar
Equivalent of the amount repaid or prepaid, multiplied by (ii) a ratio, the
numerator of which is the outstanding principal balance of the Loan secured by
such Mortgage Loan and the denominator of which is the U.S. Dollar Equivalent of
the aggregate outstanding principal balances of all Mortgage Loans securing such
Loan as determined immediately prior to such repayment or prepayment.
(B) Upon an event of default under any Mortgage Loan,
Borrower shall be deemed to have prepaid, without prepayment premium, the Loan
secured by such Mortgage Loan in an amount equal to (i) the U.S. Dollar
Equivalent of the outstanding principal balance of such defaulted Mortgage Loan,
multiplied by (ii) a ratio, the numerator of which is the outstanding principal
balance of the Loan secured by such Mortgage Loan and the denominator of which
is the U.S. Dollar Equivalent of the aggregate outstanding principal balances of
all Mortgage Loans securing such Loan as determined immediately prior to such
default, and the outstanding principal balance of such Loan shall be reduced by
such amount, and the obligation of Lender, pursuant to the applicable Mortgage
Loan Assignment Agreement, to assign any outstanding Mortgage Loans securing
such Loan to Borrower upon satisfaction in full of such Loan, shall terminate
with respect to such defaulted Mortgage Loan; provided, however, that to the
extent any amounts collected by Lender with respect to such defaulted Mortgage
Loan exceed an amount equal to the sum of (i) the amount by which the principal
amount of the Loan secured by such defaulted Mortgage Loan was reduced pursuant
to this Section, (ii) any interest accrued on such amount at the applicable
Interest Rate compounded monthly until the date of collection of such amounts,
and (iii) the amount of any collection expenses (including legal fees), such
excess shall be applied against the Excess Loan Amount and any remaining amount
shall be remitted to Borrower.
7
(C) With respect to each Loan, Borrower shall prepay,
without premium, the Excess Loan Amount (if any), in accordance with Section
1(e) of the applicable Mortgage Loan Assignment Agreement.
(D) On or prior to December 18, 1998, Borrower shall
prepay, without premium, each Loan in an amount equal to the amount by which the
outstanding principal balance of such Loan as of the Closing Date, exceeded
eighty percent (80%) of the U.S. Dollar Equivalent of the aggregate outstanding
principal balances of the Mortgage Loans securing such Loan as of the Closing
Date.
Section 2.5. Interest.
(a) Scheduled Interest. Subject to the provisions of Section
2.5(c), Borrower shall pay interest at the applicable Interest Rate on the
unpaid principal amount of each Loan from the Closing Date until payment in full
of the principal amount of the applicable Loan. Except as expressly provided
herein, all interest on the Loans shall be paid in arrears on the Interest
Payment Date for the relevant Interest Period.
(b) Interest Rate. The interest rate applicable to each Loan
from the Closing Date and for each Interest Period thereafter shall be a rate
per annum (the "Interest Rate") equal to the lesser of (i) the maximum
non-usurious rate permitted by applicable Law and (ii) the rate set forth
opposite such Loan on Exhibit A hereto.
(c) Default Rate. If Borrower shall default in any payment of
principal or interest in respect of any Loan, or any other amount owed by
Borrower under this Loan Agreement, Borrower shall pay interest on the unpaid
principal amount of such Loan, payable in arrears on each Interest Payment Date
and on demand, at a rate per annum (the "Default Rate") equal at all times to
the lesser of (x) the maximum non-usurious rate permitted by applicable Law or
(y) three percent (3%) per annum above the applicable Interest Rate until such
defaulted amount has been paid by Borrower, together with interest thereon at
the Default Rate. Payment or acceptance of the increased rate as provided in
this Section is not a permitted alternative for timely payment and shall not
constitute a waiver of a Default or an Event of Default or an amendment to this
Agreement or any other Loan Document and shall not otherwise prejudice or limit
any rights or remedies of Lender.
Section 2.6 Payments and Computations.
(a) Borrower shall make each payment hereunder and under the
Notes, irrespective of any right of counterclaim or set-off, not later than
11:00 a.m. (Eastern Standard time) on each Interest Payment Date in United
States dollars to Lender at an account or accounts Lender may designate from
time to time in same day funds.
(b) All computations of interest shall be made by Lender (or
any Person designated by Lender) on the basis of a year of 360 days consisting
of twelve (12) months of thirty (30) days each. Each determination by Lender (or
any Person designated by Lender) of interest hereunder shall be conclusive and
binding for all purposes, absent manifest error.
(c) Whenever any payment hereunder or under any Note shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day.
Section 2.7. Security for the Loans. Each Loan shall be
secured by (a) the applicable Mortgage Loans as well as the real property
securing such Mortgage Loans as more particularly
8
described in the applicable Mortgage Loan Assignment Agreement, (b) the other
applicable Collateral Documents and (c) the applicable security interests and
Liens granted in this Agreement and in the other Loan Documents with respect to
such Loan.
Section 2.8. Late Charge. Subject to Section 7.11, in the
event that any installment of interest or principal with respect to any Loan
shall become overdue for a period in excess of five (5) days, a "late charge" in
an amount equal to five percent (5%) of the amount so overdue may be charged to
Borrower by Lender for the purpose of defraying the expenses incident to
handling such delinquent payments. Subject to Section 7.11, such late charge
shall be in addition to, and not in lieu of, any other remedy Lender may have
and is in addition to Lender's right to collect reasonable fees and charges of
any agents or attorneys which Lender may employ in connection with any Default.
Section 2.9. Taxes.
(a) Any and all payments by Borrower under the Notes shall be
made, in accordance with Section 2.6 and the terms of such Note, free and clear
of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings imposed by Bermuda or any political
subdivision or taxing authority thereof or therein, and all liabilities with
respect thereto (all such taxes, levies, imposts, deductions, charges,
withholdings and liabilities in respect of payments hereunder or under the Notes
being hereinafter referred to as "Taxes"). If Borrower shall be required by law
to deduct any Taxes from or in respect of any sum payable under the Notes to
Lender (i) the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 2.9) Lender receives an amount equal to the sum
it would have received had no such deductions been made, (ii) Borrower shall
make such deductions and (iii) Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with applicable
law.
(b) Borrower shall indemnify Lender for and hold it harmless
against the full amount of Taxes, and for the full amount of taxes of any kind
imposed by any jurisdiction on amounts payable under this Section 2.9, imposed
on or paid by Lender and any liability (including penalties, additions to tax,
interest and expenses) arising therefrom or with respect thereto. This
indemnification shall be made within thirty (30) days from the date Lender makes
written demand therefor.
(c) Within thirty (30) days after the date of any payment of
Taxes, Borrower shall furnish to Lender, at its address referred to in Section
7.2, the original or a certified copy of a receipt evidencing such payment.
Section 2.10. Loan to Principal Ratio. On January 31 and
August 31 of each calendar year in which any portion of any Loan is outstanding,
Lender shall determine with respect to each Loan the ratio, expressed as a
percentage, the numerator of which is the amount of the outstanding principal
balance of such Loan as of such determination date and the denominator of which
is the U.S. Dollar Equivalent of the aggregate outstanding principal balances of
the Mortgage Loans securing such Loan as of such determination date. In the
event the ratio with respect to any Loan exceeds eighty percent (80%), Lender
shall determine the amount by which the outstanding principal balance of such
Loan as of the determination date exceeds eighty percent (80%) of the U.S.
Dollar Equivalent of the aggregate outstanding principal balances of the
Mortgage Loans securing such Loan as of the determination date (the "Excess Loan
Amount") and Borrower shall prepay such amount in accordance with Section
2.4(b)(C).
9
Article 3
Conditions of LEnding
Section 3.1. Conditions Precedent to Closing. The obligations
of Lender under this Agreement, including the obligation to make the Loans
hereunder, are subject to the fulfillment by Borrower or waiver by Lender of the
following conditions precedent no later than the Closing Date:
(a) Lender shall have completed a due diligence investigation
of Borrower and the Mortgage Loans and determined, in its sole discretion, that
Borrower and the Mortgage Loans meet Lender's underwriting standards, which due
diligence investigation may include, without limitation, review of the Mortgage
Loan File for each Mortgage Loan.
(b) Lender shall have received the following, each in form and
substance satisfactory to Lender (unless otherwise specified):
(i) The Notes to the order of Lender, duly executed by
Borrower;
(ii) The Mortgage Loan Assignment Agreements duly executed
by Borrower sufficient to grant Lender a valid security interest in the
applicable Mortgage Loans and the real property securing such Mortgage
Loans;
(iii) Certified copies of the resolutions of the Board of
Directors of Borrower approving and authorizing the execution and
delivery and performance of all Loan Documents required to be executed
and delivered by Borrower with respect to this Agreement and the other
Loan Documents;
(iv) A copy of the organizational documents of Borrower
together with each amendment thereto, and, where applicable, certified
by the Registrar of Companies of Bermuda as being a true and correct
copy thereof;
(v) A Certificate of Compliance in respect of Borrower
issued by the Registrar of Companies of Bermuda dated reasonably near
to the Closing Date; and
(vi) A certificate of the Secretary or an Assistant
Secretary of Borrower certifying the names and true signatures of the
officers of Borrower authorized to sign this Agreement and each other
Loan Document to which Borrower is or is to be a party and the other
documents to be delivered hereunder and thereunder.
(c) The representations and warranties of Borrower contained
in each Loan Document shall be true and correct on and as of the Closing Date,
before and after giving effect to the making of the applicable Loan by Lender
and to the application of the proceeds therefrom, as though made on and as of
such date.
(d) No event shall have occurred and be continuing, or would
result from the making of the Loans by Lender or from the application of the
proceeds therefrom, that constitutes a Default.
10
Article 4
Representations and Warranties
Section 4.1. Representations and Warranties of Borrower.
Borrower represents and warrants as follows:
(a) Borrower (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing in each other
jurisdiction in which the conduct of its business requires it to so qualify or
be licensed except where the failure to so qualify or be licensed would not have
a Material Adverse Effect and (iii) has all requisite power and authority
(including, without limitation, all governmental licenses, permits and other
approvals) to own the Mortgage Loans and to carry on its business as now
conducted and as proposed to be conducted.
(b) The execution, delivery and performance by Borrower of
this Agreement and each other Loan Document to which it is or is to be a party,
and the consummation of the transactions contemplated hereby, are within
Borrower's corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene Borrower's certificate of
incorporation, memorandum of association or by-laws, (ii) violate any applicable
Law or governmental regulation or permit applicable to Borrower, (iii) conflict
with or result in the breach of, or constitute a default under, any contract,
loan agreement, indenture, mortgage, deed of trust, lease or other instrument
binding on or affecting Borrower (iv) except for the Liens created under the
Loan Documents, result in or require the creation or imposition of any Lien upon
or with respect to any of the properties of Borrower. Borrower is not in
violation of any such law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award or in breach of any such contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument, the
violation or breach of which is reasonably likely to have a Material Adverse
Effect.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body or any
other third party is required for (i) the due execution, delivery, recordation,
filing or performance by Borrower of this Agreement or any other Loan Document
to which it is or is to be a party, or for the consummation of the transactions
contemplated hereby, (ii) the grant by Borrower of the Liens granted by it
pursuant to the Collateral Documents, (iii) the perfection or maintenance of the
Liens created by the Collateral Documents (including the first priority nature
thereof), other than registration with the Registrar of Companies of Bermuda or
(iv) the exercise by Lender of its rights under the Loan Documents or the
remedies in respect of the Collateral pursuant to the Collateral Documents,
other than compliance with certain registration formalities in Canada.
(d) This Agreement and each other Loan Documents has been duly
executed and delivered by Borrower. This Agreement and each other Loan Document
to which Borrower is a party are the legal, valid and binding obligation of
Borrower, enforceable against Borrower in accordance with its terms except as
enforcement may be limited by bankruptcy, insolvency or other similar laws
affecting the rights of creditors generally.
(e) There is no action, suit, investigation, litigation or
proceeding affecting Borrower or any of its Subsidiaries, including any
Environmental Action, pending or threatened before any court, governmental
agency or arbitrator that (i) would be reasonably likely to have a Material
Adverse Effect or (ii) purports to affect the legality, validity or
enforceability of this Agreement or any other Loan Document or the consummation
of the transactions contemplated hereby.
11
(f) No proceeds of any Loan will be used to acquire any equity
security of a class that is registered pursuant to Section 12 of the Securities
Exchange Act of 0000 (Xxxxxx Xxxxxx).
(g) Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock, and no proceeds
of any Loan will be used to purchase or carry any Margin Stock or to extend
credit to others for the purpose of purchasing or carrying any Margin Stock.
(h) Borrower is not (i) an "investment company" or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940 (United States), as amended, (ii) a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" of either a
"holding company" or a "subsidiary company" within the meaning of the Public
Utility Holding Company Act of 1935 (United States), as amended, or (iii)
subject to any other Law that purports to restrict or regulate its ability to
borrow money.
(i) Borrower and each of its Subsidiaries and Affiliates has
filed, has caused to be filed or has been included in all material tax returns
(federal, state, local and foreign) required to be filed and has paid all taxes
shown thereon to be due, together with applicable interest and penalties.
(j) The proceeds of the Loans shall be used solely to finance
Borrower's acquisition of the Mortgage Loans. No proceeds of the Loans will be
used to acquire any security in any transaction which is subject to Sections 13
and 14 of the Security Exchange Act of 1934 (United States).
(k) Borrower (i) is the sole owner of the Mortgage Loans and
such ownership is free and clear of any lien, security interest or other
encumbrance, (ii) has not granted, and will not grant, any participation or
other interest or assignment, other option or rights to the Mortgage Loans,
other than pursuant to this Agreement and the other Loan Documents, and (iii)
has not pledged, collaterally assigned or otherwise hypothecated any interest
therein, and will at no time do so or agree to do so, other than pursuant to
this Agreement and the other Loan Documents.
(l) Attached hereto as Exhibits C-1 and C-2 are complete lists
of all Mortgage Loans, duly executed originals of which have previously been
delivered to National Bank of Canada, as custodian for Lender, and (i) the
Mortgage Loans have not been amended or modified and are in full force and
effect, (ii) to the knowledge of Borrower, there has not occurred an event
which, if uncured or uncorrected, constitutes or would constitute, with the
giving of notice, passage of time or both, a material default under any such
Mortgage Loan, (iii) there are no provisions in the Mortgage Loans restricting
the assignability of the lender's rights thereunder, (iv) the law governing the
relations between mortgagors and/or hypothecary debtors under each Mortgage Loan
is the law of the province of Canada where the real property securing each such
Mortgage Loan is situated, and (v) none of the Mortgage Loans is secured by real
property in respect of which the registration of mortgages or hypothecs is
governed by the federal laws of Canada including, without limitation, lands
governed by the Indian Act (Canada) and the Railway Act (Canada).
(m) As of December 4, 1998, the U.S. Dollar Equivalent of the
aggregate outstanding principal balance of each Mortgage Loan is the amount set
forth in Exhibit E.
12
Article 5
Covenants of Borrower
Section 5.1. Affirmative Covenants. So long as any portion of
any Loan shall remain unpaid, Borrower will:
(a) Payment of Taxes, Etc. Pay and discharge, before the same
shall become delinquent, (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its property and (ii) all lawful claims that, if
unpaid, might by law become a Lien upon any of its property; provided, however,
that Borrower shall not be required to pay or discharge any such tax,
assessment, charge or claim that is being contested in good faith and by proper
proceedings and as to which appropriate reserves are being maintained, unless
and until any Lien resulting therefrom attaches to its property and becomes
enforceable against its other creditors;
(b) Preservation of Existence, Etc. Preserve and maintain its
existence, legal structure, legal name, rights (charter and statutory), permits,
licenses, approvals, privileges and franchises; provided, however, that Borrower
shall not be required to preserve any right, permit, license, approval,
privilege or franchise if the Board of Directors of Borrower shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of Borrower, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to Borrower or Lender;
(c) Keeping of Books. Keep proper books of record and account,
in which full and correct entries shall be made of all financial transactions
and the assets and business of Borrower in accordance with generally accepted
accounting principles in effect from time to time;
(d) Performance by Borrower. Observe, perform and satisfy, in
a timely manner, all the terms, provisions, covenants and conditions of, and pay
when due all costs, fees and expenses to the extent required under the Loan
Documents and delivered by, or applicable to Borrower; and
(e) Assistance. Render any assistance that Lender may
reasonably request to perfect Lender's security interest in, and enforce
Lender's rights under, any Mortgage Loan or to otherwise enable Lender to
qualify as a real estate investment trust under the Internal Revenue Code.
Section 5.2. Negative Covenants. So long as any portion of any
Loan shall remain unpaid, Borrower will not, at any time:
(a) Diminish Value of Mortgage Loans. Take any affirmative
action, or expressly consent to any action which would have the effect of
impairing or diminishing the value of the Mortgage Loans or the priority of the
Liens or security interest in the collateral securing such Mortgage Loans;
(b) Sale of Mortgage Loans. Sell or enter into an agreement to
sell all or a portion of the Mortgage Loans or interest therein, other than
pursuant to the Loan Documents, or release any borrower or guarantor or any
portion of the collateral, except as expressly provided in the Mortgage Loans,
or pledge, collaterally assign or otherwise hypothecate any interest in the
Mortgage Loan, other than pursuant to the Loan Documents;
(c) Change in Nature of Business. Make any material change in
the nature of its business as carried on at the date hereof;
13
(d) ERISA. Engage in any transaction which would cause any
obligation, or action taken or to be taken, hereunder (or the exercise by Lender
of any of its rights under this Agreement and the Loan Documents) to be a
nonexempt (under a statutory or administrative class exemption) prohibited
transaction under ERISA; or
(e) Domicile. Take any action to change its place of
incorporation, residence or domicile (other than with the prior written consent
of Lender).
Section 5.3. Reporting Requirements. So long as any portion of
any Loan shall remain unpaid, Borrower will furnish to Lender:
(a) Default Notice. As soon as possible and in any event
within five (5) days after the occurrence of each Default or any event,
development or occurrence reasonably likely to have a Material Adverse Effect
continuing on the date of such statement, a statement of Borrower setting forth
details of such Default and the action that Borrower has taken and proposes to
take with respect thereto;
(b) Annual Financial Statements. As soon as available and in
any event within 120 days after the end of each Fiscal Year, a balance sheet of
Borrower as of the end of such Fiscal Year and a statement of income and a
statement of cash flows of Borrower for such Fiscal Year, in each case
accompanied by an opinion acceptable to Lender of an independent public
accountant of recognized standing acceptable to Lender, and a certificate of the
chief financial officer of Borrower stating that no Default has occurred and is
continuing or, if a Default has occurred and is continuing, a statement as to
the nature thereof and the action that Borrower has taken and proposes to take
with respect thereto;
(c) Litigation. Promptly after the commencement thereof,
notice of all actions, suits, investigations, litigation and proceedings before
any court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting Borrower, and promptly after the
occurrence thereof, notice of any adverse change in the status or the financial
situation of the Borrower; and
(d) Other Information. Such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects of Borrower as Lender may from time to time reasonably
request.
Article 6
EVENTS OF DEFAULT
Section 6.1. Events of Default. With respect to each Loan, if
any of the following events ("Events of Default") shall occur and be continuing:
(a) Borrower shall fail to make any payment of principal of or
interest on such Loan when the same shall become due and payable; or
(b) Borrower fails to pay all or any portion of any other
amount payable by Borrower pursuant to this Agreement; or
(c) any representation or warranty made by Borrower under or
in connection with any Loan Document shall prove to have been incorrect in any
material respect when made; or
14
(d) any provision of the organizational documents affecting
the purpose for which Borrower is formed is amended or modified in any manner
which is reasonably likely to result in a Material Adverse Effect, or if
Borrower fails to perform or enforce the provisions of the organizational
documents in a manner that is reasonably likely to result in a Material Adverse
Effect or attempt to dissolve Borrower; or
(e) Borrower shall violate or fail to comply with any of the
provisions of Section 5.2; or
(f) Borrower shall fail to perform any other term, covenant or
agreement contained in any Loan Document on its part to be performed or observed
if such failure shall remain unremedied for thirty (30) days after the earlier
of the date on which (A) Borrower becomes aware of such failure or (B) written
notice thereof shall have been given to such Borrower by Lender; or
(g) Borrower shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against Borrower seeking
to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee or other similar official for it or for any
substantial part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it) that is being diligently
contested by it in good faith, either such proceeding shall remain undismissed
or unstayed for a period of sixty (60) days or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other similar
official for, it or any substantial part of its property) shall occur; or
Borrower shall take any corporate action to authorize any of the actions set
forth above in this subsection (g); or
(h) any provision of any Loan Document after delivery thereof
shall for any reason cease to be valid and binding on or enforceable against
Borrower, or Borrower shall so state in writing; or
(i) any Collateral Document after delivery thereof shall for
any reason (other than pursuant to the terms thereof) cease to create a valid
and perfected first priority Lien on and security interest in the Collateral
purported to be covered thereby.
then, and in any such event (other than an Event of Default described in
subsection (g) above) and at any time, Lender may, in addition to any other
rights or remedies available to it pursuant to this Agreement and the other Loan
Documents, or at law or in equity, take such action, without notice or demand,
that Lender deems advisable to protect and enforce its rights against Borrower
and in any of the Collateral, including, without limitation, by notice to
Borrower, declare the applicable Note, all interest thereon and all other
amounts payable with respect to such Note under this Agreement and the other
Loan Documents with respect to such Note to be forthwith due and payable,
whereupon such Note, all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by Borrower, and
may enforce or avail itself of any or all rights or remedies provided in the
Loan Documents against the Borrower and/or the Collateral (including selling the
applicable Mortgage Loans); and upon an Event of Default described in subsection
(g) above, the Notes, all such interest and all such amounts shall automatically
become and be due and payable, without presentment, demand, protest or any
notice of any kind, all of which are hereby expressly waived by Borrower.
15
Article 7
MISCELLANEOUS
Section 7.1. Amendments, Etc. No amendment or waiver of any
provision of this Agreement, the Notes or any other Loan Document, nor consent
to any departure by Borrower therefrom, shall in any event be effective unless
the same shall be in writing and signed by Lender, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
Section 7.2. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telecopy or telex communication) and mailed, telegraphed,
telecopied, telexed or delivered, if to Borrower, at its address x/x Xxxxxxx
Xxxx & Xxxxxxx, Xxxxxxxxx Xxxxx, 0 Xxxxxx Xxxxxx, Xxxxxxxx, XX 00 Xxxxxxx,
Xxxxxxxxx: Xxxxx Xxxxxxx; and if to Lender, at its address at 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Chief Executive Officer; with a
copy to National Bank of Canada, as servicer of Lender, at National Bank Tower,
000 xx Xx Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxx X0X 0X0 or as to each other party,
at such other address as shall be designated by such party in a written notice
to Borrower and Lender. All such notices and communications shall, when mailed,
telegraphed, telecopied or telexed, be effective when deposited in the mails,
delivered to the telegraph company, transmitted by telecopier or confirmed by
telex answerback, respectively, except that notices and communications to Lender
pursuant to Article 2 or Article 3 shall not be effective until received by
Lender. Delivery by telecopier of an executed counterpart of any amendment or
waiver of any provision of this Agreement, the Note or of any Exhibit hereto to
be executed and delivered hereunder shall be effective as delivery of a manually
executed counterpart thereof.
Section 7.3. No Waiver; Remedies. No failure on the part of
Lender to exercise, and no delay in exercising, any right hereunder or under any
Note or any other Loan Documents shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 7.4. Costs, Expenses; Indemnity.
(a) Borrower agrees to pay on demand (i) all reasonable costs
and expenses of Lender in connection with the preparation, execution, delivery,
administration, modification and amendment of the Loan Documents (including,
without limitation, (A) all due diligence, collateral review, transportation,
computer, duplication, appraisal, Lender audit, insurance, consultant, search,
filing and recording fees and expenses and (B) the reasonable fees and expenses
of counsel for Lender with respect to advising Lender as to its rights and
responsibilities, or the perfection, protection or preservation of rights or
interests, under the Loan Documents, with respect to negotiations with Borrower
or with other creditors of Borrower or any of its Subsidiaries arising out of
any Default or any events or circumstances that may give rise to a Default and
with respect to presenting claims in or otherwise participating in or monitoring
any bankruptcy, insolvency or other similar proceeding involving creditors'
rights generally and any proceeding ancillary thereto) and (ii) all costs and
expenses of Lender in connection with the enforcement of the Loan Documents,
whether in any action, suit or litigation, any bankruptcy, insolvency or other
similar proceeding affecting creditors' rights generally (including, without
limitation, the reasonable fees and expenses of counsel for Lender and with
respect thereto).
(b) Borrower agrees to indemnify and hold harmless Lender and
its Affiliates and their officers, directors, employees, agents and advisors
(each, an "Indemnified Party") from and against any and all claims, damages,
losses, liabilities and expenses (including, without limitation, reasonable fees
16
and expenses of counsel) that may be incurred by or asserted or awarded against
any Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any investigation,
litigation or proceeding or preparation of a defense in connection therewith)
the Loans, the actual or proposed use of the proceeds of the Loans, the Loan
Documents or any of the transactions contemplated thereby, except to the extent
such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct. In the
case of an investigation, litigation or other proceeding to which the indemnity
in this Section 7.4(b) applies, such indemnity shall be effective whether or not
such investigation, litigation or proceeding is brought by Borrower, its
directors, shareholders or creditors or an Indemnified Party or any Indemnified
Party is otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated. Borrower also agrees not to assert any
claim against Lender or any of its Affiliates, or any of their respective
officers, directors, employees, attorneys and agents, on any theory of
liability, for special, indirect, consequential or punitive damages arising out
of or otherwise relating to the Loans, the actual or proposed use of the
proceeds of the Loans, the Loan Documents or any of the transactions
contemplated thereby. THE FOREGOING INDEMNITY AND AGREEMENT NOT TO ASSERT CLAIMS
EXPRESSLY APPLIES, WITHOUT LIMITATION, TO THE NEGLIGENCE (BUT NOT GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT) OF THE INDEMNIFIED PARTIES.
(c) If Borrower fails to pay when due any costs, expenses or
other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may be
paid on behalf of such Borrower by Lender, in its sole discretion.
(d) Without prejudice to the survival of any other agreement
of Borrower hereunder or under any other Loan Document, the agreements and
obligations of Borrower contained in Section 2.8, Section 2.9 and this Section
7.4 shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under any of the other Loan Documents.
Section 7.5. Binding Effect. This Agreement shall become
effective when it shall have been executed by Borrower and Lender and thereafter
shall be binding upon and inure to the benefit of Borrower and Lender and their
respective successors and assigns, except that Borrower shall not have the right
to assign its rights hereunder or any interest herein without the prior written
consent of Lender.
Section 7.6. Non Recourse. Except as otherwise provided herein
and in the other Loan Documents, Lender shall not enforce the liability and
obligation of Borrower to perform and observe the obligations contained herein
and in the other Loan Documents by any action or proceeding wherein a money
judgment shall be sought against Borrower, except that Lender may bring an
action or proceeding to enable Lender to enforce and realize upon this Agreement
and the other Loan Documents, and the interest in the Mortgage Loans and in any
Collateral given to Lender created by this Agreement or the other Loan
Documents, provided, however, that any judgment in any action or proceeding
shall be enforceable against Borrower only to the extent of Borrower's interest
in the Mortgage Loans and other Collateral given to Lender. The provisions of
this Section shall not however (i) constitute a waiver, release or impairment of
any obligation evidenced or secured by the Notes or the other Loan Documents,
(ii) affect the validity or enforceability of any indemnity made in connection
with this Agreement or the other Loan Documents, or (iii) impair the enforcement
of the Mortgage Loan Assignment Agreements.
Section 7.7. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement. Any delivery of a
17
counterpart signature by telecopier shall, however, be promptly followed by
delivery of a manually executed counterpart.
Section 7.8. Jurisdiction, Etc.
(a) Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of any court sitting in Bermuda, and any appellate court thereof,
in any action or proceeding arising out of or relating to this Agreement or any
of the other Loan Documents to which it is a party, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such Bermuda court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or any of the other Loan Documents in the
courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any of the
other Loan Documents to which it is a party in any Bermuda court. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court. Lender hereby irrevocably appoints Xxxxxxx Xxxx
and Xxxxxxx, Xxxxxxxxx Xxxxx, Xxxxxx Xxxxxx, Xxxxxxxx XX CX, Bermuda ("Lender's
Process Agent"), as its agent to receive, on behalf of Lender, service of copies
of the summons and complaint and any other process that may be served in any
such action or proceeding. Any such service may be made by mailing or delivering
a copy of such process, if to Lender, in care of Lender's Process Agent at
Lender's Process Agent's above address. Lender hereby irrevocably authorizes and
directs its respective process agent to accept such service on its behalf.
Section 7.9. Governing Law. This Agreement and the other Loan
Documents shall be governed by, and construed in accordance with, the laws of
Bermuda.
Section 7.10. Waiver of Jury Trial. To the maximum extent
permitted by law, Borrower and Lender irrevocably waive all right to trial by
jury in any action, proceeding or counterclaim (whether based on contract, tort
or otherwise) arising out of or relating to any of the Loan Documents, the Loans
or the actions of Lender in the negotiation, administration, performance or
enforcement thereof.
Section 7.11. Compliance with Usury Laws. It is expressly
stipulated and agreed to be the intent of Borrower and Lender that each Loan
made hereunder comply with the applicable usury and other laws relating to the
Loan Documents now or hereafter in effect. If any such applicable laws render
usurious any amount called for under any of the Loan Documents, or contracted
for, charged or received with respect to any Loan, or if the acceleration of the
maturity of any Loan or if any prepayment by Borrower results in Borrower having
paid any interest in excess of that permitted by law, then it is the express
intent of the parties that all excess amounts theretofore collected by Lender be
refunded to Borrower, and the provisions of the applicable Loan Documents
immediately be deemed reformed and the amounts thereafter collected under such
Loan Documents reduced, without the necessity of the execution of any new
document, so as to comply with the then applicable law, but so as to permit the
recovery of the fullest amount otherwise called for under the applicable Loan
Documents.
Section 7.12. Exhibits. The Exhibits attached hereto are
hereby incorporated herein as a part of this Agreement with the same
effect as if set forth in the body hereof.
18
Section 7.13. Further Assurances. The Borrower shall, at its
sole expense and without expense to Lender, do such further acts and execute and
deliver such further documents as Lender from time to time may reasonably
require for the purpose of assuring and confirming unto Lender the rights hereby
created or intended now or hereafter so to be, or for carrying out the intention
or facilitating the performance of the terms of any Loan Document, or for
assuring the validity of any security interest or Lien under any Collateral
Document.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
BORROWER:
NB FINANCE, LTD.
By /s/ Xxxxxx Xxxxxxxx
-------------------------------------------
Xxxxxx Xxxxxxxx, Assistant Secretary
LENDER:
NB CAPITAL CORPORATION
By /s/ Xxxxxx Xxxxxxx
-------------------------------------------
Xxxxxx Xxxxxxx, Vice-President
EXHIBIT A
THE LOANS
--------------------------------------------------------------------------------
Loan Amount Interest Rate Maturity Date
--------------------------------------------------------------------------------
1998 Series 1 Loan $29,880,126.51 8.371% June 15, 2001
--------------------------------------------------------------------------------
1998 Series 2 Loan $25,836,597.23 8.371% December 15, 2001
--------------------------------------------------------------------------------
EXHIBIT B
FORM OF NOTE
PROMISSORY NOTE
(this "Note")
U.S. $______________ December 4, 1998
FOR VALUE RECEIVED, NB FINANCE, LTD., a Bermuda corporation,
having its registered office in Xxxxxxxxx Xxxxx, 0 Xxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxx (hereinafter referred to as "Borrower"), promises to pay to the order of
NB CAPITAL CORPORATION, a Maryland corporation, at its principal place of
business at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (hereinafter referred
to as "Lender"), or at such other place as the holder thereof may from time to
time designate in writing, the principal sum of ________________________
(U.S.$_______________) (the "Original Principal Amount") in lawful money of the
United States of America with interest on the principal amount outstanding from
time to time to be computed from the date hereof until such principal amount is
paid in full at an annual rate equal to the lesser of (i) the maximum
non-usurious rate permitted by applicable law and (ii) _________ percent (___%)
calculated monthly on a semi-annual basis (the "Interest Rate"), said Original
Principal Amount and interest to be paid as follows:
(i) With respect to each Interest Period, interest payments
shall be paid in arrears on the fifteenth (15th) day of each
calendar month immediately following such Interest Period;
provided, however, that if such day is not a Business Day,
interest payments shall be made on the immediately succeeding
Business Day (the "Interest Payment Date"). "Interest Period"
means each calendar month or portion thereof during the term
of the Note or, in the case of the initial Interest Period,
the date hereof through December 31, 1998. "Business Day"
means a day of the year on which banks are not required or
authorized by law to close in Maryland, Bermuda and Quebec.
(ii) The Original Principal Amount shall be due and payable,
unless otherwise accelerated or prepaid in accordance with the
terms of this Note or the Loan Agreement, dated as of the date
hereof, between Borrower and Lender (the "Loan Agreement") on
_______ 15, _____ (the "Maturity Date") in whole.
Section 1. Incorporation by Reference. All of the terms,
covenants and conditions contained in the Mortgage Loan Assignment Agreement and
the Loan Agreement with respect to the indebtedness evidenced by this Note are
hereby made a part of this Note to the same extent and with the same force as if
they were fully set forth herein.
Section 2. Security. The indebtedness evidenced by this Note
is secured pursuant to that certain mortgage loan assignment agreement of even
date herewith (the "Mortgage Loan Assignment Agreement"), assigning the mortgage
loans more particularly described therein as well as Borrower's interest in the
real property securing such Mortgage Loans (the "Mortgage Loans") as security to
Lender, subject to a reassignment upon satisfaction in full of any indebtedness
evidenced by this Note.
2
Section 3. Prepayment. The Original Principal Amount of this
Note is not subject to optional prepayment but is subject to mandatory
prepayment prior to the Maturity Date upon the terms and conditions specified in
the Loan Agreement.
Section 4. Default and Acceleration. If an Event of Default
(as defined in the Loan Agreement), other than an Event of Default described in
Section 6.1(g) of the Loan Agreement has occurred and is continuing, Lender may
at any time, in addition to any other rights or remedies available to it
pursuant to this Note, the Loan Agreement and the Mortgage Loan Assignment
Agreement, or at law or in equity, take such action, without notice or demand,
that Lender deems advisable to protect and enforce its rights against Borrower
and in any of the Collateral (as defined in the Loan Agreement), including,
without limitation, by notice to Borrower, declare the Debt to be forthwith due
and payable, whereupon such Debt shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by Borrower, and may enforce or avail itself of any
or all rights or remedies provided in this Note, the Loan Agreement and the
Mortgage Assignment Agreement against Borrower and/or the Collateral (including
selling the Mortgage Loans); and upon an Event of Default described in Section
6.1(g) of the Loan Agreement, the Debt shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by Borrower. "Debt" means (a) the outstanding
principal balance of this Note, (b) interest, default interest at the Default
Rate, late charges and other sums, as provided in this Note, the Loan Agreement
or the Mortgage Loan Assignment Agreement, (c) all other monies agreed or
provided to be paid by Borrower in this Note, the Loan Agreement or the Mortgage
Loan Assignment Agreement, and (e) all sums advanced and costs and expenses
incurred by Lender in connection with the Debt or any part thereof, any renewal,
extension, or change of or substitution of the Debt or any part thereof, or the
acquisition or perfection of the security therefor, whether made or incurred at
the request of Borrower or Lender.
Section 5. Savings Clause. It is expressly stipulated and
agreed to be the intent of Borrower and Lender that this Note complies with the
applicable usury and other laws relating to this Note now or hereafter in
effect. If any such applicable laws render usurious any amount called for under
this Note, or contracted for, charged or received with respect to this Note, or
if the acceleration of the maturity of this Note or if any prepayment by
Borrower results in Borrower having paid any interest in excess of that
permitted by applicable law, then it is the express intent of the parties that
all excess amounts theretofore collected by Lender be refunded to Borrower, and
the provisions of this Note immediately be deemed reformed and the amounts
thereafter collected under this Note reduced, without the necessity of the
execution of any new document, so as to comply with the then applicable law, but
so as to permit the recovery of the fullest amount otherwise called for under
this Note.
Section 6. Late Charges; Mortgage Default Interest Rate. (a)
Subject to Section 5, in the event that any installment of interest or principal
shall become overdue for a period in excess of five (5) days, a "late charge" in
an amount equal to five percent (5%) of the amount so overdue may be charged to
Borrower by Lender for the purpose of defraying the expenses incident to
handling such delinquent payments. Subject to Section 5, such late charge shall
be in addition to, and not in lieu of, any other remedy Lender may have and is
in addition to Lender's right to collect reasonable fees and charges of any
agents or attorneys which Lender may employ in connection with any default.
(b) If Borrower shall default in any payment of principal or
interest, or any other amount owed by Borrower under this Note, the Loan
Agreement or the Mortgage Loan Assignment Agreement, Borrower shall pay interest
on the unpaid principal amount of this Note, payable in arrears on each Interest
Payment Date and on demand, at a rate per annum equal at all times to the lesser
of (x) the maximum non-usurious rate permitted by applicable law or (y) three
percent (3%) per annum above the applicable Interest Rate until such defaulted
amount has been paid by Borrower, together with interest
3
thereon at the Default Rate. Payment or acceptance of the increased rate as
provided in this Section is not a permitted alternative for timely payment and
shall not constitute a waiver of a Default or an Event of Default or an
amendment to this Note, the Loan Agreement or the Mortgage Loan Assignment
Agreement and shall not otherwise prejudice or limit any rights or remedies of
Lender.
Section 7. No Oral Change. This Note may not be modified,
amended, waived, extended, changed, discharged or terminated orally or by act or
failure to act on the part of Borrower or Lender, but only by an agreement in
writing signed by the party against whom enforcement of any modification,
amendment, waiver, extension, change, discharge or termination is sought.
Section 8. Waivers. Except for any notices expressly provided
for in this Note, the Loan Agreement or the Mortgage Loan Assignment Agreement,
Borrower and all others who may become liable for the payment of all or any part
of the Debt do hereby severally waive presentment and demand for payment, notice
of dishonor, protest and notice of protest and non-payment and all other notices
of any kind. No release of any security for the Debt or extension of time for
payment of this Note or any installment hereof, and no alteration, amendment or
waiver of any provision of this Note, the Loan Agreement or the Mortgage Loan
Assignment Agreement between Lender or any other person or party shall release,
modify, amend, waive, extend, change, discharge, terminate or affect the
liability of Borrower, and any other person or entity who may become liable for
the payment of all or any part of the Debt, under this Note, the Loan Agreement
or the Mortgage Loan Assignment Agreement. No notice to or demand on Borrower
shall be deemed to be a waiver of the obligation of Borrower or of the right of
Lender to take further action without further notice or demand as provided for
in this Note, the Loan Agreement or the Mortgage Loan Assignment Agreement. Any
failure of Lender to insist upon strict performance by Borrower of any of the
provisions of this Note, the Loan Agreement or the Mortgage Loan Assignment
Agreement shall not be deemed a waiver of any of the terms or provisions of this
Note, the Loan Agreement or the Mortgage Loan Assignment Agreement, and Lender
shall have the right thereafter to insist upon strict performance by Borrower of
any and all of them.
Section 9. Non Recourse. Except as otherwise provided herein
and the Loan Agreement and the Mortgage Loan Assignment Agreement, Lender shall
not enforce the liability and obligation of Borrower to perform and observe the
obligations contained in this Note, the Loan Agreement and the Mortgage Loan
Assignment Agreement by any action or proceeding wherein a money judgment shall
be sought against Borrower, except that Lender may bring an action or proceeding
to enable Lender to enforce and realize upon this Note, the Loan Agreement and
the Mortgage Loan Assignment Agreement, and the interest in the Mortgage Loans
and in any Collateral (as defined in the Loan Agreement) given to Lender created
by this Note, the Loan Agreement or the Mortgage Loan Assignment Agreement,
provided, however, that any judgment in any action or proceeding shall be
enforceable against Borrower only to the extent of Borrower's interest in the
Mortgage Loans and other Collateral given to Lender. The provisions of this
Section shall not however (i) constitute a waiver, release or impairment of any
obligation evidenced or secured by this Note, the Loan Agreement or the Mortgage
Loan Assignment Agreement, (ii) affect the validity or enforceability of any
indemnity made in connection with this Note, the Loan Agreement or the Mortgage
Loan Assignment Agreement, or (iii) impair the enforcement of the Mortgage Loan
Assignment Agreement.
Section 10. Authority. Borrower (and the undersigned
representative of Borrower, if any) represents that Borrower has full power,
authority and legal right to execute and deliver this Note, the Loan Agreement
and the Mortgage Loan Assignment Agreement and that this Note, the Loan
Agreement and the Mortgage Loan Assignment Agreement are valid and binding in
accordance with their terms.
Section 11. Applicable Law. This Note shall be governed,
construed, applied and enforced in accordance with the laws of Bermuda.
4
Section 12. Counsel Fees. In the event that it should become
necessary to employ counsel to collect the Debt or to protect or foreclose the
security therefor, Borrower also agrees to pay all reasonable fees and expenses
of Lender, including, without limitation, reasonable attorney's fees for the
services of such counsel whether or not suit be brought.
Section 13. Notices. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered,
if to Borrower, at its address x/x Xxxxxxx Xxxx & Xxxxxxx, Xxxxxxxxx Xxxxx, 0
Xxxxxx Xxxxxx, Xxxxxxxx, XX 00 Xxxxxxx, Xxxxxxxxx: Xxxxx Xxxxxxx; and if to
Lender, at its address at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Chief Executive Officer; with a copy to National Bank of Canada, as
servicer of Lender, at National Bank Tower, 000 xx Xx Xxxxxxxxxxx Xxxx,
Xxxxxxxx, Xxxxxx X0X 0X0 or as to each other party, at such other address as
shall be designated by such party in a written notice to Borrower and Lender.
All such notices and communications shall, when mailed, telegraphed, telecopied
or telexed, be effective when deposited in the mails, delivered to the telegraph
company, transmitted by telecopier or confirmed by telex answerback,
respectively.
Section 14. Payment. Borrower shall make each payment,
irrespective of any right of counterclaim or set-off, not later than 11:00 a.m.
(Eastern Standard time) on each Interest Payment Date in United States dollars
to Lender at an account or accounts Lender may designate from time to time in
same day funds. All computations of interest and fees shall be made by Lender on
the basis of a year of 360 days consisting of twelve (12) months of thirty (30)
days each. Each determination by Lender of interest or fees hereunder shall be
conclusive and binding for all purposes, absent manifest error.
IN WITNESS WHEREOF, Borrower has caused this instrument to be duly
executed on the date in the year first above written.
NB FINANCE, LTD.
By
-------------------------------------
Name:
Title:
LENDER:
NB CAPITAL CORPORATION
By
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EXHIBIT C-1
1998 SERIES 1 MORTGAGE LOANS
EXHIBIT C-2
1998 SERIES 2 MORTGAGE LOANS
EXHIBIT D
FORM OF MORTGAGE LOAN ASSIGNMENT AGREEMENT
EXHIBIT E
MORTGAGE LOAN BALANCES
1998 Series 1 Mortgage Loans US$37,350,158.14
1998 Series 2 Mortgage Loans US$32,295,746.54
