CUSTODIAL AGREEMENT
THIS AGREEMENT is entered into as of September , 1996, between
INDUSTRY MORTGAGE COMPANY, L.P., a Delaware limited partnership, IMC MORTGAGE
COMPANY, a Florida corporation, and IMC CORPORATION OF AMERICA, a Delaware
corporation (whether one or more, "BORROWER"), NOMURA ASSET CAPITAL CORPORATION
("LENDER"), and LASALLE NATIONAL BANK, a national banking association
("COLLATERAL CUSTODIAN").
RECITALS
WHEREAS, Borrower and Lender have entered into a loan agreement dated of
even date herewith (the "LOAN AGREEMENT");
WHEREAS, pursuant to the Loan Agreement, Lender may from time to time
make Borrowings to Borrower, which Borrowings are to be secured by, among other
things, certain HELOCs pledged by Borrower to Lender; and
WHEREAS, Borrower and Lender wish to provide for the delivery of certain
documentation relating to such HELOCs to Collateral Custodian, which is to hold
such documentation on behalf of Lender as secured party under the Loan
Agreement, and certain related matters.
NOW THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, and for adequate and sufficient consideration the receipt
of which is hereby acknowledged, the parties hereto agree as follows:
SECTION 1. REFERENCES AND DEFINITIONS. Unless otherwise stated, (a)
references in this Agreement to "Sections" and "Exhibits" are to Sections and
Exhibits of this Agreement, (b) all time references (e.g. 10:00 a.m.) are to
time in New York, New York, and (c) any terms defined herein shall be equally
applicable to the singular and the plural forms of such terms.
AGREEMENT means this Custodial Agreement, as supplemented or amended
from time to time.
AUTHORIZED SIGNATORY or SIGNATORIES means those parties described on
EXHIBIT D, which parties are authorized to execute documents for his or her
respective entity.
BORROWING REQUEST means a Borrowing Request as required to be executed
and delivered by Borrower to Lender in accordance with the Loan Agreement.
BUSINESS DAY means any day other than Saturday, Sunday, and any other
day that Lender is authorized or obligated by law to be closed in New York, New
York, and which is a day for trading by and between banks for dollar deposits in
the London Interbank Market.
COLLATERAL means all collateral defined in the Security Agreement.
COLLATERAL CUSTODIAN means LaSalle National Bank, or its successor.
COLLATERAL DOCUMENTS means those items listed on EXHIBIT E that are
required to be delivered to Collateral Custodian pursuant to SECTION 2 and the
Loan Agreement in connection with a Borrowing Request.
COLLATERAL FILE means, with respect to each HELOC, a file containing
each of the items referenced on EXHIBIT E.
COLLATERAL REVIEW PROCEDURES means the procedures and standards of
review set forth on EXHIBIT F to be used by the Collateral Custodian when
reviewing Collateral Documents.
COLLATERAL STATUS REPORT means a collateral status report prepared by
Collateral Custodian and delivered to Lender in accordance with SECTION 3(c) and
substantially in the form of either EXHIBIT A-1 or A-2, as applicable, together
with attachments to such Exhibits.
CUSTODIAN'S CERTIFICATION means, as appropriate, a Custodian's
Certification executed and delivered by Collateral Custodian to Lender in
substantially the form of EXHIBIT A-1 for each HELOC Borrowing other than Wet
Borrowings and in the form of EXHIBIT A-2 for each Wet Borrowing.
DEFAULT means a Default by Borrower under this Agreement, the Loan
Agreement, or any other Loan Document.
DOCUMENT EXCEPTION REPORT means a report substantially in the form of
EXHIBIT H listing each Collateral Document which is incomplete, incorrect, or
otherwise missing from the Collateral Documents.
HELOC means a home equity line of credit pledged as Collateral to Lender
that is evidenced by a valid promissory note and is secured by a mortgage, deed
of trust or trust deed that grants a first or second priority lien on underlying
one-to-four family residences.
HELOC BORROWING means a borrowing by Borrower to acquire, originate, and
purchase HELOCs which meet specified criteria in the underwriting guidelines.
LENDER has the meaning set forth in the preamble of this Agreement.
LOAN AGREEMENT has the meaning set forth in the recitals of this
Agreement.
OUTSTANDING NOTES REPORT means a report prepared by Collateral Custodian
and delivered to Lender in accordance with SECTION 3(b), and substantially in
the form of EXHIBIT G, which lists each HELOC for which an original executed
note has not been delivered to Collateral Custodian within three (3) Business
Days of the related HELOC Borrowing.
PERSON means any individual, entity, or tribunal.
POTENTIAL DEFAULT means the occurrence of any event or existence of any
circumstance that would -- upon notice, time lapse, or both -- become a Default.
REQUEST FOR RELEASE OF DOCUMENTS means a trust receipt executed and
delivered by Borrower to Collateral Custodian in accordance with SECTION 4(b)(i)
and substantially in the form of EXHIBIT B.
2
WET BORROWINGS shall mean HELOC Borrowings for which all of the
Collateral Documents have not been delivered to Collateral Custodian in
accordance with SECTION 2.
SECTION 2. DELIVERY.
(a) By 4:00 p.m. on each Business Day prior to which Borrower wishes to
make a HELOC Borrowing, Borrower shall provide to Lender and Collateral
Custodian via modem a schedule containing the information, including wire
instructions for any Wet Borrowings, listed on EXHIBIT I with respect to each
related HELOC. In addition, Borrower shall simultaneously deliver a Borrowing
Request to Lender with respect to such HELOC Borrowing.
(b) On or prior to the date upon which Borrower wishes Lender to make a
HELOC Borrowing, Borrower shall deliver to Collateral Custodian the Collateral
Documents referred to in EXHIBIT E which are required to be delivered in
connection with such Borrowing Request. In the case of Wet Borrowings, Borrower
shall deliver to Collateral Custodian the remaining required Collateral
Documents within three (3) Business Days after the date upon which the related
Wet Borrowing is made.
SECTION 3. COLLATERAL CUSTODIAN'S EXAMINATION AND CERTIFICATION OF
COLLATERAL DOCUMENTS.
(a) Receipt, Examination and Certification by Collateral Custodian.
Collateral Custodian shall examine and review in accordance with the Collateral
Review Procedures the Collateral Documents delivered to it in connection with
each Borrowing Request by 2:30 p.m. on each day a HELOC Borrowing is to be made.
If Collateral Custodian determines on the basis of such examination that it is
able to make each of the certifications in the Custodian's Certification,
Collateral Custodian shall promptly telecopy to Lender and Borrower, by 2:30
p.m., an executed Custodian's Certification in the form of EXHIBIT A-1 or A-2,
as applicable, including a current Collateral Status Report, with respect to
such documents and Borrowing Request. If Collateral Custodian determines, on the
basis of such examination, that it is unable to make such certifications, it
promptly shall advise Borrower and Lender in writing that it is unable to
deliver a Custodian's Certification with respect to such documents and Borrowing
Request. Such written advice shall identify the HELOCs and the deficiencies in
the documents so examined which prevent Collateral Custodian from making such
certifications. If such deficiencies can be cured without returning any
documents to Borrower, Collateral Custodian shall request that the Borrower cure
such deficiencies immediately. If such deficiencies can only be cured by
returning documents to Borrower, Collateral Custodian shall request that
Borrower deliver to Collateral Custodian a Request for Release of Documents and,
upon receipt thereof, Collateral Custodian shall return any document containing
any deficiency to Borrower for correction and deliver to Lender a Document
Exception Report. Upon correction of the deficiencies and return of the related
documents, Collateral Custodian shall promptly telecopy to Lender and Borrower a
Custodian's Certification and an updated Document Exception Report and destroy
the related Request for Release of Documents. By 3:30 p.m., Collateral Custodian
will reconcile the Collateral Documents with the list of approved collateral
delivered by Lender and, with respect to each Wet Borrowing, wire the
appropriate funds to the appropriate accounts pursuant to instructions from
Borrower.
(b) Notification Regarding Wet Borrowings. By 2:30 p.m. of each Business
Day, Collateral Custodian shall provide Lender with a copy of an Outstanding
Notes Report if Borrower fails to deliver to Collateral Custodian the Collateral
Documents relating to Wet Borrowings within the time limits set forth in SECTION
2. By 3:30 p.m. of each Business Day on which Lender has received an Outstanding
Notes Report from Collateral Custodian, Lender shall forward a copy of such
report to Borrower together with a current Document Exception Report. In
addition, on each Business Day on which a Wet Borrowing
3
occurs, Lender shall forward to Custodian via modem a file containing the
information required pursuant to EXHIBIT I confirming the Wet Borrowings
occurring on such day.
(c) Roll-Up of Custodian's Certification. By 2:00 p.m. each Monday (or
Tuesday if Monday is not a Business Day), Collateral Custodian will deliver a
Custodian's Certification (EXHIBIT A-1 or A-2, as applicable) that is cumulative
for all loans funded under this Agreement. The receipts received each Monday
will replace all prior receipts.
(d) Notice of Security Interest. Collateral Custodian shall, promptly
upon receipt, send to Lender by facsimile copies of all notices given to
Collateral Custodian of a security interest in any of the Collateral Documents.
(e) Signatures, Authenticity and Signers' Authority or Capacity. Under
no circumstances shall Collateral Custodian be obligated to verify the
authenticity of any signature on any of the documents received or examined by
it, but each such signatory must be an Authorized Signatory.
SECTION 4. POSSESSION OF COLLATERAL DOCUMENTS.
(a) Possession of Collateral Documents on Behalf of Lender. Collateral
Custodian shall retain possession and custody of the Collateral Documents
delivered to it pursuant to SECTION 2, and any other documents delivered or
caused to be delivered to Collateral Custodian by Borrower pursuant to the Loan
Agreement, for the benefit of Lender, and as agent and bailee of and Collateral
Custodian for Lender for all purposes (including but not limited to the
perfection of the security interest of Lender in the related HELOCs) until such
documents are disposed of by Collateral Custodian in accordance with the
provisions of this Agreement. Collateral Custodian shall also make appropriate
notations in Collateral Custodian's books and records reflecting that such
documents are pledged to Lender. Collateral Custodian shall segregate and
maintain continuous custody of all such Collateral Documents in secure
facilities in accordance with customary standards for such custody.
(b) Delivery of Collateral Documents. Except as specified below or as
otherwise provided for in this Agreement, Collateral Custodian shall not deliver
any HELOC and its related Collateral Documents to any Person.
(i) Unless Lender directs otherwise or a Default or Potential
Default has occurred and is continuing, Collateral Custodian may, upon
delivery to Collateral Custodian of a Request for Release of Documents,
deliver to Borrower the Collateral Documents with respect to a HELOC,
provided that, the Collateral Documents be required to be returned to
Collateral Custodian within ten (10) calendar days after such delivery
unless (a) such HELOC is the subject of foreclosure proceedings (in
which case all Collateral Documents should be returned when no longer
necessary for the foreclosure proceedings) or (b) such HELOC has been
paid off in full and the HELOC line of credit has been closed (in which
case the Collateral Documents need not be returned), and provided
further that at any one time the aggregate principal amount of all
HELOCs which are outstanding on a Request for Release of Documents shall
not be more than $500,000.00 unless approved by Lender in writing.
(ii) Upon Lender's written notice to Collateral Custodian that a
Default or Potential Default has occurred and is continuing under the
Loan Agreement, Collateral Custodian shall, hold for the exclusive
benefit of Lender the Collateral Documents and other documents then held
or
4
which may in the future be held by Collateral Custodian pursuant to this
Agreement. Upon such notification, Collateral Custodian shall take
direction regarding the Collateral Documents and other documents from
Lender.
(iii) In the absence of specific written instructions as to the
method of shipment of Collateral Documents, Collateral Custodian may
choose an overnight carrier of its choice in the delivery of documents.
(c) Delivery of Collateral Documents When No Custodian's Certification
is Delivered. In the event that any Collateral Documents are delivered to
Collateral Custodian pursuant to SECTION 2 but no Custodian's Certification with
respect to such Collateral Documents is delivered by Collateral Custodian to
Lender because of document deficiencies, Collateral Custodian shall, within 72
hours of the request of Borrower, release and deliver such Collateral Documents
to Borrower.
SECTION 5. WAIVER BY COLLATERAL CUSTODIAN. Notwithstanding any other
provision of this Agreement, Collateral Custodian shall not at any time exercise
or seek to enforce any claim, right or remedy, including any statutory or common
law rights of set off, that Collateral Custodian might otherwise have against
all or any part of a HELOC, the related Collateral Documents, or the proceeds
thereof.
SECTION 6. RIGHT OF INSPECTION. Upon reasonable prior written notice to
Collateral Custodian, Lender, Borrower, or any duly authorized representative of
either may at any time, during normal business hours, inspect and examine the
Collateral Documents in the possession and custody of Collateral Custodian at
such place or places where such Collateral Documents are deposited.
SECTION 7. COLLATERAL CUSTODIAN'S FEES AND EXPENSES. Borrower shall (a)
pay the fees of Collateral Custodian in the amounts and at the times set forth
in EXHIBIT C, and (b) promptly upon demand, reimburse the out-of-pocket expenses
of Collateral Custodian. Lender shall not have any liability or obligation to
pay any such fees or expenses, and the duties of Collateral Custodian hereunder
shall be independent of Borrower's performance of its obligations to Collateral
Custodian in respect of such fees and expenses.
SECTION 8. TERMINATION OF AGREEMENT. This Agreement shall become
effective on and as of the date hereof and shall terminate upon Collateral
Custodian's receipt of written notification from Lender of the payment and
performance by Borrower of all of its obligations under the Loan Agreement and
the termination of all commitments to lend thereunder. Upon termination,
Collateral Custodian shall deliver all Collateral Documents then held by it to
Borrower or such other Person as may be designated in writing by Borrower.
Notwithstanding anything to the contrary contained herein, if a Default or
Potential Default has occurred or is continuing, Lender may terminate this
Agreement in Lender's sole discretion.
SECTION 9. RESIGNATION AND REMOVAL OF COLLATERAL CUSTODIAN.
(a) Resignation. Collateral Custodian shall have the right, with or
without cause, to resign as Collateral Custodian under this Agreement upon 120
days' prior written notice to Lender, with a copy to Borrower. Collateral
Custodian shall continue to act as Collateral Custodian under this Agreement
until it delivers such Collateral Documents and other documents held by it
pursuant to this Agreement to a duly appointed successor Collateral Custodian as
provided in SECTION 9(c) below. Collateral Custodian shall be responsible for
the costs associated with the appointment of a successor Collateral Custodian
upon resignation and the delivery of such Collateral Documents.
5
(b) Removal. Lender may remove and discharge Collateral Custodian from
the performance of Collateral Custodian's duties under this Agreement, with or
without cause, upon sixty (60) days' prior written notice to Collateral
Custodian, with a copy to Borrower. Borrower shall pay all amounts due to
Collateral Custodian under this Agreement on the effective date of such removal
and for the costs associated with the appointment of a successor Collateral
Custodian.
(c) Appointment of Successor Collateral Custodian: Transfer of
Collateral Documents. Upon resignation or removal of Collateral Custodian,
Lender shall appoint and designate a successor by written notice delivered to
Collateral Custodian, with a copy to Borrower. Collateral Custodian shall
deliver all Collateral Documents and other documents then held by it pursuant to
this Agreement to the Person so designated promptly following delivery to
Collateral Custodian of such written notice. Until a successor Collateral
Custodian has been appointed and assumed the duties of the Collateral Custodian
hereunder, Collateral Custodian shall keep possession and custody of such
Collateral Documents and any other documents delivered hereunder and continue to
exercise the standard of care and perform the duties required hereunder.
SECTION 10. OBLIGATIONS AND REPRESENTATIONS OF COLLATERAL CUSTODIAN.
(a) Reliance by Collateral Custodian. Collateral Custodian shall be
entitled to rely upon the advice of its legal counsel from time to time and
shall not be liable or any action or inaction by it in reliance upon such
advice. Collateral Custodian shall also be entitled to rely upon any notice,
document, correspondence, request or directive received by it from Lender or
Borrower that Collateral Custodian believes to be genuine and to have been
signed or presented by the proper and duly authorized officer or representative
thereof, as designated on EXHIBIT D hereto, and shall not be obligated to
inquire as to the authority or power of any Person so executing or presenting
such documents or as to the truthfulness of any statements set forth therein.
(b) Standard of Care. COLLATERAL CUSTODIAN AGREES TO USE REASONABLE
JUDGMENT AND GOOD FAITH IN THE PERFORMANCE OF ANY OBLIGATIONS AND DUTIES
REQUIRED UNDER THIS AGREEMENT AND SHALL INCUR NO LIABILITY TO LENDER OR BORROWER
FOR ITS ACTS OR OMISSIONS HEREUNDER, EXCEPT AS MAY RESULT FROM ITS NEGLIGENCE OR
WILLFUL MISCONDUCT. IN NO EVENT SHALL COLLATERAL CUSTODIAN BE LIABLE, DIRECTLY
OR INDIRECTLY FOR ANY (I) DAMAGES OR EXPENSES ARISING OUT OF THE SERVICES
PROVIDED BY IT HEREUNDER OTHER THAN DAMAGES WHICH RESULT FROM ITS NEGLIGENCE OR
WILLFUL MISCONDUCT, OR (II) SPECIAL, CONSEQUENTIAL, OR INDIRECT DAMAGES, EVEN IF
COLLATERAL CUSTODIAN HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. No
provision of this Agreement shall require Collateral Custodian to expend or risk
its own funds or otherwise incur financial liability in the performance of its
duties under this Agreement if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity is not reasonably assured to
it.
(c) INDEMNIFICATION OF COLLATERAL CUSTODIAN. BORROWER AGREES TO
INDEMNIFY, DEFEND AND HOLD COLLATERAL CUSTODIAN HARMLESS FROM AND AGAINST ANY
CLAIM, LEGAL ACTION, LIABILITY OR LOSS THAT IS INITIATED AGAINST OR INCURRED BY
COLLATERAL CUSTODIAN, INCLUDING COURT COSTS AND REASONABLE ATTORNEY'S FEES AND
DISBURSEMENTS, IN CONNECTION WITH COLLATERAL CUSTODIAN'S PERFORMANCE OF ITS
DUTIES UNDER THIS AGREEMENT, EXCEPT AS MAY INVOLVE NEGLIGENCE OR WILLFUL
MISCONDUCT OF COLLATERAL CUSTODIAN.
6
(d) Insurance. Collateral Custodian shall at its own expense maintain at
all times during the existence of this Agreement and keep in full force and
effect (i) fidelity insurance, (ii) theft and loss of documents insurance, and
(iii) forgery insurance. All such insurance shall be in amounts, with standard
coverage and subject to deductibles, as are customary for insurance typically
maintained by banks which act in a custodial capacity in similar transactions. A
certificate of the respective insurer as to each such policy shall be furnished
to Lender upon request, containing the insurer's statement or endorsement
thereon that such insurance shall not be materially altered or terminated except
upon ten (10) days' prior written notice to Lender delivered by registered mail.
(e) Merger, Conversion or Consolidation of Collateral Custodian. Any
Person into which Collateral Custodian may be merged or converted or with which
it may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which Collateral Custodian shall be a party, or any Person
succeeding to the business of Collateral Custodian, shall be the successor of
Collateral Custodian under this Agreement, without the execution or filing of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
(f) Representations of Collateral Custodian. Collateral Custodian hereby
represents that it is a depository institution subject to supervision or
examination by a federal or state authority, has a combined capital and surplus
of at least $100,000,000 and is qualified to do business in the jurisdictions in
which it will hold any Collateral Documents.
SECTION 11. NOTICES. All notices, demands, consents, requests and other
communications required or permitted to be given or made hereunder shall, except
as otherwise expressly provided hereunder, be in writing and shall be delivered
in person or telecopied or mailed, first class or delivered by overnight
courier, return receipt requested, postage prepaid, addressed to the respective
parties hereto at their respective addresses hereinafter set forth or, as to any
such party, at such other address as may be designated by it in a written notice
to the other:
Borrower: IMC MORTGAGE COMPANY
0000 Xxxxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxx, XX 00000
Attention: Xxx Xxxxxxxxx
Telecopier No.: 813/933-6023
INDUSTRY MORTGAGE COMPANY, L.P.
0000 Xxxxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxx, XX 00000
Attention: Xxx Xxxxxxxxx
Telecopier No.: 813/933-6023
IMC CORPORATION OF AMERICA
0000 Xxxxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxx, XX 00000
Attention: Xxx Xxxxxxxxx
Telecopier No.: 813/933-6023
Lender: Nomura Asset Capital Corporation
2 World Financial Xxxxxx, Xxxxxxxx X
0
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx
Telecopier No.: 212/667-1391
Collateral Custodian: LaSalle National Bank
00 Xxxxxxxxx Xxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxx Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Telecopier No.: 847/427-1694
All notices, certificates or other communications hereunder shall be in
writing and shall be effective and deemed delivered only when received by the
party to which they are sent; provided, however, that a facsimile transmission
shall be deemed to have been received when transmitted so long as the
transmitting machine has provided an electronic confirmation of such
transmission and such facsimile is followed by delivery of a hard copy by hand,
by mail or by overnight courier.
SECTION 12. ASSIGNMENT. This Agreement may not be assigned by Borrower
or Collateral Custodian. This Agreement may, at any time, be assigned, in whole
or in part, by Lender, and any assignee thereof may enforce this Agreement.
SECTION 13. AMENDMENTS. This Agreement may not be amended, modified or
supplemented unless such amendment, modification or supplement is set forth in a
writing signed by all of the parties hereto.
SECTION 14. GOVERNING LAW. This Agreement shall be governed by the laws
of the State of New York, without reference to its principles of conflicts of
laws.
SECTION 15. SEVERABILITY. If any provision of this Agreement shall be
declared to be illegal or unenforceable in any respect, such illegal or
unenforceable provision shall be and become absolutely null and void and of no
force and effect as though such provision were not in fact set forth herein, but
all other covenants, terms, conditions and provisions hereof shall nevertheless
continue to be valid and enforceable.
SECTION 16. CONSENT TO JURISDICTION. Each of the parties to this
Agreement agree that any action or proceeding under this Agreement or any
document delivered pursuant hereto may be commenced against it in any court of
competent jurisdiction within the State of New York, by service of process upon
it, by first class registered or certified mail, return receipt requested,
addressed to it at its address as set forth in this Agreement. Each of the
parties to this Agreement agree that any such suit, action or proceeding arising
out of or relating to this Agreement or any other such document may be
instituted in New York County or in the United States District Court; and each
hereby waives any objection to the jurisdiction or venue of any such court with
respect to, or the convenience of any court as a forum for, any such suit,
action or proceeding.
SECTION 17. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute but one and the same instrument.
SECTION 18. ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND THERETO
WITH RESPECT TO THE SUBJECT MATTER HEREOF
8
AND THEREOF, AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR OR CONTEMPORANEOUS
ORAL AGREEMENTS AMONG SUCH PARTIES. THERE ARE NO ORAL AGREEMENTS AMONG THE
PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF.
SECTION 19. WAIVER OF JURY TRIAL. BORROWER, COLLATERAL CUSTODIAN, AND
LENDER EACH HEREBY (a) COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY OF ANY
ISSUE TRIABLE OF RIGHT BY A JURY, AND (b) WAIVES ANY RIGHT TO TRIAL BY JURY
FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST. THIS
WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN, KNOWINGLY AND VOLUNTARILY,
BY BORROWER, COLLATERAL CUSTODIAN, AND LENDER, AND THIS WAIVER IS INTENDED TO
ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT OF A
JURY TRIAL WOULD OTHERWISE ACCRUE. LENDER, BORROWER, AND COLLATERAL CUSTODIAN
ARE EACH HEREBY AUTHORIZED AND REQUESTED TO SUBMIT THIS AGREEMENT TO ANY COURT
HAVING JURISDICTION OVER THE SUBJECT MATTER AND THE PARTIES HERETO, SO AS TO
SERVE AS CONCLUSIVE EVIDENCE OF THE FOREGOING WAIVER OF THE RIGHT TO JURY TRIAL.
FURTHER, BORROWER, COLLATERAL CUSTODIAN, AND LENDER EACH HEREBY CERTIFIES THAT
NO REPRESENTATIVE OR AGENT OF THE OTHER PARTY, INCLUDING THE OTHER PARTY'S
COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO ANY OF ITS REPRESENTATIVES
OR AGENTS THAT THE OTHER PARTY WILL NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO
JURY TRIAL PROVISION.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE FOLLOWS.]
9
EXECUTED as of the date first stated above.
INDUSTRY MORTGAGE COMPANY, L.P., as Borrower
By INDUSTRY MORTGAGE CORPORATION, its general
partner
By _______________________________________________
(Name) ___________________________________________
(Title) __________________________________________
IMC MORTGAGE COMPANY, as Borrower
By _______________________________________________
(Name) ___________________________________________
(Title) __________________________________________
IMC CORPORATION OF AMERICA, as Borrower
By _______________________________________________
(Name) ___________________________________________
(Title) __________________________________________
NOMURA ASSET CAPITAL CORPORATION, as Lender
By _______________________________________________
(Name) ___________________________________________
(Title) __________________________________________
LASALLE NATIONAL BANK, as Collateral Custodian
By _______________________________________________
(Name) ___________________________________________
(Title) __________________________________________
SIGNATURE PAGE TO CUSTODIAL AGREEMENT
LIQUIDITY AGREEMENT
This Liquidity Agreement ("AGREEMENT") is entered into as of September
, 1996, by and between IMC Mortgage Company, Industry Mortgage Company, L.P.,
and IMC Corporation of America (collectively, "BORROWER"), LaSalle National Bank
("SUB-SERVICER"), and Nomura Asset Capital Corporation, a Delaware corporation
("LENDER").
R E C I T A L S:
WHEREAS, Borrower originates, acquires and services home equity lines of
credit and has requested Lender to provide financing from time to time in
connection therewith;
WHEREAS, Lender and Borrower have agreed to enter into a Loan Agreement,
dated as of the date hereof (the "LOAN AGREEMENT");
WHEREAS, Sub-Servicer may from time to time make Liquidity Contributions
to fund advances under the HELOCs; and
WHEREAS, the parties hereto desire to establish procedures regarding
such Liquidity Contributions.
NOW, THEREFORE, in consideration of the foregoing and the mutual
undertakings and covenants herein, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the undersigned
parties agree as follows:
ARTICLE I
GENERAL TERMS
1.1 DEFINITIONS. Unless otherwise defined, terms defined in the Loan
Agreement have the same meanings when used in this Agreement.
AGREEMENT is defined in the introductory paragraph.
BORROWING REQUEST means a request for funds from Borrower to Lender
substantially in the form of Exhibit D-1 attached to the Loan Agreement.
COLLECTION ACCOUNT means a trust account established by Borrower with
Sub-Servicer -- styled and numbered "IMC Collection Account, in trust for Nomura
Asset Capital Corporation," Account No. ___________ -- for deposit of payments
from Mortgagors and deposit of Liquidity Contributions by Sub- Servicer.
HELOC means a home equity line of credit pledged to Lender under the
Loan Agreement.
LIQUIDITY BORROWING shall mean a Borrowing for the purpose of
reimbursing Sub-Servicer and/or the Collection Account for all previously
unreimbursed Liquidity Contributions made pursuant to this Agreement.
LIQUIDITY CONTRIBUTION means any funds advanced by Sub-Servicer to any
Mortgagor whether from the Collection Account or from Sub-Servicer's own funds.
LIQUIDITY CONTRIBUTION NOTICE means a notice from Sub-Servicer to
Borrower and Lender substantially in the form of EXHIBIT A attached.
MATURITY DATE means the earlier of either (a) the occurrence of a
Default under the Loan Agreement or (b) September ___, 1997, unless extended
pursuant to the terms of the Loan Agreement.
MORTGAGOR means each Person obligated to Borrower under a HELOC.
PERSON means any individual, entity, or tribunal.
SUB-SERVICER means LaSalle National Bank and its successors and assigns.
SUB-SERVICING AGREEMENT means the Sub-Servicing Agreement dated as of
the date hereof between Borrower and Sub-Servicer.
STOP REPORT means a report in the form of EXHIBIT B.
TERMINATION DATE means the earlier of (a) the occurrence of a default by
Borrower under the Loan Agreement, or (b) the date which is six months following
the Maturity Date.
1.2 CONSTRUCTION. Unless the context otherwise clearly indicates, words
used in the singular include the plural and words used in the plural include the
singular. All time references (e.g. 10:00 a.m.) refer to time in New York, New
York.
ARTICLE II
LIQUIDITY CONTRIBUTIONS AND PROCEDURES
2.1 LIQUIDITY CONTRIBUTIONS. In the event a Mortgagor writes a check
under a HELOC, Sub- Servicer shall use the funds in the Collection Account to
fund such checks, provided that Sub-Servicer has not received prior notification
from Borrower in the form of a Stop Report to cease all fundings on such HELOC
or that such check otherwise should not be funded because it (1) was not signed,
(2) had a signature grossly different than the signature on the signature card
on file, (3) was drawn for an amount greater than mortgagor's available credit
amount, or (4) a payment on the HELOC was 45 days or more delinquent from the
related due date. In the event that the funds in the Collection Account are
insufficient, then Sub-Servicer shall advance its own funds to cover the amount
of such check or request. On any amounts so advanced, Sub-Servicer shall be
entitled to reimburse itself from funds in the Collection Account.
2.2 LIQUIDITY REIMBURSEMENT. By 5:00 p.m. on each Friday (or Thursday,
if Friday is not a Business Day), Sub-Servicer will submit to Borrower and
Lender a Liquidity Contribution Notice setting forth in reasonable detail the
information required therein with respect to each Liquidity Contribution made
since the prior Liquidity Contribution Notice.
2
2.3 LIQUIDITY BORROWING.
(a) On or before 12:00 noon on each Monday (or Tuesday, if Monday is not
a Business Day), Borrower will submit a Borrowing Request to Lender in the same
amount as the amount set forth in the related Liquidity Contribution Notice.
Lender will fund any such Liquidity Borrowing by 3:00 p.m. on each Monday (or
Tuesday, if Monday is not a Business Day) to the account designated by
Sub-Servicer.
(b) In the event that the amount to be distributed by Sub-Servicer to
Borrower on any Remittance Date pursuant to Section 2.6 of the Sub-Servicing
Agreement exceeds the amount available in the Collection Account on such
Remittance Date, Sub-Servicer shall submit to Borrower by 4:00 p.m. on the
Business Day preceding the Remittance Date, a Liquidity Contribution Notice
advising Borrower of such excess amount. Borrower will submit a Borrowing
Request to Lender for such amount by 10:00 a.m. on the Remittance Date and
Lender will fund such Liquidity Borrowing to the account designated by
Sub-Servicer by 3:00 p.m. on the Remittance Date.
(c) Each such Liquidity Borrowing will be considered a Borrowing under
the Loan Agreement and will be subject to the terms therein.
2.4 APPLICATION OF LIQUIDITY REIMBURSEMENTS. Upon receipt of funds by
Lender, Sub- Servicer shall divide the funds between itself and the Collection
Account as follows: (1) if funds were contributed by Sub-Servicer and not
subsequently withdrawn by Sub-Servicer out of the Collection Account in
accordance with SECTION 2.1, an amount equal to such contribution shall be
retained by Sub- Servicer, and (2) if funds were withdrawn from the Collection
Account in accordance with SECTION 2.1, an amount equal to such withdrawals
shall be deposited by Sub-Servicer in the Collection Account.
ARTICLE III
GENERAL PROVISIONS
3.1 TERM AND TERMINATION.
(a) Unless otherwise notified in writing by Lender, this Agreement shall
commence on the date hereof and continue through the Termination Date.
(b) Lender may terminate this Agreement, with Borrower's concurrence,
upon the occurrence of a Sub-Servicer Event of Default (as defined herein) by
giving no less than fifteen (15) days prior written notice to the Sub-Servicer
and Borrower of its intent to terminate this Agreement. Such written notice
shall describe in detail the Event of Default. For purposes of this Agreement,
an "EVENT OF DEFAULT" hereunder shall occur in the event Sub-Servicer defaults
in the performance of any of its duties or obligations under this Agreement or
any other document relating to the HELOCs to which it is a party. If the
Sub-Servicer corrects the condition which resulted in the Event of Default
within a fifteen (15) day period from the date of notice, this Agreement shall
not terminate but shall remain in full force and effect.
(c) Upon termination of this Agreement or upon Default by Borrower under
the Loan Agreement, Sub-Servicer shall deliver to the successor sub-servicer
designated by Lender or Borrower, as applicable, all documents, statements,
records, funds and accounts held by it under this Agreement and
3
shall execute and deliver all such instruments and do all such other things as
may be reasonably required for fully transferring its rights, powers, duties and
obligations hereunder.
(d) Upon receipt of notice from Lender to Sub-Servicer of a Default by
Borrower under the Loan Agreement, Sub-Servicer will continue to provide its
services hereunder and take direction from Lender. If such default is not cured,
Lender is entitled, but not obligated to, assume all of the duties of Borrower
and receive all of the benefits of Borrower hereunder.
(e) In the event Lender fails to perform its obligations hereunder,
Sub-Servicer shall continue to make Liquidity Contributions for thirty (30) days
and shall receive a priority in the HELOCs to the extent of any Liquidity
Contributions not reimbursed in accordance with SECTION 2.3. If, on or before
the end of such thirty-day period, Borrower or Borrower's designee funds such
Liquidity Contributions, Sub- Servicer shall continue to make Liquidity
Contributions from its own funds in accordance with the terms of this Agreement.
Upon any failure by Borrower or Borrower's designee to reimburse a Liquidity
Contribution, Sub-Servicer's obligation to fund Liquidity Contributions out of
its own funds shall terminate.
(f) In the event Sub-Servicer's obligations under the Sub-Servicing
Agreement terminate, Sub- Servicer's rights and obligations under this Agreement
also terminate.
3.2 RELATIONSHIP OF THE PARTIES. The parties agree that in performing
their responsibilities pursuant to this Agreement, they are in the position of
independent contractors. This Agreement is not intended to create, nor does it
create and shall not be construed to create, a relationship of partner or joint
venturer or any association for profit between Sub-Servicer, Borrower, and
Lender.
3.3 NOTICES. All written notices and other communications by the parties
hereunder shall be deemed to have been duly given when delivered in person or to
an overnight courier service, receipt requested, or sent via telecopy
transmission verification received or when posted by registered or certified
mail, with postage prepaid, addressed as follows:
If to Sub-Servicer:
LaSalle National Bank
000 X. XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxx Xxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
If to Lender:
Nomura Asset Capital Corporation
2 World Xxxxxxxxx Xxxxxx, Xxxxxxxx X
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxx, Vice President
Tel (000) 000-0000
Fax (000) 000-0000
4
If to Borrower:
IMC Mortgage Company
0000 Xxxxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxx, XX 00000
Attn: Xxx Xxxxxxxxx
Tel (000) 000-0000
Fax (000) 000-0000
Industry Mortgage Company, L.P.
0000 Xxxxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxx, XX 00000
Attn: Xxx Xxxxxxxxx
Tel (000) 000-0000
Fax (000) 000-0000
IMC Corporation of America
0000 Xxxxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxx, XX 00000
Attn: Xxx Xxxxxxxxx
Tel (000) 000-0000
Fax (000) 000-0000
or to such other addresses as a party may from time to time designate by notice
as provided herein, except that notices of change of address shall be effective
only upon actual receipt.
3.4 MODIFICATIONS AND CHANGES. This Agreement, together with any
exhibits attached hereto, constitutes the entire agreement between the parties
relating to the subject matter herein. This Agreement may only be amended by a
written document signed by each of the parties.
3.5 ASSIGNMENT. This Agreement and the rights and obligations created
under it shall be binding upon and inure solely to the benefit of the parties
hereto and their respective successors and permitted assigns, and no other
person shall acquire or have any right under or by virtue of this Agreement.
Unless otherwise provided herein, neither Sub-Servicer nor Borrower can assign
or transfer its rights and obligations under this Agreement without the prior
written consent of Lender, which consent may be withheld at Lender's sole
discretion. Notwithstanding the foregoing, Sub-Servicer shall have the right to
delegate and assign any and all of its rights and obligations to an entity
affiliated with Sub- Servicer.
3.6 EFFECTIVENESS. This Agreement shall be effective when it has been
accepted and executed on behalf of each party by an authorized officer of that
party.
3.7 SEVERABILITY. If any provision or portion thereof of this Agreement
is held invalid, illegal, void or unenforceable by reason of any rule of law,
administrative or judicial provision or public policy, such provision shall be
ineffective only to the extent invalid, illegal, void or unenforceable, and the
remainder of such provision and all other provisions of this Agreement shall
nevertheless remain in full force and effect.
5
3.8 HEADINGS. The headings contained herein are for convenience of
reference only and are not intended to define, limit, expand or describe the
scope or intent of any provision of this Agreement.
3.9 EXECUTION; COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be an original, but together shall
constitute one and the same instrument. Counterparts of this Agreement may be
executed and delivered by facsimile transmission.
3.10 WAIVERS. Except as otherwise provided for herein, neither any
failure nor any delay on the part of the parties hereto in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise or the
exercise of any other right, power or privilege.
3.11 FEES AND EXPENSES. Unless otherwise agreed to in writing,
Sub-Servicer's fees and expenses incurred hereunder shall be paid from the fees
paid to Sub-Servicer under the Sub-Servicing Agreement and the payment of such
fees and expenses are solely an obligation of Borrower.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE TO FOLLOW.]
6
IN WITNESS WHEREOF, each party has caused this Agreement to be executed
by a duly authorized officer as of the date first written above.
LASALLE NATIONAL BANK, as Sub-Servicer
By: _____________________________________
Name: ___________________________________
Title: __________________________________
IMC MORTGAGE COMPANY, as Borrower
By: _____________________________________
Name: ___________________________________
Title: __________________________________
INDUSTRY MORTGAGE COMPANY, L.P., as
Borrower
by INDUSTRY MORTGAGE CORPORATION,
its general partner
By: _____________________________________
Name: ___________________________________
Title: __________________________________
IMC CORPORATION OF AMERICA, as Borrower
By: _____________________________________
Name: ___________________________________
Title: __________________________________
NOMURA ASSET CAPITAL CORPORATION, as
Lender
By: _____________________________________
Name: ___________________________________
Title: __________________________________
SIGNATURE PAGE TO LIQUIDITY AGREEMENT
EXHIBIT A
LIQUIDITY CONTRIBUTION NOTICE
_____________________________________ (Borrower)
0000 Xxxxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxx, XX 00000
Attn:
Nomura Asset Capital Corporation
2 World Xxxxxxxxx Xxxxxx, Xxxxxxxx X
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxx, Vice President
Re: Liquidity Contributions
Please be advised that we have advanced funds in the amounts and with respect to
the HELOCs listed on the attached schedule. Of such advanced funds, $___________
were advanced from the Collection Account and $________________ were advanced
from the Sub-Servicer's own funds.
Respectfully,
LaSalle National Bank
By ______________________________________
Name: ________________________________
Title: _______________________________
EXHIBIT A
ANNEX 1
DEPOSITORY ACKNOWLEDGMENT
The undersigned depository, _____________________________ (the
"DEPOSITORY"), acknowledges that Debtor has assigned the Account as described in
the Security Agreement by and between Debtor and Secured Party. The records of
the Depository have been marked to show the foregoing assignment. The Depository
hereby acknowledges that the Account, as described in the foregoing assignment,
has been validly created by the Depository in favor or Debtor.
The Depository hereby subordinates any and all rights of set-off and all
other rights and liens of the Depository against the Account to the rights,
security interests, and liens under the foregoing assignment, and agrees that,
so long as the Obligation remains outstanding, Depository shall not, without the
prior written consent of the Secured Party, which consent may be withheld by the
Secured Party in its sole and absolute discretion, with or without cause,
exercise or enforce any creditor's rights or remedies it may have against Debtor
or exercise any rights or remedies with respect to the Account except as
required to preserve its rights in the case of bankruptcy, reorganization or
insolvency proceedings with respect to the Debtor.
Depository further agrees to provide Secured Party copies of all notices
and records sent to Debtor relating to the Account, and will deliver to Secured
Party all monthly (or other periodic) statements of the Account and respond to
inquiries by Secured Party about any deposits, withdrawals or any other matters
relating to the Account, to the same extent Depository makes such information
available to the Debtor, and Debtor hereby acknowledges and consents to such
agreement by Depository.
Upon receipt of notice that a Default has occurred, Depository will take
instructions from Secured Party and will not permit withdrawals by Debtor.
Dated as of the date first set forth above.
_________________________________________
By _____________________________________
Name: __________________________
Title: __________________________
EXHIBIT C-1
THIS DOCUMENT Xxxxxx and Xxxxx, L.L.P.
PREPARED BY AND WHEN 000 Xxxx Xxxxxx, 00xx Xxxxx
FILED RETURN TO: Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxxx X. Xxxxx
EXHIBIT C-2
FINANCING STATEMENT
THIS FINANCING STATEMENT IS PRESENTED TO A FILING OFFICER
FOR FILING UNDER THE UNIFORM COMMERCIAL CODE.
DEBTOR'S NAME AND MAILING ADDRESS: ___________________________________
___________________________________
FED. TAX ID NO. ______________
SECURED PARTY'S NAME AND MAILING ADDRESS: Nomura Asset Capital Corporation
2 World Financial Xxxxxx, Xxxxxxxx X
Xxx Xxxx, Xxx Xxxx 00000-0000
FED. TAX ID NO. ______________
FOR FILING OFFICER:
THIS FINANCING STATEMENT COVERS THE FOLLOWING PRESENT AND FUTURE TYPES AND
ITEMS OF PROPERTY AND INTERESTS, WHETHER NOW OWNED OR ACQUIRED IN THE FUTURE
BY DEBTOR (THE "COLLATERAL"):
Each HELOC from time to time identified to Secured Party as
Collateral now owned or hereafter acquired by or entered into
by Debtor.
All Collateral Documents in any way related to any of the
above identified as Collateral -- including, without
limitation, all promissory notes evidencing, and all
mortgages, deeds of trust, or trust deeds securing, each such
HELOC -- whether deposited with or held by or for Secured
Party under this Agreement, or any Loan Document.
Private-mortgage insurance covering any HELOC.
Security of any kind pledged by an obligor for any HELOC.
Casualty insurance assigned to Debtor in connection with any
HELOC.
Guaranties related to the HELOCs.
Any Collateral otherwise described in this Agreement that may
from time to time be delivered (a) to an investor until
purchased and paid for by that investor or (b) for correction
under SECTION 4 of the Custodial Agreement.
The Dry Funding Account, Wet Funding Account, Lockbox
Account, the Collection Account, and all other demand deposit
accounts that Debtor maintains with Sub-servicer or another
depository institution related to this transaction and all
amounts, securities and the investment property deposited in
them or represented by them (collectively, the "ACCOUNTS").
Personal property, contract rights, accounts, and general
intangibles of any kind whatsoever relating to any
Collateral, including, but not limited to, all rights under
the Lockbox Agreement, the Sub-Servicing Agreement, and the
Custodial Agreement.
All books, records, files, surveys, certificates,
correspondence, appraisals, tapes, discs, cards, accounting
records, and other information and data of Debtor relating to
any Collateral -- including, without limitation, all
information, data, tapes, discs, and cards necessary to
administer and service any Collateral.
Cash and noncash proceeds and products of any Collateral or
any of the foregoing.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE FOLLOWS.]
EXHIBIT C-2
DEBTOR: SECURED PARTY:
NOMURA ASSET CAPITAL
__________________________________ CORPORATION
By _______________________________ By __________________________
(Name) ___________________________ (Name) ______________________
(Title) __________________________ (Title) _____________________
SIGNATURE PAGE TO FINANCING STATEMENT EXHIBIT C-2
EXHIBIT D
BORROWING REQUEST
LENDER: Nomura Asset Capital Corporation DATE: ___________, 199___
BORROWER: __________________________________
================================================================================
This request is delivered under the Loan Agreement (as renewed,
extended, amended, or restated, the "LOAN AGREEMENT") dated as of September __,
1996, between Borrowers and Lender. Terms defined in the Loan Agreement have the
same meaning when used -- unless otherwise defined -- in this request.
Borrowers request $_______________ in Borrowings (collectively, the
"REQUESTED BORROWING") to be funded on _______________, 199___(1) (the
"REQUESTED BORROWING DATE"). $ of the Requested Borrowing shall be a HELOC
Borrowing and $ of the Requested Borrowing shall be a Liquidity Borrowing.
Borrowers certify that as of the Requested Borrowing Date -- after
giving effect to the Requested Borrowing -- (a) the representations and
warranties of Borrowers in the Loan Documents are true and correct in all
material respects except to the extent that (i) a representation or warranty
speaks to a specific date or (ii) the facts on which a representation or
warranty is based have changed by transactions or conditions contemplated or
permitted by the Loan Documents, (b) no Default or Potential Default exists, (c)
the extension of the Requested Borrowing does not cause any Borrowing Excess to
exist, (d) all Collateral Documents required by the Loan Agreement to be
delivered to Collateral Custodian in connection with the Requested Borrowing
have been delivered to Collateral Custodian, and (e) Borrowers have otherwise
complied with all conditions of the Loan Documents to permit the Requested
Borrowing to be extended.
_________________________________________
as Borrower
By ______________________________________
(Name) ___________________________________
(2)(Title) _______________________________
--------
(1) Must be no later than the Business Day prior to such date.
(2) Must be a Responsible Officer of each Borrower.
EXHIBIT D
EXHIBIT C-1
SECURITY AGREEMENT
THIS AGREEMENT is entered into as of September __, 1996, between IMC
MORTGAGE COMPANY, a Florida corporation, IMC CORPORATION OF AMERICA, a Delaware
corporation, and INDUSTRY MORTGAGE COMPANY, L.P., a Delaware limited partnership
(whether one or more, "DEBTOR"), and NOMURA ASSET CAPITAL CORPORATION ("SECURED
PARTY").
Debtor and Secured Party have entered into a Loan Agreement (as
renewed, extended, amended, or restated, the "LOAN AGREEMENT") dated as of
September __, 1996. As a continuing inducement to Secured Party to extend credit
to Debtor under the Loan Agreement -- and as a condition precedent to that
credit -- Debtor is executing and delivering this Agreement for the benefit of
Secured Party.
ACCORDINGLY, for adequate and sufficient consideration, Debtor and
Secured Party agree as follows:
SECTION 1. DEFINITIONS AND REFERENCES. Unless stated otherwise, (a) terms
defined in the Loan Agreement or the UCC have the same meanings when used in
this Agreement, and (b) to the extent permitted by Law, if in conflict (i) the
definition of a term in the Loan Agreement controls over the definition of that
term in the UCC, and (ii) the definition of a term in Article 9 of the UCC
controls over the definition of that term elsewhere in the UCC.
COLLATERAL is defined in SECTION 2.2 of this Agreement.
DEBTOR is defined in the preamble to this Agreement and includes,
without limitation, Debtor, Debtor as a debtor-in-possession, and any receiver,
trustee, liquidator, conservator, custodian, or similar party appointed for
Debtor or for substantially all of Debtor's assets under any Debtor Law.
OBLIGOR means any Person obligated with respect to any Collateral
(whether as an account debtor, obligor on an instrument, or otherwise).
SECURED PARTY is defined in the preamble to this Agreement and includes
its successor and assigns.
SECURITY INTEREST means the security interest granted and the pledge and
assignment made under SECTION 2.1 of this Agreement, which is a Lender Lien
under the Loan Agreement.
SECTION 2. SECURITY INTEREST AND COLLATERAL.
2.1 Security Interest. To secure the full payment and performance of the
Obligation, Debtor grants to Secured Party a security interest in the Collateral
and pledges and assigns the Collateral to Secured Party, all upon and subject to
the terms and conditions of this Agreement. The grant of the Security Interest
does not subject Secured Party to the terms of any Collateral Document or in any
way transfer, modify, or otherwise affect (a) any of Debtor's obligations with
respect to any Collateral or (b) the Lender Liens under the Loan Agreement.
EXHIBIT C-1
2.2 Collateral. As used in this Agreement, the term "COLLATERAL" means
the present and future items and types of property described below, whether now
owned or acquired in the future by Debtor. This description of Collateral does
not permit any action prohibited by any Loan Document.
Each HELOC from time to time identified to Secured Party as
Collateral now owned or hereafter acquired by or entered into
by Debtor.
All Collateral Documents in any way related to any of the
above identified as Collateral -- including, without
limitation, all promissory notes evidencing, and all
mortgages, deeds of trust, or trust deeds securing, each such
HELOC -- whether deposited with or held by or for Secured
Party under this Agreement, or any Loan Document.
Private-mortgage insurance covering any HELOC.
Security of any kind pledged by an obligor for any HELOC.
Casualty insurance assigned to Debtor in connection with any
HELOC.
Guaranties related to the HELOCs.
Any Collateral otherwise described in this Agreement that may
from time to time be delivered (a) to an investor until
purchased and paid for by that investor or (b) for correction
under SECTION 4 of the Custodial Agreement.
The Dry Funding Account, Wet Funding Account, Lockbox
Account, the Collection Account, and all other demand deposit
accounts that Debtor maintains with Sub- servicer or another
depository institution related to this transaction and all
amounts, securities and the investment property deposited in
them or represented by them (collectively, the "ACCOUNTS").
Personal property, contract rights, accounts, and general
intangibles of any kind whatsoever relating to any
Collateral, including, but not limited to, all rights under
the Lockbox Agreement, the Sub-Servicing Agreement, and the
Custodial Agreement.
All books, records, files, surveys, certificates,
correspondence, appraisals, tapes, discs, cards, accounting
records, and other information and data of Debtor relating to
any Collateral -- including, without limitation, all
information, data, tapes, discs, and cards necessary to
administer and service any Collateral.
Cash and noncash proceeds and products of any Collateral or
any of the foregoing.
EXHIBIT C-1
2
SECTION 3. REPRESENTATIONS AND WARRANTIES. By entering into this Agreement, and
by each subsequent delivery of additional Collateral under this Agreement,
Debtor reaffirms the representations and warranties contained in the Loan
Agreement. Debtor further represents and warrants to Secured Party as follows:
3.1 Concerning the Collateral. All Collateral (a) is genuine and in all
respects what it purports to be, (b) is the legal, valid, and binding obligation
of each Obligor (except as enforceability may be limited by Debtor Laws), (c) is
free from any claim for credit, deduction, or allowance of any Obligor and free
from any defense, dispute, setoff, or counterclaim (other than for payments made
in respect of it), (d) is in compliance with all Laws (including, without
limitation, all usury Laws, the Real Estate Settlement Procedures Act of 1974,
the Equal Credit Opportunity Act, the Federal Truth in Lending Act, Regulation Z
promulgated by the Board of Governors of the Federal Reserve System, and all
applicable federal and state consumer protection Laws, and (e) conforms to the
applicable requirements of eligibility under the Underwriting Guidelines.
3.2 Ownership and Priority. Debtor has full legal and beneficial
ownership of all Collateral, free and clear of all Liens except Permitted Liens.
3.3 Creation and Perfection. The Security Interest is created and
perfected on (a) each promissory note that evidences a HELOC ever delivered to
Secured Party, (b) each promissory note that evidences a HELOC identified by
Debtor to Secured Party as supporting a Wet Borrowing for 21 days after the
Borrowing Date for that Borrowing, (c) all Collateral, if any, shipped to any
investor (and the Security Interest continues to be perfected until Secured
Party receives payment), (d) all Collateral shipped to Debtor for correction
under SECTION 4 of the Custodial Agreement (and the Security Interest continues
to be perfected for 21 days after that shipment), and (e) all other Collateral
upon possession or the filing of financing statements by Secured Party.
SECTION 4. COVENANTS. Until the commitment by Secured Party to extend credit
under the Loan Agreement has been cancelled or terminated and the Obligation is
fully paid and performed, Debtor covenants and agrees with Secured Party as
follows:
4.1 Concerning the Collateral. Debtor (a) shall fully perform all of its
duties under and in connection with each transaction to which any Collateral
relates, (b) shall promptly notify Secured Party about any change in any fact or
circumstances represented or warranted by Debtor about any Collateral, (c) shall
promptly notify Secured Party of any claim, action, or proceeding affecting
title to any Collateral or the Security Interest and, at Secured Party's request
and Debtor's expense, appear in and defend that action or proceeding, (d) shall
hold in trust for Secured Party all Collateral not delivered to Secured Party or
the Collateral Custodian (without excusing any failure to deliver Collateral
Documents to Secured Party or the Collateral Custodian as required by this
Agreement) and xxxx that Collateral on Debtor's records that it is subject to
the Security Interest (but the failure to do so does not impair the Security
Interest or its priority), (e) other than collections under SECTION 4.3 below,
Debtor shall pay and deliver to Secured Party all items and types of property
into which any Collateral may be converted (all of which is subject to the
Security Interest) and properly endorse, assign, or take such other action as
Secured Party may request in order to maintain and continue the Security
Interest in that property, and (f) may not compromise, extend, release, or
adjust payments on any Collateral, accept a conveyance of mortgaged property in
full or partial satisfaction of any Collateral, or release any mortgage, deed of
trust, or trust deed securing or underlying any Collateral.
EXHIBIT C-1
3
4.2 Insurance. Debtor shall keep the Collateral fully insured in the
amounts, against the risks, and with insurers as may be approved by Secured
Party, with loss payable to Secured Party as its interest may appear.
4.3 Collections. Debtor shall, at its sole cost and expense, whether
requested to do so by Secured Party or in the absence of such a request, take
all actions reasonably necessary, to obtain payment, when due and payable, of
all amounts due or to become due from Obligors with respect to any Collateral.
Debtor may not agree to any rebate, refund, compromise, or extension with
respect to any Collateral or accept any prepayment on account of any Collateral
other than in a manner and to the extent consistent with or as may otherwise be
provided in various servicing agreements to which it is a party or subject.
(a) No Default. While no Default exists, Debtor shall make all of
those collections, shall maintain such escrow accounts and otherwise
comply with the servicing agreements to which it is a party or subject,
and may otherwise retain and use the proceeds of those collections in
the ordinary course of its business.
(b) Default. While a Default exists, and upon the request of
Secured Party, each depository institution in which an Account is held
shall cease honoring checks drawn by Debtor and shall take instructions
from Secured Party regarding disposition of funds in the Accounts.
Debtor shall (i) notify and direct each Obligor to make payments on the
Collateral to Secured Party for deposit into such accounts as it may
designate so as to be held as Collateral under this Agreement and (ii)
otherwise turn over to Secured Party, in the form received and with any
necessary endorsements, all payments it receives in respect of any
Collateral for deposit into such accounts as Secured Party may designate
to be held as Collateral under this Agreement. Secured Party may at any
time apply any amounts in those accounts as a payment of the Obligation,
other than mortgage escrow payments that are deposited into escrow
accounts in accordance with the applicable Guide or servicing contract.
4.4 Concerning Debtor. Without first giving Secured Party 30 days notice
(or fewer if agreed to in writing by Secured Party) of the intention to do any
of the following and performing such acts and executing and delivering to
Secured Party such additional documents as Secured Party requests in order to
continue or maintain the existence and priority of the Security Interest, Debtor
may not (a) use or transact business under any corporate, assumed, or trade
name, except as represented in the Loan Agreement, (b) relocate its chief
executive offices or principal place of business, or (c) move or surrender
possession of its books and records regarding the Collateral.
4.5 Concerning the Accounts.
(a) Subject to Secured Party's rights as the designated owner of
the Accounts on the records of the depository, Debtor is the sole owner
of the Account and has authority to execute and deliver this assignment;
(b) Debtor covenants and agrees that without the prior consent of
Secured Party, Debtor will not:
(i) create any other security interest in, mortgage, or
otherwise encumber, or assign the Accounts, or any part thereof,
or permit the same to be or become subject to any lien,
attachment, execution, sequestration, other legal or equitable
process, or any
EXHIBIT C-1
4
encumbrance of any kind or character, except the lien herein
created and any offset rights inuring to the benefit of
depository, but only to the extent same are subordinated to
Lenders Liens; or
(ii) request, make or allow to be made any withdrawals from
the Accounts except as provided under the Loan Documents.
(c) During the existence of a Default, Secured Party, in addition
to any other remedies it may have, may do one or more of the following:
(i) declare the Obligation immediately due and payable;
(ii) demand payment and performance thereof from the
funds in or credited to the Accounts; and
(iii) withdraw funds from the Accounts and apply all or
any portion of the Accounts to the Obligation.
(d) Debtor hereby authorizes Secured Party during the existence
of Default and so long as any part of the Obligation remains
outstanding:
(i) to withdraw, collect, and receipt for any and all
funds on deposit in or payable on the Accounts.
(ii) on behalf of Debtor to endorse the name of Debtor
upon any checks, drafts, or other instruments payable to Debtor
evidencing payment on the Accounts;
(iii) to surrender or present for notation of withdrawal
the passbook, certificate, or other documents issued to Debtor in
connection with the Accounts; and
(iv) exercise any other rights or take any other actions
specified herein or in the Loan Documents.
(e) Secured Party shall not be liable for any loss of interest on
or any penalty or charge assessed against funds in, payable on, or
credited to the Accounts as a result of Secured Party exercising any of
its rights or remedies under this assignment.
(f) Debtor agrees to obtain from each depository a Depository
Acknowledgment in the form of ANNEX 1 attached for the benefit of
Secured Party within ten days of the opening of such deposit account.
SECTION 5. DEFAULT AND REMEDIES. If a Default exists, then Secured Party may, at
its election (but subject to the terms and conditions of the Loan Agreement),
exercise any and all Rights available to a secured party under the UCC, in
addition to any and all other Rights afforded by the Loan Documents, at law, in
equity, or otherwise, including, without limitation (a) requiring Debtor to
assemble all or part of the Collateral and make it available to Secured Party at
a place to be designated by Secured Party which is reasonably convenient to
Debtor and Secured Party, (b) surrendering any policies of insurance on all or
part of the Collateral and receiving and applying the unearned premiums as a
credit on the
EXHIBIT C-1
5
Obligation, (c) applying by appropriate judicial proceedings for appointment of
a receiver for all or part of the Collateral (and Debtor hereby consents to any
such appointment), and (d) applying to the Obligation any cash held by Secured
Party under the Loan Documents or held in the Accounts.
5.1 Notice. Reasonable notification of the time and place of any public
sale of the Collateral, or reasonable notification of the time after which any
private sale or other intended disposition of the Collateral is to be made,
shall be sent to Debtor and to any other Person entitled to notice under the
UCC. If any Collateral threatens to decline speedily in value or is of the type
customarily sold on a recognized market, Secured Party may sell or otherwise
dispose of the Collateral without notification, advertisement, or other notice
of any kind. Notice sent or given not less than five calendar days before the
taking of the action to which the notice relates is reasonable notification and
notice for the purposes of this section.
5.2 Application of Proceeds. Secured Party shall apply the proceeds of
any sale or other disposition of the Collateral under this SECTION 5 in the
order and manner specified in SECTION 3.5 of the Loan Agreement. Any surplus
remaining shall be delivered to Debtor or as a court of competent jurisdiction
may direct. If the proceeds are insufficient to pay the Obligation in full,
Debtor remains liable for any deficiency.
SECTION 6. OTHER RIGHTS.
6.1 Performance. If Debtor fails to pay when due all Taxes on any of the
Collateral, or to preserve the priority of the Security Interest in any of the
Collateral, or to keep the Collateral insured as required by this Agreement, or
otherwise fail to perform any of its obligations under any Loan Documents or
Collateral Documents with respect to the Collateral, then Secured Party may, at
its option, but without being required to do so, pay such Taxes, prosecute or
defend any suits in relation to the Collateral, or insure and keep insured the
Collateral in any amount deemed appropriate by Secured Party, or take all other
action which Debtor is required, but has failed or refused, to take under the
Loan Documents or Collateral Documents. Any sum which may be expended or paid by
Secured Party under this section (including, without limitation, court costs and
attorneys' fees) shall bear interest from the dates of expenditure or payment at
the Default Rate until paid and, together with such interest, shall be payable
by Debtor to Secured Party upon demand and is part of the Obligation.
6.2 Collection.
(a) Actions. When Secured Party is entitled under SECTION 4.3
above to make collection on any Collateral, it may in its own name or in
the name of Debtor (i) compromise or extend the time of payment with
respect to any Collateral for such amounts and upon such terms as
Secured Party may determine, (ii) demand, collect, receive, receipt for,
xxx for, compound, and give acquittance for any and all amounts due or
to become due with respect to Collateral, (iii) take control of cash and
other proceeds of any Collateral, (iv) endorse Debtor's name on any
notes, acceptances, checks, drafts, money orders, or other evidences of
payment on Collateral that may come into Secured Party's possession, (v)
sign Debtor's name on any invoice or xxxx of lading relating to any
Collateral, on any drafts against Obligors or other Persons making
payment with respect to Collateral, on assignments and verifications of
accounts or other Collateral and on notices to Obligors making payment
with respect to Collateral, (vi) send requests for verification of
obligations to any Obligor, (vii) do all other acts and things necessary
to carry out the intent of this Agreement, and (viii) authorize any
servicer in respect of any Collateral to perform any one or more of the
foregoing on Secured Party's behalf.
EXHIBIT C-1
6
(b) Other Matters. If any Obligor fails or refuses to make
payment on any Collateral when due, Secured Party is authorized, in its
sole discretion, either in its name or in Debtor's name, to take such
action as Secured Party deems appropriate for the collection of any
amounts owed with respect to Collateral or upon which a delinquency
exists. Regardless of any other provision, however, Secured Party is
never liable for its failure to collect, or for its failure to exercise
diligence in the collection of, any amounts owed with respect to
Collateral and is not under any duty whatever to anyone except Debtor to
account for funds that it actually receives. Without limiting the
generality of the foregoing, Secured Party has no responsibility for
ascertaining any maturities, calls, conversions, exchanges, offers,
tenders, or similar matters relating to any Collateral, or for informing
Debtor with respect to any of such matters (irrespective of whether
Secured Party actually has, or may be deemed to have, knowledge
thereof). Secured Party's receipt to any Obligor is a full and complete
release, discharge, and acquittance to that Obligor, to the extent of
any amount so paid to Secured Party.
6.3 Power of Attorney. Debtor irrevocably appoints Secured Party as its
attorney-in-fact (with full power of substitution) for, on behalf, and in the
name of Debtor to (a) endorse and deliver to any Person any check, instrument,
or other document received by Secured Party that represents payment in respect
of any Collateral, (b) prepare, complete, execute, deliver, and record any
assignment of any mortgage, deed of trust, or trust deed securing any
Collateral, (c) endorse and deliver or otherwise transfer any promissory note
evidencing any Collateral and do every other thing necessary or desirable to
effect transfer of all or any Collateral, (d) take all necessary and appropriate
action with respect to any Obligation or any Collateral, (e) commence,
prosecute, settle, discontinue, defend, or otherwise dispose of any claim
relating to any Collateral, and (f) sign Debtor's name wherever appropriate to
effect the performance of this Agreement and the Loan Agreement. This section
shall be liberally, not restrictively, construed to give the greatest latitude
to Secured Party's power as the Debtor's attorney-in-fact to collect, sell, and
deliver any Collateral and all other documents relating to it. The powers and
authorities conferred on Secured Party in this section (w) are discretionary and
not obligatory on the part of Secured Party, (x) may be exercised by Secured
Party through any Person who, at the time of the execution of a particular
document, is an officer of Secured Party, (y) may not be exercised by Secured
Party unless a Default exists, and (z) is granted for a valuable consideration,
coupled with an interest, and irrevocable until -- and all Persons dealing with
Secured Party, any of its officers acting under this section, or any substitute
are fully protected in treating the powers and authorities conferred by this
section as existing and continuing in full force and effect until advised by
Secured Party that -- all commitments under the Loan Agreement to extend credit
under this Agreement have been terminated or cancelled and the Obligation is
fully paid and performed.
SECTION 7. MISCELLANEOUS.
7.1 Miscellaneous. Because this Agreement is one of the "Loan Documents"
referred to in the Loan Agreement, the provisions relating to Loan Documents in
the Loan Agreement are incorporated into this Agreement by reference the same as
if included in this Agreement verbatim.
7.2 Term. This agreement terminates upon full payment and performance of
the Obligation. No Obligor is ever obligated to make inquiry of the termination
of this Agreement but is fully protected in making any payments on the
Collateral directly to Secured Party.
7.3 Matters Not Relevant. The Security Interest, Debtor's obligations,
and Secured Party's Rights under this Agreement are not released, diminished,
impaired, or adversely affected by any one or
EXHIBIT C-1
7
more of the following: (a) Secured Party's taking or accepting any additional --
or any release, surrender, exchange, subordination, or loss of any other --
guaranty, assurance, or security for any of the Obligation; (b) any full or
partial release of any other Person obligated on any of the Obligation; (c) the
modification or assignment of -- or waiver of compliance with -- any other Loan
Document; (d) any present or future insolvency, bankruptcy, or lack of
corporate, partnership, or trust power of any other Person obligated on any of
the Obligation; (e) any renewal, extension, or rearrangement of any of the
Obligation, or any adjustment, indulgence, forbearance, or compromise granted to
any Person obligated on any of the Obligation; (f) any Person's neglect, delay,
omission, failure, or refusal to take or prosecute any action in connection with
any of the Obligation; (g) any existing or future affect, claim, or defense
(other than the defense of full and final payment of the Obligation) of Debtor
or any other Person against Secured Party; (h) the unenforceability of any of
the Obligation against any Person obligated or any of the Obligation because it
exceeds the amount permitted by Law, the act of creating it is ultra xxxxx, or
the officers, partners, or trustees creating it exceeded their authority or
violated their fiduciary duties, or otherwise; (i) any payment of the Obligation
is held to constitute a preference under any Debtor Law or for any other reason
Secured Party is required to refund any payment or make payment to another
Person; or (j) any Person's failure to notify Debtor or Secured Party of their
acceptance of this Agreement or any Person's failure to notify Debtor about the
foregoing events or occurrences, and Debtor waives any notice of any kind under
any circumstances whatsoever with respect to this Agreement or any of the
Obligation other than as specifically provided in this Agreement.
7.4 Waivers. Except to the extent expressly otherwise provided in the
Loan Documents, Debtor waives (a) any Right to require Secured Party to proceed
against any other Person, to exhaust its Rights in the Collateral, or to pursue
any other Right which Secured Party may have, and (b) all Rights of marshaling
in respect of the Collateral.
7.5 Financing Statement. Secured Party may, at any time, file this
Agreement or a carbon, photographic, or other reproduction of this Agreement as
a financing statement, but Secured Party's failure to do so does not impair the
validity or enforceability of this Agreement.
7.6 Parties Assignments. This Agreement binds and inures to Debtor and
Secured Party, and their respective successors and permitted assigns. Only those
Persons may rely or raise any defense about this Agreement. Debtor may not
assign any Rights or obligations under this Agreement without first obtaining
the written consent of Secured Party. Secured Party may assign, pledge, and
otherwise transfer all or any of its Rights under this Agreement to any
participant or transferee permitted by the Loan Agreement.
7.7 Amendments. This Agreement may be amended at any time by a writing
executed by all parties hereto.
7.8 Entire Agreement. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[REMAINDER OF THIS PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE FOLLOWS.]
EXHIBIT C-1
8
EXECUTED as of the date first stated above.
IMC MORTGAGE COMPANY, as Debtor NOMURA ASSET CAPITAL
CORPORATION,
as Secured Party
By _______________________________
Name: _________________________
Title: ________________________ By _______________________________
Xxxxxxx X. Xxxxxx, Vice President
IMC CORPORATION OF AMERICA, as INDUSTRY MORTGAGE COMPANY,
Debtor L.P., as Debtor
By IMC MORTGAGE COMPANY, its
general partner
By _______________________________ By _______________________________
Name: _________________________ Name: _________________________
Title: ________________________ Title: ________________________
SIGNATURE PAGE TO SECURITY AGREEMENT EXHIBIT C-1
