EXHIBIT 10.52
SECURITY AGREEMENT
(Servicing)
THIS SECURITY AGREEMENT (the "Security Agreement") is made and dated as of
October 7, 1992, by and between XXXXXX MORTGAGE CORPORATION, a California
corporation ("Debtor"), located at 0000 Xxxxxxxx Xx., Xxxxxx Xxxxx, XX 00000,
and FIRST COLLATERAL SERVICES, INC., a California Corporation ("Secured Party").
RECITALS
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A. Secured Party has agreed to purchase loans from Debtor on the terms
and subject to the conditions set forth in the Master Mortgage Loan Purchasing
Agreement, dated October 7, 1992, (as amended, extended and supplemented from
time to time, the "Purchase Agreement"). Capitalized terms used herein and not
otherwise defined shall have the same meaning as in the Purchase Agreement.
B. To induce Secured Party to enter into the Purchase Agreement and
purchase loans on the terms and conditions set forth therein, Debtor has agreed
to grant to Secured Party a security interest in and lien upon certain assets of
Debtor described more particularly herein.
NOW THEREFORE, in consideration of the above Recitals and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
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1. Grant of Security Interest. Debtor hereby pledges and grants to
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Secured Party a security interest in all of its right, title, and interest in
the property described in Paragraph 2 below (collectively and severally, the
"Collateral"), to secure payment and performance of the obligations described in
Paragraph 3 below (collectively and severally, the "Obligations").
2. Collateral. The Collateral shall consist of all now existing and
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hereafter right, title and interest of Debtor in, under and to each item of
Collateral described on Schedule 1 attached hereto.
3. Obligations. The Obligations secured by this Security Agreement shall
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consist of any and all debts, obligations and liabilities of Debtor to Secured
Party (whether now existing or hereafter arising, voluntary or involuntary,
whether or not jointly owed with others, direct or indirect, absolute or
contingent, liquidated or unliquidated, and whether or not from time to time
decreased or extinguished and later increased, created or incurred).
4. Release and Substitution of Collateral. Unless and until there shall
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have occurred an Event of Default or Potential Default under the Credit
Agreement or Purchase Agreement, and provided that Collateral of comparable and
equal value is substituted by Debtor, upon the written request of Debtor,
Collateral may be released from the lien of Secured Party (or, if requested by
Debtor, Secured Party may execute and deliver to the Debtor a release, which may
be complete or partial, of its interest in said Collateral) and said Collateral
thereafter shall not be further subject to the restrictions of this Security
Agreement. Any release by Secured Party shall be without representation or
warranty by, and without recourse to, Secured Party.
5. Representations and Warranties. Debtor hereby represents and warrants
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that:
(a) Debtor is the sole owner of the Collateral (or, in the case of
after-acquired Collateral, at the time the Debtor acquires rights in the
Collateral, will be the sole owner thereof);
(b) Except as for security interests in favor of Secured Party, or
otherwise consented to in writing by Secured Party, no Person has (or, in the
case of after-acquired Collateral, at the time Debtor acquires rights therein,
will have) any right, title, claim or interest (by way of security interest or
other lien or charge or otherwise) in, against or to the Collateral; and
(c) All information heretofore, herein or hereafter supplied to
Secured Party by or on behalf of Debtor with respect to the Collateral is
accurate and complete.
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6. Covenants of Debtor. Debtor hereby agrees:
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(a) To procure, execute and deliver from time-to-time any
endorsements, assignments, financing statements and other writings deemed
necessary or appropriate by Secured Party to perfect, maintain and protect its
security interest hereunder and the priority thereof and to deliver promptly to
Secured Party all originals of Collateral or proceeds consisting of chattel
paper or instruments;
(b) Not to surrender or lose possession of (other than to or with the
permission of Secured Party), sell, encumber, or otherwise dispose of or
transfer any Collateral or rights or interest therein;
(c) At all times upon the request of Secured Party, to account fully
for and promptly to deliver to Secured Party, in the form received, all
Collateral or proceeds received, endorsed to Secured Party as appropriate and
accompanied by such assignments and powers, duly executed, as Secured Party
shall request, and until so delivered all Collateral and proceeds shall be held
in trust for Secured Party, separate from all other property of Debtor and
identified as the property of Secured Party;
(d) At any reasonable time, upon demand by Secured Party, to exhibit
to and allow inspection by Secured Party (or Persons designated by Secured
Party) of the Collateral and the records concerning the Collateral;
(e) To keep the records concerning the Collateral at the locations
set forth in Paragraph 18 below and not to remove the records from such
location(s) without the prior written consent of Secured Party;
(f) At the request of Secured Party, to place on each of its records
pertaining to the Collateral a legend, in form and content satisfactory to
Secured Party, indicating that such Collateral has been assigned to Secured
Party;
(g) Not to modify, compromise, extend, rescind or cancel any
servicing contract pledged to Secured Party or consent to a postponement of
strict compliance on the part of any party thereto to any term of provisions
thereof;
(h) To do all acts that a prudent investor would deem necessary or
desirable to maintain, preserve and protect the Collateral;
(i) Not knowingly to use or permit any Collateral to be used
unlawfully or in violation of any provision of this Security Agreement or any
applicable statute, regulation or ordinance or any policy of insurance covering
the Collateral;
(j) To pay (or require to be paid) prior to their becoming delinquent
all taxes, assessments, insurance premiums, charges, encumbrances and liens now
or hereafter imposed upon or affecting any Collateral;
(k) To notify Secured Party before any such change shall occur of any
change in Debtor's name, identity or structure through merger, consolidations or
otherwise;
(1) To appear in and defend, at Debtor's cost and expense, any action
or proceeding which may affect its title to or Secured Party's interest in the
Collateral;
(m) To keep accurate and complete records of the Collateral and to
provide Secured Party with such records and such reports and information
relating to the Collateral as Secured Party may request from time-to-time;
(n) To comply with all laws, regulations and ordinances relating to
the Collateral;
(o) To give to Secured Party, within ten (10) days after knowledge or
notice thereof is obtained by Debtor, written notice of the termination of any
servicing contract pledged to Secured Party;
(p) To notify Secured Party promptly of any item of Collateral which
ceases to be an eligible servicing contract.
7. Fidelity Bond and Mortgage Impairment. Debtor shall maintain, at its
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own expense, a blanket fidelity bond, mortgage impairment and an errors and
omissions insurance policy, with broad coverage with responsible companies on
all officers, employees or other persons acting in any capacity with regard to
the Loan who handle funds, money, documents and papers relating to the Loan. Any
such fidelity bond and errors and omissions insurance shall protect and insure
Debtor against losses, including forgery, theft, embezzlement, fraud, errors
and omissions and negligent acts of such persons. No
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provision of this Section requiring such fidelity bond and errors and omissions
insurance shall diminish or relieve Debtor from its duties and obligations as
set forth in this Servicing Agreement. The minimum coverage under any such bond
and insurance policy shall be at least equal to the corresponding amounts
required by FNMA in Section 1.01 of the FNMA Guaranteed Mortgage Backed
Securities Sellers' and Servicers' Guide, or by FHLMC in Section 6.402 or 6.403
of the FHLMC Sellers' and Services' Guide. Upon request of Secured Party, Debtor
shall cause to be delivered to Secured Party a certified true copy of such
fidelity bond and insurance policy and a statement from the surety and the
insurer that such fidelity bond or insurance policy shall in no event be
terminated or materially modified without 30 days' prior written notice to
Secured Party.
8. Collection of Collateral Payments.
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(a) Until there shall occur an Event of Default or Potential Default,
Debtor shall, at its sole cost and expense, endeavor to obtain payment, when due
and payable, of all sums due or to become due with respect to any Collateral
("Collateral Payments" or a "Collateral Payment"), including, without
limitation, the taking of such action with respect thereto as Secured Party may
request, or, in the absence of such request, as Debtor may reasonably deem
advisable; provided, however, that Debtor shall not, without the prior written
consent of Secured Party, grant or agree to any rebate, refund, compromise, or
extension with respect to any Collateral Payment or accept any prepayment on
account thereof. Thereafter, upon the request of Secured Party, Debtor will
notify and direct any party who is or might become obligated to make any
Collateral Payment, to make payment thereof to Secured Party (or to Debtor in
case of Secured Party) at such address as Secured Party may designate. Debtor
will reimburse Secured Party promptly upon demand for all out-of-pocket costs
and expenses, including reasonable attorneys' fees and litigation expenses,
incurred by Secured Party in seeking to collect any Collateral Payment.
(b) If there shall occur an Event of Default or Potential Default,
upon the request of Secured Party Debtor will, forthwith upon receipt, transmit
and deliver to Secured Party, in the form received, all cash, checks, drafts and
other instruments for the payment of money (properly endorsed where required so
that such items may be collected by Secured Party at any time as payment on
account of any Collateral Payment) and if such request shall be made, until
delivery to Secured Party, such items will be held in trust for Secured Party
and will not be commingled by Debtor with any of its other funds or property.
Thereafter, Secured Party is hereby authorized and empowered to endorse the name
of Debtor on any check, draft or other instrument for the payment of money
received by Secured Party on account on any Collateral Payment if Secured Party
believes such endorsement is necessary or desirable for purposes of collection.
(c) Debtor will indemnify and save harmless Secured Party from and
against all reasonable liabilities and expenses on account of any adverse claim
asserted against Secured Party relating to any moneys received by Secured Party
on account of any Collateral Payment. Such obligation of Debtor shall continue
in effect after and notwithstanding the discharge of the Obligations and the
release of the security interest granted in Paragraph 1 above.
9. Authorized Action by Secured Party. Debtor hereby irrevocably appoints
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Secured Party as its attorney-in-fact to do (but Secured Party shall not be
obligated to and shall incur no liability to Debtor or any third party for
failure so to do) at any one time and from time-to-time any act which Debtor is
obligated by this Security Agreement to do, and to exercise such rights and
powers as Debtor might exercise with respect to the Collateral, including
without limitation, the right to:
(a) Collect by legal proceedings or otherwise and endorse, receive
and receipt for all dividends, interest, payments, proceeds and other sums and
property now or hereafter payable on, or on account of, the Collateral;
(b) Enter into any extension, reorganization, deposit, merger,
consolidation or other agreement pertaining to, or deposit, surrender, accept,
hold or apply other property in exchange for the Collateral;
(c) Insure, process and preserve the Collateral;
(d) Transfer the Collateral to Secured Party's own or its nominee's
name, and
(e) Make any compromise or settlement, and take any other action in
deems advisable with respect to the Collateral.
It is further agreed and understood between the parties hereto that such care as
Secured Party gives to the safekeeping of its own property of like kind shall
constitute reasonable care of the Collateral when in Secured Party's possession,
or in the possession of Secured Party's custodian; provided, however, that
Secured Party shall not be required to make any presentment.
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demand or protest, or give any notice and need not take any action to preserve
any rights against any prior party or any other person in connection with the
obligations or with respect to the Collateral.
10. Notification of Obligors. Debtor agrees that Secured Party may at any
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time and from time-to-time, but shall not be obligated to, notify any Obligor on
any Collateral to make payment directly to Secured Party.
11. Default and Remedies. Upon the occurrence of an Event of Default,
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Secured Party may, at its option and without notice to or demand upon Debtor,
and in addition to all rights and remedies hereunder and under the Credit
Agreement or otherwise at law or in equity:
(a) Foreclose or otherwise enforce Secured Party's security interest
in the Collateral in any manner permitted by law or provided for in this
Security Agreement;
(b) Sell or otherwise dispose of the Collateral or any part thereof
at one or more public or private sales, whether or not such Collateral is
present at the place of sale, for cash or credit or future delivery, on such
terms and in such manner as Secured Party may determine;
(c) Require Debtor to assemble the Collateral and/or books and
records relating thereto and make such available to Secured Party at a place to
be designated by Secured Party;
(d) Enter onto property where any Collateral or books and records
relating thereto are located and take thereof with or without judicial process;
and
(e) Prior to the disposition of the Collateral, prepare it for
disposition in any manner and to the extent Secured Party deems appropriate;
provided, however, that Debtor shall be given ten (10) business days prior
notice of the time and place of any public sale or of the time after which any
private sale or other intended disposition is to be made, which notice Debtor on
its behalf hereby agrees shall be deemed reasonable notice thereof.
Upon any sale or other disposition pursuant to this Security Agreement, Secured
Party shall have the right to deliver, assign and transfer to the purchaser
thereof the Collateral or portion thereof so sold or disposed of. Each purchaser
at any such sale or other disposition shall hold the Collateral free from any
claim or right of whatever kind, including any equity or right of redemption of
Debtor, and Debtor specifically waives (to the extent permitted by law) all
rights of redemption, stay or appraisal which it has or may have under any rule
of law or statute now existing or hereafter adopted. Secured Party agrees that
upon payment in full of the Obligations, it will deliver any remaining
Collateral or Proceeds to the Person or entity entitled thereto and will
execute, deliver, and record all instruments necessary to release fully all
security interests held by the Secured Party in the Collateral or Proceeds.
12. Cumulative Rights. The right, powers, and remedies of Secured Party
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under this Security Agreement shall be in addition to all rights, powers and
remedies given to Secured Party by virtue of any statute or rule of law, the
Purchase Agreement, or any other agreement, all of which rights, powers and
remedies shall be cumulative and may be exercised successively or concurrently
without impairing Secured Party's security interest in the Collateral.
13. Waiver. Any waiver, forbearance, failure or delay by Secured Party in
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exercising, or the exercise or beginning of exercise by Secured Party of, any
right, power or remedy, simultaneous or later, shall not preclude the further,
simultaneous or later exercise thereof' and every right, power or remedy of
Secured Party shall continue in full force and effect until such right, power or
remedy is specifically waived in a writing executed by Secured Party.
14. Binding Upon Successors. All rights of Secured Party under this
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Security Agreement shall inure to the benefit of Secured Party and its
principals, beneficiaries, successors and assigns, and all obligations of Debtor
shall bind its successors and assigns.
15. Entire Agreement: Severability. This Security Agreement contains the
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entire security agreement between Secured Party and Debtor. All other waivers by
Debtor provided for in this Security Agreement have been specifically
negotiated by the parties with full cognizance and understanding of their
rights. If any of the provisions of this Security Agreement shall be held
Invalid or unenforceable, this Security Agreement shall be construed as if not
containing these provisions, and the rights and obligations of the parties
hereto shall be construed and enforced accordingly.
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16. Choice of Law. This Security Agreement shall be construed in
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accordance with and governed by the laws of the State of California and, where
applicable and except as otherwise defined herein, terms used herein shall have
the meaning given them in the California Uniform Commercial Code.
17. Amendment. This Security Agreement may not be amended or modified
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except by a writing signed by each of the parties hereto.
18. Place of Business: Records. Debtor represents and warrants that its
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chief place of business is at its address set forth above, and that its books
and records concerning the Collateral are kept at its chief place of business.
19. Notice. Any written notice, consent or other communication provided
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for in this Security Agreement shall be delivered or sent as provided in the
Purchase Agreement.
20. Custodial Arrangements. Secured Party may from time-to-time appoint a
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person or entity to act as agent and representative of Secured Party hereunder
and to hold possession of the Collateral (or a portion thereof) and to take
actions at the direction of Secured Party to the fullest extent and in such
manner and at such times as are permitted by Secured Party hereunder. Debtor
hereby consents to any and all such appointments and agrees to deliver
Collateral to such person or entity upon the direction of Secured Party. Debtor
further agrees that any such person or entity shall be exclusively the bailee
and agent of Secured Party, that receipt of Collateral by Secured Party's
Custodian shall be constructive receipt by Secured Party and shall perfect
Secured Party's security interest in the Collateral, and that Debtor shall not
have and shall not attempt to exercise any degree of control over such person or
entity or over any Collateral held at any time by such person or entity.
EXECUTED the date and year first above written.
Xxxxxx Mortgage Corporation,
a California corporation
"Debtor"
By: /s/ XXXXXX XXXXX
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Xxxxxx Xxxxx
President
First Collateral Services, Inc.
a California corporation
"Secured Party"
By: /s/ XXXXXXX X. XXXXXX
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Xxxxxxx X. Xxxxxx
Vice President
By: /s/ XXXXXX XXXXXX
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Xxxxxx Xxxxxx
Vice Chairman of the Board
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SCHEDULE I TO SECURITY AGREEMENT
(Servicing)
DEBTOR: XXXXXX MORTGAGE CORPORATION
SECURED PARTY: FIRST COLLATERAL SERVICES, INC.
COLLATERAL DESCRIPTION
The collateral shall consist of all now existing and hereafter arising rights to
servicing of Loans in Warehouse sold by Debtor to and held by Secured Party or
its Agent, and any and all residential and commercial loan servicing agreements
between Debtor and third party investors relating to Loans in Warehouse (the
"Servicing Contracts") and all amendments and replacements to said Servicing
Contracts and all now existing and hereafter arising rights of Debtor to the
payment of money for servicing Loans sold to and held by Secured Party or under
the Servicing Contracts, whether such payments are on account of services
rendered by Debtor thereunder or otherwise, and including, without limitation,
all amounts payable to Debtor on account of the sale or other disposition of any
of said rights to servicing of Loans sold by Debtor to and held by Secured Party
and on account of Servicing Contracts and/or Debtor's rights thereunder, and all
products and proceeds of any of the above.
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