AMENDED AND RESTATED SERVICING SECURITY AGREEMENT
AMENDED AND RESTATED SERVICING SECURITY AGREEMENT ("Security Agreement")
dated as of April 30, 2000 between NEW CENTURY MORTGAGE CORPORATION, a
California corporation ("the Company"), U.S. BANK NATIONAL ASSOCIATION, a
national banking association ("USBNA"), as collateral agent (in such capacity,
together with any successor Agent hereunder, the "Agent") for (A) the "Lenders"
(as defined below), (B) U.S. Bancorp Leasing & Financial, successor in interest
to FBS Business Finance Corporation (the "Lessor") as lessor under any present
or future leases of equipment by the Lessor, as lessor, to the Company or New
Century Financial Corporation ("NCFC"), as lessee, or as lender under any
present or future loan by the Lessor, as lender, to the Company or NCFC, as
borrower, secured by equipment, and (C) the "Subordinated Noteholder" (as
defined below).
RECITALS:
A. The Company, the lenders party thereto (the "Lenders") and the Agent
are party to the Fourth Amended and Restated Credit Agreement dated as of May
26, 1999 (as the same has heretofore been amended and as may hereafter be
amended, modified, extended or restated and in effect from time to time, the
"Credit Agreement").
B. The Lessor has leased, and may from time to time hereafter lease,
equipment to the Company or NCFC, or make loans to the Company or NCFC secured
by equipment.
C. USBNA has extended and has agreed to extend subordinated loans to the
Company under a Subordinated Loan Agreement (as the same may hereafter be
amended, modified, extended or restated and in effect from time to time, the
"Subordinated Loan Agreement") and a Second Amended and Restated Subordinated
Promissory Note in the principal amount of $40,000,000 (as the same may
hereafter be amended, modified, extended or restated and in effect from time to
time, the "Subordinated Note"), both of even date herewith.
D. It is a condition precedent to the agreement of USBNA to loan or
advance additional monies under such Subordinated Loan Agreement and the
Subordinated Note that the Company and the Agent execute and deliver this
Security Agreement to amend and restate the Servicing Security Agreement dated
as of May 29, 1998, as amended, from the Grantors to the Agent (the "Existing
Security Agreement").
E. The Company finds it advantageous, desirable and in the Company's best
interest to comply with the requirement that the Existing Security Agreement be
amended and restated pursuant to this Security Agreement.
Accordingly, the Company and the Agent hereby agree to amend and restate
the Existing Security Agreement as follows:
Section 1. DEFINITIONS.
Each capitalized term used herein which is not otherwise defined
herein shall have the meaning ascribed to such term in the Credit Agreement. In
addition, the following terms shall have the following respective meanings:
"Account" shall mean all rights of the Company to payment of
whatever kind or character, whether or not evidenced by an
instrument or chattel paper, whether or not such right has been
earned by performance, all guaranties and security therefor and all
security or other interests in property relating thereto, including,
without limitation, tax refunds and insurance proceeds.
"Acknowledgement Agreement" shall have the meaning given it in
Section 5(d) hereof.
"Cash and Bank Accounts" shall mean any and all cash,
short-term investments, and any and all balances, credits, deposits,
accounts, or monies of the Company or in the Company's name in the
possession or control of, or in transit to, any bank or other
financial institution.
"Collateral" shall have the meaning given it in Section 2
hereof.
"Company Address" shall mean 00000 Xxx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxxxxxxx 00000.
"Equipment" shall mean all equipment in all of its forms,
wherever located, whether existing on the date of this Security
Agreement or at any time thereafter, owned by the Company or in
which the Company has an interest (including, but not limited to,
all machinery, all manufacturing, distribution, selling, data
processing and office equipment, all computers and computer
components, terminals, monitors and keyboards, and all furniture,
fixtures and trade fixtures), all computer assisted design systems,
management information systems, computer software programs,
programming systems and other similar intangible assets used or
useful in the operation of any equipment, and all accessions and
additions thereto,
parts and appurtenances thereof, substitutions therefor and
replacements thereof.
"Foreclosure Advance Receivable" shall mean, on a date of
determination, a valid, readily enforceable claim of the Company to
retain amounts received or to be received from an obligor, or out of
the foreclosure proceeds, under a Mortgage Loan serviced by the
Company to reimburse the Company for a Foreclosure Advance.
"General Intangibles" shall mean any personal property (other
than goods, Accounts, and money) including choses in action, causes
of action, contract rights, corporate and other business records,
inventions, designs, patents, patent applications, service marks,
trademarks, tradenames, trade secrets, engineering drawings, good
will, registrations, copyrights, licenses, franchises, customer
lists, tax refund claims, royalties, licensing and product rights,
rights to the retrieval from third parties of electronically
processed and recorded data and all rights to payment resulting from
an order of any court.
"Hedge Contract" shall mean any prepayment cap agreement or
arrangement purchased by the Company to provide prepayment
protection with respect to all or any portion of the Servicing
Rights.
"Lease Agreement" shall mean each and any agreement for the
lease of equipment or for the making of a loan secured by equipment
now existing or at anytime entered into between the Lessor, as
lessor or lender, and the Company or NCFC, as lessee or borrower.
"Lease Obligations" shall mean all of the obligations now or
hereafter arising owed by the Company or NCFC to Lessor in
connection with any lease of equipment or loan secured by equipment.
"NCRC" shall mean NC Residual II Corporation, a Delaware
corporation.
"Pool P&I Payment Receivable" shall mean, on a date of
determination, a valid, readily enforceable claim of the Company to
retain amounts received or to be received from an obligor under a
Mortgage Loan serviced by the Company that is currently due from
such obligor to reimburse the Company for a Pool P&I Payment.
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"Proceeds" shall mean any consideration received from the
sale, exchange, lease or other disposition of any asset or property
which constitutes Collateral, any value received as a consequence of
the possession of any Collateral and any payment received from any
insurer or other person or entity as a result of the destruction,
loss, theft, damage or other involuntary conversion of whatever
nature of any asset or property which constitutes Collateral, and
shall include all cash and negotiable instruments received or held
on behalf of the Agent pursuant to this Security Agreement.
"Secured Parties" shall mean the Agent, the Lenders, the
Lessor and the Subordinated Noteholder.
"Servicing Contracts" shall mean any and all contracts or
agreements purchased by the Company or entered into by the Company
for its own account (and not as nominee or subservicer), whether now
existing or hereafter purchased or entered into, pursuant to which
the Company services Mortgage Loans or Mortgage Loan pools for
others (other than NCCC or NCRC).
"Servicing Rights" shall mean any and all rights of the
Company held for its own account (and not as nominee or
subservicer), whether pursuant to a Servicing Contract or otherwise,
to service Mortgage Loans or Mortgage Loan pools for others (other
than NCCC or NCRC), including, without limitation, (i) all rights to
collect payments due and enforce the rights of the mortgagee under
any Mortgage Loans, (ii) all rights to receive compensation and
termination fees under any Servicing Contract and (iii) all rights
to receive the proceeds from any sale or other transfer of the
Company's interest in any Servicing Contract.
"Servicing Purchase Agreements" shall mean, collectively, all
purchase agreements between the Company and any other Person
pursuant to which the Company has purchased or hereafter purchases
Servicing Rights, or a mortgage banking company that owns Servicing
Rights, as any of the same may have been or may be amended,
supplemented or otherwise modified from time to time in accordance
with this Security Agreement.
"Servicing Purchase Documents" shall mean, collectively, the
Servicing Purchase Agreements, any related subservicing agreements
and all other agreements, instruments, certificates and other
documents executed and delivered pursuant to or in connection
therewith, as the same may be
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amended, supplemented or otherwise modified from time to time in
accordance with this Security Agreement.
"Servicing Sale Agreements" shall mean, collectively, all sale
agreements between the Company and any other Person pursuant to
which the Company has sold or hereafter sells Servicing Contracts or
Servicing Rights, as the same may have been or may be amended,
supplemented or otherwise modified from time to time in accordance
with the Credit Agreement.
"Servicing Sale Documents" shall mean, collectively, the
Servicing Sale Agreements, any related subservicing agreements and
all other agreements, instruments, certificates or other documents
executed and delivered pursuant to or in connection with any
Servicing Sale Agreement, as the same may be amended, supplemented
or otherwise modified from time to time in accordance with the
Credit Agreement.
"Subordinated Note" shall have the meaning assigned to it in
Recital C hereto.
"Subordinated Note Obligations" shall mean the obligations of
the Company to pay principal and interest on the Subordinated Note
and all fees, costs, expenses and indemnities for which the Company
is liable in connection therewith.
"Subordinated Noteholder" shall mean USBNA and any subsequent
holder of the Subordinated Note.
"T&I Payment Receivable" shall mean, on any date of
determination, a valid, readily enforceable claim against any
obligor on any Mortgage Loan (other than a Mortgage Loan that is in
bankruptcy or in the process of foreclosure) and the accounts of
such obligor for repayment of any T&I Payment made by the Company
that is currently due from such obligor to reimburse the Company for
a T&I Payment.
(c) All other terms used in this Security Agreement which are not
specifically defined herein or the definitions of which are not incorporated
herein by reference shall have the meaning assigned to such terms in the Uniform
Commercial Code in effect in the State of Minnesota as of the date hereof to the
extent such other terms are defined therein.
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Section 2. SECURITY INTEREST.
As collateral security for the due and punctual payment of all the
Obligations, the Lease Obligations and the Subordinated Note Obligations, the
Company does hereby pledge, hypothecate, assign, transfer and convey to the
Agent, for the benefit of the Secured Parties, and hereby creates in and grants
to the Agent, for the benefit of the Secured Parties, a continuing security
interest in and to all of its right, title and interest in and to the following,
whether now existing or hereafter arising or at any time acquired (all of the
foregoing being herein referred to as the "Collateral"):
(a) all Servicing Contracts and Servicing Rights;
(b) all Accounts, Equipment and General Intangibles;
(c) all Cash and Bank Accounts;
(d) all books, correspondence, credit files, records, invoices,
bills of lading, and other documents, including, without limitation, all
tapes, cards, computer runs, and other papers and documents in the
possession or control of the Company or any computer bureau from time to
time acting for the Company, but specifically excluding books,
correspondence, credit files, records, invoices, bills of lading, and
other documents relating to Mortgage Loans pledged to third parties to
secure Indebtedness permitted by Section 4.08(g) of the Credit Agreement;
(e) all rights, remedies and other interests of the Company in, to
and under any and all Servicing Purchase Agreements and other Servicing
Purchase Documents, and any and all Servicing Sale Agreements and other
Servicing Sale Documents;
(f) all sums paid or payable to the Company under or by virtue of
any Servicing Purchase Agreements and other Servicing Purchase Documents
or by virtue of any Servicing Sale Agreements and other Servicing Sale
Documents, whether as compensation for the performance by the Company of
its obligations thereunder, damages for any breach thereof, amounts
payable upon cancellation or termination of any Servicing Purchase
Agreements and other Servicing Purchase Documents, or of any Servicing
Sale Agreements or other Servicing Sale Documents, or otherwise and any
claims of the Company therefor;
(g) any and all Hedge Contracts and any and all rights, remedies and
other interests of the Company therein or thereunder;
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(h) all sums paid or payable to the Company under or by virtue of
the Servicing Contracts, Servicing Rights or Acknowledgment Agreements,
and each of them, whether as compensation for the performance by the
Company of its obligations thereunder, damages for any breach thereof,
amounts payable upon cancellation or termination of any or all of the
Servicing Contracts or Servicing Rights, interest on any such amounts, or
otherwise, and any claims of the Company therefor;
(i) all accessions and additions to, parts and appurtenances of,
substitutions for and replacements and products of any of the foregoing,
including, without limitation, claims of rights to payments thereunder;
(j) any and all Foreclosure Advance Receivables, Pool P&I Payment
Receivables and T&I Payment Receivables;
(k) all balances, credits and deposits contained in or credited to
the Collateral Account or any other account held by the Agent which are
attributable to the proceeds of Foreclosure Advance Receivables, Pool P&I
Payment Receivables, T&I Payment Receivables or other Collateral described
herein;
(l) any other asset of the Company which has been or hereafter at
any time prior to an Event of Default is delivered to the Agent pursuant
to this Security Agreement;
(m) all books, records, files, documents, tapes, programs,
print-outs and other such materials relating to any Foreclosure Advance
Receivables, Pool P&I Payment Receivables or T&I Payment Receivables;
(n) any and all balances, credits, deposits, accounts or moneys of,
or in the name of, the Company representing or evidencing the foregoing or
any proceeds thereof; and
(o) all Proceeds of any of the foregoing.
The security interests granted pursuant to this Section 2 (the
"Security Interests") are granted as security only, and shall not subject the
Agent or any Secured Party to, or transfer or in any way affect or modify, any
obligation or liability of the Company with respect to any of the Collateral or
any transaction which gave rise thereto. Nothing herein contained shall relieve
the Company from performing any covenant, agreement or obligation on the part of
the Company to be performed or from observing any condition on the part of the
Company to be observed under or in respect of any
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Servicing Contract or Servicing Rights or from any liability thereunder or
impose any liability on the Agent or any Secured Party for the acts or omissions
of the Company thereunder or for the performance of the covenants, agreements or
obligations on the part of the Company to be performed or for the observance of
any condition on the part of the Company to be observed until and unless the
Agent shall have elected, as provided in Section 5(a) hereof, to become bound to
perform and observe the covenants, agreements, obligations and conditions to be
performed and observed by the Company under any Servicing Contract or Servicing
Rights specified by the Agent in accordance with Section 5(a) hereof.
Section 3. REPORTS CONCERNING EXISTING COLLATERAL AND HEREAFTER ACQUIRED
COLLATERAL.
From time to time hereafter as reasonably requested by the Agent,
the Company will promptly give a written report to the Agent describing and
listing each document, instrument or other paper which evidences, secures,
guarantees, insures or pertains to any item of the Collateral whether now or
hereafter owned, acquired or held by the Company. Such written report shall
contain sufficient information to enable the Agent to identify each such
document, instrument or other paper. The Company (a) upon the request of the
Agent, shall promptly provide additional information concerning, or a more
complete description of, each such document, instrument or other paper and (b)
at the request of the Agent, shall promptly deliver the same to the Agent.
Section 4. REPRESENTATIONS, WARRANTIES AND COVENANTS.
The Company hereby represents, warrants and agrees as follows:
(a) Locations. The chief executive office of the Company is located
at the Company Address. All records with respect to all the Collateral are
kept at the Company Address. As of the Signing Date, all Collateral is
kept at the Company Address or one of the other locations listed in
Attachment 1 hereto.
(b) Title to Collateral. The Company is, and will at all times be,
the lawful owner of its interest in and to all the Collateral now owned or
hereafter acquired by it, which is and at all times shall be free and
clear of any lien or security interest except security interests in favor
of the Agent, for the benefit of the Secured Parties. No financing
statement or other evidence of lien covering any of the Collateral is on
file in any public office.
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(c) Name Change. Without the prior written consent of the Agent, the
Company will not change its name from that set forth in the first
paragraph of this Security Agreement nor use any other name.
(d) Change of Location or Jurisdiction of Organization. The Company
shall give at least 30 days' prior written notification to the Agent of
the opening of a new place of business where any of the Collateral or
records relating thereto are to be located and of any change in the
location of its chief executive office. The Company will not permit any
Collateral to be located in any state (and, if any county filing is
required, in any county) in which a financing statement covering such
Collateral is required to be, but has not in fact been, filed to perfect
the Agent's security interest, for the benefit of the Secured Parties, in
such Collateral. The Company will not take any action that would cause its
jurisdiction of organization to change without giving at least 30 days'
prior written notification of such change to the Agent and executing and
delivering such financing statements covering the Collateral as the Agent
may request in connection therewith.
(e) Use of Trade Names or Styles. The Company will not, except after
giving at least 30 days' prior written notice to the Agent, use any trade
names or styles in its business in any state other than the use of those
trade names and styles and in the states listed in Attachment 1 hereto.
(f) Inspection and Verification of Books, Records and Collateral.
The books and records with respect to the Collateral will be kept at the
Company Address. The Agent, or any persons designated by it, shall have
the right, at reasonable times and, prior to the occurrence of an Event of
Default, on reasonable prior notice, without hindrance or delay, to
inspect the books and records of the Company relating to the Collateral.
The Agent, or any persons designated by it, shall have the right to make
such verifications concerning the Company's business and the Collateral as
may be reasonable. The Company will furnish to the Secured Parties such
other information as the Agent shall reasonably request.
(g) Marking Collateral and Records. Promptly upon the request of the
Agent, the Company will xxxx, or will permit the Agent to xxxx in a
reasonable manner, the Company's books, records and accounts showing or
dealing with the Collateral with a notation clearly setting forth that the
Collateral has been assigned to the Agent, for the benefit of the Secured
Parties, which notation shall be in form and substance reasonably
satisfactory to the Agent.
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(h) Reports and Schedules. The Company will from time to time, as
the Agent may reasonably request, deliver to the Secured Parties such
schedules and such certificates and reports respecting all or any of the
Collateral at the time subject to the security interests, and the items or
amounts received by the Company in full or partial payment, or otherwise
as proceeds, of any of the Collateral, all to such extent as the Agent may
reasonably request. Any such schedule, certificate or report shall be
executed by a duly authorized officer of the Company and shall be in such
form and detail as the Agent may reasonably specify. The Company will also
furnish the Secured Parties such additional information concerning the
Collateral as the Agent may from time to time reasonably request.
(i) Maintenance of Security Interest. The Company will do all acts
and things, and will execute and file or record all instruments (including
mortgages, pledges, assignments, security agreements, financing
statements, amendments to financing statements, continuation statements,
etc.) required, or reasonably requested, by the Agent to establish,
perfect, maintain and continue the perfection and priority of the security
interest of the Agent in the Collateral, for the benefit of the Secured
Parties, including, without limitation, obtaining any necessary agreements
with any Investor. The Company will also pay the costs and expenses of the
following: all filings and recordings, including taxes thereon; all
searches necessary, or reasonably deemed necessary by the Agent, to
establish and determine the validity, perfection or priority of such
security interest of the Agent; and all actions necessary to satisfy all
other liens which in the reasonable opinion of the Agent might prejudice,
imperil or otherwise affect the Collateral or the existence or priority of
such security interest. A carbon, photographic or other reproduction of
this Security Agreement or of a financing statement shall be sufficient as
a financing statement and may be filed in lieu of the original in any or
all jurisdictions which accept such reproductions. In addition, the
Company agrees to execute and deliver to the Agent any power of attorney
that the Agent may at any time request to enable it to comply with the
terms of any Acknowledgment Agreement.
(j) Collections. Until notified in writing by the Agent to the
contrary, the Company will, at its own expense, take all necessary action
to collect, as and when due, all amounts due with respect to amounts
payable under or with respect to the Servicing Contracts and Servicing
Rights, including the taking of such action with respect to collection as
the Company may deem advisable. Whenever an Event of Default shall have
occurred and be continuing, all collections of the Collateral received by
the Company will be held in trust for the Agent, for the benefit of the
Secured Parties and will be promptly remitted to the Agent, for the
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benefit of the Secured Parties, in the form received, properly endorsed,
or as the Agent may otherwise direct in writing.
(k) Power of Attorney. During the continuance of any Event of
Default, the Company appoints the Agent the Company's attorney-in-fact,
with full power of substitution, to perform any act which the Company
herein has agreed to perform but has failed to do, which appointment is
coupled with an interest and irrevocable.
(l) Status of Servicing Contracts and Other Agreements Included in
the Collateral; Maintenance and Modification Thereof. All Servicing
Contracts, Servicing Rights and other agreements included in the
Collateral, in the form delivered to the Agent, are in full force and
effect without modification or amendment of any kind except the
modifications and amendments delivered with said Servicing Contracts,
Servicing Rights and other agreements included in the Collateral, and
there has been no prepayment of any amount payable thereunder. The Company
will maintain all Servicing Contracts, Servicing Rights and other
agreements included in the Collateral in full force and effect, will fully
and faithfully perform all of the obligations and observe all of the
conditions to be performed or observed by it thereunder and under the
applicable Acknowledgment Agreement, if any, and will not, except with the
prior written consent of the Agent, (i) cancel or terminate any Servicing
Contracts, Servicing Rights or other agreements included in the Collateral
on account of the default thereunder by the other party thereto without
first consulting with the Agent or consent to any other cancellation or
termination thereof, (ii) amend, modify or otherwise effect a change in
any Servicing Contracts, Servicing Rights or other agreements included in
the Collateral, except in the ordinary course of business and in a manner
not materially deleterious to the Company, (iii) waive any material
default under or breach of any Servicing Contracts, Servicing Rights or
other agreements included in the Collateral, (iv) consent to any
prepayment or discount of amounts payable to it under any Servicing
Contracts, Servicing Rights or other agreements included in the
Collateral, or (v) give any consent, waiver or approval under any
Servicing Contracts, Servicing Rights or other agreements included in the
Collateral which would have the effect of impairing the value thereof or
the position of the Agent in respect of amounts payable thereunder.
(m) New Servicing Rights. Quarterly on the fifth Business Day of
each January, April, July and October, the Company will deliver to the
Agent copies of all Servicing Contracts entered into or acquired and a
list of all new pools of Mortgage Loans serviced pursuant to Servicing
Rights, during the preceding fiscal quarter.
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(n) Third-Party Claims. The Company will defend the Collateral and
the security interests of the Agent therein, for the benefit of the
Secured Parties, against all claims and demands of all Persons, at any
time claiming any adverse interest with respect thereto.
(o) Taxes. The Company will promptly pay any and all taxes,
assessments and governmental charges upon the Collateral prior to the date
that penalties are attached thereto or the same become a lien on any of
the Collateral, except to the extent that such taxes, assessments and
charges shall be contested by the Company in good faith and through
appropriate proceedings, for which adequate reserves in conformity with
GAAP have been provided.
(p) Impairment of Collateral. The Company will immediately notify
the Agent of any event causing a loss or diminution in the value of all or
any material part of the Collateral, and the amount (or the Company's best
estimate of the amount) of such loss or diminution.
(q) Insurance. The Company will at all times have and maintain
insurance with respect to the Collateral in accordance with the terms and
conditions of the Credit Agreement. All such insurance policies covering
losses to the Collateral shall name the Agent as a loss payee and shall be
payable to the Agent as its interests may appear. All policies of
insurance shall provide for a minimum of thirty (30) days' written notice
to the Agent prior to any cancellation, modification or non-renewal
thereof. The Company shall furnish the Agent with certificates or other
evidence reasonably satisfactory to the Agent of compliance with the
foregoing insurance provisions.
(r) Disposition of Collateral. The Company will not sell or offer to
sell or otherwise assign, transfer or dispose of any of the Collateral or
any interest therein except in the ordinary course of its business, and
may otherwise deal with its property as and to the extent permitted under
the Credit Agreement.
(s) Condition of Collateral. Except for Liens in favor of the Agent,
for the benefit of the Secured Parties, the Company will keep all of the
Collateral free from any and all adverse liens, security interests or
encumbrances and in good order and repair, reasonable wear and tear
excepted, and will not waste or destroy the Collateral or any part
thereof. To the Company's knowledge, no material dispute, right of setoff,
counterclaim or defense exists with respect to all or any part of the
Collateral (other than applicable rights of redemption).
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(t) Fixtures. If any part or all of the Collateral consisting of
Equipment will become so related to particular real estate as to become a
fixture, the Company will promptly advise the Agent as to the real estate
concerned and the record owner thereof and execute and deliver any and all
instruments necessary to perfect the security interest therein and to
assure that such security interest will be prior to the interest therein
of the owner of such real estate.
(u) Binding Agreement. The Company has good right, power and lawful
authority to pledge, assign and deliver the Collateral in the manner
hereby done or contemplated. This Security Agreement constitutes the
legal, valid and binding obligation of the Company enforceable against the
Company and the Collateral in accordance with its terms (subject to
limitations as to enforceability which might result from bankruptcy,
reorganization, arrangement, insolvency or other similar laws affecting
creditors' rights generally).
(v) Compliance with Applicable Laws. The Company has complied with
all applicable federal, state and local laws, regulations and rules
regarding the Collateral.
(w) Consent. No consent or approval (other than any which may be
incidental to any filing which may be necessary to perfect the security
interests in the Collateral) of any governmental body, regulatory
authority, person, trust, or entity is or will be (i) necessary to the
validity or enforceability of the rights created hereunder or (ii)
required prior to the assignment, transfer and delivery of any of the
Collateral to the Agent hereunder.
Section 5. REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT.
(a) If an Event of Default shall have occurred and be continuing,
the Agent shall have the right to exercise, for the benefit of the Secured
Parties, any and all rights and remedies available to it under the Uniform
Commercial Code as in effect in the State of Minnesota and any other
applicable law to the fullest extent permitted thereby. Without limiting
the foregoing, upon the occurrence of an Event of Default and during the
continuance thereof, the Agent or any Secured Parties may exercise any of
the following rights and remedies: (i) the right, in the name of the
Company or otherwise, to demand, collect, receive and receipt for,
compound, compromise, settle and give acquittance for, and prosecute and
discontinue any suits or proceedings in respect of any or all of the
Collateral; (ii) the right upon written notice to the Company and any
other Person entitled to receive such notice under any Servicing Contract
or Servicing Rights, specifying the effective date of any assumption
thereof, to assume, become bound by, and
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agree to perform and observe the covenants, agreements, obligations and
conditions to be performed and observed under any Servicing Contract or
Servicing Rights specified in such notice and to exercise all of the
rights, powers and privileges of the Company thereunder; (iii) the right
to sell and assign to any Person or Persons the right, title and interest
of the Company in any Servicing Contract or Servicing Rights; (iv) the
right to require the Company to, and the Company hereby agrees that it
will at its expense and upon request of the Agent forthwith, assemble all
or part of the Collateral as directed by the Agent and make it available
to the Agent at a place to be designated by the Agent that is reasonably
convenient to both the Agent and the Company; (v) without notice except as
specified below, the right to sell the Collateral or any part thereof in
one or more parcels at public or private sale, at any of the Agent's
offices or elsewhere, for cash, on credit, or for future delivery, and
without assumption of any credit risk, and upon such other terms as the
Agent may reasonably believe are commercially reasonable (the Company
agrees that, to the extent notice of sale shall be required by law, at
least ten days' prior notice to the Company of the time and place of any
public sale or the time after which any private sale is to be made shall
constitute reasonable notification, and the Company further agrees that
the Agent shall not be obligated to make any sale of Collateral regardless
of notice of sale having been given, and that the Agent may adjourn any
public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made
at the time and place to which it was so adjourned); (vi) the right to
occupy any premises owned or leased by the Company where the Collateral or
any part thereof or any books and records relating thereto is assembled
for a reasonable period in order to effectuate the Agent's rights and
remedies hereunder or under law, without obligation to compensate the
Company for such occupation; (vii) the right to take any action which the
Agent may reasonably deem necessary or desirable in order to realize on
the Collateral, including, the power to endorse in the name of the Company
without recourse to the Company any checks, drafts, notes or other
instruments or documents received in payment of or on account of the
Collateral; and (viii) the right to exercise any and all rights and
remedies of the Company under or in connection with the Collateral.
(b) In addition to the foregoing, if an Event of Default shall have
occurred and be continuing, the Company shall, upon the request of the
Agent, immediately initiate the transfer of its responsibilities and
rights as servicer under or with respect to any Servicing Contract or
Servicing Rights to a servicer designated by the Agent, which may be a
Secured Party or any Affiliate of a Secured Party.
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(c) Unless prohibited by the terms of a particular Servicing
Contract, the Company agrees that during the exercise by the Agent of any
of its remedies:
(i) Pending any sale or transfer of Servicing Contracts and/or
Servicing Rights, the Agent may appoint a subservicer (which may be
a Lender or an Affiliate of a Lender) for the Mortgage Loans that
are the subject of such Servicing Contracts and/or Servicing Rights
and the Company shall take all necessary action to implement said
appointment. Said subservicer shall be entitled to compensation for
its services as subservicer in accordance with its schedule of fees
for such services, said fees to be paid from the compensation
otherwise payable under the Servicing Contracts.
(ii) The Agent may, by written notice to the Company, direct
it to, and thereupon the Company shall, at its own expense, take all
necessary action to collect, as and when due, all monies, checks,
notes, drafts and other payments relating to or constituting
Servicing Contracts, Servicing Rights or proceeds thereof in trust
for the Agent, for the benefit of the Secured Parties, not commingle
the same with any other property or funds of the Company and deliver
or cause to be delivered all such payments in the exact form
received, together with any necessary endorsements, to the Agent or
to such other person as the Agent may designate. The portion of the
Servicing Rights representing compensation or termination fees under
such Servicing Contracts shall in any event be delivered to the
Agent immediately upon the Company's receipt thereof.
(iii) The Agent may notify, or request the Company to notify,
in writing or otherwise, each owner of Mortgage Loans that are
subject to Servicing Contracts and/or Servicing Rights to make
payments directly to the Agent of any fees or compensation payable
by said owners thereunder. If, notwithstanding the giving of any
notice, any such owner shall make payments to the Company, the
Company shall hold all such payments it receives in trust for the
Agent, for the benefit of the Secured Parties, without commingling
the same with other funds or property of the Company or any other
person, and shall deliver the same to the Agent immediately upon
receipt by the Company in the identical form received, together with
any necessary endorsements.
(iv) The Agent may, without notice to the Company and at such
time or times as the Agent in its sole discretion may determine,
exercise any or all of the Company's rights in, to and under, or in
any way connected
15
with or related to, any or all of the Servicing Contracts and
Servicing Rights, including (A) demanding and enforcing payment and
performance of, and exercising any or all of the Company's rights
and remedies with respect to the collection, enforcement or
prosecution of, any or all of the Servicing Contracts and Servicing
Rights, in each case by legal proceedings or otherwise, (B)
settling, adjusting, compromising, extending, renewing, discharging
and releasing any or all of, and any legal proceedings brought to
collect or enforce any or all of, the Servicing Contracts and
Servicing Rights, (C) preparing, filing and signing the name of the
Company on (1) any proof of claim or similar document to be filed in
any bankruptcy or similar proceeding involving any account debtor
covered by the Servicing Contracts and/or Servicing Rights and (2)
any notice of lien, assignment or satisfaction of lien, or similar
document in connection with any Servicing Rights, and (D) using the
information recorded on or contained in any data processing
equipment and computer hardware and software relating to the
Servicing Contracts and Servicing Rights to which the Company has
access.
(v) The Agent may settle or adjust disputes and claims
directly with any owner of Mortgage Loans which are subject to
Servicing Contracts and/or Servicing Rights for amounts and on terms
that the Agent considers advisable and in all such cases only the
net amounts received by the Agent in payment of such amounts, after
deduction of out-of-pocket costs and expenses of collection,
including reasonable attorney's fees, shall be available for
application as provided in Section 4(e) hereof.
(d) The Company acknowledges that the Company and the Agent may from
time to time hereafter enter into agreements ("Acknowledgment Agreements")
in order to obtain consent to the assignment of any security interest
granted in the Servicing Contracts and Servicing Rights pursuant to
Section 2 hereof. The Company further acknowledges that the Acknowledgment
Agreements may contain certain provisions concerning the enforcement by
the Agent of its security interest hereunder in the Servicing Contracts
and Servicing Rights. The Company agrees that the disposition of its
rights in any Servicing Contract or Servicing Rights pursuant to the terms
of the applicable Acknowledgment Agreement shall be deemed commercially
reasonable within the meaning of Section 9-504(3) of the Uniform
Commercial Code. The Company hereby waives any claims it might otherwise
have against the Agent or the Secured Parties as a result of the Agent's
compliance with the terms of any Acknowledgment Agreement.
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(e) Any proceeds of any disposition of any of the Collateral,
including without limitation the appropriation or application of any and
all balances, credits, deposits, accounts or moneys received by the Agent,
shall be applied by the Agent as follows:
FIRST, ratably to the payment of the costs and expenses of the Agent
and the Secured Parties in connection with the enforcement of this
Security Agreement (including, without limitation, any costs or
expenses related to the sale or other disposition of the Collateral)
and the reasonable fees and out of pocket expenses of counsel
employed in connection therewith, to the payment of all costs and
expenses incurred by the Agent in connection with the administration
of this Agreement and to the payment of all advances made by the
Agent and the Secured Parties for the account of the Company
hereunder, to the extent that such costs, expenses and advances have
not been reimbursed to the Agent and the Secured Parties, as the
case may be;
SECOND, to the payment in full of the principal of and any Balances
Deficiency Fees, Usage Fees, facility fees and interest on the
Notes;
THIRD, to the payment of all other Obligations, as provided in the
Credit Agreement, as the Agent or the Lenders may determine;
FOURTH, to the payment in full of the Lease Obligations, as provided
in the Lease Agreements, or otherwise, in such order as the Lessor
may determine;
FIFTH, to the payment in full of the Subordinated Note Obligations
until all of the Subordinated Note Obligations have been paid in
full;
SIXTH, the balance (if any) of such proceeds shall be paid to the
Company, its successors or assigns, or as a court of competent
jurisdiction may direct; provided, that if such proceeds are not
sufficient to satisfy the Obligations, the Lease Obligations and the
Subordinated Note Obligations in full, the Company shall remain
liable to the Agent, the Lenders, the Lessor and the holder(s) of
the Subordinated Note, as applicable, for any deficiency.
The Company hereby agrees to pay all expenses incurred by the Agent or the
Secured Parties in the collection of the Collateral, including the reasonable
attorneys' fees incurred in connection therewith by the Agent or the Secured
Parties.
Section 6. MISCELLANEOUS.
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(a) Amendments and Modifications. No amendment to this Security
Agreement, waiver of any provision of this Security Agreement or consent
to any departure by the Company therefrom shall in any event be effective
unless the same shall be in writing and signed or consented to in writing
by the Agent (with the consent of the Required Lenders, the Lessor and the
Subordinated Noteholder), and any such waiver or consent shall be
effective only in the specific instance and for the purpose for which
given.
(b) Notices. Except as otherwise specifically provided for herein,
all notices and other communications provided for herein shall be in
writing (including teletransmission communication) and, unless otherwise
required herein or by law, shall be teletransmitted, mailed or delivered
to the intended recipient at the "Address for Notices" specified (i) in
the case of the Agent or the Lenders, in the Credit Agreement, (ii) in the
case of the Company, in the Credit Agreement, (iii) in the case of the
Lessor, by the Lessor to the Company from time to time, and (iv) in the
case of the Subordinated Noteholder, in the Subordinated Loan Agreement.
All notices and other communications hereunder shall be effective when
transmitted by telex or telecopier, delivered or, in the case of a mailed
notice or notice sent by overnight courier, upon receipt thereof as
conclusively evidenced by the signed receipt therefor, in each case given
or addressed as aforesaid.
(c) Benefit of Agreement. This Security Agreement shall be binding
upon and inure to the benefit of the Company and the Agent and their
respective successors and assigns, and shall inure to the benefit of the
Secured Parties and their respective successors and assigns, except that
the Company may not assign or transfer any of its rights or obligations
under this Security Agreement without the prior written consent of the
Secured Parties.
(d) Waivers. No failure on the part of the Agent to exercise, and no
delay in exercising, any remedy, right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, remedy, power
or privilege, and no waiver whatsoever shall be valid unless in writing
signed by the Agent and the Company and then only to the extent
specifically set forth in such writing.
(e) Remedies. All remedies, rights, power and privileges, either
under this Security Agreement, the other Loan Documents, by law or
otherwise, afforded the Agent or any Secured Party shall be cumulative and
not be exclusive of any remedies, rights, power and privileges provided by
law and shall be available until
18
the Obligations, the Lease Obligations and the Subordinated Note
Obligations have been paid in full in lawful money of the United States of
America. The Agent may exercise all such remedies in any order of
priority.
(f) Care of Collateral. The Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any of the Collateral
in its possession if it takes such action for that purpose as the Company
requests in writing, but failure of the Agent to comply with any such
request shall not of itself be deemed a failure to exercise reasonable
care, and no failure of the Agent to preserve or protect any rights with
respect to such Collateral against prior parties, or to do any act with
respect to the preservation of such Collateral not so requested by the
Company, shall be deemed a failure to exercise reasonable care in the
custody or preservation of such Collateral. The Agent shall also be deemed
to have exercised reasonable care in the custody and preservation of any
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which the Agent accords its own property of
like kind.
(g) Termination; Reinstatement. This Security Agreement shall
terminate when all of the Obligations, the Lease Obligations and the
Subordinated Note Obligations have been paid in full and the Commitments,
all Lease Agreements and the Subordinated Loan Agreements have been
terminated, at which time the Agent shall reassign, release and/or deliver
to the Company the Collateral and proceeds thereof in which the Agent
shall have an interest hereunder and upon request of the Company, shall
execute and deliver termination statements to the Company for filing in
each office in which a financing statement has been filed by the Agent,
all without recourse upon or warranty by the Agent or any Secured Party
and at the cost and expense of the Company; provided, however, this
Security Agreement shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Obligations, the
Lease Obligations or the Subordinated Note Obligations is rescinded or
must otherwise be returned by the Agent, any Secured Party or any other
Person upon the insolvency, bankruptcy, or reorganization of the Company
or otherwise, all as though such payment had not been made.
(h) Survival of Representations; Warranties and Covenants. All
representations, warranties and covenants made by the Company to the Agent
or any Secured Party in connection with this Security Agreement shall
survive the execution and delivery of this Security Agreement. All
statements contained in any certificate or other instrument delivered to
the Agent or any Secured Party pursuant to this Security Agreement shall
be deemed representations, warranties and covenants hereunder of the
Company.
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(i) Form of Reports, Schedules and Assignments. All reports,
schedules, assignments, certificates and other items delivered to the
Agent or any Secured Party pursuant to this Security Agreement or any
other statement, instrument or transaction contemplated hereby or relating
hereto and all endorsements in connection therewith, shall be executed by
an authorized representative of the Company and shall be in form and
substance satisfactory to the Agent.
(j) Governing Law; Construction; Consent to Jurisdiction; Waiver of
Trial by Jury.
(i) THIS SECURITY AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAW OF THE STATE OF MINNESOTA, WITHOUT
GIVING EFFECT TO THE CHOICE OF LAW PROVISIONS THEREOF BUT GIVING
EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
(ii) Whenever possible, each provision of this Security
Agreement and any other statement, instrument or transaction
contemplated hereby or relating hereto shall be interpreted in such
manner as to be effective and valid under such applicable law, but,
if any provision of this Security Agreement or any other statement,
instrument or transaction contemplated hereby or relating hereto
shall be held to be prohibited or invalid under such applicable law,
such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Security
Agreement or any other statement, instrument or transaction
contemplated hereby or relating hereto and shall not affect the
enforceability of such provision in any other jurisdiction. In the
event of any conflict within, between or among the provisions of
this Security Agreement or any other statement, instrument or
transaction contemplated hereby or relating hereto those provisions
giving the Agent and the Secured Parties the greater right shall
govern.
(iii) THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION AND VENUE OF ANY MINNESOTA STATE OR
FEDERAL COURT SITTING IN HENNEPIN OR XXXXXX COUNTIES, STATE OF
MINNESOTA, FOR ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS SECURITY AGREEMENT, AND THE COMPANY HEREBY
20
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH MINNESOTA STATE COURT
OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. THE
COMPANY HEREBY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS THAT
SERVICE OF PROCESS UPON IT MAY BE MADE BY CERTIFIED OR REGISTERED
MAIL, RETURN RECEIPT REQUESTED, AT ITS ADDRESS SPECIFIED OR
DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 6(a) OF THIS
SECURITY AGREEMENT, AND SERVICE SO MADE SHALL BE DEEMED COMPLETED ON
THE THIRD BUSINESS DAY AFTER SUCH SERVICE IS DEPOSITED IN THE MAIL.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT, ANY OTHER
SECURED PARTY OR ANY OTHER INDEMNIFIED PERSON TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW.
(iv) THE COMPANY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT
FORUM AND VENUE OBJECTIONS TO THE MAINTENANCE OF ANY SUCH ACTION OR
PROCEEDING. THE COMPANY AND THE AGENT HEREBY IRREVOCABLY WAIVE ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS SECURITY AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
(k) Indemnification and Costs and Expenses. The Company will (a) pay
all reasonable out-of-pocket expenses, including, without limitation, any
recording or filing fees, fees of title insurance companies in connection
with records or filings, costs of mortgage insurance policies and
endorsements thereof and mortgage registration taxes (or any similar fees
or taxes), incurred by the Agent or any Secured Party in connection with
the enforcement and administration of this Security Agreement (whether or
not the transactions hereby contemplated shall be consummated), or the
enforcement of the rights of the Agent or any Secured Party in connection
with this Security Agreement, including, without limitation, the
reasonable fees and disbursements of counsel for the Agent and each
Secured Party; (b) pay, and hold the Agent and each Secured Party harmless
from and against, any and all present and future stamp and other similar
taxes with respect to the foregoing matters and save the Agent and each
Secured Party harmless from and against any and all liabilities with
respect to or resulting from any delay in
21
paying or omission to pay such taxes; and (c) pay, and indemnify and hold
harmless the Agent and each Secured Party from and against, any and all
liabilities, obligations, losses, damages, penalties, judgments, suits,
costs, expenses and disbursements of any kind whatsoever (the "Indemnified
Liabilities") which may be imposed on, incurred by or asserted against
them in any way relating to or arising out of this Security Agreement or
any of the transactions contemplated hereby or thereby, WHETHER OR NOT THE
SAME ARE CAUSED BY THE SIMPLE NEGLIGENCE OF THE AGENT OR ANY SECURED
PARTY, unless the same are caused by the gross negligence or willful
misconduct of the Agent or such Secured Party, as the case may be. The
undertakings of the Company set forth in this Section 6(k) shall survive
the payment in full of the Obligations, the Lease Obligations, the
Subordinated Note Obligations, and the termination of this Security
Agreement, the Credit Agreement, the other Loan Documents, the Lease
Agreements and the Subordinated Note Agreement.
(l) Successor Collateral Agent. In the event a successor Agent is
appointed pursuant to the Credit Agreement, such successor Agent shall
also succeed to the duties and responsibilities of the Agent hereunder.
From and after the payment in full of all of the Obligations and the
termination of the Commitments, the Agent under the Credit Agreement at
the time of such payment and termination shall remain the Agent hereunder
until the Lease Obligations and the Subordinated Note Obligations have
been paid in full and all Lease Agreements and the Subordinated Note
Agreement have been terminated; provided, however, that if any Person
other than USBNA is the Agent hereunder at such time, USBNA may direct
that such Person resign as Agent and appoint USBNA as successor Agent
hereunder.
(m) No Commitment by Lessor or Subordinated Noteholder. Nothing in
this Security Agreement shall be construed as a commitment on the part of
the Lessor to lease any equipment or make any loan, or on the part of the
Subordinated Noteholder to extend any loan pursuant to the Subordinated
Loan Agreement or the Subordinated Note, to or for the account of the
Company or NCFC.
(n) Headings. Section headings in this Security Agreement are for
convenience of reference only, and shall not govern the interpretation of
any of the provisions of this Security Agreement.
(o) Execution in Counterparts. This Security Agreement may be
executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument and either of the parties hereto
may execute this Security Agreement by signing any such counterpart.
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IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be executed on the date first above written.
NEW CENTURY MORTGAGE CORPORATION
By /s/ Xxxxxxx Xxxxxxxx
-----------------------------------
Its EVP/COO
----------------------------------
U.S. BANK NATIONAL ASSOCIATION,
as Agent
By /s/ Xxxxx Xxxxxxx
-----------------------------------
Its
-------------------------------
[Signature Page to Amended and Restated Servicing Security Agreement]
