EXHIBIT 10.6(f)
WHOLE LOAN FINANCING PROGRAM
TRI-PARTY CUSTODY AGREEMENT
AMONG
BNC MORTGAGE, INC.
("Customer")
and
DLJ MORTGAGE CAPITAL, INC.
("DLJ")
and
BANKERS TRUST COMPANY
("Custodian")
DATED: SEPTEMBER 26, 1995
This TRI-PARTY CUSTODY AGREEMENT ("Agreement") is made and entered into as of
the date written on the cover hereof, among Customer, Custodian and DLJ, for
itself and its successors and assigns.
PRELIMINARY STATEMENT
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DLJ may, from time to time, make advances or purchase assets under an agreement
to resell such purchased assets to Customer (each, an "Advance") with respect to
the mortgage loans related to this agreement, and DLJ may, from time to time,
assign all or part of its interests therein to one or more investors. Customer
has granted or shall hereafter grant to DLJ and its successors and assigns a
security interest in and lien on certain collateral (the "Collateral") as
security for the performance of the obligations of Customer in connection with
Advances. DLJ has also agreed to lend funds to Customer to allow Customer to
originate or purchase mortgage loans secured by enforceable first or second lien
mortgages on real properties, which loans made by DLJ to Customer will be
disbursed by a bank or a title company or its designated agent (collectively or
individually, a "Title Company"). Customer intends, from time to time, to
deliver certain items of Collateral to Custodian, and Custodian is willing to
hold such Collateral in custody as bailee of and as agent for DLJ and its
successors and assigns, in order to perfect the security interest in and lien on
such Collateral of DLJ, its successors and assigns. Certain items of Collateral
constitute mortgage loans intended either to secure or underlie securities or
certificates issued or guaranteed by the Government National Mortgage
Association ("GNMA"), the Federal National Mortgage Association ("FNMA") or the
Federal Home Loan Mortgage Corporation ("FHLMC"; GNMA, FNMA and FHLMC, each, an
"Agency") or to be purchased for cash by an Agency ("Agency Mortgage Loans"),
and certain items of Collateral constitute mortgage loans intended to be
purchased for cash by a purchaser listed on Schedule I hereto ("Nonagency
Purchaser") or by Customer ("Nonagency Mortgage Loans"). Agency Mortgage Loans
and Nonagency Mortgage Loans are herein referred to as "Mortgage Loans."
NOW, THEREFORE, the parties to this Agreement hereby agree as follows:
1. APPOINTMENT OF CUSTODIAN. DLJ hereby appoints Custodian, and Custodian
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hereby accepts its appointment, to act as the bailee of and agent for DLJ and
its successors and assigns for the purpose of taking custody of such Collateral
and the proceeds thereof or substitutions therefor. With respect to each Agency
Mortgage Loan, Custodian's appointment as DLJ's bailee and agent shall terminate
upon the issuance by an Agency of a security that is backed in whole or in part
by such Agency Mortgage Loan, upon settlement of purchase of such Agency
Mortgage Loan by an Agency or upon notice from DLJ. With respect to each
Nonagency Mortgage Loan, Custodian's appointment as DLJ's bailee and agent shall
terminate upon settlement of purchase of such Nonagency Mortgage Loan by a
Nonagency Purchaser, repurchase of such Nonagency Mortgage Loan by Customer or
upon notice from DLJ.
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2. DEPOSIT OF COLLATERAL. Customer shall deposit with Custodian, and Custodian
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agrees to hold in pledge, as bailee of and as agent for DLJ and its successors
and assigns, such Collateral that may be so deposited hereunder from time to
time. Custodian shall maintain such Collateral so deposited in separate records
and files.
3. GNMA REQUIRED DOCUMENTS. For each Mortgage Loan intended to be included in a
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GNMA pool, Customer shall deposit with Custodian the following required
documents (the "GNMA Required Documents") and/or all such other documents as
GNMA or DLJ may require from time to time for the issuance of related GNMA
securities, duly authorized and completed:
(a) the original note, endorsed "Pay to the order of __________, without
recourse" and signed in the name of Customer by an officer of Customer, unless
otherwise specified by GNMA;
(b) an original assignment of mortgage with assignee in blank but otherwise in
recordable form, but not recorded, and all interim assignments if any, unless
otherwise specified by GNMA;
(c) a Collateral Receipt, substantially in the form attached hereto
("Collateral Receipt");
(d) a completed Warehouse Lender's Release Letter, substantially in the form
attached hereto ("Warehouse Lender's Release Letter");
(e) a Schedule of Subscribers and GNMA Contractual Agreement on Form HUD-11705
listing ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, taxpayer number ▇▇-▇▇▇▇▇▇▇, as the only
subscriber and as the sole person who is authorized to take delivery of the
related GNMA security;
(f) a Schedule of Pooled Mortgages on Form HUD-11706;
(g) a Release of Security Interest on Form HUD-11711A, with the authorized
signature of the person signing for DLJ or Custodian on behalf of DLJ, in blank;
(h) a Certification and Agreement Regarding Security Interest on Form HUD-
11711B;
(i) a Summary of Guaranty Agreement on Form ▇▇▇-▇▇▇▇▇ (▇▇▇▇▇ payment), HUD-1746
(GPM or GEM) or HUD-1733 (serial notes) as appropriate; and
(j) a schedule of Mortgage Loans in a form acceptable to DLJ and Custodian, the
aggregate unpaid principal balance of which equals the aggregate unpaid
principal balance stated on the Collateral Receipt, which such schedule shall
also be delivered to Custodian in computer readable magnetic disk (a "Mortgage
Loan Schedule").
4. FNMA REQUIRED DOCUMENTS. For each Mortgage Loan intended to be included in a
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FNMA pool, Customer shall deposit with Custodian the following required
documents (the "FNMA Required Documents"), and/or all such other documents as
FNMA or DLJ may require from time
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to time for the issuance of the related FNMA securities or the purchase by FNMA
of such Mortgage Loans, duly authorized and completed:
(a) the original note endorsed "Pay to the order of ___________, without
recourse" and signed in the name of Customer by an officer of Customer, unless
otherwise specified by FNMA;
(b) an original assignment of mortgage with assignee in blank but otherwise in
recordable form, but not recorded, and all interim assignments if any, unless
otherwise specified by FNMA;
(c) a Collateral Receipt;
(d) a completed Warehouse Lender's Release Letter;
(e) a Security Release Certification on Form 2004, with the authorized
signature of the person signing for DLJ, or Custodian on behalf of DLJ, in
blank;
(f) a Schedule of Mortgages on Form 2005 (fixed rate), Form 2025 (ARMs, GEMs
and VRMs) or other appropriate form;
(g) either a Deliver Schedule on Form 2014 listing ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation as the only subscriber and as the sole person to which
the related FNMA securities shall be delivered or, if the Mortgage Loans are to
be purchased by FNMA, either (i) a Loan Schedule (Form 1068 or 1069) listing
DLJ's Payee Code, or (ii) a bailee letter for execution by the Custodian
substantially in the form attached hereto (the "Bailee Letter"); and
(h) a Mortgage Loan Schedule.
5. FHLMC REQUIRED DOCUMENTS. For each Mortgage Loan intended to be included in
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a FHLMC pool, Customer shall deposit with Custodian the following required
documents (the "FHLMC Required Documents"), and/or all such other documents as
FHLMC or DLJ may require from time to time for either the issuance of the
related FHLMC securities or the purchase by FHLMC of such Mortgage Loans, duly
authorized and completed:
(a) the original note endorsed "Pay to the order of __________, without
recourse" and signed in the name of Customer by an officer of Customer, unless
otherwise specified by FHLMC;
(b) an original assignment of mortgage with assignee in blank but otherwise in
recordable form but not recorded, and all interim assignments if any, unless
otherwise specified by FHLMC;
(c) a Collateral Receipt;
(d) a completed Warehouse Lender's Release Letter;
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(e) a Mortgage Loan Submission Schedule on Form 11 (fixed rate), Mortgage
Submission voucher on Form 13SF (ARM, GPM), or other appropriate form;
(f) a Contract Deliver Summary on Form 381;
(g) a Warehouse Lender Release of Security Interest on Form 996 listing either
(i) ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation as the only subscriber
and as the sole person to which the related FHLMC securities shall be delivered,
or (ii) wire transfer instructions listing DLJ as the recipient of such funds
wired, with the authorized signature of the person signing on behalf of DLJ in
blank;
(h) either (i) a Security Settlement Information and Delivery Authorization on
Form 939 listing ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation as the only
subscriber and as the sole person to which the related FHLMC securities shall be
delivered; (ii) a Wire Transfer Authorization for Cash Warehouse Delivery on
Form 987 listing DLJ as the recipient of such funds wired; or (iii) a Bailee
Letter for execution by Custodian; and
(i) a Mortgage Loan Schedule.
6. INTERIM REQUIRED DOCUMENTS. For each Mortgage Loan, Customer shall deposit
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with Custodian the following required documents (the "Interim Required
Documents"), and all such other documents as DLJ may require from time to time,
and to which Custodian has been notified of such required documents, duly
authorized and completed:
(a) the original mortgage note bearing all intervening endorsements, endorsed
at the direction of DLJ either (i) "Pay to the order of Bankers Trust Company"
without recourse, (ii) in blank without recourse and signed in the name of the
Customer or its correspondent by an officer of Customer or such correspondent,
or (iii) as may be directed by DLJ in writing;
(b) an original assignment of mortgage with assignee as either (i) Bankers
Trust Company, (ii) in blank but otherwise in recordable form but not recorded,
and all interim assignments, if any, or (iii) as may be directed by DLJ in
writing;
(c) a Collateral Receipt;
(d) if applicable, a completed Warehouse Lender's Release Letter; and
(e) a Mortgage Loan Schedule.
7. TABLE FUNDING REQUIRED DOCUMENTS. For each Mortgage Loan intended to be
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financed by Customer through funds provided by DLJ or Custodian on behalf of DLJ
directly to a Title Company, Customer shall deposit or cause to be deposited
with Custodian the following required documents (the "Table Funding Required
Documents"), and all such other documents as DLJ may require from time to time,
duly authorized and completed:
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(a) the original mortgage note bearing all intervening endorsements, endorsed
at the direction of DLJ either (i) "Pay to the order of Bankers Trust Company"
without recourse, (ii) in blank without recourse and signed in the name of the
Customer or its correspondent by an officer of such Customer or correspondent,
or (iii) as may be directed by DLJ in writing;
(b) an original assignment of mortgage with assignee as either (i) Bankers
Trust Company, (ii) in blank but otherwise in recordable form but not recorded,
and all interim assignments, if any, or (iii) as may be directed by DLJ in
writing;
(c) a Collateral Receipt;
(d) a Mortgage Loan Schedule; and
(e) if funds are sent by DLJ or Custodian on behalf of DLJ directly to a Title
Company, a letter executed by such Title Company which contains specific
irrevocable language that either (i) states that if for any reason the Mortgage
Loan does not close within 3 business days of its receipt of funds, the Title
Company must immediately return all funds to Bankers Trust Company LA Asset
Based/ABA ▇▇▇▇▇▇▇▇▇, For Further Credit to DLJ Mortgage Capital, Inc.,
Reference: Account #▇▇-▇▇▇-▇▇▇/Tri-Party Attn: DLJ STOL# (Customer Name), or
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(ii) is substantially in the form attached hereto ("Escrow Letter').
8. ESTABLISHMENT OF THE WIRE OUT AND SETTLEMENT ACCOUNTS. For each Mortgage
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Loan intended to be financed by Customer through funds provided by DLJ,
Customer, DLJ and Custodian agree as follows:
(a) Custodian shall establish and maintain a trust deposit account (the "Wire
Out Account") for and on behalf of DLJ entitled "DLJ Mortgage Capital, Inc.,
Account Number (Number) , For Benefit of (Customer) , Re: Bankers Trust Company
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Tri-Party Custody Agreement, dated (Date) ." All related fees and expenses for
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such Wire Out Account shall be borne by Customer. Upon request, Custodian shall
provide the Title Company, Customer or DLJ with the federal wire reference
number for a particular payment.
(b) Custodian shall establish and maintain a trust deposit account (the
"Settlement Account") for and on behalf of DLJ entitled "DLJ Mortgage Capital,
Inc., Account Number (Number) , For Benefit of (Customer) , Re: Bankers Trust
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Company Tri-Party Custody Agreement, dated (Date)." All proceeds from the sale
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of the Mortgage Loans subject to this Agreement will be sent directly to the
Settlement Account.
(c) All related fees and expenses for such Settlement Account shall be borne by
Customer. Customer shall provide Custodian and DLJ with written notice of funds
anticipated to be received by Custodian and DLJ, respectively.
(d) Unless otherwise agreed, with respect to the Wire Out Account, Customer
will enter disbursement instructions by 3:00 P.M., New York City time through
Custodian's suspended wire
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system and Custodian will release such wire instructions and immediately
disburse such funds provided (i) sufficient funds exists in the Wire Out
Account, (ii) such instructions do not include Customer as payee, (iii)
Custodian has received an executed Escrow Letter from the payee, and (iv) the
payee on the Escrow Letter agrees with the payee stated on such disbursement
instructions. If sufficient funds do not exist in the Wire Out Account,
Custodian will disburse funds only to the extent sufficient funds exists in the
account. In the event the Customer requests any funds to be disbursed through a
manual wire, i.e., other than through Custodian's suspended wire system, such
wire instructions must be received by Custodian by 2:00 PM, New York City time
and must be signed by an authorized officer of Customer. If a conflict exists
between the instructions of DLJ and the instructions of Customer, Custodian
shall follow DLJ's instructions. Pursuant to the above, Custodian may wire funds
directly to another mortgage company for the purpose of allowing Customer to
purchase mortgage loans from such other mortgage company provided that the
amount to be wired does not exceed the greater of $650,000 or the funding limit,
if any, establishment by DLJ ("Funding Limit") and communicated to Custodian and
Customer in writing, and further provided that Custodian has received from
Customer or the mortgage company a Warehouse Lender's Release Letter with
funding and wire disbursement instructions.
(e) Unless otherwise agreed, Customer will submit to Custodian and DLJ a
position and settlement report (the "P&S Report") in accordance with such
procedures as are separately agreed to by the parties hereto, but
notwithstanding, such procedures shall be incorporated herein), and Custodian
will immediately disburse such funds in the Settlement Account as directed in
the P&S Report provided (i) sufficient funds exist in the Settlement Account,
and (ii) DLJ has authorized such disbursements in writing. In addition,
Custodian shall not disburse funds to Customer in excess of 5% of the settlement
proceeds received without the approval of DLJ. Notwithstanding the foregoing, if
a conflict exists between the instructions of DLJ and the instructions of
Customer, Custodian shall follow DLJ's instructions.
9. CERTIFICATION OF DOCUMENTATION. (a) Custodian, upon receipt of all the
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GNMA, FNMA, FHLMC, Interim or Table Funding Required Documents, as the case may
be (collectively, the "Required Documents"), shall review such Required
Documents in accordance with the review and certification guidelines established
by the respective Agency or DLJ (as separately agreed to by DLJ and Custodian),
as the case may be, for their respective pool to verify whether all are
complete, whether each such document purporting to be an original appears on its
face to be so, and whether each such document purporting to be a certified
photocopy or conformed copy appears on its face to be a true copy of its
original. Subject to the provisions set forth in the third sentence of Section
9(b) with respect to Wet Mortgage Loans, Custodian shall notify Customer and DLJ
in an exception report of any documents that are missing, incomplete on their
face or patently inconsistent. Customer shall promptly deposit such missing
documents with Custodian or complete or correct the documents. When the
Required Documents have been received in full and correct form as required
herein, Custodian will: (a) promptly deliver a signed Collateral Receipt and,
if applicable, Warehouse Lender's Release Letter to DLJ; (b) upon the request of
Customer, promptly deliver the Required Documents referred to in Sections 3(e),
(f), (g), (h), and (i), 4(e), (f), and (g), 5(a), (e), (f), (g), and (h) and
6(a) and (b) to an Agency or a Nonagency Purchaser, as the case may be; and (c)
upon request of DLJ, deliver either the original Required Documents or copies
thereof to DLJ at
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Customer's expense. In making such verification, Custodian may rely conclusively
on the portion of the Collateral Receipt completed by Customer, the Required
Documents and the documents constituting Custodian's mortgage file, and
Custodian shall have no obligation to independently verify the correctness of
Customer's certificate on such Collateral Receipt or the effectiveness,
sufficiency, validity, enforceability, collectibility, genuineness, legality,
recordability or adequacy of such portion of the Collateral Receipt completed by
Customer, Required Documents and the documents constituting the Custodian's
mortgage file.
(b) Customer may pledge to DLJ, as part of the Collateral securing an Advance,
a Mortgage Loan on or prior to the date of such Advance and for which all of the
related Required Documents have not been deposited with Custodian on or prior to
the date of such Advance (a "Wet Mortgage Loan"). In connection with any such
pledge of a Wet Mortgage Loan, Customer shall deposit with Custodian, on the
business day immediately prior to the scheduled date of the related Advance, a
fully completed closing notice for such Wet Mortgage Loan in a form as
acceptable to DLJ and Custodian (a "Wet Closing Notice"). The deposit of the Wet
Closing Notice shall constitute a Required Document and shall be deemed to
satisfy the requirement for the deposit of the documents set forth in Section
7(a) and (b) solely for purposes of the execution of the Collateral Receipt as
of the date thereof. Notwithstanding the foregoing, Customer shall deposit with
Custodian the documents set forth in Section 7(a) and (b) for such Wet Mortgage
Loan within ten (10) days after the date of the related Collateral Receipt. If
Customer does not deposit such documents with Custodian within such ten (10) day
period, Custodian shall immediately notify DLJ. Upon deposit of such documents
with Custodian, Custodian shall review such documents in accordance with the
standards set forth in Section 9(a), shall promptly notify DLJ in the form of an
exception report if such documents do not comply with the requirements thereof
and shall indicate on its records that Custodian maintains possession of such
documents for DLJ hereunder. Customer hereby represents, warrants and covenants
to DLJ and Custodian that Customer and any person or entity acting on behalf of
Customer that has possession of any of the documents set forth in Sections 7(a)
and (b), as applicable, for such Wet Mortgage Loan prior to the deposit thereof
with Custodian will hold such documents in trust for DLJ.
10. FURTHER OBLIGATIONS OF CUSTODIAN. Custodian shall promptly notify DLJ if
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(i) Customer fails to pay any amount due to Custodian under this Agreement or
otherwise, and such failure results in Custodian's accelerating the payment of
any amount owed to Custodian by Customer, or (ii) a responsible officer of
Custodian has actual knowledge that any mortgage, pledge, lien, security
interest or other charge or encumbrance (other than for the benefit of DLJ, its
affiliates or its successors and assigns) has been placed on any account
maintained by Customer with Custodian or on the Required Documents or that GNMA,
FNMA or FHLMC has rejected any Required Document, except if any mortgage,
pledge, lien, security interest or other charge or encumbrance is made in favor
of Custodian as provided in Section 19 hereof.
Custodian shall use reasonable care and due diligence in the performance of its
duties hereunder, shall hold the Required Documents in its fire rated storage
vault under its exclusive custody and control in accordance with customary
standards for such custody and shall at all times during the existence of this
Agreement maintain and keep in full force and effect such insurance in amounts,
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with standard coverage and subject to deductibles, all as is customary for
insurance typically maintained by bankers which act as Custodian.
Custodian hereby represents and warrants to DLJ that Custodian is not controlled
by, under common control with or otherwise affiliated with Customer, and
covenants and agrees with DLJ that prior to any such affiliation in the future,
Custodian shall promptly notify DLJ.
Custodian hereby represents and warrants to DLJ that this Agreement has been
duly authorized, executed and delivered by Custodian and constitutes the legal,
valid and binding obligation of Custodian, enforceable in accordance with its
terms.
Custodian hereby agrees to recognize any security interest or lien granted to
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation.
11. RELEASE OF REQUIRED DOCUMENTS. (a) Customer may from time to time request
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DLJ and Custodian in writing to permit the temporary withdrawal of certain
Required Documents for the purpose of correction of errors therein or for
permanent withdrawal. Custodian may permit the withdrawal of up to five (5)
Mortgage Loans for the purpose of correcting such Mortgage Loans, without the
written consent of DLJ. If more than five (5) Mortgage Loans have been and
remain released for correction, any additional request for release of Mortgage
Loans will require the prior consent of DLJ. Any request for release by
Customer shall be in the form of the Request and Receipt attached hereto.
Custodian shall execute an acknowledgment of release of such Required Documents,
shall return one original to Customer, shall forward one original to DLJ and
shall retain one original. Promptly upon completion of such correction and in
any event within eighteen (18) days, Customer shall return such Required
Documents to Custodian.
(b) Upon the request of Customer and at Customer's expense, Custodian may
deliver the documents referred to in Sections 6(a), (b) and (e) above to a
Nonagency Purchaser provided that such Interim Required Documents are
accompanied by a Bailee Letter addressed to such Nonagency Purchaser. Custodian
shall make a reasonable effort to require such Nonagency Purchaser to execute
such Bailee Letter and return it to Custodian. Written instructions as to the
method of shipment and shipper(s) Custodian is directed to utilize in connection
with the transmission of Required Documents in the performance of Custodian's
duties hereunder shall be delivered by Customer to Custodian prior to any
shipment of Required Documents pursuant to the request of DLJ hereunder.
Customer will arrange for the provision of such services at its sole cost and
expense (or, at Custodian's option, reimburse Custodian for all costs and
expenses incurred by Custodian consistent with such instructions) and will
maintain such insurance against loss or damage to the required Documents as
Customer deems appropriate. In the event Custodian does not receive written
directions as to the method of shipment and shipper(s) from Customer or DLJ,
Custodian shall be hereby authorized and indemnified as provided for herein to
utilize a nationally recognized courier service. Custodian shall be entitled to
reimbursement from Customer for all costs and expenses incurred by Custodian for
utilizing such courier service. It is expressly agreed that in no event shall
the Custodian have any liability for any losses or damages to any person,
including without limitation, DLJ, arising out of actions of the Custodian
consistent with the instructions of Customer.
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(c) If Customer desires to sell Mortgage Loans directly to an Agency, Custodian
shall complete the endorsements and forward such related Required Documents as
instructed by Customer and at Customer's expense to effect such sale to the
respective Agency, together with a duly executed and completed Bailee Letter;
provided, however, that any Required Documents that are unacceptable to the
Agency shall be returned directly to Custodian and held by Custodian for DLJ in
accordance with this Agreement.
12. RIGHT TO INSPECT. Custodian shall permit with at least two (2) business
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days prior written notice (i) inspection at all reasonable times during regular
business hours by DLJ (or by its auditors when requested by DLJ) of the Required
Documents and the records of Custodian relating to this Agreement and (ii) DLJ
(or its auditors when requested by DLJ) to make copies of the Required Documents
and the records of Custodian relating to this Agreement at DLJ's expense.
13. DELIVERY OF REQUIRED DOCUMENTS TO DLJ. Custodian shall promptly deliver to
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DLJ or its designee any or all Required Documents and other items of Collateral
in Custodian's custody upon DLJ's written request. DLJ shall provide Customer
with a copy of any such notice delivered to Custodian. Written instructions as
to the method of shipment and shipper(s) Custodian is directed to utilize in
connection with the delivery of Required Documents in the performance of
Custodian's duties hereunder shall be delivered by DLJ to Custodian prior to any
shipment of Required Documents pursuant to the request of DLJ hereunder. DLJ
will arrange for the provision of such services at its sole cost and expense
(or, at Custodian's option, reimburse Custodian for all costs and expenses
incurred by Custodian consistent with such instructions) and will maintain such
insurance against loss or damage to the Required Documents as Customer deems
appropriate. In the event Custodian does not receive written directions as to
the method of shipment and shipper(s) from Customer or DLJ, Custodian shall be
hereby authorized and indemnified as provided for herein to utilize a nationally
recognized courier service. Custodian shall be entitled to reimbursement from
Customer for all costs and expenses incurred by Custodian for utilizing such
courier service. It is expressly agreed that in no event shall the Custodian
have any liability for any losses or damages to any person, including without
limitation, Customer, arising out of actions of the Custodian consistent with
the instructions of DLJ.
14. CUSTODIAN FEES. It is understood that Custodian or its successor will
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charge such fees for its services under this Agreement as are set forth in a
separate agreement between Custodian and Customer, the payment of which,
together with Custodian's expenses in connection herewith, shall be solely the
obligation of Customer.
15. TERMINATION. Custodian may terminate its obligations under this Agreement
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upon thirty (30) days prior written notice to Customer and DLJ. In the event of
such termination, Customer shall appoint a successor custodian, subject to
approval by DLJ, and Custodian shall promptly transfer to the successor
custodian, as directed by DLJ, all Required Documents and other items of
Collateral being held by Custodian under this Agreement. If, however, a
successor custodian is not appointed by Customer or DLJ within sixty (60) days,
all duties and obligations of Custodian shall cease and terminate. Custodian's
sole responsibility thereafter shall be to safely maintain all of the
Custodian's mortgage files and to deliver the same to a successor custodian.
However, if Customer and DLJ
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have not appointed a successor custodian within thirty (30) days after the
expiration of the aforementioned sixty (60) day period, Custodian shall deliver
such documents to DLJ.
16. REPRESENTATIONS BY CUSTOMER. Customer hereby represents and warrants to
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DLJ and Custodian that:
(a) Any payee from the Wire Out Account is an entity that is engaged in escrow
activities, is a Title Company or is a correspondent of Customer as a normal
course of its business;
(b) Any and all funds advanced into the Wire Out Account pursuant to Customer's
request in accordance with Section 8(a) shall be deemed to be an Advance to
Customer;
(c) The Wire Out Account shall be used only to (i) wire funds to Title
Companies, or a correspondent of Customer from which Customer is purchasing the
respective Mortgage Loans, for the sole purpose of funding the related Mortgage
Loan or (ii) return funds to DLJ;
(d) Unless otherwise agreed by DLJ, no Mortgage Loan held by Custodian pursuant
to this Agreement shall remain deposited with Custodian for more than forty-five
consecutive days; and
(e) Except for the funds advanced by DLJ as provided herein, all other
documents and requirements to create an enforceable first or second lien
mortgage, as applicable, on the related real property have been completed and
duly executed.
17. NOTICES. All written communications hereunder shall be mailed, telecopied
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or delivered to each party at its address as indicated on the signature page
hereof or at such other address as shall be designated by such party in a
written notice to the other parties. All notices and communications shall be
effective when received.
18. CONCERNING THE CUSTODIAN. Custodian its directors, officers, employees or
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agents shall not be liable for any action or omission to act hereunder, except
for their own negligence or wilful misconduct. In no event shall Custodian have
any responsibility to ascertain or take action with respect to the Required
Documents or other items of Collateral, except as expressly provided herein.
Custodian may act in reliance upon any written communication of Customer and DLJ
concerning the delivery of the Required Documents and other items of Collateral
pursuant to this Agreement. Custodian does not assume and shall have no
responsibility for, and makes no representation as to, monitoring the value of
the Required Documents and other items of Collateral.
19. REPRESENTATIONS BY CUSTODIAN. Custodian hereby represents and warrants
----------------------------
that it does not have, and will not assert, any security interest, lien, claim
or other adverse interest against the Required Documents or any other item of
Collateral, except as may be otherwise provided in a separate agreement between
DLJ and Custodian. However, Custodian makes no representations as to the title
thereto, or as to the validity or adequacy of the security afforded thereby or
hereby (except as to Custodian's authority to enter into this Agreement and the
legality, validity, binding effect and
10
enforceability of this Agreement with respect to Custodian), and Custodian shall
incur no liability or responsibility in respect of any such matters.
20. DUTIES OF CUSTODIAN. Custodian shall have no duties or responsibilities
-------------------
except those that are specifically set forth herein, and no duties or
obligations shall be implied in this Agreement against Custodian. Custodian
shall be under no responsibility or duty with respect to the disposition of any
Required Documents while such Required Documents are not in its possession. If
Custodian shall request instructions from DLJ with respect to any act, action or
failure to act in connection with this Agreement, Custodian shall be entitled to
refrain from taking such action and continue to refrain from acting unless and
until Custodian shall have received written instructions from DLJ without
incurring any liability therefore to DLJ, Customer or any other person.
If Custodian shall at any time receive conflicting instructions from DLJ and
Customer with respect to Custodian's mortgage files and the conflict between
such instructions cannot be resolved by reference to the terms of this
Agreement, Custodian shall be entitled to rely on the instructions of DLJ. In
the absence of bad faith, negligence or willful misconduct on the part of
Custodian, Custodian may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any request,
instruction, certificate, opinion or other document furnished to Custodian,
reasonably believed by Custodian to be genuine and to have been signed or
presented by the proper party or parties and conforming to the requirements of
this Agreement. Custodian may rely upon the validity of documents delivered to
it, without investigation as to their authenticity or legal effectiveness, and
Customer will hold Custodian harmless from any claims that may arise or be
asserted against Custodian because of the invalidity of any such documents or
their failure to fulfill their intended purpose. Custodian shall not be
responsible to DLJ or any other party for recitals, statements or warranties or
representations of Customer contained herein or in any document, or be bound to
ascertain or inquire as to the performance or observance of any of the terms of
this Agreement or any other agreement on the part of any party, except as may
otherwise be specifically set forth herein. No provision of this Agreement
shall require 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 the reasonable ground for believing that repayment of such funds or
adequate indemnity is not reasonably assured to it. Custodian may consult with
counsel with regard to legal questions arising out of or in connection with this
Agreement and the advice or opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken, omitted or suffered
by Custodian in good faith in accordance therewith.
DLJ hereby authorizes and directs Custodian to sign on behalf of DLJ each of the
Required Documents referred to in Sections 3, 4 and 5 hereof. Without limiting
the generality of the foregoing, Custodian may rely upon and shall be protected
in acting in good faith upon any notice or other communication received by it
and which it reasonably believes to be genuine and duly authorized with respect
to all matters pertaining to this Agreement and its duties hereunder; provided,
however, that nothing set forth in this section shall relieve Custodian of its
obligations set forth in Section 9 of this Agreement.
11
21. INDEMNIFICATION. Customer agrees to reimburse, indemnity and hold
---------------
harmless Custodian, its directors, officers, employees or agents from and
against any and all cost, expense, loss or liability, including reasonable fees
and expenses of counsel arising from or connected with Custodian's execution and
performance of this Agreement, including but not limited to the claims of any
third parties, including DLJ, except in the case of cost, expense, loss or
liability resulting from negligence or willful misconduct on the part of
Custodian. To the extent Custodian is not reimbursed, indemnified or held
harmless by Customer, DLJ will reimburse, indemnify and hold harmless Custodian,
its directors, officers, employees and agents for cost, expense, loss or
liability arising from any action or refraining from action in accordance with
instructions given to Custodian by DLJ, and Customer shall reimburse DLJ for any
sums so expended by DLJ. Custodian may enter into a settlement agreement with
respect to any matter for which indemnity is granted pursuant to this paragraph.
The foregoing indemnification shall survive any termination of this Agreement.
22. AUTHORIZATIONS. The persons whose signatures and titles appear on the
--------------
signature page hereof ("Authorized Representatives") are authorized, acting
singly, to act for Customer, DLJ or Custodian, as the case may be, under this
Agreement. From time to time, each party may supplement or amend the list of
Authorized Representatives and specimen signatures by notice to the other
parties, but each of the parties shall be entitled to rely conclusively on the
then current list until receipt of a superseding list. Custodian may rely, and
shall be protected in acting or refraining to act, upon any written instruction,
notice, order, request, direction, certificate, opinion or other instrument or
document believed by Custodian to be genuine and to have been signed or
presented by an Authorized Representative in the case of Customer and DLJ and by
the proper party or parties, in all other cases.
23. AMENDMENTS, ETC. Except as otherwise expressly provided herein, no
----------------
amendment or waiver of any provision of this Agreement nor consent to any
failure to comply herewith shall in any event be effective unless the same shall
be in writing and signed by all the parties hereto (provided that DLJ may modify
the Required Documents set forth in Sections 3, 4, 5, 6 and 7 hereof by giving
notice of such modification to Customer and Custodian, which notice is not
objected to within five (5) business days after being received), and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. This Agreement constitutes the
entire agreement and understanding of the parties with respect to those matters
and transactions contemplated by this Agreement and supersedes any prior
agreement and understandings with respect to those matters and transactions.
The provisions of this Agreement set forth the exclusive duties of Custodian,
and no implied duties shall be read into this Agreement against Custodian.
Schedule I hereto may be amended from time to time by agreement between DLJ and
Customer with notice to Custodian.
24. SEVERABILITY. If any provision of this Agreement is declared invalid by
------------
any court of competent jurisdiction, such invalidity shall not affect any other
provision, and this Agreement shall be enforced to the fullest extent permitted
by law.
25. BINDING EFFECT; GOVERNING LAW. This Agreement shall be binding and inure
-----------------------------
to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that neither
12
Customer or Custodian may assign this Agreement or any of its rights or
obligations hereunder, except with the prior written consent of DLJ. DLJ may
assign its security interest in or lien on certain items of Collateral held by
Custodian hereunder, whereupon DLJ will act for the benefit of such assignee
hereunder. This Agreement shall be construed in accordance with, and governed by
the law of the State of New York, without giving effect to the conflict of law
principles thereof. The parties hereto waive trial by jury. Customer, Custodian,
and DLJ each irrevocably consent to the non-exclusive jurisdiction of any court
of the State of New York, or in the United States District Court for the
Southern District of New York, in any action or proceeding arising out of or
relating to this Agreement. The parties hereby submit to, and waive any
objection they may have to personal jurisdiction and venue in, the courts of the
State of New York and the United States District Court for the Southern District
of New York, over any disputes arising out of or relating to this Agreement.
13
IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date and year first above written.
BNC MORTGAGE, INC., as Customer
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------------
Title: President
-----------------------------------------------
Address: ▇▇▇▇ ▇. ▇▇▇▇▇, #▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-------------------------------------------
BANKERS TRUST COMPANY, as Custodian
By: /s/ Bankers Trust Company
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
Address: ▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
DLJ/Tri-Party Custody
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
DLJ MORTGAGE CAPITAL, INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇
--------------------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
------------------------------------------------
Title: Senior Vice President
-----------------------------------------------
Address: ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Money Desk/Whole Loan Financing Program
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
14
SCHEDULE I
AUTHORIZED LIST OF NONAGENCY PURCHASERS
1. BancBoston Mortgage Corporation
2. Capstead Mortgage Corporation
3. Chase Home Mortgage Corporation
4. Chemical Residential Mortgage Corporation
5. Citicorp Mortgage, Inc.
6. Countrywide Funding Corporation
7. CWM Mortgage Holdings, Inc. (nee Countrywide Mortgage Investments, Inc.)
8. DLJ Mortgage Capital, Inc.
9. DLJ Mortgage Acceptance Corporation
10. Fleet Mortgage Corporation
11. GE Capital Mortgage Services, Inc.
12. GF Mortgage Corporation
13. Imperial Credit Industries, Inc.
14. Independent National Mortgage Corporation
15. Nationsbank Mortgage Corporation
16. Norwest Mortgage, Inc.
17. PNC Mortgage Securities Corporation of America
18. PNC Mortgage Corporation of America
19. Prudential Home Mortgage Company
20. Quality Mortgage USA, Inc.
21. Residential Funding Corporation
22. Saxon Mortgage Funding Corporation
23. _________________________________________________________
24. _________________________________________________________
25. _________________________________________________________
15
COLLATERAL RECEIPT NO. ________
DLJ Mortgage Capital, Inc. Bankers Trust Company
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Clearance Dept/Whole Loan Financing Attn: DLJ/Tri-Party Custody
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
RE: Identification/Pool #________________________
Reference is made to the Tri-Party Custody Agreement dated _______________, 1995
(the "Custody Agreement") among _____________________ ("Customer"), Bankers
Trust Company ("Custodian") and DLJ Mortgage Capital, Inc. ("DLJ"). Capitalized
terms not defined herein have the respective meanings assigned thereto in the
Tri-Party Custody Agreement.
I. Certification of Customer. In consideration of DLJ making an Advance to
-------------------------
finance the securitization or cash purchase period for the Mortgage Loans having
an aggregate face value of $______________ and a weighted average interest rate
of _____%, as more fully described in Schedule I attached hereto, the
undersigned duly authorized officer of Customer represents and warrants that (a)
the Required Documents with respect to such Mortgage Loans have been or are
hereby submitted to Custodian pursuant to the Custody Agreement, (b) all other
documents related to such Mortgage Loans (including but not limited to
mortgages, insurance policies, loan applications and appraisals) have been or
will be created and held by Customer in trust for DLJ, and (c) all documents
related to such Mortgage Loans withdrawn from Custodian shall be held in trust
by Customer for DLJ, and Customer will not attempt to pledge, hypothecate or
otherwise transfer such Mortgage Loans to any other party until the Advance to
which the Mortgage Loans are related has been paid in full by Customer.
Customer has granted to DLJ a first priority perfected security interest in and
lien on such Mortgage Loans. At the request of DLJ, all such other related
documents will be delivered to Custodian, DLJ or its assigns and may be
inspected or verified at any time by such parties.
___ No lien exists with respect to the Mortgage Loans constituting the mortgage
pools described above.
___ A lien secured by Mortgage Loans constituting the mortgage pools described
above is still in effect with DLJ.
___ A lien secured by the Mortgage Loans constituting the mortgage pools
described above is currently in effect. A Warehouse Lender's Release Letter has
been delivered to Custodian under separate cover.
16
___________________________, as Customer
By:_____________________________________ Name:______________________________
Title:__________________________________ Date:______________________________
II. Certification of Custodian. Custodian hereby (a) certifies that, as to
--------------------------
each Mortgage Loan listed on Schedule I hereto, it has reviewed the documents
delivered to it by Customer, it has received all Required Documents, the
Required Documents conform to the requirements of Section 9 of the Custody
Agreement and it will continue to hold the Required Documents as bailee of and
agent for DLJ and its successors and assigns pursuant to the Custody Agreement
until the related Agency (or Nonagency) Security has been issued by the
respective entity or the related Advance has been repaid, and (b) agrees to
comply with the guidelines of the Agency to which such Mortgage Loans will be
submitted:
BANKERS TRUST COMPANY, as Custodian
By:_____________________________________ Name:______________________________
Title:__________________________________ Date:______________________________
17
WAREHOUSE LENDER'S RELEASE LETTER
Date: ________, 199__
DLJ Mortgage Capital, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Clearance Department/Whole Loan Financing Program
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
RE: Customer:_______________________________________
RE: Agency/Nonagency______ Identification/Pool #_____ Security Rate ____%
Maturity:_____
The undersigned (the "Warehouse Lender") hereby releases all right, interest or
claim of any kind with respect to the mortgage loans constituting the mortgage
pool referenced above, as may be further described in the attached schedule,
such release to be effective automatically without any further action by any
party, upon payment for the account of Customer of $________ in immediately
available funds to account number #_________ at (specify Bank) for the account
of ___________.
Very truly yours,
______________________________________, as Warehouse Lender
By:____________________________________
Name:__________________________________
Title:_________________________________
Telephone:_____________________________
copy to:
______________________________________, as Customer
Address:_______________________________
Attention:_____________________________
Note: The above dollar amount should be EQUAL TO or LESS THAN the amount
---- -------- ---------
being funded.
If no lien exists, this form must still be sent - Customer should put a
slash through the form, indicated "NOT APPLICABLE" and sign.
--------------
18
BAILEE LETTER
Date: __________, 199__
Purchaser:________________________________
Address:__________________________________
Attention:________________________________
Gentlemen:
Attached please find those mortgage loans listed separately on the attached
schedule (the "Mortgage Loans"), which Mortgage Loans are owned by
________________ ("Borrower") and are being delivered to you for purchase. The
Mortgage Loans comprise a portion of the Collateral (as such term is defined in
the hereinafter defined Custody Agreement) under the Tri-Party Custody Agreement
("Custody Agreement"), dated as of ___________, 1995, as it may hereafter be
amended, by and among Borrower, Bankers Trust Company as Custodian
("Custodian"), and DLJ Mortgage Capital, Inc., as Lender ("DLJ"). Each of the
Mortgage Loans is subject to a security interest in favor of DLJ, which security
interest shall be automatically released upon DLJ's receipt of the full amount
of the purchase price of such Mortgage Loan (as set forth on the schedule
attached hereto) by wire transfer to the following account maintained with DLJ:
Bankers Trust Company LA Asset Based/ABA ▇▇▇▇▇▇▇▇▇, For Further Credit to
DLJ Mortgage Capital, Inc.
Reference: Account #▇▇-▇▇▇-▇▇▇/Tri-Party Attn: DLJ CTOL # (Customer Name)
------------------
Pending your purchase of each Mortgage Loan and until payment therefor is
received by DLJ, the aforesaid security interest therein will remain in full
force and effect, and you shall hold possession of such Collateral and the
documentation evidencing same as custodian, agent and bailee for and on behalf
of Custodian for DLJ. In the event any Mortgage Loan is unacceptable for
purchase, return the rejected item directly to the undersigned at the address
set forth below. In no event shall any Mortgage Loan be returned or sales
proceeds remitted to the Borrower. The Mortgage Loan must be so returned or
sales proceeds remitted in full on later than thirty (30) days from the date
hereof, unless otherwise agreed by Custodian. If you are unable to comply with
the above instructions, please do advise the undersigned immediately.
NOTE: BY ACCEPTING THE MORTGAGE LOANS DELIVERED TO YOU WITH THIS LETTER, YOU
CONSENT TO BE THE CUSTODIAN, AGENT AND BAILEE FOR BANKERS TRUST COMPANY ON
BEHALF OF THE LENDER ON THE TERMS DESCRIBED IN THIS LETTER. THE UNDERSIGNED
REQUESTS THAT YOU ACKNOWLEDGE RECEIPT OF THE ENCLOSED MORTGAGE LOANS AND THIS
LETTER BY SIGNING AND RETURNING THE ENCLOSED COPY OF THIS LETTER TO THE
UNDERSIGNED AT THE FOLLOWING ADDRESS: ▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ATTN: DLJ/TRI-
19
PARTY CUSTODY DEPARTMENT; HOWEVER, YOUR FAILURE TO DO SO DOES NOT NULLIFY SUCH
CONSENT.
Sincerely, Acknowledged and Agreed:
BANKERS TRUST COMPANY, ______________________________
as Custodian for DLJ, its successors and assigns as Purchaser
By: ____________________________________________ By: __________________________
Name: __________________________________________ Name: ________________________
Title: _________________________________________ Title: _______________________
20
ESCROW LETTER
ADDENDUM TO ESCROW INSTRUCTIONS
Dated: ___________, 199__
Escrow #:__________________________________________________
Borrower:________________________________________________________________
The funds to be used for closing this transaction may be provided via wire
transfer from Bankers Trust Company.
You are to hold the closing funds in trust for Bankers Trust Company until such
time as the funds are disbursed in accordance with the escrow instructions. If
the loan is not funded within three (3) business days of receipt of the funds,
you are to return such funds via federal funds wire to Bankers Trust Company as
follows:
Bankers Trust Company LA Asset Based/ABA ▇▇▇▇▇▇▇▇▇, For Further Credit to
DLJ Mortgage Capital, Inc.
Reference: Account #▇▇-▇▇▇-▇▇▇/Tri-Party Attn: DLJ CTOL # (Customer Name)
------------------
Between the time the funds are received and the loan is funded you are to accept
instructions regarding the use of the funds that are in conflict with the escrow
instructions only in writing from Bankers Trust Company.
This Addendum to Escrow Instructions shall be irrevocable and can only be
modified with the express written approval of Bankers Trust Company.
Agreed and Acknowledged:
Title Company:________________________
By:___________________________________
Escrow Officer
21