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EXHIBIT 10(f)
HYPOTHECATION LOAN AGREEMENT
dated as of
April 7, 2000
between
[ ]
and
CHASE PREFERRED CAPITAL CORPORATION
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS......................................................................1
SECTION 1.01. Defined Terms..............................................................1
SECTION 1.02. Terms Generally............................................................8
SECTION 1.03. Accounting Terms; GAAP.....................................................8
ARTICLE II THE CREDITS.....................................................................8
SECTION 2.01. The Commitment.............................................................8
SECTION 2.02. Request for Loan...........................................................8
SECTION 2.03. Funding of Loan............................................................9
SECTION 2.04. Termination and Reduction of the Commitment................................9
SECTION 2.05. Repayment of Loan; Evidence of Debt........................................9
SECTION 2.06. Prepayment of Loan........................................................10
SECTION 2.07. Interest..................................................................10
SECTION 2.08. Taxes.....................................................................11
SECTION 2.09. Payments Generally........................................................12
SECTION 2.10. Limited Recourse..........................................................12
ARTICLE III REPRESENTATIONS AND WARRANTIES................................................12
SECTION 3.01. Organization; Powers......................................................13
SECTION 3.02. Authorization; Enforceability.............................................13
SECTION 3.03. Governmental Approvals; No Conflicts......................................13
SECTION 3.04. Financial Condition; No Material Adverse Change...........................13
SECTION 3.05. Litigation................................................................14
SECTION 3.06. Compliance with Laws and Agreements.......................................14
SECTION 3.07. Taxes.....................................................................14
SECTION 3.08. Origination...............................................................14
SECTION 3.09. HELOCs....................................................................14
ARTICLE IV CONDITIONS.....................................................................14
SECTION 4.01. Documentary Conditions....................................................14
SECTION 4.02. Other Conditions..........................................................15
SECTION 4.03. Effective Date............................................................16
ARTICLE V AFFIRMATIVE COVENANTS...........................................................16
SECTION 5.01. Financial Statements and Other Information................................16
SECTION 5.02. Notices of Material Events................................................17
SECTION 5.03. Existence; Conduct of Business............................................17
SECTION 5.04. Payment of Obligations....................................................17
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SECTION 5.05. Books and Records; Inspection and Audit Rights............................17
ARTICLE VI NEGATIVE COVENANTS.............................................................18
SECTION 6.01. Liens.....................................................................18
SECTION 6.02. Limitation on Actions.....................................................18
ARTICLE VII EVENTS OF DEFAULT.............................................................18
ARTICLE VIII MISCELLANEOUS................................................................20
SECTION 8.01. Notices...................................................................20
SECTION 8.02. Waivers; Amendments.......................................................20
SECTION 8.03. Expenses; Indemnity; Damage Waiver........................................21
SECTION 8.04. Successors and Assigns....................................................22
SECTION 8.05. Survival..................................................................23
SECTION 8.06. Counterparts; Integration; Effectiveness..................................23
SECTION 8.07. Severability..............................................................23
SECTION 8.08. Governing Law.............................................................24
SECTION 8.09. WAIVER OF JURY TRIAL......................................................24
SECTION 8.10. Headings..................................................................24
EXHIBIT A - Form of Borrowing Base Certificate
EXHIBIT B - Form of REVT Certificate
EXHIBIT C - Form of Security Agreement
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HYPOTHECATION LOAN AGREEMENT dated as of April 7, 2000, between
and CHASE PREFERRED CAPITAL CORPORATION.
The Borrower (as hereinafter defined) has requested that the
Lender (as so defined) make a loan to it in a principal amount not exceeding
$ . The Lender is prepared to make such loan upon the terms and
conditions hereof, and, accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"Account Bank" means
.
"Account Control Agreement" has the meaning assigned to such term
in Section 4.01(g).
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"Applicable Rate" means, with respect to any Interest Payment
Period, the rate calculated by the Calculation Agent to be the simple average
rate derived by dividing (i) the sum of the Federal Funds Rate in effect for
each day during such Interest Payment Period by (ii) the number of days in such
Interest Payment Period.
"Board" means the Board of Governors of the Federal Reserve
System of the United States of America.
"Borrower" means The Chase Manhattan Bank, a New York banking
corporation.
"Borrowing Base" means, as at any date, 85% of the outstanding
principal balance of the Eligible HELOCs at such date.
"Borrowing Base Certificate" means a certificate of a Financial
Officer of the Servicer (acting on behalf of the Borrower), substantially in the
form of Exhibit A and appropriately completed.
"Borrowing Request" means a request by the Borrower for the Loan
in accordance with Section 2.02.
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed.
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"Calculation Agent" means the Person appointed by the Lender from
time to time to determine the Applicable Rate and the Federal Funds Rate.
"Call Report" means, with respect to any banking organization,
the Consolidated Reports of Income and Condition of a Bank filed from time to
time by such banking organization with its respective banking regulators.
"Capital Lease Obligations" of any Person means the obligations
of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" has the meaning assigned to such term in the
Security Agreement.
"Commitment" means the commitment of the Lender to make the Loan
hereunder on the Effective Date, expressed as an amount representing the maximum
aggregate principal amount of the Loan to be made by the Lender hereunder, as
such commitment may be reduced from time to time pursuant to Section 2.04 or as
such commitment may be increased from time to time by agreement of the parties.
The initial amount of the Commitment is $1,469,513,385.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"Default" means any event or condition which constitutes an Event
of Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Dollars" or "$" refers to lawful money of the United States of
America.
"Effective Date" means the date on which the conditions specified
in Article IV are satisfied (or waived in accordance with Section 8.02).
"Eligible HELOCs" means, as at any date, the sum of the following
(determined without duplication): all HELOCs (i) that are owned by (and in the
possession or under the control of) the Borrower as at such date, (ii) that are
secured by real property located in a jurisdiction in the United States of
America, (iii) in which the Lender has a security interest by virtue of the
Security Agreement, and (iv) as to which appropriate Uniform Commercial Code
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financing statements have been filed naming the Borrower as "debtor" and the
Lender as "secured party"; provided that the Lender may at any time exclude from
Eligible HELOCs any HELOC that the Lender (in its reasonable discretion)
determines to be inadequate collateral for the Loan.
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"Event of Default" has the meaning assigned to such term in
Article VII.
"Excluded Taxes" means, with respect to the Lender or any other
recipient of any payment to be made by or on account of any obligation of the
Borrower hereunder, (a) income or franchise taxes imposed on (or measured by)
its net income by the United States of America, or by the jurisdiction under the
laws of which such recipient is organized or in which its principal office is
located and (b) any branch profits taxes imposed by the United States of America
or any similar tax imposed by any other jurisdiction in which the Borrower is
located.
"Federal Funds Rate" means, for any day, the rate published for
such day in "Statistical Release H.15(519), Selected Interest Rates"
("H.15(519)"), or in the daily internet update of H.15(519) at
▇▇▇▇://▇▇▇.▇▇▇.▇▇▇.▇▇▇.▇▇/▇▇▇▇▇▇▇▇/▇▇▇/▇▇▇▇▇▇ ("H.15 Daily Update"), in each
case, under the heading "Federal funds (effective)"; provided, however, that:
(A) the Calculation Agent may, in lieu of the publications
referred to above, obtain the Federal Funds Rate from any recognized
service that regularly displays the daily Federal funds (effective) rate
published in H.15(519);
(B) if the above rate is not published in H.15(519), H.15 Daily
Update or another service selected by the Calculation Agent by 3:00 p.m.
New York City time on any day, the Federal Funds Rate for such day shall
be the rate determined by the Calculation Agent to be the simple average
of the rates for the last transaction in overnight Federal
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funds arranged as of 9:00 a.m. New York City time on such day by three
leading brokers of Federal funds transactions in New York City selected
by the Calculation Agent; and
(C) if on any day fewer than three brokers selected by the
Calculation Agent are quoting as mentioned in (B) above, the Federal
Funds Rate for such day shall be the Federal Funds Rate in effect on the
previous day.
"Financial Officer" means, with respect to any Person, the chief
executive officer, the president, the chief operating officer, the chief
financial officer, the treasurer, the controller, any senior vice president, any
vice president, any assistant vice president or any assistant treasurer of such
Person.
"GAAP" means generally accepted accounting principles in the
United States of America.
"Governmental Authority" means the government of the United
States of America, or of any other nation, or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
"H.15(519)" has the meaning assigned to such term in the
definition of "Federal Funds Rate".
"H.15 Daily Update" has the meaning assigned to such term in the
definition of "Federal Funds Rate".
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"Hazardous Materials" means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"HELOC" means a home equity line of credit originated or acquired
by the Borrower.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Interest Payment Date" means, with respect to the Loan, the last
Business Day of each calendar month, the first of which shall be the first such
day after the date hereof.
"Interest Payment Period" means:
(A) with respect to the interest on the Loan payable on any
Interest Payment Date (other than with respect to interest payable under Section
2.07(b)), the period commencing on the preceding Interest Payment Date to but
excluding such Interest Payment Date; provided that the first Interest Payment
Period shall commence on the date hereof and end on (but exclude) the first
Interest Payment Date; and
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(B) with respect to (i) any interest payable hereunder on any
other date (whether by reason of prepayment, default or otherwise), or (ii)
interest payable under Section 2.07(b) that is paid on any Interest Payment
Date, the period commencing the day such interest begins to accrue to but
excluding the day such interest is paid.
"Lender" means Chase Preferred Capital Corporation.
"Lien" means, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, hypothecation, encumbrance, charge or security interest
in, on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan" means the loan made by the Lender to the Borrower pursuant
to this Agreement.
"Loan Documents" means, collectively, this Agreement and the
Security Documents.
"Material Adverse Effect" means a material adverse effect on (a)
the business, assets, operations or condition, financial or otherwise, of the
Borrower, (b) the ability of the Borrower to perform any of its obligations
under this Agreement or any of the other Loan Documents or (c) the rights of or
benefits available to the Lender under this Agreement or any of the other Loan
Documents.
"Maturity Date" means the Interest Payment Date falling on or
nearest to December 31, 2001.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Principal Exposure" means, at any time, the outstanding
principal amount of the Loan at such time.
"Real Estate Value Test" means a test that is satisfied as at any
date if the sum for each Eligible HELOC of the excess of (x) the aggregate value
of the real property within the meaning of Code Section 856(c)(5)(C) directly
securing such HELOC over (y) the principal
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amount of any Indebtedness that is senior to such HELOC and secured by the same
property, represents at least ninety-five percent (95%) of the Principal
Exposure; provided that the amount of such excess for any HELOC shall not exceed
the lesser of the fair market value of the HELOC or the outstanding principal
balance of such HELOC.
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"REVT Certificate" means a certificate of a Financial Officer of
the Servicer (acting on behalf of the Borrower), substantially in the form of
Exhibit B and appropriately completed.
"Security Agreement" means a Security and Assignment Agreement
substantially in the form of Exhibit C between the Borrower and the Lender, as
the same shall be modified and supplemented and in effect from time to time.
"Security Documents" means, collectively, the Security Agreement,
the Account Control Agreement and all Uniform Commercial Code financing
statements required by the Security Agreement to be filed with respect to the
security interests in personal property and fixtures created pursuant to the
Security Agreement.
"Servicer" means Chase Manhattan Mortgage Corporation, a Delaware
corporation.
"Subsidiary" means, with respect to any Person (the "parent") at
any date, any corporation, limited liability company, partnership, association
or other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent. Unless otherwise
specified, "Subsidiary" means a Subsidiary of the Borrower.
"Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Transactions" means the execution, delivery and performance by
the Borrower of this Agreement and the other Loan Documents, the borrowing of
the Loan and the use of the proceeds thereof.
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"Underlying Mortgage" means, as to each HELOC, the mortgage, deed
of trust, deed or other security interest issued in favor of the Borrower in
respect thereof.
SECTION 1.02. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections and Exhibits shall be construed to refer
to Articles and Sections of, and Exhibits to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.03. Accounting Terms; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time.
ARTICLE II
THE CREDITS
SECTION 2.01. The Commitment. Subject to the terms and conditions
set forth herein, the Lender agrees to make the Loan to the Borrower on the
Effective Date in a principal amount equal to its Commitment. Amounts prepaid or
repaid in respect of the Loan may not be reborrowed.
SECTION 2.02. Request for Loan.
(a) Notice by the Borrower. To request the Loan, the Borrower
shall notify the Lender of such request by telephone not later than 11:00 a.m.,
New York City time, one Business Day before the date of the proposed Loan. Such
telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Lender of a written Borrowing
Request in a form approved by the Lender and signed by the Borrower.
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(b) Content of Borrowing Requests. The Borrowing Request shall
specify the following information:
(i) the amount of the requested Loan;
(ii) the date of the Loan, which shall be a Business Day;
and
(iii) the location and number of the Borrower's account to
which funds are to be disbursed, which shall comply with the
requirements of Section 2.03.
SECTION 2.03. Funding of Loan. The Lender will make the Loan
available to the Borrower by crediting the amount of the Loan, in immediately
available funds by 12:00 noon, New York City time, to an account of the Borrower
in New York City and designated by the Borrower in the Borrowing Request.
SECTION 2.04. Termination and Reduction of the Commitment.
(a) Scheduled Termination. Unless previously terminated, the
Commitment shall terminate at 5:00 p.m., New York City time, on June 30, 2000.
(b) Voluntary Termination or Reduction. The Borrower may at any
time terminate, or from time to time reduce, the Commitment.
(c) Notice of Voluntary Termination or Reduction. The Borrower
shall notify the Lender of any election to terminate or reduce the Commitment
under paragraph (b) of this Section at least three Business Days prior to the
effective date of such termination or reduction, specifying such election and
the effective date thereof. Each notice delivered by the Borrower pursuant to
this Section shall be irrevocable.
(d) Effect of Termination or Reduction. Any termination or
reduction of the Commitment shall be permanent.
SECTION 2.05. Repayment of Loan; Evidence of Debt.
(a) Repayment. The Borrower hereby unconditionally promises to
pay to the Lender the outstanding principal amount of the Loan on the Maturity
Date.
(b) Maintenance of Records by the Lender. The Lender shall
maintain records evidencing the indebtedness of the Borrower to the Lender
resulting from the Loan in which it shall record (i) the amount of the Loan made
hereunder, (ii) the amount of any principal or interest due and payable or to
become due and payable from the Borrower hereunder and (iii) the amount of any
sum received by the Lender hereunder.
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(c) Effect of Entries. The entries made in the records maintained
pursuant to paragraph (b) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of the Lender to maintain such records or any error therein shall not in
any manner affect the obligation of the Borrower to repay the Loan in accordance
with the terms of this Agreement.
(d) Promissory Notes. The Lender may request that the Loan be
evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to the Lender a promissory note payable to the order of the
Lender and in a form approved by the Lender. Thereafter, the Loan evidenced by
such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 8.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.06. Prepayment of Loan.
(a) Optional Prepayments. The Borrower shall have the right at
any time and from time to time to prepay the Loan in whole or in part, subject
to the requirements of this Section.
(b) Mandatory Prepayments. The Borrower shall from time to time
prepay the Loan in such amount as shall be necessary so that (1) the Principal
Exposure shall not exceed the Borrowing Base for more than 10 consecutive
Business Days, and (2) the Real Estate Value Test shall be satisfied as of the
last day of each calendar quarter.
(c) Notices, Etc. The Borrower shall notify the Lender by
telephone (confirmed by telecopy) of any prepayment hereunder not later than
11:00 a.m., New York City time, one Business Day before the date of prepayment.
Each such notice shall be irrevocable and shall specify the prepayment date, the
principal amount of the Loan or portion thereof to be prepaid and, in the case
of a mandatory prepayment, a reasonably detailed calculation of the amount of
such prepayment. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.07.
SECTION 2.07. Interest.
(a) Loan. The Loan shall bear interest for each Interest Payment
Period therefor at a rate per annum equal to the Applicable Rate therefor.
(b) Default Interest. Notwithstanding the foregoing, if any
principal of or interest on the Loan or any fee or other amount payable by the
Borrower hereunder is not paid within 10 days of the date the same is due,
whether at stated maturity, upon acceleration, by mandatory prepayment or
otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to 2% plus the Applicable Rate.
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(c) Payment of Interest. Accrued interest on the Loan shall be
payable in arrears on each Interest Payment Date; provided that interest accrued
pursuant to paragraph (b) of this Section shall be payable on demand from time
to time.
(d) Computation. All interest hereunder shall be computed on the
basis of a year of 360 days, and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day). The Applicable
Rate shall be determined by the Lender, and such determination shall be
conclusive absent manifest error.
SECTION 2.08. Taxes.
(a) Payments Free of Taxes. Any and all payments by or on account
of any obligation of the Borrower hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any Indemnified Taxes
or Other Taxes; provided that if the Borrower shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Lender receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) Payment of Other Taxes by the Borrower. In addition, the
Borrower shall pay any Other Taxes to the relevant Governmental Authority in
accordance with applicable law.
(c) Indemnification by the Borrower. The Borrower shall indemnify
the Lender, within 10 days after written demand therefor, for the full amount of
any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
paid by the Lender and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower by the Lender shall be conclusive absent
manifest error.
(d) Evidence of Payments. As soon as practicable after any
payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental
Authority, the Borrower shall deliver to the Lender the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Lender.
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SECTION 2.09. Payments Generally.
(a) Payments by the Borrower. The Borrower shall make each
payment required to be made by it hereunder (whether of principal, interest or
fees, or under Section 2.08, or otherwise) or under any other Loan Document
(except to the extent otherwise provided therein) prior to 12:00 noon, New York
City time, on the date when due, in immediately available funds, without set-off
or counterclaim. Any amounts received after such time on any date may, in the
discretion of the Lender, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Lender at its offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, except as otherwise expressly provided in the relevant Loan
Document. If any payment hereunder shall be due on a day that is not a Business
Day, the date for payment shall be extended to the next succeeding Business Day
and, in the case of any payment accruing interest, interest thereon shall be
payable for the period of such extension. All payments hereunder or under any
other Loan Document shall be made in Dollars.
(b) Application of Insufficient Payments. If at any time
insufficient funds are received by and available to the Lender to pay fully all
amounts of principal, interest and fees then due hereunder, such funds shall be
applied (i) first, to pay interest and fees then due hereunder, and (ii) second,
to pay principal then due hereunder.
SECTION 2.10. Limited Recourse. Notwithstanding anything herein
or in the other Loan Documents to the contrary, the Lender agrees that it will
look solely to the sums realized from the Collateral for payments to be made by
the Borrower under this Agreement and the other Loan Documents and that the
Borrower shall not be otherwise personally liable for such payments; provided,
however, that the Borrower shall indemnify the Lender against, and reimburse the
Lender upon demand for, any loss, liability, claim or expense (including,
without limitation, reasonable fees and disbursements of counsel) incurred by
the Lender as a result of (a) the Borrower's gross negligence or willful
misconduct with respect to any aspect of the Transactions or (b) any
representation or warranty made or deemed to be made by, or made by the Servicer
on behalf of, the Borrower to the Lender under this Agreement or under or in
respect of any other Loan Document being materially false as of the date made or
deemed made, as the case may be.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender that:
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SECTION 3.01. Organization; Powers. The Borrower is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to carry
on its business as now conducted and, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required.
SECTION 3.02. Authorization; Enforceability. The Transactions are
within the Borrower's corporate powers and have been duly authorized by all
necessary corporate and, if required, by all necessary shareholder action. This
Agreement has been duly executed and delivered by the Borrower and constitutes,
and each of the other Loan Documents when executed and delivered will
constitute, a legal, valid and binding obligation of the Borrower, enforceable
in accordance with its terms, except as such enforceability may be limited by
(a) bankruptcy, insolvency, reorganization, moratorium or similar laws of
general applicability affecting the enforcement of creditors' rights and (b) the
application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
SECTION 3.03. Governmental Approvals; No Conflicts. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except for (i)
such as have been obtained or made and are in full force and effect and (ii)
filings and recordings in respect of the Liens created pursuant to the Security
Documents, (b) will not violate any applicable law or regulation or the charter,
by-laws or other organizational documents of the Borrower or any order of any
Governmental Authority, (c) will not violate or result in a default under any
indenture, agreement or other instrument binding upon the Borrower or any of its
assets, or give rise to a right thereunder to require any payment to be made by
the Borrower, and (d) except for the Liens created pursuant to the Security
Documents, will not result in the creation or imposition of any Lien on any
asset of the Borrower.
SECTION 3.04. Financial Condition; No Material Adverse Change
(a) Financial Condition. The Borrower has heretofore furnished to
the Lender its Call Report as of and for the fiscal year ended December 31,
1999, certified by the chief financial officer of the Borrower. Such Call Report
presents fairly, in all material respects, the financial position and results of
operations and cash flows of the Borrower as of such date and for such period in
accordance with applicable banking regulations.
(b) No Material Adverse Change. Since December 31, 1999, there
has been no material adverse change in the business, assets, operations or
condition, financial or otherwise, of the Borrower and its Subsidiaries, taken
as a whole.
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SECTION 3.05. Litigation. There are no actions, suits or
proceedings by or before any arbitrator or Governmental Authority now pending
against or, to the knowledge of the Borrower, threatened against or affecting
the Borrower or any of its Subsidiaries that involve this Agreement or the
Transactions.
SECTION 3.06. Compliance with Laws and Agreements. Each of the
Borrower and its Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.
SECTION 3.07. Taxes. Each of the Borrower and its Subsidiaries
has timely filed or caused to be filed all Tax returns and reports required to
have been filed and has paid or caused to be paid all Taxes required to have
been paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which such Person has set aside on its books
adequate reserves or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.08. Origination. Each Eligible HELOC has been
originated or acquired by the Borrower in the ordinary course of business.
SECTION 3.09. HELOCs. Immediately after giving effect to the Loan
(a) the Real Estate Value Test shall be satisfied, and (b) the Principal
Exposure shall not exceed 80% of the outstanding principal balance of the
Eligible HELOCs.
ARTICLE IV
CONDITIONS
SECTION 4.01. Documentary Conditions. The obligations of the
Lender to make the Loan hereunder shall not become effective until the date on
which the Lender shall have received each of the following documents, each of
which shall be satisfactory to the Lender in form and substance (or such
condition shall have been waived in accordance with Section 8.02):
(a) Executed Counterparts. From the Borrower, a counterpart of
this Agreement signed on behalf of such party.
(b) [Intentionally Omitted]
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(c) Corporate Documents. Such documents and certificates as the
Lender or its counsel may reasonably request relating to the
organization, existence and good standing of the Borrower, the
authorization of the Transactions and any other legal matters relating
to the Borrower, this Agreement or the Transactions, all in form and
substance satisfactory to the Lender and its counsel.
(d) Borrowing Base Certificate. A Borrowing Base Certificate as
of a date not more than one day prior to the Effective Date.
(e) Security Agreement. The Security Agreement, duly executed and
delivered by the Borrower and the Lender. In addition, the Borrower and
the Servicer, as applicable, shall have taken such other action
(including delivering to the Lender, for filing, appropriately completed
and duly executed copies of Uniform Commercial Code financing
statements) as the Lender shall have requested in order to perfect the
security interests created pursuant to the Security Agreement.
(f) Servicing Agreement. An acknowledgment from the Servicer of
the Lender's rights hereunder and under the other Loan Documents, in
form and substance acceptable to the Lender (including to the effect
that the Servicer holds all loan files and Underlying Mortgages relating
to the HELOCs for the benefit of the Lender).
(g) Account Control Agreement. An account control agreement (the
"Account Control Agreement"), in form and substance acceptable to the
Lender, duly executed and delivered by the Borrower, the Account Bank
and the Lender.
(h) Other Documents. Such other documents as the Lender or
special New York counsel to the Lender may reasonably request.
SECTION 4.02. Other Conditions. The obligation of the Lender to
make the Loan is further subject to the satisfaction of the following
conditions:
(A) the representations and warranties of the Borrower set forth
in this Agreement and in the other Loan Documents shall be true and
correct on and as of the date of the Loan;
(B) at the time of and immediately after giving effect to the
Loan, no Default shall have occurred and be continuing; and
(C) the Borrower shall have paid such fees as the Borrower shall
have agreed to pay to the Lender in connection with the negotiation,
preparation, execution and delivery of this Agreement and the other Loan
Documents and the Loan hereunder (to the extent that statements for such
fees and expenses have been delivered to the Borrower).
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SECTION 4.03. Effective Date. The Lender shall notify the
Borrower of the Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lender to make the Loan
hereunder shall not become effective unless each of the conditions specified in
Sections 4.01 and 4.02 is satisfied (or waived pursuant to Section 8.02) on or
prior to 5:00 p.m., New York City time, on June 30, 2000 (and, in the event such
conditions are not so satisfied or waived, the Commitment shall terminate at
such time).
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitment has expired or been terminated and the
principal of and interest on the Loan and all fees payable hereunder shall have
been paid in full, the Borrower covenants and agrees with the Lender that:
SECTION 5.01. Financial Statements and Other Information. The
Borrower will furnish (or cause to be furnished) to the Lender:
(a) within 90 days after the end of each fiscal year of the
Borrower, the Call Report of the Borrower as of the end of and for such
year, which presents fairly in all material respects the financial
condition and results of operations of the Borrower in accordance with
applicable banking regulations consistently applied;
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of the Borrower, the Call Report of
the Borrower as of the end of and for such fiscal quarter and the then
elapsed portion of the fiscal year, certified by a Financial Officer of
the Borrower as presenting fairly in all material respects the financial
condition and results of operations of the Borrower in accordance with
applicable banking regulations consistently applied, subject to normal
year-end adjustments and the absence of footnotes;
(c) on or prior to 4:00 p.m., New York City time on each Business
Day, a Borrowing Base Certificate as at the preceding Business Day;
(d) periodically at the request of the Lender, a report of an
independent collateral auditor (which may be affiliated with the Lender)
with respect to the HELOCs included in the Borrowing Base as at the end
of any accounting period, which report shall indicate that, based upon a
review by such auditors of the HELOCs (including verification with
respect to the value thereof), the information set forth in the
Borrowing Base Certificate delivered by the Borrower as at the end of
such accounting period is accurate and complete in all material
respects;
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(e) as of the tenth Business Day preceding the last day of each
calendar quarter, an REVT Certificate as at a date no earlier than 10
and no later than 15 Business Days prior to the last day of such
calendar quarter; and
(f) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of the Borrower or any of its Subsidiaries, the HELOCs or
compliance with the terms of this Agreement and the other Loan
Documents, as the Lender may reasonably request.
SECTION 5.02. Notices of Material Events. The Borrower will
furnish to the Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding
by or before any arbitrator or Governmental Authority against or
affecting the Borrower or any of its Affiliates that, if adversely
determined, could reasonably be expected to result in a Material Adverse
Effect of the type described in clause (b) or (c) of the definition
thereof; and
(c) any other development that results in a Material Adverse
Effect of the type described in clause (b) or (c) of the definition
thereof.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer of the Borrower setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.
SECTION 5.03. Existence; Conduct of Business. The Borrower will
do or cause to be done all things necessary to preserve, renew and keep in full
force and effect its legal existence and the rights, licenses, permits,
privileges and franchises material to the conduct of its business.
SECTION 5.04. Payment of Obligations. The Borrower will pay its
obligations, including Tax liabilities, that, if not paid, would result in a
Material Adverse Effect before the same shall become delinquent or in default,
except where (a) the validity or amount thereof is being contested in good faith
by appropriate proceedings, (b) the Borrower has set aside on its books adequate
reserves with respect thereto in accordance with GAAP and (c) the failure to
make payment pending such contest could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 5.05. Books and Records; Inspection and Audit Rights. The
Borrower will keep proper books of record and account in which full, true and
correct entries are made of all dealings and transactions in relation to the
Transactions and the Collateral. The Borrower
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will, and will cause the Servicer to, permit any representatives designated by
Lender (including any consultants, accountants, lawyers and appraisers retained
by the Lender) to conduct evaluations and appraisals of the Borrower's
computation of the Borrowing Base and the assets included in the Borrowing Base,
all at such reasonable times and as often as reasonably requested. The Borrower
also agrees to modify or adjust the computation of the Borrowing Base to the
extent required by the Lender as a result of any such evaluation or appraisal.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitment has expired or terminated and the principal
of and interest on the Loan and all fees payable hereunder have been paid in
full, the Borrower covenants and agrees with the Lender that:
SECTION 6.01. Liens. The Borrower will not, nor will it permit
any of its Subsidiaries to, create, incur, assume or permit to exist any Lien on
any of the Collateral, or assign or sell any income or revenues (including
accounts receivable) or rights in respect thereof, except Liens created pursuant
to the Security Documents.
SECTION 6.02. Limitation on Actions. Except as otherwise
expressly permitted under the Security Agreement, the Borrower agrees that it
will take no action with respect to any part of the Collateral and will not
assign, sell, pledge or otherwise transfer any of its estate, right, title or
interest in or to the Collateral except to the Lender.
ARTICLE VII
EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of or interest
on the Loan or any fee or any other amount payable under this Agreement
or under any other Loan Document within five Business Days after
receiving notice that the same shall have become due and payable,
whether at the due date thereof or at a date fixed for prepayment
thereof or otherwise;
(b) any representation or warranty made or deemed made by, or
made by the Servicer on behalf of, the Borrower in or in connection with
this Agreement or any other Loan Document or any amendment or
modification hereof or thereof, or in any report, certificate, financial
statement, Call Report of the Borrower or other document furnished
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pursuant to or in connection with this Agreement or any other Loan
Document or any amendment or modification hereof or thereof, shall prove
to have been incorrect in any material respect when made or deemed made;
(c) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those
specified in clause (a) of this Article) or any other Loan Document and
such failure shall continue unremedied for a period of 30 or more days
after notice thereof from the Lender to the Borrower;
(d) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Borrower or its debts,
or of a substantial part of its assets, under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the
Borrower or for a substantial part of its assets, and, in any such case,
such proceeding or petition shall continue undismissed for a period of
60 or more days or an order or decree approving or ordering any of the
foregoing shall be entered;
(e) the Borrower shall (i) voluntarily commence any proceeding or
file any petition seeking liquidation, reorganization or other relief
under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in clause (d) of this Article,
(iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the
Borrower or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of
creditors or (vi) take any action for the purpose of effecting any of
the foregoing; or
(f) the Liens created by the Security Documents shall at any time
not constitute a valid and perfected Lien on the Collateral (to the
extent perfection by filing, registration, recordation or possession is
required herein or therein) in favor of the Lender, free and clear of
all other Liens (other than Liens permitted under the respective
Security Documents), or, except for expiration in accordance with its
terms, any of the Security Documents shall for whatever reason be
terminated or cease to be in full force and effect, or the
enforceability thereof shall be contested by the Borrower;
then, and in every such event (other than an event described in clause (d) or
(e) of this Article), and at any time thereafter during the continuance of such
event, the Lender may, by notice to the Borrower, take either or both of the
following actions, at the same or different times: (i) terminate the Commitment,
and thereupon the Commitment shall terminate immediately, and (ii) declare the
Loan to be due and payable in whole (or in part, in which case any principal not
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so declared to be due and payable may thereafter be declared to be due and
payable), and thereupon the principal of the Loan so declared to be due and
payable, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; and in case of any event with
respect to the Borrower described in clause (d) or (e) of this Article, the
Commitment shall automatically terminate and the principal of the Loan, together
with accrued interest thereon and all fees and other obligations of the Borrower
accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇ ▇. ▇▇▇▇ (Telecopy No. ▇▇▇-▇▇▇-▇▇▇▇;
Telephone No. ▇▇▇-▇▇▇-▇▇▇▇); and
(b) if to the Lender, to it at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (Telecopy No. ▇▇▇-▇▇▇-▇▇▇▇;
Telephone No. ▇▇▇-▇▇▇-▇▇▇▇).
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 8.02. Waivers; Amendments.
(a) No Deemed Waivers; Remedies Cumulative. No failure or delay
by the Lender in exercising any right or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Lender hereunder are
cumulative and are not exclusive of any rights or remedies that it would
otherwise have. No
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waiver of any provision of this Agreement or consent to any departure by the
Borrower therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of the Loan
shall not be construed as a waiver of any Default, regardless of whether the
Lender may have had notice or knowledge of such Default at the time.
(b) Amendments. Neither this Agreement nor any provision hereof
may be waived, amended or modified except pursuant to an agreement or agreements
in writing entered into by the Borrower and the Lender.
SECTION 8.03. Expenses; Indemnity; Damage Waiver.
(a) Costs and Expenses. The Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Lender, including the reasonable fees,
charges and disbursements of counsel for the Lender, in connection with the
preparation and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all out-of-pocket expenses incurred by the Lender, including
the fees, charges and disbursements of any counsel for the Lender, in connection
with the enforcement or protection of its rights in connection with this
Agreement and the other Loan Documents, including its rights under this Section,
or in connection with the Loan made hereunder, including in connection with any
workout, restructuring or negotiations in respect thereof and (iii) and all
costs, expenses, taxes, assessments and other charges incurred in connection
with any filing, registration, recording or perfection of any security interest
contemplated by any Security Document or any other document referred to therein.
(b) Indemnification by the Borrower. The Borrower shall indemnify
the Lender and each Related Party of the Lender (each such Person being called
an "Indemnitee") against, and to hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement or any agreement or
instrument contemplated hereby, the performance by the parties hereto of their
respective obligations hereunder or the consummation of the Transactions or any
other transactions contemplated hereby, (ii) the Loan or the use of the proceeds
therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall not,
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as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses resulted from the gross negligence or
willful misconduct of such Indemnitee.
(c) Waiver of Consequential Damages, Etc. To the extent permitted
by applicable law, the Borrower shall not assert, and hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the Transactions, the Loan or the
use of the proceeds thereof.
(d) Payments. All amounts due under this Section shall be payable
not later than five Business Days after written demand therefor.
SECTION 8.04. Successors and Assigns.
(a) Assignments Generally. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Lender (and any attempted assignment or
transfer by the Borrower without such consent shall be null and void). Nothing
in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the Related
Parties of the Lender) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
(b) Assignment by the Lender. The Lender may assign all or any
portion of the Loan only with the consent of the Borrower. Upon execution and
delivery by the assignee to the Borrower of an instrument in writing pursuant to
which such assignee agrees to become the "Lender" hereunder, and upon consent
thereto by the Borrower, the assignee shall have (unless provided in such
assignment with the consent of the Borrower) the obligations, rights and
benefits of the Lender hereunder in respect of the Loan (or the relevant portion
thereof) theretofore held by the Lender. Any assignment or transfer by the
Lender of rights or obligations under this Agreement that does not comply with
this paragraph shall be treated for purposes of this Agreement as a sale by the
Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.
(c) Participations. The Lender may, without the consent of the
Borrower, sell participations to one or more banks or other entities (a
"Participant") in all or a portion of the Lender's rights and obligations under
this Agreement and the other Loan Documents (including all or a portion of the
Loan); provided that (i) the Lender's obligations under this Agreement and the
other Loan Documents shall remain unchanged, (ii) the Lender shall remain solely
responsible to the Borrower for the performance of such obligations and (iii)
the Borrower shall
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continue to deal solely and directly with the Lender in connection with the
Lender's rights and obligations under this Agreement and the other Loan
Documents. Subject to paragraph (d) of this Section, the Borrower agrees that
each Participant shall be entitled to the benefits of Section 2.08 to the same
extent as if it were the Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section.
(d) Limitations on Rights of Participants. A Participant shall
not be entitled to receive any greater payment under Section 2.08 than the
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower's prior written consent.
SECTION 8.05. Survival. All covenants, agreements,
representations and warranties made by the Borrower (or by the Servicer on
behalf of the Borrower) herein and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement shall be considered
to have been relied upon by the Lender and shall survive the execution and
delivery of this Agreement and the making of the Loan, regardless of any
investigation made by the Lender or on its behalf and notwithstanding that the
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on the Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid and so long as the Commitment has not
expired or terminated. The provisions of Sections 2.08 and 8.03 shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loan, the expiration or
termination of the Commitment or the termination of this Agreement or any
provision hereof.
SECTION 8.06. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement and
the other Loan Documents constitute the entire contract between the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Article IV, this Agreement shall become effective
when it shall have been executed by the Lender and when the Lender shall have
received a counterpart hereof bearing the signature of the Borrower, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
SECTION 8.07. Severability. Any provision of this Agreement held
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
Hypothecation Loan Agreement
27
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SECTION 8.08. Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of New York.
SECTION 8.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTY HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 8.10. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
[Signature page follows.]
Hypothecation Loan Agreement
28
IN WITNESS WHEREOF, the parties hereto have caused this
Hypothecation Loan Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
THE CHASE MANHATTAN BANK
By
-----------------------------
Name:
Title:
CHASE PREFERRED CAPITAL
CORPORATION
By
-----------------------------
Name:
Hypothecation Loan Agreement
29
EXHIBIT A
[Form of Borrowing Base Certificate]
BORROWING BASE CERTIFICATE
[DATE]
Reference is made to the Hypothecation Loan Agreement dated as of
April 7, 2000 (as modified and supplemented and in effect from time to time, the
"Loan Agreement"), between The Chase Manhattan Bank and Chase Preferred Capital
Corporation. Terms defined in the Loan Agreement are used herein as defined
therein.
Pursuant to Section 5.01(c) of the Loan Agreement, the
undersigned, the [TITLE] of the Servicer, and as such a Financial Officer of the
Servicer, hereby certifies that, to the best of [his/her] knowledge, attached
hereto as Annex 1 is a true and accurate calculation of the Borrowing Base as of
[DATE] determined in accordance with the requirements of the Loan Agreement.
IN WITNESS WHEREOF, the undersigned has caused this certificate
to be duly executed as of the __________ day of ____________, ____.
----------------------------
Name:
Title:
Form of Borrowing Base Certificate
30
EXHIBIT B
[Form of REVT Certificate]
REVT CERTIFICATE
[DATE]
Reference is made to the Hypothecation Loan Agreement dated as of
April 7, 2000 (as modified and supplemented and in effect from time to time, the
"Loan Agreement"), between The Chase Manhattan Bank and Chase Preferred Capital
Corporation. Terms defined in the Loan Agreement are used herein as defined
therein.
Pursuant to Section 5.01(e) of the Loan Agreement, the
undersigned, the [TITLE] of the Servicer, and as such a Financial Officer of the
Servicer, hereby certifies that, to the best of [his/her] knowledge, attached
hereto as Annex 1 is a true and accurate calculation of the Real Estate Value
Test as of [DATE] determined in accordance with the requirements of the Loan
Agreement.
IN WITNESS WHEREOF, the undersigned has caused this certificate
to be duly executed as of the __________ day of ____________, ____.
----------------------------
Name:
Title:
Form of REVT Certificate
31
EXHIBIT 10(g)
SECURITY AND ASSIGNMENT AGREEMENT
dated as of
April 7, 2000
between
[ ]
and
CHASE PREFERRED CAPITAL CORPORATION
32
TABLE OF CONTENTS
Page
SECTION 1. Definitions......................................................................1
SECTION 2. Representations and Warranties...................................................3
SECTION 3. Collateral Assignment............................................................3
SECTION 4. Cash Proceeds of Collateral......................................................4
4.01. Collateral Account............................................................4
4.02. Proceeds of Accounts..........................................................5
4.03. Investment of Balance in Collateral Account...................................5
SECTION 5. Further Assurances; Remedies.....................................................6
5.01. Delivery and Other Perfection.................................................6
5.02. Other Financing Statements and Liens..........................................7
5.03. Preservation of Rights........................................................7
5.04. Triggering Event..............................................................7
5.05. Events of Default, Etc........................................................7
5.06. Removals, Etc.................................................................9
5.07. Private Sale..................................................................9
5.08. Application of Proceeds.......................................................9
5.09. Attorney-in-Fact.............................................................10
5.10. Perfection...................................................................10
5.11. Termination..................................................................10
5.12. Further Assurances...........................................................10
5.13. Release......................................................................10
SECTION 6. Miscellaneous...................................................................11
6.01. Notices......................................................................11
6.02. No Waiver....................................................................11
6.03. Amendments, Etc..............................................................11
6.04. Expenses.....................................................................11
6.05. Successors and Assigns.......................................................11
6.06. Counterparts.................................................................11
6.07. Governing Law................................................................12
6.08. WAIVER OF JURY TRIAL.........................................................12
6.09. Captions.....................................................................12
6.10. Agents and Attorneys-in-Fact.................................................12
6.11. Severability.................................................................12
ANNEX 1 - Schedule of HELOCs
ANNEX 2 - List of Locations
33
SECURITY AND ASSIGNMENT AGREEMENT
SECURITY AND ASSIGNMENT AGREEMENT dated as of April 7, 2000,
between [ ], a banking corporation (the "Borrower"), and
CHASE PREFERRED CAPITAL CORPORATION (the "Lender").
The Borrower and the Lender are parties to a Hypothecation Loan
Agreement dated as of April 7, 2000 (as modified and supplemented and in effect
from time to time, the "Loan Agreement"), providing, subject to the terms and
conditions thereof, for a loan to be made by the Lender to the Borrower in a
principal amount on the date hereof not exceeding $ .
To induce the Lender to enter into the Loan Agreement and to
extend credit thereunder, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Borrower has
agreed to pledge and grant a security interest in the Collateral (as hereinafter
defined) as security for the Secured Obligations (as so defined). Accordingly,
the parties hereto agree as follows:
SECTION 1. Definitions. Terms defined in the Loan Agreement are
used herein as defined therein, and Section 1.02 and Section 1.03 of the Loan
Agreement are incorporated herein by reference as fully and to the same extent
as if set forth herein. In addition, as used herein:
"Accounts" has the meaning assigned to such term in Section 3(a).
"Collateral" has the meaning assigned to such term in Section 3.
"Collateral Account" has the meaning assigned to such term in
Section 4.01.
"Instruments" has the meaning assigned to such term in Section
3(b).
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America), in
each case maturing within one year from the date of acquisition thereof;
Security and Assignment Agreement
34
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(b) investments in commercial paper maturing within 270 days from
the date of acquisition thereof and having, at such date of acquisition,
the highest credit rating obtainable from Standard & Poor's or from
Moody's;
(c) investments in certificates of deposit, banker's acceptances
and time deposits maturing within 180 days from the date of acquisition
thereof issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, any domestic office of any commercial
bank organized under the laws of the United States of America or any
State thereof which has a combined capital and surplus and undivided
profits of not less than $250,000,000;
(d) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) of this
definition and entered into with a financial institution satisfying the
criteria described in clause (c) of this definition; and
(e) investments in money-market funds rated AAAm or better by
Standard & Poor's or MR1 or better by Moody's, having aggregate assets
of at least $1,000,000,000 and having a portfolio consisting primarily
of securities of the type and maturity described in clauses (a), (b) and
(c).
"Secured Obligations" means, collectively, (a) the principal and
interest on the Loan made by the Lender to the Borrower and all other
amounts from time to time owing to the Lender by the Borrower under the
Loan Documents, and (b) all obligations of the Borrower to the Lender
hereunder.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Standstill Period" means:
(a) in the case of the Borrowing Base, any period during which
the Principal Exposure exceeds the Borrowing Base and a mandatory
prepayment in respect of such excess is not required pursuant to Section
2.06(b) of the Loan Agreement; and
(b) in the case of the Real Estate Value Test, any period during
which such Test is not satisfied and a mandatory prepayment in respect
thereof is not required pursuant to Section 2.06(b) of the Loan
Agreement.
Security and Assignment Agreement
35
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"Triggering Event" means:
(a) the assignment by Standard & Poor's and Moody's of a rating
to the long-term senior unsecured debt of the Borrower at or below
(by Standard & Poor's) and at or below (by Moody's); or
(b) the failure of a Person obligated in respect of any HELOC (1)
to pay when due interest, principal or other amounts relating to such
HELOC or (2) to comply with any other material obligation or covenant
relating such HELOC.
"Uniform Commercial Code" means the Uniform Commercial Code as in
effect from time to time in the State of New York.
SECTION 2. Representations and Warranties. The Borrower
represents and warrants to the Lender that:
(a) Ownership and Liens. The Borrower is the sole beneficial
owner of the Collateral and no Lien exists or will exist upon such Collateral at
any time except for the pledge and security interest in favor of the Lender
created or provided for herein.
(b) No other HELOCs. The HELOCs listed on Annex 1 hereto
represent all of the HELOCs made by the Borrower as of the date hereof and Annex
1 correctly identifies the outstanding principal amount of each HELOC, the date
such HELOC was executed and delivered and the Person obligated to the Borrower
in respect of such HELOC.
SECTION 3. Collateral Assignment. As collateral security for the
prompt payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the Secured Obligations, the Borrower hereby assigns, pledges and
grants to the Lender a security interest in all of the Borrower's right, title
and interest in, to and under the following property, whether now owned by the
Borrower or hereafter acquired and whether now existing or hereafter coming into
existence (all being collectively referred to herein as "Collateral"):
(a) the HELOCs listed on Annex 1 hereto, all HELOCs now or
hereafter made or acquired by the Borrower, all loans made pursuant to
all such HELOCs and (without duplication) all general intangibles
(including payment intangibles) and accounts (each as defined in the
Uniform Commercial Code) of the Borrower constituting any right to the
payment of money due and to become due to the Borrower in respect of any
of the HELOCs
Security and Assignment Agreement
36
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(such HELOCs, general intangibles, accounts and moneys due and to become
due being herein called collectively "Accounts");
(b) all instruments and chattel paper (each as defined in the
Uniform Commercial Code), and all other contracts, of the Borrower
evidencing, representing, arising from or existing in respect of,
relating to, securing or otherwise supporting the payment of, any of the
HELOCs, including (but not limited to) promissory notes and credit
agreements (herein collectively called "Instruments");
(c) the Collateral Account and the balance from time to time in
the Collateral Account;
(d) all Underlying Mortgages in respect of the HELOCs and any
other security interest granted in favor of the Borrower in connection
with the HELOCs; and
(e) all proceeds, products, accessions, rents, profits, income,
benefits, substitutions and replacements of and to any of the property
of the Borrower described in the preceding clauses of this Section 3
(including, without limitation, any proceeds of insurance thereon and
all causes of action, claims and warranties now or hereafter held by the
Borrower in respect of any of the items listed above) and, to the extent
related to any property described in said clauses or such proceeds,
products and accessions, all books, correspondence, credit files, credit
agreements, mortgages, deeds of trust and other security documents,
records, invoices and other papers, including without limitation all
tapes, cards, computer runs and other papers and documents in the
possession or under the control of the Borrower or any computer bureau
or service company (including the Servicer) from time to time acting for
the Borrower.
SECTION 4. Cash Proceeds of Collateral.
4.01. Collateral Account. The Borrower has established account
number ________________, designated __________________ at Chase Manhattan Bank
USA, National Association (said account, together with any replacements thereof
or substitutions therefor, the "Collateral Account"), which shall be a
"securities account" (as defined in Section 8-501 of the Uniform Commercial
Code), into which there shall be deposited from time to time the cash proceeds
of any of the Collateral (including proceeds of insurance thereon) required to
be delivered to the Lender pursuant hereto and into which the Borrower may from
time to time deposit any additional amounts that it wishes to pledge to the
Lender as additional collateral security hereunder. The balance from time to
time in the Collateral Account shall constitute part of the Collateral hereunder
and shall not constitute payment of the Secured Obligations until applied as
hereinafter
Security and Assignment Agreement
37
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provided. Except as expressly provided in the next two sentences, the Lender
shall remit the collected balance standing to the credit of the Collateral
Account to or upon the order of the Borrower as the Borrower shall from time to
time instruct. However, at any time during a Standstill Period, no portion of
the collected balance of the Collateral Account shall be remitted to or upon the
order of the Borrower. Moreover, at any time following the occurrence and during
the continuance of an Event of Default, the Lender may in its discretion apply
or cause to be applied (subject to collection) the balance from time to time
standing to the credit of the Collateral Account to the payment of the Secured
Obligations in the manner specified in Section 5.08. The balance from time to
time in the Collateral Account shall be subject to withdrawal only as provided
herein.
4.02. Proceeds of Accounts. The Borrower shall instruct all
account debtors and other Persons obligated in respect of all Accounts
(including all obligors in respect of the HELOCs) to make all payments in
respect of the Accounts either (a) directly to the Lender (by instructing that
such payments be remitted to a post office box which shall be under the control
of the Lender) or (b) to one or more other banks in the United States of America
(by instructing that such payments be remitted to a post office box which shall
be under the control of the Lender) under arrangements, in form and substance
satisfactory to the Lender, pursuant to which the Borrower shall have
irrevocably instructed such other bank (and such other bank shall have agreed)
to remit all proceeds of such payments directly to the Lender for deposit into
the Collateral Account. All payments made to the Lender, as provided in the
preceding sentence, shall be immediately deposited in the Collateral Account. In
addition to the foregoing, the Borrower agrees that if the proceeds of any
Collateral hereunder (including the payments made in respect of Accounts) shall
be received by it, the Borrower shall as promptly as possible deposit such
proceeds into the Collateral Account. Until so deposited, all such proceeds
shall be held in trust by the Borrower for and as the property of the Lender and
shall not be commingled with any other funds or property of the Borrower.
4.03. Investment of Balance in Collateral Account. The cash
balance standing to the credit of the Collateral Account shall be invested from
time to time in such Permitted Investments as the Borrower (or, after the
occurrence and during the continuance of a Default or during a Standstill
Period, the Lender) shall determine, which Permitted Investments shall be held
in the name and be under the control of the Lender (and, if the Collateral
Account is a securities account, credited to the Collateral Account), provided
that at any time after the occurrence and during the continuance of an Event of
Default, the Lender may in its discretion at any time and from time to time
elect to liquidate any such Permitted Investments and to apply or cause to be
applied the proceeds thereof to the payment of the Secured Obligations in the
manner specified in Section 5.08.
Security and Assignment Agreement
38
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SECTION 5. Further Assurances; Remedies. In furtherance of the
grant of the pledge and security interest pursuant to Section 3, the Borrower
hereby agrees with the Lender as follows:
5.01. Delivery and Other Perfection. The Borrower shall:
(a) deliver and pledge to the Lender (or its nominee) any and all
Instruments, endorsed and/or accompanied by such instruments of
assignment and transfer in such form and substance as the Lender may
request; provided, that so long as no Default shall have occurred and be
continuing, the Borrower may retain for collection in the ordinary
course any Instruments received by the Borrower in the ordinary course
of business and the Lender shall, promptly upon request of the Borrower,
make appropriate arrangements for making any Instrument pledged by the
Borrower available to the Borrower for purposes of presentation,
collection or renewal (any such arrangement to be effected, to the
extent deemed appropriate by the Lender, against trust receipt or like
document);
(b) deliver and pledge to the Lender (or its nominee) any and all
Underlying Mortgages, security documents and credit files relating to
the Collateral;
(c) give, execute, deliver, file and/or record any financing
statement, notice, instrument, document, agreement or other papers that
may be necessary or desirable (in the reasonable judgment of the Lender)
to create, preserve, perfect or validate the security interest granted
pursuant hereto or to enable the Lender (or its nominee) to exercise and
enforce its rights hereunder with respect to such pledge and security
interest, provided that notices to account debtors in respect of any
Accounts or Instruments shall be subject to the provisions of clause (f)
below and recordation in the applicable public records of the assignment
to the Lender of any interest in an Underlying Mortgage shall be subject
to Section 5.04;
(d) maintain (or cause to be maintained) full and accurate books
and records relating to the Collateral;
(e) permit representatives of the Lender, upon reasonable notice,
at any time during normal business hours to inspect and make abstracts
from its books and records pertaining to the Collateral, and permit
representatives of the Lender to be present at the Borrower's place of
business to receive copies of all communications and remittances
relating to the Collateral, and forward copies of any notices or
communications received by the Borrower with respect to the Collateral,
all in such manner as the Lender may require; and
Security and Assignment Agreement
39
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(f) upon the occurrence and during the continuance of any
Default, upon request of the Lender, promptly notify (and the Borrower
hereby authorizes the Lender so to notify) each account debtor in
respect of any Accounts or Instruments that such Collateral has been
assigned to the Lender hereunder, and that any payments due or to become
due in respect of such Collateral are to be made directly to the Lender.
5.02. Other Financing Statements and Liens. The Borrower shall
not, without the prior written consent of the Lender, file or suffer to be on
file, or authorize or permit to be filed or to be on file, in any jurisdiction,
any financing statement or like instrument with respect to the Collateral in
which the Lender is not named as the sole secured party.
5.03. Preservation of Rights. The Lender shall not be required to
take steps necessary to preserve any rights against prior parties to any of the
Collateral.
5.04. Triggering Event.
(a) Ratings-Based Triggering Event. The Borrower shall, within 90
days following the occurrence (and during the continuance) of a Triggering Event
of the type described in clause (a) of the definition thereof, record (or cause
to be recorded) in the applicable public records the assignment to the Lender of
each Underlying Mortgage and execute and deliver to the Lender any other
instruments reasonably requested by the Lender to evidence such assignment, such
assignments and other instruments to be in form and substance acceptable to the
Lender.
(b) Default on Underlying HELOC. Upon the occurrence of a
Triggering Event of the type described in clause (b) of the definition thereof,
if requested by the Lender, the Borrower shall within 2 Business Days of such
request record (or cause to be recorded) in the applicable public records the
assignment to the Lender of the Underlying Mortgage relating to such HELOC and
execute and deliver to the Lender any other instruments reasonably requested by
the Lender to evidence such assignment, such assignment and other instruments to
be in form and substance acceptable to the Lender. Thereupon, the Lender shall
be entitled to exercise any remedy with respect to such HELOC that it would be
entitled to exercise upon the occurrence and during the continuance of an Event
of Default, including the right to foreclose (or direct the Servicer to
foreclose) against the property securing such HELOC in the name of the Lender.
5.05. Events of Default, Etc. During the period during which an
Event of Default shall have occurred and be continuing:
(a) the Borrower shall, at the request of the Lender, assemble
the Collateral owned by it at such place or places, reasonably
convenient to both the Lender and the Borrower, designated in its
request;
Security and Assignment Agreement
40
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(b) the Lender may make (or direct the Servicer to make) any
reasonable compromise or settlement deemed desirable with respect to any
of the Collateral and may extend the time of payment, arrange for
payment in installments, or otherwise modify the terms of, any of the
Collateral;
(c) the Lender shall have all of the rights and remedies with
respect to the Collateral of a secured party under the Uniform
Commercial Code (whether or not said Code is in effect in the
jurisdiction where the rights and remedies are asserted) and such
additional rights and remedies to which a secured party is entitled
under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted, including, without limitation, the
right, to the maximum extent permitted by law, to exercise all voting,
consensual and other powers of ownership pertaining to the Collateral as
if the Lender were the sole and absolute owner thereof (and the Borrower
agrees to take all such action as may be appropriate to give effect to
such right);
(d) the Lender in its discretion may, in its name or in the name
of the Borrower or otherwise, demand, ▇▇▇ for, collect or receive any
money or property at any time payable or receivable on account of or in
exchange for any of the Collateral, but shall be under no obligation to
do so; and
(e) the Lender may, upon ten Business Days' prior written notice
to the Borrower of the time and place, with respect to the Collateral or
any part thereof that shall then be or shall thereafter come into the
possession, custody or control of the Lender or any of its agents, sell,
lease, assign or otherwise dispose of all or any part of such
Collateral, at such place or places as the Lender deems best, and for
cash or for credit or for future delivery (without thereby assuming any
credit risk), at public or private sale, without demand of performance
or notice of intention to effect any such disposition or of the time or
place thereof (except such notice as is required above or by applicable
statute and cannot be waived), and the Lender or anyone else may be the
purchaser, lessee, assignee or recipient of any or all of the Collateral
so disposed of at any public sale (or, to the extent permitted by law,
at any private sale) and thereafter hold the same absolutely, free from
any claim or right of whatsoever kind, including any right or equity of
redemption (statutory or otherwise), of the Borrower, any such demand,
notice and right or equity being hereby expressly waived and released.
The Lender may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for the sale, and such sale may
be made at any time or place to which the sale may be so adjourned.
Security and Assignment Agreement
41
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The proceeds of each collection, sale or other disposition under Section 5.04 or
this Section 5.05 shall be applied in accordance with Section 5.08.
5.06. Removals, Etc. Without at least 30 days' prior written
notice to the Lender, the Borrower shall not (i) maintain any of its books and
records with respect to the Collateral at any office, or maintain its principal
place of business at any place, other than at the address indicated in Section
8.01 of the Loan Agreement or at one of the locations identified in Annex 2 or
in transit from one of such locations to another or (ii) change its name, or the
name under which it does business, from the name shown on the signature pages
hereto.
5.07. Private Sale. The Lender shall incur no liability as a
result of the sale of the Collateral, or any part thereof, at any private sale
pursuant to Section 5.04 or Section 5.05 conducted in a commercially reasonable
manner. The Borrower hereby waives any claims against the Lender arising by
reason of the fact that the price at which the Collateral may have been sold at
such a private sale was less than the price that might have been obtained at a
public sale or was less than the aggregate amount of the Secured Obligations,
even if the Lender accepts the first offer received and does not offer the
Collateral to more than one offeree.
5.08. Application of Proceeds. Except as otherwise herein
expressly provided, the proceeds of any collection, sale or other realization of
all or any part of the Collateral pursuant hereto, and any other cash at the
time held by the Lender under Section 4 or this Section 5 (but subject to the
terms of said Sections), shall be applied by the Lender:
First, to the payment of the costs and expenses of such
collection, sale or other realization, including reasonable
out-of-pocket costs and expenses of the Lender and the fees and expenses
of its agents and counsel, and all expenses incurred and advances made
by the Lender in connection therewith;
Next, to the payment in full of the Secured Obligations then due
and payable (whether at stated maturity, by acceleration or otherwise);
and
Finally, provided that (a) the Principal Exposure at such time
does not exceed the Borrowing Base at such time, and (b) the Real Estate
Value Test (as most recently determined in accordance with Section
5.01(e) of the Loan Agreement) is satisfied, to the payment to the
Borrower, or its successors or assigns, or as a court of competent
jurisdiction may direct, of any surplus then remaining.
As used in this Section 5, "proceeds" of Collateral means cash,
securities and other property realized in respect of, and distributions in kind
of, Collateral, including any
Security and Assignment Agreement
42
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thereof received under any reorganization, liquidation or adjustment of debt of
the Borrower or any issuer of or obligor on any of the Collateral.
5.09. Attorney-in-Fact. Without limiting any rights or powers
granted by this Agreement to the Lender while no Triggering Event or Event of
Default has occurred and is continuing, upon the occurrence and during the
continuance of any Triggering Event or Event of Default the Lender is hereby
appointed the attorney-in-fact of the Borrower for the purpose of carrying out
the provisions of this Section 5 and taking any action and executing any
instruments that the Lender may deem necessary or advisable to accomplish the
purposes hereof, which appointment as attorney-in-fact is irrevocable and
coupled with an interest. Without limiting the generality of the foregoing, so
long as the Lender shall be entitled under this Section 5 to make collections in
respect of the Collateral, the Lender shall have the right and power to receive,
endorse and collect all checks made payable to the order of the Borrower
representing any dividend, payment or other distribution in respect of the
Collateral or any part thereof and to give full discharge for the same.
5.10. Perfection. Prior to or concurrently with the execution and
delivery of this Agreement (but subject to Section 5.04), the Borrower shall
file such financing statements and other documents in such offices as the Lender
may request to perfect the security interests granted by Section 3.
5.11. Termination. When all Secured Obligations shall have been
paid in full and the Commitment of the Lender under the Loan Agreement shall
have expired or been terminated, this Agreement shall terminate, and the Lender
shall forthwith cause to be assigned, transferred and delivered, against receipt
but without any recourse, warranty or representation whatsoever, any remaining
Collateral and money received in respect thereof, to or on the order of the
Borrower and to be released and canceled all licenses and rights referred to
herein. The Lender shall also execute and deliver to the Borrower upon such
termination such Uniform Commercial Code termination statements and such other
documentation as shall be reasonably requested by the Borrower to effect the
termination and release of the Liens on the Collateral.
5.12. Further Assurances. The Borrower agrees that, from time to
time upon the written request of the Lender, the Borrower will execute and
deliver such further documents and do such other acts and things as the Lender
may reasonably request in order fully to effect the purposes of this Agreement.
5.13. Release. From time to time, upon the request of the
Borrower, the Lender shall release HELOCs identified by the Borrower from the
Lien of this Agreement; provided that, if requested by the Lender, the Lender
shall receive (i) an officer's certificate, dated the date of the proposed
release, signed by a Financial Officer of the Borrower, confirming compliance
with
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conditions (A) and (B) set forth in Section 4.02 of the Loan Agreement (as if
each reference therein to the "Loan" were a reference to the proposed release),
and (ii) a Borrowing Base Certificate dated the date of the proposed release
setting forth all information therein immediately after giving effect to the
proposed release. The Lender shall execute and deliver to the Borrower upon any
such release such Uniform Commercial Code termination statements and such other
documentation as shall be reasonably requested by the Borrower to effect such
release.
SECTION 6. Miscellaneous.
6.01. Notices. All notices, requests, consents and demands
hereunder shall be in writing and telecopied or delivered to the intended
recipient at its address for notices specified pursuant to Section 8.01 of the
Loan Agreement and shall be deemed to have been given at the times specified in
said Section 8.01.
6.02. No Waiver. No failure on the part of the Lender to
exercise, and no course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise by the Lender of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies herein are cumulative and are not
exclusive of any remedies provided by law.
6.03. Amendments, Etc. The terms of this Agreement may be waived,
altered or amended only by an instrument in writing duly executed by the
Borrower and the Lender.
6.04. Expenses. The provisions of Section 8.03 of the Loan
Agreement are incorporated herein by reference as fully and to the same extent
as if set forth herein. Any amounts required to be paid or reimbursed by the
Borrower under said Section shall be Secured Obligations entitled to the
benefits of the collateral security provided pursuant to Section 3.
6.05. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
Borrower and the Lender (provided, however, that the Borrower shall not assign
or transfer its rights or obligations hereunder without the prior written
consent of the Lender).
6.06. Counterparts. This 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 Agreement by
signing any such counterpart.
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6.07. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York.
6.08. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTY HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
6.09. Captions. The captions and section headings appearing
herein are included solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Agreement.
6.10. Agents and Attorneys-in-Fact. The Lender may employ agents
and attorneys-in-fact in connection herewith and shall not be responsible for
the negligence or misconduct of any such agents or attorneys-in-fact selected by
it in good faith.
6.11. Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(a) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Lender in order to
carry out the intentions of the parties hereto as nearly as may be possible and
(b) the invalidity or unenforceability of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of such provision
in any other jurisdiction.
[Signature page follows.]
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IN WITNESS WHEREOF, the parties hereto have caused this Security
and Assignment Agreement to be duly executed and delivered as of the day and
year first above written.
[ ]
By:
---------------------------------
Name:
Title:
CHASE PREFERRED CAPITAL CORPORATION
By
---------------------------------
Name:
Title:
Security and Assignment Agreement