Exhibit 10.14
THIRD AMENDED AND RESTATED SECURITY AND COLLATERAL AGENCY
AGREEMENT
THIS THIRD AMENDED AND RESTATED SECURITY AND COLLATERAL AGENCY
AGREEMENT (the "Security Agreement") is made and dated as of March 31, 2003 by
and among PULTE MORTGAGE LLC , a Delaware limited liability company (the
"Company"), BANK ONE, NA, a national banking association, having its main office
in Chicago, Illinois, acting in its capacity as administrative agent for the
Lenders from time to time parties to the Credit Agreement (as defined below) (in
such capacity, the "Credit Agent"), and LASALLE BANK NATIONAL ASSOCIATION, as
collateral agent for the Secured Parties (as defined below) (in such capacity,
the "Collateral Agent").
RECITALS
A. Pursuant to that certain Fourth Amended and Restated Revolving
Credit Agreement of even date herewith, by and among the Company, the Credit
Agent and certain other Lenders named therein (the "Credit Agreement"), the
Lenders agreed to extend credit to the Company on the terms and subject to the
conditions set forth therein. Capitalized terms not otherwise defined herein are
used with the same meanings as in the Credit Agreement.
B. As a condition precedent to the effectiveness of the Credit
Agreement, the Credit Agent has required the execution and delivery of this
Security Agreement in order to, among other things, create a first priority
perfected security interest in the Collateral in favor of the Lenders, the
Credit Agent and the Collateral Agent (collectively, the "Secured Parties") to
secure payment of the Secured Obligations.
C. This Security Agreement amends and restates in its entirety
that certain Second Amended and Restated Security and Collateral Agency
Agreement dated as of March 31, 2000 by and among the Company and LaSalle Bank
National Association (as successor collateral agent to Bank One Trust Company).
NOW, THEREFORE, in consideration of the above Recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
AGREEMENTS
1. Appointment of Collateral Agent. Each Lender has, pursuant to
the terms of the Credit Agreement, appointed the Collateral Agent to act as
secured party, agent, bailee and custodian for the exclusive benefit of the
Secured Parties with respect to the Collateral. The Collateral Agent hereby
accepts such appointment and agrees to maintain and hold, or cause to be
maintained and held, all Collateral at any time delivered to it or any of its
subagents as secured party, agent, bailee and custodian for the exclusive
benefit of the Secured Parties. The Collateral Agent and the Company agree that
the Collateral Agent is acting and will act with respect to the Collateral for
the exclusive benefit of the Secured Parties and is not, and shall not at any
time in the future be, subject, with respect to the Collateral, in any manner or
to any extent, to the direction or control of the Company except as expressly
permitted hereunder and under the other Loan Documents. The Collateral Agent
agrees to act in accordance with this
Security Agreement and in accordance with any written instructions properly
delivered pursuant hereto. Under no circumstances shall the Collateral Agent
deliver, or cause to be delivered, possession of Collateral to the Company
except in accordance with the express terms of this Security Agreement or the
other Loan Documents.
2. Delivery and Categorization of Collateral.
(a) Mortgage Loans. The Company shall deliver Collateral
Transmittals to the Collateral Agent from time to time identifying Mortgage
Loans that the Company intends to include in Collateral by delivering to the
Collateral Agent the Required Mortgage Documents (as described on Schedule A
attached hereto) for such Mortgage Loans. Such delivery shall be made prior to
inclusion of such Mortgage Loans in Collateral, other than for AP Mortgages
identified in the Collateral Transmittal and covered by an Agreement to Pledge.
The Collateral Agent shall review the Required Mortgage Documents in accordance
with the review steps described on Exhibit 1 hereto.
(b) Agreement to Pledge. The Collateral Agent, upon
receipt of a Collateral Transmittal describing the AP Mortgages to be covered by
an AP Notice and an Agreement to Pledge as of that date, shall (subject to the
eligibility requirements set forth in the Credit Agreement) include such AP
Mortgages as Eligible Collateral in the Collateral Value Determination (as
defined Paragraph 6(a) below). The Company shall deliver the Required Mortgage
Documents for each such AP Mortgage not later than the ninth (9th) Business Day
after the date such AP Mortgage is first so included as a Eligible Collateral.
When a delivery of what purports to be the Required Mortgage Documents for an AP
Mortgage is received by the Collateral Agent on a given Business Day, such AP
Mortgage shall no longer be treated as an AP Mortgage for purposes of the
Borrowing Base Sublimits, and shall be included in any Collateral Value
Determination or other calculation involving the value of the Borrowing Base on
such Business Day prior to the Collateral Agent's review thereof on the
assumption that such AP Mortgage is Eligible Collateral. The Collateral Agent
shall review such Required Mortgage Documents in accordance with the steps
described on Exhibit 1 hereto before the opening of business of the Collateral
Agent on the next succeeding Business Day and shall make a decision on the
eligibility of the applicable Mortgage Loan for that Business Day.
(c) Securities. The Company may, from time to time,
deliver Securities to the Collateral Agent or an Approved MBS Custodian and
shall provide evidence that such Securities are either (a) in a certificated
form, with the certificates evidencing such Securities being delivered to the
Collateral Agent or such Approved MBS Custodian, or (b) in book entry or
uncertificated form with evidence that the Collateral Agent or such Approved MBS
Custodian has been identified as the nominal owner of such Securities in the
records of a Federal Reserve Bank or other institution authorized by the
applicable Federal Agency to maintain ownership records in respect of such
Securities.
(d) Gestation Collateral. The Company may, from time to
time, deliver a request to the Collateral Agent (or an Affiliate of the
Collateral Agent) acting in its capacity as pool custodian, for the initial
certification of Pledged Mortgages for purposes of creating a pool of Mortgage
Loans to support the issuance of a FHLMC, FNMA or GNMA Security. Such request
shall be in writing in the form of Exhibit 3.A to this Security Agreement, and
such
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Pledged Mortgages shall constitute Gestation Mortgage Loans on the Business Day
immediately following the Business Day on which such Pledged Mortgages are
certified by the Collateral Agent (or an Affiliate of the Collateral Agent) in
accordance with the standards of the applicable Federal Agency.
(e) Pledged Servicing. The Company shall deliver to the
Collateral Agent fully executed copies of the Acknowledgment Agreements with
FNMA and FHLMC. In the event the Credit Agent or the Required Lenders request
that Acknowledgement Agreements with GNMA be obtained, the Company shall deliver
to the Collateral Agent fully executed copies of Acknowledgement Agreements with
GNMA covering all Pledged Servicing with GNMA.
(f) Servicing Sale Receivables. The Company may, in
connection with a sale of Servicing Agreements from the Company to a Servicing
Purchaser, pledge the Servicing Sale Receivables due in connection with such
sale to the Collateral Agent for the benefit of the Secured Parties as
Collateral. If the Company so pledges Servicing Sale Receivables to the
Collateral Agent, the Company shall (i) deliver to the Credit Agent and the
Collateral Agent a complete executed copy of the related purchase agreement,
(ii) assign its rights to such Pledged Servicing Sale Receivables to the
Collateral Agent for the benefit of the Secured Parties pursuant to an
assignment in form and content satisfactory to the Credit Agent, and (iii) cause
the Servicing Purchaser of the applicable sold Servicing Agreements to execute
an agreement in form and content satisfactory to the Credit Agent pursuant to
which the Servicing Purchaser shall agree to (A) pay such Pledged Servicing Sale
Receivables directly to the Collateral Agent for the benefit of the Secured
Parties, and (B) provide simultaneous written notice to the Credit Agent and the
Collateral Agent of any claims made against or notices given to the Company
which would constitute an offset to or reduction in the amount of such Pledged
Servicing Sale Receivables.
(g) Identification of Collateral. All Mortgage Loans and
Securities at any time delivered to the Collateral Agent hereunder shall be held
by the Collateral Agent in a fire resistant vault, drawer or other suitable
depositary maintained in accordance with Federal Agency standards and controlled
solely by the Collateral Agent, conspicuously marked to show the respective
interests of the Secured Parties therein and not commingled with any other
assets or property of, or held by, the Collateral Agent. Accordingly, if
(pursuant to Paragraph 7(b) below) the Collateral Agent receives a shipping
request pursuant to which the Collateral Agent is to retain physical possession
of the applicable Mortgage Loans or Securities as an agent for any Person other
than the Secured Parties, the Collateral Agent shall physically separate such
Mortgage Loans or Securities from the remainder of the Collateral and shall
execute any transmittal letters required under Paragraph 7(b) below.
3. Grant of Security Interest. The Company hereby pledges and
assigns to the Collateral Agent for the benefit of the Secured Parties and
grants to the Collateral Agent for the benefit of the Secured Parties, a first
priority security interest in, the property described in Paragraph 4 below
(collectively and severally, the "Collateral"), to secure payment of the Secured
Obligations. Furthermore, each Agreement to Pledge shall create a security
interest in favor of the Collateral Agent for the benefit of the Secured Parties
in the AP Mortgages identified therein. By delivering an Agreement to Pledge,
the Company represents and warrants that each AP Mortgage identified therein
constitutes an Eligible Mortgage Loan. The Company
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agrees that while it is in possession of any Required Mortgage Documents for an
AP Mortgage, it will hold same in trust and as agent and bailee for the
Collateral Agent for the benefit of the Secured Parties, without authority to
make any other disposition thereof, or of the proceeds thereof. The Company
assumes the responsibility for loss or destruction of any such Required Mortgage
Documents until the same are delivered to the Collateral Agent.
Unless so directed by the Credit Agent when a Default has occurred and
is continuing, the Collateral Agent shall not record the assignment of mortgage
or deed of trust delivered in connection with any Pledged Mortgage.
4. Collateral. The Collateral shall consist of all right, title
and interest of the Company of every kind and nature in and to all of the
following property, assets and rights of the Company wherever located, whether
now existing or hereafter arising, and whether now or hereafter owned or
acquired by or accruing or owing to the Company, and all proceeds and products
thereof (including all proceeds in the Settlement Account and Cash and
Collateral Account and Custodian Settlement Accounts from time to time):
(a) all Pledged Mortgages;
(b) all Pledged Securities;
(c) any commitments or other agreements issued by any
private mortgage insurer or by the FHA or VA to insure or guarantee any Pledged
Mortgage;
(d) all commitments of FNMA, FHLMC or other Persons to
purchase Pledged Items from the Company or exchange Securities with the Company
for Pledged Items;
(e) any options to sell or purchase Securities, future
contracts, or any other interest rate protection products which directly or
indirectly protect the Company against reductions in value of such Pledged Items
due to changes in mortgage interest rates;
(f) the Settlement Account and Cash and Collateral
Account, the Funding Account and any Custodian Settlement Accounts and any
amounts standing to the credit of the Settlement Account and Cash and Collateral
Account and any Custodian Settlement Accounts then in existence with Approved
MBS Custodians, as described in Paragraph 7(c) below;
(g) all cash and Cash Equivalents held by the Credit
Agent or Collateral Agent as security for the Secured Obligations;
(h) all Pledged Servicing;
(i) all Pledged Servicing Sale Receivables;
(j) all property related to the foregoing, including,
without limitation, the right to service Pledged Mortgages while owned by the
Company, all accounts and general intangibles of whatsoever kind so related and
all documents or instruments delivered to the Credit Agent or the Collateral
Agent in respect of any Pledged Item, including, without
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limitation, the right to receive all insurance proceeds and condemnation awards
which may be payable in respect of the premises encumbered by any Pledged
Mortgage; and
(k) all proceeds and products of any of the foregoing.
5. Collateral Agent's Review of Collateral. Upon any receipt of
Required Mortgage Documents for any Mortgage Loan, the Collateral Agent shall
review the same and verify that:
(a) All Required Mortgage Documents relating to such
Mortgage Loan appear regular on their face (as determined by the Collateral
Agent in its reasonable discretion) and are in the Collateral Agent's
possession; and
(b) The statements set forth on Exhibit 1 hereto are
accurate and complete in all material respects.
If the Collateral Agent notes any exception in the review described in
subparagraph (a) or (b) above, the Collateral Agent shall not include such item
as Eligible Collateral in its next Collateral Value Determination (as defined in
Paragraph 6(a) below) delivered to the Credit Agent. In the event that the
Company has been requested by the Credit Agent or the Collateral Agent to
deliver the "Additional Required Mortgage Documents" (as described on Schedule B
attached hereto) with respect to any Mortgage Loan, the Collateral Agent shall
review and verify such Additional Required Mortgage Documents consistent with
the obligations of the Collateral Agent above. However, the Collateral Agent
shall have no obligation to verify that (i) the amount of any fire and extended
coverage insurance policy meets the requirements set forth on Schedule B, or
(ii) the loan to value ratio for any mortgage note is in excess of 80% (and thus
whether private mortgage insurance is required), but shall be entitled to rely
upon the determinations of the Company with respect to these matters.
6. Collateral Value Determination; Determination Assumptions.
(a) On each Business Day the Collateral Agent shall
compute the value of the Borrowing Base (taking into account all Borrowing Base
Sublimits), the Warehouse Borrowing Base and the Gestation Borrowing Base
(collectively, the "Borrowing Bases") and notify the Credit Agent thereof (a
"Collateral Value Determination") by telephone and by sending a facsimile copy
of a report ("Borrowing Base Report") in the form of Schedule C hereto (or such
other form as may be mutually agreed to by the Collateral Agent and the Credit
Agent) prior to 10:00 a.m. (Chicago time).
(b) In making any Collateral Value Determination or other
calculation involving a determination of the value of the Borrowing Bases, the
Collateral Agent shall be permitted to rely, without independent investigation
of the correctness thereof, on:
(1) The information supplied by the Company to
the Collateral Agent on the related Collateral Transmittal, with
respect to the net acquisition cost (including any discounts and
excluding any servicing released premium) of any Mortgage Loan, the
unpaid principal balance of any Mortgage Loan as of the Pledge Date
therefor, and the weighted average purchase price (expressed as a
percentage of par) committed to under all Approved Investor Commitments
which could cover such Mortgage Loan (which
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weighted average purchase price shall be recalculated by the Company
and reported to the Collateral Agent weekly);
(2) The most recent information supplied by the
Company to the Collateral Agent with respect to the number of days by
which payments on any Mortgage Loan constituting Collateral are past
due;
(3) The written information supplied by the
Company to the Collateral Agent with respect to a determination as to
whether amounts received in the Cash and Collateral Account represent
the purchase price paid for a specific Mortgage Loan or Security and,
consequently, whether the Mortgage Collateral Value of such Mortgage
Loan or MBS Value of such Security should be removed from such
calculation;
(4) The most recent information supplied by the
Credit Agent to the Collateral Agent with respect to the amount of the
then current Aggregate Commitment, which information shall be reported
by the Credit Agent to the Collateral Agent by 9:30 a.m. (Chicago time)
on each Business Day;
(5) Any information supplied by the Credit
Agent, the Company, or any other custodian of any of the Collateral, to
the Collateral Agent unless the Collateral Agent has actual knowledge
that such information is untrue or unreliable; and
(6) The information supplied by the Company or
the Credit Agent with respect to the Aggregate Servicing Value of the
Eligible Mortgage Servicing Rights and Eligible Servicing Sale
Receivables.
(c) No later than 3:30 p.m. (Chicago time) on each
Business Day (the "Information Cutoff Time") the Company shall deliver to the
Collateral Agent a list of Pledged Items (other than, so long as no Default
exists, Securities or Gestation Mortgage Loans being pooled and sold, the sale
of which is addressed in Paragraph 6(d) below) that have been sold to investors
(or, in the case of Servicing Sale Receivables, the applicable Servicing Sale
Receivables to be received on such day) (the "Paid Collateral Listing"),
together with appropriate detail identifying the specific wire that represents
the proceeds of each Pledged Item on the Paid Collateral Listing. Upon receipt
of the Paid Collateral Listing by the Information Cutoff Time, the Collateral
Agent will review all wires received in the Cash and Collateral Account on or
before 3:00 p.m. (Chicago time) (the "Wire Cutoff Time") and confirm that the
wires detailed in the Paid Collateral Listing have been received in the Cash and
Collateral Account and that the actual amounts match those shown in the Paid
Collateral Listing (the "Paid Reconciliation Process"). Any Pledged Item
identified on the Paid Collateral Listing that cannot be reconciled by the
Collateral Agent will remain in the Borrowing Base and the associated settlement
proceeds will remain in the Cash and Collateral Account until such time as the
Collateral Agent receives the necessary information from the Company to complete
the Paid Reconciliation Process. On or before 4:30 p.m. (Chicago time), the
Collateral Agent will remove the reconciled Pledged Items from the Borrowing
Base, and notify the Credit Agent of (i) the amount of reconciled proceeds
("Reconciled Non-Security Proceeds") and (ii) an updated Collateral Value
Determination reflecting the removal of such Pledged Items. No later than 4:00
p.m. (Chicago time), the Collateral Agent will notify the Company of the amount
of Reconciled Non-Security
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Proceeds and, so long as the updated Borrowing Base exceeds the total unpaid
balance of the outstanding Loans and no Default exists, authorize the Credit
Agent to transfer such amounts from the Cash and Collateral Account to the
Company's operating account or as otherwise instructed by the Company. If the
Borrowing Base does not exceed the total unpaid balance of the outstanding
Loans, the Collateral Agent shall authorize the Credit Agent to apply the
necessary amount of such Reconciled Non-Security Proceeds against the
outstanding Loans in accordance with Section 8.4 of the Credit Agreement so that
the Borrowing Base equals or exceeds the total unpaid balance of the outstanding
Loans and transfer the balance of such proceeds to the Company as set forth
above. During the continuance of a Default, all proceeds shall be applied in
accordance with the terms of Section 8.4 of the Credit Agreement.
(d) The procedures set forth in this Paragraph 6(d) will
apply for sales of Gestation Mortgage Loans and/or Securities on Pool Settlement
Days, so long as no Gestation Default has occurred or would result therefrom (in
which case the procedures described in Paragraph 6(c) shall apply). During the
continuance of a Default, all pool settlement proceeds shall be applied in
accordance with the terms of Section 8.4 of the Credit Agreement. For purposes
of this agreement, "Pool Settlement Days" shall be defined as any day on which a
pool of Gestation Mortgage Loans is funded by the applicable settlement agent.
No later than 2:00 p.m. (Chicago time) on each Pool Settlement Day the Company
shall deliver to the Collateral Agent a list of pooled Gestation Mortgage Loans
that support Securities which are expected to settle on such day (the "Pool Out
Report"), together with appropriate detail identifying the specific wire that
represents the proceeds of each pool that the Company expects to receive no
later than the close of business on that same day. On or before 1:00 p.m.
(Chicago time), upon notice from the Company that a payment is scheduled to be
made that day, the Credit Agent will, pursuant to Section 2.20 of the Credit
Agreement, pay down any outstanding Loans designated by the Company to be repaid
based on the expectation that the wire for these proceeds (the "Pool Proceeds")
will be received. At or about 4:30 p.m. (Chicago time), the Collateral Agent
will authorize the Credit Agent to repay itself the amounts advanced pursuant to
the preceding sentence with the applicable amount of the Pool Proceeds at or
about 4:30 p.m. (Chicago time). The Collateral Agent will notify the Company if
any expected Pool Proceeds have not been received by 3:30 p.m. (Chicago time).
Any shortfall still owed to the Credit Agent resulting from a negative variance
between the total expected Pool Proceeds and the actual Pool Proceeds received
on or before 4:30 p.m. (Chicago time), shall be covered by a Swingline Advance
equal to the shortfall amount. Such Swingline Advance will be made automatically
without need for a request by the Company and will accrue interest at the
Alternate Base Rate. Should the required amount exceed the Swingline
availability, the remaining unpaid amount advanced by the Credit Agent (the
"Overadvance") shall accrue interest at the Alternate Base Rate. On or before
the time at which the first determination of the Borrowing Base is prepared on
the next Business Day, the Collateral Agent will: (i) confirm that the remaining
expected Pool Proceeds were received in the Cash and Collateral Account and that
the actual amounts of all the Pool Proceeds match the amounts on the Pool Out
Report, and (ii) remove from the Borrowing Base the Gestation Mortgage Loans
which were pooled and sold. If all or a portion of the expected remaining Pool
Proceeds are not received in the Cash and Collateral Account on or before the
time at which the Borrowing Base is first prepared on the next Business Day, the
Gestation Mortgage Loans related to the expected remaining Pool Proceeds will
remain in the Borrowing Bases as long as they remain eligible. The Credit Agent
will use all Pool Proceeds received from the Cash and Collateral Account to
repay the unpaid amounts advanced by the Credit Agent
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above, and then shall apply any remaining Pool Proceeds ("Excess Pool Proceeds")
as set forth in Section 8.4 of the Credit Agreement. To the extent that the Pool
Proceeds are insufficient to repay all unpaid Overadvances, the Credit Agent
shall request repayment of such funds from the Lenders, together with interest,
in accordance with Section 2.20 of the Credit Agreement.
7. Handling of Collateral; Settlement Account.
(a) From time to time until otherwise notified in writing
by the Required Lenders, the Collateral Agent is hereby authorized to release
documentation relating to Mortgage Loans to the Company against a trust receipt
executed by the Company in the form of Exhibit 2 hereto (with such documents to
be returned within 15 days as set forth in such Exhibit 2, failing which the
applicable Mortgage Loan shall cease to be Eligible Collateral). The Collateral
Agent will maintain all original trust receipts in a vault, drawer or other
suitable depositary with a one hour fire rating maintained in accordance with
Federal Agency requirements and controlled solely by Collateral Agent. The
Company hereby represents and warrants that any request by the Company for
release of Collateral under this subparagraph (a) shall be solely for the
purposes of correcting clerical or other non-substantial documentation problems
in preparation of returning such Collateral to the Collateral Agent for ultimate
sale or exchange and that the Company has requested such release in compliance
with all terms and conditions of such release set forth herein and in the Credit
Agreement.
(b) Prior to the occurrence of a Default, upon delivery
by the Company to the Collateral Agent of a shipping request substantially in
the form of that attached hereto as Exhibit 3.B, the Collateral Agent will
transmit, or cause to be transmitted, Mortgage Loans and Securities held by it
or any Approved MBS Custodian as directed by the Company as follows:
(1) If the transmittal is of documentation for
Mortgage Loans or Securities in the possession of the Collateral Agent
or an Approved MBS Custodian in connection with the sale thereof to an
Approved Investor, such transmittal will be under cover of a
transmittal letter substantially in the form of that attached hereto as
Exhibit 4 (or such other form as may be approved by the Credit Agent or
required under any Federal Agency program pursuant to which the
relevant Mortgage Loans or Securities are being shipped) , subject to
modification of such Exhibit 4 pursuant to Paragraph 7(g) hereof at the
request of the Credit Agent. The Company is hereby authorized to direct
the Collateral Agent from time to time to transmit the documentation
for Pledged Mortgage Loans being sold to an Approved Investor along
with the documentation for other mortgage loans pledged for the benefit
of other lenders and being sold to the same Approved Investor pursuant
to a single transmittal letter in the form of Exhibit 4 which includes
the optional language bracketed in Exhibit 4 (the "Joint Transmittal
Letter").
(2) If the transmittal is of documentation for
Mortgage Loans or Securities in connection with the shipment to a
custodian or trustee (including any Affiliate of the Collateral Agent)
in connection with the formation of a mortgage pool supporting a
Security (any such Security secured or otherwise supported by any such
Mortgage Loan or Security being referred to herein as a
"Warehouse-Related Security"), such transmittal will be under cover of
a transmittal letter substantially in the form of that attached hereto
as Exhibit 5 (or such other form as may be required if the Security is
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being issued under any Federal Agency program), subject to modification
of such Exhibit 5 pursuant to Paragraph 7(g) hereof at the request of
the Credit Agent, and, in addition, will be conditioned upon the facts
that:
(i) If the Warehouse-Related Security
is being issued under a Federal Agency program, there has been
delivered for the Warehouse-Related Security such form as may
be required under the Federal Agency program pursuant to which
such Warehouse-Related Security is being issued (which form
shall name the Collateral Agent or an Approved MBS Custodian
(as defined below) as the subscriber and the Person to whom
the Warehouse-Related Security is to be delivered);
(ii) If the Warehouse-Related Security
is being issued pursuant to a program other than a Federal
Agency program, there has been delivered to and acknowledged
by the trustee and collateral agent or custodian for the
underlying mortgage pool a letter in form substantially
similar to Exhibit 5 and reasonably acceptable to the
Collateral Agent;
(iii) The Person to whom such
Warehouse-Related Security is to be delivered upon issuance in
exchange for the Mortgage Loans or Securities being shipped is
either (a) a Person approved by the Collateral Agent and the
Credit Agent which has agreed to hold such Warehouse-Related
Security and the proceeds of any sale or other disposition
thereof as custodian, agent and bailee for the benefit of the
Secured Parties pursuant to a custodial agreement
substantially in the form of that attached hereto as Exhibit 6
(a "Custodial Agreement"), or (b) the Credit Agent, the
Collateral Agent or an Affiliate thereof (any Person acting in
such capacity being referred to herein as an "Approved MBS
Custodian");
(iv) There has been delivered to the
Approved MBS Custodian a letter in the form attached to the
Custodial Agreement (Exhibit A to Exhibit 6 hereto); and
(v) At the request of the Credit Agent
pursuant to Paragraph 7(g) hereof, any Warehouse-Related
Security delivered to an Approved MBS Custodian pursuant to
subparagraphs (i) through (iv) shall be in a face amount of
not less than the amount of the Borrowing Base which is
attributable to the Mortgage Loans so delivered in exchange
for such Warehouse-Related Security.
In no event shall the Collateral Agent have any obligation to obtain written
acknowledgement of receipt from the addressee of any transmittal letter or other
communication sent by the Collateral Agent hereunder.
(c) All amounts payable on account of the sale of Pledged
Items (including, but not limited to, a sale pursuant to a repurchase agreement)
will be instructed to be paid directly by the purchaser to the Cash and
Collateral Account or, in the case of Pledged Securities delivered to an
Approved MBS Custodian, to a demand deposit account maintained with such
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Approved MBS Custodian (a "Custodian Settlement Account") and, thereafter, to
the Cash and Collateral Account as provided in the applicable Custodial
Agreement. Pursuant to Paragraph 3 above the Company has granted a security
interest in and lien upon the Cash and Collateral Account and in all Custodian
Settlement Accounts and in any and all amounts at any time held therein as
collateral security for the benefit of the Secured Parties. This Paragraph 7(c)
shall constitute notice to the Collateral Agent and any Approved MBS Custodian
of such security interest pursuant to the Uniform Commercial Code of all
relevant jurisdictions and any other law or regulation requiring such notice.
This Paragraph 7(c) shall further constitute irrevocable notice to the
Collateral Agent and any Approved MBS Custodian that the accounts referred to in
Paragraph 4(f) above (other than the Funding Account) are "no access" accounts
to the Company and the Collateral Agent except to the extent expressly permitted
hereunder. The Collateral Agent shall hold such security interest in and lien
upon the accounts referred to in Paragraph 4(f) above and all funds at any time
held therein for the benefit of the Secured Parties with all rights of a secured
party under the Uniform Commercial Code of all relevant jurisdictions.
(d) Prior to the occurrence of a Default, the Collateral
Agent and any Approved MBS Custodian shall take such steps as they may be
reasonably directed from time to time by the Company in writing which are not
inconsistent with the provisions of this Security Agreement and the other Credit
Documents and which the Company deems necessary to enable the Company to perform
and comply with Approved Investor Commitments and with other agreements for the
sale or other disposition in whole or in part of Mortgage Loans and Securities.
(e) The Collateral Agent may deliver any item of
Collateral to the Company or any other Person in accordance with the provisions
of the Credit Documents; provided, however, that the Collateral Agent shall not
deliver and shall incur no liability to the Company or any other Person for
refusing to deliver any item of Collateral to the Company or any other Person
(other than under existing Approved Investor Commitments) while a Default exists
if the Collateral Agent has been directed to refrain from so delivering
Collateral by the Required Lenders.
(f) In addition to the releases of Collateral provided
for in the preceding subparagraphs of this Paragraph 7, upon the request of the
Company delivered from time to time to the Credit Agent and the Collateral
Agent, the Collateral Agent shall, with the prior written approval of the Credit
Agent, release Collateral specified in such notice from the lien of this
Security Agreement. The Credit Agent shall give its approval of such release if,
but only if, (i) at the time of such release no Default exists and no notice of
a Default has been issued that has not been cured, (ii) any payment under
Section 2.11 of the Credit Agreement which may be required as a result of such
release has been made so that the release of such Collateral will not create a
violation of any Lending Sublimit or Borrowing Base Sublimit, and (iii) if the
Collateral to be released is Pledged Servicing, such release is made in
connection with the sale of such Pledged Servicing by the Company; provided,
however, that the Collateral Agent may release Collateral while a Default exists
or while a notice of Default has been issued but not cured if such release is in
connection with the sale of Collateral pursuant to an existing Approved Investor
Commitment with the proceeds of such sale being deposited in the Settlement
Account. The Collateral Agent is authorized to execute and deliver to the
Company, on behalf of the Secured Parties, such UCC-3 partial release forms or
other evidence as may be required of any release permitted hereunder.
- 10 -
(g) Notwithstanding the provisions of Paragraph 7(b)
above, the Credit Agent may, at any time, require that the following
modifications be made to all of its transmittal letters or only to transmittal
letters to certain Approved Investors designated by the Credit Agent:
(i) The second sentence of the second
full paragraph of the form of whole loan sale transmittal
letter attached hereto as Exhibit 4 shall be deleted and
replaced with the following sentence:
"Each of the Mortgage Loans is subject to a security
interest in favor of LaSalle Bank National Association
(the "Collateral Agent") on behalf of the Secured
Parties, which security interest shall be automatically
released upon your remittance of an amount equal to the
greater of (1) the purchase price for such Mortgage
Loans (as set forth on the schedule attached hereto),
and (2) $________, which is the mortgage collateral
value assigned by the Collateral Agent to such Mortgage
Loans. Such amount shall be remitted by wire transfer
to the following account:",
in which case the amount to be inserted in the blank in clause
two of such revised provision shall be an amount equal to the
amount of the Borrowing Base which is attributable to the
Mortgage Loans being delivered pursuant to the transmittal
letter;
(ii) The second sentence of the second
full paragraph of the form of warehouse related security
transmittal letter attached hereto as Exhibit 5 shall be
deleted and replaced with the following sentence:
"Each of the Mortgage Loans is subject to a security
interest in favor of LaSalle Bank National
Association (the "Collateral Agent") for the benefit
of the Secured Parties, which security interest shall
be automatically released upon the issuance of the
Warehouse-Related Security in accordance with the
terms of the prescribed GNMA, FNMA or FHLMC form
enclosed herewith, which form shall name a person
designated by the Collateral Agent as the person to
whom the Warehouse-Related Security is to be
delivered and require that the principal amount of
the Warehouse Related Security be in an amount not
less than $______________, which is the mortgage
collateral value assigned by the Collateral Agent to
such Mortgage Loans.",
in which case the amount to be inserted in the blank in such
revised provision shall be an amount equal to the amount of
the Borrowing Base which is attributable to the Mortgage Loans
being delivered pursuant to the transmittal letter.
8. Reports. The Collateral Agent shall deliver (a) the Borrowing
Base Report to the Credit Agent at the times and in the manner set forth in
Paragraph 6(a) above, (b) a Borrowing Base Report to the Company and each Lender
on or before the seventh day of each month, and (c) to the Credit Agent and any
Lender which makes a written request therefor, such other reports and
information as any Lender may from time to time reasonably request. In preparing
any such reports the Collateral Agent shall be entitled to rely, without
independent investigation
- 11 -
(other than the review steps described on Exhibit 1 hereto), on information
supplied to the Collateral Agent by the Company. The Collateral Agent may, with
the approval of the Company and the Credit Agent, alter the format of any report
required hereunder, provided such modified report contains the same information
previously furnished in the unmodified report.
9. No Reliance. The Collateral Agent shall not be responsible to
any Secured Party for any recitals, statements, representations or warranties
contained herein or in any other Credit Document; or for the execution,
effectiveness, genuineness, validity, enforceability, collectability, accuracy,
completeness or sufficiency of this Security Agreement or any other Credit
Document or instruments executed and delivered, or which could have been
executed or delivered, in connection with this Security Agreement or the other
Credit Documents, including, without limitation, the attachment, creation,
effectiveness or perfection of the security interests granted or purported to be
granted hereunder in and to the Collateral.
10. Intentionally Omitted.
11. Availability of Documents. The Secured Parties and their
agents, accountants, attorneys and auditors (each an "Inspecting Party") will be
permitted from time to time upon not less than three Business Days' written
notice to the Collateral Agent and the Company, and at such time as may be
mutually acceptable to such Inspecting Party, the Collateral Agent and the
Company to examine (to the extent permitted by applicable law) the files,
documents, records and other papers in the possession or under the control of
the Collateral Agent relating to any or all Collateral and to make copies
thereof. Any such activity will be at the cost and expense of the Secured Party
requesting such access, except that following the occurrence of a Default, all
reasonable out-of-pocket costs and expenses associated with the exercise by a
Secured Party of its rights under this Paragraph 11 shall be promptly paid by
the Company upon demand of the Credit Agent.
12. Representations and Warranties. The Company hereby represents
and warrants that: (a) the Company is the sole owner of the Collateral (or, in
the case of after-acquired Collateral, at the time the Company acquires rights
in the Collateral, will be the sole owner thereof), subject only to the rights
of Approved Investors under the Approved Investor Commitments; (b) except for
security interests in favor of the Collateral Agent for the benefit of the
Secured Parties hereunder, no Person has (or, in the case of after-acquired
Collateral, at the time the Company acquires rights therein, will have) any
right, title, claim or interest in, against or to the Collateral and, in any
event, so long as the Collateral Agent complies with the procedures relating to
possession of Collateral set forth in this Security Agreement, the Collateral
Agent shall have a perfected, first priority security interest therein for the
benefit of the Secured Parties; (c) no consent of any Person is required that
has not been obtained for the granting of the security interests provided for
herein, nor will any consent be required for the Collateral Agent to exercise
its rights under this Security Agreement in accordance with the terms of this
Security Agreement; (d) to the best of the Company's knowledge, all information
heretofore, herein or hereafter supplied to the Collateral Agent or to any
Lender by or on behalf of the Company with respect to the Collateral is or will
be accurate and complete; (e) the Approved Investor Commitments covering such
Collateral may be collaterally assigned to the Collateral Agent as described
herein; and (f) each Mortgage Loan and Security shall be, at all dates included
in the computation of the value of the Borrowing Bases, Eligible Collateral.
- 12 -
13. Covenants of the Company. The Company hereby agrees: (a) to
procure, execute and deliver from time to time any endorsements, assignments,
financing statements and other writings reasonably deemed necessary or
appropriate by the Collateral Agent or the Credit Agent to perfect, maintain and
protect the Collateral Agent's security interest hereunder and the priority
thereof and to deliver promptly to the Collateral Agent all originals of any
Collateral or proceeds thereof consisting of chattel paper or instruments; (b)
not to surrender or lose possession of (other than to the Collateral Agent),
sell, encumber, or otherwise dispose of or transfer, any Collateral or right or
interest therein other than shipment of Mortgage Loans and Securities under
Approved Investor Commitments and as otherwise permitted under Paragraph 7 above
and as otherwise permitted by the Credit Agreement; (c) except as otherwise
contemplated in any Custodial Agreement, not to grant to any Federal Agency or
Approved Investor any other security interest in any Collateral, or otherwise
acknowledge the creation of any ownership rights of any Federal Agency or
Approved Investor with respect to any Collateral unless and until the Collateral
Agent has received the proceeds of such Collateral as described herein; (d) at
all times to account fully for and promptly to deliver to the Collateral Agent,
in the form received, all Collateral or proceeds thereof received, endorsed to
the Collateral Agent or in blank as appropriate and accompanied by such
assignments and powers, duly executed, as the Collateral Agent or the Credit
Agent shall reasonably request, and until so delivered all Collateral and
proceeds thereof shall be held in trust for the Collateral Agent for the benefit
of the Secured Parties, separate from all other property of the Company and
identified as the property of the Collateral Agent for the benefit of the
Secured Parties; (e) to keep accurate and complete records of the Collateral and
at any reasonable time and at the Company's expense, upon demand by the
Collateral Agent or the Credit Agent, to exhibit to and allow inspection of the
Collateral and the records, reports and information concerning the Collateral by
the Collateral Agent or Credit Agent (or Persons designated by the Collateral
Agent or Credit Agent); (f) to keep the records concerning the Collateral at the
location(s) set forth in Paragraph 25 below and not to remove the records from
such location(s) without the prior written consent of the Collateral Agent and
the Credit Agent; (g) not to materially modify, compromise, extend, rescind or
cancel any deed of trust, mortgage, note or other document, instrument or
agreement connected with any Mortgage Loan pledged under this Security Agreement
or any document relating thereto or connected therewith or consent to a
postponement of strict compliance on the part of any party thereto with any term
or provision thereof in any material respect (except to the extent (i) any such
action is permissible in accordance with Federal Agency rules and regulations,
(ii) the ability to sell any affected Mortgage Loans to an Approved Investor is
not thereby diminished, and (iii) the value of such Collateral is not thereby
diminished); (h) to keep the Collateral insured against loss, damage, theft, and
other risks customarily covered by insurance, and such other risks as the
Collateral Agent or the Credit Agent may reasonably request; (i) to do all acts
that a prudent investor would deem necessary or desirable to maintain, preserve
and protect the Collateral; (j) not knowingly to use or permit any Collateral to
be used unlawfully or in violation of any provision of this Security Agreement,
the Credit Agreement or any applicable statute, regulation or ordinance or any
policy of insurance covering the Collateral; (k) to pay (or require to be paid)
prior to their becoming delinquent all taxes, assessments, insurance premiums,
charges, encumbrances and liens now or hereafter imposed upon or affecting any
Collateral except as otherwise permitted in the Credit Agreement; (l) to notify
the Collateral Agent and the Credit Agent before any such change shall occur of
any change in the Company's name, identity or structure through merger,
consolidation or otherwise; (m) to appear in and defend, at the
- 13 -
Company's cost and expense, any action or proceeding which may affect its title
to or the Collateral Agent's interest for the benefit of the Secured Parties in
the Collateral; and (n) to comply in all material respects with all laws,
regulations and ordinances relating to the possession, operation, maintenance
and control of the Collateral. Notwithstanding the foregoing, (1) the
requirements of clauses (g), (k) and (m) shall not apply to any Collateral which
is not required to be included in the computation of the value of any of the
Borrowing Bases in order for the Company to be in compliance with the
requirements of the Credit Agreement unless failure to comply with the
requirements of said subparagraphs would have an adverse effect on the
Collateral which is included in such computation, and (2) the failure of the
Company to comply with its obligations under this Paragraph 13 with respect to
any Pledged Item shall cause such Pledged Item to cease to qualify as Eligible
Collateral.
14. Collection of Collateral Payments.
(a) The Company shall, at its sole cost and expense, use
its best efforts to obtain payment, when due and payable, of all sums due or to
become due with respect to any Collateral ("Collateral Payments" or a
"Collateral Payment"), consistent with all requirements of law and contractual
obligations binding upon the Company. Upon the request of the Collateral Agent
while a Default exists, the Company will notify and direct any party who is or
might become obligated to make any Collateral Payment, to make payment thereof
to the Collateral Agent (or to the Company in care of the Collateral Agent) at
such address as the Collateral Agent may designate. The Company will reimburse
the Collateral Agent promptly upon demand for all out-of-pocket costs and
expenses, including reasonable attorneys' fees and litigation expenses, incurred
by the Collateral Agent in seeking to collect any Collateral Payment.
(b) Following the occurrence of a Default, upon the
request of the Collateral Agent the Company will transmit and deliver to the
Collateral Agent, forthwith upon receipt and in the form received, all cash,
checks, drafts and other instruments for the payment of money (properly endorsed
where required so that such items may be collected by the Collateral Agent)
which may be received by the Company at any time as payment on account of any
Collateral Payment and if such request shall be made, until delivery to the
Collateral Agent, such items will be held in trust for the Collateral Agent for
the benefit of the Secured Parties and will not be commingled by the Company
with any of its other funds or property. Thereafter, the Collateral Agent is
hereby authorized and empowered to endorse the name of the Company on any check,
draft or other instrument for the payment of money received by the Collateral
Agent on account of any Collateral Payment if the Collateral Agent believes such
endorsement is necessary or desirable for purposes of collection.
(c) The Company hereby agrees to indemnify, defend and
save harmless the Collateral Agent and its agents, officers, employees and
representatives from and against all reasonable liabilities and expenses on
account of any adverse claim asserted against the Collateral Agent relating to
any moneys received by the Collateral Agent on account of any Collateral Payment
(other than as a direct result of the gross negligence or willful misconduct of
the Collateral Agent) and such obligation of the Company shall continue in
effect after and notwithstanding the discharge of the Secured Obligations and/or
the release of the security interest granted in Paragraph 3 above.
- 14 -
15. Authorized Action by Collateral Agent. The Company hereby
irrevocably appoints the Collateral Agent as its attorney-in-fact to do (but the
Collateral Agent shall not be obligated to and shall incur no liability to the
Company or any third party for failure so to do) from time to time while a
Default exists, at the written request and direction of the Required Lenders,
any act which the Company is obligated by this Security Agreement to do, and to
exercise such rights and powers as the Company might exercise with respect to
the Collateral, including, without limitation, the right to (a) collect by legal
proceedings or otherwise and endorse, receive and receipt for all dividends,
interest, payments, proceeds and other sums and property now or hereafter
payable on or on account of the Collateral; (b) insure, process, service and
preserve the Collateral; (c) transfer the Collateral to the Collateral Agent's
own or its nominee's name; and (d) make any compromise or settlement, and take
any other action it deems advisable with respect to the Collateral.
Notwithstanding anything contained herein, in no event shall the Collateral
Agent be required to make any presentment, demand or protest, or give any
notice, and the Collateral Agent need not take any action to preserve any rights
against any prior party or any other person in connection with the Secured
Obligations or with respect to the Collateral.
16. Default and Remedies.
(a) While a Default exists, the Collateral Agent shall at
the written request and direction of the Credit Agent on behalf of the Required
Lenders, without notice to or demand upon the Company: (i) foreclose or
otherwise enforce the Collateral Agent's security interest for the benefit of
the Secured Parties in the Collateral in any manner permitted by law or provided
for hereunder; (ii) sell or otherwise dispose of the Collateral or any part
thereof at one or more public or private sales or at any broker's board or on
any securities exchange, whether or not such Collateral is present at the place
of sale, for cash or credit or future delivery (provided that the Required
Lenders have approved the terms of any sale on credit or for future delivery)
and without assumption of any credit risk, on such terms and in such manner as
the Collateral Agent may determine; (iii) require the Company to assemble the
Collateral and/or books and records relating thereto and make such available to
the Collateral Agent at a place to be designated by the Collateral Agent; (iv)
enter into property where any Collateral or books and records relating thereto
are located and take possession thereof with or without judicial process; and
(v) prior to the disposition of the Collateral, prepare it for disposition in
any manner and to the extent the Collateral Agent deems appropriate. Whether or
not the Collateral Agent exercises any right given pursuant to this Paragraph
16, upon the occurrence of any Default, the Collateral Agent on behalf of the
Secured Parties shall have as to any Collateral all other rights and remedies
provided for herein and all rights and remedies of a secured party under the
Illinois Uniform Commercial Code and, in addition thereto and not in lieu
thereof, all other rights or remedies at law or in equity existing or conferred
upon the Collateral Agent on behalf of the Secured Parties by other
jurisdictions or other applicable law or given to the Collateral Agent on behalf
of the Secured Parties pursuant to any security agreement, other instrument or
agreement heretofore, now, or hereafter given as security for the Company's
obligations hereunder.
(b) The Collateral Agent is authorized, at any such sale,
if it deems it advisable so to do, to restrict the prospective bidders or
purchasers to Persons who will represent and agree that they are purchasing for
their own account, for investment, and not with a view to the distribution or
sale of any of the Collateral. Upon any sale or other disposition pursuant to
- 15 -
this Security Agreement, the Collateral Agent shall have the right to deliver,
assign and transfer to the purchaser thereof the Collateral or portion thereof
so sold or disposed of and all proceeds thereof shall, as set forth in βββββββββ
ββ βββββ, ββ promptly transmitted to the Credit Agent for allocation to the
Secured Parties in accordance with the Credit Agreement. Each purchaser at any
such sale or other disposition shall hold the Collateral free from any claim or
right of whatever kind, including any equity or right of redemption of the
Company, and the Company specifically waives (to the extent permitted by law)
all rights of redemption, stay or appraisal which it has or may have under any
rule of law or statute now existing or hereafter adopted. The Collateral Agent
shall give the Company only such notice and shall publish such notice as may be
required by the Illinois Uniform Commercial Code or by other applicable law of
the intention to make any such public or private sale or sale at broker's board
or on a securities exchange. Any such public sale shall be held at such time or
times within the ordinary business hours and at such place or places permitted
by the Illinois Uniform Commercial Code. At any such sale the Collateral may be
sold in one lot as an entirety or in separate parcels, as the Collateral Agent
may determine. The Collateral Agent may 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 same may be so adjourned. In case of any sale of all or any part of
the Collateral on credit or for future delivery (the terms of which shall be
approved by the Required Lenders), (i) the Collateral so sold may be retained by
the Collateral Agent until the selling price is paid by the purchaser thereof,
(ii) none of the Secured Parties shall incur any liability in case of the
failure of such purchaser to take up and pay for the Collateral so sold, and
(iii) in case of any such failure, such Collateral may again be sold as provided
herein. Nothing contained in this Security Agreement shall prohibit any Lenders
from purchasing the Collateral at such sale.
(c) The Company hereby appoints the Collateral Agent as
the Company's attorney-in-fact, effective as of the date of any Unmatured
Default (and during the continuance thereof) for the purpose of taking all
actions on behalf of the Company contemplated or required under the terms of the
Acknowledgement Agreements with respect to Pledged Servicing and executing any
instruments which the Collateral Agent 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, the Collateral Agent shall have the right and power to receive,
endorse and collect all checks made payable to the order of the Company
representing any payment on account of the principal of or interest on any of
the Mortgage Loans covered by such Pledged Servicing or on account of the terms
of the Servicing Agreements governing such Pledged Servicing and to give full
discharge for the same. Furthermore, notwithstanding anything herein to the
contrary, with respect to any Collateral covered by an executed Acknowledgement
Agreement, the Collateral Agent is authorized to carry out and comply with, and
the Company approves and acknowledges, all requirements regarding such a sale
set forth therein or as may otherwise be imposed by the counterparty to such an
Acknowledgement Agreement and agrees that such a sale in accordance with the
requirements of an Acknowledgement Agreement is commercially reasonable.
17. Disposition of Proceeds. "Net Proceeds" shall mean the
proceeds realized upon the sale or other disposition of any Collateral after
deducting therefrom the payment of the costs and expenses of such sale or
disposition, including (i) reasonable compensation to the Collateral Agent's and
Credit Agent's agents and counsel, and all expenses, liabilities and advances
made
- 16 -
or incurred by any Secured Party acting on instructions of the Required Lenders,
and (ii) with respect to the Pledged Servicing, the payment of any amounts due
by the Company to FNMA or FHLMC, as the case may be, as a condition to the
transfer of the Company's interest in any such Servicing Agreements pursuant to
the terms of such Servicing Agreements, including without limitation all amounts
described in the Acknowledgement Agreements. All such costs and expenses shall
be deducted from the proceeds directly related thereto. The Collateral Agent
shall distribute the Net Proceeds to the Credit Agent for the benefit of the
Secured Parties.
18. Waiver. No Secured Party shall incur any liability as a result
of the sale of the Collateral, or any part thereof, at any public or private
sale. The Company hereby waives any claims it may have against any Secured Party
arising by reason of the fact that the price at which the Collateral may have
been sold at such private sale was less than the price which might have been
obtained at a public sale or was less than the aggregate amount of the Secured
Obligations then outstanding.
19. The Collateral Agent.
(a) Collateral Agent's Fee. Compensation of the
Collateral Agent for its services hereunder and reimbursement for any expenses
incurred by it in the performance of its duties hereunder shall be paid by the
Company pursuant to a separate fee schedule previously delivered by the
Collateral Agent to the Company (the "Fee Schedule"). The Collateral Agent shall
notify the Company of all extraordinary fees, costs and expenses of the
Collateral Agent directly relating to the Collateral Agent's performance of this
Security Agreement, and such extraordinary fees, costs and expenses shall be
paid promptly by the Company or, if already paid by the Collateral Agent, the
Company promptly shall reimburse the Collateral Agent therefor. For the purposes
of this provision, extraordinary fees, costs and expenses shall include all
fees, costs and expenses incurred by the Collateral Agent in performance of this
Security Agreement which are not otherwise expressly covered by the Fee
Schedule, including, without limitation, expenses of legal counsel to the
Collateral Agent and the fees and expenses of the Collateral Agent undertaking
any activity described in Paragraphs 14, 15 and 16 above or procedures related
to reviewing of documents listed on Schedule B or in furnishing any additional
reports and information reasonably requested by the Credit Agent or any Lender
pursuant to clause (c) of Paragraph 8 above.
(b) Actions by the Collateral Agent. The obligations of
the Collateral Agent hereunder are only those expressly set forth herein. The
Collateral Agent shall be entitled to (but shall not be obligated to) take or
refrain from taking any discretionary powers or actions under this Security
Agreement or any other Credit Document unless and until the Collateral Agent
shall have received the written direction to take or refrain from taking such
action from the Required Lenders (or all of the Lenders with respect to actions
which require unanimous approval of the Lenders). The Collateral Agent shall not
be required to take any action hereunder if it shall reasonably determine that
by so doing it may incur criminal or civil liability.
(c) Consultation with Experts. The Collateral Agent may
consult with legal counsel (who may be counsel for the Company), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with
the advice of such counsel, accountants or experts; provided,
- 17 -
however, that the Collateral Agent shall consult counsel for the Company only
with regard to information about the Company and shall not request legal advice
from such counsel.
(d) Liability of Collateral Agent.
(1) Neither the Collateral Agent, its Affiliates
nor any of its directors, officers, agents, or employees shall be
liable for any action taken or not taken by it in connection herewith
(i) with the consent or at the request of the Required Lenders or (ii)
in the absence of its own gross negligence or willful misconduct.
Furthermore, in no event shall the Collateral Agent or its Affiliates,
directors, officers, agents, and employees be held liable for any
special, indirect, punitive or consequential damages resulting from any
action taken or omitted to be taken by it or them hereunder or in
connection herewith even if advised of the possibility of such damages.
(2) The Collateral Agent shall not incur any
liability by acting in reliance upon any notice, consent, certificate,
statement, or other writing (which may be a bank wire, telex or similar
writing) or telephone communication believed by it to be genuine or, in
the case of a writing, to be signed by the proper party or parties.
(3) Except as provided in Paragraph 5 above, the
Collateral Agent shall not be under a duty to examine into or pass upon
the validity, effectiveness, genuineness or value of the Collateral or
any other instrument or document furnished pursuant thereto or
thereunder, and Collateral Agent shall be entitled to assume that the
same are valid, effective and genuine in what they purport to be.
(e) Indemnification. The Company agrees to indemnify and
hold the Collateral Agent and its directors, officers, agents, and employees
harmless against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, or disbursements of any
kind or nature whatsoever, including reasonable attorneys' fees, that may be
imposed on, incurred by, or asserted against the Collateral Agent or its
affiliates, directors, officers, agents, or employees, in anyway relating to or
arising out of this Agreement or any action taken or not taken by the Collateral
Agent or its permitted successors and assigns under this Agreement unless such
liabilities, obligations, losses, damages, penalties, actions, judgments suits,
costs, expenses, or disbursements were imposed on, incurred by or asserted
against the Collateral Agent because of the breach by the Collateral Agent of
its obligations under this Agreement, which breach was caused by the gross
negligence, lack of good faith, or willful misconduct on the part of the
Collateral Agent or any of its affiliates, directors, officers, agents, or
employees. The foregoing indemnification shall survive any termination or
expiration of this Agreement or the resignation or removal of the Collateral
Agent. Subject to the limitations set forth below, the Lenders shall indemnify
the Collateral Agent (to the extent not reimbursed by the Company) against any
cost, expense (including reasonable counsel fees and disbursements), claim,
demand, action, loss or liability (except such as result from the Collateral
Agent's gross negligence or willful misconduct) that the Collateral Agent may
suffer or incur in connection with this Security Agreement or any action taken
or omitted by the Collateral Agent hereunder (the "Indemnified Amount"). Any
Indemnified Amount due to the Collateral Agent shall be paid by the Lenders pro
rata in accordance with their respective shares of the Secured Obligations
- 18 -
outstanding at the time the Collateral Agent incurred such liability. The
provisions of this Paragraph 19(e) shall survive the termination of this
Security Agreement.
(f) Knowledge of Defaults. The Collateral Agent shall not
be deemed to have knowledge or notice of the occurrence of a Default unless the
Collateral Agent has received notice from a Secured Party or the Company
referring to a Credit Agreement or this Security Agreement describing such
Default and stating that such notice is a "Notice of Default." Following receipt
of a Notice of Default, the Collateral Agent shall assume that the Default is
continuing until the Collateral Agent receives written information to the
contrary from the Credit Agent.
(g) Reports. The Collateral Agent may, at its option with
the approval of the Company and the Credit Agent, alter the format of any report
required hereunder, provided such modified report contains the same information
previously furnished in the unmodified report.
(h) Other Transactions with Company. The Collateral Agent
and its Affiliates may accept deposits from, lend money to, and generally engage
in any kind of business with, the Company or any Subsidiary or Affiliate of the
Company as if it were not the Collateral Agent hereunder.
(i) Resignation/Removal. The Collateral Agent may resign
at any time by giving 90 days prior written notice thereof to the Lenders and
the Company. The Collateral Agent also agrees to resign within 90 days after
written notice by the Company requesting the resignation of the Collateral Agent
provided that no Default has occurred and is continuing at the time of such
request. In addition, in the event the Collateral Agent fails to perform its
obligations under this Security Agreement in any material manner and fails to
correct its performance within 30 days of receipt of written notice of such
failure given by the Credit Agent at the request of not less than the Required
Lenders, then the Collateral Agent may be removed upon 30 days written notice
given by the Credit Agent at the direction of not less than the Required
Lenders. Upon any such resignation or removal: (i) so long as there has not
occurred and is continuing a Default, the Company shall appoint (which
appointment shall be subject to the approval of the Required Lenders, such
approval not to be unreasonably withheld or delayed), a successor agent for such
Collateral Agent, and (ii) following the occurrence and during the continuance
of a Default, the Required Lenders shall appoint a successor agent for such
Collateral Agent who is in the business of acting as a collateral agent for
mortgage warehouse lenders as a part of its regular business. Following the
appointment and acceptance of a successor Collateral Agent, the Collateral shall
be transferred to the new Collateral Agent within 30 days after such acceptance.
If the Company and/or the Required Lenders, as applicable, are unable to agree
on the appointment of a successor agent by a date 10 days prior to the effective
date of such resignation or removal, the retiring Collateral Agent shall appoint
a successor Collateral Agent who is in the business of acting as a collateral
agent for mortgage warehouse lenders as a part of its regular business. After
the appointment of a successor Collateral Agent and the successor's acceptance
of such appointment, that successor Collateral Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Collateral Agent, and the retiring Collateral Agent shall be discharged
from its duties and obligations under this Security Agreement; provided,
however, that the retiring Collateral Agent shall not be discharged from any
liability as a result of its or its directors',
- 19 -
officers', agents' or employees' gross negligence or willful misconduct in
connection with the performance of its duties and obligations under this
Security Agreement prior to the effective date of its resignation or removal.
Notwithstanding the foregoing, the Collateral Agent shall continue to hold the
Pledged Items and the security interest created hereunder for the benefit of the
Secured Parties until such Pledged Items and security interest have been
effectively transferred to the successor agent. After the resignation or removal
of any Collateral Agent hereunder, the provisions of this Security Agreement
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was the Collateral Agent under this Security Agreement.
(j) Representations and Warranties. The Collateral Agent
hereby represents and warrants:
(1) The Collateral Agent is a national banking
association validly existing, in good standing and authorized to
exercise its powers, rights and privileges and is qualified to do
business in all jurisdictions where necessary, and has all requisite
power and authority to perform all of its obligations under this
Security Agreement;
(2) The execution, delivery and performance by
the Collateral Agent of this Security Agreement and all documents
required hereby to be executed by the Collateral Agent have been duly
authorized by all necessary corporate action and do not and will not
violate any existing provision of any law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award currently in
effect having applicability to the Collateral Agent; and
(3) This Security Agreement and all documents
required hereby to be executed by the Collateral Agent have been duly
executed and delivered by the Collateral Agent.
(k) Tax Returns. The Collateral Agent shall not be
responsible for preparing or filing any reports or returns relating to federal,
state or local income taxes with respect to this Security Agreement, other than
for the Collateral Agent's compensation or for reimbursement of expenses.
(l) Deemed Notification. Any other provision of this
Security Agreement to the contrary notwithstanding, the Collateral Agent shall
have no notice, and shall not be bound by any of the terms and conditions of any
other document or agreement executed or delivered in connection with, or
intended to control any part of, the transactions anticipated by or referred to
in this Security Agreement unless the Collateral Agent is a signatory party to
that document or agreement. Notwithstanding the foregoing sentence, the
Collateral Agent shall be deemed to have notice of the terms and conditions
(including without limitation definitions not otherwise set forth in full in
this Security Agreement) of other documents and agreements executed or delivered
in connection with, or intended to control any part of, the transactions
anticipated by or referred to in this Security Agreement, to the extent such
terms and provisions are referenced, or are incorporated by reference, into this
Security Agreement only as long as the Company or the Credit Agent shall have
provided a copy of any such document or agreement to the Collateral Agent.
- 20 -
(m) Business Qualification. Nothing in this Security
Agreement shall be deemed to impose on the Collateral Agent any duty to qualify
to do business in any jurisdiction, other than (i) any jurisdiction where any
Collateral documents are or may be held by the Collateral Agent from time to
time hereunder, and (ii) any jurisdiction where its ownership of property or
conduct of business requires such qualification and where failure to qualify
could have a material adverse effect on the Collateral Agent or its property or
business or on the ability of the Collateral Agent to perform it duties
hereunder.
(n) Verification of Signatures. Under no circumstances
shall the Collateral Agent be obligated to verify the authenticity of any
signature on any of the documents received or examined by it in connection with
this Security Agreement or the authority or capacity of any person to execute or
issue such document.
(o) Verification of Payment. The Collateral Agent shall
have no duty to ascertain whether or not any cash amount or payment has been
received by the Company, the Credit Agent or any third person.
(p) Collateral Agent Expenditures. No provision of this
Security Agreement shall require the Collateral Agent to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder or in the exercise of any of its rights and powers, if, in
its sole judgment, it shall believe that repayment of such funds or adequate
indemnity against such risk or liability is not assured to it.
(q) Merger or Consolidation. Any entity into which the
Collateral Agent may be merged or converted or with which it may be
consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Collateral Agent shall be a party, or any entity
succeeding to the business of the Collateral Agent, shall be the successor of
the Collateral Agent hereunder, without the execution or filing of any paper or
any further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
(r) Affiliates. The Company and the Credit Agent agree
that the Collateral Agent may execute any of its duties under this Security
Agreement through any of its agents, attorneys-in-fact, or Affiliates. Any such
agent, attorney-in-fact, or Affiliate (and such Affiliate's directors, officers,
agents and employees) which performs duties in connection with this Security
Agreement shall be entitled to the same benefits of the indemnification, waiver
and other protective provisions to which the Collateral Agent is entitled under
this Security Agreement. In particular, to the extent the Collateral Agent is
directed to or may exercise any rights or remedies with respect to this Security
Agreement or any other Credit Document, the Collateral Agent may appoint agents
to exercise any such rights or remedies on behalf of the Collateral Agent. The
Collateral Agent may also assign its rights and obligations under this
Agreement, in whole or in part, to any Affiliate; however, Collateral Agent
agrees to notify Company and Credit Agent of any such assignment.
(s) Force Majeure. The Collateral Agent shall not be
responsible for delays or failures in performance resulting from acts beyond its
control. Such acts shall include, but not be limited to, acts of God, strikes,
lockouts, riots, acts or war or terrorism, epidemics, nationalization,
expropriation, currency restrictions, governmental regulations superimposed
- 21 -
after the fact, fire, communication line failures, computer viruses, power
failures, earthquakes or other disasters.
20. Confidentiality. The Collateral Agent agrees to take normal
and reasonable precautions and exercise due care to maintain the confidentiality
of all non-public information provided to it by the Company or by any other
party on the Company's behalf in connection with this Security Agreement or the
other Credit Documents and agrees and undertakes that neither it nor any of its
Affiliates shall disclose any such information for any purpose or in any manner
other than pursuant to the terms contemplated by this Security Agreement or the
other Credit Documents. The Collateral Agent may disclose such information (1)
to any Secured Party, (2) at the request of any regulatory authority or in
connection with an examination of the Collateral Agent or any of its Affiliates
by any such authority, (3) pursuant to subpoena or other court process, (4) when
required to do so in accordance with the provisions of any applicable law, (5)
at the express direction of any other governmental authority of any State of the
United States of America or of any other jurisdiction in which the Collateral
Agent or any of its Affiliates conducts its business, (6) to the Collateral
Agent's or any of its Affiliates' independent auditors, attorneys and other
professional advisors, (7) if such information has become public other than
through disclosure by the Collateral Agent or any of its Affiliates or any
Lender, and (8) in connection with any litigation involving the Collateral Agent
or any of its Affiliates. The Collateral Agent shall give the Company prior
written notice of any disclosure pursuant to clause (2), (3), (4) or (5) of the
preceding sentence unless the Collateral Agent is prohibited from doing so by
the party requesting such information. Notwithstanding the foregoing, the
Company authorizes the Collateral Agent to disclose to any lending institution
proposed by the Company to become a Lender under the Credit Agreement or any
prospective or actual Participants such financial and other information in its
possession (i) which has been delivered to the Collateral Agent pursuant to the
Credit Documents or which has been delivered to the Collateral Agent by the
Company prior to entering into the Credit Documents or (ii) which is reasonably
necessary to effectuate the purposes of the Credit Agreement and this Security
Agreement, provided that unless otherwise agreed by the Company, such lending
institution or Participant shall agree in writing to keep such information
confidential to the same extent required of the Collateral Agent hereunder.
21. Voting of Debtholders. In all cases in which this Security
Agreement requires the consent, approval or direction of the Required Lenders or
all of the Lenders with respect to any action, the Credit Agent shall be
responsible for determining whether the Lenders have given such consent,
approval or direction and shall notify the Collateral Agent thereof in writing.
The Collateral Agent shall be entitled to rely without independent verification
upon the information supplied by the Credit Agent with respect to any consent,
approval or direction of the Required Lenders (or all of the Lenders with
respect to actions which require unanimous approval of the Lenders).
22. Binding Upon Successors. All rights of the Collateral Agent
and the Secured Parties under this Security Agreement shall inure to the benefit
of the Collateral Agent and the Secured Parties and their successors and
assigns. This Security Agreement shall not be assignable by the Company without
the consent of all Lenders.
- 22 -
23. Entire Agreement; Severability. This Security Agreement
contains the entire security agreement and collateral agency agreement with
respect to the Collateral among the Secured Parties and the Company and
supersedes all prior written or oral agreements and understandings relating
thereto. All waivers by the Company provided for in this Security Agreement have
been specifically negotiated by the parties with full cognizance and
understanding of their rights. If any of the provisions of this Security
Agreement shall be held invalid or unenforceable, this Security Agreement shall
be construed as if not containing such provisions, and the rights and
obligations of the parties hereto shall be construed and enforced accordingly.
24. Choice of Law. This Security Agreement shall be construed in
accordance with and governed by the laws of the State of Illinois. Where
applicable and except as otherwise defined herein, terms used herein shall have
the meanings given them in the Illinois Uniform Commercial Code.
25. Place of Business; Records. The Company represents and
warrants that its principal place of business and chief executive office is at
the address set forth beneath its signature below, and that its books and
records concerning the Collateral are kept at its principal place of business
and chief executive office. The Company shall not change its principal place of
business and chief executive office without 30 days' prior written notice to the
Credit Agent and the Collateral Agent.
26. Notice. Except where instructions or notices are expressly
authorized elsewhere in this Security Agreement to be given by telephone or by
other means of transmission, all instructions, notices and other communications
to be given to any party hereto shall be in writing and shall be personally
delivered or sent by certified mail, postage prepaid, private delivery service
or by facsimile, and shall be deemed to be given for purposes of this Security
Agreement on the day (or at the time of day, if applicable) when actually
received by the intended party at its address or facsimile or telephone number
as set forth following its signature below (or as such party may specify to the
other parties in writing).
- 23 -
27. Waiver of Jury Trial.
EACH PARTY TO THIS SECURITY AGREEMENT HEREBY WAIVES TRIAL BY
JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY CREDIT DOCUMENT OR THE RELATIONSHIP
ESTABLISHED THEREUNDER.
EXECUTED the day and year first above written.
PULTE MORTGAGE LLC
By: /s/ βββββ β. ββββββββ
---------------------------
Name: βββββ ββββββββ
Title: Senior Vice President and CFO
Address for Notices:
ββββ βββββ ββββββ ββββββ
βββββββββ, ββββββββ βββββ
Attn: Chief Financial Officer
Telephone No.: (βββ) βββ-ββββ
Facsimile No.: (βββ) βββ-ββββ
BANK ONE, NA, a national banking
association, as Credit Agent
By: /s/ ββββββ βββββ
---------------------------
Name: ββββββ β. βββββ
Title: Associate Director
Address for notices:
1 Bank βββ βββββ
ββββ βββββ βββ-ββββ
βββββββ, ββββββββ βββββ
Attn: βββββββ ββββββ
Telephone No.: (βββ) βββ-ββββ
Facsimile No.: (βββ) βββ-ββββ
- 24 -
LASALLE BANK NATIONAL ASSOCIATION, as
Collateral Agent
By: /s/ βββββ β. βββββββββ
---------------------------
Name: βββββ β. βββββββββ
Title: Senior Vice President
Address for Notices:
ββββ βββββ ββββ, βββββ βββ
βββ βββββ βββββββ, ββ βββββ
Attn: Collateral Services Manager
Telephone No.: (βββ) βββ-ββββ
Facsimile No.: (βββ) βββ-ββββ
- 25 -
EXHIBITS AND SCHEDULES
TO
SECURITY AGREEMENT
SCHEDULE DOCUMENT
-------- --------
A Required Mortgage Documents
B Additional Required Mortgage Documents
C Form of Borrowing Base Report
EXHIBIT DOCUMENT
------- --------
1 Required Review Steps
2 Form of Company Trust Receipt
3.A Form of Gestation Request
3.B Form of Shipping Request
4 Form of Whole Loan Sale Transmittal Letter
5 Form of Warehouse-Related MBS Transmittal
6 Form of Custodial Agreement
7 Form of Collateral Transmittal - Initial Mortgage
Information
- 26 -
SCHEDULE A
TO SECURITY AGREEMENT
REQUIRED MORTGAGE DOCUMENTS
1. Original of mortgage note executed in favor of the Company
(with a complete series of endorsements from the original
payee thereof, through any subsequent holders to the Company
if purchased by the Company) and endorsed by an authorized
signatory of the Company in blank.
2. Recorded Mortgage or deed of trust securing the above mortgage
note. In lieu of a recorded document, the Collateral Agent may
accept a copy certified as being out for recordation by the
escrow company, title insurance company or closing agent, or
an authorized signatory of the Company.
3. Assignment of the mortgage or deed of trust by the Company or
the Mortgage Electronic Registration Service as nominee of the
Company (in such capacity, "MERS") in blank in recordable form
and the original or a copy, certified by the records office or
escrow or title insurance company, or the Company or MERS (in
the case of a copy), of a proper assignment or assignments
(including any interim assignments) of the related mortgage or
deed of trust from the original holder, through any subsequent
transferees, to the Company or MERS.
- 27 -
SCHEDULE B
TO SECURITY AGREEMENT
ADDITIONAL REQUIRED MORTGAGE DOCUMENTS
1. The original recorded mortgage or deed of trust securing the
mortgage note.
2. Evidence of fire and extended coverage insurance in an amount
not less than the highest of the following: (a) the amount of
the Mortgage Loan, (b) 90% of the insurable value of the
improvements, and (c) an amount sufficient to prevent
co-insurance. The Collateral Agent reserves the right to
obtain a loss payable endorsement in its favor if it so
desires.
3. Evidence of Notice to Customer required by the federal
Truth-in-Lending Law and Federal Reserve Regulation Z.
4. In the case of an FHA mortgage note, an FHA insurance
certificate or a commitment to deliver such; in the case of a
VA mortgage note, a VA guaranty certificate or a commitment to
deliver such; and in the case of a conventional mortgage note,
an appraisal.
5. In the case of a conventional mortgage note with a
loan-to-value ratio in excess of 80%, the applicable private
mortgage insurance policy.
6. A certified copy of the preliminary policy of or commitment
for title insurance insuring the mortgage or deed of trust as
a first lien on the property subject thereto written by a
title company and in amount and containing exceptions
satisfactory to the Collateral Agent.
7. Evidence of certificate of completion, as appropriate under
the circumstances.
8. A copy, certified by the title insurance company or the
closing agent, of all applicable and necessary
powers-of-attorney and assumed name certificates.
9. Other documentation as the Collateral Agent may reasonably
deem appropriate.
10. Documentation necessary to fulfill requirements of the
Approved Investor Commitments.
11. Such additional documents as may be necessary in the good
faith opinion of the Collateral Agent to transfer to the
Collateral Agent, for the benefit of the Secured Parties, the
title to any Collateral pledged and/or hypothecated pursuant
to the Security Agreement.
- 28 -
SCHEDULE C
TO SECURITY AGREEMENT
FORM OF BORROWING BASE CERTIFICATE
- 29 -
EXHIBIT 1
TO SECURITY AGREEMENT
REQUIRED REVIEW STEPS
1. All submitted documents, are consistent with the related
Collateral Transmittal as to borrower name, loan face amount,
loan type and the Company's loan number.
2. The note and mortgage/deed of trust each bears an original
signature or signatures which appear to be those of the person
or persons named as the maker and mortgagor/trustor, or, in
the case of a certified copy of the mortgage/deed of trust,
such copy bears what appears to be a reproduction of such
signature or signatures.
3. Except for (a) the endorsement to the Company of the note in
the event such loan was purchased by the Company and (b) the
endorsement in blank of the note by an authorized signatory of
the Company, neither the note, the mortgage/deed of trust, nor
the assignment(s) of the mortgage/deed of trust contain any
irregular writings which appear on their face to affect the
validity of any such endorsement or to restrict the
enforceability of the document on which they appear.
4. The note is endorsed in blank by an authorized signatory of
the Company.
5. The assignment of the mortgage/deed of trust bears an original
signature of an authorized officer of the Company, based on
the current list of such officers supplied by the Company, or
an original signature of an officer of the Company authorized
by MERS, as nominee of the Company, to sign on behalf of MERS,
based on the corporate resolution of MERS which appointed such
officers of the Company for such purpose (a copy of such
resolution having been provided by the Company).
6. Such other review steps as the Collateral Agent, in its sole
discretion, deems appropriate.
- 30 -
EXHIBIT 2
TO SECURITY AGREEMENT
FORM OF COMPANY TRUST RECEIPT
_______________, 20__
The undersigned, PULTE MORTGAGE LLC, a Delaware limited liability
company (the "Company"), acknowledges receipt from LASALLE BANK NATIONAL
ASSOCIATION, acting as agent, bailee and custodian (in such capacity "Collateral
Agent") for the exclusive benefit of the Secured Parties pursuant to the
Security Agreement (as those terms and capitalized terms not otherwise defined
herein are defined in that certain Fourth Amended and Restated Revolving Credit
Agreement dated as of _____________, 2003, among the Lenders, the Company and
Bank One, NA, as Agent (as amended from time to time, the "Credit Agreement") of
the following described documentation for the identified Mortgage Loans (the
"Collateral Documents"), possession of which is herewith entrusted to the
Company solely for the purpose of correcting documentary defects relating
thereto:
Loan Document
Borrower Name Loan Number Note Amount Delivered
------------- ----------- ----------- -------------
It is hereby acknowledged that a security interest pursuant to the
Illinois Uniform Commercial Code in the Collateral hereinabove described and in
the proceeds of said Collateral has been granted to Collateral Agent for the
benefit of the Secured Parties pursuant to the Security Agreement.
In consideration of the aforesaid delivery by Collateral Agent, the
Company hereby agrees to hold said Collateral in trust for Collateral Agent on
behalf of the Secured Parties as provided under and in accordance with all
provisions of the Security Agreement and to return said Collateral to Collateral
Agent no later than the close of business on the fifteenth calendar day
following the date hereof or, if such day is not a Business Day, on the
immediately succeeding Business Day. The Company represents and warrants that
the aforesaid delivery by the Collateral Agent shall not cause the Aggregate
Mortgage-Related Debt to exceed the Borrowing Base or cause any violation of any
other provision of the Credit Agreement.
PULTE MORTGAGE LLC, a Delaware limited liability
company
By:________________________________
Name:______________________________
Title:_____________________________
- 31 -
EXHIBIT 3.A
TO SECURITY AGREEMENT
FORM OF GESTATION REQUEST
Date:_______________
LaSalle Bank National Association
as Collateral Agent
________________________________
________________________________
Attention: _____________________
This letter is to serve as authorization for you to endorse the following loans:
Loan Number Borrower Name Note Amount
under Commitment #__________ (the "Commitment") from an Approved Investor as
follows:
Please endorse the notes as follows:
PULTE MORTGAGE LLC, a Delaware limited liability
company
By:________________________________
Name:______________________________
Title:_____________________________
ELECTION FOR INCLUSION IN THE GESTATION BORROWING BASE
Pursuant to that certain Third Amended and Restated Security and Collateral
Agency Agreement dated as of _____________, 2003 (as amended from time to time,
the "Security Agreement") by and among LaSalle Bank National Association (the
"Collateral Agent"), Bank One, NA, and Pulte Mortgage LLC (the "Company"), by
checking any of the items below, the Company hereby requests the Collateral
Agent to include the Mortgage Loans identified in this request in Gestation
Collateral for the computation of the Gestation Borrowing Base upon the
Collateral Agent's receipt of the following Federal Agency schedule(s) from the
Company listing such Mortgage Loans, and which have been completed and executed
by the Collateral Agent as pool custodian:
( ) FNMA Schedule of Mortgages (Form 2005).
( ) GNMA Schedule of Pooled Mortgages (HUD Form 11706).
- 32 -
( ) FHLMC Custodial Certification Schedule (Form 1034).
( ) FHLMC Mortgage Loan Submission Schedule (Form 11)
We hereby certify that an Approved Investor Commitment for the Mortgage Loans to
be included in the Gestation Collateral pursuant hereto is in effect.
PULTE MORTGAGE LLC, a Delaware limited liability
company
By:________________________________
Name:______________________________
Title:_____________________________
- 33 -
EXHIBIT 3.B
TO SECURITY AGREEMENT
FORM OF SHIPPING REQUEST
Date:____________________
LaSalle Bank National Association
as Collateral Agent
________________________________
________________________________
Attention: __________________
This letter is to serve as authorization for you to endorse and ship the
following loans:
Loan Number Borrower Name Note Amount
to the following address under Commitment #__________ (the "Commitment") from an
Approved Investor as follows:
NAME:
ADDRESS:
ATTENTION:
Please endorse the notes as follows:
Please ship the loan documents either by ____________________ or by such other
courier service as we have designated to you as "approved". The courier shall
act as an independent contractor bailee acting solely on your behalf as
Collateral Agent for the Secured Parties (as defined in that certain Third
Amended and Restated Security and Collateral Agency Agreement dated as of
___________, 2003, as the same may be amended, extended or replaced from time to
time), but we acknowledge and agree that you are not responsible for any delays
in shipment caused by courier or any other actions or inactions of the courier,
including, without limitation, any loss of any loan documents; however, because
the Commitment expires on _______________, 200_, we ask that you deliver the
loan documents to the courier no later than _______________, 200_.
- 34 -
Please have the courier ββββ us by using our acct #__________. If you should
have any questions, or should feel the need for additional documentation, please
do not hesitate to call _______________.
PULTE MORTGAGE LLC, a Delaware limited liability
company
By:________________________________
Name:______________________________
Title:_____________________________
- 35 -
EXHIBIT 4
TO SECURITY AGREEMENT
(Direct Investor)
Date:________________
Name of Delivery Service:____________________________________
Airbill No.:____________________
FORM OF WHOLE LOAN SALE TRANSMITTAL LETTER
[LETTERHEAD OF COLLATERAL AGENT]
[Approved Investor]
________________________________
________________________________
Re: Pulte Mortgage LLC; Pulte Funding, Inc.
Sale of Mortgage Loans
Attached please find those Mortgage Loans listed separately on the
attached schedule, which Mortgage Loans are owned by PULTE MORTGAGE LLC ("PMC")
and/or PULTE FUNDING, INC. ("PFI") and are being delivered to you for purchase.
The Mortgage Loans comprise a portion of the collateral under that
certain Fourth Amended and Restated Revolving Credit Agreement dated as of March
31, 2003 by and among PMC, Bank One, NA, as Agent, and the lenders named therein
and that certain Amended and Restated Loan Agreement dated as of August ___,
2002 among PMC, PFI, Credit Lyonnais New York Branch, as Agent and the lenders
named therein (collectively, the "Secured Parties"). Each of the Mortgage Loans
is subject to a security interest in favor of the undersigned (the "Collateral
Agent") on behalf of the Secured Parties, which security interest shall be
automatically released upon your remittance of the full amount of the purchase
price of such Mortgage Loans (as set forth on the schedule attached hereto) by
wire transfer to the following account:
WIRE INSTRUCTIONS TO CASH AND COLLATERAL ACCOUNT
Bank One, N.A
ABA 071-00-0013
DDA# 1928368
Ref: Pulte
Pending your purchase of each Mortgage Loan and until payment therefor
is received, the aforesaid security interest therein will remain in full force
and effect, and you shall hold possession of such Collateral and the
documentation evidencing same as custodian, agent and bailee for and on behalf
of the Secured Parties. In the event any Mortgage Loan is unacceptable for
purchase, return the rejected item directly to the Collateral Agent at the
address set forth below. The Mortgage Loan must be so returned or sales proceeds
remitted in full no later than forty-five (45) calendar days from the date
hereof. In no event shall any Mortgage Loan be returned to or sales proceeds
remitted to PMC or PFI. If you are unable to comply with the above instructions,
please so advise the undersigned immediately.
- 36 -
NOTE: BY ACCEPTING THE MORTGAGE LOANS DELIVERED TO YOU WITH THIS
LETTER, YOU CONSENT TO BE THE CUSTODIAN, AGENT AND BAILEE FOR THE SECURED
PARTIES ON THE TERMS DESCRIBED IN THIS LETTER. THE UNDERSIGNED, AS COLLATERAL
AGENT, REQUESTS THAT YOU ACKNOWLEDGE RECEIPT OF THE ENCLOSED MORTGAGE LOANS AND
THIS LETTER BY SIGNING AND RETURNING THE ENCLOSED COPY OF THIS LETTER TO THE
UNDERSIGNED; HOWEVER, YOUR FAILURE TO DO SO DOES NOT NULLIFY SUCH CONSENT.
Sincerely,
LaSalle Bank National Association, as Collateral Agent
By:________________________________
Title:_____________________________
Address: __________________________
__________________________
__________________________
The undersigned each agrees to and acknowledges the terms of this
letter and, notwithstanding any contrary understanding with or instructions to
you, the addressee of this letter, each of the undersigned instructs you to act
according to the instructions set forth in this letter. These instructions
cannot be altered except by written instructions executed by Collateral Agent.
PULTE MORTGAGE LLC, a Delaware limited liability company
By:________________________________
Name:______________________________
Title:_____________________________
PULTE FUNDING, INC., a Michigan corporation
By:________________________________
Name:______________________________
Title:_____________________________
ACKNOWLEDGEMENT OF RECEIPT
[Approved Investor]
By: _________________________________
Name: _______________________________
Title: ______________________________
Date: _______________________________
- 37 -
EXHIBIT 5
TO SECURITY AGREEMENT
(Pool Formation)
FORM OF WAREHOUSE-RELATED SECURITY TRANSMITTAL LETTER
[COLLATERAL AGENT LETTERHEAD]
Date:___________________
[Certificating Custodian]
________________________________
________________________________
Re: Pulte Mortgage LLC;
Shipment of Mortgage Loans for Pool Formation
Attached please find those Mortgage Loans listed separately on the
attached schedule, which are owned by PULTE MORTGAGE LLC, a Delaware limited
liability company (the "Company") and are being delivered to you, as
custodian/trustee (the "Certificating Custodian"), for certification in
connection with the formation of a mortgage pool supporting the issuance of a
mortgage-backed security (the "Warehouse-Related Security") described as
follows: ______________________________.
The Mortgage Loans comprise a portion of the Collateral under (and as
the term "Collateral" and capitalized terms not otherwise defined herein are
defined in) that certain Fourth Amended and Restated Revolving Credit Agreement
dated as of ______________, 2003, by and among the Company, Bank One, NA, as
Agent, and the Lenders named therein. Each of the Mortgage Loans is subject to a
security interest in favor of the undersigned ("Collateral Agent") for the
benefit of the Secured Parties, which security interest shall be automatically
released upon the issuance of the Warehouse-Related Security in accordance with
the terms of the prescribed GNMA, FNMA or FHLMC form enclosed herewith.
Pending issuance of the Warehouse-Related Security, the aforesaid
security interest in each Mortgage Loan will remain in full force and effect,
and you shall hold such Collateral as custodian, agent and bailee for and on
behalf of the Secured Parties. In the event any Mortgage Loan is unacceptable
for pool formation, return the rejected item directly to the undersigned, as
Collateral Agent, at the address set forth below. Each Mortgage Loan must be so
returned or the Warehouse-Related Security issued no later than forty-five (45)
calendar days from the date hereof. In no event shall any Mortgage Loan be
returned to or proceeds relating thereto be remitted to the Company. If you are
unable to comply with the above instructions, please so advise the undersigned
immediately.
NOTE: BY ACCEPTING THE MORTGAGE LOANS DELIVERED TO YOU WITH THIS
LETTER, YOU CONSENT TO BE THE CUSTODIAN, AGENT AND BAILEE FOR THE SECURED
PARTIES ON THE TERMS DESCRIBED IN THIS LETTER. THE UNDERSIGNED, AS COLLATERAL
AGENT, REQUESTS THAT YOU ACKNOWLEDGE RECEIPT OF THE ENCLOSED MORTGAGE LOANS AND
THIS LETTER BY SIGNING
- 38 -
AND RETURNING THE ENCLOSED COPY OF THIS LETTER TO THE UNDERSIGNED; HOWEVER, YOUR
FAILURE TO DO SO DOES NOT NULLIFY SUCH CONSENT.
Sincerely,
LASALLE BANK NATIONAL ASSOCIATION, as
Collateral Agent
By:________________________________
Title:_____________________________
Address:___________________________
___________________________
___________________________
ACKNOWLEDGEMENT OF RECEIPT
[Certificating Custodian]
By:_______________________________
Name:_____________________________
Title_____________________________
Date:_____________________________
- 39 -
EXHIBIT 6
TO SECURITY AGREEMENT
FORM OF CUSTODIAL AGREEMENT
(With Operating Instructions Attached)
___________, 200___
_________________________
_________________________
_________________________
Re: Pulte Mortgage LLC
Ladies and Gentlemen:
The undersigned, LaSalle Bank National Association (the "Collateral
Agent") acts in the capacity as Collateral Agent pursuant to: (1) that certain
Fourth Amended and Restated Revolving Credit Agreement dated as of ____________,
2003 (as amended from time to time, the "Credit Agreement", and as capitalized
terms not otherwise defined herein are used with the same meaning as in the
Credit Agreement) by and among PULTE MORTGAGE LLC (the "Company"), the lenders
participating therein (collectively, the "Lenders"), and BANK ONE, NA, as agent
for the Lenders (the "Credit Agent"), and (2) that certain Third Amended and
Restated Security and Collateral Agency Agreement (the "Security Agreement")
dated concurrently therewith among the Collateral Agent, the Company, and the
Credit Agent.
The Collateral Agent represents and confirms that it has the power and
authority under the Credit Agreement and the Security Agreement to execute this
Custodial Agreement. The Collateral Agent may execute any of its duties
hereunder by or through agents or attorneys-in-fact of whose appointment you
have been notified in writing.
The Collateral Agent hereby appoints you and you hereby accept
appointment to act as agent, custodian and bailee for the benefit of the Secured
Parties (as defined in the Security Agreement) (in such capacity, the "Approved
MBS Custodian"). In such capacity, you agree to accept delivery only on a free
basis of certain mortgage-backed securities delivered to you from time to time
identified in a letter in the form attached hereto as Exhibit A (all such
mortgage-backed securities delivered to you and so identified being referred to
herein as "Subject Securities"). This Custodial Agreement governs your rights
and responsibilities as Approved MBS Custodian with respect to all Subject
Securities.
The Collateral Agent hereby directs you, as Approved MBS Custodian, to
hold or dispose of Subject Securities deposited with you only in accordance with
the instructions of a person described as an "Authorized Collateral Agent
Representative" on a schedule from time to time delivered to you by the
Collateral Agent (the initial list of such persons being attached hereto as
Schedule I) or otherwise as expressly permitted hereunder, including without
limitation the Company's right to direct the sale or disposition of the Subject
Securities as described in the
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following paragraph. You are authorized, directed and instructed to act upon all
instructions from persons reasonably believed by you to be genuine and
authorized. Any instruction given hereunder may, in your discretion, be by
telegraph, cable, facsimile or electronic communication which is received by
you.
All Subject Securities are to be held by you in a custodial account
(Account No. __________) maintained with you (the "MBS Custodial Account").
Unless and until you have received written notice to the contrary from the
Collateral Agent at the direction of the Required Lenders (which notice may be
by facsimile transmission) following a Default, you may from time to time
deliver Subject Securities at the direction of the Company to, but only to,
Approved Investors (as listed on a schedule of "Approved Investors" delivered to
you from time to time by an Authorized Collateral Agent Representative) against
payment of the purchase price therefor. Notwithstanding the preceding sentence,
even after your receipt of notice from the Collateral Agent that a Default
exists, you may deliver Subject Securities at the direction of the Company, but
only to Approved Investors pursuant to then-existing Approved Investor
Commitments. The proceeds of the sale or other disposition of all Subject
Securities are to be held by you in an account (Account No. __________)
maintained with you (the "Custodian Settlement Account") and transferred by the
end of each Business Day to Account No. 19-28368 maintained in the Credit
Agent's name at Bank One, NA (the "Cash and Collateral Account") as follows:
Bank One, N.A
ABA 071-00-0013
DDA# 1928368
Ref: Pulte
By executing this Custodial Agreement the Company confirms and the
Collateral Agent and the Company notify you that the Company has assigned and
granted to the Collateral Agent and/or the Credit Agent a security interest in
and lien upon all now existing and hereafter arising right, title and interest
of the Company in the MBS Custodial Account, the Custodian Settlement Account
and the Cash and Collateral Account and in any and all investments and proceeds
at any time held therein.
You shall be under no duty to take or omit to take any action with
respect to Subject Securities, except as specifically set forth in this
Agreement and the Operating Instructions attached hereto as Exhibit B, unless
specifically otherwise directed by the Collateral Agent and agreed to by you in
writing. In the event that you shall be uncertain as to your duties or rights
hereunder, you shall be entitled to refrain from taking any action until you
shall be directed otherwise by an order of a court of competent jurisdiction. In
case you should agree to our request and on our behalf to appear in, prosecute
or defend any legal or equitable proceeding either in your own name or in the
name of your nominee, you shall first be indemnified to your satisfaction (other
than against your gross negligence and willful misconduct).
By accepting delivery of any Subject Security, you shall be deemed to
have agreed to hold such Subject Security as Approved MBS Custodian hereunder,
free and clear of all liens, claims, interests and rights of offset in your
favor or in favor of persons claiming through you. You may accept certified
checks in payment for Subject Securities delivered on the Company's instruction
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and you shall not be responsible for the risks of collectability of any such
checks. YOU ARE HEREBY IRREVOCABLY INSTRUCTED BY THE COMPANY AND THE COLLATERAL
AGENT THAT ALL PROCEEDS RECEIVED FROM THE SALE OR OTHER DISPOSITION OF SUBJECT
SECURITIES, UNTIL OTHERWISE NOTIFIED IN WRITING BY THE COLLATERAL AGENT, SHALL
BE WIRED TO THE CASH AND COLLATERAL ACCOUNT AS PROVIDED ABOVE.
You will provide to the Collateral Agent on a daily basis at or before
9:30 a.m. (Chicago time) a report of the prior day's activity with respect to
the MBS Custodial Account and the Custodian Settlement Account.
You shall not be liable or accountable for any act or omission of
brokers, dealers or agents in connection with this Custodial Agreement. In
carrying out your duties hereunder, you may use such methods or agencies as you
determine in your sole discretion, including your own facilities.
You shall maintain regular business records documenting all
instructions transmitted to you through any authorized means and any response by
you. You are authorized to electronically record any telephone communications
with the Company or the Collateral Agent arising out of this Custodial
Agreement. Your records shall be determinative of the form, content and time of
all the Company's and Collateral Agent's instructions and any response from you.
The record of each instruction and any response thereto shall be retained by you
for at least ninety (90) days following the date of the instruction. Any claim
against you for failure to properly follow an instruction transmitted by the
Company or the Collateral Agent must be made in writing and received by you
within ninety (90) days after the date such instruction was received by you.
You shall give the Subject Securities that come into your possession
under this Custodial Agreement the same physical care and safeguards as are
afforded similar property owned by you; provided, however, your responsibility
hereunder is limited to losses occasioned directly by the gross negligence or
willful misconduct of your employees, to the extent of the market value of the
Subject Securities at the date of the discovery of such loss. With respect to
any Subject Securities which you deliver for us to a third party, and with
respect to such delivery, you shall be deemed no more than an "intermediary" as
referenced in Section 8-306(3) of the New York Uniform Commercial Code, and the
only warranty given by you shall be the warranty provided in said Section
8-306(3). In no event shall you be liable for any indirect, special or
consequential loss, even if you have been advised of the possibility of such
loss. You may, at your option, make arrangements for insuring yourselves against
loss from any cause, but you shall not be under any obligation to insure for our
benefit.
None of the Subject Securities held in the MBS Custodial Account, the
funds held at any time in the Custodian Settlement Account, the Subject
Securities or any proceeds of the sale or other disposition thereof will be
subject to any right, charge, security interest, lien, encumbrance or claim of
any kind in your or your creditors' favor. Any claims for the payment of fees
with respect to the safe custody or administration of Subject Securities or for
compensation, expenses, commitments made by you upon instructions of the
Collateral Agent, reimbursement of taxes incurred by you for the account of the
Collateral Agent, any penalties incurred by or levied or
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assessed against you resulting from the Collateral Agent's improper or incorrect
instructions, or other liabilities of the Collateral Agent to you, and for
indemnity against any claim or liability to which you are subjected by reason of
any registration of Subject Securities shall be enforceable solely against the
Company and none of the Collateral Agent, the Credit Agent or any Secured Party
shall have any responsibility therefor (except to the extent any of the
foregoing are due to the gross negligence or willful misconduct of the
Collateral Agent, the Credit Agent or any Secured Party, as applicable). The
Collateral Agent and the Company agree to make no claim against you except for
any such claims or liabilities arising, or claimed to have arisen, as a result
of your gross negligence or willful misconduct.
The Operating Instructions attached hereto are hereby made part hereof
and any and all capitalized terms defined herein shall have the same meaning
when used therein.
This Custodial Agreement contains the whole of the understanding
between you and the Collateral Agent concerning the subject matter hereof and no
provision hereof shall be modified or altered except in a writing signed by both
you and the Collateral Agent.
This Custodial Agreement shall be governed by the laws of the State of
New York and shall be binding upon the Collateral Agent and upon its successors
and assigns and shall inure to your benefit and your successors and assigns and
shall be deemed continuing until terminated by either the Collateral Agent or
you upon at least ninety (90) days prior written notice to the other.
This letter is made in triplicate and will become an agreement between
you and the Collateral Agent upon your acceptance hereof in the space provided
below at your offices in the State of New York.
LASALLE BANK NATIONAL ASSOCIATION, as
Collateral Agent
By:________________________________
Name:______________________________
Title:_____________________________
AGREED TO AND ACCEPTED:
_________________________________,
as Approved MBS Custodian
By:_________________________________
Name:_______________________________
Title:______________________________
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ACKNOWLEDGEMENT AND AUTHORIZATION
The Company approves the foregoing Custodial Agreement and authorizes
the Approved MBS Custodian to act in accordance with the terms thereof. The
Company agrees to be bound by the terms of the Custodial Agreement (including
all Exhibits thereto) to the same extent as if a party thereto. The Company
agrees to indemnify the Approved MBS Custodian for, and hold the Approved MBS
Custodian harmless against, any loss, liability or expense in connection with,
arising out of or in any way related to the transaction contemplated and
relationship established by the Custodial Agreement, or any action or omission
by the Approved MBS Custodian in connection with the Custodial Agreement, or any
agent, broker or dealer employed by the Approved MBS Custodian hereunder,
including the reasonable costs and expenses incurred in defending any such claim
of liability, except that the Company shall not be liable for (i) any loss,
liability or expense that is determined by a judgment of a court of competent
jurisdiction that is binding on the Approved MBS Custodian, final and not
subject to review on appeal, to be the direct result of acts or omissions on the
Approved MBS Custodian's part constituting gross negligence or willful
misconduct, or (ii) any claim that is based on the Approved MBS Custodian's
warranty as provided in Section 8-306(3) of the New York Uniform Commercial
Code.
PULTE MORTGAGE LLC, a Delaware limited liability
company
By:________________________________
Name:______________________________
Title:_____________________________
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EXHIBIT A
TO CUSTODIAL AGREEMENT
FORM OF LETTER TO APPROVED MBS CUSTODIAN
To: _________________________,
as Approved MBS Custodian
Re: Pulte Mortgage LLC;
Custodial and Collateral Agency Instructions
Ladies and Gentlemen:
Reference is made to the attached schedule relating to a
letter/certification to a transfer agent/trustee for the issuance of the
Security described more particularly therein, which Security is supported by a
pool of residential mortgage loans and/or mortgage-backed securities including
mortgage loans and/or mortgage-backed securities in which the undersigned as
collateral agent (in such capacity, the "Collateral Agent"), acting under that
certain Third Amended and Restated Security and Collateral Agency Agreement
dated as of ____________, 2003, as amended, extended or replaced from time to
time, holds a first priority perfected security interest. The attached schedule
is (i) Delivery Schedule Form 11705 in the case of GNMA Securities, (ii)
Delivery Schedule Form 996 in the case of FHLMC Securities, (iii) Delivery
Schedule Form 2014 in the case of FNMA Securities, or (iv) a form containing
substantially similar information in the case of any other Securities. Pursuant
to the letter/certification, the transfer agent/trustee has been instructed to
deliver such Security to you. You are hereby notified that the Collateral Agent
and the Secured Parties named therein have a first perfected security interest
in the Security and in all proceeds of the sale or other disposition thereof and
in all accounts into which said proceeds may be deposited.
This letter will confirm your agreement to hold such Security as a
"Subject Security" under and on terms and conditions set forth more particularly
in that certain Custodial Agreement, dated as of _______________, 200_ between
you and the Collateral Agent.
Very truly yours,
LASALLE BANK NATIONAL ASSOCIATION, as
Collateral Agent
By:________________________________
The undersigned agrees to and acknowledges the terms of this letter
and, notwithstanding any contrary understanding with or instructions to you, the
addressee of this letter, the undersigned instructs you to act according to the
instructions set forth in this letter. These instructions cannot be altered
except by written instructions executed by Collateral Agent.
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PULTE MORTGAGE LLC, a Delaware limited liability
company
By:________________________________
Name:______________________________
Title:_____________________________
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EXHIBIT B
TO CUSTODIAL AGREEMENT
OPERATING INSTRUCTIONS
These Operating Instructions are attached to and made a part of the
Custodial Agreement between LaSalle Bank National Association and
___________________, dated as of _______________, 200_ (as amended from time to
time, the "Custodial Agreement"). Terms defined therein shall have their same
meanings when used herein.
1. From time to time GNMA, FNMA and FHLMC Subject Securities will
be issued at the request of the Company and credited to your account with The
Federal Reserve Bank of New York ("FRBNY") (in the case of FNMA and FHLMC
Subject Securities) or your account with the Participants Trust Company ("PTC")
(in the case of GNMA Subject Securities) (in each case, to be held by you for
the account of the Collateral Agent) in accordance with the Code of Federal
Regulations (in the case of FNMA and FHLMC Subject Securities) or the rules of
PTC (in the case of GNMA Subject Securities). Upon your receipt of confirmation
that such Subject Securities have been deposited into your account with FRBNY
(in the case of FNMA and FHLMC Subject Securities) or your account with PTC (in
the case of GNMA Subject Securities), you shall promptly issue to the Collateral
Agent and the Company your confirmation that (1) you have received such
confirmation of the Fedwire (in the case of FNMA and FHLMC Subject Securities,
which confirmation will include the number of Subject Securities deposited into
your account with FRBNY) or from PTC (in the case of GNMA Subject Securities),
(2) you have made appropriate entries on your books reflecting the interests of
the Company as beneficial owner and the Collateral Agent as secured party with
respect to such Subject Securities, and (3) there are no security interests or
any rights or claims of any third party in such Subject Securities in your favor
or known to you which have priority over the security interest of the Collateral
Agent in such Subject Securities. You shall have no obligation to ensure or
verify that Securities identified in transmittal letters (in the form of Exhibit
A to the Custodial Agreement) are in fact credited to your account(s), but you
shall be obligated only to report your actual receipt of Subject Securities to
the Collateral Agent and the Company in accordance with the provision of this
Instruction 1.
2. With respect to the delivery or transfer of Subject Securities
which you hold for the account of the Collateral Agent, you are hereby
authorized to act only upon instructions from the Collateral Agent or, to the
extent permitted by the Custodial Agreement, by the Company. Upon notification
to you by the Collateral Agent at the direction of the Required Lenders
following a Default, no third party, including without limitation the Company,
may direct you to make any delivery or transfer of such Subject Securities other
than Subject Securities to be delivered pursuant to then-existing Approved
Investor Commitments.
3. The proceeds of redemptions, collections and other receipts,
including dividend and interest income, shall be credited to the Custodial
Settlement Account upon collection or payment.
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4. You are to notify the Collateral Agent and the Company upon
receipt of notice by you of any call for conversion, redemption, subscription
rights or similar proceeding affecting the Subject Securities held in the
relevant account (any of the foregoing being referred to herein as "Account
Proceedings"), and shall take such action in respect thereof as you may be
directed in writing by the Collateral Agent; provided, however, that you shall
have no duty or responsibility to notify the Company or the Collateral Agent of
any Account Proceedings which do not appear in The Wall Street Journal (New York
Edition), Financial Daily Called Bond Service, The ββββββ Services or official
notifications from the Depository Trust Company or such other publications which
you may deem reasonable from time to time. All solicitation fees payable to you
as agent in connection with such event will be retained by you unless
specifically agreed to the contrary by you.
5. You are authorized and empowered in the name and on behalf of
the Collateral Agent and the Company to execute any certificates of ownership or
other reports which you are or may hereafter be required to execute and furnish
under any regulation of the Internal Revenue Service, or other authority of the
United States, insofar as the same are required in connection with any property
which is now or may hereafter be in your possession by virtue of the Custodial
Agreement and these Operating Instructions, claiming no exemptions on behalf of
the Collateral Agent or the Company. In the preparation of such reports, the
status of the Collateral Agent is to be described as a bank, trust company or
financial institution, as the case may be, domiciled in the United States. The
Collateral Agent agrees to notify you immediately in writing of any change in
such status.
6. All mail communications which are to be furnished or forwarded
hereunder to the Collateral Agent or the Company shall be addressed to such
party at the last address on your records, provided that in case you in your
sole discretion shall determine that an emergency exists, you may use such other
means of communication as you shall deem advisable.
7. You are under no duty to supervise, recommend or advise the
Collateral Agent relative to the investment, purchase, sale, retention or other
disposition of any property held hereunder unless specifically provided for by
the Custodial Agreement.
8. With respect to any direction to receive securities in
transactions not placed through you, you shall have no duty or responsibility to
advise the Company of non-receipt, or to take any steps to obtain delivery of
securities from any brokers or dealers. All dealer concessions made to you will
be retained by you unless specifically agreed to the contrary by you.
9. Notwithstanding anything herein to the contrary, unless
instructions are received from the Collateral Agent, specifying a different
destination than the address listed on your records for the Collateral Agent,
within ten (10) days of the receipt of any termination notice, you shall have
the right to transfer all securities and other property held by you or any
depositary in connection with the Custodial Agreement or registered in your name
to the Collateral Agent at the address listed on your records.
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SCHEDULE I
TO CUSTODIAL AGREEMENT
AUTHORIZED COLLATERAL AGENT REPRESENTATIVES
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EXHIBIT 7
TO SECURITY AGREEMENT
COLLATERAL TRANSMITTAL -- INITIAL MORTGAGE INFORMATION
1. CUSTOMER NAME ________________________________
2. LOAN NUMBER __________________________________
3. MORTGAGOR ____________________________________
SURNAME ONLY
4. AP STATUS CODE _______________________________
5. DEPOSIT DATE _________________________________
6. ORIGINAL NOTE AMOUNT $________________________
7. ACQUISITION COST $____________________________
8. TAKE-OUT VALUE $______________________________
9. NOTE DATE OR CONVERSION DATE _________________
10. NOTE RATE ____________________________________
11. LOAN TYPE (i.e. a group category (e.g. GNMA 15, FNMA/FHLMC 30, etc.)
set forth on Exhibit F to the Credit Agreement)______________________
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