EXHIBIT 10.46
SECOND AMENDED AND RESTATED SECURITY AGREEMENT
THIS SECOND AMENDED AND RESTATED SECURITY AGREEMENT (the "Agreement")
is entered into as of December 30, 2002 by and between BINGHAM FINANCIAL
SERVICES CORPORATION, a Michigan corporation whose address is 260 E. Brown
Street, Suite 200, Birmingham, Michigan 48009 ("Borrower") and SUN HOME
SERVICES, INC., a Michigan corporation whose address is 31700 Middlebelt Road,
Suite 145, Farmington Hills, MI 48334 ("Secured Party").
RECITALS:
A. Borrower has executed and delivered to Sun Communities Operating
Limited Partnership ("SCOLP") an Amended and Restated Security Agreement dated
December 13, 1999, (the "First Amended Security Agreement"), pursuant to which
Borrower granted SCOLP a security interest in substantially all of Borrower's
assets to secure the performance by Borrower of, among other obligations,
Borrower's obligations under a guaranty (the "Original Guaranty") of the
obligations of Origen Financial L.L.C. ("Origen") under a line of credit (the
"Line of Credit") from SCOLP to Origen and a term loan (the "Term Loan") from
SCOLP to Origen.
B. SCOLP has assigned its interest in the First Amended Security
Agreement, the Original Guaranty, the Line of Credit and the Term Loan and
related documents to Secured Party pursuant to an Assignment of Loans of even
date herewith.
C. The Line of Credit has been amended and is evidenced by a Second
Amended and Restated Subordinated Loan Agreement dated December 4, 2002 between
Borrower and SCOLP, as amended by a First Amendment to Second Amended and
Restated Subordinated Loan Agreement of even date herewith between Origen and
Secured Party and a Seventh Amended and Restated Promissory Note of even date
herewith in the principal amount of $48,000,000 delivered by Origen to Secured
Party.
D. The Term Loan has been amended and is evidenced by a Subordinated
Term Loan Agreement dated December 4, 2002 between Borrower and SCOLP, as
amended by a First Amendment to Subordinated Term Loan Agreement of even date
herewith between Origen and Secured Party and a First Amended and Restated Term
Promissory Note of even date herewith in the principal amount of $10,000,000
delivered by Origen to Secured Party.
E. The Original Guaranty has been amended by the Second Amended and
Restated Guaranty (the "Second Amended Guaranty") of even date herewith
delivered by Borrower to Secured Party.
F. To secure the payment of all amounts due to Secured Party by
Borrower under the Second Amended Guaranty and to secure all of Borrower's other
obligations to Secured Party of any nature now or in the future owing from
Borrower to Secured Party (the "Obligations"), Borrower and Secured Party desire
to amend and restate the First Amended Security Agreement in accordance with the
terms and conditions of this Agreement.
THEREFORE, the parties hereby agree as follows:
1. DEFINITIONS. Unless otherwise defined herein, the following
terms shall have the following meanings:
(a) "Accounts" means all "accounts", as such term is defined in the
Code, in which Borrower now or hereafter has any right, title or
interest.
(b) "Books" means all books, records and correspondence relating to the
Collateral (as defined herein).
(c) "Chattel Paper" means any and all "chattel paper", as such term is
defined in the Code, in which Borrower now or hereafter has any right,
title or interest.
(d) "Code" means the Uniform Commercial Code as the same may from time
to time be in effect in the State of Michigan.
(e) "Contracts" means any and all contracts, instruments, undertakings,
documents, leases or other agreements in or under which Borrower may
now or hereafter has any right, title or interest and which pertain to
the purchase, lease, sale or other disposition by Borrower of any
Inventory, Equipment, Fixtures, real property or any interest in real
property, as any of the same may from time to time be amended,
supplemented or otherwise modified.
(f) "Current Accounts" means an Account that arises from a bona fide
outright sale of goods by Borrower, or from services performed by
Borrower that is not subject to any claim of reduction, counterclaim,
set-off, allowances, adjustments, or the like, and is not outstanding
more than 60 days from the date of its invoice.
(g) "Documents" means any and all "documents" and "instruments", as
such terms are defined in the Code, in which Borrower now or hereafter
has any right, title or interest.
(h) "Equipment" means all "equipment", as such term is defined in the
Code, in which Borrower now or hereafter has any right, title or
interest.
(i) "Fixtures" means, to the extent not otherwise included as
Equipment, all machinery, apparatus, equipment, fittings, fixtures,
furniture and furnishings in which Borrower now or hereafter has any
right, title or interest located upon or affixed to or which becomes
affixed to any real property owned or leased by Borrower, or any part
thereof, and used or usable in connection with any future occupancy or
use of such premises, including replacements and additions thereto.
(j) "General Intangibles" means all "general intangibles", as such term
is defined in the Code, in which Borrower now or hereafter has any
right, title or interest. General Intangibles shall also include all
equity interests of Borrower in other entities, including but not
limited to membership interest in Origen Financial L.L.C., Bloomfield
Acceptance Company, L.L.C., Bloomfield Servicing Company, L.L.C., and
Hartger & Willard Mortgage Associates, Inc.
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(k) "Inventory" means all "inventory", as such term is defined in the
Code, in which Borrower now or hereafter has any right, title or
interest.
(l) "Loans" means any loan originated by or acquired by Borrower,
whether an original loan, an additional loan or a substitution for an
existing loan including all indebtedness of any Borrower with respect
to such loans or any collateral pledge with respect to such loans
including but not limited to any manufactured homes, together with all
other collateral provided as security for such loans; servicing
agreements, backup servicing agreements, servicing records, insurance,
guarantees, indemnitees, and warranties and proceeds thereof, financing
statements and other agreements or arrangements of whatever character
from time to time relating to the loans, income if any from the loans,
all hedges, all insured closing letters, all escrow instructions
covering all or any of the loans, all collections from such loans, all
blocked accounts and all amounts and deposits therein, all collection
accounts and escrow accounts relating to any loan, all dealer financing
agreements, all loan agreements, all loan documents, all consignment
agreements, sale contracts, security agreements, the right to payment
of interest or finance charges and collateral securing such
obligations, and any other rights and other assets relating to such
loans or any interest in the loans, whether constituting real or
personal property, accounts, chattel paper, equipment, goods,
instruments, general intangibles, inventory or proceeds, or securities
backed by or representing an interest in such loans and any and all
replacements, substitutions, distributions on or proceeds of any and
all of the foregoing.
(m) "Proceeds" means all "proceeds", as such term is defined in the
Code.
2. SECURITY INTEREST. Borrower hereby grants to Secured Party a
continuing security interest in all of its right, title and interest in, to and
under all Accounts, Current Accounts, Books, Chattel Paper, Contracts,
Documents, Equipment, Fixtures, General Intangibles, Inventory, Loans and
Proceeds (collectively, the "Collateral"). This grant is made for the purpose of
securing the Obligations owing by Borrower to Secured Party. Borrower promises
punctually to pay the Obligations when it is so required in accordance with the
obligations and any note or agreement evidencing the Obligations, including the
Second Amended Guaranty.
3. SUBORDINATION. The security interests in the Collateral granted to
Secured Party are subordinate to and subject to liens or security interests that
Credit Suisse First Boston Mortgage Capital, L.L.C. (the "Senior Creditor") may
now or hereafter have in the Collateral as a result of any indebtedness (the
"Senior Indebtedness") owed to the Senior Creditor.
4. WARRANTIES AND COVENANTS. Borrower represents, warrants and
covenants to Secured Party as follows:
(a) Except for the security interests granted hereby and any
other security interests authorized by this Agreement or any other
agreement between Borrower and Secured Party, Borrower is, or, as to
Collateral to be acquired by Borrower after the date hereof, will be,
the owner of the Collateral free from any adverse lien, security
interest or encumbrance other than those identified on the attached
Exhibit A; and Borrower agrees to defend the Collateral and proceeds
thereof against any claims and demands of all persons at any time
claiming the same or any interest therein.
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(b) The security interests hereby created are valid and
Borrower has the authority and right to subject the Collateral to the
security interests hereby created.
(c) All financial statements, certificates and other
information concerning the financial condition of Borrower, and
proceeds hereafter furnished by Borrower to Secured Party shall be in
all respects true and correct at the time the same are provided and
shall be deemed, for all purposes, to have been furnished by Borrower
to Secured Party for the purpose of obtaining credit or an extension of
credit.
(d) This Agreement has been duly executed and delivered by a
duly authorized officer of Borrower and constitutes the legal, valid
and binding obligation of Borrower, enforceable in accordance with its
terms.
(e) Borrower does not conduct Borrower's business under any
other name than that given above, and agrees not to change or
reorganize the business entity under which it does business except upon
the Secured Party's prior written approval.
(f) There are no actions or proceedings either threatened or
pending against Borrower which might result in any material adverse
change in Borrower's financial condition or materially affect any of
Borrower's assets.
(g) Borrower's place of business or, if more than one, its
chief executive office, is as set forth on the first page of this
Agreement.
All of Borrower's warranties contained in this Section 4 shall be continuing
warranties until Borrower has no remaining Obligations to Secured Party.
5. LOSS OR DEPRECIATION OF COLLATERAL. Borrower shall immediately
notify Secured Party of any vent causing a material loss or depreciation in
value of Collateral and the amount of such loss or depreciation.
6. RECORDS, INSPECTION, AUDIT AND COVENANT FOR FURTHER ASSURANCES.
(a) At the request of Secured Party, Borrower will advise
Secured Party of the places where its books of Accounts and records,
including all records of the Collateral and the dispositions made
thereof by Borrower and of its Accounts and all collections thereon,
are kept and maintained.
(b) Borrower will keep and maintain such books and records
with respect to the Collateral as Secured Party may from time to time
reasonably prescribe for the purpose of enabling Secured Party to audit
the same.
(c) Borrower shall at all reasonable times and from time to
time allow Secured Party, by or through any of his agents, attorneys or
accountants, to examine or inspect the Collateral wherever located and
to examine, inspect and make extracts from Borrower's books and
records. Borrower shall do, make, execute and deliver all such
additional and
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further acts, things, deeds, assurances and instruments as Secured
Party may reasonably require, to assure to Secured Party its rights
hereunder.
7. PRESERVATION AND DISPOSITION OF THE COLLATERAL AND PROCEEDS.
(a) Borrower will keep the Collateral in good condition and
will not waste or destroy any of the same. Borrower will not use the
Collateral in violation of any statute or ordinance.
(b) Borrower will pay promptly when due all taxes, assessments
and governmental charges upon or against the Collateral before the same
become delinquent and before penalties accrue thereon.
(c) At its option, Secured Party may discharge taxes, liens,
other encumbrances or security interests not otherwise authorized by
this Agreement or any other agreement between Borrower and Secured
Party at any time levied or placed on the Collateral and may pay for
the maintenance and preservation of the Collateral. Borrower agrees to
reimburse Secured Party, on demand, for any payment made or any expense
incurred by Secured Party pursuant to the foregoing authorization.
(d) Borrower, at its own expense, shall keep all of the
Collateral fully insured against loss or damage by fire, theft,
explosion, business interruption, and all other risks, in such amounts,
with such companies, under such policies, and in such form as shall be
satisfactory to Secured Party.
(e) Borrower, unless in default, may use, consume and sell
Inventory in carrying on its business in the ordinary course; but a
sale in the ordinary course of business shall not include any transfer
or sale in satisfaction, partial or complete, of a debt owed by
Borrower. Borrower shall not, without the prior written consent of
Secured Party, otherwise sell or dispose of the Collateral or any
portion thereof.
8. COLLECTIONS. In the absence of contrary instructions from Secured
Party, Borrower at its own expense shall take all necessary action promptly to
collect its Accounts and Loans. Upon an Event of Default (as defined below) and
when and to the extent required by Secured Party, Borrower shall (a) pay or
deliver all cash proceeds of Accounts and Loans to Secured Party immediately
upon receipt in the exact form received without commingling with other property,
or (b) immediately upon receipt, deposit all such proceeds in a collateral
collection account established and controlled by Secured Party at a financial
institution of its choosing, and/or (c) notify account Borrowers that their
accounts, Loans and/or contract rights (to the extent included in Accounts) have
been assigned to Secured Party and shall be paid directly to Secured Party. At
its option, at any time after an Event of Default and at Borrower's expense,
Secured Party may, in addition to its other rights hereunder, sue, compromise on
terms it considers proper, endorse, sell or otherwise deal with the Accounts and
Loans and proceeds of any Collateral either in its own name or that of Borrower.
After deduction of any expenses, including, without limitation, attorneys fees
and expenses, to the extent permitted under applicable law, all proceeds
received by Secured Party may be applied by Secured Party to payment of any
Obligations, if due, whether at maturity, by acceleration or otherwise, in such
order as Secured Party may choose. At any time and from time to
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time, Secured Party may make like application of the balance of the collateral
collection account or it may release all or a part of the balance to Borrower.
9. ASSIGNMENTS, INVOICES AND INFORMATION. At Secured Party's request,
Borrower shall:
(a) give Secured Party assignments in the form specified by
Secured Party of specific Accounts and Loans as the Accounts and Loans
arise;
(b) furnish Secured Party with the original or a copy of
invoices, and contracts applicable to each Account and Loan noting
thereon, if Secured Party so requires, Secured Party's assignment and
any additional statement required; and/or
(c) notify Secured Party immediately if any Account or Loan
arises out of a contract with the United States or any of its agencies
and take any action required by Secured Party with reference to the
Federal Assignment of Claims Act.
10. NOTATION OF ASSIGNMENT, INFORMATION AND PAYMENT OF ACCOUNTS. When
and to the extent required by Secured Party, Borrower shall:
(a) mark records of Accounts, Loans and contract rights (to
the extent included in Accounts) in a manner satisfactory to Secured
Party to show Secured Party's interest therein;
(b) furnish to Secured Party satisfactory evidence of
performance of contracts and Loans; and
(c) give Secured Party lists of account Borrowers (showing
names, addresses and amounts owing) and such other data concerning its
Accounts and Loans as Secured Party may from time to time specify.
11. FINANCING STATEMENTS.
(a) Borrower irrevocably authorizes Secured Party to prepare
and file any financing statement, amendments, continuations, and all
other documents, as Secured Party deems necessary to perfect and
maintain the security interest and lien granted herein. This
authorization shall remain in full force and effect and may be relied
on by Secured Party as long as any Obligations remain outstanding.
(b) Borrower agrees to promptly execute and deliver to Secured
Party, concurrently with this Agreement and at any time thereafter, at
Secured Party's request, all financing statements, assignments,
promissory notes, certificates of title, affidavits, reports, notices,
schedules of Accounts, designations of Inventory, letters of authority,
stock certificates and any and all other documents and agreements, in
form satisfactory to Secured Party, to perfect and maintain its
security interest in the Collateral.
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(c) Except as otherwise provided in this Agreement or any
other agreement between Borrower and Secured Party, without the prior
written consent of Secured Party, Borrower will not allow or suffer any
adverse financing statement covering the Collateral, or any portion
thereof, to be on file in any public office.
12. EVENTS OF DEFAULT. Borrower shall be in default under this
Agreement and all Obligations of Borrower to Secured Party shall, without demand
or notice of any kind and notwithstanding the maturity date or dates expressed
in any evidence of any Obligations, become immediately due and payable upon the
happening of any of the following events of default ("Events of Default"):
(a) Default in the punctual payment or performance of any of
the Obligations referred to herein, or any part thereof, following any
grace period provided in the written documents evidencing the
Obligations;
(b) Default in the punctual performance of any covenant or
agreement contained in or referred to herein following any applicable
grace period;
(c) Any warranty, representation or statement made or
furnished to Secured Party by or on behalf of Borrower proves to have
been false in any material respect when made or furnished;
(d) Loss, theft, encumbrance (except as permitted hereunder)
to or of a material portion or all of the Collateral;
(e) Any sale, merger, consolidation or other disposition of
Borrower of any substantial portion of its assets or property, except
in the ordinary course of business;
(f) The closure of the business of Borrower, or the
dissolution or liquidation of Borrower, or Borrower not being qualified
to conduct business in any jurisdiction in which its failure to conduct
business would have a material adverse effect on Borrower or its
business;
(g) Any of the following events continuing for sixty (60) days
or more:
(i) The execution by Borrower of any assignment for
the benefit of creditors;
(ii) The levy against the Collateral of any
execution, attachment, sequestration or other writ;
(iii) The appointment of a receiver of Borrower, of
the Collateral, or of any substantial part thereof;
(iv) The filing by or against Borrower of any
petition under the United States Bankruptcy Code, or any
similar federal or state statute; or
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(v) The insolvency of Borrower;
(h) Any default of Borrower under the terms of any security
agreement or promissory note with any third party, which default is not
cured within the time, if any, provided for cure in such security
agreement or promissory note and/or the commencement or undertaking by
any third party of efforts to enforce any security interest in the
Collateral; or
(i) The filing or attachment of any tax lien, or any other
form of lien or levy to any or all of the Collateral, which lien or
levy is not effectively stayed, discharged, or indemnified against, to
the Secured Party's satisfaction, within sixty (60) days after such
filing or attachment.
13. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of
Default, and at any time thereafter, Secured Party shall have the rights and
remedies of a secured party under the Code in addition to the rights and
remedies provided herein or in any other instrument or agreement executed by
Borrower. Without limiting the generality of the foregoing, Borrower expressly
agrees that in any such event Secured Party, without demand of performance or
other demand, advertisement or notice of any kind (except the notice specified
below of time and place of public or private sale) to or upon Borrower or any
other person (all and each of which demands, advertisements and/or notices are
hereby expressly waived), may forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, assign, give an option or options to purchase or sell or otherwise
dispose of and deliver the Collateral (or contract to do so), or any part
thereof, in one or more parcels at public or private sale or sales, at any
exchange broker's board or at any of Secured Party's offices or elsewhere at
such prices as Secured Party may deem best, for cash or on credit or for future
delivery without assumption of any credit risk. Secured Party shall have the
right upon any such public sale or sales and, to the extent permitted by law,
upon any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right of equity of redemption, which equity of
redemption Borrower hereby releases. Secured Party may require Borrower to
assemble the Collateral and proceeds and make them available to Secured Party at
a place to be designated by Secured Party which is reasonably convenient to all
parties. Secured Party shall apply the net proceeds of any such collection,
recovery, receipt, appropriation, realization or sale after deducting all
reasonable costs and expenses of every kind incurred therein or incidental to
the care, safe-keeping or otherwise of any or all of the Collateral or in any
way relating to the rights of Secured Party hereunder, including, without
limitation, reasonable attorneys fees and expenses, to the payment in whole or
in part of the Obligations, in such order as Secured Party may elect, Borrower
remaining liable for any deficiency remaining unpaid after such application, and
only after so paying over such net proceeds and after the payment by Secured
Party of any other amount required by any provision of law, need Secured Party
account for the surplus, if any, to Borrower. To the extent permitted by
applicable law, Borrower waives all claims, damages and demands against Secured
Party arising out of the repossession, retention or sale of the Collateral.
Unless the Collateral is perishable or threatens to decline speedily in value or
is of a type customarily sold on a recognized market, Secured Party will give
Borrower reasonable notice of the time and place of any public sale thereof or
of the time after which any private sale or other intended disposition thereof
is to be made. The requirement of reasonable notice shall be met if such notice
is mailed, postage prepaid, to the address of Borrower, at least ten (10) days
before the time of the sale or disposition.
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Borrower shall pay to Secured Party on demand any and all expenses, including,
without limitation, reasonable attorneys fees and expenses, to the extent
permitted under applicable law, incurred or paid by Secured Party in protecting
or enforcing the Obligations and other rights of Secured Party hereunder
including his rights to take possession of Collateral and proceeds thereof.
14. SECURED PARTY'S APPOINTMENT AS ATTORNEY-IN-FACT. Borrower hereby
irrevocably constitutes and appoints Secured Party, with full power of
substitution, as its true and lawful attorney-in-fact with full power and
authority in the place and stead of Borrower and in the name of Borrower or in
its own name, from time to time in the sole and absolute discretion of Secured
Party, for the purpose of carrying out the terms of this Agreement, to take any
and all appropriate action and to execute any and all documents and instruments,
including without limitation, any financing statements necessary or helpful to
perfect or continue Secured Party's security interest in the Collateral, which
may be necessary or desirable to accomplish the purposes of this Agreement. This
power of attorney being coupled by an interest shall be irrevocable so long as
any Obligations remain unpaid. All acts of any such attorney are ratified and
approved, and except for willful misconduct, he or she will not be liable for
any act or omission or for any error of judgment or mistake of law.
15. SECURITY NOT CONTINGENT. Secured Party's rights under this
Agreement shall not be contingent upon the exercise or enforcement by Secured
Party of any other rights or remedies he may have against Borrower or others. No
election by Secured Party to proceed in one form of action or proceeding, or
against any party, or on any obligation, shall constitute a waiver of Secured
Party's right to enforce his rights under this Agreement.
16. GENERAL. Secured Party shall not be deemed to have waived any of
its rights hereunder or under any other agreement or instrument signed by
Borrower unless such waiver be in writing and signed by Secured Party. No delay
or omission on the part of Secured Party in exercising any right shall operate
as a waiver of such right or any other right. A waiver on any one occasion shall
not be construed as a bar to or waiver of any right or remedy on any future
occasion. All of Secured Party's rights and remedies, whether evidenced hereby
or by any other agreement or instrument, shall be cumulative and may be
exercised singularly or concurrently. Any demand upon or notice to Borrower that
Secured Party may elect to give shall be effective when deposited in the mails
addressed to Borrower at its principal place of business. Demands or notices
addressed to Borrower's address at which Secured Party customarily communicates
with Borrower shall also be effective. This Agreement shall be terminated only
by the filing of a termination statement in accordance with the applicable
provisions of the Code and/or when there are no outstanding Obligations and no
commitments on the part of Borrower to Secured Party under any agreement which
might give rise to any Obligations. Prior to such termination this shall be a
continuing agreement in every respect. This Agreement and all rights and
obligations hereunder including matters of construction, validity and
performance, shall be governed by the laws of the State of Michigan. This
Agreement is intended to take effect when signed by Borrower and delivered to
Secured Party. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original and all of which together shall constitute one
instrument. Facsimile copies of signatures to this Agreement shall be deemed to
be originals, and the parties may rely upon such facsimile copies to the same
extent as the originals.
[Remainder of page intentionally left blank. Signatures on following page.]
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IN WITNESS WHEREOF, the parties have executed this Second Amended and
Restated Security Agreement as of the day and year above written.
"BORROWER"
BINGHAM FINANCIAL SERVICES
CORPORATION, a Michigan corporation
By: /s/ Ronald A. Klein
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Its: Chief Executive Officer
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"SECURED PARTY"
SUN HOME SERVICES, INC., a Michigan corporation
By: /s/ Jeffrey P. Jorissen
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Its: Chief Financial Officer
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