EXHIBIT 10(v)
FOURTH AMENDED AND RESTATED SECURITY
AND COLLATERAL AGENCY AGREEMENT
THIS FOURTH AMENDED AND RESTATED SECURITY AND COLLATERAL AGENCY AGREEMENT
(the "Security Agreement") is made and dated as of June 30, 2004 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 Fifth 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 Third Amended and Restated Security and Collateral Agency Agreement
dated as of March 31, 2003 by and among the Company, the Credit Agent and the
Collateral Agent.
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 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
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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 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;
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(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 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
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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
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
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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 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
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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 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
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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 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 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
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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.
(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:
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"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 (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.
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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.
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
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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 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.
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\
(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.
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
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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 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 Paragraph 17 below,
be 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
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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 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
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the advice of such counsel, accountants or experts; provided, 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
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
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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', 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:
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(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.
(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
-18-
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 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
-19-
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.
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).
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.
-20-
EXECUTED the day and year first above written.
PULTE MORTGAGE LLC
By:
_________________________________________
Name: David Bruining
Title: Senior Vice President and CFO
Address for Notices:
7475 South Joliet Street
Englewood, Colorado 80112
Attn: Chief Financial Officer
Telephone No.: (303) 740-3386
Facsimile No.: (303) 741-2946
BANK ONE, NA, a national banking association, as
Credit Agent
By:
___________________________________________
Name: Kenneth Nelson
Title:
__________________________
Address for notices:
Bank One Center
131 South Dearborn
Fifth Floor
Chicago, IL 60603
Attn: Kenneth Nelson
Telephone No.: (312) 325-3129
Facsimile No.: (312) 325-3122
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LASALLE BANK NATIONAL ASSOCIATION, as Collateral
Agent
By:
__________________________________________
Name:
________________________________________
Title:
_______________________________________
Address for Notices:
___________________________
___________________________
___________________________
Attn:
______________________
Phone:
_____________________
Fax:
_____________________
-22-
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
-23-
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 as to the identity of the assignee 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. Notwithstanding the foregoing, the Company shall not be required to
deliver such a blank assignment containing the specific information
regarding the related mortgage or deed of trust needed for recordation for
any mortgage or deed of trust held by MERS so long as the Company has
delivered to and maintains with the Collateral Agent (A) a supply of not
less than 3,500 executed, non-specific assignments which have blanks for
the insertion of such specific information regarding the assigned mortgage
or deed of trust (or any greater amount of such assignments that the
Collateral Agent may require by written notice to the Company if the
volume of the Company's mortgages registered with MERS materially
increases) and (B) an irrevocable power-of-attorney executed by the
Company (pursuant to appropriate corporate resolution of MERS) authorizing
the Collateral Agent to insert all such specific information into such
assignments on behalf of the Company.
-24-
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 or second
lien, as applicable, 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.
-25-
SCHEDULE C
TO SECURITY AGREEMENT
FORM OF BORROWING BASE CERTIFICATE
-26-
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 (or, if such mortgage/deed of
trust is covered by a supply of non-specific assignments as permitted
under Schedule A to the Security Agreement, each such non-specific
assignment) 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.
-27-
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 Fifth Amended and Restated Revolving Credit Agreement dated as
of June 30, 2004, 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:____________________________
-28-
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 Fourth Amended and Restated Security and Collateral
Agency Agreement dated as of June 30, 2004 (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).
( ) FHLMC Custodial Certification Schedule (Form 1034).
-29-
( ) 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:_____________________________
-30-
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 Fourth
Amended and Restated Security and Collateral Agency Agreement dated as of June
30, 2004, 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_.
Please have the courier bill 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:_____________________________
-31-
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 Fifth
Amended and Restated Revolving Credit Agreement dated as of June 30, 2004 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 23, 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.
-32-
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:____________________________
-33-
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 Fifth Amended and Restated Revolving Credit Agreement dated as
of June 30, 2004, 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 AND RETURNING THE ENCLOSED COPY OF THIS LETTER TO THE UNDERSIGNED;
HOWEVER, YOUR FAILURE TO DO SO DOES NOT NULLIFY SUCH CONSENT.
-34-
Sincerely,
LASALLE BANK NATIONAL ASSOCIATION, as Collateral Agent
By:________________________________
Title:_____________________________
Address: _________________________
_________________________
_________________________
ACKNOWLEDGEMENT OF RECEIPT
[Certificating Custodian]
By:_______________________________
Name:_____________________________
Title_____________________________
Date:_____________________________
-35-
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
Fifth Amended and Restated Revolving Credit Agreement dated as of June 30, 2004
(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 Fourth 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 following paragraph. You are authorized, directed
and instructed to act upon all instructions from persons reasonably believed by
you to be
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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 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.
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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 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.
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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:____________________________
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
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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 Fourth Amended and Restated Security and Collateral Agency Agreement
dated as of June 30, 2004, 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.
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.
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
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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 Kenney 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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