FORM OF
LOAN AND SECURITY AGREEMENT
BY AND BETWEEN
BEACON BANK
AND
AMERICAN CHURCH MORTGAGE COMPANY
Dated As Of September _____, 2008
<PAGE>
EXHIBIT A -- BORROWING BASE CERTIFICATE
EXHIBIT B - BOND/MORTGAGE LOAN CERTIFICATE
EXHIBIT C -- COMPLIANCE CERTIFICATE
EXHIBIT D -- BUSINESS AND COLLATERAL LOCATIONS
SCHEDULE 9(g) -- LITIGATION
SCHEDULE 9(i) -- AFFILIATED TRANSACTIONS
SCHEDULE 9(j) -- NAMES & TRADE NAMES
SCHEDULE 9(m) -- INDEBTEDNESS
SCHEDULE 9(o) -- PARENT, SUBSIDIARIES AND AFFILIATES
SCHEDULE 11(g) - AFFILIATE TRANSACTIONS
SCHEDULE 15(a) -- CLOSING DOCUMENT CHECKLIST
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LOAN AND SECURITY AGREEMENT
THIS
LOAN AND SECURITY AGREEMENT (as amended, modified or supplemented
from
time to time, this
"Agreement")
made this ____ day of
September, 2008 by
and
between BEACON BANK, a
Minnesota banking
corporation
(the "Lender"), 19765
Highway 7, Shorewood, MN 55331 and AMERICAN CHURCH MORTGAGE
COMPANY, a Minnesota
corporation, having
its principal
place of business at 10237 Yellow Circle
Drive, Minneapolis, MN 55343 (the "Borrower").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Borrower may,
from time to time,
request Loans from Lender, and
the parties wish to provide for the terms and conditions upon which such Loans
or other financial accommodations, if made by Lender, shall be
made;
NOW,
THEREFORE, in consideration of any Loan (including any Loan by
renewal
or extension)
hereafter made to Borrower by Lender, and for other good and
valuable
consideration, the
receipt and sufficiency of which are hereby
acknowledged by Borrower, the parties agree as follows:
1.
DEFINITIONS.
"Account",
"Account Debtor",
"Chattel
Paper", "Deposit Accounts",
"Documents",
"Electronic Chattel
Paper", "General Intangibles", "Goods",
"Instruments",
"Inventory",
"Investment Property",
"Proceeds"
and "Tangible
Chattel Paper" shall have the respective meanings assigned to such terms in
the
Minnesota Uniform
Commercial
Code, as the same may be in effect from
time to
time.
"Affiliate" shall mean any Person (i) which directly or indirectly
through
one or more
intermediaries
controls, is
controlled
by, or is under common
control with, Borrower, (ii) which beneficially owns or
holds five percent (5%)
or more of the voting
control or equity
interests of Borrower,
or (iii) five
percent (5%) or more
of the voting
control or equity interests of which is
beneficially owned or held by Borrower.
"Bond/Mortgage Loan Certificate" shall mean a certificate
executed by both
the president and the chief financial officer of the Borrower for any
Bonds or
Mortgage Loans which
Borrower proposes to
include in the Borrowing Base in the
form set forth on Exhibit B.
"Bonds" shall mean the
first mortgage
serial Bonds of a Mortgage Loan
Obligor purchased by
Borrower, secured by a first mortgage lien or security
title to the real
property owned by the
issuer of such Bond,
which Bonds have
been delivered by
Borrower to Lender or are held in the ICA Account as security
for the Liabilities
in order to achieve the required collateral coverage
covenant under
Section 12(b) hereof and which are otherwise in form and
substance acceptable to Lender.
"Borrowing Base" shall mean the meaning set forth in Section
4(a).
<PAGE>
"Borrowing Base
Certificate"
shall mean the form of the certificate
attached hereto as Exhibit A.
"Business Day" shall
mean any day other than a Saturday, a Sunday or any
day that banks in Minneapolis, Minnesota are required or permitted
to close.
"Collateral" shall
mean all of the
property of Borrower described in
Section 4 hereof
together with all other real or personal property of any
Obligor or any other Person now or hereafter pledged to Lender to
secure, either
directly or indirectly, repayment of any of the
Liabilities.
Collateral shall
not include any Excluded Collateral.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as
amended, modified or restated from time to time.
"Event of Default" shall have the meaning specified in Section 13
hereof.
"Excluded Bonds and Excluded Mortgage Loans" shall mean all
Mortgage Loans
or Bonds that have
been or will be
pledged by
Borrower to secure Permitted
Indebtedness. Excluded
Bonds and Excluded Mortgage Loans do not include any
Bonds or Mortgage
Loans which are
required to be part of
the Borrowing
Base
unless the same have been released pursuant to the terms of this
Agreement and
the Other Agreements.
"Excluded Collateral"
shall mean any and all property of the Borrower
securing Excluded
Bonds and Excluded
Mortgage Loans and any
other property of
Borrower which is not Collateral.
"Fiscal Year"
shall mean each twelve (12) month accounting period of
Borrower, which ends on December 31st of each year.
"ICA
Account" shall mean the account at Herring
Bank which is subject
to
the Securities Account Control Agreement.
"Indemnified Party" shall have the meaning specified in Section 16
hereof.
"Indentures" shall mean, collectively, (i) that certain Indenture dated
as
of April 26, 2002 (the "Series A Indenture") between Borrower and Herring
Bank,
a Texas banking corporation, as trustee, pursuant to which Borrower has
issued
its Series A Secured
Investor Certificates
outstanding as of the
date of this
Agreement in the aggregate principal amount of $5,286,000.00
(ii) that certain
Indenture dated as of
September 28, 2004 (the "Series B
Indenture")
between
Borrower and Herring Bank, a Texas banking corporation,
as trustee, pursuant
to
which Borrower has issued its Series B Secured Investor
Certificates outstanding
as of the date of this Agreement in the aggregate principal amount of
$16,914,000.00; and
(c) any other
Indenture that may be
entered into
between
Borrower and Herring Bank, a Texas banking corporation,
as trustee, pursuant
to
which Borrower
may issue additional Secured Investor Certificates in the
aggregate principal amount of $20,000,000.00 (the "Series C
Indenture").
"Interim Loans" shall
mean a loan having a maturity date of not later than
one year from the initial advance thereunder made by Borrower
to
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a Mortgage Loan Obligor to provide interim financing pending the issuance and
sale of bonds by such Mortgage Loan Obligor, which loan is repaid from the
net
proceeds from the sale of such bonds.
"Liabilities"
shall mean
any and all obligations, liabilities and
indebtedness of Borrower to Lender or to any parent, affiliate or subsidiary of
Lender of any and every kind and nature, howsoever created, arising
or evidenced
and howsoever
owned, held or acquired, whether now or hereafter existing,
whether now due or to become due, whether primary, secondary,
direct, indirect,
absolute, contingent or otherwise (including, without limitation,
obligations of
performance), whether
several, joint or
joint and several, and whether arising
or existing under written or oral agreement or by operation of
law.
"Loans" shall mean all loans and advances made by Lender to or on
behalf of
Borrower hereunder.
"Management Agreement"
shall mean that certain Amended and Restated
Advisory Agreement dated as of January 22, 2004, between the
Borrower and Church
Loan Advisors, Inc.
"Material Adverse
Effect" shall mean a material adverse effect on the
business, property,
assets, prospects,
operations or
condition, financial
or
otherwise, of a Person as the same is determined by the Lender in
its reasonable
discretion.
"Maximum Loan Limit" shall mean Eight Million Dollars
($8,000,000.00).
"Mortgage" shall mean
with respect to each Mortgage Loan, each mortgage,
deed of trust or deed to secure debt, as applicable in the particular
jurisdiction, which
creates the first priority lien on the Mortgage Loan
Collateral in favor of
Borrower as security for the repayment of such Mortgage
Loan.
"Mortgage Assignment"
shall mean with
respect to each
Mortgage Loan, a
transfer and
assignment of the
Mortgage with
respect thereto from Borrower
executed and recorded in the applicable jurisdiction.
"Mortgage Loans" shall
mean loans made by the Borrower to a Mortgage Loan
Obligor, secured by a
mortgage lien or
security interest in and to the real
property owned by such
Mortgage Loan Obligor,
which Mortgage
Loans have been
delivered by
Borrower to Lender as
security for the
Liabilities
in order to
achieve the required collateral coverage covenant under Section
12(b) hereof and
which are otherwise in form and substance acceptable to Lender. Mortgage Loans
do not include Interim Loans.
"Mortgage Loan
Collateral" shall mean
with respect to each Mortgage Loan,
the real property,
improvements,
fixtures, personalty, insurance policies,
accounts, escrows and
any other collateral pledged by the Mortgage Loan Obligor
(and, if applicable,
by any guarantor of such Mortgage Loan) to Borrower as
security for
such Mortgage Loan (or applicable guaranty) pursuant to the
applicable Mortgage and other Mortgage Loan Collateral Documents.
Mortgage Loan
Collateral shall not include Excluded Collateral.
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<PAGE>
"Mortgage Loan
Collateral
Documents"
shall mean with respect to each
Mortgage Loan,
the original
Mortgage Loan Note,
an original
allonge to each
Mortgage Loan Note duly executed in blank by Borrower, a fully executed copy of
the recorded
Mortgage and a fully executed copy of the recorded Mortgage
Assignment;
"Mortgage Loan
Documents"
shall mean with
respect to each Mortgage Loan,
collectively, all
of the documents evidencing, guaranteeing, securing or
otherwise relating
to such Mortgage Loan, as any of the foregoing may be
modified, amended,
supplemented,
restated or renewed from time to time,
including, without limitation, the following documents:
(a)
Mortgage Loan Note.
(b)
Mortgage and related security agreement, fixture filing and financing
statement.
(c)
If applicable, an assignment of leases and rents.
(d)
If applicable, any guaranty.
"Mortgage Loan Note"
shall mean with respect to each Mortgage Loan, the
original negotiable
promissory note, bond
or other debt instrument made by the
Mortgage Loan Obligor in favor of Borrower.
"Mortgage Loan
Obligor" shall mean a church, school, other non-profit
organization or other Person obligated to make scheduled
payments of
principal,
interest and other
amounts due in relation to the loan documentation given
(including, but not
limited to, the mortgage granting a first mortgage lien) in
relation to a Bond, a Mortgage Loan or an Interim Loan.
"Mortgage Loan
Qualification
Documents"
shall mean with
respect to each
Mortgage Loan, each of the following items:
(a)
The original Mortgage
Loan Note, together
with an original allonge to
such Mortgage Loan Note duly executed in blank by the Borrower.
(b)
A duly executed, recorded and delivered Mortgage Assignment.
(c)
The original counterparts of the other Mortgage Loan Documents,
or the
original recorded counterpart upon return from recording or
filing.
(d)
With respect to each
Mortgage Loan, a favorable legal opinion of
counsel to the Mortgage Loan Obligor qualified to practice in the
state in which
the Mortgage Loan
Collateral is located,
addressed to the Borrower, as to the
enforceability of the
Mortgage Loan Documents; provided, however that for
Mortgage Loans
outstanding on the date of this Agreement, no legal opinions of
counsel shall be
required if they were not obtained by Borrower in
connection
with closing such Mortgage Loans.
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(e)
The title policy (ALTA standard form) issued by a title company
reasonably acceptable
to Lender demonstrating that the Mortgage in favor of
Borrower is a first lien on the real property described
therein.
(f)
An appraisal or
estimate of value,
survey and surveyor
certification
for the Mortgage Loan Collateral, as required by Borrower's
internal policies;
provided, however,
that for Mortgage Loans outstanding on the date of this
Agreement, no survey
or surveyor
certification shall be
required if they were
not obtained by Borrower in connection with closing such Mortgage
Loans.
(g)
The credit
display, underwriting analysis or other documentation
prepared by Borrower or Church Loan Advisors, Inc., or any other affiliate of
Borrower upon which
the decision
of Borrower
to make the
Mortgage Loan was
based.
(h)
An assignment
in form and content
acceptable
to Lender by which
the
Mortgage Loan
Qualification
Documents and Mortgage Loan Documents are assigned
to Lender.
"Note" means that
certain Revolving Note of even date herewith in the
original principal amount of $8,000,000.00 executed by the Borrower and
payable
to the order of the Lender.
"Obligor" shall mean
Borrower and each other Person who is or shall become
primarily or secondarily liable for any of the Liabilities.
"OREO" shall mean property acquired by the Borrower pursuant to
foreclosure
proceedings, deed in
lieu of conveyance or foreclosure or a similar conveyance
transaction as a result of a defaulted Mortgage Loan or Bond.
"Original Term" shall have the meaning specified in Section 8
hereof.
"Other Agreements"
shall mean all
agreements,
instruments and documents,
other than this Agreement, including, without limitation,
guaranties, mortgages,
trust deeds, pledges,
powers of attorney,
consents, assignments, contracts,
notices, security
agreements,
leases, financing statements and all other
writings heretofore, now or from time to time hereafter executed by
or on behalf
of Borrower
or any other
Person and delivered to Lender or to any parent,
affiliate or
subsidiary of Lender
in connection with the
Liabilities
or the
transactions
contemplated hereby, as each of the same may be amended,
modified
or supplemented from time to time.
"Parent" shall mean any Person now or at any time or times
hereafter owning
or controlling
(alone or with any
other Person)
at least a
majority of the
issued and outstanding equity of Borrower and, if Borrower is a
partnership, the
general partner of Borrower.
"Performing Bond" shall mean a Bond with respect to which the
Mortgage Loan
Obligor has met all of the material terms and conditions set forth in the
Bond
and in any security
documents related
thereto and no default
or event, which
with the passage
of time or giving of
notice, or both, might constitute a
default, exists and has continued for more than ninety (90) days
under such Bond
and related security documents.
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<PAGE>
"Performing Mortgage Loan" shall mean a Mortgage Loan with respect
to which
the Mortgage Loan Obligor has met all of the material terms and conditions set
forth in the Mortgage
Loan Documents
and no default or
event, which with
the
passage of time or giving of notice, or both, might constitute a
default, exists
and has continued
for more than
ninety (90) days under such Mortgage Loan
Documents.
"Permitted
Indebtedness" shall
mean all indebtedness
of the Borrower in
connection with the Indentures and the Secured Investor
Certificates.
"Person" shall mean any individual, sole proprietorship,
partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company,
institution,
entity, party or foreign or United States
government (whether
federal, state, county, city, municipal or otherwise),
including, without
limitation, any
instrumentality,
division, agency, body or
department thereof.
"Plan" shall have the meaning specified in subsection 10(b)(v)
hereof.
"Prime Rate" shall mean the Wall Street Journal's publicly announced prime
rate (which is not
intended to be
Lender's lowest or
most favorable
rate in
effect at any time) in effect from time to time.
"Qualifying Bond"
shall mean a Bond,
which meets the
criteria of Section
4(a) hereof, approved
by Lender for inclusion in the Borrowing Base and is held
in the ICA Account or otherwise delivered to the Lender.
"Qualifying Mortgage
Loan" shall mean a Mortgage Loan, which meets the
criteria of Section
4(a) hereof,
is approved by Lender
for inclusion
in the
Borrowing Base
and with respect to which each and all of the following
conditions and requirements have been met as evidenced by written
certification
delivered by Borrower to Lender:
(a)
Lender shall have received the Mortgage Loan Qualification
Documents.
(b)
Lender shall have received the Mortgage Loan Collateral Documents,
all
of which remain in full force and effect.
(c)
Each of the Mortgage Loan Documents evidencing, securing or otherwise
relating to the
Mortgage Loan shall
have been executed by
the Mortgage
Loan
Obligor and shall be legal, valid, and binding on and enforceable
against the
Mortgage Loan Obligor.
(d)
The making
of such Mortgage Loan by Borrower was in all material
respects in compliance
with and was not in
violation of
Borrower's
standard
underwriting
guidelines and criteria, as approved by Lender, and any
applicable
law.
(e)
Based on the Appraised
Value of the Mortgage Loan Collateral for such
Mortgage Loan,
the loan to value
ratio of such
Mortgage Loan shall not be
greater than
seventy-five percent
(75%) and the Mortgage Loan Collateral shall
not have any material title, survey, environmental,
entitlement/zoning issues or
other defects.
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(f)
The Mortgage Loan is a Performing Mortgage Loan.
(g)
The representations
and warranties in Section 6.24 shall
be true and
correct with respect to such Mortgage Loan.
(h)
The Mortgage Loan Documents shall be free and clear of all
liens.
"Secured
Investor
Certificates"
shall mean
the secured investor
certificates issued from time to time in connection with the
Indentures, as the
same may be renewed from time to time in accordance with the
Indentures.
"Securities Account
Control Agreement"
shall mean the securities account
control agreement between Borrower, Lender and Herring Bank.
"Subsidiary" shall
mean any corporation
of which more than
fifty percent
(50%) of the
outstanding capital
stock having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of whether
at the time stock of
any other class of
such corporation
shall have or
might
have voting power by reason of the happening of any contingency) is
at the time,
directly or indirectly, owned by Borrower, or any partnership,
joint venture or
limited liability
company of which more than fifty percent (50%) of the
outstanding equity interests are at the time, directly or indirectly,
owned by
Borrower or any partnership of which Borrower is a general
partner.
"Tangible Net Worth"
shall have the meaning
specified in
subsection
12
hereof.
2.
LOANS.
(a)
Loans.
Subject to the
terms and conditions of this Agreement and the Other
Agreements, during the
Original Term, Lender shall make Loans and advances (the
"Loans") in an amount up to Eight Million Dollars ($8,000,000.00), subject to
the collateral
coverage covenant
under Section 12(b) hereof. Unless and until
Lender obtains one or
more participants
who agree to
participate in the Loans
and enter into participation agreements with Lender, the maximum
amount of Loans
and advances by Lender is limited to $4,500,000.00.
Borrower hereby authorizes Lender, in its sole discretion, to
charge any of
Borrower's accounts
or advance Loans to make any payments of principal,
interest, fees,
costs or expenses
required to be made
under this Agreement or
the Other Agreements.
A
request for a Loan
shall be made or shall be deemed to be made, each in
the following manner:
Borrower shall give Lender same day notice, no later than
1:00 P.M. (determined based on the local time of Borrower at its
principal place
of business) for such day, of its request for a Loan. In the event
that Borrower
maintains a controlled
disbursement account at Lender, each check presented for
payment against such
controlled
disbursement
account and any other
charge or
request for
payment against such controlled disbursement account shall
constitute a request for a Loan. As an accommodation to Borrower, Lender may
permit telephone requests for Loans and electronic transmittal of instructions,
authorizations,
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agreements or
reports to Lender by Borrower. Unless Borrower specifically
directs Lender in
writing not to accept or act upon telephonic or electronic
communications from Borrower, Lender shall have no liability to
Borrower for any
loss or damage
suffered by Borrower
as a result of
Lender's honoring of any
requests, execution
of any instructions, authorizations or agreements or
reliance on any reports communicated to it telephonically
or electronically and
purporting to have been sent to Lender by Borrower and Lender shall
have no duty
to verify the origin of any such communication or the authority of the Person
sending it.
Borrower hereby
irrevocably authorizes
Lender to disburse the proceeds of
each Loan requested
by Borrower,
or deemed to be
requested by Borrower, as
follows: the
proceeds of each Loan requested under Section 2(a) shall be
disbursed by
Lender in lawful money of the United States of America in
immediately available funds, in the case of the initial borrowing,
in accordance
with the terms of the written disbursement letter from Borrower,
and in the case
of each subsequent borrowing, by wire transfer or Automated
Clearing House (ACH)
transfer to such bank
account as may be agreed upon by Borrower and Lender from
time to time, or elsewhere if pursuant to a written direction from
Borrower.
(b)
Repayments.
The
Loans shall be repaid on the last day of the Original Term. Prior to
maturity, amounts of
principal repaid may
be readvanced to
Borrower. Accrued
interest is payable monthly.
(c)
Note.
The
Loans shall be evidenced by the Note and constitute a revolving
loan.
3.
INTEREST, FEES AND CHARGES.
(a)
Interest Rate.
The
Loans shall bear
interest at the rate set forth in the Note. Upon the
occurrence of an Event of Default and during the continuance
thereof, the Loans
shall bear interest at
the rate of four percent (4%) per annum in excess of the
interest rate
otherwise payable
thereon, which interest shall be payable on
demand. All interest
shall be calculated on the basis of actual days elapsed in
a 360-day year.
(b)
Fees And Charges.
(i)
Origination
Fee. Borrower shall pay to Lender an
origination fee of
$15,750.00, which
fee shall be fully earned and payable on the
disbursement of the initial Loan hereunder. On the first anniversary
date of this Agreement, the Borrower shall pay to Lender an
additional
fee equal to 0.25% of the previous year's average Loan balance.
(ii)
Mortgage Loan.
For any Mortgage Loan
which Borrower
proposes to be
included in the Borrowing Base, Borrower shall pay to Lender a file
review fee of $250.00.
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(iii) Costs and Expenses. Borrower shall reimburse Lender for all
costs and
expenses, including, without limitation, legal expenses and
reasonable
attorneys' fees (whether for internal or outside counsel), incurred
by
Lender in connection with the (i) documentation and consummation of
this transaction
and any other
transactions
between Borrower and
Lender, including,
without limitation, Uniform Commercial Code and
other public record searches and filings, overnight courier or other
express or
messenger delivery, appraisal costs, surveys, title
insurance and
environmental audit or
review costs; (ii)
collection,
protection or enforcement of any rights in or to the Collateral;
(iii)
collection of any Liabilities; and (iv) administration and
enforcement
of any of Lender's rights under this Agreement or any Other
Agreement.
Borrower shall also pay all normal service charges with respect to
all
accounts maintained
by Borrower with Lender and any additional
services requested by Borrower from Lender. All such costs, expenses
and charges shall constitute Liabilities hereunder, shall be payable
by Borrower to Lender on demand, and until paid, shall bear interest
at the highest rate then applicable to Loans hereunder.
(c)
Maximum Interest.
It
is the intent of the parties that the rate of interest and other
charges
to Borrower
under this
Agreement and the Other Agreements shall be lawful;
therefore, if for any
reason the interest or other charges payable under this
Agreement are
found by a court of competent jurisdiction, in a final
determination, to
exceed the limit which Lender may lawfully charge Borrower,
then the obligation to
pay interest and other charges shall automatically be
reduced to such limit and, if any amount in excess of such limit
shall have been
paid, then such amount shall be refunded to Borrower.
4.
COLLATERAL.
(a) Borrowing
Base.
The
Borrowing Base shall
at all times conform to the collateral coverage
covenant under Section 12(b) hereof, subject to these additional
restrictions:
(i)
At no time shall
Mortgage Loans make up more than thirty percent (30%)
of the Borrowing Base, and
(ii)
No single Mortgage Loan may make up more than fifteen percent (15%)
of
the Borrowing Base for more than one successive calendar quarter,
and
(iii) No Bond issued
by any one
issuer may make up more than fifteen
percent (15%) of the
Borrowing Base for more than one successive
calendar quarter except that the Borrowing Base may include
Performing
Bonds of up to
$1,100,000.00 issued
by Agape Assembly Baptist Church
which are subject to the Securities Account Control Agreement as of
the date of this Agreement, and
(iv)
All Mortgage Loans must be Performing Mortgage Loans, and
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(v)
All Bonds must be
Performing Bonds, and
(vi)
All Mortgage Loans must be Qualifying Mortgage Loans, and
(vii) All Bonds must be Qualifying Bonds.
(b)
Grant of Security
Interest to Lender.
As
security for the payment of all Loans now or in the
future made by
Lender to Borrower
hereunder and for the payment or other satisfaction of all
other Liabilities,
Borrower hereby assigns to Lender and grants to Lender
a
continuing security
interest in all of Borrower's property and assets of
whatever type or description and all additions thereto and
replacements thereof,
and all other property
whether now owned or hereafter created, acquired or
reacquired by Borrower, wherever located (collectively,
the "Collateral,"
which
Collateral shall in no event include Excluded Collateral) including, without
limitation, the following:
Investment Property/Bonds/Mortgage Loans
i.
All Bonds now
existing or hereafter made; and
ii.
All Mortgage Loans;
and
iii.
All Mortgage Loan Qualification Documents; and
iv.
All security for the indebtedness evidenced by the Bonds and the
Mortgage Loans including, without limitation, the real and personal
property securing
the Bonds and Mortgage Loans, and all liens,
security interests and title of Borrower with respect thereto;
and
v.
All other
documents evidencing or securing the Bonds and Mortgage
Loans or any security
therefor or guaranties thereof, all title
insurance (whether
evidenced by policies,
commitments or
otherwise)
issued with respect to the real and personal property and to any
other
security for the Bonds
and Mortgage Loans, all accounts, funds,
lockboxes, and
all other instruments, documents and agreements
executed by or in
favor of Borrower or any prior holder of such
documents and instruments in connection with any of the foregoing,
and
all other documents
delivered or to be delivered to Borrower or
any
prior holder of such
documents and
instruments
under the Bonds
and
Mortgage Loans, and all books and records documenting, evidencing or
relating to the Bonds and Mortgage Loans (the Bonds, Mortgage Loans
and all of said documents, policies, instruments and agreements,
and
any and
all additions, renewals, extensions,
amendments,
modifications,
consolidations, restatements or supplements thereto of
any of the foregoing,
being hereinafter
referred to
collectively as
the
"Collateral Documents"); and
vi.
All payments due and
to become due under the Collateral Documents, all
collections thereon and all other amounts paid thereunder,
including,
without
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limitation, all
prepayments under the Collateral Documents, and all
other cash and non-cash proceeds of the Collateral Documents or of
any
other collateral for
the obligations of
Mortgage Loan Obligors under
the Collateral Documents; and
vii.
All rights and privileges obtained by Borrower in connection
with the
Bonds and Mortgage Loans issued by Mortgage Loan Obligors evidenced
by
the Collateral Documents, together with the real and personal
property
described in the Collateral Documents, and all the powers, options,
privileges and immunities contained in any of the foregoing;
and
viii. Any and all renewals and extensions of any of the foregoing and
any
and all replacements or substitutions for any of the foregoing.
Accounts
All
accounts, deposit accounts, letter of credit rights (whether or not
the
letter of credit is
evidenced by a writing) and other rights to payment of
money for property
sold or leased or for
services rendered, related or
arising from the Bonds and Mortgage Loans, expressly including, without
limitation, all
agreements with and
sums due from Mortgage Loan Obligors,
and
all books and records recording, evidencing or relating to such
rights
or
any part thereof (collectively, the "Accounts").
Contracts
All
(i) contracts and
agreements for the purchase of interests in real and
personal property,
(ii) management contracts and agreements
including,
without limitation,
the Management
Agreement, (iii)
security agreements,
guarantees and other agreements evidencing, securing or otherwise relating
to
the Accounts
or other rights to receive payment, and (iv) other
agreements to which Borrower is a party, whether now existing or
hereafter
arising (collectively, the "Contracts").
General Intangibles
All
other general
intangibles
(as such term is
defined in the Uniform
Commercial Code) and
contract rights including personal property not
included above,
related to or arising from or related to the Bonds and the
Mortgage Loans,
including, without
limitation, (i)
customer and supplier
lists, books and records, computer programs and other intellectual
property
rights, insurance
policies, tax refunds,
(ii) all goodwill,
trademarks,
trademark applications, trade names, trade secrets,
patents, copyrights,
service marks,
formulas, industrial designs, information contained on
computer disks or tapes, software, other intellectual property or rights
therein, whether under
license or otherwise, all rights to receive payment
on
property upon or in
connection
with any transfer of
any license, and
(iii) all payment intangibles (collectively, the
"Intangibles").
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<PAGE>
Miscellaneous Items
All
inventory, equipment
fixtures and other goods, chattel paper (whether
tangible or
electronic),
documents,
instruments
(including
promissory
notes), supplies,
choses in action,
commercial tort
claims,
(including,
without
limitation,
payments received
with respect to termination,
arbitration or
litigation
under
any Contract), money, cash, cash
equivalents, or other
assets of Borrower
(that come into the
possession,
custody, or control of
the agent or any bank), deposits, certificates of
deposit, stock
or share certificates, certificated and uncertificated
securities and all other investment property, supporting obligations (as
such
term is defined in the Uniform Commercial Code), URL's, domain names
and
licenses, and all other property and assets of whatever type or
description not
included above related to the acquisition, sale or
maintenance of
the Bonds and the Mortgage Loans (collectively, the
"Miscellaneous Items"); and
Proceeds
All
proceeds, whether
tangible or intangible, of any of the above, and all
proceeds of any loss of, damage to or destruction of the above, whether
insured or not insured, and all other proceeds of any
sale, lease or other
disposition of any
property or interest therein referred to above, together
with
all proceeds of any
policies of insurance
covering any or all of the
above, the proceeds of any award in condemnation with respect to
any of the
property, any rebates
or refunds,
whether for taxes or otherwise, and
together with
all proceeds of any such proceeds (collectively, the
"Proceeds").
(c) Collateral
for Indentures.
Provided Borrower
is in compliance with the Borrowing Base and the
collateral coverage
covenant of Section 12(b) hereof and not otherwise in
default under
the terms of this Agreement, Borrower may pledge Bonds and
Mortgage Loans not
included in the
Borrowing Base to secure the Indentures.
Borrower may not pledge Bonds and Mortgage Loans to secure such Indentures to
the extent
that the aggregate principal balance of the pledged Bonds and
Mortgage Loans
exceed in excess of
120% of the amount of the funded investor
certificates issued.
If Borrower has
Qualifying Bonds and Qualifying Mortgage
Loans in the
Borrowing Base in excess of what is needed to maintain the
collateral coverage covenant of Section 12(b) of this Agreement,
and Borrower is
not otherwise in default under the terms of this Agreement,
Lender shall,
upon
five (5) days' written notice by Borrower, which request shall include the
most
recent month end
reports set forth in
Section 7(b)
hereof, release certain
Qualifying Bonds
and/or Qualifying
Mortgage Loans
provided that the requested
release does not cause
a violation
of the Borrowing Base or the collateral
coverage covenant.
(d) Other
Security.
Lender, in
its sole discretion, without waiving or releasing any
obligation, liability
or duty of Borrower
under this
Agreement or the Other
Agreements or any
Event of Default,
may at any time or
times hereafter,
but
shall not be obligated to, pay, acquire or accept an assignment of
any security
interest, lien or encumbrance of any Person in, upon or against
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<PAGE>
the Collateral
which is not consented
to or otherwise
approved by the Lender.
All sums paid by Lender in respect thereof and all costs, fees and expenses
including, without limitation, reasonable attorney fees, all court
costs and all
other charges relating thereto incurred by Lender shall constitute
Liabilities,
payable by Borrower to Lender on demand and, until paid,
shall bear interest
at
the highest rate then applicable to Loans hereunder.
(e) Possessory
Collateral.
Immediately upon
Borrower's
receipt of any portion of the Collateral
evidenced by
an agreement, Instrument or Document, including, without
limitation, any Tangible Chattel Paper and any Investment Property
consisting of
certificated
securities (including,
but not limited to, Bonds), Borrower shall
deliver the original thereof to Lender together with an appropriate
endorsement
or other specific evidence of assignment thereof to Lender (in form and
substance acceptable
to Lender). If an
endorsement
or assignment of any
such
items shall not be made for any reason, Lender is hereby
irrevocably authorized,
as Borrower's
attorney and agent-in-fact, to endorse or assign the same on
Borrower's behalf.
(f) Electronic
Chattel Paper.
To
the extent that
Borrower obtains or
maintains any
Electronic Chattel
Paper, Borrower shall
create, store and assign the record or records comprising
the Electronic
Chattel Paper in such
a manner that (i) a single authoritative
copy of the record or records exists which is unique, identifiable
and except as
otherwise provided in
clauses (iv), (v) and (vi) below, unalterable, (ii) the
authoritative copy
identifies Lender as
the assignee of the record or records,
(iii) the authoritative copy is communicated to and
maintained by the Lender or
its designated
custodian,
(iv) copies or revisions that add or change an
identified assignee
of the authoritative copy can only be made with the
participation of Lender, (v) each copy of the authoritative copy
and any copy of
a copy is readily
identifiable as a copy that is not the authoritative copy and
(vi) any revision
of the authoritative copy is readily identifiable as an
authorized or unauthorized revision.
5. PRESERVATION OF COLLATERAL AND PERFECTION OF SECURITY INTERESTS
THEREIN.
Borrower shall,
at Lender's
request, at any time and from time to
time,
authenticate, execute
and deliver to Lender the Securities Account Control
Agreement and such
financing statements,
documents and other
agreements
and
instruments (and pay
the cost of filing or
recording the same in all public
offices deemed
necessary or desirable by Lender) and do such other acts
and
things or cause third
parties to do such other acts and things as Lender
may
deem necessary or
desirable in its sole
discretion in order to
establish and
maintain a valid,
attached and perfected security interest in the Collateral in
favor of Lender (free and clear of all other liens, claims, encumbrances and
rights of third parties whatsoever, whether voluntarily or involuntarily
created) to secure
payment of the
Liabilities, and in
order to facilitate the
collection of the Collateral. Borrower irrevocably hereby makes,
constitutes and
appoints Lender
(and all Persons designated by Lender for that purpose) as
Borrower's true and lawful attorney and agent-in-fact to execute and file such
financing statements, documents and other agreements and
instruments and do such
other acts and things as may be necessary to preserve and perfect
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<PAGE>
Lender's security
interest in the
Collateral. Borrower
further agrees that
a
carbon, photographic,
photostatic or other reproduction of this Agreement or of
a financing statement
shall be sufficient as
a financing statement.
Borrower
further ratifies
and confirms the prior filing by Lender of any and all
financing statements
which identify the
Borrower as debtor,
Lender as secured
party and any or all Collateral as collateral.
6. POSSESSION OF COLLATERAL AND RELATED MATTERS.
Until otherwise
notified by Lender following the occurrence of an Event of
Default, Borrower
shall have the right,
except as otherwise
provided in this
Agreement, in the
ordinary course of Borrower's business, to collect Accounts
and deposit Account proceeds into any bank account of Bor
