Exhibit 10.2
PLEDGE AND SECURITY
AGREEMENT
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THIS AGREEMENT
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is made as of
November 20, 2008
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TO:
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GMAC
LLC , a Delaware limited
liability company, as Lender (together with its successors and
assigns, the “ Lender ”);
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GRANTED BY:
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GMAC
RESIDENTIAL FUNDING OF CANADA, LIMITED , a company organized under the laws of Canada,
together with its successors and assigns, the “
Grantor ”);
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WHEREAS, pursuant to a Loan
Agreement, dated as of the date hereof, between the Grantor, as
Borrower (the “ Borrower ”), and the Lender, as
Lender (as amended, supplemented, restated or otherwise modified
from time to time, the “ Loan Agreement ”), the
Lender agreed to make a loan to the Borrower (the “
Loan ”);
AND WHEREAS, as a requirement under
the Loan Agreement and the making of the Loan under the Loan
Agreement, the Grantor is required to execute and deliver this
Agreement.
NOW THEREFORE, the parties agree as
follows:
ARTICLE 1
DEFINITIONS AND PRINCIPLES OF
INTERPRETATION
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1.1
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Defined
Statutory Terms
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Unless the context otherwise
requires or unless otherwise specified, all the terms used in this
Agreement without initial capitals, which are defined in the PPSA
(as defined below) or the STA (as defined below), have the same
meanings in this Agreement as in the PPSA or the STA, as
applicable.
Wherever used in this Agreement
(including in the recitals hereto), all capitalized terms used and
not defined have the meanings ascribed to them in the Loan
Agreement and the following words and terms have the meanings set
out below:
“ 1020491 ” means
1020491 Alberta Ltd., a corporation existing under the laws of
Alberta;
“1020491
Shares” means all
of the issued and outstanding shares of 1020491;
“ CDIC ” means
the Canada Deposit Insurance Corporation;
“Control
Agreement” means
any present or future agreement or agreements entered into by the
Grantor, the Lender and the applicable issuer, securities
intermediary or futures intermediary, whereby the parties intend
for the Lender to obtain control of Pledged Securities;
PLEDGE AND SECURITY AGREEMENT
“ Governmental
Authority ” means any U.S., Canadian, state, provincial
or municipal entity, any foreign government and any political
subdivision or other executive, legislative, administrative,
judicial, quasi-judicial or other governmental department,
commission, court, board, bureau, agency or instrumentality,
domestic or foreign;
“Issuers”
means the issuers in respect of all
securities now or in the future held at any time or from time to
time by the Grantor or its nominee or agent, including those
issuers listed on Schedule 4.1(b);
“Lien”
means any lien, mortgage, hypothec,
pledge, assignment, security interest, charge or encumbrance of any
kind and any option, trust or other preferential arrangement having
the practical effect of any of the foregoing which secures payment
or performance of an obligation;
“ OSFI ” means
the Office of the Superintendent of Financial Institutions
(Canada);
“ Pledged Securities
” means (i) all the securities listed on Schedule
4.1(d), as such schedule may be amended or replaced from time to
time, including all warrants and options relating to such
securities and any substitutions, additions and proceeds arising
out of any consolidation, subdivision, reclassification,
conversion, stock dividend or similar increase or decrease in or
alteration of the capital of such Persons or any other event and
any securities acquired pursuant to the exercise of a right or
offer granted or made by the Grantor to the extent that any such
right or offer arises out of the ownership of any shares in the
capital of such Persons; and (ii) all Proceeds therefrom and
all interest, dividends, distributions, income or revenue thereon
and therefrom, including personal property in any form derived
directly or indirectly from any dealing with such property or
proceeds therefrom, and any payment as indemnity or compensation
for loss or damage to such property or any right to such payment,
and any payment made in total or partial discharge or redemption of
such property;
“PPSA”
means the Personal Property
Security Act , R.S.O. 1990, c.P.10;
“Proceeds”
means all proceeds and personal
property in any form derived directly or indirectly from any
dealing with all or any part of the Pledged Securities, and
proceeds of proceeds and any part of any such proceeds;
“ RCC ” means
ResMor Capital Corporation, a corporation existing under the laws
of Alberta;
“ RCC Shares ”
means all of the issued and outstanding shares of RCC owned by the
Grantor;
“ ResMor Trust ”
means ResMor Trust Company, a Canadian federally incorporated trust
company;
PLEDGE AND SECURITY AGREEMENT
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“Securities
Account” means all
of the present or future securities accounts maintained for the
Grantor by a securities intermediary, including all of the
financial assets credited to such securities accounts, all related
securities entitlements and the agreements between the Grantor and
the securities intermediary governing such securities
accounts;
“Security
Interest” means the
security interest granted under Section 2.1; and
“STA”
means the Securities Transfer
Act, 2006, S.O. 2006, c. 8.
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1.3
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Certain
Rules of Interpretation
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In this Agreement:
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(a)
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Governing
Law – This
Agreement is a contract made under and shall be governed by and
construed in accordance with the laws of the Province of Ontario
and the federal laws of Canada applicable in the Province of
Ontario without prejudice to or limitation of any other rights or
remedies available under the laws of any jurisdiction where
property or assets of the Grantor may be found.
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(b)
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Headings – Headings of Articles and Sections are
inserted for convenience of reference only and shall not affect the
construction or interpretation of this Agreement
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(c)
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Including – Where the word “including”
or “includes” is used in this Agreement, it means
“including (or includes) without
limitation”.
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(d)
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No Strict
Construction – The
language used in this Agreement is the language chosen by the
parties to express their mutual intent, and no rule of strict
construction shall be applied against any party.
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(e)
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Number and
Gender – Unless the
context otherwise requires, words importing the singular include
the plural and vice versa and words importing gender include
all genders.
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(f)
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Severability – If, in any jurisdiction, any provision
of this Agreement or its application to any party or circumstance
is restricted, prohibited or unenforceable, such provision shall,
as to such jurisdiction, be ineffective only to the extent of such
restriction, prohibition or unenforceability without invalidating
the remaining provisions of this Agreement and without affecting
the validity or enforceability of such provision in any other
jurisdiction or without affecting its application to other parties
or circumstances.
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(g)
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Statutory
references – A
reference to a statute includes all regulations made pursuant to
such statute and, unless otherwise specified, the provisions of any
statute or regulation which amends, revises, restates, supplements
or supersedes any such statute or any such regulation or, in each
case, any provision thereof.
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(h)
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Time – Time is of the essence in the
performance of the parties’ respective
obligations.
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PLEDGE AND SECURITY AGREEMENT
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(i)
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References
to Agreements – The
term “this Agreement” refers to this agreement
including all schedules, amendments, supplements, extensions,
renewals, replacements, novations or restatements from time to
time, in each case as permitted, and references to
“Articles” or “Sections” means the
specified Articles or Sections of this Agreement.
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(j)
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Paramountcy – Except as otherwise specifically
provided in this Agreement, in the event of any conflict or
inconsistency between a term or provision of this Agreement and a
term or provision of the Loan Agreement, the provisions of the Loan
Agreement shall govern and prevail to the extent required to
resolve the conflict or inconsistency and to the extent necessary
to preserve the rights of the Lender in the Pledged Securities. Any
right or remedy in this Agreement which may be in addition to the
rights and remedies contained in the Loan Agreement shall not
constitute a conflict, inconsistency, ambiguity or
difference.
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This Agreement, together with the
other Loan Documents constitutes the entire agreement between the
parties and set out all the covenants, promises, warranties,
representations, conditions, understandings and agreements between
the parties pertaining to the subject matter of this Agreement and
supersede all prior agreements, understandings, negotiations and
discussions, whether oral or written. There are no covenants,
promises, warranties, representations, conditions, understandings
or other agreements, oral or written, express, implied or
collateral between the parties in connection with the subject
matter of this Agreement except as specifically set forth in this
Agreement and the other Loan Documents.
The schedules to this Agreement, as
listed below, are an integral part of this Agreement:
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4.1(b)
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Issuers
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4.1(d)
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Pledged Securities
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ARTICLE 2
SECURITY INTERESTS
As continuing security for the
repayment and the performance of the Obligations of the Grantor,
the Grantor grants to the Lender, a first continuing, specific and
fixed security interest (the “ Security Interest
”) in all of the Grantor’s Pledged
Securities.
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2.2
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Fixed Nature
of Security Interests
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The Security Interest is intended to
operate as a fixed and specific charge of all of the Pledged
Securities presently existing, and with respect to all future
Pledged Securities, to operate as a fixed and specific charge of
such future Pledged Securities.
PLEDGE AND SECURITY AGREEMENT
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The Grantor acknowledges that value
has been given. The Security Interest of the Grantor is intended to
attach, as to all of the Pledged Securities, upon the execution by
the Grantor of this Agreement.
The Grantor delivers to and deposits
with the Lender all security or other certificates evidencing the
Pledged Securities held by the Grantor together with all other
necessary documents and effective endorsements to enable the Lender
or its agent or nominee, as the Lender may direct, to be registered
as the owner of and to transfer or sell or cause to be transferred
or sold the Pledged Securities upon any enforcement of the
Lender’s rights and remedies. If the Grantor acquires any
security certificates evidencing the Pledged Securities held by the
Grantor after the date of this Agreement, the Grantor shall as soon
as practicable deliver and deposit all such security certificates
to the Lender, its agent or nominee, together with all other
necessary documents and effective endorsements to enable the Lender
or its agent or nominee to be registered as the owner of and to
transfer or sell or cause to be transferred or sold such Pledged
Securities upon any enforcement of the Lender’s rights and
remedies. To the extent that any of the Pledged Securities are
uncertificated securities registered in the name of the Grantor or
its nominee or agent, the Grantor shall immediately:
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(a)
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cause the
issuer of the Pledged Securities to register the Lender or its
agent or nominee, as the Lender may direct, as the registered owner
of such Pledged Securities; or
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(b)
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deliver to the
Lender an irrevocable agreement of the issuer of such Pledged
Securities satisfactory to the Lender that the issuer will comply
with instructions that are originated by the Lender without the
further consent of the Grantor.
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Notwithstanding the foregoing, the
Lender may, at its sole and unfettered discretion, require that the
Pledged Securities be registered at any time in the name of the
Lender or as it may direct.
ARTICLE 3
OBLIGATIONS
SECURED
The Security Interest constitutes
and will constitute continuing security for the following
obligations of the Grantor to the Lender pursuant to the Loan
Documents:
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(a)
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Indebtedness – The prompt payment, as and when due and
payable, of all Obligations; and
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(b)
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Performance
of Agreements – The
strict performance and observance by the Grantor of all agreements,
warranties, representations, covenants and conditions of the
Grantor made pursuant to this Agreement and the other Loan
Documents, in each case as now in effect or as subsequently entered
into, amended, restated, supplemented, renewed, extended or
replaced from time to time.
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PLEDGE AND SECURITY AGREEMENT
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ARTICLE 4
GRANTOR’S REPRESENTATIONS,
WARRANTIES AND COVENANTS
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4.1
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Representations and Warranties
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The Grantor represents and warrants
to the Lender the matters set out below:
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(a)
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Place of
Business of Grantor - The
following are the Grantor’s places of
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business, chief executive office and
registered or head office:
Place of Business and Chief
Executive Office:
3250 Bloor Street West, East Tower,
Suite 1400
Etobicoke, Ontario,
M8X 2X9
Registered Office:
Suite 5300, TD Bank Tower
Toronto Dominion Centre
Toronto, Ontario
M5K 1E6
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(b)
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No Other
Corporate Names or Styles – It does not carry on business under or
use any name or style other than the names specified in this
Agreement, including any names in the French language.
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(c)
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Authority of
Grantor - Grantor is a
corporation organized and existing under the laws of Canada.
Grantor has good and sufficient company power, authority and right
to enter into and deliver this Agreement and to complete the
transactions to be completed by Grantor hereunder. The execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been approved by all the
directors of ResCap, including its independent directors, under
Section 2(b) of the Amended and Restated Operating Agreement,
dated as of November 27, 2006, between General Motors
Corporation, GMAC and ResCap. This Agreement constitutes a valid
and legally binding obligation of Grantor, enforceable against
Grantor in accordance with its terms, except as such enforceability
may be limited by principles of public policy and subject to the
laws of general application relating to bankruptcy, insolvency, and
the relief of debtors and to rules of law governing specific
performance, injunctive relief and other equitable remedies.
Grantor is not a non-resident of Canada within the meaning of the
Income Tax Act (Canada).
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(d)
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Ownership of
Pledged Securities –
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(i)
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Schedule 4.1(d)
sets forth all the Pledged Securities owned by the Grantor and such
Pledged Securities constitute the percentage of issued and
outstanding shares of stock, percentage of membership interests,
percentage of partnership interests or percentage of beneficial
interest of the respective Issuers thereof indicated on such
Schedule 4.1(d);
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PLEDGE AND SECURITY AGREEMENT
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(ii)
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The Grantor is
the registered and beneficial owner of, and has good title to, the
Pledged Securities held by the Grantor, subject only to the
Security Interest;
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(iii)
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The Pledged
Securities have been duly issued and are outstanding as fully paid
and non-assessable securities and all of the warrants and options
relating thereto are in full force and effect;
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(iv)
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The 1020491
Shares constitute all of the issued and outstanding shares or other
equity interests (including any rights to acquire such interests)
of 1020491. The authorized capital of 1020491 consists of an
unlimited number of common shares without nominal or par value.
There are 9,885,613.35 issued and outstanding 1020491 Shares, and
Grantor is the owner of all right, title and interest (record and
beneficial) in and to all of the 1020491 Shares, free and clear of
any Lien. All of the 1020491 Shares have been duly authorized,
validly issued and are outstanding as fully paid and non-assessable
shares.
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(v)
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The RCC Shares
constitute all of the issued and outstanding shares or other equity
interests (including any rights to acquire such interests) of RCC
owned by the Grantor. The authorized capital of RCC consists of an
unlimited number of Class A Common Shares of RCC and an
unlimited number of Class B Common Shares of RCC. There are 11,393
issued and outstanding Class A Common Shares. Grantor is the
owner of all right, title and interest (record and beneficial) in
and to 1,508 Class A Common Shares, and 1020491 is the owner
of all right, title and interest (record and beneficial) in and to
9,885 Class A Common Shares, in each case free and clear of
any Lien. There are 100,000 issued and outstanding Class B Common
Shares of RCC. Grantor is the owner of all right, title and
interest (record and beneficial) in and to 38,665 Class B Common
Shares, and 1020491 is the owner of all right, title and interest
(record and beneficial) in and to 61,335 Class B Common Shares, in
each case free and clear of any Lien. All of the RCC Shares have
been duly authorized, validly issued and are outstanding as fully
paid and non-assessable shares.
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(vi)
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None of the
rights of the Grantor arising as the legal and beneficial owner of
the Pledged Securities held by the Grantor have been surrendered,
cancelled or terminated;
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(vii)
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There is no
default or dispute existing in respect of the Pledged
Securities;
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(viii)
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All of the
Pledged Securities are certificated and the articles of association
or other constating documents, as applicable, of each Issuer that
is a limited liability company expressly states that the Pledged
Securities thereof are “securities” for the purposes of
the STA;
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PLEDGE AND SECURITY AGREEMENT
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(e)
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No delivery has
occurred in respect of any Pledged Securities that constitute
uncertificated securities of the Issuers other than any delivery in
favour of the Lender (in respect of Pledged Securities that have
the Lender named as the registered owner thereof);
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(f)
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The Grantor has
not given its consent to any agreement whereby any of the Issuers
agree to comply with instructions that are originated by any Person
other than the Grantor in respect of any Pledged Securities that
constitute uncertificated securities, without the further consent
of the Grantor, other than any such consents given by the Grantor
relating to agreements for instructions to be originated by the
Lender; and
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(g)
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No consent of,
or declaration, filing or registration with, CDIC, OSFI or any
other Governmental Authority or Person is required to be obtained
or made, as applicable, by the Grantor, RCC or 1020491 or ResMor
Trust in connection with the execution, delivery and performance of
its obligations under this Agreement and the other Loan Documents,
or the consummation of the transactions contemplated by this
Agreement or the other Loan Documents, except for consents,
declarations, filings and registrations the failure to have which,
individually or in the aggregate, would not reasonably be expected
to have a material adverse effect on the ability of the Grantor to
consummate the transactions contemplated hereby and satisfy all its
obligations hereunder.
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All representations and warranties
of the Grantor made in this Agreement or in any certificate or
other document delivered by or on behalf of the Grantor to or for
the benefit of the Lender are material, shall survive and shall not
merge upon the execution and delivery of this Agreement and shall
continue in full force and effect. The Lender shall be deemed to
have relied upon such representations and warranties
notwithstanding any investigation made or lack thereof by or on
behalf of the Lender at any time.
The Grantor covenants and agrees
that:
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(a)
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Notification
to Lender – It
shall as soon as practicable notify the Lender of:
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(i)
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Claims and
Liens – any claim
or Lien made or asserted against any of the Pledged Securities;
and
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(ii)
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Loss or
Damage – all loss
or damage to or loss of possession of all or any part of the
Pledged Securities other than by disposition in accordance with the
terms of this Agreement;
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and the Grantor shall, at its own
expense, defend the Pledged Securities against any and all such
claims or Liens other than as permitted pursuant to the Loan,
including any adverse claim as defined in the STA, and against any
and all such suits, actions or proceedings;
PLEDGE AND SECURITY AGREEMENT
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(b)
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Delivery of
Documents – It
shall deliver to the Lender as soon as practicable upon
request:
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(i)
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Documents – any certificated securities to be
pledged pursuant to this Agreement and upon such delivery, where
applicable, duly endorse the same for transfer in blank or as the
Lender may direct; and
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(ii)
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Other
Information – such
information concerning the Pledged Securities, the Grantor and the
Grantor’s business and affairs as the Lender may reasonably
request;
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(c)
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Changes and
Other Names – It
shall not, without giving 15 days prior written notice to the
Lender, (i) change its name nor add a French form of name as
it appears in official filings in the jurisdiction of its
organization; (ii) change its registered office, head office,
chief executive office, places of business, corporate offices, or
the location of its books and records; (iii) change the type
of entity that it is; (iv) change its jurisdiction of
incorporation or organization;
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(d)
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No Affecting
the Security – It
shall not do, permit or suffer to be done anything to adversely
affect the ranking, validity or perfection of the Security
Interest; and
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(e)
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Investment
Property –
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(i)
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Additional
Certificates – If
the Grantor shall become entitled to receive or shall receive any
security certificate, option or right in respect of the Pledged
Securities, the Grantor shall accept as the Lender’s agent,
and shall hold such security certificates in trust for the Lender
and immediately deliver them to the Lender (or to the
Lender’s agent or nominee, as the Lender may direct) in the
exact form received, together with the documents and effective
endorsements to enable the Lender or its nominee to be registered
as owner, to be held by the Lender as additional security for the
Obligations. Upon the occurrence of an Event of Default which is
continuing, any sums paid in respect of the Pledged Securities upon
the liquidation or dissolution of the Issuers shall forthwith be
paid to the Lender to be held by it as part of the Pledged
Securities. Upon the occurrence of an Event of Default which is
continuing, any distribution of capital shall be made in respect of
the Pledged Securities or any property shall be distributed with
respect to the Pledged Securities pursuant to the recapitalization,
reclassification or reorganization of the capital of the Issuers,
the property so distributed shall forthwith be delivered to the
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