NB CAPITAL CORPORATION
Company,
and
NATIONAL BANK OF CANADA,
Custodian,
and
NATIONAL BANK OF CANADA
Servicer
--------------------
CUSTODIAL AGREEMENT
Dated as of September 3, 1997
--------------------
CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT, dated as of September 3, 1997, (this
"Agreement") by and between NB CAPITAL CORPORATION, a Maryland corporation,
having an office at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Company"),
NATIONAL BANK OF CANADA, a Canadian chartered bank, having an address at
National Bank Tower, 000 xx Xx Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxx X0X 0X0,
("Custodian"), and NATIONAL BANK OF CANADA, a Canadian chartered bank, having an
address at National Bank Tower, 000 xx Xx Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxx X0X
0X0 ("Servicer").
W I T N E S S E T H
WHEREAS, Company has made a series of loans (the "Loans") to
NB Finance, Ltd., a Bermuda company ("Borrower"), pursuant to a Loan Agreement,
dated as of September 3, 1997 (the "Loan Agreement");
WHEREAS, as security for each such Loan, Borrower has assigned
to Company certain mortgage loans (and the real property securing such mortgage
loans) pursuant to and more particularly described in the applicable Mortgage
Loan Assignment Agreement, dated as of September 3, 1997, between NB Finance and
Company (collectively, the "Mortgage Loans");
WHEREAS, Servicer is to service the Mortgage Loans pursuant to
a Servicing Agreement dated as of September 3, 1997 by and between Servicer and
Borrower, as assigned pursuant to an Assignment of Servicing Agreement dated as
of September 3, 1997, by Borrower to Company (as assigned, the "Servicing
Agreement");
WHEREAS, Custodian is a bank incorporated under the terms of
the Bank Act (Canada) (S.C. 1991, Chapter 46) and validly existing and in good
standing under the laws of and regulated by the laws of its jurisdiction of
incorporation, and is otherwise authorized to act as Custodian pursuant to this
Agreement; and
WHEREAS, Company desires to have Custodian take possession of
the Mortgage File (as defined below) as custodian of Company on September 3,
1997 (the "Delivery Date"), in accordance with the terms and conditions hereof.
NOW, THEREFORE, in consideration of the mutual undertakings
herein expressed, the parties hereto hereby agree as follows:
Section 1. Delivery of Mortgage File. (a) On the Delivery
Date, Company shall deliver, or cause to be delivered, to Custodian, or to the
extent already in possession of Custodian, Custodian shall continue to hold, the
mortgage file containing all the agreements, deeds and proceedings evidencing
the Mortgage Loans and the real property
securing such Mortgage Loans, as well as any architectural and engineering
reports, title reports, surveys, insurance policies and other information
material with respect to the Mortgage Loans or the real property securing the
Mortgage Loans (the "Mortgage File"), to be held on behalf of Company.
Custodian's signature to this Agreement shall serve as an acknowledgement of the
receipt of the Mortgage File, subject to Section 1(b) hereof.
(b) With respect to any documents that have been sent for
recording by Company on the Delivery Date, Company shall deliver or cause to be
delivered such original documents or acknowledgement copies thereof with
evidence of recording thereon to Custodian upon receipt and Custodian shall have
no responsibility for such recording. Custodian shall hold such original
recorded documents or acknowledgment copies delivered to it in trust for the
benefit of Company in accordance with the terms hereof.
Section 2. Obligations of Custodian. Custodian shall hold all
documents received by it constituting the Mortgage File and shall make
disposition thereof only in accordance with the instructions of Company and the
terms of this Agreement. The Mortgage File shall be appropriately marked and
identified to clearly reflect that such documents are held by Custodian, as
agent on behalf of Company.
Section 3. Release for Servicing. From time to time and as
appropriate for the foreclosure or other servicing of the Mortgage Loans,
Custodian is hereby authorized, to release to Servicer the Mortgage File or any
document contained in the Mortgage File. All documents so released to Servicer
shall be held by Servicer in trust and shall be returned to Custodian when
Servicer's need therefor in connection with such foreclosure or servicing no
longer exists. Upon the payment in full of all obligations under a Loan,
Custodian shall, upon receipt by Custodian of a request, promptly release the
Mortgage File with respect to such Loan to Servicer to be delivered to Borrower.
Section 4. Fees of Custodian. Custodian may charge such fees
for its services under this Agreement as are customary, the payment of which
fees, together with Custodian's expenses in connection herewith, shall be the
obligation of Company.
Section 5. Removal of Custodian. Company may upon at least 30
days' notice remove and discharge Custodian from the performance of its duties
under this Agreement by written notice from Company to Custodian, with a copy to
Servicer. In the event of any such removal, Custodian shall promptly transfer to
Company, or as otherwise directed by the Company, the Mortgage File. Such
removal of Custodian shall not affect the obligations and duties of Servicer
under the Servicing Agreement.
Section 6. Insurance of Custodian. At its own expense,
Custodian shall maintain at all times during the existence of this Agreement and
keep in full force and effect such fidelity bonds and/or insurance policies in
amounts, with standard coverage and subject
2
to deductibles, all as are customarily maintained by banks which act as
custodian and as required under the Servicing Agreement.
Section 7. Counterparts. For the purpose of facilitating the
execution of this Agreement as herein provided and for other purposes, this
Agreement may be executed in any number of counterparts, each of which
counterparts shall be deemed to be an original and all of such counterparts
together shall constitute and be one and the same instrument. Delivery of an
executed counterpart of a signature page to this Agreement by telecopier shall
be effective as delivery of a manually executed counterpart of this Agreement.
Any delivery of a counterpart signature by telecopier shall, however, be
promptly followed by delivery of a manually executed counterpart.
Section 8. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the Province of Quebec and the
obligations, rights and remedies hereunder shall be determined in accordance
with the substantive laws of the Province of Quebec. Each of the parties hereto
irrevocably and unconditionally submits itself and its property, to the
non-exclusive jurisdiction of any provincial court of Canada, and any appellate
court thereof in any action or proceeding arising out of or relating to this
Agreement, or for the recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in such
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgement or in any other matter provided by law.
Nothing in this Agreement shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this Agreement in the courts
of any jurisdiction. Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection they may now or hereafter have to the laying of venue of any suit,
action or proceeding arising our or relating to this Agreement in any provincial
court of Canada. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defence of an inconvenient forum to the
maintenance of such action or proceeding in such court. Company hereby
irrevocably appoints Montreal Trust, Place Montreal Trust, 0000 XxXxxx Xxxxxxx
Xxxxxx, Xxxxxxxx, Xxxxxx, Xxxxxx X0X 0X0 ("Company's Process Agent"), as its
agent to receive, on behalf of Company, service of copies of the summons and
complaint and any other process that may be served in any such action or
proceeding. Any such service may be made by mailing or delivering a copy of such
process, in care of Company at Company's Process Agent's above address. Company
hereby irrevocably authorizes and directs its agent to accept such service on
its behalf.
Section 9. Provisions Separable. The provisions of this
Agreement are independent of and separable from each other, and no provision
shall be affected or rendered invalid or unenforceable by virtue of the fact
that for any reason any other provision or provisions may be invalid or
unenforceable in whole or in part.
3
Section 10. Termination by Custodian. Custodian may terminate
its obligations under this Agreement upon at least 30 days' notice to Company.
Such termination shall not affect the duties and obligations of Servicer under
the Servicing Agreement. Any termination by Custodian shall not be effective
until a successor custodian has been appointed and the Mortgage File has been
appropriately transferred.
Section 11. Term of Agreement. Unless terminated pursuant to
Section 5 or Section 10 hereof, this Agreement shall terminate upon the final
payment or other liquidation of the Mortgage Loans, and the final remittance of
all funds due Custodian. In such event, all documents remaining in the Mortgage
File shall be released in accordance with the written instructions of Company.
Section 12. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered if personally delivered, mailed by certified or registered mail,
postage-prepaid, return receipt requested, or sent by overnight courier or
telecopied to the addresses set forth in the first paragraph of this Agreement
and in the event of Company, to the attention of Chief Financial Officer, in the
event of Servicer or Custodian, to the attention of Senior
Vice-President-Treasury and Financial Markets or such other address and persons
as may hereafter be furnished to the other parties by like notice.
Section. 13. Successors and Assigns. This Agreement shall
inure to the benefit of the successors and permitted assigns of the parties
hereto.
Section 14. Exculpation of Custodian. Neither Custodian nor
any of its directors, officers, agents, employees or "controlling persons"
(within the meaning of the Securities Act of 1933 (United States), as amended)
shall be liable for any action taken or omitted to be taken by it or them
hereunder or in connection herewith in good faith and believed by it or them to
be within the purview of this Agreement, except for its or their own negligence,
lack of good faith or willful misconduct. In no event shall Custodian or its
directors, officers, agents, employees or controlling persons be held liable for
any special, indirect or consequential damages resulting from any action taken
or omitted to be taken by it or them hereunder or in connection herewith in good
faith and reasonably believed by it or them to be within the purview of this
Agreement.
Section 15. Reliance of Custodian. In the absence of bad faith
on the part of Custodian, Custodian may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon any
request, instructions, certificate, opinion or other document furnished to
Custodian, reasonably believed by Custodian to be genuine and to have been
signed or presented by the proper party or parties and conforming to the
requirements of this Agreement.
Section 16. Entire Agreement. This Agreement and the Servicing
Agreement contain the entire agreement among the parties hereto with respect to
the subject
4
matter hereof, and supersede all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or written
of any nature whatsoever with respect to the subject matter hereof. The express
terms hereof control and supersede any course of performance and/or usage of the
trade inconsistent with any of the terms hereof.
5
IN WITNESS WHEREOF, Company, Servicer and Custodian have
caused their names to be duly signed hereto by their respective officers
thereunto duly authorized, all as of the date first above written.
COMPANY:
NB CAPITAL CORPORATION
By:________________________________
SERVICER:
NATIONAL BANK OF CANADA
By:________________________________
CUSTODIAN:
NATIONAL BANK OF CANADA
By:________________________________