Exhibit 10.2

 

ADVANCES AND SECURITY AGREEMENT

 

This ADVANCES AND SECURITY AGREEMENT (this “Agreement”), dated as of the earlier
of the date of execution by the Bank (as hereinafter defined) and February 15,
2005 is entered into between BankUnited, FSB, a a savings and loan assocation
organized under the laws of and located in the state of Florida, having its
principal place of business at 255 Alhambra Circle 2nd Floor, Coral Gables, FL
33134-5420 (the “Borrower”) and the Federal Home Loan Bank of Atlanta, a
corporation organized and existing under the laws of the United States, having
its principal office at 1475 Peachtree Street, N.E., Atlanta, Georgia 30309 (the
“Bank”).

 

WHEREAS, the Borrower desires from time to time to participate in the Bank’s
credit programs under the terms of this Agreement, and the Bank is authorized to
extend credit to the Borrower pursuant to the provisions of the Federal Home
Loan Bank Act, as now and hereafter amended, modified, supplemented or restated
(the “Act”), and the regulations and guidelines of the Federal Housing Finance
Board (the “Board”) or any successor entity, as now and hereafter in effect,
including all amendments, modifications, supplements and restatements thereto or
thereof (collectively, the “Regulations”);

 

WHEREAS, the Bank requires that extensions of credit by the Bank be secured
pursuant to this Agreement, and the Borrower and any Obligor (as hereinafter
defined) joined to this Agreement from time to time, as provided herein, agree
to provide the security the Bank requests in accordance with this Agreement; and

 

WHEREAS, the Borrower and each other Obligor acknowledges, understands and
agrees that (a) the Bank shall not have any obligation or commitment (under this
Agreement, the Credit and Collateral Policy, or otherwise) to approve any
application by the Borrower for Advances, Credit Products, Derivative
Transactions, or Other Products, (b) the terms and conditions of any Advances,
Credit Products, Derivative Transactions, or Other Products which the Bank may
make or issue, except for any such terms and conditions specified in a
Confirmation, may change after the date made or issued, in connection with a
modification to the Bank’s Credit and Collateral Policy as provided in Section
6.01 of this Agreement, and (c) the Bank, in its sole discretion, may modify the
Credit and Collateral Policy from time to time after the date of this Agreement
and need not obtain any further consent from any Obligor in order for those
modifications to become binding upon each Obligor.

 

NOW THEREFORE, the Borrower and the Bank agree as follows:

 

ARTICLE I: DEFINITIONS

 

Section 1.01 Definitions. As used herein, the following terms shall have the
following meanings:

 

(A) “Advances” means any and all loans or other similar extensions of credit,
heretofore, now or hereafter granted by the Bank to, on behalf of, or for the
account of, the Borrower.

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(B) “Affiliate” means an affiliate of the Borrower which (i) has been accepted
by the Bank, in its sole discretion, as a person which may pledge collateral to
the Bank and otherwise support the obligations of the Borrower to the Bank
hereunder and (ii) has entered into a Joinder Agreement. The Affiliate and the
Borrower are hereinafter jointly referred to as the “Obligors.”

 

(C) “Application” means an application or other writing, in such form or forms
as shall be specified by the Bank from time to time, by which the Borrower
requests an Advance or a Credit Product, and by which an Obligor requests a
Derivative Transaction or an Other Product.

 

(D) “Borrowed Money” means, with respect to any Person, without duplication (a)
all indebtedness for borrowed money, (b) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, or upon which
interest payments are customarily made, (c) that portion of obligations with
respect to capital leases that is properly classified as a liability on a
balance sheet in conformity with GAAP, (d) any obligations of such Person issued
or assumed as the deferred purchase price of property or services purchased by
such Person (other than trade debt incurred in the ordinary course of business
and due within six months of the incurrence thereof or evidenced by a note or
other instrument), (e) all Borrowed Money of others secured by (or for which the
holder of such Borrowed Money has an existing right, contingent or otherwise, to
be secured by) any lien on, or payable out of the proceeds of production from,
any property or asset owned, held or acquired by such Person regardless of
whether the indebtedness secured thereby shall have been assumed by that Person
or is nonrecourse to the credit of that Person, (f) all guaranty obligations of
such Person in respect of any Borrowed Money of any other person, (g) the
maximum amount of all standby letters of credit issued or bankers’ acceptances
facilities created for the account of such Person and, without duplication, all
drafts drawn thereunder (to the extent unreimbursed), (h) the principal balance
outstanding under any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product plus any
accrued interest thereon, and (i) the Borrowed Money of any partnership or
unincorporated joint venture in which such Person is a general partner or joint
venturer.

 

(E) “Borrowing Documents” means this Agreement (as amended by any and all
Joinder Agreements and any and all Collateral Pledge Amendments), all
Applications, all Confirmations, and all Supplemental Documentation.

 

(F) “Capital Stock” means all of the capital stock in the Bank held by the
Borrower and all payments which have been or hereafter are made on account of
subscriptions to and all unpaid dividends on such capital stock.

 

(G) “Collateral” means (i) all property, including the products and proceeds
thereof, heretofore assigned, transferred or pledged to the Bank by any Obligor
as collateral for an Advance, a Credit Product, a Derivative Transaction, an
Other Product or any other Liability prior to the date hereof and (ii) all
Capital Stock, Deposits, Residential First Mortgage Collateral, Commercial
Mortgage Collateral, Multifamily Mortgage Collateral, Government and Agency
Securities Collateral, HELOC and Second Mortgage Collateral, Other Securities
Collateral and Other Collateral, including the products and proceeds thereof,
which is now or hereafter pledged to the Bank pursuant to Section 3.01 hereof or
any Joinder Agreement.

 

(H) “Collateral Maintenance Level” means the aggregate dollar amount equal to
such percentage(s) as the Bank may specify from time to time of all Liabilities
(1) for Advances

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and Credit Products; (2) with respect to Derivative Transactions for which an
Obligor is required to maintain Collateral; and (3) with respect to any Other
Product or under any Borrowing Documents. The Bank may increase or decrease the
Collateral Maintenance Level at any time as provided in the Credit and
Collateral Policy, and such increase or decrease, as specified by the Bank, will
apply to all existing as well as after-arising Liabilities.

 

(I) “Collateral Pledge Amendment” means a Collateral Pledge Amendment,
substantially in the form attached hereto as Exhibit B, whereby the Obligors and
the Bank have agreed to amend the collateral pledge provisions of Section
3.01(ii) hereof as provided therein.

 

(J) “Commercial Mortgage Collateral” means all notes, bonds, instruments,
mortgages, deeds of trust, deeds to secure debt, security agreements, policies
and certificates of insurance, guarantees, evidences of recordation,
applications, underwriting materials, surveys, appraisals, approvals, permits,
notices, opinions of counsel, loan servicing data and all other electronically
stored and written records or materials relating to fully-disbursed loans held
by any Obligor secured by a first lien on property improved by one or more
commercial buildings, together with all rights and interests associated with
such loans and documents, including all legal, beneficial, residual and
servicing rights, and any endorsements or assignments thereof.

 

(K) “Confirmation” means a confirmation, in such form or forms as the Bank may
generate from time to time, by which the Bank agrees to, confirms and provides
any additional terms with respect to any Advance, Credit Product, Derivative
Transaction, or Other Product.

 

(L) “Credit and Collateral Policy” means the policies and procedures of the Bank
governing the administration of its credit and other programs, including the
requirements for maintenance of collateral to secure extensions of credit by the
Bank, as any such policies and procedures may be amended, supplemented, restated
or otherwise modified from time to time hereafter, in accordance with Section
6.01.

 

(M) “Credit Products” means any and all commitments or obligations under which
the Bank agrees to make payments on behalf of or for the account of the
Borrower, including letters of credit, guarantees or other arrangements intended
to facilitate transactions between the Borrower and third parties, or under
which the Bank enters into a credit or financial accommodation, agreement or
other arrangement with the Borrower, irrespective of whether the Bank’s
obligation is contingent or conditional.

 

(N) “Deposits”means all deposit accounts maintained by any Obligor with the
Bank, all money, cash, checks, drafts, notices, bills, bills of exchange and
bonds deposited therein or credited thereto, any increases, renewals,
extensions, substitutions and replacements thereof, whether or not deposited in
any such deposit account and all statements, certificates, passbooks and
instruments representing any such deposit account.

 

(O) “Derivative Transactions” means all interest rate swaps, all interest rate
caps, floors and collars, all currency exchange transactions, all options and
all similar transactions entered into between the Bank and any Obligor.

 

(P) “GAAP” means generally accepted accounting principles.

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(Q) “Government and Agency Securities Collateral” means mortgage-backed
securities (including participation certificates) issued by the Federal Home
Loan Mortgage Corporation or the Federal National Mortgage Association,
obligations guaranteed by the Government National Mortgage Association, and
obligations issued or guaranteed by the United States or an agency thereof.

 

(R) “HELOC and Second Mortgage Collateral” means all notes, bonds, instruments,
mortgages, deeds of trust, deeds to secure debt, security agreements, policies
and certificates of insurance or guarantees, evidences of recordation,
applications, underwriting materials, surveys, appraisals, approvals, permits,
notices, opinions of counsel and loan servicing data and all other
electronically stored and written records or materials relating to home equity
lines of credit held by any Obligor, loans held by any Obligor secured by a
junior lien on one-to-four unit single-family dwellings, or other similar loans
held by any Obligor which have not been fully disbursed, together with all
rights and interests associated with such loans and documents, including all
legal, beneficial, residual and servicing rights, and any endorsements or
assignments thereof.

 

(S) “Joinder Agreement” means a joinder agreement, substantially in the form
attached hereto as Exhibit A, whereby an Obligor has agreed in writing to be
primarily, jointly and severally liable for all obligations of all of the
Obligors to the Bank under this Agreement and to pledge Collateral satisfactory
to the Bank as security for such obligations.

 

(T) “Lendable Collateral Value” means an amount equal to such percentage as the
Bank shall from time to time, in its sole discretion, ascribe in the Credit and
Collateral Policy to the market value or unpaid principal balances (as the Bank
may specify or define) of Qualifying Collateral.

 

(U) “Liabilities” means all fees, expenses, obligations, liabilities or
indebtedness of any Obligor to the Bank, due or to become due, direct or
indirect, absolute or contingent, joint or several, now existing or hereafter at
any time created, arising or incurred, under this Agreement, any Application,
Confirmation, Supplemental Documentation, Advance, Derivative Transaction,
Credit Product, Other Product or Deposit, including any overdrafts or other
charges in connection therewith, or under any other obligation for any other
service provided by the Bank, including any obligations under indemnification
provisions in any agreement or document between any Obligor and the Bank, and
any renewal, extension or substitution of any such obligations, liabilities and
indebtedness, including reasonable attorneys’ fees of the Bank in the collection
thereof and the enforcement of any remedies with respect to any Collateral
therefor.

 

(V) “Material Adverse Effect” means (a) a material adverse effect upon the
business, operations, properties, assets or condition (financial or otherwise)
of any Obligor, or (b) the impairment of the ability of any Obligor to perform
its obligations under any Borrowing Document to which it is a party or of Bank
to enforce any Borrowing Document or collect any of the Liabilities. In
determining whether any individual event would result in a Material Adverse
Effect, notwithstanding that such event does not of itself have such effect, a
Material Adverse Effect shall be deemed to have occurred if the cumulative
effect of such event and all other then existing events would result in a
Material Adverse Effect. In determining whether an event would result in a
Material Adverse Effect on any Affiliate, a Material Adverse Effect shall be
deemed to have occurred with respect to such Affiliate if the effect of such
event would result in a Material Adverse Effect on the Borrower and such
Affiliate, taken as a whole.

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(W) “Multifamily Mortgage Collateral” means all notes, bonds, instruments,
mortgages, deeds of trust, deeds to secure debt, security agreements, policies
and certificates of insurance, guarantees, evidences of recordation,
applications, underwriting materials, surveys, appraisals, approvals, permits,
notices, opinions of counsel, loan servicing data and all other electronically
stored and written records or materials relating to the fully-disbursed loans
held by any Obligor secured by a first lien on property improved by one or more
multifamily buildings, together with all rights and interests associated with
such loans and documents, including all legal, beneficial, residual and
servicing rights, and any endorsements or assignments thereof.

 

(X) “Obligors” means, collectively, the Borrower and any Affiliate joined
hereunder as provided herein.

 

(Y) “Other Collateral” means such items of personal property, other than Capital
Stock, Deposits, Residential First Mortgage Collateral, Commercial Mortgage
Collateral, Multifamily Mortgage Collateral, Government and Agency Securities
Collateral, HELOC and Second Mortgage Collateral, and Other Securities
Collateral, that are offered by any Obligor as Collateral and are specifically
accepted by the Bank as Collateral; provided, Other Collateral may from time to
time include specific items of Residential First Mortgage Collateral, Commercial
Mortgage Collateral, Multifamily Mortgage Collateral and HELOC and Second
Mortgage Collateral which are identified and offered by an Obligor as Collateral
and are specifically accepted by the Bank as Collateral.

 

(Z) “Other Products” means all products and services, other than an Advance,
Credit Product or Derivative Transaction, offered by the Bank to any Obligor
from time to time, including correspondent banking services, mortgage purchase
programs and affordable housing and community investment products and services.

 

(AA) “Other Securities Collateral” means securities (other than Government and
Agency Securities Collateral) representing unsubordinated interests in, or
collateralized by first lien security interests in, both the interest and
principal payments on first lien residential mortgages.

 

(BB) “Person” means an individual, partnership, corporation, trust, joint
venture, joint stock company, limited liability company, association,
unincorporated organization, governmental authority, or any other entity.

 

(CC) “Qualifying Collateral” means Collateral, other than Capital Stock and
Deposits, which is eligible as collateral to support the origination of
Advances, Credit Products, Derivative Transactions and Other Products under the
terms and conditions of the Act, the Regulations and the Credit and Collateral
Policy, and which satisfies such other requirements for lending as may be
established by the Bank.

 

(DD) “Residential First Mortgage Collateral” means all notes, bonds,
instruments, mortgages, deeds of trust, deeds to secure debt, security
agreements, policies and certificates of insurance or guarantees, evidences of
recordation, applications, underwriting materials, surveys, appraisals,
approvals, permits, notices, opinions of counsel and loan servicing data and all
other electronically stored and written records or materials relating to
fully-disbursed loans held by any Obligor secured by a first lien on one-to-four
unit single family dwellings, together with all rights and interests associated
with such loans and documents, including all legal, beneficial, residual and
servicing rights, and any endorsements or assignments thereof.

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(EE) “Supplemental Documentation” means any document, agreement or other writing
(other than this Agreement) between the Bank and an Obligor relating to
Deposits, Advances, Credit Products, Derivative Transactions and Other Products,
including reimbursement agreements, mortgage purchase documents, wire transfer
agreements, automated clearinghouse agreements, agreements related to the loans
held for sale program, International Swap Dealers Association (“ISDA”) master
agreements, schedules to ISDA master agreements and credit support annexes to
ISDA master agreements.

 

Section 1.02 Other Definitional Provisions. References to “Sections,”
“Subsections” and “Exhibits” shall be to Sections, Subsections and Exhibits,
respectively, of this Agreement unless otherwise specifically provided. Any of
the terms defined in Section 1.01 may, unless the context otherwise requires, be
used in the singular or the plural depending on the reference. In this
Agreement, “hereof,” “herein,” “hereto,” “hereunder” and the like mean and refer
to this Agreement as a whole and not merely to the specific section, paragraph
or clause in which the respective word appears; words importing any gender
include the other gender; references to “writing” include printing, typing,
lithography, facsimile, electronic and other means of reproducing words or other
data in a tangible visible form; the words “including,” “includes” and “include”
shall be deemed to be followed by the words “without limitation”; references to
agreements and other contractual instruments shall be deemed to include
subsequent amendments, assignments, and other modifications thereto, but only to
the extent such amendments, assignments and other modifications are not
prohibited by the terms of this Agreement; references to Persons include their
respective permitted successors and assigns or, in the case of governmental
Persons, Persons succeeding to the relevant functions of such Persons; and all
references to statutes and related regulations shall include any amendments of
same and any successor statutes and regulations.

 

ARTICLE II: ADVANCES AGREEMENT

 

Section 2.01 Documentation. Subject to Section 6.03 hereof, the Borrower may
apply to the Bank for Advances, Credit Products, Derivative Transactions and
Other Products in accordance with the Credit and Collateral Policy. The final
terms of any Advance, Credit Product, Derivative Transaction or Other Product
shall be conclusively established by this Agreement and any Confirmation and
Supplemental Documentation related thereto. Any Obligor shall be estopped from
asserting any claim or defense with respect to the terms of any Confirmation or
other Supplemental Documentation that is not required to be signed by the
Borrower applicable to any Advance, Credit Product, Derivative Transaction or
Other Product unless, within the earlier of (i) any time period specified in any
Confirmation or Supplemental Documentation relating thereto and (ii) five (5)
business days of receipt of the final documents relating to such product or
service, the Borrower delivers to the Bank a written notice specifying the
disputed term(s) or condition(s) of the Advance, Credit Product, Derivative
Transaction or Other Product. Upon the request of the Bank, or as provided in
the Credit and Collateral Policy, the Borrower shall sign and deliver to the
Bank a promissory note or notes and such other Supplemental Documentation in
such form as the Bank may reasonably require evidencing any Advance, Credit
Product, Derivative Transaction or Other Product. Unless otherwise agreed by the
Bank in writing, all Advances shall be made by crediting the Borrower’s demand
deposit account(s) with the Bank. All Borrowing Documents shall be deemed to
have been executed and delivered in Atlanta, Georgia, and all payments made
under the Borrowing Documents shall be deemed to have been made in Atlanta,
Georgia. The Bank’s obligation to fund any portion of any approved Advance,
issue any approved letter of credit, guaranty or financial accommodation
relating to a Credit Product or continue under any Derivative

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Transaction or Other Product shall be subject to (i) continuing compliance by
the Obligors with the terms and provisions of this Agreement (ii) there having
occurred no Event of Default hereunder and (iii) the continuing satisfaction by
the Obligors of the credit and collateral considerations of the Bank and the
eligibility requirements and policies prescribed in the Act, the Regulations and
the Credit and Collateral Policy.

 

Section 2.02 Repayment of Liabilities. Each Obligor agrees, jointly and
severally, to repay all Liabilities in accordance with this Agreement, the
Credit and Collateral Policy and the terms and conditions of the Confirmation
and Supplemental Documentation evidencing such Liabilities. Interest shall be
paid on all Liabilities at the times specified by the Bank in the Credit and
Collateral Policy and in the Confirmation or Supplemental Documentation and
shall be charged for each day that such Liabilities are outstanding at the rate
applicable to such Liabilities. Each Obligor shall pay to the Bank, immediately
and without demand, interest on any past due principal of and interest on any
Liabilities at an interest rate which is the greater of (i) the rate applicable
to such Liabilities plus one percent or (ii) the rate in effect and being
charged by the Bank from time to time on overdrafts on demand deposit accounts
of its members, but in no event more than any applicable limit established by
the Regulations (the “Default Rate”). The Borrower shall ensure that, on any day
on which any payment is due to the Bank with respect to any Liabilities, whether
by maturity, prepayment or acceleration, the Borrower’s demand deposit
account(s) with the Bank has an available balance in an amount at least equal to
the amounts then due and payable to the Bank, and the Borrower hereby authorizes
the Bank to debit the Borrower’s demand deposit account(s) with the Bank for all
amounts due and payable with respect to any Liabilities and for all other
amounts due and payable hereunder. In the event that the available balance in
the Borrower’s demand deposit account(s) is insufficient to pay such due and
payable amounts, the Bank may, without notice to or request from any Obligor,
apply any other deposits, credits, or monies of any Obligor then in the
possession of the Bank to the payment of amounts due and payable. Each Obligor
agrees that, in the event that any such debit results in any of the Borrower’s
accounts with the Bank being overdrawn, the Obligor shall immediately reimburse
the Bank for such overdraft amount and pay overdraft charges thereon at the
Default Rate, in addition to any minimum fees for overdrafts imposed by the Bank
from time to time. All payments with respect to Liabilities shall be applied
first to any fees or charges applicable thereto and to interest due thereon, in
such order as the Bank may determine, and then to any principal amount thereof
that is then due and payable.

 

Section 2.03 Payment of Prepayment Charges. All prepayment fees and charges
described in the Credit and Collateral Policy, or in any Application,
Confirmation or Supplemental Documentation, shall be payable at the time of any
voluntary or involuntary payment of all or part of the principal of any
Liabilities prior to the originally scheduled maturity thereof, including
without limitation payments that are made as a part of a liquidation of any
Obligor or that become due by operation of law or as a result of an acceleration
pursuant to Section 5.02 hereof, whether such payment is made by any Obligor, by
a conservator, receiver, liquidator or trustee of or for any Obligor, or by any
successor to or any assignee of any Obligor.

 

Section 2.04 Compliance with the Credit and Collateral Policy. Each Obligor
hereby agrees to comply at all times with the Credit and Collateral Policy.

 

ARTICLE III: SECURITY AGREEMENT

 

Section 3.01 Creation of Security Interest. As security for all Liabilities, the
Borrower

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hereby assigns, transfers, and pledges to the Bank, and grants to the Bank a
security interest in, (i) all property assigned, transferred or pledged by the
Borrower to the Bank as collateral securing Liabilities and other obligations of
the Borrower as of the date hereof, (ii) except as otherwise provided in a
Collateral Pledge Amendment, all of the Capital Stock, Deposits, Residential
First Mortgage Collateral, Commercial Mortgage Collateral, Multifamily Mortgage
Collateral and HELOC and Second Mortgage Collateral now or hereafter owned by
the Borrower and (iii) all of the Government and Agency Securities Collateral,
Other Securities Collateral, and Other Collateral, specifically identified by
the Borrower to the Bank as Collateral and accepted by the Bank, and all
proceeds and products of any items of the Collateral described in clauses (i)
through (iii) above. In addition, as security for all Liabilities, each
Affiliate will assign, transfer and pledge to the Bank, and grant to the Bank a
security interest in, the Collateral set forth in its Joinder Agreement.

 

Section 3.02 Representations and Warranties Concerning Collateral. Each Obligor
represents and warrants to the Bank, as of the date hereof, the date of each
Advance, Credit Product, Derivative Transaction or Other Product, and the date
of delivery of each collateral report required under Section 3.07(A) hereof, as
follows:

 

(A) The Obligor owns and has marketable title to the Collateral pledged by it
hereunder and has the right and authority to grant a security interest in such
Collateral and to subject all of such Collateral to this Agreement;

 

(B) The information given from time to time by the Obligor as to each item of
Collateral pledged by it hereunder is true, accurate and complete in all
material respects;

 

(C) The Obligors own Qualifying Collateral with a Lendable Collateral Value at
least equal to the Collateral Maintenance Level;

 

(D) The lien of the Residential First Mortgage Collateral, Commercial Mortgage
Collateral and Multifamily Mortgage Collateral on the real property securing
such Collateral is a first, prior and perfected lien under applicable law;

 

(E) The Obligor has not conveyed or otherwise created, and there does not
otherwise exist, any participation interest or other direct, indirect, legal, or
beneficial interest, lien or encumbrance in any Collateral on the part of any
Person other than the Bank and the Obligor, except that the Obligor may sell or
otherwise dispose of Collateral not necessary to meet the requirements of
Section 3.03(A), and not otherwise reported to the Bank as Qualifying Collateral
for purposes of meeting the requirements of Section 3.03(A); provided, however,
any sale of Collateral to a person controlling, controlled by or in common
control with any Obligor, except to any other Obligor that also pledges such
Collateral to the Bank, must be at fair market value and on terms and conditions
that are fair and reasonable to such Obligor;

 

(F) To the best knowledge of the Obligor, after reasonable inquiry, no account
debtor or other obligor owing any obligation to the Obligor with respect to any
Qualifying Collateral necessary to meet the collateral maintenance requirement
in Section 3.03(A) hereof, or otherwise reported to the Bank as Qualifying
Collateral for purposes of meeting the requirements of Section 3.03(A), has or
shall have any defenses, offsetting claims, or other rights affecting the right
of the Obligor or the Bank to enforce the terms of such Qualifying Collateral,
and no defaults (or conditions that, with the passage of time or the giving of
notice or both, would constitute a default) exist under any such

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Qualifying Collateral; provided, however, that promptly upon discovery by the
Bank or the Obligor of any such defenses, offsetting claims, rights affecting
the rights of the Obligor or the Bank to enforce the terms of such Qualifying
Collateral, or any defaults (or conditions that, with the passage of time or the
giving of notice or both, would constitute a default), in addition to any other
remedies of the Bank under this Agreement, the Obligor shall replace such items
of Collateral not in compliance with the provisions of this Section 3.02(F) with
an equal amount of Qualifying Collateral meeting all requirements of this
Agreement and the Credit and Collateral Policy; and

 

(G) To the best knowledge of the Obligor, after reasonable inquiry, no part of
any real property or interest in real property that is included within the
Collateral contains or is subject to the effects of toxic or hazardous materials
or other hazardous substances (including those defined in the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended, 42
U.S.C. §9601, et seq.; the Hazardous Materials Transportation Act, 49 U.S.C.
§1801 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. §6901 et
seq.; and in the regulations adopted and publications promulgated pursuant to
said laws) the presence of which could reasonably subject the Bank to any
liability under applicable state or Federal law or local ordinance either at any
time that such property is pledged to the Bank or upon the enforcement by the
Bank of its security interest therein.

 

Section 3.03 Collateral Maintenance Requirement.

 

(A) The Obligors shall at all times maintain Qualifying Collateral which has a
Lendable Collateral Value that is at least equal to the Collateral Maintenance
Level. At any time the Obligors fail to maintain such Qualifying Collateral, as
reasonably determined by the Bank, in addition to any other remedies of the Bank
under this Agreement, the Obligors agree to assign, transfer and pledge, and
grant to the Bank a security interest in, such additional amounts of Collateral
as may be deemed necessary by the Bank for its protection in accordance with
Section 10(d) of the Act.

 

(B) All documents and other matters pertaining to the Qualifying Collateral
necessary to meet the requirements of Section 3.03(A), or otherwise reported to
the Bank as Qualifying Collateral for purposes of meeting the requirements of
Section 3.03(A), must be satisfactory to the Bank and, if not, the Bank may
refuse to accept such Qualifying Collateral or may assign such Qualifying
Collateral a Lendable Collateral Value less than the Lendable Collateral Value
otherwise applicable under the Credit and Collateral Policy.

 

(C) No Obligor shall assign, pledge, transfer, create any lien, encumbrance or
security interest in, sell, or otherwise dispose of any Collateral; provided,
however, (i) an Obligor may sell or otherwise dispose of Collateral not
necessary to meet the requirements of Section 3.03(A) and not otherwise reported
to the Bank as Qualifying Collateral for purposes of meeting the requirements of
Section 3.03(A), so long as (A) no Event of Default has occurred and is
continuing and (B) any sale of Collateral to a person controlling, controlled by
or in common control with any Obligor, except to any other Obligor that also
pledges such Collateral to the Bank, is made at fair market value and on terms
and conditions that are fair and reasonable to such Obligor, and (ii) upon the
written request of the Obligors, the Bank will agree to release such Collateral
as shall be mutually agreeable to the Bank and the Obligors so long as such
Collateral to be released is not necessary to meet the requirements of Section
3.03(A) and not otherwise reported to the Bank as Qualifying Collateral for
purposes of meeting the requirements of Section 3.03(A).

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Section 3.04 Holding of Collateral.

 

(A) Each Obligor shall hold any Collateral in its possession in such manner as
reasonably identifies the security interest of the Bank and as the Bank shall
further direct.

 

(B) Except for Collateral required to be delivered to the Bank or its custodian
as required hereunder, Collateral shall be held by each Obligor in its
possession (except as otherwise provided herein) in trust for the benefit of,
and subject to the direction, and control of, the Bank and shall be physically
safeguarded by the Obligor in accordance with reasonable commercial procedures.
To the extent that any Obligor enters into any custodial arrangement with
respect to the Collateral, the Obligor shall notify the Bank in writing of such
arrangement, shall provide the Bank with copies of all agreements evidencing
such arrangement, which shall be satisfactory to the Bank in all respects, and
shall cause such agreements to provide that the custodian holds the Collateral
for the benefit of the Bank and no other person and that the custodian shall
accept instructions from the Bank with respect to the Collateral. Without
limitation of the foregoing, each Obligor shall take all action necessary or
desirable to protect and preserve the Collateral and the Bank’s interest
therein, including, the collection of payments under all mortgages and under any
insurance, assuring that all mortgages are serviced in accordance with the
standards of a reasonable and prudent mortgagee and compliance with all
requirements with respect to the Collateral set forth in the Credit and
Collateral Policy.

 

(C) Any Collateral which is a security or other investment property shall be
delivered to the Bank, together with such assignments, powers and other
documents as the Bank shall require in connection with its perfected,
first-priority security interest in such Collateral. With respect to any
uncertificated securities pledged to the Bank as Collateral hereunder, the
delivery requirements contained in this Agreement shall be satisfied by the
transfer of a perfected, first-priority security interest in such securities to
the Bank, such transfer to be effected in such manner and to be evidenced by
such documents as shall be reasonably specified by the Bank.

 

Section 3.05 Delivery of Collateral.

 

(A) Promptly upon the Bank’s written request, or as provided in the Credit and
Collateral Policy, the Obligors shall deliver to the Bank, or to a custodian
designated by the Bank, such Qualifying Collateral as may be necessary so that
the Lendable Collateral Value of Qualifying Collateral held by the Bank, or such
custodian, meets or exceeds the Collateral Maintenance Level at all times.
Collateral delivered to the Bank shall be endorsed and assigned, as appropriate,
in such form as reasonably specified by the Bank and together with such
information with respect to such Collateral as the Bank shall request.

 

(B) Each Obligor agrees to pay to the Bank such reasonable fees and charges as
may be assessed by the Bank to cover the Bank’s overhead and other costs
relating to the receipt, holding and redelivery of Collateral and other
reasonable expenses, disbursements and advances incurred or made by the Bank in
connection therewith (including the reasonable compensation and the expenses and
disbursements of any custodian, consultant or appraiser that may be appointed by
the Bank hereunder, and the agents and legal counsel of the Bank and of such
custodian).

 

Section 3.06 Collateral Reports; Access to Collateral.

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(A) At the times provided in the Credit and Collateral Policy, and promptly
after any additional requests by the Bank, each Obligor shall deliver to the
Bank such information, reports, verification reviews and schedules with respect
to the Collateral, the Qualifying Collateral and compliance with this Agreement
and the Credit and Collateral Policy as provided in the Credit and Collateral
Policy, or as the Bank shall request, all in form and substance as prescribed by
the Bank.

 

(B) Each Obligor shall provide the Bank with such financial reports and other
information relating to such Obligor’s financial condition as the Bank may
reasonably request.

 

(C) Each Obligor shall give the Bank, its agents and representatives access at
reasonable times and locations to the Collateral, and to such Obligor’s books
and records of account relating to such Collateral, for the purpose of the Bank
or its agents and representatives examining, verifying or reconciling the
Collateral and such Obligor’s reports to the Bank thereon. At the Bank’s
request, the Obligors shall make any or all documents and information pertaining
to the Collateral available to the Bank, its agents and representatives at
reasonable times and locations for their inspection and approval. Each Obligor
shall make adequate working facilities available to the Bank, its agents and
representatives for purposes of such verifications and reviews. Reasonable fees
and charges may be assessed to the Obligors by the Bank to cover overhead and
other costs relating to such verifications and reviews, including, any costs and
expenses of third parties engaged by the Bank for such purposes.

 

(D) If any Obligor becomes aware or has reason to believe that the Lendable
Collateral Value of such Obligors’ Qualifying Collateral has fallen below the
Collateral Maintenance Level, that a contingency exists which with the lapse of
time could result in such Obligors’ failure to meet the Collateral Maintenance
Level, or any event has occurred which could reasonably be expected to have a
Material Adverse Effect on such Obligor, such Obligor shall immediately notify
the Bank.

 

(E) Each Obligor shall notify the Bank prior to (i) any change in such Obligor’s
name, charter or other such similar organizational documents filed with any
governmental entity, jurisdiction of organization, or form of organization and
(ii) any event that could result in a change in such Obligor’s “location” as
defined in the Uniform Commercial Code.

 

Section 3.07 Additional Documentation; Further Assurances.

 

(A) Each Obligor shall, or the Bank may, in lieu of the Obligor, make, execute,
record and deliver such agreements, financing statements, notices, assignments,
listings, powers, and other documents with respect to the Collateral and the
Bank’s first-priority security interest therein and in such form as the Bank may
reasonably require. Each Obligor shall, upon request of the Bank, immediately
take such actions as the Bank shall deem necessary or appropriate to perfect the
Bank’s first-priority security interest in the Collateral or otherwise to
obtain, preserve, protect, enforce or collect the Collateral or the proceeds
thereof.

 

(B) The Bank may from time to time hereafter require any Obligor to provide
representations, warranties, and undertakings, in addition to those contained
herein, reasonably related to the securing, perfecting, maintaining or enforcing
of the Bank’s rights and interests in the Collateral.

 

 

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Section 3.08 Bank’s Responsibilities as to Collateral. The Bank’s duty as to the
Collateral shall be solely to use reasonable care in the custody and
preservation of the Collateral in its possession, which shall not include any
steps necessary to preserve rights against prior parties nor the duty to send
notices, perform services, or take any action in connection with the management
of the Collateral. The Bank shall not have any responsibility or liability for
the form, sufficiency, correctness, genuineness or legal effect of any
instrument or document constituting a part of the Collateral, or any signature
thereon or the description or misdescription, or value of property represented,
or purported to be represented, by any such document or instrument. Each Obligor
agrees that any and all Collateral may be removed by the Bank from the state or
location where situated, and may be subsequently dealt with by the Bank as
provided in this Agreement.

 

Section 3.09 Bank’s Rights as to Collateral; Power of Attorney. At any time or
times, at the expense of the Obligors, the Bank may in its discretion, before
the occurrence of an Event of Default as defined in Section 5.01 hereof in the
case of (A), (C), (E), (F) or (H) below, or after the occurrence of an Event of
Default in the case of (B), (D), (G) or (I) below, in its own name or in the
name of its nominee or of any Obligor, do any or all things and take any and all
actions that are pertinent to the protection of the Bank’s interest hereunder
and are lawful under applicable law, so long as such rights are exercised in
good faith and in a commercially reasonable manner, including, but not limited
to, the following:

 

(A) Terminate any waiver, consent or forbearance given in connection with this
Agreement; provided, however, any Event of Default which may result as a
consequence of the termination of any such waiver, consent or forbearance shall
not be deemed to have occurred unless such Event of Default has not been cured
within three days following the termination of such waiver, consent or
forbearance;

 

(B) Notify obligors on any Collateral to make payments or render performance
thereon directly to the Bank;

 

(C) Endorse any Collateral in any Obligor’s name;

 

(D) Enter into any extension, compromise, settlement, or other agreement
relating to or affecting any Collateral;

 

(E) Take any action any Obligor is required to take or which is otherwise
reasonably necessary to file a financing statement, take possession of
Collateral as described in Section 3.05(A) of this Agreement, obtain control of
Collateral or otherwise perfect a security interest in any or all of the
Collateral.

 

(F) Take any action any Obligor is permitted to take in connection with the
Collateral that is pertinent to the protection of the Bank’s interest hereunder,
to the same extent as if the Bank were the originator of the Collateral;

 

(G) Take control of any funds or other proceeds generated by the Collateral and
use the same to reduce Liabilities as they become due;

 

(H) Cause the Government and Agency Securities Collateral and the Other
Securities Collateral to be transferred to its name or the name of its nominee;
and

 

(I) Cause the Collateral to be transferred to its name or the name of its
nominee.

 

 

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Each Obligor hereby appoints the Bank as its true and lawful attorney, for and
on behalf of the Obligor and in its name, place and stead, to prepare, execute
and record endorsements and assignments to the Bank of all or any item of
Collateral, giving or granting to the Bank, as such attorney, full power and
authority to do or perform every lawful act necessary or proper in connection
therewith as fully as the Obligor might or could do. Each Obligor hereby
ratifies and confirms all that the Bank shall lawfully do or cause to be done by
virtue of this special power of attorney. This special power of attorney is
granted for a period commencing on the date hereof and continuing until the
discharge of all Liabilities and all obligations of the Obligors hereunder
regardless of any default by any Obligor, is coupled with an interest, and is
irrevocable for the period granted. This special power of attorney may be
exercised only in accordance with the terms and provisions of this Agreement.

 

Section 3.10 Proceeds of Collateral. Each Obligor, as the Bank’s agent, shall
collect all payments when due on all Collateral. If the Bank so requires, after
the occurrence of an Event of Default, each Obligor shall hold such collections
separate from its other monies in one or more designated cash collateral
accounts maintained at the Bank and apply them to the reduction of Liabilities
as they become due; otherwise, the Bank consents to the Obligors’ use and
disposition of all such collections.

 

ARTICLE IV: ADDITIONAL REPRESENTATIONS,

WARRANTIES AND COVENANTS

 

Section 4.01 General Representations and Warranties by the Obligors. Each
Obligor hereby represents and warrants that, as of the date hereof, the date of
each Advance, Credit Product, Derivative Transaction or Other Product, and the
date of delivery of each collateral report required under Section 3.07(A)
hereof:

 

(A) Such Obligor is not, and neither the execution of nor the performance of any
of the transactions or obligations of such Obligor under this Agreement shall,
with the passage of time, the giving of notice or otherwise, cause such Obligor
to be: (i) in violation of its charter or articles of incorporation, by-laws,
the Act or the Regulations, any other law or administrative regulation, or any
court decree, which could reasonably be expected to have a Material Adverse
Effect on such Obligor; or (ii) in default under or in breach of any indenture,
contract or other instrument or agreement to which such Obligor is a party or by
which it or any of its property is bound, which default or breach could
reasonably be expected to have a Material Adverse Effect on such Obligor;

 

(B) Such Obligor has full corporate power and authority and has received all
corporate and governmental authorizations and approvals (including those
required under the Act and the Regulations) as may be required to enter into and
perform its obligations under this Agreement and to obtain any Derivative
Transaction or Other Product, and the Borrower has full corporate power and
authority and has received all corporate and governmental authorizations and
approvals (including those required under the Act and the Regulations) as may be
required to borrow each Advance and to obtain each Credit Product, Derivative
Transaction and Other Product;

 

(C) The information given by such Obligor herein or in any Application,
Confirmation or Supplemental Documentation, or in any other written statement
made in connection with transactions contemplated thereunder, is true, accurate
and complete in all material respects;

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(D) The name, location (as defined in the Uniform Commercial Code) and corporate
form of such Obligor is, and for the lesser of its entity existence or the four
months prior to the date of this Agreement has been, the same as set forth in
the opening paragraph of this Agreement or in a Joinder Agreement;

 

(E) All financial statements concerning such Obligor which have been furnished
to the Bank or will hereafter be furnished to the Bank pursuant to this
Agreement or any Joinder Agreement, have been or will be prepared in accordance
with GAAP consistently applied (except as disclosed therein) and do or will
present fairly the financial condition of the entities covered thereby as at the
dates thereof and the results of their operations for the periods then ended,
subject to, in the case of unaudited financial statements, the absence of
footnotes and year-end adjustments;

 

(F) Since the date of the most recent audited financial statements of such
Obligor referred to in Section 4.01(E) above, there have been no events or
changes in facts or circumstances affecting such Obligor which individually or
in the aggregate have had or could reasonably be expected to have a Material
Adverse Effect on such Obligor;

 

(G) (i) Such Obligor is not the subject of any review or audit by any
governmental or regulatory investigation concerning the violation or possible
violation of any law (except for routine examinations in connection with which
no violation or possible violation has been identified by such governmental or
regulatory entity) which could reasonably be expected to result in any Material
Adverse Effect on such Obligor and (ii) there are no judgments outstanding
against such Obligor or affecting any property of such Obligor, nor is there any
action, charge, claim, demand, suit, proceeding, petition, governmental
investigation or arbitration now pending or, to the best knowledge of such
Obligor after due inquiry, threatened against or affecting such Obligor or any
property of such Obligor which could reasonably be expected to result in any
Material Adverse Effect on such Obligor;

 

(H) To such Obligor’s best knowledge, after reasonable investigation, none of
the proceeds of any Advance (or other credit extension hereunder) will be used
in connection with any “reportable transaction” within the meaning of Treasury
Regulation Section 1.6011-4(b) or in connection with any “potentially abusive
tax shelter” within the meaning of Section 6112(b) of the Internal Revenue Code
of 1986, as amended; and

 

(I) Each Borrowing Document is and will remain (notwithstanding any amendment
thereto occurring after the date of this Agreement) the legally valid and
binding obligation of such Obligor, enforceable in accordance with its terms.

 

Section 4.02 General Covenants by the Obligors. Until the termination of this
Agreement and the indefeasible satisfaction in full of all of the Liabilities:

 

(A) To the extent that the Borrower relies upon the Lendable Collateral Value of
Qualifying Collateral owned by an Affiliate in obtaining or maintaining any
Advance (or other extension of credit under the Borrowing Documents), the
Borrower will use, directly or indirectly, all of the proceeds of such Advance
(or other extension of credit) in a manner that shall result in such Affiliate
receiving valuable consideration, fair value, fair consideration and reasonable
equivalent value in exchange for the pledging of such Qualifying Collateral to
the Bank; and

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(B) Each Obligor will (a) comply with (i) the requirements of all applicable
laws, rules, regulations and orders of any governmental authority (including,
laws, rules, regulations and orders relating to taxes, employer and employee
contributions, securities, employee retirement and welfare benefits,
environmental protection matters, employee health and safety and credit
protection, anti-predatory and fair lending) as now in effect and which may be
imposed in the future in all jurisdictions in which such Obligor is now doing
business or may hereafter be doing business and (ii) the obligations, covenants
and conditions contained in all binding contracts of such Obligor, as
applicable, other than those laws, rules, regulations, orders and provisions of
such contracts the noncompliance with which could not be reasonably expected to
have, either individually or in the aggregate, a Material Adverse Effect, and
(b) maintain or obtain all licenses, qualifications and permits now held or
hereafter required to be held by such Obligor, for which the loss, suspension,
revocation or failure to obtain or renew, could reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect. This
subsection shall not preclude any Obligor from contesting any taxes or other
payments, if they are being diligently contested in good faith in a manner which
stays enforcement thereof and if appropriate expense provisions have been
recorded in conformity with GAAP.

 

ARTICLE V: DEFAULT; REMEDIES

 

Section 5.01 Events of Default. Each of the following events shall constitute an
Event of Default hereunder:

 

(A) Failure of any Obligor to pay when due any interest on or principal of any
Liabilities; or

 

(B) Failure of any Obligor to perform any promise or obligation or to satisfy
any condition or liability contained herein, or in any Application, Confirmation
or Supplemental Documentation, or the occurrence of a default or an event of
default under any Supplemental Documentation; or

 

(C) Any representation, statement, covenant or warranty made or furnished in any
manner to the Bank by or on behalf of any Obligor in connection with this
Agreement or any Application, Confirmation, Supplemental Documentation,
Liabilities or Collateral was false in any material respect when made or
furnished; or

 

(D) The issuance of any tax, levy, seizure, attachment, garnishment, levy of
execution, or other process with respect to the Collateral which has not been
stayed within 60 days after the issuance thereof; or

 

(E) Any suspension of payment by any Obligor to any creditor of sums due under
or the occurrence of any event which results in another creditor having the
right to accelerate the maturity of any indebtedness of any Obligor under any
security agreement, indenture, loan agreement, or comparable undertaking which
could reasonably be expected to have a Material Adverse Effect on any Obligor;
or

 

(F) Appointment of a conservator, receiver, or similar official for any Obligor
or any subsidiary of any Obligor, of any Obligor’s property, entry of a judgment
or decree adjudicating any Obligor or any subsidiary of any Obligor insolvent or
bankrupt or an assignment by any Obligor or any subsidiary of any Obligor for
benefit of creditors; or

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(G) Sale by any Obligor of a material part of such Obligor’s assets or the
taking of any other action by any Obligor to liquidate or dissolve; or

 

(H) Termination for any reason of the Borrower’s membership in the Bank, failure
of the Borrower to comply with the stock purchase requirements of the Bank in
effect from time to time, or the Borrower’s ceasing to be eligible to become a
member of the Bank or any Obligor ceasing to be eligible to pledge Collateral or
support the obligations of the Borrower hereunder under the Act, the Regulations
or the Credit and Collateral Policy; or

 

(I) Merger, consolidation or other combination of any Obligor with an entity
that is not a member of the Bank if the nonmember entity is the surviving
entity; or

 

(J) Any Obligor or any of its respective directors, executive officers or senior
officers is criminally indicted or convicted of or under a felony or a crime,
each of which involves fraud against or in relation to such Obligor, and such
indictment or conviction could reasonably be expected to have a Material Adverse
Effect on such Obligor; or

 

(K) Any event which could reasonably be expected to have a Material Adverse
Effect on any Obligor.

 

For purposes of Section 5.01(G), “material part” means a sale of assets (in one
or a series of transactions) by any Obligor, other than in the ordinary course
of such Obligor’s business, in any given fiscal year, the book value of which
exceeds an amount equal to such Obligor’s TIER 1 capital, or if TIER 1 capital
is not available, total capital as determined by such Obligor’s, or the
Borrower’s, primary regulator, at the close of the immediately preceding fiscal
year.

 

Section 5.02 Acceleration; Other Remedies. Upon the occurrence of an Event of
Default, in addition to any other remedies provided herein, in any Supplemental
Documentation or at law or in equity, the Bank may at its option, by a notice to
the Borrower, declare all or any part(s) of the Liabilities and accrued interest
thereon, including any prepayment fees or charges which are applicable thereto,
to be immediately due and payable, without presentment, demand, protest, or any
further notice. Furthermore, upon the occurrence of an Event of Default, the
Bank shall have all of the rights and remedies provided by applicable law, which
shall include, but not be limited to, all of the remedies of a secured party
under the Uniform Commercial Code as in effect in the State of Georgia. In
addition, the Bank may take immediate possession of any of the Collateral or any
part thereof wherever the same may be found. The Bank may sell, assign and
deliver the Collateral or any part thereof at public or private sale for such
price as the Bank deems appropriate without any liability for any loss due to
decrease in the market value of the Collateral during the period held. The Bank
shall have the right to purchase all or part of the Collateral at such sale. If
the Collateral includes insurance or securities which will be redeemed by the
issuer upon surrender, or any accounts or deposits in the possession of the
Bank, the Bank may realize upon such Collateral without notice to any Obligor.
If any notification of intended disposition of any of the Collateral is required
by applicable law, such notification shall be deemed reasonable and properly
given if given as provided by applicable law or in accordance with Section 6.06
hereof at least ten days before any such disposition. The proceeds of any sale
shall be applied in the order that the Bank, in its sole discretion, may choose,
subject to applicable law. Each Obligor agrees that the Bank may exercise any
and all of its rights of setoff upon the occurrence of an Event of Default.
Notwithstanding any other provision hereof, upon the occurrence of any Event of
Default at any time when all or part of

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the Liabilities shall be the subject of a guarantee by a third party for the
Bank’s benefit, and there shall be other outstanding obligations of any Obligor
to the Bank that are not so guaranteed, but that are secured by the Collateral,
then any sums realized by the Bank from the Collateral, or from any other
collateral pledged or furnished to the Bank by any Obligor under any other
agreement, shall be applied first to the satisfaction of such other
nonguaranteed obligations and then to such Obligor’s guaranteed obligations
hereunder. Each Obligor agrees to pay all the costs and expenses of the Bank in
the collection of the Liabilities and enforcement of the Bank’s rights and
remedies in case of default, including, reasonable attorneys’ fees. The Bank
shall, to the extent required by law, apply any surplus, after (i) payment of
the Liabilities, (ii) provision for repayment to the Bank of any amounts to be
paid or advanced under Other Credit Products, and (iii) payment of all costs of
collection and enforcement, to the claims of person(s) legally entitled thereto,
with any remaining surplus paid to the Borrower. Each Obligor shall be liable to
the Bank for any deficiency remaining.

 

Section 5.03 Certain Provisions as to Sale of Collateral. The Bank may, from
time to time after the occurrence of an Event of Default, attempt to sell
certain Collateral by means of a private placement. In so doing, the Bank may
restrict the bidders and prospective purchasers to those who will represent and
agree that they are purchasing for investment only and not for distribution or
otherwise impose restrictions deemed appropriate by the Bank for the purpose of
complying with the requirements of applicable securities laws. The Bank may
solicit offers to buy such Collateral, for cash or otherwise, from a limited
number of investors deemed by the Bank to be responsible parties who might be
interested in purchasing such Collateral. If the Bank solicits offers from not
less than three such investors, then the acceptance by the Bank of the highest
offer obtained therefrom (whether or not three offers are obtained) shall be
deemed to be a commercially reasonable method of disposing of the Collateral.

 

ARTICLE VI: MISCELLANEOUS

 

Section 6.01 Changes to Credit and Collateral Policy. The Bank reserves the
right to amend, supplement, restate or otherwise modify the Credit and
Collateral Policy (each, a “Policy Modification”) at any time, in its sole
discretion, without the consent of any Obligor, and each Obligor hereby (i)
acknowledges and agrees that this Agreement shall be deemed to have been amended
by each such Policy Modification, (ii) acknowledges and agrees that each such
Policy Modification shall apply to all Advances, Credit Products, Derivative
Transactions and Other Products (whether outstanding on the date of such Policy
Modification or issued after the date thereof) and (iii) agrees to be bound by
each and every Policy Modification occurring on, prior to, or after the date of
this Agreement. Each Policy Modification shall become effective immediately upon
adoption by the Bank; provided, however, no Event of Default shall occur as a
result of any Policy Modification until 90 days after the effective date of such
Policy Modification. The Bank shall provide notice of any Policy Modification in
writing, which may include by electronic mail, to the Borrower no later than 30
days after the effective date of such Policy Modification; provided, however,
such notice shall be deemed effective when given by the Bank, whether or not
actually received by the Borrower. Notwithstanding the provisions of this
section, the Bank shall not amend, supplement, restate or otherwise modify the
terms and conditions of any Advance, Credit Product, Derivative Transaction or
Other Product specified in a Confirmation, without the consent of the Borrower.

 

Section 6.02 Assignment. Each Obligor hereby gives the Bank the full right,
power and authority to pledge or assign to any party all or part of the
Liabilities, together with all or any part of

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the Collateral, as security for consolidated Federal Home Loan Bank obligations
issued pursuant to the provisions of the Act or for any other purpose authorized
by the Act, the Regulations or the Federal Housing Finance Board. In case of any
such pledge or assignment, the Bank shall have no further responsibility with
respect to Collateral transferred to the pledgee or assignee. The Obligors may
not (whether voluntarily, involuntarily, by operation of law or otherwise)
assign or transfer any of their rights or obligations hereunder or with respect
to any Advance, Credit Product, Derivative Transaction or Other Product without
the express prior written consent of the Bank. The Bank may at any time, upon
notice to the Borrower and subject to applicable law, sell, assign, grant
participations in, or otherwise transfer to any other person, firm or
corporation, including another Federal Home Loan Bank, all or part of the
Liabilities outstanding hereunder. Each Obligor hereby acknowledges and agrees
that any such disposition shall give rise to a direct obligation of the Obligor
to such assignee, participant or transferee. Each Obligor hereby authorizes the
Bank and each assignee, participant or transferee, in case of default by any
Obligor hereunder, to proceed directly, by right of setoff, banker’s lien, or
otherwise, against any assets of any Obligor which may at the time of such
default be in the respective hands of the Bank or any such assignee, participant
or transferee. Each Obligor further agrees that the Bank may furnish any
information pertaining to any Obligor which is in the possession of the Bank to
any prospective assignee, participant or transferee to assist it in evaluating
such assignment, participation or transfer provided that any non-public
information reasonably designated in writing to the Bank by any Obligor as
constituting non-public information shall be furnished to such prospective
assignee, participant or transferee on a confidential basis. Nothing contained
herein shall be deemed to grant to any third party any rights hereunder.

 

Section 6.03 Discretion of the Bank to Grant or Deny Advances. Nothing contained
herein or in any documents describing the Bank’s credit program and credit
policies, including the Credit and Collateral Policy, shall be construed as an
agreement or commitment on the part of the Bank to grant Advances or enter into
Credit Products, Derivative Transactions or Other Products. No Obligor, except
the Borrower, shall have any right to apply to the Bank for Advances or Credit
Products. The right and power of the Bank in its discretion to either grant or
deny any Advance, Credit Product, Derivative Transaction or Other Product
requested hereunder is hereby expressly reserved. The determination by the Bank
of Lendable Collateral Value and the Collateral Maintenance Level shall not
constitute a determination by the Bank that the Borrower may obtain Advances,
Credit Products, Derivative Transactions or Other Products in amounts up to such
Lendable Collateral Value and Collateral Maintenance Level.

 

Section 6.04 Amendment; Waivers. No modification, amendment or waiver of any
provision of this Agreement (other than the provisions of the Credit and
Collateral Policy incorporated by reference herein) or consent to any departure
therefrom shall be effective unless in a writing executed by a responsible
officer of the party against whom such change is asserted and shall be effective
only in the specific instance and for the purpose of which given. No notice to
or demand on any Obligor in any case shall entitle any Obligor to any other or
further notice or demand in the same, or similar or other circumstances. Any
forbearance, failure or delay by the Bank in exercising any right, power or
remedy hereunder shall not be deemed to be a waiver thereof, and any single or
partial exercise by the Bank of any right, power or remedy hereunder shall not
preclude the further exercise thereof. Every right, power and remedy of the Bank
shall continue in full force and effect until specifically waived by the Bank in
writing.

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Section 6.05 Consent to Jurisdiction. In any action or proceeding brought by the
Bank or any Obligor in order to enforce any right or remedy under this
Agreement, the parties hereby consent to, and agree that they will submit to,
the nonexclusive jurisdiction of the United States District Court for the
Northern District of Georgia or, if such action or proceeding may not be brought
in Federal court, the jurisdiction of the courts of the State of Georgia located
in the City of Atlanta.

 

Section 6.06 Notices. Except as provided in the last sentence of this Section,
any written notice, advice, request, consent or direction given, made or
withdrawn pursuant to this Agreement shall be in writing, and shall be given by
first class mail, postage prepaid, by telecopy or other facsimile transmission,
or by private courier or delivery service. All non-oral notices shall be deemed
given when actually received at the principal office of the Bank or when
actually given in the case of notices by the Bank to the Borrower (for all
Obligors). All notices shall be designated to the attention of the president and
chief executive officer of the Bank and to an office or section of the Borrower
if the Borrower has made a request for the notice to be so addressed. Any notice
by the Bank to the Borrower pursuant to Section 3.06 hereof may be oral and
shall be deemed to have been duly given to and received by the Borrower at the
time of the oral communication.

 

Section 6.07 Signatures of Obligors. For purposes of this Agreement, documents
shall be deemed signed by each Obligor when a signature (electronic or manual)
of an authorized signatory or an authorized facsimile thereof appears on the
document. The Bank may rely on any signature (electronic or manual) or facsimile
thereof which reasonably appears to the Bank to be the signature of an
authorized person, including signatures appearing on documents transmitted
electronically to and reproduced mechanically at the Bank. The Secretary or an
Assistant Secretary of each Obligor shall from time to time certify to the Bank
on forms provided by the Bank the names and specimen signatures of the persons
authorized to apply on behalf of the Borrower to the Bank for Advances and
commitments for Advances and otherwise act for and on behalf of the Obligors in
accordance with this Agreement. The Obligors shall promptly notify the Bank of
any changes to such certifications, and until receipt of such notice, the Bank
shall be authorized to rely on the authorizations in such current
certifications. Such certifications are incorporated herein and made a part of
this Agreement and shall continue in effect until expressly revoked or amended
in writing by the Obligors, notwithstanding that subsequent certifications may
authorize additional persons to act for and on behalf of the Obligors.

 

Section 6.08 Applicable Law; Severability. In addition to the terms and
conditions specifically set forth herein and in any Application, Confirmation or
Supplemental Documentation, this Agreement and all Advances, Credit Products,
Derivative Transactions and Other Products shall be governed by the statutory
and common law of the United States and, to the extent Federal law incorporates
or defers to state law, the laws (exclusive of the choice of law provisions) of
the State of Georgia. Notwithstanding the foregoing, the Uniform Commercial Code
as in effect in the State of Georgia shall be deemed applicable to this
Agreement and any Application, Confirmation and Supplemental Documentation and
to any Advance, Credit Product, Derivative Transaction or Other Product and
shall govern the attachment and perfection of any security interest granted
hereunder or thereunder. In the event that any portion of this Agreement, or any
Application, Confirmation or Supplemental Documentation, conflicts with
applicable law, such conflict shall not affect other provisions of this
Agreement or such Application, Confirmation or Supplemental Documentation, which
may be given effect without the conflicting provision, and to this end the
provisions of this Agreement and any Application, Confirmation and Supplemental
Documentation are declared to be severable.

--------------------------------------------------------------------------------

Section 6.09 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the successors and permitted assigns of the Obligors and
the Bank.

 

Section 6.10 Entire Agreement. This Agreement, together with any Confirmation or
Supplemental Documentation, and any amendments or addenda thereto executed by
the Bank and the Obligors, embody the entire agreement and understanding between
the parties hereto relating to the subject matter hereof and supersedes all
prior agreements between such parties that relate to such subject matter. If,
prior to the date of this Agreement, the Borrower and the Bank have entered into
an Agreement for Advances and Security Agreement with Blanket Floating Lien (as
amended) or an Advances, Specific Collateral Pledge and Security Agreement
(each, a “Prior Agreement”), then this Agreement shall amend and restate the
Prior Agreement in its entirety as the date hereof.

 

Section 6.11 Attorneys’ Fees. Each Obligor agrees to pay all charges and
expenses incurred by Bank (including reasonable attorneys’ fees and expenses) in
connection with the administration of the Borrowing Documents, any investigation
by Bank in respect of any Borrowing Document, the enforcement, protection or
preservation of any right or claim of Bank, the termination of this Agreement or
any other Borrowing Document, the termination of any liens of Bank on the
Collateral, or the collection of any amounts due under the Borrowing Documents.

 

Section 6.12 Indemnification of the Bank. Each Obligor hereby indemnifies and
agrees to defend (with counsel acceptable to the Bank) and hold harmless the
Bank and each of its directors, officers, agents and employees (each, an
“Indemnitee”) from and against any liability, loss, cost or expense (including
reasonable attorneys’ fees and expenses) incurred in connection with any claim,
damage, suit, arbitration, action, proceeding, investigation or pre-filing
settlement discussion or negotiation, whenever taking place, and suffered by any
one or more of the Indemnitees (collectively, “Losses”) or in which any one or
more of the Indemnitees may ever be or become involved (whether as a party,
witness or otherwise), in connection with, or in any way relating to, any
Liability, this Agreement, any Borrowing Document, any Advance, any Credit
Product, any Derivative Transaction, or any Other Product and any Loss (a)
arising from any Obligor’s failure to observe, perform or discharge any of its
covenants, obligations, agreements or duties under this Agreement or any other
Borrowing Document, (b) arising from the breach of any of the representations or
warranties contained in any Borrowing Document, (c) relating to claims of any
Person with respect to any Collateral, or (d) arising from any Obligor’s failure
to comply with any federal, state, or local statute, regulation, ordinance or
other provision of law; provided, an Indemnitee shall not be indemnified for
Losses to the extent they result solely from the gross negligence or willful
misconduct of such Indemnitee. Notwithstanding any contrary provision in any
Borrowing Document, obligations of each Obligor under this Section 6.12 shall
survive the payment in full of the Liabilities and the termination of this
Agreement.

 

[Signatures appear on following page.]

 

 

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IN WITNESS WHEREOF, Borrower and Bank have caused this Agreement to be signed in
their names by their duly authorized officers as of the date first above
mentioned.

 

BANKUNITED, FSB

 

By:

 

/s/  Humberto L. Lopez

--------------------------------------------------------------------------------

   

Name:  Humberto L. Lopez

Title:  CFO

 

 

By:

 

/s/  Beatriz Ortega

--------------------------------------------------------------------------------

   

Name:  Beatriz Ortega

Title:  SVP – Financial Planning

 

 

FEDERAL HOME LOAN BANK OF ATLANTA

 

By:

 

/s/  Charles I. Abitt

--------------------------------------------------------------------------------

   

Name:  Charles I. Abitt

Title:  Senior Vice President

 

By:

 

/s/  Randy B. Gonzalez

--------------------------------------------------------------------------------

   

Name:  Randy B. Gonzalez

Title:  First Vice President