Attached files
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| 8-K - KH FUNDING CO | v179017_8k.htm |
| EX-4.1 - KH FUNDING CO | v179017_ex4-1.htm |
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Exhibit
10.1
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DEPOSIT
ACCOUNT CONTROL AGREEMENT
THIS DEPOSIT ACCOUNT CONTROL AGREEMENT
(this “Agreement”) is made this 10th day of
March, 2010, by and among WELLS FARGO BANK, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Trustee under that certain Indenture dated
August 2, 2004, as the same has been and may hereafter be amended, supplemented,
modified, replaced or substituted (the “Indenture”), and any successor Trustee
(the “Trustee”), with a location at 45 Broadway, 12th Floor, New York, New York
10006 (Attn: James R. Lewis, Corporate Trust Services), KH FUNDING
COMPANY, a Maryland corporation (the “Debtor”), located at 10801 Lockwood Drive,
Suite 370, Silver Spring, Maryland 20901 (Attn: Robert L. Harris),
and Sandy Spring Bank, a Maryland commercial bank (the “Bank”), at 17801 Georgia
Avenue, Olney, Maryland 20832 (Attn: SVP, Retail Administration, with a copy to
Associate Counsel).
Recitals
R.1 The
Bank holds deposit account number ________ in the name of the Debtor (the
“Account”).
R.2 Debtor
hereby grants to Trustee a security interest in the Account. Trustee,
Debtor and Bank are entering into this Agreement to perfect Trustee’s security
interest in the Account.
NOW, THEREFORE, in consideration of the
Recitals and other consideration, the Bank, Debtor and Trustee agree as
follows:
Agreement
1. Grant of Security
Interest. The Debtor hereby grants to the Trustee a continuing
first priority security interest in the Account, including all funds now or
hereafter credited to the Account.
2. The
Account. The Bank represents and warrants to Trustee that (a)
Paragraph R.1 of the
“Recitals” section hereof is true and correct, (b) Exhibit A is the most
recently issued statement of the Account and is complete and accurate as of the
date thereof, (c) the Bank has not agreed with any party, other than the Debtor
and the Trustee, to comply with instructions concerning the Account, and (d) the
Bank has no actual knowledge of any claim to or interest in the Account, other
than the interests of the Trustee and the Debtor and any claim of the Bank
permitted under Section
3 hereof.
3. Priority of
Lien. The Bank waives any encumbrances, claims and rights of
set off (or recoupment) it may have against the Account and agrees that, except
with respect to payment of its fees under the agreement between the Debtor and
the Bank attached hereto as Exhibit B (the
“Customer Agreement”), it will not assert any banker’s lien, encumbrance, claim
or setoff against the Account. Provided, however, that if any checks or other
items or receipts deposited in the Account are returned unpaid or otherwise
dishonored, Bank shall have the right to charge any and all such returned or
dishonored items against the Account or to demand reimbursement therefor
directly from Debtor.
4. Control. Subject
to Section 5 hereof,
the Bank will comply with any written instructions, including, without
limitation, instructions to close the Account, given to it by both the Trustee
and the Debtor. The Bank will promptly transmit to the Trustee and
the Debtor any Account instructions it receives concerning the Account given by
any person other than the Debtor or the Trustee.
5. Debtor’s Authority to
Withdraw. The Bank may comply with the Debtor’s instructions
concerning the Account until the Trustee notifies the Bank in writing that the
Trustee is exercising exclusive control over the Account (the “Control
Notice”). No later than three (3) banking days after receiving the
Control Notice, the Bank shall stop complying with any instructions given by the
Debtor. The Bank has no liability to the Trustee for following any
instruction given to it by the Debtor prior to such date. For
purposes of this Agreement, a “banking day” is any day other than a Saturday, a
Sunday, a legal holiday or any other day on which the Bank is permitted or
required by federal and Maryland law to be closed for business.
6. Statements and
Confirmations. The Bank will send copies of all statements and
other correspondence concerning the Account to the Trustee at Trustee’s address,
at the sole expense of Debtor.
7. Responsibility of the
Bank. Except for complying with the Debtor’s instructions in
violation of Section 5, the Bank has no liability to Debtor for complying with
the Trustee’s notice of exclusive control or complying with instructions
concerning the Account given by the Trustee. This Agreement does not
create any obligation or duty on the Bank other than those expressly set forth
herein. Bank shall not be bound in any way by the terms of any agreement or
contract between Debtor and Trustee or any other party, whether or not the Bank
has knowledge thereof excluding this Agreement. Bank's only duties or
responsibilities shall be to hold and disburse the funds in the Account, in
accordance with the terms of this Agreement.
8. Bank May Rely on
Instruments. Bank
assumes no liability or responsibility for the form, sufficiency, accuracy,
genuineness, falsification or legal effect of any documents, notices or
certifications delivered pursuant to this Agreement. Bank shall have no
responsibility or liability to Debtor or Trustee or their successors in
interest, for any action taken by Bank in good faith upon receipt of any
instrument or other writing reasonably believed by Bank to be genuine and to be
properly signed or presented, and Bank shall be under no duty to investigate or
question any such instrument or other writing. Bank shall not be responsible for
any act done or omitted by it in good faith. Bank shall not be bound by any
notice of a claim or demand with respect hereto unless received by it in
writing.
9. Exclusion of Bank;
Indemnification by Debtor. Debtor and Trustee agree that Bank
shall have no liability to either of Debtor or Trustee for any loss or damage
that either or both may claim to have suffered or incurred, either directly or
indirectly, by reason of this Agreement or any transaction or service
contemplated by its provisions, unless occasioned by the gross negligence or
willful misconduct of Bank. In no event shall Bank be liable for any
losses, costs, or damages, whether direct or indirect, special, or consequential
resulting or arising from computer malfunction, interruption of communication
facilities, labor difficulties, or other causes beyond Bank’s reasonable
control. Debtor agrees to indemnify Bank and hold it harmless from
and against any and all claims, other than those based upon the gross negligence
or willful misconduct of Bank as finally determined by a court, and from and
against any damages, penalties, judgments, liabilities, losses, or expenses
(including reasonable attorney fees and disbursements) incurred as a result of
the assertion of any claim, by any person or entity, arising out of, or
otherwise related to, any transaction conducted or service provided by Bank
through the use of any account at Bank pursuant to the procedures provided for
or contemplated by this Agreement. To the extent not paid by Debtor
within fifteen (15) calendar days after demand, Trustee will indemnify Bank
against any claims, liabilities or expenses (including reasonable attorneys’
fees) to the extent they arise out of Bank’s compliance with any instructions
from Trustee with respect to the Account, except if such claims, liabilities or
expenses are caused by Bank’s gross negligence or willful
misconduct.
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10. Conflicting
Claims. If any dispute arises between the parties with respect
to the obligations of Bank hereunder or if at any time Bank is served with legal
process, which Bank, in good faith, believes may subject Bank to loss or
liability for disbursing any funds deposited in the Account as provided herein,
then Bank shall have the right either (x) to place a hold on funds in the
Account until such time as Bank receives an appropriate court order or other
assurance satisfactory to it as to the disposition of the funds or (y) to
commence, at Debtor’s expense, an interpleader action in any competent federal
or state court located in the State of Maryland, and to take no further action,
except in accordance with joint written instructions from Debtor and Trustee or
in accordance with an appropriate court order.
11. Tax
Reporting. All income, gain, expense and loss recognized in
the Account shall be reported to all taxing authorities under the Debtor’s name
and taxpayer identification number.
12. Customer
Agreement. The terms of this Agreement will prevail if this
Agreement conflicts with any other agreement between the Bank and the Debtor,
including, without limitation, the Customer Agreement. Irrespective
of any term of the Customer Agreement, the Uniform Commercial Code of Maryland
shall govern the Account for purposes of Article 9 of the Uniform Commercial
Code.
13. Termination. This
Agreement may be terminated by Debtor only upon delivery to Bank of a written
notification jointly executed by Debtor and Trustee. This Agreement
may be terminated by the Trustee at any time, with or without cause, upon its
delivery of written notice to Debtor and Bank. This Agreement
may be terminated by Bank at any time on not less than 30 days’ prior written
notice delivered to Debtor and Trustee. Upon delivery or receipt of
such notice of termination to or by Bank, Bank will immediately transmit to such
deposit account as Trustee may direct all funds, if any, then on deposit in the
Account.
14. Entire
Agreement. This Agreement, Exhibit A and Exhibit B constitute
the entire agreement of the parties with respect to the subject matter hereof
and supersede all prior agreements (written or oral) and negotiations and all
contemporaneous oral agreements concerning this subject matter.
15. Amendments. No
amendment, modification or termination of this Agreement or waiver of any right
shall be binding on any party unless it is in writing and signed by the party to
be charged.
16. Severability. If
any term of this Agreement is invalid or unenforceable, the remainder of this
Agreement shall be construed as if such invalid or unenforceable term were
omitted.
17. Successors. The
terms of this Agreement are binding upon, and inure to the benefit of, the
parties and their respective successors and assigns.
18. Notices. Any
notice or other communication required or permitted to be given under this
Agreement shall be in writing and deemed to have been properly given when
personally delivered, or upon receipt after being sent by certified United
States mail, or the next banking day after depositing any notice with a
reputable overnight courier service, to the party at the address set forth next
to such party’s name in the introduction to this Agreement. Any party
may change that party’s address for notices in the manner set forth
above.
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19. Choice of
Law. This Agreement shall be governed by the laws of the State
of Maryland without regard to its conflict of laws provisions.
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IN WITNESS WHEREOF, the parties hereto
have executed or caused this Agreement to be executed under seal as of the date
and year first written above.
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WELLS
FARGO BANK, NATIONAL
ASSOCIATION,
as Trustee
By: /s/ James R.
Lewis
Name: James
R. Lewis
Title: Vice
President
KH
FUNDING COMPANY
By: /s/ Robert L.
Harris
Name: Robert
L. Harris
Title: President
SANDY
SPRING BANK
By: /s/ Terri L.
Ferrara
Name:
Title: Retail
Administration, SVP
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EXHIBIT
A
STATEMENT
OF ACCOUNT
[OMITTED]
EXHIBIT
B
CUSTOMER
AGREEMENT
Fee
Agreement
The
following fees shall be applicable to this agreement:
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Administration
Fee - $2500
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All
account fees set forth in Bank’s Deposit Account Agreement, a copy of
which has been previously provided to
Debtor.
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