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EXHIBIT 10.55
TRI-PARTY AGREEMENT
This Tri-Party Agreement is made as of June 20, 1997 by and among MEGO
MORTGAGE CORPORATION ("Borrower"), GREENWICH CAPITAL MARKETS, INC. ("Greenwich")
and THE FIRST NATIONAL BANK OF CHICAGO, as agent ("Agent") for itself and the
other "Lenders" from time to time under a Revolving Credit Agreement of even
date herewith among Agent, Borrower and certain banks which are parties thereto
(the "Credit Agreement").
Borrower, Greenwich and Mego Financial Corp. ("Guarantor") have entered
into an Amended and Restated Master Loan Purchase and Servicing Agreement dated
as of October 1, 1996 (the "MLPSA"), pursuant to which Greenwich has, among
other things, agreed to purchase "FHA Loans" and "Conventional Loans" (as such
terms are defined in the MLPSA) from Borrower from time to time upon
satisfaction of the conditions contained in the MLPSA. All capitalized terms
used herein and not otherwise defined shall have the meaning given to them in
the MLPSA.
Borrower, Agent and the Lenders have entered into the Credit Agreement
pursuant to which the Lenders have agreed to provide secured financing for the
Borrower's origination, acquisition and warehousing of certain of such FHA Loans
and Conventional Loans, to the extent such Loans meet the eligibility
requirements of the Credit Agreement, for sale to Greenwich and other investors.
This Tri-Party Agreement shall not be effective until Borrower has terminated
its existing revolving credit agreement with BankBoston, N.A. (formerly known as
The First National Bank of Boston) and the existing collateral assignment of the
original MLPSA made in connection therewith has been terminated by written
notice delivered to Greenwich.
As a condition to any advances to Borrower under the Credit Agreement,
the Agent and Lenders have required that (i) all such Loans being acquired or
originated by Borrower and pledged as collateral pursuant to the Credit
Agreement must be eligible for purchase by Greenwich or other investors approved
by the Lenders; and (ii) purchase commitments from Greenwich or such other
approved investors covering the full amount of all such Loans be in full force
and effect at all times while such Loans are pledged as collateral pursuant to
the Credit Agreement, subject to Borrower's right to maintain pledged loans in
excess of such purchase commitments for not more than 30 days during any fiscal
quarter of Borrower.
The Borrower and the Lenders have requested that this Tri-Party
Agreement be executed and delivered to supplement the MLPSA, to provide for the
delivery of certain notices and other information from Greenwich directly to the
Agent on behalf of the Lenders, and to confirm the terms under which Greenwich
will purchase Loans in which First Chicago National Processing Corporation, in
its capacity as the "Collateral Agent" (as defined under the Credit Agreement)
holds a security interest for the benefit of the Lenders, if such Loans are to
be sold to satisfy the indebtedness of the Borrower under the Credit Agreement.
Greenwich will benefit from the Borrower's increased ability to acquire
or originate Loans for sale to Greenwich as a result of the extension of credit
by the Lenders to the Borrower under the Credit Agreement.
THEREFORE, in consideration of the foregoing, Greenwich, Borrower and
the Agent, for itself and on behalf of the Lenders, agree as follows:
1. Status of MLPSA.
(a) Greenwich hereby confirms to the Agent that the MLPSA is
in full force
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and effect and that no Event of Default or, to the knowledge of
Greenwich, breach or default which with the passage of time or the giving of
notice would become an Event of Default on the part of Borrower, now exists
under the MLPSA. Greenwich further confirms to the Agent with regard to the
MLPSA that, as of the date hereof:
(i) the aggregate principal balance of Loans sold to
Greenwich thereunder (excluding all Loans resold or transferred by
Greenwich pursuant to a Purchaser Disposition prior to the date of
this Tri-Party Agreement) is $99,165,314.57 as of May 30, 1997 (the
"Transferred Loans"), leaving $50,834,685.43 of the $150,000,000
current Portfolio Limit (which has temporarily been increased from
$100,000,000 to $150,000,000 until August 31, 1997) available and
unused as of May 30, 1997;
(ii) the aggregate principal balance of all Loans sold to
Greenwich thereunder (without exclusion) is $326,102,717.30, leaving
$1,673,897,282.70 of the $2 billion maximum commitment thereunder
available and unused as of May 30, 1997;
(iii) the most recent Pricing Letter is attached hereto as
Exhibit A and made a part hereof;
(iv) Greenwich has permanently waived the 65% limitation on
Conventional Loans contained in clause (iv) of Section 2(a) of the
MLPSA;
(v) to Greenwich's knowledge, as of the date hereof,
Borrower is not obligated to repurchase any Transferred Loans or
provide Qualified Substitute Loans for Transferred Loans under
Section 7.03 of the MLPSA;
(vi) the Guaranty of Borrower's obligations under the MLPSA
originally provided by Mego Financial Corp. has been released upon
compliance with Section 32 of the MLPSA;
(vii) the definition of "Note" in the MLPSA includes retail
installment contracts executed by the "Obligor" under a Loan; and
(viii) the Loans underwritten by Borrower in accordance with
Borrower's Undeirwriting Programs listed on Schedule A hereto are
eligible for purchase by Greenwich under the MLPSA.
(b) Greenwich agrees to use reasonable efforts to deliver copies
of all subsequent Pricing Letters to the Agent on the same day as delivery
to the Borrower. Borrower agrees to deliver a copy of each such Pricing
Letter to the Agent no later than the time the Borrower delivers an executed
copy to Greenwich. Borrower and Greenwich agree to amend the form of Pricing
Letter to include a statement of the remaining unused and available Portfolio
Limit. Greenwich agrees that, if the Portfolio Limit is to be reassessed at any
time under Section 2(a) of the MLPSA, no reduction in the Portfolio Limit shall
be effective as between Greenwich and the Agent unless Greenwich shall have
given the Agent at least 30 days prior written notice of the amount of such
reduction, provided that no notice shall be necessary to reduce the Portfolio
Limit to $100,000,000 on August 31, 1997 on the expiration of the temporary
increase described above.
2. Greenwich Commitment to Purchase from Lenders. If any sale to
Greenwich of the
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Loans held as collateral under the Credit Agreement is made at
the request or direction of the Agent, rather than in the ordinary course at the
request or direction of the Borrower, such sale will occur only if and when
Borrower has defaulted in its obligations under the Credit Agreement. Greenwich
agrees, upon request by the Agent, for the benefit of the Agent and the Lenders
to purchase any Loans held as collateral under the Credit Agreement (the
"Pledged Loans") for the Purchase Price determined by Greenwich in accordance
with the MLPSA, provided that (i) no Event of Default (or default that with the
passage of time would constitute an Event of Default) by the Borrower under the
MLPSA has occurred and is then continuing, (ii) in Greenwich's reasonable
judgment, no material adverse change has occurred (other than solely as a result
of the existence of a default by the Borrower under the Credit Agreement) in the
value or marketability of the Transferred Loans, the financial condition of the
Borrower or the ability of the Borrower to fulfill its obligations (including
without limitation its ability to make corporate and loan-related
representations and warranties and to effect any required repurchases) under the
MLPSA and (iii) the Borrower and each such Pledged Loan is in compliance in all
material respects with the standards set forth in Section 7.02 of the MLPSA and,
after giving effect to the purchase of such Pledged Loans, the conditions to
purchase Loans from the Borrower, as if the Borrower had offered such Loans
directly pursuant to the MLPSA, set forth in Section 2 of the MLPSA would be
satisfied. Subject to the foregoing, the Borrower hereby irrevocably directs and
authorizes Greenwich to take such actions and purchase such Pledged Loans upon
presentation of a statement by the Agent that the Borrower has defaulted in its
obligations under the Credit Agreement, without any obligation on the part of
Greenwich to inquire into the existence of such a default by the Borrower under
the Credit Agreement or to require any further confirmation or direction from
the Borrower, it being expressly understood and agreed that the Borrower shall
be fully liable for all of its obligations under the MLPSA with respect to such
Pledged Loans.
3. No Assumption. Neither the Agent nor the Lenders shall be deemed
solely by virtue of this Tri-Party Agreement to have assumed any of the
obligations of the Borrower under the MLPSA, each of which obligations the
Borrower covenants and agrees with the Lenders to perform and observe as if this
Tri-Party Agreement had not been made. Neither the Agent nor the Lenders, by
entering into this Tri-Party Agreement, shall have any obligations to sell any
Loans to Greenwich or shall have any liability to Greenwich as a result of any
Loans not being sold to Greenwich.
4. Amendments to MLPSA. Greenwich agrees that (other than increases in
the Portfolio Limit or other matters which will not adversely affect the Agent
or the Lenders) Greenwich will not amend, change, modify, or terminate by
agreement the MLPSA without using reasonable efforts to give at least 30 days
prior notice thereof to the Agent. The Borrower will not waive any provision of
the MLPSA which would in any material respect reduce the obligations of
Greenwich thereunder.
5. Notices of Default. Greenwich agrees that it will use reasonable
efforts to furnish to the Agent copies of all written notices given to the
Borrower with respect to any default of the Borrower under the MLPSA,
simultaneously with the giving of such notice to the Borrower. The Agent agrees
that it will use reasonable efforts to furnish to Greenwich copies of all
written notices given to the Borrower with respect to any default of the
Borrower under the Credit Agreement, simultaneously with the giving of such
notice to the Borrower.
6. Payments for Loans. Greenwich agrees, and the Borrower hereby
irrevocably directs Greenwich, to forward all payments due or to become due to
the Borrower from Greenwich under the MLPSA on account of Loans shipped to
Greenwich by the "Collateral Agent" under the
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Credit Agreement only to the Borrower's Account No. 19-29623 at the Agent, until
Greenwich receives written notice from the Agent of the termination of the
Credit Agreement and any further security interest for the benefit of the
Lenders in the Loans then owned by the Borrower.
7. Indemnity by Borrower. In consideration of Greenwich's joinder in
this Tri-Party Agreement, the Borrower agrees to hold Greenwich harmless from
and indemnify Greenwich against any loss, claim, proceeding, or expense
(including reasonable attorneys' fees and disbursements) incurred or arising out
of any act or omission taken or made by Greenwich in accordance with the
provisions of this Tri-Party Agreement during the term hereof (including any act
or omission in reliance on the Agent's authority to bind the Lenders as
described below), except to the extent due to Greenwich's gross negligence or
willful misconduct.
8. Reliance by Greenwich. Except to the extent expressly stated therein
to the contrary, Greenwich shall be entitled to rely upon, and shall be
protected in acting on, the directions, notices, requests, consents and other
written advice given by the Agent as being the fully authorized and binding
action of the Lenders under the Credit Agreement.
9. Notices. All demands, notices and communications hereunder shall be
in writing and shall be given by registered or certified mail, return receipt
requested, by private delivery service or by telecopier at the following
addresses or telephone numbers, as the case may be, as follows:
(a) if to the Borrower:
Mego Mortgage Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Mego Mortgage Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇]
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Agent or the Lenders:
The First National Bank of Chicago
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to Greenwich:
Greenwich Capital Markets, Inc.
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Greenwich Capital Markets, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address or telephone number as may hereafter be furnished to the
other parties by like notice. Any such demand, notice or communication hereunder
shall be deemed to have been received on the date delivered to or received at
the premises of the addressee (as evidenced, in the case of registered or
certified mail, by the date noted on the return receipt).
10. Severability Clause. Any provision of this Tri-Party Agreement which
is prohibited or which is held to be void or unenforceable shall be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. To the extent permitted by applicable law, the
parties hereto waive any provision of law which prohibits or renders void or
unenforceable any provision hereof.
11. Counterparts. This Tri-Party Agreement may be executed
simultaneously in any number of counterparts. Each counterpart shall be deemed
to be an original, and all such counterparts shall constitute one and the same
instrument.
12. Governing Law. The Tri-Party Agreement shall be construed in
accordance with the laws of the State of New York without regard to any
conflicts of law provisions and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with the laws of the State
of New York, except to the extent preempted by federal law.
13. Successors and Assigns. This Tri-Party Agreement shall bind and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns.
14. Waivers. No term or provision of this Tri-Party Agreement may be
waived or modified unless such waiver or modification is in writing and signed
by the party against whom such waiver or modification is sought to be enforced.
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15. Exhibits. The exhibits to this Tri-Party Agreement are hereby
incorporated and made a part hereof and are an integral part of this Tri-Party
Agreement.
16. Further Agreements. The parties each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Tri-Party Agreement.
17. Entire Agreement. This Tri-Party Agreement constitutes the entire
agreement of the three parties with respect to the subject matter hereof and
supersedes all prior agreements, oral and written, between the three parties
hereto with respect to the subject matter hereof, and the provisions of this
Tri-Party Agreement shall survive each closing of the transactions contemplated
by the MLPSA and each Pricing Letter. In the event that there exist
inconsistencies between this Tri-Party Agreement and the MLPSA or any Pricing
Letter, this Tri-Party Agreement shall control. Notwithstanding anything herein
to the contrary, however, except as expressly provided herein with respect to
Greenwich's obligations to the Agent under Section 2, nothing contained in this
Tri-Party Agreement shall create, or be deemed to create, any lesser or greater
obligation on the part of Greenwich to purchase Loans, or the Borrower to sell
Loans, under the MLPSA.
In witness of the foregoing the parties have executed and delivered this
Tri-Party Agreement as of the date first above written.
MEGO MORTGAGE CORPORATION THE FIRST NATIONAL BANK OF
(the "Borrower") CHICAGO, as agent for the Lenders (the
"Agent")
By: By:
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Name: Name:
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Title: Title:
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GREENWICH CAPITAL MARKETS, INC.
("Greenwich")
By:
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Name:
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Title:
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EXHIBIT A
PRICING LETTER
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SCHEDULE A
BORROWER'S UNDERWRITING PROGRAMS
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