THIS AGREEMENT is made on 24 April 1998 between:
(1) OCWEN ASSET INVESTMENT-UK, LLC, a Delaware limited liability company,
and whose principal place of business is at The Forum, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "BORROWER"); and
(2) GREENWICH CAPITAL FINANCIAL PRODUCTS, INC. a company incorporated under
the laws of the State of Delaware (the "LENDER"); and
WHEREAS:
(1) Ocwen Financial Corporation ("OFC") and City Mortgage Corporation
Limited ("CMC") together with other parties referred to therein have
entered into an agreement for the sale and purchase of the business of
CMC and its subsidiaries dated 31 March 1998 (the "SALE AGREEMENT")
pursuant to which OFC has agreed to buy or procure another Buyer Group
Company (as therein defined) or any OAIC Group Company (as therein
defined) to buy the assets specified therein and the entire issued
share capital of City Mortgage Receivables 7 Plc.
(2) The Lender has agreed to provide a facility to the Borrower to finance
the acquisition by the Borrower of the Securitisation Residuals under
the Sale Agreement on the terms and subject to the conditions contained
herein.
(3) The Borrower is a wholly owned subsidiary and Ocwen Partnership L.P.
(the "GUARANTOR") is a 98 per cent. owned subsidiary of Ocwen Asset
Investment Corporation.
(4) The Guarantor has agreed to provide a loan to the Borrower (the
"INTERCOMPANY LOAN") to finance the balance of the purchase price of
the Securitisation Residuals and in consideration for the economic
benefit to be received by the Guarantor under the Intercompany Loan and
in order to protect its return under the Intercompany Loan the
Guarantor has agreed to guarantee the obligations of the Borrower under
this Agreement on and subject to the terms of the Guarantee.
1. INTERPRETATION
1.1 DEFINITIONS
In this Agreement (including the recitals hereto) the following terms
shall have the respective meanings set forth below:
"ACCELERATION" means any acceleration of the Advance hereunder
following the occurrence of an Event of Default.
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"ACCOUNT BANK" means National Westminster Bank Plc or such other bank
or financial institution as may be substituted as account bank with the
prior written consent of the Lender.
"ADDITIONAL PRINCIPAL REPAYMENT AMOUNT" means, on any Principal
Repayment Date in respect of which the provisions of clause 6.4 and 6.5
apply, the amount necessary such that after application of such amount
to Outstanding Advances (and after application of the Principal
Repayment Amount to Outstanding Advances on such date) the Collateral
Percentage is equal to 65 per cent.
"ADVANCE" means, save as otherwise provided herein, the advance (as
from time to time reduced by repayment and prepayment) in an amount of
,19,000,000 (nineteen million pounds) to be made by the Lender to the
Borrower in one instalment on the Advance Date to be applied by the
Borrower, together with the advance made to it under the Intercompany
Loan on or prior to the Advance Date, to finance the purchase by the
Borrower of the Securitisation Residuals.
"ADVANCE DATE" means the date hereof or such later date as agreed by
the Lender.
"AGREEMENT" means this Residuals Loan Facility Agreement, including all
schedules and annexures hereto, which expression shall include the same
as varied, supplemented, re-stated, extended or replaced, in each case
in writing, from time to time.
"AVAILABLE CASH" means, for each Principal Repayment Date, an amount
equal to the aggregate of:-
(a) the Permitted Percentage (at the relevant time) of
Securitisation Residual Receipts received or recovered during
the related Collection Period; and
(b) 100 per cent of all Securitisation Residual Proceeds received
or recovered during the related Collection Period.
"BORROWER PROCEEDS ACCOUNT" means the account in the name of the
Borrower with the Account Bank number ▇▇▇▇▇▇▇▇ assigned to the Lender
pursuant to the Borrower Proceeds Account Assignment.
"BORROWER PROCEEDS ACCOUNT ASSIGNMENT" means the assignment of the
Borrower Proceeds Account in favour of the Lender dated on or about the
date hereof in form and substance satisfactory to the Lender.
"BUSINESS DAY" means a day (other than a Saturday or Sunday) on which
banks are generally open for business in London and New York.
"COLLATERAL PERCENTAGE" means, on any day by reference to which the
same falls to be calculated, Outstanding Advances expressed as a
percentage of Residuals Market Value plus Eligible Collateral Value,
calculated and agreed in accordance with Clause 16.
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"COLLECTION PERIOD" means the calendar month immediately prior to the
calendar month in which the relevant Interest Payment Date or Principal
Repayment Date falls.
"CONSOLIDATED INDEBTEDNESS" means for any period, the aggregate
Indebtedness of the relevant entity determined on a consolidated basis
in accordance with GAAP less any non-specific balance sheet reserves
maintained in accordance with GAAP.
"CONSOLIDATED TANGIBLE NET WORTH" means all amounts included as capital
on the relevant entity's consolidated balance sheet determined in
accordance with GAAP less amounts owing to affiliates and less any
intangible assets including, without limitation, goodwill and deferred
tax assets.
"DEFERRED INTEREST PERIOD" means each period which would, but for the
deferral of the first Interest Payment Date, have been an Interest
Period prior to the First Interest Payment Date.
"DETERMINATION DATE" means the last day of each Collection Period.
"DISPOSAL" means in the case of the Securitisation Residuals financed
hereunder the sale or other disposition thereof, by the Borrower or the
Lender as assignee.
"ELIGIBLE COLLATERAL" means any form of collateral which is mutually
acceptable to both the Lender and the Borrower charged (by way of first
fixed charge) or otherwise pledged so as to give the Lender a first
priority, perfected security interest pursuant to security documents in
form and substance satisfactory to the Lender;
"ELIGIBLE COLLATERAL VALUE" means the market value of the Eligible
Collateral determined at the sole discretion of the Lender, acting in
good faith which in the absence of manifest error shall be conclusive.
"ENFORCEMENT" means any enforcement by the Lender of any of its
Security under the Security Documents irrespective of whether, at that
time, an Acceleration shall have occurred;
"EVENT OF DEFAULT" means any one of the conditions or circumstances
referred to in clause 14.
"FACILITY" means the facility granted to the Borrower by the Lender
under this Agreement.
"FACILITY OFFICE" means the office of the Lender through which it makes
the Advance to the Borrower.
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"FINAL MATURITY DATE" means the day falling on the third anniversary
from the date hereof unless that day is not a Business Day in which
case the Final Maturity Date shall be the immediately preceding day
which is a Business Day.
"GAAP" means accounting principles generally accepted and adopted in
the United States of America as at the relevant date and applied on a
consistent basis.
"GUARANTEE" means the guarantee to be given by the Guarantor on or
about the date hereof in form and substance satisfactory to the Lender
guaranteeing, inter alia, the obligations of the Borrower under this
Agreement.
"HOLDING COMPANY" of a company or corporation means any company or
corporation of which the first-mentioned company or corporation is a
subsidiary, and references to a company or corporation shall be deemed
to include a company or corporation which is not formed and registered
under the Companies ▇▇▇ ▇▇▇▇.
"INDEBTEDNESS" means any obligation (whether incurred as principal or
surety) for the payment or repayment of money in respect of:
(a) monies borrowed and debit balances at banks;
(b) any loan note, bond, note, loan stock, commercial paper,
debenture or other security;
(c) any acceptance or letters of credit;
(d) the deferred purchase price of property or services, except
accounts payable and accrued expenses arising in the ordinary
course of business;
(e) any receivable sold or discounted (otherwise than on a
non-recourse basis);
(f) the capital value of any lease (whether in respect of land,
machinery, equipment or otherwise) entered into primarily as a
method of raising finance or financing the acquisition of the
asset leased;
(g) any currency or interest swap, cap, collar, floor or corridor
transaction, any repurchase or reverse repurchase transaction,
any foreign exchange, spot or forward transaction, any stock
lending transaction, any financial option, or any combination
of any of the foregoing; or
(h) without double counting, any guarantee, indemnity or
contingent liability in respect of any borrowings of any
person of a type referred to in (a) to (g) above but only to
the extent the borrowings thereby guaranteed or indemnified
against are outstanding.
"INITIAL COLLATERAL DEFICIENCY PERIOD" means the period commencing on
the date hereof and continuing until the Collateral Percentage is 60
per cent or less for three
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successive Principal Repayment Dates unless on the date hereof the
Collateral Percentage is 60 per cent or less in which case there shall
be no Initial Collateral Deficiency Period.
"INTEREST CALCULATION AMOUNT" means in respect of each Deferred
Interest Period falling within (or part within) the period from the
date hereof to the First Interest Payment Date (as defined in the
definition of "Interest Payment Date"), the amount of interest which
would, but for the extended First Interest Period, have been payable on
each Principal Repayment Date falling within (and on the final day of)
such period, calculated on the basis that:-
(1) all interest on each such Principal Repayment Date is paid on
its due date;
(2) LIBOR is re-set on each Principal Repayment Date; and
(3) interest is calculated on the actual reducing principal
balance of the Advance.
"INTEREST PAYMENT DATE" means in the case of the First Interest Payment
Date the earlier of the Principal Repayment Date immediately following
the date on which the Borrower receives a direction from the Inland
Revenue pursuant to the United States/United Kingdom double taxation
treaty to pay interest under this Agreement free of UK withholding tax
or the Principal Repayment Date immediately following notice by the
Lender to the Borrower that interest payments are to be paid subject to
UK withholding tax (such date, the "FIRST INTEREST PAYMENT DATE"), and
in the case of each subsequent interest payment date, each Principal
Repayment Date.
"Interest Period" means each of the following periods:
(a) the period commencing on (and including) the day the Advance
is made and ending on (but excluding) the next following
Interest Payment Date; and
(b) thereafter, each period commencing on (and including) an
Interest Payment Date and ending on (but excluding) the next
following Interest Payment Date,
provided that any Interest Period which would otherwise overrun the
Final Maturity Date shall end upon of the Final Maturity Date.
"ISSUERS" means each of City Mortgage Receivables 1 Plc (Company No.
3126751), City Mortgage Receivables 2 Plc (Company No. 3245450), City
Mortgage Receivables 3 Plc (Company No. 3245445), City Mortgage
Receivables 4 Plc (Company No. 3246090), City Mortgage Receivables 5
Plc (Company No. 3304205) and City Mortgage Receivables 6 Plc (Company
No. 3328209).
"LIBOR" in respect of a particular period and in relation to the
Advance or other amount in respect of which an interest rate is to be
determined pursuant to this Agreement, means the percentage interest
rate per annum for the time being offered
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in the London Interbank Market to prime banks for sterling deposits for
the relevant period at or about 11.00 a.m. (London time) on the first
day of such period as published on the relevant page of The Bloomberg
(Bloomberg L.P.) under the heading "Money Market - Money Market Rates"
save that LIBOR for the First Interest Period shall be one month LIBOR.
"MARGIN" means 2.5 per cent per annum.
"NOVATION AGREEMENTS" means the six novation agreements to be entered
into on or about the date hereof each in form and substance
satisfactory to the Lender relating to, inter alia, Securitisation
Residuals in respect of Securitisations and the Novation agreement to
be entered into on or about the date hereof in form and substance
satisfactory to the Lender relating to, inter alia, certain bank
accounts.
"OUTSTANDING ADVANCE" means, on any day by reference to which the same
falls to be determined, the aggregate amount of the Advance outstanding
under the Facility.
"PERMITTED PERCENTAGE" means:
(i) during the Initial Collateral Deficiency Period:
(a) 75 per cent. for so long as the Collateral Percentage
does not exceed 65 per cent; or
(b) 94 per cent. for so long as the Collateral Percentage
exceeds 65 per cent; or
(ii) during the Subsequent Collateral Deficiency Period:
(a) 50 per cent. for so long as the Collateral Percentage
does not exceed 65 per cent; or
(b) 94 per cent. for so long as the Collateral Percentage
exceeds 65 per cent.
"POTENTIAL EVENT OF DEFAULT" means any event which with the giving of
notice or the passing of time or both or the occurrence of any other
event will become an Event of Default.
"PRINCIPAL REPAYMENT AMOUNT" for any Principal Repayment Date means an
amount equal to Available Cash (calculated for the relevant Principal
Repayment Date) less the aggregate of:-
(a) interest due hereunder on the relevant Principal Repayment
Date; and
(b) all reasonable fees, expenses and other amounts due to the
Lender under any Transaction Document on such Principal
Repayment Date.
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"PRINCIPAL REPAYMENT DATE" means, the 25th day of May 1998, unless that
day is not a Business Day in which case the first Principal Repayment
Date shall be the immediately preceding day which is a Business Day and
thereafter the 25th day of each month unless that day is not a Business
Day is which case the Principal Repayment Date
shall be the immediately preceding day which is a Business Day.
"PURCHASE PRICE" means such part of the purchase price payable under
the Sale Agreement as is attributed to the Securitisation Residuals.
"PURCHASE PRICE BALANCE" means the amount by which the Purchase Price
exceeds the Advance.
"RESIDUALS ASSIGNMENT" means the assignment agreement to be entered
into on or about the date hereof in form and substance satisfactory to
the Lender by the Borrower assigning in favour of the Lender the Assets
(as therein defined).
"RESIDUALS MARKET VALUE" means the market value of the Securitisation
Residuals financed under the Facility determined at the sole discretion
of the Lender, acting in good faith which in the absence of manifest
error shall be conclusive.
"SECURED LIABILITIES" means all liabilities and obligations of whatever
nature of the Borrower, the Guarantor or any other person secured under
any Security Document.
"SECURITISATION DOCUMENTATION" means all documentation executed in
connection with each Securitisation as the same shall have been novated
and amended pursuant to, inter alia, the Novation Agreements.
"SECURITISATION RESIDUALS" has the meaning attributed to it in the
Residuals Assignment.
"SECURITISATION RESIDUALS PROCEEDS" means, in respect of Securitisation
Residuals financed hereunder, the aggregate amount of:-
(a) all cash consideration received by or on behalf of the
Borrower or the Lender as assignee upon or as a result of the
Disposal of some or all of such Securitisation Residuals; and
(b) any non-refundable deposit or other advance payment paid to or
for the account of the Borrower or the Lender as assignee by
any person acquiring or proposing to acquire all or any of
such Securitisation Residuals under a contract or offer to
purchase or otherwise acquire the same which has been
withdrawn, terminated, cancelled or has lapsed,
irrespective of whether the same shall be payable upon or at any time
after the relevant Disposal.
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"SECURITISATION RESIDUALS RECEIPTS" means all amounts received or
recovered by or on behalf of the Borrower or the Lender as assignee in
respect of their respective rights, title and interest in and to any
Securitisation Residual, whether received or recovered under or in
accordance with the Securitisation Documentation or otherwise but
excluding all Securitisation Residuals Proceeds.
"SECURITISATIONS" means each of the six securitisations of Mortgage
Loans originated by CMC and certain of its subsidiaries, effected
through sales of the Mortgage Loans to the Issuers on 21 March, 1996,
18 October, 1996, 31 October, 1996, 31 January, 1997 and 30 April,
1997.
"SECURITY" includes any mortgage, sub mortgage, fixed or floating
charge, sub charge, encumbrance, lien, pledge, hypothecation, absolute
assignment, assignment by way of security, or title retention
arrangement, and any agreement or arrangement having substantially the
same economic or financial effect as any of the foregoing (including
any "hold back" or "flawed asset" arrangement).
"SECURITY DOCUMENTS" means the Residuals Assignment, (and each further
security document executed pursuant thereto), the Borrower Proceeds
Account Assignment and any other security document executed pursuant to
this Agreement.
"SERVICE DOCUMENT" means a writ, summons, order judgment or other
process issued in connection with any Proceedings;
"SUBSEQUENT COLLATERAL DEFICIENCY PERIOD" means the period commencing
on the day immediately following the last day of the Initial Collateral
Deficiency Period and continuing until the Final Maturity Date or, if
earlier the repayment in full of the Advance.
"SUBSIDIARY" of a person means (i) any corporation or other entity of
which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly
owned or controlled by such person, one or more of the other
subsidiaries of such person or any combination thereof or (ii) any
partnership in which such person is a general partner.
"TRANSACTION DOCUMENTS" means this Agreement, the Security Documents
and the Guarantee and each other document at any time entered into
between all or any of the Borrower, the Guarantor, the Lender and any
third party pursuant to or in connection with any document which is a
Transaction Document.
the "LENDER" shall be construed so as to include its and any subsequent
successors and assigns in accordance with their respective interests.
8
a "MONTH" is a reference to a period starting on one day in a calendar
month and ending on the numerically corresponding day in the next
following calendar month; PROVIDED that, where any such period would
otherwise end on a day which is not a Business Day, it shall end on the
following succeeding Business Day, unless that day falls in the
calendar month next following that in which it would otherwise have
ended, in which case it shall end on the immediately preceding Business
Day; and provided further that, if there is no numerically
corresponding day in the next following calendar month, that period
shall end on the last Business Day in that next following calendar
month (and references to "MONTHS" shall be construed accordingly).
a "PERSON" shall be construed as a reference to any person, firm,
company, corporation, government, state or agency of a state or any
association or partnership (whether or not having separate legal
personality) of two or more of the foregoing.
"REPAY" (or any derivative form thereof) shall, subject to any contrary
indication, be construed to include "PREPAY" (or, as the case may be,
the corresponding derivative form thereof).
"TAX" shall be construed so as to include any present or future tax,
levy, impost, duty or other charge of a similar nature (including any
penalty or interest payable in connection with any failure to pay or
any delay in paying any of the same).
"VAT" shall be construed as a reference to value added tax including
any similar tax which may be imposed in place thereof from time to
time.
the "WINDING-UP", "DISSOLUTION" or "ADMINISTRATION" of a company or
corporation shall be construed so as to include any equivalent or
analogous proceedings under the law of the jurisdiction in which such
company or corporation is incorporated or any jurisdiction in which
such company or corporation carries on business including the seeking
of liquidation, winding-up, reorganisation, dissolution,
administration, arrangement, adjustment, protection or relief of
debtors.
1.2 INTERPRETATION
For the purposes of this Agreement except as otherwise expressly
provided or unless the context otherwise requires:-
(1) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally
accepted accounting principles;
(2) references herein to "clauses", "sub-clauses", "paragraphs",
and other subdivisions without reference to a document are to
designated clauses, sub-clauses paragraphs and other
subdivisions of this Agreement;
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(3) reference to a sub-clause without further reference to a
clause is a reference to such sub-clause as contained in the
same clause in which the reference appears, and this rule
shall also apply to paragraphs and other subdivisions;
(4) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Agreement as a whole and not to
any particular provision;
(5) headings to clauses and Schedules are for convenience only and
do not affect the interpretation of this Agreement;
(1)
(6) references to a "company" shall be construed so as to include
any company, corporation or other body corporate, wherever and
however incorporated or established;
(7) references to times of the day are to London time;
(8) references to any agreement (including without limitation to
each Transaction Document), shall be construed as a reference
to such agreement as the same may be, or may from time to time
have been, amended, modified, supplemented, novated or
restated in accordance with the terms of the Transaction
Documents;
(1) "(POUND STERLING)", "POUNDS" and "STERLING" denote the lawful
currency of the United Kingdom and "$" and "DOLLAR" denote the
lawful currency of the United States of America;
(10) any reference in this Agreement to a statute shall be
construed as a reference to such statute as the same may have
been, or may from time to time be, amended, modified or
re-enacted;
(11) any reference to Security shall include not only interests
which constitute Security as a matter of English law but also
(and separately) those which constitute Security as a matter
of U.S. law.
2. THE FACILITY AND PURPOSEFACILITY AND PURPOSE
2.1 The Lender hereby grants to the Borrower a credit facility comprising
the Advance on and subject to the terms of this Agreement.
2.2 The Advance will be used by the Borrower for the sole purpose of
purchasing the Securitisation Residuals (as novated and amended
pursuant to the Novation Agreements) from CMC and Mortgage Management
Limited on the terms of the Sale Agreement.
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2.3 The Lender shall not be obliged to concern itself with the application
of amounts borrowed by the Borrower under this Agreement and
application by the Borrower of funds so borrowed contrary to the
provisions of clause 2.2 shall not prejudice the Lender's rights
hereunder or under any other Transaction Document.
3. AVAILABILITY
3.1 The Facility will not become available to the Borrower and the Lender
shall be under no obligation to make the Advance hereunder until each
of the following conditions precedent shall have been fulfilled to the
satisfaction of the Lender:
(1) the Lender shall have received each of the following
documents, each in form and substance satisfactory to it:-
(1) a true and complete copy of the Certificate of
Formation of the Borrower, certified by the Secretary
of State of the State of Delaware, together with a
certified true and complete copy of the limited
liability company agreement of the Borrower certified
by the Secretary or Assistant Secretary of the
Borrower and a true and complete copy of the
Certificate of Limited Partnership of the Guarantor,
certified by the Secretary of Commonwealth of the
Commonwealth of Virginia, together with a certified
true and complete copy of the limited partnership
agreement of the Guarantor certified by the Secretary
or Assistant Secretary of the Guarantor;
(2) a certificate of the Secretary or an Assistant
Secretary of each of the Borrower and the Guarantor
certifying, among other things (a) the names and true
signatures of the officers of such person authorised
to sign the Transaction Documents to which it is a
party; (b) that the limited liability company
agreement or limited partnership agreement of such
person delivered to the Lender on the date of the
drawing of the Advance are true and complete, and
have not been amended, rescinded or otherwise
modified; (c) that the resolutions of the Board of
Directors (or equivalent governing body) of each of
such person attached thereto, which authorise, among
other things the execution and delivery of the
Transaction Documents, are true and complete, and
have not been amended, rescinded or otherwise
modified; (d) that the Sale Agreement and Novation
Agreements delivered to the Lender on the date of the
drawing of the Advance are true and complete copies
of such documents and contain all amendments or
modifications thereto as of such date; and (e) that
there have been no changes in the Certificate of
Formation or Certificate of Limited Partnership, as
the case may be, of such person since the date of the
most recent certification thereof by the Secretary of
State of Delaware or Secretary of Commonwealth of the
Commonwealth of Virginia, as the case may be.
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(3) originals (or, where the Lender is not party to the
relevant document, certified copies) of each of the
following documents, duly executed by each party
thereto other than the Lender:-
(1) the Guarantee;
(2) the Security Documents and all notices and
acknowledgements thereof to be given and
received thereunder and all consents to any
such security being granted;
(3) the Sale Agreement including all schedules
thereto and the disclosure letter relating
thereto;
(4) the Novation Agreements together with all
notices relating thereto;
(5) the Intercompany Loan.
(4) in respect of each of the Borrower and the Guarantor
a copy (certified by the secretary or a director or
equivalent officer of the relevant company to be
true, complete and up to date as at the date of
advance of the Advance) of all consents, approvals,
authorisations or orders of any court or governmental
agency or body required for the execution, delivery
and performance by it of, or compliance by it with,
the terms of any Transaction Document or the
consummation of the transactions contemplated
thereby;
(5) duly executed account mandates in relation to the
Borrower Proceeds Account, specifying the authorised
signatories for the Borrower and the Lender;
(6) UCC-1 Financing Statements executed by the Borrower
against the Securitisation Residuals with respect to
the jurisdictions requested by the Lender;
(2) all conditions precedent under each other Transaction Document
(other than any requirement that the Facility shall have
become available hereunder) shall have been fulfilled;
(3) the Lender shall have received legal opinions, each in form
and substance satisfactory to it, from each of the following:
(1) Edge and ▇▇▇▇▇▇▇;
(2) Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇ LLP;
(3) in house counsel to Ocwen Financial
Corporation
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(4) the articles of incorporation and By-Laws of the Borrower
shall be in form and substance satisfactory to the Lender.
(5) the representations and warranties made in Section 12 shall be
true and correct on and as of the Advance Date, immediately
preceding and after giving effect to such Advance and to the
application of the proceeds therefrom;
(6) the Lender shall be satisfied that the loan, in an amount at
least equal to the Purchase Price Balance, shall have been
made by the Guarantor to the Borrower under the Intercompany
Loan.
4. DRAWINGS
4.1 Subject to:-
(1) the conditions precedent in Clause 3 having been fulfilled to
the satisfaction of the Lender or waived by the Lender; and
(2) no Event of Default or Potential Event of Default having
occurred and subsisting unremedied (to the satisfaction of the
Lender) and unwaived,
in each case by no later than 12, noon London time on the Advance Date
the Lender will make the Advance to the Borrower on the Advance Date.
4.2 Subject to the foregoing provisions of this Clause 4 the Lender shall,
not later than 2 pm London time on the date on which the Advance is to
be made (or such later time as maybe agreed between the Borrower and
the Lender), make the Advance requested, the Advance to be credited to
an account specified by the Borrower.
4.3 If the Borrower fails for any reason whatsoever (other than as a
consequence of a breach of the Lender's obligations) to draw down the
Advance on the Advance Date (whether such failure be the result of the
occurrence of an Event of Default or otherwise), the Borrower will pay
to the Lender on demand such amount as the Lender certifies to be
necessary to compensate for all losses excluding loss of Margin
incurred or to be incurred on account of deposits acquired or arranged
in order to fund the Advance. Any such certificate by the Lender shall
be prima facie evidence of such losses.
5. INTEREST ON ADVANCESON ADVANCES
5.1 The Borrower will pay interest on the Advance on each Interest Payment
Date in respect of each Interest Period referable thereto at the rate
per annum equal to the aggregate of (i) the Margin and (ii) LIBOR for
the relevant Interest Period.
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5.2 On the First Interest Payment Date, the Borrower shall pay an
additional amount of interest at the rate equal to LIBOR on the
Interest Calculation Amount for each Deferred Interest Period falling
prior to the First Interest Payment Date such interest to accrue from
and including the first day of each respective Deferred Interest Period
to but not including the last day of such Deferred Interest Period.
5.3 The Lender will, as soon as practicable after commencement of each
Interest Period advise the Borrower of LIBOR for that Interest Period.
Any certificate of the Lender as to the rate and amount of interest
determined by it under this Agreement in respect of any Interest Period
shall, save for manifest error, be conclusive and binding on the
Borrower and the Guarantor.
5.4 Interest at the rate determined as aforesaid shall be calculated on
each Advance and each part thereof on the basis of actual days elapsed
and a 365 day year, shall accrue from day to day from and including the
first day of each Interest Period to but excluding the date of
repayment of the Advance.
5.5 If LIBOR cannot be determined for any reason the rate of interest
applicable to the Advance shall be the sum of the Margin and the rate,
expressed as a percentage rate per annum, which is the actual cost to
the Lender of funding the Advance from whatever sources it may select
during such Interest Period (as applicable) and, if the Lender so
requires, within five days of such notification the Lender and the
Borrower shall enter into negotiations with a view to agreeing a
substitute basis for determining the rates of interest which may be
applicable to the Advance in the future.
5.6 If the Borrower is required to repay principal on the Advance on any
day other than an Interest Payment Date or Principal Repayment Date,
the Borrower shall be obliged to pay such amount together with interest
accrued thereon to the date of such repayment.
6. REPAYMENT AND APPLICATION OF RECEIPTSAND APPLICATION OF RECEIPTS
6.1 The Borrower shall repay the amount of the Outstanding Advance in full
(together with all other amounts then due hereunder) on the Final
Maturity Date.
6.2 The Borrower shall, on each Principal Repayment Date repay the
Principal Repayment Amount for such Principal Repayment Date.
6.3 Securitisation Residuals Receipts and Securitisation Residuals Proceeds
received by any party hereto other than the Lender shall be paid by
such party, forthwith upon receipt of the same, to the Borrower
Proceeds Account and shall be held by the relevant party on trust for
the Lender pending payment of the same into the Borrower Proceeds
Account.
6.4 On each Principal Repayment Date the Permitted Percentage of all
Securitisation Residual Receipts and 100 per cent of all Securitisation
Residuals Proceeds shall be
14
applied in or towards satisfaction of the obligations of the Borrower
hereunder in the following order of priority:
(1) first, in or towards payment of all interest falling due to
the Lender hereunder on the relevant Interest Payment Date
together with any overdue interest accrued thereon up to and
including the relevant distribution date;
(2) second, in or towards payment of the Principal Repayment
Amount due on such Principal Repayment Date;
(3) third, in or towards payment of all reasonable fees and
expenses or other amounts due and owing to the Lender under
all Transaction Documents (other than amounts referred to in
(a) or (b)); and
(4) prior to an Event of Default which is continuing, the balance,
if any, to be released to the Borrower,
(1)
provided that at all times following the earlier of an Acceleration or
an Enforcement the whole of the provisions of this clause 6 shall cease
to apply and all amounts received or recovered in respect of the assets
subject to the Security Documents may be applied by the Lender in or
towards satisfaction of the Secured Liabilities in such order as the
Lender in its absolute discretion shall determine.
6.5 If:-
(a) (i) on the third consecutive Principal Repayment Date on
which the applicable Permitted Percentage is 94 per
cent; and
(ii) on each of such three (3) consecutive Principal
Repayment Dates the Collateral Percentage (calculated
on the basis of Outstanding Advances as reduced by
the Principal Repayment Amount repaid on such date)
exceeds 65 per cent,
OR
(b) on any Principal Repayment Date the provisions of clauses
6.5(a)(i) and (ii) or this clause 6.5(b) have been applicable
to any of the six immediately preceding Principal Repayment
Dates and on such Principal Repayment Date the Collateral
Percentage, after application of the provisions of clause 6.4,
exceeds 65 per cent,
then the Borrower shall, at its option, on such Principal Repayment
Date either:
(A) prepay an amount equal to the Additional Principal
Repayment Amount; or
15
(B) provide additional Eligible Collateral of a value as
would result in a Collateral Percentage (calculated
on the basis of Outstanding Advances as reduced by
the Principal Repayment Amount repaid on the relevant
Principal Repayment Date) of 65 per cent,
6.6 Following application of funds under and in accordance with clause 6.4,
and provided that no Event of Default has occurred and is continuing if
the aggregate of:-
(a) Securitisation Residual Receipts received or recovered during
the related Collection Period; plus
(b) Securitisation Residual Proceeds received or recovered during
the related Collection Period,
exceeds Available Cash, then such excess shall be released to the
Borrower, to such account as the Borrower shall from time to time
direct.
6.7 Without prejudice to the Security Documents, the Lender shall consent
to the Disposal of some or all of the Securitisation Residuals financed
hereunder provided that the Collateral Percentage calculated
immediately following such Disposal is no greater than the Collateral
Percentage calculated on the Principal Repayment Date immediately prior
to such Disposal.
6.8 If all or any part of the Advance is repaid under this clause other
than on an Principal Repayment Date, the Borrower will pay to the
Lender on demand such amount as the Lender certifies to be necessary to
compensate it for all losses excluding loss of Margin incurred or to be
incurred by it on account of deposits acquired or arranged in order to
fund the Advance. Any such certificate by the Lender shall, in the
absence of manifest error, be prima facie evidence of such losses.
6.9 Subject to Clause 6.8, the Borrower may on any Business Day, upon five
Business Days prior written notice to the Lender, prepay in whole or in
part the Outstanding Advance hereunder together with all accrued
interest thereon.
7. EVIDENCE OF DEBTOF DEBT
The Lender shall maintain in accordance with its usual practice,
accounts evidencing the amounts from time to time lent by and owing to
it hereunder, and in any legal action or proceeding arising out of or
in connection with this Agreement, the entries made in such accounts
shall in the absence of manifest error be prima facie evidence of the
existence and amounts of the specified obligations of the Borrower.
8. TAXES
8.1 If the Borrower:-
16
(1) whether before or after receipt by the Borrower of a direction
from the Inland Revenue pursuant to the United States/United
Kingdom double taxation treaty to pay interest under this
Agreement free of UK withholding tax is required as a result
of any change in law or in its interpretation or
administration to make any payment to the Lender hereunder
subject to any deduction or withholding on account of tax; or
(2) is unable to obtain a direction from the Inland Revenue
pursuant to the United States/United Kingdom double taxation
treaty to pay interest under this Agreement free of UK
withholding tax (other than as a result of an act or omission
of the Lender);
it shall notify the Lender of such event and, provided that as a result
of (a) or (b) above payments hereunder are required to be made subject
to a deduction or withholding on account of tax, the sum payable by the
Borrower in respect of which such deduction or withholding is required
to be made shall, subject to clause 8.2, be increased (the amount of
such increase being referred to hereafter as the "GROSS-UP AMOUNT") to
the extent necessary to ensure that, after the making of the required
deduction or withholding, the Lender receives and retains (free from
any liability in respect of such deduction or withholding) a net sum
equal to the sum which it would have received and so retained had no
such deduction or withholding been made or required to be made.
8.2 If, at any time, the circumstances in clause 8.1 apply, the Borrower
shall be entitled to prepay the whole (but not part) of the Outstanding
Advance within 60 days of the change in law or unavailability of a
direction pursuant to the treaty, as the case may be, in accordance
with Clause 6.9 and in such circumstances the Lender agrees that the
provisions of Clause 6.8 hereof shall not apply and, if during such 60
day period any Gross-up Amount would otherwise fall due for payment
hereunder, the Borrower shall be entitled to defer the obligation to
pay the same until the last day of the 60 day period, on which day it
shall fall due.
8.3 If the Borrower makes any payment hereunder in respect of which it is
required by law to make any deduction or withholding on account of tax,
it shall pay the full amount required to be deducted or withheld to the
relevant taxation or other authority within the time allowed for such
payment under applicable law and shall deliver to the Lender, within
thirty days after it has made such payment to the applicable authority,
an original receipt (or a certified copy thereof) issued by such
authority evidencing the payment to such authority of all amounts so
required to be deducted or withheld in respect of such payment or any
other written evidence acceptable to the Lender.
8.4 If the Borrower pays any increased amount under clause 8.1 ( a "TAX
PAYMENT") and the Lender, acting reasonably, determines that it has
received and retained a refund of, or a credit against, the tax paid or
payable by it and that the refund or credit is in respect of, or
calculated with reference to, the deduction or withholding giving rise
to
17
the Tax Payment (such refund or credit being referred to hereafter as a
"TAX CREDIT"), then the Lender shall, to the extent that it can do so
without prejudice to the retention of the Tax Credit, reimburse to the
Borrower in the manner described in the following sentence such amount
as the Lender shall reasonably determine to be the proportion of the
Tax Credit as will leave the Lender after reimbursement in no better or
worse position than it would have been in if the Tax Payment had not
been required. The manner in which such reimbursement is to be made
shall first be by way of set off against such of the amount(s) which
the Borrower is then liable to pay to the Lender (for whatever reason
and regardless of whether the payment of such amount(s) has fallen due)
as the Lender shall, in its sole opinion, specify and notify to the
Borrower.
8.5 Nothing in this clause 8 shall interfere with the Lender's right to
arrange its tax affairs in whatever manner it thinks fit and, without
limiting the foregoing, the Lender shall not be under any obligation to
claim any Tax Credit in priority to any other claims, reliefs, credits
or deductions available to it. The Lender shall not in any event be
obliged to disclose any information relating to its tax affairs or any
computations in respect thereof to the Borrower or any other person.
8.6 All amounts payable under this Agreement are expressed to be exclusive
of any VAT chargeable in respect thereof. If any VAT is chargeable in
respect of such amounts, the Borrower shall, in addition, pay to the
Lender an amount equal to such VAT, and the Lender shall provide the
Borrower with a proper VAT invoice in respect thereof.
9. INCREASED COSTSCOSTS
9.1 If, by reason of:-
(1) the introduction of, or any change in any applicable law,
regulation or regulatory requirement or any change in the
interpretation or application of any thereof in each case
after the date hereof and/or
(2) compliance by the Lender or any holding company of the Lender
with any applicable directive, request or requirement whether
or not having the force of law but, if not having the force of
law being of general application and of a type with which the
Lender or a holding company of the Lender is accustomed to
comply of any central bank or any self regulating organisation
or any governmental, fiscal, monetary or other authority
(including, but not limited to, a directive, request or
requirement which affects the manner in which any bank
allocates capital in support of its assets or liabilities or
contingent liabilities or deposits with it or for its account
or advances or commitments made by it) which is brought into
effect after the date hereof,
and if, to the extent of compliance with either or both of paragraphs
(a) and (b):-
(1) the Lender or any holding company of the Lender is
unable to obtain the rate of return on its capital
which it would have been able to obtain
18
but for the Lender's entering into or assuming or
maintaining a commitment or performing its
obligations (including its obligation to make
Advances) under this Agreement;
(2) the Lender or any holding company of the Lender
incurs a cost as a result of the Lender's entering
into or assuming or maintaining a commitment or
performing its obligations (including its obligation
to make Advances) under this Agreement;
(3) there is any increase in the cost to the Lender or
any holding company of the Lender of funding or
maintaining all or any of the Advances;
(4) the Lender or any holding company of the Lender
becomes liable to make any payment on account of tax
or otherwise (except on account of any tax imposed on
and calculated by reference to the net income of the
Facility Office by the jurisdiction in which the
Lender (or its holding company) is incorporated or in
which the Facility Office is located), or foregoes
any interest or other return, on or calculated by
reference to the amount of any Advance or the amount
of any sum received or receivable by it (or its
subsidiary) under this Agreement,
then the Borrower shall, from time to time on demand of the Lender,
promptly pay to the Lender amounts sufficient to indemnify the Lender
or its holding company as appropriate against, as the case may be, (1)
such reduction in the rate of return of capital, (2) such cost, (3)
such increased cost (or such proportion of such increased cost as is,
in the opinion of the Lender, attributable to its or its holding
company funding or maintaining the Advance), or (4) such liability.
9.2 If the Lender intends to make a claim pursuant to this clause 9 it
shall notify the Borrower of the event by reason of which it is
entitled to do so PROVIDED that nothing herein shall require the Lender
to disclose any confidential information relating to the organisation
of its affairs and shall consult with the Borrower as to possible steps
that could be taken to reduce any such increased costs provided that
the Lender shall be under no obligation to take any such steps
considered.
9.3 If notwithstanding the consultation referred to in Clause 9.2, the
provisions of Clause 9.1 would apply then the Borrower shall, at its
option, be entitled to prepay the whole (but not part) of the
Outstanding Advance in accordance with Clause 6.9 and in such
circumstances the Lender agrees that the provisions of Clause 6.8
hereof shall not apply.
10. ILLEGALITY
If, at any time, it is or becomes unlawful for the Lender to make, fund
or allow to remain outstanding all or part of the Advance, then the
Lender shall, promptly after becoming aware of the same, deliver to the
Borrower a notice to that effect, the
19
Lender shall not thereafter be obliged to make the Advance hereunder
and, if the Lender has made the Advance, the Borrower shall on the
earlier of:
(a) the date falling 90 days after the date of notification of the
illegality; and
(b) the Business Day immediately preceding the day on which it
will become unlawful for the Lender to do as aforesaid,
repay any Outstanding Advance together with accrued interest thereon
and all other amounts owing to the Lender hereunder.
11. PAYMENTS
Any payment to be paid by the Borrower to the Lender pursuant to this
Agreement shall be made in sterling, in immediately available, freely
transferrable and cleared funds for value same day, to such account of
the Lender as the Lender shall, from time to time, have specified in
writing for such purpose.
12. REPRESENTATIONS AND WARRANTIESAND WARRANTIES
12.1 The Borrower hereby represent, warrant, covenant and undertake to the
Lender that:-
(1) it is a limited liability company duly organised, validly
existing and in good standing under the laws of the state of
its organisation and is duly authorised and qualified to
transact any and all business contemplated by this Agreement
and the other Transaction Documents to be conducted by it.
(2) it has the full limited liability company power and authority
to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Agreement and
the other Transaction Documents to which it is a party and has
been duly authorised by all necessary limited liability
company action on its part the execution, delivery and
performance of this Agreement and the other Transaction
Documents to which it is a party; and this Agreement and each
Transaction Document to which it is a party, assuming the due
authorisation, execution and delivery thereof by the Lender,
constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its respective
terms, except to the extent that (a) the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance
and injunctive and other forms of equitable relief may be
subject to the equitable defences and to the discretion of the
court before which any proceeding therefor may be brought;
(3) its execution and delivery of this Agreement and each
Transaction Document to which it is a party, the consummation
of any other of the transactions herein or therein
contemplated on its part and the fulfilment of or compliance
with
20
the terms hereof or thereof will not (i) result in a material
breach of any term or provision of its Certificate of
Formation, limited liability company agreement and/or other
constituent documents or (ii) materially conflict with, result
in a material breach, violation or acceleration of, or result
in a material default under, the terms of any other material
agreement or instrument to which it is a party or by which it
may be bound, or any statute, order or regulation applicable
to it of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it;
(4) it is not party to, bound by, or in breach or violation of any
material indenture or other material agreement or instrument,
or subject to or in violation of any statute, order or
regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it, which
materially and adversely affects or, to its knowledge, would
in the future materially and adversely affect, (i) its ability
to perform its obligations under this Agreement or the
Transaction Documents to which it is a party or (ii) its
business, operations, financial condition, properties or
assets taken as a whole;
(1)
(5) no litigation is pending or, to the best of its knowledge,
threatened against it that would materially and adversely
affect the execution, delivery or enforceability of this
Agreement or the Transaction Documents to which it is a party
or its ability to perform any of its obligations hereunder or
thereunder in accordance with the terms hereof or thereof;
(6) no consent, approval, authorisation or order of any court or
governmental agency or body is required for the execution,
delivery and performance by it of, or compliance by it with,
this Agreement or any Transaction Document to which it is a
party or the consummation of the transactions contemplated
hereby or thereby, or if any such consent, approval,
authorisation or order is required, it has obtained or it is
in the process of obtaining the same;
(7) it has not, at any time since its formation, had any employee,
entered into any contracts, carried on any business or
incurred any liabilities;
(8) it has filed or caused to be filed, all tax returns (federal,
state and local) (or requests for extension which are
routinely granted) which are required to be filed and has paid
all taxes including those which have become due pursuant to
such returns or pursuant to any assessments made against it or
any of its properties, as the case may be, and all other
material taxes or other charges imposed on it or any of its
properties by any Governmental Authority; and no tax liens
have been filed;
(9) no proceeds of the Advance will be used, directly or
indirectly, by it for the purpose of "purchasing" or
"carrying" any "margin stock" or for the purpose of reducing
or retiring any Indebtedness which was originally incurred to
21
purchase or carry margin stock or for any other purpose which
might cause the Advance to be a "purpose credit" within the
meaning of Regulation U of the Board of Governors of the
Federal Reserve System;
(10) all financial statements of the Borrower delivered to the
Lender fully and accurately present the financial position of
the Borrower as of the respective dates thereof in accordance
with GAAP. Since 31 December, 1997, there has been no material
adverse change in the business, operations, properties,
condition (financial or otherwise) or prospects of the
Borrower;
(11) it is, not directly or indirectly, controlled by any Person
which is, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended; the Borrower and
Guarantor are not subject to any regulation under any federal
or state statute or regulation which limits its ability to
incur Indebtedness.
The representations and warranties under clause 14.1(a)-(k) inclusive
shall be given on the date of this Agreement and shall be repeated on
each date on which the Advance is outstanding hereunder by reference to
the facts and circumstances existing at the relevant time.
12.2 The Lender represents and warrants to the Borrower in terms of clauses
12.1(a) to (f) (inclusive), mutatis mutandis, save that the reference
in Clause 12.1 (a) to a limited liability company shall be construed as
a reference to a corporation.
12.3 lt is understood and agreed that the representations and warranties set
forth in clause 12.1 shall survive the pledging and charging of the
Securitisation Residuals to the Lender and shall enure to the benefit
of the Lender.
12.4 With respect to the representations and warranties contained in clause
12.1 which are made to the best of the Borrower's knowledge, after
reasonable inquiry and investigation, if it is discovered by either the
Borrower, or the Lender that the substance of such representation and
warranty is inaccurate then, notwithstanding the Borrower's lack of
knowledge with respect to the inaccuracy at the time the representation
or warranty was made, the Lender shall have the same rights in respect
of the breach thereof as it would have if the applicable representation
or warranty was breached.
12.5 Upon discovery by either the Borrower or the Lender of a breach of any
of the foregoing representations and warranties given under clause 12.1
the party discovering such breach shall give prompt written notice to
the other.
13. UNERTAKINGS AND COVENANTS
13.1 The Borrower hereby undertakes with the Lender that from and after the
date hereof and until all sums due and to become due hereunder have
been paid or repaid in full and the Facility shall no longer exist:
22
(1) it shall obtain, comply with the terms of and do all that is
necessary to maintain in full force and effect all
authorisations, approvals, licences and consents required in
or by the laws and regulations of all applicable jurisdictions
to enable it lawfully to enter into and perform its
obligations under this Agreement and each Transaction Document
and to ensure the legality, validity, enforceability or
admissibility in evidence in England of this Agreement and
each Transaction Document and shall ensure that none of the
foregoing are revoked or modified;
(2) it shall promptly inform the Lender of the occurrence of any
Event of Default or Potential Event of Default and, upon
receipt of a written request to that effect from the Lender,
confirm to the Lender that, save as previously notified to the
Lender or as notified in such confirmation, no such event has
occurred;
(3) it shall ensure that at all times the claims of the Lender
against it under this Agreement and the Transaction Documents
are secured as provided in the Security Documents and that the
security thereunder will be of the nature and will rank in the
priority it is expressed to have in the Security Documents;
(4) it shall not, without the prior written consent of the Lender,
create or permit to subsist any Security over all or any of
its present or future revenues or assets save for security
created (or permitted) under the Security Documents;
(5) it shall not, without the prior written consent of the Lender,
incur any Indebtedness (whether actual or contingent,
subordinated or otherwise whatsoever) make any loans, grant
any credit or give any guarantee or indemnity (except as
contemplated in the Transaction Documents) to or for the
benefit of any person or otherwise voluntarily assume any
liability, whether actual or contingent, in respect of any
obligation of any other person;
(6) it shall not, without the prior written consent of the Lender,
issue any further membership interests or alter any rights
attaching to its issued membership interests in existence at
the date hereof;
(7) it shall not, without the prior written consent of the Lender,
sell, lease, transfer or otherwise dispose of, by one or more
transactions or series of transactions (whether related or
not), the whole or any part of its revenues or its assets
except as permitted under the Transaction Documents;
(8) it shall ensure that the Residual Assignment remains at all
times its valid obligation and that the Security created
thereunder remains valid and perfected security.
(9) it shall apply all monies released to it pursuant to this
Agreement first in discharge of amounts due to the Guarantor
under the Intercompany Loan.
23
(10) it shall not, unless and until it has satisfied on such a date
any amounts which have fallen due to the Guarantor under the
Intercompany Loan make or declare any dividend or other
distribution;
(11) it shall not, without the prior written consent of the Lender,
open or permit to be opened any bank accounts in its name or
on its behalf other than the Borrower Proceeds Account;
(12) it shall not engage in any business other than that
contemplated in the Transaction Documents and shall not have
any employees;
(13) it shall not make or permit any amendments to be made to the
Certificate of Formation, limited liability company agreement
and/or its other constituent documents without prior written
consent of the Lender, such consent not to be unreasonably
withheld;
(14) it shall deliver to the Lender as soon as the same are
available, and in any event within one hundred and twenty
(120) days after the end of each of its financial years a copy
of its audited annual financial statements;
(15) it shall provide the Lender promptly upon request with any
information relating to it and/or its financial condition as
the Lender may from time to time reasonably require in
connection with this Agreement;
(16) it shall ensure that each set of audited annual financial
statements delivered pursuant to sub-clause (l) are prepared
in accordance with generally accepted accounting principles
and on the same basis every year and half year (save as may be
required from time to time as a result of changes in law or
regulation or generally accepted accounting principles);
(17) it shall, promptly upon receipt of the same, deliver to the
Lender a copy of any independent accountants' management
letters received by it relating to it or any member of its
group;
14. DEFAULT
14.1 In the event of:-
(1) any default by the Borrower in the payment of any amount due
for payment hereunder, including without limitation under
clause 6.2 (if applicable) or under any Transaction Document
within two Business Days after written notice from the Lender
demanding payment of the same has been received; or
(2) the Borrower failing to observe or perform any other
covenants, obligations or agreements of the Borrower under
this Agreement or any Transaction
24
Document which, if (in the good faith opinion of the Lender)
capable of remedy shall not have been remedied (to the
satisfaction of the Lender) within thirty Business Days of
written notice from the Lender requiring remedy of the same;
or
(3) any representation or warranty made or repeated by the
Borrower or the Guarantor under this Agreement or under any
other Transaction Document being or proving to be or have been
untrue or incorrect or misleading in any material respect as
at the date at which it was made or repeated, and in the case
of any such breach which is (in the good faith opinion of the
Lender) capable of remedy, the relevant breach not having been
remedied within thirty Business Days of the Lender requiring
the Borrower or, as the case may be, the Guarantor to do so;
or
(4) any default by the Guarantor in the payment of any amount due
for payment under the Guarantee or under any other Transaction
Document on the due date therefor; or
(5) the Guarantor failing to observe or perform any other
covenant, obligation or agreement contained in the Guarantee
or under any other Transaction Document which, if (in the good
faith opinion of the Lender) is capable of remedy has not been
remedied (to the satisfaction of the Lender) within thirty
Business Days of the Lender requiring the Guarantor to do so;
or
(6) the Residual Assignment ceasing to be a binding obligation
upon the Borrower Security thereunder; or
(7) the Borrower or the Guarantor shall: (i) become insolvent;
(ii) be dissolved; (iii) fail generally to pay its debts as
such debts become due; (iv) commence a voluntary case under
federal bankruptcy, insolvency or other similar law; (v)
consent to the appointment of or taking of possession by a
receiver, liquidator, assignee, trustee, custodian, or
sequestrator (or other similar official) of the Borrower or
the Guarantor or of any substantial part of its property; (vi)
make an assignment for the benefit of creditors; or (vii) take
any action intended or likely to result in any event described
in the foregoing clauses (i) through (vi); or
(8) there shall be filed or entered in respect of the Borrower or
the Guarantor a petition, decree or order for relief by a
court having jurisdiction in the premises in an involuntary
case under the federal bankruptcy laws, as now or hereafter
constituted, or any other applicable federal, state or foreign
bankruptcy, insolvency or other similar law, or appointing a
receiver, liquidator, assignee, custodian, trustee or
sequestrator (or other similar official) of the Borrower or
the Guarantor or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and any
such petition, decree or order shall continue undismissed,
unstayed and in effect for a period
25
of 60 days; or
(9) any material adverse change in the condition (financial,
business, prospects or otherwise) of any of the Borrower or
the Guarantor occurring, which, in the reasonable judgment of
the Lender is reasonably likely to prevent the Borrower or the
Guarantor, as the case may be, from performing its respective
material obligations under any Transaction Document or is
likely to adversely affect the value (to the Lender) of its
security whether by adversely affecting the value of such
security, the prospects of a sale thereof or otherwise; or
(10) the Borrower ceasing to be a wholly owned subsidiary of Ocwen
Asset Investment Corporation ("OAIC"); or
(11) OAIC ceasing to own a majority of the issued and outstanding
common shares of Ocwen General, Inc.
(12) the Borrower or the Guarantor shall default in respect of: (i)
any payment obligation under any loan from the Lender or any
subsidiary or affiliate of the Lender or any obligation to pay
for securities delivered to the Borrower or the Guarantor by
the Lender or a subsidiary; (ii) the Borrower or the Guarantor
shall fail to pay any money due under any other agreement,
note, indenture or instrument evidencing, securing,
guaranteeing or otherwise relating to Indebtedness of the
Borrower or the Guarantor for borrowed money in the aggregate
of $10,000,000, which failure to pay constitutes an event of
default under any such agreement or instrument or constitutes
a default and such default shall continue beyond any
applicable grace periods therein specified or the Borrower or
the Guarantor shall default in the observance or performance
of any other covenant or condition in any such agreement or
instrument, which default constitutes an event of default and
has not been waived by the creditor or other applicable party
thereunder, and such default shall continue beyond any
applicable grace periods therein specified; (iii) any other
event shall occur or condition shall exist if the effect of
such event or condition is to accelerate the maturity of such
Indebtedness; or (iv) any such Indebtedness shall be declared
due and payable prior to the stated maturity thereof; other
than, in the case of items (ii) thereof (iv), Indebtedness
with respect to which the failure to pay would not,
individually or in the aggregate, be expected to have a
material adverse effect on the financial condition,
operations, business or prospects of the Borrower or the
Guarantor,
(each of the foregoing an "EVENT OF DEFAULT"), the Lender may, (save
that in relation to clause 14.1 (g) and (h) upon the occurrence of
which the Outstanding Advance together with all interest accrued
thereon and all other sums then due and outstanding from the Borrower
hereunder shall automatically become immediately due and payable), for
so long as such event is continuing unwaived by the Lender do each or
any of the following:
26
(1) declare, by written notice to the Borrower, the
Outstanding Advance together with all interest
accrued thereon and all other sums then due and
outstanding hereunder from the Borrower to be
immediately due and payable, whereupon the same shall
become immediately due and payable; and/or
(2) enforce all or any of its security under the Security
Documents; and
(3) terminate this Agreement,.
whereupon the Lender shall cease to be obliged to make, if not already
made, the Advance hereunder.
14.2 If the Advance shall be declared immediately due and payable as
aforesaid, the Borrower shall pay to the Lender such amount as the
Lender certifies to be necessary to compensate it for any loss incurred
(excluding loss of Margin) or to be incurred on account of deposits
acquired or arranged in order to fund such Advance as a consequence of
such Event of Default.
14.3 The rights conferred on the Lender pursuant to this clause 14 shall be
in addition to whatever rights the Lender may have both at law and in
equity.
14.4 The Lender may waive any default by the Borrower in the performance of
its obligations hereunder and its consequences. Upon any such waiver of
a past default, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon
except to the extent expressly so waived.
14.5 The Borrower agrees to indemnify and keep indemnified the Lender from
and against any loss, cost (including any cost of enforcement),
liability (including any tax liability), claim or damage which the
Lender incurs or suffers as a consequence of the occurrence of any
Event of Default and the indemnity may, without limiting the Lender's
rights, be claimed as a debt or liquidated demand.
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15. DEFAULT INTERESTINTEREST
15.1 If any sum due and payable by the Borrower hereunder is not paid on the
due date therefor or if any sum due and payable by the Borrower under
any judgement or decree of any court in connection herewith is not paid
on the date of such judgement or decree, the period beginning on such
due date or, as the case may be, the date of such judgement or decree
and ending on the date upon which the obligation of the Borrower to pay
such sum (the balance thereof for the time being unpaid being herein
referred to as an "UNPAID SUM") is discharged shall be divided into
successive periods, each of which (other than the first) shall start on
the last day of the preceding such period and the duration of each of
which shall (except as otherwise provided in this clause 15) be
selected by the Lender.
15.2 During each such period relating thereto as is mentioned in clause 15.1
an unpaid sum shall bear interest at the rate per annum which is the
sum from time to time of two per cent and the Margin in respect thereof
at such time and LIBOR on the first day of the relevant period provided
that:
(1) if, for any such period, LIBOR cannot be determined, the rate
of interest applicable to such unpaid sum shall be the rate
per annum which is the sum of two per cent and the Margin in
respect thereof at such time and the rate per annum determined
by the Lender to be equal to the rate which express as a
percentage rate per annum equals the cost to it of funding
such unpaid sum for such period from whatever sources it may
select; and
(2) if such unpaid sum is all or part of the Advance which became
due and payable on a day other than an Interest Payment Date
therefor, the first such period applicable thereto shall be of
a duration equal to the unexpired portion of that Interest
Period and the rate of interest applicable thereto from time
to time during such period shall be that which exceeds by two
per cent the rate which would have been applicable to it had
it not so fallen due.
15.3 Any interest which shall have accrued under this clause 15 in respect
of an unpaid sum shall be due and payable and shall be paid by the
Borrower at the end of the period by reference to which it is
calculated or on such other dates as the Lender may specify by written
notice to the Borrower.
1.1
16. CALCULATIONS
16.1 The Borrower shall, for each Interest Payment Date, calculate the
Collateral Percentage for that date, such calculation to be done as
soon as possible after the applicable Determination Date and in any
event no later than the third Business Day prior to the Interest
Payment Date in question and shall notify the same to the Lender,
immediately upon calculation of the same.
16.2 The Lender shall, for the purposes of the calculation under clause 16.1
notify the Borrower of the fair market value of the Securitisation
Residuals financed under this
28
Agreement which have not, at the relevant time, been sold or otherwise
disposed of by the Borrower, as determined by the Lender, in good
faith.
16.3 The Lender's determination of the matters to be notified to the
Borrower under this clause shall, in the absence of manifest error or
bad faith, be final and binding on the parties hereto.
16.4 The Borrower's determination of the Collateral Percentage once agreed
by the Lender under clause 16.5 shall, in the absence of manifest error
or bad faith (on the part of either party), be final and binding on the
parties hereto.
16.5 The Lender shall use reasonable endeavours to agree the Borrower's
determinations of the Collateral Percentage within three Business Days
of notification of the same to the Lender.
17. CURRENCY OF ACCOUNTOF ACCOUNT
17.1 Sterling is the currency of account and payment for each and every sum
at any time due from the Borrower hereunder provided that each payment
in respect of costs and expenses shall be made in the currency in which
the same were incurred.
17.2 If any sum due from the Borrower under this Agreement or any order or
judgement given or made in relation hereto has to be converted from the
currency (the "FIRST CURRENCY") in which the same is payable hereunder
or under such order, decree or judgement into another currency (the
"SECOND CURRENCY") for the purpose of (a) making or filing a claim or
proof against the Borrower, (b) obtaining an order, decree or judgement
in any court or other tribunal or (c) enforcing any order, decree or
judgement given or made in relation hereto, the Borrower shall
indemnify and hold harmless each of the persons to whom such sum is due
from and against any loss suffered as a result of any discrepancy
between (i) the rate of exchange used for such purpose to convert the
sum in question from the first currency into the second currency and
(ii) the rate or rates of exchange at which such person may in the
ordinary course of business purchase the first currency with the second
currency upon receipt of a sum paid to it in satisfaction, in whole or
in part, of any such order, judgement, decree, claim or proof.
18. SET-OFF-OFF
18.1 The Borrower authorises the Lender to apply any credit balance to which
the Borrower is entitled on any account of the Borrower with the Lender
in satisfaction of any sum due and payable from the Borrower to the
Lender hereunder but unpaid.
18.2 All payments required to be made by the Borrower hereunder shall be
calculated without reference to any set-off, deduction or counterclaim
and shall be made free and clear of and without any deduction for or on
account of any set-off, deduction or counterclaim.
29
19. CALCULATION OF INTERESTOF INTEREST
Interest shall accrue from day to day and shall be calculated on the
basis of a year of 365 days and the actual number of days elapsed.
20. COSTS AND EXPENSESAND EXPENSES
20.1 The Borrower shall, save where expressed to the contrary in any other
Transaction Document, from time to time on demand of the Lender,
reimburse the Lender for all reasonable costs and expenses (including
legal fees) together with any VAT thereon incurred by it in connection
with the negotiation, preparation and execution of this Agreement, the
Transaction Documents and the completion of the transactions pursuant
to this Agreement or the Transaction Documents or in connection with
the preservation and/or enforcement of any of the rights of the Lender
under this Agreement and the Transaction Documents.
20.2 The Borrower shall pay all stamp, registration and similar taxes to
which this Agreement or any judgement or decree given in connection
herewith is or at any time may be subject (including in relation to the
perfection of security granted by the Security Documents) and shall,
from time to time on demand of the Lender, indemnify the Lender against
any liabilities, costs, claims and expenses resulting from any failure
to pay or any delay in paying any such tax.
20.3 The Borrower shall, from time to time on demand of the Lender
compensate the Lender at such daily and/or hourly rates as the Lender
shall from time to time reasonably determine for the time and
expenditure, all costs and expenses (including telephone, fax, copying,
travel and personnel costs) incurred by the Lender in connection with
its taking such action as it may deem appropriate or in complying with
any request by the Borrower in connection with (a) the granting or
proposed granting of any waiver or consent requested hereunder by the
Borrower; (b) any actual, potential or reasonably suspected breach by
the Borrower of its obligations hereunder; (c) the occurrence of any
event which is an Event of Default or a Potential Event of Default; or
(d) any amendment or proposed amendment hereto requested by the
Borrower.
20.4 The Borrower, agrees to indemnify the Lender and its immediate parent
company (collectively, "INDEMNITEES") from and against any and all
liabilities, obligations, losses or damages, arising from suits, claims
or actions brought by third parties against the Indemnitees (including,
without limitation, any reasonable, costs, expenses or disbursements
relating to the forgoing) arising out of this Agreement, or any action
taken or omitted by the Lender under or pursuant to this Agreement,
provided that the Borrower shall not be liable for any portion of such
liabilities, obligations, losses (excluding consequential losses) or
damages resulting from the gross negligence or wilful misconduct of
such Indemnitee as finally determined by a court of competent
jurisdiction. The foregoing agreements shall survive termination or
expiration of this Agreement for a period of three years.
30
21. REMEDIES AND WAIVERSAND WAIVERS
No failure to exercise, nor any delay in exercising, on the part of the
Lender, any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or
remedy prevent any further or other exercise thereof or the exercise of
any other right or remedy. The rights and remedies herein provided are
cumulative and not exclusive of any rights or remedies provided by law.
22. CONFIDENTIALITY
The Parties shall not, without the prior written consent of the other
parties hereto, disclose to any person the existence or any details
concerning the Transaction Documents except to the extent such
disclosure is contemplated in any Transaction Document, or is required
pursuant to the application of any applicable law or an order of a
court of competent jurisdiction, or is made to the that party's
auditors or other professional advisors who are subject to
confidentiality restrictions imposed by a professional body which are
substantially similar to those set forth above.
23. NOTICES
23.1 ADDRESSES
Any notice or other communication or document to be made or delivered
under this Agreement shall be made or delivered by fax or otherwise in
writing. Each notice, communication or other document to be delivered
to any party to this Agreement shall (unless that other person has by
fifteen days' written notice to the other party specified another
address or fax number) be made or delivered to that person at the
address(es) or fax number (if any) set out below:-
(1) in the case of the Lender to ▇▇▇ ▇▇▇ ▇▇▇▇, attention ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ with a simultaneous copy to ▇▇▇ ▇▇▇ ▇▇▇▇, attention
General Counsel;
(2) in the case of the Borrower to:
c/o Ocwen Capital Corporation
The Forum
1675 Palm Beach ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
for the attention of: ▇▇▇▇ ▇▇▇▇▇, Corporate Secretary
Tel: + (▇▇▇) ▇▇▇ ▇▇▇▇
Fax: + (▇▇▇) ▇▇▇ ▇▇▇▇
With a copy to:
31
▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇
Senior Vice President
Ocwen Capital Corporation
The Forum
1675 Palm Beach ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
for the attention of: Corporate Secretary
Tel: + (▇▇▇) ▇▇▇ ▇▇▇▇
Fax: + (▇▇▇) ▇▇▇ ▇▇▇▇
23.2 DEEMED DELIVERY
Any notice, communication or document to be delivered to any person
shall be deemed to have been delivered:-
(1) in the case of personal delivery, at the time of such
delivery;
(2) in the case of delivery by post, on the business day following
the day on which it was posted and in proving such delivery it
shall be sufficient to prove that the relevant notice,
communication or document was properly addressed, stamped and
posted (by airmail, if to another country) in the United
Kingdom or, in the case of service to or from an address
outside the United Kingdom at 9.00 a.m. on the fourth day
following the day on which it was posted;
(3) in the case of any notice or other communication by fax, (a)
on the business day the same was transmitted so long as there
is evidence that such fax message was received prior to 5.00
p.m. local time of the recipient on such day and such day is a
business day for the recipient, otherwise (b) on the business
day following the day on which it was transmitted and, in
either case, in proving such delivery it shall be sufficient
to prove that the whole of the fax message was received on any
fax machine of the recipient and that there was no evidence
that such transmission had been interrupted.
24. SEVERABILITY
If at any time any provision of this Agreement is or becomes illegal,
invalid or unenforceable in any respect under the law of any
jurisdiction, that shall not affect or impair:-
(1) the legality, validity or enforceability in that jurisdiction
of any other provision of this Agreement; or
32
(2) the legality, validity or enforceability under the law of any
other jurisdiction of that or any other provision of this
Agreement.
25. ASSIGNMENT
25.1 The Lender may at any time:-
(1) sub-participate part (but not the whole) of its rights or
benefits under this Agreement provided that at any time, no
more than 51% of its rights and benefits hereunder may be
sub-participated; and
(2) assign or transfer part (but not the whole) of its rights or
benefits under this Agreement provided that at any time, no
more than 51% of its rights and benefits hereunder may be
assigned or transferred and provided further that:-
(1) if such assignment or transfer is to any person other
than a subsidiary, holding company of or other member
of the Lender's group such assignment or transfer
shall require the prior consent of the Borrower (such
consent not to be unreasonably withheld); and
(2) if, at the time and as a result of any proposed
transfer or assignment, the Borrower would incur any
increased cost or be liable to make payments in
excess of those required to be made hereunder
immediately prior thereto (other than any minimum
liquid asset costs) such assignment or transfer is on
terms that the Borrower is not and will not be liable
for any such increased cost or liability.
25.2 The Borrower shall not be entitled to assign, transfer or otherwise
dispose of all or any of its rights or benefits under this Agreement
without the prior written consent of the Lender.
25.3 The Lender may disclose to a proposed assignee, transferee or
sub-participant information in its possession relating to the
provisions of this Agreement and the Transaction Documents which it
considers necessary or desirable to disclose for the purposes of the
proposed assignment, transfer or sub-participation, notwithstanding the
provisions of clause 22 (Confidentiality), provided that the Lender
obtains from such assignee, transferee, or sub-participant a
confidentiality undertaking on the same terms as Clause 22 or such
other terms as may be agreed between the Borrower and the Lender.
25.4 This Agreement shall bind and inure to the benefit of and be
enforceable by the Lender and its respective successors, transferees
and assigns and references to the Lender shall be deemed to include
references to each of the foregoing.
33
26. NO MARSHALLING
The Borrower consents and agrees that neither the Lender nor any Person
acting for or on behalf of the Lender shall be under any obligation to
marshal any assets in favor of the Borrower or against or in payment of
any or all of the obligations hereunder or under any Transaction
Document.
27. FURTHER ASSURANCE
The Borrower shall, from time to time on being required to do so by the
Lender, now or at any time in the future, do or procure the doing of
all such acts and/or execute or procure the execution of all such
documents in a form satisfactory to the Lender as the Lender may
consider necessary for giving full effect to this Agreement and the
Transaction Documents and securing to the Lender the full benefit of
the rights, powers and remedies conferred upon the Lender in this
Agreement or any Transaction Documents.
28. AGENT FOR SERVICE
28.1 The Borrower irrevocably agrees that any Service Document may be
sufficiently and effectively served on it in connection with
Proceedings, whether pursuant to this Agreement or any other
Transaction Document, in England and Wales by service on its agent
Ocwen Limited, Ref: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, if no replacement agent has been
appointed and notified to the Lender pursuant to sub-clause 28.4, or on
the replacement agent if one has been appointed and notified to the
Lender.
28.2 Any Service Document served pursuant to this clause shall be marked for
the attention of:
(1) Ocwen Limited, c/o Edge & ▇▇▇▇▇▇▇ at ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ (Reference: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇) or such other
address within England and Wales as may be notified to the
Lender by the Borrower and the Guarantor; or
(2) such other person as is appointed as agent for service
pursuant to sub-clause 28.4 at the address notified pursuant
to sub-clause 28.4.
28.3 Any document addressed in accordance with sub-clause 28.2 shall be
deemed to have been duly served if:-
(1) left at the specified address, when it is left; or
(2) sent by first class post, two clear Business Days after the
date of posting.
1.4 If the agent referred to in sub-clause 28.1 (or any replacement agent
appointed pursuant to this sub-clause) at any time ceases for any
reason to act as such, the Borrower shall appoint a replacement agent
to accept service having an address for service in England or Wales and
shall notify the Lender of the name and address of the replacement
agent; failing such appointment and notification, the Lender shall be
34
entitled by notice to the Borrower to appoint such a replacement agent
to act on the Borrowers' behalf.
1.5 A copy of any Service Document served on an agent pursuant to this
clause shall be sent by post to the Borrower at its address for the
time being for the service of notices and other communications under
clause 23 (Notices), but no failure or delay in so doing shall
prejudice the effectiveness of service of the Service Document in
accordance with the provisions of sub-clause 28.1
1.6 Each party irrevocably consents to the service of process of any of the
courts in Submitted States in any such action or Proceeding by the
mailing of copies thereof by registered or certified mail, postage
prepaid to the party's notice address specified above, such service to
become effective upon receipt of evidence of the receipt thereof.
29. ENTIRE AGREEMENT
This Agreement (together with the Transaction Document, entered into on
or after the date hereof) constitutes the whole and only agreement
between the parties relating to the secured, guaranteed residuals
facility relating to CMR1 to CMR6 (as described in the commitment
letter between Greenwich Capital Markets, Inc and Ocwen Financial
Corporation dated 31 March, 1998) and supersedes and extinguishes any
prior drafts, agreements, undertakings, representations, warranties and
arrangements of any nature whatsoever, including without limitation the
said commitment letter provided that the provisions of said commitment
letter under the heading "The Residual Financing Facilities" and
"Miscellaneous" (insofar as they relate to the foregoing) relating to
the Subsequent Residual Facility shall remain and be effective for the
purposes of OFC having available in accordance with the terms
thereunder the Subsequent Residual Facility.
35
30. GOVERNING LAW
30.1 This Agreement shall be governed by and construed in accordance with
the laws of England.
30.2 The parties to this Agreement irrevocably agree that the courts of
England are to have jurisdiction to settle any dispute which may arise
out of or in connection with this Agreement and any other Transaction
Document and that accordingly any proceeding, suit, or action arising
out of or in connection with this Agreement or any other Transaction
Document ("Proceedings") may be brought in such courts.
30.3 Without prejudice to sub-Clause 30.2, all the parties further
irrevocably agree that any Proceedings may be brought in any court of
the State of New York, or the State of Florida or any other state of
the United States, where any party has its chief executive office (all
of such states being the "Submitted States") or federal court sitting
in the Submitted States and any court having jurisdiction over appeals
of matters heard in such courts and each of the parties hereto
irrevocably submits to the non-exclusive jurisdiction of such courts.
30.4 Each of the parties hereto irrevocably waives any objection it may have
now or hereafter to the laying of the venue of any Proceedings in any
such court as is referred to in this clause and any claim of forum non
conveniens and further irrevocably agrees that a judgment in any
Proceedings brought in any court referred to in this clause shall be
conclusive and binding upon it and may be enforced in the courts of any
other jurisdiction.
IN WITNESS WHEREOF, this Agreement is duly executed the date and year first
above written.
for and on behalf of
OCWEN ASSET INVESTMENT - UK, LLC
a Delaware limited liability company
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇▇▇
----------------------
Name: ▇. ▇. ▇▇▇▇▇▇▇▇▇
Title: Authorised Officer
36
for and on behalf of GREENWICH
CAPITAL FINANCIAL PRODUCTS, INC.
By: /s/ ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
37