Exhibit 10.1
[THE BOND MARKET
ASSOCIATION LOGO]
MASTER REPURCHASE AGREEMENT
September 1996 Version
DATED AS OF JANUARY 26, 2005
--------------------------------------------------------------------------------
BETWEEN: AMERICAN BUSINESS CREDIT, INC.
--------------------------------------------------------------------------------
AND GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
--------------------------------------------------------------------------------
1. APPLICABILITY
From time to time the parties hereto may enter into transactions in
which one party ("Seller") agrees to transfer to the other ("Buyer")
securities or other assets ("Securities") against the transfer of funds
by Buyer, with a simultaneous agreement by Buyer to transfer to Seller
such Securities at a date certain or on demand, against the transfer of
funds by Seller. Each such transaction shall be referred to herein as a
"Transaction" and, unless otherwise agreed in writing, shall be governed
by this Agreement, including any supplemental terms or conditions
contained in Annex I hereto and in any other annexes identified herein
or therein as applicable hereunder.
2. DEFINITIONS
(a) "Act of Insolvency", with respect to any party, (i) the
commencement by such party as debtor of any case or proceeding
under any bankruptcy, insolvency, reorganization, liquidation,
moratorium, dissolution, delinquency or similar law, or such
party seeking the appointment or election of a receiver,
conservator, trustee, custodian or similar official for such
party or any substantial part of it property, or the convening
of any meeting of creditors for purposes of commencing any such
case or proceeding or seeking such an appointment or election,
(ii) the commencement of any such case or proceeding against
such party, or another seeking such an appointment or election,
or the filing against a party of an application for a protective
decree under the provisions of the Securities Investor
Protection Act of 1970, which (A) is consented to or not timely
contested by such party, (B) results in the entry of an order
for relief, such an appointment or election, the issuance of
such a protective decree or the entry of an order having a
similar effect, or (C) is not dismissed within 15 days, (iii)
the making by such party of a general assignment for the benefit
of creditors, or (iv)
the admission in writing by such party of such party's inability
to pay such party's debts as they become due;
(b) "Additional Purchased Securities", Securities provided by Seller
to Buyer pursuant to Paragraph 4(a) hereof;
(c) "Buyer's Margin Amount", with respect to any Transaction as of
any date, the amount obtained by application of the Buyer's
Margin Percentage to the Repurchase Price for such Transaction
as of such date;
(d) "Buyer's Margin Percentage", with respect to any Transaction as
of any date, a percentage (which may be equal to the Seller's
Margin Percentage) agreed to by Buyer and Seller or, in the
absence of any such agreement, the percentage obtained by
dividing the Market Value of the Purchased Securities on the
Purchase Date by the Purchase Price on the Purchase Date for
such Transaction;
(e) "Confirmation", the meaning specified in Paragraph 3(b) hereof;
(f) "Income", with respect to any Security at any time, any
principal thereof and all interest, dividends or other
distributions thereon;
(g) "Margin Deficit", the meaning specified in Paragraph 4(a)
hereof;
(h) "Margin Excess", the meaning specified in Paragraph 4(b) hereof;
(i) "Margin Notice Deadline", the time agreed to by the parties in
the relevant Confirmation, Annex I hereto or otherwise as the
deadline for giving notice requiring same-day satisfaction of
margin maintenance obligations as provided in Paragraph 4 hereof
(or, in the absence of any such agreement, the deadline for such
purposes established in accordance with market practice);
(j) "Market Value", with respect to any Securities as of any date,
the price for such Securities on such date obtained from a
generally recognized source agreed to by the parties or the most
recent closing bid quotation from such a source, plus accrued
Income to the extent not included therein (other than any Income
credited or transferred to, or applied to the obligations of,
Seller pursuant to Paragraph 5 hereof) as of such date (unless
contrary to market practice for such Securities);
(k) "Price Differential", with respect to any Transaction as of any
date, the aggregate amount obtained by daily application of the
Pricing Rate for such Transaction to the Purchase Price for such
Transaction on a 360 day per year basis for the actual number of
days during the period commencing on (and including) the
Purchase Date for such Transaction and ending on (but excluding)
the date of determination (reduced by any amount of such Price
Differential previously paid by Seller to Buyer with respect to
such Transaction);
(l) "Pricing Rate", the per annum percentage rate for determination
of the Price Differential;
2
(m) "Prime Rate", the prime rate of U.S. commercial banks as
published in The Wall Street Journal (or, if more than one such
rate is published, the average of such rates);
(n) "Purchase Date", the date on which Purchased Securities are to
be transferred by Seller to Buyer;
(o) "Purchase Price", (i) on the Purchase Date, the price at which
Purchased Securities are transferred by Seller to Buyer, and
(ii) thereafter, except where Buyer and Seller agree otherwise,
such price increased by the amount of any cash transferred by
Buyer to Seller pursuant to Paragraph 4(b) hereof and decreased
by the amount of any cash transferred by Seller to Buyer
pursuant to Paragraph 4(a) hereof or applied to reduce Seller's
obligations under clause (ii) of Paragraph 5 hereof;
(p) "Purchased Securities", the Securities transferred by Seller to
Buyer in a Transaction hereunder, and any Securities substituted
therefor in accordance with Paragraph 9 hereof. The term
"Purchased Securities" with respect to any Transaction at any
time also shall include Additional Purchased Securities
delivered pursuant to Paragraph 4(a) hereof and shall exclude
Securities returned pursuant to Paragraph 4(b) hereof;
(q) "Repurchase Date", the date on which Seller is to repurchase the
Purchased Securities from Buyer, including any date determined
by application of the provisions of Paragraph 3(c) or 11 hereof;
(r) "Repurchase Price", the price at which Purchased Securities are
to be transferred from Buyer to Seller upon termination of a
Transaction, which will be determined in each case (including
Transactions terminable upon demand) as the sum of the Purchase
Price and the Price Differential as of the date of such
determination;
(s) "Seller's Margin Amount", with respect to any Transaction as of
any date, the amount obtained by application of the Seller's
Margin Percentage to the Repurchase Price for such Transaction
as of such date;
(t) "Seller's Margin Percentage", with respect to any Transaction as
of any date, a percentage (which may be equal to the Buyer's
Margin Percentage) agreed to by Buyer and Seller or, in the
absence of any such agreement, the percentage obtained by
dividing the Market Value of the Purchased Securities on the
Purchase Date by the Purchase Price on the Purchase Date for
such Transaction.
3. INITIATION; CONFIRMATION; TERMINATION
(a) An agreement to enter into a Transaction may be made orally or
in writing at the initiation of either Buyer or Seller. On the
Purchase Date for the Transaction, the Purchased Securities
shall be transferred to Buyer or its agent against the transfer
of the Purchase Price to an account of Seller.
3
(b) Upon agreeing to enter into a Transaction hereunder, Buyer or
Seller (or both), as shall be agreed, shall promptly deliver to
the other party a written confirmation of each Transaction (a
"Confirmation"). The Confirmation shall describe the Purchased
Securities (including CUSIP number, if any), identify Buyer and
Seller and set forth (i) the Purchase Date, (ii) the Purchase
Price, (iii) the Repurchase Date, unless the Transaction is to
be terminable on demand, (iv) the Pricing Rate or Repurchase
Price applicable to the Transaction, and (v) any additional
terms or conditions of the Transaction not inconsistent with
this Agreement. The Confirmation, together with this Agreement,
shall constitute conclusive evidence of the terms agreed between
Buyer and Seller with respect to the Transaction to which the
Confirmation relates, unless with respect to the Confirmation
specific objection is made promptly after receipt thereof. In
the event of any conflict between the terms of such Confirmation
and this Agreement, this Agreement shall prevail.
(c) In the case of Transactions terminable upon demand, such demand
shall be made by Buyer or Seller, no later than such time as is
customary in accordance with market practice, by telephone or
otherwise on or prior to the business day on which such
termination will be effective. On the date specified in such
demand, or on the date fixed for termination in the case of
Transactions having a fixed term, termination of the Transaction
will be effected by transfer to Seller or its agent of the
Purchased Securities and any Income in respect thereof received
by Buyer (and not previously credited or transferred to, or
applied to the obligations of, Seller pursuant to Paragraph 5
hereof) against the transfer of the Repurchase Price to an
account of Buyer.
4. MARGIN MAINTENANCE
(a) If at any time the aggregate Market Value of all Purchased
Securities subject to all Transactions in which a particular
party hereto is acting as Buyer is less than the aggregate
Buyer's Margin Amount for all such Transactions (a "Margin
Deficit"), then Buyer may by notice to Seller require Seller in
such Transactions, at Seller's option, to transfer to Buyer cash
or additional Securities reasonably acceptable to Buyer
("Additional Purchased Securities"), so that the cash and
aggregate Market Value of the Purchased Securities, including
any such Additional Purchased Securities, will thereupon equal
or exceed such aggregate Buyer's Margin Amount (decreased by the
amount of any Margin Deficit as of such date arising from any
Transactions in which such Buyer is acting as Seller).
(b) It at any time the aggregate Market Value of all Purchased
Securities subject to all Transactions in which a particular
party hereto is acting as Seller exceeds the aggregate Seller's
Margin Amount for all such Transactions at such time (a "Margin
Excess"), then Seller may by notice to Buyer require Buyer in
such Transactions, at Buyer's option, to transfer cash or
Purchased Securities to Seller, so that the aggregate Market
Value of the Purchased Securities, after deduction of any such
cash or any Purchased Securities so transferred, will thereupon
not exceed such aggregate Seller's Margin Amount (increased by
the amount of any
4
Margin Excess as of such date arising from any Transactions in
which such Seller is acting as Buyer).
(c) If any notice is given by Buyer or Seller under subparagraph (a)
or (b) of this Paragraph at or before the Margin Notice Deadline
on any business day, the party receiving such notice shall
transfer cash or Additional Purchased Securities as provided in
such subparagraph no later than the close of business in the
relevant market on such day. If any such notice is given after
the Margin Notice Deadline, the party receiving such notice
shall transfer such cash or Securities no later than the close
of business in the relevant market on the next business day
following such notice.
(d) Any cash transferred pursuant to this Paragraph shall be
attributed to such Transactions as shall be agreed upon by Buyer
and Seller.
(e) Seller and Buyer may agree, with respect to any or all
Transactions hereunder, that the respective rights of Buyer or
Seller (or both) under subparagraphs (a) and (b) of this
Paragraph may be exercised only where a Margin Deficit or Margin
Excess, as the case may be, exceeds a specified dollar amount or
a specified percentage of the Repurchase Prices for such
Transactions (which amount or percentage shall be agreed to by
Buyer and Seller prior to entering into any such Transactions).
(f) Seller and Buyer may agree, with respect to any or all
Transactions hereunder, that the respective rights of Buyer and
Seller under subparagraphs (a) and (b) of this Paragraph to
require the elimination of a Margin Deficit or a Margin Excess,
as the case may be, may be exercised whenever such a Margin
Deficit or Margin Excess exists with respect to any single
Transaction hereunder (calculated without regard to any other
Transaction outstanding under this Agreement).
5. INCOME PAYMENTS
Seller shall be entitled to receive an amount equal to all income paid
or distributed on or in respect of the Securities that is not otherwise
received by Seller, to the full extent it would be so entitled if the
Securities had not been sold to Buyer. Buyer shall, as the parties may
agree with respect to any Transaction (or, in the absence of any such
agreement, as Buyer shall reasonably determine in its discretion), on
the date such Income is paid or distributed either (i) transfer to or
credit to the account of Seller such Income with respect to any
Purchased Securities subject to such Transaction or (ii) with respect to
Income paid in cash, apply the Income payment or payments to reduce the
amount, if any, to be transferred to Buyer by Seller upon termination of
such Transaction. Buyer shall not be obligated to take any action
pursuant to the preceding sentence (A) to the extent that such action
would result in the creation of a Margin Deficit, unless prior thereto
or simultaneously therewith Seller transfers to Buyer cash or Additional
Purchased Securities sufficient to eliminate such Margin Deficit, or (B)
if an Event of Default with respect to Seller has occurred and is then
continuing at the time such Income is paid or distributed.
5
6. SECURITY INTEREST
Although the parties intend that all Transactions hereunder be sales and
purchases and not loans, in the event any such Transactions are deemed
to be loans, Seller shall be deemed to have pledged to Buyer as security
for the performance by Seller of its obligations under each such
Transaction, and shall be deemed to have granted to Buyer a security
interest in, all of the Purchased Securities with respect to all
Transactions hereunder and all Income thereon and other proceeds
thereof.
7. PAYMENT AND TRANSFER
Unless otherwise mutually agreed, all transfers of funds hereunder shall
be in immediately available funds. All Securities transferred by one
party hereto to the other party (i) shall be in suitable form for
transfer or shall be accompanied by duly executed instruments of
transfer or assignment in blank and such other documentation as the
party receiving possession may reasonably request, (ii) shall be
transferred on the book entry system of a Federal Reserve Bank, or (iii)
shall be transferred by any other method mutually acceptable to Seller
and Buyer.
8. SEGREGATION OF PURCHASED SECURITIES
To the extent required by applicable law, all Purchased Securities in
the possession of Seller shall be segregated from other securities in
its possession and shall be identified as subject to this Agreement.
Segregation may be accomplished by appropriate identification on the
books and records of the holder, including a financial or securities
intermediary or a clearing corporation. All of Seller's interest in the
Purchased Securities shall pass to Buyer on the Purchase Date and,
unless otherwise agreed by Buyer and Seller, nothing in this Agreement
shall preclude Buyer from engaging in repurchase transactions with the
Purchased Securities or otherwise selling, transferring, pledging or
hypothecating the Purchased Securities, but no such transaction shall
relieve Buyer of its obligations to transfer Purchased Securities to
Seller pursuant to Paragraph 3, 4 or 11 hereof, or of Buyer's obligation
to credit or pay Income to, or apply Income to the obligations of,
Seller pursuant to Paragraph 5 hereof.
6
--------------------------------------------------------------------------------
REQUIRED DISCLOSURE FOR TRANSACTIONS IN WHICH THE SELLER
RETAINS CUSTODY OF THE PURCHASED SECURITIES
Seller is not permitted to substitute other securities for those subject
to this Agreement and therefore must keep Buyer's securities segregated
at all times, unless in this Agreement Buyer grants Seller the right to
substitute other securities. If Buyer grants the right to substitute,
this means that Buyer's securities will likely be commingled with
Seller's own securities during the trading day. Buyer is advised that,
during any trading day that Buyer's securities are commingled with
Seller's securities, they [will]* [may]** be subject to liens granted by
Seller to [its clearing bank]* [third parties]** and may be used by
Seller for deliveries on other securities transactions. Whenever the
securities are commingled, Seller's ability to resegregate substitute
securities for Buyer will be subject to Seller's ability to satisfy [the
clearing]* [any]** lien or to obtain substitute securities.
* Language to be used under 17 C.F.R. 403.4(e) if Seller is a government
securities broker or dealer other than a financial institution.
** Language to be used under 17 C.F.R. 403.5(d) if Seller is a financial
institution.
--------------------------------------------------------------------------------
9. SUBSTITUTION
(a) Seller may, subject to agreement with and acceptance by Buyer,
substitute other Securities for any Purchased Securities. Such
substitution shall be made by transfer to Buyer of such other
Securities and transfer to Seller of such Purchased Securities.
After substitution, the substituted Securities shall be deemed
to be Purchased Securities.
(b) In Transactions in which Seller retains custody of Purchased
Securities, the parties expressly agree that Buyer shall be
deemed, for purposes of subparagraph (a) of this Paragraph, to
have agreed to and accepted in this Agreement substitution by
Seller of other Securities for Purchased Securities; provided,
however, that such other Securities shall have a Market Value at
least equal to the Market Value of the Purchased Securities for
which they are substituted.
10. REPRESENTATIONS
Each of Buyer and Seller represents and warrants to the other that (1)
it is duly authorized to execute and deliver this Agreement, to enter
into Transactions contemplated hereunder and to perform its obligations
hereunder and has taken all necessary action to authorize such
execution, delivery and performance, (ii) it will engage in such
Transactions as principal (or, if agreed in writing, in the form of an
annex hereto or otherwise, in advance of any Transaction by the other
party hereto, as agent for a disclosed principal), (iii) the person
signing this Agreement on its behalf is duly authorized to do so on its
behalf (or
7
on behalf of any such disclosed principal), (iv) it has obtained all
authorizations of any governmental body required in connection with this
Agreement and the Transactions hereunder and such authorizations are in
full force and effect and (v) the execution, delivery and performance of
this Agreement and the Transactions hereunder will not violate any law,
ordinance, charter, bylaw or rule applicable to it or any agreement by
which it is bound or by which any of its assets are affected. On the
Purchase Date for any Transaction Buyer and Seller shall each be deemed
to repeat all the foregoing representations made by it.
11. EVENTS OF DEFAULT
In the event that (i) Seller fails to transfer or Buyer falls to
purchase Purchased Securities upon the applicable Purchase Date, (ii)
Seller fails to repurchase or Buyer fails to transfer Purchased
Securities upon the applicable Repurchase Date, (iii) Seller or Buyer
fails to comply with Paragraph 4 hereof, (iv) Buyer fails, after one
business day's notice, to comply with Paragraph 5 hereof, (v) an Act of
Insolvency occurs with respect to Seller or Buyer, (vi) any
representation made by Seller or Buyer shall have been incorrect or
untrue in any material respect when made or repeated or deemed to have
been made or repeated, or (vii) Seller or Buyer shall admit to the other
its inability to, or its intention not to, perform any of its
obligations hereunder (each an "Event of Default"):
(a) The nondefaulting party may, at its option (which option shall
be deemed to have been exercised immediately upon the occurrence
of an Act of Insolvency), declare an Event of Default to have
occurred hereunder and, upon the exercise or deemed exercise of
such option, the Repurchase Date for each Transaction hereunder
shall, if it has not already occurred, be deemed immediately to
occur (except that, in the event that the Purchase Date for any
Transaction has not yet occurred as of the date of such exercise
or deemed exercise, such Transaction shall be deemed immediately
canceled). The nondefaulting party shill (except upon the
occurrence of an Act of Insolvency) give notice to the
defaulting party of the exercise of such option as promptly as
practicable.
(b) In all Transactions in which the defaulting party is acting as
Seller, if the nondefaulting party exercises or is deemed to
have exercised the option referred to in subparagraph (a) of
this Paragraph, (i) the defaulting party's obligations in such
Transactions to repurchase all Purchased Securities, at the
Repurchase Price therefor on the Repurchase Date determined in
accordance with subparagraph (a) of this Paragraph, shall
thereupon become immediately due and payable, (ii) all Income
paid after such exercise or deemed exercise shall be retained by
the nondefaulting party and applied to the aggregate unpaid
Repurchase Prices and any other amounts owing by the defaulting
party hereunder, and (iii) the defaulting party shall
immediately deliver to the nondefaulting party any Purchased
Securities subject to such Transactions then in the defaulting
party's possession or control.
(c) In all Transactions in which the defaulting party is acting as
Buyer, upon tender by the nondefaulting party of payment of the
aggregate Repurchase Prices for all
8
such Transactions, all right, title and interest in and
entitlement to all Purchased Securities subject to such
Transactions shall be deemed transferred to the nondefaulting
party, and the defaulting party shall deliver all such Purchased
Securities to the nondefaulting party.
(d) If the nondefaulting party exercises or is deemed to have
exercised the option referred to in subparagraph (a) of this
Paragraph, the nondefaulting party, without prior notice to the
defaulting party, may:
(i) as to Transactions in which the defaulting party is
acting as Seller, (A) immediately sell, in a recognized
market (or otherwise in a commercially reasonable
manner) at such price or prices as the nondefaulting
party may reasonably deem satisfactory, any or all
Purchased Securities subject to such Transactions and
apply the proceeds thereof to the aggregate unpaid
Repurchase Prices and any other amounts owing by the
defaulting party hereunder or (B) in its sole discretion
elect, in lieu of selling all or a portion of such
Purchased Securities, to give the defaulting party
credit for such Purchased Securities in an amount equal
to the price therefor on such date, obtained from a
generally recognized source or the most recent closing
bid quotation from such a source, against the aggregate
unpaid Repurchase Prices and any other amounts owing by
the defaulting party hereunder; and
(ii) as to Transactions in which the defaulting party is
acting as Buyer, (A) immediately purchase, in a
recognized market (or otherwise in a commercially
reasonable manner) at such price or prices as the
nondefaulting party may reasonably deem satisfactory,
securities ("Replacement Securities") of the same class
and amount as any Purchased Securities that are not
delivered by the defaulting party to the nondefaulting
party as required hereunder or (B) in its sole
discretion elect, in lieu of purchasing Replacement
Securities, to be deemed to have purchased Replacement
Securities at the price therefor on such date, obtained
from a generally recognized source or the most recent
closing offer quotation from such a source.
Unless otherwise provided in Annex I, the parties acknowledge
and agree that (1) the Securities subject to any Transaction
hereunder are instruments traded in a recognized market, (2) in
the absence of a generally recognized source for prices or bid
or offer quotations for any Security, the nondefaulting party
may establish the source therefor in its sole discretion and (3)
all prices, bids and offers shall be determined together with
accrued Income (except to the extent contrary to market practice
with respect to the relevant Securities).
(e) As to Transactions in which the defaulting party is acting as
Buyer, the defaulting party shall be liable to the nondefaulting
party for any excess of the price paid (or deemed paid) by the
nondefaulting party for Replacement Securities over the
Repurchase Price for the Purchased Securities replaced thereby
and for any
9
amounts payable by the defaulting party under Paragraph 5 hereof
or otherwise hereunder.
(f) For purposes of this Paragraph 11, the Repurchase Price for each
Transaction hereunder in respect of which the defaulting party
is acting as Buyer shall not increase above the amount of such
Repurchase Price for such Transaction determined as of the date
of the exercise or deemed exercise by the nondefaulting party of
the option referred to in subparagraph (a) of this Paragraph.
(g) The defaulting party shall be liable to the nondefaulting party
for (i) the amount of all reasonable legal or other expenses
incurred by the nondefaulting party in connection with or as a
result of an Event of Default, (ii) damages in an amount equal
to the cost (including all fees, expenses and commissions) of
entering into replacement transactions and entering into or
terminating hedge transactions in connection with or as a result
of an Event of Default, and (iii) any other loss, damage, cost
or expense directly arising or resulting from the occurrence of
an Event of Default in respect of a Transaction.
(h) To the extent permitted by applicable law, the defaulting party
shall be liable to the nondefaulting party for interest on any
amounts owing by the defaulting party hereunder, from the date
the defaulting party becomes liable for such amounts hereunder
until such amounts are (i) paid in full by the defaulting party
or (ii) satisfied in full by the exercise of the nondefaulting
party's rights hereunder. Interest on any sum payable by the
defaulting party to the nondefaulting party under this Paragraph
11(h) shall be at a rate equal to the greater of the Pricing
Rate for the relevant Transaction or the Prime Rate.
(i) The nondefaulting party shall have, in addition to its rights
hereunder, any rights otherwise available to it under any other
agreement or applicable law.
12. SINGLE AGREEMENT
Buyer and Seller acknowledge that, and have entered hereinto and will
enter into each Transaction hereunder in consideration of and in
reliance upon the fact that, all Transactions hereunder constitute a
single business and contractual relationship and have been made in
consideration of each other. Accordingly, each of Buyer and Seller
agrees (i) to perform all of its obligations in respect of each
Transaction hereunder, and that a default in the performance of any such
obligations shall constitute a default by it in respect of all
Transactions hereunder, (ii) that each of them shall be entitled to set
off claims and apply property held by them in respect of any Transaction
against obligations owing to them in respect of any other Transactions
hereunder and (iii) that payments, deliveries and other transfers made
by either of them in respect of any Transaction shall be deemed to have
been made in consideration of payments, deliveries and other transfers
in respect of any other Transactions hereunder, and the obligations to
make any such payments, deliveries and other transfers may be applied
against each other and netted.
13. NOTICES AND OTHER COMMUNICATIONS
10
Any and all notices, statements, demands or other communications
hereunder may be given by a party to the other by mail, facsimile,
telegraph, messenger or otherwise to the address specified in Annex II
hereto, or so sent to such party at any other place specified in a
notice of change of address hereafter received by the other. All
notices, demands and requests hereunder may be made orally, to be
confirmed promptly in writing, or by other communication as specified in
the preceding sentence.
14. ENTIRE AGREEMENT; SEVERABILITY
This Agreement shall supersede any existing agreements between the
parties containing general terms and conditions for repurchase
transactions. Each provision and agreement herein shall be treated as
separate and independent from any other provision or agreement herein
and shall be enforceable notwithstanding the unenforceability of any
such other provision or agreement.
15. NON-ASSIGNABILITY; TERMINATION
(a) The rights and obligations of the parties under this Agreement
and under any Transaction shall not be assigned by either party
without the prior written consent of the other party, and any
such assignment without the prior written consent of the other
party shall be null and void. Subject to the foregoing, this
Agreement and any Transactions shall be binding upon and shall
inure to the benefit of the parties and their respective
successors and assigns. This Agreement may be terminated by
either party upon giving written notice to the other, except
that this Agreement shall, notwithstanding such notice, remain
applicable to any Transactions then outstanding.
(b) Subparagraph (a) of this Paragraph 15 shall not preclude a party
from assigning, charging or otherwise dealing with all or any
part of its interest in any sum payable to it under Paragraph 11
hereof.
16. GOVERNING LAW
This Agreement shall be governed by the laws of the State of New York
without giving effect to the conflict of law principles thereof.
17. NO WAIVERS, ETC.
No express or implied waiver of any Event of Default by either party
shall constitute a waiver of any other Event of Default and no exercise
of any remedy hereunder by any party shall constitute a waiver of its
right to exercise any other remedy hereunder. No modification or waiver
of any provision of this Agreement and no consent by any party to a
departure herefrom shall be effective unless and until such shall be in
writing and duly executed by both of the parties hereto. Without
limitation on any of the foregoing, the failure to give a notice
pursuant to Paragraph 4(a) or 4(b) hereof will not constitute a waiver
of any right to do so at a later date.
18. USE OF EMPLOYEE PLAN ASSETS
11
(a) If assets of an employee benefit plan subject to any provision
of the Employee Retirement Income Security Act of 1974 ("ERISA")
are intended to be used by either party hereto (the "Plan
Party") in a Transaction, the Plan Party shall so notify the
other party prior to the Transaction. The Plan Party shall
represent in writing to the other party that the Transaction
does not constitute a prohibited transaction under ERISA or is
otherwise exempt therefrom, and the other party may proceed in
reliance thereon but shall not be required so to proceed.
(b) Subject to the last sentence of subparagraph (a) of this
Paragraph, any such Transaction shall proceed only if Seller
furnishes or has furnished to Buyer its most recent available
audited statement of its financial condition and its most recent
subsequent unaudited statement of its financial condition.
(c) By entering into a Transaction pursuant to this Paragraph,
Seller shall be deemed (i) to represent to Buyer that since the
date of Seller's latest such financial statements, there has
been no material adverse change in Seller's financial condition
which Seller has not disclosed to Buyer, and (ii) to agree to
provide Buyer with future audited and unaudited statements of
its financial condition as they are issued, so long as it is a
Seller in any outstanding Transaction involving a Plan Party.
19. INTENT
(a) The parties recognize that each Transaction is a "repurchase
agreement" as that term is defined in Section 101 of Title 11 of
the United States Code, as amended (except insofar as the type
of Securities subject to such Transaction or the term of such
Transaction would render such definition inapplicable), and a
"securities contract" as that term is defined in Section 741 of
Title 11 of the United States Code, as amended (except insofar
as the type of assets subject to such Transaction would render
such definition inapplicable).
(b) It is understood that either party's right to liquidate
Securities delivered to it in connection with Transactions
hereunder or to exercise any other remedies pursuant to
Paragraph 11 hereof is a contractual right to liquidate such
Transaction as described in Sections 555 and 559 of Title 11 of
the United States Code, as amended.
(c) The parties agree and acknowledge that if a party hereto is an
"insured depository institution," as such term is defined in the
Federal Deposit Insurance Act, as amended ("FDIA"), then each
Transaction hereunder is a "qualified financial contract," as
that term is defined in FDIA and any rules, orders or policy
statements thereunder (except insofar as the type of assets
subject to such Transaction would render such definition
inapplicable).
(d) It is understood that this Agreement constitutes a "netting
contract" as defined in and subject to Title IV of the Federal
Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA")
and each payment entitlement and
12
payment obligation under any Transaction hereunder shall
constitute a "covered contractual payment entitlement" or
"covered contractual payment obligation", respectively, as
defined in and subject to FDICIA (except insofar as one or both
of the parties is not a "financial institution" as that term is
defined in FDICIA).
20. DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS
The parties acknowledge that they have been advised that:
(a) in the case of Transactions in which one of the parties is a
broker or dealer registered with the Securities and Exchange
Commission ("SEC") under Section 15 of the Securities Exchange
Act of 1934 ("1934 Act"), the Securities Investor Protection
Corporation has taken the position that the provisions of the
Securities Investor Protection Act of 1970 ("SIPA") do not
protect the other party with respect to any Transaction
hereunder;
(b) in the case of Transactions in which one of the parties is a
government securities broker or a government securities dealer
registered with the SEC under Section 15C of the 1934 Act, SIPA
will not provide protection to the other party with respect to
any Transaction hereunder; and
(c) in the case of Transactions in which one of the parties is a
financial institution, funds held by the financial institution
pursuant to a Transaction hereunder are not a deposit and
therefore are not insured by the Federal Deposit Insurance
Corporation or the National Credit Union Share Insurance Fund,
as applicable.
AMERICAN BUSINESS CREDIT, INC. GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ Bastich
----------------------------- ---------------------------------
Title: Executive Vice President Title: Senior Vice President
and General Counsel
----------------------------- ---------------------------------
Date: January 26, 2005 Date: January 26, 2005
----------------------------- ---------------------------------
13
CONFIRMATION
TO
MASTER REPURCHASE AGREEMENT
Date of Confirmation: January 26, 2005
Reference is hereby made to the Master Repurchase Agreement (the "REPO
AGREEMENT") dated as of January 26, 2005 between Greenwich Capital Financial
Products, Inc. ("BUYER") and American Business Credit, Inc., as a
debtor-in-possession ("SELLER"). Capitalized terms used but not defined herein
shall have the meanings given to such terms in the Repo Agreement. This document
confirms the agreement of Buyer and Seller to enter into a Transaction on the
following terms:
I. PRINCIPAL TERMS.
1. Buyer: Greenwich Capital Financial Products,
Inc.
2. Seller: American Business Credit, Inc.
3. Purchase Date: January 26, 2005
4. Purchased Security: Class X Certificate, No. X-2 issued by
ABFS Mortgage Loan Trust 2002-4
5. Purchase Price: $6,830,000
6. Pricing Rate: One-month LIBOR plus 850 basis points
per annum reset monthly; provided
that during the continuance of an Event
of Default, the foregoing shall be
increased by an additional 300 basis
points per annum
7. Repurchase Date: February 4, 2005; provided, however,
that, if the DIP Facility is approved
at the Interim Hearing pursuant to an
order in form and substance satisfactory
to the Buyer, the Buyer may, in its sole
discretion, extend the Repurchase Date
8. Price Differential: Aggregate of Pricing Rate applied to
Purchase Price for the term of the
Transaction
9. Repurchase Price: The Purchase Price for the Purchased
Security plus the Price Differential
II. DEFINITIONS. Notwithstanding anything to the contrary in the Repo Agreement
or elsewhere:
"ABFS DEBTORS" shall mean American Business Financial Services, Inc., a
Delaware corporation; American Business Credit, Inc., a Pennsylvania
corporation; HomeAmerican Credit, Inc., a Pennsylvania corporation; American
Business Mortgage Services, Inc., a New Jersey corporation; Tiger Relocation
Company, a Pennsylvania corporation; and ABFS Consolidated Holdings, Inc., a
Delaware corporation; each debtors in cases (the "CHAPTER 11 CASES") commenced
under Chapter 11 of Title 11 of the United States Code (the "BANKRUPTCY CODE")
in the United States Bankruptcy Court for the District of Delaware
14
(the "BANKRUPTCY COURT"), having retained possession of their assets and being
authorized under the Bankruptcy Code to continue the operation of their
businesses as debtors-in-possession.
"AFFILIATE" shall mean, in relation to any specified person or entity,
(a) any other person or entity who, directly or indirectly, is in control of, or
controlled by, or is under common control with, such specified person or entity
or (b) any other person or entity who is a director, officer, employee, member
or general partner of (i) such specified person or entity or (ii) any such other
person or entity described in clause (a) above. For the purposes of this
definition, "CONTROL" of a person or entity means the power, direct or indirect,
(i) to vote more than 50% of the securities having ordinary voting power for the
election of directors of such person or entity or (ii) to direct or cause the
direction of the management and policies of such person or entity, whether by
contract or otherwise.
"BUSINESS DAY" shall mean any day other than (i) a Saturday or Sunday,
(ii) a day on which the New York Stock Exchange, the Federal Reserve Bank of New
York, or banking and savings and loan institutions in the State of New York or
Connecticut or the City of New York are closed, or (iii) a day on which trading
in securities on the New York Stock Exchange or any other major securities
exchange in the United States is not conducted.
"INTERIM DIP HEARING" shall mean an interim hearing to approve the DIP
Facility (as defined in the Order).
"MARKET VALUE" shall mean the price at which the Purchased Security
could be sold in its entirety to a single third party purchaser, as determined
by the Buyer in its sole discretion exercised in good faith.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (a)
the business, assets, property, condition (financial or otherwise) or prospects
of Seller, (b) the ability of the Seller to perform its obligations under the
Repo Agreement or the Confirmation, (c) the validity or enforceability of the
Repo Agreement or the Confirmation, (d) the rights and remedies of the Buyer
under the Repo Agreement or the Confirmation, or (e) the Purchased Security.
"OBLIGATION" shall mean (a) all of Seller's indebtedness, obligation to
pay the Repurchase Price on the Repurchase Date, and other obligations and
liabilities to Buyer or its Affiliates arising under, or in connection with, the
Transaction or the documents related thereto (the "TRANSACTION DOCUMENTS"),
whether now existing or hereafter arising; (b) any and all sums paid by Buyer or
on behalf of Buyer in order to preserve or protect the Purchased Security or its
interest therein; (c) in the event of any proceeding for the collection or
enforcement of any of Seller's indebtedness, obligations or liabilities referred
to in clause (a), the reasonable expenses of retaking, holding, collecting,
preparing for sale, selling or otherwise disposing of or realizing on the
Purchased Security, or of any exercise by Buyer of its rights under the related
agreements, including without limitation, reasonable attorneys' fees and
disbursements and court costs; and (d) all of Seller's indemnity obligations to
Buyer pursuant to the Transaction Documents.
"ORDER" shall mean that certain ORDER APPROVING DEBTORS' EMERGENCY
MOTION FOR TRANSFERS OF CERTAIN PURCHASED ASSETS PURSUANT TO SECTIONS 105 & 363
OF THE BANKRUPTCY CODE, GRANT OF CERTAIN PRIORITY SECURITY INTERESTS AND
ALLOWANCE OF SUPERPRIORITY CLAIMS of the Bankruptcy Court approving the Repo
Agreement and this Confirmation.
III. EVENTS OF DEFAULT. The term "Event of Default" with respect to the Seller
shall include, in addition to the definition set forth in Paragraph 11 of the
Repo Agreement, the following events:
15
1. Any event shall occur which, in the sole good faith discretion
of the Buyer, may have a Material Adverse Effect.
2. Any provision of the Order shall cease to be in full force and
effect, or shall be reversed, stayed, modified, amended or
appealed.
3. The Seller shall fail to comply with any term or condition of
the Order.
4. The Interim DIP Hearing shall cease to be scheduled for a date
on or before February 3, 2005.
5. The occurrence of any event of default under any other agreement
entered into by the Seller or any of its Affiliates with the
Buyer or any of its Affiliates.
6. Notwithstanding anything to the contrary in the Repo Agreement,
the filing of the Chapter 11 Cases shall not be deemed to be an
Event of Default.
IV. CONDITIONS PRECEDENT. Prior to entering into the initial Transaction under
this Agreement, Seller shall cause each of the following conditions to occur:
(a) The Transaction Documents shall be duly executed and delivered to the
parties thereto and be in full force and effect, free of modification, breach or
waiver.
(b) JPMorgan Chase, as designee of the Buyer, shall have received the Purchased
Security and all applicable transfer documentation, in form and substance
satisfactory to the Buyer.
(c) The Buyer shall have received satisfactory evidence of the entry of the
Order which Order (i) shall have been entered upon an application or motion of
the ABFS Debtors reasonably satisfactory in form and substance to the Buyer,
(ii) shall authorize the transactions hereunder, (iii) shall approve the payment
by the Seller of the Facility Fee referred to in Section VI hereof, (iv) shall
be in full force and effect, and (v) shall not have been vacated, stayed,
reversed, modified, amended or appealed in any respect.
(d) The Buyer shall have paid to the Seller the Facility Fee referred to in
Section VI hereof.
(e) The Bankruptcy Court shall have scheduled the Interim DIP Hearing for a date
on or before February 3, 2005.
(f) The Seller shall have complied with all terms and conditions of the Order.
(g) The Buyer shall have received an opinion from counsel to the Seller, in form
and substance satisfactory to the Buyer.
V. FEES AND DISBURSEMENTS; INDEMNIFICATION.
(a) Seller agrees to pay on demand (i) all reasonable out-of-pocket costs and
expenses of Buyer in connection with the preparation, execution, delivery,
administration, modification and amendment of this Agreement (including, without
limitation, (A) all due diligence, collateral review, syndication,
transportation, computer, duplication, appraisal, audit, insurance, consultant,
search, filing and recording fees and expenses and (B) the reasonable fees and
expenses of counsel for Buyer with respect thereto, with respect to advising
Buyer as to its rights and responsibilities, or the perfection, protection or
preservation of rights or interests, under this Agreement, with respect to
negotiations with Seller or with other creditors of Seller or any of its
subsidiaries arising out of any Event of Default or any events or circumstances
that may give rise to an Event of Default and with respect to presenting claims
in or otherwise participating in or monitoring any bankruptcy, insolvency or
other similar proceeding involving creditors' rights generally and any
proceeding ancillary thereto, in each case involving Seller), and (ii) all costs
and expenses of Buyer in connection with the enforcement of this Agreement,
whether in any action, suit or litigation, any bankruptcy, insolvency or other
similar proceeding affecting
16
creditors' rights generally (including, without limitation, the reasonable fees
and expenses of counsel for Buyer) whether or not the transactions contemplated
hereby are consummated.
(b) Seller agrees to indemnify and hold harmless Buyer and each of its
respective Affiliates and their officers, directors, employees, agents and
advisors (each, an "INDEMNIFIED PARTY") from and against (and will reimburse
each Indemnified Party as the same is incurred) any and all claims, damages,
losses, liabilities and expenses (including, without limitation, reasonable fees
and expenses of counsel) that may be incurred by or asserted or awarded against
any Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any investigation,
litigation or other proceeding (whether or not such Indemnified Party is a party
thereto) relating to, resulting from or arising out of any of the Transaction
Documents and all other documents related thereto, any breach of a
representation or warranty of Seller or Seller's officer in the Repo Agreement
as supplemented by this Confirmation or any other Transaction Document, and all
actions taken pursuant thereto) the Transactions, the actual or proposed use of
the proceeds of the Transactions, or any of the transactions contemplated
thereby, including, without limitation, any acquisition or proposed acquisition
or, except to the extent such claim, damage, loss, liability or expense is found
in a final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct.
In the case of an investigation, litigation or other proceeding to which the
indemnity in this Section applies, such indemnity shall be effective whether or
not such investigation, litigation or proceeding is brought by Seller, its
members, or creditors or an Indemnified Party or any Indemnified Party is
otherwise a party thereto and whether or not the transactions contemplated
hereby are consummated. Seller also agrees not to assert any claim against Buyer
or any of its Affiliates, or any of their respective officers, directors,
employees, attorneys and agents, on any theory of liability, for special,
indirect, consequential or punitive damages arising out of or otherwise relating
to the Transaction Documents, the actual or proposed use of the proceeds of the
Transactions, the Repo Agreement as supplemented by this Confirmation or any of
the transactions contemplated thereby. THE FOREGOING INDEMNITY AND AGREEMENT NOT
TO ASSERT CLAIMS EXPRESSLY APPLIES, WITHOUT LIMITATION, TO THE NEGLIGENCE (BUT
NOT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF THE INDEMNIFIED PARTIES.
VI. FACILITY FEE. The Seller shall pay to the Buyer a facility fee (the
"FACILITY FEE") equal to $500,000, which Facility Fee will be fully earned and
nonrefundable on the Purchase Date.
VII. GOVERNING LAW. THIS CONFIRMATION SHALL BE GOVERNED BY NEW YORK LAW WITHOUT
REFERENCE TO CHOICE OF LAW DOCTRINE (OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW).
VIII. SUBMISSION TO JURISDICTION; WAIVERS. THE SELLER AND THE BUYER EACH HEREBY
IRREVOCABLY AND UNCONDITIONALLY: (A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THE REPO AGREEMENT AND THIS CONFIRMATION,
OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE
NON-EXCLUSIVE GENERAL JURISDICTION OF THE UNITED STATES BANKRUPTCY COURT FOR THE
DISTRICT OF DELAWARE AND APPELLATE COURTS THEREFROM OR THE COURTS OF THE STATE
OF NEW YORK, WITHIN THE COUNTY OF NEW YORK, IN THE EVENT THE FOREGOING COURTS
LACK OR DECLINE JURISDICTION; (B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING
MAY BE BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN
INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME; (C) AGREES THAT
SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A
COPY THEREOF BY
17
REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL),
POSTAGE PREPAID, TO ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH
OTHER ADDRESS OF WHICH THE BUYER SHALL HAVE BEEN NOTIFIED; AND (D) AGREES THAT
NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO ▇▇▇ IN ANY OTHER
JURISDICTION.
IX. WAIVER OF JURY TRIAL. EACH OF THE SELLER AND THE BUYER HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THE REPO
AGREEMENT, THIS CONFIRMATION OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
X. FURTHER ASSURANCES. The Seller agrees to do such further acts and things and
to execute and deliver to the Buyer such additional assignments,
acknowledgments, agreements, powers and instruments as are reasonably required
by the Buyer to carry into effect the purposes of the Repo Agreement and this
Confirmation, to perfect the interests of Buyer in the Collateral or to better
assure and confirm unto Buyer its rights, powers and remedies hereunder.
XI. OTHER.
1. The last sentence of Paragraph 3(b) of the Repo Agreement is
hereby deleted in its entirety and replaced with the following:
"In the event of any conflict between the terms of such
Confirmation and this Agreement, such Confirmation shall
prevail."
2. The Price Differential shall be payable on the Repurchase Date
(the "PAYMENT DATE"). For purposes of Paragraph 5, an amount
equivalent to all Income on the Purchased Security will be
payable to Buyer and will be applied in the following order of
priority: (a) to pay any Price Differential then due and owing
under the Repo Agreement; (b) to pay to Buyer all other amounts
due and owing under the Repo Agreement; and (c) the remainder,
if any, to the Seller. Notwithstanding anything to the contrary
contained herein or elsewhere, the parties hereto acknowledge
and agree that to the extent Income on the Purchased Security is
received on a day other than the Payment Date, the Buyer shall
be entitled to hold such Income until the Payment Date, after
which the Buyer shall apply such Income in accordance with the
second sentence of this Section.
3. Section 4 of the Repo Agreement and all references to Margin
Deficit or Margin Excess are hereby deleted in their entirety.
4. The following paragraph shall be added to Section 9 of the Repo
Agreement: "(c) Notwithstanding anything to the contrary
contained in the Agreement or elsewhere, Seller shall not have
the right to substitute Securities for the Purchased Security
without the express written consent of the Buyer."
5. The Buyer agrees that, following the exercise by the Buyer of
remedies following the occurrence of an Event of Default, to the
extent that the Buyer receives net proceeds from the sale of the
Purchased Security in excess of the sum of (a) the Repurchase
Price, (b) any other amounts owed by the Seller to the Buyer
under the Repo Agreement and this Confirmation and (c) the
obligations secured by the Clearwing Lien (as defined in the
Order), after payment in full in cash of such obligations to the
Buyer and Clearwing (as defined in the Order), the Buyer shall
remit any remaining surplus to the Seller or to whomsoever shall
be lawfully entitled thereto.
18
6. Each of the parties hereto agrees that the Purchased Security
shall be delivered to Buyer's Custodian, JPMorgan Chase Bank, at
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇, for the account of Greenwich Capital
Financial Products, Inc., pursuant to delivery instructions
provided by Buyer to Seller. The parties acknowledge that
JPMorgan Chase Bank is a "financial institution" as defined in
Section 101(22) of the United States Bankruptcy Code, as
amended.
7. This Confirmation may be executed in any number of counterparts,
each of which shall be deemed to be an original, and all of
which taken together shall constitute but one and the same
instrument.
8. This Agreement shall be binding upon and inure to the benefit of
the respective successors and assigns of the Seller and the
Buyer; PROVIDED that neither Seller nor any ABFS Debtor shall
assign or transfer any of its rights or obligations hereunder
without the prior written consent of Buyer.
* * * * *
19
Agreed: Agreed:
AMERICAN BUSINESS CREDIT, INC., as Seller GREENWICH CAPITAL FINANCIAL
PRODUCTS, INC., as Buyer
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ Bastich
--------------------- -------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ Bastich
Title: Executive Vice President and Title: Senior Vice President
General Counsel
20