EXHIBIT 10.66
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EXECUTION COPY
NOTE PURCHASE AGREEMENT
Dated as of August 8, 2003
among
OPTION ONE MORTGAGE CORPORATION,
as the Servicer,
OPTION ONE LOAN WAREHOUSE CORPORATION,
as the Depositor,
OPTION ONE OWNER TRUST 2003-4,
as the Issuer,
FALCON ASSET SECURITIZATION CORPORATION,
JUPITER SECURITIZATION CORPORATION, and
PREFERRED RECEIVABLES FUNDING CORPORATION,
as the Conduit Purchasers,
THE FINANCIAL INSTITUTIONS PARTY HERETO,
as the Committed Purchasers,
and
BANK ONE, NA (MAIN OFFICE CHICAGO),
as the Note Agent
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.................................................................... 1
SECTION 1.01. Defined Terms.......................................................... 1
SECTION 1.02. Accounting Terms; Other Terms.......................................... 7
SECTION 1.03. Other Rules of Construction............................................ 7
SECTION 1.04. Computation of Time Periods............................................ 8
ARTICLE II PURCHASE AND SALE; PURCHASE COMMITMENT........................................ 8
SECTION 2.01. Purchase and Sale of the Note.......................................... 8
SECTION 2.02. [Reserved]............................................................. 8
SECTION 2.03. Increases and Decreases in the Note Principal Balance; Decreases in
the Maximum Note Principal Balance..................................... 8
SECTION 2.04. Fees................................................................... 9
SECTION 2.05. Extension of Term...................................................... 9
SECTION 2.06. Calculation and Payment of Monthly Interest............................ 10
SECTION 2.07. Increased Costs...............................................'........ 11
SECTION 2.08. Increased Capital...................................................... 12
SECTION 2.09. Taxes.................................................................. 13
ARTICLE III CLOSING...................................................................... 15
SECTION 3.01. Closing................................................................ 15
SECTION 3.02. Transactions to be Effected at the Closing............................. 15
ARTICLE IV PURCHASER CONDITIONS PRECEDENT................................................ 16
SECTION 4.01. Conditions Precedent to the Purchase of the Note....................... 16
SECTION 4.02. Conditions Precedent to Principal Balance Increases.................... 18
ARTICLE V REPRESENTATIONS AND WARRANTIES................................................. 19
SECTION 5.01. Representations and Warranties of the Depositor........................ 19
SECTION 5.02. Representations and Warranties of the Servicer......................... 20
SECTION 5.03. Representations and Warranties of the Issuer........................... 23
SECTION 5.04. Representations and Warranties of the Note Agent and the
Purchasers............................................................. 24
ARTICLE VI COVENANTS OF THE ISSUER, THE DEPOSITOR AND THE SERVICER....................... 25
SECTION 6.01. Covenants of the Issuer, the Depositor and the Servicer................ 25
SECTION 6.02. Reporting Requirements of the Depositor and the Servicer............... 26
SECTION 6.03. Optional Repurchase.................................................... 27
SECTION 6.04. Change in Name; Jurisdiction of Organization........................... 27
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ARTICLE VII INDEMNIFICATION.............................................................. 27
SECTION 7.01. Indemnification by the Depositor and the Servicer...................... 27
SECTION 7.02. Costs and Expenses..................................................... 28
ARTICLE VIII THE NOTE AGENT.............................................................. 29
SECTION 8.01. Authorization and Action............................................... 29
SECTION 8.02. Note Agent's Reliance, Etc............................................. 30
SECTION 8.03. Note Agent and Affiliates.............................................. 30
SECTION 8.04. Purchase Decision...................................................... 30
SECTION 8.05. Indemnification........................................................ 31
SECTION 8.06. Successor Note Agent................................................... 31
ARTICLE IX MISCELLANEOUS................................................................. 31
SECTION 9.01. Amendments, Etc........................................................ 31
SECTION 9.02. Notices, Etc........................................................... 32
SECTION 9.03. No Waiver; Remedies.................................................... 32
SECTION 9.04. Binding Effect; Assignability.......................................... 32
SECTION 9.05. Note as Evidence of Indebtedness....................................... 34
SECTION 9.06. Governing Law.......................................................... 34
SECTION 9.07. No Proceedings......................................................... 34
SECTION 9.08. Execution in Counterparts; Severability................................ 35
SECTION 9.09. No Recourse............................................................ 35
SECTION 9.10. Confidentiality........................................................ 36
SECTION 9.11. Limitation on Liability................................................ 36
SCHEDULES AND EXHIBITS
Schedule I Commitments
Schedule II Notice Addresses
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THIS NOTE PURCHASE AGREEMENT dated as of August 8, 2003, is among OPTION
ONE MORTGAGE CORPORATION, a California corporation, as Servicer, OPTION ONE LOAN
WAREHOUSE CORPORATION, a Delaware corporation, as Depositor, OPTION ONE OWNER
TRUST 2003-4, a Delaware business trust, as the Issuer, FALCON ASSET
SECURITIZATION CORPORATION, a Delaware corporation ("Falcon"), JUPITER
SECURITIZATION CORPORATION, a Delaware corporation ("Jupiter") PREFERRED
RECEIVABLES FUNDING CORPORATION, Delaware corporation ("PREFCO") (Falcon,
Jupiter and PREFCO are collectively referred to as the "Conduit Purchasers" and
each, individually, a "Conduit Purchaser"), THE FINANCIAL INSTITUTIONS PARTY
HERETO FROM TIME TO TIME, as committed purchasers (the "Committed Purchasers"
and, together with the Conduit Purchaser, the "Purchasers") and BANK ONE, NA
(MAIN OFFICE CHICAGO), a national banking association ("Bank One"), as agent
(the "Note Agent") for the Purchasers and the other "Owners" (as defined below).
In consideration of the representations, warranties and agreements herein
contained, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used herein, the following terms shall
have the meanings specified below. Capitalized terms used herein that are not
otherwise defined shall have the meanings ascribed thereto in the Sale and
Servicing Agreement or the Indenture, as the case may be.
"Act" means the Securities Act of 1933, as amended.
"Additional Amounts" means, for each Accrual Period, an amount equal to
the sum of (i) the aggregate amount payable to all Affected Parties pursuant to
Sections 2.07, 2.08 and 2.09 in respect of such Accrual Period and (ii) the
aggregate of such amounts with respect to prior Accrual Periods which remain
unpaid.
"Adjusted LIBO Rate" means, for any Accrual Period, an interest rate per
annum equal to the rate per annum obtained by dividing (i) the LIBO Rate in
effect for such Accrual Period by (ii) a percentage equal to 100% minus the
Eurodollar Reserve Percentage for such Accrual Period.
"Affected Party" means each Purchaser, the Note Agent, each Liquidity
Provider, and any permitted assignee of any Purchaser or any Liquidity Provider.
"Agreement" or "Note Purchase Agreement" means this note purchase
agreement and any supplements, amendments, exhibits and schedules hereto.
"Alternate Base Rate" means a fluctuating interest rate per annum as shall
be in effect from time to time, which rate per annum shall at all times be equal
to the highest of:
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(a) the rate of interest announced publicly by Bank One in Chicago,
Illinois, from time to time as Bank One's prime rate;
(b) 1/2 of one percent above the latest three-week moving average of
secondary market morning offering rates in the United States for
three-month certificates of deposit of major United States money market
banks, such three-week moving average being determined weekly on each
Monday (or, if any such day is not a Business Day on the next succeeding
Business Day) for the three-week period ending on the previous Friday by
Bank One on the basis of such rates reported by certificate of deposit
dealers to and published by the Federal Reserve Bank of New York or, if
such publication shall be suspended or terminated, on the basis of
quotations for such rates received by Bank One from three New York
certificate of deposit dealers of recognized standing selected by Bank
One, in either case adjusted to the nearest 1/4 of one percent or, if
there is no nearest 1/4 of one percent, to the next higher 1/4 of one
percent; or
(c) 1/2 of one percent per annum above the Federal Funds Rate.
"Assignee Rate" for any Accrual Period means an interest rate per annum
equal to the Adjusted LIBO Rate plus 3.0%; provided, however, that (i) in the
case of any Accrual Period of less than one month, the "Assignee Rate" for such
Accrual Period shall be calculated as the Adjusted LIBO Rate as if such Accrual
Period has a duration of one month; and (ii) if it shall become unlawful for
Bank One to obtain funds in the London interbank market in order to make, fund
or maintain the Note Principal Balance or deposits in dollars (in the applicable
amounts) are not being offered by Bank One in the London interbank market, then
the "Assignee Rate" for any Accrual Period shall be calculated using an interest
rate per annum equal to the Alternate Base Rate.
"Asset Purchase Agreement" means any one or more asset purchase, transfer
or similar liquidity agreement, entered into at any time pursuant to which a
Purchaser may from time to time assign part or all of its interests in the Note
held by such Purchaser to a Liquidity Provider, as such agreements may be
amended, restated, supplemented or modified from time to time.
"Bank One" means Bank One, NA, a national banking association.
"Breakage Costs" means, for each Owner for each funding period, to the
extent that an Owner is funding the maintenance of its investment in the Note
during such funding period through the issuance of Commercial Paper Notes or at
the Adjusted LIBO Rate, during which the amount of such investment is reduced
(in whole or in part) prior to the end of the period for which it was originally
scheduled to remain outstanding (the amount of such reduced investment being
referred to as the "Allocated Amount"), the excess of (i) the sum of (a) the
discount or interest that would have accrued on the Allocated Amount during the
remainder of such funding period if such reduction had not occurred and (b)
other costs and expenses incurred by such Owner as a result of such reduction
(including costs incurred due to the related early termination of any agreement
entered into for the purpose of hedging such Owner's obligations under this
Agreement) over (ii) the net income scheduled to be received by such Owner from
investing the Allocated Amount for the remainder of such funding period, it
being understood that in investing
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such Allocated Amount such Owner will, but without limitation to its discretion,
endeavor to minimize the associated Breakage Costs.
"Business Day" means a day that is (i) a "Business Day" as such term is
defined in the Sale and Servicing Agreement and (ii) when used in connection
with the Adjusted LIBO Rate, a day other than a day on which banking
institutions in London, England, trading in Dollar deposits in the London
interbank market are authorized or obligated by law or executive order to be
closed.
"Closing" shall have the meaning specified in Section 3.01.
"Closing Date" shall have the meaning specified in Section 3.01.
"Collection Date" means the earliest Business Day following the
termination (as opposed to suspension) of the Revolving Period on which the Note
Principal Balance shall have been reduced to zero and all Monthly Interest and
all other amounts due to the Owners shall have been paid in full.
"Commercial Paper Notes" means short-term promissory notes issued or to be
issued by a Conduit Purchaser to fund its investments in accounts receivable and
other financial assets.
"Commitment" means with respect to each Committed Purchaser on any date,
the dollar amount set forth next to such Committed Purchaser's name on Schedule
I hereto, as such amount may be reduced pursuant to Section 2.03 and as such
amount may be increased from time to time on terms and conditions acceptable to
the Depositor and such Committed Purchaser in its sole discretion; provided,
that upon any other Person becoming a Committed Purchaser hereunder as a result
of any assignment pursuant to Section 9.04, the Commitment of the assigning
Committed Purchaser as in effect immediately prior to such assignment shall be
allocated as between the assigning Committed Purchaser and such assignee
Committed Purchaser as such Persons shall so designate in a notice to the Note
Agent, and thereafter such respective allocated amounts shall be such Committed
Purchasers' respective Commitments.
"Commitment Termination Date" means August 6, 2004, as such date may be
extended in accordance with Section 2.05.
"Committed Purchaser" shall have the meaning specified in the Preamble
hereto.
"Conduit Purchaser" shall have the meaning specified in the Preamble
hereto.
"CP Rate" means, for each Conduit Purchaser for any Accrual Period, the
per annum rate equivalent to the weighted average of the per annum rates paid or
payable by such Conduit Purchaser from time to time as interest on or otherwise
(by means of interest rate hedges or otherwise) in respect of the Commercial
Paper Notes issued by such Conduit Purchaser that are allocated, in whole or in
part, by the Note Agent (on behalf of such Conduit Purchaser) to fund or
maintain its interest in the Note during such Accrual Period, as determined by
the Note Agent (on behalf of such Conduit Purchaser) and reported to the
Servicer and the Indenture Trustee,
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which rates shall reflect and give effect to the commissions of placement agents
and dealers in respect of such promissory notes, to the extent such commissions
are allocated, in whole or in part, to such promissory notes by the Note Agent
(on behalf of such Conduit Purchaser); provided, however, that if any component
of such rate is a discount rate, in calculating the "CP Rate" for such Accrual
Period, the Note Agent shall for such component use the rate resulting from
converting such discount rate to an interest bearing equivalent rate per annum.
"Depositor" means Option One Loan Warehouse Corporation, in its capacity
as depositor under the Sale and Servicing Agreement.
"Eurocurrency Liabilities" shall have the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Reserve Percentage" for any Accrual Period means the reserve
percentage applicable to Bank One during such Accrual Period under regulations
issued from time to time by the Board of Governors of the Federal Reserve System
(or any successor) (or if more than one such percentage shall be so applicable,
the daily average of such percentages for those days in such Accrual Period
during which any such percentage shall be so applicable) under regulations
issued from time to time by the Board of Governors of the Federal Reserve System
(or any successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal reserve
requirement) for Bank One in respect of liabilities or assets consisting of or
including Eurocurrency Liabilities having a term equal to such Accrual Period.
"Excluded Taxes" shall have the meaning specified in Section 2.09(a).
"Federal Funds Rate" means, for any day, a fluctuating interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day, the
average of the quotations for such day for such transactions received by Bank
One from three Federal funds brokers of recognized standing selected by it.
"Fee Letter" means the letter agreement, dated as of the Closing Date,
among the Depositor, the Servicer, and the Note Agent, regarding certain fees
payable under or in connection with this Agreement, as the same may be amended,
restated, supplemented or otherwise modified form time to time.
"Fees" shall have the meaning specified in Section 2.04 hereof.
"Governmental Actions" means any and all consents, approvals, permits,
orders, authorizations, waivers, exceptions, variances, exemptions or licenses
of, or registrations, declarations or filings with, any Governmental Authority
required under any Governmental Rules.
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"Governmental Authority" means the United States of America, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government,
"Governmental Rules" means any and all laws, statutes, codes, rules,
regulations, ordinances, orders, writs, decrees and injunctions of any
Governmental Authority and any and all legally binding conditions, standards,
prohibitions, requirements and judgments of any Governmental Authority.
"Increase Date" shall have the meaning specified in Section 2.03(c).
"Indenture" means the Indenture, dated as of August 8, 2003, between the
Issuer and the Indenture Trustee, as the same may be amended, supplemented or
otherwise modified from time to time.
"Indenture Trustee" means Wells Fargo Bank Minnesota, National
Association, a national banking association, in its capacity as trustee under
the Indenture, its successors in interest and any successor indenture trustee
under the Indenture.
"Interpretation" as used in Sections 2.07 and 2.08 with respect to any law
or regulation, means the interpretation or application of such law or regulation
by any Governmental Authority (including any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government), central bank, accounting standards board (including the
Financial Accounting Standards Board), financial services industry advisory body
or any comparable entity.
"Issuer" means Option One Owner Trust 2003-4, a Delaware business trust.
"LIBO Rate" means, with respect to any Accrual Period, the rate per annum
equal the applicable British Bankers' Association Interest Settlement Rate for
deposits in U.S. dollars appearing on Reuters Screen FRBD as of 11:00 a.m.
(London time) two Business Days prior to the first day of the relevant Accrual
Period, and having a maturity equal to such Accrual Period, provided that, (1)
if Reuters Screen FRBD is not available to the Note Agent for any reason, the
applicable LIBO Rate for the relevant Accrual Period shall instead be the
applicable British Bankers' Association Interest Settlement Rate for deposits in
U.S. dollars as reported by any other generally recognized financial information
service as of 11:00 a.m. (London time) two Business Days prior to the first day
of such Accrual Period, and having a maturity equal to such Accrual Period, and
(2) if no such British Bankers' Association Interest Settlement Rate is
available to the Note Agent, the applicable LIBO Rate for the relevant Accrual
Period shall instead be the rate determined by the Note Agent to be the rate at
which it offers to place deposits in U.S. dollars with first-class banks in the
London interbank market at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Accrual Period, in the approximate amount to
be funded at the LIBO Rate and having a maturity equal to such Accrual Period.
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"Liquidity Provider" means a financial institution providing liquidity
support to or for the account of any Conduit Purchaser pursuant to or in
connection with an Asset Purchase Agreement.
"Losses" shall have the meaning specified in Section 7.01(a).
"Maximum Note Principal Balance" means $1,000,000,000, as such amount may
be increased or decreased in accordance with the terms of this Agreement.
"Monthly Interest" means with respect to any Payment Date, an amount equal
to the sum of (i) the product of (a) the Note Interest Rate in effect with
respect to the Accrual Period ending immediately prior to such Payment Date, (b)
the average daily Note Principal Balance during such Accrual Period, and (c) a
fraction the numerator of which is the actual number of days in such Accrual
Period and the denominator of which is 360, plus (ii) all Breakage Costs
incurred by Owners during the immediately preceding Accrual Period, plus (iii)
all Fees owed to the Note Agent and the Owners for the Accrual Period ending
immediately prior to such Payment Date.
"Note" means the Option One Owner Trust 2003-4 Mortgage-Backed Note issued
by the Issuer pursuant to the Indenture.
"Note Interest Rate" means, for any Accrual Period:
(i) to the extent that a Conduit Purchaser funds or maintains its
interest in the Note by issuing its Commercial Paper Notes, the CP Rate,
(ii) if and to the extent that a Conduit Purchaser elects in its
sole discretion not to fund or maintain, or is not able to fund or
maintain, its interest in the Note for such Accrual Period by the issuance
of its Commercial Paper Notes, or if and to the extent that a Committed
Purchaser funds or maintains an interest in the Note, a rate equal to the
Assignee Rate for such Accrual Period.
(iii) at any time following the occurrence of an Event of Default,
the "Note Interest Rate" for each Accrual Period shall be the sum of the
Alternate Base Rate plus 3.0% per annum.
"Other Taxes" means any present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies that arise from
any payment or deposit required to be made hereunder, under the Sale and
Servicing Agreement or the Indenture or from the execution, delivery or
registration of, or otherwise with respect to, any of the foregoing.
"Owner" means each Purchaser, each Liquidity Provider, and all other
owners by assignment, participation or otherwise of the Note or any interest
therein.
"Owner Trustee" means Wilmington Trust Company, not in its individual
capacity but solely as owner trustee under the Trust Agreement.
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"Principal Balance Increase" shall have the meaning specified in Section
2.03.
"Purchaser" shall have the meaning specified in the preamble hereto.
"Required Owners" means, at any time, those Owners owning interests in the
Note aggregating 66-2/3% of the Note Principal Balance at such time.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement,
dated as of August 8, 2003, among the Issuer, the Depositor, the Servicer and
the Indenture Trustee, as the same may be amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms thereof.
"Taxes" shall have the meaning specified in Section 2.09(a).
"Transferee" shall have the meaning specified in Section 9.04(d).
"Trust Agreement" means the Trust Agreement dated as of August 8, 2003,
between the Depositor and the Owner Trustee, as the same may be amended,
restated, supplemented or otherwise modified from time to time.
"UCC" means the Uniform Commercial Code as from time to time in effect in
the applicable jurisdiction.
SECTION 1.02. Accounting Terms; Other Terms. All accounting terms used in
this Agreement shall, unless otherwise specifically provided, have the meanings
customarily given to them in accordance with generally accepted United States
accounting principles or United States regulatory accounting principles, as
applicable, as in effect from time to time, and all financial computations
hereunder shall, unless otherwise specifically provided, be computed in
accordance with generally accepted United States accounting principles or United
States regulatory accounting principles, as applicable, as in effect from time
to time, consistently applied. All terms used in Article 9 of the UCC in the
State of New York, and not specifically defined herein, are used herein as
defined in such Article 9.
SECTION 1.03. Other Rules of Construction. References in this Agreement to
sections, schedules and exhibits are to sections of and schedules and exhibits
to this Agreement unless otherwise indicated. The words "hereof, "herein",
"hereunder" and comparable terms refer to the entirety of this Agreement and not
to any particular article, Section or other subdivision hereof or attachment
hereto. Words in the singular include the plural and in the plural include the
singular. Unless the context otherwise requires, the word "or" is not exclusive.
The word "including" shall be deemed to mean "including, without limitation".
The Section and article headings and table of contents contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Except as otherwise specified
herein, all references herein (i) to any Person shall be deemed to include such
Person's successors and assigns and (ii) to any Governmental Rule or contract
specifically defined or referred to herein shall be deemed references to such
Governmental Rule or contract as the same
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may be supplemented, amended, waived, consolidated, replaced or modified from
time to time, but only to the extent permitted by, and effected in accordance
with, the terms thereof.
SECTION 1.04. Computation of Time Periods. Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each mean "to but excluding."
ARTICLE II
PURCHASE AND SALE; PURCHASE COMMITMENT
SECTION 2.01. Purchase and Sale of the Note. On the terms and subject to
the conditions set forth in this Agreement (including, without limitation, the
conditions precedent set forth in Article IV), and in reliance on the covenants,
representations, warranties and agreements herein set forth, the Issuer agrees
to sell, transfer and deliver to the Note Agent, for the benefit of the
Purchasers, at the Closing, and the Purchasers agree to purchase from the
Issuer, at the Closing, the Note.
SECTION 2.02. [Reserved].
SECTION 2.03. Increases and Decreases in the Note Principal Balance;
Decreases in the Maximum Note Principal Balance.
(a) Subject to the terms and conditions set forth in Section 4.02 hereof,
the Conduit Purchasers may, in their sole discretion, and the Committed
Purchasers shall during the Revolving Period, fund the applicable portion of any
increase to the Note Principal Balance (a "Principal Balance Increase")
requested by the Issuer from the Purchasers in accordance with the procedures
described in Section 2.06 of the Sale and Servicing Agreement; provided,
however, that at no time shall (i) the Principal Balance exceed the Maximum
Principal Balance, or (ii) the Note Principal Balance allocable to any Committed
Purchasers exceed such Committed Purchaser's Commitment.
(b) Each request for a Principal Balance Increase shall be deemed to be a
request that the Conduit Purchasers fund such Principal Balance Increase. To the
extent a Conduit Purchaser elects not to fund its share of any Principal Balance
Increase requested by the Issuer, each related Committed Purchaser shall fund
its pro rata share of the portion of such Principal Balance Increase allocated
to such Conduit Purchaser. Each Conduit Purchaser shall provide prompt notice to
the Note Agent if such Conduit Purchaser elects not to fund its share of a
Principal Balance Increase (and the Note Agent shall forward such notice to the
Servicer, the Depositor and the Issuer).
(c) Upon the satisfaction of the conditions precedent set forth in Section
4.02 hereof on the date on which the Issuer has requested a Principal Balance
Increase to occur (the "Increase Date"), each Purchaser funding a portion of the
requested Principal Balance Increase shall deliver to the Note Agent funds in an
amount equal to the portion of the Principal Balance Increase allocated to such
Purchaser by the Note Agent. Upon its receipt of such funds, the Note
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Agent will remit such amount, in same day funds, to the Advance Account in
accordance with the Sale and Servicing Agreement.
(d) On any date, the Note Principal Balance may be decreased in accordance
with the Sale and Servicing Agreement. Any such reductions to the Note Principal
Balance and any such reductions on any other date to the Note Principal Balance
shall be applied to reduce the Note Principal Balances allocated to the
interests in the Note held by Purchasers hereunder as determined by the Note
Agent, provided, that each such Purchaser which is a Committed Purchaser shall
be allocated its pro rata share of any such reduction.
(e) Notwithstanding anything to the contrary contained herein, if any
Principal Balance Increase is not made on the date specified by the Issuer in
its written request therefor delivered pursuant to Section 2.06 of the Sale and
Servicing Agreement, the Issuer shall indemnify each Affected Party against any
reasonable loss, cost or expense incurred by such Affected Party as a result of
such occurrence, including, without limitation, any reasonable loss, cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Affected Party to fund such anticipated Principal
Balance Increase; provided, however, that the Issuer shall not be obligated to
indemnify the Affected Parties for such losses, costs or expenses if it provides
notice to the Note Agent by no later than 11:00 a.m. on the Business Day
immediately preceding the Increase Date of its request to cancel the proposed
Principal Balance Increase or to reduce the amount of the proposed Principal
Balance Increase.
(f) At any time the Issuer may, upon at least 30 Business Days' prior
written notice to the Note Agent, reduce the Maximum Note Principal Balance to
an amount not less than the Note Principal Balance. Reductions of the Maximum
Note Principal Balance pursuant to this subsection 2.03 (f) shall be allocated
to the aggregate Commitments of the Committed Purchasers pro rata based on their
relative Commitments or as the Note Agent, each related Conduit Purchaser and
each Committed Purchaser whose Commitment is to be reduced less than such
respective amount may otherwise agree in writing; provided, however, that in the
event the Note Agent makes a claim on behalf of any Purchaser for any amounts
payable pursuant to Sections 2.07 or 2.06, the Issuer need only give 2 Business
Days' prior written notice to the Note Agent to effect a reduction in the
Maximum Note Principal Balance.
SECTION 2.04. Fees. From and after the Closing Date until the Collection
Date, the fees set forth in the Fee Letter (the "Fees") shall be paid in
accordance with Section 5.04 of the Indenture.
SECTION 2.05. Extension of Term.
(a) The Issuer may, at any time during the period which is not less than
45 days and not more than 75 days prior to the Commitment Termination Date then
in effect hereunder (as such date may have previously been extended pursuant to
this Section 2.05, the "Existing Termination Date"), request that the Existing
Termination Date be extended for an additional 364 days from the Existing
Termination Date. Any such request shall be in writing and delivered to the Note
Agent (which shall then deliver it to each Committed Purchaser), and shall be
subject to the following conditions: (i) at no time will this Agreement have a
remaining term
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of more than 364 days and, if any such request would result in a remaining term
of more than 364 days, such request shall be deemed to have been made for such
number of days so that, after giving effect to such extension on the date
requested, such remaining term will not exceed 364 days, (ii) neither the Note
Agent nor any Committed Purchaser shall have any obligation to extend the
Commitment Termination Date at any time, and (iii) any such extension shall be
effective only upon the written agreement of the Note Agent, the applicable
Committed Purchaser, the Depositor, the Issuer and the Servicer. Each Committed
Purchaser, acting in its sole discretion, shall, by written notice to the Note
Agent (which shall notify the Issuer and the other Purchasers) given on or
before the date (herein, the "Consent Date") that is 30 days prior to Existing
Termination Date (except that, if such date is not a Business Day, the Consent
Date shall be the next succeeding Business Day), advise the Note Agent whether
or not such Committed Purchaser intends to extend the Existing Termination Date;
provided, that each Committed Purchaser that determines not to extend the
Existing Termination Date (a "Non-extending Committed Purchaser") shall notify
the Note Agent (which shall notify the Issuer and the other Purchasers) of such
fact within 30 days of the Issuer's request for the extension of the Existing
Termination Date; provided, further, however, that any Committed Purchaser that
does not advise the Note Agent of its decision whether or not to extend the
Existing Termination Date on or before the Consent Date shall be deemed to be a
Non-extending Committed Purchaser.
(b) The Note Agent shall have the right on the Existing Termination Date
to replace any Committed Purchaser with, and/or otherwise add to this Agreement,
one or more other Committed Purchasers (which may include any existing Committed
Purchaser; each such Person prior to the Existing Termination Date, an
"Additional Committed Purchaser") (but only with the prior written consent of
the Issuer which consent shall not be unreasonably withheld or delayed) each of
which Additional Committed Purchasers shall, effective as of the Existing
Termination Date, undertake a commitment to fund Principal Balance Increases in
accordance with Section 2.03(b) hereof (and, if any such Additional Committed
Purchaser is already a Committed Purchaser, its Commitment shall be increased by
the applicable amount on such date). If the Note Agent is unable to replace a
Non-extending Committed Purchaser, then on the Existing Termination Date the
Maximum Principal Balance shall be reduced to an amount equal to the aggregate
of the Commitments of the Committed Purchasers which have extended their
respective Commitments in accordance with Section 2.05(a) above.
SECTION 2.06. Calculation and Payment of Monthly Interest.
(a) The amount of interest payable on each Payment Date in respect of the
Note shall equal the Monthly Interest for such Payment Date. The Note Agent
shall notify the Servicer, the Owner Trustee, the Indenture Trustee and the
Purchasers of the Monthly Interest for the related Payment Date and the Note
Interest Rate for the related Accrual Period on or before the Business Day
immediately following the end of such Accrual Period.
(b) Out of the Monthly Interest received by the Note Agent for each
Accrual Period as contemplated in Section 8.01(b), the Note Agent shall remit to
each Owner an amount of interest equal to the product of (i) the Note Interest
Rate applicable to such Owner for such Accrual Period and (ii) such Owner's
allocable share of the Note Principal Balance during such
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Accrual Period, plus the amount of any Breakage Costs and Fees applicable to
such Owner in respect of such Payment Date.
(c) All computations of interest and other amounts under this Agreement
shall be made on the basis of a year of 360 days and the actual number of days
elapsed. Whenever any payment or deposit to be made hereunder shall be due on a
day other than a Business Day, such payment or deposit shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of such payment or deposit.
SECTION 2.07. Increased Costs.
(a) If due to the introduction of or any change (including, without
limitation, any change by way of imposition or increase of reserve requirements)
in or in the Interpretation of any law, regulation or accounting principle or
the imposition of any guideline or request from any central bank or other
Governmental Authority after the date hereof, there shall be an increase in the
cost to an Affected Party of making, funding or maintaining any investment in
the Note or any interest therein or of agreeing to purchase or invest in the
Note or any interest therein, as the case may be (other than by reason of any
Interpretation of or change in laws or regulations relating to Taxes or Excluded
Taxes), such Affected Party shall promptly submit to the Depositor, the Servicer
and the Note Agent a certificate setting forth in reasonable detail, the
calculation of such increased costs incurred by such Affected Party. In
determining such amount, such Affected Party may use any reasonable averaging
and attribution methods, consistent with the averaging and attribution methods
generally used by such Affected Party in determining amounts of this type. The
amount of increased costs set forth in such certificate (which certificate
shall, in the absence of manifest error, be prima facie evidence as to such
amount) shall be included in the Additional Amounts for (i) the first full
Accrual Period immediately succeeding the date on which the certificate
specifying the amount owing was delivered and (ii) to the extent remaining
outstanding, each Accrual Period thereafter until paid in full, and shall be
paid to the Note Agent pursuant to Section 5.04 of the Indenture. The Note Agent
shall, out of amounts received by it (as contemplated in Section 8.01(b)) in
respect of the Additional Amounts on any Payment Date (as contemplated in
Section 8.01(b)), pay to each Affected Party, any increased costs due pursuant
to this Section 2.07; provided, however, that if the amount distributable in
respect of the Additional Amounts on any Payment Date is less than the aggregate
amount payable to all Affected Parties pursuant to Sections 2.07, 2.08 and 2.09
for the corresponding Accrual Period, the resulting shortfall shall be allocated
among such Affected Parties on a pro rata basis (determined by the amount owed
to each). Failure on the part of any Affected Party to demand compensation for
any amount pursuant to this Section for any period shall not constitute a waiver
of such Affected Party's right to demand compensation for such period. For the
avoidance of doubt, if the issuance of FASB Interpretation No. 46, or any other
change in accounting standards or the issuance of any other pronouncement,
release or interpretation, causes or requires the consolidation of all or a
portion of the assets and liabilities of Company or Seller with the assets and
liabilities of the Agent, any Financial Institution or any other Funding Source,
such event shall constitute a circumstance on which such Funding Source may base
a claim for reimbursement under this Section.
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(b) Each Owner agrees that it shall use its reasonable efforts to take (or
cause any Affected Party claiming through such Owner to take) such steps as
would eliminate or reduce the amount of any increased costs described in this
Section 2.07 incurred by such Owner or Affected Party; provided that no such
steps shall be required to be taken if, in the reasonable judgment of such Owner
or Affected Party, such steps would be disadvantageous to such Owner or Affected
Party or inconsistent with its internal policy and legal and regulatory
restrictions.
SECTION 2.08. Increased Capital.
(a) If the introduction of or any change in or in the Interpretation of
any law, regulation or accounting principle or the imposition of any guideline
or request from any central bank or other Governmental Authority, in each case,
after the date hereof, affects or would affect the amount of capital required or
expected to be maintained by any Affected Party, and such Affected Party
determines that the amount of such capital is increased as a result of (i) the
existence of the Purchaser's agreement to make or maintain an investment in the
Note or any interest therein and other similar agreements or facilities or (ii)
the existence of any agreement by Affected Parties to make or maintain an
investment in the Note or any interest therein or to fund any such investment
and any other commitments of the same type, such Affected Party shall promptly
submit to the Depositor, the Servicer and the Note Agent a certificate setting
forth the additional amounts required to compensate such Affected Party in light
of such circumstances. In determining such amount, such Affected Party may use
any reasonable averaging and attribution methods, consistent with the averaging
and attribution methods generally used by such Affected Party in determining
amounts of this type. The amount set forth in such certificate (which
certificate shall, in the absence of manifest error, be prima facie evidence as
to such amount) shall be included in the Additional Amounts for (i) the first
full Accrual Period immediately succeeding the date on which the certificate
specifying the amount owing was delivered and (ii) to the extent remaining
outstanding, each Accrual Period thereafter until paid in full, and shall be
paid to the Note Agent pursuant to Section 5.04 of the Indenture. The Note Agent
shall, out of amounts received by it in respect of the Additional Amounts on any
Payment Date (as contemplated in Section 8.01(b)), pay to each Affected Party
any amount due pursuant to this Section, provided, however, that if the amount
distributable in respect of the Additional Amounts on any Payment Date is less
than the aggregate amount payable to all Affected Parties pursuant to Sections
2.07, 2.08 and 2.09 for the corresponding Accrual Period, the resulting
shortfall shall be allocated among such Affected Parties on a pro rata basis
(determined by the amount owed to each). Failure on the part of any Affected
Party to demand compensation for any amount pursuant to this Section 2.08 for
any period shall not constitute a waiver of such Affected Party's right to
demand compensation for such period. For the avoidance of doubt, if the issuance
of FASB Interpretation No. 46, or any other change in accounting standards or
the issuance of any other pronouncement, release or interpretation, causes or
requires the consolidation of all or a portion of the assets and liabilities of
Company or Seller with the assets and liabilities of the Agent, any Financial
Institution or any other Funding Source, such event shall constitute a
circumstance on which such Funding Source may base a claim for reimbursement
under this Section.
(b) Each Owner agrees that it shall use its reasonable efforts to take (or
cause any Affected Party claiming through such Owner to take) such steps as
would eliminate or reduce the
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amount of any increased costs described in this Section 2.08 incurred by such
Owner or Affected Party; provided that no such steps shall be required to be
taken if, in the reasonable judgment of such Owner or Affected Party, such steps
would be disadvantageous to such Owner or Affected Party or inconsistent with
its internal policy and legal and regulatory restrictions.
SECTION 2.09. Taxes.
(a) Subject to Section 2.09(d), any and all payments and deposits required
to be made hereunder or under the Sale and Servicing Agreement or the Indenture
by the Depositor or the Indenture Trustee to or for the benefit of the Note
Agent or any Owner shall be made, to the extent allowed by law, free and clear
of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto imposed by any Governmental Authority, excluding, in the case of each
Owner and the Note Agent, (i) taxes, levies, imposts, deductions, charges or
withholdings imposed on, or measured by reference to, the net income of such
Owner or the Note Agent, as applicable, franchise taxes imposed on such Owner or
the Note Agent, as applicable (including, branch profits taxes, minimum taxes
and taxes computed under alternative methods, at least one of which is based on
net income), and any other taxes (other than withholding taxes not imposed by
Section 1446 of the Code and Other Taxes), levies, imposts, deductions, charges
or withholdings based or imposed on income or the receipts or gross receipts of
such Owner or the Note Agent, as applicable, in each case, by any of (A) the
United States or any State thereof, (B) the state or foreign jurisdiction under
the laws of which such Owner or the Note Agent, as applicable, is organized,
with which it has a present or former connection (other than solely by reason of
this Agreement), or in which it is otherwise doing business or (C) any political
subdivision thereof; (ii) any taxes, levies, imposts, duties, charges or fees to
the extent of any credit or other benefit actually realized by such Note Agent
or Owner, as applicable, as a result thereof; and (iii) any taxes, levies,
imposts, duties, charges or fees imposed as a result of a change by the Note
Agent or Owner, as applicable, of the office in which all or any part of its
interest in the Note is acquired, accounted for or booked (all such excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
referred to herein as "Excluded Taxes" and all such nonexcluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being referred to
herein as "Taxes"). If the Depositor or the Indenture Trustee shall be required
by law to deduct any Taxes from or in respect of any sum required to be paid or
deposited hereunder to or for the benefit any Owner or the Note Agent, then,
subject to Section 2.09(d), (i) such sum shall be increased as may be necessary
so that, after making all required deductions (including deductions applicable
to additional sums payable under this Section 2.09), such Owner or the Note
Agent (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Depositor or the Indenture
Trustee (as appropriate) shall make such deductions and (iii) the Depositor or
the Indenture Trustee (as appropriate) shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law.
(b) Subject to Section 2.09(d), each Owner and the Note Agent shall be
reimbursed for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
otherwise payable under this Section 2.09) paid by such Owner or the Note Agent
(as the case may be) and any liability (including penalties,
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interest and expenses) arising therefrom or with respect thereto. Each Owner and
the Note Agent agrees to promptly notify the Depositor and the Servicer of any
payment of such Taxes or Other Taxes made by it and, if practicable, any
request, demand or notice received in respect thereof prior to such payment. In
addition, in the event any Owner is required, in accordance with and pursuant to
the terms of any agreement or other document providing liquidity support, credit
enhancement or other similar support to such Owner in connection with the Note
or the funding or maintenance of an interest therein, to compensate a bank or
other financial institution in respect of taxes under circumstances similar to
those described in this Section, then, subject to Section 2.09(d), such Owner
shall be reimbursed for any such compensation so paid by it. A certificate as to
the amount of any indemnification pursuant to this Section 2.09 submitted to the
Depositor by such Owner or the Note Agent, as the case may be, setting forth in
reasonable detail the basis for and the calculation thereof, shall (absent
manifest error) be prima facie evidence as to such amount.
(c) Within 30 days after the date of any payment of Taxes or Other Taxes,
the Depositor (on behalf of the Issuer) will furnish to the Note Agent the
original or a certified receipt evidencing payment thereof.
(d) Any amounts payable to an Owner or the Note Agent pursuant to this
Section shall be included in the Additional Amounts for (i) in the case of
amounts payable pursuant to Section 2.09(a), the Accrual Period in respect of
which the payment subject to withholding is made, (ii) in the case of amounts
payable pursuant to Section 2.09(b), the first full Accrual Period immediately
succeeding the date on which the certificate specifying the amount owing was
delivered and (iii) in either case, to the extent remaining outstanding, each
Accrual Period thereafter until paid in full, and shall be paid to the Note
Agent pursuant to Section 5.04 of the Indenture. The Note Agent shall, out of
amounts received by it in respect of the Additional Amounts on any Payment Date
(as contemplated in Section 8.01(b)), pay to each Owner and itself, as
applicable, any reimbursement due pursuant to this Section, provided, however,
that if the amount distributable in respect of the Additional Amounts on any
Payment Date is less than the aggregate amount payable to all Affected Parties
pursuant to Sections 2.07, 2.08 and 2.09 for the corresponding Accrual Period,
the resulting shortfall shall be allocated among such Affected Parties on a pro
rata basis (determined by the amount owed to each).
(e) The Note Agent and each Owner (i) that is organized under the laws of
a jurisdiction outside the United States hereby agrees to complete, execute and
deliver to the Indenture Trustee from time to time prior to the initial Payment
Date on which such Person will be entitled to receive distributions pursuant to
the Indenture and this Agreement, Internal Revenue Service form W-8ECI (or any
successor form), (ii) at the request of the Depositor (on behalf of the Issuer),
hereby agree to complete, execute and deliver to the Indenture Trustee from time
to time prior to the first Payment Date on which such Person will be entitled to
receive distributions pursuant to the Indenture and this Agreement, Internal
Revenue Service form W-9 (or any successor form), and (iii) hereby agree to
complete, execute and deliver to the Indenture Trustee from time to time prior
to the first Payment Date on which such Person will be entitled to receive
distributions pursuant to the Indenture and this Agreement, such other forms or
certificates as may be required under the laws of any applicable jurisdiction in
order to permit the Depositor or the Indenture Trustee to make payments to, and
deposit funds to or for the account
14
of, such Person hereunder and under the Sale and Servicing Agreement and the
Indenture without any deduction or withholding for or on account of any United
States tax. Each of the Note Agent and each Owner agrees to provide like
additional subsequent duly executed forms on or before the date that any such
form expires or becomes obsolete, or upon the occurrence of any event requiring
an amendment, resubmission or change in the most recent form previously
delivered by it and to provide such extensions or renewals as may be reasonably
requested by the Depositor or the Indenture Trustee. Each of the Note Agent and
each Owner certifies, represents and warrants that as of the date of this
Agreement, or in the case of an Owner which is an assignee as of the date of
such assignment, that (i) it is entitled (A) to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes (other than taxes subject to withholding pursuant to Code Section 1446)
and (B) to an exemption from United States backup withholding tax, and (ii) it
will pay any taxes attributable to its ownership of an interest in the Note.
Each of the Note Agent and each Owner further agrees that compliance with this
Section 2.09(e) (including by reason of Section 9.04(c) in the case of any sale
or assignment of any interest in Note) is a condition to the payment of any
amount otherwise due pursuant to Sections 2.09(a) and 2.09(b). Notwithstanding
anything to the contrary herein, each of the Paying Agent, Servicer and
Indenture Trustee shall be entitled to withhold any amount that it reasonably
determines in its sole discretion is required to be withheld pursuant to Section
1446 of the Code and such amount shall be deemed to have been paid to the Note
Agent or Owner, as applicable, for all purposes of the Agreement.
(f) Any Owner entitled to the payment of any additional amount pursuant to
this Section 2.09 shall use its reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to take such steps as would
eliminate or reduce the amount of such payment; provided that no such steps
shall be required to be taken if, in the reasonable judgment of such Owner, such
steps would be materially disadvantageous to such Owner.
(g) Without prejudice to the survival of any other agreement of the
Depositor hereunder, the agreements and obligations of the Depositor contained
in this Section 2.09 shall survive the termination of this Agreement.
ARTICLE III
CLOSING
SECTION 3.01. Closing. The closing of the purchase and sale of the Note
(the "Closing") shall take place at the offices of Manatt, Phelps & Phillips,
LLP, 650 Town Center Drive, Suite 1250, Costa Mesa, California 92626, on August
8, 2003, or, if the conditions to closing set forth in Article IV shall not have
been satisfied or waived by such date, as soon as practicable after such
conditions shall have been satisfied or waived, or at such other time, date and
place as the parties shall agree upon (the date of the Closing being referred to
herein as the "Closing Date").
SECTION 3.02. Transactions to be Effected at the Closing. At the Closing,
the Issuer shall deliver the Note with an aggregate maximum principal amount
equal to the Maximum Note Principal Balance to the Note Agent on behalf of the
Purchasers.
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ARTICLE IV
PURCHASER CONDITIONS PRECEDENT
SECTION 4.01. Conditions Precedent to the Purchase of the Note. The
obligation of the Purchasers to purchase and pay for the Note on the Closing
Date is subject to the satisfaction at the time of the Closing of the following
conditions:
(a) Performance by the Issuer, the Servicer, the Loan Originator and the
Depositor. All the terms, covenants, agreements and conditions of this Agreement
and the other Basic Documents to be complied with and performed by the Issuer,
the Servicer, the Loan Originator or the Depositor, as applicable, by the
Closing shall have been complied with and performed in all respects.
(b) Representations and Warranties of the Issuer, the Servicer, the Loan
Originator and the Depositor. Each of the representations and warranties of the
Depositor, the Servicer, the Loan Originator and the Issuer made in this
Agreement and the other Basic Documents, shall be true and correct in all
respects as of the time of the Closing as though made as of such time (except to
the extent they expressly relate to an earlier time).
(c) Officers' Certificate. The Note Agent shall have received from the
Servicer, in form and substance reasonably satisfactory to the Purchasers and
the Note Agent, an Officer's Certificate, dated the Closing Date, certifying as
to the satisfaction of the conditions set forth in Sections 4.01 (a) and 4.0
1(b) with respect to the Servicer, the Loan Originator, the Depositor and the
Issuer, respectively.
(d) Certain Opinions of Counsel. The Note Agent shall have received from
(1) Manatt, Phelps & Phillips, LLP, acting as counsel for the Depositor, the
Servicer, the Loan Originator and/or certain other parties, as applicable, and
(2) in-house counsel for the Loan Originator, favorable opinions, dated the
Closing Date and reasonably satisfactory in form and substance to the
Purchasers, the Note Agent and their counsel.
(e) Opinions of Counsel for the Indenture Trustee and the Owner Trustee.
The Note Agent shall have received from:
(i) Kennedy Covington Lobdell & Hickman, L.L.P., counsel for the
Indenture Trustee, a favorable opinion, dated the Closing Date and
reasonably satisfactory in form and substance to the Purchasers, the Note
Agent and their counsel.
(ii) Richards, Layton & Finger, P.A., counsel for the Owner Trustee
and the Issuer, a favorable opinion, dated the Closing Date and reasonably
satisfactory in form and substance to the Purchasers, the Note Agent and
their counsel.
(f) Financing Statements. The Note Agent shall have received evidence
reasonably satisfactory to the Purchasers and the Note Agent that, on or before
the Closing Date, (i) UCC-1 financing statements have been filed in the offices
of the Secretary of State or comparable offices of the applicable states and in
the appropriate office or offices in such other locations as may be
16
specified in the relevant opinions of counsel delivered pursuant to Section
4.01(d) and in such other jurisdictions as its counsel deems appropriate,
reflecting the assignments contemplated by such opinions of counsel and the
respective interests of the applicable parties and (ii) all other recording,
registrations and filings (including, without limitation, recording of
Assignments of Mortgage) as may be necessary, or in the opinion of the Note
Agent and the Purchasers desirable, to perfect the security interest of the
Indenture Trustee in the Collateral (including, without limitation, the Loans)
have been completed.
(g) Receipt of Certain Documents. The Note Agent shall have received a
fully executed copy of each of the Basic Documents and the other instruments,
documents and agreements required to be delivered thereunder. Each of the Basic
Documents shall have been duly authorized, executed and delivered by the
Depositor, the Servicer, the Loan Originator, the Issuer, the Owner Trustee and
the Indenture Trustee, as applicable, and shall be in full force and effect on
the Closing Date.
(h) No Actions or Proceedings. No action, suit, proceeding or
investigation by or before any Governmental Authority shall have been instituted
to restrain or prohibit the consummation by the Issuer, the Depositor, the
Servicer, the Loan Originator, the Note Agent or the Purchasers of, or to
invalidate, the transactions contemplated by this Agreement, any of the other
Basic Documents or any of the Asset Purchase Agreements in any respect.
(i) Approvals and Consents. All Governmental Actions of Governmental
Authorities required by the Note Agent, the Issuer, the Purchasers, the
Servicer, the Loan Originator or the Depositor with respect to the transactions
contemplated by this Agreement, the other Basic Documents and the Asset Purchase
Agreements shall have been obtained or made.
(j) Payment of Fees. All Fees required to be paid to the Note Agent or the
Purchasers in connection with the Closing pursuant to the Fee Letter shall have
been paid.
(k) Accounts. The Note Agent shall have received evidence reasonably
satisfactory to it that each Trust Account has been established in accordance
with the terms of the Sale and Servicing Agreement.
(l) Proceedings in Contemplation of Sale of the Note. All actions and
proceedings undertaken by the Issuer, the Loan Originator, the Depositor and the
Servicer in connection with the issuance and sale of the Note as herein
contemplated shall be satisfactory in all respects to the Note Agent, the
Purchasers and their counsel.
(m) Financial Covenants. The Loan Originator and the Servicer shall be in
compliance with the financial covenants set forth in Section 7.02 of the Sale
and Servicing Agreement.
(n) Trust Accounts Control Agreements. The Note Agent shall have received
control agreements relating to the Trust Accounts in form and substance
satisfactory to the Note Agent.
(o) Other Documents. The Servicer, the Loan Originator, the Depositor and
the Issuer shall have furnished to the Purchasers or the Note Agent, as the case
may be, such other
17
information, certificates and documents as the Purchasers, the Note Agent or
their counsel may reasonably request.
SECTION 4.02. Conditions Precedent to Principal Balance Increases. The
obligation of the Purchasers to make any Principal Balance Increase is subject
to the satisfaction, as of the applicable Increase Date, of each of the
following conditions:
(a) the request with respect to such Principal Balance Increase shall have
been delivered to the Note Agent and the Servicer by the time, and shall
otherwise conform to the requirements, specified in Section 2.06 of the Sale and
Servicing Agreement;
(b) each of the conditions set forth in Section 2.06 of the Sale and
Servicing Agreement shall have been satisfied;
(c) after giving effect to such Principal Balance Increase, the Note
Principal Balance shall not exceed the Maximum Note Principal Balance;
(d) no Default, Event of Default or Servicer Event of Default has occurred
and is continuing or would result from such Principal Balance Increase;
(e) the Revolving Period shall not have ended as of such Increase Date;
(f) each of the representations and warranties of the Issuer, the
Servicer, the Loan Originator and the Depositor set forth in the Basic
Documents, shall be true and correct as though made on and as of such Increase
Date (except to the extent they expressly relate to an earlier date);
(g) the Issuer, the Servicer, the Loan Originator and the Depositor shall
be in compliance with all of their respective covenants contained in the Basic
Documents and the Note;
(h) the Note Agent shall have received evidence satisfactory to it of the
completion of all recordings, registrations, and filings as may be necessary or,
in the opinion of the Note Agent, desirable to perfect or evidence the
assignments required to be effected on such Increase Date in accordance with the
Sale and Servicing Agreement including, without limitation, the assignment of
the Loans and the proceeds thereof required to be assigned pursuant to the
related LPA Assignment, S&SA Assignment and the Indenture; and
(i) after giving effect to such Principal Balance Increase, no
Overcollateralization Shortfall shall exist.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01. Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants to the Owners and the Note Agent, as of
the date of this Agreement, as of the Closing Date, and as of (and as a
condition to any Principal Balance Increase occurring on) each Increase Date, in
each case with reference to the facts and circumstances then existing, as
follows:
(a) Corporate Existence. The Depositor is a corporation, duly organized,
validly existing and in good standing under the laws of Delaware, with full
power and authority under such laws to own its properties and conduct its
business as such properties are presently owned and such business is presently
conducted and to execute, deliver and perform its obligations under this
Agreement and each Basic Document to which it is a party.
(b) Corporate Authority. The Depositor has the corporate power and
authority to execute, deliver and perform this Agreement and each Basic Document
to which it is a party and all the transactions contemplated hereby and thereby
and has taken all necessary corporate action to authorize the execution,
delivery and performance of this Agreement and each Basic Document to which it
is a party; and, when executed and delivered, each of this Agreement and each
Basic Document to which it is a party will constitute its legal, valid and
binding obligation, enforceable in accordance with its terms, subject to
applicable bankruptcy, reorganization, insolvency, moratorium, receivership,
conservatorship and other laws relating to or affecting the enforcement of
creditors rights. The enforceability of its obligations under such agreements is
also subject to general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law, and no
representation or warranty is made with respect to the enforceability of its
obligations under any indemnification provisions in such agreements to the
extent that indemnification is sought in connection with securities laws
violations and is contrary to public policy.
(c) No Consents Required. No consent, license, approval or authorization
of, or registration with, any Governmental Authority is required to be obtained
by the Depositor in connection with the execution, delivery or performance by
the Depositor of each of this Agreement and the Basic Documents to which it is a
party, that has not been duly obtained and which is not and will not be in full
force and effect on the Closing Date or the relevant Increase Date, as
applicable.
(d) No Violation. The execution, delivery and performance of each of this
Agreement and the Basic Documents to which it is a party do not violate any
provision of any existing law or regulation applicable to the Depositor, any
order or decree of any court or other judicial authority to which it is subject,
its charter or by-laws or any mortgage, indenture, contract or other agreement
to which it is a party or by which it or any of its properties is bound.
(e) No Proceeding. There is no action, litigation or proceeding before any
court, tribunal or governmental body presently pending or, to the knowledge of
the Depositor threatened against the Depositor with respect to this Agreement,
the Basic Documents to which it
19
is a party, the transactions contemplated hereby or thereby or the issuance of
the Note, and there is no such litigation or proceeding against it or any of its
properties.
(f) Trust Indenture Act. Neither the Indenture nor the Sale and Servicing
Agreement is required to be qualified under the Trust Indenture Act of 1939.
(g) Investment Company Act. The Depositor is not required to be registered
under the Investment Company Act of 1940, as amended.
(h) No Event of Default or Default. No Event of Default or Default has
occurred and is continuing, both before and immediately after giving effect to
the purchase or issuance of the Note or the relevant Principal Balance Increase,
as applicable.
(i) The Note. The Note has been duly and validly authorized, and, when
executed and authenticated in accordance with the terms of the Indenture and
delivered to the Note Agent in accordance with this Agreement, will be duly and
validly issued and outstanding, and will be entitled to the benefits of, as
applicable, this Agreement and the applicable Basic Documents.
(j) Taxes, Etc. Any taxes, fees and other charges of Governmental
Authorities imposed upon the Depositor in connection with the execution,
delivery and performance by the Depositor of this Agreement, the other Basic
Documents and the Note or otherwise in connection with the Issuer have been paid
or will be paid by the Depositor at or prior to the Closing Date or the relevant
Increase Date, as applicable, to the extent then due.
(k) Disclosure. All written factual information heretofore furnished by
the Depositor or any of its representatives to the Note Agent or any Owner or
any of their representatives for purposes of or in connection with this
Agreement, including, without limitation, information relating to the Loans and
the Depositor's mortgage loan businesses, when considered with other information
provided to the Note Agent, other Owners or their representatives, as well as
information publicly available to them, was true and correct in all material
respects on the date such information was furnished by the Depositor or, if such
information specifically relates to an earlier date, on such earlier date.
(l) Location of Offices. The Depositor's principal place of business and
chief executive office is located in the State of California, or such other
jurisdiction with respect to which the requirements specified in Section 6.04
have been satisfied.
(m) Sale and Servicing Agreement Representations and Warranties. Its
representations and warranties in Section 3.01 of the Sale and Servicing
Agreement are true and correct in all material respects as of the dates they
were made (unless they specifically refer to an earlier date, in which case they
were true and correct on such earlier date).
SECTION 5.02. Representations and Warranties of the Servicer. The Servicer
hereby represents and warrants to the Owners and the Note Agent, as of the date
of this Agreement, as of the Closing Date, and as of (and as a condition to any
Principal Balance Increase occurring
20
on) each Increase Date, in each case with reference to the facts and
circumstances then existing, as follows:
(a) Corporate Existence. The Servicer is a corporation, duly organized,
validly existing and in good standing under the State of California, with full
power and authority under such laws to own its properties and conduct its
business as such properties are presently owned and such business is presently
conducted and to execute, deliver and perform its obligations under this
Agreement and each Basic Document to which it is a party.
(b) Corporate Authority. The Servicer has the corporate power, authority
and right to make, execute, deliver and perform this Agreement and each Basic
Document to which it is a party and all the transactions contemplated hereby and
thereby and has taken all necessary corporate action to authorize the execution,
delivery and performance of this Agreement and each Basic Document to which it
is a party; and, when executed and delivered, each of this Agreement and the
Basic Documents to which it is a party will constitute its legal, valid and
binding obligation, enforceable in accordance with its terms, subject to
applicable bankruptcy, reorganization, insolvency, moratorium, receivership,
conservatorship and other laws relating to or affecting the enforcement of
creditors rights. The enforceability of its obligations under such agreements is
also subject to general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law, and no
representation or warranty is made with respect to the enforceability of its
obligations under any indemnification provisions in such agreements to the
extent that indemnification is sought in connection with securities laws
violations and is contrary to public policy.
(c) No Consents Required. No consent, license, approval or authorization
of, or registration with, any Governmental Authority is required to be obtained
by the Servicer in connection with the execution, delivery or performance by the
Servicer of each of this Agreement and the Basic Documents to which it is a
party, that has not been duly obtained and which is not and will not be in full
force and effect on the Closing Date or the relevant Increase Date, as
applicable.
(d) No Violation. The execution, delivery and performance of each of this
Agreement and the Basic Documents to which it is a party do not violate any
provision of any existing law or regulation applicable to the Servicer any order
or decree of any court or other judicial authority to which it is subject, its
charter or by-laws or any mortgage, indenture, contract or other agreement to
which it is a party or by which it or any of its properties is bound.
(e) Financial Statements. Prior to the Closing Date, the Servicer has
delivered or caused to be delivered to the Note Agent, or, if such financial
statements are publicly available, the Agent has otherwise obtained, complete
and correct copies of, the audited consolidated balance sheet of Option One
Mortgage Corporation and its subsidiaries as of April 30, 2003, and the related
audited consolidated statements of income and cash flows of Option One Mortgage
Corporation and its subsidiaries for the fiscal year then ended, accompanied by
the opinion of Option One Mortgage Corporation's independent certified public
accountants. Such financial statements are complete and correct in all material
respects and fairly present the financial condition of Option One Mortgage
Corporation and its subsidiaries as of their respective dates
21
and the results of operations of Option One Mortgage Corporation and its
subsidiaries for the applicable periods then ended, subject to year-end
adjustments in the case of unaudited information, all in accordance with
generally accepted accounting principles or regulatory accounting principles, as
applicable, consistently applied.
(f) No Proceeding. There is no action, litigation or proceeding before any
court, tribunal or governmental body presently pending or, to the knowledge of
the Servicer threatened against the Servicer with respect to this Agreement, the
Basic Documents to which it is a party, the transactions contemplated hereby or
thereby or the issuance of the Note, and there is no such litigation or
proceeding against it or any of its properties.
(g) Trust Indenture Act. Neither the Indenture nor Sale and Servicing
Agreement is required to be qualified under the Trust Indenture Act of 1939.
(h) Investment Company Act. The Servicer is not required to be registered
under the Investment Company Act of 1940, as amended.
(i) No Event of Default or Default. No Event of Default or Default has
occurred and is continuing, both before and immediately after giving effect to
the purchase or issuance of the Note or the relevant Principal Balance Increase,
as applicable.
(j) The Note. The Note has been duly and validly authorized, and, when
executed and authenticated in accordance with the terms of the Indenture and
delivered to the Note Agent in accordance with this Agreement, will be duly and
validly issued and outstanding, and will be entitled to the benefits of, as
applicable, this Agreement and the applicable Basic Documents.
(k) Taxes, Etc. Any taxes, fees and other charges of Governmental
Authorities imposed upon the Servicer in connection with the execution, delivery
and performance by the Servicer of this Agreement any other Basic Document and
the Note or otherwise in connection with the Issuer have been paid or will be
paid by the Servicer at or prior to the Closing Date or the relevant Increase
Date, as applicable, to the extent then due.
(l) Disclosure. All written factual information heretofore furnished by
the Servicer or any of its representatives to the Note Agent or any Owner or any
of their representatives for purposes of or in connection with this Agreement,
including, without limitation, information relating to the Loans and the
Servicer's mortgage loan businesses, when considered with other information
provided to the Note Agent, other Owners or their representatives, as well as
information publicly available to them, was true and correct in all material
respects on the date such information was furnished by the Servicer or, if such
information specifically relates to an earlier date, on such earlier date.
(m) Location of Offices. The Servicer's principal place of business and
chief executive office is located in the State of California, or such other
jurisdiction with respect to which the requirements specified in Section 6.04
have been satisfied.
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(n) Sale and Servicing Agreement Representations and Warranties. Its
representations and warranties in Sections 3.03 of the Sale and Servicing
Agreement are true and correct in all material respects as of the dates they
were made (unless they specifically refer to an earlier date, in which case they
were true and correct on such earlier date).
SECTION 5.03. Representations and Warranties of the Issuer. The Issuer
hereby represents and warrants to the Owners and the Note Agent as of the date
of this Agreement, as of the Closing Date, and as of (and as a condition to any
Principal Balance Increase occurring on) each Increase Date, in each case with
reference to the facts and circumstances then existing, as follows:
(a) Due Organization. The Issuer is Delaware statutory trust organized,
validly existing and in good standing under the laws of the State of Delaware,
with full power and authority under such laws to own its properties and conduct
its business as such properties are presently owned and such business is
presently conducted, to execute, deliver and perform its obligations under this
Agreement and each Basic Document to which it is a party and to issue the Note.
(b) Authorization of the Basic Documents. The Issuer has the power,
authority and right to make, execute, deliver and perform this Agreement and
each Basic Document to which it is a party and all the transactions contemplated
hereby and thereby and to issue the Note, and has taken all necessary action to
authorize the execution, delivery and performance of this Agreement and each
Basic Document to which it is a party and to issue the Note; and, when executed
and delivered, each of this Agreement and the Basic Documents to which it is a
party will constitute its legal, valid and binding obligation, enforceable in
accordance with its terms, subject to applicable bankruptcy, reorganization,
insolvency, moratorium, receivership, conservatorship and other laws relating to
or affecting the enforcement of rights of creditors from time to time in effect.
The enforceability of its obligations under such agreements is also subject to
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law, and no representation or
warranty is made with respect to the enforceability of its obligations under any
indemnification provisions in such agreements to the extent that indemnification
is sought in connection with securities laws violations and is contrary to
public policy.
(c) No Consents Required. No consent, license, approval or authorization
of, or registration with, any Governmental Authority is required to be obtained
by the Issuer in connection with the execution, delivery or performance by the
Issuer of each of this Agreement and the Basic Documents to which it is a party,
that has not been duly obtained and which is not and will not be in full force
and effect on the Closing Date or the relevant Increase Date, as applicable.
(d) No Violation. The execution, delivery and performance of each of this
Agreement and the Basic Documents to which it is a party do not violate any
provision of any existing law or regulation applicable to the Issuer any order
or decree of any court or other judicial authority to which it is subject, the
Trust Agreement, any organizational documents or bylaws or any mortgage,
indenture, contract or other agreement to which it is a party or by which
23
it or any significant portion of its properties is bound (other than violations
of such laws, regulations, orders, decrees, mortgages, indentures, contracts and
other agreements which, individually or in the aggregate, would not have a
material adverse effect on the Issuer's ability to perform its obligations
under, or the validity or enforceability of, this Agreement or the Basic
Documents).
(e) No. Proceeding. There is no action, litigation or proceeding before
any court, tribunal or governmental body presently pending or, to the knowledge
of the Issuer, threatened against the Issuer with respect to this Agreement, the
Basic Documents, the transactions contemplated hereby or thereby or the issuance
of the Note, and there is no such litigation or proceeding against it or any
significant portion of its properties which would have a material adverse effect
on the transactions contemplated by, or its ability to perform its obligations
under, this Agreement or any Basic Document to which it is a party.
(f) Investment Company Act. The Issuer is not required to be registered
under the Investment Company Act of 1940, as amended.
(g) The Note. The Note has been duly and validly authorized, and, when
executed and authenticated in accordance with the terms of the Indenture and
delivered to the Note Agent in accordance with this Agreement, will be duly and
validly issued and outstanding, and will be entitled to the benefits of, as
applicable, this Agreement and the applicable Basic Documents.
(h) Taxes, Etc. Any taxes, fees and other charges of Governmental
Authorities imposed upon the Issuer in connection with the execution, delivery
and performance by the Issuer of this Agreement any other Basic Document and the
Note has been paid or will be paid by the Issuer at or prior to the Closing Date
or the relevant Increase Date, as applicable, to the extent then due.
(i) Disclosure. All written factual information heretofore furnished by
the Issuer to the Note Agent or any Owner or any of their representatives for
purposes of or in connection with this Agreement or the Note, when considered
with other information provided to the Note Agent, other Owners or their
representatives, as well as information publicly available to them, was true and
correct in all material respects on the date such information was furnished by
the Issuer or, if such information specifically relates to an earlier date, on
such earlier date.
SECTION 5.04. Representations and Warranties of the Note Agent and the
Purchasers. The Note Agent and each of the Purchasers hereby represents and
warrants to the Issuer, the Depositor and the Servicer as of the date of this
Agreement, as follows:
(a) Each of the Note Agent and such Purchaser has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of the purchase of an interest in the Note. Each of the Note
Agent and such Purchaser (i) is (A) a "qualified institutional buyer" as defined
under Rule 144A promulgated under the Securities Act of 1933, as amended (the
"1933 Act"), acting for its own account or the accounts of other "qualified
institutional buyers" as defined under Rule 144A, or (B) an "accredited
investor" within the meaning of Regulation D promulgated under the 1933 Act, and
(ii) is aware that the
24
Issuer intends to rely on the exemption from registration requirements under the
1933 Act provided by Rule 144A or Regulation D, as applicable.
(b) Each of the Note Agent and such Purchaser understands that neither the
Note nor interests in the Note have been registered or qualified under the 1933
Act, nor under the securities laws of any state, and therefore neither the Note
nor interests in the Note can be resold unless they are registered or qualified
thereunder or unless an exemption from registration or qualification is
available.
(c) It is the intention of the Note Agent and such Purchaser to acquire
interests in the Note (a) for investment for its own account, or (b) for resale
to "qualified institutional buyers" in transactions under Rule 144A, and not in
any event with the view to, or for resale in connection with, any distribution
thereof. Each of the Note Agent and such Purchaser understands that the Note and
interests therein have not been registered under the 1933 Act by reason of a
specific exemption from the registration provisions of the 1933 Act which
depends upon, among other things, the bona fide nature of the Purchaser's
investment intent (or intent to resell only in Rule 144A transactions) as
expressed herein.
The Note Agent shall, and does hereby agree to, indemnify the Issuer, the Owner
Trustee, the Depositor, the Trustee and the Servicer against any liability that
may result from a breach of the foregoing representations.
ARTICLE VI
COVENANTS OF THE ISSUER, THE DEPOSITOR AND THE SERVICER
SECTION 6.01. Covenants of the Issuer, the Depositor and the Servicer.
Each of the Issuer, the Depositor and the Servicer will (with respect to itself
only and not with respect to the other), from the date hereof until the
Collection Date, unless, in each case, the Note Agent shall otherwise consent in
writing:
(a) Preservation of Corporate Existence. Except as permitted by the Sale
and Servicing Agreement, preserve and maintain its corporate existence, rights,
franchises and privileges in the jurisdiction of its formation, and qualify and
remain qualified in good standing as a foreign corporation in each jurisdiction
where the failure to preserve and maintain such existence, rights, franchises,
privileges and qualification is reasonably likely to materially adversely affect
the interests of the Note Agent or any Owner under this Agreement or the Note.
(b) Security Interest; Further Assurances. The Issuer shall take all
action necessary to maintain vested in the Indenture Trustee under the
Indenture, a first priority perfected security interest in the Collateral. The
Depositor and Servicer each agrees to do and perform, from time to time, any and
all acts and to execute any and all further instruments required or reasonably
requested by the Note Agent more fully to effect the purposes of this Agreement.
(c) Access to Information. From the Closing Date until the Collection
Date, at any time and from time to time during regular business hours, on
reasonable notice to the Depositor or Servicer, as applicable, permit the Note
Agent, or its agents or representatives, at the
25
Servicer's expense (once during any calendar year prior to the occurrence of an
Event of Default), (i) to examine all books, records and documents (including
computer tapes and disks) in the possession or under the control of the
Depositor or Servicer, as the case may be, relating to the Loans or the Basic
Documents, and (ii) to visit the offices and properties of the Depositor or the
Servicer, as applicable, for the purpose of examining such materials described
in clause (i) above.
SECTION 6.02. Reporting Requirements of the Depositor and the Servicer.
The Depositor and the Servicer will (with respect to itself only and not with
respect to the other), from the date hereof until the Collection Date, unless,
in each case, the Note Agent shall otherwise consent in writing, furnish to the
Note Agent:
(a) a copy of each certificate, report, statement, notice or other
communication furnished by or on behalf of the Depositor or the Servicer to the
Indenture Trustee or any Rating Agency pursuant to the Sale and Servicing
Agreement or the Indenture, concurrently therewith, and promptly after receipt
thereof, a copy of each notice, demand or other communication received by or on
behalf of the Depositor or the Servicer under the Sale and Servicing Agreement
or the Indenture;
(b) as soon as possible and in any event within five Business Days after
the occurrence thereof, notice of each "Event of Default" or "Default" under and
as defined in the Indenture or "Servicer Event of Default" under and as defined
in the Sale and Servicing Agreement or event that with the giving of notice or
lapse of time or both would constitute such a Servicer Event of Default;
(c) copies of all amendments to any Basic Document;
(d) prompt notice of any failure on the part of any party thereto to
observe or perform any material term of any Basic Document;
(e) (i) within 120 days following the end of each fiscal year of Option
One Mortgage Corporation, beginning with the fiscal year ending April 30, 2004,
the audited consolidated balance sheet of Option One Mortgage Corporation and
its subsidiaries as of the end of such fiscal year, and the related audited
consolidated statements of income and cash flows of Option One Mortgage
Corporation and its subsidiaries for such fiscal year, accompanied by the
opinion of nationally-recognized independent certified public accountants and
(ii) within 60 days following the end of each fiscal quarter of Option One
Mortgage Corporation, beginning with the fiscal quarter ending July 31, 2003,
the unaudited consolidated balance sheet of Option One Mortgage Corporation and
its subsidiaries as of the end of such fiscal quarter, and the related unaudited
consolidated statements of income and cash flows of Option One Mortgage
Corporation and its subsidiaries for such fiscal quarter; provided, however,
that the financial statements required to be delivered in accordance with this
Section 6.02(e) will only be required to be delivered hereunder if such items
are not publicly available at the time indicated at no expense to the Note
Agent;
26
(f) such other information, documents, records or reports respecting the
Depositor, the Servicer, the Loan Originator, or the Issuer or the condition or
operations, financial or otherwise, of the Depositor, the Servicer, the Loan
Originator or the Issuer as the Note Agent may from time to time reasonably
request; and
(g) such other information, documents, records or reports respecting the
Loans or the servicing thereof as the Note Agent may from time to time
reasonably request.
SECTION 6.03. Optional Repurchase. The Issuer shall not exercise its right
to redeem the Note pursuant to Section 10.01 of the Indenture unless the Owners
and the Note Agent have been paid, or will be paid upon such redemption, the
Note Principal Balance, all interest thereon and all other amounts owing
hereunder in full.
SECTION 6.04. Change in Name; Jurisdiction of Organization. The Depositor
shall not (1) make any change to its name indicated on the public record of its
jurisdiction of organization which shows it to have been organized, or (2)
change its jurisdiction of organization, in either case, unless it shall have
given the Note Agent at least 30 days' prior written notice of such relocation
and shall have filed such UCC financing statements and other items and delivered
such opinions as the Note Agent deems reasonably necessary to maintain the
Indenture Trustee's perfected security interest in the Receivables.
ARTICLE VII
INDEMNIFICATION
SECTION 7.01. Indemnification by the Depositor and the Servicer.
(a) The Depositor shall indemnify and hold harmless each Owner, the Note
Agent, their respective Affiliates and their respective officers, directors,
employees, stockholders, agents and representatives, against any and all losses,
claims, damages, liabilities or reasonable expenses (including legal and
accounting fees) (collectively, "Losses"), as incurred (payable promptly upon
written request), for or on account of or arising from or in connection with or
otherwise with respect to any breach of any representation or warranty of the
Depositor or the Issuer set forth in this Agreement any other Basic Document or
in any certificate delivered pursuant hereto or thereto; provided, however, that
the Depositor shall not be so required to indemnify any such Person or otherwise
be liable to any such Person hereunder for (i) any Losses incurred for or on
account of or arising from or in connection with or otherwise with respect to
any breach of any representation or warranty set forth in the Sale and Servicing
Agreement a remedy for the breach of which is provided in Section 3.06 of the
Sale and Servicing Agreement or (ii) any Losses to the extent they result from
the gross negligence or willful misconduct of any Affected Party.
(b) The Servicer shall indemnify and hold harmless each Owner, the Note
Agent, their respective Affiliates and their respective officers, directors,
employees, stockholders, agents and representatives, against any and all Losses,
as incurred (payable promptly upon written request), for or on account of or
arising from or in connection with or otherwise with respect to any breach of
any representation or warranty of the Servicer set forth in this Agreement or
the
27
Sale and Servicing Agreement or in any certificate delivered pursuant hereto or
thereto; provided, however, that the Servicer shall not be so required to
indemnify any such Person or otherwise be liable to any such Person hereunder
for (i) any Losses incurred for or on account of or arising from or in
connection with or otherwise with respect to any breach of any representation or
warranty set forth in the Sale and Servicing Agreement a remedy for the breach
of which is provided in Section 3.06 of the Sale and Servicing Agreement or (ii)
any Losses to the extent they result from the gross negligence or willful
misconduct of any Affected Party.
(c) In case any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be instituted involving any
Affected Party in respect of which indemnity may be sought pursuant to this
Section 7.01, such Affected Party shall promptly notify the Issuer and the
Depositor in writing and, upon request of the Affected Party, the Issuer and the
Depositor shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to such Affected Party to represent such Affected Party
and any others the indemnifying party may designate and shall pay the reasonable
fees and disbursements of such counsel related to such proceeding; provided that
failure to give such notice or deliver such documents shall not affect the
rights to indemnity hereunder unless such failure materially prejudices the
rights of the indemnifying party. The Affected Party will have the right to
employ its own counsel in any such action in addition to the counsel of the
Issuer and/or the Depositor, but the reasonable fees and expenses of such
counsel will be at the expense of such Affected Party, unless (i) the employment
of counsel by the Affected Party at its expense has been reasonably authorized
in writing by the Depositor or the Issuer, (ii) the Depositor or the Issuer has
not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action or
(iii) the named parties to any such action or proceeding (including any
impleaded parties) include the Depositor or the Issuer and one or more Affected
Parties, and the Affected Parties shall have been advised by counsel that there
may be one or more legal defenses available to them which are different from or
additional to those available to the Depositor or the Issuer. Reasonable
expenses of counsel to any Affected Party shall be reimbursed by the Issuer and
the Depositor as they are incurred. The Issuer and the Depositor shall not be
liable for any settlement of any proceeding affected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the Affected Party
from and against any loss or liability by reason of such settlement or judgment.
Neither the Issuer nor the Depositor will, without the prior written consent of
the Affected Party, effect any settlement of any pending or threatened
proceeding in respect of which any Affected Party is or could have been a party
and indemnity could have been sought hereunder by such Affected Party, unless
such settlement includes an unconditional release of such Affected Party from
all liability on claims that are the subject matter of such proceeding.
SECTION 7.02. Costs and Expenses. Each of the Depositor and the Servicer
agree to pay on demand (a) to the Note Agent and the Purchasers all reasonable
costs and expenses in connection with the preparation, execution, delivery and
administration (including any amendments, waivers or consents, other than
amendments, waivers and consents made solely at the request of any Purchaser or
the Note Agent, as opposed to the Depositor or the Servicer) of this Agreement
and the other documents to be delivered hereunder or in connection herewith,
including, without limitation, (i) the reasonable fees and out-of-pocket
expenses of counsel for
28
each of the Note Agent and the Purchasers, with respect thereto and with respect
to advising each of the Note Agent and the Purchasers, as to its respective
rights and remedies under this Agreement and the other documents delivered
hereunder or in connection herewith, (ii) rating agency fees, costs and expenses
incurred in connection with the purchase by the Purchasers of the Note, (iii)
the reasonable fees, costs and expenses of any third party auditors and (iv)
other reasonable fees, costs and expenses incurred by any Purchaser or the Note
Agent in connection with the purchase by such Purchaser of the Note (including
trustee's fees, costs and expenses), and (b) to the Note Agent and any other
Affected Party, all reasonable costs and expenses, if any (including reasonable
counsel fees and expenses), in connection with the enforcement of this
Agreement, and the other documents delivered hereunder or in connection
herewith.
ARTICLE VIII
THE NOTE AGENT
SECTION 8.01. Authorization and Action.
(a) Each of the Owners hereby designates and appoints Bank One as Note
Agent hereunder, and authorizes the Note Agent to take such action as agent on
its behalf and to exercise such powers as are delegated to the Note Agent under
this Agreement and any related agreement, instrument and document as are
delegated to the Note Agent by the terms hereof or thereof, together with such
powers as are reasonably incidental thereto. The Note Agent reserves the right,
in its sole discretion to exercise any rights and remedies under this Agreement
or any related agreement, instrument or document executed and delivered pursuant
hereto, or pursuant to applicable law, and also to agree to any amendment,
modification or waiver of this Agreement or any related agreement, instrument
and document, in each instance, on behalf of the Owners. The Note Agent shall
not have any duties or responsibilities, except those expressly set forth
herein, or any fiduciary relationship with any Owner, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities on the part of
the Note Agent shall be read into this Agreement or otherwise exist for the Note
Agent. In performing its functions and duties hereunder, the Note Agent does not
assume nor shall be deemed to have assumed any obligation or relationship of
trust or agency with or for the Depositor or the Issuer or any of its successors
or assigns. Notwithstanding anything herein or elsewhere to the contrary, the
Note Agent shall not be required to take any action which exposes the Note Agent
to personal liability or which is contrary to this Agreement or applicable law.
(b) Each Purchaser and each subsequent Owner from time to time hereby
acknowledges and agrees that all payments in respect of the Note and in respect
of fees and other amounts owing to the Owners under this Agreement shall, except
as otherwise expressly provided herein, be remitted by the applicable payor to
the Note Agent on behalf of the Owners, and the Note Agent shall distribute all
such amounts, promptly following receipt thereof, to the applicable parties in
interest according to their respective interests therein, determined by
reference to the terms of the Sale and Servicing Agreement, the Indenture, this
Agreement and the Note Agent's books and records relating to the Note (it being
agreed that the entries made in such books and records of the Note Agent shall
be conclusive and binding for all purposes absent manifest error).
29
SECTION 8.02. Note Agent's Reliance, Etc. Neither the Note Agent nor any
of its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them as Note Agent under or in connection
with this Agreement or any related agreement, instrument or document except for
its or their own gross negligence or willful misconduct. Without limiting the
foregoing, the Note Agent: (i) may consult with legal counsel (including counsel
for the Depositor, the Servicer, the Issuer, the Owner Trustee or the Indenture
Trustee), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (ii)
makes no warranty or representation to any Owner and shall not be responsible to
any Owner for any statements, warranties or representations made in or in
connection with this Agreement or in connection with any related agreement,
instrument or document; (iii) shall not have any duty to ascertain or to inquire
as to the performance or observance of any of the terms, covenants or conditions
of this Agreement or any related agreement, instrument or document on the part
of the Depositor, the Servicer, the Issuer, the Owner Trustee or the Indenture
Trustee or to inspect the property (including the books and records) of the
Depositor, the Servicer, the Issuer, the Owner Trustee or the Indenture Trustee;
(iv) shall not be responsible to any Owner for the due execution, legality,
validity, enforceability, genuineness or sufficiency of value of this Agreement
or any related agreement, instrument or document; (v) shall not be deemed to be
acting as any Owner's trustee or otherwise in a fiduciary capacity hereunder or
in connection with any related agreement, instrument or document; and (vi) shall
incur no liability under or in respect of this Agreement or any related
agreement, instrument or document by acting upon any notice (including notice by
telephone), consent, certificate or other instrument or writing (which may be by
telex or facsimile) believed by it to be genuine and signed or sent by the
proper party or parties.
SECTION 8.03. Note Agent and Affiliates. To the extent that the Note Agent
or any of its Affiliates shall become an Owner, the Note Agent or such
Affiliate, in such capacity, shall have the same rights and powers under this
Agreement and each related agreement, instrument and document as would any Owner
and may exercise the same as though it were not the Note Agent or such
Affiliate, as the case may be. The Note Agent and its Affiliates may generally
engage in any kind of business with the Depositor, the Servicer, the Issuer, the
Owner Trustee or the Indenture Trustee, any Obligor or any of their respective
Affiliates and any Person who may do business with or own securities of any of
the foregoing, all as if it were not the Note Agent or such Affiliate, as the
case may be, and without any duty to account therefor to the Owners.
SECTION 8.04. Purchase Decision. Each Owner acknowledges that it has,
independently and without reliance upon the Note Agent, any other Owner or any
of their respective Affiliates, and based on such documents and information as
it has deemed appropriate, made its own evaluation and decision to enter into
this Agreement and to invest in the Note (or such interest therein as such Owner
may hold). Each Owner also acknowledges that it will, independently and without
reliance upon the Note Agent, any other Owner or any of their respective
Affiliates, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own decisions in taking or not
taking action under this Agreement or any related agreement, instrument or other
document.
30
SECTION 8.05. Indemnification. Each Owner (other than the Purchasers)
agrees to indemnify the Note Agent (to the extent not reimbursed by the
Depositor, the Servicer or the Issuer), ratably according to its share of the
Note Principal Balance from time to time, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against the Note Agent in any way relating
to or arising out of this Agreement or any related agreement, instrument or
document, or any action taken or omitted by the Note Agent under this Agreement,
or any related agreement, instrument or document; provided, however, that no
Owner shall not liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Note Agent's gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, each Owner (including the
Purchasers, but only to the extent the Purchasers are reimbursed by the
Depositor, the Servicer or the Issuer for such a expenses) agrees to reimburse
the Note Agent, ratably according to its share of the Note Principal Balance
from time to time, promptly upon demand, for any out-of-pocket expenses
(including reasonable counsel fees) incurred by the Note Agent in connection
with the administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement or and related agreement,
instrument or document.
SECTION 8.06. Successor Note Agent. The Note Agent may resign at any time
by giving 30 days' notice thereof to the Owners, the Depositor, the Issuer, the
Servicer and the Indenture Trustee and such resignation shall become effective
upon the appointment and acceptance of a successor Note Agent as described
below. Upon any such resignation, the Owners shall have the right to appoint a
successor Note Agent approved by the Depositor (which approval will not be
unreasonably withheld or delayed). If no successor Note Agent shall have been so
appointed by the Owners and accepted such appointment within 30 days after the
retiring Note Agent's giving of notice of resignation, then the retiring Note
Agent may, on behalf of the Owners, appoint a successor Note Agent approved by
the Depositor (which approval will not be unreasonably withheld or delayed),
which successor Note Agent shall be (i) either (a) a commercial bank having a
combined capital and surplus of at least $250,000,000 or (b) an Affiliate of
such bank and (ii) experienced in the types of transactions contemplated by this
Agreement. Upon the acceptance of any appointment as Note Agent hereunder by a
successor Note Agent, such successor Note Agent shall thereupon succeed to and
become vested with all of the rights, powers, privileges and duties of the
retiring Note Agent, and the retiring Note Agent shall be discharged from its
duties and obligations hereunder. After any retiring Note Agent's resignation or
removal hereunder as Note Agent, the provisions of this Article shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Note Agent hereunder.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc. No amendment or waiver of any provision of
this Agreement, and no consent to any departure by the Depositor or the Servicer
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Depositor, the Servicer, the Issuer, the Required Owners and
the Note Agent. Notwithstanding the foregoing,
31
without the prior written consent of each Purchaser, no such amendment shall (i)
decrease the amount of, or extend the time for payment of, the Note Principal
Balance or the Monthly Interest, (ii) change the definition of "Required
Owners," or (iii) amend this Section 9.01. Any such amendment, waiver or consent
shall be effective in any event only in the specific instance and for the
specific purpose for which given.
SECTION 9.02. Notices, Etc. All notices and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing (including
telecopies) and mailed, telecopied or delivered, as to each party hereto, at its
address set forth on Schedule II attached hereto or at such other address as
shall be designated by such party in a written notice to the other party hereto.
All such notices and communications shall, when mailed or telecopied, be
effective when deposited in the mails or telecopied (with telephonic
acknowledgement of receipt). Notwithstanding the foregoing, requests for
Principal Balance Increases may be transmitted by electronic mail to the address
provided by the Note Agent from time to time and will be deemed to be effective
upon being sent.
SECTION 9.03. No Waiver; Remedies. No failure on the part of any party
hereto to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 9.04. Binding Effect; Assignability.
(a) This Agreement shall be binding upon each of and inure to the benefit
of the Depositor, the Servicer, the Note Agent, the Owners and their respective
successors and permitted assigns.
(b) Neither the Depositor nor the Servicer may assign any of its rights
and obligations hereunder or any interest herein without the prior written
consent of the Required Owners and the Note Agent.
(c) An Owner may, at any time, subject to the terms and conditions
hereinafter set forth and the terms and conditions of the Indenture, (i) without
the consent of the Depositor, assign, or grant undivided participation interests
in, any or all of its rights and obligations hereunder or under the Note to any
Purchaser, any Liquidity Provider, Bank One or any other commercial paper
conduit managed by Bank One, and (ii) with the prior written consent of the
Issuer, such consent not to be unreasonably withheld, assign, or grant undivided
participation interests in, any or all of its rights and obligations hereunder
or under the Note to any other Person; provided, however, that (A) without the
prior written consent of the Issuer, such consent not to be unreasonably
withheld, no participant (other than a Purchaser, any Liquidity Provider, or
Bank One) or Affected Party claiming through a participant (other than a
Purchaser, any Liquidity Provider, or Bank One) shall be entitled to receive any
payment pursuant to Sections 2.07, 2.08, 2.09 or 8.02 in excess of the amount
that the Owner granting such participation interest would have been entitled to
receive had such participation interest not been sold to such participant; (B)
in the case of any transfer by sale, assignment or participation, the
32
transferee as a condition of transfer shall be subject to compliance with
Sections 2.09(e) and (f) hereof; (C) the aggregate number of Owners at any time
shall not exceed ten (excluding, if applicable, any Federal Reserve Bank to
which a pledge is made); and (D) no assignment or participation hereunder shall
be effective unless the Note Agent shall have first consented thereto in
writing, such consent being required for the purpose of assuring compliance with
the requirements of this Section. Any assignment or grant of a participation
interest by an Owner pursuant to this Section shall be effected pursuant to
documentation satisfactory in form and substance to the Note Agent. Upon the
consummation of any such assignment or sale hereunder, the assignee shall be
subject to all of the obligations and entitled to all of the rights and benefits
of the assignor hereunder. The Note Agent shall promptly notify the Depositor of
any sale, assignment or participation under this Section. Each Purchaser hereby
agrees that promptly following the sale of any assignment or participation by
any Liquidity Provider of all or any portion of its rights and obligations under
the applicable Asset Purchase Agreement, such Purchaser, to the extent that the
Depositor's prior consent to such assignment or participation is not required
hereunder, shall notify the Depositor thereof, specifying the transferor, the
transferee and the extent of the applicable assignment or participation.
(d) It is expressly agreed that, in connection with any assignment, sale
or other transfer or any proposed assignment, sale or other transfer of the Note
or any interest therein, each Owner making or proposing to make such assignment,
sale or other transfer may provide such information regarding the Loans, the
Issuer, the Sale and Servicing Agreement, the Indenture and the other Basic
Documents as such Owner may deem appropriate to any such assignee, purchaser or
other transferee or proposed assignee, purchaser or other transferee, as
applicable (any such Person being a "Transferee"), of the Note or such interest
therein, provided that prior to any such disclosure of such information, such
Transferee shall have agreed to maintain the confidentiality of such information
designated by the Depositor as confidential on substantially the basis set forth
in Section 9.10.
(e) The Note Agent may not assign at any time its rights and obligations
hereunder and interests herein as Note Agent without the consent of the Owners,
the Depositor, the Servicer or the Issuer (which consent shall not be
unreasonably withheld or delayed).
(f) Each Owner may assign and pledge all or a portion of such Owner's
interest in the Note to any Federal Reserve Bank as collateral to secure any
obligation of such Owner to such Federal Reserve Bank. Notwithstanding anything
to the contrary herein or in the Indenture, such assignment may be made at any
time without notice or other obligation with respect to the assignment.
(g) This Agreement shall create and constitute the continuing obligations
of the parties hereto in accordance with its terms, and shall remain in full
force and effect until the Collection Date; provided, however, that the rights
and remedies with respect to any breach of any representation or warranty made
by the Depositor and the Servicer pursuant to Article VI and the provisions of
Sections 8.01, 8.02, and 10.07 shall be continuing and shall survive any
termination of this Agreement.
33
SECTION 9.05. Note as Evidence of Indebtedness. It is the intent of each
of the parities hereto that, for all federal, state, local and foreign taxes,
the Note will be evidence of indebtedness of the Issuer. Each of the parties
hereto and the other Owners agrees to treat the Note for purposes of all
federal, state, local and foreign taxes as indebtedness of the Issuer secured by
the Collateral.
SECTION 9.06. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW) AND THE RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 9.07. No Proceedings.
(a) The Issuer, the Servicer and the Depositor, each Owner and the Note
Agent each hereby agrees that it will not, prior to the date that is one year
and one day after the latest maturing commercial paper note, medium term note or
other debt instrument issued by any Conduit Purchaser has been issued,
acquiesce, petition or otherwise invoke or cause such Conduit Purchaser to
invoke the process of any Governmental Authority for the purpose of commencing
or sustaining a case against such Conduit Purchaser under any Federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of such
Conduit Purchaser or any substantial part of its property or ordering the
winding-up or liquidation of the affairs of such Conduit Purchaser. The Issuer,
the Servicer, the Depositor, each Owner and the Note Agent each hereby further
agrees that prior to the date that is one year and one day after the latest
maturing commercial paper note, medium term note or other debt instrument issued
by any Conduit Purchaser has been issued, amounts payable by such Conduit
Purchaser under or in connection with this Agreement as reimbursement for
out-of-pocket expenses or indemnification shall be payable only to the extent
that payment thereof will not render such Conduit Purchaser insolvent and is
made from funds of such Conduit Purchaser that are freely distributable by such
Conduit Purchaser at such Conduit Purchaser's discretion.
(b) Each Owner and the Note Agent hereby agrees that it will not, prior to
the date that is one year and one day after the termination of the Trust
Agreement, acquiesce, petition or otherwise invoke or cause the Issuer to invoke
the process of any Governmental Authority for the purpose of commencing or
sustaining a case against the Issuer or the Depositor under any Federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Issuer or any substantial part of its property or ordering the winding-up or
liquidation of the affairs of the Issuer or the Depositor. Each Owner and the
Note Agent each further agrees that prior to the date that is one year and one
day after the termination of the Trust Agreement with respect to the Depositor,
amounts payable by the Depositor under or in connection with this Agreement as
reimbursement for out-of-pocket expenses or indemnification shall be payable
only to the extent that payment thereof will not render the Depositor insolvent
and is made from funds of the Depositor that are freely distributable by the
Depositor at the Depositor's discretion.
34
(c) The provisions of this Section 9.07 shall survive the termination of
this Agreement.
SECTION 9.08. Execution in Counterparts; Severability. This Agreement may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement. In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 9.09. No Recourse.
(a) No recourse under or with respect to any obligation, covenant or
agreement (including, without limitation, the payment of any fees or any other
obligations) of any Purchaser (whether in its capacity as a Purchaser or as an
Owner under this Agreement) as contained in this Agreement or any other
agreement, instrument or document entered into by it pursuant hereto or in
connection herewith shall be had against any incorporator, affiliate,
stockholder, officer, employee or director of such Purchaser, as such, by the
enforcement of any assessment or by any legal or equitable proceeding, by virtue
of any statute or otherwise (except to the extent that recourse against any such
Person arises from the gross negligence or willful misconduct of such Person);
it being expressly agreed and understood that the agreements of each Purchaser
contained in this Agreement and all of the other agreements, instruments and
documents entered into by it pursuant hereto or in connection herewith are, in
each case, solely the corporate obligations of such Purchaser, and that no
personal liability whatsoever shall attach to or be incurred by any
incorporator, stockholder, affiliate, officer, employee or director of any
Purchaser, as such, or any of them, under or by reason of any of the
obligations, covenants or agreements of any Purchaser contained in this
Agreement or in any other such instruments, documents or agreements, or which
are implied therefrom, and that any and all personal liability of each
incorporator, stockholder, affiliate, officer, employee or director of any
Purchaser, or any of them, for breaches by any Purchaser of any such
obligations, covenants or agreements, which liability may arise either at common
law or at equity, or by statute or constitution, or otherwise, is hereby
expressly waived except to the extent that such personal liability of any such
Person arises from the gross negligence or willful misconduct of such Person.
(b) Notwithstanding anything contained in this Agreement, no Conduit
Purchaser shall have any obligation to pay any amount required to be paid by it
hereunder to any of the Liquidity Provider, the Note Agent or any Owner, in
excess of any amount available to such Conduit Purchaser after paying or making
provision for the payment of its Commercial Paper Notes. All payment obligations
of each Conduit Purchaser hereunder are contingent upon the availability of
funds in excess of the amounts necessary to pay Commercial Paper Notes; and each
of the Liquidity Provider, the Note Agent and each Owner agrees that they shall
not have a claim under Section 101(5) of the United States Bankruptcy Code if
and to the extent that any such payment obligation exceeds the amount available
to such Conduit Purchaser to pay such amounts after paying or making provision
for the payment of its Commercial Paper Notes.
35
(c) The provisions of this Section 9.09 shall survive the termination of
this Agreement.
SECTION 9.10. Confidentiality. Notwithstanding anything contained herein
to the contrary, unless the Depositor has otherwise given its prior written
consent, each Affected Person and the Note Agent hereby agrees to protect and
maintain the confidentiality of the information relating to the business and
operations of the Issuer, the Depositor and the Servicer and to the Loans as the
Issuer, the Depositor or the Servicer may from time to time disclose to each
Affected Person and the Note Agent; provided, however, that none of the Affected
Persons or the Note Agent shall be obligated to take or observe any such measure
(i) with respect to disclosures to Bank One, any Affected Person under an Asset
Purchase Agreement, any Person providing credit support to a Purchaser or any
rating agency and (ii) if to do so would, in the reasonable judgment of such
Affected Person or the Note Agent, as the case may be, (a) be inconsistent with
any Requirement of Law or compliance by such Affected Person or the Note Agent
with any binding request of any regulatory body having jurisdiction over such
Affected Person or the Note Agent, as the case may be, or (b) materially and
adversely affect the ability of such Affected Person or the Note Agent to
perform its obligations hereunder or in connection herewith or to enforce its
rights hereunder or in connection herewith.
Notwithstanding anything herein to the contrary, each party hereto (and
each employee, representative, or other agent of any of the foregoing) may
disclose to any and all persons, without limitation of any kind, the "tax
treatment" and "tax structure" (in each case, within the meaning of Treasury
Regulation Section 1.6011-4) of the transaction contemplated hereby and all
materials of any kind (including opinions or other tax analyses) that are or
have been provided to any of the foregoing relating to such tax treatment or tax
structure, and it is hereby confirmed that each of the foregoing has been so
authorized since the commencement of discussions regarding the transaction
contemplated hereby.
SECTION 9.11. Limitation on Liability. It is expressly understood and
agreed by the parties hereto that (a) this Note Purchase Agreement is executed
and delivered by Wilmington Trust Company, not individually or personally, but
solely as Owner Trustee of Option One Owner Trust 2003-4, in the exercise of the
powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the
Issuer is made and intended not as personal representations, undertakings and
agreements by Wilmington Trust Company but is made and intended for the purpose
for binding only the Issuer, (c) nothing herein contained shall be construed as
creating any liability on Wilmington Trust Company, individually or personally,
to perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties hereto and by any
Person claiming by, through or under the parties hereto and (d) under no
circumstances shall Wilmington Trust Company be personally liable for the
payment of any indebtedness or expenses of the Issuer or be liable for the
breach or failure of any obligation, representation, warranty or covenant made
or undertaken by the Issuer under this Note Purchase Agreement or any other
related documents.
36
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized, as of the date first above
written.
OPTION ONE LOAN WAREHOUSE
CORPORATION, as Depositor
By: /s/ William L. O'Neill
------------------------------------
Name: William L. O'Neill
Title: Senior Vice President
OPTION ONE MORTGAGE CORPORATION, as
Servicer
By: /s/ William L. O'Neill
------------------------------------
Name: William L. O'Neill
Title: Senior Vice President
OPTION ONE OWNER TRUST 2003-4, as Issuer
By: Wilmington Trust Company, not in its
individual capacity, but solely as Owner
Trustee
By:_____________________________________
Name:
Title:
Signature Page
to
Note Purchase Agreement
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized, as of the date first above
written.
OPTION ONE LOAN WAREHOUSE
CORPORATION, as Depositor
By: ____________________________________
Name:
Title:
OPTION ONE MORTGAGE CORPORATION, as
Servicer
By: ____________________________________
Name:
Title:
OPTION ONE OWNER TRUST 2003-4, as Issuer
By: Wilmington Trust Company, not in its
individual capacity, but solely as Owner
Trustee
By: /s/ Patricia A. Evans
------------------------------------
Name: Patricia A. Evans
Title: Assistant Vice President
Signature Page
to
Note Purchase Agreement
FALCON ASSET SECURITIZATION
CORPORATION, as a Conduit Purchaser
By: /s/ Daniel J. Clarke
------------------------------------
Name: Daniel J. Clarke, Jr.
Title: Authorized Signatory
JUPITER SECURITIZATION CORPORATION,
as a Conduit Purchaser
By: /s/ Daniel J. Clarke
------------------------------------
Name: Daniel J. Clarke, Jr.
Title: Authorized Signatory
PREFERRED RECEIVABLES FUNDING
CORPORATION, as a Conduit Purchaser
By: /s/ Daniel J. Clarke
------------------------------------
Name: Daniel J. Clarke, Jr.
Title: Authorized Signatory
BANK ONE, N.A., as a Committed Purchaser
and as Note Agent
By: /s/ Daniel J. Clarke
------------------------------------
Name: Daniel J. Clarke, Jr.
Title: Managing Director
Signature Page
to
Note Purchase Agreement
SCHEDULE I
COMMITMENTS
COMMITTED PURCHASER COMMITMENT
- ------------------- ----------
Bank One, N.A. $1,020,000,000
SCHEDULE II
NOTICE ADDRESSES
If to Falcon Asset Securitization Corporation:
c/o Bank One, NA, as Note Agent
Asset Backed Finance
Suite IL1-0079, 1-19
1 Bank One Plaza
Chicago, Illinois 60670-0079
Facsimile No.: (312) 732-1844
Telephone No.: (312) 732-2960
With a copy to the Note Agent;
If to Jupiter Securitization Corporation:
c/o Bank One, NA, as Note Agent
Asset Backed Finance
Suite IL1-0079, 1-19
1 Bank One Plaza
Chicago, Illinois 60670-0079
Facsimile No.: (312) 732-1844
Telephone No.: (312) 732-2960
With a copy to the Note Agent;
If to Preferred Receivables Funding Corporation:
c/o Bank One, NA, as Note Agent
Asset Backed Finance
Suite IL1-0079, 1-19
1 Bank One Plaza
Chicago, Illinois 60670-0079
Facsimile No.: (312) 732-1844
Telephone No.: (312) 732-2960
With a copy to the Note Agent;
If to the Note Agent:
Asset Backed Finance
Suite IL1-0596, 1-21
1 Bank One Plaza
Chicago, Illinois 60670-0596
Facsimile No.: (312) 732-4487
Telephone No.: (312) 732-2960
If to the Issuer:
Option One Owner Trust 2003-4
c/o Wilmington Trust Company
One Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Facsimile No.: (302) 636-4144
Telephone No.: (302) 636-1000
If to the Depositor:
Option One Loan Warehouse Corporation
3 Ada Drive
Irvine, California 92618
Attention: William O'Neill
Facsimile No.: (949) 790-7540
Telephone No.: (949) 790-7504
If to the Servicer:
Option One Mortgage Corporation
3 Ada Drive
Irvine, California 92618
Attention: William O'Neill
Facsimile No.: (949) 790-7540
Telephone No.: (949) 790-7504