THIS AGREEMENT is made on 23 April 1999 between:
(1) OCWEN LIMITED, a company incorporated under the laws of England and
Wales, registered number 3542994 whose registered office is at ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (the "BORROWER"); and
(2) NATIONAL WESTMINSTER BANK PLC whose registered office is at ▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (the "LENDER") acting through its duly
authorised agent, Greenwich NatWest Limited ("GNW") whose principal
office is at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇; and
(3) OCWEN FINANCIAL CORPORATION, a company incorporated in the State of
Florida, USA and whose principal place of business is at The Forum,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("OFC"
or the "GUARANTOR")
WHEREAS:
(1) The Borrower carries on the business of originating and acquiring
mortgage loans secured by residential property in England, Wales and
Scotland.
(2) The Lender has agreed to provide a facility to the Borrower to enable
the Borrower to repay the GIL Facility and to finance the origination
by the Borrower of mortgage loans on the terms and subject to the
conditions contained herein.
(3) OFC has agreed to indemnify the Lender in respect of, INTER ALIA, the
obligations of the Borrower under this Agreement.
1. INTERPRETATION
1.1 DEFINITIONS
In this Agreement (including the recitals hereto) the following terms
shall have the respective meanings set forth below:
"ACCELERATION" means any acceleration of the Advances hereunder
following the occurrence of an Event of Default;
"ACCOUNT CHARGES" means the Borrower Collection Account Charge and the
Borrower Funding Account Charge.
"ACCOUNT BANK" means National Westminster Bank Plc or such other bank
or financial institution as may be substituted as account bank with the
prior written consent of the Lender.
1
"ADVANCE" means, save as otherwise provided herein, the Closing Date
Advance and any advance made by the Lender hereunder pursuant to this
Loan Facility to fund the origination of a Mortgage Loan (as from time
to time reduced by repayment and prepayment).
"ADVANCE DATE" means, in the case of the Closing Date Advance, the date
hereof and, in the case of each other Advance, each date on which the
Lender advances monies to the Solicitors under clause 4.3 to fund the
origination of Mortgage Loans hereunder.
"ADVANCE MONIES UNDERTAKING" means the Solicitors' undertaking given in
respect of monies drawn under this Facility (save in respect of the
refinancing of Existing Mortgage Loans), in the form set out in
Schedule 5 (part 1).
"AFFILIATE" means, in relation to any company, a subsidiary or holding
company of such company and, if such company is itself a subsidiary,
any company which is also a subsidiary of the holding company of such
first mentioned company, as such terms are defined in section 736 of
the Companies ▇▇▇ ▇▇▇▇.
"AGREED FORM DOCUMENTATION LETTERS" means the letters of even date from
the Lender, addressed respectively to (i) the Borrower, The ▇▇▇▇▇▇▇
Partnership and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Sandler & Co. and (ii) the Borrower
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Green, with agreed form documentation attached,
in each case signed by way of acknowledgement and acceptance by the
relevant solicitors and the Borrower.
"AGREEMENT" means this Loan Facility Agreement, including all schedules
and annexures hereto, which expression shall include the same as
varied, supplemented, re-stated, novated, extended or replaced from
time to time.
"ASSOCIATED COSTS RATE" means the cost imputed to the Lender of
compliance with, inter alia, the mandatory liquid assets requirements
of the Financial Services Authority during any Interest Period (or
other period), expressed as a rate per annum and determined in
accordance with Schedule 4.
"AVAILABLE COMMITMENT" means, at any time, the Loan Commitment at such
time less the Loan Amount then outstanding.
"AVAILABILITY PERIOD" means the period commencing on the date of this
Agreement and ending on the earlier of:-
(a) the date on which the Lender ceases to be under any obligation
to make further Advances to the Borrower hereunder pursuant to
the terms hereof; and
(b) the Final Maturity Date.
"BARCLAYS FACILITY" means the loan facility agreement dated 9 November,
1998 between Ocwen 2 Limited as borrower and Barclays Bank plc as
lender.
2
"▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ SANDLER & CO. CLIENT ACCOUNT" means account number
▇▇▇▇▇▇▇▇ sort code 60-00-01 at the Account Bank in the name of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Company - Ocwen Originations or such other account
or accounts as may be utilised for the purpose of funding the
origination of Mortgage Loans by Messrs. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Sandler & Co.
"BORROWER COLLECTION ACCOUNT" means the account in the name of the
Borrower with the Account Bank number ▇▇▇▇▇▇▇▇ charged to the Lender
pursuant to the Borrower Collection Account Charge.
"BORROWER COLLECTION ACCOUNT CHARGE" means the charge of the Borrower
Collection Account in favour of the Lender dated on or about the date
hereof in form and substance satisfactory to the Lender.
"BORROWER FUNDING ACCOUNT" means the account in the name of the
Borrower at the Account Bank number ▇▇▇▇▇▇▇▇ charged to the Lender
under the Borrower Funding Account Charge.
"BORROWER FUNDING ACCOUNT CHARGE" means the charge of the Borrower
Funding Account in favour of the Lender dated on or about the date
hereof in form and substance satisfactory to the Lender.
"BORROWING BASE DEFICIENCY" means, on any day by reference to which the
same falls to be calculated, the excess (if any) of the Loan Amount
over Collateral Value calculated and agreed in accordance with clause
20.
"BUSINESS DAY" means a day (other than a Saturday or Sunday) on which
banks are generally open for business in London.
"CCA" means the Consumer Credit ▇▇▇ ▇▇▇▇.
"CLIENT ACCOUNTS" means the ▇▇▇▇▇▇▇ Partnership Client Account, the
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Sandler & Co. Client Account and the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
& Green Client Account and "Client Account" means each of such
accounts.
"CLOSING DATE ADVANCE" means an advance in an amount equal to all
outstandings (other than the GIL Accrued Interest) under the GIL
Facility on the Closing Date, to be made available by the Lender
hereunder, subject to the terms hereof, on the Closing Date.
"CLOSING DATE" means 23 April 1999.
"CLOSING DATE ADVANCE REQUEST" means a written request from the
Borrower to the Lender for the Closing Date Advance substantially in
the form set out in Schedule 1, Part 1.
3
"COLLATERAL PERCENTAGE" in respect of any Mortgage Loan as at any date
means the percentage of the Outstanding Principal Balance of the
Mortgage Loan set out in the table below by reference to the category
into which such Mortgage Loan falls:-
Performing Senior Mortgage Loan 100%
Performing Junior Mortgage Loan 95%
Non Performing Senior Mortgage Loan 70%
Non Performing Junior Mortgage Loan 30%
"COLLATERAL VALUE" means, on any Interest Payment Date by reference to
which the same falls to be determined, the aggregate of the values
attributed to each Mortgage Loan as at the related Determination Date
(other than any Mortgage Loan in relation to which the related Advance
has been repaid in full), the value to be attributed to each such
Mortgage Loan for such purpose to be determined by multiplying the
lesser of the Collateral Percentage and the Market Value Percentage for
each Mortgage Loan (on the basis of the status of such Mortgage Loan as
at the related Determination Date) by the Outstanding Principal Balance
of each such Mortgage Loan as at the relevant Determination Date
provided that the Collateral Value shall be deemed to be zero with
respect to each Mortgage Loan:
(a) in respect of which there is a material breach of a
representation and warranty contained in clause 15.4 as at the
relevant Determination Date which:
(i) is curable but, as at the relevant Determination
Date, has remained uncured for a period of 50 days or
more; or
(ii) (in the reasonable opinion of the Lender) is not
curable;
(b) in respect of which the related Mortgaged Property has been
repossessed;
(c) if
(i) the related Mortgage Loan or the related Mortgage is
not genuine or is not the legal, valid, binding and
enforceable obligation of the maker or grantor
thereof;
(ii) such Mortgage, is not a valid, subsisting and
enforceable mortgage or heritable security on the
Mortgaged Property with the priority which it is
expressed to have.
"COLLECTION PERIOD" means the period from and including the first day
of the calendar month immediately preceding the calendar month in which
the relevant Interest Payment Date falls until and including the last
day of such preceding calendar month.
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"CONSOLIDATED INDEBTEDNESS" means for any period, the aggregate
Indebtedness of the relevant entity determined on a consolidated basis
in accordance with GAAP less any non-specific balance sheet reserves
maintained in accordance with GAAP.
"CONSOLIDATED TANGIBLE NET WORTH" means all amounts included as capital
on the relevant entity's consolidated balance sheet determined in
accordance with GAAP less amounts owing to affiliates and less any
intangible assets including, without limitation, goodwill and deferred
tax assets.
"COUNTER INDEMNITY" means the counter indemnity to be entered into on
or about the date hereof between OFC and the Borrower in respect of the
Indemnity, in form and substance satisfactory to the Lender.
"DEBENTURE" means the debenture to be entered into on or about the date
hereof in form and substance satisfactory to the Lender by the Borrower
in favour of the Lender creating fixed and floating charges over all of
the Borrower's undertaking and assets and includes (where the context
so admits) all further deeds and documents granted or executed pursuant
thereto.
"DETERMINATION DATE" means the fifth Business Day of each calendar
month and "related Determination Date" in the context of an Interest
Payment Date means the fifth Business Day of the calendar month in
which such Interest Payment Date falls.
"DRAWDOWN REQUEST" means the form of written request for an Advance to
be delivered by the Borrower to the Lender prior to the relevant
Advance Date, substantially in the form set out in Schedule 1, Part 2,
together with a Solicitors' Report on Title attached thereto in
relation to each Mortgage Loan to be originated.
"ELIGIBLE COLLATERAL" means any mortgage loan which, as at the date on
which the Borrower is required to provide additional security to the
Lender hereunder:
(a) is neither subject to the fixed charges contained in the
Debenture nor forms the subject of a Scottish Sub-Security;
and
(b) complies with all representations and warranties set out in
clause 15.4.
"ELIGIBLE COLLATERAL SCHEDULE" means a schedule provided by the
Borrower to the Lender under clause 8.
"ENGLISH MORTGAGE LOAN" means a Mortgage Loan secured over a Mortgaged
Property situated in England or Wales.
"EVENT OF DEFAULT" means any one of the conditions or circumstances
referred to in clause 18.
5
"EXISTING MORTGAGE LOANS" means those of the mortgage loans which are
financed under the GIL Facility as at the Closing Date, details of
which are listed in the Existing Mortgage Loans Schedule.
"EXISTING MORTGAGE LOANS SCHEDULE" means the schedule of mortgage loans
set out in Schedule 1 to the Debenture.
"EXISTING MORTGAGE LOANS UNDERTAKING" means the Solicitors'
undertakings in respect of Existing Mortgage Loans in the form set out
in Schedule 5 (part 2) addressed to the Lender.
"FACILITY OFFICE" means the office of the Lender through which it makes
any Advance to the Borrower.
"FINAL MATURITY DATE" means the day falling 364 days from (but
including) the date hereof unless that day is not a Business Day in
which case the Final Maturity Date shall be the immediately preceding
day which is a Business Day.
"FIRST LEGAL SUB-MORTGAGE" means a document in the form set out in
Schedule 2 to the Debenture relating to a Mortgage Loan of a Mortgaged
Property in England or Wales.
"GIL" means Greenwich International, Ltd.
"GIL FACILITY" means the loan facility agreement dated 24 April 1998
between GIL as lender, the Borrower as borrower and OFC as guarantor,
as amended and supplemented by an amending agreement dated 21 October
1998 and as further amended and supplemented by a second amending
agreement dated 26 October 1998.
"GIL ACCRUED INTEREST" means the amount of interest accrued under the
GIL Facility from and including 15 April 1999 to but excluding the
Closing Date.
"GNW" means Greenwich NatWest Limited.
"INDEBTEDNESS" means any obligation (whether incurred as principal,
cautioner or surety) for the payment or repayment of money in respect
of:
(a) monies borrowed and debit balances at banks;
(b) any loan note, bond, note, loan stock, commercial paper,
debenture or other security;
(c) any acceptance or documentary credit;
(d) the deferred purchase price of property or services, except
accounts payable and accrued expenses arising in the ordinary
course of business;
6
(e) any receivable sold or discounted (otherwise than on a
non-recourse basis);
(f) the capital value of any lease (whether in respect of land,
machinery, equipment or otherwise) entered into primarily as a
method of raising finance or financing the acquisition of the
asset leased;
(g) any currency or interest swap, cap, collar or floor
transaction, any repurchase or reverse repurchase transaction,
any foreign exchange, spot or forward transaction, any stock
lending transaction, any financial option, or any combination
of any of the foregoing; or
(h) without double counting, any guarantee, indemnity or
contingent liability in respect of any borrowings of any
person of a type referred to in (a) to (g) above but only to
the extent the borrowings thereby guaranteed or indemnified
against are outstanding.
"INDEMNITY" means the indemnity to be given by OFC on or about the date
hereof in form and substance satisfactory to the Lender indemnifying,
inter alia, the Lender for, inter alia, the obligations of the Borrower
under this Agreement.
"INTEREST PAYMENT DATE" means the 15th day of each month unless that
day is not a Business Day in which case the Interest Payment Date shall
be the immediately preceding day which is a Business Day.
"INTEREST PERIOD" means, for each Advance, each of the following
periods:
(a) the period commencing on (and including) the day the relevant
Advance is made and ending on (but excluding) the next
following Interest Payment Date; and
(b) thereafter, each period commencing on (and including) an
Interest Payment Date and ending on (but excluding) the next
following Interest Payment Date,
provided that any Interest Period which would otherwise overrun the
Final Maturity Date or the Repayment Date of the relevant Advance shall
end upon whichever is the earlier of the Final Maturity Date or the
relevant Repayment Date.
"ISSUERS" means each of City Mortgage Receivables 1 Plc (Company No.
3126751), City Mortgage Receivables 2 Plc (Company No. 3245450), City
Mortgage Receivables 3 Plc (Company No. 3245445), City Mortgage
Receivables 4 Plc (Company No. 3246090), City Mortgage Receivables 5
Plc (Company No. 3304205), City Mortgage Receivables 6 Plc (Company No.
3328209), Ocwen Mortgage Loans 1 Plc (Company No. 3565250) and Ocwen
Mortgage Loans 2 Plc (Company No. 3654408).
"JUNIOR MORTGAGE LOAN" means any Mortgage Loan which is secured other
than by way of a first ranking legal mortgage or first ranking Standard
Security.
7
"LIBOR" in respect of a particular period and in relation to an Advance
or other amount in respect of which an interest rate is to be
determined pursuant to this Agreement, means the percentage interest
rate per annum for the time being offered in the London Interbank
Market to prime banks for one month sterling deposits at or about 11.00
a.m. (London time) on the first day of such period as published on the
relevant page of The Bloomberg (Bloomberg L.P.) under the heading
"Money Market Money Market Rates".
"LOAN AMOUNT" means, on any date, the aggregate of Advances drawn down
against the Loan Commitment by the Borrower as at that date, save to
the extent that any such Advances have been repaid to the Lender.
"LOAN COMMITMENT" means an aggregate amount of (pound)100,000,000 (one
hundred million pounds) (including, for the avoidance of doubt, the
Closing Date Advance).
"LOAN FACILITY" means the loan facility granted to the Borrower by the
Lender under this Agreement.
"MANUALS" has the meaning attributed to it in the Servicing Agreement.
"MARGIN" means 0.875%.
"MARKET VALUE PERCENTAGE" means in respect of any Mortgage Loan on any
date of determination, the market value of such Mortgage Loan
(expressed as a percentage of the Outstanding Principal Balance of such
Mortgage Loan) determined by the Lender in its sole discretion acting
reasonably and having notified the Borrower in advance of its
determination and the reasons therefor, which determination shall, in
the absence of manifest error, be conclusive.
"MHA DOCUMENTATION" means in relation to any Scottish Mortgage Loan,
any affidavit, consent or renunciation granted in terms of the
Matrimonial Homes (Family Protection) (Scotland) ▇▇▇ ▇▇▇▇ given in
connection with such Scottish Mortgage Loan or the Mortgaged Property
secured thereunder.
"MINDED TO REVOKE NOTICE" means any notice given under section 32 of
the CCA.
"MIRAS" means the mortgage interest relief at source scheme specified
in section 369 of the Income and Corporation Taxes ▇▇▇ ▇▇▇▇.
"MONTHLY PAYMENT" means, in respect of any Mortgage Loan, the monthly
payment due and payable by the relevant Mortgagor on a Monthly Payment
Date in accordance with the relevant Mortgage Conditions including all
interest, principal, fees, charges and expenses payable thereunder.
"MONTHLY PAYMENT DATE" means, in respect of any Mortgage Loan, the date
in each month on which the relevant Mortgagor is required to make
payments of interest and, as the case may be, principal in accordance
with the Mortgage Deed applicable thereto.
8
"MORTGAGE" means each charge, Standard Security or mortgage created by
a Mortgage Deed.
"MORTGAGE DEED" means in relation to each Mortgage Loan, the deed
creating the charge by way of first or subsequent ranking legal
mortgage or first or subsequent ranking Standard Security over the
relevant Mortgaged Property, and incorporating the terms and conditions
on which the relevant advance to the Mortgagor was made.
"MORTGAGE FILE" means the Mortgage Loan Documents pertaining to a
particular Mortgage Loan including, without limitation, any land
certificates or charge certificates obtained by it issued by HM Land
Registry or the Registers of Scotland now vested in the Borrower or
vesting in it after the date of this Deed, together with the related
mortgage application forms completed by the relevant Mortgagor(s),
credit agency checks, if any, carried out in respect of such
Mortgagor(s), correspondence files and all other material documents,
papers and computer records held by or for the Borrower in respect of
the particular Mortgage Loan and the origination and servicing thereof.
"MORTGAGE LOAN" means each mortgage loan referred to in a Mortgage Loan
Schedule and any other mortgage loan, the origination of which is
financed by the Lender hereunder (other than any such mortgage loan in
respect of which the Borrower has repaid the related Advance in full)
and all rights and entitlements of the Borrower in relation thereto and
all references herein to "Mortgage Loan" shall be construed as a
reference to the relevant Mortgage Loan, together with its Related
Security.
"MORTGAGE LOAN DOCUMENTS" means, in respect of a Mortgage Loan, the
original of each of the documents listed in Schedule 3 pertaining to
any Mortgage Loan.
"MORTGAGE LOAN SCHEDULE" means each of the following:-
(a) the Existing Mortgage Loans Schedule;
(b) a schedule of loans annexed to a Drawdown Request containing,
in respect of each mortgage loan specified therein the
information set out in Part 3 of Schedule 1; and
(c) any Eligible Collateral Schedule.
"MORTGAGED PROPERTY" means each and all (as the context admits)
freehold and/or leasehold properties in England or Wales and/or
properties held on heritable title or long lease in Scotland subject to
a Mortgage Deed.
"MORTGAGOR" means the party (or parties) referred to as such or as "the
Borrower" or "the Grantor" in the relevant Mortgage Deed.
"NEW MORTGAGE LOAN" means a mortgage loan (other than an Existing
Mortgage Loan) in respect of which the Borrower has drawn an Advance
under this Facility.
9
"NEW MORTGAGE LOANS UNDERTAKING" means the Solicitors' Undertaking in
respect of New Mortgage Loans in the form set out in Schedule 5 (part
3) addressed to the Lender.
"NON PERFORMING JUNIOR MORTGAGE LOANS" means a Junior Mortgage Loan
which as of the last day of the related Collection Period has due and
unpaid all or any part of at least one Monthly Payment.
"NON PERFORMING SENIOR MORTGAGE LOANS" means each Mortgage Loan which:
(a) is a Senior Mortgage Loan; and
(b) as of the last day of the related Collection Period has due
and unpaid all or any part of at least two Monthly Payments.
"OFT" means the Office of Fair Trading.
"OFT GUIDELINES" means the guidelines issued by the OFT relating to the
non-status lending market in effect from time to time.
"OUTSTANDING PRINCIPAL BALANCE" means, in respect of any Mortgage Loan
on any date, the principal amount advanced to the relevant Mortgagor on
completion of that Mortgage Loan, together with any retention amounts
subsequently released to such Mortgagor and secured by the same
Mortgage, (but excluding for the avoidance of doubt any fees, charges,
disbursements and capitalised interest charged to the Mortgagor's
mortgage account) less any repayments of the same (other than early
repayments) received prior to that date.
"PERFORMING JUNIOR MORTGAGE LOAN" means a Junior Mortgage Loan which is
not a Non Performing Junior Mortgage Loan.
"PERFORMING SENIOR MORTGAGE LOAN" means each Mortgage Loan which:
(a) is a Senior Mortgage Loan; and
(b) is not a Non Performing Senior Mortgage Loan.
"PIPELINE LOAN" means such of the Existing Mortgage Loans brief details
of which are set out in Schedule 7.
"POTENTIAL EVENT OF DEFAULT" means any event which with the giving of
notice or the passing of time or both or the occurrence of any other
event will become an Event of Default.
"REASONABLY PRUDENT MORTGAGE LENDER" means a mortgage lender lending to
credit-impaired borrowers in England, Wales and Scotland who is
reasonably prudent in the origination, administration and enforcement
of mortgage loans and the security for their repayment beneficially
owned by such mortgage lender.
10
"REGISTERS OF SCOTLAND" means the Land Register of Scotland and/or the
General Register of Sasines.
"REGULATED MORTGAGE LOAN" means a Mortgage Loan that is a regulated or
partly regulated agreement for the purposes of the Consumer Credit ▇▇▇
▇▇▇▇.
"RELATED SECURITY" has the meaning given to it in the Debenture.
"REPAYMENT DATE" means, in relation to:
(a) the Closing Date Advance in respect of each Existing Mortgage
Loan refinanced by the Closing Date Advance, the date which is
180 days after the day on which the advance relating to such
Existing Mortgage Loan was made under the GIL Facility (such
that, for the avoidance of doubt, the Closing Date Advance
will become repayable on a number of Repayment Dates, each
determined as aforesaid); and
(b) in relation to any other Advance, the Final Maturity Date or
other date which is 180 days following its Advance Date,
whichever is the earlier.
"REPORT ON TITLE" means the Solicitors' report on title in respect of a
Mortgaged Property addressed to the Borrower.
"▇▇▇▇▇▇▇ PARTNERSHIP CLIENT ACCOUNT" means account number ▇▇▇▇▇▇▇▇ sort
code 60-00-01 with the Account Bank in the name of the ▇▇▇▇▇▇▇
Partnership - Ocwen Originations or such other account or accounts as
may be utilised for the purpose of funding Mortgage Loans by the
▇▇▇▇▇▇▇ Partnership.
"SCOTTISH MORTGAGE LOAN" means a Mortgage Loan secured over a Mortgaged
Property situated in Scotland.
"SCOTTISH SUB-SECURITY" means a Standard Security granted in favour of
the Lender over a Scottish Mortgage Loan pursuant to clause 3.7 or
3.8(b) of the Debenture substantially in either of the forms set out in
Schedule 3 and 4 thereof.
"SECURED SUMS" has the meaning given to it in the Debenture.
"SECURITISATION BANK AGREEMENTS" means the bank agreements dated 21
March 1996, 18 October 1996, 31 October 1996, 31 January 1997, 30 April
1997, 30 June 1998 and 25 November 1998 in relation to the
Securitisations.
"SECURITISATIONS" means each of the securitisations of mortgage loans
originated by City Mortgage Corporation Limited and certain of its
subsidiaries, effected through sales of mortgage loans to certain of
the Issuers on 21 March 1996, 18 October 1996, 31 October 1996, 31
January 1997 and 30 April 1997 and the securitisations of mortgage
loans originated by the Borrower and of mortgage loans acquired by the
Borrower from City Mortgage Corporation Limited and certain of its
subsidiaries effected through sales of such mortgage loans to certain
of the Issuers on 30 June 1998 and 25 November 1998.
11
"SECURITISED MORTGAGE LOANS" has the meaning attributed to it in the
Debenture.
"SECURITY" includes any mortgage, sub mortgage, Standard Security,
fixed or floating charge, sub charge, encumbrance, lien, pledge,
hypothecation, absolute assignment, assignment by way of security, or
title retention arrangement, and any agreement or arrangement having
substantially the same economic or financial effect as any of the
foregoing (including any "hold back" or "flawed asset" arrangement).
"SECURITY DOCUMENTS" means the Debenture (and each further security
document executed pursuant thereto including, without limitation, any
First Legal Sub-Mortgage or Scottish Sub-Security) and the Account
Charges and any security executed in respect of additional collateral
provided pursuant to the terms hereof.
"SENIOR MORTGAGE LOANS" means each Mortgage Loan which is secured by
way of a first ranking legal mortgage or first ranking Standard
Security.
"SERVICE DOCUMENT" means a writ, summons, order, judgment or other
process issued out of the courts of England and Wales.
"SERVICER" means Ocwen UK Servicing Limited or, following the
termination of that company's appointment as servicer under the
Servicing Agreement, any substitute servicer appointed thereunder.
"SERVICER COLLECTION ACCOUNT" means the account in the name of Ocwen UK
Servicing Limited with the Account Bank, number ▇▇▇▇▇▇▇▇.
"SERVICER COLLECTION ACCOUNT TRUST" means all trusts subsisting from
time to time over the Servicer Collection Account.
"SERVICING AGREEMENT" means the servicing agreement in form and
substance satisfactory to the Lender to be entered into on or about the
date hereof between the Borrower, the Lender and the Servicer.
"SOLICITOR LETTERS OF INSTRUCTION" means the form of letters of
instruction so described and annexed to each of the Agreed Form
Documentation Letters.
"SOLICITORS" means each of the ▇▇▇▇▇▇▇ Partnership, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Sandler & Co and in relation to Scottish Mortgage Loans, ▇▇▇▇▇▇
Macfarlane Green and each other firm of solicitors approved in writing
by the Lender, each comprising a minimum of two partners holding
current practising certificates issued by the Law Society or the Law
Society of Scotland, engaged by the Borrower to undertake conveyancing
and/or security enforcement services in relation to Mortgaged
Properties, and who carry professional indemnity insurance in the sum
of at least (pound)1,000,000 for each and every claim against them by
any party in any one year or such increased amount as may from time to
time be prescribed by the Lender, acting reasonably.
12
"SOLICITORS UNDERTAKINGS" means each of the Existing Mortgage Loans
Undertakings, the Advance Monies Undertakings, and the New Mortgage
Loans Undertakings.
"STANDARD SECURITY" means a standard security in terms of the
Conveyancing and Feudal Reform (Scotland) ▇▇▇ ▇▇▇▇.
"STANDARD FORM DOCUMENTATION" means the standard form documents to be
used by the Borrower in the origination of Mortgage Loans as the same
have been initialled by the parties hereto for the purpose of
identification and annexed hereto in Annexure 2 or as otherwise
changed, varied, supplemented or substituted by or on behalf of the
Borrower as approved and agreed by the Lender.
"TERM" means save as otherwise provided herein, in relation to any
Advance, the period commencing on (and including) the date on which
such Advance is made and ending on (but excluding) the Repayment Date
relating to such Advance.
"▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ & GREEN CLIENT ACCOUNT" means account number
▇▇▇▇▇▇▇▇ sort code 80-09-15 at Bank of Scotland in the name of ▇▇▇▇▇▇
Macfarlane & Green Client Account or such other account or accounts as
may be utilised for the purpose of funding Mortgage Loans by ▇▇▇▇▇▇
Macfarlane & Green.
"TRANSACTION DOCUMENTS" means this Agreement, the Security Documents,
the Indemnity, the Servicing Agreement, and each other document at any
time entered into between all or any of the Borrower, OFC, the Lender,
the Servicer and any third party pursuant to or in connection with any
document which is a Transaction Document.
"UNDERTAKING" means the undertaking to be given by OFC to the Borrower
on the date hereof.
"UNDERWRITING GUIDELINES" means the underwriting guidelines applied by
the Borrower in connection with the origination of Mortgage Loans, as
set out in Schedule 5, as the same may be amended or supplemented from
time to time with the prior written consent of the Lender.
"Y2K COMPLIANT" means, in respect of any computer system, that neither
the performance nor functionality of such system is affected by dates
prior to, during and after 9 September 1999, as more particularly
described in BS1 PD2000-1.
"HOLDING COMPANY" of a company or corporation means any company or
corporation of which the first-mentioned company or corporation is a
subsidiary, and references to a company or corporation shall be deemed
to include a company or corporation which is not formed and registered
under the Companies ▇▇▇ ▇▇▇▇.
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a "MONTH" is a reference to a period starting on one day in a calendar
month and ending on the numerically corresponding day in the next
following calendar month, provided that, where any such period would
otherwise end on a day which is not a Business Day, it shall end on the
following succeeding Business Day, unless that day falls in the
calendar month next following that in which it would otherwise have
ended, in which case it shall end on the immediately preceding Business
Day and provided further that, if there is no numerically corresponding
day in the next following calendar month, that period shall end on the
last Business Day in that next following calendar month (and references
to "MONTHS" shall be construed accordingly).
a "PERSON" shall be construed as a reference to any person, firm,
company, corporation, government, state or agency of a state or any
association or partnership (whether or not having separate legal
personality) of two or more of the foregoing.
"REPAY" (or any derivative form thereof) shall, subject to any contrary
indication, be construed to include "PREPAY" (or, as the case may be,
the corresponding derivative form thereof).
"SUBSIDIARY" has the meaning given to it by section 736 of the
Companies ▇▇▇ ▇▇▇▇ save that references therein to company shall be
deemed to include a company which has not been formed and registered
under the Companies ▇▇▇ ▇▇▇▇.
"TAX" shall be construed so as to include any present or future tax,
levy, impost, duty or other charge of a similar nature (including any
penalty or interest payable in connection with any failure to pay or
any delay in paying any of the same).
"VAT" shall be construed as a reference to value added tax including
any similar tax which may be imposed in place thereof from time to
time.
the "WINDING-UP", "DISSOLUTION" or "ADMINISTRATION" of a company or
corporation shall be construed so as to include any equivalent or
analogous proceedings under the law of the jurisdiction in which such
company or corporation is incorporated or any jurisdiction in which
such company or corporation carries on business including the seeking
of liquidation, winding-up, reorganisation, dissolution,
administration, arrangement, adjustment, protection or relief of
debtors.
1.2 INTERPRETATION
For the purposes of this Agreement except as otherwise expressly
provided or unless the context otherwise requires:-
(a) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally
accepted accounting principles save that references herein to
GAAP are to generally accepted accounting principles in the
14
United States of America in the case of information relating
to OFC and to generally accepted accounting principles in the
United Kingdom in the case of any entity based primarily in
the United Kingdom;
(b) references herein to "clauses", "sub-clauses", "paragraphs",
and other subdivisions without reference to a document are to
designated clauses, sub-clauses paragraphs and other
subdivisions of this Agreement;
(c) reference to a sub-clause without further reference to a
clause is a reference to such sub-clause as contained in the
same clause in which the reference appears, and this rule
shall also apply to paragraphs and other subdivisions;
(d) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Agreement as a whole and not to
any particular provision;
(e) headings to clauses and Schedules are for convenience only and
do not affect the interpretation of this Agreement;
(f) references to a "company" shall be construed so as to include
any company, corporation or other body corporate, wherever and
however incorporated or established;
(g) references to times of the day are to London time;
(h) references to any agreement (including without limitation to
each Transaction Document), shall be construed as a reference
to such agreement as the same may be, or may from time to time
have been, amended, modified, supplemented, novated or
restated in accordance with (in the case of a Transaction
Document) the terms of the Transaction Documents;
(i) "(POUND)", "POUNDS" and "STERLING" denote the lawful currency
of the United Kingdom;
(j) any reference in this Agreement to a statute shall be
construed as a reference to such statute as the same may have
been, or may from time to time be, amended, modified or
re-enacted;
(k) any reference to any person, including without limitation the
"LENDER", shall be construed so as to include its and any
subsequent successors and assigns in accordance with their
respective interests.
(l) any obligation of the Lender contained in this Agreement shall
be deemed to be discharged if such obligation is performed by
GNW on behalf of the Lender;
(m) any right which the Lender is entitled to exercise hereunder
may be exercised on behalf of the Lender by GNW;
15
(n) any consent, authorisation or approval required to be given or
determination to be made by the Lender hereunder shall be
deemed to have been duly given if given by GNW on behalf of
the Lender.
2. THE FACILITY AND PURPOSE
2.1 The Lender hereby agrees to:-
(a) make the Closing Date Advance available to the Borrower in
accordance with clause 4.1 for the sole purpose of repaying
amounts owing by the Borrower under the GIL Facility; and
(b) make the remainder of the Loan Commitment available to the
Borrower on and subject to the terms of this Agreement for the
sole purpose of financing the origination of Mortgage Loans.
2.2 At no time may the Loan Amount exceed the Loan Commitment.
2.3 The Lender shall not be obliged to concern itself with the application
of amounts borrowed by the Borrower under this Agreement and
application by the Borrower of funds so borrowed contrary to the
provisions of clause 2.1 shall not prejudice the Lender's rights
hereunder or under any other Transaction Document.
2.4 Without prejudice to clause 18.1, the Lender shall cease to be obliged
to make any Advances hereunder on the Final Maturity Date and any
undrawn portion of the Loan Commitment shall be automatically cancelled
on that date.
3. AVAILABILITY
3.1 The Loan Facility will not become available to the Borrower and the
Lender shall be under no obligation to make any Advance hereunder until
each of the following conditions precedent shall have been fulfilled to
the satisfaction of the Lender:
(a) the Lender shall have received each of the following
documents, each in form and substance satisfactory to it:-
(i) a certified copy of the Certificate of Incorporation
and Memorandum and Articles of Association or
constitutional documents of each of the Borrower, OFC
(comprising, in the case of OFC, articles of
incorporation, byelaws and a certificate of good
standing) and the Servicer each duly certified by the
secretary or a director of the relevant company as
true, accurate and complete as at the date hereof;
(ii) originals (or, where the Lender is not party to the
relevant document, certified copies) of each of the
following documents, duly executed by each party
thereto other than the Lender:-
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(A) the Indemnity, Counter Indemnity and
Undertaking;
(B) the Security Documents (other than any First
Legal Sub-Mortgage or Scottish Sub-Security
to be delivered to the Lender under clause
3.9 of the Debenture) and all notices and
acknowledgements thereof to be given and
received thereunder and all consents to any
such security being granted;
(C) the Servicing Agreement;
(D) copies of the mandates relating to the
Servicer Collection Account;
(E) an Existing Mortgage Loans Undertaking
executed by each of the Solicitors;
(F) the Agreed Form Documentation Letters;
(G) the Solicitors Letters of Instruction, duly
acknowledged in writing by each of the
Solicitors;
(H) an Advance Monies Undertaking executed by
each of the Solicitors;
(I) a deed of release and reassignment by GIL of
all the assets of the Borrower subject to
the security created by the debenture dated
24 April 1998 granted by the Borrower in
favour of GIL and by the deeds of assignment
by the Borrower of the Borrower Collection
Account and the Borrower Funding Account in
favour of GIL, also dated 24 April 1998;
(iii) in respect of each of the Borrower, OFC and the
Servicer, a copy (certified by the secretary or a
director or equivalent officer of the relevant
company to be true, complete and up to date as at the
date of drawing of the Initial Advance) of all board
minutes and all other resolutions and authorisations
passed or given in relation to the entry into the
Transaction Documents or the performance of the
relevant party's obligations thereunder;
(iv) in respect of the Borrower and the Servicer, a
solvency certificate in the form set out in Schedule
2 dated the date hereof;
(v) in respect of each of the Borrower, OFC and the
Servicer a copy (certified by the secretary or a
director or equivalent officer of the relevant
company to be true, complete and up to date as at the
date of advance of the Closing Date Advance) of all
consents, approvals, authorisations or orders of any
court or governmental agency or body (including,
17
without limitation, the OFT) required for the
execution, delivery and performance by it of, or
compliance by it with, the terms of any Transaction
Document or the consummation of the transactions
contemplated thereby;
(iv) in relation to each of the Borrower and the Servicer,
a copy (certified by the secretary or a director of
the relevant company as in full force and effect) of
the Consumer Credit Act licence held by such company
together with evidence of registration of each such
company under the Data Protection ▇▇▇ ▇▇▇▇;
(vii) duly executed account mandates in relation to the
Borrower Funding Account and the Borrower Collection
Account, specifying the authorised signatories for
the Borrower;
(viii) a certificate of the Directors of the Servicer
stating that all computer and electronic systems
utilised by the Servicer in connection with the
administration and enforcement of the Mortgage Loans
is Y2K Compliant or will be Y2K Compliant by 9
September 1999; and
(ix) such information relating to the servicing agreement
entered into by the Servicer in relation to the
Barclays Facility as the Lender shall reasonably
require and the undertakings and covenants given by
the Servicer thereunder;
(b) confirmation as to the identity of all Solicitors engaged by
the Borrower as at the date of this Agreement in relation to
conveyancing and/or security enforcement concerning Mortgaged
Properties, together with evidence as to their respective
professional indemnity insurance cover;
(c) all conditions precedent under each other Transaction Document
(other than any requirement that the Facility shall have
become available hereunder) shall have been fulfilled or
expressly waived by the Lender;
(d) the Lender shall have received legal opinions, each in form
and substance satisfactory to it, from each of the following
firms:
(i) edge ▇▇▇▇▇▇▇;
(ii) Tods ▇▇▇▇▇▇; and
(iii) in house counsel to OFC;
(e) the Borrower having provided satisfactory information to the
Lender (including, without limitation, such legal opinions and
auditors' reports as the Lender shall require) relating to the
matters referred to in the letter dated 5 March 1999 from the
Lender to the Borrower, a copy of which is annexed hereto as
Schedule 8; and
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(f) GIL shall have received from the Borrower, in cleared funds
into an account nominated by GIL, an amount equal to the GIL
Accrued Interest.
4. DRAWINGS
4.1 Subject to:-
(a) the conditions precedent in clause 3 having been fulfilled to
the satisfaction of the Lender or waived by the Lender;
(b) no Event of Default or Potential Event of Default having
occurred and subsisting unremedied (to the satisfaction of the
Lender) and unwaived;
(c) there having been received from the Borrower by the Lender not
later than 5pm (London time) on the Business Day before the
date on which the Closing Date Advance is to be made a duly
completed Closing Date Advance Request relating thereto
including a schedule giving required details of each Existing
Mortgage Loan;
the Lender will make the Closing Date Advance to the Borrower on the
Closing Date.
4.2 Subject to:-
(a) each condition precedent in clause 3 having been fulfilled to
the satisfaction of the Lender or waived by the Lender;
(b) no Event of Default or Potential Event of Default having
occurred and subsisting unremedied (to the satisfaction of the
Lender) and unwaived;
(c) the following having been received by the Lender in respect of
each Mortgage Loan specified in a Mortgage Loan Schedule not
later than 5pm (London time) on the Business Day before the
date on which the Advance under the Loan Facility is to be
made to fund the origination of each such Mortgage Loan:
(i) a Report on Title in a form satisfactory to the
Lender (in its absolute discretion);
(ii) a duly completed Drawdown Request including a duly
completed Mortgage Loan Schedule specifying each loan
which the Borrower requires to be funded by that
Advance;
(iii) a data tape in respect of the relevant Mortgage
Loans, in computer readable form, containing the
information set out in Schedule 6 Part 1 regarding
each loan specified in the Mortgage Loan Schedule;
and
19
(iv) a duly executed Scottish Sub-Security in respect of
each Scottish Mortgage Loan specified in the Mortgage
Loan Schedule;
(d) each Mortgage Loan specified in the Mortgage Loan Schedule
complying with the representations and warranties contained in
clause 15.1 and 15.4;
(e) the Borrower and OFC being, in all material respects, in
compliance with the covenants and undertakings contained in
clause 17;
(f) no Minded to Revoke Notice having been served on the Borrower
or the Servicer;
(g) no injunction or interdict having been obtained by (or on
behalf of) the OFT against the Borrower or the Servicer which
relates to their respective residential mortgage lending
and/or servicing activities including, without limitation, any
Mortgage Loan financed hereunder;
(h) where the proposed Advance is to fund Mortgage Loans secured
by a Mortgage over unregistered land in England and Wales
where the Borrower does not hold the title deeds to such
Mortgaged Property (and in relation to which the Borrower's
legal mortgage is therefore a second or subsequent ranking
legal mortgage protected at Central Land Charges Registry by
registration of a C(i) Land Charge) the Lender shall have
received a schedule of such Mortgage Loans (together with the
full names of the owners of such Mortgaged Property and the
full address of that Mortgaged Property);
the Borrower may draw Advances under the Loan Commitment (subject to
the provisions of this Agreement) to fund the origination of Mortgage
Loans provided always that:-
(i) Advances may only be made on Business Days during the
Availability Period;
(ii) the aggregate of Advances to be made on any one day
shall be a minimum of(pound)250,000 or, if less than
(pound)250,000, the Available Commitment;
(iii) no Advance shall be made to the extent that, if as a
result thereof :
(A) the Loan Amount for the time being
outstanding would exceed the Loan
Commitment; or
(B) the covenant of the Borrower contained in
clause 17.1(u) would be breached;
(iv) no Advance shall be made or may be requested to
refinance any Mortgage Loan the origination of which
was financed by a prior Advance under this Agreement;
20
(v) the amount of each Advance requested shall not,
insofar as it relates to any particular Mortgage Loan
to be financed thereby, be greater than the value
attributed to such Mortgage Loan, such value to be
determined by multiplying the lesser of the
Collateral Percentage and the Market Value Percentage
of such Mortgage Loan by the Outstanding Principal
Balance thereof as at the relevant Advance Date.
4.3 Subject to the foregoing provisions of this clause 4, upon receipt of a
duly executed Drawdown Request the Lender shall, not later than 11 am
(London time) on the Business Day on which the Advance is to be made
(or such later time as may be agreed between the Borrower and GNW on
behalf of the Lender), make the Advance requested, such Advance to be
advanced to the Client Account of the Solicitors acting for the
Borrower in relation to the particular Mortgage Loans to be financed by
the Advance and it is acknowledged (for the avoidance of doubt) that
any Advance paid to Solicitors under this clause 4.3 shall be deemed to
have been drawn by the Borrower under this Agreement on the date of
such payment.
4.4 If the Borrower fails for any reason whatsoever (other than as a
consequence of a breach of the Lender's obligations) to draw down an
Advance after a Drawdown Request has been received by the Lender
(whether such failure be the result of the occurrence of an Event of
Default or otherwise), the Borrower will pay to the Lender on demand
such amount as the Lender certifies to be necessary to compensate the
Lender for all losses excluding loss of Margin incurred or to be
incurred on account of deposits acquired or arranged in order to fund
the Advance. Any such certificate by the Lender shall be PRIMA FACIE
evidence of such losses.
4.5 In the event that no duly completed New Mortgage Loans Undertaking
shall have been received by the Lender in respect of any Mortgage
Loan(s) in respect of which an Advance shall have been made hereunder
by 5pm (London time) on the fourth Business Day following the making of
the Advance (or such longer period as the Lender may, in its sole
discretion, agree) the Lender shall immediately notify the Borrower and
an amount equal to the Advance, or such part thereof as was advanced in
respect of such Mortgage Loan or Mortgage Loans shall become due and
repayable by the Borrower to the Lender together with accrued interest
thereon on the fourth Business Day following the making of the Advance.
4.6 If all or any part of any Advance made to finance a Mortgage Loan which
is subject to the provisions of clause 4.4 shall be held by any
Solicitors, payment in full by such Solicitors to the following account
of the amounts due under clause 4.5 shall discharge the Borrower's
obligation to pay the same:
Account Name: NatWest Capital Markets
Account Number: ▇▇▇▇▇▇▇▇
Sort Code: 60-00-04
21
4.7 All parties hereby agree and acknowledge that:
(a) all sums credited to the Borrower Funding Account shall be
subject to the Borrower Funding Account Charge; and
(b) all sums credited to the Borrower Collection Account shall be
subject to the Borrower Collection Account Charge.
5. CANCELLATION
5.1 The Borrower may at any time by giving not less than two Business Days
irrevocable written notice to the Lender cancel any amount (in integral
multiples of (pound)5,000,000) of the Loan Commitment to the extent not
currently outstanding or requested in a current Drawdown Request,
provided that if the Borrower wishes to reduce the Loan Commitment
below the Loan Amount then outstanding plus the amount of Advances
requested in a current Drawdown Request, the Borrower shall, prior to
the date on which the reduction takes effect:
(a) repay the Advances to the extent necessary to reduce the Loan
Amount outstanding to below the reduced Loan Commitment
requested; and
(b) pay to the Lender such amount as is certified by the Lender to
be necessary to compensate the Lender for loss of margin and
all other amounts which the Lender certifies to be necessary
to compensate it for all losses incurred by it in connection
with such cancellation. Any such certificate by the Lender
shall be PRIMA FACIE evidence of such loss.
5.2 During such period of notice the Borrower may not serve a Drawdown
Request purporting to draw all or any part of the amount of the subject
of such notice of cancellation.
5.3 Upon such cancellation becoming effective, the Loan Commitment shall be
appropriately reduced.
6. INTEREST ON ADVANCES
6.1 The Borrower will pay interest on each Advance on each Interest Payment
Date in respect of each Interest Period referable thereto at the rate
per annum equal to the aggregate of (i) the Margin and (ii) LIBOR for
the relevant Interest Period and (iii) the Associated Costs Rate.
6.2 The Lender will, as soon as practicable after commencement of each
Interest Period advise the Borrower of LIBOR for that Interest Period.
Any certificate of the Lender as to the rate and amount of interest
determined by it under this Agreement in respect of any Interest Period
shall, save for manifest error, be conclusive and binding on the
Borrower and OFC.
22
6.3 Interest at the rate determined as aforesaid shall be calculated on
each Advance and each part thereof on the basis of actual days elapsed
and a 365 day year, shall accrue from day to day from and including the
first day of each Interest Period to but excluding the date of
repayment of such Advance.
6.4 If LIBOR cannot be determined for any reason the rate of interest
applicable to such Advance shall be the sum of the Margin, the
Associated Costs Rate and the rate, expressed as a percentage rate per
annum, which is the actual cost to the Lender of funding such Advance
from whatever sources it may reasonably select during such Interest
Period (as applicable) and, if the Lender so requires, within five days
of such notification the Lender and the Borrower shall enter into
negotiations with a view to agreeing a substitute basis for determining
the rates of interest which may be applicable to Advances in the
future.
7. REPAYMENT AND APPLICATION OF RECEIPTS
7.1 Without prejudice to any of the Borrower's other obligations to make
any payment, repayment or prepayment hereunder (including without
limitation under clause 18.1), the Borrower shall repay the whole of
the outstanding amount of each Advance and, in the case of the Closing
Date Advance, each part thereof on the Repayment Date relating thereto.
Any amount repaid or any part thereof may, subject to the provisions of
this Agreement, be redrawn.
7.2 Prior to midday on the Business Day prior to each Interest Payment
Date, the Borrower shall provide a data tape to the Lender specifying
the Mortgage Loans in relation to which all or any part of the relevant
Advances are to be repaid on such Interest Payment Date which shall
include the information set out in Schedule 6.
7.3 If on any Interest Payment Date there is a Borrowing Base Deficiency
the Borrower shall, at its option, on the relevant Interest Payment
Date or on the Business Day immediately following the Interest Payment
Date either:-
(a) prepay an amount equal to the amount of the Borrowing Base
Deficiency; or
(b) provide additional Eligible Collateral of a value which is
determined by the Lender to be at least equal to the amount of
the Borrowing Base Deficiency in accordance with clause 8.
7.4 On each Interest Payment Date all amounts standing to the credit of the
Borrower Collection Account shall be applied in or toward satisfaction
of obligations of the Borrower in the following order of priority:-
(a) first, in or toward payment of all interest falling due to the
Lender hereunder on the relevant Interest Payment Date
together with any overdue interest accrued thereon up to and
including the relevant distribution date;
23
(b) second, in or towards repayment of any Borrowing Base
Deficiency or any other amount due under clause 7.3 on such
date;
(c) third, in or towards payment of all amounts due and owing to
the Lender under all Transaction Documents other than the
foregoing; and
(d) the balance to be released to the Borrower,
provided that at all times following the occurrence of an Acceleration
the provisions of this clause 7.4 shall cease to apply and after such
time all amounts received or recovered in respect of the assets subject
to the Security Documents may be applied by the Lender (whether through
set-off or otherwise) in or towards satisfaction of the Secured Sums in
such order as the Lender in its absolute discretion shall determine.
7.5 If the Borrower wishes to or is required to repay all or any part of an
Advance other than on an Interest Payment Date, the Borrower will pay
to the Lender on demand such amount as the Lender certifies to be
necessary to compensate it for all losses excluding loss of Margin
incurred or to be incurred by it on account of deposits acquired or
arranged in order to fund the Advance which the Borrower is seeking to
or is obliged to repay except in the case of a repayment of any Advance
on any such date where:
(a) that Advance is repaid from the proceeds of a securitisation
of the relevant Mortgage Loan or Mortgage Loans (whether as
part of a securitisation involving any such Mortgage Loan or
otherwise); and
(b) the Lender or any Affiliate of the Lender is the lead arranger
(or lead manager) in respect of the relevant securitisation
(it being agreed that any appointment as co-lead arranger or
co-lead manager shall not constitute fulfilment of this
condition (b)).
Any such certificate by the Lender shall be PRIMA FACIE evidence of
such losses.
7.6 Subject to clause 7.5, the Borrower may on any Business Day, upon five
Business Days prior written notice to the Lender, prepay in whole or in
part any Advance outstanding hereunder together with all accrued
interest thereon.
7.7 If the outstanding Advances are prepaid pursuant to clause 11.6 or
clause 12.4, the Loan Commitment shall be reduced to zero and the
Lender shall cease to be obliged to make Advances hereunder.
8. ELIGIBLE COLLATERAL
In the event that the Borrower is obliged to provide Eligible
Collateral under clause 7.3(b), 17.1(r) or if, in the case of clause
16.5(b), the Borrower elects to provide Eligible Collateral the
Borrower shall, on the Business Day prior to the day on which the
Borrower is required to provide such additional Eligible Collateral,
deliver a schedule to the Lender substantially in the form set out in
Part 3 of Schedule 1 setting out details of Mortgage Loans which
constitute Eligible Collateral and which the Borrower wishes to provide
to the Lender as additional security in discharge of its obligations
under those clauses. If the Lender, in its sole discretion, is
satisfied that each loan referred to in such schedule constitutes
Eligible Collateral, (but without prejudice to the Lender's rights
under clauses 9 or 16) the Lender shall evidence such approval by
signing the same.
24
9. EXAMINATION OF MORTGAGE FILES
9.1 The Lender or its delegates shall have the right to examine the
Mortgage Files to determine, INTER ALIA, whether each Mortgage Loan
complies with the representations and warranties in clause 15.4 and the
undertakings and covenants in clause 17. Such examination may be made
by or on behalf of the Lender at any time during reasonable hours upon
reasonable prior notice before or after the date on which any Advance
is to be or was made.
9.2 If the Lender or its delegates makes such examination prior to the date
on which an Advance is to be made and properly identifies any Mortgage
Loans specified in a schedule attached to a Drawdown Request which do
not comply with the representations and warranties in clause 15.4, such
loans shall be deleted from the schedule of loans appended to the
Drawdown Request.
9.3 The Lender may make an Advance without conducting any partial or
complete examination. The fact that the Lender has conducted or has
failed to conduct any partial or complete examination of the Mortgage
Files or to review any Drawdown Request under clause 9.2 shall not
affect the Lender's (or any of its successor's) rights provided herein
including, without limitation, those contained in clause 16 and clause
18.
10. EVIDENCE OF DEBT
The Lender shall maintain, or shall cause to be maintained, in
accordance with its usual practice accounts evidencing the amounts from
time to time lent by and owing to it hereunder, and in any legal action
or proceeding arising out of or in connection with this Agreement, the
entries made in such accounts shall in the absence of manifest error be
PRIMA FACIE evidence of the existence and amounts of the specified
obligations of the Borrower.
11. TAXES
11.1 Subject to clause 11.2, all payments to be made by the Borrower to the
Lender hereunder shall be made free and clear of and without deduction
or withholding for or on account of tax.
11.2 If the Borrower is nevertheless required as a result of any change in
law or in its interpretation or administration to make any payment to
the Lender hereunder subject to any deduction or withholding on account
of tax the sum payable by the Borrower in respect of which such
deduction or withholding is required to be made shall be increased to
25
the extent necessary to ensure that, after the making of the required
deduction or withholding, the Lender receives and retains (free from
any liability in respect of such deduction or withholding) a net sum
equal to the sum which it would have received and so retained had no
such deduction or withholding been made or required to be made.
11.3 If the Borrower makes any payment hereunder in respect of which it is
required by law to make any deduction or withholding on account of tax,
it shall pay the full amount required to be deducted or withheld to the
relevant taxation or other authority within the time allowed for such
payment under applicable law and shall deliver to the Lender, within
thirty days after it has made such payment to the applicable authority,
an original receipt (or a certified copy thereof) issued by such
authority evidencing the payment to such authority of all amounts so
required to be deducted or withheld in respect of such payment or any
other written evidence acceptable to the Lender.
11.4 All amounts payable under this Agreement are expressed to be exclusive
of any VAT chargeable in respect thereof. If any VAT is chargeable in
respect of such amounts, the Borrower shall, in addition, pay to the
Lender an amount equal to such VAT, and the Lender shall provide the
Borrower with a proper VAT invoice in respect thereof.
11.5 If the Lender or the Borrower becomes aware that the Borrower will be
required as a result of any change in law or its interpretation or
administration to make any payment to the Lender hereunder subject to
any deduction or withholding on account of tax, the Lender or, as the
case may be, the Borrower shall, promptly upon becoming aware of the
same, notify the other party, in writing, setting out the reasons for
the anticipated deduction or withholding and the date from which such
deduction or withholding will be required by law to be made (such date
the "WITHHOLDING DATE").
11.6 If an increased payment is made under clause 11.2 by the Borrower and
the Lender reasonably determines that it has received or been granted
(and has derived use and benefit from) a credit against, or relief or
remission for, or repayment of, any tax, then, if and to the extent
that the Lender reasonably determines that such credit, relief,
remission or repayment is in respect of or calculated with reference to
the deduction or withholding giving rise to such increased payment, the
Lender shall, to the extent that it can do so without prejudice to the
retention of the amount of such credit, relief, remission or repayment,
pay to the Borrower such amount as the Lender shall have reasonably
concluded to be attributable to such deduction or withholding. Nothing
contained in this Clause shall interfere with the right of the Lender
to arrange its tax affairs in whatever manner it thinks fit or oblige
the Lender to disclose any information in relation to its tax affairs
or computations.
12. INCREASED COSTS
12.1 If, by reason of:-
26
(a) the introduction of, or any change in any applicable law,
regulation or regulatory requirement or any change in the
interpretation or application of any thereof in each case
after the date hereof and/or
(b) compliance by the Lender or any holding company of the Lender
with any applicable directive, request or requirement whether
or not having the force of law but, if not having the force of
law being of general application and of a type with which the
Lender or a holding company of the Lender is accustomed to
comply of any central bank or any self regulating organisation
or any governmental, fiscal, monetary or other authority
(including, but not limited to, a directive, request or
requirement which affects the manner in which any bank
allocates capital in support of its assets or liabilities or
contingent liabilities or deposits with it or for its account
or advances or commitments made by it) which is brought into
effect after the date hereof,
and if, to the extent of compliance with either or both of paragraphs
(a) and (b) and as a result thereof:-
(c) the Lender or any holding company of the Lender is unable to
obtain the rate of return on its capital which it would have
been able to obtain but for the Lender's entering into or
assuming or maintaining a commitment or performing its
obligations (including its obligation to make Advances) under
this Agreement;
(d) the Lender or any holding company of the Lender incurs a cost
as a result of the Lender's entering into or assuming or
maintaining a commitment or performing its obligations
(including its obligation to make Advances) under this
Agreement;
(e) there is any increase in the cost to the Lender or any holding
company of the Lender of funding or maintaining all or any of
the Advances;
(f) the Lender or any holding company of the Lender becomes liable
to make any payment on account of tax or otherwise (except on
account of any tax imposed on and calculated by reference to
the net income of the Facility Office by the jurisdiction in
which the Lender (or its holding company) is incorporated or
in which the Facility Office is located), or foregoes any
interest or other return, on or calculated by reference to the
amount of any Advance or the amount of any sum received or
receivable by it (or its subsidiary) under this Agreement,
then the Borrower shall, from time to time on demand of the Lender,
promptly pay to the Lender amounts sufficient to indemnify the Lender
and its holding company against, as the case may be, (1) such reduction
in the rate of return of capital, (2) such cost, (3) such increased
cost (or such proportion of such increased cost as is, in the opinion
of the Lender, attributable to its or its holding company funding or
maintaining the Advance), or (4) such liability.
27
12.2 If the Lender intends to make a claim pursuant to clause 12.1 it shall
notify the Borrower of the event by reason of which it is entitled to
do so, such notification to be given as soon as practicable following
the Lender becoming aware of the same, provided that nothing herein
shall require the Lender to disclose any confidential information
relating to the organisation of its affairs.
12.3 If the Borrower receives notice under clause 12.2, then without
prejudice to the Lender's rights under clause 12.1, the Lender shall
consult with the Borrower as to possible steps that could be taken to
reduce any such increased costs, provided that the Lender shall be
under no obligation to take any such steps considered.
12.4 Upon receipt of a notice under clause 12.2 the Borrower shall be
entitled, upon the giving of 5 Business Days written notice, to prepay
all (but not part) of the Advances (together with all interest accrued
thereon and other amounts then due hereunder) provided that the
provisions of clause 7.5 shall not apply in respect of any such
prepayment.
13. ILLEGALITY
13.1 If, at any time, it is or will become unlawful for the Lender to make,
fund or allow to remain outstanding all or part of any of the Advances,
then the Lender shall, promptly after becoming aware of the same,
deliver to the Borrower a notice to that effect notifying the Borrower
of the date (or estimated date) on which it will become (if it has not
already become) unlawful as aforesaid (such date the "Unlawful Date").
13.2 Unless the Lender shall have exercised its rights under clause 13.3 by
such time, the Lender shall not, with effect from close of banking
business on the Business Day immediately prior to the Unlawful Date, be
obliged to make any further Advances hereunder, the Loan Commitment
shall be immediately and automatically reduced to zero and the Borrower
shall, on such date, repay any outstanding Advances, in each case
together with accrued interest thereon and all other amounts owing to
the Lender hereunder.
13.3 Following service of notice under clause 13.1, the Lender shall consult
with the Borrower as to possible steps that could be taken to avoid
such illegality provided that the Lender shall be under no obligation
to take any such steps considered, and the Lender shall have the right,
during the period after service of such notice but before the Unlawful
Date to, to require the Borrower to repay all Advances hereunder
(together with all interest accrued thereon and other amounts
outstanding hereunder) on a date earlier than that specified under
clause 13.2 (the "Early Repayment Date") (in which event and whereupon
the Lender shall cease to be obliged to make further Advances hereunder
and the Loan Commitment shall be reduced to zero) provided that the
Lender shall only have the right to require repayment on an Early
Repayment Date after consultation with the Borrower, and acting
reasonably.
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14. PAYMENTS
Any payment to be paid by the Borrower to the Lender pursuant to this
Agreement shall be made in sterling, in immediately available, freely
transferrable and cleared funds for value same day, to such account of
the Lender as the Lender shall, from time to time, have specified in
writing for such purpose.
15. REPRESENTATIONS AND WARRANTIES
15.1 The Borrower and OFC (each in relation to itself) hereby represent,
warrant, covenant and undertake to the Lender that (except as
previously disclosed to the Lender in writing on or prior to the date
hereof):-
(a) it is a limited liability company duly incorporated under the
laws of England and Wales and, in the case of OFC, it is a
corporation duly incorporated and validly existing and in good
standing under the laws of the State of Florida and is duly
authorised and qualified to transact any and all business
contemplated by this Agreement and the other Transaction
Documents to be conducted by it and is in compliance with such
laws to the extent necessary to ensure its ability to enforce
each Mortgage Loan;
(b) it has the full corporate power and authority to execute,
deliver and perform, and to enter into and consummate the
transactions contemplated by this Agreement and the other
Transaction Documents to which it is a party and has been duly
authorised by all necessary corporate action on its part to
execute, deliver and perform this Agreement and the other
Transaction Documents to which it is a party; and its
obligations under this Agreement and each Transaction Document
to which it is a party, assuming the due authorisation,
execution and delivery thereof by the Lender, constitutes its
legal, valid and binding obligations, enforceable against it
in accordance with its respective terms, except to the extent
that (a) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other
similar laws relating to creditors' rights generally and (b)
the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to the equitable
defences and to the discretion of the court before which any
proceeding therefor may be brought;
(c) its execution and delivery of this Agreement and each
Transaction Document to which it is a party, the consummation
of any of the transactions herein or therein contemplated on
its part and the fulfilment of or compliance with the terms
hereof or thereof will not (i) result in a material breach of
any term or provision of its Memorandum and Articles of
Association and/or its other constitutional documents or (ii)
materially conflict with, result in a material breach,
violation or acceleration of, or result in a material default
under, the terms of any other material agreement or instrument
to which it is a party or by which it may be bound, or any
statute, order or regulation applicable to it of any court,
regulatory body, administrative agency or governmental body
having jurisdiction over it;
29
(d) it is not party to, bound by, or in breach or violation of any
material indenture or other material agreement or instrument,
or subject to or in violation of any statute, order or
regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it, which
materially and adversely affects or, to its knowledge, would
in the future materially and adversely affect, (i) its ability
to perform its obligations under this Agreement or the
Transaction Documents to which it is a party or (ii) its
business, operations, financial condition, properties or
assets taken as a whole;
(e) no litigation is pending or, to the best of its knowledge,
threatened against it that would materially and adversely
affect the execution, delivery or enforceability of this
Agreement or the Transaction Documents to which it is a party
or its ability to perform any of its obligations hereunder or
thereunder in accordance with the terms hereof or thereof;
(f) no consent, approval, authorisation or order of any court or
governmental agency or body is required for the execution,
delivery and performance by it of, or compliance by it with,
this Agreement or any Transaction Document to which it is a
party or the consummation of the transactions contemplated
hereby or thereby, or if any such consent, approval,
authorisation or order is required, it has obtained or it is
in the process of obtaining the same.
15.2 The representations and warranties under clause 15.1(a) to (f)
inclusive shall be given on the date of this Agreement and shall be
repeated on each date on which any Advance is outstanding hereunder by
reference to the facts and circumstances existing at the relevant time.
15.3 The Lender represents and warrants to the Borrower in terms of clauses
15.1(a) to (f) (inclusive), MUTATIS MUTANDIS.
15.4 The Borrower hereby represents and warrants to the Lender in relation
to the Existing Mortgage Loans on the Closing Date and each other
Mortgage Loan on the Advance Date applicable thereto or, if later, the
date on which a New Mortgage Loans Undertaking in respect thereof is
issued, as follows:
(a) the information set forth on each Mortgage Loan Schedule (and,
in relation to any Scottish Mortgage Loan, in the schedule to
any Scottish Sub-Security) with respect to each Mortgage Loan
is true and correct in all material respects;
(b) each Mortgage Deed constitutes (i) in the case of English
Mortgage Loans, a valid and enforceable legal mortgage of the
relevant Mortgaged Property subject only in certain cases to
registration of the relevant Mortgage Deed at HM Land
Registry, or (ii) in the case of Scottish Mortgage Loans, a
valid and enforceable Standard Security over the relevant
Mortgaged Property subject only in certain cases to
registration or recording of the relevant Mortgage Deed in the
30
Registers of Scotland, in either case duly executed by the
Mortgagor named in the relevant Mortgage Deed;
(c) the Borrower (subject only to registration of legal title at
HM Land Registry or the Registers of Scotland as appropriate)
has good title to each Mortgage Loan and its Related Security,
has full right and authority to charge and assign the same by
way of security and the same is the absolute property of the
Borrower (subject to any registration or recording in favour
of the Borrower which may be pending at HM Land Registry or
the Registers of Scotland) free and clear of all mortgages,
securities, charges, liens, encumbrances, claims and equities
(including, without limitation, rights of set off or
counterclaim, overriding interest within the meaning of
Section 3(xvi) of the Land Registration ▇▇▇ ▇▇▇▇ or Section
28(1) of the Land Registration (Scotland) Act 1979 and adverse
entries or notices of application therefor against any title
at HM Registry or the Registers of Scotland to any relevant
Mortgaged Property) except any such encumbrances, claims,
equities, overriding interests or entries which rank after the
interests of the Borrower and the Lender in the Mortgaged
Loans or which do not have an adverse effect on the value of
the relevant Mortgaged Property as security for the relevant
Mortgage Loan or which are the subject of a duly completed and
signed Postponement Agreement or appropriate executed MHA
Documentation as contemplated in sub-clause (y) below;
(d) each Mortgaged Property is a residential property or mixed
commercial and residential property in England, Wales or
Scotland;
(e) the steps necessary to perfect the vesting of full legal and
equitable title to each Mortgage Loan and the Related Security
in the Borrower have been duly taken at the appropriate time
or are in the course of being taken with all due diligence;
(f) to the best of its knowledge, each Mortgaged Property is free
of material damage;
(g) each Mortgage Loan at origination complied in all material
respects with applicable laws and regulations including, where
applicable, the Consumer Credit ▇▇▇ ▇▇▇▇ and any regulations
made thereunder (and in particular no Mortgage Loan is
cancellable thereunder) and consummation of the transactions
contemplated hereby will not involve the violation of any such
laws and regulations;
(h) in respect of each Existing Mortgage Loan the Borrower has not
(a) modified the Mortgage Loan in any material respect, except
that a Mortgage Loan may have been modified by a written
instrument in respect of which any applicable registration(s)
have been completed; (b) satisfied, cancelled or subordinated
such Mortgage Loan in whole or in part; (c) released the
related Mortgaged Property in whole or in part from the
security created by the relevant Mortgage Deed; or (d)
31
executed any instrument of release, cancellation, discharge,
modification or satisfaction with respect thereto;
(i) no sub-mortgage, sub-charge, pledge, lien or right of set off
or counterclaim or other security interest or other adverse
right or interest has been created or has arisen between it
and any Mortgagor which entitles or entitled the Mortgagor to
reduce the amount of any payment otherwise due under the terms
of such Mortgagor's Mortgage Loan (save, in the case of Junior
Mortgage Loans, the relevant prior ranking legal mortgage or
mortgages of or Standard Security over the relevant Mortgaged
Property created by the Mortgagor and any related security for
the loan secured thereby);
(j) each Mortgage Loan was originated in all material respects in
accordance with the criteria set out in the Underwriting
Guidelines;
(k) each Mortgage Loan (other than a Pipeline Loan) was originated
in the name of the Borrower;
(l) each Pipeline Loan was acquired by the Borrower in accordance
with the origination and transfer agreement dated 24 April
1998 between, inter alia, the Borrower, City Mortgage
Corporation Limited and the Donors (as defined therein);
(m) in relation to each Mortgaged Property:-
(i) in respect of title to property in England or Wales
which is not registered, the relevant Mortgagor had
or will on completion of the relevant Mortgage have
good and marketable title to the fee simple absolute
in possession (if freehold) or a term of years
absolute of not less than thirty years beyond the
term of the Mortgage Loan (if leasehold) relating to
such Mortgaged Property and is free from any
encumbrance which would adversely affect such title;
(ii) in relation to title which is registered at HM Land
Registry, it is registered with title absolute in the
case of freehold property or absolute leasehold or
good leasehold title aforesaid in the case of
leasehold property;
(iii) in relation to which title is registered or recorded
in the Registers of Scotland, it was so registered or
recorded with valid and marketable title (whether
feudal or long lease), having in the case of a long
lease an unexpired term of not less than thirty years
beyond the term of the Mortgage Loan;
(iv) no works on the relevant Mortgaged Property were
carried out in violation of any applicable planning
law or regulation or building regulations;
32
(v) if the relevant Mortgaged Property is leasehold or
(in Scotland) held under long lease, any requisite
consent of the landlord to or notice to the landlord
of the creation of the relevant Mortgage had been
obtained or given and no consents of or notices to
such landlord are required to any transfer,
assignation or sub-charge of the relevant Mortgage,
and a copy of any such consent or notice is held with
the title deeds to the relevant Mortgaged Property or
held to the order of the Lender or its Solicitors;
(vi) the relevant Mortgaged Property is not subject to any
adverse third party claim or proceeding for
compulsory acquisition thereof;
(n) the obligations of each grantor of each Mortgage relating to a
Mortgage Loan (and any other documents entered into in
relation to the relevant Mortgage Loan) constitute the legal,
valid and binding obligations of the grantor thereof,
enforceable in accordance with their respective terms and with
applicable laws and the parties thereto had legal capacity to
execute each Mortgage and associated document and the same
have been duly and properly executed by such parties;
(o) either:
(i) the full amount of each Mortgage Loan has been fully
disbursed and there is no requirement for further
advances thereunder; or
(ii) if any retention was recommended by the Borrower or
its valuer, the recommendation to make a retention
was implemented and cash was not advanced until the
Borrower had received a certificate (or other
evidence acceptable to it) of completion of the
relevant repairs or other works;
(p) the Mortgage Documents applicable to each Mortgage Loan are
substantially in the form of the relevant Standard Documents;
(q) the origination and underwriting practices used by the
Borrower with respect to each Mortgage Loan have been in all
respects in accordance with the standards of a Reasonably
Prudent Mortgage Lender and comply with the Underwriting
Guidelines;
(r) either:
(i) each Mortgaged Property is insured under the block
insurance policy from time to time maintained by the
Borrower to provide, cover against such risks and
contingencies as are commonly insured against in a
fully comprehensive buildings insurance for
residential properties to a minimum of the full cost
of reinstatement thereof together with inflation cost
over any period that may be required for obtaining
33
any relevant planning permission and other approvals
and the reinstatement or repair period and architects
and other professional fees; or
(ii) where the Mortgagor insures, the Borrower has
established that such insurance was, at the date of
origination of the relevant Mortgage Loan, in
accordance with the foregoing provisions of this
sub-clause, with a reputable insurer, with an
acknowledgement by the insurer that the interest of
the Borrower has been or will be promptly following
the relevant Advance Date noted on the relevant
policy. In the case of leasehold property in England
and Wales, the relevant Mortgaged Property is insured
under arrangements effected by the freeholder or any
intermediate leaseholder, on a fully comprehensive
basis as aforesaid;
(s) prior to making the relevant advance the subject of a Mortgage
Loan, the Borrower carried out or caused to be carried on its
behalf the investigations, searches (other than local
authority searches) and other actions and made or caused to be
made on its behalf the enquiries as to the Mortgagor's status
that were required in accordance with the relevant lending
criteria of the Borrower applicable at the time when the offer
of advance was made and the results thereof were acceptable to
the Borrower in accordance with such lending criteria for the
purposes of the proposed advance;
(t) any further advances after the date of the Mortgage Deed but
made prior to the Advance Date have been advanced under
separate mortgage documentation (and, accordingly, have not
been consolidated with the outstanding principal amount
secured by the Mortgage), and all ground rents, ground burdens
and service charges and other payments required in relation to
leasehold property or heritable property which previously
became due and owing have been paid. Except for interest
accruing from the date of the relevant Mortgage Deed or date
of advance to the relevant Mortgagor, whichever is later, to
the day which precedes by one month the date for payment of
the first instalment of principal and interest, the Borrower
has not advanced funds, or induced, solicited or knowingly
received any advance of funds by a party other than the
Mortgagor, directly or indirectly, for the payment of any
amount in relation to the relevant Mortgage Loan save to the
extent that the same reduces the Mortgage Loan;
(u) to the best of the Borrower's knowledge and belief (the
Borrower having made all reasonable enquiries) there is no
default, breach, violation or event of acceleration existing
under any Mortgage Loans and it has not waived any default,
breach, violation or event of acceleration other than any
waiver which is in accordance with and permitted under the
relevant Manuals;
(v) each Mortgage File contains a valuation of the relevant
Mortgaged Property undertaken on the instructions of the
Borrower or instructions issued on its behalf by an
independent qualified valuer being an associate or fellow of
the Royal Institute of Chartered Surveyors or, as the case may
be, Society of Valuers and Auctioneers, in each case approved
34
by the Borrower and unless otherwise agreed between the Lender
and the Borrower, the principal amount advanced to the
relevant Mortgagor was not more than the amount permissible
under the terms of the Underwriting Guidelines;
(w) at the time of the making of the Mortgage Loan, the Mortgaged
Property was not located within a 1 mile radius of any
contaminated land or any land with environmental or hazardous
waste risks known to the Borrower or, where such was the case,
an environmental audit was procured by the Borrower or
evaluated in accordance with its established environmental
review procedures, and found to be satisfactory;
(x) in selecting the Mortgage Loans in respect of which Advances
are made hereunder, no selection procedure was employed by the
Borrower which was intended to adversely affect the interests
of the Lender;
(y) prior to the making of the relevant mortgage advance, enquiry
was made of each Mortgagor as to the identity of the persons
in actual occupation of the Mortgaged Property and (i) in the
case of English Mortgage Loans, any person who at the date
when the advance was made had attained the age of 18 and who
was identified in writing to the Borrower or its Solicitor by
the Mortgagor as residing or being about to reside in the
relevant Mortgaged Property is either named as joint mortgagor
on the relevant Mortgage Deed or has signed a legally binding
agreement postponing (each a "POSTPONEMENT AGREEMENT") all
rights and entitlements to which such person may be entitled
in the Mortgaged Property to the interests, rights and
entitlements of the Borrower or such other person as may have
or acquire as mortgagee or chargee of the property from time
to time, such agreement in a form as was satisfactory to such
Solicitor, and (ii) in the case of Scottish Mortgage Loans,
prior to the making of the advance, the Borrower or its
Solicitor obtained all necessary validly executed MHA
Documentation so as to ensure that neither the relevant
Mortgage Loan nor the relevant Mortgaged Property was subject
to or affected by any statutory right of occupancy in favour
of a non-entitled spouse;
(z) the Borrower has kept, or caused to be kept, full and proper
accounts, books and records showing all transactions payments,
receipts and proceedings relating to that Mortgage and all
such accounts, books and records are up to date and in its
possession or held to its order;
(aa) there exists no litigation, dispute or complaint (subsisting
or pending or threatened) calling into question in any way
title of the Borrower to any Mortgage Loan or the ability of
the Borrower or any other person to enforce such Mortgage Loan
in accordance with its terms or, to the best of its knowledge,
the relevant Mortgagor's title to his Mortgaged Property;
35
(bb) the Mortgage Loan Documents are held to the order of the
Lender by the relevant Solicitor or have been lodged at H.M.
Land Registry or the Registers of Scotland and in the case of
each Mortgaged Property the title to which is registered or
for which application for first registration has been made the
Borrower knows the title number under which the Mortgaged
Property is (or, in the case of first registration, is to be)
registered at H.M. Land Registry or the Registers of Scotland;
(cc) in relation to each Mortgage Deed for Mortgaged Property where
registration is pending at H.M. Land Registry, there is no
caution, notice or other entry which would prevent the
registration of the Mortgage Deed as a charge by way of first
or, as the case may be, second or third subsequent legal
mortgage;
(dd) none of the Mortgagors which pay interest is a company;
(ee) the Mortgage Loan Documents applicable to each Mortgage Loan
require the relevant Mortgagor to make all payments thereunder
directly into the Servicer Collection Account.
15.5 It is acknowledged and agreed that references in this clause 15 to
Mortgage Loans shall include reference to their Related Security, as
appropriate.
16. BREACH OF REPRESENTATIONS AND WARRANTIES
16.1 lt is understood and agreed that the representations and warranties set
forth in clauses 15.1, 15.2 and 15.4 shall survive the charging of
Mortgage Loans to the Lender and shall enure to the benefit of the
Lender notwithstanding the examination by the Lender or failure by the
Lender to examine any Mortgage File.
16.2 The Borrower shall notify the Lender of any breach of any
representation and warranty (relating to the Borrower) given under
clause 15.1 forthwith upon becoming aware of the same.
16.3 OFC shall notify the Lender of any breach of any representation and
warranty (relating to OFC) given under clause 15.1 forthwith upon
becoming aware of the same.
16.4 The Borrower shall notify the Lender, forthwith upon becoming aware of
the same, of any breach of any representation and warranty given under
clause 15.4 which would have (or has) a material and adverse effect on
the value of relevant Mortgage Loan.
17. UNDERTAKINGS AND COVENANTS
17.1 The Borrower and (but only where the covenant or undertaking relates to
OFC) OFC hereby undertake with the Lender that from and after the date
hereof and until all sums due and to become due hereunder have been
paid or repaid in full and the Loan Facility shall no longer exist:
36
(a) the Borrower and OFC shall obtain, comply with the terms of
and do all that is necessary to maintain in full force and
effect all authorisations, approvals, licences and consents
required in or by the laws and regulations of England,
Scotland and (in the case of OFC) Florida to enable it
lawfully to enter into and perform its obligations under this
Agreement and each Transaction Document and to ensure the
legality, validity, enforceability or admissibility in
evidence in England and in Scotland of this Agreement and each
Transaction Document and shall ensure that none of the
foregoing are revoked or modified;
(b) the Borrower shall promptly inform the Lender of the
occurrence of any Event of Default or Potential Event of
Default and, upon receipt of a written request to that effect
from the Lender, confirm to the Lender that, save as
previously notified to the Lender or as notified in such
confirmation, no such event has occurred;
(c) to the extent that the Event of Default or Potential Event of
Default relates to the conduct, omission, status or condition
or otherwise relates to OFC, OFC shall promptly inform the
Lender of the occurrence of any Event of Default or Potential
Event of Default and shall also (unless it is aware that the
Lender has received notification thereof) notify the Lender of
any Event of Default or Potential Event of Default arising
from any other fact or circumstance forthwith upon becoming
aware thereof;
(d) the Borrower shall ensure that at all times the claims of the
Lender against it under this Agreement are secured as provided
in the Security Documents and that the security thereunder
will be of the nature and will rank in the priority it is
expressed to have in the Security Documents;
(e) the Borrower shall not, without the prior written consent of
the Lender, create or permit to subsist any Security over all
or any of its present or future revenues or assets save for
security created (or permitted) under the Security Documents;
(f) the Borrower shall not, without the prior written consent of
the Lender, make any loans, grant any credit or give any
guarantee or indemnity (except (i) as contemplated in the
Transaction Documents; or (ii) to OFC or any of its subsidiary
companies or affiliates) to or for the benefit of any person
or otherwise voluntarily assume any liability, whether actual
or contingent, in respect of any obligation of any other
person;
(g) the Borrower shall not, without the prior written consent of
the Lender, sell, lease, transfer or otherwise dispose of, by
one or more transactions or series of transactions (whether
related or not), the whole or any part of its revenues or its
assets except as permitted under the Debenture;
37
(h) the Borrower undertakes to continue to endeavour to settle all
matters outstanding and pending with the OFT from time to time
as expeditiously as reasonably practicable;
(i) the Borrower will procure that the origination, administration
and enforcement of each Mortgage Loan does not violate in any
material respect:-
(i) OFT Guidelines for Non-Status Lending; and
(ii) any undertakings or agreements from time to time
between the Borrower, any holding company or any
subsidiary of the Borrower and the OFT;
(j) the Borrower will procure that the Lender is:-
(i) promptly notified on the receipt by Ocwen UK plc or
any of its Affiliates of any correspondence (other
than correspondence which is of a routine nature)
received from the OFT on or after the date hereof
relating to Ocwen UK plc's or any of its Affiliates'
mortgage lending business and/or mortgage servicing
business (insofar as it relates to mortgage loans
owned (whether legally or beneficially) by Ocwen UK
plc or any of its Affiliates) and/or the
enforceability or servicing of mortgage loans which
are owned (whether legally or beneficially) by Ocwen
UK plc or any of its Affiliates; and
(ii) all correspondence sent by the Borrower to the OFT
(other than any correspondence of a routine nature)
provided that nothing in this or any other
undertaking shall entitle the Lender to receive
access to or copies of privileged correspondence
between the Borrower and its counsel.
Upon the Lender being notified of the receipt of any
correspondence from the OFT under clause 17.1 (j)(i), the
Lender shall be entitled, upon giving reasonable prior notice
to the Borrower and at reasonable times, to inspect the
Borrower's files at the Borrower's offices relating to the
matter which is the subject of such correspondence;
(k) the Borrower will procure that:
(i) all Mortgage Loan Documents are delivered to ▇▇▇▇
Business Services Limited or such other ▇▇▇▇▇▇ as the
Lender may have approved (acting reasonably) from
time to time (subject always to clause 3.10(d) of the
Debenture) as soon as reasonably practicable
following receipt thereof by the Borrower or the
Solicitors acting on behalf of the Borrower in
connection with the relevant Mortgage Loan and shall
use reasonable endeavours to procure that the Lender
has, upon 1 Business Day's notice, access to the
offices of all Solicitors, ▇▇▇▇ Business Services
Limited or other storage provider aforesaid) during
normal business hours and shall procure that the
38
Solicitors are instructed to allow the Lender to take
possession of any Mortgage Loan Documents in relation
to any Mortgage Loan financed or to be financed
hereunder; and
(ii) all Mortgage Loan Files (other than the Mortgage Loan
Documents referred to in (i) are delivered to the
Servicer as soon as reasonably possible after the
origination of the relevant Mortgage Loan;
(l) immediately on becoming aware thereof, the Borrower will
provide the Lender with full and accurate details of any
litigation (subsisting or pending) and of any dispute or
complaint (other than any dispute or complaint which is
frivolous or vexatious (but only if the subject matter or
nature of the dispute or complaint (which includes, without
limitation, any particular provision or provisions in the
mortgage loan documentation to which the claim or dispute
relates) is not of a type as has been subject to prior
actions, disputes or complaints in relation to mortgage loans
owned legally and/or beneficially by the Borrower or its
Affiliates on at least five occasions) or is remedied within
ten Business Days of it first being made) which may affect the
value to the Lender of the security created by the Security
Documents. Following notification of any such litigation,
dispute or complaint and prior to any settlement thereof
(other than any settlement thereof through the 10 Business Day
remedy as permitted by this clause), the Borrower shall
consult with the Lender and shall take due account of the
Lender's representations (whether made in its capacity as
Lender hereunder or as lead manager of the Securitisations)
regarding how the litigation, dispute or complaint in question
is to be settled;
(m) the Borrower will not amend the Standard Form Documentation or
the Underwriting Guidelines without the prior written consent
of the Lender;
(n) the Borrower shall deliver to the Lender as soon as the same
are available, and in any event within one hundred and twenty
(120) days after the end of each of their respective financial
years
(i) a copy of the Borrower's audited annual financial
statements; and
(ii) a copy of Ocwen UK plc's consolidated audited
financial statements.
(o) the Borrower shall provide the Lender promptly upon request
with any information relating to it and/or its financial
condition and with any information relating to OFC and/or
OFC's financial condition as the Lender may from time to time
reasonably require in connection with this Agreement;
(p) the Borrower shall ensure that each set of audited annual
financial statements delivered pursuant to sub-clause (n) are
prepared in accordance with generally accepted accounting
principles and on the same basis every year and half year
39
(save as may be required from time to time as a result of
changes in law or regulation or generally accepted accounting
principles);
(q) the Borrower shall, promptly upon receipt of the same, deliver
to the Lender a copy of any independent accountants'
management letters received by it relating to it;
(r) the legal and equitable title of each Mortgage Loan financed
hereunder and not sold or otherwise disposed of (whether
through a securitisation, whole loan sale or otherwise) by the
Borrower will be held in the name of the Borrower and the
Borrower shall procure that in each case all necessary steps
are undertaken to protect the Borrower's title to the Related
Security including as appropriate registration or recording of
the relevant Mortgage Deeds in the name of the Borrower at HM
Land Registry or the Registers of Scotland and shall take all
reasonable steps within its power to ensure that (i) such
registration or recording shall be completed within 6 months
from the date of application to the relevant registry and will
submit each such application promptly (and within any
applicable priority time periods) and (ii) the Solicitors will
comply with the Solicitor's Undertakings and the Borrower
shall be responsible for and meet any registration fees and
other costs in connection therewith, provided that breach by
the Borrower of this provision in relation to any one or more
Mortgage Loans, shall not constitute an Event of Default but
shall entitle the Lender to require (i) repayment of the
Advance, or part thereof, (and all interest accrued thereon)
which funded the acquisition of the relevant Mortgage Loan
against release by the Lender of the relevant Mortgage Loan
from the security created by the Debenture or (ii) if the
relevant Mortgage Loan was specified in an Eligible Collateral
Schedule, the provision by the Borrower of replacement
Eligible Collateral in accordance with clause 8;
(s) the Borrower shall procure that where any retention is made in
respect of a Mortgage Loan funded hereunder, the amount
retained is, pending advance of the same against the relevant
certificate (or other evidence) of completion of the relevant
works, held either in the Borrower Funding Account or with the
relevant Solicitor under the terms of the Solicitor's
Undertaking.
(t) the Borrower shall procure that the Mortgage Loans are
administered at all times in accordance with the standards of
a Reasonably Prudent Mortgage Lender and, in particular but
without limitation, that all computer and electronic systems
required to administer the Mortgage Loans in accordance with
such standards are Y2K compliant;
(u) the Borrower undertakes that:
(i) (subject as set out in (v) below the aggregate
Outstanding Principal Balance of Junior Mortgage
Loans shall not at any time exceed 55% of the Loan
Amount;
40
(ii) the aggregate Outstanding Principal Balance of
Mortgage Loans secured by third or subsequent ranking
Mortgages shall not at any time exceed 3% of the Loan
Amount;
(iii) if the amount of mortgage loans secured by second or
subsequent ranking mortgages or standard securities
("Junior Loans") and originated by the Borrower and
its Affiliates over any period of 3 consecutive
months as a proportion of all mortgage loans so
originated falls significantly below such proportion
over the preceding 6 months, the Borrower will
endeavour to ensure that such a fall is reflected in
the proportion of Junior Loans funded out of the Loan
Facility thereafter;
(iv) in determining the ranking of a Mortgage, for the
purposes of this clause 17.1(u) any Mortgage ranking
immediately in priority shall be disregarded;
(v) this clause shall have no effect in relation to
Junior Mortgage Loans already funded out of the Loan
Facility as at close of business on the Closing Date.
17.2 The Borrower shall procure that the Servicer provides such certificates
as required by the Lender pursuant to the Servicing Agreement.
17.3 The Borrower shall not originate any MIRAS loans without the prior
written consent of the Lender.
17.4 Subject to clauses 17.5 and 17.6 the Borrower shall take all reasonable
steps within its power to procure that all payments made in respect of
each Mortgage Loan shall be paid directly into the Servicer Collection
Account.
17.5 The Borrower shall, if required by the Lender, give notice to
Mortgagors requiring the Mortgagors to redirect payment so as to pay
direct to the Borrower Collection Account, or such other account of the
Borrower or (following an Acceleration) such other Account as the
Lender shall specify.
17.6 In the event that any payments under Mortgage Loans financed hereunder
("Mortgage Proceeds") are paid to or for the account of the Borrower
other than by way of a direct credit to the Servicer Collection
Account, the Borrower shall transfer such Mortgage Proceeds (or shall
procure that such Mortgage Proceeds are transferred) to the Servicer
Collection Account forthwith.
17.7 The Guarantor shall, for so long as this Agreement is in effect :
(a) maintain a minimum Consolidated Tangible Net Worth of
$320,000,000.00 (three hundred and twenty million United
States dollars);
41
(b) not permit the ratio of its Consolidated Indebtedness to
Consolidated Tangible Net Worth to exceed 12:1; and
(c) maintain liquid assets consisting of cash and cash equivalents
on an unconsolidated basis of not less than $15,000,000.00
(fifteen million United States dollars).
17.8 The Borrower shall, forthwith upon becoming aware of the same, notify
the Lender (in writing) of each of the following:
(a) any termination of the Barclays Facility or servicing
agreement with the Servicer relating to the Barclays Facility
(the "Barclays Servicing Agreement");
(b) the occurrence of any event which entitles any person to
terminate the Barclays Facility or the appointment of the
Servicer as servicer under the Barclays Servicing Agreement;
(c) the occurrence of any event which, with the passing of time,
fulfilment of any condition or both would entitle any person
to terminate the Barclays Facility or appointment of the
Servicer as servicer under the Barclays Servicing Agreement;
and
(d) Ocwen 2 Limited negotiating or agreeing with Barclays Bank Plc
to terminate the Barclays Facility or significantly reduce the
amount available to be drawn by Ocwen 2 Limited thereunder.
17.9 The Borrower undertakes with the Lender that it will use all reasonable
endeavours to avoid securitising Mortgage Loans during the period from
15 December 1999 to 16 January 2000 without the Lender's prior consent
and the Lender agrees with the Borrower that it will endeavour to
co-operate with the Borrower to facilitate it in complying with such
undertaking.
18. DEFAULT
18.1 In the event of:-
(a) any default by the Borrower in the payment of any amount due
for payment hereunder or under any Transaction Document within
two Business Days after receipt of written notice by the
Lender requiring payment of the same; or
(b) the Borrower failing to observe or perform any other
covenants, obligations or agreements of the Borrower under
this Agreement or any Transaction Document which, if (in the
good faith opinion of the Lender) capable of remedy shall not
have been remedied (to the satisfaction of the Lender) within
thirty days of being required by the Lender to do so; or
42
(c) any representation or warranty made or repeated by the
Borrower under this Agreement (other than any representation
or warranty made or deemed to be made pursuant to clause 15.4)
or under any other Transaction Document or any representation
and warranty made or repeated by OFC hereunder being or
proving to be or have been untrue or incorrect or misleading
in any material respect as at the date at which it was made or
repeated, and in the case of any such breach which is (in the
good faith opinion of the Lender) capable of remedy, the
relevant breach not having been remedied within thirty days of
the Lender requiring the Borrower or, as the case may be, OFC
to do so; or
(d) any default by OFC in the payment of any amount due for
payment hereunder or under the Indemnity on the due date
therefor; or
(e) OFC failing to observe or perform any other covenant,
obligation or agreement contained hereunder or in the
Indemnity which, if (in the good faith opinion of the Lender)
is capable of remedy has not been remedied (to the
satisfaction of the Lender) within thirty days of the Lender
requiring OFC to do so; or
(f) the Servicing Agreement being terminated, or becoming capable
of being terminated (after expiration of any applicable grace
periods) in accordance with its terms other than by reason of
a disposal that by its terms is conditional upon a release of
servicing in respect of such Mortgage Loans; or
(g) OFC or the Servicer failing to observe or perform any material
covenant, obligation or agreement (including any obligation to
make any payment) on its part to be observed or performed
under any Transaction Document (other than, in the case of
OFC, this Agreement, or the Indemnity and, in the case of the
Servicer the Servicing Agreement) which is (in the good faith
opinion of the Lender) capable of remedy shall not have been
remedied (to the satisfaction of the Lender) within thirty
days (or such shorter or longer grace period as may apply in
respect of the relevant breach under the relevant Transaction
Document) of the Lender requiring remedy of the same; or
(h) any representation or warranty made or repeated by OFC or the
Servicer under any Transaction Document (other than, in the
case of OFC, this Agreement and the Indemnity and in the case
of the Servicer, the Servicing Agreement) being or becoming
untrue or misleading as of the date on which made or repeated
and, in the case of any such breach which is (in the good
faith opinion of the Lender) capable of remedy, the relevant
breach not having been remedied to the satisfaction of the
Lender within thirty days (or such shorter or longer grace
period as may apply in respect of the relevant breach under
the relevant Transaction Document) of the Lender requiring OFC
or the Servicer, as the case may be, to do so; or
(i) the loss by the Borrower or the Servicer of its Consumer
Credit Act Licence; or
43
(j) an adverse determination being made by the OFT in respect of
any Minded to Revoke Notice served by the OFT on any of the
Borrower or the Servicer in respect of the Consumer Credit Act
Licence of the Borrower or the Servicer irrespective of any
right to appeal (or other right) which the Borrower, or the
Servicer may have thereafter, a "determination" being the
decision or determination made by the Director (as defined
under the CCA) under section 34(3) CCA in respect of the
relevant Minded to Revoke Notice; or
(k) an injunction or interdict which relates to its residential
mortgage lending business including, without limitation,
Mortgage Loans financed hereunder being obtained by (or on
behalf of) the OFT against the Servicer or the Borrower which
remains in effect for more than 60 days;
(l) an order being made or an effective resolution being passed
for winding up of the Borrower, the Servicer or OFC or any
analogous provision or order being made under any applicable
jurisdiction; or
(m) the Borrower, the Servicer or OFC ceasing or threatening to
cease to carry on business or a substantial part of such
business or stopping payment or threatening to stop payment of
its debts or being or becoming unable to pay its debts within
the meaning of Section 123(1)(a), (b), (c) or (d) of the
Insolvency ▇▇▇ ▇▇▇▇, as that section may be amended, (or as
the case may be any analogous provision under any applicable
jurisdiction) or otherwise becoming unable to pay its debts as
they fall due or the value of its assets falling to less than
the amount of its liabilities (taking into account for both
these purposes its contingent and prospective liabilities) or
the Borrower, the Servicer or OFC otherwise becoming
insolvent;
(n) proceedings being initiated against the Borrower, the Servicer
or OFC under any applicable liquidation, insolvency,
composition, bankruptcy, reorganisation (other than a
reorganisation the terms of which have been approved by the
Lender and where the Borrower, the Servicer or OFC is solvent)
or other similar laws, or a petition for an administration
order being presented against the Borrower, or the Servicer or
OFC or an administrative or other receiver, administrator or
other similar official in any applicable jurisdiction being
appointed in relation to the Borrower, or the Servicer or OFC
or in relation to the whole or any substantial part of the
undertaking of or assets of the Borrower, or the Servicer or
OFC or an encumbrancer taking possession of the whole or any
substantial part of the undertaking or assets of the Borrower,
or the Servicer or OFC or a distress, diligence or execution
or other process being levied or enforced upon or sued out
against the whole or any substantial part of the undertaking
or assets of the Borrower, or the Servicer or OFC or the
Borrower, or the Servicer or OFC initiating or consenting to
judicial proceedings relating to itself under any applicable
liquidation, insolvency, composition, reorganisation or other
similar laws or making a conveyance or assignment for the
benefit of its creditors generally; or
44
(o) any material adverse change in the condition (financial,
business, prospects or otherwise) of any of the Borrower or
OFC occurring, which, in the reasonable judgment of the Lender
is reasonably likely to prevent the Borrower or OFC, as the
case may be, from performing its respective material
obligations under any Transaction Document or is likely to
adversely affect the value (to the Lender) of its security
whether by adversely affecting the value of such security, the
prospects of a sale thereof or otherwise; or
(p) the Borrower ceasing to be a wholly owned subsidiary of the
Guarantor; or
(q) any Indebtedness, arising under any one or more transactions
of the Guarantor and/or the Borrower, in excess (in aggregate)
of $5,000,000 or the equivalent thereof in any other currency
(determined by translating the other currency into dollars at
the mean of National Westminster Bank Plc's spot buying and
selling rates (based on the market rates prevailing at the
relevant time) for the exchange of dollars and such currency
at the relevant time):
(i) not being paid on its due date or within any
applicable grace period; or
(ii) if payable on demand, not being paid on demand or
within any applicable grace period; or
(iii) becoming due by reason of a declared (or automatic)
event of default (howsoever described) prior to its
original maturity date and not being paid within 5
days of its required date of payment;
(each of the foregoing an "EVENT OF DEFAULT"), the Lender may, for so
long as such event is continuing unwaived by the Lender do each or any
of the following:
(A) declare, by notice in writing to the Borrower, any
undrawn portion of the Loan Commitment or any of it to
be no longer available to the Borrower; and/or
(B) declare, by written notice to the Borrower, all
Advances outstanding together with all interest
accrued thereon and all other sums then due and
outstanding hereunder from the Borrower to be
immediately due and payable, whereupon the same shall
become immediately due and payable; and/or
(C) enforce all or any of its security under the Security
Documents; and/or
(D) terminate the Servicing Agreement pursuant to its
terms; and/or
(E) terminate this Agreement,
45
whereupon the Lender shall cease to be obliged to make Advances
hereunder.
18.2 If any Advance shall be declared immediately due and payable as
aforesaid, the Borrower shall pay to the Lender such amount as the
Lender certifies to be necessary to compensate it for any loss incurred
(excluding loss of Margin) or to be incurred on account of deposits
acquired or arranged in order to fund such Advances as a consequence of
such Event of Default.
18.3 The rights conferred on the Lender pursuant to this clause 18 shall be
in addition to whatever rights the Lender may have both at law and in
equity.
18.4 The Lender may waive any default by the Borrower in the performance of
its obligations hereunder and its consequences. Upon any such waiver of
a past default, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon
except to the extent expressly so waived.
18.5 The Borrower agrees to indemnify and keep indemnified the Lender, GNW
and every Receiver, delegate, attorney, manager or agent or other
person appointed by the Lender hereunder or acting on behalf of the
Lender in connection with any Transaction Document from and against any
loss, cost (including, without limitation, any cost of enforcement),
liability (including, without limitation, any tax liability), claim or
damage which any such person incurs or suffers (other than through that
person's own gross negligence or wilful default):
(a) as a consequence of any breach of any representation and
warranty contained in clause 15;
(b) as a consequence of any breach of any undertaking and covenant
contained in clause 17;
(c) as a consequence of any Event of Default or any Potential
Event of Default; and
(d) in connection with any actions, proceedings, claims or demands
whether brought or made (directly or indirectly) by Mortgagors
(of Mortgage Loans financed or previously financed hereunder)
or other third parties, in each case in respect of or relating
to any Mortgage Loan at any time financed hereunder whether
such Mortgage Loan or Mortgage Loans continue to be financed
hereunder at the time any such action, claim, proceeding or
demand is made (or concluded) and irrespective of the status
of such Mortgage Loan or Mortgage Loans, at the relevant time,
(including, without limitation, whether the same had been
previously redeemed) including, without limitation, any claim,
demand, proceeding or action for repayment or recovery (or
compensation or damages in respect) of amounts paid under the
relevant Mortgage Loan or Mortgage Loans.
46
The indemnity contained in this clause 18.5 may, without limiting the
Lender's rights, be claimed as a debt or liquidated demand.
19. DEFAULT INTEREST
19.1 If any sum due and payable by the Borrower hereunder is not paid on the
due date therefor or if any sum due and payable by the Borrower under
any judgement or decree of any court in connection herewith is not paid
on the date of such judgement or decree, the period beginning on the
date seven days after such due date (in the case of non payment by the
Borrower of an amount due hereunder) or, as the case may be, the date
of such judgement or decree and ending on the date upon which the
obligation of the Borrower to pay such sum (the balance thereof for the
time being unpaid being herein referred to as an "UNPAID SUM") is
discharged shall be divided into successive periods, each of which
(other than the first) shall start on the last day of the preceding
such period and the duration of each of which shall (except as
otherwise provided in this clause 19) be selected by the Lender.
19.2 During each such period relating thereto as is mentioned in clause 19.1
an unpaid sum shall bear interest at the rate per annum which is the
sum from time to time of two per cent and the Margin and the Associated
Costs Rate in respect thereof at such time and LIBOR on the first day
of the relevant period provided that:
(a) if, for any such period, LIBOR cannot be determined, the rate
of interest applicable to such unpaid sum shall be the rate
per annum which is the sum of two per cent and the Margin and
the Associated Costs Rate in respect thereof at such time and
the rate per annum determined by the Lender to be equal to the
rate which expressed as a percentage rate per annum equals the
cost to it of funding such unpaid sum for such period from
whatever sources it may select; and
(b) if such unpaid sum is all or part of an Advance which became
due and payable on a day other than the Repayment Date
therefor, the first such period applicable thereto shall be of
a duration equal to the unexpired portion of that Term and the
rate of interest applicable thereto from time to time during
such period shall be that which exceeds by two per cent the
rate which would have been applicable to it had it not so
fallen due.
19.3 Any interest which shall have accrued under clause 19 in respect of an
unpaid sum shall be due and payable and shall be paid by the Borrower
at the end of the period by reference to which it is calculated or on
such other dates as the Lender may specify by written notice to the
Borrower.
20. CALCULATIONS AND PORTFOLIO INFORMATION
20.1 On each Determination Date, the Borrower shall calculate the Borrowing
Base Deficiency for the next Interest Payment Date and shall notify the
same to the Lender by data tape, immediately upon calculation of the
same.
47
20.2 By close of business on the second Business Day prior to each
Determination Date, the Lender shall, for the purposes of the
calculation under clause 20.1, notify the Borrower of the Market Value
Percentage of all Mortgage Loans which have not, at the relevant time,
been sold or otherwise disposed of by the Borrower.
20.3 The Lender's determination of the matters to be notified to the
Borrower under clause 20.2 shall, in the absence of manifest error or
bad faith, be final and binding on the parties hereto.
20.4 The Borrower's determination of the Borrowing Base Deficiency once
agreed by the Lender under clause 20.5 shall, in the absence of
manifest error or bad faith (on the part of either party), be final and
binding on the parties hereto.
20.5 The Lender shall use reasonable endeavours to agree the Borrower's
determinations of the Borrowing Base Deficiency within three Business
Days of notification of the same to the Lender.
20.6 On each Determination Date, the Borrower shall provide a data tape to
the Lender setting out the information specified in Schedule 6 in
respect of each Mortgage Loan as at that date, such information to be
correct as at close of business on the last day of the Collection
Period immediately preceding such Determination Date.
21. CURRENCY OF ACCOUNT
21.1 Sterling is the currency of account and payment for each and every sum
at any time due from the Borrower hereunder provided that each payment
in respect of costs and expenses shall be made in the currency in which
the same were incurred.
21.2 If any sum due from the Borrower under this Agreement or any order or
judgement given or made in relation hereto has to be converted from the
currency (the "FIRST CURRENCY") in which the same is payable hereunder
or under such order, decree or judgement into another currency (the
"SECOND CURRENCY") for the purpose of (a) making or filing a claim or
proof against the Borrower, (b) obtaining an order, decree or judgement
in any court or other tribunal or (c) enforcing any order, decree or
judgement given or made in relation hereto, the Borrower shall
indemnify and hold harmless each of the persons to whom such sum is due
from and against any loss suffered as a result of any discrepancy
between (i) the rate of exchange used for such purpose to convert the
sum in question from the first currency into the second currency and
(ii) the rate or rates of exchange at which such person may in the
ordinary course of business purchase the first currency with the second
currency upon receipt of a sum paid to it in satisfaction, in whole or
in part, of any such order, judgement, decree, claim or proof.
48
22. SET-OFF
22.1 The Borrower authorises the Lender to apply any credit balance to which
the Borrower is entitled on any account of the Borrower with the Lender
in satisfaction of any sum due and payable from the Borrower to the
Lender hereunder but unpaid.
22.2 All payments required to be made by the Borrower hereunder shall be
calculated without reference to any set-off, deduction or counterclaim
and shall be made free and clear of and without any deduction for or on
account of any set-off, deduction or counterclaim.
23. CALCULATION OF INTEREST
Interest shall accrue from day to day and shall be calculated on the
basis of a year of 365 days and the actual number of days elapsed.
24. COSTS AND EXPENSES
24.1 The Borrower shall, save where expressed to the contrary in any other
Transaction Document, from time to time on demand of the Lender,
reimburse the Lender for all reasonable costs and expenses (including
legal fees) together with any VAT thereon incurred by it in connection
with the negotiation, preparation and execution of this Agreement, the
Transaction Documents and the completion of the transactions pursuant
to this Agreement and the Transaction Documents or in connection with
the preservation and/or enforcement of any of the rights of the Lender
under this Agreement and the Transaction Documents.
24.2 The Borrower shall pay all stamp, registration and similar taxes to
which this Agreement or any other Transaction Document or any judgement
or decree given in connection herewith is or at any time may be subject
(including in relation to the perfection of security granted by the
Security Documents) and shall, from time to time on demand of the
Lender, indemnify the Lender against any liabilities, costs, claims and
expenses resulting from any failure to pay or any delay in paying any
such tax.
24.3 The Borrower shall, from time to time on demand of the Lender
compensate the Lender at such daily and/or hourly rates as the Lender
shall from time to time reasonably determine for the time and
expenditure, all costs and expenses (including telephone, fax, copying,
travel and personnel costs) incurred by the Lender in connection with
its taking such action as it may deem appropriate or in complying with
any request by the Borrower in connection with (a) the granting or
proposed granting of any waiver or consent requested hereunder by the
Borrower; (b) any actual, potential or reasonably suspected breach by
the Borrower of its obligations hereunder; (c) the occurrence of any
event which is an Event of Default or a Potential Event of Default; or
(d) any amendment or proposed amendment hereto requested by the
Borrower.
49
25. REMEDIES AND WAIVERS
No failure to exercise, nor any delay in exercising, on the part of the
Lender, any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or
remedy prevent any further or other exercise thereof or the exercise of
any other right or remedy. Save as otherwise expressly provided herein
the rights and remedies herein provided are cumulative and not
exclusive of any rights or remedies provided by law.
26. CONFIDENTIALITY
The Borrower shall not, without the prior written consent of the
Lender, disclose to any person the existence or any details concerning
the Transaction Documents except to the extent such disclosure is
contemplated in any Transaction Document, or is required pursuant to
the application of any applicable law or an order of a court of
competent jurisdiction, or is made to the Borrower's auditors or other
professional advisors who are subject to confidentiality restrictions
imposed by a professional body which are substantially similar to those
set forth above.
27. NOTICES
27.1 WRITTEN NOTICES
Any notice or other communication, information or document to be made
or delivered under this Agreement (save for any communication required
to be made by data tape) shall be made or delivered by fax or otherwise
in writing. Each such notice, communication information or other
document to be delivered to any party to this Agreement shall (unless
that other person has by fifteen days' written notice to the other
party specified another address or fax number) be made or delivered to
that person at the address(es) or fax number (if any) set out below:-
(a) in the case of the Lender, to GNW's branch office in the
United Kingdom, facsimile number: 0171 375 5395, attention
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ with a copy to:
Office of the General Counsel,
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇
Facsimile number: 001 203 629 4571
Attention General Counsel
(b) in the case of the Borrower, to its offices at ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ facsimile number: 01923
426456, attention Chief Executive, with a copy to:
50
▇▇▇▇ ▇▇▇▇▇
Company Secretary
Ocwen Financial Corporation
The Forum
1675 Palm Beach ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No: ▇▇▇-▇▇▇-▇▇▇▇
Telefax No: ▇▇▇-▇▇▇-▇▇▇▇
(c) in the case of OFC, to its offices at:
The Forum
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Corporate Secretary
Telephone No: ▇▇▇-▇▇▇-▇▇▇▇
Telefax No: ▇▇▇-▇▇▇-▇▇▇▇
27.2 ELECTRONICALLY TRANSMITTED NOTICES
Any communication, document or information required to be made or
delivered by the Borrower under this Agreement by data tape shall be
transmitted by electronic mail to the following addresses (or such
other addresses as the Lender may notify to the Borrower from time to
time not later than the Business Day prior to the day on which the data
tape is required to be received by the Lender in accordance with this
Agreement):
▇▇▇▇.▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
27.3 In the event that any attempted transmission of data by electronic mail
fails, for whatever reason, the Borrower shall procure the delivery to
the Lender of the relevant data in disk format, to be delivered to the
Lender at the address specified in clause 27.1, marked for the
attention of ▇▇▇▇ ▇▇▇▇ by 9.30 a.m on the day following the day on
which the Borrower is informed that the electronic transmission failed.
27.4 DEEMED DELIVERY
Any notice, communication, information, document or data type to be
delivered to any person shall be deemed to have been delivered:-
51
(a) in the case of personal delivery, at the time of such
delivery;
(b) in the case of delivery by post, on the business day following
the day on which it was posted and in proving such delivery it
shall be sufficient to prove that the relevant notice,
communication or document was properly addressed, stamped and
posted (by airmail, if to another country) in the United
Kingdom or, in the case of service to or from an address
outside the United Kingdom at 9.00 a.m. on the fourth day
following the day on which it was posted;
(c) in the case of any notice or other communication by fax, (a)
on the business day the same was transmitted so long as there
is evidence that such fax message was received prior to 5.00
p.m. local time of the recipient on such day and such day is a
business day for the recipient, otherwise (b) on the business
day following the day on which it was transmitted and, in
either case, in proving such delivery it shall be sufficient
to prove that the whole of the fax message was received on any
fax machine of the recipient and that there was no evidence
that such transmission had been interrupted.
(d) In the case of any data tape to be transmitted by electronic
mail or disk, on actual receipt thereof by the Lender.
28. SEVERABILITY
If at any time any provision of this Agreement is or becomes illegal,
invalid or unenforceable in any respect under the law of any
jurisdiction, that shall not affect or impair:-
(a) the legality, validity or enforceability in that jurisdiction
of any other provision of this Agreement; or
(b) the legality, validity or enforceability under the law of any
other jurisdiction of that or any other provision of this
Agreement.
29. ASSIGNMENT AND SUB PARTICIPATION
29.1 The Lender may at any time:-
(a) sub-participate all or any part of its rights or benefits
under this Agreement; and
(b) assign or transfer all or any part of its rights or benefits
under this Agreement
provided that:-
(i) if such sub-participation, assignment or transfer is
of 51% or more of the total Loan Facility and is to
any person other than a subsidiary, holding company
of or other member of the Lender's group such sub
participation, assignment or transfer shall require
52
the prior consent of the Borrower (such consent not
to be unreasonably withheld) provided that if any
such member of the Lender's group who, at the
relevant time, holds (whether as sub-participant,
assignee or transferee) 51% or more of the total Loan
Facility ceases to be a member of the group it shall,
unless the Borrower shall have consented to the said
member retaining its interest after it ceases to be a
member of the group, immediately upon it ceasing to
be a member of the group assign transfer its interest
to any subsidiary, holding company or other member of
the Lender's group; and
(ii) if, at the time and as a result of any proposed
transfer or assignment, the Borrower would incur any
increased cost or be liable to make payments in
excess of those required to be made hereunder
immediately prior thereto (other than any minimum
liquid asset costs) such assignment or transfer is on
terms that the Borrower is not and will not be liable
for any such increased cost or liability.
29.2 The Borrower shall not be entitled to assign, transfer or otherwise
dispose of all or any of its rights or benefits under this Agreement
without the prior written consent of the Lender.
29.3 The Lender may disclose to a proposed assignee, transferee or
sub-participant information in its possession relating to the
provisions of this Agreement and the Transaction Documents which it
considers necessary or desirable to disclose for the purposes of the
proposed assignment, transfer or sub-participation, notwithstanding the
provisions of clause 26 (Confidentiality) provided that the Lender
obtains from such assignee, transferee or sub-participant a
confidentiality undertaking on substantially the same terms as clause
26 (but substituting references to such proposed assignee, transferee
or sub-participant for references therein to the Borrower) or on such
other terms as may be agreed between the Borrower and the Lender.
29.4 This Agreement shall bind and inure to the benefit of and be
enforceable by the Lender and its respective successors, transferees
and assigns and references to the Lender shall be deemed to include
references to each of the foregoing.
30. FURTHER ASSURANCE
The Borrower shall, from time to time on being required to do so by the
Lender, now or at any time in the future, do or procure the doing of
all such acts and/or execute or procure the execution of all such
documents in a form satisfactory to the Lender as the Lender may
consider necessary for giving full effect to this Agreement and the
Transaction Documents and securing to the Lender the full benefit of
the rights, powers and remedies conferred upon the Lender in this
Agreement or any Transaction Documents.
53
32. ENTIRE AGREEMENT
This Agreement (together with the Transaction Documents entered into on
or after the date hereof) constitutes the whole and only agreement
between the parties relating to the secured, guaranteed facility
provided by the Lender to the Borrower described herein and supersedes
and extinguishes any prior drafts, agreements, undertakings,
representations, warranties and arrangements of any nature whatsoever.
32.1 AGENT FOR SERVICE
32.2 OFC irrevocably agrees that any Service Document may be sufficiently
and effectively served on it in connection with Proceedings, whether
pursuant to this Agreement or any other Transaction Document, in
England and Wales by service on its agent Ocwen Limited, if no
replacement agent has been appointed and notified to the Lender
pursuant to sub-clause 32.4, or on the replacement agent if one has
been appointed and notified to the Lender.
32.3 Any Service Document served pursuant to this clause shall be marked for
the attention of:
(a) Ocwen Limited at ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ or such other address within England and Wales as may
be notified to the Lender by OFC; or
(b) such other person as is appointed as agent for service
pursuant to sub-clause 32.4 at the address notified pursuant
to sub-clause 32.4.
32.4 Any document addressed in accordance with sub-clause 32.2 shall be
deemed to have been duly served if:-
(a) left at the specified address, when it is left; or
(b) sent by first class post, two clear Business Days after the
date of posting.
32.4 If the agent referred to in sub-clause 32.4 (or any replacement agent
appointed pursuant to this sub-clause) at any time ceases for any
reason to act as such, OFC shall appoint a replacement agent to accept
service having an address for service in England or Wales and shall
notify the Lender of the name and address of the replacement agent;
failing such appointment and notification, the Lender shall be entitled
by notice to OFC to appoint such a replacement agent to act on OFC's
behalf.
32.5 A copy of any Service Document served on an agent pursuant to this
clause shall be sent by post to OFC at its address for the time being
for the service of notices and other communications under clause 27 but
no failure or delay in so doing shall prejudice the effectiveness of
service of the Service Document in accordance with the provisions of
sub-clause 32.1.
54
33 GOVERNING LAW AND JURISDICTION
33.1 This Agreement shall be governed by and construed in accordance with
the laws of England, provided that any terms hereof which are
particular to Scots law shall be construed in accordance with the laws
of Scotland.
33.2 The parties to this Agreement irrevocably agree that the courts of
England are to have jurisdiction to settle any dispute which may arise
out of or in connection with this Agreement and each other Transaction
Document and that accordingly any proceeding, suit, or action arising
out of or in connection with this Agreement or any other Transaction
Document ("PROCEEDINGS") may be brought in such courts.
33.3 Without prejudice to clause 33.2, all the parties further irrevocably
agree that any Proceedings may be brought in any court of the State of
New York, or the State of Florida or any other state of the United
States, where any party has its chief executive office (all of such
states being the "SUBMITTED STATES") or federal court sitting in the
Submitted State and any court having jurisdiction over appeals of
matters heard in such courts and each of the parties hereto irrevocably
submits to the non-exclusive jurisdiction of such courts. Each of OFC
and the Lender irrevocably consent to the service of process of any of
the aforesaid courts in Submitted States in any such action or
Proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid to the party's notice address specified above,
such service to become effective upon receipt of evidence of the
receipt thereof.
33.4 Each of the parties hereto irrevocably waives any objection it may have
now or hereafter to the laying of the venue of any Proceedings in any
such court as is referred to in this clause and any claim of FORUM NON
CONVENIENS and further irrevocably agrees that a judgment in any
Proceedings brought in any court referred to in this clause shall be
conclusive and binding upon it and may be enforced in the courts of any
other jurisdiction.
IN WITNESS WHEREOF this Agreement is duly executed the date and year first above
written.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
.......................................................
for and on behalf of
OCWEN LIMITED
/s/ (authorized signatory)
.......................................................
for and on behalf of
GREENWICH NATWEST LIMITED,
acting as duly authorised agent for
NATIONAL WESTMINSTER BANK, PLC
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
.......................................................
for and on behalf of OCWEN FINANCIAL
CORPORATION
55
The following schedules have been deleted herefrom, but are available
to the Commission upon request:
SCHEDULE
PART 1 - FORM OF CLOSING DATE ADVANCE REQUEST
PART 2 - FORM OF DRAWDOWN REQUEST
PART 3 - MORTGAGE LOAN SCHEDULE
SCHEDULE 2
FORM OF SOLVENCY CERTIFICATE
SCHEDULE 3
ENGLISH MORTGAGE LOAN DOCUMENTS
SCOTTISH MORTGAGE LOAN DOCUMENTS
SCHEDULE 4
ASSOCIATED COSTS RATE
SCHEDULE 5
PART 1 - FORM OF ADVANCE MONIES UNDERTAKING
PART 2 - FORM OF EXISTING MORTGAGE LOANS UNDERTAKING
PART 3 - FORM OF NEW MORTGAGE LOANS UNDERTAKING
SCHEDULE 6
PART 1 - DAILY FUNDING FILE TO BE PROVIDED
UNDER CLAUSE 4.2(c)(iii)
PART 2 - MONTH END FILES TO BE PROVIDED UNDER CLAUSE 20.6
PART 3 -INTEREST PAYMENT DATE FILE TO BE PROVIDED
UNDER CLAUSE 7.2
SCHEDULE 7
PIPELINE LOANS
SCHEDULE 8
LETTER FROM GNW TO OFC OF 5 MARCH 1999
SCHEDULE 9
UNDERWRITING GUIDELINES
