Exhibit 4.21
EXECUTION COPY
COLLATERAL AGENCY
AND
INTERCREDITOR
AGREEMENT
Collateral Agency and Intercreditor
Agreement, dated as of May 10, 2005 (this
“Agreement”), is by and among CALYON NEW YORK BRANCH
(“Calyon”), and LEHMAN BROTHERS SPECIAL FINANCING INC.,
in its individual capacity (“Lehman” and, together with
Calyon, the “Swap Counterparties”) and as agent under
this Agreement for Lehman and Calyon (in such capacity and together
with any successor thereto in such capacity, “Collateral
Agent”).
Recitals:
WHEREAS, Lehman has entered into
that certain ISDA Master Agreement, dated as of May 10, 2005
(including the Schedule, each Confirmation and Credit Support
thereto, the “Lehman Swap”), between Lehman and
Accredited Home Lenders, Inc.
(“Accredited”);
WHEREAS, Calyon has entered into
that certain ISDA Master Agreement, dated as of May 10, 2005
(including the Schedule and each Confirmation and Credit Support
Annex thereto, the “Calyon Swap” and, together with the
Lehman Swap, the “Swaps”), between Calyon and
Accredited;
WHEREAS, Accredited has pledged
pursuant to the Credit Support Annex to the Lehman Swap (the
“Lehman CSA”) certain posted debt obligations,
securities and cash and its hedges and other assets (collectively,
the “Lehman Collateral”) to support its obligations
under the Lehman Swap (the “Lehman
Obligations”);
WHEREAS, Accredited has pledged
pursuant to the Credit Support Annex to the Calyon Swap (the
“Calyon CSA” and, together with the Lehman CSA, the
“Security Documents”) certain posted debt obligations,
securities and cash and its hedges and other assets (the
“Calyon Collateral” and, together with the Lehman
Collateral, the “Collateral”) to support its
obligations under the Calyon Swap (the “Calyon
Obligations” and, together with the Lehman Obligations, the
“Obligations”);
WHEREAS, the Swap Counterparties
desire to appoint Lehman as Collateral Agent under this Agreement
and the Security Documents and to define the rights and duties of
the Collateral Agent and the Collateral Agent desires to set forth
the terms and conditions upon which it shall accept such agency;
and
WHEREAS, the Swap Counterparties
also desire to enter into agreements with one another as to certain
matters relating to the Security Documents, including the
administration of liens and the application of the proceeds of the
Collateral.
NOW THEREFORE, in consideration of
the foregoing and the mutual covenants herein contained, and for
other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as
follows:
1. Enforcement of Collateral
.
1.1 Events of Enforcement .
Anything contained in the Security Documents to the contrary
notwithstanding, the Swap Counterparties agree among themselves and
for their own benefit alone that, except as expressly provided
otherwise in this Agreement (including, without limitation, actions
permitted pursuant to the provisions of Section 4.4), the
Collateral Agent shall only be authorized to take such actions
under the Security Documents and to enforce or prepare to enforce
such remedies available under such Security Documents as it may be
directed to take or enforce pursuant to the written instruction of
the Instructing Swap Counterparty (as defined in Section 4.7)
(each such instruction being herein called an “Event of
Enforcement”). In furtherance of the foregoing, the
Collateral Agent agrees to make such demands and give such notice
under the Security Documents as may be requested by, and to take
such action to enforce the Security Documents and to foreclose
upon, collect and dispose of the Collateral or any portion thereof
as may be directed by, the Instructing Swap Counterparty;
provided, however , that (i) the Collateral Agent shall
not be required to take any action that it has been advised by
legal counsel is contrary to law or the terms of the Swaps, the
Security Documents, or this Agreement and (ii) the Collateral
Agent shall not be required to take any action unless indemnified
in accordance with the provisions of Section 4.6
hereof.
1.2 Collateral Agent’s
Enforcement Against Collateral . Upon the occurrence of any
Event of Enforcement, the Collateral Agent shall, on behalf of the
Swap Counterparties, seek to realize upon the liens and security
interests and other rights granted and provided for in the Security
Documents in accordance with the instructions of the Instructing
Swap Counterparty, but in the absence of such instructions, then in
such manner as it deems appropriate and in that regard shall have
the right to incur costs and expenses (including reasonable costs
and expenses of attorneys) which, to the extent are not paid by
Accredited or out of the proceeds of the Collateral, shall be
shared by the Swap Counterparties in the manner provided for in
Section 4.11 of this Agreement. The Collateral Agent shall not
be obligated to exhaust its remedies against the Collateral or
Accredited prior to seeking reimbursement for its costs and
expenses from the Swap Counterparties.
1.3 Restrictions on Actions .
Each Swap Counterparty agrees that, so long as any Obligations are
outstanding, the provisions of this Agreement shall provide the
exclusive method by which any Swap Counterparty may realize the
benefits afforded by the Security Documents. Each Swap Counterparty
shall, for the mutual benefit of all Swap Counterparties, except as
expressly provided otherwise by this Agreement:
(a) refrain from taking or filing
any action, judicial or otherwise, to enforce rights or pursue any
remedy with respect to or under the Security Documents, except for
delivering notices hereunder;
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(b) refrain from (i) selling
any Obligations to Accredited or any affiliate of Accredited, and
(ii) accepting any guaranty of, or any other security for, the
Obligations from Accredited or any affiliate of Accredited, except
any guaranty or security granted to the Collateral Agent for the
benefit of all Swap Counterparties; and
(c) refrain (except in connection
with action taken by the Instructing Swap Counterparty) from
exercising or requesting the Collateral Agent to exercise any
rights or remedies under the Security Documents which have or may
have arisen or which may arise as a result of an event of default
or event of termination (as such terms are defined in the Swaps, an
“Event of Default” or “Termination Event”)
under any Swap;
provided, however
, that nothing contained in
subsections (a) through (c) above shall prevent any Swap
Counterparty from imposing a default interest in accordance with
the Swaps, or prevent a Swap Counterparty from raising any defenses
in any action in which it has been made a party defendant or has
been joined as a third party; provided, further that nothing
contained herein shall prevent any Swap Counterparty from accepting
a guaranty from any person or entity which, contemporaneously with
the granting of such guaranty to such Swap Counterparty, is
granting a guaranty or guaranties to the other Swap Counterparty to
secure the Obligations owed to them, which guaranty or guarantees
has or have the same or substantially the same terms as the terms
of the guaranty or guarantees given to such Swap Counterparty; and
provided, further that nothing contained herein shall affect
or impair the right any Swap Counterparty may have under the terms
and conditions governing the Obligations owing to such Swap
Counterparty to accelerate, demand and take any action to enforce
repayment of such Obligations or to file a lawsuit and obtain and
enforce a judgment against Accredited, subject to the provisions of
Article 3 hereof.
1.4 Terms of Obligations .
Subject to the terms of the Swaps, the terms and conditions
applicable to the Obligations owing to each Swap Counterparty by
Accredited shall be such as such Swap Counterparty and Accredited
shall from time to time agree upon and may be changed or modified
at any time in accordance with the applicable Swap without in any
manner affecting this Agreement or impairing this
Agreement.
2. Release of Collateral
.
2.1 The Collateral Agent may,
without notice to or the consent of any Swap Counterparty, release
from the liens and security interests of the Security Documents any
portion of the Collateral in connection with the sale, transfer or
disposition of such Collateral by Accredited in the ordinary course
of its business to the extent permitted by, and subject to the
terms and conditions of, the Swaps.
3. Allocation of Proceeds of
Collateral .
3.1 Application of Proceeds .
The proceeds of the Collateral, including proceeds received through
enforcement of the liens and security interests and other rights
granted and provided for in the Security Documents, shall be
applied and shared among the Swap Counterparties as
follows:
(a) First, to the payment of any
outstanding costs and expenses incurred by the Collateral Agent in
enforcing such liens and security interests and in protecting and
maintaining the Collateral and collecting the proceeds of the
Collateral, to the extent that it has not theretofore been
reimbursed for same by Accredited or out of the proceeds of the
Collateral or, if not reimbursed promptly by Accredited or out of
such proceeds, by the Swap Counterparties; and
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(b) Second, to the Swap
Counterparties ratably in accordance with the respective
outstanding amount of Obligations owing to such Swap Counterparty
under the Swaps for application to Obligations arising under and in
connection with the Swaps.
3.2 Sharing of Proceeds
.
(a) Subject to the remaining
provisions of this Section 3.2, if a Swap Counterparty obtains
any payments (other than scheduled payments on any Obligations, in
each case received in the ordinary course either (i) prior to
such Swap Counterparty’s receipt of written notice from
another Swap Counterparty that an Event of Default or Termination
Event has occurred and is continuing under which Accredited is the
Defaulting Party or the Affected Party (as such terms are used in
the Swaps) or (ii) after such Event of Default no longer shall
be continuing) or proceeds of the Collateral, from Accredited with
respect to any of the Obligations, including from the exercise of
any setoff rights (hereinafter called a “Sharing
Payment”), such Swap Counterparty shall either
(i) promptly cause such amounts to be delivered to or put in
the custody, possession or control of the Collateral Agent for
disposition and distribution in accordance with Section 3.1
hereof or (ii) if such Swap Counterparty has not promptly
complied with subclause (i) next above, promptly purchase from
the remaining Swap Counterparties participations in the Obligations
owing to the remaining Swap Counterparties and shall make such
other adjustments from time to time as shall be equitable (herein,
the purchase of such participations or the making of such other
adjustments being called “Sharing Adjustments”) to the
end that all Swap Counterparties shall share the benefit of such
Sharing Payment pro rata in accordance with the respective
outstanding principal amount of Obligations then owing to each Swap
Counterparty.
(b) If, during the course of, or
pursuant to, any bankruptcy, insolvency, reorganization,
receivership, dissolution or similar proceeding or the assignment
for the benefit of creditors or any other marshalling of assets (a
“Bankruptcy Proceeding”) of Accredited, a Swap
Counterparty (the “Returning Swap Counterparty”) is
required by a court or other tribunal of competent jurisdiction,
pursuant to Section 547 of the Bankruptcy Code or an analogous
provision of other applicable law, to disgorge, refund, rebate or
otherwise return any payment received for which there has been a
distribution under Section 3.1 hereof to such Returning Swap
Counterparty with respect to the Obligations (a “Disputed
Payment”) to any trustee presiding over such Bankruptcy
Proceeding or to any other person or entity, the other Swap
Counterparty shall promptly pay to the Returning Swap Counterparty
its respective pro rata shares of such Disputed Payment, such pro
rata share being determined by multiplying the amount of
the
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Disputed Payment by a fraction, the
numerator of which is the portion of such Disputed Payment received
by such Swap Counterparty and the denominator of which is the
amount of such Disputed Payment.
4. The Collateral Agent
.
4.1 Appointment . Each of the
Swap Counterparties hereby appoints Lehman as the initial
Collateral Agent for the Swap Counterparties under, and subject to
the provisions of, this Agreement, the Swaps and the Security
Documents, and each of the Swap Counterparties authorizes the
Collateral Agent to act as the agent of the Swap Counterparties
under, and to effectuate the purposes of, this Agreement, the Swaps
(to the extent of the duties delegated to the Collateral Agent
thereunder) and the Security Documents (to the extent of the duties
delegated to the Collateral Agent thereunder). The Collateral Agent
agrees to act as such upon the express conditions contained in this
Agreement.
4.2 Duties . (a) By the
execution of this Agreement, each Swap Counterparty
(i) authorizes the Collateral Agent to file all financing
statements and amendments to and/or assignments of financing
statements necessary to perfect the security interests granted
pursuant to the Security Documents or to continue the perfection of
such security interests as are covered by the financing statements
in favor of Collateral Agent, and (ii) ratifies the Collateral
Agent’s prefiling, if any, prior to the date hereof of
financing statements as part of such perfection process. All of
such financing statements or amendments to and/or assignments of
financing statements shall name the Collateral Agent, as agent, as
secured party for the benefit of all of the Swap Counterparties in
accordance with the interests of each Swap Counterparty as
described in this Agreement.
(b) Subject to the terms of this
Agreement, the Swaps and the Security Documents, the Collateral
Agent agrees to receive, hold, administer and enforce the
Collateral and the Security Documents (including, without
limitation, acting as Valuation Agent and making the calculation of
Exposure (as defined in the Swaps), the determination of Value,
Current Market Value and Exposure (as defined in the Swaps) and
making market calls under the Security Documents), and to foreclose
upon, collect and dispose of the Collateral and to apply the
proceeds therefrom, in such manner and on such terms as are set
forth herein and therein, and for the ratable benefit of the Swap
Counterparties as provided herein and therein, and otherwise to
perform its duties and obligations as Collateral Agent hereunder
and under each Security Document to which it is a party in
accordance with the respective terms hereof and thereof.
Notwithstanding any provision to the contrary set forth elsewhere
in this Agreement or the Security Documents, the Collateral Agent
shall not have any duties or responsib
