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Exhibit 10.2
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AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
Dated as of August 5, 2005
among
OPTION ONE MORTGAGE CORPORATION,
as the Servicer,
OPTION ONE LOAN WAREHOUSE CORPORATION,
as the Depositor,
OPTION ONE OWNER TRUST 2003-4,
as the Issuer,
FALCON ASSET SECURITIZATION CORPORATION,
JUPITER SECURITIZATION CORPORATION, and
PREFERRED RECEIVABLES FUNDING CORPORATION,
as the Conduit Purchasers,
THE FINANCIAL INSTITUTIONS PARTY HERETO,
as the Committed Purchasers,
and
JPMORGAN CHASE BANK, N.A.
(successor by merger to Bank One, NA (Main Office Chicago)),
as the Note Agent
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS..................................................................
1
SECTION 1.01. Defined
Terms.........................................................
1
SECTION 1.02. Accounting
Terms; Other Terms.........................................
5
SECTION 1.03. Other Rules of
Construction...........................................
5
SECTION 1.04. Computation of
Time Periods...........................................
5
ARTICLE II PURCHASE AND SALE; PURCHASE
COMMITMENT...................................... 6
SECTION 2.01. Purchase and
Sale of the Note.........................................
6
SECTION 2.02.
[Reserved]............................................................
6
SECTION 2.03. Increases and
Decreases in the Note Principal Balance; Decreases in
the Maximum Note Principal
Balance.................................... 6
SECTION 2.04.
Fees..................................................................
7
SECTION 2.05. Extension of
Term.....................................................
7
SECTION 2.06. Calculation
and Payment of Monthly Interest...........................
8
SECTION 2.07. Increased
Costs.......................................................
9
SECTION 2.08. Increased
Capital.....................................................
9
SECTION 2.09.
Taxes.................................................................
10
ARTICLE III
CLOSING....................................................................
13
SECTION 3.01.
Closing...............................................................
13
SECTION 3.02. Transactions
to be Effected at the Closing............................
13
ARTICLE IV PURCHASER CONDITIONS
PRECEDENT..............................................
13
SECTION 4.01. Conditions
Precedent to the Purchase of the Note......................
13
SECTION 4.02. Conditions
Precedent to Principal Balance Increases...................
15
ARTICLE V REPRESENTATIONS AND
WARRANTIES...............................................
16
SECTION 5.01.
Representations and Warranties of the
Depositor....................... 16
SECTION 5.02.
Representations and Warranties of the
Servicer........................ 18
SECTION 5.03.
Representations and Warranties of the
Issuer.......................... 20
SECTION 5.04.
Representations and Warranties of the Note Agent and the
Purchasers... 22
ARTICLE VI COVENANTS OF THE ISSUER, THE
DEPOSITOR AND THE SERVICER..................... 22
SECTION 6.01. Covenants of
the Issuer, the Depositor and the Servicer...............
22
SECTION 6.02. Reporting
Requirements of the Depositor and the Servicer..............
23
SECTION 6.03. Optional
Repurchase...................................................
24
SECTION 6.04. Change in
Name; Jurisdiction of Organization..........................
24
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ARTICLE VII
INDEMNIFICATION............................................................
24
SECTION 7.01.
Indemnification by the Depositor and the
Servicer..................... 24
SECTION 7.02. Costs and
Expenses....................................................
25
ARTICLE VIII THE NOTE
AGENT............................................................
26
SECTION 8.01. Authorization
and Action..............................................
26
SECTION 8.02. Note Agent's
Reliance, Etc............................................
27
SECTION 8.03. Note Agent and
Affiliates.............................................
27
SECTION 8.04. Purchase
Decision.....................................................
27
SECTION 8.05.
Indemnification.......................................................
28
SECTION 8.06. Successor Note
Agent..................................................
28
ARTICLE IX
MISCELLANEOUS...............................................................
28
SECTION 9.01. Amendments,
Etc.......................................................
28
SECTION 9.02. Notices,
Etc..........................................................
29
SECTION 9.03. No Waiver;
Remedies...................................................
29
SECTION 9.04. Binding
Effect; Assignability.........................................
29
SECTION 9.05. Note as
Evidence of Indebtedness......................................
30
SECTION 9.06. Governing
Law.........................................................
31
SECTION 9.07. No
Proceedings........................................................
31
SECTION 9.08. Execution in
Counterparts; Severability...............................
32
SECTION 9.09. No
Recourse...........................................................
32
SECTION 9.10.
Confidentiality.......................................................
33
SECTION 9.11. Limitation on
Liability...............................................
33
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SCHEDULES AND EXHIBITS
Schedule I Commitments
Schedule II Notice Addresses
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THIS AMENDED AND
RESTATED NOTE PURCHASE AGREEMENT amends and restates,
effective as of August 5, 2005, that
certain Note Purchase Agreement dated as of
August 8, 2003, among OPTION ONE MORTGAGE
CORPORATION, A California corporation,
as Servicer, OPTION ONE LOAN WAREHOUSE
CORPORATION, a Delaware corporation, as
Depositor, OPTION ONE OWNER TRUST 2003-4, a
Delaware business trust, as the
Issuer, FALCON ASSET SECURITIZATION
CORPORATION, a Delaware corporation
("Falcon"), JUPITER SECURITIZATION
CORPORATION, a Delaware corporation
("Jupiter") PREFERRED RECEIVABLES FUNDING
CORPORATION, a Delaware corporation
("PREFCO") (Falcon, Jupiter and PREFCO
being collectively referred to as the
"Conduit Purchasers" and each,
individually, a "Conduit Purchaser"), THE
FINANCIAL INSTITUTIONS PARTY HERETO FROM
TIME TO TIME, as committed purchasers
(the "Committed Purchasers" and, together
with the Conduit Purchaser, the
"Purchasers") and JPMORGAN CHASE BANK, N.A.
(successor by merger to Bank One, NA
(Main Office Chicago)) a national banking
association ("JPMorgan"), as agent
(the "Note Agent") for the Purchasers and
the other "Owners" (as defined below),
as the same has heretofore been
amended.
In consideration
of the representations, warranties and agreements herein
contained, the parties agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01.
Defined Terms. As used herein, the following terms shall have
the meanings specified below. Capitalized
terms used herein that are not
otherwise defined shall have the meanings
ascribed thereto in the Sale and
Servicing Agreement or the Indenture, as
the case may be.
"Act" means the
Securities Act of 1933, as amended.
"Additional
Amounts" means, for each Accrual Period, an amount equal to the
sum of (i) the aggregate amount payable to
all Affected Parties pursuant to
Sections 2.07, 2.08 and 2.09 in respect of
such Accrual Period and (ii) the
aggregate of such amounts with respect to
prior Accrual Periods which remain
unpaid.
"Adjusted LIBO
Rate" shall have the meaning specified in the Pricing Side
Letter.
"Affected Party"
means each Purchaser, the Note Agent, each Liquidity
Provider, and any permitted assignee of any
Purchaser or any Liquidity Provider.
"Agreement" or
"Note Purchase Agreement" means this note purchase agreement
and any supplements, amendments, exhibits
and schedules hereto.
"Asset Purchase
Agreement" means any one or more asset purchase, transfer
or similar liquidity agreement, entered
into at any time pursuant to which a
Purchaser may from time to time assign part
or all of its interests in the Note
held by such Purchaser to a Liquidity
Provider, as such agreements may be
amended, restated, supplemented or modified
from time to time.
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"Breakage Costs"
means, for each Owner for each funding period, to the
extent that an Owner is funding the
maintenance of its investment in the Note
during such funding period through the
issuance of Commercial Paper Notes or at
the Adjusted LIBO Rate, during which the
amount of such investment is reduced
(in whole or in part) prior to the end of
the period for which it was originally
scheduled to remain outstanding (the amount
of such reduced investment being
referred to as the "Allocated Amount"), the
excess of (i) the sum of (a) the
discount or interest that would have
accrued on the Allocated Amount during the
remainder of such funding period if such
reduction had not occurred and (b)
other costs and expenses incurred by such
Owner as a result of such reduction
(including costs incurred due to the
related early termination of any agreement
entered into for the purpose of hedging
such Owner's obligations under this
Agreement) over (ii) the net income
scheduled to be received by such Owner from
investing the Allocated Amount for the
remainder of such funding period, it
being understood that in investing such
Allocated Amount such Owner will, but
without limitation to its discretion,
endeavor to minimize the associated
Breakage Costs.
"Business Day"
means a day that is (i) a "Business Day" as such term is
defined in the Sale and Servicing Agreement
and (ii) when used in connection
with the Adjusted LIBO Rate, a day other
than a day on which banking
institutions in London, England, trading in
Dollar deposits in the London
interbank market are authorized or
obligated by law or executive order to be
closed.
"Closing" shall
have the meaning specified in Section 3.01.
"Closing Date"
shall have the meaning specified in Section 3.01.
"Collection
Date" means the earliest Business Day following the termination
(as opposed to suspension) of the Revolving
Period on which the Note Principal
Balance shall have been reduced to zero and
all Monthly Interest and all other
amounts due to the Owners shall have been
paid in full.
"Commercial
Paper Notes" means short-term promissory notes issued or to be
issued by a Conduit Purchaser to fund its
investments in accounts receivable and
other financial assets.
"Commitment"
means with respect to each Committed Purchaser on any date,
the dollar amount set forth next to such
Committed Purchaser's name on Schedule
I hereto, as such amount may be reduced
pursuant to Section 2.03 and as such
amount may be increased from time to time
on terms and conditions acceptable to
the Depositor and such Committed Purchaser
in its sole discretion; provided,
that upon any other Person becoming a
Committed Purchaser hereunder as a result
of any assignment pursuant to Section 9.04,
the Commitment of the assigning
Committed Purchaser as in effect
immediately prior to such assignment shall be
allocated as between the assigning
Committed Purchaser and such assignee
Committed Purchaser as such Persons shall
so designate in a notice to the Note
Agent, and thereafter such respective
allocated amounts shall be such Committed
Purchasers' respective Commitments.
"Commitment
Termination Date" means October 4, 2005, as such date may be
extended in accordance with Section
2.05.
"Committed
Purchaser" shall have the meaning specified in the Preamble
hereto.
2
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"Conduit
Purchaser" shall have the meaning specified in the Preamble
hereto.
"Depositor"
means Option One Loan Warehouse Corporation, in its capacity as
depositor under the Sale and Servicing
Agreement.
"Eurocurrency
Liabilities" shall have the meaning assigned to that term in
Regulation D of the Board of Governors of
the Federal Reserve System, as in
effect from time to time.
"Excluded Taxes"
shall have the meaning specified in Section 2.09(a).
"Fee Letter"
means the letter agreement, dated as of the Closing Date,
among the Depositor, the Servicer, and the
Note Agent, regarding certain fees
payable under or in connection with this
Agreement, as the same may be amended,
restated, supplemented or otherwise
modified form time to time.
"Fees" shall
have the meaning specified in Section 2.04 hereof.
"Governmental
Actions" means any and all consents, approvals, permits,
orders, authorizations, waivers,
exceptions, variances, exemptions or licenses
of, or registrations, declarations or
filings with, any Governmental Authority
required under any Governmental Rules.
"Governmental
Authority" means the United States of America, any state or
other political subdivision thereof and any
entity exercising executive,
legislative, judicial, regulatory or
administrative functions of or pertaining
to government.
"Governmental
Rules" means any and all laws, statutes, codes, rules,
regulations, ordinances, orders, writs,
decrees and injunctions of any
Governmental Authority and any and all
legally binding conditions, standards,
prohibitions, requirements and judgments of
any Governmental Authority.
"Increase Date"
shall have the meaning specified in Section 2.03(c).
"Indenture"
means the Indenture, dated as of August 8, 2003, between the
Issuer and the Indenture Trustee, as the
same may be amended, supplemented or
otherwise modified from time to time.
"Indenture
Trustee" means Wells Fargo Bank Minnesota, National
Association,
a national banking association, in its
capacity as trustee under the Indenture,
its successors in interest and any
successor indenture trustee under the
Indenture.
"Interpretation"
as used in Sections 2.07 and 2.08 with respect to any law
or regulation, means the interpretation or
application of such law or regulation
by any Governmental Authority (including
any entity exercising executive,
legislative, judicial, regulatory or
administrative functions of or pertaining
to government), central bank, accounting
standards board (including the
Financial Accounting Standards Board),
financial services industry advisory body
or any comparable entity.
3
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"Issuer" means
Option One Owner Trust 2003-4, a Delaware business trust.
"JPMorgan" means
JPMorgan Chase Bank, N.A. (successor by merger to Bank
One, NA (Main Office Chicago)), a national
banking association.
"LIBO Rate"
shall have the meaning specified in the Pricing Side Letter.
"Liquidity
Provider" means a financial institution providing liquidity
support to or for the account of any
Conduit Purchaser pursuant to or in
connection with an Asset Purchase
Agreement.
"Losses" shall
have the meaning specified in Section 7.01(a).
"Maximum Note
Principal Balance" shall have the meaning specified in the
Pricing Side Letter.
"Monthly
Interest" means with respect to any Payment Date, an amount
equal
to the sum of (i) the product of (a) the
Note Interest Rate in effect with
respect to the Accrual Period ending
immediately prior to such Payment Date, (b)
the average daily Note Principal Balance
during such Accrual Period, and (c) a
fraction the numerator of which is the
actual number of days in such Accrual
Period and the denominator of which is 360,
plus (ii) all Breakage Costs
incurred by Owners during the immediately
preceding Accrual Period, plus (iii)
all Fees owed to the Note Agent and the
Owners for the Accrual Period ending
immediately prior to such Payment Date.
"Note" means the
Option One Owner Trust 2003-4 Mortgage-Backed Note issued
by the Issuer pursuant to the
Indenture.
"Note Interest
Rate" shall have the meaning specified in the Pricing Side
Letter.
"Other Taxes"
means any present or future stamp or documentary taxes or any
other excise or property taxes, charges or
similar levies that arise from any
payment or deposit required to be made
hereunder, under the Sale and Servicing
Agreement or the Indenture or from the
execution, delivery or registration of,
or otherwise with respect to, any of the
foregoing.
"Owner" means
each Purchaser, each Liquidity Provider, and all other owners
by assignment, participation or otherwise
of the Note or any interest therein.
"Owner Trustee"
means Wilmington Trust Company, not in its individual
capacity but solely as owner trustee under
the Trust Agreement.
"Principal
Balance Increase" shall have the meaning specified in Section
2.03.
"Purchaser"
shall have the meaning specified in the preamble hereto.
"Required
Owners" means, at any time, those Owners owning interests in
the
Note aggregating 66-2/3% of the Note
Principal Balance at such time.
4
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"Sale and
Servicing Agreement" means the Amended and Restated Sale and
Servicing Agreement, dated as of August 5,
2005, among the Issuer, the
Depositor, the Servicer and the Indenture
Trustee, as the same may be amended,
restated, supplemented or otherwise
modified from time to time in accordance
with the terms thereof.
"Taxes" shall
have the meaning specified in Section 2.09(a).
"Transferee"
shall have the meaning specified in Section 9.04(d).
"Trust
Agreement" means the Trust Agreement dated as of August 8,
2003,
between the Depositor and the Owner
Trustee, as the same may be amended,
restated, supplemented or otherwise
modified from time to time.
"UCC" means the
Uniform Commercial Code as from time to time in effect in
the applicable jurisdiction.
SECTION 1.02.
Accounting Terms; Other Terms. All accounting terms used in
this Agreement shall, unless otherwise
specifically provided, have the meanings
customarily given to them in accordance
with generally accepted. United States
accounting principles or United States
regulatory accounting principles, as
applicable, as in effect from time to time,
and all financial computations
hereunder shall, unless otherwise
specifically provided, be computed in
accordance with generally accepted United
States accounting principles or United
States regulatory accounting principles, as
applicable, as in effect from time
to time, consistently applied All terms
used in Article 9 of the UCC in the
State of New York, and not specifically
defined herein, are used herein as
defined in such Article 9.
SECTION 1.03.
Other Rules of Construction. References in this Agreement to
sections, schedules and exhibits are to
sections of and schedules and exhibits
to this Agreement unless otherwise
indicated. The words "hereof", "herein",
"hereunder" and comparable terms refer to
the entirety of this Agreement and not
to any particular article, Section or other
subdivision hereof or attachment
hereto. Words in the singular include the
plural and in the plural include the
singular. Unless the context otherwise
requires, the word "or" is not exclusive.
The word "including" shall be deemed to
mean "including, without limitation".
The Section and article headings and table
of contents contained in this
Agreement are for reference purposes only
and shall not affect in any way the
meaning or interpretation of this
Agreement. Except as otherwise specified
herein, all references herein (i) to any
Person shall be deemed to include such
Person's successors and assigns and (ii) to
any Governmental Rule or contract
specifically defined or referred to herein
shall be deemed references to such
Governmental Rule or contract as the same
may be supplemented, amended, waived,
consolidated, replaced or modified from
time to time, but only to the extent
permitted by, and effected in accordance
with, the terms thereof.
SECTION 1.04.
Computation of Time Periods. Unless otherwise stated in this
Agreement, in the computation of a period
of time from a specified date to a
later specified date, the word "from" means
"from and including" and the words
"to" and "until" each mean "to but
excluding."
5
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ARTICLE II
PURCHASE AND SALE; PURCHASE COMMITMENT
SECTION 2.01.
Purchase and Sale of the Note. On the terms and subject to
the conditions set forth in this Agreement
(including, without limitation, the
conditions precedent set forth in Article
IV), and in reliance on the covenants,
representations, warranties and agreements
herein set forth, the Issuer agrees
to sell, transfer and deliver to the Note
Agent, for the benefit of the
Purchasers, at the Closing, and the
Purchasers agree to purchase from the
Issuer, at the Closing, the Note.
SECTION 2.02.
[Reserved].
SECTION 2.03.
Increases and Decreases in the Note Principal Balance;
Decreases in the Maximum Note Principal
Balance.
(a) Subject to
the terms and conditions set forth in Section 4.02 hereof,
the Conduit Purchasers may, in their sole
discretion, and the Committed
Purchasers shall during the Revolving
Period, fund the applicable portion of any
increase to the Note Principal Balance (a
"Principal Balance Increase")
requested by the Issuer from the Purchasers
in accordance with the procedures
described in Section 2.06 of the Sale and
Servicing Agreement; provided,
however, that at no time shall (i) the
Principal Balance exceed the Maximum
Principal Balance, or (ii) the Note
Principal Balance allocable to any Committed
Purchasers exceed such Committed
Purchaser's Commitment.
(b) Each request
for a Principal Balance Increase shall be deemed to be a
request that the Conduit Purchasers fund
such Principal Balance Increase. To the
extent a Conduit Purchaser elects not to
fund its share of any Principal Balance
Increase requested by the issuer, each
related Committed Purchaser shall fund
its pro rata share of the portion of such
Principal Balance Increase allocated
to such Conduit Purchaser. Each Conduit
Purchaser shall provide prompt notice to
the Note Agent if such Conduit Purchaser
elects not to fund its share of a
Principal Balance Increase (and the Note
Agent shall forward such notice to the
Servicer, the Depositor and the
Issuer).
(c) Upon the
satisfaction of the conditions precedent set forth in Section
4.02 hereof on the date on which the Issuer
has requested a Principal Balance
Increase to occur (the "Increase Date"),
each Purchaser funding a portion of the
requested Principal Balance Increase shall
deliver to the Note Agent funds in an
amount equal to the portion of the
Principal Balance Increase allocated to such
Purchaser by the Note Agent. Upon its
receipt of such funds, the Note Agent will
remit such amount, in same day funds, to
the Advance Account in accordance with
the Sale and Servicing Agreement.
(d) On any date,
the Note Principal Balance may be decreased in accordance
with the Sale and Servicing Agreement. Any
such reductions to the Note Principal
Balance and any such reductions on any
other date to the Note Principal Balance
shall be applied to reduce the Note
Principal Balances allocated to the
interests in the Note held by Purchasers
hereunder as determined by the Note
Agent, provided, that each such Purchaser
which is a Committed Purchaser shall
be allocated its pro rata share of any such
reduction.
6
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(e)
Notwithstanding anything to the contrary contained herein, if
any
Principal Balance Increase is not made on
the date specified by the Issuer in
its written request therefor delivered
pursuant to Section 2.06 of the Sale and
Servicing Agreement, the Issuer shall
indemnify each Affected Party against any
reasonable loss, cost or expense incurred
by such Affected Party as a result of
such occurrence, including, without
limitation, any reasonable loss, cost or
expense incurred by reason of the
liquidation or reemployment of deposits or
other funds acquired by such Affected Party
to fund such anticipated Principal
Balance Increase; provided, however, that
the Issuer shall not be obligated to
indemnify the Affected Parties for such
losses, costs or expenses if it provides
notice to the Note Agent by no later than
11:00 a.m. on the Business Day
immediately preceding the Increase Date of
its request to cancel the proposed
Principal Balance Increase or to reduce the
amount of the proposed Principal
Balance Increase.
(f) At any time
the Issuer may, upon at least 30 Business Days' prior
written notice to the Note Agent, reduce
the Maximum Note Principal Balance to
an amount not less than the Note Principal
Balance. Reductions of the Maximum
Note Principal Balance pursuant to this
subsection 2.03(f) shall be allocated to
the aggregate Commitments of the Committed
Purchasers pro rata based on their
relative Commitments or as the Note Agent,
each related Conduit Purchaser and
each Committed Purchaser whose Commitment
is to be reduced less than such
respective amount may otherwise agree in
writing; provided, however, that in the
event the Note Agent makes a claim on
behalf of any Purchaser for any amounts
payable pursuant to Sections 2.07 or 2.06,
the Issuer need only give 2 Business
Days' prior written notice to the Note
Agent to effect a reduction in the
Maximum Note Principal Balance.
SECTION 2.04.
Fees. From and after the Closing Date until the Collection
Date, the fees set forth in the Fee Letter
(the "Fees") shall be paid in
accordance with Section 5.04 of the
Indenture.
SECTION 2.05.
Extension of Term.
(a) The Issuer
may, at any time during the period which is not less than 45
days and not more than 75 days prior to the
Commitment Termination Date then in
effect hereunder (as such date may have
previously been extended pursuant to
this Section 2.05, the "Existing
Termination Date"), request that the Existing
Termination Date be extended for an
additional 364 days from the Existing
Termination Date. Any such request shall be
in writing and delivered to the Note
Agent (which shall then deliver it to each
Committed Purchaser), and shall be
subject to the following conditions: (i) at
no time will this Agreement have a
remaining term of more than 364 days and,
if any such request would result in a
remaining term of more than 364 days, such
request shall be deemed to have been
made for such number of days so that, after
giving effect to such extension on
the date requested, such remaining term
will not exceed 364 days, (ii) neither
the Note Agent nor any Committed Purchaser
shall have any obligation to extend
the Commitment Termination Date at any
time, and (iii) any such extension shall
be effective only upon the written
agreement of the Note Agent, the applicable
Committed Purchaser, the Depositor, the
Issuer and the Servicer. Each Committed
Purchaser, acting in its sole discretion,
shall, by written notice to the Note
Agent (which shall notify the Issuer and
the other Purchasers) given on or
before the date (herein, the "Consent
Date") that is 30 days prior to Existing
Termination Date (except that, if such date
is not a Business Day, the Consent
Date shall be the next succeeding Business
Day), advise the Note Agent whether
or not such
7
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Committed Purchaser intends to extend the
Existing Termination Date; provided,
that each Committed Purchaser that
determines not to extend the Existing
Termination Date (a "Nonextending Committed
Purchaser") shall notify the Note
Agent (which shall notify the Issuer and
the, other Purchasers) of such fact
within 30 days of the Issuer's request for
the extension of the Existing
Termination Date; provided, further,
however, that any Committed Purchaser that
does not advise the Note Agent of its
decision whether or not to extend the
Existing Termination Date on or before the
Consent Date shall be deemed to be, a
Non-extending Committed Purchaser.
(b) The Note
Agent shall have the right on the Existing Termination Date to
replace any Committed Purchaser with,
and/or otherwise add to this Agreement,
one or more other Committed Purchasers
(which may include any existing Committed
Purchaser; each such Person prior to the
Existing Termination Date, an
"Additional Committed Purchaser") (but only
with the prior written consent of
the Issuer which consent shall not be
unreasonably withheld or delayed) each of
which Additional Committed Purchasers
shall, effective as of the Existing
Termination Date, undertake a commitment to
fund Principal Balance Increases in
accordance with Section 2.03(b) hereof
(and, if any such Additional Committed
Purchaser is already a Committed Purchaser,
its Commitment shall bee increased
by the applicable amount on such date). If
the Note Agent is unable to replace a
Non-extending Committed Purchaser, then on
the Existing Termination Date the
Maximum Principal Balance shall be reduced
to an amount equal to the aggregate
of the Commitments of the Committed
Purchasers which have extended their
respective Commitments in accordance with
Section 2.05(a) above.
SECTION 2.06.
Calculation and Payment of Monthly Interest.
(a) The amount
of interest payable on each Payment Date in respect of the
Note shall equal the Monthly Interest for
such Payment Date. The Note Agent
shall notify the Servicer, the Owner
Trustee, the Indenture Trustee and the
Purchasers of the Monthly Interest for the
related Payment Date and the Note
Interest Rate for the related Accrual
Period on or before the Business Day
immediately following the end of such
Accrual Period.
(b) Out of the
Monthly Interest received by the Note Agent for each Accrual
Period as contemplated in Section 8.01(b),
the Note Agent shall remit to each
Owner an amount of interest equal to the
product of (i) the Note Interest Rate
applicable to such Owner for such Accrual
Period and (ii) such Owner's allocable
share of the Note Principal Balance during
such Accrual Period, plus the amount
of any Breakage Costs and Fees applicable
to such Owner in respect of such
Payment Date.
(c) All
computations of interest and other amounts under this Agreement
shall be made on the basis of a year of 360
days and the actual number of days
elapsed. Whenever any payment or deposit to
be made hereunder shall be due on a
day other than a Business Day, such payment
or deposit shall be made on the next
succeeding Business Day and such extension
of time shall be included in the
computation of such payment or deposit.
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SECTION 2.07.
Increased Costs.
(a) If due to
the introduction of or any change (including, without
limitation, any change by way of imposition
or increase of reserve requirements)
in or in the Interpretation of any law,
regulation or accounting principle or
the imposition of any guideline or request
from any central bank or other
Governmental Authority after the date
hereof, there shall be an increase in the
cost to an Affected Party of making,
funding or maintaining any investment in
the Note or any interest therein or of
agreeing to purchase or invest in the
Note or any interest therein, as the case
may be (other than by reason of any
Interpretation of or change in laws or
regulations relating to Taxes or Excluded
Taxes), such Affected Party shall promptly
submit to the Depositor, the Servicer
and the Note Agent a certificate setting
forth in reasonable detail, the
calculation of such increased costs
incurred by such Affected Party. In
determining such amount, such Affected
Party may use any reasonable averaging
and attribution methods, consistent with
the averaging and attribution methods
generally used by such Affected Party in
determining amounts of this type. The
amount of increased costs set forth in such
certificate (which certificate
shall, in the absence of manifest error, be
prima facie evidence as to such
amount) shall be included in the Additional
Amounts for (i) the first full
Accrual Period immediately succeeding the
date on which the certificate
specifying the amount owing was delivered
and (ii) to the extent remaining
outstanding, each Accrual Period thereafter
until paid in full, and shall be
paid to the Note Agent pursuant to Section
5.04 of the Indenture. The Note Agent
shall, out of amounts received by it (as
contemplated in Section 8.01(b)) in
respect of the Additional Amounts on any
Payment Date (as contemplated in
Section 8.01(b)), pay to each Affected
Party, any increased costs due pursuant
to this Section 2.07; provided, however,
that if the amount distributable in
respect of the Additional Amounts on any
Payment Date is less than the aggregate
amount payable to all Affected Parties
pursuant to Sections 2.07, 2.08 and 2.09
for the corresponding Accrual Period, the
resulting shortfall shall be allocated
among such Affected Parties on a pro rata
basis (determined by the amount owed
to each). Failure on the part of any
Affected Party to demand compensation for
any amount pursuant to this Section for any
period shall not constitute a waiver
of such Affected Party's right to demand
compensation for such period. For the
avoidance of doubt, if the issuance of FASB
Interpretation No. 46, or any other
change in accounting standards or the
issuance of any other pronouncement,
release or interpretation, causes or
requires the consolidation of all or a
portion of the assets and liabilities of
Company or Seller with the assets and
liabilities of the Agent, any Financial
Institution or any other Funding Source,
such event shall constitute a circumstance
on which such Funding Source may base
a claim for reimbursement under this
Section.
(b) Each Owner
agrees that it shall use its reasonable efforts to take (or
cause any Affected Party claiming through
such Owner to take) such steps as
would eliminate or reduce the amount of any
increased costs described in this
Section 2.07 incurred by such Owner or
Affected Party; provided that no such
steps shall be required to be taken if, in
the reasonable judgment of such Owner
or Affected Party, such steps would be
disadvantageous to such Owner or Affected
Party or inconsistent with its internal
policy and legal and regulatory
restrictions.
SECTION 2.08.
Increased Capital.
(a) If the
introduction of or any change in or in the Interpretation of
any
law, regulation or accounting principle or
the imposition of any guideline or
request from any central
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bank or other Governmental Authority, in
each case, after the date hereof,
affects or would affect the amount of
capital required or expected to be
maintained by any Affected Party, and such
Affected Party determines that the
amount of such capital is increased as a
result of (i) the existence of the
Purchaser's agreement to make or maintain
an investment in the Note or any
interest therein and other similar
agreements or facilities or (ii) the
existence of any agreement by Affected
Parties to make or maintain an investment
in the Note or any interest therein or to
fund any such investment and any other
commitments of the same type, such Affected
Party shall promptly submit to the
Depositor, the Servicer and the Note Agent
a certificate setting forth the
additional amounts required to compensate
such Affected Party in light of such
circumstances. In determining such amount,
such Affected Party may use any
reasonable averaging and attribution
methods, consistent with the averaging and
attribution methods generally used by such
Affected Party in determining amounts
of this type. The amount set forth in such
certificate (which certificate
shall, in the absence of manifest error, be
prima facie evidence as to such
amount) shall be included in the Additional
Amounts for (i) the first full
Accrual Period immediately succeeding the
date on which the certificate
specifying the amount owing was delivered
and (ii) to the extent remaining
outstanding, each Accrual Period thereafter
until paid in full, and shall be
.paid to the Note Agent pursuant to Section
5.04 of the Indenture. The Note
Agent shall, out of amounts received by it
in respect of the Additional Amounts
on any Payment Date (as contemplated in
Section 8.01(b)), pay to each Affected
Party any amount due pursuant to this
Section, provided, however, that if the
amount distributable in respect of the
Additional Amounts on any. Payment Date
is less than the aggregate amount payable
to all Affected Parties pursuant to
Sections 2.07, 2.08 and 2.09 for the
corresponding Accrual Period, the resulting
shortfall shall be allocated among such
Affected Parties on a pro rata basis
(determined by the amount owed to each).
Failure on the part of any Affected
Party to demand compensation for any amount
pursuant to this Section 2.08 for
any period shall not constitute a waiver of
such Affected Party's right to
demand compensation for such period. For
the avoidance of doubt, if the issuance
of FASB Interpretation No. 46, or any other
change in accounting standards or
the issuance of any other pronouncement,
release or interpretation, causes or
requires the consolidation of all or a
portion of the assets and liabilities of
Company or Seller with the assets and
liabilities of the Agent, any Financial
Institution or any other Funding Source,
such event shall constitute a
circumstance on which such Funding Source
may base a claim for reimbursement
under this Section.
(b) Each Owner
agrees that it shall use its reasonable efforts to take (or
cause any Affected Party claiming through
such Owner to take) such steps as
would eliminate or reduce the amount of any
increased costs described in this
Section 2.08 incurred by such Owner or
Affected Party; provided that no such
steps shall be required to be taken if, in
the reasonable judgment of such Owner
or Affected Party, such steps would be
disadvantageous to such Owner or Affected
Party or inconsistent with its internal
policy and legal and regulatory
restrictions.
SECTION 2.09.
Taxes.
(a) Subject to
Section 2.09(d), any and all payments and deposits required
to be made hereunder or under the Sale and
Servicing Agreement or the Indenture
by the Depositor or the Indenture Trustee
to or for the benefit of the Note
Agent or any Owner shall be made, to the
extent allowed by law, free and clear
of and without deduction for any and all
present or future taxes, levies,
imposts, deductions, charges or
withholdings, and all liabilities with respect
thereto
10
<PAGE>
imposed by any Governmental Authority,
excluding, in the case of each Owner and
the Note Agent, (i) taxes, levies, imposts,
deductions, charges or withholdings
imposed on, or measured by reference to,
the net income of such Owner or the
Note Agent, as applicable, franchise taxes
imposed on such Owner or the Note
Agent, as applicable (including, branch
profits taxes, minimum taxes and taxes
computed under alternative methods, at
least one of which is based on net
income), and any other taxes (other than
withholding taxes not imposed by
Section 1446 of the Code and Other Taxes),
levies, imposts, deductions, charges
or withholdings based or imposed on income
or the receipts or gross receipts of
such Owner or the Note Agent, as
applicable, in each case, by any of (A) the
United States or any State thereof, (B) the
state or foreign jurisdiction under
the laws of which such Owner or the, Note
Agent, as applicable, is organized,
with which it has a present or former
connection (other than solely by reason of
this Agreement), or in which it is
otherwise doing business or (C) any political
subdivision thereof; (ii) any taxes,
levies, imposts, duties, charges or fees to
the extent of any credit or other benefit
actually realized by such Note Agent
or Owner, as applicable, as a result
thereof; and (iii) any taxes, levies,
imposts, duties, charges or fees imposed as
a result of a change by the Note
Agent or Owner, as applicable, of the
office in which all or any part of its
interest in the Note is acquired, accounted
for or booked (all such excluded
taxes, levies, imposts, deductions,
charges, withholdings and liabilities being
referred to herein as "Excluded Taxes" and
all such nonexcluded taxes, levies,
imposts, deductions, charges, withholdings
and liabilities being referred to
herein as "Taxes"). If the Depositor or the
Indenture Trustee shall be required
by law to deduct any Taxes from or in
respect of any sum required to be paid or
deposited hereunder to or for the benefit
any Owner or the Note Agent, then,
subject to Section 2.09(d), (i) such sum
shall be increased as may be necessary
so that, after making all required
deductions (including deductions applicable
to additional sums payable under this
Section 2.09), such Owner or the Note
Agent (as the case may be) receives an
amount equal to the sum it would have
received had no such deductions been made,
(ii) the Depositor or the Indenture
Trustee (as appropriate) shall make such
deductions and (iii) the Depositor or
the Indenture Trustee (as appropriate)
shall pay the full amount deducted to the
relevant taxation authority or other
authority in accordance with applicable
law.
(b) Subject to
Section 2.09(d), each Owner and the Note Agent shall be
reimbursed for the full amount of Taxes or
Other Taxes (including, without
limitation, any Taxes or Other Taxes
imposed by any jurisdiction on amounts
otherwise payable under this Section 2.09)
paid by such Owner or the Note Agent
(as the case may be) and any liability
(including penalties, interest and
expenses) arising therefrom or with respect
thereto. Each Owner and the Note
Agent agrees to promptly notify the
Depositor and the Servicer of any payment of
such Taxes or Other Taxes made by it and,
if practicable, any request, demand or
notice received in respect thereof prior to
such payment. In addition, in the
event any Owner is required, in accordance
with and pursuant to the terms of any
agreement or other document providing
liquidity support, credit enhancement or
other similar support to such Owner in
connection with the Note or the funding
or maintenance of an interest therein, to
compensate a bank or other financial
institution in respect of taxes under
circumstances similar to those described
in this Section, then, subject to Section
2.09(d), such Owner shall be
reimbursed for any such compensation so
paid by it. A certificate as to the
amount of any indemnification pursuant to
this Section 2.09 submitted to the
Depositor by such Owner or the Note Agent,
as the case may be, setting forth in
reasonable detail the basis for and the
calculation thereof, shall (absent
manifest error) be prima facie evidence as
to such amount.
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<PAGE>
(c) Within 30
days after the date of any payment of Taxes or Other Taxes,
the Depositor (on behalf of the Issuer)
will furnish to the Note Agent the
original or a certified receipt evidencing
payment thereof.
(d) Any amounts
payable to an Owner or the Note Agent pursuant to this
Section shall be included in the Additional
Amounts for (i) in the case of
amounts payable pursuant to Section
2.09(a), the Accrual Period in respect of
which the payment subject to withholding is
made, (ii) in the case of amounts
payable pursuant to Section 2.09(b), the
first full Accrual Period immediately
succeeding the date on which the
certificate specifying the amount owing was
delivered and (iii) in either case, to the
extent remaining outstanding, each
Accrual Period thereafter until paid in
full, and shall be paid to the Note
Agent pursuant to Section 5.04 of the
Indenture. The Note Agent shall, out of
amounts received by it in respect of the
Additional Amounts on any Payment Date
(as contemplated in Section 8.01(b)), pay
to each Owner and itself, as
applicable, any reimbursement due pursuant
to this Section, provided, however,
that if the amount distributable in respect
of the Additional Amounts on any
Payment Date is less than the aggregate
amount payable to all Affected Parties
pursuant to Sections 2.07, 2.68 and 2.09
for the corresponding Accrual Period,
the resulting shortfall shall be allocated
among such Affected Parties on a pro
rata basis (determined by the amount owed
to each).
(e) The Note
Agent and each Owner (i) that is organized under the laws of a
jurisdiction outside the United States
hereby agrees to complete, execute and
deliver to the Indenture Trustee from time
to time prior to the initial Payment
Date on which such Person will be entitled
to receive distributions pursuant to
the Indenture and this Agreement, Internal
Revenue Service form W-8ECI (or any
successor form), (ii) at the request of the
Depositor (on behalf of the Issuer),
hereby agree to complete, execute and
deliver to the Indenture Trustee from time
to time prior to the first Payment Date on
which such Person will be entitled to
receive distributions pursuant to the
Indenture and this Agreement, Internal
Revenue Service form W-9 (or any successor
form), and (iii) hereby agree to
complete, execute and deliver to the
Indenture Trustee from time to time prior
to the first Payment Date on which such
Person will be entitled to receive
distributions pursuant to the Indenture and
this Agreement, such other forms or
certificates as may be required under the
laws of any applicable jurisdiction in
order to permit the Depositor or the
Indenture Trustee to make payments to, and
deposit funds to or for the account of,
such Person hereunder and under the Sale
and Servicing Agreement and the Indenture
without any deduction or withholding
for or on account of any United States tax.
Each of the Note Agent and each
Owner agrees to provide like additional
subsequent duly executed forms on or
before the date that any such form expires
or becomes obsolete, or upon the
occurrence of any event requiring an
amendment, resubmission or change in the
most recent form previously delivered by it
and to provide such extensions or
renewals as may be reasonably requested by
the Depositor or the Indenture
Trustee. Each of the Note Agent and each
Owner certifies, represents and
warrants that as of the date of this
Agreement, or in the case of an Owner which
is an assignee as of the date of such
assignment, that (i) it is entitled (A) to
receive payments under this Agreement
without deduction or withholding of any
United States federal income taxes (other
than taxes subject to withholding
pursuant to Code Section 1446) and (B) to
an exemption from United States backup
withholding tax, and (ii) it will pay any
taxes attributable to its ownership of
an interest in the Note. Each of the Note
Agent and each Owner further agrees
that compliance with this Section 2.09(e)
(including by reason of Section
9.04(c) in the case of any sale or
assignment of any interest in Note) is a
condition to the payment of any amount
otherwise
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<PAGE>
due pursuant to Sections 2.09(a) and
2.09(b). Notwithstanding anything to the
contrary herein, each of the Paying Agent,
Servicer and Indenture Trustee shall
be entitled to withhold any amount that it
reasonably determines in its sole
discretion is required to be withheld
pursuant to Section 1446 of the Code and
such amount shall be deemed to have been
paid to the Note Agent or Owner, as
applicable, for all purposes of the
Agreement.
(f) Any Owner
entitled to the payment of any additional amount pursuant to
this Section 2.09 shall use its reasonable
efforts (consistent with its internal
policy and legal and regulatory
restrictions) to take such steps as would
eliminate or reduce the amount of such
payment; provided that no such steps
shall be required to be taken if, in the
reasonable judgment of such Owner, such
steps would be materially disadvantageous
to such Owner.
(g) Without
prejudice to the survival of any other agreement of the
Depositor hereunder, the agreements and
obligations of the Depositor contained
in this Section 2.09 shall survive the
termination of this Agreement.
ARTICLE III
CLOSING
SECTION 3.01.
Closing. The closing of the purchase and sale of the Note
(the "Closing") shall take place at the
offices of Manatt, Phelps & Phillips,
LLP, 650 Town Center Drive, Suite 1250,
Costa Mesa, California 92626, on August
8, 2003, or, if the conditions to closing
set forth in Article IV shall not have
been satisfied or waived by such date, as
soon as practicable after such
conditions shall have been satisfied or
waived, or at such other time, date and
place as the parties shall agree upon (the
date of the Closing being referred to
herein as the "Closing Date").
SECTION 3.02.
Transactions to be Effected at the Closing. At the Closing,
the Issuer shall deliver the Note with an
aggregate maximum principal amount
equal to the Maximum Note Principal Balance
to the Note Agent on behalf of the
Purchasers.
ARTICLE IV
PURCHASER CONDITIONS PRECEDENT
SECTION 4.01.
Conditions Precedent to the Purchase of the Note. The
obligation of the Purchasers to purchase
and pay for the Note on the Closing
Date is subject to the satisfaction at 'the
time of the Closing of the following
conditions:
(a) Performance
by the Issuer, the Servicer, the Loan Originator and the
Depositor. All the terms, covenants,
agreements and conditions of this Agreement
and the other Basic Documents to be
complied with and performed by the Issuer,
the Servicer, the Loan Originator or the
Depositor, as applicable, by the
Closing shall have been complied with
and
