THIS AGREEMENT IS SUBJECT TO AN INTERCREDITOR AND SUBORDINATION AGREEMENT DATED
AS OF THE DATE HEREOF (THE "INTERCREDITOR AGREEMENT") BY AND AMONG U.S. BANK
TRUST NATIONAL ASSOCIATION, AS AGENT, DELTA FUNDING CORPORATION, A NEW YORK
CORPORATION, DF SPECIAL HOLDINGS CORPORATION, A DELAWARE CORPORATION, XXXXXXX
XXXXX MORTGAGE COMPANY, A NEW YORK LIMITED PARTNERSHIP, AND GREENWICH CAPITAL
FINANCIAL PRODUCTS, INC., A DELAWARE CORPORATION, WHICH MATERIALLY SUBORDINATES
CERTAIN SECURITY INTERESTS AND LIENS, AND LIMITS ENFORCEMENT OF RIGHTS UNDER
THIS AGREEMENT. ALL PERSONS OR OTHER ENTITIES WHICH AT ANY TIME HOLD
INDEBTEDNESS WHICH IS SECURED HEREBY ARE BOUND BY THE TERMS OF THE INTERCREDITOR
AGREEMENT, WHICH WILL BE MADE AVAILABLE UPON REQUEST TO ANY PARTY HERETO.
PLEDGE AGREEMENT
PLEDGE AND SECURITY AGREEMENT dated as of March 16, 2001 made
by DF SPECIAL HOLDINGS CORPORATION, a Delaware corporation (the "PLEDGOR"), in
favor of U.S. BANK TRUST NATIONAL ASSOCIATION, as trustee and collateral agent
(the "AGENT"), under that certain Indenture dated as of December 21, 2000, as
amended (the "INDENTURE") among DELTA FINANCIAL CORPORATION ("DELTA"), as
issuer, the parties whose names and signatures appear on the signature pages
thereto under the heading "Subsidiary Guarantors" and the Agent.
W I T N E S S E T H:
WHEREAS, the Pledgor is a party to that certain Deposit Trust
Agreement dated as of December 22, 2000 (the "DEPOSIT TRUST AGREEMENT") by and
between the Pledgor, as depositor, and Wilmington Trust Company, a Delaware
banking corporation, as owner trustee;
WHEREAS, in connection with the execution and delivery of the
Indenture, the Pledgor transferred to the Trust (as defined below) certain
residual receivables, including the Pledged Residuals (as defined below);
WHEREAS, the Holders of a majority in principal amount of the
Senior Notes have agreed that the Pledgor may withdraw from the Trust the
Pledged Residuals and grant to the Senior Lenders (as defined below) a first
priority security interest in the Pledged Residuals; and
WHEREAS, as an inducement to the Holders to consent to the
release of the Pledged Residuals from the Trust and the granting of a first
priority security interest therein to the Senior Lenders, Pledgor and Agent have
entered into this Agreement.
NOW, THEREFORE, in consideration of the premises and the
agreements herein and of other good and valuable consideration, the Pledgor
hereby agrees with the Agent as follows:
SECTION 1. DEFINITIONS. As used in this Agreement, capitalized
terms used herein without definition have the meanings specified in the
Indenture or if not defined in the Indenture, then in Article 8 or Article 9 of
the Uniform Commercial Code (the "CODE") currently in effect in the State of New
York, and the following terms shall have the following meanings:
"GOVERNMENTAL AUTHORITY" shall mean any nation or government,
any federal, state, city, town, municipality, county, local or other political
subdivision thereof or thereto and any department, commission, board, bureau,
instrumentality, agency or other entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"PLEDGED RESIDUALS" shall mean the residual receivables set
forth on Schedule I.
"SENIOR LENDERS" shall mean, collectively, Greenwich Capital
Financial Products, Inc. and Xxxxxxx Xxxxx Mortgage Company.
"SENIOR LIEN" shall mean the security interest granted to the
Senior Lenders pursuant to the Senior Loan Agreement.
"SENIOR LIEN TERMINATION DATE" shall mean the date on which
the Senior Lien is terminated.
"SENIOR LOAN AGREEMENT" shall mean that certain Master Loan
and Security Agreement dated as of September 30, 1999 by and between Delta
Funding Corporation, Greenwich Capital Financial Products, Inc. and Xxxxxxx
Sachs Mortgage Company, as amended.
"TRUST" shall mean Delta Funding Residual Holding Trust 2000-1
established under the Deposit Trust Agreement.
SECTION 2. PLEDGE AND GRANT OF SECURITY INTEREST. As
collateral security for all of the Obligations (as defined in Section 3 hereof),
the Pledgor hereby pledges and collaterally assigns to the Agent, and grants to
the Agent a continuing security interest in, all of the Pledgor's right, title
and interest in and to the Pledged Residuals, whether now owned or hereafter
acquired by the Pledgor and howsoever its interest therein may arise or appear
(whether by ownership, security interest, claim or otherwise) and all Proceeds
of any and all of the foregoing (the "PLEDGED COLLATERAL").
SECTION 3. SECURITY FOR OBLIGATIONS. The security interest
created hereby in the Pledged Residuals constitutes continuing collateral
security for all of the following obligations whether now existing or hereafter
incurred (collectively, the "OBLIGATIONS"):
(a) the due and punctual payment of any and all amounts due
and owing by the Pledgor under the Subsidiary Guarantee to which the Pledgor is
a party;
(b) the due performance and observance by the Pledgor of all
of its other obligations from time to time existing in respect of the Indenture,
the Senior Notes, the Collateral Agreements and the Related Agreements; and
(c) all fees, costs, charges and expenses paid or incurred by
the Agent in connection with the creation, protection and preservation or
enforcement of its rights under any of the Indenture, the Senior Notes, the
Subsidiary Guarantees, the Collateral Agreements and the Related Agreements, on
a full indemnity basis.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Pledgor
represents and warrants as follows:
(a) The Pledged Residuals have been duly authorized, executed
and delivered by the respective issuers thereof, and all such Pledged Residuals
are legal, valid and binding obligations of such issuers, enforceable against
such issuers in accordance with their terms, subject as to enforceability to
applicable bankruptcy, insolvency, reorganization and similar laws affecting
creditors' rights and to general principles of equity.
(b) It is the legal and beneficial owner of the Pledged
Residuals free and clear of any Lien, security interest, option or other charge
or encumbrance except for the Senior Lien and the security interest created by
this Agreement.
(c) The exercise by the Agent of any of its rights and
remedies hereunder does not contravene any law or any material contractual
restriction binding on or affecting it or any of its properties, and will not
result in or require the creation of any Lien, security interest or other charge
or encumbrance upon or with respect to any of its properties other than pursuant
to this Agreement or other Collateral Agreements.
(d) No authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority is required to be obtained
or made by it for (i) the due execution, delivery and performance of this
Agreement, (ii) the grant, or the perfection, of the security interest purported
to be created hereby in the Pledged Residuals, or (iii) the exercise by the
Agent of its rights and remedies hereunder, except (A) for the filing under the
Code of UCC-1 Financing Statements in the offices set forth in Schedule II
hereto and (B) as may be required in connection with any sale of any Pledged
Residuals by laws affecting the offering and sale of securities generally.
(e) This Agreement creates a valid security interest in favor
of the Agent in the Pledged Residuals, as security for the Obligations. The
filing under the Code of the UCC-1 Financing Statements in the offices described
in Schedule II hereto will result in the perfection of such security interest in
the Pledged Residuals. The security interest granted hereby is a perfected,
second priority security interest. After the Senior Lien Termination Date, such
security interest will be a perfected, first priority security interest. All
action necessary to perfect and protect such security interest has been duly
taken, except for the Agent's or the Agent's custodian, nominee or other
designee) having possession of the Pledged Residuals after the Senior Lien
Termination Date.
(f) There is no pending or, to the best of its knowledge,
threatened action, suit, proceeding or claim before any court or other
Governmental Authority or any arbitrator, or any order, judgment or award by any
court or other Governmental Authority or arbitrator, that may adversely affect
the grant or the perfection of the security interest purported to be created
hereby in the Pledged Residuals, or the exercise by the Agent of any of its
rights or remedies hereunder.
SECTION 5. COVENANTS AS TO THE PLEDGED RESIDUALS. So long as
any Obligations shall remain outstanding, the Pledgor will, unless the Agent
shall otherwise consent in writing:
(a) keep adequate records concerning the Pledged Residuals and
permit the Agent or any agents or representatives thereof at any time or from
time to time to examine and make copies of and abstracts from such records;
(b) at its expense, upon the request of the Agent, promptly
deliver to the Agent a copy of each material notice or other communication
received by it in respect of the Pledged Residuals;
(c) at its expense, defend the Agent's right, title and
security interest in and to the Pledged Residuals against the claims of any
Person;
(d) at its expense, at any time and from time to time,
promptly execute and deliver all further instruments and documents and take all
further action that may be necessary or that the Agent may reasonably request in
order to (i) perfect and protect the security interest purported to be created
hereby, (ii) enable the Agent to exercise and enforce its rights and remedies
hereunder in respect of the Pledged Residuals, or (iii) otherwise effect the
purposes of this Agreement, including, without limitation, delivering to the
Agent, after the occurrence and during the continuation of an Event of Default,
irrevocable proxies in respect of the Pledged Residuals;
(e) not sell, assign (by operation of law or otherwise),
exchange or otherwise dispose of any Pledged Residuals or any interest therein
except for sales, assignments, exchanges or other dispositions of Pledged
Residuals permitted under the Intercreditor Agreement;
(f) not create or suffer to exist any Lien, security interest
or other charge or encumbrance upon or with respect to any Pledged Residuals
except for the Senior Lien and the security interest created hereby;
(g) not make or consent to any amendment or other modification
or waiver with respect to any Pledged Residuals or enter into any agreement or
permit to exist any restriction with respect to any Pledged Residuals other than
pursuant to the Collateral Agreements and applicable securities laws; and
(h) not take or fail to take any action which would in any
manner materially impair the enforceability of the Agent's security interest in
any Pledged Residuals.
SECTION 6. VOTING RIGHTS, DISTRIBUTIONS, AGENT'S CONSENT, ETC.
IN RESPECT OF THE PLEDGED RESIDUALS.
(a) So long as no Event of Default shall have occurred and be
continuing:
(i) the Pledgor may exercise any and all voting and
other consensual rights pertaining to any Pledged Collateral for any purpose not
inconsistent with the terms of this Agreement, the Indenture, the Senior Notes
or the other Collateral Agreements;
(ii) the Pledgor may receive and retain any and all
interest, cash, instruments, distributions and other property paid in respect
of the Pledged Residuals whether now owned or hereafter acquired, and the
proceeds of any of the foregoing, except after the occurrence of and during the
continuance of an Event of a Default;
(iii) the Agent will execute and deliver (or cause to
be executed and delivered) to the Pledgor all such proxies and other instruments
as the Pledgor may reasonably request in writing for the purpose of enabling the
Pledgor to exercise the voting and other rights which it is entitled to exercise
pursuant to paragraph (i) of this Section 6(a) and to receive the dividends
which it is authorized to receive and retain pursuant to paragraph (ii) of this
Section 6(a); and
(iv) the Agent will not consent to any action or
proposed action under this Agreement without obtaining the prior consent of
the Holders or Beneficial Holders of a majority of the principal amount of the
then outstanding Senior Notes.
(b) Upon the occurrence and during the continuance of an Event
of Default:
(i) all rights of the Pledgor to exercise the voting
and other consensual rights which it would otherwise be entitled to exercise
pursuant to paragraph (i)of subsection (a) of this Section 6, and to receive the
distributions and interest payments which it would otherwise be authorized to
receive and retain pursuant to paragraph (ii) of subsection (b) of this Section
6, shall cease, and all such rights shall thereupon become vested in the Agent
which shall thereupon have the sole right to exercise such voting and other
consensual rights and to receive and hold as Pledged Collateral such dividends
and interest payments;
(ii) without limiting the generality of the foregoing
, the Agent may at its option exercise any and all rights of conversion,
exchange, subscription or any other rights, privileges or options pertaining
to any of the Pledged Residuals as if it were the absolute owner thereof; and
(iii) all distributions and interest payments or
other cash which are received by the Pledgor contrary to the provisions of
paragraph (i) of this Section 6(b) shall be received in trust for the benefit
of the Agent, shall be segregated from other funds of the Pledgor, and shall be
forthwith paid over to the Agent as Pledged Collateral in the exact form
received with any necessary endorsement and/or appropriate transfer forms duly
executed in blank, to be held by the Agent as Pledged Collateral and as
further collateral security for the Obligations.
SECTION 7. ADDITIONAL PROVISIONS CONCERNING THE PLEDGED
RESIDUALS.
(a) The Pledgor hereby authorizes the Agent to file, without
the signature of the Pledgor where permitted by law, one or more financing or
continuation statements, and amendments thereto, relating to the Pledged
Residuals.
(b) The Pledgor hereby irrevocably appoints the Agent the
Pledgor's attorney-in-fact and proxy, with full authority in the place and stead
of the Pledgor and in the name of the Pledgor or otherwise, from time to time in
the Agent's discretion exercised reasonably and during the continuance of an
Event of Default, to take any action and to execute any instrument which the
Agent may deem necessary or reasonably advisable to accomplish the purposes of
this Agreement (subject to the rights of the Pledgor under Section 6(a) hereof).
(c) After the occurrence and during the continuance of an
Event of Default, if the Pledgor fails to perform any agreement or obligation
contained herein, the Agent itself may perform, or cause performance of, such
agreement or obligation, and the expenses of the Agent incurred in connection
therewith shall be payable by the Pledgor pursuant to Section 10 hereof.
(d) Except as provided in Section 6(a)(iv), other than the
exercise of reasonable care to assure the safe custody of the Pledged Residuals
while held hereunder, the Agent shall have no duty or liability to preserve
rights pertaining thereto and shall be relieved of all responsibility for the
Pledged Residuals upon surrendering it or tendering surrender of it to the
Pledgor. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Pledged Residuals in its possession if the
Pledged Residuals is accorded treatment substantially equal to that which the
Agent accords its own property, it being understood that the Agent shall not
have responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders, or other matters relating to any
Pledged Residuals, whether or not the Agent has or is deemed to have knowledge
of such matters, or (ii) except as provided in Section 6(a)(iv), taking any
necessary steps to preserve rights against any parties with respect to any
Pledged Residuals.
(e) The Agent may at any time after the occurrence and during
the continuation of an Event of Default in its discretion (i) without notice to
the Pledgor, transfer or register in the name of the Agent or any of its
nominees any or all of the Pledged Residuals, subject only to the revocable
rights of the Pledgor under Section 6(a) hereof, and (ii) exchange certificates
or instruments constituting such Pledged Residuals for certificates or
instruments of smaller or larger denominations.
(f) In the event that the Agent takes possession of any
Pledged Residuals, the Agent shall at all times during the term of this
Agreement keep such Pledged Residuals within the State of New York.
SECTION 8. REMEDIES UPON EVENT OF DEFAULT. If any Event of
Default shall have occurred and be continuing:
(a) The Agent may exercise in respect of the Pledged
Residuals, in addition to other rights and remedies provided for herein or
otherwise available to it, all of the rights and remedies of a secured party on
default under the Code then in effect in the State of New York; and without
limiting the generality of the foregoing and without notice except as specified
below, sell the Pledged Residuals or any part thereof in one or more parcels at
public or private sale, at any exchange or broker's board or elsewhere, at such
price or prices and on such other terms as the Agent may deem commercially
reasonable. The Pledgor agrees that, to the extent notice of sale shall be
required by law, at least ten (10) Business Days' notice to the Pledgor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Agent shall not be
obligated to make any sale of Pledged Residuals regardless of notice of sale
having been given. The Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned.
(b) The Pledgor recognizes that it is impracticable to effect
a public sale of all or any part of the Pledged Residuals and that the Agent
may, therefore, determine to make one or more private sales of any such
securities to a restricted group of purchasers who will be obligated to agree,
among other things, to acquire such securities for their own account, for
investment and not with a view to the distribution or resale thereof. The
Pledgor acknowledges that any such private sale may be at prices and on terms
less favorable to the seller than the prices and other terms which might have
been obtained at a public sale and, notwithstanding the foregoing, agrees that
such private sales shall be deemed to have been made in a commercially
reasonable manner and that the Agent shall have no obligation to delay sale of
any such securities for the period of time necessary to permit the issuer of
such securities to register such securities for public sale under the Securities
Act of 1933, as amended (the "SECURITIES ACT"). The Pledgor further acknowledges
and agrees that any offer to sell such securities which has been (i) publicly
advertised on a BONA FIDE basis in a newspaper or other publication of general
circulation in the financial community of New York, New York (to the extent that
such an offer may be so advertised without prior registration under the
Securities Act), or (ii) made privately in the manner described above to not
less than fifteen (15) BONA FIDE offerees shall be deemed to involve a "public
sale" for the purposes of Section 9-504(3) of the Code (or any successor or
similar, applicable statutory provision) as then in effect in the State of New
York, notwithstanding that such sale may not constitute a "public offering"
under the Securities Act, and that the Agent may, in such event, bid for the
purchase of such securities.
(c) All cash proceeds received by the Agent in respect of any
sale of, collection from, or other realization upon, all or any part of the
Pledged Residuals shall be held by the Agent as collateral for, and/or then or
at any time thereafter applied (after payment of any amounts payable to the
Agent pursuant to Section 10 hereof) in whole or in part by the Agent against,
all or any part of the Obligations as directed by the Pledgor consistent with
the provisions of the Indenture. Any surplus of such cash or cash proceeds held
by the Agent and remaining after payment in full of all of the Obligations shall
be paid over to the Pledgor or to such person as may be lawfully entitled to
receive such surplus.
(d) In the event that the proceeds of any such sale,
collection or realization are insufficient to pay all amounts to which the Agent
is legally entitled, the Pledgor shall be liable for the deficiency, together
with interest thereon at the highest rate specified in the Senior Notes for
interest on overdue principal thereof or such other rate as shall be fixed by
applicable law, together with the costs of collection and the reasonable fees
and expenses of any attorneys employed by the Agent to collect such deficiency.
SECTION 9. INTERCREDITOR AGREEMENT.
(a) Notwithstanding anything to the contrary in this
Agreement, (i) the provisions of this Agreement shall in all respects be subject
to the Intercreditor Agreement and (ii) the rights of the Agent and the payment
of all cash proceeds of any sale of, collection from or realization upon, all or
any part of the Pledged Residuals are subject to the provisions of the
Intercreditor Agreement.
(b) Within five (5) days after the Senior Lien Termination
Date, the Pledgor shall ensure that all documents and instruments evidencing the
Pledged Residuals which have not previously been delivered to the Agent shall be
delivered to the Agent.
SECTION 10. INDEMNITY AND EXPENSES.
(a) The Pledgor agrees to indemnify the Agent from and against
any and all claims, losses and liabilities growing out of or resulting from this
Agreement (including, without limitation, enforcement of this Agreement), except
claims, losses or liabilities resulting from the Agent's gross negligence or
willful misconduct as determined by a final judgment of a court of competent
jurisdiction.
(b) The Pledgor shall be obligated for, and will promptly pay
to the Agent, the amount of any and all reasonable costs and expenses, including
the reasonable fees and disbursements of the Agent's counsel and of any experts
and agents, which the Agent may incur in connection with (i) the administration
of this Agreement, (ii) the custody, preservation, use or operation of, or the
sale of, collection from, or other realization upon, any Pledged Residuals,
(iii) the exercise or enforcement of any of the rights of the Agent hereunder,
or (iv) the failure by any of the Pledgor to perform or observe any of the
provisions hereof.
SECTION 11. NOTICES, ETC. All notices and other communications
provided for hereunder shall be in writing and shall be mailed (by certified
mail, postage prepaid and return receipt requested), telecopied or delivered, if
to the Pledgor, to the address for the Pledgor specified in the Indenture, and
if to the Agent, to it at its address specified in the Indenture, or as to
either such Person at such other address as shall be designated by such Person
in a written notice to such other Person complying as to delivery with the terms
of this Section 11. All such notices and other communications shall be effective
(i) if sent by certified mail, return receipt requested, when received or three
(3) Business Days after mailing, whichever first occurs, (ii) if telecopied,
when transmitted and confirmation is received, provided same is on a Business
Day and, if not, on the next Business Day, or (iii) if delivered, upon delivery,
provided same is on a Business Day and, if not, on the next Business Day.
SECTION 12. CONSENT TO JURISDICTION, ETC.
(a) Any legal action or proceeding with respect to this
Agreement or any document related thereto may be brought in the courts of the
State of New York located in the borough of Manhattan or of the United States of
America for the Southern District of New York, and, by execution and delivery of
this Agreement, the Pledgor hereby accepts unconditionally the jurisdiction of
the aforesaid courts. The Pledgor hereby irrevocably waives any objection,
including, without limitation, any objection to the laying of venue or based on
the grounds of FORUM NON CONVENIENS, which the Pledgor may now or hereafter have
to the bringing of any such action or proceeding in such respective
jurisdictions.
(b) The Pledgor irrevocably consents to the service of process
of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
the Pledgor at its address referred to in Section 11 hereof.
(c) Nothing contained in this Section 12 shall affect the
right of the Agent to serve legal process in any other manner permitted by law
or to commence legal proceedings or otherwise proceed against the Pledgor in any
other jurisdiction.
SECTION 13. WAIVER OF JURY TRIAL. THE PLEDGOR AND THE AGENT
(BY ACCEPTING THIS AGREEMENT) WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR ANY
OTHER COLLATERAL AGREEMENTS OR ARISING FROM ANY OTHER COLLATERAL AGREEMENT AND
AGREE THAT ANY SUCH ACTION, PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
SECTION 14. MISCELLANEOUS.
(a) No amendment of any provision of this Agreement shall be
effective unless it is in writing and signed by the Pledgor, the Agent and the
holders of more than 50% of the outstanding principal amount of the Senior
Notes, and no waiver of any provision of this Agreement, and no consent to any
departure by the Pledgor therefrom, shall be effective unless it is in writing
and signed by the Agent and the holders of more than 50% of the outstanding
principal amount of the Senior Notes, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
(b) No failure on the part of the Agent to exercise, and no
delay in exercising, any right hereunder or under any other document shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of any
other right. The rights and remedies of the Agent provided herein are cumulative
and are in addition to, and not exclusive of, any rights or remedies provided by
law. The rights of the Agent under any document against any party thereto are
not conditional or contingent on any attempt by the Agent to exercise any of its
rights under any other document against such party or against any other person.
(c) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining portions hereof or thereof or affecting the validity or enforceability
of such provision in any other jurisdiction.
(d) This Agreement shall create a continuing security interest
in the Pledged Residuals and shall (i) subject to paragraphs (e) and (f) of this
Section 14, remain in full force and effect until the payment and performance in
full or release of the Obligations and the termination of the Indenture, and
(ii) be binding on the Pledgor and by its acceptance hereof, the Agent, and
their respective successors and assigns and shall inure, together with all
rights and remedies of the Agent hereunder, to the benefit of the Pledgor, the
Agent and their respective successors, transferees and assigns. The Agent may
resign at any time upon giving the Pledgor and the Trustee thirty (30) days'
prior written notice. The Agent shall continue to serve until its successor,
appointed by notice of the Pledgor, accepts appointment as successor collateral
agent and receives all property held by the Agent under this Agreement. The
holders of a majority in principal amount of the outstanding Senior Notes may at
any time remove the Agent by so notifying the Pledgor and the Agent and may
appoint a successor agent with the Pledgor's consent, provided that after the
occurrence of an Event of Default, the Pledgor's consent shall not be required.
If the Agent resigns or is removed or if a vacancy exists in
the office of Agent for any reason, the Pledgor shall notify each Holder of such
event and the holders of a majority in principal amount of the Senior Notes
shall promptly appoint a successor Agent. A successor Agent shall deliver a
written acceptance of its appointment to the retiring Agent, the Trustee and the
Pledgor. Immediately after that, the retiring Agent shall transfer all property
held by the retiring Agent under this Agreement to the successor, the
resignation or removal of the retiring Agent shall become effective, and the
successor Agent shall have all the rights, powers and duties of the Agent under
this Agreement. If a successor Agent does not take office within 60 days after
the retiring Agent resigns or is removed, the retiring Agent, the Pledgor or the
holders of at least 10% in principal amount of the outstanding Senior Notes may
petition any court of competent jurisdiction, at the expense of the Pledgor, for
the appointment of a successor collateral agent. The terms and conditions of
this Agreement will remain unimpaired by resignation of the Agent or the
appointment of a successor collateral agent. Following the appointment of a
successor collateral agent, such person shall for all intents and purposes of
this Agreement be the "Agent" hereunder. None of the rights or obligations of
the Pledgor hereunder may be assigned or otherwise transferred without the prior
written consent of the Agent.
(e) Upon the earlier of (i) the transfer by Delta (or its
affiliates) of actual servicing for the entirety of the mortgage loans
underlying residual receivables held in the Trust and those held in the Delta
Funding Residual Holding Trust 2000-2 to Ocwen Federal Bank, FSB (or another
third party reasonably satisfactory to the holders of a majority in principal
amount of the Notes) and delivery by Delta to the Agent of an officer's
certificate certifying that such transfer has been completed or (ii)
satisfaction in full of Obligations and the termination of the Indenture, (A)
this Agreement and the security interest created hereby shall terminate and all
rights to the Pledged Residuals shall revert to the Pledgor, and (B) the Agent
will, upon the Pledgor's request, and at the Pledgor's expense, promptly (1)
return to the Pledgor such of the Pledged Residuals as shall not have been sold
or otherwise disposed of or applied pursuant to the terms hereof, and (2)
execute and deliver to the Pledgor, without recourse, representation or
warranty, such documents as the Pledgor shall reasonably request to evidence
such termination. Notwithstanding the foregoing, a termination of this Agreement
and the security interest created hereby triggered by clause (i) of this Section
14(e) shall be conditioned upon the Agent's receipt of: (A) an officer's
certificate from the Pledgor issued in accordance with the Indenture certifying
that such termination is authorized and permitted by the Indenture and complies
with Section 314 of the Trust Indenture Act of 1939, as amended (the "TIA") and
(B) a legal opinion from Pledgor's counsel, in form and substance reasonably
satisfactory to the Agent, that such termination is authorized and permitted by
the Indenture and complies with Section 314 of the TIA.
(f) All amounts paid by the Agent in connection with the
purchase of Pledged Residuals under Section 4(c) of the Intercreditor Agreement
shall be deemed an expense under Section 10 of this Agreement. Pledged Residuals
purchased by the Agent under Section 4(c) of the Intercreditor Agreement, and
all cash proceeds received by the Agent in respect of any sale of, collection
from, or other realization upon, all or any part of such Pledged Residuals,
shall be held by the Agent subject to Section 8 of this Agreement and shall be
applied to the Obligations in accordance therewith.
(g) This Agreement shall be governed by and construed in
accordance with the law of the State of New York, except as required by
mandatory provisions of law and except to the extent that the validity and
perfection or the perfection and the effect of perfection or non-perfection of
the security interest created hereby, or remedies hereunder, in respect of any
particular Pledged Residuals are governed by the law of a jurisdiction other
than the State of New York.
(h) This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts each
of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the Pledgor has caused this Agreement to
be executed and delivered by its officer thereunto duly authorized, as of the
date first above written.
PLEDGOR:
DF SPECIAL HOLDINGS CORPORATION
By: /S/ XXXX X. XXXXXX
-----------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
ACCEPTED AND AGREED:
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Agent
By: /S/ XXXXX X. XXXXXX
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: Trust Officer
SCHEDULE I
TO
PLEDGE AGREEMENT
PLEDGED RESIDUALS
-----------------
ISSUER SERIES CLASS PERCENTAGE
------ ------ ----- ----------
INTEREST
--------
Delta Funding Home Equity Loan
Trust 1999-3, Home Equity Loan 1999-3 BIO 100%
Asset-Backed Certificates
Delta Funding Home Equity Loan
Trust 1999-3, Home Equity Loan 1999-3 R-1 99.999999%
Asset-Backed Certificates
Delta Funding Home Equity Loan
Trust 1999-3, Home Equity Loan 1999-3 R-2 99.999999%
Asset-Backed Certificates
Delta Funding Home Equity Loan
Trust 1999-3, Home Equity Loan 1999-3 R-3 99.999999%
Asset-Backed Certificates
SCHEDULE II
TO
PLEDGE AGREEMENT
UCC FILING OFFICES
------------------
Delta Funding Corporation Delaware Secretary of State
New York Secretary of State
County Clerk's Office, Nassau County, N.Y.
County Clerk's Office, New york County, N.Y.
