Exhibit 10.22
EXECUTION COPY
CREDIT AND SECURITY AGREEMENT
By and Among
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.,
as Lender
LONG BEACH ACCEPTANCE RECEIVABLES CORP.,
as Borrower
and
LONG BEACH ACCEPTANCE CORP.,
as Guarantor
---------------------------
Dated as of June 13, 2001
---------------------------
TABLE OF CONTENTS
Page
----
1. Definitions.............................................................................................. 1
2. The Loans................................................................................................ 12
2.1. Agreement to Lend............................................................................... 12
2.2. Procedure for the Pre-Funding Loan.............................................................. 12
2.3. Promissory Note................................................................................. 13
2.4. Interest........................................................................................ 14
2.5. Repayment of the Loans.......................................................................... 14
2.6. Optional Prepayments............................................................................ 14
2.7. Payment Procedures.............................................................................. 14
2.8. Indemnity....................................................................................... 15
2.9. Illegality; Substituted Interest Rate........................................................... 15
2.10. Limited Recourse................................................................................ 16
3. Grant of Security Interest; Eligible Collateral.......................................................... 16
3.1. Valid Security Interest......................................................................... 16
3.2. Further Assurances.............................................................................. 17
3.3. Data Reporting.................................................................................. 17
3.4. Powers.......................................................................................... 17
3.5. No Duty on the Part of Lender................................................................... 17
3.6. Performance by Lender of Borrower's Obligations................................................. 18
3.7. Limitation on Duties Regarding Preservation of Collateral....................................... 18
3.8. Powers Coupled with an Interest................................................................. 18
3.9. Termination..................................................................................... 18
3.10. Segregation of Funds............................................................................ 18
3.11. The Spread Account.............................................................................. 18
3.12. Advance Rate Maintenance; Release of Excess Collateral.......................................... 19
3.13. Valuation Model. ............................................................................... 19
3.14. Exhibit G....................................................................................... 20
3.15. Payment of Excess Cash Flow..................................................................... 20
3.16. Exhibit J....................................................................................... 21
4. Representations and Warranties........................................................................... 21
4.1. Organization.................................................................................... 21
4.2. Power and Authority............................................................................. 21
4.3. Authorization of Borrowing...................................................................... 21
4.4. Agreement Binding............................................................................... 21
4.5. Compliance with Law............................................................................. 22
4.6. Consents........................................................................................ 22
4.7. Litigation...................................................................................... 22
4.8. Financial Statements............................................................................ 22
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4.9. Other Obligations............................................................................... 22
4.10. Regulation G.................................................................................... 23
4.11. Investment Company Act.......................................................................... 23
4.12. Chief Executive Office.......................................................................... 23
4.13. Collateral Security............................................................................. 23
4.14. Ownership of Properties......................................................................... 23
4.15. Full Disclosure................................................................................. 23
4.16. ERISA........................................................................................... 22
4.17. Basic Documents................................................................................. 24
5. Affirmative Covenants.................................................................................... 24
5.1. Notice.......................................................................................... 24
5.2. Taxes........................................................................................... 25
5.3. Separate Existence: No Commingling.............................................................. 25
5.4. Financing Statements............................................................................ 25
5.5. Books and Records; Other Information............................................................ 25
5.6. Payment of Fees and Expenses.................................................................... 26
5.7. Continuity of Business and Compliance With Agreement............................................ 26
5.8. Financial Statements and Access to Records...................................................... 26
5.9. Financial Condition............................................................................. 27
5.10. Litigation Matters.............................................................................. 27
5.11. Fulfillment of Obligations...................................................................... 27
5.12. Notice of Change of Chief Executive Office...................................................... 27
5.13. Compliance with Laws, etc....................................................................... 27
5.14. Information Sheet............................................................................... 27
5.15. [Reserved]...................................................................................... 27
5.16. Material Adverse Change......................................................................... 28
6. Negative Covenants....................................................................................... 28
6.1. Adverse Transactions............................................................................ 28
6.2. Guaranties...................................................................................... 28
6.3. Corporate Documents............................................................................. 28
6.4. Investments; Dividends.......................................................................... 28
6.5. Loans; Capital Structure; Affiliates............................................................ 28
6.6. Liens........................................................................................... 29
6.7. VSI Policies.................................................................................... 29
6.8. Custodian. ..................................................................................... 30
6.9. Change of Control............................................................................... 30
7. Conditions Precedent..................................................................................... 30
7.1. Conditions Precedent to Agreement............................................................... 30
7.2. Conditions Precedent to the Pre-Funding Loan.................................................... 31
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8. Events of Default........................................................................................ 32
8.1. Events of Default............................................................................... 32
8.2. Remedies of Default............................................................................. 35
9. Miscellaneous............................................................................................ 36
9.1. Payment of Expenses, Indemnity, etc............................................................. 36
9.2. Set-off......................................................................................... 38
9.3. Amendments...................................................................................... 38
9.4. Waiver; Cumulative Rights....................................................................... 38
9.5. Nonpetition Covenant............................................................................ 38
9.6. Non-affiliation................................................................................. 38
9.7. Binding Effect.................................................................................. 38
9.8. Survival........................................................................................ 38
9.9. GOVERNING LAW, ETC.; WAIVER OF TRIAL BY JURY. .................................................. 38
9.10. Notice.......................................................................................... 39
9.11. Severability.................................................................................... 41
9.12. Counterparts.................................................................................... 41
9.13. Merger or Consolidation......................................................................... 41
9.14. Subsequent Actions.............................................................................. 41
9.15. Assignability................................................................................... 41
9.16. Certain Reimbursements.......................................................................... 41
EXHIBIT A - Form of Promissory Note............................................................................... A-1
EXHIBIT B - Form of LBAC Guarantee................................................................................ B-1
EXHIBIT C - Form of AMC Guarantee................................................................................. C-1
EXHIBIT D - Form of Notice of Borrowing........................................................................... D-1
EXHIBIT E - Form of Opinion of Counsel to the Borrower and Each Guarantor......................................... E-1
EXHIBIT F - Litigation Matters.................................................................................... F-1
EXHIBIT G - Other Residual Financing Agreements................................................................... G-1
EXHIBIT H - [Reserved]............................................................................................ H-1
EXHIBIT I - [Reserved]............................................................................................ I-1
EXHIBIT J - Crossed Residual Financing Agreements................................................................. J-1
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CREDIT AND SECURITY AGREEMENT
CREDIT AND SECURITY AGREEMENT, dated as of June 13, 2001 (as
amended, supplemented or otherwise modified from time to time, this
"AGREEMENT"), by and among (i) GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., a
Delaware corporation (the "LENDER"), (ii) LONG BEACH ACCEPTANCE RECEIVABLES
CORP., a Delaware corporation (the "BORROWER"), and (iii) LONG BEACH
ACCEPTANCE CORP., a Delaware corporation (the "GUARANTOR").
R E C I T A L S
WHEREAS, Borrower is a direct wholly-owned subsidiary of LBAC, which
is in the business of originating and acquiring Receivables (as defined
herein); and
WHEREAS, simultaneously with the execution and delivery of this
Agreement, Guarantor and Borrower are entering into a securitization
transaction (the "SECURITIZATION TRANSACTION") providing for, among other
things, (a) one of Lender's affiliates to purchase certain securities issued
thereunder and (b) Borrower to retain the Certificate (as defined herein)
issued thereunder; and
WHEREAS, in order to induce Lender to enter into this Agreement,
Guarantor is willing to provide the Guarantee (as defined herein) and
Ameriquest Mortgage Company, a Delaware corporation ("AMC"), is willing to
provide the AMC Guarantee (as defined herein); and
WHEREAS, Lender is willing to provide Borrower with the secured
loans described herein in order to induce Borrower and Guarantor to enter
into the Securitization Transaction and in consideration of the Guarantee,
the AMC Guarantee, the pledge of the Collateral (as defined herein) and on
the terms and conditions set forth herein and in the Guarantee and the AMC
Guarantee; and
WHEREAS, Borrower and Guarantor have entered into and may from time
to time enter into Other Residual Financing Agreements (as defined herein)
with Lender; and
WHEREAS, Borrower, Guarantor and Lender have agreed to secure the
Other RF Obligations (as defined herein) with the Collateral pledged
hereunder (in addition to the collateral pledged under the Other Residual
Financing Agreements).
NOW, THEREFORE, in consideration of the premises and mutual
agreements contained herein, the adequacy and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Definitions. When used herein, the following terms shall have the
meanings set forth below:
"ACCEPTABLE DATA FILE" has the meaning assigned thereto in Section
2.2(a) hereof.
"ADDITIONAL COLLATERAL RELEASE CONDITION" shall be satisfied if, as
of any date of determination, in the event any Obligations or Other RF
Obligations, as applicable, under one or more Residual Financing Agreements
remain outstanding as of such date of determination, the Cumulative Actual
Advance Rates calculated pursuant to the definition of "Cumulative Actual
Advance Rate" do not exceed the related Target Advance Rate minus 5%.
"ADVANCE RATE" means, as of any Calculation Date, the percentage
equivalent of a fraction, the numerator of which shall equal the aggregate
unpaid principal balance of the Loans, and the denominator of which shall
equal the Present Value of the Collateral, in each case measured as of such
Calculation Date. The Advance Rate shall be determined in accordance with
Section 3.12(a) (and (x) for the calculation of the Advance Rate provided in
Section 6.4, also as provided in such Section and (y) for the calculation of
the Advance Rate provided in Section 9.16 (a) and (b), also as provided in
such subsections).
"AMC" has the meaning assigned thereto in the recitals hereto.
"AMC GROUP" has the meaning assigned thereto in Section 3.13(b).
"AMC GUARANTEE" means the guarantee in the form attached hereto as
EXHIBIT C provided by AMC as an inducement to Lender to provide Borrower with
the Loans, as amended, supplemented or otherwise modified from time to time.
"AVAILABILITY PERIOD" means, with respect to the Pre-Funding Loan,
the period commencing on the Subsequent Transfer Date on which the
Pre-Funding Originations are transferred to the Trust and ending on the
Expiry Date.
"AVERAGE CONSTANT DEFAULT RATE" means, as of any Calculation Date,
the lesser of (i) the arithmetic average of the Constant Default Rates for
the most recent three months as reported in the monthly information sheets
delivered by Borrower to Lender and (ii) the arithmetic average of the
Constant Default Rates for the most recent six months as reported in the
monthly information sheets delivered by Borrower to Lender.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy," as amended from time to time.
"BORROWER" has the meaning assigned thereto in the heading hereto.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a
day on which commercial banking institutions or trust companies in The City
of
New York shall be authorized or obligated by law, executive order, or
governmental decree to be closed.
"CALCULATION DATE" has the meaning assigned thereto in Section
3.12(a).
"CERTIFICATE" means the security evidenced by the trust certificate
issued pursuant to the Trust Agreement.
"CHANGE OF CONTROL" means the occurrence of any of the following
without the Lender's prior written consent: (i) the consummation of any
transaction or series of transactions following
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which more than 49% of the outstanding capital stock entitled to vote of a
member of the Parent Group or more than 49% of the outstanding capital stock
entitled to vote generally in the election of directors of a member of the
Parent Group are owned by one or more Persons who are not AMC; or (ii) there
occurs any consolidation of a member of the Parent Group with, or merger of a
member of the Parent Group into, any other Person, or any merger of another
Person into a member of the Parent Group (other than any such transaction
pursuant to which the holders of the outstanding capital stock of such member
of the Parent Group entitled to vote generally in the election of directors
of such member of the Parent Group immediately prior to such transaction
have, directly or indirectly, shares of capital stock of the continuing or
surviving corporation immediately after such transaction which entitle such
holders to exercise in excess of 51% of the total voting power of all shares
of capital stock of the continuing or surviving corporation entitled to vote
generally in the election of directors), or (iii) a Person or group of
Persons acting in concert in one or a series of transactions acquire (through
purchase, transfer, assignment or otherwise) a substantial portion of the
assets of a member of the Parent Group if, following such transaction or
transactions, such Person or Persons are not wholly owned subsidiaries of AMC
or any successor thereto. Notwithstanding the foregoing, a "Change of
Control" shall not include (i) the establishment of any new entity by or the
occurrence of any transaction with Ameriquest Capital Corporation or Xxxxxx
Xxxxxx which does not involve the transfer of any assets of or an ownership
interest in AMC or any of its direct or indirect subsidiaries or (ii) any
transfer of assets by any member of the Parent Group in the ordinary course
of its business.
"CLOSING DATE" means June 13, 2001.
"CLOSING LOAN" has the meaning assigned thereto in Section 2.1
hereof.
"CODE" means the Uniform Commercial Code as from time to time in
effect in the State of
New York.
"COLLATERAL" has the meaning assigned thereto in Section 3.1 hereof.
"COMMONLY CONTROLLED ENTITY" means, as to any Person, an entity,
whether or not incorporated, which is under common control with such Person
within the meaning of Section 4001 of ERISA or is part of a group which
includes such Person and which is treated as a single employer under Section
414 of the Internal Revenue Code of 1986, as amended from time to time.
"CONSTANT DEFAULT RATE" means, with respect to any Collection Period:
12
100 x (1-(1-D ))
where "D" equals the Default Rate for such Collection Period.
"CROSSED PAYDOWN METHOD" means, with respect to funds applied to
satisfy Obligations and Other Residual Financing Obligations, as applicable,
arising under any Crossed Residual Financing Agreements pursuant to Section
3.15 hereof, that such funds shall be applied sequentially, first to reduce
to zero the Obligations or Other RF Obligations, as applicable, relating to
the Crossed Residual Financing Agreement having the earliest origination
date, and then to reduce to zero the Obligations or Other RF Obligations, as
applicable, arising under the
3
remaining Crossed Residual Financing Agreement having the earliest
origination date. The foregoing order of priority shall be repeated until all
Obligations or Other RF Obligations, as applicable, arising under Crossed
Residual Financing Agreements have been reduced to zero.
"CROSSED RESIDUAL FINANCING AGREEMENT" means each
credit and
security agreement or other similar agreement among Lender, Borrower and
Guarantor secured by one or more certificates, excess cash flow certificates
or other residual interests in securitizations identified on EXHIBIT J hereto
(as such EXHIBIT J may be amended or supplemented from time to time in
accordance with Section 3.16 hereof), as each such agreement may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof.
"CUMULATIVE ACTUAL ADVANCE RATE" means, as of any date of
determination and in the event that any Obligations or Other RF Obligations,
as applicable, under one or more Crossed Residual Financing Agreements remain
outstanding as of such date of determination, then (x) with respect to such
Crossed Residual Financing Agreements, the percentage equivalent of a
fraction, (i) the numerator of which shall equal the aggregate unpaid
principal balance of all loans under each Crossed Residual Financing
Agreement as of such date of determination and (ii) the denominator of which
shall equal the aggregate present value of all collateral securing Borrower's
obligations to Lender under and as determined in each Crossed Residual
Financing Agreement (determined as of the most recent date specified in such
Crossed Residual Financing Agreement), and (y) with respect to all Residual
Financing Agreements other than the Crossed Residual Financing Agreements
covered in clause (x) above, the percentage equivalent of a fraction, (i) the
numerator of which shall equal the aggregate outstanding principal balance of
all loans under each such Residual Financing Agreement that is not a Crossed
Residual Financing Agreement as of such date and (ii) the denominator of
which shall equal the aggregate present value of all collateral securing
Borrower's obligations to Lender under and as determined in each such
Residual Financing Agreement (determined as of the most recent date specified
in such Residual Financing Agreement); PROVIDED that, for purposes of this
definition, with respect to the determination of the present value of
collateral under any Other Residual Financing Agreement during the first six
months of its effectiveness, such determination shall be deemed to equal the
initial determination of the present value of the collateral under and as
determined in such Other Residual Financing Agreement in connection with the
initial borrowing thereunder.
"DEFAULT" means any condition, act or event, which, with notice or
lapse of time or both, would constitute an Event of Default.
"DEFAULT RATE" means, with respect to any Collection Period, a
fraction, expressed as a percentage, (a) the numerator of which is the sum of
(1) the aggregate of the Principal Balances (as of the end of the immediately
preceding Collection Period) of all Receivables that became Liquidated
Receivables during the current Collection Period and (2) the aggregate of the
Principal Balances (as of the related repurchase date) of all Receivables
that became Purchased Receivables during such current Collection Period that
were 30 days or more delinquent (calculated based on a 360-day year
consisting of twelve 30-day months) with respect to more than 5% of a
Scheduled Receivable Payment at the time of such repurchase and (b) the
denominator of which is equal to the Pool Balance as of the end of the
immediately preceding Collection Period.
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"DISCOUNT RATE" means 15% per annum.
"ELIGIBLE SECURITIES" means (i) the Certificate, (ii) direct
obligations of, and obligations fully guaranteed as to the full and timely
payment by, the United States of America or any agency thereof, in each case
having a maturity not to exceed the maturity of the Loans and (iii) and such
other securities as are acceptable to Lender in its sole discretion.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"EVENT OF DEFAULT" has the meaning assigned thereto in Section 8.1
hereof.
"EXPIRY DATE" means the date that is 364 days after the Closing Date
(or if such day is not a Business Day, the next preceding Business Day), or
such earlier date as Lender's commitment hereunder may be terminated pursuant
to the provisions hereof.
"FUNDING PERIOD" has the meaning assigned thereto in the Sale and
Servicing Agreement.
"GCFP TRIGGER EVENT" means, with respect to any Determination Date,
the occurrence of any of the following events: (a) the Cumulative Default
Rate equals or exceeds 85% of the percentage referenced in clause (b) of the
definition of Trigger Event relating to such Determination Date, (b) the
Cumulative Loss Rate equals or exceeds 85% of the percentage referenced in
clause (c) of the definition of Trigger Event relating to such Determination
Date or (c) the Average Delinquency Ratio equals or exceeds 6.50% for two
successive Determination Dates.
"GOVERNMENTAL AUTHORITY" means any nation, government, or State, or
any political subdivision thereof, or any court, stock exchange, entity or
agency exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"GUARANTEE" means the guarantee in the form attached hereto as
EXHIBIT B provided by Guarantor as an inducement to Lender to provide
Borrower with the Loans, as amended, supplemented or otherwise modified from
time to time.
"GUARANTOR" has the meaning assigned thereto in the heading hereto.
"INITIAL DATA FILE" has the meaning assigned thereto in Section
2.2(a) hereof.
"INITIAL RECEIVABLES" has the meaning assigned thereto in the Sale
and Servicing Agreement.
"INTEREST RATE DETERMINATION DATE" means, with respect to the first
Remittance Date, the Closing Date, and with respect to each subsequent
Remittance Date, the day which is two (2) LIBOR Business Days prior to the
immediately preceding Remittance Date.
"LENDER" has the meaning assigned thereto in the heading hereto.
"LIBOR" means, with respect to the interest payment to be made on
each Remittance Date, the rate of interest per annum (rounded upwards, if
necessary, to the nearest 1/100th of
5
1%) for U.S. Dollar deposits with a duration of one (1) month at or about
11:00 a.m. (London time) on the Interest Rate Determination Date
corresponding to such Remittance Date on Telerate Page 3750, or if such page
ceases to display such information, then such other page as may replace it on
that service for the purpose of display of such information (the "TELERATE
RATE"). If the Telerate Rate cannot be determined, then LIBOR shall mean,
with respect to the interest payment to be made on such Remittance Date, the
arithmetic mean of the rates of interest (rounded upwards, if necessary, to
the nearest 1/100th of 1%) offered to two prime banks in the London interbank
market (selected by Lender) of U.S. Dollar deposits with a duration of one
(1) month at or about 11:00 a.m. (London time) on the Interest Rate
Determination Date corresponding to such Remittance Date.
"LIBOR BUSINESS DAY" means a Business Day on which trading in U.S.
Dollars is conducted by and between banks in the London interbank market.
"LIEN" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
financing lease having substantially the same economic effect as any of the
foregoing).
"LOAN" means the Closing Loan and the Pre-Funding Loan. The Closing
Loan and the Pre-Funding Loan are referred to collectively as the "Loans".
"MAINTENANCE ADVANCE RATE" means, as of any Calculation Date, the
rate which is 5% in excess of the Target Advance Rate with respect to such
date.
"MARGIN" means 2.50% per annum.
"MATURITY DATE" means the date that is 364 days after the Closing
Date (or if such day is not a Business Day, the next preceding Business Day);
PROVIDED that if, prior to such date, the Indenture is terminated pursuant to
Section 4.1 thereof or the Certificateholder exercises its option to redeem
the Notes issued pursuant to the Indenture as provided in Section 10.1 of the
Indenture, the Maturity Date shall be the date of such termination or
redemption, as the case may be.
"MONTHLY RECOVERY RATE" means, with respect to any Collection
Period, a fraction, the numerator of which shall equal the sum of all
Liquidation Proceeds and Recoveries for such Collection Period, and the
denominator of which shall equal the sum of the Principal Balances (as of the
end of the immediately preceding Collection Period) of all Receivables which
were actually liquidated during such Collection Period, in each case as
reported in the related Servicer's Certificate.
"MULTIEMPLOYER PLAN" means a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"98-1 AGREEMENT" has the meaning assigned thereto in clause (i) of
the definition of Other Residual Financing Agreements.
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"98-2 AGREEMENT" has the meaning assigned thereto in clause (ii) of
the definition of Other Residual Financing Agreements.
"99-1 AGREEMENT" has the meaning assigned thereto in clause (iii) of
the definition of Other Residual Financing Agreements.
"99-2 AGREEMENT" has the meaning assigned thereto in clause (iv) of
the definition of Other Residual Financing Agreements.
"OBLIGATIONS" mean (i) the unpaid principal of and premiums, if any,
and interest (including interest accruing at the then applicable rate
provided in this Agreement after the maturity of the Loans and interest
accruing at the then applicable rate provided in this Agreement after the
filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceedings, relating to Borrower or Guarantor whether
or not a claim for post-filing or post-petition interest is allowed in such
proceeding) on the Loans, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise and (ii)
all other obligations and liabilities of every nature of Borrower or
Guarantor from time to time owing to Lender, in each case whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred (including monetary obligations incurred during the
pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding),
to the extent such obligations and liabilities arise under, out of, or in
connection with, this Agreement or the Guarantee or under any other document
made, delivered or given in connection with any of the foregoing, in each
case whether on account of principal, premium, if any, interest, fees,
indemnities, costs, expenses or otherwise (including all fees and
disbursements of counsel to Lender) that are required to be paid by Borrower
or Guarantor pursuant to the terms of this Agreement or the Guarantee.
"OMNIBUS AMENDMENT AGREEMENT" means the Omnibus Amendment Agreement
dated as of March 31, 1999 among Borrower, as borrower, Guarantor, as
guarantor, and Lender, as lender.
"OMNIBUS AMENDMENT AGREEMENT NO. 2" means the Omnibus Amendment
Agreement dated as of August 12, 1999 among Borrower, as borrower, Guarantor,
as guarantor, and Lender, as lender.
"OMNIBUS AMENDMENT AGREEMENT NO. 3" means the Omnibus Amendment
Agreement dated as of April 14, 2000 among Borrower, as borrower, Guarantor,
as guarantor, and Lender, as lender.
"OMNIBUS AMENDMENT AGREEMENT NO. 4" means the Omnibus Amendment
Agreement dated as of December 13, 2000 among Borrower, as borrower,
Guarantor, as guarantor, and Lender, as lender.
"OMNIBUS AMENDMENT AGREEMENT NO. 5" means the Omnibus Amendment
Agreement dated as of January 12, 2001 among Borrower, as borrower,
Guarantor, as guarantor, and Lender, as lender.
7
"OMNIBUS AMENDMENT AGREEMENT NO. 6" means the Omnibus Amendment
Agreement dated as of June 13, 2001 among Borrower, as borrower, Guarantor,
as guarantor, and Lender, as lender.
"OTHER RESIDUAL FINANCING AGREEMENTS" means, collectively, (i) the
Credit and Security Agreement dated as of January 30, 1998 by and among
Lender, as lender, Borrower, as borrower, and Guarantor, as guarantor, as
amended by the Omnibus Amendment Agreement, the Omnibus Amendment Agreement
No. 3, the Omnibus Amendment Agreement No. 4, the Omnibus Amendment Agreement
No. 5 and the Omnibus Amendment Agreement No. 6, and as otherwise amended,
supplemented or modified from time to time pursuant to the terms thereof (as
so amended, the "98-1 AGREEMENT"), (ii) the
Credit and Security Agreement
dated as of November 25, 1998 by and among Lender, as lender, Borrower, as
borrower, and Guarantor, as guarantor, as amended by the Omnibus Amendment
Agreement, the Omnibus Amendment Agreement No. 2 , the Omnibus Amendment
Agreement No. 3, the Omnibus Amendment Agreement No. 4, the Omnibus Amendment
Agreement No. 5 and the Omnibus Amendment Agreement No. 6, and as otherwise
amended, supplemented or modified from time to time pursuant to the terms
thereof (as so amended, the "98-2 AGREEMENT"), (iii) the
Credit and Security
Agreement dated as of August 12, 1999 by and among Lender, as lender, the
Borrower, as borrower, and Guarantor, as guarantor, as amended by the Omnibus
Amendment Agreement No. 3, the Omnibus Amendment Agreement No. 4, the Omnibus
Amendment Agreement No. 5 and the Omnibus Amendment Agreement No. 6, and as
otherwise amended, supplemented or modified from time to time pursuant to the
terms thereof (as so amended, the "99-1 AGREEMENT"), (iv) the
Credit and
Security Agreement dated as of December 9, 1999 by and among Lender, as
lender, Borrower, as borrower, and Guarantor, as guarantor, as amended by the
Omnibus Amendment Agreement No. 3 and the Omnibus Amendment Agreement No. 4,
the Omnibus Amendment Agreement No. 5 and the Omnibus Amendment Agreement No.
6, and as otherwise amended, supplemented or modified from time to time
pursuant to the terms thereof (as so amended, the "99-2 AGREEMENT"), (v) the
Credit and Security Agreement dated as of June 15, 2000 by and among Lender,
as lender, Borrower, as borrower, and Guarantor, as guarantor, as amended by
the Omnibus Amendment Agreement No. 4, the Omnibus Amendment Agreement No. 5
and the Omnibus Amendment Agreement No. 6, and as otherwise amended,
supplemented or modified from time to time pursuant to the terms thereof (as
so amended, the "2000-1 Agreement"), (vi) the
Credit and Security Agreement
dated as of December 13, 2000 by and among Lender, as lender, Borrower, as
borrower, Guarantor, as guarantor, as amended by the Omnibus Agreement No. 5
and the Omnibus Amendment Agreement No. 6, and as otherwise amended,
supplemented or modified from time to time pursuant to the terms thereof (as
so amended, the "2000-2 Agreement"), and (vii) each other credit and security
agreement or other similar agreement between Lender and Borrower secured by
one or more certificates, excess cash flow certificates or other residual
interests in securitizations identified on EXHIBIT G hereto (as such EXHIBIT
G may be amended or supplemented from time to time in accordance with Section
3.14 hereof), as each such other agreement may be amended, supplemented or
otherwise modified from time to time pursuant to the terms thereof.
"OTHER RF AMENDMENTS" means, collectively, the Omnibus Amendment
Agreement and Amendments No. 1 to the credit and security agreements referred
to in clauses (i) and (ii) of the definition of Other RF Agreements.
8
"OTHER RF EVENT OF DEFAULT" means the occurrence of any Event of
Default under and as defined in any Other Residual Financing Agreement (after
giving effect to any grace or cure period applicable thereto).
"OTHER RF OBLIGATIONS" means all obligations and liabilities of
every nature of Borrower or Guarantor from time to time owing to Lender, in
each case whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), to the extent such obligations and liabilities
arise under, out of, or in connection with, any Other Residual Financing
Agreement, any guarantees related thereto or any other document made,
delivered or given in connection therewith, in each case whether on account
of principal, premium, if any, interest, fees, indemnities, costs, expenses
or otherwise (including all fees and disbursements of counsel to Lender).
"PARENT GROUP" means AMC, Guarantor and Borrower and each of their
respective subsidiaries and affiliates, and each other entity which owns
directly or indirectly 51% or more of the outstanding capital stock entitled
to vote in the election of directors of AMC, Guarantor or Borrower and each
of their respective subsidiaries or affiliates. Notwithstanding the
foregoing, "Parent Group" shall not include any entity formed as a result of
any transaction specified in the last sentence of the definition of "Change
of Control."
"PERSON" means an individual, partnership, limited liability
company, corporation, business trust, joint venture or other entity of
whatever nature.
"PLAN" means any Person that is (i) an "employee benefit plan" (as
defined in Section 3(3) of ERISA) that is subject to the provisions of Title
I of ERISA, (ii) a "plan" (as defined in Section 4975(e)(1) of the Code) that
is subject to Section 4975 of the Code or (iii) any entity whose underlying
assets include assets of a plan described in (i) or (ii) above by reason of
such plan's investment in the entity.
"PLEDGED SECURITIES" means Eligible Securities pledged and held as
Collateral hereunder pursuant to Section 3.1.
"PRE-FUNDING LOAN" has the meaning assigned thereto in Section 2.1
hereof.
"PRE-FUNDING ORIGINATION CONDITION" means a condition precedent to
Lender's commitment to make the Pre-Funding Loan hereunder. The Pre-Funding
Origination Condition will be satisfied with respect to the Pre-Funding Loan,
as determined by Lender in its sole discretion, if the Pre-Funding
Originations would not, if transferred to the Trust, cause the Receivables,
including without limitation the Pre-Funding Originations, to fail to meet
the criteria specified in Section 2.2(b)(xv) of the Sale and Servicing
Agreement.
"PRE-FUNDING ORIGINATIONS" means, with respect to the Pre-Funding
Loan, the retail installment sale contracts originated by Guarantor (in its
capacity as Originator) and scheduled to be included in the Subsequent
Receivables to be transferred to the Trust during the Funding Period.
9
"PREPAYMENT RATE" means, as of any Calculation Date, the cumulative
ABS rate (calculated according to the Uniform Practices for the Clearance and
Settlement of Mortgage-Backed Securities and Other Related Securities of the
Public Securities Association) for the most recent three months, calculated
using the Principal Balance, APR, original term to maturity and remaining
term to maturity of the Receivables as reported in the related Servicer's
Certificates.
"PRESENT VALUE OF THE COLLATERAL" means, as of any Calculation Date,
in the case of the Certificate, the then current present value thereof,
determined based upon the Valuation Rates (as modified by the Valuation
Model) and calculated in accordance with Section 3.12(a), and in all other
cases, the then current market value of the Collateral.
"PRIME RATE" means the prime rate (or if a range is given, the
average prime rates) listed under "Money Rates" in THE WALL STREET JOURNAL
for such date or, if THE WALL STREET JOURNAL is not published on such date,
then in THE WALL STREET JOURNAL most recently published.
"PRINCIPAL BALANCE" has the meaning assigned thereto in Annex A to
the Sale and Servicing Agreement, without giving effect to the proviso at the
end of such definition.
"PROCEEDS" means all "proceeds" as defined in the Code and, in any
event, in connection with the Collateral shall include without limitation,
all collections, distributions or other income from the Pledged Securities.
"PROMISSORY NOTE" has the meaning assigned thereto in Section 2.3(a)
hereof.
"PURCHASE AGREEMENT" means the Purchase Agreement, dated as of June
1, 2001, between LBAC and Borrower, as amended, supplemented or otherwise
modified from time to time.
"RECOURSE PROPERTY" has the meaning assigned thereto in Section 2.10.
"RECOVERY RATE" means, as of any Calculation Date, the arithmetic
average of the Monthly Recovery Rates for the most recent three months.
"REMITTANCE DATE" means the 13th day of each month or, if such day
is not a Business Day, the immediately succeeding Business Day, commencing
July 13, 2001.
"REQUIREMENT OF LAW" means, as to any Person, any law, statute,
rule, treaty, regulation, or determination of an arbitrator, court or other
Governmental Authority, in each case applicable to or binding upon such
Person or any of its properties or to which any such Person or any of its
properties may be bound or affected.
"RESIDUAL FINANCING AGREEMENTS" means this Agreement and any or all
Other Residual Financing Agreements, as the context may require.
"RESPONSIBLE OFFICER" means the president, chief executive officer,
chief financial officer, any executive vice president, secretary, vice
president-finance, comptroller or treasurer of Borrower, Guarantor or AMC, as
applicable.
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"REVISED DATA FILE" has the meaning assigned thereto in Section
2.2(a) hereof.
"SALE AND SERVICING AGREEMENT" means the Sale and Servicing
Agreement, dated as of June 1, 2001, among the Trust, as issuer, LBAC, as
originator of the receivables and servicer, Borrower, as transferor, and The
Chase Manhattan Bank, as indenture trustee, back-up servicer, custodian and
trust collateral agent, as amended, supplemented or otherwise modified from
time to time in accordance with the terms thereof.
"XXXX REINSURED SERIES" has the meaning assigned thereto in the
Spread Account Agreement.
"SECURITIZATION TRANSACTION" has the meaning assigned thereto in the
recitals hereto.
"SECURITY AGREEMENT" means the Security Agreement dated as of
January 30, 1998 made by Long Beach Acceptance Corp., as Pledgor, in favor of
Greenwich Capital Financial Products, Inc., as Pledgee, as the same may be
amended, supplemented or otherwise modified from time to time in accordance
with the terms thereof.
"SERIES SUPPLEMENT" has the meaning assigned thereto in the Spread
Account Agreement.
"SPREAD ACCOUNT AGREEMENT" means the Amended and Restated Master
Spread Account Agreement dated as of June 1, 2001, among Borrower, the Note
Insurer, the Indenture Trustee and the Collateral Agent, as the same may be
amended, supplemented or otherwise modified from time to time in accordance
with the terms thereof.
"TARGET ADVANCE RATE" means, as of any Calculation Date, 30%.
"TRIGGER EVENT" shall have the meaning assigned to such term in the
Spread Account Agreement.
"TRUST" has the meaning assigned thereto in the Trust Agreement.
"TRUST AGREEMENT" means the Trust Agreement dated as of November 1,
2000, between Borrower, as transferor, and Wilmington Trust Company, as owner
trustee, as amended and restated as of December 1, 2000, and as otherwise
amended, supplemented or modified from time to time in accordance with the
terms thereof.
"2000-1 AGREEMENT" has the meaning assigned thereto in clause (v) of
the definition of Other Residual Financing Agreement.
"2000-2 AGREEMENT" has the meaning assigned thereto in clause (vi)
of the definition of Other Residual Funding Agreement.
"VALUATION MODEL" means a proprietary cash flow valuation model in
computer spread sheet form to be used by Lender in calculating the Present
Value of the Collateral and making related calculations on each Calculation
Date.
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"VALUATION RATES" means, collectively, the Prepayment Rate, the
Average Constant Default Rate, the Recovery Rate and the Discount Rate.
"VSI POLICY" has the meaning assigned thereto in Annex A to the Sale
and Servicing Agreement, without giving effect to the proviso of such
definition.
"WAREHOUSE LENDING AGREEMENT" means the Warehouse Lending Agreement
dated as of January 30, 1998 between Long Beach Acceptance Corp., as
Borrower, and Greenwich Capital Financial Products, Inc., as Lender, as
amended by Amendment No. 1 thereto, dated as of January 30, 1998, Amendment
No. 2 thereto, dated as of December 16, 1998, the Renewal and Amendment
Agreement dated as of January 29, 1999, Amendment No. 3 thereto, dated as of
September 1, 1999, Renewal and Amendment Agreement No. 2, dated as of January
26, 2000 and Renewal and Amendment Agreement No. 3, dated as of February 2,
2001, and as otherwise amended, supplemented or modified from time to time in
accordance with the terms thereof.
"WAREHOUSE OBLIGATIONS" means the Obligations (as defined in the
Warehouse Lending Agreement) under the Warehouse Lending Agreement.
Capitalized terms used but not defined herein shall have the
meanings assigned thereto in Annex A to the Sale and Servicing Agreement.
2. The Loans.
2.1. AGREEMENT TO LEND. Subject to the terms and conditions of this
Agreement, (i) Lender agrees to lend to Borrower on the Closing Date, an
aggregate principal amount not to exceed Four Million, Nine Hundred Seven
Thousand, Two Hundred Fifty-nine Dollars and Zero Cents ($4,907,259.00) (the
CLOSING LOAN") and (ii) Lender agrees to lend to Borrower on any Business Day
that occurs during the Availability Period (subject to the provisions of
Section 2.2 below) an aggregate principal amount not to exceed One Million,
Five Hundred Twenty-one Thousand, Nine Hundred Forty-nine Dollars and Eighty
Cents ($1,521,949.80) (the "PRE-FUNDING LOAN"), such Loans being secured by
the Collateral; PROVIDED, HOWEVER, that after giving effect to the
Pre-Funding Loan, the Advance Rate shall not exceed the Target Advance Rate.
2.2. PROCEDURE FOR PRE-FUNDING LOAN. (a) The Borrower may request the
making of the Pre-Funding Loan hereunder by delivering to Lender a notice in
the form of Exhibit D hereto (a "NOTICE OF BORROWING") not later than 12:00
noon,
New York City time, on any Business Day during the Availability Period,
appropriately completed to specify the aggregate amount of the Pre-Funding
Loan requested. The Notice of Borrowing shall be accompanied or preceded
(provided that the Notice of Borrowing must be delivered to Lender in the
calendar month in which Lender receives the relevant Initial Data File) by a
data file (an "INITIAL DATA FILE") relating to the Pre-Funding Originations
as of the close of business on the last day of the calendar month immediately
preceding the month in which the Subsequent Transfer of the Pre-Funding
Originations are to be made in a format consistent with the data file
relating to the Initial Receivables delivered to Lender. If the Initial Data
File is received by Lender by no later than 12:00 noon,
New York City time,
on any Business Day during the Availability Period, Lender shall, by no later
than 5:00 p.m.,
New York City time, on the third Business Day immediately
succeeding the Business Day on which the Initial Data File is received by
Lender, advise
12
Borrower as to whether the Initial Data File contains all data as is
necessary and in such format, in each case as determined by Lender in its
sole discretion, for Lender to confirm satisfaction of the Pre-Funding
Origination Condition (an "ACCEPTABLE DATA FILE") with respect to the
Subsequent Receivables. In the event that Lender advises Borrower that the
Initial Data File is deficient in any respect, Borrower shall provide Lender
with a revised data file (the "REVISED DATA FILE") relating to the
Pre-Funding Originations as of the close of business on the last day of the
calendar month immediately preceding the calendar month in which the
Pre-Funding Loan is to be made. If the Revised Data File is received by
Lender by no later than 12:00 noon,
New York City time, on any Business Day
during the Availability Period, Lender shall, by no later than 5:00 p.m.,
New
York City time, on the immediately succeeding Business Day, advise Borrower
as to whether such Revised Data File constitutes an Acceptable Data File. The
foregoing procedures for delivery and approval of a Revised Data File may be
repeated as often as is necessary during the Availability Period until such
time as Lender advises Borrower that it has received an Acceptable Data File.
If the Initial Data File or any Revised Data File is received by Lender after
12:00 noon,
New York City time, on any Business Day, receipt by Lender of the
Initial Data File or such Revised Data File, as applicable, shall be deemed
to have occurred at 9:00 a.m.,
New York City time, on the immediately
succeeding Business Day.
(b) Subject to the prior or contemporaneous satisfaction of each
condition precedent specified in Section 7.2 hereof during the Availability
Period, Lender shall disburse the Pre-Funding Loan no later than the close of
business on the Business Day immediately succeeding the Business Day on which
Lender has received an Acceptable Data File.
2.3. PROMISSORY NOTE.
(a) Borrower's obligation to repay the Loans extended pursuant hereto
and interest thereon shall be evidenced by a single promissory note of
Borrower payable to the order of Lender, substantially in the form of EXHIBIT
A hereto (as amended, supplemented or otherwise modified from time to time,
the "PROMISSORY NOTE").
(b) The date and amount of each Loan by Lender and the date and amount
of each payment of principal made by Borrower shall be evidenced by entries
made by Lender in its books and records kept by it in the normal course of
its business. Borrower agrees and acknowledges that such books and records of
Lender documenting actual amounts received from Borrower shall constitute
PRIMA FACIE evidence of Borrower's indebtedness outstanding hereunder and
under the Promissory Note.
2.4. INTEREST.
(a) Borrower agrees to pay to Lender interest on the unpaid principal
amount of each Loan from and including the date such Loan is extended to but
not including the date on which such Loan is paid in full. Interest shall
accrue on an adjustable basis at a rate per annum equal to LIBOR plus the
Margin. LIBOR with respect to the interest payment to be made on each
Remittance Date shall be equal to LIBOR as determined on the related Interest
Rate Determination Date. Accrued interest shall be payable in arrears on each
Remittance Date, and on the date of repayment in full of each Loan.
13
(b) If Borrower shall fail to pay when due (whether at stated maturity,
by acceleration or otherwise) any principal, interest or other Obligation due
and owing to Lender under this Agreement or the Promissory Note, and such
failure to pay shall constitute an Event of Default, Borrower shall pay to
Lender on demand such principal, interest or other Obligation together with
interest on such principal, interest (to the extent permitted by applicable
law) or other Obligation in default from and including the date such payment
became due until payment thereof in full (after as well as before judgment)
at a rate per annum equal to LIBOR plus five (5) percent per annum.
(c) If, by the terms of this Agreement or the Promissory Note, Borrower
at any time is required or obligated to pay interest at a rate in excess of
the maximum rate permitted by applicable law, the rate of interest shall be
deemed to be immediately reduced to such maximum rate and the portion of all
prior interest payments in excess of such maximum rate shall be applied and
shall be deemed to have been payments made in reduction of the principal
amount due hereunder and under the Promissory Note.
(d) All interest payable hereunder shall be computed based on the
actual number of days elapsed in a year of 360 days.
2.5. REPAYMENT OF THE LOANS. Subject to Section 8, (a) all Loans
outstanding shall be repaid in full on the Maturity Date, together with
accrued but unpaid interest thereon and (b) pursuant to the agreement
described in Section 2.7(b), Borrower shall cause the Trust Collateral Agent
to remit directly to Lender all distributions payable under the Sale and
Servicing Agreement and the Spread Account Agreement to the Certificateholder
until such time as all Loans and all other Obligations of Borrower to Lender
hereunder are paid in full.
2.6. OPTIONAL PREPAYMENTS. Borrower may at any time and from time to time
upon two (2) Business Days' prior written notice to Lender prepay any Loan in
whole or in part, without premium, together with accrued interest to the date
of such prepayment on the amount prepaid. Any amounts prepaid by Borrower
hereunder may not be reborrowed.
2.7. PAYMENT PROCEDURES.
(a) Borrower agrees and acknowledges that Borrower will, immediately
upon an Event of Default or an Other RF Event of Default (i) re-register any
securities (other than the Certificate) delivered as Collateral hereunder
into Lender's name and (ii) subject to Section 3.7 of the Trust Agreement,
upon the request of Lender, re-register the Certificate in the name of a
Bankruptcy Remote Entity designated by Lender.
(b) On or prior to the Closing Date, Borrower will provide Trust
Collateral Agent under the Sale and Servicing Agreement with a notice
providing for, among other things, all remittances on the Certificate to be
paid to Lender to the full extent of Borrower's Obligations to Lender
hereunder and Borrower's Other RF Obligations to Lender under the Other
Residual Financing Agreements, which notice to Trust Collateral Agent will be
irrevocable for so long as any of the Obligations or Other RF Obligations
remain outstanding (unless otherwise consented to in writing by Lender). All
amounts received in respect of the Certificate or other Collateral will be
applied as set forth in Section 3.15. Any amounts received by Lender in
excess of the
14
Obligations and Other RF Obligations due and owing to Lender shall be
remitted by Lender to Borrower. Any amounts received by Lender pursuant to
this Section 2.7(b) prior to 6:00 p.m.,
New York City time, on any Business
Day shall be deemed to be received on such Business Day, and any amounts
received by Lender after 6:00 p.m., New York City time, on any Business Day
shall be deemed to be received on the next succeeding Business Day.
(c) All payments to Lender hereunder or under the Promissory Note shall
be made in immediately available funds, and free and clear of and without
deduction for any taxes, levies, duties, charges, counterclaims, set-offs,
fees or withholdings of any nature hereafter imposed, assessed or collected,
not later than the due date for such payment through the Federal Reserve
Fedwire System for credit to the account of Lender (Account No. 140095961 at
The Chase Manhattan Bank, ABA No. 000000000, or such other account or
accounts as Lender shall specify to Borrower in writing no later than one
Business Day prior to the related due date).
(d) Any payments made hereunder shall be applied first against costs
and expenses due hereunder pursuant to Section 9.1; then against default
interest, if any; then against interest due on the Loans; and thereafter
against the unpaid principal of the Loans.
2.8. INDEMNITY. Borrower agrees to indemnify Lender and to hold it harmless
from any cost, loss or expense which Lender may sustain or incur as a
consequence of any acceleration of the maturity of any Loan by Lender in
accordance with the terms of this Agreement, including, but not limited to,
any cost, loss or expense arising in liquidating the Loans and from interest
or fees payable by Lender to lenders of funds obtained by it in order to
maintain the Loans hereunder. In the event Borrower is required to make any
payment pursuant to this Section 2.8, Lender shall provide to Borrower in
writing the basis upon which such charges were calculated in reasonable
detail.
2.9. ILLEGALITY; SUBSTITUTED INTEREST RATE. Notwithstanding any other
provisions herein, (a) if any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for Lender to
make or maintain the Loans at LIBOR as contemplated by this Agreement, or (b)
in the event that Lender shall have determined (which determination shall be
conclusive and binding upon Borrower) that by reason of circumstances
affecting the LIBOR interbank market either adequate and reasonable means do
not exist for ascertaining LIBOR, (x) the obligation of Lender to make or
maintain the Loans at LIBOR shall forthwith be suspended and Lender shall
promptly notify Borrower thereof (by telephone confirmed in writing) and (y)
the Loans shall, from and including the next Remittance Date, or at such
earlier date as may be required by law, until payment in full thereof, bear
interest at the rate per annum equal to the greater of the Prime Rate and the
rate of interest (including the Margin) in effect on the date immediately
preceding the date any event described in clause (a) or (b) occurred
(calculated on the basis of the actual number of days elapsed in a year of
360 days). If any such conversion of LIBOR to the Prime Rate is made on a day
which is not a Remittance Date, Borrower shall pay to Lender such amounts, if
any, as may be required to compensate Lender for any cost, loss or expense
which Lender may incur as a consequence of such conversion on a day which is
not a Remittance Date, including any interest or fees payable by Lender to
lenders of funds obtained by it in order to maintain the Loans. If subsequent
to such suspension of the obligation of Lender to make or maintain the Loans
at LIBOR it becomes lawful for Lender to make or maintain the Loans at LIBOR,
or the circumstances described in clause (b) above no longer exist,
15
Lender shall so notify Borrower and the LIBOR-based rate on the Loans shall
be reinstated effective as of the date it becomes lawful for Lender to make
or maintain the Loans at LIBOR, or the circumstances described in clause (b)
above no longer exist.
2.10. LIMITED RECOURSE. The Obligations of Borrower hereunder shall be
limited in recourse to the property and assets of Borrower which Borrower
pledges on the date hereof, or may hereinafter from time to time pledge, as
Collateral pursuant to the terms of this Agreement (the "RECOURSE PROPERTY").
To the extent that the Recourse Property is insufficient to satisfy the
Obligations of Borrower hereunder, Lender shall have no claim against
Borrower or any property or assets of Borrower that are not on the date
hereof or have not been, as of the applicable date, so pledged.
Notwithstanding the foregoing, however, the Obligations of Guarantor
hereunder and under the Guarantee shall be fully recourse to Guarantor and
all property and assets of Guarantor, whether now owned or hereinafter
acquired, and Guarantor shall remain liable for all Obligations of Borrower
hereunder pursuant to the terms of the Guarantee.
3. Grant of Security Interest; Eligible Collateral.
3.1. VALID SECURITY INTEREST. As security for the prompt and complete
payment when due (whether at the Maturity Date, by acceleration or otherwise)
of the Obligations, Other RF Obligations and Warehouse Obligations, Borrower
hereby pledges, assigns and transfers to Lender and its successors,
endorsees, transferees and assigns and hereby grants to Lender and its
successors, endorsees, transferees and assigns a continuing, first priority
security interest in all of Borrower's right, title and interest in the
following property, whether now owned by Borrower or hereafter acquired and
whether now existing or hereafter coming into existence (all being
collectively referred to as "COLLATERAL"):
(a) the Certificate delivered to and held by
Lender or its designee or agent and all rights to receive
payments payable under the Sale and Servicing Agreement to the
Certificateholder pursuant to the terms and provisions of the
Sale and Servicing Agreement and the Spread Account Agreement;
(b) any other cash, Eligible Securities, or
other property acceptable to Lender in its sole discretion and
transferred or otherwise delivered to Lender or its agent from
time to time and designated by Borrower as Collateral
hereunder; and
(c) all Proceeds of any of the foregoing,
including, in any event, all causes of action, claims and
warranties now or hereafter held by Borrower or its designee
or agent in respect of any of the foregoing, all shares,
securities, moneys (including cash) or property representing a
current dividend, collection, income or distribution on any of
the Pledged Securities or resulting from a split-up, revision,
reclassification, or other like change of any of the Pledged
Securities or otherwise received in exchange therefor, all
current income, collections and distributions with respect to
any of the foregoing and, to the extent related to any of the
foregoing, all books, correspondence, files, records and other
papers necessary to protect Lender's security interest
hereunder.
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3.2. FURTHER ASSURANCES. At any time and from time to time, upon the
written request of Lender and at the sole expense of Borrower, Borrower will
promptly and duly execute and deliver such further instruments and documents
and take any and all such further action required by Lender in order to
ensure Lender has a valid, first priority, perfected security interest in the
Collateral and for the purpose of preserving the full benefits of this
Agreement and of the rights and powers herein granted, including, without
limitation, filing any financing or continuation statements under the Uniform
Commercial Code in effect in any jurisdiction with respect to the Liens
created hereby, taking actions which may be necessitated by the adoption of
revisions to Article 9 of the Uniform Commercial Code, assigning or endorsing
Collateral in blank or to Lender or its designee and delivering Collateral to
Lender or Lender's Custodian. Borrower also hereby authorizes Lender to file
any such financing or continuation statement in respect of the Collateral
without the signature of Borrower to the extent permitted by applicable law.
A carbon, photographic or other reproduction of this Agreement shall be
sufficient as a financing statement for filing in any jurisdiction.
3.3. DATA REPORTING. Borrower and Guarantor will deliver or cause to be
delivered to Lender: (a) copies of all reports, statements and certificates
required to be delivered by Borrower or Guarantor to Lender or any other
party pursuant to the Basic Documents; and (b) prompt notice of: (i) any
material adverse developments with respect to pending or future litigation
involving Borrower or Guarantor, if any, upon obtaining knowledge thereof;
(ii) any other developments which might materially and adversely affect the
financial condition of Borrower or Guarantor, upon obtaining knowledge
thereof; (iii) the acceleration of any debt obligation or the termination of
any credit facility of Borrower or Guarantor, if any, and (iv) the amount and
maturity of any debt assumed after the date hereof, if any, by Borrower or
Guarantor.
3.4. POWERS.
(a) Borrower hereby irrevocably constitutes and appoints Lender and any
officer or agent of Lender with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of Borrower and in the name of Borrower or in its own name,
from time to time in Lender's discretion, for the purpose of carrying out the
terms of this Agreement, to take any and all appropriate action and to
execute any and all documents and instruments which may be reasonably
necessary to accomplish the purposes of this Agreement.
(b) Borrower also authorizes Lender, from time to time if an Event of
Default or Other RF Event of Default shall have occurred and be continuing,
to execute and/or file and record, in connection with any sale provided for
herein, any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral.
3.5. NO DUTY ON THE PART OF LENDER. The powers conferred on Lender under
this Agreement are solely to protect Lender's interests in the Collateral and
shall not impose any duty upon Lender to exercise any such powers. Lender
shall be accountable only for amounts that it actually receives as a result
of the exercise of such powers, and neither it nor any of its officers,
directors, employees, affiliates, agents or successors shall be responsible
to Borrower for any act or failure to act hereunder, except for their gross
negligence or willful misconduct.
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3.6. PERFORMANCE BY LENDER OF BORROWER'S OBLIGATIONS. If Borrower fails to
perform or comply with any of its agreements contained herein and Lender, as
provided for by the terms of this Agreement, shall perform or comply, or
otherwise cause performance or compliance, with such agreements, the
reasonable expenses of Lender incurred in connection with such performance or
compliance, together with interest thereon at a rate per annum equal to the
default rate applicable to the Loans as set forth in this Agreement, shall be
payable by Borrower to Lender on demand, and Borrower's obligations to make
such payments shall constitute Obligations secured by the Collateral pursuant
to this Agreement.
3.7. LIMITATION ON DUTIES REGARDING PRESERVATION OF COLLATERAL. Lender's
sole duty with respect to the custody, safekeeping and physical preservation
of the Collateral in its possession, under Section 9-207 of the Code or
otherwise, shall be to deal with it in the same manner as Lender deals with
similar property for its own account. Neither Lender nor any of its
directors, officers, employees, affiliates or agents shall be liable for
failure to demand, collect or realize upon all or any part of the Collateral
or for any delay in doing so or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of Borrower or any other
Person.
3.8. POWERS COUPLED WITH AN INTEREST. All authorizations and agencies
herein contained with respect to the Collateral are powers coupled with an
interest and are irrevocable until the termination of the security interest
created by this Agreement in accordance with Section 3.9 hereof.
3.9. TERMINATION. The security interest created by this Agreement shall not
be released until the payment in full of the Obligations and Other RF
Obligations shall have occurred and Lender's commitment under this Agreement
shall have terminated; PROVIDED that if any payment, or any part thereof, of
any of the Obligations or Other RF Obligations is rescinded or must otherwise
be restored or returned by Lender upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of Borrower or Guarantor, or upon
or as a result of the appointment of a receiver, intervenor or conservator
of, or a trustee or similar officer for, Borrower or Guarantor or any
substantial part of its property, or otherwise, this Agreement, all rights
hereunder and the Liens created hereby shall continue to be effective, or be
reinstated, as though such payments had not been made.
3.10. SEGREGATION OF FUNDS. All payments which are received by Borrower or
Guarantor in connection with the Collateral contrary to any provision of this
Agreement, the Guarantee or the Basic Documents shall be held by Borrower or
Guarantor, as the case may be, in trust for Lender, segregated from all other
funds of Borrower or Guarantor, as the case may be, and shall forthwith upon
receipt by Borrower or Guarantor, as the case may be, be turned over to
Lender in the exact form received by Borrower or Guarantor, respectively
(duly endorsed by Borrower or Guarantor to Lender, if required), to be
applied to the Obligations and Other RF Obligations.
3.11. THE SPREAD ACCOUNT. Lender acknowledges that pursuant to the Spread
Account Agreement, Borrower, as holder of the Certificate, has pledged and
created a security interest in certain funds and property in the account
designated in the Spread Account Agreement as the "Series 2001-A Spread
Account." Lender acknowledges that the pledge and grant of the security
interest created herein in no way impairs or affects Borrower's pledge of
such funds and property.
18
3.12. ADVANCE RATE MAINTENANCE; RELEASE OF EXCESS COLLATERAL.
(a) Lender shall determine the Present Value of the Collateral and the
Advance Rate monthly within five Business Days following each Remittance Date
based upon the Valuation Rates as modified by the Valuation Model (each such
date of determination, a "CALCULATION DATE").
(b) After the first Calculation Date on which the Advance Rate exceeds
the Maintenance Advance Rate, in the event that as of any Calculation Date
(after such first Calculation Date) the Advance Rate exceeds the Maintenance
Advance Rate, (i) Borrower shall, within one Business Day of such Calculation
Date, pay down the Loans or pledge additional Collateral (and comply with the
provisions of Section 8.2(b)(ii) in respect thereof) in the amount necessary
to cause the Advance Rate not to exceed the Maintenance Advance Rate and (ii)
until such time as the Advance Rate equals or is less than the Maintenance
Advance Rate, all funds received by Borrower in respect of and Proceeds of
all Collateral shall be remitted by Borrower to Lender and applied in the
manner set forth in Section 2.7(c).
(c) After the first Calculation Date on which the Advance Rate exceeds
the Maintenance Advance Rate, in the event that at the determination of the
Advance Rate as contemplated in Section 3.12(a) (after such first Calculation
Date) the Advance Rate is less than the Target Advance Rate by an amount such
that, after giving effect to a release of a Pledged Security (such released
security, a "DESIGNATED SECURITY") as Collateral hereunder, the Advance Rate
would continue to be less than the Target Advance Rate, Borrower may request
(subject to the conditions set forth in the next sentence) that Lender
release such Designated Security to Borrower. So long as no Event of Default
or Other RF Event of Default has occurred and is continuing and so long as
the Additional Collateral Release Condition is satisfied, Lender will release
and deliver such Designated Security to Borrower within five (5) Business
Days following such request, unless Lender reasonably determines that, after
giving effect to such release, the Advance Rate would no longer continue to
be less than the Target Advance Rate.
3.13. VALUATION MODEL. Lender hereby agrees to provide to Borrower a copy of
its Valuation Model on or before the Closing Date. In connection with
Lender's provision of the Valuation Model to Borrower, Borrower, Guarantor
and Lender each expressly acknowledge and agree as follows:
(a) Lender shall be entitled, in the case of any manifest error or
manifest inaccuracy contained in the Valuation Model, to revise or modify the
Valuation Model to correct any such error or inaccuracy and shall, as soon as
reasonably practicable, provide to Borrower a copy of such Valuation Model as
so revised or modified. Following the provision of such revised or modified
Valuation Model to Borrower, all calculations of the Present Value of the
Collateral and all related calculations shall be made on all subsequent
Calculation Dates in accordance with such Valuation Model as so revised or
modified.
(b) Borrower and Guarantor hereby acknowledge and agree that the
Valuation Model is proprietary to Lender, and that the Valuation Model shall
not be used by Borrower or Guarantor, or any of their respective affiliates,
subsidiaries, directors, officers, agents or employees, as applicable
(collectively, the "AMC GROUP"), for any purpose other than
19
determining the Present Value of the Collateral and making relating
calculations in connection therewith, and shall at all times be maintained by
each member of the AMC Group as confidential.
(c) Borrower and Guarantor further acknowledge and agree that Lender is
furnishing the Valuation Model to Borrower solely as an accommodation in
connection with the transactions contemplated by this Agreement. Lender makes
no representation or warranty (whether express or implied, oral or written)
as to the accuracy or completeness, or fitness for a particular use, of the
Valuation Model, and assumes no responsibility whatsoever to any member of
the AMC Group in connection with any use of such Valuation Model and,
consequently, no member of the AMC Group is relying upon Lender or the
Valuation Model in such regard.
(d) In consideration of Lender's providing the Valuation Model to
Borrower, for which Lender is not receiving any compensation, each member of
the AMC Group hereby unconditionally and irrevocably releases and discharges
Lender and its respective affiliates, directors, officers, agents, employees
and representatives from, and agrees to indemnify, hold harmless and
reimburse any such party or parties with respect to, any and all actions,
liabilities, losses, damages or claims of any kind or nature whatsoever
(including, without limitation, reasonable attorney's fees and expenses), as
incurred, that may be imposed on or incurred by or asserted against any such
party or parties in any way relating to or arising out of Lender's release of
such Valuation Model to Borrower.
3.14. EXHIBIT G. Exhibit G hereto may be amended or supplemented from time
to time by (i) written notice from Lender to Borrower of any such amendment
or supplement or (ii) delivery by Lender to Borrower of a copy of Exhibit G
as so amended or supplemented; PROVIDED that such amendment or supplement
relates to one or more credit and security agreements or other similar
agreements among Lender, Borrower and Guarantor. In addition, if Lender
delivers changes to Exhibit G to any Other Residual Financing Agreement as
provided therein, Exhibit G hereto shall automatically and without further
action be amended by such changes; PROVIDED that such change relates to one
or more credit and security agreements or other similar agreements among
Lender, Borrower and Guarantor. For all purposes of the Warehouse Lending
Agreement and the Security Agreement, EXHIBIT G hereto will be deemed to be
designated as "SCHEDULE G."
3.15. PAYMENT OF EXCESS CASH FLOW. Upon receiving a distribution pursuant to
Section 2.5(b) or Section 2.7(b) hereof, as applicable, in respect of amounts
distributable to the Certificateholder under the Sale and Servicing Agreement
and the Spread Account Agreement, (a) if a GCFP Trigger Event shall not have
occurred and be continuing, Lender shall apply such distribution in the
following manner and order of priority: FIRST, 100% of such distribution
shall be applied by Lender to reduce to zero all Obligations and Other RF
Obligations, as applicable, under each Crossed Residual Financing Agreement
pursuant to the Crossed Paydown Method, and SECOND, the remainder of such
distribution shall be applied by Lender to reduce to zero any outstanding
Other RF Obligations, or (b) if a GCFP Trigger Event has occurred and is
continuing with respect to a Crossed Residual Financing Agreement, Lender
shall apply such distribution in the following manner and order of priority:
FIRST, 100% of such distribution shall be applied to reduce to zero all
Obligations or Other RF Obligations, as applicable, arising under such
Crossed Residual Financing Agreement and, second, if such GCFP Trigger Event
has an adverse affect
20
on any other Crossed Residual Financing Agreement, the remaining amount of
such distribution, if any, shall be applied to reduce to zero all Obligations
and Other RF Obligations, as applicable, arising under such other Crossed
Residual Financing Agreements pursuant to the Crossed Payment Method.
3.16. EXHIBIT J. Exhibit J hereto may be amended or supplemented from time
to time by (i) written notice from Lender to Borrower of any such amendment
or supplement or (ii) delivery by Lender to Borrower of a copy of Exhibit J
as so amended or supplemented; PROVIDED that (a) such amendment or supplement
relates to one or more credit and security agreements or other similar
agreements among Lender, Borrower and Guarantor, and (b) such credit and
security agreement relates to the financing of a certificate issued in
connection with a XXXX Reinsured Series, the spread account relating to which
is crossed, pursuant to the related Spread Account Agreement or any other
spread account agreement relating thereto, with the spread account of one or
more of the Crossed Residual Financing Agreements listed on Exhibit J,
whether at present so listed or hereafter added to Exhibit J. In addition, if
Lender delivers changes to Exhibit J to any Other Residual Financing
Agreement as provided therein, Exhibit J hereto shall automatically and
without further action be amended by such changes; PROVIDED that such change
relates to one or more credit and security agreements or other similar
agreements among Lender, Borrower and Guarantor.
4. Representations and Warranties.
Each of Borrower and Guarantor hereby represents and warrants to Lender
as of the date of this Agreement and on an ongoing basis on each date that
any Loan is outstanding hereunder as follows:
4.1. ORGANIZATION. It is a corporation duly incorporated and validly
existing in good standing under the laws of the State of Delaware and is duly
qualified to do business in each jurisdiction in which the failure to be so
qualified could reasonably be expected to have a material adverse effect on
its financial condition, operations, business or prospects.
4.2. POWER AND AUTHORITY. It has all requisite corporate power and has all
material governmental licenses, authorizations, consents and approvals
necessary to own its assets and carry on its business as now being conducted
(except as could not reasonably be expected to have a material adverse effect
on its financial condition, operations, business or prospects), and to
execute and deliver and perform its obligations under this Agreement,
including the pledge and delivery of Collateral hereunder, and, in the case
of Borrower, the Promissory Note, and, in the case of Guarantor, the
Guarantee.
4.3. AUTHORIZATION OF BORROWING. All appropriate and necessary action has
been taken by it to authorize the execution and delivery of this Agreement
and, in the case of Borrower, the Promissory Note, and, in the case of
Guarantor, the Guarantee, and to authorize the performance and observance of
the terms hereof and thereof.
4.4. AGREEMENT BINDING. This Agreement, the Promissory Note and Guarantee,
when executed and delivered for value will be duly executed and delivered and
will constitute a legal, valid and binding obligation of Borrower and
Guarantor, as applicable, enforceable in
21
accordance with their respective terms, except as enforceability may be
limited by laws governing insolvency or creditors' rights generally and
general equity principles. The execution, delivery and performance of this
Agreement, the Promissory Note and the Guarantee does not and will not
violate any provision of law, regulation, order or other governmental
directive, or conflict with, constitute a default under, or result in the
breach of any provision of any material agreement, ordinance, decree, bond,
indenture, order or judgment to which Borrower or Guarantor is a party or by
which it is bound.
4.5. COMPLIANCE WITH LAW. It is conducting its business and operations in
compliance with all applicable laws, regulations, ordinances and directives
of governmental authorities, except to the extent that any noncompliance
could not reasonably be expected to have a material adverse effect on its
financial condition, operation, business or prospects. It has filed all tax
returns required to be filed and has paid all taxes due in respect of the
ownership of its assets or the conduct of its operations except (a) to the
extent that the payment of such taxes is being contested in good faith by it
in appropriate proceedings and adequate reserves have been provided for the
payment thereof, or (b) with respect to such returns and/or taxes which are
not material in either nature or amount such that any failure to file such
returns or pay such taxes would not materially and adversely affect its
financial condition, operations, business or prospects.
4.6. CONSENTS. All licenses, consents and approvals required from and all
registrations and filings required to be made with any governmental or other
public body or authority for the making and performance by Borrower of this
Agreement and the Promissory Note and by Guarantor of this Agreement and the
Guarantee have been obtained and are in effect, except as could not
reasonably be expected to have a material adverse effect on its financial
condition, operations, business or prospects or on its ability to perform the
Obligations.
4.7. LITIGATION. Except for those actions, suits or proceedings, if any,
listed on Exhibit F hereto, there is no action, suit or proceeding at law or
in equity by or before any court, governmental agency or authority or
arbitral tribunal now pending or, to the best of its knowledge, threatened
against or affecting it which, if determined adversely, may reasonably be
expected to have a material adverse effect on its business, operations or
financial condition.
4.8. FINANCIAL STATEMENTS. The unaudited balance sheets of Guarantor as at
April 30, 2001 and the related statements of income for the fiscal periods
ended on such date, heretofore furnished to Lender, are complete and correct
in all material respects and fairly present the financial condition of
Guarantor as at said date (subject to normal year-end audit adjustments), all
in accordance with U.S. generally accepted accounting principles applied on a
consistent basis. On said dates, Guarantor had no material contingent
liabilities, liabilities for taxes, unusual or anticipated losses from any
unfavorable commitments, except as referred to or reflected in said balance
sheets as at said dates. Since April 30, 2001 there has been no material
adverse change in the operations, condition (financial or otherwise),
business or prospects of Guarantor from that set forth in said financial
statements as at said date.
4.9. OTHER OBLIGATIONS. It is not in default in the performance, observance
or fulfillment of any obligation, covenant or condition in any of the Basic
Documents or in any agreement or
22
instrument to which it is a party or by which it is bound the result of which
could reasonably be expected to have a material adverse effect on its
business, operations or financial condition.
4.10. REGULATION U. No proceeds of any Loan will be used, directly or
indirectly, by Borrower for the purpose of purchasing or carrying any Margin
Stock (as defined in Regulation U of the Board of Governors of the Federal
Reserve System) or for the purpose of reducing or retiring any indebtedness
which was originally incurred to purchase or carry Margin Stock or for any
other purpose which might cause any Loan to be a "purpose credit" within the
meaning of Regulation U.
4.11. INVESTMENT COMPANY ACT. It is not an "investment company" or a company
"controlled" by an investment company within the meaning of the Investment
Company Act of 1940, as amended.
4.12. CHIEF EXECUTIVE OFFICE. The chief executive office of Borrower is
located at Xxx Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000.
4.13. COLLATERAL SECURITY.
(a) Except for the Liens granted to Lender pursuant to this Agreement
and Liens referred to in Section 3.11, Borrower owns and will own each item
which it pledges on the date hereof or may hereinafter pledge as Collateral,
free and clear of any and all Liens. No security agreement, financing
statement or other public notice similar in effect with respect to all or any
part of the Collateral is or will be on file or of record in any public
office, except such as have been or may hereinafter be filed in favor of
Lender pursuant to this Agreement, and except in connection with the security
interest referred to in Section 3.11.
(b) This Agreement is effective to create, as collateral security for
the Obligations, the Other RF Obligations and the Warehouse Obligations valid
and enforceable Liens on the Collateral in favor of Lender.
(c) Upon filing of the financing statements delivered to Lender by
Borrower on the Closing Date with the Secretary of State of the State of New
Jersey and the Secretary of State of the State of Delaware (which financing
statements are in proper form for filing in such jurisdictions) and the
delivery to, and continuing possession by, Lender or its nominee of the
Pledged Securities, the Liens created pursuant to this Agreement will
constitute a first priority perfected security interest in the Collateral in
favor of Lender (except to the extent the Collateral may be deemed to
represent funds on deposit in the Spread Account as referred to in Section
3.11), which Liens will be prior to all other Liens of all other Persons and
which Liens are enforceable as such as against all other Persons.
4.14. OWNERSHIP OF PROPERTIES. Borrower has good and marketable title to any
and all of its properties and assets free and clear of Liens, except as
contemplated by this Agreement and the Basic Documents, and except for Liens
as may have been or may be created on property other than the Collateral in
connection with past or future securitizations of receivables.
4.15. FULL DISCLOSURE. No representation or warranty made by or on behalf of
Borrower or Guarantor contained in this Agreement or the Guarantee and no
written information or
23
information in any certificate, financial statement or report furnished or to
be furnished by or on behalf of Borrower or Guarantor (including without
limitation the information to be furnished pursuant to Section 2.2 hereof)
hereunder or thereunder or in connection with the transactions contemplated
hereby or thereby contains or will contain an untrue statement of a material
fact, or omits or will omit to state any material fact necessary to make the
statements herein or therein contained, in light of the circumstances in
which made, not misleading.
4.16. ERISA. Set forth on Schedule 4.16 hereto is a list of all Plans, if
any, maintained by Borrower or Guarantor or any of their respective
subsidiaries (as applicable). Except as may be set forth on such schedule,
neither Borrower nor Guarantor nor any of their respective subsidiaries (as
applicable) maintains any Plans, and each of Borrower and Guarantor agrees to
notify Lender in advance of forming any Plans. Neither Borrower nor Guarantor
nor any Commonly Controlled Entity has any obligations or liabilities with
respect to any employee pension benefit plans or Multiemployer Plans, nor
have any such Persons had any obligations or liabilities with respect to any
such Plans during the five-year period prior to the date this representation
is made or deemed made. Each of Borrower and Guarantor will give notice if at
any time it or any Commonly Controlled Entity has any obligations or
liabilities with respect to any employee pension benefit plan or
Multiemployer Plan. All Plans maintained by Borrower or Guarantor or any
Commonly Controlled Entity are in substantial compliance with all applicable
laws (including ERISA). Neither Borrower nor Guarantor is an employer under
any Multiemployer Plan.
4.17. BASIC DOCUMENTS. Each of the representations and warranties made by it
in the Basic Documents to which it is a party is true and correct; PROVIDED
that this representation shall not be deemed to have been breached if (i)
Borrower or Guarantor, as the case may be, shall have breached a
representation or warranty contained in any Basic Document but such party
shall have cured such breach within the applicable cure period, if any, set
forth in the applicable Basic Document or (ii) Guarantor shall have breached
any representation set forth in Section 3.2(b) of the Purchase Agreement, so
long as (x) Guarantor complies with its obligations under Section 6.2 of the
Purchase Agreement with respect to such breach or (y) AMC complies with its
obligations under the AMC Guarantee in connection with Guarantor's
obligations under Section 6.2 of the Purchase Agreement with respect to such
breach.
5. Affirmative Covenants.
Each of Borrower and Guarantor (where indicated) hereby covenants to
Lender that, until the payment in full and final performance of all of
Borrower's and Guarantor's obligations to Lender under this Agreement, the
Promissory Note and the Guarantee, it shall perform the following obligations:
5.1. NOTICE.
(a) Each of Borrower and Guarantor shall promptly give notice to Lender
and the Note Insurer of the occurrence of (i) any Default, Event of Default
or Other RF Event of Default, specifying the event and the action which
Borrower proposes to take with respect thereto, (ii) any event or occurrence
which will or could reasonably be expected to adversely affect the
collectibility of any of the Receivables or the ability of Guarantor to
service such Receivables or
24
the ability of Borrower or Guarantor to perform its respective obligations
under any related documents or (iii) any other event or occurrence which
individually or in the aggregate could reasonably be expected to materially
and adversely affect Borrower's or Guarantor's financial condition,
operations, business or prospects. Each of Borrower and Guarantor agrees to
provide contemporaneously to AMC a copy of any notice provided to Lender
pursuant to the preceding sentence; PROVIDED that failure of Borrower or
Guarantor to deliver such notice to AMC shall not in any way affect (i) the
obligations or liabilities of AMC under the AMC Guarantee, (ii) any rights of
Lender with respect to AMC or (iii) any other provisions or any
interpretation of this Agreement, the Guarantee, the AMC Guarantee or any
document related thereto.
(b) Borrower shall provide Lender promptly with copies of all notices
which it is required to deliver to the Trust Collateral Agent, the Owner
Trustee and/or the Indenture Trustee pursuant to the terms of the Sale and
Servicing Agreement, the Trust Agreement and/or the Indenture, as applicable.
5.2. TAXES. Each of Borrower and Guarantor shall pay and discharge all
taxes and governmental charges upon it or against any of its properties or
assets or its income prior to the date after which penalties attach for
failure to pay, except (a) to the extent that Borrower or Guarantor shall be
contesting in good faith in appropriate proceedings its obligation to pay
such taxes or charges, adequate reserves having been set aside for the
payment thereof, or (b) with respect to such taxes and charges which are not
material in either nature or amount such that any failure to pay or discharge
them, and any resulting penalties, either in any one instance or in the
aggregate, would not materially and adversely affect the financial condition,
operations, business or prospects of Borrower or Guarantor, respectively.
5.3. SEPARATE EXISTENCE: NO COMMINGLING. Borrower shall maintain separate
books and records and accounts in order to maintain a separate and distinct
corporate identity from any other entity, including Guarantor and AMC and any
of Borrower's other affiliates. Borrower shall not commingle any of its funds
with the funds of any other such entity.
5.4. FINANCING STATEMENTS. At the request of Lender, each of Borrower and
Guarantor shall execute (i) such financing statements as may be necessitated
by the adoption of revisions to Article 9 of the Uniform Commercial Code and
(ii) such other financing statements as Lender determines may be required by
law to perfect, maintain and protect the interest of Lender in the Collateral
and in the Proceeds thereof.
5.5. BOOKS AND RECORDS; OTHER INFORMATION.
(a) Borrower shall maintain accurate and complete books and records
with respect to the Collateral and Borrower's business. All accounting books
and records shall be maintained in accordance with generally accepted
accounting principles consistently applied.
(b) Only to the extent reasonably necessary to protect Lender's
interest hereunder, each of Borrower and Guarantor shall, and shall (as
applicable) cause each of its respective subsidiaries to, permit any
representative of Lender to visit and inspect any of the properties of
Borrower or Guarantor to examine the books and records of Borrower or
Guarantor and to make copies and take extracts therefrom, and to discuss the
business, operations, properties, condition
25
(financial or otherwise) or prospects of Borrower or Guarantor and each such
subsidiary or any of the Collateral with the officers and independent public
accountants thereof and as often as Lender may reasonably request, and so
long as no Default or Event of Default shall have occurred and be continuing,
all at such reasonable times during normal business hours upon reasonable
notice. In connection with the matters described in this Section 5.5(b),
Lender shall not at any time use or disclose to any Person, except to any
professional adviser who needs to know such information in connection with
the transactions contemplated hereby, or except in connection with any
litigation or arbitral proceedings commenced by or against Lender or any of
its affiliates, any information that may be within or may come to its or
their knowledge if such information is of a type that would generally be
expected to be held as confidential; PROVIDED that the foregoing shall not
apply to the extent that such information was (i) previously known by Lender
from sources other than Borrower or Guarantor or their respective directors,
officers or agents, (ii) in the public domain through no fault of Lender,
(iii) lawfully acquired by Lender on a non-confidential basis from other
sources who are not known by Lender to be bound by a confidentiality
agreement with Borrower or Guarantor or (iv) required to be disclosed by
judicial or administrative process or by any other Requirement of Law.
(c) Each of Borrower and Guarantor shall provide to Lender all
information regarding their respective operations and practices as Lender
shall reasonably request in writing.
5.6. PAYMENT OF FEES AND EXPENSES. Each of Borrower and Guarantor shall pay
to Lender, on demand, any and all fees, costs or expenses which Lender pays
to a bank or other similar institution arising out of or in connection with
the return of payments deposited from Borrower or Guarantor, as applicable,
for collection by Lender.
5.7. CONTINUITY OF BUSINESS AND COMPLIANCE WITH AGREEMENT. Each of Borrower
and Guarantor shall continue in business in a prudent, reasonable and lawful
manner with all licenses, permits, and qualifications necessary to perform
its respective obligations under this Agreement and the Guarantee, except
where failure to do so could not reasonably be expected to materially and
adversely affect such performance or the enforceability of Lender's security
interest in the Collateral.
5.8. FINANCIAL STATEMENTS AND ACCESS TO RECORDS. Each of Borrower and
Guarantor shall provide Lender with quarterly unaudited financial statements
within sixty (60) days of the end of each of Guarantor's and Borrower's first
three fiscal quarters, and Guarantor will provide Lender with audited annual
financial statements within one hundred twenty (120) days of each of
Guarantor's and Borrower's fiscal year-end audited by a nationally recognized
independent certified public accounting firm. Upon request of Lender, each of
Borrower and Guarantor shall provide Lender with unaudited monthly financial
statements. Each of Borrower and Guarantor shall deliver to Lender with each
financial statement a certificate by each of Borrower's and Guarantor's chief
financial officer, certifying that (i) such financial statements are complete
and correct in all material respects, (ii) Borrower is in compliance with the
covenants set forth in Sections 5 and 6 of this Agreement and (iii) that,
except as noted in such certificate, such chief financial officer has no
knowledge of any Default or Event of Default or of any event that has
occurred and is continuing which with notice or lapse of time or both would
become a Default or Event of Default.
26
5.9. FINANCIAL CONDITION. Guarantor shall maintain on a consolidated basis
a net worth calculated in accordance with GAAP (including advances and loans
from AMC or its affiliates (other than subsidiaries of Guarantor) to
Guarantor and subordinated debt with maturities exceeding three years) of at
least $5 million.
5.10. LITIGATION MATTERS. Borrower and/or Guarantor shall notify Lender in
writing, promptly upon its learning thereof, of any litigation, arbitration
or administrative proceeding which may reasonably be expected to materially
and adversely affect the operations, financial condition or business of
Borrower or Guarantor or Borrower's or Guarantor's ability to perform under
this Agreement or involve Lender's security interest in the Collateral or
other rights under this Agreement, the Promissory Note or the Guarantee.
5.11. FULFILLMENT OF OBLIGATIONS. Each of Borrower and Guarantor shall pay
and perform, as and when due, all of its obligations of whatever nature,
except where the amount or validity thereof is currently being contested in
good faith by appropriate proceedings and reserves in conformity with
generally accepted accounting principles with respect thereto have been
provided on the books of Borrower or Guarantor, as the case may be, and
except to the extent that the failure to do so could not individually or in
the aggregate reasonably be expected to materially and adversely affect the
financial condition, operations, business or prospects of Borrower or
Guarantor, as the case may be.
5.12. NOTICE OF CHANGE OF CHIEF EXECUTIVE OFFICE. Borrower will provide
Lender with not less than 30 days prior written notice of any change in the
chief executive office or state of incorporation of Borrower to permit Lender
to make any additional filings necessary to continue Lender's perfected
security interest in the Collateral.
5.13. COMPLIANCE WITH LAWS, ETC. Each of Borrower and Guarantor shall, and
shall cause each of its respective subsidiaries (as applicable) to, comply
(i) in all material respects with all Requirements of Law and any change
therein or in the application, administration or interpretation thereof
(including, without limitation any request, directive, guideline or policy,
whether or not having the force of law) by any Governmental Authority charged
with the administration or interpretation thereof; and (ii) with all
indentures, mortgages, deeds of trust, agreements, or other instruments or
contractual obligations to which it is a party, including without limitation,
each Basic Document to which it is a party, or by which it or any of its
properties may be bound or affected, or which may affect the Receivables, if
the failure to comply therewith could, individually or in the aggregate,
reasonably be expected to materially and adversely affect the financial
condition, operations, business or prospects of Borrower or Guarantor, as the
case may be.
5.14. INFORMATION SHEET. By 1:00 p.m. (New York City time), on each Payment
Date, Guarantor shall deliver to Lender an information sheet indicating the
Average Constant Default Rate, the Prepayment Rate, the Recovery Rate and
notice of the occurrence of any GCFP Trigger Event and the continuance
thereof for the related Collection Periods.
5.15. [RESERVED].
27
5.16. MATERIAL ADVERSE CHANGE. Each of Borrower and Guarantor shall promptly
give written notice to Lender of Borrower or Guarantor, as applicable, of its
obtaining knowledge of or its discovery of a material adverse change in the
business, operations, prospects or condition (financial or otherwise) of
Borrower, Guarantor or AMC, which in Borrower's or Guarantor's, as
applicable, good faith, reasonable judgment gives Borrower or Guarantor, as
applicable, reasonable cause to believe that as a result of such event (x)
Borrower may be unable to fulfill its obligations hereunder, (y) Guarantor
may be unable to fulfill its obligations under the Guarantee or (z) AMC may
be unable to fulfill its obligations under the AMC Guarantee.
6. Negative Covenants.
Each of Borrower and Guarantor (where indicated) hereby covenants to
Lender that, until the payment in full and final performance of all of
Borrower's and Guarantor's respective obligations to Lender under this
Agreement, the Promissory Note and the Guarantee, without Lender's prior
written consent (which shall not be unreasonably withheld), it shall be
subject to the following restrictions:
6.1. ADVERSE TRANSACTIONS. Neither Borrower nor Guarantor shall enter into
any transaction (including without limitation any Series Supplement (as such
term is defined in the Spread Account Agreement)) which adversely affects the
Collateral or Lender's rights under this Agreement, the Promissory Note or
the Guarantee.
6.2. GUARANTIES. Neither Borrower nor Guarantor shall guarantee or
otherwise in any way become liable with respect to the obligations or
liabilities, of any other Person if any such action would constitute a breach
of the covenant contained in Section 5.9 hereof, except (a) for the
obligations of affiliates of Borrower or Guarantor to Lender and (b) by
customary endorsement of instruments or items of payment for deposit to the
general account of Borrower or Guarantor or for delivery to Lender.
6.3. CORPORATE DOCUMENTS. Borrower will not amend or modify any provision
of its Certificate of Incorporation or by-laws without Lender's prior written
consent.
6.4. INVESTMENTS; DIVIDENDS. The covenants set forth in this Section 6.4
shall be effective unless (i) the Advance Rate shall be less than 15%
(provided that until the first Calculation Date on which the Advance Rate
exceeds the Maintenance Advance Rate, the Present Value of the Collateral
used to calculate such Advance Rate shall be the Present Value of the
Collateral as of the close of business on the Closing Date) or (ii) the net
worth of AMC calculated in accordance with generally accepted accounting
principles shall be greater than $75 million (and such covenants shall be
reinstated if neither of the foregoing conditions remains satisfied):
(a) INVESTMENTS. Neither Borrower nor Guarantor shall make
any investment in any Person through the direct or indirect holding of
securities or otherwise, other than in the ordinary course of business or in
connection with the future securitization of receivables.
(b) DIVIDENDS. Guarantor shall not declare or pay any
dividends.
6.5. LOANS; CAPITAL STRUCTURE; AFFILIATES. The covenants set forth in this
Section 6.5 shall become effective (i) upon written notice from Lender to
Borrower and Guarantor that Lender has
28
determined a material adverse change as described in Section 8.1(n) hereof
has occurred or (ii) in the event that AMC shall have breached the net worth
covenant set forth in Section 10(g) of the AMC Guarantee:
(a) LOANS. Except for routine and customary salary advances or loans to
employees in connection with relocation expenses consistent with past
practice of AMC and its affiliates, neither Borrower nor Guarantor shall make
any unsecured loans or other advances of money to officers, directors,
employees, stockholders, or affiliates in excess of $50,000 in the aggregate.
Other than the indebtedness under this Agreement and the Promissory Note,
neither Borrower nor Guarantor shall incur any long term or working capital
debt (i) if such action would constitute a breach of the covenant contained
in Section 5.9 hereof or (ii) secured by Collateral.
(b) CHANGES IN CAPITAL STRUCTURE OR BUSINESS OBJECTIVES. Neither
Borrower nor Guarantor shall do any of the following if it will adversely
affect the payment or performance of, or Borrower's and Guarantor's ability
to pay and/or perform, its obligations to Lender with respect to this
Agreement, the Promissory Note and the Guarantee: (i) redeem, retire,
purchase or otherwise acquire, directly or indirectly, any of Borrower's or
Guarantor's stock, except in connection with employment or similar agreements
with officers and directors of Borrower or Guarantor consistent with past
practice, or (ii) make any change in Borrower's or Guarantor's capital
structure, or (iii) make any material change in any of its business
objectives, purposes or operations which could reasonably be expected to
adversely affect the payment or performance of, or Borrower's and Guarantor's
ability to pay and/or perform, its obligations to Lender with respect to this
Agreement, the Promissory Note or the Guarantee.
(c) TRANSACTIONS WITH AFFILIATES. Neither Borrower nor Guarantor shall
enter into, or be a party to, any transaction with any affiliate or
stockholder of Borrower or Guarantor, except, consistent with Borrower's or
Guarantor's practice before entering into this Agreement, in the ordinary
course of, and pursuant to the reasonable requirements of, Borrower's and
Guarantor's business and upon fair and reasonable terms (which Borrower
agrees to discuss with Lender from time to time upon Lender's request) which
are not materially less favorable than would be obtained in a comparable
arm's length transaction with a person or entity not an affiliate or
stockholder of Borrower or Guarantor.
6.6. LIENS.
(a) Borrower shall not grant or otherwise create any Lien on any of its
properties except to Lender hereunder and to Lender under any Other Residual
Financing Agreement.
(b) Neither Borrower nor Guarantor shall grant or otherwise permit any
Liens on the capital stock of Borrower, except to Financial Security
Assurance Inc. under the Stock Pledge and Collateral Agency Agreement dated
as of March 1, 1997 among Guarantor, as pledgor, Financial Security Assurance
Inc., as pledgee, and Chase Bank of Texas, National Association , as
collateral agent, as such agreement may be amended, supplemented or otherwise
modified from time to time.
6.7. VSI POLICIES. Borrower has obtained each VSI Policy and as of the
Cutoff Date, one or more of such policies is in full force and effect with
respect to each Receivable. Borrower shall
29
not (a) replace any such VSI Policy with a substitute insurance policy unless
(i) the insurer issuing such replacement policy has a rating by A.M. Best of
"A-" or higher and (ii) such replacement shall not adversely affect the
Collateral or Lender's rights under this Agreement, the Promissory Note or
the Guarantee, and (b) except as provided in clause (a) above, Borrower will
not cancel or otherwise terminate any VSI Policy (or any replacement
insurance policy) unless Lender has given its prior written consent to such
cancellation or termination.
6.8. CUSTODIAN. Guarantor shall not, pursuant to Section 10.8(e) of the
Sale and Servicing Agreement, assume the duties of Custodian without having
obtained the prior written consent of Lender.
6.9. CHANGE OF CONTROL. No Change of Control shall occur.
7. Conditions Precedent.
7.1. CONDITIONS PRECEDENT TO AGREEMENT. The obligations of Lender to extend
to Borrower any Loan as described in this Agreement are subject to
satisfaction of the following conditions on or prior to the Closing Date:
(a) The receipt by Lender, concurrently with the signing of this
Agreement and, with respect to paragraph (v) only, together with the
financial statements to be delivered pursuant to this Agreement, in form and
substance satisfactory to Lender, of the following:
(i) Evidence of the authority of the persons executing this
Agreement, the Promissory Note, the Guarantee and the AMC Guarantee and
any other documents contemplated herein and therein, together with
specimen signatures of such persons; and
(ii) A certified copy of each of Borrower's, Guarantor's and
AMC's Certificate of Incorporation and By-Laws and a good standing
certificate from the State of Delaware and/or of California, as
applicable, for each of Borrower, Guarantor and AMC; and
(iii) Certified copies of all necessary resolutions of each of
the Boards of Directors of Borrower, Guarantor and AMC authorizing the
execution and delivery and performance under this Agreement, the
Promissory Note, the Guarantee and the AMC Guarantee, as applicable;
and
(iv) The duly executed, original Promissory Note; and
(v) A certificate, as of the date of signing of this
Agreement, by the President, a Vice President, the Chief Financial
Officer or the Treasurer of each of Borrower, Guarantor and AMC
certifying that the representations and warranties contained in Section
4 hereof or in Section 9 of the AMC Guarantee, as the case may be, are
true and correct, that each of Borrower, Guarantor and AMC, as the case
may be, is in compliance with the covenants set forth in Sections 5 and
6 hereof or in Section 10 of the AMC Guarantee, as the case may be, and
that no Default, Event of Default or Other RF Event of Default has
occurred and is continuing; and
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(vi) The duly executed, original of the Guarantee and the AMC
Guarantee; and
(vii) The following opinions of counsel in form and substance
satisfactory to Lender's counsel:
(A) Standard corporate opinions of Borrower,
Guarantor and AMC regarding due authorization, execution,
consents, material litigation and noncontravention,
substantially in the form attached hereto as EXHIBIT E;
(B) Enforceability of this Agreement, the
Promissory Note, the Guarantee and the AMC Guarantee;
(C) Lien, priority and perfection opinions
relating to the pledge of Collateral pledged on the date
hereof by Borrower to Lender;
(D) Non-consolidation opinions as between
Borrower, Guarantor and AMC; and
(E) Such other opinions as Lender's counsel
shall reasonably request; and
(viii) A notice to the Trust Collateral Agent signed by Borrower
to the effect set forth in Section 2.7(b);
(ix) The duly executed, original Omnibus Amendment No. 6; and
(x) Such other documents, certificates or financial or other
information as Lender may reasonably request.
(b) The consummation of the Securitization Transaction.
(c) The Certificate shall have been delivered to Lender or its agent,
together with appropriate instruments of transfer duly endorsed in blank, and
together with a Medallion Guarantee with respect to the signature on the
transfer power accompanying the Certificate delivered to Lender or its agent
on the Closing Date.
(d) Financing statements on Form UCC-1 naming Borrower as "debtor" and
Lender as "secured party" and describing the Collateral as "collateral"
thereunder, shall have been delivered to Lender in proper form for filing in
each jurisdiction in which it is necessary to file to perfect a security
interest therein.
7.2 CONDITIONS PRECEDENT TO THE PRE-FUNDING LOAN. In addition to each of
the conditions precedent set forth in Section 7.1 being met, the obligation
of Lender to extend the Pre-Funding Loan hereunder shall be subject to the
following conditions:
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(a) Each of the representations and warranties made by Borrower and
Guarantor in this Agreement and by AMC in the AMC Guarantee shall be true and
correct as of the date on which the Pre-Funding Loan is extended;
(b) There shall not have occurred and be continuing any Default, Event
of Default or Other RF Event of Default and Borrower, Guarantor and AMC shall
be in full compliance with all of their respective covenants and obligations
under this Agreement, the Guarantee and the AMC Guarantee;
(c) Lender shall have received the Notice of Borrowing described in
Section 2.2(a) hereof; and
(d) The Pre-Funding Origination Condition shall have been satisfied as
determined by Lender in its sole discretion.
8. Events of Default.
8.1. EVENTS OF DEFAULT. Each of the following events and occurrences shall
constitute an Event of Default under this Agreement if not cured within three
Business Days of their occurrence unless the context of the provision
indicates otherwise (provided that the events described in paragraphs (f),
(g), (h), (i), (j) and (m) shall have no cure period):
(a) Payment by or on behalf of Borrower shall fail to be made to Lender
when due of principal or interest on any Loan or of any other Obligation.
(b) Borrower fails to perform or observe any material provision of
Section 6 of this Agreement, or Guarantor fails to perform or observe any
material provision of the Guarantee or AMC fails to perform or observe any
material provision of the AMC Guarantee (such materiality in each case, as
determined by Lender) and such failure to perform or observe continues
unremedied for 30 days following the earlier to occur of (i) a Responsible
Officer having actual knowledge of such failure to perform or observe and
(ii) written notice of such failure to perform or observe from Lender to
Borrower, Guarantor or AMC, as the case may be.
(c) Borrower shall fail to perform or observe any other provision of
this Agreement (other than as referred to in Sections 8.1(a) or 8.1(b)) or
the Promissory Note, or Guarantor shall fail to perform or observe any
provision of this Agreement or the Guarantee (other than as referred to in
Sections 8.1(a) or 8.1(b)), or AMC shall fail to perform or observe any
material provision of the AMC Guarantee (other than as referred to in
Sections 8.1(a) or 8.1(b)) within 30 days following the earlier of (i) a
Responsible Officer having actual knowledge of such failure to perform or
observe or (ii) written notice thereof from Lender; PROVIDED that any such
failure to perform or observe Section 5.11 hereof caused solely by an event
described in Section 8.1(d) shall constitute an Event of Default only as
provided in Section 8.1(d).
(d) Borrower, Guarantor or AMC shall fail to pay any money due under
any other agreement, note, indenture or instrument evidencing, securing,
guaranteeing or otherwise relating to indebtedness of Borrower, Guarantor or
AMC for borrowed money, which failure to pay constitutes an event of default
under any such agreement or instrument or constitutes a default thereunder
and such default shall continue beyond the grace period (not to exceed one
Business
32
Day), if any, therein specified and, in connection with such failure, the
maturity of such indebtedness is accelerated; or Borrower, Guarantor or AMC
shall default in the observance or performance of any other covenant or
condition in any such agreement or instrument and such default shall continue
beyond the grace period, if any, therein specified and, in connection with
such default, the maturity of such indebtedness is accelerated; or any other
event shall occur or condition shall exist if the effect of such event or
condition is to accelerate the maturity of such indebtedness; or any such
indebtedness shall be declared due and payable prior to the stated maturity
thereof; other than, in each case, indebtedness with respect to which the
failure to pay could not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the financial condition,
operations, business or prospects of Borrower, Guarantor or AMC, as the case
may be.
(e) Borrower, Guarantor or AMC receives notice, or a Responsible
Officer has knowledge, of a breach by Borrower, Guarantor or AMC of any
material representation, warranty or obligation contained in this Agreement,
the Promissory Note, the Guarantee, the AMC Guarantee, the Basic Documents or
in any other agreement with Lender; PROVIDED that (i) a breach by Borrower,
Guarantor or AMC of a representation or warranty in a Basic Document shall
not constitute an Event of Default hereunder if such party shall have cured
such breach within the applicable cure period, if any, set forth in such
Basic Document and (ii) a breach by Guarantor of the representations and
warranties set forth in Section 3.2(b) of the Purchase Agreement shall not
constitute an Event of Default hereunder so long as Guarantor complies with
its obligations under Section 6.2 of the Purchase Agreement with respect to
such breach; PROVIDED, FURTHER, that any such breach of Section 5.11 hereof
caused solely by an event described in Section 8.1(d) shall constitute an
Event of Default only as provided in Section 8.1(d).
(f) The Collateral or any other assets of Borrower, Guarantor or AMC
are attached, seized, levied upon or subjected to a writ or distress warrant,
or come within the possession of any receiver, trustee, custodian or assignee
for the benefit of Borrower, Guarantor or AMC and the same is not dissolved
or dismissed within sixty (60) days thereafter except, in the case of
Guarantor or AMC, where any such actions or events would not either
individually or in the aggregate materially and adversely affect the
financial condition, operations, business or prospects of Guarantor or AMC,
as the case may be; an application is made by any Person other than Borrower,
Guarantor or AMC for the appointment of a receiver, trustee, or custodian for
the Collateral or a material portion of the assets of Borrower, Guarantor or
AMC and the same is not dismissed within sixty (60) days after the
application thereof, or Borrower, Guarantor or AMC shall have concealed,
removed or permitted to be concealed or removed, in the case of Borrower, any
part, and in the case of Guarantor or AMC, any material portion, of its
property with intent to hinder, delay or defraud its creditors or made or
suffered a transfer of any of its property which is fraudulent under any
bankruptcy, fraudulent conveyance or other similar law.
(g) An application is made by Borrower, Guarantor or AMC for the
appointment of a receiver, trustee or custodian for the Collateral or any
other assets of Borrower, Guarantor or AMC; a petition under any section or
chapter of the Bankruptcy Code or federal or state law or regulation shall be
filed by Borrower, Guarantor or AMC, or Borrower, Guarantor or AMC shall make
an assignment for the benefit of its creditors, or any case or proceeding
shall be filed by
33
Borrower, Guarantor or AMC for its dissolution, liquidation, or termination,
by Borrower, Guarantor or AMC, or Borrower, Guarantor or AMC ceases to
conduct its business.
(h) Borrower, Guarantor or AMC is enjoined, restrained or in any way
prevented by court order from conducting all or any material part of its
business affairs, or a petition under any section or chapter of the
Bankruptcy Code or any similar federal or state law or regulation is filed
against Borrower, Guarantor or AMC, or any case or proceeding is filed
against Borrower, Guarantor or AMC, for its dissolution or liquidation, and
such injunction, restraint, petition, case or proceeding is not dismissed
within sixty (60) days after the entry of filing thereof.
(i) A notice of lien, levy or assessment is filed of record with
respect to all or any assets of Borrower, Guarantor or AMC by the United
States, or any department, agency or instrumentality thereof, or by any
state, county, municipal or other governmental agency and it is not released
within sixty (60) days after the filing and is material to the financial
position of the respective entity, or if any taxes or debts become a lien or
encumbrance upon the Collateral or any other affiliate's assets, and the same
is not released within sixty (60) days after the same becomes a lien or
encumbrance, except to the extent that such taxes or debts are being
contested in good faith in appropriate proceedings, adequate reserves have
been set aside for the payment thereof and notice of such proceedings and of
the actions being taken in respect thereof have been provided to Lender.
(j) Borrower, Guarantor or AMC becomes insolvent or admits in writing
to its inability to pay its debts as they mature.
(k) Guarantor shall at any time resign, or be terminated, as a servicer
under any securitization.
(l) Lender shall for any reason cease to have a first priority
perfected security interest in the Collateral free and clear of all Liens,
other than the Liens granted to Lender hereunder; PROVIDED that the Borrower
shall have five days after Borrower obtains actual knowledge of such
condition to cure such condition.
(m) The Guarantee or the AMC Guarantee shall cease to be in full force
and effect or the Guarantor or AMC or an officer or authorized representative
acting on its behalf shall so assert.
(n) Lender, in its good faith judgment, has reasonable cause to believe
that there has been a material adverse change in (i) the Collateral, (ii) in
Lender's rights under this Agreement, the Promissory Note, the Guarantee or
the AMC Guarantee, or (iii) in the business, operations, prospects or
condition (financial or otherwise) of Borrower, Guarantor or AMC (which, in
the case of this clause (iii), has not been cured within three Business Days
following written notice thereof from the Lender); PROVIDED that Lender, in
its good faith judgement, has reasonable cause to believe that as a result of
such event (x) Borrower may be unable to fulfill its obligations hereunder
(y) Guarantor may be unable to fulfill its obligations under the Guarantee or
(z) AMC may be unable to fulfill its obligations under the AMC Guarantee.
(o) Borrower shall enter into a Series Supplement pursuant to the
Spread Account Agreement relating to or otherwise affecting the collateral
securing this Agreement and/or any
34
Other Residual Financing Agreement without having obtained the prior written
consent of Lender.
8.2. REMEDIES OF DEFAULT.
(a) If not cured within the cure period, if any, provided within the
relevant provision, then upon the continuance of such Event of Default Lender
may, by notice to Borrower (which notice shall be deemed given automatically
upon occurrence of an Event of Default referred to in paragraph (f), (g),
(h), (i) or (j)), terminate its commitment to make any Loans hereunder and/or
declare immediately due and payable all principal, interest and other
Obligations payable hereunder and under the Promissory Note by Borrower then
due and payable that would otherwise be due after the date specified in the
notice (or the date such notice is deemed given), whereupon all those amounts
shall become immediately due and payable, all without further diligence,
presentment, demand of payment, protest or notice of any kind, all of which
are expressly waived by Borrower. If any Event of Default shall occur and be
continuing, Lender may exercise all rights and remedies of a secured party
under the Code, and, to the extent permitted by law, all other rights and
remedies granted to Lender in this Agreement, the Guarantee and the AMC
Guarantee and in any other instrument or agreement securing, evidencing or
relating to the Obligations. Without limiting the generality of the
foregoing, if an Event of Default or Other RF Event of Default shall occur
and be continuing Lender may sell the Collateral in a commercially reasonable
manner as determined by Lender (subject to the limitations set forth in the
Trust Agreement), instituting suit in equity or instituting other appropriate
proceedings, whether for the specific performance of any agreement contained
herein, or for an injunction against a violation of any of the terms hereof,
or in aid of the exercise of any power granted hereby or by law. If Lender
opts to sell or otherwise dispose of the Collateral as one of its remedies
upon an Event of Default or Other RF Event of Default, Borrower (subject to
Section 2.10) and Guarantor shall remain liable for any remaining deficiency
upon applying the proceeds of such sale or other disposition against any and
all Obligations and Other RF Obligations, including, without limitation, the
reasonable fees and disbursements of any attorneys employed by Lender to
collect such deficiency.
(b) Without limitation to any of the provisions or remedies set forth
in Section 8.2(a), if any Event of Default shall have occurred and be
continuing, Borrower may, with the consent of Lender in Lender's sole
discretion, (i) make a principal payment on the Loans in such amount as
Lender shall specify or (ii) pledge additional Collateral having such value,
as determined by Lender in its sole discretion, as Lender shall specify. If
Lender consents to Borrower's taking such action as is described in this
Section 8.2(b) upon an Event of Default, Borrower (subject to Section 2.10)
and Guarantor shall remain liable for any remaining deficiency between the
amount of the Obligations and the amount of the principal payment or pledge
of additional Collateral made pursuant hereto, and under no circumstances
shall Lender's consent to such action be construed as a waiver of such
deficiency or a modification of the Obligations.
(c) In the event that Borrower shall hereinafter pledge any Collateral
in addition to the Collateral pledged to Lender on the date hereof, Borrower
shall, concurrently with such pledge, deliver to Lender an opinion of counsel
in form and substance reasonably satisfactory to Lender regarding priority,
perfection and the absence of Liens in respect of such Collateral.
35
(d) Notwithstanding anything in Section 6.5 to the contrary, it is
expressly understood and agreed that Lender shall have sole discretion in
determining whether to enforce the covenants set forth in Section 6.5 or
immediately to pursue the remedies set forth in this Section 8.2 upon the
occurrence of a material adverse change as described in Section 8.1(n). Under
no circumstances shall Lender's decision to enforce the covenants set forth
in Section 6.5 following such a material adverse change be construed as a
waiver of the Event of Default described in Section 8.1(n), or otherwise in
any way modify, limit, delay or impair any rights which Lender would
otherwise have pursuant to this Section 8.2.
(e) Lender shall use its reasonable efforts to notify Guarantor and AMC
upon the occurrence of an Event of Default; PROVIDED that the omission so to
notify shall not relieve Guarantor or AMC from any liability which it may
have to Lender (or extend the period of time within which performance is
required by Guarantor or AMC) in connection with such Event of Default or
from any of its respective obligations under the Guarantee or the AMC
Guarantee, as the case may be.
9. Miscellaneous.
9.1. PAYMENT OF EXPENSES, INDEMNITY, ETC. Each of Borrower and Guarantor
jointly and severally agree to:
(i) pay or reimburse Lender on demand for all its reasonable
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, modification or supplement
to, or any waiver under, this Agreement or the Guarantee and any other
document prepared in connection therewith, and the consummation and
administration of the transactions contemplated thereby, including without
limitation the reasonable fees and disbursements of counsel to Lender;
PROVIDED that, neither the Borrower nor Guarantor shall be obligated to
reimburse Lender for the foregoing costs and expenses of counsel unless such
costs and expenses are incurred in connection with:
(A) the advice of counsel with respect to
(1) the performance of Borrower or Guarantor and/or any of
their respective Affiliates under this Agreement, the
Guarantee or any other document prepared in connection
therewith or (2) (x) the rights of Lender under this
Agreement, the Guarantee or any other document prepared in
connection therewith and (y) Lender's rights relating to
the Collateral (including, without limitation, its security
interest therein), in each case in this clause (2) in
connection with any change in the condition (financial or
otherwise), operations, business or prospects of the
Borrower or any of its Affiliates;
(B) any waiver in respect of this Agreement,
the Guarantee or any other document prepared in connection
therewith (whether or not executed or otherwise granted as
provided therein);
(C) any amendment, supplement or
modification in respect of this Agreement, the Guarantee or
any other document prepared in connection herewith or
therewith that is executed by the parties thereto as
36
required by this Agreement or the Guarantee or any other
document prepared in connection therewith, as the case may
be; or
(D) any proposed amendment, supplement or
modification in respect of this Agreement, the Guarantee or
any other document prepared in connection herewith or
therewith that is not executed by the parties thereto as
required by such loan document if Borrower proposed or
requested such amendment, supplement or modification;
(ii) pay on demand all reasonable costs and expenses of
Lender, including without limitation the reasonable fees and disbursements of
counsel to Lender, in connection with the occurrence or continuance of a
Default or Event of Default and the enforcement, collection, protection or
preservation (whether through negotiations, legal proceedings or otherwise)
of this Agreement or the Guarantee, the Collateral, any Obligation or any
right, remedy, power or privilege of Lender hereunder or under the Guarantee;
(iii) pay and hold Lender harmless from and against any and
all present and future stamp, excise, recording or other similar taxes or
fees payable in connection with the execution, delivery, recording and filing
of this Agreement or the Guarantee and hold Lender harmless from and against
any and all liabilities with respect to or resulting from any delay or
omission to pay such taxes or fees; and
(iv) indemnify Lender and its affiliates and each of their
respective directors, officers, employees and agents and hold each of them
harmless from and against, any and all liabilities, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses and
disbursements, including without limitation the reasonable fees and
disbursement of counsel to Lender and such other parties, incurred by any of
them in connection with, arising out of or in any way relating to (i)
Borrower's, Guarantor's, AMC's, the Trust's or Lender's involvement (in the
case of any such involvement of the Lender, provided such involvement is
limited to Lender in, or as a result of, its capacity as Lender under this
Agreement or under any Other Residual Financing Agreement) in, or the effect
on any Receivable or any retail installment sale contract relating to the
"Collateral" for any Other Residual Financing Agreement as a result of, any
action, suit or proceeding listed in Exhibit F hereto or (ii) any other
investigation, claim, litigation or other proceeding, pending or threatened
(whether or not any of them is designated a party thereto), in connection
with, arising out of or in any way related to this Agreement, the Guarantee,
the Receivables, any other retail installment sale contract relating to the
"Collateral" for any Other Residual Financing Agreement or any of the
transactions contemplated herein or therein or any use of the proceeds of any
Loan by Borrower; PROVIDED that Lender shall not be entitled to any
indemnification for any of the foregoing resulting from its gross negligence
or willful misconduct.
If and to the extent that the indemnity obligations of Borrower under this
Section 9.1 may be unenforceable for any reason, Borrower hereby agree to
make the maximum contribution to the payment and satisfaction of each of such
indemnity obligations which is permissible under applicable law.
37
9.2. SET-OFF. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, during the
continuance of any Event of Default hereunder Lender is hereby authorized at
any time and from time to time, without notice to Borrower, Guarantor or to
any other person or entity, any such notice being hereby expressly waived, to
set-off against any obligation owing by Lender or any affiliate of Lender to
Borrower or Guarantor, or against any funds or other property of Borrower or
Guarantor held by or otherwise in the possession of Lender or any affiliate
of Lender, the obligations and liabilities of Borrower to Lender under this
Agreement or of Guarantor to Lender under its respective Guarantee,
irrespective of whether or not Lender shall have made any demand hereunder or
under the Guarantee.
9.3. AMENDMENTS. No provision of this Agreement may be amended,
supplemented, modified or waived unless the same shall be in writing signed
by Lender, Borrower and Guarantor and, solely in the case of amendments,
supplements, modifications or waivers to Sections 2.10 and 9.5 hereof,
without the prior written consent of the Note Insurer thereto.
9.4. WAIVER; CUMULATIVE RIGHTS. No failure on the part of Lender to
exercise and no delay in exercising, and no course of dealing with respect
to, any right, power or privilege under this Agreement or the Promissory Note
shall operate as a waiver thereof, nor shall any single or partial exercise
of any right, power or privilege under this Agreement, the Promissory Note or
the Guarantee preclude any other or further exercise thereof or the exercise
of any other right, power, or privilege. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
9.5. NONPETITION COVENANT. Lender shall not, prior to the date which is one
year and one day after the termination of each of the Indenture, the Trust
Agreement and the Spread Account Agreement with respect to Borrower, petition
or otherwise invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against Borrower under any Federal
or State bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar
official of Borrower or any substantial part of its property, or ordering the
winding up or liquidation of the affairs of Borrower.
9.6. NON-AFFILIATION. Lender hereby agrees that, so long as it has any
interest in the Certificate hereunder, it shall not become an affiliate of
Borrower.
9.7. BINDING EFFECT. This Agreement shall be binding upon and shall be
enforceable by Borrower, Guarantor and Lender and their respective successors
and permitted assigns.
9.8. SURVIVAL. The provisions of Sections 3.13(b), (c) and (d) and 9.1
shall survive the execution and delivery of this Agreement and the payment in
full of the Obligations, and in the case of Section 9.1, the Other RF
Obligations.
9.9. GOVERNING LAW, ETC.; WAIVER OF TRIAL BY JURY. (A) THIS AGREEMENT AND
THE PROMISSORY NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAW OF THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE
38
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY
NEW YORK STATE COURT SITTING IN NEW YORK CITY FOR THE PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE PROMISSORY
NOTE, THE GUARANTEE OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY PARTY HERETO IN ANY OTHER
JURISDICTION. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY
CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
(B) EACH OF BORROWER, LENDER AND GUARANTOR HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
(C) EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS
PERSONALLY DELIVERED OR TRANSMITTED BY REGISTERED MAIL TO THE ADDRESS SET
FORTH FOR NOTICES IN SECTION 9.10; PROVIDED THAT UPON ANY SUCH SERVICE BY
REGISTERED MAIL THE SENDING PARTY SHALL, SIMULTANEOUSLY THEREWITH, SEND
NOTICE OF SUCH SERVICE TO THE OTHER PARTY VIA FACSIMILE TRANSMISSION. NOTHING
IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW.
9.10. NOTICE.
(a) Any notice hereunder shall be in writing and shall be personally
delivered, transmitted by postage prepaid registered airmail, by facsimile,
telegram or cable to the parties as follows:
To Lender: Greenwich Capital Financial Products, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Asset-Backed Finance
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
WITH A COPY TO:
39
Greenwich Capital Financial Products, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To Borrower: Long Beach Acceptance Receivables Corp.
Xxx Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With copies to Guarantor and AMC as per clause (b)
below.
To Guarantor: Long Beach Acceptance Corp.
Xxx Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To AMC: Ameriquest Mortgage Company
0000 Xxxx xxx Xxxxxxx Xxxx
Xxxxxx, XX 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To the Note
Insurer: Financial Security Assurance Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Surveillance Department;
Re: Long Beach Auto Receivables Trust
2001-A
Telephone: (000) 000-0000
Facsimile: (000) 000-0000; (000) 000-0000
All notices and other communications shall be deemed to have been duly
given on the date of receipt if delivered personally; the date five (5)
calendar days after posting if transmitted by mail; or in the case of a
facsimile, telegram or cable, at the time sent. Any party may change its
address for purposes hereof by notice to the other.
(b) Lender hereby agrees that it will provide to Guarantor and AMC
copies of all notices it provides to Borrower hereunder.
40
9.11. SEVERABILITY. If any one or more of the provisions contained in this
Agreement or any document executed in connection herewith shall be invalid,
illegal or unenforceable in any respect under any applicable law, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired.
9.12. COUNTERPARTS. This Agreement may be signed in any number of
counterparts which, taken together, shall constitute a full and original
agreement for all purposes.
9.13. MERGER OR CONSOLIDATION. Any Person (i) into which Borrower or
Guarantor may be merged or consolidated, (ii) resulting from any merger or
consolidation to which Borrower or Guarantor is a party or (iii) succeeding
to all or substantially all of the business of Borrower or Guarantor,
PROVIDED that in any of the foregoing cases such Person shall execute an
agreement of assumption to perform every obligation of Borrower or Guarantor,
as the case may be, under this Agreement, and whether or not such assumption
agreement is executed, shall be the successor to Borrower or Guarantor
hereunder (without relieving Borrower or Guarantor of its responsibilities
hereunder, if it survives such merger or consolidation) without the execution
or filing of any document or any further act by any of the parties to this
Agreement.
9.14. SUBSEQUENT ACTIONS. Each party shall, upon the written request of the
other party from time to time after execution of this Agreement and without
further consideration, execute such documents or take such action as may be
reasonably necessary to carry out the purpose or intention of this Agreement.
9.15. ASSIGNABILITY. The rights and obligations of the parties under this
Agreement shall not be assigned or otherwise transferred, by sale of
participation interests or otherwise, by any party without the prior written
consent of the other party, which consent shall not be unreasonably withheld,
except that this Agreement may be assigned without such prior written consent
to any Person who succeeds Borrower or Guarantor, as the case may be, as
provided in Section 9.13.
9.16. CERTAIN REIMBURSEMENTS.
(a) Notwithstanding Section 8 of the Guarantee or anything herein to
the contrary, Borrower may on any Remittance Date reimburse Guarantor for any
payments made under the Guarantee, so long as (i) all amounts owing to Lender
on such Remittance Date have been paid, (ii) no Default or Event of Default
shall have occurred and be continuing and (iii) the Advance Rate shall be
less than the then applicable Target Advance Rate (provided that until the
first Calculation Date on which the Advance Rate exceeds the Maintenance
Advance Rate, (x) the Present Value of the Collateral used to calculate such
Advance Rate shall be the Present Value of the Collateral as of the close of
business on the Closing Date and (y) the Advance Rate used in the calculation
of the Target Advance Rate shall be based on the Present Value of the
Collateral as of the close of business on the Closing Date).
(b) Notwithstanding Section 8 of the AMC Guarantee or anything herein
to the contrary, Borrower and/or Guarantor may on any Remittance Date
reimburse AMC for any payments made under the Guarantee, so long as (i) all
amounts owing to Lender on such Remittance Date have been paid, (ii) no
Default or Event of Default shall have occurred and be continuing and (iii)
the Advance Rate shall be less than the then applicable Target Advance Rate
(provided that
41
until the first Calculation Date on which the Advance Rate exceeds the
Maintenance Advance Rate, (x) the Present Value of the Collateral used to
calculate such Advance Rate shall be the Present Value of the Collateral as
of the close of business on the Closing Date and (y) the Advance Rate used in
the calculation of the Target Advance Rate shall be based on the Present
Value of the Collateral as of the close of business on the Closing Date).
[Signature Page Follows]
42
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives on the date first written
above.
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., Lender
By: ________________________________________
Name: Xxxx X. Xxxxx
Title: Vice President
LONG BEACH ACCEPTANCE RECEIVABLES CORP., Borrower
By: ________________________________________
Name:
Title:
LONG BEACH ACCEPTANCE CORP., Guarantor
By: ________________________________________
Name:
Title:
43
SCHEDULE 4.16
PLANS
Borrower: None
Guarantor: None
EXHIBIT A
FORM OF PROMISSORY NOTE
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
PROMISSORY NOTE
June 13, 2001
Amount: U.S. $6,429,208.80
FOR VALUE RECEIVED, LONG BEACH ACCEPTANCE RECEIVABLES CORP. (the
"BORROWER") unconditionally promises to pay on the Maturity Date (as defined
in the Agreement referred to below) to the order of Greenwich Capital
Financial Products, Inc. (the "LENDER") in Federal or other immediately
available funds in lawful money of the United States the principal sum of Six
Million, Four Hundred Twenty-nine Thousand, Two Hundred Eight Dollars and
Eighty Cents (U.S. $6,429,208.80) or, if less, the aggregate unpaid principal
amount of the Loans made by Lender to Borrower pursuant to the Agreement, and
to pay interest thereon from the date on which such Loan is made pursuant to
Section 2.1 of the Agreement until this Promissory Note is repaid in like
money at the rates per annum and in the manner set forth in the Agreement.
The principal of and interest on this Promissory Note shall be
payable in immediately available funds without set-off or counterclaim, in
the manner set forth in the Agreement.
This Promissory Note is issued pursuant to the terms of a Credit and
Security Agreement dated as of June 13, 2001 among Borrower, Lender and Long
Beach Acceptance Corp., as Guarantor (as amended from time to time, the
"AGREEMENT"), and is subject to the terms thereof and is entitled to the
benefits therein provided.
Upon the occurrence of an Event of Default (as defined in the
Agreement), the principal of and accrued interest on this Promissory Note may
be declared due and payable in the manner and with the effect provided in the
Agreement, without presentment, demand, protest or notice of any kind, each
of which is hereby expressly waived by Borrower.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
LONG BEACH ACCEPTANCE RECEIVABLES CORP.
By: ________________________________
Name:
Title:
A-1
EXHIBIT B
FORM OF LBAC GUARANTEE
June 13, 2001
Greenwich Capital Financial Products, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Re: Guarantee by Long Beach Acceptance Corp. of Credit
and Security Agreement Dated as of June 13, 2001
--------------------------------------------------
Ladies and Gentlemen:
1. For value received and in accordance with the terms of the
Credit and Security Agreement, dated as of June 13, 2001 (the "AGREEMENT"),
among Greenwich Capital Financial Products, Inc., as Lender ("LENDER"), Long
Beach Acceptance Receivables Corp., as Borrower ("BORROWER"), and Long Beach
Acceptance Corp., as Guarantor (the "GUARANTOR"), Guarantor hereby
unconditionally and irrevocably guarantees to Lender, or any successor in
interest of Lender, the due, punctual and complete payment and performance by
Borrower when and as due, whether at the stated maturity, by acceleration,
upon one or more dates set for repayment or prepayment or otherwise of the
Obligations. Lender may make demands under this Guarantee for such amounts
and performance from time to time. Guarantor hereby represents that its
obligations hereunder do and shall rank PARI PASSU with all unsecured and
unsubordinated indebtedness of Guarantor, as applicable. Terms used and not
defined herein shall have the meanings assigned in the Agreement.
2. Payments and performance required under this Guarantee shall be
payable and performed whenever any amount or performance guaranteed hereunder
has not been promptly made to Lender in accordance with the Agreement. When
pursuing its rights and remedies hereunder against Guarantor, Lender may, but
shall be under no obligation to, pursue the rights, remedies, powers and
privileges as it may have against Borrower or any other Person or against any
collateral security or guarantee for the Obligations or any right of offset
with respect thereto. Any failure by Lender to pursue the other rights,
remedies, powers or privileges or to collect any payments from Borrower or
any other Person or to realize upon any collateral security or guarantee or
to exercise any right of offset, or any release of Borrower or any other
Person or of any the collateral security, guarantee or right of offset, shall
not relieve Guarantor of any liability hereunder, and shall not impair or
affect the rights, remedies, powers or privileges, whether express, implied
or available as a matter of law, of Lender against Guarantor.
3. Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against Guarantor, and without notice to or
further assent by Guarantor, any demand for payment of any of the Obligations
made by Lender may be rescinded by Lender, and any of the Obligations
continued, and the Obligations, or the liability of any other Person upon or
B-1
for any part thereof, or any collateral security or guarantee therefor or
right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised,
waived, surrendered or released by Lender, and the Guarantee or the Agreement
and any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated in accordance with the terms
thereof, in whole or in part, as Lender may deem advisable from time to time,
and any collateral security, guarantee or right of offset at any time held by
Lender for the payment of the Obligations may be sold, exchanged, waived,
surrendered or released. Lender shall have no obligation to protect, secure,
perfect or insure any Lien at any time held by it as security for the
Obligations or for the guarantee set forth herein or any property subject
thereto. When making any demand hereunder against Guarantor, Lender may, but
shall be under no obligation to, make a similar demand on Borrower or any
other guarantor (including, without limitation, any other Guarantor), and any
release of Borrower or the other guarantor (including, without limitation,
any other Guarantor), shall not relieve any of its obligations or liabilities
hereunder, and shall not impair or affect the rights, remedies, powers and
privileges, express or implied, or as a matter of law, of Lender against
Guarantor.
4. Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Obligations and notice of or proof of
reliance by Lender upon the guarantee of Guarantor set forth herein or
acceptance of the guarantee of Guarantor set forth herein; the Obligations,
and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon the guarantee of Guarantor set forth herein; and all dealings between
Borrower or Guarantor, on the one hand, and Lender, on the other, shall
likewise be conclusively presumed to have been had or consummated in reliance
upon the guarantee of Guarantor set forth herein. Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment
and all other notices of any kind to or upon Borrower or Guarantor with
respect to the Obligations. The guarantee of Guarantor set forth herein shall
be construed as a guarantee of payment, and not of collection.
5. The guarantee set forth herein shall remain in full force and
effect and be binding in accordance with and to the extent of its terms upon
Guarantor and its successors and permitted assigns, and shall inure to the
benefit of Lender, and its respective successors, endorsees, transferees and
assigns, until all the Obligations and the obligations of Guarantor under the
guarantee shall have been satisfied by payment in full and the commitment of
Lender under the Agreement shall have been terminated.
6. The guarantee set forth herein shall continue to be effective, or
be reinstated, as the case may be, if at any time payment, or any part
thereof, of any of the Obligations is rescinded or must otherwise be restored
or returned by Lender for any reason whatsoever, including, without
limitation, upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of Guarantor or Borrower or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, Borrower or Guarantor or any substantial part of its
property, or otherwise, all as though the payments had not been made.
7. All payments due hereunder shall be paid in immediately
available funds after demand no later than 1:00 P.M. on the second Business
Day following the date of such demand.
B-2
Demand shall be made in writing to Guarantor's office located at Xxx Xxxx
Xxxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000, or such other address in the United
States which may be designated by Guarantor by written notice delivered to
Lender.
8. To the full extent permitted by law, Guarantor hereby waives all
rights of subrogation, contribution, reimbursement, indemnity or otherwise,
whether arising by contract or operation of law (including, without
limitation, any such right arising under the Bankruptcy Code) or otherwise by
reason of any payment or performance by Guarantor pursuant to the provisions
of this Guarantee. Without limitation to the foregoing, notwithstanding any
payment or payments made by Guarantor hereunder or any setoff or application
of funds of Guarantor by Lender, Guarantor shall not be entitled to be
subrogated to any of the rights of Lender against Borrower or any collateral
security or guarantee or right of offset held by Lender for the payment of
the Obligations, nor shall Guarantor seek or be entitled to seek any
contribution or reimbursement from Borrower in respect of payments made by
Guarantor hereunder, until all amounts owing to Lender by Borrower and
Guarantor on account of the Obligations are paid in full and the commitment
of Lender under the Agreement shall have been terminated. If any amount shall
be paid to Guarantor on account of the subrogation rights at any time when
all of the Obligations shall not have been paid in full and the commitment of
Lender under the Agreement shall not have been terminated, the amount shall
be held by Guarantor in trust for Lender, segregated from other funds of
Guarantor, and shall forthwith upon receipt by Guarantor, be turned over to
Lender in the exact form received by Guarantor (duly endorsed by Guarantor to
Lender, if required), to be applied against the Obligations, whether matured
or unmatured, at the time and in the order as Lender may determine.
Notwithstanding the foregoing, Guarantor may request reimbursement from
Borrower to the extent permitted pursuant to Section 9.16(a) of the Agreement.
9. As further security for this Guarantee, Guarantor hereby grants
a first priority security interest in and transfers and assigns to Lender (a)
any and all interest, if any, it may now or hereafter have in the Collateral
until it has been sold or otherwise disposed of by Lender, and (b) all claims
and demands, presently existing or hereafter accrued thereon, and any and all
collateral or security Guarantor now has or may hereafter have or acquire
against Borrower with respect to the Collateral or any of them with full
right on the part of Lender in its own name or in the name of Guarantor to
collect and enforce such claims by legal action, proof of debt in bankruptcy
or other liquidation proceedings, and to vote in any proceedings for the
arrangement of debts at any time proposed, and Guarantor hereby irrevocably
appoints Lender as attorney-in-fact for Guarantor for the purpose of such
enforcement and for the purpose of endorsing in the name of Guarantor any
Collateral for the payment of money.
10. In the event that any representation or warranty made by
Borrower or by Guarantor in the Agreement or any Basic Document to which it
is a party shall be false or misleading in any material respect, there shall
be immediately due from Guarantor to Lender the loss, out-of-pocket cost,
damage or out-of-pocket expense incurred by Lender by reason of such
representation or warranty being false or misleading in any material respect.
11. In the event that Lender for any reason whatsoever shall deem
it necessary to enforce this Guarantee or any rights hereunder or otherwise,
there shall be immediately due from Guarantor to Lender, all losses,
out-of-pocket costs, damages, out-of-pocket expenses, claims
B-3
and liabilities associated with such enforcement, including but not limited
to, reasonable outside attorneys' fees and out-of-pocket disbursements,
together with all reasonable out-of-pocket costs and out-of-pocket expenses
of any related action.
12. Guarantor hereby covenants that it shall not assign this
Guarantee except with the prior written consent of Lender, which consent
shall not be unreasonably withheld.
13. Guarantor represents and warrants to Lender that each of the
representations and warranties made by it in the Agreement is true and
correct.
14. The obligations of Guarantor under this Guarantee are
irrevocable, primary, absolute and unconditional and shall be paid or
performed strictly in accordance with this Guarantee under all circumstances
irrespective of:
(a) any lack of validity or enforceability of the Agreement, the
AMC Guarantee or any of the Collateral, or any amendment, other modification
or waiver in respect thereof;
(b) any exchange or release of any other obligations hereunder;
(c) the existence of any claim, set-off, defense, reduction,
abatement or other right that Lender or Borrower may have at any time against
Borrower, Guarantor or any other person;
(d) any document presented in connection with this Guarantee
proving to be forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect;
(e) any payment by Guarantor under this Guarantee against
presentation of a certificate or other document that does not strictly comply
with terms of this Guarantee; and
(f) any other circumstances, other than payment in full, that might
otherwise constitute a defense available to, or discharge of, Borrower in
respect of the Agreement.
15. Neither the failure of Borrower or Lender to perform any
covenant or obligation in favor of Guarantor nor the failure or omission to
make a demand permitted hereunder shall in any way affect or limit
Guarantor's obligations under this Guarantee. If an action or proceeding to
enforce this Guarantee is brought, the beneficiary shall be entitled to
recover from Guarantor costs and expenses reasonably incurred, including
without limitation reasonable fees and expenses of counsel and out-of-pocket
costs.
16. THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. Communications with
respect to this Guarantee other than requests for payment pursuant to a
notice referred to in the preceding paragraph shall also be addressed to
Guarantor at Xxx Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000, specifically
referring to this Guarantee.
17. EACH PARTY HERETO HEREBY WAIVES THE RIGHT OF TRIAL BY JURY IN
ANY LITIGATION ARISING HEREUNDER AND ALSO WAIVES THE RIGHT IN ANY SUCH
LITIGATION, TO IMPOSE COUNTERCLAIMS OR SET-OFFS OF ANY
B-4
KIND OR DESCRIPTION UNLESS SUCH COUNTERCLAIM OR SET-OFF IS COMPULSORY OR
MANDATORY IN NATURE UNDER THE NEW YORK CIVIL PRACTICE LAW AND RULES. EACH
PARTY HERETO FURTHER SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW
YORK STATE COURT SITTING IN NEW YORK CITY FOR THE PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS GUARANTEE OR THE TRANSACTIONS
CONTEMPLATED HEREBY. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND
ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE
OF PROCESS IN ANY SUCH PROCEEDING PERSONALLY DELIVERED OR TRANSMITTED BY
REGISTERED MAIL TO THE ADDRESS SET FORTH ABOVE; PROVIDED THAT UPON ANY SUCH
SERVICE BY REGISTERED MAIL THE SENDING PARTY SHALL, SIMULTANEOUSLY THEREWITH,
SEND NOTICE OF SUCH SERVICE TO THE OTHER PARTY VIA FACSIMILE TRANSMISSION.
NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
18. Any notice hereunder shall be in writing and shall be
personally delivered, transmitted by postage prepaid registered mail, by
facsimile, telegram or cable to the parties at the address for notices set
forth in the Agreement. All notices and other communications shall be deemed
to have been duly given on the date of receipt if delivered personally; the
date five (5) calendar days after posting if transmitted by mail; or in the
case of a facsimile, telegram or cable, at the time sent. Either party may
change its address for purposes hereof by notice to the other.
19. Capitalized terms used but not otherwise defined herein shall
have the respective meanings assigned to them in the Agreement.
LONG BEACH ACCEPTANCE CORP., Guarantor
By: _________________________________
Name:
Title:
AGREED AND ACCEPTED:
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., Lender
By: ____________________________
Name:
Title:
B-5
EXHIBIT C
FORM OF AMC GUARANTEE
June 13, 2001
Greenwich Capital Financial Products, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Re: Guarantee by Ameriquest Mortgage Company of Long Beach
Acceptance Corp. Guarantee Dated as of June 13, 2001
-------------------------------------------------------
Ladies and Gentlemen:
1. For value received and in accordance with the terms of (i) the
Credit and Security Agreement, dated as of June 13, 2001 (the "AGREEMENT"),
among Greenwich Capital Financial Products, Inc., as Lender ("LENDER"), Long
Beach Acceptance Receivables Corp., as Borrower ("BORROWER") and Long Beach
Acceptance Corp., as Guarantor ("LBAC"), and (ii) the Guarantee dated June
13, 2001 made by LBAC in favor of Lender (the "LBAC GUARANTEE"), Ameriquest
Mortgage Company, a Delaware corporation ("AMC"), hereby unconditionally and
irrevocably guarantees to Lender, or any successor in interest of Lender, the
due, punctual and complete payment and performance by LBAC when and as due,
whether at the stated maturity, by acceleration, upon one or more dates set
for repayment or prepayment or otherwise, of the LBAC Obligations. For
purposes of this guarantee, "LBAC OBLIGATIONS" shall mean any and all
Obligations of LBAC to Lender under the Agreement and the LBAC Guarantee.
Lender may make demands under this guarantee for such amounts and performance
from time to time. AMC hereby represents that its obligations hereunder do
and shall rank PARI PASSU with all unsecured and unsubordinated indebtedness
of AMC, as applicable. Terms used and not defined herein shall have the
meanings assigned in the Agreement.
2. Payments and performance required under this guarantee shall be
payable and performed whenever any amount or performance guaranteed hereunder
has not been promptly made to Lender in accordance with the Agreement and the
LBAC Guarantee. When pursuing its rights and remedies hereunder against AMC,
Lender may, but shall be under no obligation to, pursue the rights, remedies,
powers and privileges as it may have against Borrower, LBAC or any other
Person or against any collateral security or guarantee for the LBAC
Obligations or any right of offset with respect thereto. Any failure by
Lender to pursue the other rights, remedies, powers or privileges or to
collect any payments from Borrower, LBAC or any other Person or to realize
upon any collateral security or guarantee or to exercise any right of offset,
or any release of Borrower, LBAC or any other Person or of any of the
collateral security, guarantee or right of offset, shall not relieve AMC of
any liability hereunder, and shall not impair or affect the rights, remedies,
powers or privileges, whether express, implied or available as a matter of
law, of Lender against AMC.
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3. AMC shall remain obligated hereunder notwithstanding that,
without any reservation of rights against AMC, and without notice to or
further assent by AMC, any demand for payment of any of the LBAC Obligations
made by Lender may be rescinded by Lender, and any of the LBAC Obligations
continued, and the LBAC Obligations, or the liability of any other Person
upon or for any part thereof, or any collateral security or guarantee
therefor or right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by Lender, and the LBAC
Guarantee or the Agreement and any other documents executed and delivered in
connection therewith may be amended, modified, supplemented or terminated in
accordance with the terms thereof, in whole or in part, as Lender may deem
advisable from time to time, and any collateral security, guarantee or right
of offset at any time held by Lender for the payment of the LBAC Obligations
may be sold, exchanged, waived, surrendered or released. Lender shall have no
obligation to protect, secure, perfect or insure any Lien at any time held by
it as security for the LBAC Obligations or for the guarantee set forth herein
or any property subject thereto. When making any demand hereunder against
AMC, Lender may, but shall be under no obligation to, make a similar demand
on Borrower, LBAC or any other guarantor and any release of Borrower, LBAC or
any other guarantor shall not relieve any of its obligations or liabilities
hereunder, and shall not impair or affect the rights, remedies, powers and
privileges, express or implied, or as a matter of law, of Lender against AMC.
4. AMC waives any and all notice of the creation, renewal,
extension or accrual of any of the LBAC Obligations and notice of or proof of
reliance by Lender upon the guarantee of AMC set forth herein or acceptance
of the guarantee of AMC set forth herein; the LBAC Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon the
guarantee of AMC set forth herein; and all dealings between LBAC or AMC, on
the one hand, and Lender, on the other, shall likewise be conclusively
presumed to have been had or consummated in reliance upon the guarantee of
AMC set forth herein. AMC waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment and all other notices of any kind
to or upon LBAC or AMC with respect to the LBAC Obligations. The guarantee of
AMC set forth herein shall be construed as a guarantee of payment, and not of
collection.
5. The guarantee set forth herein shall remain in full force and
effect and be binding in accordance with and to the extent of its terms upon
AMC and its successors and permitted assigns, and shall inure to the benefit
of Lender, and its respective successors, endorsees, transferees and assigns,
until all the LBAC Obligations and the obligations of AMC under this
guarantee shall have been satisfied by payment in full and the commitment of
Lender under the Agreement shall have been terminated. Notwithstanding
Section 2.10 of the Agreement, the obligations of AMC under this guarantee
shall be fully recourse to AMC and all property and assets of AMC whether now
owned or hereinafter acquired, and AMC shall remain liable for all of the
LBAC Obligations pursuant to the terms of this guarantee.
6. The guarantee set forth herein shall continue to be effective,
or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any of the LBAC Obligations is rescinded or must otherwise be
restored or returned by Lender for any reason whatsoever, including, without
limitation, upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of LBAC or AMC or upon or as a result of the appointment of a
receiver,
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intervenor or conservator of, or trustee or similar officer for, LBAC or AMC
or any substantial party of its property, or otherwise, all as though the
payments had not been made.
7. All payments due hereunder shall be paid in immediately
available funds after demand no later than 1:00 P.M. on the second Business
Day following the date of such demand. Demand shall be made in writing to
AMC's office located at 0000 Xxxx xxx Xxxxxxx Xxxx, Xxxxxx, XX 00000,
Attention: General Counsel or such other address in the United States which
may be designated by AMC by written notice delivered to Lender.
8. To the full extent permitted by law, AMC hereby waives all
rights of subrogation, contribution, reimbursement, indemnity or otherwise,
whether arising by contract or operation of law (including, without
limitation, any such right arising under the Bankruptcy Code) or otherwise by
reason of any payment or performance by AMC pursuant to the provisions of
this guarantee. Without limitation to the foregoing, notwithstanding any
payment or payments made by AMC hereunder or any setoff or application of
funds of AMC by Lender, AMC shall not be entitled to be subrogated to any of
the rights of Lender against or any collateral security or guarantee or right
of offset held by Lender for the payment of the LBAC Obligations, nor shall
AMC seek or be entitled to seek any contribution or reimbursement from LBAC
in respect of payments made by AMC hereunder, until all amounts owing to
Lender by LBAC on account of the LBAC Obligations are paid in full and the
commitment to Lender under the Agreement shall have been terminated. If any
amount shall be paid to AMC on account of the subrogation rights at any time
when all of the LBAC Obligations shall not have been paid in full and the
commitment to Lender under the Agreement shall not have been terminated, the
amount shall be held by AMC in trust for Lender, segregated from other funds
of AMC, and shall forthwith upon receipt by AMC, be turned over to Lender in
the exact form received by AMC (duly endorsed by AMC to Lender, if required),
to be applied against the LBAC Obligations, whether matured or unmatured, at
the time and in the order as Lender may determine. Notwithstanding the
foregoing, AMC may request reimbursement from Borrower or Guarantor to the
extent permitted pursuant to Section 9.16(b) of the Agreement.
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, AMC EXPRESSLY
WAIVES ANY AND ALL BENEFITS UNDER CALIFORNIA CIVIL CODE SECTIONS 2809, 2810,
2819, 2845, 2849, 2850, AND 2855, CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS
580a, 580b, 580d, AND 726, AND ANY OTHER SURETYSHIP OR SIMILAR LAW OR DEFENSE
NOW OR HEREAFTER IN EFFECT.
9. AMC hereby represents and warrants to Lender as of the date of
this guarantee and on an ongoing basis on each date that the LBAC Obligations
are outstanding as follows:
(a) ORGANIZATION. It is a corporation duly incorporated and
validly existing in good standing under the laws of the State of Delaware and
is duly qualified to do business in each jurisdiction in which the failure to
be so qualified could reasonably be expected to have a material adverse
effect on its financial condition, operations, business or prospects.
(b) POWER AND AUTHORITY. It has all requisite corporate power
and has all material governmental licenses, authorizations, consents and
approvals necessary to own its assets and carry on its business as now being
conducted and to execute and deliver and perform
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its obligations under this guarantee, except as could not reasonably be
expected to have a material adverse effect on its financial condition,
operations, business or prospects.
(c) AUTHORIZATION OF GUARANTEE. All appropriate and necessary
action has been taken by it to authorize the execution and delivery of this
guarantee and the performance and observance of the terms hereof.
(d) GUARANTEE BINDING. This guarantee has been duly executed and
delivered and constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms, except as enforceability may be
limited by laws governing insolvency or creditors' rights generally and
general equity principles. The execution, delivery and performance of this
guarantee does not and will not violate any provision of law, regulation,
order or other governmental directive, or conflict with, constitute a default
under, or result in the breach of any provision of any material agreement,
ordinance, decree, bond, indenture, order or judgment to which it is a party
or by which it is bound.
(e) COMPLIANCE WITH LAW. It is conducting its business and
operations in compliance with all applicable laws, regulations, ordinances
and directives of governmental authorities, except to the extent that any
noncompliance could not reasonably be expected to have a material adverse
effect on its financial condition, operation, business or prospects. It has
filed all tax returns required to be filed and has paid all taxes due in
respect of the ownership of its assets or the conduct of its operations
except (a) to the extent that the payment of such taxes is being contested in
good faith by it in appropriate proceedings and adequate reserves have been
provided for the payment thereof, or (b) with respect to such returns and/or
taxes which are not material in either nature or amount such that any failure
to file such returns or pay such taxes would not materially and adversely
affect its financial condition, operations, business or prospects.
(f) CONSENTS. All licenses, consents and approvals required from
and all registrations and filings required to be made with any governmental
or other public body or authority for the making and performance by it of
this guarantee have been obtained and are in effect, except as could not
reasonably be expected to have a material adverse effect on its financial
condition, operations, business or prospects or on its ability to perform the
obligations hereunder.
(g) LITIGATION. There is no action, suit or proceeding at law or
in equity by or before any court, governmental agency or authority or
arbitral tribunal now pending or, to the best of its knowledge, threatened
against or affecting it which, if determined adversely, may reasonably be
expected to have a material adverse effect on its business, operations or
financial condition.
(h) FINANCIAL STATEMENTS. The unaudited balance sheets of AMC as
at April 30, 2001, and the related statements of income for the fiscal
periods ended on such date, heretofore furnished to Lender, are complete and
correct in all material respects and fairly present the financial condition
of AMC as at said date (subject to normal year-end audit adjustments and tax
planning adjustments), all in accordance with U.S. generally accepted
accounting principles applied on a consistent basis. On said date, AMC had no
material
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contingent liabilities, liabilities for taxes, unusual or anticipated losses
from any unfavorable commitments, except as referred to or reflected in said
balance sheets as at said date. Since April 30, 2001, there has been no
material adverse change in the operations, condition (financial or
otherwise), business or prospects of AMC from that set forth in said
financial statements as at said date.
(i) OTHER OBLIGATIONS. It is not in default in the performance,
observance or fulfillment of any obligation, covenant or condition in any of
the Basic Documents or in any agreement or instrument to which it is a party
or by which it is bound the result of which could reasonably be expected to
have a material adverse effect on its business, operations or financial
condition.
(j) INVESTMENT COMPANY ACT. It is not an "investment company" or
a company "controlled" by an investment company within the meaning of the
Investment Company Act of 1940, as amended.
(k) FULL DISCLOSURE. No representation or warranty made by or on
behalf of AMC contained in this guarantee and no written information or
information in any certificate, financial statement or report furnished or to
be furnished by or on behalf of AMC hereunder or in connection with the
transactions contemplated hereby contains or will contain an untrue statement
of a material fact, or, omits or will omit to state any material fact
necessary to make the statements herein or therein contained, in light of the
circumstances in which made, not misleading.
(l) ERISA. Set forth on Schedule 9(l) hereto is a list of all
Plans, if any, maintained by AMC or any of its subsidiaries. Except as may be
set forth on such schedule, neither AMC nor any of its subsidiaries maintains
any Plans, and AMC agrees to notify Lender in advance of forming any Plans.
Neither AMC nor any Commonly Controlled Entity has any obligations or
liabilities with respect to any employee pension benefit plans or
Multiemployer Plans, nor have any such Persons had any obligations or
liabilities with respect to any such Plans during the five-year period prior
to the date this representation is made or deemed made. AMC will give notice
if at any time it or any Commonly Controlled Entity has any obligations or
liabilities with respect to any employee pension benefit plan or
Multiemployer Plan. All Plans maintained by AMC or any Commonly Controlled
Entity are in substantial compliance with all applicable laws (including
ERISA). AMC is not an employer under any Multiemployer Plan.
(m) BASIC DOCUMENTS. Each of the representations and warranties
made by it in (i) the AMC Guarantee, dated as of June 1, 2001, made by AMC in
favor of Financial Security Assurance Inc. and The Chase Manhattan Bank and
(ii) the Guarantee, dated as of June 1, 2001, made by AMC in favor of
Greenwich Capital Markets, Inc., relating to the Note Purchase Agreement,
dated June 13, 2001, among Borrower, Guarantor and Lender, is true and
correct; PROVIDED that this representation shall not be deemed to have been
breached if AMC shall have breached a representation or warranty in either
such document but shall have cured such breach within the applicable cure
period, if any, set forth therein.
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10. AMC hereby covenants as follows:
(a) NOTICE. It shall promptly give notice to Lender of the
occurrence of (i) any Event of Default relating to it under the Agreement or
event which with the giving of notice or the passing of time or both would
constitute such an Event of Default relating to it, specifying the event and
the action which it proposes to take with respect thereto, (ii) any event or
occurrence known to it which will or could reasonably be expected to
adversely affect the collectibility of the Receivables or the ability of LBAC
to service such Receivables or the ability of AMC to perform its obligations
under any related documents or (iii) any other event or occurrence which
individually or in the aggregate could reasonably be expected to materially
and adversely affect AMC's financial condition, operations, business or
prospects.
(b) TAXES. AMC shall pay and discharge all taxes and
governmental charges upon it or against any of its properties or assets or
its income prior to the date after which penalties attach for failure to pay,
except (i) to the extent that AMC shall be contesting in good faith in
appropriate proceedings its obligation to pay such taxes or charges, adequate
reserves having been set aside for the payment thereof, or (ii) with respect
to such taxes and charges which are not material in either nature or amount
such that any failure to pay or discharge them, and any resulting penalties,
either in any one instance or in the aggregate, would not materially and
adversely affect the financial condition, operations, business or prospects
of AMC.
(c) BOOKS AND RECORDS; OTHER INFORMATION. (i) AMC shall
maintain accurate and complete books and records with respect to its
business. All accounting books and records shall be maintained in accordance
with generally accepted accounting principles consistently applied.
(ii) Only to the extent reasonably necessary to protect
Lender's interest hereunder, AMC shall, and shall cause each of its
respective subsidiaries to, permit any representative of Lender to visit and
inspect any of the properties of AMC to examine the books and records of AMC
and to make copies and take extracts therefrom, and to discuss the business,
operations, properties, condition (financial or otherwise) or prospects of
AMC and each such subsidiary with the officers and independent public
accountants thereof and as often as Lender may reasonably request, and so
long as no default hereunder shall have occurred and be continuing, all at
such reasonable times during normal business hours upon reasonable notice.
AMC shall provide to Lender all information regarding its respective
operations and practices as Lender shall reasonably request in writing. In
connection with the matters described in this Section 10(c), Lender shall not
at any time use or disclose to any Person, except to any professional adviser
who needs to know such information in connection with the transactions
contemplated hereby, or except in connection with any litigation or arbitral
proceedings commenced by or against Lender or any of its affiliates, any
information that may be within or may come to its or their knowledge if such
information is of a type that would generally be expected to be held as
confidential; PROVIDED that the foregoing shall not apply to the extent that
such information was (i) previously known by Lender from sources other than
AMC or its directors, officers or agents, (ii) in the public domain through
no fault of Lender, (iii) lawfully acquired by Lender on a non-confidential
basis from other sources who are not known by Lender to be bound by a
confidentiality agreement with AMC or (iv) required to be disclosed by
judicial or administrative process or by any other Requirement of Law.
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(d) PAYMENT OF FEES AND EXPENSES. AMC shall pay to Lender, on
demand, any and all fees, costs or expenses which Lender pays to a bank or
other similar institution arising out of or in connection with the return of
payments by AMC deposited for collection by Lender.
(e) CONTINUITY OF BUSINESS AND COMPLIANCE WITH AGREEMENT. AMC
shall continue in business in a prudent, reasonable and lawful manner with
all licenses, permits, and qualifications necessary to perform its
obligations under this guarantee, except where failure to do so could not
reasonably be expected to materially and adversely affect such performance.
(f) FINANCIAL STATEMENTS AND ACCESS TO RECORDS. AMC shall
provide Lender with quarterly unaudited financial statements within sixty
(60) days of the end of AMC's first three fiscal quarters, and will provide
Lender with audited annual financial statements within one hundred twenty
(120) days of AMC's fiscal year-end audited by a nationally recognized
independent certified public accounting firm. Upon request of Lender, AMC
shall provide Lender with unaudited monthly financial statements. AMC shall
deliver to Lender with each financial statement a certificate by AMC's chief
financial officer, certifying that such financial statements are complete and
correct in all material respects and that, except as noted in such
certificate, such chief financial officer has no knowledge of any default by
it hereunder or any event which with the giving of notice or the passing of
time or both would constitute such a default.
(g) FINANCIAL CONDITION. AMC shall maintain a net worth of at
least 100% of the net worth AMC is required to maintain pursuant to the
credit documents AMC has entered into with its primary warehouse lender
(which on the date hereof is PaineWebber Incorporated) (net worth, in each
case, being calculated in accordance with such credit documents); PROVIDED
that, if such credit documents are terminated and AMC does not have a primary
warehouse lender, the reference to such credit documents will be deemed to be
to such credit documents as in effect immediately prior to such termination.
AMC shall maintain a debt-to-equity ratio of no more than 100% of the
debt-to-equity ratio AMC is required to maintain pursuant to the credit
documents AMC has entered into with its primary warehouse lender (which on
the date hereof is PaineWebber Incorporated) (debt-to-equity, in each case,
being calculated in accordance with such credit documents); PROVIDED that, if
such credit documents are terminated and AMC does not have a primary
warehouse lender, the reference to credit documents AMC has entered into with
its primary warehouse lender will be deemed to be to such credit documents as
in effect immediately prior to such termination.
(h) LITIGATION MATTERS. AMC shall notify Lender in writing,
promptly upon its learning thereof, of any litigation, arbitration or
administrative proceeding which may reasonably be expected to materially and
adversely affect the operations, financial condition or business of AMC or
AMC's ability to perform under this guarantee or other rights under this
guarantee.
(i) FULFILLMENT OF OBLIGATIONS. AMC shall pay and perform, as
and when due, all of its obligations of whatever nature, except where the
amount or validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with generally accepted
accounting principles with respect thereto have been provided on the books of
AMC, and except to the extent that the failure to do so could not
individually or in the aggregate
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reasonably be expected to materially and adversely affect the financial
condition, operations, business or prospects of AMC.
(j) COMPLIANCE WITH LAWS, ETC. AMC shall, and shall cause
each of its respective subsidiaries to, comply (i) in all material respects
with all Requirements of Law and any change therein or in the application,
administration or interpretation thereof (including, without limitation any
request, directive, guideline or policy, whether or not having the force of
law) by any Governmental Authority charged with the administration or
interpretation thereof; and (ii) with all indentures, mortgages, deeds of
trust, agreements, or other instruments or contractual obligations to which
it is a party, including without limitation, each Basic Document to which it
is a party, or by which it or any of its properties may be bound or affected,
or which may affect the Receivables, if the failure to comply therewith
could, individually or in the aggregate, reasonably be expected to materially
and adversely affect the financial condition, operations, business or
prospects of AMC.
(k) NO ASSIGNMENT. Except in connection with an assignment to
any successor that complies with Section 15 hereof, AMC shall not assign this
guarantee, except with the prior written consent of Lender, which consent
shall not be unreasonably withheld.
(l) VALUATION MODEL. AMC expressly accepts and acknowledges,
and agrees to comply with and be bound by, the provisions of Section 3.13 of
the Agreement.
11. The obligations of AMC under this guarantee are irrevocable,
primary, absolute and unconditional and shall be paid or performed strictly
in accordance with this guarantee under all circumstances irrespective of:
(a) any lack of validity or enforceability of the Agreement,
the LBAC Guarantee or of any of the Collateral, or any amendment, other
modification or waiver in respect thereof;
(b) any exchange or release of any other obligations
hereunder;
(c) the existence of any claim, set-off, defense, reduction,
abatement or other right that Lender, Borrower or LBAC may have at any time
against any of Borrower, LBAC, AMC or any other person;
(d) any document presented in connection with the Agreement,
the LBAC Guarantee or this guarantee proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue
or inaccurate in any respect;
(e) any payment by AMC under this guarantee against
presentation of a certificate or other document that does not strictly comply
with terms of this guarantee; and
(f) any other circumstances, other than payment in full, that
might otherwise constitute a defense available to, or discharge of, Lender,
Borrower or LBAC in respect of the Agreement or the LBAC Guarantee.
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12. Neither the failure of Borrower, Lender or LBAC to perform
any covenant or obligation in favor of AMC nor the failure or omission to
make a demand permitted hereunder shall in any way affect or limit AMC's
obligations under this guarantee.
13. AMC agrees to:
(i) pay or reimburse Lender on demand for all its reasonable
out-of-pocket costs and expenses incurred in connection with
the development, preparation and execution of, and any
amendment, modification or supplement to, or any waiver under,
this guarantee, the LBAC Guarantee and any other document
prepared in connection therewith, and the consummation and
administration of the transactions contemplated thereby,
including without limitation the reasonable fees and
disbursements of counsel to Lender;
(ii) pay on demand all reasonable costs and expenses of
Lender, including without limitation the reasonable fees and
disbursements of counsel to Lender, in connection with the
occurrence or continuance of a default under this guarantee
and the LBAC Guarantee and the enforcement, collection,
protection or preservation (whether through negotiations,
legal proceedings or otherwise) of this guarantee, any LBAC
Obligation or any right, remedy, power or privilege of Lender
hereunder or under the LBAC Guarantee;
(iii) pay and hold Lender harmless from and against any and
all present and future stamp, excise, recording or other
similar taxes or fees payable in connection with the
execution, delivery, recording and filing of this guarantee or
the LBAC Guarantee and hold Lender harmless from and against
any and all liabilities with respect to or resulting from any
delay or omission to pay such taxes or fees; and
(iv) indemnify Lender and its affiliates and each of their
respective directors, officers, employees and agents and hold
each of them harmless from and against, any and all
liabilities, losses, damages, penalties, actions, judgments,
suits, claims, costs, expenses and disbursements, including
without limitation the reasonable fees and disbursements of
counsel to Lender and such other parties, incurred by any of
them in connection with, arising out of or in any way relating
to any investigation, claim, litigation or other proceeding,
pending or threatened (whether or not any of them is
designated a party thereto), in connection with, arising out
of or in any way related to this guarantee or the LBAC
Guarantee or any of the transactions contemplated herein or
therein; PROVIDED that Lender shall not be entitled to any
indemnification for any of the foregoing resulting from its
gross negligence or willful misconduct.
If and to the extent that the indemnity obligations of AMC under this Section
13 may be unenforceable for any reason, AMC hereby agrees to make the maximum
contribution to the payment and satisfaction of each of such indemnity
obligations which is permissible under applicable law.
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14. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, during the
continuance of any default under this guarantee or the LBAC Guarantee Lender
is hereby authorized at any time and from time to time, without notice to AMC
or to any other person or entity, any such notice being hereby expressly
waived, to set-off against any obligation owing by Lender or any affiliate of
Lender to LBAC or AMC, or against any funds or other property of LBAC or AMC
held by or otherwise in the possession of Lender or any affiliate of Lender,
the LBAC Obligations and the obligations and liabilities of AMC to Lender
hereunder, irrespective of whether or not Lender shall have made any demand
hereunder or under the LBAC Guarantee.
15. Any Person (i) into which AMC may be merged or consolidated,
(ii) resulting from any merger or consolidation to which AMC is a party or
(iii) succeeding to all or substantially all of the business of AMC shall
execute an agreement of assumption to perform every obligation of AMC under
this guarantee, and whether or not such assumption agreement is executed,
shall be the successor to AMC hereunder (without relieving AMC of its
responsibilities hereunder, if it survives such merger or consolidation)
without the execution or filing of any document or any further act by any of
the parties to this guarantee.
16. Each party shall, from time to time after execution of this
guarantee and without further consideration, execute such documents or take
such action as may be reasonably necessary to carry out the purpose or
intention of this guarantee.
17. THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. Communications with
respect to this guarantee other than requests for payment pursuant to a
notice referred to in the preceding paragraph shall also be addressed to AMC
at 0000 Xxxx xxx Xxxxxxx Xxxx, Xxxxxx, XX 00000, Attention: General Counsel,
specifically referring to this guarantee.
18. EACH PARTY HERETO HEREBY WAIVES THE RIGHT OF TRIAL BY JURY IN
ANY LITIGATION ARISING HEREUNDER AND ALSO WAIVES THE RIGHT IN ANY SUCH
LITIGATION, TO IMPOSE COUNTERCLAIMS OR SET-OFFS OF ANY KIND OR DESCRIPTION
UNLESS SUCH COUNTERCLAIM OR SET-OFF IS COMPULSORY OR MANDATORY IN NATURE
UNDER THE NEW YORK CIVIL PRACTICE LAW AND RULES. EACH PARTY HERETO FURTHER
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING
IN NEW YORK CITY FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS GUARANTEE OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH
PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF
ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN ANY SUCH
PROCEEDING PERSONALLY DELIVERED OR TRANSMITTED BY REGISTERED MAIL TO THE
ADDRESS SET FORTH ABOVE; PROVIDED THAT UPON ANY SUCH SERVICE BY REGISTERED
MAIL THE SENDING
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PARTY SHALL, SIMULTANEOUSLY THEREWITH, SEND NOTICE OF SUCH SERVICE TO THE
OTHER PARTY VIA FACSIMILE TRANSMISSION. NOTHING IN THIS AGREEMENT WILL AFFECT
THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW.
19. Any notice hereunder shall be in writing and shall be
personally delivered, transmitted by postage prepaid registered airmail, by
facsimile, telegram or cable to the parties at the address for notices set
forth in the Agreement. All notices and other communications shall be deemed
to have been duly given on the date of receipt if delivered personally; the
date five (5) calendar days after posting if transmitted by mail; or in the
case of a facsimile, telegram or cable, at the time sent. Either party may
change its address for purposes hereof by notice to the other.
20. Capitalized terms used but not otherwise defined herein shall
have the respective meanings assigned to them in the Agreement.
AMERIQUEST MORTGAGE COMPANY
By: ________________________________________
Name:
Title:
AGREED AND ACCEPTED:
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., Lender
By: ________________________________________
Name: Xxxx X. Xxxxx
Title: Vice President
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SCHEDULE 9(l)
PLANS
Ameriquest Mortgage Company 401(k) Plan
PPO/HMO Health Plan
Dental Plan
Vision Service Plan
Short and Long Term Disability Plan
Company Paid Life & AD&D
Dependent Care Reimbursement Plan
Health Care Spending Account
EXHIBIT D
FORM OF NOTICE OF BORROWING
[Date]
Greenwich Capital Financial Products, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Ladies and Gentlemen:
In accordance with Section 2.2(a) of that certain Credit and
Security Agreement, dated as of June 13, 2001 (as amended, modified or
otherwise supplemented from time to time, the "AGREEMENT", the terms defined
therein being used herein as defined therein), by and among Greenwich Capital
Financial Products, Inc., as Lender, the undersigned, as Borrower, and Long
Beach Acceptance Corp., as Guarantor, the undersigned hereby requests a Loan
in an aggregate principal amount equal to $___________, to be disbursed in
the manner provided below. We are sending to you herewith or have heretofore
sent to you the Initial Data File specified in Section 2.2(a) of the
Agreement.
The undersigned hereby certifies that the following statements are
true on the date hereof:
A. the representations and warranties contained in Section 4 of
the Agreement are true and correct; and
B. no Default, Event of Default or Other RF Event of Default has
occurred and is continuing.
Capitalized terms used but not defined herein shall have the
respective meanings assigned to them in the Agreement.
DISBURSEMENT INSTRUCTIONS:
Very truly yours,
Long Beach Acceptance Receivables Corp.,
as Borrower
By: ___________________________________
Name:
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EXHIBIT E
FORM OF OPINION OF COUNSEL TO THE
BORROWER AND EACH GUARANTOR*
June 13, 2001
Greenwich Capital Financial Products, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Re: Credit and Security Agreement, dated as of June 13, 2001, by
and among Greenwich Capital Financial Products, Inc., as
Lender, Long Beach Acceptance Receivables Corp., as Borrower
and Long Beach Acceptance Corp., as Guarantor
------------------------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Long Beach Acceptance
Receivables Corp., a Delaware corporation (the "BORROWER"), Long Beach
Acceptance Corp., a Delaware corporation ("LBAC") and Ameriquest Mortgage
Company, a Delaware corporation ("AMC") in connection with the preparation,
execution and delivery of:
(a) the Credit and Security Agreement, dated as of June 13, 2001 (the
"CREDIT AND SECURITY AGREEMENT"), by and among Greenwich Capital
Financial Products, Inc. (the "LENDER"), Borrower and LBAC, as
Guarantor;
(b) the Promissory Note (as defined in the Credit and Security
Agreement);
(c) the Guarantee, dated June 13, 2001 (the "LBAC GUARANTEE"), made by
LBAC in favor of Lender; and
(d) the Guarantee, dated June 13, 2001 (the "AMC GUARANTEE"), made by
AMC in favor of Lender.
(the documents referred to in clauses (a) through (d), collectively, the
"DELIVERED DOCUMENTS").
--------------------------
* May be incorporated into such other opinions delivered by counsel to Borrower
and each Guarantor in connection with the Securitization Transaction.
This opinion is being furnished to Lender at the request of Borrower,
LBAC and AMC.
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In rendering the opinions set forth herein, we have examined and are
familiar with originals or copies, certified or otherwise identified to our
satisfaction, of (i) the Delivered Documents, (ii) the articles of
incorporation and by-laws of each of Borrower, LBAC and AMC, each as in
effect on the date hereof, (iii) resolutions of the boards of directors of
each of Borrower, LBAC and AMC relating to each of the Delivered Documents
adopted on or prior to the date hereof, and (iv) such certificates of public
officials and such other certificates, documents, records, and statements of
officers and other representatives of Borrower, LBAC and AMC and public
officials as we have deemed appropriate or necessary as the basis for the
opinions set forth below. As to certain facts material to the opinions
expressed herein, we have relied upon, and assumed the accuracy of, (i) the
representations and warranties contained in the Delivered Documents, and (ii)
the certificates and other documents, records and statements referred to in
the immediately preceding sentence. We have assumed the genuineness of all
signatures (other than those of Borrower, LBAC and AMC), the legal capacity
of all natural persons, the authenticity of all documents submitted to us as
originals, the conformity to original documents of all documents submitted to
us as certified or photostatic copies and the authenticity of the originals
of such copies. We have also assumed the due execution and delivery, pursuant
to due authorization, by Lender of the Credit and Security Agreement.
We are admitted to the bar in the State of New York and we express
no opinion as to the laws of any jurisdiction other than the laws of the
State of New York, the State of Delaware and the Federal securities laws of
the United States.
Based upon the foregoing, and subject to the qualifications
and exceptions stated herein, we are of the opinion that:
1. Each of Borrower, LBAC and AMC (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, (b) has the corporate power and authority to own and operate
its property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where
its ownership, lease or operation of property or the conduct of its business
requires such qualification, except, with respect to the preceding clause
(c), to the extent that the failure to be so qualified and in good standing
would not, in the aggregate, reasonably be expected to have a material
adverse effect on the business, operations, property or condition (financial
or otherwise) or prospects of Borrower, LBAC or AMC (a "MATERIAL ADVERSE
EFFECT").
2. Borrower has the corporate power and authority to execute,
deliver and perform each of the Credit and Security Agreement and the
Promissory Note, to borrow under the Credit and Security Agreement and the
Promissory Note, and to grant liens pursuant to the Credit and Security
Agreement, and has taken all necessary corporate action to authorize such
borrowing, the granting of such liens on the terms and subject to the
conditions of the Credit and Security Agreement, and the execution, delivery
and performance of each of the Credit and Security Agreement and the
Promissory Note. LBAC has the corporate power and authority to execute,
deliver and perform each of the Credit and Security Agreement and the LBAC
Guarantee, and has taken all necessary corporate action to authorize the
execution, delivery and performance of the Credit and Security Agreement and
the LBAC Guarantee. AMC has the corporate power and
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authority to execute, deliver and perform the AMC Guarantee, and has taken
all necessary corporate action to authorize the execution, delivery and
performance of the AMC Guarantee.
3. No consent or authorization of, filing with or other act by or
in respect of any governmental authority of or within the State of New York,
the State of California or the State of Delaware is required in connection
with the borrowing under the Credit and Security Agreement and the Promissory
Note or with the execution, delivery, performance, validity or enforceability
of the Delivered Documents, except for consents, authorizations and filings
which have been obtained or made, as the case may be, and are in full force
and effect.
4. Each of the Credit and Security Agreement and the Promissory
Note has been duly executed and delivered on behalf of Borrower and
constitutes a legal, valid and binding obligation of Borrower, enforceable
against Borrower in accordance with its terms, subject to the effect of (i)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
transfer or other similar laws relating to or affecting the rights of
creditors and (ii) the application of general principles of equity
(regardless of whether enforceability is considered in proceedings at law or
in equity). Each of the Credit and Security Agreement and the LBAC Guarantee
has been duly executed and delivered on behalf of LBAC and constitutes a
legal, valid and binding obligation of LBAC, enforceable against each LBAC in
accordance with its terms, subject to the effect of (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or transfer or
other similar laws relating to or affecting the rights of creditors and (ii)
the application of general principles of equity (regardless of whether
enforceability is considered in proceedings at law or in equity). The AMC
Guarantee has been duly executed and delivered on behalf of AMC and
constitutes a legal, valid and binding obligation of AMC, enforceable against
AMC in accordance with its terms, subject to the effect of (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or transfer or
other similar laws relating to or affecting the rights of creditors and (ii)
the application of general principles of equity (regardless of whether
enforceability is considered in proceedings at law or in equity).
5. The execution, delivery and performance by each of Borrower,
LBAC and AMC of the Delivered Documents to which it is a party, the borrowing
by Borrower under the Credit and Security Agreement and the use of the
proceeds thereof, and the granting of liens by Borrower pursuant to the
Credit and Security Agreement, will not violate any Requirement of Law of the
State of New York, the State of California or in respect of the General
Corporation Law of the State of Delaware or Regulation G of the Board of
Governors of the Federal Reserve System, or, to the best of our knowledge,
any of the material terms or provisions of, or constitute a default under,
any indenture, mortgage, loan agreement, deed of trust or any other material
agreement or instrument to which Borrower, LBAC or AMC is a party or by which
Borrower, LBAC or AMC is bound (collectively, the "SPECIFIED AGREEMENTS"),
and will not result in, or require, the creation or imposition of any lien on
any of either of their respective properties or revenues pursuant to any such
Requirement of Law or Specified Agreement (other than the liens created by
the Credit and Security Agreement in favor of Lender). As used herein
"REQUIREMENT OF LAW" means the governing documents of Borrower, LBAC or AMC,
or any law, treaty, rule or regulation or determination of an arbitrator or a
court or other governmental authority, in each case applicable to or binding
upon, Borrower, LBAC or AMC or any of their respective properties or to which
Borrower, LBAC or AMC or any of their respective properties is subject.
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6. No litigation or proceeding of or before any arbitrator or
governmental authority is pending or, to the best of our knowledge,
threatened by or against Borrower, LBAC, AMC or any of their respective
subsidiaries or against any of their respective properties or revenues (a)
with respect to any of the Delivered Documents or any of the transactions
contemplated thereby, or (b) which would reasonably be expected to have a
Material Adverse Effect.
7. Borrower is not (a) an "investment company", or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended or (b) a "holding company" within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
8. The provisions of the Credit and Security Agreement are
effective to create, in favor of Lender, a legal, valid and enforceable
security interest in all right, title and interest of Borrower in the
"Collateral" described therein.
9. Upon (i) delivery to Lender of the Pledged Securities, together
with a bond power for each Pledged Security endorsed in blank by a duly
authorized officer of Borrower, and (ii) the filing of financing statements
in the form of Annex A in the offices in the jurisdictions as listed on
Schedule 1 hereto, the security interests created under the Credit and
Security Agreement will constitute fully perfected first priority security
interests in all right, title and interest of Borrower in the "Collateral"
described therein which can be perfected by filing a financing statement
under Article 9 of the Uniform Commercial Code as in effect in the State of
New York.
10. The issuance of the Promissory Note, the LBAC Guarantee and the
AMC Guarantee to Lender pursuant to the Credit and Security Agreement are not
transactions requiring the registration of the Promissory Note, the LBAC
Guarantee or the AMC Guarantee under the Securities Act of 1933, as amended.
This opinion is rendered only to Lender is solely for its
benefit in connection with the above transactions and may not be relied upon
by Lender for any other purpose, relied upon by any other person, firm or
corporation for any purpose without our prior written consent.
Very truly yours,
E-4
EXHIBIT F
LITIGATION MATTERS
1. XXXXXX X. XXXXXXX FORD, Case No. BC229917, filed May 12, 2000 in
California Superior Court, Los Angeles County.
2. XXXXXX V. LONG BEACH ACCEPTANCE CORP., Case No. BC246485, filed March
8, 2001 in California Superior Court, Los Angeles County.
3. XXXXXXX V. LONG BEACH ACCEPTANCE CORP., Case No. 834941-5, filed
January 11, 2001 in California Superior Court, Alameda County.
F-1
EXHIBIT G
OTHER RESIDUAL FINANCING AGREEMENTS
Credit and Security Agreement dated as of January 30, 1998 by and among
Greenwich Capital Financial Products, Inc., as lender, Long Beach Acceptance
Receivables Corp., as borrower, and Long Beach Acceptance Corp., as
guarantor, as amended by the Omnibus Amendment Agreement dated as of March
31, 1999, Omnibus Amendment Agreement No. 3, dated as of April 14, 2000,
Omnibus Amendment Agreement No. 4 dated as of December 13, 2000, Omnibus
Amendment No. 5 dated as of January 12, 2001 and Omnibus Amendment Agreement
No. 6 dated as of June 13, 2001, and as otherwise amended, supplemented or
modified from time to time pursuant to the terms thereof.
Credit and Security Agreement dated as of November 25, 1998 by and among
Greenwich Capital Financial Products, Inc., as lender, Long Beach Acceptance
Receivables Corp., as borrower, and Long Beach Acceptance Corp., as
guarantor, as amended by the Omnibus Amendment Agreement dated as of March
31, 1999, Omnibus Amendment Agreement No. 2 dated as of August 12, 1999,
Omnibus Amendment Agreement No. 3 dated as of April 14, 2000, Omnibus
Amendment Agreement No. 4 dated as of December 13, 2000, Omnibus Amendment
No. 5 dated as of January 12, 2001 and Omnibus Amendment Agreement No. 6
dated as of June 13, 2001, and as otherwise amended, supplemented or modified
from time to time pursuant to the terms thereof.
Credit and Security Agreement dated as of August 12, 1999 by and among
Greenwich Capital Financial Products, Inc., as lender, Long Beach Acceptance
Receivables Corp., as borrower, and Long Beach Acceptance Corp., as
guarantor, as amended by Omnibus Amendment Agreement No. 3 dated as of April
14, 2000, Omnibus Amendment Agreement No. 4 dated as of December 13, 2000,
Omnibus Amendment No. 5 dated as of January 12, 2001 and Omnibus Amendment
Agreement No. 6 dated as of June 13, 2001, and as otherwise amended,
supplemented or modified from time to time pursuant to the terms thereof.
Credit and Security Agreement dated as of December 9, 1999 by and among
Greenwich Capital Financial Products, Inc., as lender, Long Beach Acceptance
Receivables Corp., as borrower, and Long Beach Acceptance Corp., as
guarantor, as amended by Omnibus Amendment Agreement No. 3 dated as of April
14, 2000, Omnibus Amendment Agreement No. 4 dated as of December 13, 2000,
Omnibus Amendment No. 5 dated as of January 12, 2001 and Omnibus Amendment
Agreement No. 6 dated as of June 13, 2001, and as otherwise amended,
supplemented or modified from time to time pursuant to the terms thereof.
Credit and Security Agreement dated as of June 15, 2000 by and among
Greenwich Capital Financial Products, Inc., as lender, Long Beach Acceptance
Receivables Corp., as borrower, and Long Beach Acceptance Corp., as
guarantor, as amended by Omnibus Amendment Agreement No. 4 dated as of
December 13, 2000, Omnibus Amendment No. 5 dated as of January 12, 2001 and
Omnibus Amendment Agreement No. 6 dated as of June 13, 2001, and as otherwise
amended, supplemented or modified from time to time in accordance with the
terms thereof.
H-1
Credit and Security Agreement dated as of December 13, 2000 by and among
Greenwich Capital Financial Products, Inc., as lender, Long Beach Acceptance
Receivables Corp., as borrower, and Long Beach Acceptance Corp., as
guarantor, as amended by Omnibus Amendment Agreement No. 5 dated as of
January 12, 2001 and Omnibus Amendment Agreement No. 6 dated as of June 13,
2001, and as otherwise amended, supplemented or modified from time to time in
accordance with the terms thereof.
Warehouse Lending Agreement dated as of January 30, 1998 between Long Beach
Acceptance Corp., as borrower, and Greenwich Capital Financial Products,
Inc., as lender, as amended by Amendment No. 1 thereto, dated as of January
30, 1998, Amendment No. 2 thereto, dated as of December 16, 1998, the Renewal
and Amendment Agreement dated as of January 29, 1999, Amendment No. 3
thereto, dated as of September 1, 1999, Renewal and Amendment Agreement No.
2, dated as of January 26, 2000 and Renewal and Amendment Agreement No. 3,
dated as of February 2, 2001, and as otherwise amended, supplemented or
modified from time to time pursuant to the terms thereof.
Security Agreement dated as of January 30, 1998 made by Long Beach Acceptance
Corp., as pledgor, in favor of Greenwich Capital Financial Products, Inc., as
pledgee, as amended, supplemented or modified from time to time in accordance
with the terms thereof.
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EXHIBIT H
[Reserved]
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EXHIBIT I
[Reserved]
J-1
EXHIBIT J
CROSSED RESIDUAL FINANCING AGREEMENTS
Credit and Security Agreement dated as of November 25, 1998 by and among
Greenwich Capital Financial Products, Inc., as lender, Long Beach Acceptance
Receivables Corp., as borrower, and Long Beach Acceptance Corp., as
guarantor, as amended by the Omnibus Amendment Agreement dated as of March
31, 1999, Omnibus Amendment Agreement No. 2 dated as of August 12, 1999,
Omnibus Amendment Agreement No. 3 dated as of April 14, 2000, Omnibus
Amendment Agreement No. 4 dated as of December 13, 2000, Omnibus Amendment
Agreement No 5 dated as of January 12, 2001 and Omnibus Amendment Agreement
No. 6 dated as of June 13, 2001, and as otherwise amended, supplemented or
modified from time to time pursuant to the terms thereof.
Credit and Security Agreement dated as of December 13, 2000 by and among
Greenwich Capital Financial Products, Inc., as lender, Long Beach Acceptance
Receivables Corp., as borrower, and Long Beach Acceptance Corp., as
guarantor, as amended by the Omnibus Amendment Agreement No. 4 dated as of
December 13, 2000, Omnibus Amendment Agreement No. 5 dated as of January 12,
2001 and Omnibus Amendment Agreement dated as of June 13, 2001, and as
otherwise amended, supplemented or modified from time to time pursuant to the
terms thereof.
J-I
