Exhibit 99.4
Execution Copy
___________________________________
LOAN PURCHASE AGREEMENT
among
NEW CENTURY MORTGAGE CORPORATION
as Seller,
NEW CENTURY FINANCIAL CORPORATION,
and
NEW CENTURY FUNDING I
as Purchaser
____________________________________
Dated as of
May 10, 2002
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS ................................................................................ 1
SECTION 1.01 Definitions ......................................................................... 1
ARTICLE II SALE AND CONTRIBUTION OF MORTGAGE LOANS ................................................... 2
SECTION 2.01 Acquisition; Capital Contribution ................................................... 2
SECTION 2.02 Delivery of Mortgage Files .......................................................... 3
SECTION 2.03 Intention of the Parties; Grant of Security Interest ................................ 3
ARTICLE III REPRESENTATIONS AND WARRANTIES ........................................................... 3
SECTION 3.01 Representations and Warranties ...................................................... 3
SECTION 3.02 Purchase of Mortgage Loans by the New Century Parties ............................... 9
ARTICLE IV COVENANTS ................................................................................. 9
SECTION 4.01 Covenants of New Century Parties .................................................... 9
SECTION 4.02 Purchaser Covenants ................................................................. 16
SECTION 4.03 Pledge of Mortgage Loans ............................................................ 18
ARTICLE V CONDITIONS PRECEDENT ....................................................................... 18
SECTION 5.01 Conditions to the Purchaser Obligations ............................................. 18
ARTICLE VI TERMINATION ............................................................................... 19
SECTION 6.01 Termination ......................................................................... 19
SECTION 6.02 Effect of Termination ............................................................... 19
ARTICLE VII MISCELLANEOUS PROVISIONS ................................................................. 19
SECTION 7.01 Amendment ........................................................................... 19
SECTION 7.02 GOVERNING LAW; JURISDICTION ......................................................... 19
SECTION 7.03 Notices ............................................................................. 20
SECTION 7.04 Severability of Provisions .......................................................... 21
SECTION 7.05 Assignment .......................................................................... 21
SECTION 7.06 Further Assurances .................................................................. 21
SECTION 7.07 No Waiver; Cumulative Remedies ...................................................... 21
SECTION 7.08 Counterparts ........................................................................ 21
SECTION 7.09 Binding Effect: Third-Party Beneficiaries .......................................... 21
SECTION 7.10 Merger and Integration .............................................................. 22
SECTION 7.11 Headings ............................................................................ 22
SECTION 7.12 Schedules and Exhibits .............................................................. 22
SECTION 7.13 No Bankruptcy Petition Against the Purchaser ........................................ 22
SECTION 7.14 No Recourse ......................................................................... 22
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SCHEDULES & ANNEXES
Schedule 1 Representations and Warranties
ANNEX A Form of Contribution Agreement
Schedule 2 New Century Parties' Former Names and Current or Former Trade
Names, Fictitious Names, Assumed Names and or "Doing Business As"
Names
Schedule 3 Form of Financial Statement Footnote
Schedule 4 List of Guaranties in Effect
Schedule 5 List of Qualified Originators
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THIS LOAN PURCHASE AGREEMENT (as amended, supplemented or
otherwise modified from time to time, this "Loan Purchase Agreement"), dated as
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of May 10, 2002, is made among New Century Mortgage Corporation, a California
corporation, New Century Financial Corporation, a Delaware corporation ("New
---
Century Financial" and, together with the Seller, jointly and severally, the
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"New Century Parties"), and New Century Funding I, a Delaware business trust
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(the "Purchaser").
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WITNESSETH:
WHEREAS, pursuant to the terms of this Loan Purchase
Agreement, the Seller desires from time to time to sell the Eligible Mortgage
Loans to the Purchaser upon the terms and conditions hereinafter set forth;
WHEREAS, the Purchaser, UBS Warburg Real Estate Securities
Inc., and certain other entities are parties to the Committed Note Purchase and
Security Agreement, dated as of the date hereof (as amended, supplemented or
otherwise modified and in effect from time to time, the "Note Purchase
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Agreement"), pursuant to which certain parties thereto (the "Note Purchasers"),
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severally, have agreed, subject to the terms and conditions of the Note Purchase
Agreement, to purchase the Notes issued thereunder by the Purchaser (the
"Notes"), which will be secured by Eligible Mortgage Loans (as defined therein)
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owned by the Purchaser and will be held from time to time by the entities that
are parties to the Note Purchase Agreement as Noteholders (each a "Noteholder")
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and UBS Warburg Real Estate Securities Inc. is acting thereunder as agent for
the Note Purchasers and the Noteholders (in that capacity, the "Agent").
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WHEREAS, pursuant to the terms of the Note Purchase Agreement,
the Purchaser will from time to time pledge Eligible Mortgage Loans to secure
the Notes; and
WHEREAS, each of the New Century Parties and the Purchaser
agree that all representations, warranties, covenants and agreements made by it
herein will be for the benefit of each other and will be assigned by the
Purchaser to the Agent for the benefit of the Agent, the Note Purchasers and the
Noteholders;
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions. For all purposes of this Loan
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Purchase Agreement, except as otherwise expressly provided herein or unless the
context otherwise requires, capitalized terms not otherwise defined herein shall
have the meanings assigned to such terms in the definitions contained in Section
1.01 of the Note Purchase Agreement which is incorporated by reference herein.
ARTICLE II
SALE AND CONTRIBUTION OF MORTGAGE LOANS
SECTION 2.01 Acquisition; Capital Contribution. (a) On the
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Effective Date and on any Note Purchase Date thereafter until and including the
Termination Date, the Seller will sell and does hereby sell, and the Purchaser
will purchase and does hereby purchase, the Eligible Mortgage Loans owned by the
Seller, whether now existing or hereafter arising, without recourse (except as
provided in Sections 3.02 and 4.01(a) hereof). After each such sale, ownership
in the Eligible Mortgage Loans will be vested in the Purchaser. In connection
with such sale, to the extent that the fair market value of the Eligible
Mortgage Loans sold hereby by the Seller exceeds the cash consideration received
by the Seller in connection therewith, then the Seller will be deemed to have
made a capital contribution to the Purchaser in the amount of such excess.
(b) In connection with such sale and contribution, the
Seller agrees to record and file, at the Seller's expense, financing statements
(and thereafter will file continuation statements with respect to such financing
statements) with respect to the Mortgage Loans contributed and to be transferred
by the Seller to the Purchaser pursuant to this Loan Purchase Agreement, meeting
the requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect and to maintain the perfection of, the
transfer, conveyance and contribution of the Mortgage Loans from the Seller to
the Purchaser and the pledge of the Collateral from the Purchaser to the Agent,
pursuant to the Note Purchase Agreement, (which financing statements must be
submitted for recording on or prior to the initial Note Purchase Date);
provided, however, that the Mortgage Files (including each original executed
Mortgage) will not be physically delivered to the Agent but instead will be held
by the Custodian.
(c) If in any enforcement suit or legal proceeding it is
held that the Servicer may not enforce a Mortgage on the ground that it is not a
real party in interest or holder entitled to enforce the Mortgage, the Purchaser
shall, at the expense of the Seller, take such steps as the Servicer deems
necessary to enforce the Mortgage, including bringing suit in the Purchaser's
name.
(d) Pursuant to Section 2.01(a) hereof, the Seller from time
to time may convey additional Eligible Mortgage Loans to the Purchaser by
delivering a supplemented Mortgage Loan Schedule and, in the case of each
Wet-Ink Mortgage Loan, a detailed list, to the Purchaser on the related Note
Purchase Date containing for each Eligible Mortgage Loan transferred on such
Note Purchase Date the information set forth in the definition of the Mortgage
Loan Schedule (or, in the case of a Wet-Ink Mortgage Loan, the information
required by the Note Purchase Agreement). Upon delivery of any such supplement
to the Mortgage Loan Schedule, the Mortgage Loan Schedule shall be deemed
amended to incorporate therein the information contained in such supplement.
(e) Except for the obligations of the New Century Parties
hereunder with respect to any breach of a representation, warranty or covenant
made herein and except as
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otherwise specified in Section 3.02(d), the sale and conveyance of the Eligible
Mortgage Loans will be without recourse to the New Century Parties.
SECTION 2.02 Delivery of Mortgage Files. Pursuant to Section
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2 of the Custodial Agreement, in connection with each assignment and conveyance,
the Seller shall on behalf of and at the direction of the Purchaser deliver to,
and deposit with the Custodian at the times contemplated by the Custodial
Agreement, the Mortgage Files and a related Mortgage Loan Schedule, as
applicable with respect to each of the Mortgage Loans to be sold to the
Purchaser and pledged by the Purchaser to the Agent on such Note Purchase Date.
SECTION 2.03 Intention of the Parties; Grant of Security
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Interest. It is the intention of the parties hereto that each transfer of the
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Eligible Mortgage Loans to be made pursuant to the terms hereof shall constitute
an absolute assignment and a sale or capital contribution of such Eligible
Mortgage Loan by the Seller to the Purchaser and not a loan. In the event,
however, that a court of competent jurisdiction were to hold that any such
transfer constitutes a loan and not a sale or capital contribution, it is the
intention of the parties hereto that this Loan Purchase Agreement is deemed to
be a security agreement and that the Seller shall be deemed to have granted to
the Purchaser as of the date hereof a first priority perfected security interest
in all of the Seller's respective right, title and interest in, to and under
each Mortgage Loan and all related Mortgage Documents whether now or hereafter
acquired and wherever located, and all income and proceeds thereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 Representations and Warranties. (a) Each of the
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New Century Parties hereby makes the following representations and warranties to
the Purchaser, and understands that the benefit of these representations and
warranties will be assigned by the Purchaser to the Agent for the benefit of the
Agent, the Note Purchasers and the Noteholders. Such representations and
warranties are made as of the Effective Date and as of any Note Purchase Date
with respect to Mortgage Loans transferred to the Purchaser on such date and
shall survive each assignment, transfer and conveyance by the Seller of the
Mortgage Loans to the Purchaser and its successors and assigns:
(i) Existence. Each of the New Century Parties (a) is a
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corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization, (b) has all requisite corporate or
other power, and has all governmental licenses, authorizations, consents and
approvals necessary to own its assets and carry on its business as now being or
as proposed to be conducted, except where the lack of such licenses,
authorizations, consents and approvals would not be reasonably likely to have a
Material Adverse Effect; and (c) is qualified to do business and is in good
standing in all other jurisdictions in which the nature of the business
conducted by it makes such qualification necessary, except where failure so to
qualify would not be reasonably likely (either individually or in the aggregate)
to have a Material Adverse Effect.
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(ii) Financial Condition. Each of the New Century Parties
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has heretofore furnished to the Agent a copy of (a) its consolidated balance
sheet and the consolidated balance sheets of its consolidated Subsidiaries for
the fiscal year of such New Century Party ended December 31, 2001, and the
related consolidated statements of income and retained earnings and of cash
flows for such New Century Party and its consolidated Subsidiaries for such
fiscal year, setting forth in each case in comparative form the figures for the
previous year, with the opinion thereon of KPMG LLP. All such financial
statements are complete and fairly presented, in all material respects, the
consolidated financial condition of such New Century Party and its Subsidiaries
and the consolidated results of their operations as at such dates and for such
fiscal periods, all in accordance with GAAP applied on a consistent basis. Since
December 31, 2001, there has been no material adverse change in the consolidated
business, operations or financial condition of such New Century Party and its
consolidated Subsidiaries taken as a whole from that set forth in said financial
statements.
(iii) Litigation. There are no actions, suits, arbitrations,
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investigations (including, without limitation, to the best of such New Century
Party's knowledge, any of the foregoing which are pending or threatened) or
other legal or arbitrable proceedings affecting a New Century Party or any of
its Subsidiaries or affecting any of the Property of any of them before any
Governmental Authority (each a "Dispute") that questions or challenges the
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validity or enforceability of any of the Transaction Documents or any action to
be taken in connection with the transactions contemplated thereby, (in the event
any New Century Party is a publicly-held company) requires filing with the
Securities and Exchange Commission in accordance with the 1934 Act or any rules
thereunder or that (i) has arisen other than in the ordinary course of business
of such New Century Party, (ii) is reasonably likely to be determined adversely
to such New Century Party and (iii) if so determined, would be reasonably
likely, either individually or together with any other Dispute covered by
clauses (i) and (ii) of this sentence, to have a Material Adverse Effect on the
ability of such New Century Party to perform any of its obligations under any of
this Loan Purchase Agreement or any of the other Transaction Documents. None of
the New Century Parties is (i) in violation of any applicable law which
violation materially adversely affects or would reasonably be expected to
materially adversely affect the business, operations, Properties, assets or
condition (financial or otherwise) of the New Century Parties, or (ii) subject
to or in default with respect to any final judgment, writ, injunction, decree,
rule or regulation of any court or federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, which would have a material adverse effect on the business,
operations, Properties, assets or condition (financial or otherwise) of the New
Century Parties;
(iv) No Breach. Neither (a) the execution and delivery of
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the Transaction Documents nor (b) the consummation of the transactions therein
contemplated in compliance with the terms and provisions thereof will (i)
conflict with or result in a breach of the charter or by-laws of any New Century
Party, or any applicable law, rule or regulation, or any order, writ, injunction
or decree of any Governmental Authority, or any Servicing Agreement or other
material agreement or instrument to which any New Century Party or any of its
Subsidiaries is a party or by which any of them or any of their Property is
bound or to which any of them is subject, (ii) constitute a default under any
such material agreement or instrument or result in the creation or imposition of
any Lien upon any Property of a New Century Party or any of its Subsidiaries
pursuant to the terms of any such agreement or instrument or (iii) constitute an
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event of default or an event which, solely with the passage of time and
which is not amenable to cure, would constitute an event of default under the
Other Financing Documents.
(v) Action. Each of the New Century Parties has all
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necessary corporate or other power, authority and legal right to execute,
deliver and perform its obligations under each of the Transaction Documents; the
execution, delivery and performance by such New Century Party of each of the
Transaction Documents have been duly authorized by all necessary corporate or
other action on its part; and each Transaction Document has been duly and
validly executed and delivered by such New Century Party and constitutes a
legal, valid and binding obligation of such New Century Party, enforceable
against such New Century Party in accordance with its terms, subject as to
enforceability to applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights generally and to general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
at law).
(vi) Approvals. No authorizations, approvals or consents of,
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and no filings or registrations with, any Governmental Authority or any
securities exchange are necessary for the execution, delivery or performance by
each of the New Century Parties of the Transaction Documents or for the
legality, validity or enforceability thereof, except for filings and recordings
in respect of the Liens created pursuant to this Loan Purchase Agreement and the
Note Purchase Agreement.
(vii) Taxes. Each of the New Century Parties and their
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respective Subsidiaries have filed all Federal income tax returns and all other
material tax returns that are required to be filed by them and have paid all
taxes due pursuant to such returns or pursuant to any assessment received by any
of them, except for any such taxes as are being appropriately contested in good
faith by appropriate proceedings diligently conducted and with respect to which
adequate reserves have been established in conformity with GAAP. The charges,
accruals and reserves on the books of each of the New Century Parties and their
respective Subsidiaries in respect of taxes and other governmental charges are,
in the opinion of such New Century Party, adequate.
(viii) Investment Company Act. None of the New Century Parties
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nor any of their respective Subsidiaries is an "investment company", or a
company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
(ix) Jurisdiction of Organization. On the Effective Date,
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the jurisdiction of organization of the Seller is California and the
jurisdiction of organization of New Century Financial is Delaware.
(x) Location of Books and Records. The location where each
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of the New Century Parties keeps its books and records, including all computer
tapes and records relating to the Eligible Mortgage Loans is its chief executive
office located at 00000 Xxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxx 00000;
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(xi) True and Complete Disclosure. The information,
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reports, financial statements, exhibits and schedules furnished in writing by or
at the direction of the New Century Parties to the Purchaser in connection with
the negotiation, preparation or delivery of this Loan Purchase Agreement and the
other Transaction Documents or included herein or therein or delivered pursuant
hereto or thereto, when taken as a whole, do not contain any untrue statement of
material fact or omit to state any material fact necessary to make the
statements herein or therein, in light of the circumstances under which they
were made, not materially misleading. All written information furnished after
the date hereof by or at the request of a New Century Party or otherwise
pursuant to this Loan Purchase Agreement to the Agent in connection with this
Loan Purchase Agreement and the other Transaction Documents and the transactions
contemplated hereby and thereby will be true, complete and accurate in all
material respects, or (in the case of projections) based on reasonable
estimates, on the date as of which such information is stated or certified.
There is no fact known to a Responsible Officer of any of the New Century
Parties, after due inquiry, that would reasonably be expected to have a Material
Adverse Effect that has not been disclosed herein, in the other Transaction
Documents or in a report, financial statement, exhibit, schedule, disclosure
letter or other writing furnished to the Agent for use in connection with the
transactions contemplated hereby or thereby;
(xii) Tangible Net Worth. As of December 31, 2001, the
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aggregate Tangible Net Worth of New Century Financial is not less than
$200,000,000. As used in this Agreement, the "Tangible Net Worth" of New Century
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Financial is the positive excess, if any of (i) all amounts which would be
included under capital on the balance sheet of New Century Financial at such
date under GAAP, but disregarding (a) assets booked as "organizational expenses"
or as "goodwill", (b) notes due from Affiliates, (c) capitalized mortgaging
servicing rights, valued at the sole discretion of the Agent, using its
reasonable business judgment, taking into account the level of interest rates,
the characteristics of the mortgage loans and general market conditions, and (d)
other intangible assets, over (ii) liabilities;
(xiii) ERISA. Each Plan to which any of the New Century
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Parties or their respective Subsidiaries make direct contributions, and, to the
knowledge of each of the New Century Parties, each other Plan and each
Multiemployer Plan, is in compliance in all material respects with, and has been
administered in all material respects in compliance with, the applicable
provisions of ERISA, the Code and any other Federal or State law. No Reportable
Event has occurred under any Plan to which any of the New Century Parties or
their respective Subsidiaries make direct contributions, nor, to the knowledge
of each of the New Century Parties, under each other Plan and each Multiemployer
Plan maintained by any of the New Century Parties or any of their respective
Subsidiaries which is likely to result in the termination of such Plan for
purposes of Title IV of ERISA;
(xiv) Valid Sale and Contribution. This Loan Purchase
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Agreement constitutes a valid sale, contribution, assignment, transfer or other
conveyance to the Purchaser of all right, title, and interest of the New Century
Parties in, to and under the Eligible Mortgage Loans enforceable against all
creditors of and purchasers from the New Century Parties, and the Eligible
Mortgage Loans will be held by the Purchaser free and clear of any Lien of any
Person claiming through or under the New Century Parties, except for Liens
permitted under, or to be created by this Loan Purchase Agreement or the Note
Purchase Agreement;
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(xv) Valid Business Reasons. Each of the New Century
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Parties has valid business reasons for selling its interests in the Eligible
Mortgage Loans rather than obtaining a loan with the Eligible Mortgage Loans as
collateral;
(xvi) Insolvency. None of the New Century Parties is
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insolvent. No New Century Party will be rendered insolvent by the transactions
contemplated by this Loan Purchase Agreement and each New Century Party has an
adequate amount of capital to conduct its respective business in the ordinary
course and to carry out its respective obligations hereunder and under each
Transaction Document to which it is a party;
(xvii) Accounting and Tax Treatment. Each of the New Century
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Parties will endeavor to treat the sale and contribution of the Eligible
Mortgage Loans to the Purchaser pursuant to Article II as a contribution of the
Eligible Mortgage Loans to the capital of the Purchaser for all tax purposes,
and as a sale for financial reporting and accounting purposes, although such
sales may be characterized as a sale to a consolidated entity;
(xviii) Legal Name. The legal name of each New Century Party
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is as set forth in the signature line of this Loan Purchase Agreement. All names
of each New Century Party since its incorporation and all trade names,
fictitious names, assumed names or "doing business as" names that each New
Century Party has used are as set forth in Schedule 2 to this Loan Purchase
Agreement; and
(xix) Consideration. Seller has received fair
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consideration, with a value reasonably equivalent to, or in excess of, the value
of the assets being transferred in exchange for Seller's interest in the
Eligible Mortgage Loans conveyed on such date.
(b) The Purchaser hereby makes the following representations and
warranties for the benefit of the New Century Parties, the Agent, the Note
Purchasers and the Noteholders. Such representations and warranties are made as
of the Effective Date and each Note Purchase Date and shall survive each sale,
assignment, transfer and conveyance by the Seller of the Mortgage Loans to the
Purchaser and its successors and assigns.
(i) Existence. The Purchaser (a) is a business trust duly
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organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has all requisite corporate or other
power, and has all governmental licenses, authorizations, consents and approvals
necessary to own its assets and carry on its business as now being or as
proposed to be conducted, except where the lack of such licenses,
authorizations, consents and approvals would not be reasonably likely to have a
Material Adverse Effect; and (c) is qualified to do business and is in good
standing in all other jurisdictions in which the nature of the business
conducted by it makes such qualification necessary, except where failure so to
qualify would not be reasonably likely (either individually or in the aggregate)
to have a Material Adverse Effect.
(ii) Legal Name. The legal name of the Purchaser is as set
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forth in the signature line of this Loan Purchase Agreement and the Purchaser
has not changed its name since its organization and since its organization the
Purchaser did not use, nor does the Purchaser now use, any trade names,
fictitious names, assumed name or "doing business as" names;
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(iii) Power and Authority. The Purchaser has the power and
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authority to execute and deliver this Loan Purchase Agreement and each other
Transaction Document to which it is a party, and to carry out their respective
terms; the Purchaser has duly authorized the receipt from the Seller, and the
pledge to the Agent in the Note Purchase Agreement, of all of its right, title
and interest in the Eligible Mortgage Loans and other Collateral by all
necessary action; and the execution, delivery, and performance of this Loan
Purchase Agreement, and each other Transaction Document to which it is a party,
have been duly authorized by the Purchaser by all necessary action;
(iv) Due Execution and Delivery. This Loan Purchase
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Agreement and each other Transaction Document to which it is a party have been
duly executed and delivered on behalf of the Purchaser;
(v) Binding Obligations. This Loan Purchase Agreement, and
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the other Transaction Documents to which the Purchaser is a party, when duly
executed and delivered, will constitute legal, valid, and binding obligations of
the Purchaser enforceable against the Purchaser in accordance with their
respective terms subject as to enforceability to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors' rights
generally and to general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law);
(vi) No Violation. The consummation of the transactions
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contemplated by and the fulfillment of the terms of this Loan Purchase Agreement
will not conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time) a default under, the
organizational documents of the Purchaser, or any material term of any
indenture, agreement, mortgage, deed of trust, or other instrument to which the
Purchaser is a party or by which it is bound, or result in the creation or
imposition of any Lien upon any of its Properties pursuant to the terms of any
such indenture, agreement, mortgage, deed of trust, or other instrument, or
violate any law or any order, injunction, writ, rule, or regulation applicable
to the Purchaser of any court or of any federal or state regulatory body,
administrative agency, or other Governmental Authority having jurisdiction over
the Purchaser or any of its Properties which would have a material adverse
effect on the Mortgage Loans;
(vii) No Proceedings. There are no proceedings or
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investigations pending, or, to the knowledge of the Purchaser, threatened,
before any court, regulatory body, administrative agency, or other tribunal or
Governmental Authority (A) asserting the invalidity of this Loan Purchase
Agreement, (B) seeking to prevent the consummation of any of the transactions
contemplated by this Loan Purchase Agreement, or (C) seeking any determination
or ruling that might (in the reasonable judgment of the Purchaser) materially
and adversely affect the performance by the Purchaser of its obligations under,
or the validity or enforceability of, this Loan Purchase Agreement or each other
Transaction Document for which it is a party;
(viii) No Consent Required. The Purchaser is not required to
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obtain the consent of any other Person, or any consent, license, approval or
authorization or registration or declaration with, any Governmental Authority,
bureau or agency in connection with the execution, delivery or performance of
this Loan Purchase Agreement and the Transaction Documents to which it is a
party, except for such as have been obtained, effected or made, except
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for filings and recordings in respect of the Liens created pursuant to the Note
Purchase Agreement;
(ix) Jurisdiction of Organization. On the Effective Date,
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the Purchaser's jurisdiction of organization is Delaware.
(x) Absence of Event. No event has occurred which adversely
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affects the Purchaser's operations or its ability to perform its obligations
under the Transaction Documents to which it is a party; and
(xi) Subsidiaries. The Purchaser has no subsidiaries.
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SECTION 3.02 Purchase of Mortgage Loans by the New Century
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Parties. (a) Upon discovery of a breach of any of the representations or
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warranties set forth in Schedule 1 hereto that materially adversely affects any
Mortgage Loan or the related Mortgage File, as the case may be, or if the New
Century Parties fail to cause delivery of evidence of filing or copies of any
UCC financing statement in accordance with the terms of this Loan Purchase
Agreement (any such event, a "Warranty Event"), the New Century Parties, jointly
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and severally, shall repurchase such Mortgage Loan by remitting to the Purchaser
the Repurchase Amount with respect to such Mortgage Loan as provided in Section
3.02(b).
(b) In consideration of its repurchase of a Mortgage Loan, the
relevant New Century Party shall remit the Repurchase Amount to the Agent for
application in accordance with the Note Purchase Agreement.
(c) Except as may be set forth in this Loan Purchase Agreement, it
is understood and agreed that the obligations of the New Century Parties with
respect to a breach as provided in this Section 3.02 constitute the sole remedy
against the New Century Parties for such breach available to the Purchaser. The
representations and warranties set forth in Section 3.01 shall survive the sale
and contribution of the Mortgage Loans to the Purchaser and the pledge of the
Collateral to the Agent.
(d) Except as provided in this Section 3.02 and in Section
4.01(a), upon the New Century Parties' transfer of their respective interests in
the Mortgage Loans to the Purchaser, none of the New Century Parties will bear
any further risk with respect to the ultimate collectibility of the Mortgage
Loans or the adequacy of the collateral securing the Mortgage Loans.
ARTICLE IV
COVENANTS
SECTION 4.01 Covenants of New Century Parties. Each New Century
--------------------------------
Party hereby covenants and agrees with the Purchaser, the Agent, the Note
Purchasers and the Noteholders with respect to itself as follows:
(a) Agreement to Support Purchaser. Each New Century Party,
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jointly and severally, agrees that it will pay to the Agent (for application in
accordance with the terms of the
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Note Purchase Agreement), any unpaid amounts which may become due and owing
under the Note Purchase Agreement or any Note, but remain unpaid on the third
Business Day after the relevant amount became due, (i) on the day on which such
New Century Party is given notice of the circumstances, if the notice is given
at or before 10:00 a.m., New York City time, on a Business Day, or (ii) on the
Business Day following the day such notice is given, if it is given after that
time on a Business Day or on a day that is not a Business Day. The aggregate
amount of this recourse for the New Century Parties shall not exceed the sum of
(a) 10% of the greater of (i) the total principal amount of Notes then
outstanding under the Note Purchase Agreement and (ii) the Commitment Amount and
(b) any unpaid Facility Fee.
(b) Financial Statements. The New Century Parties shall
--------------------
deliver to the Agent:
(i) as soon as available and in any event within
forty-five (45) calendar days after the end of each month, the unaudited
consolidated balance sheets of the New Century Parties as at the end of such
period and the related unaudited consolidated statements of income and retained
earnings and of cash flows for the New Century Parties and their consolidated
Subsidiaries for such month and the portion of the fiscal year through the end
of such month, setting forth, in each case, in comparative form the figures for
the previous year or month, accompanied by a certificate of a Responsible
Officer of the New Century Parties, which certificate shall state that said
consolidated financial statements fairly present the consolidated financial
condition and results of operations of the New Century Parties and their
consolidated Subsidiaries in accordance with GAAP, consistently applied, as at
the end of, and for, such month (subject to normal year-end audit adjustments);
(ii) as soon as available and in any event within 90 days
after the end of each fiscal year of the New Century Parties, the consolidated
balance sheets of the New Century Parties and their consolidated Subsidiaries as
at the end of such fiscal year and the related consolidated statements of income
and retained earnings and of cash flows for the New Century Parties and their
consolidated Subsidiaries for such year, setting forth in each case in
comparative form the figures for the previous year, and, accompanied by an
opinion thereon of independent certified public accountants of recognized
national standing, which opinion shall not be qualified as to scope of audit or
going concern and shall state that said consolidated financial statements fairly
present the consolidated financial condition and results of operations of the
New Century Parties and their consolidated Subsidiaries as at the end of, and
for, such fiscal year in accordance with GAAP and a certificate of such
accountants stating that, in making the examination necessary for their opinion,
they obtained no knowledge, except as specifically stated, of any Default or
Event of Default;
(iii) from time to time such other information regarding
the financial condition, operations, or business of the New Century Parties as
the Agent may reasonably request;
(iv) as soon as reasonably possible, and in any event
within thirty (30) days after a Responsible Officer of a New Century Party
knows, or with respect to any Plan or Multiemployer Plan to which a New Century
Party or any of its Subsidiaries makes direct contributions, has reason to
believe, that any of the events or conditions specified below with respect to
any Plan or Multiemployer Plan has occurred or exists, a statement signed by a
senior
10
financial officer of such New Century Party setting forth details
respecting such event or condition and the action, if any, that such New Century
Party or its ERISA Affiliate proposes to take with respect thereto (and a copy
of any report or notice required to be filed with or given to PBGC by such New
Century Party or an ERISA Affiliate with respect to such event or condition):
(a) any reportable event, as defined in Section 4043(c) of
ERISA and the regulations issued thereunder, with respect to a Plan, as to which
PBGC has not by regulation waived the requirement of Section 4043(a) of ERISA
that it be notified within thirty (30) days of the occurrence of such event
(provided that a failure to meet the minimum funding standard of Section 412 of
the Code or Section 302 of ERISA, including without limitation the failure to
make on or before its due date a required installment under Section 412(m) of
the Code or Section 302(e) of ERISA, shall be a reportable event regardless of
the issuance of any waivers in accordance with Section 412(d) of the Code); and
any request for a waiver under Section 412(d) of the Code for any Plan;
(b) the distribution under Section 4041(c) of ERISA of a notice
of intent to terminate any Plan or any action taken by any New Century Party or
an ERISA Affiliate to terminate any Plan;
(c) the institution by PBGC of proceedings under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer,
any Plan, or the receipt by either any New Century Party or any ERISA Affiliate
of a notice from a Multiemployer Plan that such action has been taken by PBGC
with respect to such Multiemployer Plan;
(d) the complete or partial withdrawal from a Multiemployer
Plan by any of the New Century Parties or any ERISA Affiliate that results in
liability under Section 4201 or 4204 of ERISA (including the obligation to
satisfy secondary liability as a result of a purchaser default) or the receipt
by any New Century Party or any ERISA Affiliate of notice from a Multiemployer
Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245
of ERISA or that it intends to terminate or has terminated under Section 4041A
of ERISA;
(e) the institution of a proceeding by a fiduciary of any
Multiemployer Plan against any New Century Party or any ERISA Affiliate to
enforce Section 515 of ERISA, which proceeding is not dismissed within 30 days;
and
(f) the adoption of an amendment to any Plan that, pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA, would result in the loss
of tax-exempt status of the trust of which such Plan is a part if any New
Century Party or an ERISA Affiliate fails to provide timely security to such
Plan in accordance with the provisions of said Sections.
(v) Within 30 days of the end of such calendar quarter,
a compliance certificate of a senior financial officer of New Century Financial
certifying compliance as of the end of the prior quarter with (a) all covenants
applicable to the New Century Parties under this Agreement and (b) all covenants
applicable to the New Century Parties and any Affiliates thereof bound thereby
under all Other Financing Documents.
11
(c) Litigation. Each New Century Party will promptly, and in
----------
any event within 10 days after service of process on any of the following, give
to the Agent notice of all litigation, actions, suits, arbitrations,
investigations (including, without limitation, any of the foregoing which are
pending or threatened) or other legal or arbitrable proceedings affecting such
New Century Party or affecting any of its Property before any Governmental
Authority that (i) questions or challenges the validity or enforceability of any
of the Transaction Documents or any action to be taken in connection with the
transactions contemplated hereby or thereby, (ii) makes a claim or claims which,
individually or in the aggregate, if adversely determined, would be reasonably
likely to have a Material Adverse Effect, or (iii) requires filing with the
Securities and Exchange Commission in accordance with the 1934 Act and any rules
thereunder.
(d) Existence, etc. Each New Century Party will:
--------------
(i) preserve and maintain its legal existence and all of
its material rights, privileges, licenses and franchises;
(ii) comply with the requirements of all applicable laws,
rules, regulations and orders of Governmental Authorities (including, without
limitation, all environmental laws) if failure to comply with such requirements
would be reasonably likely (either individually or in the aggregate) to have a
Material Adverse Effect;
(iii) keep adequate records and books of account, in which
complete entries will be made in accordance with GAAP consistently applied;
(iv) not change its jurisdiction of organization from the
jurisdiction referred to in Section 3.01(a)(ix) unless it shall have provided
the Agent thirty (30) days' prior written notice of such change;
(v) pay and discharge all taxes, assessments and
governmental charges or levies imposed on it or on its income or profits or on
any of its Property prior to the date on which penalties attach thereto, except
for any such tax, assessment, charge or levy the payment of which is being
contested in good faith and by proper proceedings and against which adequate
reserves are being maintained in conformity with GAAP; provided that this shall
not include the payment of any Mortgagor or Mortgaged Property taxes,
assessments, governmental charges or levies subject to the servicing standards
set forth in the Servicing Agreement; and
(vi) upon reasonable notice, permit representatives of
the Agent (and any Note Purchaser or Noteholder holding (or holding commitments
to purchase) not less than the lower of (A) the outstanding principal amount of
the Notes and (B) $5,000,000 principal amount of Notes and not affiliated with
any competitor of such New Century Party that wishes to accompany the Agent's
representatives), during normal business hours, to examine, copy and make
extracts from its books and records, to inspect any of its Properties, and to
discuss its business and affairs with its officers, all to the extent reasonably
requested by the Agent. For purposes of this provision, a Person will not be
deemed to be an affiliate of another unless it controls the second person and a
natural person will not be treated as an affiliate.
(e) Underwriting Guidelines. In the event any New Century Party
-----------------------
makes a material amendment or modification to the Underwriting Guidelines, such
New Century Party
12
shall promptly deliver to the Agent a complete copy of such amended or
modified Underwriting Guidelines. The New Century Parties and the Purchaser
acknowledge that until the Agent has approved the amendments or modifications,
which approval shall not be unreasonably withheld, the Note Purchasers shall
have no obligation to make any further Note Purchases.
(f) Transactions with Affiliates. Each New Century Party
----------------------------
will not enter into any transaction, including without limitation any purchase,
sale, lease or exchange of Property or the rendering of any service, with any
Affiliate unless such transaction is (a) otherwise permitted under this Loan
Purchase Agreement, the Note Documents or the Trust Agreement, (b) in the
ordinary course of such New Century Party's business and (c) upon fair and
reasonable terms no less favorable to such New Century Party than it would
obtain in a comparable arm's length transaction with a Person which is not an
Affiliate, or make a payment that is not otherwise permitted by this paragraph
(f) to any Affiliate.
(g) Ownership of Mortgage Loans. The New Century Parties
---------------------------
will defend the Purchaser's ownership of the Mortgage Loans against, and will
take such other action as is necessary to remove, any Lien, security interest or
claim on or to the Mortgage Loans, other than the security interests created or
permitted hereunder and under the Note Purchase Agreement, and the New Century
Parties will defend the right, title and interest of the Purchaser in and to any
of the Mortgage Loans against the claims and demands of all Persons whomsoever.
(h) Limitation on Guarantees. The New Century Parties
------------------------
shall not create, incur, assume or suffer to exist any Guarantees by any of them
of obligations of others, in excess of $100,000 in the aggregate, except as
otherwise listed on Schedule 4 hereto.
(i) Maintenance of Tangible Net Worth. As of the end of
---------------------------------
each calendar quarter following December 31, 2001, the aggregate Tangible Net
Worth of New Century Financial shall be at least the greater of (x) $200,000,000
or (y) the sum of (i) 85% of the actual Tangible Net Worth number as of the most
recent calendar year end plus (ii) 70% of net earnings after declared dividends
plus (iii) 90% of net new capital received (whether in the form of equity or
subordinated debt which the Agent determines has substantial equity features),
for each such quarter on a cumulative basis.
(j) Maintenance of Ratio of Total Indebtedness to Book
--------------------------------------------------
Equity. New Century Financial (i) shall not permit the consolidated ratio of
------
aggregate Total Indebtedness to its aggregate book equity as determined under
GAAP to be greater than 10: 1 as measured as of the last day of each calendar
quarter and (ii) shall provide to the Agent on the last day of each fiscal
quarter a tabulation of all borrowings pursuant to the Other Financing
Documents. At no time following the Effective Date shall New Century Financial
have unencumbered cash or cash equivalents, including short-term investments, of
less than $30,000,000.
(k) Maintenance of Profitability. The New Century
----------------------------
Parties shall not permit, for any period of the shorter of (x) two rolling
quarters or (y) any shorter period of time set forth in any Other Financing
Document with respect to a profitability test (each such period, a "Test
----
Period"), Net Income for such Test Period, before income taxes for such Test
------
Period and distributions made during such Test Period, to be less than $1.00.
13
(l) Required Filings. The New Century Parties shall promptly
----------------
provide the Agent with copies of all documents which any of the New Century
Parties or any Affiliate of any New Century Party is required to file with the
Securities and Exchange Commission or any Governmental Authority which may be
substituted therefor in accordance with the 1934 Act or any rules thereunder;
provided that the New Century Parties shall not be required to provide the Agent
with filings of a standard nature relating to the issuance of securities under a
REMIC or similar pass-through trust.
(m) No Adverse Selection. The New Century Parties have not
--------------------
selected the Mortgage Loans in a manner so as to adversely affect the
Purchaser's interests.
(n) Preservation of Security Interest. The New Century Parties
---------------------------------
shall execute and file such financing statements and cause to be executed and
filed such continuation statements, all in such manner and in such places as may
be required by law fully to preserve, maintain, and protect the respective
right, title and interest of the Purchaser and the Agent, the Note Purchasers
and the Noteholders in the Mortgage Loans. The New Century Parties shall deliver
(or cause to be delivered) to the Custodian file-stamped copies of, or filing
receipts for, any document filed as provided above, as soon as available
following such filing.
(o) Obligations with Respect to Mortgage Loans. Each of the New
------------------------------------------
Century Parties will duly fulfill all obligations on its respective part to be
fulfilled under or in connection with each Mortgage Loan, and will do nothing to
impair the rights of the Purchaser or the Agent in any of the Mortgage Loans.
(p) Compliance with Law. Each New Century Party will comply, in
-------------------
all material respects, with all laws, acts, rules, requisitions, orders, decrees
and directions of any Governmental Authority applicable to its business and to
the Mortgage Loans or any part thereof; provided, however, that such New Century
Party may contest any law, act, regulation, order, decree or direction in any
reasonable manner which shall not materially and adversely affect the rights or
interests of the Purchaser or the Agent (for the Agent, the Note Purchasers and
the Noteholders) in the Mortgage Loans.
(q) Conveyance of Mortgage Loans; Security Interests. Except
------------------------------------------------
for the transfers and conveyances under or permitted in this Loan Purchase
Agreement or any other Transaction Document, none of the New Century Parties
will sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any Lien, on any Mortgage Loan, or any interest
therein and each of the New Century Parties shall defend the right, title, and
interest of the Purchaser, the Agent (for the benefit of the Agent, the Note
Purchasers and the Noteholders), and their respective successors and assigns in,
to, and under the Mortgage Loans, against all claims of third parties claiming,
through or under the New Century Parties; provided, however, that nothing in
this Section 4.01(q) shall prevent or be deemed to prohibit the New Century
Parties from suffering to exist upon any of the Mortgage Loans any Liens for
municipal or other local taxes if such taxes shall not at the time be due and
payable or if the New Century Parties shall concurrently be contesting the
validity thereof in good faith by appropriate proceedings and shall have set
aside on its books adequate reserves with respect thereto and such contests pose
no risk of forfeiture.
14
(r) Notification of Breach. Each of the New Century Parties
----------------------
will advise the Purchaser, the Agent and the Custodian promptly, in reasonable
detail, upon discovery of the occurrence of any breach by (i) any New Century
Party of any of its representations, warranties or covenants contained herein,
or (ii) by any New Century Party or any Affiliate thereof of any of its
representations, warranties or covenants contained in any Other Financing
Document.
(s) Further Assurances. Each of the New Century Parties will
------------------
make, execute or endorse, acknowledge and file or deliver to the Purchaser, the
Agent and the Custodian from time to time such schedules, confirmatory
assignments, conveyances, transfers, endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such further
steps relating to the Mortgage Loans and other rights covered by this Loan
Purchase Agreement, as the Purchaser, the Agent or the Custodian may request and
reasonably require.
(t) Indemnification. The New Century Parties, jointly and
---------------
severally, hereby agree to indemnify, defend and hold the Purchaser, the Agent,
the Note Purchasers, the Noteholders, the Servicer, the Custodian and their
respective Affiliates and each of their respective officers, directors,
employees, agents, trustees and advisors (each, an "Indemnified Party") harmless
-----------------
from and against any and all loss, liability, damage, judgment, claim,
deficiency, or expense (including interest, penalties, reasonable attorneys'
fees and amounts paid in settlement) payable to a Person that is not a party to
any of the Transaction Documents, or payable by a party to a Transaction
Document to another party to a Transaction Document, if any of them may become
subject thereto, insofar as such loss, liability, damage, judgment, claim,
deficiency, or expense arises out of or is based upon a breach by any New
Century Party of its representations contained in Section 3.01 or its covenants
contained in Section 4.01, or any information set forth in this Loan Purchase
Agreement or in any schedule delivered by any New Century Party hereunder or
thereunder, being untrue in any material respect at any time or relating to or
arising out of this Loan Purchase Agreement or any other Transaction Document
that results from anything other than any Indemnified Party's gross negligence
or willful misconduct. The New Century Parties may offer to assume the defense
of any action brought against any Indemnified Party, provided that the counsel
proposed to handle the defense be satisfactory to such Indemnified Party in its
sole discretion. If the Indemnified Party agrees to such an arrangement, then
the New Century Parties shall not be liable for any separate counsel for such
Indemnified Party. In no event will an Indemnified Party be liable for a
settlement effected without its prior consent. The obligations of the New
Century Parties under this Section 4.01(t) shall be considered to have been
relied upon by the Purchaser, the Agent, the Note Purchasers, the Noteholders,
the Servicer, and the Custodian and shall survive the execution, delivery, and
performance of this Loan Purchase Agreement regardless of any investigation made
by the Purchaser, the Agent, any Note Purchaser, any Noteholder, the Custodian
or on their behalf of any of them. THE INDEMNIFICATION OBLIGATIONS OF THE NEW
CENTURY PARTIES PURSUANT TO THE PRECEDING PROVISIONS OF THIS PARAGRAPH SHALL
APPLY REGARDLESS OF ANY NEGLIGENCE OR OTHER FAULT ON THE PART OF THE PURCHASER,
THE AGENT, ANY NOTE PURCHASER, ANY NOTEHOLDER, THE SERVICER, THE CUSTODIAN OR
ANY OF THEIR RESPECTIVE OFFICERS, EMPLOYEES, TRUSTEES OR AGENTS EXCEPT AS
EXPRESSLY STATED IN THIS PARAGRAPH.
15
The New Century Parties, jointly and severally, also agree to
reimburse an Indemnified Party as and when billed by such Indemnified Party for
all such Indemnified Party's costs and expenses incurred in connection with the
enforcement or the preservation of such Indemnified Party's rights (including
third-party beneficiary rights of the Agent, the Note Purchasers and the
Noteholders) under this Loan Purchase Agreement, including without limitation
the reasonable fees and disbursements of one counsel for the Note Purchasers and
the Noteholders as a group.
(u) Notice of Liens. Each New Century Party shall notify the
---------------
Purchaser, the Agent, the Servicer and the Custodian, promptly after becoming
aware of any Lien on any Mortgage Loan other than the Liens created hereunder
and under the Note Purchase Agreement (including any other Lien that is
permitted under the Note Purchase Agreement).
(v) Taxes. The New Century Parties shall promptly pay all applicable
-----
taxes required to be paid in connection with the assignment of the Mortgage
Loans and acknowledges that the Purchaser shall have no responsibility with
respect thereto.
(w) Taxes and Other Liabilities. The New Century Parties shall
---------------------------
promptly pay and discharge all material taxes, assessments, fees, claims and
other governmental charges when due and payable by any New Century Party except
(i) such as may be paid thereafter without penalty or (ii) such as may be
contested in good faith by appropriate proceedings and for which an adequate
reserve has been established and is maintained in accordance with GAAP. The New
Century Parties shall promptly notify the Agent of any material challenge,
contest or proceeding pending by or against the New Century Parties or any
Affiliate of the New Century Parties before any taxing authority.
(x) No Agency. None of the New Century Parties will act as an agent
---------
of the Purchaser in any capacity except to the limited extent provided in the
Transaction Documents, but instead will present itself to the public as a
corporation separate from the Purchaser.
(y) Financial Statements. The financial statements and books and
--------------------
records of each Seller shall reflect the separate existence of the Purchaser and
shall also include a footnote substantially to the effect set forth in Schedule
3.
SECTION 4.02 Purchaser Covenants. The Purchaser hereby covenants and
-------------------
agrees with the New Century Parties and the Agent, the Note Purchasers and the
Noteholders as follows:
(a) Mortgagor's Quiet Enjoyment. The Purchaser hereby acknowledges
---------------------------
and agrees that its rights in the Mortgaged Property are expressly subject to
the rights of the related Mortgagors in such Mortgaged Property pursuant to the
applicable Mortgage Loans. The Purchaser covenants and agrees that, so long as a
Mortgagor shall not be in default of any of the provisions of the applicable
Mortgaged Loan, neither the Purchaser nor any assignee of the Purchaser will
disturb the Mortgagor's quiet and peaceful possession of the related Mortgaged
Property and the Mortgagor's use thereof for its intended purpose.
(b) Operation of the Purchaser. The Purchaser shall be operated in
--------------------------
the following manner, with a view toward assuring that it would not be
substantively consolidated
16
with or in the trust estate of another Person (that is, such that the
separate legal existence of the Purchaser and such Person would be disregarded)
and in that regard, the Purchaser shall:
(i) be a limited purpose business trust whose primary
activities are restricted as provided in the Trust Agreement as in effect on the
date of this Loan Purchase Agreement;
(ii) not engage in any action that would cause the separate
legal identity of the Purchaser not to be respected, including, without
limitation, (a) holding itself out as being liable for the debts of any other
party or (b) acting other than through its duly authorized agents;
(iii) not be involved in the day-to-day management of any New
Century Party;
(iv) not incur, assume or guarantee any indebtedness except
for such indebtedness as may be incurred by the Purchaser in connection with the
issuance of the Notes;
(v) not commingle its funds, assets and records relating
thereto with those of any New Century Party or any other entity;
(vi) entitle the separate creditors of the Purchaser to be
satisfied out of the Purchaser's assets and not permit its assets to be made
available to any other Person except as expressly contemplated in the Trust
Agreement;
(vii) act solely in its own name in the conduct of its business,
including business correspondence and other communications, and shall conduct
its business so as not to mislead others as to the identity of the entity with
which they are concerned;
(viii) maintain records and books of account and shall not
commingle its records and books of account with the records and books of account
of any other Person;
(ix) not engage in any business or activity other than in
accordance with or relating to the Trust Agreement and its continuation as a
Delaware business trust;
(x) not form, or cause to be formed, any subsidiaries;
(xi) comply with all restrictions and covenants in, and shall
not fail to comply with the formalities established in, the Trust Agreement;
(xii) maintain its assets separately from the assets of the New
Century Parties (including through the maintenance of a separate bank account);
(xiii) manage its day-to-day business without the involvement of
the New Century Parties (except as may be otherwise provided in the
Administration Agreement);
(xiv) maintain a separate office (in care of the Owner Trustee)
from that of the New Century Parties;
17
(xv) not act as an agent of the New Century Parties, except to
the limited extent provided in the Transaction Documents; and
(xvi) maintain at all times an Administrator to perform the
duties contemplated in the Administration Agreement.
(c) Merger or Consolidation. The Purchaser will keep in full effect
-----------------------
its existence, rights status as a Delaware business trust and, if applicable,
will obtain and preserve its qualification to do business in each jurisdiction
which permits such qualification and in which it is necessary to protect the
validity and enforceability of this Loan Purchase Agreement, any other
Transaction Document to which it is a party or any of the Mortgage Loans and to
perform its duties under this Loan Purchase Agreement and each other Transaction
Document to which it is a party.
SECTION 4.03 Pledge of Mortgage Loans. The New Century Parties
------------------------
understand that the Purchaser intends to pledge and assign the benefits of this
Agreement, along with the Mortgage Loans to the Agent, for the benefit of the
Agent, the Note Purchasers and the Noteholders pursuant to the Note Purchase
Agreement. Each of the New Century Parties agree that such assignee of the
Purchaser may exercise the rights of the Purchaser hereunder and shall be
entitled to all of the benefits of the Purchaser hereunder to the extent
provided for in such pledge and assignment.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01 Conditions to the Purchaser Obligations. The obligations
---------------------------------------
of the Purchaser to accept the transfer of the Mortgage Loans on each Note
Purchase Date shall be subject to the satisfaction of the following conditions:
(a) All representations and warranties of the New Century Parties
contained in this Loan Purchase Agreement and in the Transaction Documents shall
be true and correct on the Execution Date and on each Note Purchase Date with
the same effect as though such representations and warranties had been made on
such date;
(b) All information concerning the Mortgage Loans provided to the
Purchaser shall be true and correct as of the related Note Purchase Date in all
material respects;
(c) The New Century Parties shall have delivered to the Purchaser a
Mortgage Loan Schedule with respect to the Mortgage Loans as of the related Note
Purchase Date and shall have substantially performed all other obligations
required to be performed by the provisions of this Loan Purchase Agreement;
(d) The New Century Parties shall have recorded and filed, at their
expense, any financing statement with respect to the Mortgage Loans and the
other Mortgage Loans to be transferred from time to time to the Purchaser
pursuant to this Loan Purchase Agreement meeting the requirements of applicable
state law in such manner in such jurisdictions as are necessary to perfect the
transfer of the Mortgage Loans and the other Mortgage Loans from the
18
Sellers to the Purchaser, and shall deliver a file-stamped copy of such
financing statements or other evidence of such filings to the Purchaser and the
Agent;
(e) All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Loan Purchase Agreement
shall be satisfactory in form and substance to the Purchaser, and the Purchaser
shall have received from the New Century Parties copies of all documents
(including, without limitation, records of corporate proceedings) relevant to
the transactions herein contemplated as the Purchaser may reasonably have
requested; and
(f) All respective conditions necessary to vest in the Purchaser good
title, free and clear of all Liens (other than Liens permitted in the proviso
contained in Section 4.01(q) hereof), to its respective Mortgage Loans shall
have been satisfied.
ARTICLE VI
TERMINATION
SECTION 6.01 Termination. The respective obligations and
-----------
responsibilities of the New Century Parties and the Purchaser created by this
Loan Purchase Agreement shall terminate upon the latest of (i) the maturity or
other liquidation of the last Mortgage Loan and the disposition of any amounts
received upon disposition of any defaulted Mortgage Loans; and (ii) the
termination of the Note Purchase Agreement in accordance with the terms thereof;
provided, however, that the indemnifications contained in Section 4.01(t) herein
shall survive the termination of this Loan Purchase Agreement.
SECTION 6.02 Effect of Termination. No termination or rejection or
----------------------
failure to assume the executory obligations of this Loan Purchase Agreement in
the bankruptcy of any of the New Century Parties or the Purchaser shall be
deemed to impair or affect the obligations pertaining to any executed sale or
executed obligations, including, without limitation, pre-termination breaches of
representations and warranties by any New Century Party or the Purchaser.
Without limiting the foregoing, prior to termination, the failure of the New
Century Parties to pay a Repurchase Amount shall not render such transfer or
obligation executory, nor shall the continued duties of the parties pursuant to
Article 4 or Section 7.06 of this Loan Purchase Agreement render an executed
sale executory.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.01 Amendment. This Loan Purchase Agreement may be amended
---------
from time to time by the parties hereto only with the prior written consent of
the Agent and, to the extent specified in the Note Purchase Agreement, the
Noteholders and the Note Purchasers.
SECTION 7.02 GOVERNING LAW; JURISDICTION. (a) THIS LOAN PURCHASE
---------------------------
AGREEMENT AND ANY AMENDMENT HEREOF PURSUANT TO SECTION 7.01 SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK
(WITHOUT REGARD TO CHOICE OF LAW PRINCIPLES) APPLICABLE TO AGREEMENTS
19
MADE AND TO BE PERFORMED THEREIN AND THE OBLIGATIONS, RIGHTS, AND REMEDIES
OF THE PARTIES UNDER THIS LOAN PURCHASE AGREEMENT SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
(b) EACH OF THE NEW CENTURY PARTIES AND THE PURCHASER HEREBY
IRREVOCABLY AND UNCONDITIONALLY:
(1) TO THE EXTENT PERMITTED BY LAW, SUBMITS FOR ITSELF AND ITS
PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS LOAN PURCHASE
AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT
THEREOF, TO THE NON-EXCLUSIVE PERSONAL JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(2) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(3) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET
FORTH IN OR PURSUANT TO THIS LOAN PURCHASE AGREEMENT FOR NOTICES; AND
(4) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO XXX IN ANY OTHER JURISDICTION.
SECTION 7.03 Notices. All demands, notices, and communications under
-------
or in connection with this Loan Purchase Agreement shall be in writing and shall
be deemed to have been duly given, made and received (i) when delivered against
receipt of registered or certified mail or upon actual receipt of registered or
certified mail, postage prepaid, return receipt requested; (ii) when delivered
by courier with appropriate evidence of receipt; or (iii) upon transmission via
facsimile with appropriate evidence of receipt (a) in the case of New Century
Financial and Seller, at the following address: 00000 Xxx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxxxx Xxxxxxxxxxx, Esq., Fax No.: (949)
000-0000, and (b) in the case of the Purchaser, c/o the Administrator, New
Century Mortgage Corporation, Attention: Xxxxxxxx Xxxxxxxxxxx, Esq., Fax No.
(000) 000-0000 and a copy to Wilmington Trust Company, Xxxxxx Square North, 0000
Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000, facsimile number: (302)
636-4041 or (000) 000-0000; Attention: Corporate Trust Administration, in the
case of the Agent, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxx
20
Xxxxxxxxx and Xxxxxx Xxxxxxxxxxxx, Fax No.: (000) 000-0000. Any party may alter
the address to which communications are to be sent by giving notice of such
change of address in conformity with the provisions of this Section 7.03 for
giving notice and by otherwise complying with any applicable terms of this Loan
Purchase Agreement.
SECTION 7.04 Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions, or terms of this Loan Purchase Agreement
shall be for any reason whatsoever held invalid, then such covenants,
agreements, provisions, or terms shall be deemed severable from the remaining
covenants, agreements, provisions, or terms of this Loan Purchase Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Loan Purchase Agreement.
SECTION 7.05 Assignment. Notwithstanding anything to the contrary
----------
contained in this Loan Purchase Agreement, this Loan Purchase Agreement and the
respective rights and duties of the New Century Parties and the Purchaser
hereunder may not be assigned or otherwise transferred by the New Century
Parties or the Purchaser (as applicable), without the prior written consent of
the other parties to this Loan Purchase Agreement, the Agent and such of the
Note Purchasers and Noteholders as are required under the Note Purchase
Agreement. Whether or not expressly stated, all representations, warranties,
covenants and agreements of the New Century Parties and the Purchaser in this
Loan Purchase Agreement, or in any document delivered by any of them in
connection with this Loan Purchase Agreement, shall be for the benefit of, and
shall be exercisable by, the Agent.
SECTION 7.06 Further Assurances. Each of the New Century Parties and
------------------
the Purchaser agrees to do such further acts and things and to execute and
deliver to the Agent such additional assignments, agreements, powers and
instruments as are required by the Agent in its sole discretion or pursuant to
the direction of the Majority Investors to carry into effect the purposes of
this Loan Purchase Agreement or to better assure and confirm unto the Agent, the
Note Purchasers and the Noteholders their rights, powers and remedies hereunder.
SECTION 7.07 No Waiver; Cumulative Remedies. No failure to exercise
------------------------------
and no delay in exercising, on the part of the Purchaser or the New Century
Parties or the Agent or any Note Purchaser or Noteholder, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise hereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exhaustive of any rights, remedies,
powers and privilege provided by law.
SECTION 7.08 Counterparts. This Loan Purchase Agreement may be
------------
executed in two or more counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of which shall
constitute one and the same instrument.
SECTION 7.09 Binding Effect: Third-Party Beneficiaries. This Loan
-----------------------------------------
Purchase Agreement will inure to the benefit of and be binding upon the parties
hereto. The Agent, the Note Purchasers and the Noteholders are intended third
party beneficiaries of this Loan Purchase Agreement.
21
SECTION 7.10 Merger and Integration. Except as specifically stated
----------------------
otherwise herein, this Loan Purchase Agreement sets forth the entire
understanding of the parties relating to the subject matter hereof, and all
prior understandings, written or oral, relating thereto are superseded by this
Loan Purchase Agreement. This Loan Purchase Agreement may not be modified,
amended, waived or supplemented except as provided herein.
SECTION 7.11 Headings. The headings herein are for purposes of
--------
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
SECTION 7.12 Schedules and Exhibits. The schedules and exhibits
----------------------
attached hereto and referred to herein shall constitute a part of this Loan
Purchase Agreement and are incorporated into this Loan Purchase Agreement for
all purposes.
SECTION 7.13 No Bankruptcy Petition Against the Purchaser. Each of
--------------------------------------------
the New Century Parties agrees that, prior to the date that is one year and one
day after the payment in full of the Notes and all amounts payable under the
Note Purchase Agreement, it will not institute against the Purchaser, or join
any other Person in instituting against the Purchaser, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
proceedings under the laws of the United States or any state of the United
States. This Section 7.13 shall survive the termination of this Loan Purchase
Agreement.
SECTION 7.14 No Recourse. It is expressly understood and agreed by
-----------
the parties hereto that (a) this Loan Purchase Agreement is executed and
delivered by Wilmington Trust Company, not individually or personally but solely
as trustee of the Purchaser, in the exercise of the powers and authority
conferred and vested in it, (b) each of the representations, undertakings and
agreements herein made on the part of the Purchaser is made and intended not as
personal representations, undertakings and agreements by Wilmington Trust
Company but is made and intended for the purpose of binding only the Purchaser,
(c) nothing herein contained shall be construed as creating any liability on
Wilmington Trust Company, individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties hereto and by an Person claiming by, through or
under the parties hereto and (d) under no circumstances shall Wilmington Trust
Company be personally liable for the payment of any indebtedness or expenses of
the Purchaser or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Purchaser under
this Loan Purchase Agreement or any other related documents.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Loan Purchase
Agreement to be duly executed by their respective officers as of the day and
year first above written.
NEW CENTURY MORTGAGE CORPORATION
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------------------
Name: ______________________________________
Title: President
--------------------------------------
NEW CENTURY FINANCIAL CORPORATION
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------------------
Name: _______________________________________
Title: Executive Vice President
--------------------------------------
NEW CENTURY FUNDING I
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner
Trustee under the Trust Agreement
By: /s/ Xxxxx X. Daliago
--------------------------------------
Name:______________________________________
Title: Executive Vice President
--------------------------------------
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