Exhibit 4
THIS AGREEMENT IS SUBJECT TO THE TERMS AND CONDITIONS OF THE INTERCREDITOR AND
COLLATERAL SUBORDINATION AGREEMENT DATED AUGUST 31, 1999 (THE "SUBORDINATION
AGREEMENT"). AS THE SAME MAY BE AMENDED, MODIFIED OR OTHERWISE SUPPLEMENTED FROM
TIME TO TIME, BY AND AMONG ALTIVA FINANCIAL CORPORATION, AS BORROWER, GREENWICH
CAPITAL MARKETS, INC. AND GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., PARTIES TO
THE SENIOR AGREEMENTS REFERRED TO IN THE SUBORDINATION AGREEMENT, AND THE
HOLDERS FROM TIME TO TIME OF THE OBLIGATIONS ARISING UNDER THE SUBORDINATED LOAN
AGREEMENT REFERRED TO IN THE SUBORDINATION AGREEMENT.
PLEDGE AND SECURITY AGREEMENT
This PLEDGE and SECURITY AGREEMENT, dated as of August 31, 1999 (as
amended, supplemented or otherwise modified from time to time, this "Pledge
Agreement"), between ALTIVA FINANCIAL CORPORATION, a Delaware corporation (the
"Borrower"), having its principal place of business at 0000 Xxxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 and VALUE PARTNERS, LTD., a Texas limited
partnership, having its principal place of business at 0000 Xxxx Xxxxxx, Xxxxx
000, Xxxxxx, Xxxxx 00000, on its own behalf and as agent (in such agency
capacity and together with any successor agent, the "Agent") for Value Partners,
Ltd. as the initial purchaser (the "Initial Purchaser") of the Notes, as defined
herein, issued pursuant to the Secured Convertible Note Purchase Agreement (the
"Purchase Agreement") and any subsequent Registered Owners of the Notes sold,
assigned or otherwise transferred in accordance with the Purchase Agreement (who
together with any successor agent acting as such under the Purchase Agreement,
are referred to collectively as the "Lenders").
W I T N E S S E T H
WHEREAS, on August 31, 1999, the Borrower and the Initial Purchaser
entered into the Purchase Agreement, which Purchase Agreement is incorporated
herein by reference, which provides for the loan by the Lenders of $7,000,000.00
in the aggregate to be evidenced by the issuance by the Borrower of 12% Secured
Convertible Notes due 2006 (the "Notes") to the Initial Purchaser in the
aggregate principal amount of $7,000,000.00; and
WHEREAS, concurrently with the execution and delivery hereof, the
Borrower has issued the Notes to the Initial Purchaser; and
WHEREAS, in order to induce the Initial Purchaser to purchase the
Notes, the Borrower has agreed to grant to the Agent for the account of the
Lenders (a) a first priority lien and security interest in certain Collateral,
as defined herein, and (b) a subordinated lien and security interest in the
Subordinated Collateral, as defined herein, which is presently pledged to and
subject to the security interest of Greenwich Capital Financial Products, Inc.,
a Delaware corporation ("Greenwich") pursuant to that certain Pledge and
Security Agreement, dated April 17, 1997, which
PAGE 1
subordinated lien shall become a first priority lien and security interest upon
the Borrower's satisfaction of its indebtedness and obligations to Greenwich
secured by the Subordinated Collateral; and
WHEREAS, in order to induce the Initial Purchaser to purchase the
Notes, the Borrower has agreed to grant to the Lenders a first priority lien and
security interest in the Textron Collateral, as defined herein, pledged by the
Borrower to Textron Financial Corporation ("Textron") pursuant to the Textron
Documents, as defined herein, and to deliver to the Agent for the account of the
Lenders the Textron Collateral within ten (10) Business Days of the date the
security interest of Textron Financial Corporation ("Textron") in the Textron
Collateral is extinguished;
NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Borrower, the Agent and the Lenders hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS. As used herein, the following terms shall have the
following meanings:
"Accounts" shall have such meaning as such term is defined in Article 9
of the UCC, and shall include, without limitation, each of the following,
whether now owned or hereafter acquired by the Borrower: (a) all accounts
receivable, contract rights, book debts, notes, drafts and other obligations or
indebtedness owing the Borrower (including, without limitation, any such
obligation that might be characterized as an account, contract right, or general
intangible under the UCC in effect in any jurisdiction) and all monies due to or
to become due to the Borrower under all contracts for the sale, lease, or
exchange of goods or other property (whether or not earned by performance on the
part of the Borrower), in each case whether now in existence or hereafter
arising or acquired, including, without limitation, the right to receive the
proceeds thereof; (b) all rights of the Borrower to receive any payment of money
or other form of consideration; (c) all security pledged, assigned or granted to
or held by the Borrower to secure any of the foregoing; and (d) all guaranties
of, or indemnifications with respect to, any of the foregoing.
"Additional Collateral" means property acceptable to the holders of not
less than a majority in aggregate principal amount of the Notes then outstanding
in writing, in their sole and absolute discretion.
"Agent" shall have the meaning specified in the introductory paragraph
hereof.
"Borrower" shall have the meaning specified in the introductory
paragraph hereof.
PAGE 2
"Borrower's Residual Percentage" means the percentage of residual
interest in a Securitization which a particular Residual Interest Instrument
owned by the Borrower (and not by a subsidiary or affiliate) and pledged as
Collateral represents.
"Business Day" means any day other than Saturday, Sunday or other day
on which banking institutions in Atlanta, Georgia are authorized or required by
law or executive order to be closed.
"Certificates" means any security, chattel paper, certificated security
or instrument, as from time to time amended, modified or supplemented, including
the following: any Residual Interest Instrument, any Interest Only Instrument,
the Senior Trust Certificate, and a Certificated Security as defined in Section
8-102 of the UCC.
"Clearing Corporation" shall have the meaning given such term in
Section 8-102(a)(5) of the UCC.
"Collateral" shall have the meaning specified in Section 2.1 hereof and
shall include the Subordinated Collateral.
`
"Collateral Requirement" means an aggregate dollar amount equal to one
hundred seventy-five percent (175%) of the aggregate outstanding principal
amount unpaid under the then outstanding Notes, plus accrued and unpaid interest
thereon and any other sums then due the Lenders under the Loan Documents.
"Current Market Value" means the lesser of (a) the fair market value of
the Qualified Collateral on such day as determined in good faith by the Agent,
applying standards of commercial reasonableness that are customary in the
mortgage-related securities industry, minus all sums due any Person who holds a
security interest senior to that of the Agent for the account of the Lenders in
such Qualified Collateral, or (b) the sum of the Overcollateralization Amount
for each Qualified Securitization as reported by the most recent trustee
certificate to which the Borrower is entitled, plus the fair market value of any
Additional Collateral (the value of which shall be determined by the Agent in
its sole and absolute discretion), plus the Restricted Proceeds, minus all sums
due any Person who holds a security interest senior to that of the Lenders in
Collateral issued pursuant to such Qualified Securitization, in the Restricted
Proceeds or in any Additional Collateral.
"Default" has the meaning set forth in Article I of the Notes.
"Delivery" means a delivery of Collateral to the Agent (or Escrow
Agent, in the case of proceeds) in accordance with this Pledge Agreement,
including Section 2.2 hereof.
"Escrow Agent" means U.S. Trust Company of Texas, N.A., or such
successor thereto, who acts as escrow agent pursuant to the Escrow Agreement.
PAGE 3
"Escrow Agreement" means that certain Escrow and Security Agreement, in
the form attached hereto as Exhibit "B" and by this reference incorporated
herein.
"Event of Default" has the meaning set forth in Section 5.1 of the
Notes.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time.
"Governmental Authority" means any nation, government, 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.
"Grantor Trust Right" means all rights of the Borrower, including the
right to payments to the Borrower, in the Sale Agreement executed in relation to
Mego Mortgage Home Loan Trust 1996- 3, including, without limitation, the rights
set forth in Section 4.05(b)(xvii) of such Sale Agreement.
"Greenwich" has the meaning specified in the third recital paragraph
hereof.
"Greenwich Documents" means that certain Amended and Restated Master
Loan Purchase and Servicing Agreement dated as of October 1, 1996 between
Greenwich as lender and the Borrower, that certain Promissory Note in the
original maximum aggregate principal amount not to exceed $11,000,000.00 and all
related documents, including that certain Pledge and Security Agreement dated as
of April 17, 1997, financing statements and transfer powers, all as amended,
supplemented or otherwise modified.
"Indebtedness" has the meaning set forth in Section 2 of the Notes.
"Intercreditor Agreement" means that certain Intercreditor and
Collateral Subordination Agreement in the form attached hereto as Exhibit "A"
and by this reference incorporated herein, executed effective as of the date
hereof by Greenwich, the Agent and the Borrower, pursuant to which, inter alia
Greenwich agrees to hold the Subordinated Collateral to perfect the pledge of
such Subordinated Collateral to the Agent for the account of Lenders, subject to
the security interest of Greenwich.
"Interest Only Instrument(s)" shall, as to that particular Certificate,
have the meaning ascribed to the term "Class S Certificate" or a similar phrase
describing an interest only security in the respective Sale Agreement arising
from the Securitization pursuant to which such security is issued, which
security represents the undivided interest of the Borrower in all or a portion
of the interest payments due on certain loans securitized in that
Securitization.
"Lenders" shall have the meaning specified in the introductory
paragraph hereof.
"Loan Documents" means, collectively, the Purchase Agreement, the
Notes, the Escrow Agreement, this Pledge Agreement, the Registration Rights
Agreement and any other documents
PAGE 4
evidencing or relating to the Notes or the Collateral, including the
Subordinated Collateral, the Additional Collateral or any such security which
may now or hereafter be given as further security for or in connection with the
Notes.
"Notes" shall have the meaning specified in the first recital paragraph
hereof.
"Original Collateral" means the Certificates and Grantor Trust Right
and all other rights described on Exhibit "C" attached hereto and by this
reference incorporated herein.
"Overcollateralization Amount" has, as to a particular Securitization,
the meaning ascribed it in the respective Sale Agreement related to a Qualified
Securitization, multiplied by the Borrower's Residual Percentage of that
Securitization.
"Person" means any individual, partnership, corporation, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization, or governmental entity (or any department, agency
or political subdivision thereof), or any other entity.
"Pledge Agreement" shall have the meaning specified in the introductory
paragraph hereof.
"Proceeds Accounts" shall mean any and all accounts established and
maintained by the Escrow Agent in the name of the Borrower, established pursuant
to the Escrow Agreement, for the deposit of proceeds of the Collateral.
"Purchase Agreement" shall have the meaning specified in the
introductory paragraph hereof.
"Qualified Collateral" means: the Original Collateral, the Subordinated
Collateral, the Restricted Proceeds and any Additional Collateral, to the extent
each is Collateral at such time. The Textron Collateral shall become Qualified
Collateral only when it becomes Collateral pursuant to the terms hereof.
"Qualified Securitization" means a Securitization as to which a
Residual Interest Instrument (which represents not less that ninety-nine percent
(99%) of the residual interest in such Securitization) is pledged as Qualified
Collateral pursuant to the terms of this Pledge Agreement.
"Quarter" means any final quarter ended on the last day of the months
of February, May, August and November.
"Registration Rights Agreement" shall have the meaning set forth in the
Purchase Agreement.
"Residual Interest Instrument(s)" shall, as to that particular
Certificate, have the meaning ascribed to the term "Class R Certificate",
"Residual Interest Instrument", "Residual Certificate", "Residual Instrument" or
a similar phrase describing a certificated residual interest in the Sale
Agreement arising from the Securitization pursuant to which such security is
issued, which security represents the undivided residual interest of the holder,
including in all or a portion of the interest
PAGE 5
and principal payments due on certain loans securitized in that Securitization.
Neither the Grantor Trust Right nor the Senior Trust Certificate are Residual
Interest Instruments.
"Restricted Proceeds" shall mean those sums deposited in the Proceeds
Accounts, which constitute proceeds of the Collateral, which the Borrower is
prohibited from withdrawing from the Proceeds Accounts pursuant to the terms of
this Pledge Agreement, including Section 2.7.
"Sale Agreement" means the respective Pooling and Servicing Agreement,
Sale and Servicing Agreement or similar agreement, together with related
agreements, including trust agreements and indentures, which create and grant
rights in Certificates and the Grantor Trust Right, entered into in relation to
a particular Securitization.
"Securitization" means the respective securitization as set forth on
Exhibit "E" hereto and by this reference incorporated herein.
"Senior Trust Certificate" means that certain 125 Home Loan Owner Trust
1998-1, Senior Trust Certificate.
"Subordinated Collateral" means the Certificates and all other rights
presently pledged to Greenwich as described in Section 2.1 below and in Exhibit
"D" attached hereto and by this reference incorporated herein.
"Textron" shall have the meaning specified in the fourth recital
paragraph hereof.
"Textron Collateral" means those Certificates and all other rights
presently pledged to Textron as described in Exhibit "F" attached hereto and by
this reference incorporated herein.
"Textron Documents" means that certain Credit Agreement dated as of
October 27, 1997 by and between Textron as agent and the Borrower, that certain
Note as of the same date issued to the lenders under such Credit Agreement and
all related documents, including that certain Security Agreement dated as of
October 27, 1997, financing statements and transfer powers, all as amended,
supplemented or otherwise modified.
"UCC" means the Uniform Commercial Code as in effect in the State of
Maryland; PROVIDED, that if by mandatory provisions of law, the perfection or
effect of perfection or non-perfection of the security interest in any
Collateral to which this Pledge Agreement relates is governed by the Uniform
Commercial Code as in effect on or after the date hereof in any other
jurisdiction, UCC means the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such perfection
or the effect of perfection or non-perfection.
"Uncertificated Security" shall have the meaning given such term in
Section 8-102(a)(18) of the UCC.
ARTICLE II
PAGE 6
PLEDGE AND DELIVERY OF COLLATERAL
MANAGEMENT OF COLLATERAL
2.1 SECURITY. As security for the payment (whether at the stated
maturity, by acceleration or otherwise) of all obligations, liabilities and
indebtedness of the Borrower to the Lenders, whether now or hereafter owing or
existing, arising under or relating to this Pledge Agreement, the Notes and the
other Loan Documents, and for the payment, performance and discharge of all
other obligations or undertakings now or hereafter made for the benefit of the
Lenders under this Pledge Agreement, the Notes, the other Loan Documents or
under any other agreement, promissory note or undertaking now existing or
hereafter entered into by the Borrower with or to the Lenders pursuant to the
terms hereof, including any guaranty or surety obligations of the Borrower owed
to the Lenders arising under or relating to the Pledge Agreement, the Notes and
the other Loan Documents, the Borrower hereby pledges, assigns, transfers and
delivers to Agent for the account of the Lenders, and grants to the Agent for
the account of the Lenders, a continuing first priority lien and security
interest (except as noted below or, in the case of Additional Collateral, as
otherwise agreed by the Lenders in accepting the same) in all of the Borrower's
rights, title and interest in, to and under: (a) the Certificates representing
the Original Collateral and Subordinated Collateral, subject only to the
security interest of Greenwich in the Subordinated Collateral; (b) the Grantor
Trust Right, subject to the Securitizations; (c) any other property of the
Borrower held by the Agent on behalf of the Lenders arising under or relating to
the Loan Documents, from time to time, or securing any other obligation of the
Borrower to the Lenders or any of their respective affiliates; (d) Additional
Collateral, and (e) all proceeds, payments, income, products and profits derived
from or related to the above-described property, including without limitation,
the Restricted Proceeds (all of the foregoing are collectively referred to
herein as the "Collateral"). The agreements and related documents evidencing the
Grantor Trust Right and the Certificates and related documents comprising the
Original Collateral are set forth on Exhibit "C". The Certificates and related
documents comprising the Subordinated Collateral are set forth on Exhibit "D".
The Collateral shall include all rights of the Borrower related to the
Original Collateral, the Subordinated Collateral, the Additional Collateral and
any other Collateral pledged pursuant to the terms hereof, including the
following:
(a) Cash Proceeds. All rights to receive the payment of money in
respect of the Collateral, including the Certificates and Grantor Trust Right.
(b) Chattel Paper, Instruments, etc. All chattel paper, securities,
uncertificated securities, instruments, non-negotiable instruments, negotiable
instruments, investment property, general intangibles, documents (as those terms
are defined in the UCC), Accounts and Certificates evidencing or with respect to
any of the Collateral.
(c) Deposit Accounts. All rights to payments under the Collateral,
including payments due to the holders of Certificates and the Grantor Trust
Right from the accounts of the trustee (or other Person) into which funds to be
payable under Certificates and the Grantor Trust Right are deposited or held
under a Securitization, and all money, cash and cash equivalents of the
Borrower,
PAGE 7
in each case arising from payments with respect to any of the Collateral,
including the Certificates and the Grantor Trust Right or other Collateral.
(d) Collateral. All collateral granted by third party obligors to, or
held by, the Borrower with respect to the Collateral, including the Certificates
and the Grantor Trust Right.
(e) Books and Records. All books and records, including books of
account and ledgers of every kind and nature, all electronically recorded data
(including all computer programs, disks, tapes, electronic data processing media
and software used in connection with maintaining the Borrower's books and
records), all files and correspondence and all receptacles and containers for
the foregoing, all with respect to the Collateral, including Certificates and
the Grantor Trust Right.
(f) Cash. All cash and other property (including the Proceeds Account)
held by the Escrow Agent under this Pledge Agreement and the Escrow Agreement.
(g) Proceeds Accounts. Each of the Proceeds Accounts (to the extent a
security interest therein is not otherwise created pursuant to this Pledge
Agreement), including any and all assets of whatever type or kind deposited by
on behalf of the Borrower in such Proceeds Accounts, whether now owned or
hereafter acquired, existing or arising, including, without limitation, all
moneys, checks, drafts, instruments, securities or interests therein of any type
or nature deposited in such Proceeds Accounts, and all investments and all
certificates and other instruments (including depository receipts, if any) from
time to time representing or evidencing the same, and all dividends, interest,
distributions, cash and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the
foregoing.
(h) Miscellaneous. All right, title, interest in, to and under the
clean-up call provisions, including as contained in Section 9.01 of each of the
Sale Agreement with respect to the subject Securitization, and all proceeds,
payments and income derived from or relating thereto.
(i) Proceeds and Products. All proceeds and products of the Collateral,
to the extent not included in the foregoing, including:
(i) all distributions arising from and pursuant to
the designated trust agreements or other Securitization
agreements (including Sales Agreements) with respect to the
Collateral,
(ii) all other proceeds of insurance and guarantees,
if any, with respect to the Collateral provided by MBIA
Insurance Corporation, the Federal Housing Administration or
any other Person providing coverage for loss or diminution in
value of the Collateral, and
(iii) all other proceeds from the liquidation or
other recovery (if any) of loans relating to the Collateral;
and
PAGE 8
(iv) all "proceeds", as that term is defined in
Section 9-306 of the UCC.
The Borrower will pay all filing, recording, search and other expenses
reasonably incurred by the Lenders with respect to perfection of the Lenders'
security interest under this Pledge Agreement and the confirmation of the
priority of the Lenders' security interest in the Collateral.
2.2 DELIVERY OF COLLATERAL.
(a) Delivery of Collateral to the Agent under this Pledge Agreement
shall be made in the following manner: (i) in the case of cash, including
proceeds on the Collateral and cash which constitutes Additional Collateral, by
wire transfer or other method acceptable to the Agent of immediately available
funds to the applicable Proceeds Account; (ii) in the case of a Certificate (or
similar property perfected by possession), by the physical delivery thereof
evidencing such Collateral to the Agent or its designee, whenever possible,
registered in the name of the Agent, and in all other instances, in suitable
form for delivery and transfer, accompanied by duly executed instruments of
transfer or assignment in blank or such other documentation as may be necessary
to effect transfer to the Agent, whereupon the Agent may take such steps as it
deems necessary to effect the recordation or re-registration of such Collateral
in its name; (iii) with respect to an Uncertificated Security by registration in
the name of the Agent, whenever possible, and in all other instances (other than
an Uncertificated Security credited on the books of a Clearing Corporation), the
Borrower shall cause the issuer of such Uncertificated Security to duly
authorize and execute, and deliver to the Agent, an agreement for the benefit of
the Lenders substantially in the form of Exhibit "G" hereto (appropriately
completed to the satisfaction of the Agent and with such modifications, if any,
as shall be satisfactory to the Agent) pursuant to which such issuer agrees to
comply with any and all instructions originated by the Agent for the account of
the Lenders without further consent by the registered owner and not to comply
with instructions regarding such Uncertificated Security originated by any other
Person other than a court of competent jurisdiction: ( (iv) with respect to a
certificated security (as defined in the UCC) or Uncertificated Security
credited on the books of a Clearing Corporation (including a Federal Reserve
Bank, Participants Trust Company or The Depository Trust Company), the Borrower
shall promptly notify the Agent thereof and shall promptly take all actions (x)
required (i) to comply with the applicable rules of such Clearing Corporation
and (ii) to perfect the security interest of the Lenders under applicable law
(including, in any event, under Sections 9-115 (4)(a) and (b), 9-115 (1)(e) and
8-106(d) of the UCC) and (y) as the Agent deems necessary or desirable to effect
the foregoing;and (v) in the case of any other Collateral (such Collateral to be
subject to the written approval of the Agent, which approval may be withheld in
the sole discretion of the Agent), in such manner as the Agent shall agree to in
writing. Except as otherwise provided herein or, in the case of Additional
Collateral, as otherwise agreed by the Agent in accepting the same, all
Collateral shall be delivered free and clear of all liens and security interests
other than the lien and security interest created in favor of the Agent for the
account of the Lenders under this Pledge Agreement.
PAGE 9
(b) In addition to the actions required to be taken pursuant to
preceding Section 2.2(a), the Borrower shall take the following additional
actions with respect to the Collateral:
(i) with respect to all Collateral of such Borrower whereby or
with respect to which the Agent for the account of the Lenders may obtain
"control" thereof within the meaning of Section 8-106 of the UCC (or under any
other provision of the UCC as the same may be amended or supplemented from time
to time, or under the laws of any relevant State other than the State of
Maryland), the Borrower shall take all actions as may be requested from time to
time by the Agent so that "control" of such Collateral is obtained and at all
times held by the Agent; and
(ii) Borrower shall from time to time cause appropriate
financing statements (on Form UCC-1 or other appropriate form) under the Uniform
Commercial Code as in effect in the various relevant states, covering all
Collateral hereunder (with the form of such financing statements to be
satisfactory to the Agent), to be filed in the relevant filing offices so that
at all times the Agent has a security interest in all Collateral which is
perfected by the filing of such financing statements (in each case to the
maximum extent perfection by filing may be obtained under the laws of the
relevant states, including, without limitation, Section 9-115(4)(b) of the UCC).
2.3 THE ESCROW.
(a) RESTRICTED PROCEEDS. Restricted Proceeds shall be deposited into
one or more Proceeds Accounts, established as a cash account, over which the
Agent shall have exclusive and absolute control and dominion (and no withdrawals
or transfers may be made therefrom by any Person except with the prior written
consent of the Agent). Deposits of Restricted Proceeds shall be held in a
segregated account or accounts. The Proceeds Accounts shall be established at
the Escrow Agent and shall be subject to the Escrow Agreement. Cash deposited in
that account on behalf of the Lenders shall constitute Collateral. The Agent may
exercise all rights granted a secured party under ss. 9-502 of the UCC, without
need of notice or consent of the Borrower, whether or not a Default exists. This
Section 2.3 shall not limit or otherwise affect any other rights and remedies of
the Lenders.
(b) CASH AS COLLATERAL. In the event cash is provided as Additional
Collateral, the Borrower shall deposit such sums in an account (other than the
Proceeds Accounts) with the Escrow Agent, subject to the terms of the Escrow
Agreement and shall take all steps necessary to perfect a security interest in
such account in favor of the Agent, including permitting such account to be
located in the State of California and complying with all requirements of the
UCC of the State of California necessary to perfect such a pledge.
2.4 NOTICE, REGISTRATION AND CONSENTS.
On or prior to the date a Certificate, the Grantor Trust Right or any
other property becomes or is to become Collateral, the Borrower shall:
PAGE 10
(a) obtain all requisite consents necessary to provide to the Lenders
the rights granted in this Pledge Agreement, including the grant and perfection
of the Agent (for the account of the Lenders) of a security interest in such
Collateral and, in the case of registered or certificated Collateral, to cause
the registration thereof (on the books of the Securitization trustee,
certificate transfer agent and registrar or similar Person) in the name of the
Agent on behalf of the Lenders; and
(b) provide all requisite notices necessary to provide to the Lenders
the rights granted in this Pledge Agreement, including the grant and perfection
of the Lenders' security interest in such Collateral, including the notices set
forth in Exhibits "G" attached hereto and by this reference incorporated herein.
Notices and consents shall include notices to and consents of the
indenture trustee and the certificate transfer agent and registrar of any
Securitization.
2.5 ADDITIONAL COLLATERAL.
(a) Delivery of Collateral. If the Current Market Value is less than
the Collateral Requirement at the close of business on any Business Day, the
Borrower shall, within five (5) Business Days of receipt of written notice from
the Agent, make Delivery to the Agent of Additional Collateral such that the
aggregate Current Market Value (determined as of the Business Day prior to such
Delivery) is equal to or in excess of the Collateral Requirement. Once delivered
such Additional Collateral shall remain Collateral pursuant to this Agreement,
even if no longer necessary to cause the Current Market Value to exceed the
Collateral Requirement.
(b) Right of Agent to Direct Payment of Additional Collateral. The
Agent may, at any time, whether or not there then exists a Default or an Event
of Default, without the consent of the Borrower, direct the issuer which has
issued an instrument constituting Additional Collateral to make payment to the
Escrow Agent, on behalf of the Lenders, with such payments to be deposited in a
segregated Proceeds Account with the Escrow Agent to be held as collateral
pursuant to this Pledge Agreement. The Borrower shall provide irrevocable
written notice of such right to the issuer of such instrument in a form
acceptable to the Agent, in its sole and absolute discretion.
(c) Nothing herein shall limit any other right or remedy of the
Agent.
2.6 SUBORDINATED COLLATERAL AND TEXTRON COLLATERAL.
(a) Subordinated Collateral. The Intercreditor Agreement, dated as of
the date of this Pledge Agreement, shall be entered into among the Borrower, the
Agent, Greenwich and Greenwich Capital Markets, Inc. The Subordinated Collateral
shall be held by Greenwich pursuant to the Intercreditor Agreement until such
time as such Certificates are delivered to and registered in the name of the
Agent or its designee in compliance with Section 2.2.
(b) Textron Collateral. On the date Textron's security interest in
the Textron Collateral is terminated in accordance with the terms of the Textron
Documents, the Textron Collateral shall
PAGE 11
be deemed Collateral as if it were set forth in Section 2.1 and included on
Exhibit "C". Commencing at such time the Lenders shall have a first priority
lien and security interest therein pursuant to this Pledge Agreement and the
Borrower shall within ten (10) Business Days after the expiration of Textron's
security interest deliver to and register in the name of the Agent (including in
compliance with Section 2.2) those items on Exhibit "F" hereto, together with
any other such documents necessary to perfect the Lenders' first priority lien
and security interest therein and to grant control to the Agent under Article 8.
2.7 Proceeds.
(a) Until such time as the security interest granted the Agent herein
is terminated, without limiting any rights or remedies of the Agent in the Loan
Documents, all payments due the holder of a Certificate and/or the Grantor Trust
Right shall be disbursed as follows:
(i) all proceeds from the Collateral received following a
Default (including without limitation because the Current Market Value is less
than the Collateral Requirement at the close of business on any Business Day) or
an Event of Default, shall be made to the Agent's account for deposit into the
Proceeds Accounts as Restricted Proceeds and shall remain as Collateral and
shall not thereafter be released to the Borrower upon cure of a Default or an
Event of Default; and
(ii) all proceeds from the Collateral received when no Default
or an Event of Default exists shall be disbursed to the Borrower, except as
otherwise limited by this Pledge Agreement or any of the other Loan Documents.
(b) Nothing in this paragraph shall serve to limit any other rights or
remedies of the Agent;
(c) Registration of the Certificates and the Grantor Trust Right shall
remain in the name of the Agent until all obligations of the Borrower to the
Lenders under the Loan Documents are satisfied and the Lenders' liens under this
Pledge Agreement are terminated. This Section shall not limit or otherwise
effect any other rights or remedies of the Lenders. The Agent shall promptly
notify the Securitization trustees to disburse proceeds to the Borrower during
the time period where the Borrower is entitled to receive such proceeds under
the terms xxxxxx.Xx the event proceeds to which the Agent, pursuant to paragraph
(a) of this Section 2.7, is entitled or which are to be deposited into the
Proceeds Accounts as Restricted Proceeds are paid to Borrower, Borrower shall
promptly pay such proceeds to the Escrow Agent. In the event proceeds which the
Borrower, pursuant to paragraph (a) of this Section 2.7, is entitled are
deposited in the Proceeds Accounts, the Agent shall cause the Escrow Agent to
pay such sums to Borrower. Nothing herein shall prevent the Agent from causing
proceeds to which the Borrower is entitled to be deposited into the Proceeds
Accounts and then disbursed to the Borrower.
(d) The Borrower shall not cause any sums to be deposited into the
Proceeds Accounts which are not proceeds of the Collateral.
PAGE 12
2.8 HELD IN TRUST. Any sums collected or received and any property
recovered or possessed by the Borrower in connection with the Collateral, which,
under the terms of this Pledge Agreement, should have been delivered to the
Agent or the Escrow Agent, shall be received and held by the Borrower in trust
for and on the Lenders' behalf, shall be segregated from the other assets and
funds of the Borrower, and shall be delivered to the Escrow Agent or the Agent
for the benefit of the Lenders.
ARTICLE III
FURTHER ASSURANCES
Subject to the terms of the Greenwich Documents and the Textron
Documents, the Borrower will, from time to time, at its expense, execute,
deliver, file, register, and record (in such manner and form as the Agent may
require) any statement, assignment, instrument, document, agreement, or other
paper and take any other action (including, without limitation, any filings of
financing or continuation statements under the UCC) that the Agent may from time
to time determine to be necessary or desirable in order to create, preserve,
upgrade in rank (to the extent required hereby), perfect, confirm, or validate
the lien and first or other priority security interests granted the Lenders, or
to enable the Lenders to obtain the full benefits of this Pledge Agreement
(including control, as that term is used in Articles 8 and 9 of the UCC), and to
enable the Lenders to exercise and enforce any of its rights, powers, and
remedies hereunder with respect to any of the Collateral.
At the request of the Agent, the Borrower will use its reasonable best
efforts to obtain the consent or acknowledgement of any Person that is necessary
or desirable to effect the pledge hereunder of any right, title, claims, and
benefits now owned or hereafter acquired by the Borrower.
To the extent permitted by law, the Borrower hereby authorizes the
Agent to execute and file financing statements or continuation statements
without the Borrower's signature appearing thereon. The Borrower agrees that a
carbon, photographic, or other reproduction of this Pledge Agreement or of a
financing statement is sufficient as a financing statement. The Borrower shall
pay the costs of, or incidental to, any financing or continuation statements
concerning the Collateral. In the event that any re-recording or refiling
thereof (or filing of any statements of continuation or assignment of any
financing statement) is required to protect and preserve such security interest,
the Borrower, at its own cost and expense, shall cause the same to be
re-recorded and/or refiled at the time and in the manner requested by the Agent.
The Borrower hereby authorizes the Agent for the account of the Lenders
to file or refile any financing statements, continuation statements, and/or
amended statements with respect to the security interests granted or to be
granted pursuant to this Pledge Agreement which, at any time, may be required or
appropriate, although the same may have been executed only by the Agent, and to
execute such statements on behalf of the Borrower.
In addition, in the event and to the extent that any of the Collateral
consists of or is represented by Certificates, including instruments or other
evidences of ownership such as would
PAGE 13
require physical possession of the same in order to perfect the security
interests therein, subject to the terms of the Greenwich Documents and the
Textron Documents, the Borrower will promptly, at its expense, deliver the same
to the Agent, with any necessary endorsements thereon. The Borrower shall take
all steps necessary to cause the Collateral to be registered in the name of the
Agent, on behalf of the Lenders, with the appropriate Person, including under
the Securitizations. Upon the Agent's request, subject to the terms of the
Greenwich Documents and the Textron Documents, the Borrower shall promptly
deliver any documents related to any of the Collateral and provide the Lenders
all information it may reasonably request concerning the Collateral. The
Borrower will take all steps requested by the Agent to perfect a security
interest in the Additional Collateral, including delivery of physical
possession, the granting of control, the execution and delivery of assignments
and/or endorsements, the registration thereof in the name of the Agent, and the
execution of financing statements. The Borrower hereby irrevocably designates
the Agent for the account of the Lenders as agent and attorney-in-fact for the
Borrower for the aforesaid purposes.
ARTICLE IV
COVENANTS
4.1 NO LIENS. Subject to the terms of the Greenwich Documents and the
Textron Documents, the Borrower shall not, without the prior written consent of
the Agent, in any manner, transfer, assign or further encumber or permit the
encumbrance of the Borrower's interest in the Collateral. If the Collateral, or
any part thereof, is sold or otherwise disposed of in violation of these
provisions, the security interest of the Lenders shall continue in such
Collateral or any part thereof notwithstanding such sale or other disposition,
and the Borrower will deliver any proceeds thereof to the Escrow Agent.
4.2 LOAN DOCUMENTS. The Borrower shall at all times during the term of
this Pledge Agreement comply with all of the affirmative covenants, negative
covenants and other terms and provisions contained in the Loan Documents.
4.3 GREENWICH COLLATERAL. The Borrower shall take all action which is
necessary or advisable in order for the Lenders to obtain, and the Lenders shall
receive, a first priority lien and security interest in the Subordinated
Collateral after the lien of Greenwich in the Subordinated Collateral
terminates.
4.4 TEXTRON COLLATERAL. The Borrower shall take all action which is
necessary or advisable in order for the Lenders to obtain, and the Lenders shall
receive, a first priority lien and security interest in the Textron Collateral
after the lien of Textron in the Textron Collateral terminates.
4.5 DELIVERY OF CERTIFICATES AND REPORTS. The Borrower shall deliver,
by facsimile and first class mail, to the Agent, the following: (a) not later
than ten (10) Business Days following the end of each Quarter, a certificate
setting forth the Current Market Value (determined by the Company under
generally accepted accounting principles pursuant to clause (a) of the
definition of this term) as of the last day of such Quarter in the form of
Exhibit "H", a copy of which is attached
PAGE 14
hereto and by this reference incorporated herein; and (b) not later than ten
(10) Business Days following the end of each month, a certificate setting forth
an analysis of subpart (b) of the Current Market Value (as determined pursuant
to clause (b) of the definition of this term) as of the last day of such month,
in the form of Exhibit "I", a copy of which is attached hereto and by this
reference incorporated herein. Such certificates shall set forth in detail the
basis of the above information and attach all reports from the respective
trustee, servicer or other party of the particular Securitization related to
such certifications, even in the event such report is not utilized in preparing
such certifications. Each certification shall be executed by the chief financial
officer of the Borrower and shall provide that such officer has caused such
certificate to be reviewed and that the information provided in such certificate
is true and correct in all material respects. Should the Agent, in writing,
request additional information related to any such certificate, such information
shall be provided to the Agent by facsimile and first class mail not later than
five (5) Business Days following the date of such written request.
4.6 TAXES. All payments due the Lenders under the Loan Documents shall
be made without set-off or counterclaim and free and clear of any deductions,
including deductions for taxes, unless the Borrower is required by law to make
such deductions. If (a) any Lender shall be subject to any tax with respect to
any such payment (other than income or franchise taxes), or (b) the Borrower
shall be required to withhold or deduct any tax on any such payment, then such
Lender may claim compensation from the Borrower under Section 4.7. Whenever
taxes must be withheld by the Borrower with respect to any such payments, the
Borrower shall promptly furnish to the Agent official receipts (to the extent
that the relevant governmental authority delivers such receipts) evidencing
payment of any such taxes so withheld. If the Borrower fails to pay any such
taxes when due or fails to remit to the Agent the required receipts evidencing
payment of any such taxes so withheld or deducted, the Borrower shall indemnify
the affected Lender for any incremental taxes and interest or penalties that may
become payable by such Lender as a result of any such failure.
4.7 COMPENSATION CLAIMS. Within fifteen (15) days after the receipt by
the Borrower of a certificate from the Agent on behalf of a Lender setting forth
why such Lender is claiming compensation under Section 4.6 and computations (in
reasonable detail) of the amount thereof, the Borrower shall pay to such Lender
such additional amounts as such Lender sets forth in such certificate as
sufficient fully to compensate it on account of the foregoing provisions of
Section 4.6, together with interest on such amount from the 15th day after
receipt of such certificate until payment in full thereof at the applicable
interest rate on the Notes which is then in effect. The reasonable determination
of such Lender of the amount to be paid to it and the basis for computation
thereof hereunder shall, in the absence of manifest error, be conclusive. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods.
4.8 OTHER INFORMATION. The Borrower shall use its best efforts to, and
cause the trustee or servicing agent for a Securitization to, enable the Agent's
authorized officers and representatives, during normal business hours upon
reasonable notice and at reasonable intervals, to examine documents, bank
statements and other records and to make copies and notes therefrom for the
purpose of ascertaining the financial condition of the Borrower and its
subsidiaries and the condition of the Collateral, PROVIDED, HOWEVER, that any
such examination shall be at the Borrower's expense,
PAGE 15
including all reasonable and necessary travel expenses, but excluding salaries
for the officers and representatives conducting such examination.
4.9 BOOKS AND RECORDS. The Borrower shall at all times keep its records
concerning the Collateral at its chief executive office and principal place of
business (which shall be one and the same) as set forth in this Pledge
Agreement, or so long as the Borrower shall have taken all steps reasonably
necessary to perfect the Agent's security interest in the Collateral with
respect to such new address, at such other address as the Borrower may specify
by notice actually received by the Agent not less than (10) Business Days prior
to such change of address.
4.10 INSURANCE POLICIES. The Borrower grants to the Agent full power
and authority as its attorney-in-fact, effective upon notice to the Borrower
after the occurrence and during the continuance of an Event of Default, to
adjust and settle any insurance policy owned by the Borrower insuring against
loss to the Collateral, to endorse any drafts thereon and to sign receipts for
any payments thereunder. Any amounts that the Agent receives under any such
policy (including return of unearned premiums) insuring against loss to the
Collateral shall be delivered to the Escrow Agent to be held as Collateral.
4.11 PERFORMANCE OF SECURITIZATION OBLIGATIONS. The Borrower shall
perform all servicing and other obligations required to be performed by it under
the Securitization agreements or any other agreement relating to the Collateral
and the Textron Collateral.
4.12 PROTECTION OF THE COLLATERAL. All Collateral shall be free and
clear of any liens and restrictions on the transfer hereof, except as
specifically permitted or granted herein. The Borrower shall defend the title to
the Collateral against all claims and demands which could have an effect on the
Lenders' rights or privileges hereunder. Except as set forth in the
Securitization documents, the Greenwich Documents and the Textron Documents, the
Borrower shall keep the respective Collateral free and clear of all liens,
claims, security interests, restrictions of transfer, charges, encumbrances,
taxes and assessments, and shall pay all taxes, assessments and fees relating to
the Collateral. The Borrower will exclude from contracts to which it becomes a
party after the date hereof, provisions that would prevent the Borrower from
creating and maintaining in favor of the Lenders a security interest in the
Collateral as pledged hereby. The Borrower shall not modify, amend or waive any
terms or conditions of the Collateral or the Textron Collateral (including the
waiver of a default), or any rights or interest therein, without the Agent's
prior written consent. The Borrower will not sell, assign, transfer or otherwise
dispose of any of the Collateral. The Borrower will not take any action or
suffer to exist any conditions that could have an adverse effect on the Lenders'
rights (including, without limitation, the security interest in the Collateral)
granted hereunder, subject to the Greenwich Documents and the Textron Documents.
4.13 APPLICABLE LAW. The Borrower will not use any of the Collateral in
violation of any applicable law.
ARTICLE V
REMEDIES
PAGE 16
5.1 REMEDIES. If an Event of Default shall have occurred and be
continuing, then the Agent may, at its election, to the fullest extent permitted
by applicable law, but subject to Greenwich and Textron Documents :
(a) Proceed to exercise any rights or remedies the Lenders' may have
hereunder or under the Notes or any other Loan Documents or otherwise;
(b) Pursue, consecutively or cumulatively, any rights or remedies it
may have at law, equity or otherwise, including all rights and remedies
available to secured parties under the applicable UCC provisions;
(c) Cancel or otherwise terminate this Pledge Agreement, the Notes and
any other agreement with the Borrower without prior notice to the Borrower (and
the Borrower will be liable to the Lenders for any resulting loss, costs and
expenses), and the Lenders may: (i) set off any obligation to the Borrower
hereunder or thereunder against any obligation of the Borrower to the Lenders
hereunder or thereunder; and (ii) realize upon property securing any obligation
to Lenders hereunder or thereunder;
(d) Require the Borrower to, upon the Agents' request, assemble the
Collateral and otherwise make it available to the Agent. The Agent may have a
receiver appointed for all or any portion of the Borrower's assets or business
which constitutes the Collateral in order to manage, protect, preserve, sell and
otherwise dispose of all or any portion of the Collateral in accordance with the
terms of the Loan Documents, to continue the operations of the Borrower and to
collect all revenues and profits therefrom to be applied to the payment of the
Notes, including the compensation and expenses of such receiver. The Agent may
offset and apply toward the payment of the Notes or require to be paid to the
Escrow Agent (and/or toward the curing of any Event of Default) any indebtedness
from any Lender to the Borrower, including any indebtedness represented by
deposits in any account maintained with any Lender, and the Proceeds Account
regardless of the adequacy of any security for the Loan. The Agent shall have no
duty to determine the adequacy of any such security in connection with any such
offset;
(e) To the extent specified in written notice from the Agent to the
Borrower take any of the following actions (for the sole benefit of the Lenders
but at the Borrower's expense):
(i) To ask for, demand, take, collect, xxx for and receive all
payments in respect of any Collateral which the Borrower could otherwise ask
for, demand, take, collect, xxx for and receive for its own use;
(ii) To extend the time of payment of any Collateral and to
make any allowance or other adjustment with respect thereto;
PAGE 17
(iii) To settle, compromise, prosecute or defend any action or
proceeding with respect to any Collateral and to enforce all rights and remedies
thereunder which the Borrower could otherwise enforce;
(iv) To enforce the payment of any Collateral, either in the
name of the Borrower or in its own name, and to endorse the name of the Borrower
on all checks, drafts, money orders and other instruments tendered to or
received in payment of indebtedness to the Lenders;
(v) To notify the third party payor with respect to any
Collateral of the existence of the security interest created hereby and to cause
all payments in respect thereof thereafter to be made directly to the Agent,
PROVIDED, HOWEVER, that whether or not the Agent shall have so notified such
payor, the Borrower will at its expense render all reasonable assistance to the
Agent in collecting such items and in enforcing claims thereon;
(vi) To sell, transfer, assign or otherwise deal in or with
any Collateral or the proceeds thereof, as fully as the Borrower otherwise could
do;
(vii) To withdraw any and all cash from the Proceeds Accounts;
(viii) To vote all or any part of the Collateral (whether or
not transferred into the name of the Agent) and give all consents, waivers and
ratifications in respect of the Collateral and otherwise act with respect
thereto as though it were the outright owner thereof (the Borrower hereby
irrevocably constituting and appointing the Agent the proxy and attorney in fact
of the Borrower, with full power of substitution to do so); and
(ix) To transfer all or any part of the Collateral into the
Agent's name or the name of its nominee or nominees;
(f) All or any part of the Collateral may be sold for cash or other
value, and the proceeds thereof applied against any amounts owed to the Lenders
by the Borrower, in any number of lots at public or private sale in a
commercially reasonable manner, without demand, advertisement or notice,
PROVIDED, HOWEVER, that the Agent shall give the Borrower 10 days' prior written
notice of the time and place and proposed terms of any public sale, or the time
after which a private sale may be made, which notice each of the Borrower and
the Agent agrees to be reasonable. At any sale or sales of Collateral, the Agent
or the Lenders or any of their officers acting on their behalf, or their
assigns, may bid for and purchase all or any part of the property and rights so
sold, may use all or any portion of the indebtedness owed to the Lenders as
payment for the property or rights so purchased, and upon compliance with the
terms of such sale may hold and dispose of such property and rights without
further accountability to the Borrower, except for the proceeds of such sale or
sales pursuant to Article X. The Borrower acknowledges that any such sale will
be made by the Agent or the Lenders on an "as is" basis with disclaimers of all
warranties, whether express or implied. The Borrower will execute and deliver or
cause to be executed and delivered such instruments, documents, assignments,
waivers, certificates and affidavits, will supply or cause to be supplied such
further information and will take such further action, as the Agent or the
Lenders shall
PAGE 18
reasonably request in connection with any such sale. The Agent and the Lenders
shall not be obligated to make such sale of Collateral regardless of whether
such notice of sale has theretofore been given. Each purchaser at any such sale
shall hold the property so sold absolutely free from any claim or right on the
part of the Borrower. In lieu of selling the Collateral, the Lenders may credit
the current market value of the Collateral, as determined in a commercially
reasonable manner, all free from any right of redemption, against any amounts
owed by the Borrower to the Lenders; provided, however, that the Borrower shall
remain liable for any deficiency and shall pay interest on such deficiency as
prescribed in the Notes (the Borrower agreeing that, to the extent that
applicable law requires the giving of notice by the Agent to the Borrower of any
such disposition, the minimum time required by such law (or if no minimum time
is specified, one Business Day) shall constitute reasonable notice). Neither the
Agent nor any Lender shall be liable for failure to collect or realize upon any
or all of the Collateral or for any delay in so doing nor shall any of them be
under any obligation to take action whatsoever with regard thereto;
(g) If, at any time when the Agent shall determine to exercise its
rights hereunder to sell all or a part of the securities included in the
Collateral, the securities in question shall not be effectively registered under
applicable law, the Agent may, in its sole discretion, sell such securities by
private or other sale not requiring such registration in such manner and in such
circumstances as the Agent may deem necessary or advisable in order that such
sale may be effected in accordance with applicable securities laws without such
registration and the related delays, uncertainty and expense. Without limiting
the generality of the foregoing, in any event the Agent may in its sole
discretion; (a) approach and negotiate with a single purchaser or one or more
possible purchasers to effect such sale; (b) restrict such sale to one or more
purchaser each of whom will represent and agree that such purchaser is
purchasing for its own account, for investment and not with a view to the
distribution or sale of such securities; and (c) cause to be placed on
certificates representing the securities in question a legend to the effect that
such securities have not been registered under applicable law and may not be
disposed of in violation of the provisions thereof. The Borrower agrees that
such manner of disposition is commercially reasonable, that it will, upon the
Agent's request, give any such purchaser access to such information regarding
the issuer of the securities in question as the Agent may reasonably request and
that the Agent shall not incur any responsibility for selling all or a part of
the securities included in the Collateral at any private or other sale not
requiring such registration, notwithstanding the possibility that a
substantially higher price might be realized if the sale were deferred until
after registration under applicable law or until made in compliance with certain
other rules or exemptions from the registration provisions under applicable law.
The Borrower acknowledges that no adequate remedy at law exists for breach by it
of this provision and that such breach would not be adequately compensable in
damages and therefore agrees that this provision may be specifically enforced;
and/or
(h) Transfer or assign the Loan Documents to any Person without the
prior written consent of the Borrower.
5.2 COST AND EXPENSES ON DEFAULT. If an Event of Default shall have
occurred, the Lenders shall be entitled to collect, in addition to principal,
interest and delinquency charges hereunder, all costs of collection, including
without limitation, reasonable attorneys' fees and
PAGE 19
disbursements, incurred in connection with the protection or realization of
Collateral or in connection with any of the Lenders' collection efforts, whether
or not suit on the Notes or any foreclosure proceeding is filed, and all such
costs and expenses shall be payable on demand and until paid shall also be
secured by the Collateral and other Loan Documents and by all other collateral
held by the Agent as security for the Borrower's obligations to the Lenders.
5.3 MARSHALING. Neither the Agent nor the other Lenders shall be
required to make any demand upon, or pursue or exhaust any of its rights or
remedies against, the Borrower or any guarantor, pledgor or any other Person
with respect to the payment of the Notes or to pursue or exhaust any of its
rights or remedies with respect to any Collateral therefore or any direct or
indirect guarantee thereof or insurance with respect thereto. Neither the Agent
nor the Lenders shall be required to marshal the Collateral or any guarantee of
the Notes or to resort to the Collateral or any such guarantee in any particular
order, and all of its rights hereunder or under any other Loan Document shall be
cumulative. To the extent it may lawfully do so, the Borrower absolutely and
irrevocably waives and relinquishes the benefit and advantage of, and covenants
not to assert against the Agent or the other Lenders, any valuation, stay,
appraisement, extension, redemption or similar laws now or hereafter existing
which, but for this provision, might be applicable to the sale of any Collateral
made under the judgment, order or decree of any court, or privately under the
power of sale conferred by this Pledge Agreement, or otherwise. Without limiting
the generality of the foregoing, the Borrower: (a) agrees that it will not
invoke or utilize any law which might prevent, cause a delay in or otherwise
impede the enforcement of the rights of the Agent or the Lenders in the
Collateral; (b) waives all such laws; and (c) agrees that it will not invoke or
raise as a defense to any enforcement by the Agent or the other Lenders of any
rights and remedies relating to the Collateral or the Notes, any legal or
contractual requirement with which the Agent or the other Lenders may have in
good faith failed to comply. In addition, the Borrower waives any right to prior
notice (except to the extent expressly required by the other provisions of this
Pledge Agreement) or judicial hearing in connection with foreclosure on or
disposition of any Collateral, including any such right which the Borrower would
otherwise have under the Constitution of the United States of America, any state
or territory thereof or any other jurisdiction. The Borrower hereby waives and
releases to the fullest extent permitted by law any right or equity of
redemption with respect to the Collateral, whether before or after sale
hereunder.
ARTICLE VI
CONTINUING SECURITY INTEREST
The Borrower shall not assign or otherwise transfer this Pledge
Agreement or any interest herein without the Agent's prior written consent. This
Pledge Agreement shall create a continuing security interest in the Collateral
and shall: (a) remain in full force and effect until the final payment in full
of all amounts payable under the Notes and the other Loan Documents; (b) bind
the Borrower, its successors and permitted assigns; and (c) inure to the benefit
of the Lenders and its successors, transferees and assigns.
Subject to the requirements of Sections 3.2 of the Purchase Agreement,
upon transfer of Notes, each of the respective Lenders may transfer its interest
in the Loan Documents to any of its
PAGE 20
successors or assigns, by notice to the Borrower, and such other person or
entity shall thereupon be vested with all the benefits in respect thereof
granted to such Lender herein or otherwise; provided that such successor or
assign has agreed in a writing, which shall be delivered to the Borrower, to
assume all of the obligations of the respective Lender under the Loan Documents.
ARTICLE VII
REPRESENTATIONS, WARRANTIES
AND ADDITIONAL COVENANTS OF BORROWER
7.1 REPRESENTATIONS AND WARRANTIES. The Borrower represents and
warrants to the Lenders continuously throughout the term of the Notes, that:
(a) The Collateral is owned by the Borrower free and clear of all
liens, claims or encumbrances, except for those granted Lenders herein (except,
as to the Subordinated Collateral, the security interest of Greenwich and as to
the Textron Collateral, the security interest of Textron, and as to the
Certificates and the Grantor Trust Right, subject to the applicable
Securitization). Except as disclosed in this Pledge Agreement, none of the
Collateral is subject to any option to purchase or similar rights of any Person;
(b) All Collateral (other than cash, the Grantor Trust Right or
Additional Collateral consented to in writing) shall be evidenced by
certificates or instruments, which certificates or instruments shall be
registered in the name of and delivered to the Agent with any related assignment
forms, duly completed by the Borrower, required by the Securitization agreements
(or, as to the Subordinated Collateral held by Greenwich, shall be subject to
the Intercreditor Agreement until such registration in the name of the Agent and
delivery to the Agent and, as to the Textron Collateral, shall be subject to the
Textron Documents until such registration in the name of the Agent and delivery
to the Agent). The Borrower will, promptly upon the receipt thereof, deliver to
the Agent any certificate or similar instrument representing any of such
Collateral, together with appropriate, duly executed assignment forms, in
accordance with the terms hereof. The Borrower will take all steps necessary to
register the pledge to the Agent (or ownership if requested by the Agent in
writing) on the books of the issuer, purchaser, trustee or custodian, as the
case may be, with respect to all Collateral that is not evidenced by
certificates or other instruments in accordance with the terms hereof;
(c) The Borrower has obtained any and all permits, licenses, approval
and consents of any Governmental Authority and any third party as may be
required to own, purchase, pledge, sell or otherwise dispose of the Collateral
and to conduct or to transact its business or own, lease or operate its
properties and is in material compliance with all applicable requirements of
law;
(d) The lien of this Pledge Agreement constitutes a first priority
perfected and enforceable security interest in the Collateral in favor of the
Lenders (other than the Subordinated Collateral, which shall be subject only to
the existing security interest of Greenwich and other than the Textron
Collateral, which shall be subject to the existing security interest of
Textron); on each occasion which the Borrower makes a Delivery of Collateral to
the Agent, the Borrower will be the
PAGE 21
sole record and beneficial owner of that Collateral (until registration thereof
in the name of the Agent) and will, subject to the terms of the Pledge
Agreement, have the right to receive all payments (subject to the terms of any
sales and servicing or pooling and servicing agreement, indenture or any similar
agreement pursuant to which the Certificates were issued or to which the Grantor
Trust Right or any other right or interest arose) on the Collateral, in each
case free and clear of all liens and security interests other than the lien of
this Pledge Agreement, other than the Subordinated Collateral, which, subject to
the Intercreditor Agreement and the terms hereof, shall be subject to the
security interest of Greenwich, and other than the Textron Collateral, which is
subject to the Textron Documents and the security interest of Textron;
(e) Except for financing statements contemplated or permitted by this
Pledge Agreement, there are no financing statements or other actions required
under the UCC or similar law of any state or jurisdiction required in connection
with the grants of security interests to the xxxxxx set forth in this Pledge
Agreement;
(f) No representation or warranty made by or on behalf of Borrower
contained in any Loan Document and no information (written or oral),
certificate, financial statement or report furnished or to be furnished by or on
behalf of the Borrower thereunder or in connection with the transactions
contemplated thereby, contains or will contain an untrue statement of a material
fact, or, omits or will omit to state any material fact (including without
limitation, whether, to the best knowledge of Borrower, Borrower or any of its
respective officers or directors (past or present) is (or during the last five
(5) years has been) under civil or criminal investigation by a Governmental
Authority or is under indictment by any Governmental Authority) necessary to
make the statements herein or therein contained, in light of the circumstances
in which made, not misleading;
(g) It does not have any reason to believe that it will not be able to
perform in all material respects all covenants and agreements to be performed by
it under this Pledge Agreement and each of the other Loan Documents;
(h) Each of the representations and warranties of the Borrower
contained in the other Loan Documents is true and correct;
(i) The right of Borrower to receive a residual cash payment pursuant
to Section 4.05(b)(xvii) of the sale Agreement arising from the Mego Mortgage
Home Loan Trust 1996-3 is non-certificated and is evidenced only by the Sale
Agreement arising from that Securitization;
(j) Any Residual Interest Instrument pledged as Collateral shall
represent the right of the holder thereof to receive one hundred percent (100%)
of the residual interest in the interest and principal payments due on the
underlying loans securitized in that Securitization, except as follows: (a)
Class R Certificate R-0001, 1996-3 represents the right to receive one hundred
percent (100%) of the residual interests in Group 1 Loans, as that term is
defined in the Sale Agreement for that Securitization; and (b) Residual Interest
Instrument No. 1 1997-1 and Residual Certificate Xx. 0, 0000-0 each represent
the right to receive ninety-nine percent (99%) of the residual interest in the
respective Securitization;
PAGE 22
(k) Except as disclosed on Schedule I hereto, there is no circumstance
presently in existence which prohibits the receipt of payment of obligations due
pursuant to the terms of the Certificates and the Grantor Trust Right pledged as
Collateral;
(l) To the best of Borrower's knowledge, all of the Collateral has been
duly and validly issued, is fully paid and non-assessable and is subject to no
options to purchase or similar rights;
(m) The pledge, collateral assignment and delivery to and continuous
possession by the Agent of the Collateral consisting of certificated securities
pursuant to this Pledge Agreement creates a valid and perfected first priority
security interest in such securities and the proceeds thereof, subject to no
prior lien or encumbrance or to any agreement purporting to grant to any third
party a lien or encumbrance on the property or assets of the Borrower which
would include the Collateral and the Agent for the account of the Lender is
entitled to all the rights, priorities and benefits afforded by the UCC or other
relevant law as enacted in any relevant jurisdiction to perfect security
interests in respect of such Collateral; and
(n) "Control" (as defined in Section 8-106 of the UCC) has been
obtained by the Lenders over all Collateral consisting of Securities with
respect to which such "control" may be obtained pursuant to Section 8-106 of the
UCC.
ARTICLE VIII
THE AGENT MAY PERFORM
The Borrower hereby appoints any officer, general partner or agent of
the Agent as the Borrower's true and lawful attorney-in-fact with full authority
in the place and stead of the Borrower and in the name of the Agent or
otherwise, from time to time in the Agent's discretion, to take any action and
to execute any agreements, documents and instruments which the Agent may deem
necessary or advisable to accomplish the purpose of this Pledge Agreement. The
powers conferred on the Agent hereunder are solely to protect its interest in
the Collateral and shall not impose any duty upon the Agent to exercise any such
powers. All authorization and agencies herein contained with respect to the
Collateral are irrevocable and powers coupled with an interest.
ARTICLE IX
CUSTODY OF COLLATERAL
Except as provided by applicable law that cannot be waived, the Agent
will have no duty as to the custody and protection of the Collateral, the
collection of any part thereof or of any income thereon or the preservation or
exercise of any rights pertaining thereto, including rights against prior
parties, except for the use of reasonable care in the custody and physical
preservation of any Collateral in its possession. The Agent will not be liable
or responsible for any loss or damage to any Collateral, or for any diminution
in the value thereof, by reason of the act or omission of any agent selected by
the Agent (including without limitation the Escrow Agent) acting in good faith.
ARTICLE X
PAGE 23
APPLICATION OF COLLATERAL AND PROCEEDS
The proceeds of any sale of, or other realization upon, all or any part
of the Collateral shall be applied in the order set forth in Section 5.3 of the
Notes.
ARTICLE XI
SECURITY INTEREST ABSOLUTE
All rights of the Lenders hereunder and the interest and all
obligations of the Borrower hereunder shall be absolute and unconditional
irrespective of:
(a) except as expressly provided in Section 13.9, any lack of
validity or enforceability of the Loan Documents or any other agreement or
instrument relating to the Loan Documents;
(b) any change in the time, manner or place of payment of, or
in any other term of, the Loan Documents, or any renewal or extension of the
Loan Documents or any other amendment or waiver of or any consent to any
departure from this Pledge Agreement or any other agreement or instrument;
(c) any sale, exchange, release or nonperfection of any of the
Collateral, or any release of any guarantor or any person liable in any manner
for the collection of the Notes, or any amendment or waiver of or consent to or
departure from any guaranty or the Loan Documents; or
(d) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Borrower in respect of any of the
Loan Documents.
ARTICLE XII
REMEDIES CUMULATIVE
Each right, power and remedy of the Borrower provided for in this
Pledge Agreement or any other Loan Document, or now or hereafter existing at law
or in equity or by statute shall be cumulative and concurrent and shall be in
addition to every other such right, power or remedy. The exercise or beginning
of the exercise by the Agent of any one or more of the rights, powers or
remedies provided for in this Pledge Agreement or any other Loan Document or now
or hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by the Agent of all such other
rights, powers or remedies, and no failure or delay on the part of the Agent to
exercise any such right, power or remedy shall operate as a waiver thereof.
Unless otherwise required by the Loan Documents, no notice to or demand on the
Borrower in any case shall entitle the Borrower to any other or further notice
or demand in similar other circumstances or constitute waiver of any of the
rights of the Agent to any other or further action in any circumstances without
demand or notice. The obligations of the Borrower under the Loan Documents are
with full recourse to the Borrower and the Borrower shall remain liable for any
deficiency upon the exercise of remedies by Agent.
PAGE 24
ARTICLE XIII
MISCELLANEOUS
13.1 SUCCESSORS AND ASSIGNS; NO THIRD-PARTY BENEFICIARIES. This Pledge
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective permitted successors and assigns. This Pledge Agreement
shall not confer any rights, obligations, remedies or liabilities upon any
Person other than the parties hereto and their permitted successors and assigns.
13.2 GOVERNING LAW. THE PARTIES HERETO ACKNOWLEDGE THAT THE
TRANSACTIONS CONTEMPLATED BY THIS PLEDGE AGREEMENT AND THE NOTES BEAR A
REASONABLE RELATION TO THE STATE OF MARYLAND IN THAT, INTER ALIA, AN INTENDED
PARTICIPANT IN THE NOTES HAS ITS PRINCIPAL PLACE OF BUSINESS IN THE STATE OF
MARYLAND, PART OF THE NEGOTIATIONS RELATING TO THE TRANSACTIONS CONTEMPLATED
HEREBY HAS OCCURRED IN THE STATE OF MARYLAND AND THE CLOSING WILL OCCUR IN SUCH
STATE. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF MARYLAND, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT
OF LAWS THEREOF.
13.3 NOTICES. All notices, requests, demands, claims and other
communications under this Pledge Agreement shall be in writing (unless otherwise
specified herein) and shall be deemed duly given if (and then two (2) Business
Days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to Borrower:
Altiva Financial Corporation
Sixth Floor
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Office of the Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a Copy to:
King & Spalding
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Driver, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
PAGE 25
If to the Agent:
Value Partners, Ltd.
0000 Xxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Bergman, Xxxxx & Bird, L.L.P.
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
And
Elias, Matz, Xxxxxxx & Xxxxxxx
000 00xx Xxxxxx, X.X.
00xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may send any notice, request, demand, claim or other
communications hereunder to the intended recipient at the address set forth
above using any other means (including personal delivery, expedited courier,
messenger service, telecopy, telex, ordinary mail, or electronic mail), but no
such notice, request, demand, claim, or other communication shall be deemed to
have been duly given unless and until it actually is received by the intended
recipient. Any party may change the address to which notices, requests, demands,
claims, and other communications hereunder are to be delivered by giving the
other party notice in the manner herein set forth.
13.4 AMENDMENTS; WAIVERS. This Pledge Agreement may not be amended,
modified or supplemented except in writing signed by each of the parties hereto.
Each party may, by written notice to the other, extend the time for or waive the
performance of any of the obligations of such other hereunder. The waiver by any
party hereto of a breach of this Pledge Agreement shall not operate or be
construed as a waiver of any other or subsequent breach. No delay, omission or
act by a party shall be deemed a waiver of such party's rights, powers or
remedies. No course of dealing between the parties hereto shall operate a waiver
of any provision hereof.
PAGE 26
13.5 PAYMENT OF EXPENSES; INDEMNITY. The Borrower shall:
(a) pay or reimburse the Agent on demand for all of its reasonable
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of any amendment, modification or supplement to, or
any waiver under, any Loan Document and any other document prepared in
connection therewith, and the consummation of the transactions contemplated
thereby, including, without limitation, the reasonable fees and disbursements of
counsel to the Lenders;
(b) pay on demand all reasonable costs and expenses of the
Lenders, including, without limitation, the reasonable fees and disbursements of
counsel to Lenders, in connection with the occurrence or continuance of an Event
of Default and the enforcement, collection, protection or preservation (whether
through negotiation, legal proceedings or otherwise) of this Pledge Agreement or
any other Loan Document, the Collateral, and any obligation or any rights,
remedy, power or privilege of the Lenders hereunder or thereunder;
(c) pay and hold the Lenders 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 any
Loan Document and hold the Lenders 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
(d) indemnify and hold harmless the Lenders and their respective
directors, officers, partners, employees and agents 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 the Lenders 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 Pledge Agreement or any other Loan
Document or any of the transactions contemplated herein or therein or any use of
the proceeds of the Notes by the Borrower; provided that the Lenders shall not
be entitled to any indemnification for any of the foregoing resulting from their
gross negligence or willful misconduct as determined by a court of competent
jurisdiction.
If, and to the extent that, the indemnity obligations of the Borrower
hereunder may be unenforceable for any reason, the Borrower hereby agrees to
make the maximum contributions to the payment and satisfaction of each of such
indemnity obligations which is permissible under applicable law.
13.6 LIMITED LIABILITY. No recourse under any Loan Document shall
be had against, and no personal liability shall attach to, any officer,
employee, director, partner, affiliate, shareholder or agent of any party
hereto, as such, by the enforcement of any assessment or by any legal or
equitable proceeding, by virtue of any statute or otherwise in respect of any of
the Loan Documents, it being expressly agreed and understood that each Loan
Document is solely a corporate or limited liability
PAGE 27
entity obligation of each party hereto, and that any and all personal liability,
either at common law or in equity, or by statute or constitution, of every such
officer, employee, director, partner, affiliate, shareholder or agent for
breaches by any party hereto of any obligation under any Loan Document is hereby
expressly waived as a condition of and in consideration for the execution and
delivery of this Pledge Agreement.
13.7 COUNTERPARTS. This Pledge Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
13.8 SEVERABILITY; INTERPRETATION. Any term or provision of this
Pledge Agreement that is invalid, illegal or unenforceable in any situation in
any jurisdiction shall not affect the validity, legality or enforceability of
the remaining terms and provisions hereof or the validity, legality or
enforceability of the offending term or provision in any other situation or in
any other jurisdiction.
13.9 USURY. All agreements between Borrower and the Agent on behalf
of the Lenders, whether now existing or hereafter arising and whether written or
oral, are hereby limited so that in no contingency, whether by reason of demand
or acceleration of the maturity Date, as that term is defined in the Notes, or
otherwise, shall the interest contracted for, charged, received, paid or agreed
to be paid to the Lenders exceed the maximum amount permissible under the laws
of the State of Maryland (hereinafter the "Applicable Law"). If, from any
circumstance whatsoever, interest would otherwise be payable to Lenders in
excess of the maximum amount permissible under the Applicable Law, the interest
payable to Lenders shall be reduced to the maximum amount permissible under the
Applicable Law, and if from any circumstance Lenders shall ever receive anything
of value deemed interest by the Applicable Law in excess of the maximum amount
permissible under the Applicable Law, an amount equal to the excessive interest
shall be applied to the reduction of the principal of the Notes and not to the
payment of interest, or if such excessive amount of interest exceeds the unpaid
balance of principal of the Notes, such excess shall be refunded to the
Borrower. All interest paid or agreed to be paid to the Lenders shall, to the
extent permitted by the Applicable Law, be amortized, pro-rated, allocated and
spread throughout the full period (including any renewal or extension) until
payment in full of the principal so that the interest on the Notes for such full
period shall not exceed the maximum amount permissible under the Applicable Law.
The Lenders expressly disavow any intent to contract for, charge or receive
interest in an amount which exceeds the maximum amount permissible under the
Applicable Law. This paragraph as well as a similar paragraph as set forth in
the Notes shall control all agreements between Borrower and the Lenders.
13.10 TIME IS OF THE ESSENCE; NO WAIVER; CUMULATIVE REMEDIES. Time
and exactitude of each of the terms, obligations, covenants and conditions of
this Pledge Agreement are hereby declared to be of the essence.
13.11 BINDING EFFECT. This Pledge Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, successors and assigns. Subject to Article VI, the
Lenders may assign this Pledge Agreement, and if assigned, the assignee
PAGE 28
shall be entitled, upon notifying the Borrower, to the payment and performance
of the obligations arising under the Loan Documents and agreements of the
Borrower hereunder and to all of the rights and remedies of the Lenders
hereunder, and the Borrower will assert no claims or defenses the Borrower may
have against the Lenders against the assignee. The gender and number used in
this Pledge Agreement are used for reference term only and shall apply with the
same effect whether the parties are masculine, feminine, neuter, singular or
plural.
13.12 MULTIPLE COUNTERPARTS. This Pledge Agreement may be executed
in separate or multiple counterparts by the parties, and all of such
counterparts shall be considered as one and the same instrument notwithstanding
the fact that various counterparts are signed by only one or more of the
parties, and all of such Pledge Agreements shall be deemed but one and the same
Pledge Agreement.
13.13 HEADINGS. The captions and Section headings in this Pledge
Agreement are for convenience of reference only, and shall not limit or
otherwise affect the meaning or interpretation of any provision hereof.
13.14 SECURED PARTY. This Pledge Agreement shall constitute a
security agreement, and the Lenders shall have all of the rights in the
Collateral of a secured party, including under Articles 8 and 9 of the UCC.
13.15 CHIEF EXECUTIVE OFFICE; RECORDS. The chief executive office of
the Borrower is located at the address specified in the introduction. The
Borrower will not move its chief executive office except to such new location as
such Borrower may establish in accordance with the last sentence in this Section
13.16. The Borrower shall not establish a new location for such office until (i)
it shall have given to the Agent and the Escrow Agent not less than 30 days'
prior written notice of its intention so to do, clearly describing such new
location and providing such other information in connection therewith as the
Agent may reasonably request and (ii) with respect to such new location, it
shall have taken all action, satisfactory to the Agent, to maintain the security
interest of the Agent in the Collateral intended to be granted hereby at all
times fully perfected and in full force and effect.
PAGE 29
PAGE 30
IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed as of the date first above written.
VALUE PARTNERS, LTD., on its own behalf and on
behalf of the Lenders as Agent
By: XXXXX & PARTNERS,
General Partner
By: /s/ XXXXXXX X. XXXXX
------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Partner
Address:
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
ALTIVA FINANCIAL CORPORATION
By: /s/ CHAMP MEYERCORD
------------------------------------------
Name: Champ Meyercord
Title: Chairman
Address:
0000 Xxxxxxxx Xxxxxx, Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
PAGE 31
STATE OF MARYLAND ss.
ss.
COUNTY OF Harford ss.
BEFORE ME, the undersigned authority, on this day personally appeared
Xxxxxxx X. Xxxxx, the Managing Partner of Xxxxx & Partners, general partner of
Value Partners, Ltd. who stated that he has read the foregoing, and that the
information contained therein is within his personal knowledge and is true and
correct.
------------------------------------------
SUBSCRIBED AND SWORN TO BEFORE ME, on this the 25th day of August, 1999
to certify with my hand and seal of office.
/s/ XXXXXX X. XXXXXX
------------------------------------------
Notary Public in and for the
State of Maryland
My Commission Expires:9-1-2003
XXXXXX X. XXXXXX
------------------------------------------
Printed Name of Notary Public
PAGE 32
STATE OF MARYLAND ss.
ss.
COUNTY OF Harford ss.
BEFORE ME, the undersigned authority, on this day personally appeared
Champ Meyercord, the Chairman of Altiva Financial Corporation who stated that he
has read the foregoing, and that the information contained therein is within his
personal knowledge and is true and correct.
------------------------------------------
SUBSCRIBED AND SWORN TO BEFORE ME, on this the 25th day of August, 1999
to certify with my hand and seal of office.
/s/ XXXXXX X. XXXXXX
------------------------------------------
Notary Public in and for the
State of Maryland
My Commission Expires:9-1-2003
XXXXXX X. XXXXXX
------------------------------------------
Printed Name of Notary Public
PAGE 33
SCHEDULE I
RESTRICTIONS ON PAYMENT
None
PAGE 34
