EXHIBIT 10.98
EXECUTION
COPY
LOAN AND SECURITY AGREEMENT
This Loan and Security Agreement
("Agreement") is made as of this
12th day
of
September, 1996
between AEGIS AUTO FINANCE,
INC., a Delaware corporation ("Borrower") and
III FINANCE LTD., a Cayman Islands company
("Lender").
PRELIMINARY STATEMENT:
WHEREAS, Borrower has requested,
and Lender has agreed, on the terms and
conditions set forth therein, that Lender
advance to the Borrower up to
$3,000,000.00
on a revolving credit basis;
NOW, THEREFORE, in consideration of
the terms and conditions contained herein,
and of any loans or extension of credit now
or hereafter made to or for the benefit of
Borrower by Lender hereunder, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 General Terms. When
used herein, the following terms shall have
the following meanings:
"ABS" shall mean that model of
prepayments commonly applied to
automobile loans which measures
prepayments as a percentage of original
pool balance.
"Additional Loan" shall mean any
Loan other than the Initial Loan.
"Affiliate" shall mean, as to any
Person, any other Person that, directly
or indirectly, controls, is controlled
by or is under common control with such
Person or is a director or officer of
such Person.
"Applicable Insured Percentage"
shall mean, (A) with respect to Insured
Receivables, so long as the Insurer is
obligated (by endorsement or otherwise)
to make payments on the Risk Default
Policy and maintains the A.M. Best
Rating specified below, the percentage
specified below opposite such rating,
calculated monthly as of each month end;
(B) with respect to Uninsured
Receivables, 35% and (C) with respect to
Insured Receivables, if the Insurer does
not remain so obligated as described in
clause A above, then 35%.
Rating Applicable
Insured Percentage
A- or better 80%
Less than A- but
B or better 65%
Less than B but
C or better 50%
Below C
35%.
"Applicable Stress Factor"
means 2.0; provided however, that
if the Lender, in its discretion,
deems the collection history of the
various receivables portfolios
underlying the "Collateral" under
this Agreement and the other
Secured Loan Agreements to be
materially weaker than such
collection history as of the end of
March 1996, the Lender may, upon
not less than five (5) Business
Days' prior written notice to the
Borrower, increase the Applicable
Stress Factor to a number not
exceeding 2.50 and such increase
shall take effect in the next
calculation of the Borrowing Base
to be made under Section 2.1.
"Average Pool Balance" shall have
the meaning set forth in Section 2.1
hereof.
"Backup Servicer" shall have the
meaning set forth in the Pooling and
Servicing Agreement.
"Borrowing Base" shall have the
meaning set forth in Section 2.1 hereof.
"Business Day" shall mean any day
other than a Saturday, Sunday, legal
holiday or other day under the laws of
Bermuda, the United States, or the State
of New York, on which commercial banking
institutions are obligated by law or
executive order to be closed.
"Cash Flow Valuation Report" shall
mean a monthly report delivered pursuant
to Section 2.2 (b) or Section 5.1(c) in
the form attached hereto as Exhibit A.
"Change in Control" shall mean any
of the following: (i) Parent ceases to
be the owner, directly or indirectly, of
100% of the equity interest in, and
capital stock of, the Borrower; or (ii)
Xxxxxx Xxxxxxxx and/or Xxxxxx Xxxxxxxx
shall cease to hold their offices as
President and Chief Executive Officer,
respectively, of the Borrower.
"Collateral" shall have the meaning
set forth in Section 6.1.
"Default" shall mean any event
which, with the passage of time or the
giving of notice, or both, would
constitute an Event of Default.
"Default Rate" shall have the
meaning set forth in Section 2.1.
"Default Ratio" shall have the
meaning set forth in Section 2.1.
"Defaulted Receivables" shall mean,
collectively, "Defaulted Receivables"
and "Liquidated Receivables" as each
such term is defined in the Pooling and
Servicing Agreement.
"Delinquency Rate" shall have the
meaning set forth in Section 2.1.
"Delinquency Ratio" shall have the
meaning set forth in Section 2.1.
"Distribution Date" shall have the
meaning set forth in the Pooling and
Servicing Agreement.
"Event of Default" shall mean any
one or more of the events specified in
Section 7.1.
"Excess Receipts" shall have the
meaning set forth in the Pooling and
Servicing Agreement.
"Existing AAF Loan Agreements"
shall mean those certain Loan and
Security Agreements between the
Borrower and Lender, dated as of
June 20, 1995, September 25, 1995,
December 20, 1995, March 22, 1996,
May 20, 1996 and June 25, 1996,
respectively, as the same have been
or may hereafter be amended,
restated or otherwise modified from
time to time.
"Existing ACF Loan Agreements"
shall mean those certain Loan and
Security Agreements between Aegis
Consumer Finance, Inc. and Lender,
dated as of August 11, 1994,
September 28, 1994, December 22,
1994 and March 22, 1995,
respectively, as the same have been
or may hereafter be amended,
restated or otherwise modified from
time to time.
"Existing Loan Agreements"
shall mean the Existing ACF Loan
Agreements and the Existing AAF
Loan Agreements.
"Existing Loans" shall mean the
"Loans" outstanding from time to time
under the Existing Loan Agreements.
"Financing Agreements" shall mean
all agreements, instruments and
documents, including, without
limitation, this Agreement, the
Guaranty, the Note, the SPC
Acknowledgment and all other
assignments, security agreements, pledge
instructions, loan agreements, notes,
guarantees, certificates of title,
subordination agreements, pledges,
powers of attorney, consents,
assignments, contracts, notices, leases,
financing statements, instruments,
documents and all other written matter
whether heretofore, now or hereafter
executed by or on behalf of Borrower in
connection with the transactions
contemplated by this Agreement.
"Funding Date" shall mean any date
on which a Loan (other than the Initial
Loan) is made hereunder.
"Governmental Authority" shall mean
any nation or government, any federal,
state, local or other political
subdivision thereof and any entity
exercising executive, legislative,
judicial, regulatory or administrative
functions of or pertaining to
government.
"Guaranty" shall mean that certain
Guaranty executed by Parent pursuant to
which Parent guaranties all of the
Obligations of Borrower to Lender under
this Agreement.
"Indebtedness" of any Person shall
mean (i) indebtedness of such Person for
borrowed money, (ii) obligations of such
Person evidenced by bonds, debentures,
notes or other similar instruments,
(iii) obligations of such Person to pay
the deferred purchase price of property
or services, (iv) obligations of such
Person as lessee under leases which
shall have been or should be, in
accordance with generally accepted
accounting principles, recorded as a
capital lease, (v) obligations secured
by any Lien upon property or assets
owned by such Person, even though such
Person has not assumed or become liable
for the payment of such obligations, and
(vi) obligations of such Person under
direct or indirect guaranties in respect
of, and obligations (contingent or
otherwise) to purchase or otherwise
acquire, or otherwise to assure a
creditor against loss in respect of,
indebtedness or obligations of others of
the kinds referred to in clause (i)
through (v) above.
"Initial Funding Date" shall mean
the date on which the Initial Loan is
made.
"Initial Loan" shall mean the
initial Loan made by Lender to Borrower
hereunder.
"Insured Receivable" shall mean
each Receivable loss on which is insured
under the Risk Default Policy.
"Insurer" shall mean The
Connecticut Indemnity Company.
"IRC" shall mean the Internal
Revenue Code of 1986, as amended.
"Lien" shall mean any security
interest, charge, pledge, option or lien
or other encumbrance of any nature,
whether arising under contract or by
operation of law.
"Liquidation Period" shall have the
meaning set forth in Section 2.1.
"Loans" shall have the meaning set
forth in Section 2.1.
"Maximum Rate" shall have the
meaning ascribed to such term in Section
2.4(c) hereof.
"Note" shall mean a promissory note
of Borrower in favor of Lender
substantially in the form of Exhibit B.
"Obligations" shall mean all of the
payment and performance obligations and
liabilities of Borrower to Lender under
this Agreement, the Existing Loan
Agreements, the other Financing
Agreements, and the other "Financing
Agreements" (as such term is defined in
each Existing Loan Agreement).
"Parent" shall mean The Aegis
Consumer Funding Group, Inc., a Delaware
corporation formerly known as Aegis
Holdings Corporation.
"Person" shall mean any individual,
sole proprietorship, partnership, joint
venture, trust, unincorporated
organization, association, corporation,
institution, entity, party or government
(whether national, federal, state,
provincial, county, city, municipal or
otherwise, including without limitation,
any instrumentality, division, agency,
body or department thereof).
"Pledged Stock" shall mean the
issued and outstanding stock of the SPC.
"Pool Balance" shall have the
meaning set forth in the Pooling and
Servicing Agreement.
"Pooling and Servicing Agreement"
shall mean that certain Pooling and
Servicing Agreement dated as of
September 1,
1996 among the SPC, Norwest
Bank Minnesota, National Association, as
Backup
Servicer, and Norwest Bank
Minnesota, National Association, as
Trustee, a copy of which is attached
hereto as Exhibit C.
"Prepayment Rate" shall have the
meaning set forth in Section 2.1.
"Purchase
Agreement"
shall
mean the
Purchase
Agreement
made as of September
1, 1996 between Borrower, as seller, and
the SPC as purchaser.
"Receivables" shall have the
meaning set forth in the Pooling and
Servicing Agreement.
"Recovery Upon Default" shall have
the meaning set forth in Section 2.1.
"Registry" shall have the meaning
set forth in Section 2.1.
"Report Date" shall mean the 20th
day of each calendar month or, if such
day is not a Business Day, then the next
succeeding Business Day.
"Repossessed Receivables" shall
have the meaning set forth in Section
2.1.
"Residual Interest" shall have the
meaning set forth in the Pooling and
Servicing Agreement.
"Risk Default Policy" shall have
the meaning set forth in the Pooling and
Servicing Agreement.
"Secured Loan Agreement" shall
mean each Existing Loan Agreement
and each other loan agreement or
credit agreement entered into by
Borrower or any of its Affiliates
with Lender from time to time which
is designated in writing as a
"Secured Loan Agreement" within the
meaning of this Agreement;
provided, however, that the term
"Secured Loan Agreement" shall not
include that certain Loan and
Security Agreement dated as of
November 8, 1993 by and among Aegis
Auto Finance, Inc., Aegis Capital
Markets, Inc., Aegis Acceptance
Corp. and Lender (as amended,
restated or otherwise modified from
time to time).
"Secured Obligations" shall
mean, collectively, all of the
"Obligations" as defined under this
Agreement and under any other
Secured Loan Agreement and
including all indebtedness and
other obligations owed by Borrower
or any of its Affiliates to Lender
under any Secured Loan Agreement.
"Servicer" shall have the meaning
set forth in the Pooling and Servicing
Agreement.
"SPC" shall mean Aegis Auto Funding
Corp., a Delaware corporation and a
wholly-owned subsidiary of the Borrower.
"SPC Acknowledgment" shall mean
that certain Acknowledgment executed by
the SPC as of the Initial Funding Date
whereby the SPC acknowledges the terms
of this Agreement and agrees to comply
with certain provisions hereof
pertaining to the SPC and agrees, from
and after an Event of Default, to to pay
directly to the Lender any and all
amounts owed by the SPC to the Borrower.
"Termination Date" shall mean the
earlier of (i) the second anniversary of
the Initial Funding Date and (ii) the
date on which Lender terminates this
Agreement pursuant to Section 7.1(A).
"Trust" shall mean the Aegis Auto
Receivables Trust
1996-3 created
pursuant to the Pooling and Servicing
Agreement.
"Trust Certificates" shall mean the
Aegis Auto Receivables Trust 1996-3
Automobile Receivable Pass-Through
Certificates, Series 1996-3, issued
pursuant to the Pooling and Servicing
Agreement.
"Uninsured Receivables" shall mean
all Receivables which are not Insured
Receivables.
"Voting Notice" shall have the
meaning set forth in Section 6.1(c).
"VSI Insurance Policy" shall have
the meaning set forth in the Pooling and
Servicing Agreement.
Section 1.2 Terms Defined in
Uniform Commercial Code. All other terms
contained in this Agreement (and which are
not otherwise specifically defined herein)
shall have the meanings provided by the
Uniform Commercial Code as in effect from
time to time in the State of New York (the
"Code") to the extent the same are used or
defined therein.
Section 1.3 Accounting Terms. All
accounting terms not specifically defined
herein shall be construed in accordance with
generally accepted accounting principles,
consistently applied.
Section 1.4 Other Terms. Any
references herein to exhibits, sections,
articles or schedules, unless otherwise
specified, are references to exhibits,
sections, articles or schedules of this
Agreement. The words "hereof", "herein", and
"hereunder" and words of similar import when
used in this Agreement shall refer to this
Agreement as a whole and not to any
particular provisions of this Agreement.
Wherever appropriate in context, terms used
herein in the singular also include the
plural, and vice-versa, and each masculine,
feminine or neuter pronoun shall also include
the other gender.
Section 1.5 Preliminary Statement.
The Preliminary Statement is incorporated
herein by this reference thereto.
ARTICLE II
LOANS AND INTEREST
Section 2.1 Loans. (a) Subject
to the terms and conditions contained in this
Agreement, Lender will from time to time,
prior to the Termination Date, extend loans
("Loans") to Borrower up to an aggregate
principal amount equal to the lesser of (i)
Three Million
Dollars and No Cents
($3,000,000.00);
or (ii) the Borrowing Base
(as defined below); provided, that if the
Lender ceases trading activities, dissolves
or commences distribution of a material
portion of its assets, then the Lender may,
from and after written notice to the
Borrower, refuse to advance any further Loans
to the Borrower. The "Borrowing Base" shall
be calculated on each Funding Date and
monthly on each Report Date in the Cash Flow
Valuation Report then delivered and shall
equal the discounted present value of the
Excess Receipts (utilizing a discount rate
equal to twelve percent (12%)) as calculated
by the Borrower in each Cash Flow Valuation
Report in a manner reasonably satisfactory to
the Lender in accordance with the following
parameters:
(i) Assume that the number of
Receivables which will become Defaulted
Receivables on an annualized basis will
equal the Default Rate times the
outstanding principal balance of the
Receivables as of the most recent month
end. As used herein, (a) the "Default
Rate" shall mean the greater of (1)
the
Applicable Stress Factor times
the
Default Ratio as of the end of the most
recent calendar month and (2) eighteen
percent (18%) and (b)
the "Default
Ratio" shall mean, with respect to the
three most recent calendar months, a
fraction, (1) the numerator of which
equals four times the sum of (A) the
dollar amount of Receivables which
became Defaulted Receivables during such
three-month period and (B) the dollar
amount of "Repossessed Receivables") (as
defined below) acquired during such
three-month period, and (2) the
denominator of which equals the "Average
Pool Balance" of the Receivables during
such three-month period. As used above,
the term "Repossessed Receivables" with
respect to any three-month period shall
mean the outstanding principal amount of
Receivables the underlying collateral
for which has been repossessed during
such period but which have not become
Defaulted Receivables during such
period. The Average Pool Balance shall
be computed by taking the sum of the
Pool Balance as of the beginning of the
three-month period referred to above
plus the Pool Balance as of the end of
such three-month period and dividing
such number by two.
(ii) Assume that Receivables will
be prepaid in accordance with the most
recently calculated Prepayment Rate. As
used herein, the "Prepayment Rate" shall
mean the greater of (a) one and one-half
times the most recently monthly
prepayment rate, as calculated by
utilizing the standard ABS formula (also
known as the "Absolute Prepayment
Model") as of the end of the most recent
calendar month and (b) one hundred and
twenty percent times the standard ABS
benchmark rate.
(iii) Assume that Receivables will
become or remain past due on an
annualized basis in accordance with the
most recently calculated Delinquency
Rate. The "Delinquency Rate" for
Receivables which may become or remain
30, 60, and 90 days past due shall mean
two times the Delinquency Ratio as of
the end of the most recent calendar
month. As used herein, the "Delinquency
Ratio" shall mean, with respect to
Receivables which may become or remain
30, 60 or 90 days past due, a fraction,
the numerator of which is twelve times
the amount of Receivables which became
or remained 30, 60 and/or 90 days past
due during the most recent calendar
month, as applicable, and the
denominator of which equals the
outstanding principal balance of the
Receivables as of the beginning of such
calendar month.
(iv) Assume that collections and
other recoveries with respect to
Defaulted Receivables and Repossessed
Receivables, after application of all
cash payments including insurance
proceeds, shall equal the Recovery Upon
Default and shall not be collected until
the expiration of the Liquidation Period
with respect to such Receivables. As
used herein, (a) the "Recovery Upon
Default", with respect to any Defaulted
Receivable or Repossessed Receivable,
shall mean the Applicable Insured
Percentage times the outstanding
principal balance of such Receivable and
(b) the "Liquidation Period" with
respect to any Defaulted Receivables or
Repossessed Receivables, shall equal the
greater of (1) one and one-half times
the average number of days outstanding
between the date such Receivables first
became Defaulted Receivables or
Repossessed Receivables, as the case may
be, and the date such Receivables are
paid, through liquidation of the
underlying collateral therefor or
otherwise, according to a methodology
acceptable to the Lender, and (2) 270
days.
The Borrower shall set forth in the Cash Flow
Valuation Report, delivered monthly pursuant
to Section 5.1(c), the calculation of the
Borrowing Base in reasonable detail and with
such supporting information as may be
reasonably requested by Lender. In the event
of any discrepancy between the Borrower's and
the Lender's calculation of the Borrowing
Base or of any component thereof, the
Lender's calculation, absent manifest error,
shall control. It is expressly understood and
agreed that amounts on deposit in the
"Funding Account" (as such term is defined in
the Pooling and Servicing Agreement) shall
not be credited towards the Borrowing Base
Calculation.
(b) The aggregate principal amount
of the Loans shall be evidenced by a Note and
shall be payable in accordance with Section
2.5.
(c) Borrower may prepay any
portion of the Loans in whole or in part;
provided, however, that simultaneously with
such prepayment, Borrower shall pay all
interest accrued and unpaid on the amount so
prepaid through the date of prepayment.
Section 2.2 Making the Loans. (a)
No Loan shall be in an aggregate amount of
less than $100,000, nor shall it be in an
amount greater than the Borrowing Base minus
the aggregate principal amount of all Loans
previously advanced and still outstanding.
(b) On or prior to each Funding
Date, the Borrower shall deliver a Cash Flow
Valuation Report setting forth the
calculation of the Borrowing Base as of the
last day of the preceding calendar month in
accordance with the parameters set forth in
Section 2.1 above based on the Receivables
which, as of the close of business on such
Funding Date, will have been transferred to
the Trust pursuant to the Pooling and
Servicing Agreement. The Initial Loan shall
be in an aggregate amount not exceeding the
Borrowing Base as calculated in such report.
Each subsequent Loan shall be in an aggregate
amount not exceeding the Borrowing Base as
calculated in such report minus the aggregate
principal amount of all Loans previously
advanced and still outstanding.
Notwithstanding anything to the contrary in
this Agreement, Lender's obligations to make
any subsequent Loans hereunder shall
terminate on the earlier of (i) the end of
the "Funding Period" (as such term is defined
in the Pooling and Servicing Agreement) and
(ii) December 15, 1996.
Section 2.3 Note. Concurrently
with the execution hereof, Borrower shall
execute and deliver to Lender the Note to
evidence the aggregate amount of all Loans
outstanding from time to time. The Note
shall be dated the date hereof and shall
mature on the Termination Date. Lender is
hereby authorized to endorse the amount of
each Loan, each repayment or prepayment of
principal thereof on the schedule attached to
and constituting a part of the Note, which
endorsement shall constitute prima facie
evidence of the accuracy of the information
so endorsed; provided, that failure by Lender
to make such endorsement shall not affect the
obligations of Borrower hereunder or under
the Note. In lieu of endorsing such
schedule, Lender is hereby authorized, at its
option, to record such Loans, repayments or
prepayments in its books and records, such
books and records constituting prima facie
evidence of the accuracy of the information
contained therein.
Section 2.4 Interest. (a)
Borrower hereby promises to pay to Lender
interest on the unpaid principal amount of
each Loan for the period commencing on the
date such Loan was made until, but not
including, the date such Loan shall be paid
in full. All Loans shall bear interest at a
rate equal to twelve percent (12%) per annum.
Each interest payment shall be computed on
the basis of a 360-day year for the actual
number of days elapsed. Interest shall be
paid, monthly in arrears on each Distribution
Date, commencing on the first Distribution
Date after the Initial Loan is made, for all
accrued and unpaid interest on the unpaid
principal of the Loans through such date. In
addition, on any date of any principal
prepayment hereunder pursuant to Sections 2.5
and 7.1, the Borrower shall pay accrued and
unpaid interest on the amount of such
prepayment to the extent such interest is not
otherwise paid pursuant to the immediately
preceding sentence.
(b) After the occurrence and during
the continuance of an Event of Default, the
Loans shall bear interest at a rate equal to
the rate set forth in Section 2.4(a) plus two
percent (2.00%).
(c) Notwithstanding the foregoing,
nothing in this Agreement shall require
Borrower to pay interest at a rate exceeding
the maximum rate (the "Maximum Rate")
permitted by applicable law. If the interest
rate provided for hereunder on any date would
exceed the Maximum Rate, then the interest
rate shall be automatically reduced to the
Maximum Rate and the interest rate for any
subsequent period, to the extent less than
the Maximum Rate, shall be increased to equal
the Maximum Rate until such time as the
interest paid hereunder equals the amount
which would have been paid if the interest
otherwise payable hereunder had at all times
been permitted under applicable law.
Section 2.5 Repayments;
Prepayments. (a) The Loans shall be payable
as follows:
(i) Whenever the aggregate
principal amount of Loans outstanding
less the sum of any accrued and unpaid
interest on the Loans exceeds the
Borrowing Base, as calculated pursuant
to Section 2.1 hereof, then a mandatory
prepayment of principal shall be made in
the amount of such excess. Such
prepayments shall be applied to the
Obligations as set forth in Section
2.5(b) and shall be accompanied by a
payment of all interest accrued and
unpaid through the date of such
mandatory prepayment and allocable to
the amount so prepaid.
(ii) The entire remaining
outstanding principal balance of the
Loans, together with any accrued and
unpaid interest and any other
Obligations hereunder, shall be due and
payable on the Termination Date.
(iii) In addition to the foregoing,
if the Lender ceases trading activities,
dissolves or commences distribution of a
material portion of its assets, then the
Lender may demand payment of all Loans
then outstanding, in which event the
entire remaining outstanding principal
balance of the Loans, together with any
accrued and unpaid interest and any
other Obligations hereunder, shall be
due and payable on the ninetieth day
following such written notice.
(b) Subject to Section 7.2(d), all
payments of any amounts due under any
provision of this Agreement or any other
Financing Agreement, shall be applied in the
following order: first to payment of
interest due and owing; second to the then
outstanding principal balance of the Loans;
and third to the remaining balance of the
Obligations. If any payment becomes due on a
Saturday, Sunday or any day on which Lender
is legally closed for business, such payment
shall be made on the next succeeding Business
Day, and, in the case of a principal payment,
interest on such principal payment shall be
payable for such extension of time and shall
be included with such payment.
(c) Borrower shall make each
payment hereunder and under the Note on the
day when due in lawful money of the United
States of America to Lender at The First
National Bank of Chicago, Chicago, Illinois,
account number 52-61333, or at such other
account which Lender may hereafter designate
to Borrower in writing.
(d) The obligation of Borrower to
pay the Loans and other Obligations shall be
a general obligation of Borrower, absolute
and unconditional.
ARTICLE III
CONDITIONS TO LENDING
Section 3.1 Conditions Precedent
to the Initial Loan. The obligation of
Lender to make the Initial Loan is subject to
the satisfaction of all of the following
conditions precedent:
(a) Documents. Lender shall have
received, on or before the Initial Funding
Date, this Agreement, the Note, the SPC
Acknowledgement, the Guaranty, and all other
agreements, documents, financing statements
and instruments described in the List of
Closing Documents
attached hereto as Exhibit
D and made a part hereof, each duly executed
where appropriate, dated the
Initial Funding
Date
where appropriate and in form and
substance reasonably satisfactory to Lender.
(b) Governmental and Other
Consents and Approvals. All notices to and
filings with all regulatory bodies and other
Persons required to be given or made, and all
consents or other approvals therefrom shall
have been obtained in connection with the
transactions contemplated by this Agreement
and the other Financing Agreements.
(c) Pooling and Servicing
Agreement. (i) The transactions contemplated
by the Pooling and Servicing Agreement shall
have been consummated, (ii) the SPC shall
have received the net cash proceeds from the
sale of Trust Certificates thereunder and
(iii) the Borrower and its Affiliates shall
have made all prepayments owed to the Lender
under that certain Loan and Security
Agreement dated as of November 8, 1993 among
Lender and certain of Borrower's Affiliates
on account of the transactions contemplated
by the Pooling and Servicing Agreement.
Section 3.2 Conditions Precedent
to All Loans. The obligation of Lender to
make any Loans hereunder (including the
Initial Loan) shall be subject to the further
conditions precedent that on each such date
(a) the following statements shall be true
(and the request for any Loans and the
acceptance by Borrower of the proceeds of
such Loan, shall constitute a representation
and warranty by Borrower that on the date of
making of such Loan such statements are
true):
(i) The representations and
warranties contained in Article IV are
true and correct in all respects on and
as of the date of such Loan, before and
after giving effect to such Loan, as
though made on and as of such date;
(ii) No event has occurred and is
continuing, or would result from such
Loan, which constitutes a Default or an
Event of Default;
(iii) There has been no material
adverse change in the business
operations or financial condition of
Parent or Borrower since June 30, 1995;
(iv) No law, regulation, order,
judgment or decree of any Governmental
Authority shall enjoin, prohibit or
restrain, or impose or result in the
imposition of any material adverse
condition upon, Lender's making of the
requested Loan; and
(v) the aggregate outstanding
amount of all Loans hereunder (after
giving effect to the requested Loan
hereunder), together with all "Loans"
outstanding under Lender's other loan
agreements with Borrower and Borrower's
Affiliates, shall not exceed 35% of
Lender's "net assets" (as such term is
defined in Lender's Articles of
Association).
(vi) the Lender shall have
received such other approvals, opinions
or documents as Lender may reasonably
request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce Lender to enter into this
Agreement and make the Loans provided for
herein, Borrower hereby makes the following
representations and warranties to Lender,
each of which shall survive the execution and
delivery of this Agreement or any other
Financing Agreement and shall be deemed
remade as of the date of each Additional Loan
to Borrower:
Section 4.1 Corporate Existence.
Each of the Borrower, the Parent and the SPC
is duly organized, validly existing and in
good standing under the laws of the State of
Delaware, and has authority to conduct
business and is in good standing in all other
states where the nature and extent of the
business transacted by it or the ownership of
its assets makes such authorization
necessary.
Section 4.2 Corporate Authority;
No Conflicts. The borrowings hereunder and
the execution, delivery and performance by
the Borrower of this Agreement, the Note and
the other Financing Agreements (i) are within
Borrower's corporate powers, (ii) have been
duly authorized by all necessary corporate
and stockholder action, (iii) do not
contravene Borrower's Certificate of
Incorporation or by-laws, and (iv) do not
contravene nor result in a default under, nor
result in the creation of a Lien (other than
the Liens in favor of Lender created pursuant
to the terms of this Agreement) under, any
law or any contractual restriction binding on
or affecting Borrower. No consent or
approval of any holder of any indebtedness or
obligation of Borrower, and no consent,
permission, authorization, order or license
of any Governmental Authority, is necessary
in connection with the execution, delivery
and performance of the Financing Agreements,
including, without limitation, this Agreement
and the Note, or any transaction contemplated
hereby or thereby. The execution, delivery
and performance by the Parent of the Guaranty
(i) are within the Parent's corporate powers,
(ii) have been duly authorized by all
necessary corporate and stockholder action,
(iii) do not contravene the Parent's
Certificate of Incorporation or by-laws, and
(iv) do not contravene nor result in a
default under, nor result in the creation of
a Lien under, any law or any contractual
restriction binding on or affecting the
Parent. The execution, delivery and
performance by the SPC of the SPC
Acknowledgement (i) are within the SPC's
corporate powers (ii) have been duly
authorized by all necessary corporate and
stockholder action, (iii) do not contravene
the SPC's Certificate of Incorporation or by-
laws, and (iv) do not contravene nor result
in a default under, nor result in the
creation of a Lien under, any law or
contractual restriction binding on or
affecting the SPC. This Agreement, the Note
and the other Financing Agreements to which
the Borrower is a party constitute valid,
binding and legal obligations of the Borrower
enforceable in accordance with their terms,
the Guaranty constitutes the valid, binding
and legal obligation of the Parent
enforceable in accordance with its terms, and
the SPC Acknowledgement constitutes the
valid, binding and legal obligation of the
SPC enforceable in accordance with its terms.
Section 4.3 Financial Condition.
The audited consolidated financial statements
of the Parent and its subsidiaries (including
the Borrower) dated as of June 30, 1995, and
all interim financial statements previously
delivered to Lender are complete and correct
and such financial statements have been
prepared in conformity with generally
accepted accounting principles and practices
consistently applied and fairly present the
financial condition and results of operations
of the Parent and the Borrower as of the date
thereof (and for the period then ended) in
conformity with such accounting principles
and practices (subject, in the case of
interim statements, to normal year-end
adjustments). Since June 30, 1995, there has
been no material adverse change is such
financial condition or results of operation
for the Parent and/or the Borrower.
Section 4.4 Litigation. There is
no litigation, tax claim, proceeding or
dispute pending or, to the Borrower's
knowledge, threatened against the Borrower,
the Parent, or the SPC, or affecting their
respective properties or assets, which, if
determined adversely to Borrower, the Parent,
or the SPC as the case may be, (a) could
reasonably be expected to adversely affect
(i) the execution, delivery or enforceability
of this Agreement or the other Financing
Agreements, or (ii) the ability of Borrower
to perform its obligations under this
Agreement or any of the other Financing
Agreements, or (b) could reasonably be
expected to have a material adverse effect on
the financial condition of the Borrower or
the SPC.
Section 4.5 Compliance with Laws
and Regulations. Borrower, the Parent and
the SPC are in compliance with all laws,
orders, regulations and ordinances of all
Governmental Authorities relating to their
business operations and assets.
Section 4.6 Title to Pledged Stock
and Excess Receipts. (a) Attached as Exhibit
C to the
Existing
Loan Agreement dated June
20, 1995 is a true, complete and accurate
copy of the Certificate of Incorporation of
the SPC, which has not been amended since
June 20, 1995. Borrower is the legal and
beneficial owner of 100% of the Pledged Stock
free and clear of any Lien
except for (i)
Liens in favor of Lender created pursuant to
the Secured Loan Agreements and (ii) Liens in
favor of Greenwich Capital Financial
Products, Inc. which are subordinated to the
Liens of the Lender on terms agreed to by
Lender in writing, and the SPC is the legal
and beneficial holder of the Residual
Interest free and clear of any Lien, and has
the unencumbered right to receive the Excess
Receipts. Such Pledged Stock represents 100%
of the issued and outstanding stock of the
SPC. After giving effect to the anticipated
depletion to zero of the "Funding Account"
(as defined in the Pooling and Servicing
Agreement), the Residual Interest will be
valued on the books and records of the SPC at
$6,151,029.03, and the Borrower's
interest in
the Pledged Stock will be valued on the books
and records of the Borrower at the sum of (x)
the equivalent amount, plus (y) the current
valuation of the
Borrower's residual
interests in the various trusts formed in
connection with prior securitizations as
referred to in the Existing
Loan
Agreements.
Borrower has the right to vote the Pledged
Stock and to pledge and grant a security
interest in all of the Collateral to the
Lender. Except as otherwise provided in the
Pooling and Servicing Agreement or in the
SPC's Certificate of Incorporation or in the
Existing Loan Agreements, there are no
restrictions upon any of the rights
associated with, or the transfer of, any of
the Collateral, which would interfere with
the Lender's ability to exercise the Lender's
rights and remedies hereunder. Borrower has
no obligation to make capital contributions
or make any other payments to the SPC with
respect to its interests, the non-payment of
which would in any way create a right of
offset from the SPC as against distributions
otherwise payable to the Borrower. The SPC
(i) has conducted no business other than the
transactions evidenced by and contemplated
(x) under the Purchase
Agreement
and the
Pooling and Servicing Agreement, and (y) the
"Purchase Agreement" and "Pooling and
Servicing Agreement" (as each such term is
defined in each Existing Loan Agreement),
(ii) has no properties other than the
Residual Interest and the "Residual Interest"
(as defined in each Existing Loan Agreement)
and (iii) has no Indebtedness to any third-
parties (including Affiliates) except for any
Indebtedness expressly created under the
above-referenced agreements.
(b) Lender has a perfected, first-
priority security interest in the Collateral
constituting the Pledged Stock and any
general intangibles relating thereto and no
further action is required to perfect such
security interest.
Section 4.7 No Defaults. No event
has occurred and is continuing or would
result from the making of a Loan which
constitutes a Default or an Event of Default.
Neither Borrower, Parent nor the SPC is in
default under any loan or credit agreement or
any other material agreement, lease or
instrument to which they are parties or by
which it or any of their properties are
bound.
Section 4.8 Taxes. Each of
Borrower and the Parent have filed all
required federal and local tax returns and
paid all material taxes due pursuant to said
returns or any assessments against Borrower
or Parent, as the case may be, except for
those taxes being contested in good faith and
for which adequate reserves have been
provided on the books and records of Borrower
or Parent, as the case may be.
Section 4.9 Margin Stock. None of
the proceeds of any Loan will be used,
directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of
purchasing or carrying any "margin stock"
within the meaning of Regulation G and
Regulation X of the Board of Governors of the
Federal Reserve System. Borrower is not
engaged in the business of extending credit
for the purpose of purchasing or carrying any
such margin stock and no part of the proceeds
of the Loans will be used to purchase or
carry any such margin stock of for any other
purpose that violates or is inconsistent with
such Regulation G or Regulation X.
Section 4.10 Investment Company
Act. Borrower is not an "investment company"
or a company "controlled" by an "investment
company," within the meaning of the
Investment Company Act of 1940, as amended.
Section 4.11 Disclosure. No
representation or warranty of Borrower
contained in this Agreement or any
certificate or similar instrument required to
be furnished to Lender by or on behalf of
Borrower in connection with the transactions
contemplated by this Agreement contains or
will contain any untrue statement of a
material fact or omits to state a material
fact (known to Borrower, in the case of any
document not furnished by it) necessary in
order to make the statements contained herein
or therein not misleading.
Section 4.12 Chief Executive
Office. Borrower's chief executive office
and principal place of business are located
at 000 Xxxxxxxxxx Xxxxxx, Xxxxxx Xxxx, Xxx
Xxxxxx 00000, or, from and after the date
hereof, at such other location with respect
to which all necessary actions under Section
5.11 hereof have been performed.
Section 4.13 Pooling and Servicing
Agreement. Attached hereto as Exhibit C is a
true, complete and accurate copy of the
Pooling and Servicing Agreement. There are
no agreements written or otherwise, which
would modify or otherwise affect the rights
of the SPC under the Pooling and Servicing
Agreement. All of the representations and
warranties made by the Borrower, the SPC or
any Affiliates thereof in the aforementioned
agreements are true and correct in all
material respects and are hereby confirmed.
ARTICLE V
COVENANTS
Borrower covenants and agrees that,
so long as any Obligations remain
outstanding, and (even if there shall be no
Obligations outstanding) so long as this
Agreement remains in effect:
Section 5.1 Reports/Financial
Information. Borrower shall deliver to
Lender:
(a) As soon as practicable, and in
any event within forty-five (45) days after
the end of each calendar month, the
consolidated balance sheet and income
statement of Parent and its subsidiaries as
at the end of such month, which for each
month coinciding with the end of a calendar
quarter shall set forth comparative figures
for the related periods in the prior fiscal
year, all of which shall be certified by the
chief financial officer, chief accounting
officer or chief executive officer of
Borrower, subject to changes resulting from
audit and normal year-end adjustments;
(b) As soon as practicable, and in
any event within one-hundred-twenty (120)
days after the end of each fiscal year of
Parent, the consolidated balance sheet and
income statement of Parent and its
subsidiaries as at the end of such year,
certified by independent certified public
accountants of recognized national standing
whose certification shall be without
qualification as to the scope of audit,
together with a certificate of such
accounting firm stating that in the course of
its regular audit of the business of the
Parent and Borrower, which audit was
conducted in accordance with generally
accepted auditing standards, such accounting
firm has obtained no knowledge of any Default
or Event of Default under Sections 5.1(a),
(b), (f), 5.2(a), 5.6(a), 5.10 or 5.12 hereof
which has occurred or is continuing or, if in
the opinion of such accounting firm such a
Default or Event of Default under the above-
referenced Sections has occurred and is
continuing, a statement as to the nature
thereof;
(c) On or before the Report Date
of each calendar month, a schedule of
activity for the preceding calendar month,
which sets forth (i) the aggregate
outstanding principal amount of Receivables
and of the Trust Certificates, (ii) a Cash
Flow Valuation Report in the form attached
hereto as Exhibit A, setting forth, among
other things, the calculation of the
Borrowing Base with supporting information in
reasonable detail, (iii) copies of the
monthly reports distributed to holders of the
Trust Certificates pursuant to Section 5.09
of the Pooling and Servicing Agreement or any
successor provisions and (iv) any other
pertinent information reasonably requested by
Lender.
(d) Promptly upon receipt thereof,
copies of (i) any financial reports or other
information required to be delivered by
Borrower or the SPC or any other affiliate
thereof pursuant to the terms of the Pooling
and Servicing Agreement and (ii) any written
reports, certifications or other material
notices given to the Borrower, the SPC or any
affiliate thereof by the Trustee, Servicer
or
Backup
Servicer.
(e) Promptly, such other financial
or portfolio information related to this
Agreement or the Financing Agreements that
Lender may reasonably request from time to
time.
(f) As soon as practicable, and in
any event within forty-five (45) days after
the end of each fiscal quarter of Borrower, a
list of all agreements entered into by
Borrower pursuant to which Borrower may (i)
incur any Indebtedness to any Person in
excess of $100,000 or (ii) become the obligee
with respect to any loan, advance or other
Indebtedness of any Affiliate; such notice
shall include the name and date of the
agreement, the name of the counterparty, the
maximum amount of Indebtedness thereunder,
and a description of any security thereunder
for such Indebtedness; provided, however,
that after the occurrence and during the
continuance of an Event of Default, the
Borrower shall notify Lender immediately upon
entering into any agreement described in this
Section 5.1(f).
Section 5.2 Notices. Borrower
shall give prompt written notice to Lender
of:
(a) Any litigation, including,
without limitation, adversary proceedings or
contested matters brought by Parent, Borrower
or by any other Person against Parent or
Borrower (or any material change in such
litigation), where the amount in controversy
is $100,000 or more and all litigation when
the aggregate amounts in controversy equal or
exceed $500,000, or any other litigation or
proceeding which Borrower deems material or
which could materially and adversely affect
the operations, financial condition or
prospects of Parent and/or Borrower, and, if
requested by Lender, deliver to Lender copies
of all pleadings with respect to any such
matters served on or filed by Parent or
Borrower;
(b) Any Event of Default or
Default and Borrower's proposed cure
therefor; any such notice shall refer to this
Agreement, describe such Event of Default or
Default and state that such notice is a
"Notice of Default"; and
Section 5.3 Corporate Existence.
Borrower shall maintain and preserve its
corporate existence and all rights,
privileges and franchises now enjoyed, and
conduct its business in accordance with the
terms of, and otherwise comply with, its
formation documents. Borrower shall cause
the SPC to maintain and preserve its
corporate existence and all rights,
privileges and franchises now enjoyed by it.
Section 5.4 Compliance with Law.
Borrower shall, and shall cause the SPC to,
comply in all material respects with all
applicable laws, rules, regulations and
orders.
Section 5.5 Compliance with
Financing Agreements. Borrower shall comply
promptly with any and all covenants and
provisions of this Agreement, the Note and
the other Financing Agreements, and shall
cause the SPC and its other Affiliates to
comply promptly with any and all covenants
and provisions to be performed by such
parties under the Pooling and Servicing
Agreement.
Section 5.6 Books and Records;
Right of Inspection. (a) Borrower shall,
and shall cause the SPC to, maintain adequate
books, accounts and records, and prepare all
financial statements required hereunder in
accordance with generally accepted accounting
principles and, once per calendar year after
reasonable notice, and at any time after the
occurrence and during the continuance of an
Event of Default, permit employees or agents
of Lender at any reasonable time to inspect
the properties of Borrower and the SPC and to
examine or audit each of their books,
accounts and records and make copies and
memoranda thereof.
(b) Borrower shall maintain all
records necessary for compliance with the
exception to withholding for portfolio
interest under Section 871(h) of the Internal
Revenue Code.
Section 5.7 Further Assurances.
(a) Borrower shall furnish to Lender such
periodic, special, or other reports and
information as reasonably requested by
Lender.
(b) From time to time, at its own
expense, Borrower will take whatever action
is reasonably requested by Lender or its
legal counsel to preserve, protect or perfect
the security interest in the Collateral
granted pursuant to Article VI, including,
without limitation, executing UCC financing
statements, endorsing notes, executing
additional security documents or delivering
possession of Collateral, and shall perform
such acts as Lender shall reasonably deem
necessary or appropriate to effectuate the
purposes of this Agreement. Borrower will
appear in and defend at its own expense any
action or proceeding which may affect
Borrower's title to the Collateral, the
security interest granted hereunder or the
SPC's title to the Excess Receipts and the
Residual Interest.
Section 5.8 Maintenance of
Insurance. (a) Borrower shall maintain and
keep in force in adequate amounts insurance
with responsible and reputable companies or
implement and maintain a reasonable program
of self-insurance, and accept no self-
insurance risks which are substantially
greater than those historically carried by
Borrower.
(b) Borrower shall cause to be
paid all annual insurance premiums with
respect to the Risk Default Policy and the
VSI Insurance Policy and shall take all other
actions necessary or possible to be taken on
its part in order to maintain the
effectiveness of each such policy and the
liability of the Insurer with respect
thereto.
Section 5.9 Pooling and Servicing
Agreement. Without the prior written consent
of Lender, Borrower shall not, and shall not
permit any of its affiliates to (i) amend,
modify, restate, supplement, cancel or
terminate the Pooling and Servicing
Agreement, (ii) waive any of its rights under
any provision thereof, (iii) consent to any
deviation from the terms thereof or (iv)
otherwise grant any consents provided for
thereunder, or default in its obligations
thereunder.
Section 5.10 Merger;
Consolidation, Etc. Borrower shall not, and
shall not permit the SPC to, liquidate,
dissolve, merge into or consolidate with
another entity; or sell, lease or otherwise
dispose of all or a substantial portion of
its business or assets, except for sales of
loans not constituting Receivables in the
ordinary course of its business. Borrower
shall not permit the SPC to engage in any
business other than the holding of the
Residual Interest and the "Residual Interest"
(as defined in each Existing Loan Agreement),
nor to acquire any other assets nor incur any
Indebtedness not expressly permitted under
Section 4.6 hereof except that the SPC shall
be permitted to hold residual interests which
are substantially similar in nature to the
Residual Interest and to incur any
Indebtedness under any other pooling and
servicing agreement which is substantially
similar in nature to the Pooling and
Servicing Agreement and to which the Lender
has consented.
Section 5.11 Change of Principal
Office. Borrower shall not (a) change the
location of its chief executive office and
principal place of business from Newport
Tower, 000 Xxxxxxxxxx Xxxxxx, Xxxxxx Xxxx,
Xxx Xxxxxx 00000 or (b) change its name,
identity or corporate structure to such an
extent that any financing statement filed in
connection with this Agreement would become
seriously misleading, unless Borrower shall
have given Lender at least 30 days prior
written notice thereof and prior to effecting
any such change, taken such steps as Lender
may deem necessary or desirable to continue
the perfection and priority of the Liens in
favor of Lender granted in connection
herewith.
Section 5.12 Net Worth. The sum
of the Parent's consolidated total assets
minus the Parent's consolidated total
liabilities (each determined in conformity
with generally accepted accounting
principles, consistently applied and without
duplication) shall not be less than
$15,000,000 as of the Initial Funding Date,
and the greater of such amount or ten percent
(10%) of Parent's consolidated assets
(without duplication) on any subsequent date;
provided, however that for purposes of this
Section, the Collateral shall constitute an
asset of Borrower and any assets which have
been sold by any Person in a non-recourse
sale to an unaffiliated third party in a
securitization transaction shall not
constitute assets of any such Person.
Section 5.13 Limited Business of
SPC. The Borrower will take all actions
which may be required on its part to ensure
that the SPC engages in no business and
incurs no Indebtedness or other liabilities
other than that permitted under Section 4.6
and Section 5.10 above or and issues no
capital stock or other equity interest in
favor of any Person other than the Borrower.
ARTICLE VI
COLLATERAL
Section 6.1 Security Interest.
(a) To secure the prompt and complete
payment, observance and performance of all of
the
Secured Obligations,
Borrower hereby (1)
reaffirms the grant of a security interest in
the Collateral made under the Existing Loan
Agreements and (2) pledges and grants to
Lender a security interest in and assignment
of all of Borrower's rights, title and
interest in and to the following property and
interests in property, whether now owned or
existing or hereafter arising or acquired and
wheresoever located and whether the same
comprise accounts, instruments, securities,
chattel paper or general intangibles (the
"Collateral"):
(i) all of Borrower's rights in the
Pledged Stock, and all of Borrower's
rights, as a shareholder of the SPC, in
and to the property (and interests in
property) that is owned by the SPC;
(ii) all warrants, options and
other rights to acquire stock in the SPC
and all of Borrower's rights, if any, to
participate in the management of the
SPC;
(iii) all rights, privileges,
authority and powers of Borrower as
owner or holder of its equity interest
in the SPC, including, but not limited
to, all general intangibles and contract
rights related thereto;
(iv) all documents and certificates
representing or evidencing Borrower's
equity interest in the SPC;
(v) all of Borrower's interest in
and to the profits and losses of the SPC
and Borrower's right as a shareholder of
the SPC to receive dividends on account
of the SPC's capital stock or to receive
distributions of the SPC's assets, upon
complete or partial liquidation or
otherwise;
(vi) all of Borrower's right, title
and interest to receive payments of
principal and interest on any loans
and/or other extensions of credit made
by Borrower or its Affiliates to the
SPC, all other accounts and other rights
to payment which may be owing by the SPC
to Borrower, and any all instruments
creating or evidencing such rights;
(vii) all distributions, cash,
instruments and other property from time
to time received, receivable or
otherwise distributed in respect of, or
in exchange for, Borrower's interest in
the SPC; and
(viii) any other right, title,
interest, privilege, authority and power
of Borrower in or relating to the SPC,
all whether now existing or hereafter
arising, and whether arising at law or
in equity and any and all proceeds of
any of the foregoing and all books and
records of Borrower pertaining to any of
the foregoing.
(b) Pursuant to the Existing Loan
Agreement dated June 20, 1995, Borrower has
delivered to Lender all stock certificates
evidencing the Collateral. If Borrower
acquires (by dividend, purchase, additional
contribution, reclassification or otherwise):
(a) any additional stock, shares, units,
options or warrants of stock in the SPC
(whether or not certificated or otherwise
evidenced in writing); (b) any subscriptions,
warrants or any other rights or options
issued in connection with any of the
Collateral; or (c) any options, warrants or
convertible securities in connection with the
Collateral; (all of the foregoing being
collectively referred to as the "Additional
Interests"), then all such Additional
Interests shall be promptly delivered to and
held by the Lender (if the same are
certificated) under the terms of this
Agreement, accompanied by duly executed stock
powers, instruments of transfer or
assignments in blank, as applicable, all in
form and substance satisfactory to the
Lender, and the same shall constitute
Collateral hereunder.
(c) Notwithstanding the foregoing,
prior to the delivery of a Voting Notice (as
defined below in this paragraph (c)),
Borrower shall be entitled to exercise any
and all voting rights pertaining to the
Collateral (or any portion thereof), except
as otherwise provided in Section 5.9 above.
As used herein, the term "Voting Notice"
means a written notice from the Lender to
each of the Borrower and the SPC providing
that the Lender may exercise all of the
voting rights and powers described in
subparagraph (a) of Section 6 hereof.
Borrower hereby acknowledges and agrees that
upon the receipt of a Voting Notice, the
Lender shall be entitled to exercise all of
said voting rights and powers and all of the
Borrower's voting rights and powers shall
immediately cease. Except as otherwise
expressly provided herein, under no
circumstances shall the Lender have, or be
deemed to have or have had, any right to
exercise, or to direct Borrower to exercise,
any voting, managerial, election or other
rights of an owner of the Pledged Stock.
(d) All distributions by the SPC,
all Additional Interests and other payments
that are made, paid, issued, distributed or
delivered by the SPC to Borrower in cash or
otherwise shall be received in trust for the
benefit of the Lender and shall be delivered
to the Lender for application (i) to the
extent such payments are attributable or
allocable to Excess Receipts or other amount
distributable in respect of the Residual
Interest, in accordance with the terms of
this Agreement; (ii) to the extent such
payments are attributable or allocable to
"Excess Receipts" or other amounts
distributable
to the Borrower in respect
of
any "Class
B
Certificate" or "Residual
Interest", as
such
term is defined in any
Existing Loan Agreement, in accordance with
the terms of such Existing Loan Agreement;
and (iii) to the extent such payments are
attributable or allocable to similar amounts
received in respect of any residual interest
received under any similar transaction and in
respect of which Lender has given value under
any subsequent loan agreement with Borrower,
in accordance with the terms of such other
loan agreement.
Section 6.2 Perfection of the
Security Interest. (a) Borrower agrees (i)
promptly to deliver to the Lender or its
designee, all certificates, instruments and
other documents evidencing any portion of the
Collateral, which may at any time come into
the possession of the Borrower and in which a
security interest may be perfected, (ii) to
execute and deliver such notices of the
Lender's security interest in the Collateral
(which notice shall be satisfactory in form
and substance to the Lender and which may
request acknowledgment from the addressee) to
any third party designated by the Lender,
(iii) to execute and deliver to the Lender
such financing statements as the Lender may
request with respect to the Collateral, (iv)
to cause the SPC to indicate in its records
the security interests granted hereby, in a
manner satisfactory to the Lender, and (v) to
take such other steps as the Lender may from
time to time request in order to perfect the
Lender's security interest in the Collateral
under applicable law. Borrower agrees that
this Agreement or a photocopy of this
Agreement shall be sufficient as a financing
statement to the extent permitted by
applicable law.
Section 6.3 Power of Attorney.
Subject to the terms and provisions of this
Agreement, at any time, without notice and at
the expense of Borrower, Lender may, and Bor-
rower hereby appoints Lender its true
attorney-in-fact (such agency being coupled
with an interest) for such purposes.
(a) Upon the occurrence of an
Event of Default, perform any
obligation of Borrower hereunder in
Borrower's name or otherwise;
(b) Upon the occurrence of
any Event of Default, notify any
Person obligated on any Collateral
of the rights of Lender hereunder;
(c) Upon the occurrence of
any Event of Default, enter into
any extension, settlement or
compromise agreement relating to or
affecting the Collateral and, in
connection therewith, to sell,
transfer or dispose of any of the
Collateral, and take such action as
Lender may deem proper, and apply
any money or property received in
exchange for any of such Collateral
to any of the
Secured Obligations;
(d) Upon the occurrence of
any Event of Default, endorse,
deliver evidence of title, enforce
and collect by legal action or
otherwise any of the Collateral;
(e) Upon the occurrence of
any Event of Default, receive
payment or performance in
connection with any insurance
claims, claims for breach of
warranty or any other claims
concerning any of the Collateral;
and
(f) Upon the occurrence of
any Event of Default, protect,
defend and preserve the Collateral
including, without limitation,
filing or prosecution of any third
party claim or other legal action
or proceeding which Lender deems
necessary to protect any of the
rights, interests or priorities of
Lender with respect to any of the
Collateral.
ARTICLE VII
DEFAULT; REMEDIES
Section 7.1 Events of Default.
Upon the occurrence of any of the following
events (each an "Event of Default"):
(a) Borrower fails to make any
payment of principal of or interest on the
Note, or payment of any other Obligation due
hereunder, under the Note or under any other
Financing Agreement on or before the date
such payment is due;
(b) Any breach by Borrower in the
due observance or performance of any covenant
set forth in Sections 5.1 to 5.3 or 5.5 to
5.12, and such breach continues unremedied
for five (5) Business Days after any officer
of Borrower obtains knowledge thereof;
(c) Any breach by Borrower of any
covenant, other than those covenants
enumerated in Section 7.1 (a) or (b) of this
Agreement, which remains unremedied for
thirty (30) days after the date such breach
occurs;
(d) Any representation or warranty
made by Borrower under this Agreement or by
Borrower or Parent under any other Financing
Agreement or in any certificate, report,
financial statement or other agreement,
instrument or document furnished in
connection with this Agreement or any other
Financing Agreement shall prove to have been
false or misleading in any material respect
when made;
(e) Default in, or breach of, any
provision of the SPC Acknowledgment by the
SPC or by Borrower;
(f) Any representation or warranty
made by Borrower, the SPC or any Affiliates
in the Purchase Agreement or in the Pooling
and Servicing Agreement or in any certificate
or report a copy of which is delivered to
Lender pursuant to this Agreement shall prove
to have been false or misleading in any
material respect when made;
(g) The occurrence of a default,
breach or failure of condition by Borrower,
any guarantor of the Obligations or Parent
under any other Financing Agreement which
(unless such default otherwise constitutes an
Event of Default pursuant to the other
provisions of this Section 7.1) is not
remedied within the applicable cure period
contained therein, if any;
(h) Any default by Borrower, any
guarantor of the Obligations, the SPC or
Parent after any applicable notice and cure
period, shall occur under any Indebtedness
with respect to which Borrower or Parent, as
applicable, is a party as borrower or
guarantor, provided, that any such default by
Parent described in this subsection 7.01(h)
shall not constitute an Event of Default
unless the aggregate Indebtedness owed under
such agreement is greater than or equal to
$100,000;
(i) Borrower, the SPC, any
guarantor of the Obligations or Parent shall
generally not pay its debts as they become
due or shall admit in writing its inability
to pay its debts, or shall make a general
assignment for the benefit of creditors;
(j) Borrower, the SPC, any
guarantor of the Obligations, or Parent,
shall (i) apply for or consent to the
appointment of a receiver, trustee,
custodian, intervenor or liquidator of it, or
of all or a substantial part of its assets,
(ii) file a voluntary petition in bankruptcy,
(iii) file a petition or answer seeking
reorganization or an arrangement with
creditors, or to take advantage of any
applicable liquidation, conservatorship
bankruptcy, moratorium, arrangement,
receivership, insolvency, reorganization or
similar laws affecting the rights of
creditors generally, (iv) file an answer
admitting the material allegations of, or
consent to, or default in answering, a
petition filed against it in any bankruptcy,
reorganization or insolvency proceeding, or
(v) take corporate action for the purpose of
effecting any of the foregoing;
(k) An involuntary petition or
complaint shall be filed against Borrower,
the SPC, any guarantor of the Obligations, or
Parent, seeking bankruptcy or reorganization
of such Person or the appointment of a
receiver, custodian, trustee, intervenor or
liquidator of such Person, or all or
substantially all of its assets, and such
petition or complaint shall not have been
dismissed within sixty (60) days of the
filing thereof; or an order, order for
relief, judgment or decree shall be entered
by any court of competent jurisdiction or
other competent authority approving a
petition or complaint seeking reorganization
of such Person or appointing a receiver,
custodian, trustee, intervenor or liquidator
of such Person, or of all or substantially
all of its assets;
(l) Any final judgment or order
for the payment of money in excess of
$100,000 shall be rendered against Borrower,
the SPC or the Parent, and either (i)
enforcement proceedings shall have been
commenced by any creditor upon such judgment
or order or (ii) the same remains
undischarged or unpaid for a period of sixty
(60) days, during which period the execution
of such judgment is not effectively stayed;
(m) (i) Any of the Financing
Agreements, or any Lien or priority claim
granted thereunder shall terminate, cease to
be effective or cease to be the legal, valid,
binding and enforceable obligation of
Borrower, the SPC, Parent or any guarantor of
the Obligations; (ii) Borrower or any of its
Affiliates, shall, directly or indirectly,
contest in any manner such effectiveness,
validity, binding nature or enforceability
(it being understood that Borrower may, in
good faith, question the accuracy of any
mathematical calculation of an amount owed
hereunder); or (iii) any Lien or priority
claim securing the
Secured Obligations
shall
cease to be effective and to be of first
priority;
(n) Any Person shall levy on,
seize or attach all or any material portion
of the assets of Borrower, the SPC or Parent
and within thirty (30) days thereafter such
person shall not have dissolved such levy or
attachment, as the case may be, and, if
applicable, regained possession of such
seized assets;
(o) the occurrence of a Change in
Control;
(p) either the Risk Default Policy
or the VSI Insurance Policy shall cease to be
in full force and effect;
(r) an "Event of Backup Servicing
Default" shall have occurred and been
continuing under the Pooling and Servicing
Agreement; or
(s) this Agreement, the Note or
any other Financing Agreement shall for any
reason cease to be in full force and effect,
or be declared null and void or unenforceable
in whole or in part as the result of any
action initiated by any Person other than
Lender;
then, and in every such event and at any time
thereafter during the continuance of such
event, Lender may, at the same or different
times, take one or more of the following
actions:
(A) By notice to Borrower (which
may be telephonic notice confirmed in
writing) declare Lender's obligation to
make any future Loans hereunder
terminated and/or declare the occurrence
of the Termination Date, whereupon, in
each case, such obligations shall be
terminated and/or the Termination Date
shall have occurred; and
(B) By notice to Borrower,
declare the unpaid principal amount
and interest of the Loans and all
other amounts payable by Borrower
hereunder to be forthwith due and
payable, whereupon such amounts
shall become forthwith due and
payable, both as to principal and
interest, without presentment,
demand, protest or any other notice
of any kind, all of which are
hereby expressly waived, anything
contained herein or in the
Financing Agreements to the
contrary notwithstanding.
Notwithstanding the foregoing, upon
the occurrence of an Event of Default
described in paragraph (j) or (k) of this
Section 7.1, with respect to the Parent, the
SPC or Borrower the actions described in
paragraphs (A) and (B) above shall occur
automatically without the requirement of
giving of any notice to Borrower.
Section 7.2 Remedies. (a) Lender
shall have all rights and remedies provided
to Lender at law, in equity, under the
Financing Agreements and under the Uniform
Commercial Code as in effect in the State of
New York (the "Code"), all of which rights
and remedies shall be cumulative, and, in
addition, upon the occurrence of any Event of
Default, Lender may exercise any one or more
of the following rights and remedies:
(i) Exercise all the rights
and remedies available to secured
parties under the provisions of the
Code.
(ii) Institute legal
proceedings to foreclose upon and
against the Lien granted by the
Financing Agreements to recover
judgment for the Obligations and to
collect the same out of any of the
Collateral or the proceeds of any
sale thereof.
(iii) Without being
responsible for loss or damage to
such Collateral beyond the
responsibility to use reasonable
care with respect to the
Collateral, require delivery to
Lender of any Collateral then being
held by Borrower, sell and dispose
of, or cause to be sold and
disposed of, all or any part of the
Collateral at one or more public or
private sales, or other
dispositions, at such places and
times and on such terms and condi-
tions and in such order as Lender
may deem fit, without any previous
demand or advertisement but with
reasonable notification to Borrower
of any such sale or other disposal.
Reasonable notification pursuant to
this Section 7.2(a)(iii) shall be
deemed to be written or telephonic
notice at least ten (10) days prior
to such public or private sale.
(b) Any notice of sale or other
disposition, advertisement and other notice
or demand, any right or equity of redemption
and any obligation of a prospective purchaser
to inquire as to the power and authority of
Lender to sell or otherwise dispose of the
Collateral or as to the application of the
proceeds of sale or otherwise, which would
otherwise be required by, or available to
Borrower under, applicable law are hereby
expressly waived by Borrower to the fullest
extent permitted by such law.
(c) All moneys received or
collected by Lender pursuant to this
Agreement from and after an Event of Default
shall be applied, at Lender's discretion,
first to the payment of all costs incurred in
the collection of such moneys (including
reasonable attorneys' fees and legal
expenses). All remaining amounts shall be
applied pursuant to Section 2.5(b). The
balance, if any, of such moneys remaining
after payment in full of the
Secured
Obligations
shall be remitted to Borrower or
as otherwise directed by a court of competent
jurisdiction.
(d) In view of the fact that
federal and state securities laws may impose
certain restrictions on the method by which a
sale of the Collateral may be effected, the
Borrower agrees that, upon the occurrence and
during the continuance of an Event of Default
and without notice except as otherwise
specified hereinabove, the Lender may attempt
to sell all or any part of the Collateral by
means of a private placement, restricting the
bidders and prospective purchasers to those
who are qualified and who will represent and
agree that they are purchasing in accordance
with an exemption from registration under the
federal or state securities laws. In so
doing, the Lender may solicit offers to buy
the Collateral, or any part of it, for cash,
from a limited number of institutional
investors deemed by the Lender in its
reasonable judgment to be financially
responsible parties who might be interested
in purchasing such Collateral and, if the
Lender solicits such offers from not less
than four (4) such investors, the acceptance
by the Lender of the highest offer obtained
therefrom shall be deemed to be a
commercially reasonable method of disposing
of such Collateral.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Amendments, etc. No
amendment or waiver of any provision of this
Agreement or the Note, nor consent to any
departure by Borrower therefrom, shall be
effective unless the same shall be in writing
and signed by Lender, and then such waiver or
consent shall be effective only in the
specific instance and for the specific
purpose for which given.
Section 8.2 Notices. All notices
and other communications provided for
hereunder shall be in writing (including
telegraphic or facsimile transmission) and
mailed by registered mail, return receipt
requested, or telexed, telecopied or hand
delivered, (a) as to Lender:
III Finance Ltd.
c/o International Fund
Administration, Ltd.
00 Xxx-Xx-Xxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX00 Xxxxxxx
Telecopy:
(441)
295-9637
Confirmation:
(441)
295-4718
Attention: Xxxxxxx Xxxxx
with a copy to:
III Offshore Advisors
000 Xxxxx Xxxxxxxxxx Xxxxxx, Xxxxx
000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
Confirmation: (000) 000-0000
Attention: Xxxxxx Xxxxxxxx
(b) as to Borrower:
Aegis Auto Finance, Inc.
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx Xxxx, Xxx Xxxxxx, 00000
Telecopy: (000) 000-0000
Confirmation: (000) 000-0000
Attention: Xxxxxx Xxxxxxxx
or (c) at such other address as shall be
designated by such party in a written notice
to the other party. All such notices and
communications shall be effective and deemed
delivered only when received by the party to
which it is sent; provided, however, that a
telecopy transmission shall be deemed to be
received when transmitted so long as the
transmitting machine has provided an
electronic confirmation of such transmission.
Section 8.3 Survival of
Representations and Warranties. All
representations and warranties made herein
shall survive the execution, delivery and
acceptance of this Agreement, the Note and
the other Financing Agreements.
Section 8.4 No Waiver; Remedies.
No failure on the part of Lender to exercise,
and no delay in exercising any right
hereunder or under the Note or any other
Financing Agreement shall operate as a waiver
thereof; nor shall any single or partial
exercise of any right hereunder or under the
Note preclude any other or further exercise
thereof or the exercise of any other right.
The remedies herein provided are cumulative
and not exclusive of any remedies provided by
law.
Section 8.5 Costs and Expenses.
Except as otherwise provided in the
immediately subsequent sentence, each party
hereto agrees to pay its own costs and
expenses (including attorneys' and
paralegals' fees and expenses) in connection
with the execution and delivery of this
Agreement, the Note and the other Financing
Agreements. Borrower agrees to pay (a) all
costs and expenses incurred by Lender in
maintaining, preserving or insuring any
Collateral and (b) all costs and expenses of
Lender (including reasonable attorneys' and
paralegals' fees and expenses) in connection
with the enforcement of this Agreement, the
Note, the other Financing Agreements and/or
the Lien on any of the Collateral. All of
the costs, fees and expenses enumerated in
the immediately preceding sentence shall
constitute Obligations.
Section 8.6 Relationship;
Indemnity. (a) The relationship of Borrower
to the Lender under the Financing Agreements
is, and shall at all times remain, solely
that of borrower and lender; other than as
set forth in Section 7.2(a)(iii), Lender does
not undertake or assume any responsibility or
duty to Borrower or to any third party with
respect to the Collateral.
(b) Borrower hereby indemnifies
and agrees to hold harmless Lender and its
officers, directors, employees, attorneys and
agents (collectively, the "Indemnified
Parties") from any and all losses, damages
(whether general, punitive or otherwise),
liabilities, claims, causes of action and
other costs and expenses, including
reasonable attorneys' fees, which any
Indemnified Party may suffer or incur by or
as a result of claims by third parties in any
manner relating to or arising out of this
Agreement or the other Financing Agreements,
or any act, event or transaction related
thereto, the making of Loans, the use or
intended use of the proceeds of the Loans, or
any of the other transactions contemplated by
the Financing Agreements.
(c) Promptly after any Indemnified
Party is served with process in connection
with the commencement of any action, such
Indemnified Party shall, if a claim against
Borrower in respect thereof is to be made
pursuant to this indemnification, notify
Borrower of the commencement thereof.
Borrower shall pay any Obligations arising
under this indemnity to such Indemnified
Party immediately upon demand. The duty of
Borrower to indemnify Lender shall survive
the release and cancellation of this
Agreement or any of the other Financing
Agreements.
Section 8.7 Successors and
Assigns; Assignment. This Agreement shall be
binding upon and inure to the benefit of
Borrower and Lender and their respective
successors and assigns, except that no
Borrower shall have the right to assign its
rights hereunder or any interest herein
without the prior written consent of Lender.
Lender, at its sole option, shall have the
right to assign this Agreement, the Note and
any of its rights and interest hereunder and
thereunder.
Section 8.8 Registered
Obligations. The Loans (including the Note
evidencing the Loans) are registered
obligations and the right, title and interest
of Lender and its assigns (and of a Person
who takes a participation in a Loan directly
from Lender) in and to such Loan shall be
transferrable only upon notation of such
transfer in a registry (the "Registry")
maintained to record the interest of Lender
and its assigns (and such direct
participants). A Note shall only evidence
Lender's, or its assigns', right, title and
interest in and to the related Loans, and in
no event is any such Note to be considered a
bearer instrument or obligation. This
Section 8.8 shall be construed so that the
Loans are at all times maintained in
"registered form" within the meaning of
Section 163(f), 871(h)(2) and 881(c)(2) of
the IRC and any related regulations (or any
successor provisions of the IRC or such
regulations). Borrower shall maintain the
Registry in which Borrower will register the
Loans. No transfer by Lender or any of its
assigns of (or direct participant with
respect to) any of the Loans shall be
permitted or effective unless and until
recorded on the Registry. Any such transfer
shall be made only by written application by
the transferring Lender, its assigns, or
participants to Borrower stating the name of
the proposed transferee. Borrower agrees
that within five (5) Business Days after its
receipt of such written notice, Borrower
shall, at its own expense, record such
transfer on the Registry and shall, if
requested by Lender or the transferee,
execute new Notes to the order of Lender
and/or the transferee, as applicable, in
exchange for the surrendered Note or Notes.
Such new Note or Notes shall be in an
aggregate principal amount equal to the
unpaid aggregate principal amount of such
surrendered Note or Notes, shall be dated the
effective date of the assignment and shall
otherwise be in substantially the form of
Exhibit B.
Section 8.9 Binding Effect;
Governing Law. This Agreement constitutes
the complete and final expression of the
parties' agreement with respect to the
matters set forth herein and supersedes all
oral negotiations and prior writings in
respect of such matters. This Agreement and
the Note shall be governed by, and construed
in accordance with, the laws and decisions of
the State of New York. Whenever possible,
each provision of this Agreement shall be
interpreted in such manner as to be effective
and valid under applicable law, but if any
provision of this Agreement shall be
prohibited or invalid under applicable law,
such provision shall be ineffective only to
the extent of such prohibition or invalidity,
without invalidating the remainder of such
provision or the remaining provisions of this
Agreement.
Section 8.10 WAIVER OF TRIAL BY
JURY; SUBMISSION TO JURISDICTION. BORROWER
AND LENDER EACH HEREBY AGREE TO WAIVE ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION ARISING UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY
FINANCING AGREEMENT, WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE. BORROWER HEREBY
CONSENTS TO THE JURISDICTION OF ANY LOCAL OR
FEDERAL COURT LOCATED WITHIN THE STATE OF NEW
YORK AND WAIVES ANY OBJECTION WHICH BORROWER
MAY HAVE BASED ON IMPROPER VENUE OR FORUM NON
CONVENIENS TO THE CONDUCT OF ANY PROCEEDING
IN ANY SUCH COURT; NOTHING IN THIS SECTION
8.10 SHALL AFFECT LENDER'S RIGHT TO BRING ANY
ACTION OR PROCEEDING AGAINST BORROWER OR ITS
PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION.
Section 8.11 Term. This
Agreement shall become effective when
executed and delivered by the parties hereto
and shall expire upon that date occurring on
or after the Termination Date when Lender has
received indefeasible payment in full in cash
of the Obligations. Notwithstanding the
foregoing, Borrower's agreement to indemnify
Lender under Section 8.6 shall survive the
termination of this Agreement.
Section 8.12 Headings. Article
and Section headings in this Agreement are
included for convenience of reference only
and shall not affect any construction or
interpretation of this Agreement.
Section 8.13 Counterparts. This
Agreement may be executed by the parties
hereto in separate counterparts, each of
which when so executed shall be deemed to be
an original and both of which taken together
shall constitute one and the same agreement.
Section 8.14 Reference to and
Effect Upon Existing Loan Agreements. The
parties hereto agree that, to the extent the
transactions evidenced hereby would not be
permitted under the terms of the Existing
Loan Agreements, the terms of the Existing
Loan Agreements shall be waived to the
extent, and solely to the extent, necessary
to permit such transactions.
[Rest of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be
executed by their respective officers
thereunto duly authorized, as of the date
first written above.
III FINANCE
LTD.
By______________________________
Name:
Title:
AEGIS AUTO
FINANCE, INC.
By______________________________
Name:
Title:
The undersigned, Aegis Consumer
Finance, Inc., a Delaware corporation, hereby
acknowledges the foregoing Loan and Security
Agreement (the "New AAF Loan Agreement")
between Aegis Auto Finance, Inc. and III
Finance, Ltd. and hereby agrees that: (i)
such New AAF Loan Agreement shall constitute
a "Secured Loan Agreement" within the meaning
of the "Existing ACF Loan Agreements" (as
such term is defined in the New AAF Loan
Agreement) and (ii) the "Obligations" under
the New AAF Loan Agreement shall be secured
by all of the "Collateral" in which a
security interest has been granted by the
undersigned under the Existing ACF Loan
Agreements.
AEGIS
CONSUMER FINANCE, INC.
By:
_______________________
Title:_____________________
EXECUTION
COPY
(9/09/96)
LOAN AND SECURITY AGREEMENT
Dated as of
September 12, 1996
BETWEEN
AEGIS AUTO FINANCE, INC.
as Borrower
AND
III FINANCE LTD.
as Lender
TABLE OF CONTENTS
PAGE
ARTICLE
I
DEFINITIONS
Section 1.1 General Terms. . . . . . . . . . . .1
Section 1.2 Terms Defined in Uniform
Commercial Code. . . . . . . . . . . . . . .7
Section 1.3 Accounting Terms.. . . . . . . . . .7
Section 1.4 Other Terms. . . . . . . . . . . . .7
Section 1.5 Preliminary Statement. . . . . . . .8
ARTICLE II
LOANS AND INTEREST
Section 2.1 Loans. . . . . . . . . . . . . . . .8
Section 2.2 Making the Loans.. . . . . . . . . 10
Section 2.3 Note.. . . . . . . . . . . . . . . 10
Section 2.4 Interest.. . . . . . . . . . . . . 11
Section 2.5 Repayments; Prepayments. . . . . . 11
ARTICLE III
CONDITIONS TO LENDING
Section 3.1 Conditions Precedent to the
Initial Loan.. . . . . . . . . . . . . . . . . . . . 12
Section 3.2 Conditions Precedent to All
Loans. . . . . . . . . . . . . . . . . . . 13
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Corporate Existence. . . . . . . . 14
Section 4.2 Corporate Authority; No
Conflicts. . . . . . . . . . . . . . . . . 14
Section 4.3 Financial Condition. . . . . . . . 15
Section 4.4 Litigation.. . . . . . . . . . . . 15
Section 4.5 Compliance with Laws and
Regulations.15 . . . . . . . . . . . . . . .
Section 4.6 Title to Pledged Stock and
Excess Receipts. . . . . . . . . . . . . . 15
Section 4.7 No Defaults. . . . . . . . . . . . 16
Section 4.8 Taxes. . . . . . . . . . . . . . . 17
Section 4.9 Margin Stock.. . . . . . . . . . . 17
Section 4.10 Investment Company Act.. . . . . . 17
Section 4.11 Disclosure.. . . . . . . . . . . . 17
Section 4.12 Chief Executive Office . . . . . . 17
Section 4.13 Pooling and Servicing
Agreement. . . . . . . . . . . . . . . . . 17
ARTICLE V
COVENANTS
Section 5.1 Reports/Financial
Information. . . . . . . . . . . . . . . . 18
Section 5.2 Notices. . . . . . . . . . . . . . 19
Section 5.3 Corporate Existence. . . . . . . . 19
Section 5.4 Compliance with Law. . . . . . . . 20
Section 5.5 Compliance with Financing
Agreements. . . . 20 . . . . . . . . . . . .
Section 5.6 Books and Records; Right of
Inspection.. . . . . . . . . . . . . . . . 20
Section 5.7 Further Assurances.. . . . . . . . 20
Section 5.8 Maintenance of Insurance.. . . . . 21
Section 5.9 Pooling and Servicing
Agreement. . . . . . . . . . . . . . . . . 21
Section 5.10 Merger; Consolidation, Etc.
. . . . . . . . . . . . . . . . . . . . . 21
Section 5.11 Change of Principal Office.
. . . . . . . . . . . . . . . . . . . . . 21
Section 5.12 Net Worth. . . . . . . . . . . . . 22
Section 5.13 Limited Business of SPC. . . . . . 22
ARTICLE VI
COLLATERAL
Section 6.1 Security Interest. . . . . . . . . 22
Section 6.2 Perfection of the Security
Interest.. . . . . . . . . . . . . . . . . 24
Section 6.3 Power of Attorney. . . . . . . . . 24
ARTICLE VII
DEFAULT; REMEDIES
Section 7.1 Events of Default. . . . . . . . . 25
Section 7.2 Remedies.. . . . . . . . . . . . . 28
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Amendments, etc. . . . . . . . . . 30
Section 8.2 Notices. . . . . . . . . . . . . . 30
Section 8.3 Survival of Representations
and Warranties.. . . . . . . . . . . . . . 31
Section 8.4 No Waiver; Remedies. . . . . . . . 31
Section 8.5 Costs and Expenses.. . . . . . . . 31
Section 8.6 Relationship; Indemnity. . . . . . 31
Section 8.7 Successors and Assigns;
Assignment . . . . . . . . . . . . . . . . 32
Section 8.8 Registered Obligations . . . . . . 32
Section 8.9 Binding Effect; Governing
Law. . . . . . . . . . . . . . . . . . . . 33
Section 8.10 WAIVER OF TRIAL BY JURY;
SUBMISSION TO
JURISDICTION.. . . . . . . . . . . . . . . . . . . . 33
Section 8.11 Term.. . . . . . . . . . . . . . . 33
Section 8.12 Headings.. . . . . . . . . . . . . 33
Section 8.13 Counterparts.. . . . . . . . . . . 33
Section 8.14 Reference to and Effect
Upon Existing Loan
Agreements.. . . . . . . . . . . . . . . . . . . . . 33