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EXHIBIT 10.31(b)
GUARANTY
GUARANTY, dated as of February 10, 1999 (the "Guaranty"), made by AAMES
FINANCIAL CORPORATION (the "Guarantor") in favor of GREENWICH CAPITAL FINANCIAL
PRODUCTS, INC. (the "Lender"), party to the Master Loan and Security Agreement
referred to below.
RECITALS
Pursuant to the Master Loan and Security Agreement dated as of
February 10, 1999 (as amended, supplemented or otherwise modified from time to
time, the "Loan Agreement") between Aames Capital Corporation (the "Borrower")
and the Lender, the Lender has agreed to make certain Advances to the Borrower
upon the terms and subject to the conditions set forth therein. It is a
condition precedent to the obligation of the Lender to make any such Advance to
the Borrower under the Loan Agreement that the Guarantor shall have executed and
delivered this Guaranty to the Lender.
NOW, THEREFORE, in consideration of the premises and to induce
the Lender to enter into the Loan Agreement and to induce the Lender to make any
Advances to the Borrower under the Loan Agreement, the Guarantor hereby agrees
with the Lender as follows:
1. Defined Terms. (a) Unless otherwise defined herein, terms defined in the Loan
Agreement and used herein shall have the meanings given to them in the Loan
Agreement.
(b) "Obligations" shall mean the obligations and liabilities of
the Borrower to the Lender, including, without limitation, the obligations
whether direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, or out of or in
connection with the Loan Agreement, this Guaranty and any other document made,
delivered or given in connection therewith or herewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all fees and disbursements of counsel
to the Lender that are required to be paid by the Borrower pursuant to the terms
of the Loan Agreement) or otherwise.
(c) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Guaranty shall refer to this Guaranty as a
whole and not to any particular provision of this Guaranty, and section and
paragraph references are to this Guaranty unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. Guaranty. (a) The Guarantor hereby, unconditionally and irrevocably,
guarantees to the Lender and its successors, indorsees, transferees and assigns,
the prompt and complete payment and performance by the Borrower when due
(whether at the stated maturity, by acceleration or otherwise) of the
Obligations.
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(b) The Guarantor further agrees to pay any and all expenses
(including, without limitation, all reasonable fees and disbursements of
counsel) which may be paid or incurred by the Lender in enforcing any rights
with respect to, or collecting, any or all of the Obligations and/or enforcing
any rights with respect to, or collecting against, the Guarantor under this
Guaranty. This Guaranty shall remain in full force and effect until the
Obligations are paid in full notwithstanding that from time to time prior
thereto the Borrower may be free from any Obligations.
(c) No payment or payments made by the Borrower, the Guarantor,
any other guarantor or any other Person or received or collected by the Lender
from the Borrower, the Guarantor, any other guarantor or any other Person by
virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in payment of
the Obligations shall be deemed to modify, reduce, release or otherwise affect
the liability of the Guarantor hereunder which shall, notwithstanding any such
payment or payments other than payments made by the Guarantor in respect of the
Obligations or payments received or collected from the Guarantor in respect of
the Obligations, remain liable for the Obligations up to the maximum liability
of the Guarantor hereunder until the Obligations are paid in full and the Loan
Agreement is terminated.
(d) The Guarantor agrees that whenever, at any time, or from
time to time, it shall make any payment to the Lender on account of its
liability hereunder, it will notify the Lender in writing that such payment is
made under this Guaranty for such purpose.
3. Representations, Warranties and Covenants of Guarantor. (a) Guarantor hereby
represents and warrants (i) that it is duly organized and validly existing in
good standing under the laws of the jurisdiction under which it is organized and
is duly qualified to do business and is in good standing in every other
jurisdiction as to which the nature of the business conducted by it makes such
qualification necessary, (ii) that it has power and authority to enter into and
perform this Guaranty, (iii) that execution, delivery and performance of this
Guaranty by it have been duly authorized by proper action and are not in
contravention of law or of the terms of its Articles of Incorporation or
By-Laws, or any agreement, instrument, indenture or other undertaking to which
it is a party or by which it is bound, (iv) that all registrations and approvals
of any governmental agency, department or commission necessary for the
execution, delivery and performance of this Guaranty and for the validity and
enforceability thereof, have been obtained and are in full force and effect, (v)
that this Guaranty is the legal, valid and binding obligation of the Guarantor,
enforceable against Guarantor, in accordance with its terms, subject to
bankruptcy, insolvency and similar laws and to the availability of equitable
remedies, (vi) that no legal proceedings are pending, or threatened, before any
court or governmental agency which would adversely affect its financial
condition, operations or any licenses or its ability to perform under this
Guaranty, and (vii) that Guarantor has received and reviewed copies of the Loan
Agreement.
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(b) The Guarantor covenants and agrees with the Lender that,
until the payment in full of the Obligations or the termination of this Guaranty
pursuant to Section 20 hereof:
(i) Maintenance of Tangible Net Worth. The Tangible Net
Worth of the Guarantor, on a consolidated basis and on any given
day, shall be (a) prior to July 1, 1999, $120,000,000; and (b)
on and after July 1, 1999, not less than the greater of (x)
$150,000,000 and (y) 80% of the Tangible Net Worth of the
Guarantor, on a consolidated basis, as at the end of each fiscal
quarter;
(ii) Maintenance of Ratio of Total Indebtedness to
Tangible Net Worth. The Guarantor shall not permit the ratio of
Total Indebtedness to Tangible Net Worth, on a consolidated
basis and on any given day, to be greater than 3.5:1;
(iii) Liquidity. The aggregate amount of the Guarantor's
cash, Cash Equivalents and available borrowing capacity on
unencumbered assets that could be drawn against (taking into
account required haircuts) under committed warehouse or working
capital facilities, on a consolidated basis and on any given
day, shall be (a) prior to July 1, 1999, $5,000,000; and (b) on
and after July 1, 1999, $15,000,000; provided, however that the
liquidity of the Guarantor, on a consolidated basis and on any
given day, may fall below the foregoing thresholds one time in
any given calendar month and such noncompliance shall not last
for more than three Business Days;
(iv) Maintenance of Ratio of Earnings to Total Interest
Expense. Effective as of December 31, 1999 and thereafter, the
Guarantor shall not permit the ratio of earnings before interest
and taxes to total interest expense, on a consolidated basis, to
be less than 1.10:1 measured on a rolling basis from the
immediately preceding two calendar quarters commencing with the
two quarters ending September 30, 1999 and December 31, 1999;
(v) Profitability. The Guarantor shall have a GAAP after
tax net income of at least $1.00 as measured at the end of June
30, 1999 and September 30, 1999; and
(vi) Capitalization of Guarantor. The Guarantor has been
capitalized by a contribution of cash to the equity of the
Guarantor in an aggregate amount equal to not less than
$65,000,000 (after taking into account related expenses, if any,
payable on date of contribution) and, as of June 30, 1999, the
Guarantor shall have received an additional contribution to
capital in an amount not less than $25,000,000 (after taking
into account related expenses, if any, payable on the date of
such contribution).
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(c) At the time that the Guarantor delivers its consolidated
financial statements to the Lender in accordance with Section 7.01 of the Loan
Agreement, the Guarantor shall forward to the Lender a certificate of a
Responsible Officer of the Guarantor which demonstrates that the Guarantor is in
compliance with the covenants set forth in clauses (b) (i) through (v) above.
Prior to the execution of this Guaranty, the Guarantor shall have provided
evidence satisfactory to the Lender of its compliance with clause (b)(vi) above.
4. Right of Set-off. Upon the occurrence of any Event of Default, the Guarantor
hereby irrevocably authorizes the Lender and each of its affiliates at any time
and from time to time without notice to the Guarantor, any such notice being
expressly waived by the Guarantor, to set-off and appropriate and apply any and
all deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Lender or any of its affiliates to
or for the credit or the account of the Guarantor, or any part thereof in such
amounts as the Lender or any of its affiliates may elect, against and on account
of the obligations and liabilities of the Guarantor to the Lender hereunder and
claims of every nature and description of the Lender or any of its affiliates
against the Guarantor, in any currency, whether arising hereunder, under the
Loan Agreement as the Lender may elect, whether or not the Lender has made any
demand for payment and although such obligations, liabilities and claims may be
contingent or unmatured. The Lender shall notify the Guarantor promptly of any
such set-off and the application made by the Lender, provided that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of the Lender under this Section are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which the Lender may have.
5. No Subrogation. Notwithstanding any payment or payments made by the Guarantor
hereunder or any set-off or application of funds of the Guarantor by the Lender,
the Guarantor shall not be entitled to be subrogated to any of the rights of the
Lender against the Borrower or any other guarantor or any collateral security or
guarantee or right of offset held by the Lender or any of its affiliates for the
payment of the Obligations, nor shall the Guarantor seek or be entitled to seek
any contribution or reimbursement from the Borrower or any other guarantor in
respect of payments made by the Guarantor hereunder, until all amounts owing to
the Lender by the Borrower on account of the Obligations are paid in full and
the Loan Agreement is terminated. If any amount shall be paid to the Guarantor
on account of such subrogation rights at any time when all of the Obligations
shall not have been paid in full, such amount shall be held by the Guarantor in
trust for the Lender, segregated from other funds of the Guarantor, and shall,
forthwith upon receipt by the Guarantor, be turned over to the Lender in the
exact form received by the Guarantor (duly indorsed by the Guarantor to the
Lender, if required), to be applied against the Obligations, whether matured or
unmatured, in such order as the Lender may determine.
6. Amendments, Etc. with Respect to the Obligations. The Guarantor shall remain
obligated hereunder notwithstanding that, without any reservation of rights
against the Guarantor and without notice to or further assent by the Guarantor,
any demand for payment of any of the Obligations made by the Lender may be
rescinded by the Lender and any of the Obligations
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continued, and the Obligations, or the liability of any other party upon or for
any part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Lender, and the Loan Agreement and any other
documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Lender may
deem advisable from time to time, and any collateral security, guarantee or
right of offset at any time held by the Lender for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released. The Lender
shall not have any obligation to protect, secure, perfect or insure any Lien at
any time held by it as security for the Obligations or for this Guaranty or any
property subject thereto. When making any demand hereunder against the
Guarantor, the Lender may, but shall be under no obligation to, make a similar
demand on the Borrower or any other guarantor, and any failure by the Lender to
make any such demand or to collect any payments from the Borrower or any such
other guarantor or any release of the Borrower or such other guarantor shall not
relieve the Guarantor of its obligations or liabilities hereunder, and shall not
impair or affect the rights and remedies, express or implied, or as a matter of
law, of the Lender against the Guarantor. For the purposes hereof "demand" shall
include the commencement and continuance of any legal proceedings.
7. Waiver of Rights. The Guarantor waives any and all notice of the creation,
renewal, extension or accrual of any of the Obligations, and notice of or proof
of reliance by the Lender upon this Guaranty or acceptance of this Guaranty; the
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon this Guaranty; and all dealings between the Borrower and the Guarantor, on
the one hand, and the Lender, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon this Guaranty. The
Guarantor waives diligence, presentment, protest, demand for payment and notice
of default or nonpayment to or upon the Borrower or the Guarantor with respect
to the Obligations.
8. Guaranty Absolute and Unconditional. The Guarantor understands and agrees
that this Guaranty shall be construed as a continuing, absolute and
unconditional guarantee of the full and punctual payment and performance by the
Borrower of the Obligations and not of their collectibility only and is in no
way conditioned upon any requirement that the Lender first attempt to collect
any of the obligations from the Borrower without regard to (a) the validity,
regularity or enforceability of the Loan Agreement, any of the Obligations or
any other collateral security therefor or guarantee or right of offset with
respect thereto at any time or from time to time held by the Lender, (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Borrower against the Lender, or (c) any other circumstance whatsoever (with or
without notice to or knowledge of the Borrower or the Guarantor) which
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Borrower from the Obligations, or of the Guarantor from this
Guaranty, in bankruptcy or in any other instance. When pursuing its rights and
remedies hereunder against the Guarantor, the Lender may, but shall be under no
obligation to, pursue such rights and remedies as it may have against the
Borrower or any other Person or against any collateral security or guarantee for
the Obligations or any right of offset with respect
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thereto, and any failure by the Lender to pursue such other rights or remedies
or to collect any payments from the Borrower or any such other Person or to
realize upon any such collateral security or guarantee or to exercise any such
right of offset, or any release of the Borrower or any such other Person or any
such collateral security, guarantee or right of offset, shall not relieve the
Guarantor of any liability hereunder, and shall not impair or affect the rights
and remedies, whether express, implied or available as a matter of law, of the
Lender against the Guarantor. This Guaranty shall remain in full force and
effect and be binding in accordance with and to the extent of its terms upon the
Guarantor and the successors and assigns thereof, and shall inure to the benefit
of the Lender, and its successors, indorsees, transferees and assigns, until all
the Obligations and the obligations of the Guarantor under this Guaranty shall
have been satisfied by payment in full and the Loan Agreement shall be
terminated, notwithstanding that from time to time during the term of the Loan
Agreement the Borrower may be free from any Obligations.
9. Reinstatement. This Guaranty shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Obligations is rescinded or must otherwise be restored or returned by
the Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or the Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower or the Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.
10. Payments. The Guarantor hereby guarantees that payments hereunder will be
paid to the Lender without set-off or counterclaim in U.S. Dollars in accordance
with the wiring instructions of the Lender.
11. Notices. All notices, requests and other communications provided for herein
(including without limitation any modifications of, or waivers, requests or
consents under, this Guaranty) shall be given or made in writing (including
without limitation by telex or telecopy) delivered to the intended recipient at
the "Address for Notices" specified below its name on the signature pages of the
Loan Agreement); or, as to any party, at such other address as shall be
designated by such party in a written notice to each other party. All such
communications shall be deemed to have been duly given when transmitted by telex
or telecopy or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
12. Severability. Any provision of this Guaranty which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
13. Integration. This Guaranty and the Loan Agreement represent the agreement of
the Guarantor with respect to the subject matter hereof and thereof and there
are no promises or representations by the Lender relative to the subject matter
hereof or thereof not reflected herein or therein.
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14. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None of the terms
or provisions of this Guaranty may be waived, amended, supplemented or otherwise
modified except by a written instrument executed by the Guarantor and the
Lender, provided that any provision of this Guaranty may be waived by the
Lender.
(b) The Lender shall not by any act (except by a written
instrument pursuant to Section 14(a) hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Lender, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A waiver by the
Lender of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Lender would otherwise have
on any future occasion.
(c) The rights and remedies herein provided are cumulative, may
be exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
15. Section Headings. The section headings used in this Guaranty are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.
16. Successors and Assigns. This Guaranty shall be binding upon the successors
and assigns of the Guarantor and shall inure to the benefit of the Lender and
its successors and assigns. This Guaranty may not be assigned by the Guarantor
without the express written consent of the Lender.
17. Governing Law. This Guaranty shall be governed by New York law without
reference to choice of law doctrine.
18. SUBMISSION TO JURISDICTION; WAIVERS. THE GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS GUARANTY AND THE LOAN AGREEMENT, OR FOR
RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE
NON-EXCLUSIVE GENERAL JURISDICTION OF THE FEDERAL COURTS OF THE UNITED
STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE
COURTS FROM ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT
IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION
THAT IT MAY NOW OR HEREAFTER
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HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR
THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND
AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE
PREPAID, TO ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH
OTHER ADDRESS OF WHICH THE LENDER SHALL HAVE BEEN NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT
THE RIGHT TO XXX IN ANY OTHER JURISDICTION.
19. WAIVER OF JURY TRIAL. EACH OF THE GUARANTOR AND THE LENDER HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS GUARANTY, ANY THE LOAN AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.
20. Termination. This Guaranty shall terminate upon the final payment in full of
the Obligations and the termination of the Loan Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned has caused this Guaranty to
be duly executed and delivered by its duly authorized officer as of the day and
year first above written.
AAMES FINANCIAL CORPORATION
By: /s/ Xxxxx X. Xxxxx
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Name:
Title:
