EXHIBIT 10.6
RESIDUAL FINANCING FACILITY AGREEMENT
RESIDUAL FINANCING FACILITY AGREEMENT, dated as of the 23rd day of June
1999, by and between (i) GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., a Delaware
corporation, as Lender and Pledgee ("Greenwich"), and (ii) NC CAPITAL
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CORPORATION, a California corporation, as Borrower and Pledgor (the "Borrower").
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R E C I T A L S
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WHEREAS, the Borrower desires to enter into this Agreement (as defined
herein) and the Note (as defined herein); and
WHEREAS, the Borrower will incur monetary and other obligations to the
Lender pursuant to this Agreement and the Note; and
WHEREAS, Greenwich and/or certain of its Affiliates (as defined herein) and
the Borrower, contemplate entering into certain securitization transactions from
time to time (the "Securitization Transactions") providing for, among other
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things, the transfer to the Borrower of certain Residual Securities (as defined
herein) issued thereunder and certain other collateral as shall be determined by
the Lender in its sole discretion; and
WHEREAS, all of the right, title and interest in the Residual Securities
are intended to be and shall be the assets of the Borrower; and
WHEREAS, Greenwich is willing to provide the Borrower with a secured credit
facility in consideration of the pledge of the Collateral (as defined herein)
and on the terms and conditions set forth herein; and
WHEREAS, it is a condition precedent to the obligation of Greenwich to
enter into this Agreement and to make any Loan hereunder to the Borrower, that
the Borrower shall have executed and delivered the Pledged Securities to
Greenwich;
NOW THEREFORE in consideration of the premises and mutual agreements
contained herein, the adequacy and sufficiency of which are hereby acknowledged,
the parties hereby agree as follows:
1. Section Definitions. When used herein, the following terms shall have the
meanings set forth below:
"Affiliate" shall mean, with respect to any Person, any other Person which,
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directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person.
For purposes of this definition, control of a Person shall mean the power,
direct or indirect, (i) to vote 25% or more of the securities having ordinary
voting power for the election of directors of such Person or (ii) to direct or
cause the direction of the management and policies of such Person, whether by
contract or otherwise.
"Agreement" shall mean this Residual Financing Facility Agreement, as the
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same may be amended, supplemented or otherwise modified from time to time.
"Bailee" shall mean Chase Manhattan Bank, N.A., in its capacity as bailee
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for the Pledgee.
"Borrower" shall mean NC Capital Corporation, a California corporation, and
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any successor thereto.
"Business Day" shall mean any day other than a Saturday, Sunday or any day
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on which federal reserve banks or the Lender are not authorized or required to
close.
"Capital Stock" shall mean any and all shares, interests, participations or
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other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the foregoing.
"Cash" shall mean all cash and cash equivalents, as shown on the
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consolidated balance sheet of the Borrower prepared in accordance with GAAP,
including, without limitation, all deposit accounts of the Borrower with the
Lender or any other financial institution.
"Code" shall mean the Internal Revenue Code of 1986, together with all
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amendments from time to time thereto.
"Collateral" shall have the meaning set forth in Section 3.1 hereof.
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"Collateral Deficiency" shall have the meaning set forth in Section 3.5(a)
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hereof.
"Collateral Value" shall mean with respect to any Loan and any of the
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Collateral securing such Loan, (a) for Eligible Residual Securities, 50% of the
Market Value of such Collateral and (b) for Collateral other than Eligible
Residual Securities, the value determined by the Lender in its sole discretion.
"Compliance/Borrowing Base Certificate" shall mean a certificate in a form
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mutually acceptable to the Lender and the Borrower.
"Default" shall mean an Event of Default or an event that with notice or
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lapse of time or both would become an Event of Default.
"Eligible Residual Securities" shall mean Residual Securities acceptable
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to the Lender in its sole discretion, which securities have been issued pursuant
to a Pooling and Servicing Agreement evidencing beneficial interests in one or
more pools of residential Mortgage Loans originated or purchased by New Century
in accordance with New Century's Underwriting Guidelines and serviced by a
servicer acceptable to the Lender in its sole discretion, and which securities
were underwritten by the Lender as sole or lead underwriter.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
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amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
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incorporated) that is a member of a group that is treated as a single employer
under Section 414 of the Code of which any Loan Party is a member.
"Event of Default" shall have the meaning set forth in Section 9 hereof.
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"Facility" shall mean the secured residual financing facility described in
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this Agreement.
"Facility Amount" shall have the meaning set forth in Section 2.1 hereof.
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"GAAP" shall mean generally accepted accounting principles as in effect in
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the United States, as may be in place from time to time, on a consistent basis.
"Governmental Authority" shall mean any nation, government, or State, or
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any political subdivision thereof, or any court, stock exchange, entity or
agency exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Greenwich" shall mean Greenwich Capital Financial Products, Inc., a
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Delaware corporation, and any successor thereto.
"Guarantee" shall mean any obligation, contingent or otherwise, of any
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Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness of any other Person (the "primary obligor") in any manner, whether
directly or otherwise, (a) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or to purchase (or to advance or
supply funds for the purchase of) any direct or indirect security therefor, (b)
to purchase property, securities, or services for the purpose of assuring the
owner of such Indebtedness of the payment of such Indebtedness, (c) to maintain
working capital, equity capital, or other financial statement condition of the
primary obligor so as to enable the primary obligor to pay such Indebtedness or
otherwise to protect the owner thereof against loss in respect thereof, or (d)
entered into for the purpose of assuring in any manner the owner of such
Indebtedness of the payment of such Indebtedness or to protect such owner
against loss in respect thereof; provided, that the term "Guarantee" shall not
include endorsements for collection or deposit, in each case in the ordinary
course of business.
"Guarantors" shall mean New Century Mortgage Corporation and New Century
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Financial Corporation.
"Guaranty" shall mean that certain Affiliate Guaranty dated as of the date
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hereof made by New Century Mortgage Corporation and New Century Financial
Corporation in favor of the Lender, as amended from time to time.
"Indebtedness" shall mean with respect to any Person at any time, without
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duplication, all obligations of such Person which, in accordance with GAAP,
consistently applied, should be classified as liabilities on an unconsolidated
balance sheet of such Person, but in any event shall include: (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (c)
all obligations of such Person upon which interest charges are customarily paid
or accrued, (d) all obligations of such Person under conditional sale or other
title retention agreements relating to property purchased by such Person, (e)
all obligations of such Person issued or assumed as the deferred purchase price
of property or services, but excluding accrued expenses and trade payables
incurred and paid in the ordinary course of business, (f) all obligations of
others secured by any Lien on property owned or acquired by such Person, whether
or not the obligations secured thereby have been assumed, (g) all capitalized
lease obligations of such Person, (h) all obligations of such Person in respect
of interest rate protection agreements, (i) all obligations of such Person,
actual or contingent, in respect of letters of credit or banker's acceptances,
(j) all obligations of any partnership or joint venture as to which such Person
is or may become personally liable, and (k) all Guarantees by such Person of
Indebtedness of others.
"Investment" as applied to any Person, shall mean, any direct or indirect
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purchase or other acquisition by that Person of, or a beneficial interest in,
stock or other securities of any other Person, or any direct or indirect loan,
advance (other than advances to employees for moving and travel expenses,
drawing accounts and similar expenditures in the ordinary course of business) or
capital contribution by that Person to any other Person, including all
Indebtedness and accounts receivable from that other Person which are not
current assets or did not arise from sales to that other Person in the ordinary
course of business.
"Interest Rate" shall have the meaning set forth in Section 2.4(a) hereof.
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"Lender" shall mean Greenwich.
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"Leverage Ratio" shall mean, on any date of determination, the ratio of (a)
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Total Indebtedness to (b) Tangible Net Worth.
"Lien" shall mean any interest in property securing an obligation owed to,
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or a claim by, a Person other than the owner of such property, whether such
interest is based on the common law, statute or contract, and including, but not
limited to, the security interest,
security title or lien arising from a security agreement, mortgage, deed of
trust, deed to secure debt, encumbrance or pledge for security purposes.
"Loan" shall mean each extension of funds to the Borrower by Greenwich
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pursuant to Section 2 of this Agreement.
"Loan Documents" shall mean and include this Agreement, the Note, the
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Guaranty and all other documents and instruments executed and delivered in
connection herewith or therewith.
"Loan Party" shall mean collectively, the Borrower and the Guarantors.
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"Mandatory Prepayment Amount" shall mean for each Loan, all of the monthly
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cash flow attributable to the related Pledged Securities after payment of
interest on the Loans pursuant to Section 2.4(a) hereof, which are pledged as
Collateral for such Loan.
"Market Value" shall mean the value, determined by Greenwich in its sole
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reasonable discretion, of the Pledged Securities if sold in their entirety to a
single third-party purchaser. In determining Market Value, the Lender may take
into account customary factors, including, but not limited to current market
conditions and the fact that the Pledged Securities may be sold under
circumstances in which the Borrower is in default under this Agreement.
Greenwich's determination of Market Value shall be conclusive upon the parties,
absent manifest error on the part of Greenwich. The Borrower acknowledges that
Greenwich's determination of Market Value is for the limited purpose of
determining Collateral Value for lending purposes hereunder without the ability
to perform customary purchaser's due diligence and is not necessarily equivalent
to a determination of the fair market value of the Pledged Securities achieved
by obtaining competing bids in an orderly market in which the Borrower is not in
default and the bidders have adequate opportunity to perform customary loan and
servicing due diligence.
"Material Adverse Effect" shall mean a material adverse effect on (a) the
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business, operations, properties or condition (financial or otherwise) of (i)
any Loan Party individually or (ii) the such Loan Party and its Subsidiaries
taken as a whole or (b) the validity or enforceability of this or any of the
other Loan Documents or the rights or remedies of the Lender hereunder or
thereunder or (c) the ability of any Loan Party to perform its obligations under
any Loan Document or any Other Agreement.
"Mortgage" shall mean a mortgage or deed of trust on real property which
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has been improved by a completed single family (i.e., one to four family units)
dwelling unit (i.e., a detached house, townhouse or condominium).
"Mortgage-backed Security" shall mean a security (including, without
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limitation, a participation certificate) that is an interest in a pool of
Mortgage Loans or is secured by such an interest.
"Mortgage Loan" shall mean a Mortgage Note and the related Mortgage.
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"Mortgage Note" shall mean a promissory note which has a term not exceeding
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30 years evidencing a loan or advance which is secured by a Mortgage.
"Multiemployer Plan" shall mean a Plan which is a multiemployer plan as
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defined in Section 4001(a)(3) of ERISA.
"Net Worth" shall mean the excess of total assets of the Borrower over
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total liabilities of the Borrower, determined in accordance with GAAP.
"New Century" shall mean New Century Mortgage Corporation, a California
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corporation.
"Note" shall have the meaning set forth in Section 2.3(a) hereof.
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"Notice of Borrowing" shall have the meaning set forth in Section 2.2(a)
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hereof.
"Obligations" shall mean (i) the unpaid principal of and premiums, if any,
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and interest (including interest accruing at the then applicable rate provided
in this Agreement after the maturity of the Loans and interest accruing at the
then applicable rate provided in this Agreement after the filing of any petition
in bankruptcy, or the commencement of any insolvency, reorganization or like
proceedings, relating to the Borrower whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) on the Loans, when and as
due, whether at maturity, by acceleration, upon one or more dates set for
prepayment or otherwise and (ii) all other obligations and liabilities of every
nature of the Borrower from time to time owing to Greenwich, in each case
whether direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred (including monetary obligations incurred during
the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding),
which may arise under, out of, or in connection with, this Agreement or any
other Loan Document or under any other document made, delivered or given in
connection with any of the foregoing, in each case whether on account of
principal, premium, if any, interest, fees, indemnities, costs, expenses or
otherwise (including all reasonable fees and disbursements of counsel to the
Lender) that are required to be paid by the Borrower pursuant to the terms of
this Agreement or any other Loan Document.
"One-Month LIBOR" shall mean as of any date of determination, the rate per
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annum equal to the rate appearing at page 3750 of the Telerate Screen as one-
month LIBOR on such day, and if such rate shall not be so quoted, the rate per
annum at which the Lender is offered Dollar deposits at or about 11:00 a.m., New
York City time, on such date by prime banks in the interbank eurodollar market
where the eurodollar and foreign currency exchange operations in respect of its
Loans are then being conducted for delivery on such day for a period of one
month, and in an amount comparable to the amount of the Loans to be outstanding
on such day.
"Other Agreements" shall mean any agreement, other than this Agreement,
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between the Borrower and Greenwich or any of its Affiliates or agents, whether
now existing or hereafter entered into, as any such agreement may be amended,
supplemented or otherwise modified from time to time.
"Xxxxx Xxxxxx Financing Documents" shall mean the Master Loan and Security
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Agreement, by and between the Loan Parties and Xxxxx Xxxxxx Real Estate
Securities, Inc. substantially in the form provided to the Lender prior to the
date of this Agreement.
"Payment Date" shall mean the twenty-seventh of each month, day of each
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month, or if such day is not a Business Day, the immediately succeeding Business
Day.
"Person" shall mean an individual, partnership, limited liability company,
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corporation, business trust, joint venture or other entity of whatever nature.
"Plan" shall mean, at a particular time, any employee benefit plan which is
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covered by ERISA and in respect of which any Loan Party or an Affiliate is (or,
if such plan were terminated at such time, would under Section 4069 of ERISA be
deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Pledged Securities" shall mean the Residual Securities pledged to the
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Lender hereunder from time to time and held by the Lender or its designee as
Collateral hereunder pursuant to Section 3.1.
"Pledgee" shall mean Greenwich.
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"Pledgor" shall mean the Borrower.
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"Pooling and Servicing Agreement" shall mean any pooling and servicing
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agreement, trust agreement or other agreement pursuant to which the Mortgage
Loans underlying any of the Pledged Securities are serviced or administered or
the Pledged Securities are issued or exchanged.
"Proceeds" shall mean all "proceeds" as defined in Section 9-306(1) of the
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UCC and, in any event, shall include without limitation, all collections,
distributions or other income or receipts from or in respect of the Pledged
Securities.
"Residual Securities" shall mean interest-only strips, residual interests
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or reserve certificates issued and transferred to the Borrower in connection
with the Securitization Transactions.
"Responsible Officer" shall mean the president or any vice president of the
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Borrower.
"Restricted Payments" shall mean with respect to any Person, collectively,
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all dividends or other distributions of any nature (cash, securities, assets or
otherwise), and all
payments, by virtue of redemption or otherwise, on any class of equity
securities (including, without limitation, warrants, options or rights therefor)
issued by such Person, whether such securities are now or may hereafter be
authorized or outstanding and any distribution in respect of any of the
foregoing, whether directly or indirectly.
"Securities Act" shall mean the Securities Act of 1933, as amended.
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"Securitization Transaction" shall have the meaning set forth in the
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recitals hereto.
"Servicing Contract" shall mean a contract or agreement purchased by New
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Century or entered into by New Century for its own account (and not as nominee
or subservicer), whether now existing or hereafter purchased or entered into,
pursuant to which New Century services Mortgage Loans or Mortgage Loan pools for
others.
"Servicing Rights" shall mean any and all rights of New Century held for
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its own account (and not as nominee or subservicer), whether pursuant to a
Servicing Contract or otherwise, to service Mortgage Loans or Mortgage Loan
pools, including, without limitation, (i) all rights to collect payments due and
enforce the rights of the mortgagee under any Mortgage Loans, (ii) all rights to
receive compensation and termination fees under any Servicing Contract and (iii)
all rights to receive the proceeds from any sale or other transfer of New
Century's interest in any Servicing Contract.
"Subsidiary" shall mean, as to any Person, a corporation, partnership or
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other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person.
"Tangible Net Worth" shall mean, as of any date of determination, the
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consolidated Net Worth of the Borrower and its subsidiaries, less the
consolidated net book value of all assets of the Borrower and its subsidiaries
(to the extent reflected as an asset in the balance sheet of the Borrower or any
subsidiary at such date) which will be treated as intangibles under GAAP,
including, without limitation, such items as deferred financing expenses, net
leasehold improvements, good will, trademarks, trade names, service marks,
copyrights, patents, licenses and unamortized debt discount and expense;
provided, that Residual Securities issued by the Borrower shall not be treated
as intangibles for purposes of this definition.
"Termination Date" shall mean 364 days following the date of this Agreement
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or such earlier date on which this Agreement shall terminate in accordance with
the provisions hereof or by operation of law, as same may be extended by Lender
in its sole discretion.
"Total Indebtedness" shall mean at any time of determination, the
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Indebtedness of the Borrower and its Subsidiaries, minus obligations under
gestation repurchase agreements or similar arrangements under which the Borrower
or its subsidiaries are required to repurchase Mortgage-backed Securities or
Mortgage Loans from the Lender or other counterparty reasonably satisfactory to
the Lender, whether or not such obligations are reflected on the Borrower's
balance sheet; provided, that such gestation repurchase agreements are entered
into in the ordinary course of business in contemplation of the subsequent non-
recourse sale of such Mortgage-backed Securities or Mortgage Loans.
"Trustee" shall mean any trustee under a Pooling and Servicing Agreement.
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"UCC" shall mean the Uniform Commercial Code from time to time in effect in
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the State of New York.
"Underwriting Guidelines" shall be the Borrower's underwriting guidelines
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in effect as of the date hereof, a copy of which is attached hereto as Exhibit
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F.
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"U.S. Bank Financing Facility Documents" shall mean the Fourth Amended and
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Restated Credit Agreement, dated as of May 26, 1999, by and between New Century
and U.S. Bank National Association and all other documents or agreements
executed in connection therewith.
1. Section The Loans.
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1.1 Agreement to Lend. Subject to the terms and conditions of this
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Agreement, and provided that no Default or Event of Default shall have occurred
and be continuing hereunder, Greenwich shall make available to the Borrower a
secured credit facility in an aggregate principal amount not to exceed
$30,000,000 at any one time outstanding (the "Facility Amount"), against which
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the Borrower may borrow, prepay, in whole or in part, and reborrow at any time
(and without limit on the number of times) before the Termination Date. The
amount of each Loan drawn down by the Borrower shall be at least $100,000.
1.1 Manner of Borrowing.
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(a) The Borrower shall notify Greenwich of its intention to
borrow hereunder by delivering a Notice of Borrowing substantially in the form
of Exhibit B hereto (a "Notice of Borrowing") not later than 12:00 Noon New York
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City time on a Business Day, no more than once per week. Each Notice of
Borrowing shall specify (i) the amount of the Loan requested and (ii) a summary
of the Pledged Securities and any Collateral securing such Loan.
(a) In connection with each Notice of Borrowing, if, as of the
date of the requested Loan, all of the conditions to the making of a Loan set
forth in Section 8 have been met, Greenwich shall, within three (3) Business
Days of receipt of such Notice of Borrowing and via wire transfer in immediately
available funds, extend the requested Loan to the Borrower; provided that the
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aggregate outstanding principal amount of all of the Loans
(taking into account the Loan to be made on such date) shall not exceed the
lesser of (i) the Collateral Value of the Collateral securing such Loans and
(ii) the Facility Amount.
(a) Greenwich shall determine the Market Value of the Collateral at
the time of each such Notice of Borrowing and upon the request of the Borrower,
which request may be made no more frequently than monthly. Greenwich may at any
time in its discretion determine the Market Value of the Collateral. Greenwich's
determination of Market Value shall be made in good faith and in its sole
discretion after consultation with the Borrower.
1.1 Note.
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(a) The Borrower's obligation to repay any and all Loans extended and
interest thereon shall be evidenced by a single promissory note of the Borrower
payable to the order of Greenwich, substantially in the form of Exhibit A hereto
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(as amended, supplemented or otherwise modified from time to time, the "Note").
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(a) The date and amount of each Loan made by Greenwich and the date
and amount of each payment of principal made by the Borrower shall be evidenced
by entries made by Greenwich in its books and records kept by it in the normal
course of its business. The Borrower agrees and acknowledges that such books and
records of Greenwich documenting actual disbursements paid to and received from
the Borrower shall constitute prima facie evidence of the Borrower's
Indebtedness outstanding hereunder.
1.1 Interest.
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(a) The Borrower agrees to pay Greenwich interest on the unpaid
principal amount of each Loan from and including the date the Loan is extended
to but not including the date of which the Loan is paid in full. Interest shall
accrue on an adjustable monthly basis at a rate per annum equal to One-month
LIBOR plus 2.5% (two hundred and fifty basis points) (the "Interest Rate"). The
Interest Rate shall be determined on each Payment Date. Accrued interest shall
be payable in arrears on each Payment Date and on the date of repayment in full
of the applicable Loan.
(a) If the Borrower shall fail to pay when due (whether at stated
maturity, by acceleration or otherwise) any principal, interest or other amount
owing to Greenwich under this Agreement or the Note and such failure to pay
shall constitute an Event of Default, the Borrower shall pay to Greenwich on
demand such principal, interest or other amount together with interest on such
principal, interest or other amount in default from and including the date such
payment became due until payment thereof in full at a rate per annum equal to
the Interest Rate plus two percent (2%) per annum.
(a) All interest payable hereunder shall be computed on the basis of
a 360-day year for the actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable.
1.1 Repayment of the Loans. Each Loan outstanding shall be repaid in full
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on the Termination Date, together with accrued but unpaid interest thereon.
1.1 Optional Prepayments. The Borrower may at any time upon one (1)
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Business Day's prior written notice to Greenwich prepay any Loan in whole or in
part, without premium, together with accrued interest to the date of such
prepayment on the amount prepaid.
1.1 Payment Procedures.
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(a) All payments to Greenwich hereunder or under the Note shall
be made in immediately available funds, and free and clear of and without
deduction for any taxes, levies, duties, charges, counterclaims, set-offs, fees
or withholdings of any nature hereafter imposed, assessed or collected, not
later than the due date for such payment through the Federal Reserve Fedwire
System for credit to the account of the Lender (Account No. 140095961 at the
Chase Manhattan Bank, N.A., New York, ABA No. 000000000, Attention: Xxxxx
Xxxxx).
(a) Any payments made hereunder shall be applied first against
costs and expenses due hereunder pursuant to Section 9.3; then against default
interest, if any; then against interest due on the Loans; and thereafter against
the unpaid principal of the Loans.
(a) Any payments made on account of principal hereunder may not
be reborrowed, it being the express intent of the parties that this Agreement
cover a one-time term Loan notwithstanding any provision to the contrary set
forth herein.
1. Section Pledge; Grant of Security Interest.
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1.1 Pledge. The Borrower hereby pledges and grants to Greenwich and
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its successors, endorsees, transferees and assigns, as collateral security for
the prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations, a security interest
in and assignment of all of the 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
(as each such term is defined in the UCC) (the "Collateral"):
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(a) all of the Borrower's rights in the Pledged Securities and
any additional property acceptable to the Lender in its sole discretion and
delivered or otherwise perfected as required by the Lender;
(a) all rights, privileges, authority and powers of the Borrower
as owner or holder of the foregoing, including, but not limited to, all general
intangibles and contract rights related thereto;
(a) all securities, moneys or property representing dividends or interest
on any of the foregoing, or representing a distribution in respect of the
foregoing, or resulting from a split-up, revision, reclassification or other
like change of the foregoing or otherwise received in exchange therefor, and any
subscription warrants, rights or options issued to the holders of, or otherwise
in respect of, the foregoing;
(a) all documents and certificates representing or evidencing the
Borrower's interest in the foregoing;
(a) all distributions, cash, instruments and other property from time to
time received, receivable or otherwise distributed in respect of, or in exchange
for, the Borrower's interest in the foregoing;
(a) all "collateral", however defined, under any Other Agreements and all
other property securing indebtedness of the Borrower to Greenwich or any of its
Affiliates or Subsidiaries to the extent not applied to the satisfaction of such
indebtedness; and
(a) any other right, title, interest, privilege, authority and power of
the Borrower, as a holder of the foregoing, 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 the Borrower
pertaining to any of the foregoing.
1.1 Stock Powers; Re-registration.
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(a) Concurrently with the delivery to the Bailee, on behalf of Greenwich,
of each certificate representing one or more shares of Pledged Securities
pursuant to Section 2 above, the Borrower shall deliver an undated stock power
covering such certificate, duly executed in blank by the Borrower with, if
Greenwich so requests, signature guaranteed, along with any other documents
necessary to re-register the Pledged Securities.
(a) The Borrower agrees and acknowledges that Greenwich may at its sole
discretion re-register any Pledged Securities delivered as Collateral hereunder
into Greenwich's name.
1.1 Notification to Trustee. Concurrently with the delivery to the Bailee, on
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behalf of Greenwich, of each certificate representing one or more shares of
Pledged Securities pursuant to Section 2 above, (A) the Borrower shall have (1)
notified the Trustee in connection with the related Securitization Transaction
of the pledge of the related Pledged Securities hereunder, and (2) instructed
the Trustee to pay all amounts payable to the holders of the Pledged Securities
to an account specified by the Lender, in the form of the instruction letter
attached hereto as Exhibit G (the "Instruction Letter") and (B) the Trustee
shall have acknowledged in writing the instructions set forth in clause (A)
above, and a copy of the fully executed Instruction Letter shall be delivered to
the Lender.
1.1 Further Assurances. The Borrower shall take any and all action required by
------------------
Greenwich in order that Greenwich has a valid, first priority, perfected
security interest in the Collateral, including executing financing statements,
assigning or endorsing Collateral to Greenwich and delivering Collateral to
Greenwich or the Bailee.
1.1 Collateral Maintenance; Release of Collateral.
---------------------------------------------
(a) In the event that at the determination of the Collateral Value of
Collateral, the Collateral Value of Collateral is less than the aggregate
principal balance of the Loans outstanding plus accrued interest thereon (a
"Collateral Deficiency"), the Borrower shall upon written request of Greenwich
---------------------
deliver to the Bailee or the Lender (as instructed by the Lender) additional
cash or Collateral in an amount at least equal to such Collateral Deficiency or
repay Loans in the amount of such Collateral Deficiency, in each case within one
Business Day of receipt of such request. Until such time as the Collateral Value
of Collateral equals or exceeds the aggregate principal balance of the Loans
outstanding plus accrued interest thereon, Greenwich shall not be obligated to
extend further Loans hereunder and all funds received by the Borrower in respect
of, and Proceeds of, such Collateral shall be remitted to Greenwich and applied
in the manner set forth in Section 2.7(b).
(a) The Borrower may request from time to time, and the Lender shall agree
to release the Lien of the Lender on certain Pledged Securities for which the
outstanding principal balance plus accrued interest for the Loan secured by such
Pledged Securities has been paid in full; provided that (i) no Default shall
have occurred and be continuing, and (ii) after giving effect to such release,
no Collateral Deficiency shall exist.
1.1 Data Reporting. The Borrower will report or cause an Affiliate to report
--------------
the following information with respect to the Residual Securities:
(a) On a monthly basis, (x) a remittance statement setting forth the
following, in accordance with Section 2.2: (i) the aggregate losses allocated to
the Pledged Securities for the preceding collection period; (ii) the aggregate
of payments received on the Pledged Securities; (iii) the aggregate principal
balance or notional principal balance, if applicable, of the Pledged Securities
as of the close of business on the last day of the preceding collection period,
after giving effect to payments allocated to principal on such day; and (iv)
such other information as Greenwich shall reasonably request and (y) a copy of
any remittance statement received from the Trustee relating to the underlying
Securitization Transaction.
(a) Promptly: (i) any material adverse developments with respect to any
pending or future litigation involving the Borrower in which the amount in
controversy exceeds $1,000,000; (ii) any other Material Adverse Effect; (iii)
the acceleration of any debt obligation or the termination of any credit
facility of the Borrower (in each case, representing obligations or facilities
in excess of $1,000,000); (iv) the amount and maturity of any debt assumed after
the date hereof by the Borrower; and (iv) the breach of any covenant in Section
4 or 5 hereof.
1. Section Representations and Warranties of the Borrower.
----------------------------------------------
The Borrower hereby represents and warrants to Greenwich as of the date of
this Agreement and on each date that a Loan is made hereunder as follows:
1.1 Organization. It is a corporation duly incorporated and validly
------------
existing in good standing under the laws of the State of its incorporation and
is duly qualified to do business and is in good standing in each jurisdiction in
which such qualification is necessary, except where the failure to be so
qualified or in good standing could not have a Material Adverse Effect.
1.1 Power and Authority. It has all requisite corporate power and
-------------------
authority and has all material governmental licenses, authorizations, consents
and approvals necessary to own its assets and carry on its business as now being
conducted and to execute and deliver and perform its obligations under the Loan
Documents, including, to pledge and deliver the Pledged Securities as Collateral
under this Agreement and to execute the Note.
1.1 Authorization of Borrowing. All appropriate and necessary action
--------------------------
has been taken by it to authorize the execution and delivery of this Agreement
and, in the case of the Borrower, the Note, and to authorize the performance and
observance of the terms hereof and thereof.
1.1 Agreement Binding. This Agreement and the Note each constitutes
-----------------
the legal, valid and binding obligation of the Borrower enforceable in
accordance with their terms except as may be limited by laws governing
insolvency or creditors' rights or by rules of equity. The execution, delivery
and performance of this Agreement, the Note and any other Loan Document will not
violate any provision of law, regulation, order or other governmental directive,
or conflict with, constitute a default under, or result in the breach of any
provision of any material agreement, ordinance, decree, bond, indenture, order
or judgment to which the Borrower is a party or by which it or its properties is
or are bound.
1.1 Compliance with Law. It is conducting its business and operations
-------------------
in material compliance with all applicable material laws, regulations,
ordinances and directives of governmental authorities. It has filed all tax
returns required to be filed and has paid all taxes in respect of the ownership
of its assets or the conduct of its operations prior to the date after which
penalties attach for failure to pay except (a) to the extent that the payment of
such taxes is being contested in good faith by it in appropriate proceedings and
adequate reserves have been provided for the payment thereof, or (b) with
respect to such returns and/or taxes which are not material in either nature or
amount such that any failure to file such returns or pay such taxes would not
materially and adversely affect its financial condition, operations, business or
prospects.
1.1 Consents. All licenses, consents and approvals required from and
--------
all registrations and filings required to be made with any governmental or other
public body or
authority for the making and performance by the Borrower of this Agreement and
the Note have been obtained and are in effect.
1.1 Litigation. There is no action, suit or proceeding at law or in equity
----------
by or before any court, governmental agency or authority or arbitral tribunal
now pending or, to the knowledge of the Borrower, threatened against or
affecting it which, if determined adversely, may have a Material Adverse Effect.
1.1 Financial Statements. The unaudited balance sheet of the Borrower (on
--------------------
a consolidated basis) as at December 31, 1998, and the related statement of
income for the fiscal period ended on such date, in each case heretofore
furnished to the Lender, are complete and correct in all material respects and
fairly present the financial condition of the Borrower as at said date (subject
to normal year-end audit adjustments), all in accordance with GAAP applied on a
consistent basis. On said date, the Borrower had no material contingent
liabilities, liabilities for taxes, unusual or anticipated losses from any
unfavorable commitments, except as referred to or reflected in said balance
sheet as at said date. Since December 31, 1998, there has been no material
adverse change in the operations, condition (financial or otherwise) or business
of the Borrower from that set forth in said financial statements as at said
date.
1.1 Other Obligations. It is not in default in the performance, observance
-----------------
or fulfillment of any obligation, covenant or condition in any agreement or
instrument to which it is a party or by which it is bound the result of which
could have a Material Adverse Effect.
1.1 Margin Regulations. It is not engaged principally, or as one of its
------------------
important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation G of the
Board of Governors of the Federal Reserve System). No part of the proceeds of
any Loan will be used to (a) purchase or carry any margin stock or to extend
credit to others for the purpose of purchasing or carrying any margin stock or
(b) pay the principal or interest of any securities issued by the Borrower in
connection with a Securitization Transaction.
1.1 Investment Company Act. It is not an "investment company" or a company
----------------------
"controlled" by an investment company within the meaning of the Investment
Company Act of 1940, as amended.
1.1 Chief Executive Office. The chief executive office of the Borrower is
----------------------
located in 00000 Xxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxx 00000 or such other
location in the United States as has been notified to Greenwich from time to
time pursuant to Section 5.21.
1.1 Ownership of the Borrower of the Pledged Securities. The Borrower owns
---------------------------------------------------
beneficially and of record all of the Pledged Securities, free and clear of all
Liens.
1.1 Full Disclosure. No representation or warranty made by or on behalf of
---------------
the Borrower contained herein and no information (written or oral), certificate,
financial statement or report furnished by or on behalf of the Borrower
hereunder, contains an untrue statement of a material fact or omits to state any
material fact necessary to make the statements herein or therein contained, in
light of the circumstances in which made, not misleading.
1.1 ERISA. Except as disclosed to the Lender, neither it nor any of its
-----
respective Subsidiaries maintains any Plans, and it agrees to notify the Lender
in advance of forming any Plans. Neither it nor any of its Affiliates has any
obligations or liabilities with respect to any employee pension benefit plans or
Multiemployer Plans, nor have any such Persons had any obligations or
liabilities with respect to any such Plans during the five-year period prior to
the date this representation is made or deemed made. It and any of its
Affiliates will give notice if at any time it or any of its Affiliates has any
obligations or liabilities with respect to any employee pension benefit plan or
Multiemployer Plan. All Plans maintained by it or any of its Affiliates are in
substantial compliance with all applicable laws (including ERISA).
1.1 Representations of the Borrower with respect to the Pledged
-----------------------------------------------------------
Securities.
----------
(a) All of the Pledged Securities have been validly issued, and are
fully paid and non-assessable, and the Pledged Securities have been offered,
issued and sold in compliance with all applicable laws and (A) there are no
outstanding rights, options, warrants or agreements for the purchase from, or
sale or issuance, in connection with the Pledged Securities; (B) there are no
agreements on the part of the Borrower to issue, sell or distribute the Pledged
Securities; and (C) the Borrower has no obligation (contingent or otherwise) to
purchase, redeem or otherwise acquire any securities or any interest therein or
to pay any dividend or make any distribution in respect of the Pledged
Securities.
(a) Borrower is, or will be upon issuance of the Pledged Securities,
the record and beneficial owner of, and has, or will have upon issuance, good
title to, the Pledged Securities, free of any and all Liens or options in favor
of, or claims of, any other Person, except the security interest created by this
Agreement.
(a) The Pledged Securities, when pledged as Collateral hereunder,
shall be unencumbered, and this Agreement, together with delivery to the Lender
or the Bailee of the Pledged Securities and the filing of a financing statement
on Form UCC-1 with the Secretary of State of the State of California naming the
Borrower as "debtor" and the Lender as "secured party" and describing such
Collateral as the "collateral", will create a valid first priority perfected
security interest in such Collateral in favor of Greenwich in accordance with
its terms against all creditors of the Borrower and any Persons purporting to
purchase such Collateral from the Borrower.
(a) Borrower has obtained from any and all concerned creditors, any
waivers, amendments, releases or acknowledgments necessary to create and perfect
in favor of the Lender the first priority security interests provided herein.
1.1 Representations as to each Pooling and Servicing Agreement. All
----------------------------------------------------------
of the representations and warranties in any applicable Pooling and Servicing
Agreement are true and correct in all material respects as of the date hereof as
if made on such date and are incorporated herein by reference mutatis mutandis;
------- --------
or any such breach thereof does not have a Material Adverse Effect. No Event of
Default has occurred and is continuing under any Pooling and Servicing
Agreement.
1.1 Year 2000 Compliance. The Borrower has made a full and complete
--------------------
assessment of all material issues which may be related to the occurrence of the
year 2000, including all material issues related to its computer program and
software (the "Year 2000 Issues"), and the Borrower has a realistic and
achievable program for remediating the Year 2000 Issues on a timely basis (the
"Year 2000 Program"). Based on such assessment and on the Year 2000 Program,
the Borrower does not reasonably anticipate that Year 2000 Issues will have a
material adverse effect on the Borrower's operations, servicing or financial
condition.
1.1 Survival. All representations and warranties made by the Borrower
--------
herein, whether express or implied, shall survive until all Obligations have
been fully satisfied and discharged.
1. Section Affirmative Covenants of the Borrower.
-------------------------------------
The Borrower hereby covenants to Greenwich that, until the payment in full
and final performance of all of its respective Obligations to Greenwich under
the Loan Documents, it shall perform the following obligations:
1.1 Financial Statements and Other Reports. Each Loan Party will
--------------------------------------
maintain a system of accounting established and administered in accordance with
sound business practices such as to permit the preparation of financial
statements in accordance with GAAP and furnish or cause to be furnished to the
Lender:
(a) as soon as available and in any event within 30 days after
the end of each calendar month, a copy of the unaudited financial statements of
each Loan Party (on a consolidated and a consolidating basis) as at the end of
such month, consisting of at least a balance sheet and the related statements of
income, shareholders' equity and cash flow of the Borrower for such month and
from the beginning of the then current fiscal year of each Loan Party to the end
of such month, setting forth in each case in comparative form the figures for
the corresponding date or period of the previous fiscal year, all in reasonable
detail, and certified by the chief financial officer of each Loan Party as being
complete and correct in all material respects and fairly presenting each Loan
Party's financial condition and results of operations, subject to changes
resulting from normal year-end adjustments;
(a) as soon as available and in any event within 90 days after
the end of each fiscal year, unaudited financial statements of the Borrower and
audited financial
statements of the Guarantors (on a consolidated and a consolidating basis),
consisting of at least a balance sheet as at the end of such fiscal year and the
related statement of income, shareholders' equity and cash flow for such fiscal
year of each Guarantor, setting forth in each case in comparative form the
corresponding figures as of the end of and for the previous fiscal year, all in
reasonable detail, accompanied by a report thereon of the accounting firm of
KPMG LLP or other independent certified public accountants selected by the
Borrower and reasonably satisfactory to the Lender, which report shall be
unqualified and shall state that such financial statements present fairly the
financial condition of each Guarantor as at the date indicated and the results
of their operations for the periods indicated in conformity with GAAP applied on
a basis consistent with prior fiscal years (except as otherwise required by GAAP
and stated therein) and that the examination of such accountants in connection
with such consolidated financial statements has been made in accordance with
generally accepted auditing standards, accompanied by a letter from such
accounting firm addressed to the Lender acknowledging that the Lender is
extending credit in reliance on such statements and authorizing such reliance,
and also by any management letters to any Guarantor or its board of directors
furnished by such accounting firm in connection with its audit of such
Guarantor's consolidated financial statements;
(a) with the financial statements furnished pursuant to Section 5.1(a) for
each calendar month: (i) a certificate signed by the chief financial officer of
each Loan Party stating that to the best of such officer's knowledge, after due
inquiry, there exists no Default, or, if such Default exists, stating the nature
thereof, the period of existence thereof, and what action such Loan Party
proposes to take with respect thereto; (ii) a properly completed
Compliance/Borrowing Base Certificate as of the end of such month; (iii) a
servicing/delinquency report showing with respect to the Eligible Residual
Securities: the number of Mortgage Notes included therein, the total outstanding
principal amount thereof, Investor type, weighted average coupon, delinquency
status and foreclosure experience; and (iv) such additional information
concerning the Eligible Residual Securities and such selective detail by
segments and categories thereof as may from time to time be reasonably requested
by the Lender;
(a) within five Business Days after any officer of the Borrower has
knowledge of their occurrence, notice of each of the following events: (i) the
commencement of any action, suit, proceeding or arbitration against the Borrower
or any Subsidiary of the Borrower, or any material development in any action,
suit, proceeding or arbitration pending or threatened against the Borrower or
any such Subsidiary, (A) in which the aggregate uninsured amount claimed is more
than $1,000,000, (B) which would, if decided in a manner adverse to the Borrower
or such Subsidiary, result in a Material Adverse Effect or (C) which relates to
this Agreement or any document executed pursuant hereto or any transaction
financed or to be financed in whole or in part directly or indirectly with the
proceeds of the loans made pursuant hereto; (ii) any Default and what actions,
if any, the Borrower is taking or contemplates taking in regard thereto; (iii)
any notice under any Pooling and Servicing Agreement from any party thereunder
that it intends to put the Borrower on probation, declare an event of default
thereunder, or that it intends to terminate the servicer thereunder; (iv) notice
of any other Material Adverse Effect, including any material adverse development
which occurs in any litigation, arbitration or governmental investigation or
proceeding previously disclosed by the Borrower to the Lender;
(a) within ten Business Days following each Securitization
Transaction by the Borrower, a copy of the due diligence report prepared in
connection with such Securitization Transaction by KPMG LLP or other independent
certified public accountants selected by the Borrower and reasonably
satisfactory to the Lender;
(a) prior to the end of each fiscal year, final annual budgets,
forecasts and pro-forma cash flow projections developed by the Borrower for its
next succeeding fiscal year;
(a) as soon as available, copies of all financial statements, reports
and returns sent to the Borrower's stockholders and copies of all regular,
periodic, or special reports which the Borrower is or may be required to file
with any governmental department, bureau, commission or agency; and
(a) from time to time, such other information regarding the business,
operations, affairs and financial condition of the Borrower as the Lender may
reasonably request.
The parties hereto acknowledge that the financial statements of the Borrower
described in Section 5.1(a) above shall not be required to be prepared in
accordance with GAAP. Notwithstanding the preceding sentence, the Borrower
hereby represents to the Lender that such financial statements will accurately
reflect the Borrower's financial condition and any deviation from GAAP standards
will not have the effect of increasing the Borrower's Tangible Net Worth above
the amount that would have been determined using GAAP standards.
1.1 Corporate Existence; Agency Status. Each Loan Party will (a) maintain
----------------------------------
its corporate existence in good standing under the laws of the jurisdiction of
its incorporation and (b) its right to carry on its business and operations in
each jurisdiction in which the character of the properties owned or leased by it
or the business conducted by it makes such qualification necessary and the
failure to be in good standing would preclude such Loan Party from enforcing its
rights with respect to any material assets or expose such Loan Party to any
material liability.
1.1 Compliance with Laws, Taxes, etc. Each Loan Party will comply in all
--------------------------------
material respects with all applicable laws, rules, regulations and orders
(including without limitation Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System), the failure to be in compliance with
which would have a Material Adverse Effect on the financial condition of such
Loan Party, such compliance to include, without limitation, paying before the
same become delinquent all taxes, assessments and governmental charges imposed
upon it or upon its property except to the extent contested in good faith by
appropriate proceedings and for which any reserves required by GAAP have been
established. In the event the Borrower fails to satisfy its obligations under
this Section 5.3 as to taxes,
assessments and governmental charges, the Lender may but is not obligated to
satisfy such obligations in whole or in part and any payments made and expenses
incurred in doing so shall constitute Obligations, shall bear interest at the
rate set forth in Section 2.4 from the date incurred and shall be paid or
reimbursed by the Borrower on demand.
1.1 ERISA. Each Loan Party will maintain, and cause each ERISA Affiliate
-----
to maintain, each Plan in compliance with all material applicable requirements
of ERISA and of the Code and with all applicable rulings and regulations issued
under the provisions of ERISA and of the Code and will not and not permit any of
the ERISA Affiliates to (a) engage in any transaction in connection with which
any Loan Party or any of the ERISA Affiliates would be subject to either a civil
penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section
4975 of the Code, in each case in an amount exceeding $10,000, or (b) fail to
make full payment when due of all amounts which, under the provisions of any
Plan, any Loan Party or any ERISA Affiliate is required to pay as contributions
thereto, or permit to exist any accumulated funding deficiency (as such term is
defined in Section 302 of ERISA and Section 412 of the Code), whether or not
waived with respect to any Plan in an aggregate amount exceeding $10,000. No
Loan Party will permit, or allow any ERISA Affiliate to permit, any event to
occur or condition to exist which would permit any Plan to terminate under any
circumstances which would cause the Lien provided for in Section 4068 of ERISA
to attach to any assets of any Loan Party or any Subsidiary of any Loan Party;
and no Loan Party will permit, as of the most recent valuation date for any Plan
subject to Title IV of ERISA, the present value (determined on the basis of
reasonable assumptions employed by the independent actuary for such Plan and
previously furnished in writing to the Lender) of such Plan's projected benefit
obligations to exceed the fair market value of such Plan's assets. No Loan
Party will become, or permit any ERISA Affiliate to become, a party to any
Multiemployer Plan.
1.1 Assets and Insurance. The Borrower will maintain or require to
--------------------
maintain in full force and effect (a) an adequate errors and omissions insurance
policy, (b) such other insurance coverage by financially sound and respectable
insurers, on all properties of a character usually insured by organizations
engaged in the same or similar business (including, without limitation, all real
property covered by Mortgages to the extent normally required by prudent
mortgagees) against loss or damage of a kind customarily insured against by such
organizations, (c) adequate public liability insurance against tort claims which
may be asserted against the Borrower, and (d) a mortgage bankers blanket bond
insurance policy in at least the amount customarily maintained by organizations
engaged in the same or similar business and under similar circumstances as the
Borrower.
1.1 Inspection, Visitation, etc. The Borrower will permit any Person
---------------------------
designated by the Lender in writing, at the Lender's expense, to visit and
inspect any of the properties, corporate books and financial records of the
Borrower and discuss its affairs and finances with the principal officers of the
Borrower and its independent public accountants, all at such times as the Lender
shall reasonably request.
1.1 Further Assurances. The Borrower will take all such further actions and
------------------
execute all such further documents and instruments as the Lender may at any time
reasonably determine in its sole discretion to be necessary or advisable to
further carry out and consummate the transactions contemplated by the Loan
Documents and to perfect or protect the Liens granted to the Lender under any
Loan Document.
1.1 Indebtedness. The Borrower will not, directly or indirectly, create,
------------
incur, assume, guarantee, or otherwise become or remain directly or indirectly
liable with respect to, any Indebtedness, except:
(a) the Obligations;
(a) current liabilities not more than 90 days overdue, unless
contested in good faith by appropriate proceedings and any reserves required by
GAAP have been established, incurred by the Borrower in the ordinary course of
business otherwise than for money borrowed; and
(a) Indebtedness incurred to finance the purchase of equipment and
secured solely by Liens on such equipment, in an aggregate amount not to exceed
$1,000,000;
(a) Indebtedness incurred to finance Residual Securities issued by
the Borrower and which Indebtedness is secured only by such Residual Securities,
provided, such Indebtedness shall not exceed 75% of the value of such Residual
Securities determined in accordance with GAAP;
(a) intercompany Indebtedness of the Borrower to any Affiliate of the
Borrower in an aggregate amount not to exceed $1,000,000; and
(a) Indebtedness incurred under the U.S. Bank Financing Documents or
the Xxxxx Xxxxxx Financing Documents.
1.1 Liens. The Borrower will not, directly or indirectly, create, incur,
-----
assume or permit to exist, any Lien with respect to any property now owned or
hereafter acquired by the Borrower, or any income or profits therefrom, except:
(a) the security interests granted to the Lender under the Loan
Documents;
(a) Liens in connection with deposits or pledges to secure payment of
workers' compensation, unemployment insurance, old age pensions or other social
security obligations, in the ordinary course of business of the Borrower;
(a) Liens for taxes, fees, assessments and governmental charges not
delinquent or which are being contested in good faith by appropriate proceedings
and for which appropriate reserves have been established in accordance with
GAAP;
(a) encumbrances consisting of zoning regulations, easements, rights
of way, survey exceptions and other similar restrictions on the use of real
property and minor irregularities in title thereto which do not materially
impair their use in the operation of its business;
(a) Liens on equipment arising under any capitalized lease obligation
or other purchase money Liens on equipment acquired after the Signing Date to
secure Indebtedness permitted pursuant to Section 5.8(c);
(a) Liens incurred in connection with gestation repurchase agreements
or similar arrangements under which the Borrower or its subsidiaries are
required to repurchase Mortgage-backed Securities or Mortgage Loans from the
Lender or other counterparty reasonably satisfactory to the Lender; provided,
that such gestation repurchase agreements are entered into in the ordinary
course of business in contemplation of the subsequent non-recourse sale of such
Mortgage-backed Securities or Mortgage Loans;
(a) Liens on Residual Securities issued by the Borrower and which
Liens secure Indebtedness permitted by Section 5.8(d);
(a) Liens on Servicing Rights and which Liens secure Indebtedness
permitted by Section 5.8(f).
1.1 Investments. The Borrower will not, directly or indirectly, make or
-----------
own any Investment, except Investments in (a) marketable direct obligations
issued or unconditionally guaranteed by the United States Government or issued
by any agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one year from the date of acquisition
thereof, (b) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having the highest rating obtainable
from either Standard & Poor's Corporation or Xxxxx'x Investors Service, Inc.,
(c) commercial paper maturing no more than one year from the date of creation
thereof and, at the time of acquisition, having the highest rating obtainable
from either Standard & Poor's Corporation or Xxxxx'x Investors Service, Inc.,
(d) Mortgage Loans originated or acquired by the Borrower in the ordinary course
of the Borrower's business, (e) certificates of deposits or bankers acceptances
issued by any commercial bank organized under the laws of the United States or
any State thereof and having a combined capital and surplus of at least
$500,000,000, or by United States offices of foreign banks having the highest
rating obtainable from a nationally recognized rating agency, in each case
maturing within one year from the date of acquisition thereof, (f) investments
in mutual funds that invest substantially all of their assets in Investments of
the types described in subsections (a), (b), (c) and (e) of this Section 5.10,
(g) the Capital Stock of any Subsidiary of the Borrower (subject to the
limitations set forth in Sections 5.13 and 5.16).
1.1 Guarantees. The Borrower will not, directly or indirectly, create or
----------
become or be liable with respect to any Guarantee, other than any Guarantee
under the U.S. Bank Financing Facility Documents.
1.1 Net Worth. The Borrower will at all times maintain Tangible Net Worth
---------
of not less than the greater of (i) $40,000,000 measured on a monthly basis (as
at the end of each month) and (ii) 85% of Tangible Net Worth at the end of the
most recently completed fiscal year plus (a) 90% of capital contributions made
during such fiscal year plus (b) 50% of positive year to date net income.
1.1 Restriction on Fundamental Changes. The Borrower will not engage in
----------------------------------
any business activities or operations substantially different from or unrelated
to those in which the Borrower were engaged on the date of this Agreement, enter
into any transaction of merger or consolidation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease, transfer or otherwise dispose of, in one transaction or a series of
transactions, any of its assets, whether now owned or hereafter acquired, or
acquire by purchase or otherwise all or substantially all the business or
property of, or stock or other evidence of beneficial ownership of, any Person,
except:
(a) the Borrower may sell or otherwise dispose of property in the
ordinary course of business, provided such sales do not include all or
substantially all of the assets of the Borrower; and
(a) the Borrower and its Subsidiaries may engage in any business
involving the origination, acquisition, service, sale or securitization of
Mortgage Loans or other consumer obligations.
1.1 Restricted Payments. The Borrower will not make any Restricted
-------------------
Payments.
1.1 Reserved.
--------
1.1 Subsidiaries. The Borrower will not create or acquire any
------------
Subsidiaries, other than Subsidiaries engaged solely in any business involving
the origination, acquisition, service, sale or securitization of Mortgage Loans
or other consumer obligations.
1.1 Affiliate Transactions. The Borrower will not enter into any
----------------------
transaction with an Affiliate of the Borrower, other than transactions in the
ordinary course of business on terms no less favorable to the Borrower than
those that would be obtained in an arm's-length transaction and the loans
described in Section 5.8(e).
1.1 Escrow Imbalances. The Borrower will, no later than five (5) Business
-----------------
Days after learning (from any source) of any material imbalance in any escrow
account, fully and completely correct and eliminate such imbalance.
1.1 Inconsistent Agreements. The Borrower will not, directly or
-----------------------
indirectly, enter into any agreement containing any provision which would be
violated or breached by any borrowing by the Borrower hereunder or by the
performance by the Borrower of its obligations hereunder or under any other Loan
Document.
1.1 Independence of Covenants. All covenants hereunder shall be given
-------------------------
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitations of, another covenant shall not avoid
the occurrence of a Default if such action is taken or condition exists.
1.1 Notice of Change of Chief Executive Office. It will provide Greenwich
------------------------------------------
with not less than 30 days prior written notice of any change in its chief
executive office to permit Greenwich to make any additional filings necessary to
continue Greenwich's perfected security interest in the Collateral.
1.1 Covenants of the Borrower with respect to the Pledged Securities.
----------------------------------------------------------------
(a) The Borrower shall promptly deliver to the Lender (i) any report
received by or required to be delivered by any Person pursuant to the Pooling
and Servicing Agreement at the same time as required thereunder, including,
without limitation, any trustee's report and any reports delivered to related
surety companies; (ii) any notice of transfer of servicing; and (iii) any other
such document or information as the Lender may reasonably request from time to
time with respect to the Pledged Securities.
(a) The Borrower shall permit the Lender to inspect its books and
records relating to the Mortgage Loans, any Securitization Transaction, the
Pledged Securities and other matters relating to the transactions contemplated
hereby, upon reasonable prior notice and during normal business hours.
(a) If the Borrower shall, as a result of its ownership of the
Pledged Securities, become entitled to receive or shall receive any rights,
whether in addition to, in substitution of, as a conversion of, or in exchange
for the Pledged Securities, or otherwise in respect thereof, the Borrower shall
accept the same as the Lender's agent, hold the same in trust for the Lender and
deliver the same forthwith to the Lender in the exact form received, duly
indorsed by the Borrower to the Lender, if required, together with an undated
bond power covering such certificate duly executed in blank and with, if the
Lender so requests, signature guaranteed, to be held by the Lender hereunder as
additional collateral security for the Obligations. If any sums of money or
property so paid or distributed in respect of the Pledged Securities shall be
received by the Borrower, the Borrower shall, until such money or property is
paid or delivered to the Lender as required hereunder, hold such money or
property in trust for the Lender, segregated from other funds of the Borrower,
as additional collateral security for the Obligations.
(a) At any time and from time to time, upon the written request
of Greenwich, and at the sole expense of the Borrower, the Borrower will
promptly and duly execute and deliver such further instruments and documents and
take such further actions as Greenwich may reasonably request for the purposes
of obtaining or preserving the full benefits of this Agreement and of the rights
and powers herein granted. If any amount payable under or in connection with any
of the Collateral shall be or become evidenced by any instrument (including any
certificated security or promissory note) or chattel paper (in each case as
defined in the UCC), such instrument or chattel paper shall be immediately
delivered to the Bailee, on behalf of Greenwich, duly endorsed in a manner
satisfactory to Greenwich, to be held as Collateral pursuant to this Agreement.
Prior to such delivery, the Borrower shall hold all such instruments or chattel
paper in trust for Greenwich, and shall not commingle any of the foregoing with
any assets of the Borrower.
(a) The Borrower shall pay, and save Greenwich harmless from,
any and all liabilities with respect to, or resulting from any delay in paying,
any and all stamp, excise, sales or other similar taxes which may be payable or
determined to be payable with respect to any of the Collateral or in connection
with any of the transactions contemplated by this Agreement.
1.1 Year 2000 Compliance. (a) The Borrower shall take and shall cause
--------------------
each of its Affiliates to take all such actions as are reasonably necessary to
successfully implement the Year 2000 Program and to assure that the Year 2000
Issues will not have a material adverse effect on the Borrower's operations,
servicing or financial condition. At the request of Greenwich, the Borrower will
provide a description of the Year 2000 Program, together with any updates or
progress reports with respect thereto. The Borrower shall provide Greenwich with
immediate notice in writing in the event that Greenwich has reason to believe
that the occurrence of the year 2000 will adversely affect the Borrower's
business or any Loans executed in connection herewith.
(b) By September 1, 1999, the Borrower shall be required to provide
written assurance to Greenwich that it is year 2000 compliant. If satisfactory
assurance can not be made on such date, Greenwich shall have no obligation to
make any additional Loans under this Agreement. In addition, the failure of the
Borrower to provide satisfactory assurance of year 2000 compliance within thirty
days thereafter shall constitute an Event of Default under this Agreement.
1. Section Cash Dividends; Voting Rights.
-----------------------------
The Lender shall be permitted to receive all cash dividends and
distributions paid in respect of the Pledged Securities and shall apply same in
accordance with Section 3 hereof. Without the prior written consent of
Greenwich, the Borrower will not (i) vote to enable, or take any other action to
permit, any rights afforded it as holder of the Pledged Securities under any
Pooling and Servicing Agreement, or (ii) sell, assign, transfer, exchange or
otherwise dispose of, or grant any option with respect to, the Collateral, or
(iii) create, incur or permit to exist any Lien or option in favor of, or any
adverse claim of any Person with respect to, any
of the Collateral, or any interest therein, except for the security interests
created by this Agreement.
1. Section Rights of Greenwich as Pledgee.
------------------------------
1.1 Greenwich shall receive any and all cash dividends or
distributions paid in respect of the Pledged Securities and shall apply such
amounts in accordance with Section 2 hereof. All Proceeds while held by
Greenwich, the Bailee (or by the Borrower in trust for Greenwich) shall continue
to be held as collateral security for all the Obligations and shall not
constitute payment thereof until applied as provided in Section 9.3 hereof.
1.1 If an Event of Default shall occur and be continuing,
(a) Greenwich shall have the right to make application of any
cash dividends or distributions paid in respect of the Pledged Securities to the
Obligations in such order as is provided in Section 9.3 hereof, and
(a) all shares of the Pledged Securities shall, at the election
of Greenwich, be registered in the name of Greenwich or its nominee and the
Instruction Letters shall be delivered to each Trustee, and Greenwich or its
nominee may thereafter exercise (A) all voting, corporate and other rights
pertaining to such shares of the Pledged Securities and (B) any and all rights
of conversion, exchange, subscription and any other rights, privileges or
options pertaining to such shares of the Pledged Securities as if it were the
absolute owner thereof (including, without limitation, upon the exercise by
Greenwich of any right, privilege or option pertaining to such shares of the
Pledged Securities, and in connection therewith, the right to deposit and
deliver any and all of the Pledged Securities with any committee, depository,
transfer agent, registrar or other designated agency upon such terms and
conditions as Greenwich may determine), and
(a) notify any Person obligated on any Collateral of the rights
of Greenwich hereunder, enter into any extension, settlement or compromise
agreement relating to or affecting the Collateral, receive payment or
performance of any insurance claims, claims for breach of warranty or any other
claims concerning the Collateral, all without liability (other than for its
gross negligence or willful misconduct) except to account for property actually
received by it, but Greenwich shall have no duty to the Borrower to exercise any
such right, privilege or option and shall not be responsible for any failure to
do so or delay in so doing.
1. Section Conditions Precedent.
--------------------
1.1 Conditions Precedent to this Agreement. The obligations of
--------------------------------------
Greenwich to extend any Loan hereunder are subject to the receipt by Greenwich,
concurrently with the signing of this Agreement and, together with the monthly
financial statements to be delivered pursuant to this Agreement, in form and
substance satisfactory to Greenwich, of the following:
(a) Evidence of the authority of the persons executing this
Agreement, the Note and any other documents contemplated herein and therein,
together with specimen signatures of such persons;
(a) A certified copy of the Borrower's Articles of Incorporation
and By-Laws and a good standing certificate from its State of incorporation;
(a) Certified copies of all necessary resolutions of the Board
of Directors of the Borrower authorizing the execution and delivery and
performance under this Agreement and the Note;
(a) The duly executed, original Note;
(a) A certificate, as of the date of signing of the Agreement,
by the President, a Vice President or the Treasurer of the Borrower certifying
that the representations and warranties contained in Section 4 hereof are true
and correct, that the Borrower is in compliance with the covenants set forth in
Section 5 and that no Default or Event of Default has occurred and is
continuing;
(a) The duly executed, original Guaranty executed by the
Guarantors.
(a) With respect to each Guarantor, a certified copy of the
Certificate or Articles of Incorporation and By-Laws and a good standing
certificate from its State of incorporation.
(a) The following opinions of counsel in form and substance
reasonably satisfactory to Greenwich's counsel:
(i) Standard corporate opinions of the Borrower regarding
due authorization, execution, consents, material litigation and
noncontravention, which opinions may be rendered by in-house counsel;
(i) Enforceability of the Agreement and the Note;
(i) Lien, priority and perfection opinions relating to the
pledge of Collateral from the Borrower to Greenwich; and
(i) Such other opinions as Greenwich's counsel shall
reasonably request; and
(a) Such other documents, certificates or financial or other
information as Greenwich may reasonably request.
1.1 Conditions Precedent to Each Loan. In addition to each of the
---------------------------------
conditions precedent set forth in Section 8.1 being met, the obligations of
Greenwich to extend each Loan hereunder shall be subject to the following
conditions:
(a) There shall not have occurred and be continuing any Event of
Default and the Borrower shall be in compliance in all material respects with
all of its respective covenants and obligations under this Agreement, and the
Borrower shall be in compliance in all material respects with all of its
covenants and obligations under the Note;
(a) Greenwich shall have received the Notice of Borrowing
described in Section 2.2(a);
(a) Taking into account the amount of the requested Loan, the
Collateral Value of the Collateral shall be equal to or in excess of the
aggregate principal balance of the Loans outstanding plus accrued interest
thereon;
(a) Pledged Securities with Collateral Value equal to or greater
than the sum of (i) the principal balance of the Loan requested plus (ii) any
outstanding Loans shall have been delivered to Greenwich, the Bailee or its
agent with necessary assignments or bond powers;
(a) The following documents shall have been delivered to the
Lender or Bailee with respect to the Pledged Securities: (i) the original
documents described in Sections 3.2 and 3.3 hereof, (ii) a copy of the executed
Pooling and Servicing Agreement governing the Pledged Securities and/or any
supplements thereto, and the offering documents related to the Pledged
Securities, each certified by the Borrower or the Trustee or master servicer
under such Pooling and Servicing Agreement as a true, correct and complete copy
of the original, and all ancillary documents required to be delivered to the
certificateholders under such Pooling and Servicing Agreement, and (iii) copies
of distribution statements delivered to the Trustee for two months prior to the
month in which the related Request for Borrowing is made, if any, certified by
the applicable servicer or master servicer as true and correct; and
(a) Financing statements on Form UCC-1 naming the Borrower as
"debtor" and Greenwich as "secured party" and describing the Collateral as
"collateral" thereunder, to be filed in each jurisdiction in which it is
necessary to file to perfect a security interest in Collateral.
1. Section Default.
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1.1 Events of Default. Each of the following events and occurrences
-----------------
shall constitute an Event of Default under this Agreement if not cured within 3
Business Days of their occurrence unless the context of the provision indicates
otherwise (provided that the events described in paragraphs (a)(i), (e), (f),
(g), (h) and (i) shall have no cure period):
(a) The Borrower shall fail to make payment to Greenwich of (i)
principal or interest when due of any amount that the Borrower is obligated to
pay under this Agreement or the Note or (ii) any other amount payable by it
hereunder or under any other Loan Document and such default shall have continued
unremedied for three (3) Business Days.
(a) The earlier to occur of (i) a Responsible Officer having
knowledge of such failure to perform or observe or (ii) written notice thereof
from Greenwich of the Borrower failing to perform or observe any material
provision of this Agreement (such materiality, as reasonably determined by
Greenwich).
(a) The Borrower shall fail to perform or observe any other
provision of this Agreement or the Note, within 30 days following the earlier of
(i) a Responsible Officer having knowledge of such failure to perform or observe
or (ii) written notice thereof from Greenwich.
(a) The Guarantors shall (i) fail to make any payment required
to be made to Greenwich under the Guaranty or (ii) fail to comply with the
requirements of Section 3(b) of the Guaranty.
(a) The Borrower shall fail to pay any money due under any other
agreement, note, indenture or instrument evidencing, securing, guaranteeing or
otherwise relating to indebtedness of the Borrower for borrowed money, which
failure to pay constitutes a default or event of default under any such
agreement or indebtedness, or the Borrower receives notice, or a Responsible
Officer has knowledge, of any other default or event of default or other event
which with the giving of notice or the passing of time or both would constitute
a default or event of default under any such agreement or instrument, with
respect to amounts due under such agreement or instrument, whether by
acceleration or otherwise, in an aggregate amount of $5,000,000 or such lesser
amount as shall be included in a cross-acceleration provision of any such
agreement or instrument.
(a) Any representation, warranty or certification made or deemed
made by the Borrower herein or by the Borrower in any other Loan Document or any
certificate furnished to the Lender pursuant to the provisions thereof or in
connection with a Securitization Transaction, shall prove to have been false or
misleading in any material respect as of the time made or furnished.
(a) The Collateral or any other assets of the Borrower or any
Affiliate thereof are attached, seized, levied upon or subjected to a writ or
distress warrant, or come within the possession of any receiver, trustee,
custodian or assignee for the benefit of creditors and the same is not dissolved
or dismissed within sixty (60) days thereafter; an application is made by any
Person for the appointment of a receiver, trustee, or custodian for the
Collateral or any assets of a member of the Borrower or any Affiliate thereof
and the same is not dismissed within sixty (60) days after the application
thereof, or the Borrower or any Affiliate thereof shall have concealed, removed
or permitted to be concealed or removed, any part of its property, with intent
to hinder, delay or defraud its creditors or made or suffered a
transfer of any of its property which may be fraudulent under any bankruptcy,
fraudulent conveyance or other similar law.
(a) An application is made by the Borrower or any Affiliate
thereof or for the appointment of a receiver, trustee or custodian for the
Collateral or any other assets of the Borrower or any Affiliate thereof; a
petition under any section or chapter of the Bankruptcy UCC or any similar
federal or state law or regulation shall be filed by the Borrower or any
Affiliate thereof or the Borrower or any Affiliate thereof shall make an
assignment for the benefit of its creditors, or any case or proceeding shall be
filed by the Borrower or any Affiliate thereof for its dissolution, liquidation,
or termination, by the Borrower or any Affiliate thereof, or the Borrower or any
Affiliate thereof ceases to conduct a material part of its current business.
(a) The Borrower or any Affiliate thereof is enjoined,
restrained or in any way prevented by court order from conducting all or any
material part of its business affairs, or a petition under any section or
chapter of the Bankruptcy Code or any similar federal or state law or regulation
is filed against the Borrower or any Affiliate thereof, or any case or
proceeding is filed against the Borrower or any Affiliate thereof, for its
dissolution or liquidation, and such injunction, restraint, petition, case or
proceeding is not dismissed within sixty (60) days after the entry of filing
thereof.
(a) The Borrower or any Affiliate thereof becomes insolvent or
admits in writing to its inability to pay its debts as they mature.
(a) An unaudited financial statement of the Borrower in
Greenwich's reasonable opinion, contains a material, adverse qualification with
respect to the Borrower, the Residual Securities or the Collateral.
(a) A "default," "event of default" or "event of termination,"
however defined, shall occur under any Other Agreement, which has not been
waived by Greenwich or its Affiliate, as applicable.
(a) The Borrower shall grant, or suffer to exist, any Lien on
any Collateral except the Liens contemplated hereby; or the Liens contemplated
hereby shall cease to be first priority perfected Liens on the Collateral in
favor of the Lender or shall be Liens in favor of any Person other than the
Lender.
(a) Any other event shall occur which, in the sole good faith
discretion of the Lender, has had a Material Adverse Effect.
1.1 Acceleration. If not cured within the cure period provided within the
------------
relevant provision, then upon the continuance of such Event of Default,
Greenwich may, by notice to the Borrower (which notice shall be deemed given
automatically upon the occurrence of an Event of Default referred to in
paragraph (a)(i), (e), (f), (g), (h) or (i), (A) declare the obligations of
Greenwich hereunder to be terminated, whereupon those obligations shall
terminate, and (B) declare immediately due and payable all amounts payable
hereunder and under the Note by the Borrower that would otherwise be due after
the date specified in the notice (or the date such notice is deemed given),
whereupon all those amounts shall become immediately due and payable, all
without further diligence, presentment, demand of payment, protest or notice of
any kind, all of which are expressly waived by the Borrower. If any Event of
Default shall occur and be continuing, Greenwich may take any lawful action to
protect and enforce its rights by an action at law, including selling the
Collateral, suit in equity or other appropriate proceedings, whether for the
specific performance of any agreement contained herein, or for an injunction
against a violation of any of the terms hereof, or in aid of the exercise of any
power granted hereby or by law. If Greenwich opts to sell the Collateral as one
of its remedies upon an Event of Default, the Borrower shall remain liable for
any remaining deficiency upon applying the proceeds of such sale against any and
all amounts owed by the Borrower to Greenwich hereunder.
1.1 Remedies on Default.
-------------------
(a) If an Event of Default shall have occurred and be continuing, at
any time at Greenwich's election, Greenwich may apply all or any part of
Proceeds of the Collateral in payment of the Obligations in the following order
of priority:
FIRST, to the payment of all reasonable costs and expenses incurred by
Greenwich in connection with this Agreement, the Note or, any other Loan
Document or any of the Obligations, including, without limitation, all court
costs and the reasonable costs or expenses incurred in connection with the
exercise by Greenwich of any right or remedy under this Agreement, the Note or
any other Loan Document;
SECOND, to the satisfaction of all other Obligations; and
THIRD, any excess to the Borrower or to whomsoever may be lawfully
entitled to receive the same.
(a) If an Event of Default shall occur and be continuing, Greenwich
may exercise, in addition to all other rights and remedies granted in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the UCC. Without limiting the generality of the foregoing, to the extent
permitted by law, Greenwich, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon the Borrower or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived to the extent permitted by law), may in such circumstances forthwith
collect, receive, appropriate and realize upon the Collateral, or any part
thereof, and/or may forthwith sell, assign, give option or options to purchase
or otherwise dispose of and deliver the Collateral or any part thereof (or
contract to do any of the foregoing), in one or more parcels at public or
private sale or sales, in the over-the-counter market, at any exchange, broker's
board or office of Greenwich or elsewhere upon such terms and conditions as it
may deem advisable and at such prices as it
may deem best, for cash or on credit or for future delivery without assumption
of any credit risk. Greenwich shall have the right upon any such public sale or
sales, and, to the extent permitted by law, upon any such private sale or sales,
to purchase the whole or any part of the Collateral so sold, free of any right
or equity of redemption in the Borrower, which right or equity is hereby waived
and released. Greenwich shall apply any Proceeds from time to time held by it
and the proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of every
kind incurred in respect thereof or incidental to the care or safekeeping of any
of the Collateral or in any way relating to the Collateral or the rights of
Greenwich hereunder, including, without limitation, reasonable attorneys' fees
and expenses of counsel to Greenwich, to the payment in whole or in part of the
Obligations, in the order of priority specified in Section 9.3(a) hereof, and
only after such application and after the payment by Greenwich of any other
amount required by any provision of law, including, without limitation, Section
9-504(1)(c) of the UCC, need Greenwich account for the surplus, if any, to the
Borrower. To the extent permitted by applicable law, the Borrower waives all
claims, damages and demands it may acquire against Greenwich arising out of the
exercise by them of any rights hereunder, other than any such claims, damages
and demands that may arise from its gross negligence or willful misconduct. If
any notice of a proposed sale or other disposition of Collateral shall be
required by law, to the extent permitted by law such notice shall be deemed
reasonable and proper if given at least 10 days before such sale or other
disposition. The Borrower shall remain liable for any deficiency if the proceeds
of any sale or other disposition of Collateral are insufficient to pay the
Obligations and the fees and expenses of any attorneys employed by Greenwich to
collect such deficiency.
1. Section Private Sales, Etc.
------------------
The Borrower recognizes that Greenwich may be unable to effect a public
sale of any or all of the Pledged Securities, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. The Borrower acknowledges and
agrees that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. Greenwich shall be under no obligation
to delay a sale of any of the Pledged Securities for the period of time
necessary to permit any issuer of such Pledged Securities to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if any such issuer would agree to do so.
1. Section Irrevocable Authorization and Instruction to the Trustees.
---------------------------------------------------------
The Borrower hereby authorizes and instructs each Trustee to comply with
any instruction received by it from the Pledgee in writing that (a) states that
an Event of Default has occurred and is continuing and (b) is otherwise in
accordance with the terms of this Agreement and any other Loan Document to which
it is a party, without any other or further instructions
from the Borrower, and the Borrower agrees that each Trustee shall be fully
protected in so complying.
1. Section Greenwich's Appointment as Attorney-in-Fact.
-------------------------------------------
(a) The Borrower hereby irrevocably constitutes and appoints
Greenwich and any officer or agent of Greenwich, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of the Borrower and in the name of
the Borrower or in Greenwich's own name, from time to time in Greenwich's
discretion, for the purpose of carrying out the terms of this Agreement or any
other Loan Document, to take any and all appropriate action and to execute any
and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement, to the extent permitted by law,
including, without limitation, any financing statements, endorsements,
assignments or other instruments of transfer.
(a) The Borrower hereby ratifies all that said attorneys shall
lawfully do or cause to be done pursuant to the power of attorney granted
hereunder. All powers, authorizations and agencies contained in this Agreement
are coupled with an interest and are irrevocable until this Agreement is
terminated and the security interests created hereby are released.
1. Section Duty of Greenwich as Pledgee.
----------------------------
Greenwich's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the UCC
or otherwise, shall be to deal with it in the same manner as Greenwich deals
with similar securities and property for its own account. Neither Greenwich nor
any of its respective directors, officers, employees or agents shall be liable
for failure to demand, collect or realize upon any of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Collateral upon the request of the Borrower or any other Person or to
take any other action whatsoever with regard to the Collateral or any part
thereof.
1. Section Execution of Financing Statements.
---------------------------------
Pursuant to Section 9-402 of the UCC, the Borrower authorizes Greenwich to
file financing statements with respect to the Collateral without the signature
of the Borrower in such form and in such filing offices as Greenwich reasonably
determines appropriate to perfect the security interests of Greenwich under this
Agreement. A carbon, photographic or other reproduction of this Agreement shall
be sufficient as a financing statement for filing in any jurisdiction.
1. Section Miscellaneous.
-------------
1.1 Expenses.
--------
(a) The Borrower agrees to hold the Lender and each of its officers,
directors, agents and employees (each, an "Indemnified Party") harmless from and
-----------------
indemnify each Indemnified Party against all liabilities, losses, damages,
judgments, costs and expenses of any kind which may be imposed on, incurred by
or asserted against such Indemnified Party in any suit, action, claim or
proceeding relating to or arising out of this Loan Agreement, the Note, any
other Loan Document or any transaction contemplated hereby or thereby, or any
amendment, supplement or modification of, or any waiver or consent under or in
respect of, this Loan Agreement, the Note, any other Loan Document or any
transaction contemplated hereby or thereby, that, in each case, results from
anything other than the Lender's gross negligence or willful misconduct. In any
suit, proceeding or action brought by the Lender for any sum owing under any
Pledged Securities, or to enforce any provisions thereof, the Borrower will
save, indemnify and hold the Lender harmless from and against all expense, loss
or damage suffered by reason of any defense, set-off, counterclaim, recoupment
or reduction or liability whatsoever of the account debtor or obligor
thereunder, arising out of a breach by the Borrower of any obligation thereunder
or arising out of any other agreement, indebtedness or liability at any time
owing to or in favor of such account debtor or obligor or its successors from
the Borrower. The Borrower also agrees to reimburse the Lender as and when
billed by the Lender for all the Lender's costs and expenses incurred in
connection with the enforcement or the preservation of the Lender's rights under
this Loan Agreement, the Note, any other Loan Document or any transaction
contemplated hereby or thereby, including without limitation the fees and
disbursements of its counsel (including all reasonable fees and disbursements
incurred in any action or proceeding between the Borrower and the Lender or
between the Lender and any third party relating hereto). The Borrower hereby
acknowledges that, notwithstanding the fact that the Note is secured by the
Collateral, the obligation of the Borrower under the Note is a recourse
obligation of the Borrower.
(a) The Borrower agrees to pay as and when billed by the Lender all
of the out-of-pocket costs and expenses incurred by the Lender in connection
with the development, preparation and execution of, and any amendment,
supplement or modification to, this Loan Agreement, the Note, any other Loan
Document or any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including without limitation (i) all the reasonable fees,
disbursements and expenses of counsel to the Lender in connection with the
execution of the Loan Documents (not in excess of $25,000) and (ii) all the due
diligence, inspection, testing and review costs and expenses incurred by the
Lender with respect to Collateral under this Loan Agreement.
1.1 Set-off. In addition to any rights now or hereafter granted under
-------
applicable law and not by way of limitation of any such rights, during the
continuance of any Event of Default hereunder, Greenwich is hereby authorized at
any time and from time to time, without notice to the Borrower, or to any other
person or entity, any such notice being hereby expressly waived, to set-off
against any obligation owing by Greenwich or any Affiliate of Greenwich to the
Borrower or any Affiliate thereof, or against any funds or other property of the
Borrower or any Affiliate thereof held by or otherwise in the possession of
Greenwich or any Affiliate of Greenwich, the obligations and liabilities of the
Borrower to Greenwich under this
Agreement or the Note, irrespective of whether or not Greenwich shall have made
any demand hereunder or under the Note.
1.1 Amendments. No provision of this Agreement may be amended,
----------
supplemented, modified or waived unless the same shall be in writing signed by
Greenwich and the Borrower.
1.1 Waiver of Notices, etc. The Borrower hereby expressly waives
----------------------
promptness, diligence, notice of acceptance and any other notice with respect to
any of its Obligations hereunder or under the Note, and any requirement that
Greenwich protect, secure, perfect or insure any security interest or lien or
any property subject thereto or exhaust any right or take any action against the
Borrower or any other person or entity or any collateral, and all other notices,
demands and protests, and all other formalities of every kind in connection with
the enforcement of the Obligations hereunder or under the Note.
1.1 Waiver; Cumulative Rights. No failure on the part of Greenwich to
-------------------------
exercise and no delay in exercising, and no course of dealing with respect to,
any right, power or privilege under this Agreement or the Note shall operate as
a waiver thereof, nor shall any single or partial exercise of any right, power
or privilege under this Agreement or the Note preclude any other or further
exercise thereof or the exercise of any other right, power, or privilege. The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
1.1 Binding Effect. This Agreement shall be binding upon and shall be
--------------
enforceable by the Borrower and Greenwich and their respective successors and
permitted assigns.
1.1 Survival. The provisions of Section 15.1 shall survive the payment in
--------
full of the Loans and all other amounts payable under this Agreement and the
Note.
1.1 GOVERNING LAW, ETC.; WAIVER OF TRIAL BY JURY.
--------------------------------------------
(A) THIS AGREEMENT AND THE NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. THE BORROWER HEREBY SUBMITS TO
THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW
YORK CITY FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE BORROWER
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(B) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO ALSO WAIVES THE
RIGHT IN ANY SUCH LITIGATION TO IMPOSE COUNTERCLAIMS OR SET-OFFS OF ANY KIND OR
DESCRIPTION UNLESS SUCH COUNTERCLAIM OR SET-OFF IS COMPULSORY OR MANDATORY IN
NATURE UNDER THE NEW YORK CIVIL PRACTICE LAW AND RULES.
1.1 Notice. Any notice hereunder shall be in writing and shall be
------
personally delivered, transmitted by postage prepaid registered or certified
mail, by facsimile, telegram or cable to the parties as follows:
To Greenwich: Greenwich Capital Financial Products, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To the Borrower: NC Capital Corporation
00000 Xxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxxxxxxx, Esq.
General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
All notices and other communications shall be deemed to have been duly
given on the date of receipt if delivered personally; the date five (5) calendar
days after posting if transmitted by mail; or in the case of a facsimile,
telegram or cable, at the time sent. Any party hereto may change its address
for purposes hereof by written notice to the other.
1.1 Severability. If any one or more of the provisions contained
------------
in this Agreement or any document executed in connection herewith shall be
invalid, illegal or unenforceable in any respect under any applicable law, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired.
1.1 Counterparts. This Agreement may be signed in any number of
------------
counterparts which, taken together, shall constitute a full and original
agreement for all purposes.
1.1 Assignability.
-------------
(a) The Borrower may not assign any of its rights or obligations
hereunder or under the Note without the prior written consent of the Lender. The
Lender may assign or transfer to any bank or other financial institution that
makes or invests in loans all or any of its rights or obligations under this
Loan Agreement and the other Loan Documents.
(a) The Lender may, in accordance with applicable law, at any time
sell to one or more lenders or other entities ("Participants") participating
------------
interests in any Advance, the Note, its commitment to make Advances, or any
other interest of the Lender hereunder and under the other Loan Documents. In
the event of any such sale by the Lender of participating interests to a
Participant, the Lender's obligations under this Loan Agreement to the Borrower
shall remain unchanged, the Lender shall remain solely responsible for the
performance thereof, the Lender shall remain the holder of the Note for all
purposes under this Loan Agreement and the other Loan Documents, and the
Borrower and the Lender shall continue to deal solely and directly with the
Lender in connection with the Lender's rights and obligations under this Loan
Agreement and the other Loan Documents. The Borrower agrees that if amounts
outstanding under this Loan Agreement and the Note are due or unpaid, or shall
have been declared or shall have become due and payable upon the occurrence of
an Event of Default, each Participant shall be deemed to have the right of set-
off in respect of its participating interest in amounts owing under this Loan
Agreement and the Note to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under this Loan Agreement or the
Note; provided, that such Participant shall only be entitled to such right of
--------
set-off if it shall have agreed in the agreement pursuant to which it shall have
acquired its participating interest to share with the Lender the proceeds
thereof. The Lender also agrees that each Participant shall be entitled to the
benefits of Section 15.1 with respect to its participation in the Loans
outstanding from time to time; provided, that the Lender and all Participants
--------
shall be entitled to receive no greater amount in the aggregate pursuant to such
Sections than the Lender would have been entitled to receive had no such
transfer occurred.
(a) The Lender may furnish any information concerning the Borrower or
any of its Subsidiaries in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants).
(a) The Borrower agrees to cooperate with the Lender in connection
with any such assignment and/or participation, to execute and deliver such
replacement notes, and to enter into such restatements of, and amendments,
supplements and other modifications to, this Loan Agreement and the other Loan
Documents in order to give effect to such assignment and/or participation. The
Borrower further agrees to furnish to any Participant identified by the Lender
to the Borrower copies of all reports and certificates to be delivered by the
Borrower to the Lender hereunder, as and when delivered to the Lender.
1.1 Hypothecation or Pledge of Collateral. The Lender shall have free and
-------------------------------------
unrestricted use of all Collateral and nothing in this Agreement shall preclude
the Lender from
engaging in repurchase transactions with the Collateral or otherwise pledging,
repledging, transferring, hypothecating, or rehypothecating the Collateral.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives on the date first written
above.
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., as Lender
and Pledgee
By: /s/ illegible
------------------------------------------
Name:
Title:
NC CAPITAL CORPORATION
as Borrower and Pledgor
By: /s/ Xxxx X. Xxxxxxx
------------------------------------------
Name:
Title:
EXHIBIT A
[FORM OF PROMISSORY NOTE]
$[__________] June __, 0000
Xxx Xxxx, Xxx Xxxx
FOR VALUE RECEIVED, NC CAPITAL CORPORATION, a California corporation (the
"Borrower"), hereby promises to pay to the order of GREENWICH CAPITAL FINANCIAL
--------
PRODUCTS, INC. a Delaware corporation (the "Lender"), at the principal office of
------
the Lender at 000 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000, in lawful money
of the United States, and in immediately available funds, the principal sum of
[__________________] DOLLARS ($[__________]) (or such lesser amount as shall
equal the aggregate unpaid principal amount of the Loans made by the Lender to
the Borrower under the Facility Agreement as defined below), on the dates and in
the principal amounts provided in the Facility Agreement, and to pay interest on
the unpaid principal amount of each such Loan, at such office, in like money and
funds, for the period commencing on the date of such Loan until such Loan shall
be paid in full, at the rates per annum and on the dates provided in the
Facility Agreement.
The date, amount and interest rate of each Loan made by the Lender to the
Borrower, and each payment made on account of the principal and interest
thereof, shall be recorded by the Lender on its books and, prior to any transfer
of this Note, endorsed by the Lender on the schedule attached hereto or any
continuation thereof; provided, that the failure of the Lender to make any such
--------
recordation or endorsement shall not affect the obligations of the Borrower to
make a payment when due of any amount owing under the Facility Agreement or
hereunder in respect of the Loans made by the Lender.
This Note is the Note referred to in Residual Financing Facility Agreement
dated as of June 23, 1999 (as amended, supplemented or otherwise modified and in
effect from time to time, the "Facility Agreement") between the Borrower and the
------------------
Lender, and evidences Loans made by the Lender thereunder. Terms used but not
defined in this Note have the respective meanings assigned to them in the
Facility Agreement.
The Borrower agrees to pay all the Lender's costs of collection and
enforcement (including reasonable attorneys' fees and disbursements of Lender's
counsel) in respect of this Note when incurred, including, without limitation,
reasonable attorneys' fees through appellate proceedings.
Notwithstanding the pledge of the Collateral, the Borrower hereby
acknowledges, admits and agrees that the Borrower's obligations under this Note
are recourse obligations of the Borrower to which the Borrower pledges its full
faith and credit.
The Borrower, and any indorsers or guarantors hereof, (a) severally waive
diligence, presentment, protest and demand and also notice of protest, demand,
dishonor and nonpayments of this Note, (b) expressly agree that this Note, or
any payment hereunder, may be
extended from time to time, and consent to the acceptance of further Collateral,
the release of any Collateral for this Note, the release of any party primarily
or secondarily liable hereon, and (c) expressly agree that it will not be
necessary for the Lender, in order to enforce payment of this Note, to first
institute or exhaust the Lender's remedies against the Borrower or any other
party liable hereon or against any Collateral for this Note. No extension of
time for the payment of this Note, or any installment hereof, made by agreement
by the Lender with any person now or hereafter liable for the payment of this
Note, shall affect the liability under this Note of the Borrower, even if the
Borrower is not a party to such agreement; provided, however, that the Lender
-------- -------
and the Borrower, by written agreement between them, may affect the liability of
the Borrower.
Any reference herein to the Lender shall be deemed to include and apply to
every subsequent holder of this Note. Reference is made to the Facility
Agreement for provisions concerning optional and mandatory prepayments,
Collateral, acceleration and other material terms affecting this Note.
Any enforcement action relating to this Note may be brought by motion for
summary judgment in lieu of a complaint pursuant to Section 3213 of the New York
Civil Practice Law and Rules. The Borrower hereby submits to New York
jurisdiction with respect to any action brought with respect to this Note and
waives any right with respect to the doctrine of forum non conveniens with
respect to such transactions.
This Note shall be governed by and construed under the laws of the State of
New York (without reference to choice of law doctrine but with reference to
Section 5-1401 of the New York General Obligations Law, which by its terms
applies to this Note) whose laws the Borrower expressly elects to apply to this
note. The Borrower agrees that any action or proceeding brought to enforce or
arising out of this Note may be commenced in the Supreme Court of the State of
New York, Borough of Manhattan, or in the District Court of the United States
for the Southern District of New York.
NC CAPITAL CORPORATION
By:
Name:
Title:
SCHEDULE OF LOANS
This Note evidences Loans made under the within-described Facility
Agreement to the Borrower, on the dates, in the principal amounts and bearing
interest at the rates set forth below, and subject to the payments and
prepayments of principal set forth below:
Principal Interest Amount Paid Unpaid Notation
Date Made Amount Of Loan Rate Or Prepaid Principal Made By
Amount
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
EXHIBIT B
Notice of Borrowing
-------------------
(date)
Greenwich Capital Financial Products, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Ladies and Gentlemen:
In accordance with Section 2.2(a) of that certain Residual Financing
Facility Agreement, dated as of June 23, 1999 (the "Agreement"), by and among
---------
Greenwich Capital Financial Products, Inc., as Lender and Pledgee and the
undersigned, as Borrower and Pledgor, the undersigned hereby requests a Loan on
the date hereof in an amount equal to $________.
In connection with such Loan, we are pledging the Pledged Securities
listed on Annex I hereto as collateral security therefor.
Very truly yours,
NC CAPITAL CORPORATION, Borrower
By: _________________________
Name:
Title:
Annex I to
Exhibit B
---------
PLEDGED SECURITIES
[to be added]
EXHIBIT C
INTENTIONALLY DELETED
EXHIBIT D
[FORM OF OPINION OF COUNSEL TO THE BORROWER AND THE GUARANTORS]
________ __, 1999
Greenwich Capital Financial Products, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Re: Residual Financing Facility Agreement, dated as of June 23, 1999, by
and between Greenwich Capital Financial Products, Inc., as Lender and
Pledgee, and NC Capital Corporation, as Borrower and Pledgor
Ladies and Gentlemen:
We have acted as special counsel to NC Capital Corporation, a California
corporation (the "Borrower"), New Century Mortgage Corporation, a California
--------
corporation and New Century Financial Corporation, a Delaware corporation
(collectively, the "Guarantors") in connection with the preparation, execution
----------
and delivery of:
(a) the Residual Financing Facility Agreement, dated as of June 23_, 1999
(the "Residual Financing Agreement"), by and between Greenwich Capital Financial
----------------------------
Products, Inc. (the "Lender") and the Borrower;
------
(b) the Note (as defined in the Residual Financing Facility Agreement);
and
(c) the Guaranty (as defined in the Residual Financing Facility
Agreement).
(the documents referred to in clauses (a), (b) and (c), collectively, the
"Delivered Documents").
-------------------
This opinion is being furnished to the Lender at the request of the
Borrower.
In rendering the opinions set forth herein, we have examined and are
familiar with originals or copies, certified or otherwise identified to our
satisfaction, of (i) the Delivered Documents, (ii) the articles of incorporation
and by-laws of each of the Borrower and the Guarantors, as in effect on the date
hereof, (iii) resolutions of the boards of directors of the Borrower relating to
each of the Delivered Documents adopted on or prior to the date hereof, and (iv)
such certificates of public officials and such other certificates, documents,
records, and statements of officers and other representatives of the Borrower
and the Guarantors, and public officials as we have deemed appropriate or
necessary as the basis for the opinions set forth below. As to certain facts
material to the opinions expressed herein, we have relied upon, and assumed the
accuracy of, (v) the representations and warranties contained in the Delivered
Documents, and (vi) the certificates and other documents, records and statements
referred to in the immediately preceding sentence. We have assumed the
genuineness of all signatures (other
than those of the Borrower and the Guarantors), the legal capacity of all
natural persons, the authenticity of all documents submitted to us as originals,
the conformity to original documents of all documents submitted to us as
certified or photostatic copies of the authenticity of the originals of such
copies. We have also assumed the due execution and delivery, pursuant to due
authorization, by the Lender of the Residual Financing Facility Agreement.
We are admitted to the bar in the State of [_______] and we express no
opinion as to the laws of any jurisdiction other than the laws of the State of
[______], the General Corporation Law of the State of [_______], the Uniform
Commercial Code as in effect in the state of New York and the Federal securities
laws of the United States.
Based upon the foregoing, and subject to the qualifications and exceptions
stated herein, we are of the opinion that:
1. Each of the Borrower and the Guarantors (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, (b) has the corporate power and authority to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification, except, with respect to the preceding clause (c),
to the extent that the failure to be so qualified and in good standing would
not, in the aggregate, reasonably be expected or have a material adverse effect
on the business, operations, property or condition (financial or otherwise) or
prospects of the Borrower or the Guarantors (a "Material Adverse Effect").
-----------------------
2. Each of the Borrower and the Guarantors has the corporate power and
authority to execute, deliver and perform each of the Delivered Documents to
which it is a party. The Borrower has the corporate power and authority to
borrow under the Residual Financing Agreement and the Note, and each of the
Borrower and the Guarantors has taken all necessary corporate action to
authorize such borrowings on the terms and subject to the conditions of the
Delivered Documents, and the execution, delivery and performance of each of the
Delivered Documents.
3. No consent or authorization of, filing with or other act by or in
respect of any governmental authority of or within the State of [________], or
with respect to the General Corporation Law of the State of [________] is
required in connection with the borrowings under the Residual Financing Facility
Agreement and the Note or with the execution, delivery, performance, validity or
enforceability of the Delivered Documents, except for consents, authorizations
and filings which have been obtained or made, as the case may be, and are in
full force and effect.
4. Each of the Delivered Documents has been duly executed and delivered
on behalf of the Borrower or the Guarantors, as applicable, and constitutes a
legal, valid and binding obligation of such party, enforceable against such
party in accordance with its terms, subject to the effect of (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or
transfer of other similar laws relating to or affecting the rights of creditors
and (ii) the application of general principles of equity (regardless of whether
endorsement is considered in proceedings at law or in equity).
5. The execution, delivery and performance by each of the Borrower and
the Guarantors of the Delivered Documents to which it is a party, the borrowings
by the Borrower under the Residual Financing Facility Agreement and the use of
the proceeds thereof, and the granting of liens by the Borrower pursuant to the
Residual Financing Facility Agreement, will not violate any Requirement of Law
of the State of [______] or in respect of the General Corporation Law of the
State of [_______], or, to the best of our knowledge, any of the material terms
or provisions of, or constitute a default under, any indenture, mortgage, loan
agreement, deed of trust or any other material agreement or instrument to which
the Borrower or either of the Guarantors is a party or by which the Borrower or
either of the Guarantors is bound (collectively, the "Specified Agreements"),
--------------------
and will not result in, or require, the creation or imposition of any lien on
any of either of their respective properties or revenues pursuant to any such
Requirement of Law or Specified Agreement (other than the liens created by the
Residual Financing Facility Agreement in favor of the Lender). As used herein
"Requirement of Law" means the governing documents of the Borrower or the
------------------
Guarantor, or any law, treaty, rule or regulation or determination of an
arbitrator or a court or other governmental authority, in each case applicable
to or binding upon, the Borrower or any of its property or to which the Borrower
or any of its property is subject.
6. No litigation or proceeding of or before any arbitrator or
governmental authority is pending or, to the best of our knowledge, threatened
by or against the Borrower or the Guarantors, or any of their respective
subsidiaries or against any of its or their respective properties or revenues
(a) with respect to any of the Delivered Documents or any of the transactions
contemplated thereby, or (b) which would reasonably be expected to have a
Material Adverse Effect.
7. Neither the Borrower nor the Guarantors is (a) an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended or (b) a "holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
8. The provisions of the Residual Financing Facility Agreement are
effective to create, in favor of the Lender, a legal, valid and enforceable
security interest in all right, title and interest of the Borrower in the
"Collateral" described therein.
9. Upon (i) delivery to the Lender of the Pledged Securities, together
with a stock power for each Pledged Securities endorsed in blank by a duly
authorized officer of the Borrower, and (ii) the filing of financing statements
in the form of Annex A in the offices in the jurisdictions as listed on Schedule
1 hereto, the security interests created under the Residual Financing Facility
Agreement will constitute fully perfected first priority security interests in
all right, title and interest of the Borrower in the "Collateral" described
therein which can be
perfected by filing a financing statement under Article 9 of the Uniform
Commercial Code as in effect in the State of [________].
10. Other than nominal recording fees, no fees, taxes or other charges are
due in connection with the financing statements referred to in paragraph 9.
* * *
This opinion is rendered only to the Lender, is solely for its benefit in
connection with the above transactions and may not be relied upon by the Lender
for any other purpose, relied upon by any other person, firm or corporation for
any purpose without our prior written consent.
Very truly yours,
EXHIBIT E
INTENTIONALLY DELETED
EXHIBIT F
UNDERWRITING GUIDELINES
-----------------------
EXHIBIT G
FORM OF TRUSTEE INSTRUCTION LETTER
----------------------------------
__________ __, 1999
[_______________], as Trustee
__________________________
__________________________
Attention: _______________
Re: Residual Financing Facility Agreement, dated as of June 23_,
1999, by and between Greenwich Capital Financial Products, Inc.,
as Lender and Pledgee, and NC Capital Corporation, as Borrower
and Pledgor
Ladies and Gentlemen:
Pursuant to Section 3.3 of the Residual Financing Facility Agreement,
dated as of June 23, 1999 (the "Facility Agreement"), between Greenwich Capital
Financial Products, Inc. (the "Lender") and NC Capital Corporation (the
"Borrower"), you are hereby notified that: (i) the Borrower has pledged to the
Lender the residual securities described on Schedule 1 hereto (the "Residual
Securities"), (ii) each of the Residual Securities is subject to a security
interest in favor of the Lender and (iii) unless otherwise notified by the
Lender in writing, any payments or distributions made with respect to such
Residual Securities should be remitted immediately by the Trustee directly to
the Lender, in accordance with the following wire instructions:
____________________
Please acknowledge receipt of this instruction letter by signing in
the signature block below and forwarding an executed copy to the Lender promptly
upon receipt.
Very truly yours,
NC CAPITAL CORPORATION
By:________________________
ACKNOWLEDGED:
_____________________________, as Trustee
By:
Name:
Title:
EXHIBIT H
CERTIFICATES OF THE BORROWER
----------------------------
CERTIFICATE OF INCUMBENCY
I, , being Secretary of NC Capital Corporation, a corporation
incorporated under the laws of the State of [__________] (the "Corporation")
-----------
hereby certify that the following individual currently holds the title in the
Corporation as set forth opposite his name and that the signature also set forth
opposite his name is true and correct. Furthermore, the below named individual,
or his legal designees, has been authorized to enter into the Residual Financing
Facility Agreement dated as of June 23, 1999, between NC Capital Corporation and
Greenwich Capital Financial Products, Inc. on behalf of the Corporation and is
authorized to take any action necessary to effectuate said agreements.
Date: ________ __, 1999
, Secretary
SECRETARY'S CERTIFICATE
I, , Secretary of NC Capital Corporation, a [_______]
corporation, hereby certify that the Articles of Incorporation and the By-laws
attached hereto are true and correct copies of the original documents in my
possession and that no action has been taken to rescind or amend said documents.
Date: ________ __, 1999
, Secretary
SECRETARY'S CERTIFICATE
I, , being the Secretary of NC Capital Corporation, a
[________] corporation, hereby certify that the following is a full, true and
correct copy of resolutions duly and regularly adopted by unanimous consent of
the Board of Directors of said Corporation as of _________, 1999, and that no
action has been taken to rescind or amend said resolutions and the same are in
full force and effect.
BE IT RESOLVED, that NC Capital Corporation is hereby authorized and empowered
to enter into the Residual Financing Facility Agreement (the "Agreement"), dated
---------
as of June 23, 1999, for the principal amount of up to Thirty Million Dollars
($30,000,000), with Greenwich Capital Financial Products, Inc., and any other
documents necessary to effect the same and to carry out any and all transactions
contemplated thereby, including but not limited to the Note.
RESOLVED, that the following individuals are authorized and empowered to act on
behalf of the Corporation to take such actions, including the execution and
delivery of the Agreement and documents, and the signature of any one of the
individuals listed below shall be adequate to bind the
Corporation:____________________.
Date: ________ __, 1999
, Secretary
QUARTERLY COMPLIANCE CERTIFICATE
I, , Treasurer of NC Capital Corporation, hereby certify that
the representations and warranties contained in Section 4 of the Residual
Financing Facility Agreement (the "Agreement") dated as of June 23, 1999 between
---------
NC Capital Corporation (the "Corporation") and Greenwich Capital Financial
-----------
Products, Inc. are true and correct, that the Corporation is in compliance with
the covenants set forth in Section 5 of the Agreement and that no Event of
Default (as defined in the Agreement), and no event which with notice or lapse
of time or both would become an Event of Default, has occurred and is
continuing.
Date: ________ __, 1999
, Treasurer
