AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
SOUTHERN PACIFIC FUNDING CORPORATION,
(AS DEBTOR-IN-POSSESSION)
AND
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
AMENDED AND RESTATED AS OF MAY 21, 1999
AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
This Amended and Restated Asset Purchase Agreement ("Purchase
Agreement") dated as of May 21, 1999, by and between ▇▇▇▇▇▇▇, SACHS & CO., a
Delaware limited partnership ("Asset Company"), and SOUTHERN PACIFIC FUNDING
CORPORATION, a California corporation acting in its capacity as
Debtor-in-Possession ("Seller").
RECITALS
A. On October 1, 1998, Southern Pacific Funding Corporation
(referred to generally as the "Company") filed for bankruptcy under Chapter 11
of the United States Bankruptcy Code in the United States Bankruptcy Court for
the District of Oregon (the "Bankruptcy Case"). The assets of the Company
constitute a bankruptcy estate supervised and managed by Seller as
Debtor-in-Possession for the benefit of the Company's creditors.
B. Seller has filed its Plan of Reorganization, which will be
amended promptly after the parties have signed and delivered this Purchase
Agreement and related agreements, including a Stock Subscription and Purchase
Agreement (all referred to as the "Definitive Agreements"). Seller is seeking
confirmation of such plan, as amended, from the United States Bankruptcy Court
for the District of Oregon or such other court or adjunct thereof that exercises
jurisdiction over the Bankruptcy Case (the "Bankruptcy Court").
C. Pursuant to the Plan of Reorganization (as it may be
amended, and once confirmed by the Confirmation Order), the Company will sell
certain of its assets to Asset Company pursuant to this Purchase Agreement.
D. Seller desires to sell, and Asset Company desires to
purchase, certain of its assets for the consideration, on the terms, and subject
to the conditions set forth in this Purchase Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. DEFINITIONS
For purposes of this Purchase Agreement, capitalized terms not
otherwise defined have the meanings given in Appendix I attached to and hereby
incorporated into this Purchase Agreement by reference.
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2. ASSETS PURCHASED; NO LIABILITIES ASSUMED
2.1 ASSETS PURCHASED
Subject to the terms and conditions of this Purchase Agreement, at
Closing Seller agrees to sell to Asset Company and Asset Company agrees to
purchase from Seller the assets listed on Schedule 2.1 (the "Purchased Assets").
Seller will exclude all other assets of Seller from this sale and purchase.
2.2 NO LIABILITIES ASSUMED
Asset Company is assuming no liabilities of Seller pursuant to this
Purchase Agreement. All obligations and liabilities of Seller will remain and be
the obligations and liabilities of Seller or of the Liquidating Trust and will
not be assumed by Asset Company.
3. PURCHASE PRICE
3.1 The purchase price (the "Purchase Price") for the Purchased Assets is
the amount consisting of the (i) Base Cash Price less the Adjustment
Amount, and (ii) plus the Asset Cash Flow Instrument.
3.2 The Base Cash Price is $11,614,768.
3.3 The Adjustment Amount will be equal to 50 percent of (i) Prepayment
Penalty Income, (ii) amounts received with respect to the IO
Certificates (including partnership distributions), and (iii) all other
amounts actually received by Seller between April 1, 1999, and the
Closing Date with respect to the Purchased Assets. Asset Company will
pay the Purchase Price in immediately available funds at Closing.
4. ASSET CASH FLOW INSTRUMENT
4.1 At Closing, Asset Company will issue to Seller an instrument in the
form of Exhibit 4.1 (the "Asset Cash Flow Instrument"). The Asset Cash
Flow Instrument will provide for periodic payments to Seller of the sum
(without duplication) of 50 percent of the following (i.e., 50 percent
of the amounts in clause (a) minus 50 percent of the amounts in clause
(b)) with respect to the Purchased Assets and Purchased Asset Proceeds.
("Purchased Asset Proceeds" means any securities or tangible non-cash
consideration received on a sale or transfer of Purchased Assets to a
non-Related Person of Asset Company, or any securities retained by
Asset Company in connection with the securitization of any Purchased
Assets):
(a) the sum (without duplication) of:
(i) the aggregate of all pre-tax cash flows from each of the
Purchased Assets and Purchased Asset Proceeds from the Closing Date
until the sale (or transfer) or Financing Transaction with respect to
the related Purchased Assets or
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Purchased Asset Proceeds, it being agreed that the cash flows will
continue to be payable to Holder after any sale or transfer to a
Related Person of Asset Company (other than a sale to a Related Person
of Asset Company for the sole purpose of facilitating a Financing
Transaction) or pursuant to a transaction that has not been found by
the board of directors (or if Asset Company is not a corporation, the
comparable governing body) of Asset Company to be an arms-length
transaction;
(ii) all pre-tax Proceeds from the sale of any Purchased Asset or
Purchased Asset Proceeds or portion of a Purchased Asset or Purchased
Asset Proceeds; and
(iii) all pre-tax Proceeds from any Financing Transaction entered
into by Asset Company with respect to any of the Purchased Assets or
Purchased Asset Proceeds and all Hedging Gains;
(50% of the sum of the amounts in clause (i), (ii) and (iii) is the "Asset
Purchase Cash Flows"); minus
(b) otherwise unreimbursed Out-of-Pocket Expenses incurred by Asset
Company.
4.2 The periodic payments (each a "Distribution") made with respect to the
Asset Cash Flow Instrument each calendar month, commencing with the
first full calendar month following the Closing Date (each such month,
a "Cash Flow Period") will equal (i) the Asset Purchase Cash Flows
received by Asset Company during such Cash Flow Period (or from the
Closing Date through the last day of the first Cash Flow Period, in the
case of the first Distribution) minus (ii) 50 percent of the
Out-of-Pocket Expenses not previously applied in reduction of Asset
Purchase Cash Flows.
4.3 Out-of-Pocket Expenses means:
(a) Direct Third Party out-of-pocket expenses reasonably incurred
by the Asset Company or by a Related Person of Asset Company with
respect to the Purchased Asset and Purchased Asset Proceeds, not
otherwise reimbursable from a third party, and directly related to a
sale of Purchased Assets or Purchased Asset Proceeds or Financing
Transaction.
(b) Notwithstanding Section 2.3.3(a), Out-of-Pocket Expenses
specifically include:
(i) Hedging Losses and carrying costs of hedging
transactions;
(ii) principal and interest repaid on any Financing
Transaction;
(iii) otherwise reimbursable Third Party expenses that Asset
Company has determined to be uncollectible; and
(iv) fees and expenses incurred with respect to Asset Company
or a Related Person of Asset Company in connection with a sale or
Financing Transaction,
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but only to the extent such fees are consistent with market rates
and industry standards and are approved by the Holder, which
approval shall not be unreasonably withheld ("Related Person
Expenses"). Related Person Expenses shall be deemed to be approved
if not objected to within 21 days after Holder received a detailed
report from the Asset Company together with a request for
approval.
4.4 The Distribution for a particular month will be paid on or before
the first business day following the end of the related Cash Flow
Period.
4.5 The terms and conditions of this Section 4 reflect the intent and
agreement of the parties. In the case of any conflict between the
terms of this Purchase Agreement and the terms of the Asset Cash
Flow Instrument, however, the terms of this Agreement will control
until Closing, in which case the Asset Cash Flow Instrument itself
will control.
5. ADDITIONAL COVENANTS AGREEMENT
5.1 The Plan of Reorganization will provide for Asset Company to enter
into an agreement with the Liquidating Trust, the Reorganized
Company, and Subscriber in the form of Exhibit 5.1. (the
"Additional Covenants Agreement"), with such further changes as
the parties may agree are necessary, desirable or appropriate.
Asset Company agrees to accept any change agreed to by Subscriber
prior to Closing. The Additional Covenants Agreement will contain
all of the substantive provision of Exhibit 5.1.
6. CLOSING
The completion of the purchase and sale of the Purchased
Assets provided for in this Purchase Agreement (the "Closing") will take place
at the same place as and immediately prior to, the closing of the transactions
contemplated by the Stock Subscription and Purchase Agreement.
7. CLOSING DELIVERIES
7.1 Seller will deliver to Asset Company at Closing:
(a) a certificate signed by Seller in which Seller represents and
warrants to Asset Company that each of Seller's representations and
warranties in this Purchase Agreement was accurate in all respects as
of the date of this Purchase Agreement and is accurate in all respects
as of the Closing Date as if made on the Closing Date (giving full
effect to any supplements to the Disclosure Schedules that were
delivered by Seller to Asset Company prior to the Closing Date in
accordance with Section 10.3);
(b) possession of the Purchased Assets free and clear of all
Encumbrances, including any documents and instruments of transfer
necessary to transfer ownership of the IO Certificates, the Series
1998-H1 Class X Certificate, and Prepayment Penalty Trust
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Certificates and Prepayment Penalty Rights to Asset Company, in each
case in accordance with the applicable Pooling and Servicing Agreement;
(c) a fully executed copy of the Additional Covenants Agreement;
and
(d) a fully executed copy of the Stock Subscription and Purchase
Agreement.
7.2 Asset Company will deliver to Seller at Closing:
(a) The Purchase Price paid on behalf of the Company sent by wire
transfer to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. at Account Number ABA#: ▇▇▇▇▇▇▇▇▇ at
Citibank, clearance account 87709012600; directed to account ▇▇▇▇▇▇▇ in
partial payment of the amount owing under the DIP Financing Agreement;
(b) the Asset Cash Flow Instrument;
(c) a certificate signed by Asset Company in which Asset Company
represents and warrants to Seller that each of Asset Company's
representations and warranties in this Purchase Agreement was accurate
in all respects as of the date of this Purchase Agreement and is
accurate in all respects as of the Closing Date as if made on the
Closing Date;
(d) a fully executed copy of the Stock Subscription and Purchase
Agreement; and
(e) a fully executed copy of the Additional Covenants Agreement.
8. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller (in its capacity both as Seller and as the Company)
represents and warrants to Asset Company as follows:
8.1 ORGANIZATION AND GOOD STANDING
8.1.1 The Company is a corporation duly organized, validly
existing, and in good standing under the laws of California.
8.1.2 Seller has delivered to Asset Company copies of the
Organizational Documents of the Company, as currently in effect.
8.2 AUTHORITY; NO CONFLICT
8.2.1 Upon approval of the Contemplated Transactions by the
Bankruptcy Court, the Seller Definitive Agreements will constitute
the legal, valid, and binding obligations of Seller, enforceable
against Seller in accordance with its terms. Subject to the
requirement of Bankruptcy Court approval, Seller has the absolute
and unrestricted right, power, authority, and capacity to execute
and deliver this Purchase Agreement and to perform its obligations
under the Seller Definitive Agreements.
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8.2.2 Except as set forth in Schedule 8.2.2, neither the execution
and delivery of this Purchase Agreement nor the consummation or
performance of any of the Contemplated Transactions will, directly
or indirectly (with or without notice or lapse of time):
(a) contravene, conflict with, or result in a violation of (i) any
provision of the Organizational Documents of the Seller, or (ii) any
resolution adopted by the board of directors of the Seller;
(b) contravene, conflict with, or result in a violation or breach
of any provision of, or give any Person the right to declare a default
or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate, or modify, any contract; or
(c) result in the imposition or creation of any Encumbrance upon
or with respect to any of the Purchased Assets (except as expressly
approved in this Purchase Agreement).
8.2.3 Except for obtaining appropriate approval from the
Bankruptcy Court, the Company is not and will not be required to
give any notice to or obtain any Consent from any Person in
connection with the execution and delivery of this Purchase
Agreement or the consummation or performance of any of the
Contemplated Transactions.
9. REPRESENTATIONS AND WARRANTIES OF ASSET COMPANY
Asset Company represents and warrants to Seller as follows:
9.1 ORGANIZATION AND GOOD STANDING
Asset Company is a limited partnership duly organized, validly
existing, and in good standing under the laws of the State of Delaware.
9.2 AUTHORITY; NO CONFLICT
9.2.1 The Asset Company Definitive Agreements constitute the
legal, valid, and binding obligations of Asset Company,
enforceable against Asset Company in accordance with its terms.
Asset Company has the absolute and unrestricted right, power, and
authority to execute and deliver the Asset Company Definitive
Agreements and to perform its obligations under the Asset Company
Definitive Agreements.
9.2.2 Except as set forth in Schedule 9.2.2, neither the execution
and delivery of this Purchase Agreement nor the consummation or
performance of any of the Contemplated Transactions will give any
Person the right to prevent, delay, or otherwise interfere with
any of the Contemplated Transactions pursuant to:
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(a) any provision of Asset Company's Organizational Documents;
(b) any Legal Requirement or Order to which Asset Company may be
subject; or
(c) any Contract to which Asset Company is a party or by which
Asset Company may be bound.
9.2.3 Except as set forth in Schedule 9.2.3, Asset Company is not
and will not be required to obtain any Consent from any Person in
connection with the execution and delivery of this Purchase
Agreement or the consummation or performance of any of the
Contemplated Transactions.
9.3 CERTAIN PROCEEDINGS
Except for matters raised in connection with the Bankruptcy
Case, no pending Proceeding has been commenced against Asset Company that
challenges, or may have the effect of preventing, delaying, making illegal, or
otherwise interfering with, any of the Contemplated Transactions. To Asset
Company's Knowledge, no such Proceeding has been Threatened.
9.4 ABSENCE OF BROKER'S FEE OR COMMISSION
Neither Asset Company nor any of its Representatives has
incurred any liability to pay a broker's fee or commission, in connection with
the signing, delivery or performance of this Purchase Agreement or entering into
the Contemplated Transactions.
9.5 QUALIFIED INSTITUTIONAL BUYER; RESTRICTED SECURITIES
Asset Company is a "qualified institutional buyer" as defined
in Rule 144A under the Securities Act and acknowledges that the IO Certificates
and Prepayment Penalty Certificates have not been registered under the
Securities Act. The I0 Certificates and Prepayments Penalty Certificates may be
deemed to be "restricted securities" subject to restrictions on transferability
and resale and may not be transferred or resold except in accordance with the
requirements of the related Pooling and Servicing Agreements, and except (i) in
a transaction not subject to the registration requirements of the Securities Act
and (ii) pursuant to the requirements of, or an exemption under, applicable
state securities laws.
9.6 DUE DILIGENCE
Asset Company has performed its own thorough due diligence
investigation of the Purchased Assets offered for sale and is not relying on any
representation or warranty, express or implied, of Seller or any of its
Representatives or third-party vendors, other than those expressly contained in
this Purchase Agreement.
10. COVENANTS OF SELLER PRIOR TO CLOSING DATE
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10.1 ACCESS AND INVESTIGATION
Between the date of this Purchase Agreement and the Closing
Date, Seller will, and will cause its Representatives to, afford Asset Company
and its Representatives the same access and information afforded to Subscriber
in Section 5.1 of the Stock Subscription and Purchase Agreement.
10.2 REQUIRED APPROVALS
As promptly as practicable after the date of this Purchase
Agreement and prior to the Closing Date, Seller will make all filings Company is
required to make by Legal Requirements (with the understanding that Asset
Company will pay all filing fees for any HSR Act filing, as provided by
statute). As promptly as practicable after the date of this Agreement and prior
to the Closing Date, Seller will (a) cooperate with the Asset Company with
respect to all filings that Asset Company elects to make or is required by Legal
Requirements to make in connection with the Contemplated Transactions, and (b)
cooperate with Asset Company in obtaining all Consents identified in Schedule
9.2.3 (including taking all actions requested by Asset Company to cause early
termination of any applicable waiting period under the HSR Act).
10.3 NOTIFICATION
Between the date of this Purchase Agreement and the Closing
Date, Seller will promptly notify Asset Company in writing if Seller becomes
aware of any fact or condition that (a) causes or constitutes a Breach of any of
Seller's representations and warranties in this Purchase Agreement as of the
date of this Purchase Agreement, or (b) would cause or constitute a Breach of
any such representation or warranty had such representation or warranty been
made as of the time of occurrence or discovery of such fact or condition. Should
any such fact or condition require any change in the Disclosure Schedules in
order to make the Disclosure Schedules accurate as of Closing, Seller will
promptly deliver to Asset Company a supplement to the Disclosure Schedules
specifying such change.
10.4 BEST EFFORTS
Between the date of this Purchase Agreement and the Closing
Date, Seller will use its Best Efforts to cause the conditions in Section 12 to
be satisfied and to complete Closing no later than June 30, 1999.
11. COVENANTS OF ASSET COMPANY PRIOR TO CLOSING DATE
In addition to the covenants set forth elsewhere in this
Purchase Agreement, Asset Company covenants as follows:
11.1 APPROVALS OF GOVERNMENTAL BODIES
As promptly as practicable after the date of this Purchase
Agreement, Asset Company will, and will cause each of its Related
Persons to, make all filings required by Legal
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Requirements to be made by them to consummate the Contemplated
Transactions (including all filings under the HSR Act) and will use its
Best Efforts to obtain the Consents identified in Schedules 9.2.3.
Between the date of this Purchase Agreement and the Closing Date, Asset
Company will, and will cause each Related Person to, cooperate with
Seller with respect to all filings that Seller are required by Legal
Requirements to make in connection with the Contemplated Transactions,
(including, without limitation, by paying the filing fee under the HSR
Act as provided by statute).
11.2 BEST EFFORTS
Between the date of this Purchase Agreement and the Closing
Date, Asset Company will use its Best Efforts to cause the conditions in Section
13 to be satisfied.
11.3 NOTIFICATION
Between the date of this Purchase Agreement and the Closing
Date, Asset Company will promptly notify Seller in writing if Seller becomes
aware of any fact or condition that (a) causes or constitutes a Breach of any of
Asset Company's representations and warranties in this Purchase Agreement as of
the date of this Purchase Agreement, or (b) would cause or constitute a Breach
of any such representation or warranty had such representation or warranty been
made as of the time of occurrence or discovery of such fact or condition.
12. CONDITIONS PRECEDENT TO ASSET COMPANY'S OBLIGATION TO CLOSE
Asset Company's obligation to purchase the Purchased Assets and to take
the other actions required to be taken by Asset Company at Closing is subject to
the satisfaction, at or prior to Closing, of each of the following conditions
(any of which may be waived by Asset Company, in whole or in part):
12.1 ACCURACY OF REPRESENTATIONS
All of Seller's representations and warranties in this
Purchase Agreement (considered collectively), and each of these representations
and warranties (considered individually), must have been accurate in all
material respects as of the date of this Purchase Agreement, and must be
accurate in all material respects as of the Closing Date as if made on the
Closing Date, without regard to any supplement to the Disclosure Schedules.
12.2 SELLER'S PERFORMANCE
12.2.1 All of the covenants and obligations that Seller is
required to perform or to comply with pursuant to this Purchase
Agreement at or prior to Closing (considered collectively), and
each of these covenants and obligations (considered individually),
must have been duly performed and complied with in all material
respects.
12.2.2 Seller must have signed and delivered all documents and
other item required to be delivered by it pursuant to Section
7.1.1, and each such document must be in
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form attached to this Purchase Agreement otherwise in form and
substance satisfactory to the Asset Company.
12.3 NO INJUNCTION
There must not be in effect any Legal Requirement or any
injunction or other Order that prohibits the sale of the Purchased Assets by
Seller to Asset Company.
12.4 BANKRUPTCY MATTERS
12.4.1 The Plan of Reorganization and Disclosure Statement, as
amended and supplemented, must have been filed with the Bankruptcy
Court and must not have been withdrawn.
12.4.2 The Confirmation Order (in form and substance reasonably
satisfactory to Asset Company) must have been entered by the
Bankruptcy Court, must be in effect, final and nonappealable, and
not otherwise subject to any stay, and must not have been modified
in any material respect.
12.4.3 The Confirmation Order will authorize and direct the Seller
to perform its obligations under the Definitive Agreements.
12.4.4 The Confirmation Order will (a) approve all Definitive
Agreements, including without limitation, the Stock Subscription
and Purchase Agreement; and (b) contain a provision stating that
the Purchased Assets acquired by Asset Company are acquired free
and clear of any and all claims, obligations, and liabilities.
12.4.5 Asset Company will have (i) received copies of all relevant
material documents regarding the rights and obligations of the
Seller, Advanta Mortgage Corp. USA, MBIA Insurance Corporation,
Norwest Bank Minnesota, NA, and Bankers Trust in connection with
the Purchased Assets; and (ii) received certification from each
such party that there are no relevant material documents other
than those given to Asset Company and that Seller is in compliance
with all terms and provisions of the relevant documents (unless
Seller has furnished Asset Company with a forbearance agreement in
which the relevant party agrees not to enforce its rights or
remedies against the company and to waive defaults in connection
with any noncompliance.
13. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
Seller's obligation to sell the Purchased Assets and to take
the other actions required to be taken by Seller at the Closing is subject to
the satisfaction, at or prior to the Closing, of each of the following
conditions (any of which may be waived by Seller, in whole or in part):
13.1 ACCURACY OF REPRESENTATIONS
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All of Asset Company's representations and warranties in this
Purchase Agreement (considered collectively), and each of these representations
and warranties (considered individually), must have been accurate in all
material respects as of the date of this Purchase Agreement and must be accurate
in all material respects as of the Closing Date as if made on the Closing Date.
13.2 ASSET COMPANY'S PERFORMANCE
13.2.1 All of the covenants and obligations that Asset Company is
required to perform or to comply with pursuant to this Purchase
Agreement at or prior to the Closing (considered collectively),
and each of these covenants and obligations (considered
individually), must have been performed and complied with in all
material respects.
13.2.2 Asset Company must have paid the Purchase Price and
delivered each of the documents and other items required to be
delivered by Asset Company pursuant to Section 7.2.
13.3 NO INJUNCTION
There must not be in effect any Legal Requirement or any
injunction or other Order that prohibits the sale of the Purchased Assets by
Seller to Asset Company.
13.4 BANKRUPTCY MATTERS
13.4.1 The Plan of Reorganization and Disclosure Statement, as
amended and supplemented, must have been filed with the Bankruptcy
Court and must not have been withdrawn.
13.4.2 The Confirmation Order must have been entered by the
Bankruptcy Court, must be in effect, and must not have been stayed
or modified in any material respect.
13.4.3 The Confirmation Order will approve all Definitive
Agreements and all Definitive agreement (including, without
limitation, the Stock Subscription and Purchase Agreement).
14. TERMINATION
14.1 TERMINATION EVENTS
This Purchase Agreement may not be terminated by either party,
except:
(a) this Purchase Agreement shall terminate automatically upon any
termination of the Stock Subscription and Purchase Agreement, without
notice or further act;
(b) by mutual consent of Asset Company and Seller;
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(c) by either Asset Company or Seller if a material Breach of any
provision of this Agreement has been committed by the other party and
such Breach has not been cured or waived;
(d) by Asset Company if any of the conditions in Section 12 has
not been satisfied as of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure of
Buyer to comply with its obligations under this Agreement) and Asset
Company has not waived such condition on or before the Closing Date;
(e) by Seller, if any of the conditions in Section 13 has not been
satisfied as of the Closing Date or if satisfaction of such a condition
is or becomes impossible (other than through the failure of Seller to
comply with their obligations under this Agreement) and Seller has not
waived such condition on or before the Closing Date; and
(f) by Asset Company if Seller enters into a definitive agreement
for the sale of Purchased Assets to a party unrelated to Subscriber.
14.2 EFFECT OF TERMINATION
Prior to Closing, Asset Company's exclusive remedy for a
Breach by Seller is the exercise of Asset Company's right of termination under
Section 14.1. Seller's right of termination under Section 14.1 is in addition to
any other rights it may have under this Purchase Agreement or otherwise, and the
exercise of its right of termination will not be an election of remedies and
will not impair Seller's right to pursue all legal remedies.
14.3 REINSTATEMENT
If this Purchase Agreement and the Stock Subscription and
Purchase Agreement shall have been terminated for any reason, this Purchase
Agreement shall be automatically reinstated on any reinstatement of the Stock
Subscription and Purchase Agreement, without further notice or act.
15. GENERAL PROVISIONS
15.1 EXPENSES
Each party to this Purchase Agreement will bear its respective
expenses incurred in connection with the preparation, execution, and performance
of this Purchase Agreement and the Contemplated Transactions, including all fees
and expenses of its Representatives. Seller and the Liquidating Trust will pay
all amounts payable to Pentalpha Capital, LLC in connection with this Purchase
Agreement and the Contemplated Transactions.
15.2 NOTICES
All notices, consents, waivers, and other communications under
this Purchase Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand, (b) sent by facsimile (with written
confirmation of receipt), or (c) when received by the
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addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and facsimile
numbers set forth below (or to such other addresses and facsimile numbers as a
party may designate by notice to the other parties):
SELLER:
Southern Pacific Funding Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Miller, Nash, Wiener, Hager & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
ASSET COMPANY:
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
15.3 JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision of,
or based on any right arising out of, this Purchase Agreement may be brought
against any of the parties in the courts of the State of Oregon, County of
Multnomah, and each of the parties consents to the jurisdiction of such court
(and of the appropriate appellate court) in any such action or proceeding and
waives any objection to venue laid therein. Process in any action or proceeding
referred to in the preceding sentence may be served on any party anywhere in the
world. In connection with any such action or proceeding, the prevailing party
(whether prevailing affirmatively or by means of a successful defense
13
with respect to the issues having the greatest value or importance) will be
entitled to recover its costs, including reasonable attorney fees at trial and
on any appeal.
15.4 FURTHER ASSURANCES
The parties agree (a) to furnish upon request to each other
such further information, (b) to execute and deliver to each other such other
documents, and (c) to do such other acts and things, all as the other party may
reasonably request for the purpose of carrying out the intent of this Purchase
Agreement and the other agreements referred to in this Purchase Agreement.
15.5 WAIVER
Neither the failure nor any delay by any party in exercising
any right, power, or privilege under this Purchase Agreement or the documents
referred to in this Purchase Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, no party will be deemed to have
waived any of its rights or privileges under this Purchase Agreement or the
documents referred to in this Purchase Agreement unless the waiver is in writing
and no waiver given by a party will be applicable except in the specific
instance for which it is given.
15.6 MODIFICATION
This Purchase Agreement may not be amended except by a written
agreement executed by the party to be charged with the amendment.
15.7 ASSIGNMENTS, SUCCESSORS, AND THIRD-PARTY RIGHTS
Neither party may assign any of its rights under this Purchase
Agreement without the prior consent of the other party, other than an assignment
of the rights of Asset Company to a wholly owned (direct or indirect) Related
Person of Asset Company that affirms in writing that it will be bound to the
representations, warranties, and obligation of Asset Company under this Purchase
Agreement as if it signed the Agreement as the original signatory Asset Company
(with such factual changes, such as jurisdiction of organization, as reasonably
may be required). Subject to the preceding sentence, this Purchase Agreement
will apply to, be binding in all respects upon, and inure to the benefit of the
successors and permitted assigns of the parties. Nothing expressed or referred
to in this Purchase Agreement will be construed to give any Person other than
the parties to this Purchase Agreement any legal or equitable right, remedy, or
claim under or with respect to this Purchase Agreement or any provision of this
Purchase Agreement. This Purchase Agreement and all of its provisions and
conditions are for the sole and exclusive benefit of the parties to this
Purchase Agreement and their successors and assigns. The Liquidating Trust is an
express beneficiary of the covenants and obligations of the parties to this
Agreement.
14
15.8 SEVERABILITY
If any provision of this Purchase Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Purchase Agreement will remain in full force and effect. Any provision of
this Purchase Agreement held invalid or unenforceable only in part or degree
will remain in full force and effect to the extent not held invalid or
unenforceable.
15.9 SECTION HEADINGS; CONSTRUCTION
The headings of Sections in this Purchase Agreement are
provided for convenience only and will not affect its construction or
interpretation. All references to "Section" or "Sections" refer to the
corresponding Section or Sections of this Purchase Agreement. All words used in
this Purchase Agreement will be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the word "including"
does not limit the preceding words or terms.
15.10 TIME OF ESSENCE
With regard to all dates and time periods set forth or
referred to in this Purchase Agreement, time is of the essence.
15.11 GOVERNING LAW
THIS PURCHASE AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
15.12 COUNTERPARTS
This Purchase Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Purchase Agreement and all of which, when taken together, will be deemed to
constitute the and the same agreement.
15
IN WITNESS WHEREOF, the parties have executed and delivered
this Amended and Restated Purchase Agreement as of the date first written above.
ASSET COMPANY SELLER
▇▇▇▇▇▇▇, SACHS & CO. SOUTHERN PACIFIC FUNDING CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director President
APPENDIX I TO
ASSET PURCHASE AGREEMENT
DEFINED TERMS
All references in this Appendix I to Sections are references
to Sections of this Purchase Agreement unless otherwise specified. Unless the
context otherwise requires, capitalized terms used in the Purchase Agreement, if
not otherwise defined, have the following meanings:
"ADDITIONAL COVENANTS AGREEMENT" has the meaning given in
Section 5.1.
"ADJUSTMENT AMOUNT" has the meaning given in Section 3.3.
"AGREEMENT" means, when referring to "this Agreement," the
Amended and Restated Asset Purchase Agreement dated as of May 21, 1999, between
Seller and Asset Company.
"ASSET CASH FLOW INSTRUMENT" has the meaning given in Section
4.
"ASSET COMPANY" means the buyer of assets identified in
paragraph one of this Agreement, or any permitted assignee.
"ASSET COMPANY DEFINITIVE AGREEMENTS" means this Agreement,
the Stock Subscription and Purchase Agreement, Additional Covenants Agreement,
the Settlement Agreement, the Cash Flow Instrument, the Asset Purchase Agreement
Cash Flow Instrument, and the Guarantee.
"ASSET PURCHASE AGREEMENT" or "PURCHASE AGREEMENT" means the
Amended and Restated Asset Purchase Agreement dated as of May 21, 1999, between
Seller and Asset Company.
"ASSET PURCHASE CASH FLOWS" has the meaning given in Section
4.1.
"ASSET CASH FLOW INSTRUMENT" has the meaning given in Section
4.
"BANKRUPTCY CASE" has the meaning given in the Recitals to
this Agreement.
"BANKRUPTCY COURT" has the meaning given in the Recitals to
this Agreement.
"BASE CASH PRICE" has the meaning given in Section 3.2.
"BEST EFFORTS" means the efforts that a prudent Person who
desires to achieve a certain result would use in similar circumstances to
achieve the result as expediently as possible.
"BREACH" means (a) any inaccuracy in or breach of, or any
failure to perform or comply with, a representation, warranty, covenant,
obligation, or other provision of this Agreement or any instrument delivered
pursuant to this Agreement, or (b) any claim (by any Person) or other occurrence
or circumstance that is or was inconsistent with a representation, warranty,
covenant, obligation, or other provision of this Agreement or any instrument
delivered pursuant to this Agreement.
17
"CASH FLOW PERIOD" has the meaning given in Section 4.2.
"CLOSING" has the meaning given in Section 6.
"CLOSING DATE" means the date and time when Closing actually
takes place.
"COMPANY" has the meaning given in the Recitals to this
Agreement.
"CONFIRMATION ORDER" means the order of the Bankruptcy Court
confirming the Plan of Reorganization.
"CONSENT" means any approval, consent, ratification, waiver,
or other authorization (including any Governmental Authorization).
"CONTEMPLATED TRANSACTIONS" means all of the transactions set
forth in the definition of Contemplated Transactions in the Stock Subscription
and Purchase Agreement.
"CONTRACT" means any agreement, contract, obligation, promise,
or undertaking (whether written or oral and whether express or implied) that is
legally binding.
"DEFINITIVE AGREEMENTS" means this Agreement, the Stock
Subscription and Purchase Agreement and all related agreements or instruments
referred to in this Agreement or in the Stock Subscription and Purchase
Agreement.
"DIP FINANCING AGREEMENT" means the Master Repurchase
Agreement, Annex I to such Master Repurchase Agreement, the Margin Agreement and
the related agreements, annexes and exhibits entered into between Debtor and
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., pursuant to which ▇▇▇▇▇▇▇, Sachs & Co. extended a credit
facility in the appropriate initial principal amount of $33,600,000.
"DISCLOSURE SCHEDULES" means the schedules attached to this
Agreement and delivered by Debtor to Subscriber concurrently with the execution
and delivery of this Agreement.
"DISCLOSURE STATEMENT" means the disclosure statement filed in
Bankruptcy Court with respect to the Plan of Reorganization, as amended.
"DISTRIBUTION" has the meaning given in Section 4.2.
"ENCUMBRANCE" means any charge, claim, community property
interest, condition, equitable interest, lien, option, pledge, security
interest, right of first refusal, or restriction of any kind, including any
restriction on use, voting, transfer, receipt of income, or exercise of any
other attribute of ownership.
"FINANCING TRANSACTION" means any nonrecourse borrowing or any
borrowing with recourse solely to a bankruptcy remote special purpose entity in
respect of the Reorganized Company or the Asset Company, which borrowing is
secured by, and on which principal and/or interest payments are made primarily
from cash flows on, the related Assets or Purchased Assets and entered
18
into primarily for the purpose of distributing Proceeds. Financing Transaction
also includes all incremental borrowings from the reserve funds created for
Trust Series 1995-2, 1996-1 and 1996-3.
"GOVERNMENTAL BODY" means any:
(a) nation, state, county, city, town, village, district, or
other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other
government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or
entity and any court or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory,
or taxing authority or power of any nature.
"HEDGING GAINS" means any realized gains of the Asset Company
on hedging transactions.
"HEDGING LOSSES" means any realized losses of the Asset
Company on hedging transactions.
"HOLDER" means the holder of the Asset Cash Flow Instrument.
"HSR ACT" means the ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇ Antitrust Improvements
Act of 1976 or any successor law, and regulations and rules issued pursuant to
that Act or any successor law.
"IO CERTIFICATE" means each of the certificates included among
the Purchased Assets, representing subordinated interest-only REMIC regular
interests in the related Securitization Trusts (or, in the case of the Series
1998-H1 Securitization Trust, a subordinated non-REMIC equity interest).
"LEGAL REQUIREMENT" means any federal, state, local,
municipal, foreign, international, multinational, or other administrative order,
constitution, law, ordinance, principle of common law, regulation, statute, or
treaty.
"LIQUIDATING TRUST" means the liquidating trust established
for the benefit of the Company's creditors in the Bankruptcy Case.
"MATERIAL INTEREST" has the meaning given in Appendix 1 of the
Stock Subscription and Purchase Agreement.
19
"ORDER" means any award, decision, injunction, judgment,
order, ruling, subpoena, or verdict entered, issued, made, or rendered by any
court, administrative agency, or other Governmental Body or by any arbitrator.
"ORGANIZATIONAL DOCUMENTS" means (a) the articles or
certificate of incorporation and the bylaws of a corporation; (b) the
partnership agreement and any statement of partnership of a general partnership;
(c) the limited partnership agreement and the certificate of limited partnership
of a limited partnership; (d) the operating agreement and articles or
certificate of organization of a limited liability company; (e) any charter or
similar document adopted or filed in connection with the creation, formation, or
organization of a Person; and (f) any amendment to any of the foregoing.
"PERSON" means any individual, corporation (including any
non-profit corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization, labor union,
or other entity or Governmental Body.
"PREPAYMENT PENALTY INCOME" means the income from the
Prepayment Penalty Trust Certificates and the Prepayment Penalty Rights.
"PREPAYMENT PENALTY TRUST CERTIFICATES" means the certificates
included among the Purchased Assets representing interests in prepayment penalty
income in respect of the mortgage loans in the Securitization Trusts.
"PREPAYMENT PENALTY RIGHTS" means all rights to prepayments
penalty income from the Securitization Trusts not represented by a Prepayment
Penalty Trust Certificate.
"PROCEEDING" means any action, arbitration, audit, case,
hearing, investigation, litigation, or suit (whether civil, criminal,
administrative, investigative, or informal) commenced, brought, conducted, or
heard by or before, or otherwise involving, any Governmental Body or arbitrator.
"PROCEEDS" means the cash amount realized from an arms-length
sale, transfer or Financing Transaction.
"PURCHASE AGREEMENT" or "ASSET PURCHASE AGREEMENT" means the
Amended and Restated Asset Purchase Agreement dated as of May 21, 1999, between
Seller and Asset Company.
"PURCHASE PRICE" has the meaning given in Section 3.1.
"PURCHASED ASSETS" means the assets set forth on Schedule 2.1
of this Agreement.
"PURCHASED ASSET PROCEEDS" has the meaning given in Section
4.1.
"RELATED PERSON" means, with respect to a specified Person
other than an individual:
(a) any Person that directly or indirectly controls, is
directly or indirectly controlled by, or is directly or indirectly
under common control with such specified Person;
20
(b) any Person that holds a Material Interest in such
specified Person;
(c) each Person that serves as a director, officer, partner,
executor, or trustee of such specified Person (or in a similar
capacity), and each Person who is married to, resides with, or related
within the second degree to any such director, officer, partner,
executor, trustee, or Person in a similar capacity;
(d) any Person in which such specified Person holds a Material
Interest;
(e) any Person with respect to which such specified Person
serves as a general partner or a trustee (or in a similar capacity);
and
(f) any Related Person of any individual described in clause
(b) or (c).
"REORGANIZED COMPANY" refers to the Company upon the effective
date of the Plan of Reorganization.
"REPRESENTATIVE" means, with respect to a particular Person,
any director, officer, employee, agent, consultant, advisor, or other
representative of such Person, including legal counsel, accountants, and
financial advisors.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
or any successor law, and regulations and rules issued pursuant to that Act or
any successor law.
"SECURITIZATION TRUST" means the trusts into which pools of
mortgage loans were deposited pursuant to the 13 securitization transactions
entered into by the Company (or one of its Subsidiaries) between 1995 and 1998
and which in turn issued various classes of mortgage securities representing
interests in, or in the case of the Series 1998-H1 Securitization Trust, secured
by, the trust assets.
"SELLER" means the seller of assets identified in paragraph
one of this Purchase Agreement.
"SELLER DEFINITIVE AGREEMENTS" means this Agreement, the
Settlement Agreement, the Liquidating Trust Agreement, the Stock Subscription
and Purchase Agreement and the Additional Covenants Agreement.
"SETTLEMENT AGREEMENT" means the settlement agreement among
Seller, Norwest Bank Minnesota, National Association and MBIA Insurance
Corporation to be entered into prior to the Closing Date.
"STOCK SUBSCRIPTION AND PURCHASE AGREEMENT" means the Amended
and Restated Stock Subscription and Purchase Agreement between Seller and
Subscriber dated as of May 21, 1999.
21
"SUBSCRIBER" has the meaning given in the first paragraph of
the Stock Subscription and Purchase Agreement.
"THREATENED" means a demand or statement has been made (orally
or in writing) or a notice has been given (orally or in writing), or another
event has occurred or other circumstances exist, that would lead a prudent
Person to conclude that a claim, Proceeding, dispute, action, or other matter is
likely to be asserted, commenced, taken, or otherwise pursued in the future.
22
SCHEDULE 2.1
PURCHASED ASSETS
The following Subordinated Interest-Only Interests, Prepayment Penalty
Income, and Partnership Interest:
Securitization Trust Interest(s)
-------------------- -----------
1995-1 Prepayment Penalty Income
1995-2 ▇-▇, ▇-▇, Prepayment Penalty Income
1996-1 I S-1, I ▇-▇, ▇▇
▇-▇, ▇▇ ▇-▇,
Prepayment Penalty
Income
1996-2 I S, II S, Prepayment Penalty Income
1996-3 I S, II S, Prepayment Penalty Income
1996-4 I S, II S, Prepayment Penalty Income
1997-1 II S, Prepayment Penalty Income
1997-2 ▇-▇▇, ▇-▇▇, Prepayment Penalty Income
1997-3 Prepayment Penalty Income
1997-4 Prepayment Penalty Income
1998-1 Prepayment Penalty Income
1998-2 Prepayment Penalty Income
1998-H1 Class X(1)
Prepayment Penalty Income
--------
1 This interest is a partnership interest for tax purposes.
Exhibit 4.1
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE. NEITHER THIS
CERTIFICATE NOR ANY INTEREST HEREIN MAY BE OFFERED FOR SALE, SOLD OR OTHERWISE
TRANSFERRED UNLESS THE PROSPECTIVE TRANSFEREE PROVIDES THE COMPANY WITH AN
OPINION OF COUNSEL (WHICH SHALL NOT BE AT THE EXPENSE OF THE COMPANY)
SATISFACTORY TO THE COMPANY IN ITS SOLE JUDGMENT THAT SUCH TRANSFER IS BEING
MADE EITHER PURSUANT TO A REGISTRATION STATEMENT THAT HAS BECOME EFFECTIVE UNDER
THE ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, AND EITHER
DOES NOT REQUIRE REGISTRATION OR QUALIFICATION UNDER ANY STATE SECURITIES LAWS,
OR HAS BEEN SO REGISTERED OR QUALIFIED. THE OPINION SHALL ALSO STATE THAT AS A
RESULT OF SUCH TRANSFER, THE COMPANY IS UNDER NO OBLIGATION TO REGISTER UNDER
THE SECURITIES ACT OF 1934, AS AMENDED, THE INVESTMENT COMPANY ACT OF 1940 OR
ANY OTHER FEDERAL OR STATE SECURITIES LAW.
ASSET CASH FLOW INSTRUMENT
NEW YORK, NEW YORK
-------, 1999
FOR VALUE RECEIVED, the undersigned ----------, ("Asset Company"), a
----------- having its principal place of business at
-----------------------------, promises to pay to the order of SOUTHERN PACIFIC
FUNDING CORPORATION ("Holder") at ------------------------------------- the
amounts as provided herein.
This Asset Cash Flow Instrument (the "Instrument") evidences an
obligation incurred pursuant to the Amended Plan of Reorganization dated May
---, 1999, of Southern Pacific Funding Corporation acting in its capacity as
Debtor-in-Possession in its bankruptcy case filed under Chapter 11 of the United
States Bankruptcy Code in the United States Bankruptcy Court for the District of
Oregon.
Capitalized terms used in this Instrument and not otherwise defined
have the meanings given in Appendix I hereto, which is incorporated into this
Instrument by reference.
This Instrument represents a general obligation of Asset Company,
payable from any available funds.
1. ASSET CASH FLOW INSTRUMENT
1.1 The Asset Company shall make periodic payments to Holder (each a
"Distribution") of the sum (without duplication) of 50 percent of the following
(i.e., 50 percent of the amounts in clause (a) minus 50 percent of the amounts
in
clause (b)) with respect to the Purchased Assets and Purchased Asset Proceeds.
("Purchased Asset Proceeds" means any securities or tangible non-cash
consideration received on a sale or transfer of Purchased Assets to a
non-Related Person of Asset Company, including any securities retained by Asset
Company in connection with the securitization of any Purchased Assets):
(a) the sum (without duplication) of:
(i) the aggregate of all pre-tax cash flows from each of the
Purchased Assets and Purchased Asset Proceeds from June ---, 1999
until the sale (or transfer) or Financing Transaction with respect
to the related Purchased Assets or Purchased Asset Proceeds, it
being agreed that the cash flows will continue to be payable to
Holder after any sale or transfer to a Related Person of Asset
Company (other than a sale to a Related Person of Asset Company
for the sole purpose of facilitating a Financing Transaction) or
pursuant to a transaction that has not been found by the board of
directors of Asset Company to be an arms-length transaction;
(ii) all pre-tax Proceeds from the sale of any Purchased
Asset or Purchased Asset Proceeds or any portion of a Purchased
Asset or Purchased Asset Proceeds; and
(iii) all pre-tax Proceeds from any Financing Transaction
entered into by Asset Company with respect to any of the Purchased
Assets or Purchased Asset Proceeds and all hedging gains;
(50% of the sum of the amounts in clause (i), (ii) and
(iii) are the "Asset Purchase Cash Flows"); minus
(b) otherwise unreimbursed Out-of-Pocket Expenses incurred by Asset
Company.
1.2 The periodic payments (each a "Distribution") made with respect to
this Instrument each calendar month, commencing with the first full calendar
month following June ---, 1999 (each such month, a "Cash Flow Period") will
equal (i) Asset Purchase Cash Flows received by Asset Company during such Cash
Flow Period (or from June ---, 1999 through the last day of the first Cash Flow
Period, in the case of the first Distribution) minus (ii) 50 percent of the
otherwise unreimbursed Out-of-Pocket Expenses not previously applied in
reduction of Asset Purchase Cash Flows.
1.3 Out-of-Pocket Expenses means:
(a) Direct Third Party out-of-pocket expenses reasonably incurred by
the Asset Company or by a Related Person of Asset Company with
respect to the Purchased Assets and Purchased Asset Proceeds, not
otherwise reimbursable from a third party, and directly
2
related to a sale of Purchased Assets or Purchased Asset Proceeds
or Financing Transaction.
(b) Notwithstanding Section 1.3(a), Out-of-Pocket Expenses
specifically include:
(i) hedging losses and carrying costs of hedging
transactions;
(ii) principal and interest repaid on any Financing
Transaction;
(iii) otherwise reimbursable Third Party expenses that Asset
Company has determined to be uncollectible; and
(iv) fees and expenses incurred with respect to The ▇▇▇▇▇▇▇
Sachs Group L.P. or a Related Person of The ▇▇▇▇▇▇▇ ▇▇▇▇▇ Group
L.P. in connection with a sale or Financing Transaction, but only
to the extent such fees are consistent with market rates and
industry standards and are approved by the Holder, which approval
shall not be unreasonably withheld ("Related Person Expenses").
Related Person Expenses shall be deemed to be approved if not
objected to within 21 days after Holder received a detailed report
from the Asset Company together with a request for approval.
1.4 The Distribution for a particular month will be paid on or before
the first business day following the end of the related Cash Flow Period by wire
transfer to an account specified by Holder.
2. OBLIGATIONS ABSOLUTE
The obligations of Asset Company to pay Distributions under this
Instrument (in accordance with its terms) shall be absolute and unconditional
and shall not be subject to any abatement, reduction, set-off, defense (other
than the defense that the amount due has been paid), counterclaim or recoupment
("Abatements") for any reason whatsoever, including without limitation,
Abatements due to any present or future claims of Asset Company against Holder
under this Instrument or otherwise, or against any other Person for whatever
reason.
It is the express intention of Asset Company and Holder that all
Distributions are, and shall continue to be, payable in all events unless the
obligation to pay such Distributions is terminated pursuant to the express
provisions of this Instrument.
3. REMEDIES
Asset Company and all others who may become liable for the payment of
all or any part of the obligations hereunder do hereby severally waive
presentment and demand for payment, notice of dishonor, protest and notice of
protest and non-payment and all other notices of any kind, except for notices
expressly provided for in this Instrument.
3
Upon the occurrence and during the continuance of any breach by the
Asset Company of any of its obligations hereunder, Holder shall have all
remedies available to Holder at law or in equity, including, without limitation
of any other remedies, the right to specifically enforce any of the obligations
or duties owing by Asset Company or any other person and the right to also bring
an action for money damages.
4. VENUE; ATTORNEY FEES; GOVERNING LAW
In any action or proceeding seeking to enforce any provision of, or
based on any right arising out of, this Instrument may be brought against any of
the parties in the courts of the State of Oregon, County of Multnomah, and each
of the parties consents to the jurisdiction of such court (and of the
appropriate appellate court) in any such action or proceeding and waives any
objection to venue laid therein. Process in any action or proceeding referred to
in the preceding sentence may be served on any party anywhere in the world. In
connection with any such action or proceeding, the prevailing party will be
entitled to recover its costs, including reasonable attorney fees at trial and
on any appeal.
4
THIS INSTRUMENT, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER, SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICT OF LAWS.
IN WITNESS WHEREOF, this Asset Cash Flow Instrument has been executed
and delivered to the Holder as of the date first specified above.
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
By: -------------------------------
Title: ----------------------------
5
APPENDIX I TO
ASSET CASH FLOW INSTRUMENT
DEFINED TERMS
Unless the context otherwise requires, capitalized terms used
in the Asset Cash Flow Instrument, if not otherwise defined, have the following
meanings:
"FINANCING TRANSACTION" means any nonrecourse borrowing or any
borrowing with recourse solely to an bankruptcy remote special purpose entity in
respect of the Asset Company, which borrowing is secured by, and on which
principal and/or interest payments are made primarily from cash flows from, the
Purchased Assets or Purchased Asset Proceeds and entered into primarily for the
purpose of distributing Proceeds. Financing Transaction also includes all
incremental borrowings from the reserve funds created for Trust Series 1995-2,
1996-1 and 1996-3.
"GOVERNMENTAL BODY" means any:
(i) nation, state, county, city, town, village, district, or
other jurisdiction of any nature;
(ii) federal, state, local, municipal, foreign, or other
government;
(iii) governmental or quasi-governmental authority of any
nature (including any governmental agency, branch,
department, official, or entity and any court or other
tribunal);
(iv) multi-national organization or body; or
(v) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative,
police, regulatory, or taxing authority or power of any
nature.
"MATERIAL INTEREST" means, for purposes of the definition of
Related Person, a direct or indirect beneficial ownership (as defined in Rule
13d-3 under the Securities Exchange Act of 1934) of voting securities or other
voting interests representing at least 25% of the outstanding voting power of a
Person or equity securities or other equity interests representing at least 25%
of the outstanding equity securities or equity interest in a Person.
"PERSON" means any individual, corporation (including any
non-profit corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization, labor union,
or other entity or Governmental Body.
"PROCEEDS" means the cash amount realized from an arms-length
sale, transfer or Financing Transaction.
6
"PURCHASED ASSETS" means the assets set forth on the Schedule
of Assets to this Asset Cash Flow Instrument.
"RELATED PERSON" means, with respect to a specified Person
other than an individual:
(i) any Person that directly or indirectly controls, is
directly or indirectly controlled by, or is directly or
indirectly under common control with such specified
Person;
(ii) any Person that holds a Material Interest in such
specified Person;
(iii) each Person that serves as a director, officer, partner,
executor, or trustee of such specified Person (or in a
similar capacity), and each Person who is married to,
resides with, or related within the second degree to any
such director, officer, partner, executor, trustee, or
Person in a similar capacity;
(iv) any Person in which such specified Person holds a
Material Interest;
(v) any Person with respect to which such specified Person
serves as a general partner or a trustee (or in a
similar capacity); and
(vi) any Related Person of any individual described in clause
(b) or (c).
"THIRD PARTY" means a Person that is neither The ▇▇▇▇▇▇▇ Sachs
Group L.P. nor any Related Person of The ▇▇▇▇▇▇▇ ▇▇▇▇▇ Group L.P.
7
SCHEDULE OF ASSETS
The following Subordinated Interest-Only Interests, Prepayment Penalty
Income, and Partnership Interest:
Securitization Trust Interest(s)
-------------------- -----------
1995-1 Prepayment Penalty Income
1995-2 ▇-▇, ▇-▇, Prepayment Penalty Income
1996-1 I S-1, I ▇-▇, ▇▇
▇-▇, ▇▇ ▇-▇,
Prepayment Penalty
Income
1996-2 I S, II S, Prepayment Penalty Income
1996-3 I S, II S, Prepayment Penalty Income
1996-4 I S, II S, Prepayment Penalty Income
1997-1 II S, Prepayment Penalty Income
1997-2 ▇-▇▇, ▇-▇▇, Prepayment Penalty Income
1997-3 Prepayment Penalty Income
1997-4 Prepayment Penalty Income
1998-1 Prepayment Penalty Income
1998-2 Prepayment Penalty Income
1998-H1 Class X1
Prepayment Penalty Income
--------
1 This interest is a partnership interest for tax purposes.
8
Exhibit 5.1
See Exhibit 2.4.1 to Exhibit 99.4 to this Current Report on Form 8-K.
SCHEDULE 8.2.2
CONFLICTS WITH ORGANIZATIONAL DOCUMENTS, LAWS, ASSUMED CONTRACTS--DEBTOR
NONE.
SCHEDULE 9.2.2
CONFLICTS WITH ORGANIZATIONAL DOCUMENTS, LAWS, CONTRACTS--SUBSCRIBER
NONE.
SCHEDULE 9.2.3
CONSENTS--SUBSCRIBER
NONE.