Exhibit 10.18
EXECUTION COPY
CREDIT AND SECURITY AGREEMENT
By and Among
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.,
as Lender
LONG BEACH ACCEPTANCE RECEIVABLES CORP.,
as Borrower
and
LONG BEACH ACCEPTANCE CORP.,
as Guarantor
---------------------------
Dated as of June 15, 2000
---------------------------
TABLE OF CONTENTS
PAGE
----
1. Definitions.....................................................................................1
2. The Loans......................................................................................11
2.1. Agreement to Lend..............................................................................11
2.2. Procedure for Pre-Funding Loans................................................................12
2.3. Promissory Note................................................................................12
2.4. Interest.......................................................................................13
2.5. Repayment of the Loans.........................................................................13
2.6. Optional Prepayments...........................................................................13
2.7. Payment Procedures.............................................................................13
2.8. Indemnity......................................................................................14
2.9. Illegality; Substituted Interest Rate..........................................................14
2.10. Limited Recourse...............................................................................15
3. Grant of Security Interest; Eligible Collateral................................................15
3.1. Valid Security Interest........................................................................15
3.2. Further Assurances.............................................................................16
3.3. Data Reporting.................................................................................16
3.4. Powers. .......................................................................................16
3.5. No Duty on the Part of Lender..................................................................17
3.6. Performance by Lender of Borrower's Obligations................................................17
3.7. Limitation on Duties Regarding Preservation of Collateral......................................17
3.8. Powers Coupled with an Interest................................................................17
3.9. Termination....................................................................................17
3.10. Segregation of Funds...........................................................................17
3.11. The Spread Account.............................................................................18
3.12. Advance Rate Maintenance; Release of Excess Collateral.........................................18
3.13. Valuation Model. ..............................................................................18
3.14. Exhibit G......................................................................................19
3.15. Payment of Excess Cash Flow....................................................................19
4. Representations and Warranties.................................................................20
4.1. Organization...................................................................................20
4.2. Power and Authority............................................................................20
4.3. Authorization of Borrowing.....................................................................20
4.4. Agreement Binding..............................................................................20
4.5. Compliance with Law............................................................................20
4.6. Consents.......................................................................................21
4.7. Litigation.....................................................................................21
4.8. Financial Statements...........................................................................21
4.9. Other Obligations..............................................................................21
4.10. Regulation G...................................................................................21
4.11. Investment Company Act.........................................................................21
4.12. Chief Executive Office.........................................................................22
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4.13. Collateral Security............................................................................22
4.14. Ownership of Properties........................................................................22
4.15. Full Disclosure................................................................................22
4.16. ERISA..........................................................................................22
4.17. Basic Documents................................................................................23
5. Affirmative Covenants..........................................................................23
5.1. Notice.........................................................................................23
5.2. Taxes..........................................................................................23
5.3. Separate Existence: No Commingling.............................................................24
5.4. Financing Statements...........................................................................24
5.5. Books and Records; Other Information...........................................................24
5.6. Payment of Fees and Expenses...................................................................25
5.7. Continuity of Business and Compliance With Agreement...........................................25
5.8. Financial Statements and Access to Records.....................................................25
5.9. Financial Condition............................................................................25
5.10. Litigation Matters.............................................................................25
5.11. Fulfillment of Obligations.....................................................................25
5.12. Notice of Change of Chief Executive Office.....................................................26
5.13. Compliance with Laws, etc......................................................................26
5.14. Information Sheet..............................................................................26
5.15. Year 2000 Compliance. .........................................................................26
5.16. Material Adverse Change........................................................................26
6. Negative Covenants.............................................................................26
6.1. Adverse Transactions...........................................................................27
6.2. Guaranties.....................................................................................27
6.3. Corporate Documents............................................................................27
6.4. Investments; Dividends.........................................................................27
6.5. Loans; Capital Structure; Affiliates...........................................................27
6.6. Liens..........................................................................................28
6.7. VSI Policies...................................................................................28
6.8. Custodian. ....................................................................................28
6.9. Change of Control..............................................................................28
7. Conditions Precedent...........................................................................29
7.1. Conditions Precedent to Agreement..............................................................29
7.2. Conditions Precedent to Pre-Funding Loans......................................................30
8. Events of Default..............................................................................31
8.1. Events of Default..............................................................................31
8.2. Remedies of Default............................................................................33
9. Miscellaneous..................................................................................35
9.1. Payment of Expenses, Indemnity, etc............................................................35
9.2. Set-off........................................................................................36
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9.3. Amendments.....................................................................................36
9.4. Waiver; Cumulative Rights......................................................................36
9.5. Nonpetition Covenant...........................................................................37
9.6. Non-affiliation................................................................................37
9.7. Binding Effect.................................................................................37
9.8. Survival.......................................................................................37
9.9. GOVERNING LAW, ETC.; WAIVER OF TRIAL BY JURY...................................................37
9.10. Notice.........................................................................................38
9.11. Severability...................................................................................39
9.12. Counterparts...................................................................................39
9.13. Merger or Consolidation........................................................................39
9.14. Subsequent Actions.............................................................................39
9.15. Assignability..................................................................................40
9.16. Certain Reimbursements.........................................................................40
EXHIBIT A - Form of Promissory Note.............................................................................A-1
EXHIBIT B - Form of LBAC Guarantee..............................................................................B-1
EXHIBIT C - Form of AMC Guarantee...............................................................................C-1
EXHIBIT D - Form of Notice of Borrowing.........................................................................D-1
EXHIBIT E - Form of Opinion of Counsel to the Borrower and Each Guarantor.......................................E-1
EXHIBIT F - Litigation Matters..................................................................................F-1
EXHIBIT G - Other Residual Financing Agreements.................................................................G-1
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CREDIT AND SECURITY AGREEMENT
CREDIT AND SECURITY AGREEMENT, dated as of June 15, 2000 (as amended,
supplemented or otherwise modified from time to time, this "AGREEMENT"), by and
among (i) GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., a Delaware corporation
(the "LENDER"), (ii) LONG BEACH ACCEPTANCE RECEIVABLES CORP., a Delaware
corporation (the "BORROWER"), and (iii) LONG BEACH ACCEPTANCE CORP., a Delaware
corporation (the "GUARANTOR").
R E C I T A L S
WHEREAS, Borrower is a direct wholly-owned subsidiary of LBAC, which is
in the business of originating and acquiring Receivables (as defined herein);
and
WHEREAS, simultaneously with the execution and delivery of this
Agreement, Guarantor and Borrower are entering into a securitization transaction
(the "SECURITIZATION TRANSACTION") providing for, among other things, (a) one of
Lender's affiliates to purchase certain securities issued thereunder and (b)
Borrower to retain the Certificate (as defined herein) issued thereunder; and
WHEREAS, in order to induce Lender to enter into this Agreement,
Guarantor is willing to provide the Guarantee (as defined herein) and Ameriquest
Mortgage Company, a Delaware corporation ("AMC"), is willing to provide the AMC
Guarantee (as defined herein); and
WHEREAS, Lender is willing to provide Borrower with the secured loans
described herein in order to induce Borrower and Guarantor to enter into the
Securitization Transaction and in consideration of the Guarantee, the AMC
Guarantee, the pledge of the Collateral (as defined herein) and on the terms and
conditions set forth herein and in the Guarantee and the AMC Guarantee; and
WHEREAS, Borrower and Guarantor have entered into and may from time to
time enter into Other Residual Financing Agreements (as defined herein) with
Lender; and
WHEREAS, Borrower, Guarantor and Lender have agreed to secure the Other
RF Obligations (as defined herein) with the Collateral pledged hereunder (in
addition to the collateral pledged under the Other Residual Financing
Agreements).
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. Definitions. When used herein, the following terms shall have the meanings
set forth below:
"ACCEPTABLE DATA FILE" has the meaning assigned thereto in Section
2.2(a) hereof.
"ADDITIONAL COLLATERAL RELEASE CONDITION" means, as of any date of
determination, if the Cumulative Actual Advance Rate for such date does not
exceed 75%.
"ADVANCE RATE" means, as of any Calculation Date, the percentage
equivalent of a fraction, the numerator of which shall equal the aggregate
unpaid principal balance of the Loans, and the denominator of which shall equal
the Present Value of the Collateral, in each case measured as of such
Calculation Date. The Advance Rate shall be determined in accordance with
Section 3.12(a) (and (x) for the calculation of the Advance Rate provided in
Section 6.4, also as provided in such Section and (y) for the calculation of the
Advance Rate provided in Section 9.16 (a) and (b), also as provided in such
subsections).
"AMC" has the meaning assigned thereto in the recitals hereto.
"AMC GROUP" has the meaning assigned thereto in Section 3.13(b).
"AMC GUARANTEE" means the guarantee in the form attached hereto as
EXHIBIT C provided by AMC as an inducement to Lender to provide Borrower with
the Loans, as amended, supplemented or otherwise modified from time to time.
"AVAILABILITY PERIOD" means, with respect to any Pre-Funding Loan, the
period commencing on the Subsequent Transfer Date on which the related
Pre-Funding Originations are transferred to the Trust and ending on the Expiry
Date.
"AVERAGE CONSTANT DEFAULT RATE" means, as of any Calculation Date, the
lesser of (i) the arithmetic average of the Constant Default Rates for the most
recent three months as reported in the monthly information sheets delivered by
Borrower to Lender and (ii) the arithmetic average of the Constant Default Rates
for the most recent six months as reported in the monthly information sheets
delivered by Borrower to Lender.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy," as amended from time to time.
"BORROWER" has the meaning assigned thereto in the heading hereto.
"CALCULATION DATE" has the meaning assigned thereto in Section 3.12(a).
"CERTIFICATE" means the security evidenced by the trust certificate
issued pursuant to the Trust Agreement.
"CHANGE OF CONTROL" means the occurrence of any of the following
without the Lender's prior written consent: (i) the consummation of any
transaction or series of transactions following which more than 49% of the
outstanding capital stock entitled to vote of a member of the Parent Group or
more than 49% of the outstanding capital stock entitled to vote generally in the
election of directors of a member of the Parent Group are owned by one or more
Persons who are not AMC; or (ii) there occurs any consolidation of a member of
the Parent Group with, or merger of a member of the Parent Group into, any other
Person, or any merger of another Person into a member of the Parent Group (other
than any such transaction pursuant to which the holders of the outstanding
capital stock of such member of the Parent Group entitled to vote generally in
the election of directors of such member of the Parent Group immediately prior
to such transaction have, directly or indirectly, shares of capital stock of the
continuing or surviving corporation immediately after such transaction which
entitle such holders to exercise in excess of 51% of the total voting power of
all shares of capital stock of the continuing or surviving corporation entitled
to vote generally in the
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election of directors), or (iii) a Person or group of Persons acting in concert
in one or a series of transactions acquire (through purchase, transfer,
assignment or otherwise) a substantial portion of the assets of a member of the
Parent Group if, following such transaction or transactions, such Person or
Persons are not wholly owned subsidiaries of AMC or any successor thereto.
Notwithstanding the foregoing, a "Change of Control" shall not include (i) the
establishment of any new entity by or the occurrence of any transaction with
Ameriquest Capital Corporation or ▇▇▇▇▇▇ ▇▇▇▇▇▇ which does not involve the
transfer of any assets of or an ownership interest in AMC or any of its direct
or indirect subsidiaries or (ii) any transfer of assets by any member of the
Parent Group in the ordinary course of its business.
"CLOSING DATE" means June 15, 2000.
"CODE" means the Uniform Commercial Code as from time to time in effect
in the State of
New York.
"COLLATERAL" has the meaning assigned thereto in Section 3.1 hereof.
"COMMONLY CONTROLLED ENTITY" means, as to any Person, an entity,
whether or not incorporated, which is under common control with such Person
within the meaning of Section 4001 of ERISA or is part of a group which includes
such Person and which is treated as a single employer under Section 414 of the
Internal Revenue Code of 1986, as amended from time to time.
"CONSTANT DEFAULT RATE" means, with respect to any Collection Period:
100 x (1-(1-D(12)))
where "D" equals the Default Rate for such Collection Period.
"CUMULATIVE ACTUAL ADVANCE RATE" means, as of any date, the percentage
equivalent of a fraction, (a) the numerator of which shall equal the sum of (i)
the aggregate unpaid principal balance of the Loans hereunder on such date and
(ii) the aggregate outstanding principal balance of all loans under each Other
Residual Financing Agreement as of such date and (b) the denominator of which
shall equal the sum of (i) the Present Value of the Collateral hereunder
(determined as of the most recent date calculated in accordance with Section
3.12(a)) and (ii) the aggregate present value of all collateral securing
Borrower's obligations to Lender under and as determined in each Other Residual
Financing Agreement (determined as of the most recent date specified in each
such Other Residual Financing Agreement); PROVIDED that, for purposes of this
definition, with respect to the determination of the present value of collateral
under any Other Residual Financing Agreement during the first six months of its
effectiveness, such determination shall be deemed to equal the initial
determination of the present value of the collateral under and as determined in
such Other Residual Financing Agreement in connection with the initial borrowing
thereunder.
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"DEFAULT" means any condition, act or event, which, with notice or
lapse of time or both, would constitute an Event of Default.
"DEFAULT RATE" means, with respect to any Collection Period, a
fraction, expressed as a percentage, (a) the numerator of which is the sum of
(1) the aggregate of the Principal Balances (as of the end of the immediately
preceding Collection Period) of all Receivables that became Liquidated
Receivables during the current Collection Period and (2) the aggregate of the
Principal Balances (as of the related repurchase date) of all Receivables that
became Purchased Receivables during such current Collection Period that were 30
days or more delinquent (calculated based on a 360-day year consisting of twelve
30-day months) with respect to more than 5% of a Scheduled Receivable Payment at
the time of such repurchase and (b) the denominator of which is equal to the
Pool Balance as of the end of the immediately preceding Collection Period.
"DISCOUNT RATE" means 15% per annum.
"ELIGIBLE SECURITIES" means (i) the Certificate, (ii) direct
obligations of, and obligations fully guaranteed as to the full and timely
payment by, the United States of America or any agency thereof, in each case
having a maturity not to exceed the maturity of the Loans and (iii) and such
other securities as are acceptable to Lender in its sole discretion.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EVENT OF DEFAULT" has the meaning assigned thereto in Section 8.1
hereof.
"EXPIRY DATE" means December 31, 2000 or such earlier date as Lender's
commitment hereunder may be terminated pursuant to the provisions hereof.
"FUNDING PERIOD" has the meaning assigned thereto in the Sale and
Servicing Agreement.
"GCFP TRIGGER EVENT" means, with respect to any Determination Date, the
occurrence of any of the following events: (a) the Cumulative Default Rate
equals or exceeds 85% of the percentage referenced in clause (b) of the
definition of Trigger Event relating to such Determination Date, (b) the
Cumulative Loss Rate equals or exceeds 85% of the percentage referenced in
clause (c) of the definition of Trigger Event relating to such Determination
Date or (c) the Average Delinquency Ratio equals or exceeds 6.50% for two
successive Determination Dates.
"GOVERNMENTAL AUTHORITY" means any nation, government, or State, or any
political subdivision thereof, or any court, stock exchange, entity or agency
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"GUARANTEE" means the guarantee in the form attached hereto as EXHIBIT
B provided by Guarantor as an inducement to Lender to provide Borrower with the
Loans, as amended, supplemented or otherwise modified from time to time.
"GUARANTOR" has the meaning assigned thereto in the heading hereto.
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"INITIAL DATA FILE" has the meaning assigned thereto in Section 2.2(a)
hereof.
"INITIAL RECEIVABLES" has the meaning assigned thereto in the Sale and
Servicing Agreement.
"INTEREST RATE DETERMINATION DATE" means, with respect to the first
Remittance Date, the Closing Date, and with respect to each subsequent
Remittance Date, the day which is two (2) LIBOR Business Days prior to the
immediately preceding Remittance Date.
"LENDER" has the meaning assigned thereto in the heading hereto.
"LIBOR" means, with respect to the interest payment to be made on each
Remittance Date, the rate of interest per annum (rounded upwards, if necessary,
to the nearest 1/100th of 1%) for U.S. Dollar deposits with a duration of one
(1) month at or about 11:00 a.m. (London time) on the Interest Rate
Determination Date corresponding to such Remittance Date on Telerate Page 3750,
or if such page ceases to display such information, then such other page as may
replace it on that service for the purpose of display of such information (the
"TELERATE RATE"). If the Telerate Rate cannot be determined, then LIBOR shall
mean, with respect to the interest payment to be made on such Remittance Date,
the arithmetic mean of the rates of interest (rounded upwards, if necessary, to
the nearest 1/100th of 1%) offered to two prime banks in the London interbank
market (selected by Lender) of U.S. Dollar deposits with a duration of one (1)
month at or about 11:00 a.m. (London time) on the Interest Rate Determination
Date corresponding to such Remittance Date.
"LIBOR BUSINESS DAY" means a Business Day on which trading in U.S.
Dollars is conducted by and between banks in the London interbank market.
"LIEN" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any financing lease
having substantially the same economic effect as any of the foregoing).
"LOAN" means the Tranche A Loan, the Tranche B Loan, the Tranche C Loan
or the Tranche D Loan. The Tranche A Loan, the Tranche B Loan, the Tranche C
Loan and the Tranche D Loan are referred to herein collectively as the "Loans".
"MAINTENANCE ADVANCE RATE" means, as of any Calculation Date, the rate
which is 5% in excess of the Target Advance Rate with respect to such date.
"MARGIN" means 2.50% per annum.
"MATURITY DATE" means December 31, 2001 (or if such day is not a
Business Day, the next preceding Business Day); PROVIDED that if, prior to such
date, the Indenture is terminated pursuant to Section 4.1 thereof or the
Certificateholder exercises its option to redeem the Notes issued pursuant to
the Indenture as provided in Section 10.1 of the Indenture, the Maturity Date
shall be the date of such termination or redemption, as the case may be.
5
"MONTHLY RECOVERY RATE" means, with respect to any Collection Period, a
fraction, the numerator of which shall equal the sum of all Liquidation Proceeds
and Recoveries for such Collection Period, and the denominator of which shall
equal the sum of the Principal Balances (as of the end of the immediately
preceding Collection Period) of all Receivables which were actually liquidated
during such Collection Period, in each case as reported in the related
Servicer's Certificate.
"MULTIEMPLOYER PLAN" means a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"97-1 AGREEMENT" has the meaning assigned thereto in clause (i) of the
definition of Other Residual Financing Agreements.
"97-2 AGREEMENT" has the meaning assigned thereto in clause (ii) of the
definition of Other Residual Financing Agreements.
"98-1 AGREEMENT" has the meaning assigned thereto in clause (iii) of
the definition of Other Residual Financing Agreements.
"98-2 AGREEMENT" has the meaning assigned thereto in clause (iv) of the
definition of Other Residual Financing Agreements.
"99-1 AGREEMENT" has the meaning assigned thereto in clause (v) of the
definition of Other Residual Financing Agreements.
"99-2 AGREEMENT" has the meaning assigned thereto in clause (vi) of the
definition of Other Residual Financing Agreements.
"98-2 SPREAD ACCOUNT AGREEMENT" means the "Spread Account Agreement",
as defined in the
Credit and Security Agreement dated as of November 25, 1998
among Borrower, Lender and Guarantor.
"99-1 SPREAD ACCOUNT AGREEMENT" means the "Spread Account Agreement",
as defined in the
Credit and Security Agreement dated as of August 12, 1999
among Lender, Borrower and Guarantor.
"99-2 SPREAD ACCOUNT AGREEMENT" means the "Spread Account Agreement",
as defined in the
Credit and Security Agreement dated as of December 9, 1999
among Lender, Borrower and Guarantor.
"NOTICE OF BORROWING" has the meaning assigned thereto in Section
2.2(a) hereof.
"OBLIGATIONS" mean (i) the unpaid principal of and premiums, if any,
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 Borrower or Guarantor whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) on the
Loans, when and as
6
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 Borrower or Guarantor from time to time owing to Lender, 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), to
the extent such obligations and liabilities arise under, out of, or in
connection with, this Agreement or the Guarantee 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 fees and disbursements of counsel to
Lender) that are required to be paid by Borrower or Guarantor pursuant to the
terms of this Agreement or the Guarantee.
"OMNIBUS AMENDMENT AGREEMENT" means the Omnibus Amendment Agreement
dated as of March 31, 1999 among Borrower, as borrower, Guarantor, as guarantor,
and Lender, as lender.
"OMNIBUS AMENDMENT AGREEMENT NO. 2" means the Omnibus Amendment
Agreement dated as of August 12, 1999 among Borrower, as borrower, Guarantor, as
guarantor, and Lender, as lender.
"OMNIBUS AMENDMENT AGREEMENT NO. 3" means the Omnibus Amendment
Agreement dated as of April 14, 2000 among Borrower, as borrower, Guarantor, as
guarantor, and Lender, as lender.
"OTHER RESIDUAL FINANCING AGREEMENTS" means, collectively, (i) the
Credit and Security Agreement dated as of March 31, 1997 by and among Lender, as
lender, Borrower, as borrower, and Guarantor, as guarantor, as amended by
Amendment No. 1 thereto dated as of January 30, 1998, as further amended by the
Omnibus Amendment Agreement and the Omnibus Amendment Agreement No. 3, and as
otherwise amended, supplemented or modified from time to time pursuant to the
terms thereof (as so amended, the "97-1 AGREEMENT"), (ii) the
Credit and
Security Agreement dated as of August 29, 1997 by and among Lender, as lender,
Borrower, as borrower, and Guarantor, as guarantor, as amended by Amendment No.
1 thereto dated as of January 30, 1998, as further amended by the Omnibus
Amendment Agreement, the Omnibus Amendment Agreement No. 2 and the Omnibus
Amendment Agreement No. 3, and as otherwise amended, supplemented or modified
from time to time pursuant to the terms thereof (as so amended, the "97-2
AGREEMENT"), (iii) the
Credit and Security Agreement dated as of January 30,
1998 by and among Lender, as lender, Borrower, as borrower, and Guarantor, as
guarantor, as amended by the Omnibus Amendment Agreement and the Omnibus
Amendment Agreement No. 3, and as otherwise amended, supplemented or modified
from time to time pursuant to the terms thereof (as so amended, the "98-1
AGREEMENT"), (iv) the
Credit and Security Agreement dated as of November 25,
1998 by and among Lender, as lender, Borrower, as borrower, and Guarantor, as
guarantor, as amended by the Omnibus Amendment Agreement, the Omnibus Amendment
Agreement No. 2 and the Omnibus Amendment Agreement No. 3, and as otherwise
amended, supplemented or modified from time to time pursuant to the terms
thereof (as so amended, the "98-2 AGREEMENT"), (v) the Credit and Security
Agreement dated as of August 12, 1999 by and among Lender, as lender, the
Borrower, as borrower, and Guarantor, as guarantor, as amended
7
by the Omnibus Amendment Agreement No. 3, and as otherwise amended, supplemented
or modified from time to time pursuant to the terms thereof (as so amended, the
"99-1 AGREEMENT"), (vi) the Credit and Security Agreement dated as of December
9, 1999 by and among Lender, as lender, Borrower, as borrower, and Guarantor, as
guarantor, as amended by the Omnibus Amendment Agreement No. 3, and as otherwise
amended, supplemented or modified from time to time pursuant to the terms
thereof (as so amended, the "99-2 AGREEMENT"), and (vii) each other credit and
security agreement or other similar agreement between Lender and Borrower
secured by one or more certificates, excess cash flow certificates or other
residual interests in securitizations identified on EXHIBIT G hereto (as such
EXHIBIT G may be amended or supplemented from time to time in accordance with
Section 3.14 hereof), as each such other agreement may be amended, supplemented
or otherwise modified from time to time pursuant to the terms thereof.
"OTHER RF AMENDMENTS" means, collectively, the Omnibus Amendment
Agreement and Amendments No. 1 to the credit and security agreements referred to
in clauses (i) and (ii) of the definition of Other RF Agreements.
"OTHER RF EVENT OF DEFAULT" means the occurrence of any Event of
Default under and as defined in any Other Residual Financing Agreement (after
giving effect to any grace or cure period applicable thereto).
"OTHER RF OBLIGATIONS" means all obligations and liabilities of every
nature of Borrower or Guarantor from time to time owing to Lender, 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), to
the extent such obligations and liabilities arise under, out of, or in
connection with, any Other Residual Financing Agreement, any guarantees related
thereto or any other document made, delivered or given in connection therewith,
in each case whether on account of principal, premium, if any, interest, fees,
indemnities, costs, expenses or otherwise (including all fees and disbursements
of counsel to Lender).
"PARENT GROUP" means AMC, Guarantor and Borrower and each of their
respective subsidiaries and affiliates, and each other entity which owns
directly or indirectly 51% or more of the outstanding capital stock entitled to
vote in the election of directors of AMC, Guarantor or Borrower and each of
their respective subsidiaries or affiliates. Notwithstanding the foregoing,
"Parent Group" shall not include any entity formed as a result of any
transaction specified in the last sentence of the definition of "Change of
Control."
"PERSON" means an individual, partnership, limited liability company,
corporation, business trust, joint venture or other entity of whatever nature.
"PLAN" means any Person that is (i) an "employee benefit plan" (as
defined in Section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA, (ii) a "plan" (as defined in Section 4975(e)(1) of the Code) that is
subject to Section 4975 of the Code or (iii) any entity whose underlying assets
include assets of a plan described in (i) or (ii) above by reason of such plan's
investment in the entity.
8
"PLEDGED SECURITIES" means Eligible Securities pledged and held as
Collateral hereunder pursuant to Section 3.1.
"PRE-FUNDING LOAN" and "PRE-FUNDING LOANS" have the respective meanings
assigned thereto in Section 2.1 hereof.
"PRE-FUNDING ORIGINATION CONDITION" means a condition precedent to
Lender's commitment to make each of the Pre-Funding Loans hereunder. The
Pre-Funding Origination Condition will be satisfied with respect to a
Pre-Funding Loan, as determined by Lender in its sole discretion, if the
relevant Pre-Funding Originations would not, if transferred to the Trust, cause
the Receivables, including without limitation the relevant Pre-Funding
Originations, to fail to meet the criteria specified in Section 2.2(b)(xv) of
the Sale and Servicing Agreement.
"PRE-FUNDING ORIGINATIONS" means, with respect to a Pre-Funding Loan,
the relevant retail installment sale contracts originated by Guarantor (in its
capacity as Originator) and scheduled to be included in the Subsequent
Receivables to be transferred to the Trust during the Funding Period.
"PREPAYMENT RATE" means, as of any Calculation Date, the cumulative ABS
rate (calculated according to the Uniform Practices for the Clearance and
Settlement of Mortgage-Backed Securities and Other Related Securities of the
Public Securities Association) for the most recent three months, calculated
using the Principal Balance, APR, original term to maturity and remaining term
to maturity of the Receivables as reported in the related Servicer's
Certificates.
"PRESENT VALUE OF THE COLLATERAL" means, as of any Calculation Date, in
the case of the Certificate, the then current present value thereof, determined
based upon the Valuation Rates (as modified by the Valuation Model) and
calculated in accordance with Section 3.12(a), and in all other cases, the then
current market value of the Collateral.
"PRIME RATE" means the prime rate (or if a range is given, the average
prime rates) listed under "Money Rates" in THE WALL STREET JOURNAL for such date
or, if THE WALL STREET JOURNAL is not published on such date, then in THE WALL
STREET JOURNAL most recently published.
"PRINCIPAL BALANCE" has the meaning assigned thereto in Annex A to the
Sale and Servicing Agreement, without giving effect to the proviso at the end of
such definition.
"PROCEEDS" means all "proceeds" as defined in Section 9-306(1) of the
Uniform Commercial Code as in effect in the State of
New York and, in any event,
in connection with the Collateral shall include without limitation, all
collections, distributions or other income from the Pledged Securities.
"PROMISSORY NOTE" has the meaning assigned thereto in Section 2.3(a)
hereof.
"PURCHASE AGREEMENT" means the Purchase Agreement, dated as of June 1,
2000, between LBAC and Borrower, as amended, supplemented or otherwise modified
from time to time.
"RECOURSE PROPERTY" has the meaning assigned thereto in Section 2.10.
9
"RECOVERY RATE" means, as of any Calculation Date, the arithmetic
average of the Monthly Recovery Rates for the most recent three months.
"REMITTANCE DATE" means the 19th day of each month or, if such day is
not a Business Day, the immediately succeeding Business Day, commencing July 19,
2000.
"REQUIREMENT OF LAW" means, as to any Person, any law, statute, rule,
treaty, regulation, or determination of an arbitrator, court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its properties or to which any such Person or any of its properties
may be bound or affected.
"RESPONSIBLE OFFICER" means the president, chief executive officer,
chief financial officer, any executive vice president, secretary, vice
president-finance, comptroller or treasurer of Borrower, Guarantor or AMC, as
applicable.
"REVISED DATA FILE" has the meaning assigned thereto in Section 2.2(a)
hereof.
"SALE AND SERVICING AGREEMENT" means the Sale and Servicing Agreement,
dated as of June 1, 2000, among the Trust, as issuer, LBAC, as originator of the
receivables and servicer, Borrower, as transferor, and The Chase Manhattan Bank,
as indenture trustee, back-up servicer, custodian and trust collateral agent, as
amended, supplemented or otherwise modified from time to time in accordance with
the terms thereof.
"SECURITIZATION TRANSACTION" has the meaning assigned thereto in the
recitals hereto.
"SECURITY AGREEMENT" means the Security Agreement dated as of January
30, 1998 made by Long Beach Acceptance Corp., as Pledgor, in favor of Greenwich
Capital Financial Products, Inc., as Pledgee, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof.
"SERIES SUPPLEMENT" has the meaning assigned thereto in the Spread
Account Agreement.
"SPREAD ACCOUNT AGREEMENT" means the Master Spread Account Agreement
dated as of June 1, 2000, among Borrower, the Certificate Insurer, the Indenture
Trustee and the Collateral Agent, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof.
"TARGET ADVANCE RATE" means, as of any Calculation Date, 60%.
"TRANCHE A LOAN" has the meaning assigned thereto in Section 2.1
hereof.
"TRANCHE B LOAN" has the meaning assigned thereto in Section 2.1
hereof.
"TRANCHE C LOAN" has the meaning assigned thereto in Section 2.1
hereof.
"TRANCHE D LOAN" has the meaning assigned thereto in Section 2.1
hereof.
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"TRIGGER EVENT" shall have the meaning assigned to such term in the
Spread Account Agreement.
"TRUST" has the meaning assigned thereto in the Trust Agreement.
"TRUST AGREEMENT" means the Trust Agreement dated as of May 1, 2000,
between Borrower, as transferor, and Wilmington Trust Company, as owner trustee,
as amended and restated as of June 1, 2000, and as otherwise amended,
supplemented or modified from time to time in accordance with the terms thereof.
"VALUATION MODEL" means a proprietary cash flow valuation model in
computer spread sheet form to be used by Lender in calculating the Present Value
of the Collateral and making related calculations on each Calculation Date.
"VALUATION RATES" means, collectively, the Prepayment Rate, the Average
Constant Default Rate, the Recovery Rate and the Discount Rate.
"VSI POLICY" has the meaning assigned thereto in Annex A to the Sale
and Servicing Agreement, without giving effect to the proviso of such
definition.
"WAREHOUSE LENDING AGREEMENT" means the Warehouse Lending Agreement
dated as of January 30, 1998 between Long Beach Acceptance Corp., as Borrower,
and Greenwich Capital Financial Products, Inc., as Lender, as amended by the
Renewal and Amendment Agreement dated as of January 29, 1999, and as otherwise
amended, supplemented or modified from time to time in accordance with the terms
thereof.
"WAREHOUSE OBLIGATIONS" means the Obligations (as defined in the
Warehouse Lending Agreement) under the Warehouse Lending Agreement.
Capitalized terms used but not defined herein shall have the meanings
assigned thereto in Annex A to the Sale and Servicing Agreement.
2. The Loans.
2.1. AGREEMENT TO LEND. Subject to the terms and conditions of this Agreement,
(i) Lender agrees to lend to Borrower on the Closing Date, an aggregate
principal amount not to exceed three million, eight hundred thousand, three
hundred seventy-three dollars and sixty cents ($3,803,373.60) (the "TRANCHE A
LOAN") and (ii) Lender agrees to lend to Borrower on any date during each
Availability Period (not to exceed three (3) Availability Periods) principal
amounts, the aggregate of which is not to exceed one million, nine hundred
thirty-four thousand, nine hundred sixty-eight dollars and twenty cents
($1,934,968.20) (the borrowings pursuant to this clause (ii), the "TRANCHE B
LOAN," the "TRANCHE C LOAN" and the "TRANCHE D LOAN," respectively (each, a
"PRE-FUNDING LOAN", and collectively, the "PRE-FUNDING LOANS"), such Loans being
secured by the Collateral; PROVIDED, HOWEVER, that after giving effect to any
Pre-Funding Loan, the Advance Rate shall not exceed the Target Advance Rate. The
proceeds of the Tranche A Loan shall be used by Borrower to make the initial
deposits required to be made to the Spread Account pursuant to the Spread
Account Agreement and to the Class B Reserve Account pursuant to the Sale and
Servicing Agreement.
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2.2. PROCEDURE FOR PRE-FUNDING LOANS. (a) The Borrower may request the making of
a Pre-Funded Loan hereunder by delivering to Lender a notice in the form of
Exhibit D hereto (a "NOTICE OF BORROWING") not later than 12:00 noon,
New York
City time, on any Business Day during the relevant Availability Period,
appropriately completed to specify the aggregate amount of such Pre-Funding Loan
requested. The Notice of Borrowing shall be accompanied or preceded (provided
that the Notice of Borrowing must be delivered to Lender in the calendar month
in which Lender receives the relevant Initial Data File) by a data file (an
"INITIAL DATA FILE") relating to the relevant Pre-Funding Originations as of the
close of business on the last day of the calendar month immediately preceding
the month in which the Subsequent Transfer of such Pre-Funding Originations are
to be made in a format consistent with the data file relating to the Initial
Receivables delivered to Lender. If the relevant Initial Data File is received
by Lender by no later than 12:00 noon,
New York City time, on any Business Day
during the relevant Availability Period, Lender shall, by no later than 5:00
p.m.,
New York City time, on the third Business Day immediately succeeding the
Business Day on which such Initial Data File is received by Lender, advise
Borrower as to whether such Initial Data File contains all data as is necessary
and in such format, in each case as determined by Lender in its sole discretion,
for Lender to confirm satisfaction of the Pre-Funding Origination Condition (an
"ACCEPTABLE DATA FILE") with respect to the related Subsequent Receivables. In
the event that Lender advises Borrower that the relevant Initial Data File is
deficient in any respect, Borrower shall provide Lender with a revised data file
(the "REVISED DATA FILE") relating to the relevant Pre-Funding Originations as
of the close of business on the last day of the calendar month immediately
preceding the calendar month in which such Pre-Funding Loan is to be made. If
the relevant Revised Data File is received by Lender by no later than 12:00
noon,
New York City time, on any Business Day during the relevant Availability
Period, Lender shall, by no later than 5:00 p.m.,
New York City time, on the
immediately succeeding Business Day, advise Borrower as to whether such Revised
Data File constitutes an Acceptable Data File. The foregoing procedures for
delivery and approval of a Revised Data File may be repeated as often as is
necessary during the relevant Availability Period until such time as Lender
advises Borrower that it has received a relevant Acceptable Data File. If the
relevant Initial Data File or any relevant Revised Data File is received by
Lender after 12:00 noon,
New York City time, on any Business Day, receipt by
Lender of such Initial Data File or such Revised Data File, as applicable, shall
be deemed to have occurred at 9:00 a.m.,
New York City time, on the immediately
succeeding Business Day.
(b) Subject to the prior or contemporaneous satisfaction of each
condition precedent specified in Section 7.2 hereof during the relevant
Availability Period, Lender shall disburse the relevant Pre-Funding Loan no
later than the close of business on the Business Day immediately succeeding the
Business Day on which Lender has received a relevant Acceptable Data File.
2.3. PROMISSORY NOTE. (a) Borrower's obligation to repay the Loans extended
pursuant hereto and interest thereon shall be evidenced by a single promissory
note of Borrower payable to the order of Lender, substantially in the form of
EXHIBIT A hereto (as amended, supplemented or otherwise modified from time to
time, the "PROMISSORY NOTE").
(b) The date and amount of each Loan by Lender and the date and amount
of each payment of principal made by Borrower shall be evidenced by entries made
by Lender in its books and records kept by it in the normal course of its
business. Borrower agrees and acknowledges that such books and records of Lender
documenting actual amounts received from
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Borrower shall constitute PRIMA FACIE evidence of Borrower's indebtedness
outstanding hereunder.
2.4. INTEREST. (a) Borrower agrees to pay to Lender interest on the unpaid
principal amount of each Loan from and including the date such Loan is extended
to but not including the date on which such Loan is paid in full. Interest shall
accrue on an adjustable basis at a rate per annum equal to LIBOR plus the
Margin. LIBOR with respect to the interest payment to be made on each Remittance
Date shall be equal to LIBOR as determined on the related Interest Rate
Determination Date. Accrued interest shall be payable in arrears on each
Remittance Date, and on the date of repayment in full of each Loan.
(b) If Borrower shall fail to pay when due (whether at stated maturity,
by acceleration or otherwise) any principal, interest or other Obligation due
and owing to Lender under this Agreement or the Promissory Note, and such
failure to pay shall constitute an Event of Default, Borrower shall pay to
Lender on demand such principal, interest or other Obligation together with
interest on such principal, interest (to the extent permitted by applicable law)
or other Obligation in default from and including the date such payment became
due until payment thereof in full (after as well as before judgment) at a rate
per annum equal to LIBOR plus five (5) percent per annum.
(c) If, by the terms of this Agreement or the Promissory Note, Borrower
at any time is required or obligated to pay interest at a rate in excess of the
maximum rate permitted by applicable law, the rate of interest shall be deemed
to be immediately reduced to such maximum rate and the portion of all prior
interest payments in excess of such maximum rate shall be applied and shall be
deemed to have been payments made in reduction of the principal amount due
hereunder and under the Promissory Note.
(d) All interest payable hereunder shall be computed based on actual
number of days elapsed in a year of 360 days.
2.5. REPAYMENT OF THE LOANS. Subject to Section 8, (a) all Loans outstanding
shall be repaid in full on the Maturity Date, together with accrued but unpaid
interest thereon and (b) pursuant to the agreement described in Section 2.7(b),
Borrower shall cause the Trust Collateral Agent to remit directly to Lender all
distributions payable under the Sale and Servicing Agreement and the Spread
Account Agreement to the Certificateholder until such time as all Loans and all
other Obligations of Borrower to Lender hereunder are paid in full.
2.6. OPTIONAL PREPAYMENTS. Borrower may at any time and from time to time upon
two (2) Business Days' prior written notice to Lender prepay any Loan in whole
or in part, without premium, together with accrued interest to the date of such
prepayment on the amount prepaid. Any amounts prepaid by Borrower hereunder may
not be reborrowed.
2.7. PAYMENT PROCEDURES. (a) Borrower agrees and acknowledges that Borrower
will, immediately upon an Event of Default or an Other RF Event of Default (i)
re-register any securities (other than the Certificate) delivered as Collateral
hereunder into Lender's name and (ii) subject to Section 3.7 of the Trust
Agreement, upon the request of Lender, re-register the Certificate in the name
of a Bankruptcy Remote Entity designated by Lender.
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(b) On or prior to the Closing Date, Borrower will provide Trust
Collateral Agent under the Sale and Servicing Agreement with a notice providing
for, among other things, all remittances on the Certificate to be paid to Lender
to the full extent of Borrower's Obligations to Lender hereunder and Borrower's
Other RF Obligations to Lender under the Other Residual Financing Agreements,
which notice to Trust Collateral Agent will be irrevocable for so long as any of
the Obligations or Other RF Obligations remain outstanding (unless otherwise
consented to in writing by Lender). All amounts received in respect of the
Certificate or other Collateral will be applied first to satisfy the Obligations
and then to satisfy the Other RF Obligations. Any amounts received by Lender in
excess of the Obligations and Other RF Obligations due and owing to Lender shall
be remitted by Lender to Borrower. Any amounts received by Lender pursuant to
this Section 2.7(b) prior to 6:00 p.m.,
New York City time, on any Business Day
shall be deemed to be received on such Business Day, and any amounts received by
Lender after 6:00 p.m., New York City time, on any Business Day shall be deemed
to be received on the next succeeding Business Day.
(c) All payments to Lender hereunder or under the Promissory 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 Lender (Account No. 140095961 at The Chase
Manhattan Bank, ABA No. ▇▇▇▇▇▇▇▇▇, or such other account or accounts as Lender
shall specify to Borrower in writing no later than one Business Day prior to the
related due date).
(d) Any payments made hereunder shall be applied first against costs
and expenses due hereunder pursuant to Section 9.1; then against default
interest, if any; then against interest due on the Loans; and thereafter against
the unpaid principal of the Loans.
2.8. INDEMNITY. Borrower agrees to indemnify Lender and to hold it harmless from
any cost, loss or expense which Lender may sustain or incur as a consequence of
any acceleration of the maturity of any Loan by Lender in accordance with the
terms of this Agreement, including, but not limited to, any cost, loss or
expense arising in liquidating the Loans and from interest or fees payable by
Lender to lenders of funds obtained by it in order to maintain the Loans
hereunder. In the event Borrower is required to make any payment pursuant to
this Section 2.8, Lender shall provide to Borrower in writing the basis upon
which such charges were calculated in reasonable detail.
2.9. ILLEGALITY; SUBSTITUTED INTEREST RATE. Notwithstanding any other provisions
herein, (a) if any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for Lender to make or maintain the
Loans at LIBOR as contemplated by this Agreement, or (b) in the event that
Lender shall have determined (which determination shall be conclusive and
binding upon Borrower) that by reason of circumstances affecting the LIBOR
interbank market either adequate and reasonable means do not exist for
ascertaining LIBOR, (x) the obligation of Lender to make or maintain the Loans
at LIBOR shall forthwith be suspended and Lender shall promptly notify Borrower
thereof (by telephone confirmed in writing) and (y) the Loans shall, from and
including the next Remittance Date, or at such earlier date as may be required
by law, until payment in full thereof, bear interest at the rate per annum equal
to the greater of the Prime Rate and the rate of interest (including the Margin)
in effect on the date
14
immediately preceding the date any event described in clause (a) or (b) occurred
(calculated on the basis of the actual number of days elapsed in a year of 360
days). If any such conversion of LIBOR to the Prime Rate is made on a day which
is not a Remittance Date, Borrower shall pay to Lender such amounts, if any, as
may be required to compensate Lender for any cost, loss or expense which Lender
may incur as a consequence of such conversion on a day which is not a Remittance
Date, including any interest or fees payable by Lender to lenders of funds
obtained by it in order to maintain the Loans. If subsequent to such suspension
of the obligation of Lender to make or maintain the Loans at LIBOR it becomes
lawful for Lender to make or maintain the Loans at LIBOR, or the circumstances
described in clause (b) above no longer exist, Lender shall so notify Borrower
and the LIBOR-based rate on the Loans shall be reinstated effective as of the
date it becomes lawful for Lender to make or maintain the Loans at LIBOR, or the
circumstances described in clause (b) above no longer exist.
2.10. LIMITED RECOURSE. The Obligations of Borrower hereunder shall be limited
in recourse to the property and assets of Borrower which Borrower pledges on the
date hereof, or may hereinafter from time to time pledge, as Collateral pursuant
to the terms of this Agreement (the "RECOURSE PROPERTY"). To the extent that the
Recourse Property is insufficient to satisfy the Obligations of Borrower
hereunder, Lender shall have no claim against Borrower or any property or assets
of Borrower that are not on the date hereof or have not been, as of the
applicable date, so pledged. Notwithstanding the foregoing, however, the
Obligations of Guarantor hereunder and under the Guarantee shall be fully
recourse to Guarantor and all property and assets of Guarantor, whether now
owned or hereinafter acquired, and Guarantor shall remain liable for all
Obligations of Borrower hereunder pursuant to the terms of the Guarantee.
3. Grant of Security Interest; Eligible Collateral.
3.1. VALID SECURITY INTEREST. As security for the prompt and complete payment
when due (whether at the Maturity Date, by acceleration or otherwise) of the
Obligations, Other RF Obligations and Warehouse Obligations, Borrower hereby
pledges, assigns and transfers to Lender and its successors, endorsees,
transferees and assigns and hereby grants to Lender and its successors,
endorsees, transferees and assigns a continuing, first priority security
interest in all of Borrower's right, title and interest in the following
property, whether now owned by Borrower or hereafter acquired and whether now
existing or hereafter coming into existence (all being collectively referred to
as "COLLATERAL"):
(a) the Certificate delivered to and held by Lender or its
designee or agent and all rights to receive payments payable under the
Sale and Servicing Agreement to the Certificateholder pursuant to the
terms and provisions of the Sale and Servicing Agreement and the Spread
Account Agreement;
(b) any other cash, Eligible Securities, or other property
acceptable to Lender in its sole discretion and transferred or
otherwise delivered to Lender or its agent from time to time and
designated by Borrower as Collateral hereunder; and
(c) all Proceeds of any of the foregoing, including, in any
event, all causes of action, claims and warranties now or hereafter
held by
15
Borrower or its designee or agent in respect of any of the foregoing,
all shares, securities, moneys (including cash) or property
representing a current dividend or distribution on any of the Pledged
Securities or resulting from a split-up, revision, reclassification, or
other like change of any of the Pledged Securities or otherwise
received in exchange therefor, all current income and distributions
with respect to any of the foregoing and, to the extent related to any
of the foregoing, all books, correspondence, files, records and other
papers necessary to protect Lender's security interest hereunder.
3.2. FURTHER ASSURANCES. At any time and from time to time, upon the written
request of Lender and at the sole expense of Borrower, Borrower will promptly
and duly execute and deliver such further instruments and documents and take any
and all such further action required by Lender in order to ensure Lender has a
valid, first priority, perfected security interest in the Collateral and for the
purpose of preserving the full benefits of this Agreement and of the rights and
powers herein granted, including, without limitation, filing any financing or
continuation statements under the Uniform Commercial Code in effect in any
jurisdiction with respect to the Liens created hereby, assigning or endorsing
Collateral in blank or to Lender or its designee and delivering Collateral to
Lender or Lender's Custodian. Borrower also hereby authorizes Lender to file any
such financing or continuation statement in respect of the Collateral without
the signature of Borrower to the extent permitted by applicable law. A carbon,
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement for filing in any jurisdiction.
3.3. DATA REPORTING. Borrower and Guarantor will deliver or cause to be
delivered to Lender: (a) copies of all reports, statements and certificates
required to be delivered by Borrower or Guarantor to Lender or any other party
pursuant to the Basic Documents; and (b) prompt notice of: (i) any material
adverse developments with respect to pending or future litigation involving
Borrower or Guarantor, if any, upon obtaining knowledge thereof; (ii) any other
developments which might materially and adversely affect the financial condition
of Borrower or Guarantor, upon obtaining knowledge thereof; (iii) the
acceleration of any debt obligation or the termination of any credit facility of
Borrower or Guarantor, if any, and (iv) the amount and maturity of any debt
assumed after the date hereof, if any, by Borrower or Guarantor.
3.4. POWERS. (a) Borrower hereby irrevocably constitutes and appoints Lender and
any officer or agent of Lender 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 Borrower and in the name of Borrower or in its own name, from time
to time in Lender's discretion, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments which may be reasonably necessary to accomplish
the purposes of this Agreement.
(b) Borrower also authorizes Lender, from time to time if an Event of
Default or Other RF Event of Default shall have occurred and be continuing, to
execute and/or file and record, in connection with any sale provided for herein,
any endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral.
16
3.5. NO DUTY ON THE PART OF LENDER. The powers conferred on Lender and hereunder
are solely to protect Lender's interests in the Collateral and shall not impose
any duty upon Lender to exercise any such powers. Lender shall be accountable
only for amounts that it actually receives as a result of the exercise of such
powers, and neither it nor any of its officers, directors, employees,
affiliates, agents or successors shall be responsible to Borrower for any act or
failure to act hereunder, except for their gross negligence or willful
misconduct.
3.6. PERFORMANCE BY LENDER OF BORROWER'S OBLIGATIONS. If Borrower fails to
perform or comply with any of its agreements contained herein and Lender, as
provided for by the terms of this Agreement, shall perform or comply, or
otherwise cause performance or compliance, with such agreements, the reasonable
expenses of Lender incurred in connection with such performance or compliance,
together with interest thereon at a rate per annum equal to the default rate
applicable to the Loans as set forth in this Agreement, shall be payable by
Borrower to Lender on demand, and Borrower's obligations to make such payments
shall constitute Obligations secured hereby.
3.7. LIMITATION ON DUTIES REGARDING PRESERVATION OF COLLATERAL. Lender's sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the Code or otherwise,
shall be to deal with it in the same manner as Lender deals with similar
property for its own account. Neither Lender nor any of its directors, officers,
employees, affiliates or agents shall be liable for failure to demand, collect
or realize upon all or any part 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 Borrower or any other Person.
3.8. POWERS COUPLED WITH AN INTEREST. All authorizations and agencies herein
contained with respect to the Collateral are powers coupled with an interest and
are irrevocable until the termination of the security interest created by this
Agreement in accordance with Section 3.9 hereof.
3.9. TERMINATION. The security interest created by this Agreement shall not be
released until the payment in full of the Obligations and Other RF Obligations
shall have occurred and Lender's commitment under this Agreement shall have
terminated; PROVIDED that if any payment, or any part thereof, of any of the
Obligations or Other RF Obligations is rescinded or must otherwise be restored
or returned by Lender upon the insolvency, bankruptcy, dissolution, liquidation
or reorganization of Borrower or Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or a trustee or similar
officer for, Borrower or Guarantor or any substantial part of its property, or
otherwise, this Agreement, all rights hereunder and the Liens created hereby
shall continue to be effective, or be reinstated, as though such payments had
not been made.
3.10. SEGREGATION OF FUNDS. All payments which are received by Borrower or
Guarantor in connection with the Collateral contrary to any provision of this
Agreement, the Guarantee or the Basic Documents shall be held by Borrower or
Guarantor, as the case may be, in trust for Lender, segregated from all other
funds of Borrower or Guarantor, as the case may be, and shall forthwith upon
receipt by Borrower or Guarantor, as the case may be, be turned over to Lender
in the exact form received by Borrower or Guarantor, respectively (duly endorsed
by Borrower or Guarantor to Lender, if required), to be applied to the
Obligations and Other RF Obligations.
17
3.11. THE SPREAD ACCOUNT. Lender acknowledges that pursuant to the Spread
Account Agreement, Borrower, as holder of the Certificate, has pledged and
created a security interest in certain funds and property in the account
designated in the Spread Account Agreement as the "Series 2000-1 Spread
Account." Lender acknowledges that the pledge and grant of the security interest
created herein in no way impairs or affects Borrower's pledge of such funds and
property.
3.12. ADVANCE RATE MAINTENANCE; RELEASE OF EXCESS COLLATERAL. (a) Lender shall
determine the Present Value of the Collateral and the Advance Rate monthly
within five Business Days following each Remittance Date based upon the
Valuation Rates as modified by the Valuation Model (each such date of
determination, a "CALCULATION DATE").
(b) After the first Calculation Date on which the Advance Rate exceeds
the Maintenance Advance Rate, in the event that as of any Calculation Date
(after such first Calculation Date) the Advance Rate exceeds the Maintenance
Advance Rate, (i) Borrower shall, within one Business Day of such Calculation
Date, pay down the Loans or pledge additional Collateral (and comply with the
provisions of Section 8.2(b)(ii) in respect thereof) in the amount necessary to
cause the Advance Rate not to exceed the Maintenance Advance Rate and (ii) until
such time as the Advance Rate equals or is less than the Maintenance Advance
Rate, all funds received by Borrower in respect of and Proceeds of all
Collateral shall be remitted by Borrower to Lender and applied in the manner set
forth in Section 2.7(c).
(c) After the first Calculation Date on which the Advance Rate exceeds
the Maintenance Advance Rate, in the event that at the determination of the
Advance Rate as contemplated in Section 3.12(a) (after such first Calculation
Date) the Advance Rate is less than the Target Advance Rate by an amount such
that, after giving effect to a release of a Pledged Security (such released
security, a "DESIGNATED SECURITY") as Collateral hereunder, the Advance Rate
would continue to be less than the Target Advance Rate, Borrower may request
(subject to the conditions set forth in the next sentence) that Lender release
such Designated Security to Borrower. So long as no Event of Default or Other RF
Event of Default has occurred and is continuing and so long as the Additional
Collateral Release Condition is satisfied, Lender will release and deliver such
Designated Security to Borrower within five (5) Business Days following such
request, unless Lender reasonably determines that, after giving effect to such
release, the Advance Rate would no longer continue to be less than the Target
Advance Rate.
3.13. VALUATION MODEL. Lender hereby agrees to provide to Borrower a copy of its
Valuation Model on or before the Closing Date. In connection with Lender's
provision of the Valuation Model to Borrower, Borrower, Guarantor and Lender
each expressly acknowledge and agree as follows:
(a) Lender shall be entitled, in the case of any manifest error or
manifest inaccuracy contained in the Valuation Model, to revise or modify the
Valuation Model to correct any such error or inaccuracy and shall, as soon as
reasonably practicable, provide to Borrower a copy of such Valuation Model as so
revised or modified. Following the provision of such revised or modified
Valuation Model to Borrower, all calculations of the Present Value of the
Collateral and all related calculations shall be made on all subsequent
Calculation Dates in accordance with such Valuation Model as so revised or
modified.
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(b) Borrower and Guarantor hereby acknowledge and agree that the
Valuation Model is proprietary to Lender, and that the Valuation Model shall not
be used by Borrower or Guarantor, or any of their respective affiliates,
subsidiaries, directors, officers, agents or employees, as applicable
(collectively, the "AMC GROUP"), for any purpose other than determining the
Present Value of the Collateral and making relating calculations in connection
therewith, and shall at all times be maintained by each member of the AMC Group
as confidential.
(c) Borrower and Guarantor further acknowledge and agree that Lender is
furnishing the Valuation Model to Borrower solely as an accommodation in
connection with the transactions contemplated by this Agreement. Lender makes no
representation or warranty (whether express or implied, oral or written) as to
the accuracy or completeness, or fitness for a particular use, of the Valuation
Model, and assumes no responsibility whatsoever to any member of the AMC Group
in connection with any use of such Valuation Model and, consequently, no member
of the AMC Group is relying upon Lender or the Valuation Model in such regard.
(d) In consideration of Lender's providing the Valuation Model to
Borrower, for which Lender is not receiving any compensation, each member of the
AMC Group hereby unconditionally and irrevocably releases and discharges Lender
and its respective affiliates, directors, officers, agents, employees and
representatives from, and agrees to indemnify, hold harmless and reimburse any
such party or parties with respect to, any and all actions, liabilities, losses,
damages or claims of any kind or nature whatsoever (including, without
limitation, reasonable attorney's fees and expenses), as incurred, that may be
imposed on or incurred by or asserted against any such party or parties in any
way relating to or arising out of Lender's release of such Valuation Model to
Borrower.
3.14. EXHIBIT G. Exhibit G hereto may be amended or supplemented from time to
time by (i) written notice from Lender to Borrower of any such amendment or
supplement or (ii) delivery by Lender to Borrower of a copy of Exhibit G as so
amended or supplemented; PROVIDED that such amendment or supplement relates to
one or more credit and security agreements or other similar agreements between
Lender and Guarantor. In addition, if Lender delivers changes to Exhibit G to
any Other Residual Financing Agreement as provided therein, Exhibit G hereto
shall automatically and without further action be amended by such changes;
PROVIDED that such change relates to one or more credit and security agreements
or other similar agreements between Lender and Guarantor. For all purposes of
the Warehouse Lending Agreement and the Security Agreement, EXHIBIT G hereto
will be deemed to be designated as "SCHEDULE G."
3.15. PAYMENT OF EXCESS CASH FLOW. Upon receiving a distribution pursuant to
Section 2.5(b) hereof in respect of amounts distributable to the
Certificateholder under the Sale and Servicing Agreement and the Spread Account
Agreement, Lender shall remit to Borrower an amount equal to 40% of any such
distribution by 4:00 p.m., New York City time, on the date of receipt by Lender,
in the case of distributions received by Lender before 1:00 p.m., New York City
time, and by 12:00 noon, New York City time, on the Business Day immediately
succeeding the date of receipt by Lender, in the case of distributions received
by Lender after 1:00 p.m., New York City time; PROVIDED, HOWEVER, that if a
Trigger Event (as defined in the Spread Account Agreement, the 98-2 Spread
Account Agreement, the 99-1 Spread Account Agreement or the 99-2
19
Spread Account Agreement) or a GCFP Trigger Event has occurred and is
continuing, Lender shall not remit to Borrower any amounts received by Lender
pursuant to Section 2.5(b) hereof. Lender shall remit any amounts payable to
Borrower pursuant to the immediately preceding sentence to Borrower's account
(Account No. 00102672111) at Chase Bank of Texas, National Association (ABA No.
▇▇▇▇▇▇▇▇▇).
4. Representations and Warranties.
Each of Borrower and Guarantor hereby represents and warrants to Lender
as of the date of this Agreement and on an ongoing basis on each date that any
Loan is outstanding hereunder as follows:
4.1. ORGANIZATION. It is a corporation duly incorporated and validly existing in
good standing under the laws of the State of Delaware and is duly qualified to
do business in each jurisdiction in which the failure to be so qualified could
reasonably be expected to have a material adverse effect on its financial
condition, operations, business or prospects.
4.2. POWER AND AUTHORITY. It has all requisite corporate power and has all
material governmental licenses, authorizations, consents and approvals necessary
to own its assets and carry on its business as now being conducted (except as
could not reasonably be expected to have a material adverse effect on its
financial condition, operations, business or prospects), and to execute and
deliver and perform its obligations under this Agreement, including the pledge
and delivery of Collateral hereunder, and, in the case of Borrower, the
Promissory Note, and, in the case of Guarantor, the Guarantee.
4.3. 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 Borrower, the Promissory Note, and, in the case of Guarantor, the
Guarantee, and to authorize the performance and observance of the terms hereof
and thereof.
4.4. AGREEMENT BINDING. This Agreement constitutes, and the Promissory Note and
Guarantee, when executed and delivered for value will be duly executed and
delivered and will constitute, a legal, valid and binding obligation of Borrower
and Guarantor, as applicable, enforceable in accordance with their respective
terms, except as enforceability may be limited by laws governing insolvency or
creditors' rights generally and general equity principles. The execution,
delivery and performance of this Agreement, the Promissory Note and the
Guarantee does not and 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 Borrower or Guarantor is a
party or by which it is bound.
4.5. COMPLIANCE WITH LAW. It is conducting its business and operations in
compliance with all applicable laws, regulations, ordinances and directives of
governmental authorities, except to the extent that any noncompliance could not
reasonably be expected to have a material adverse effect on its financial
condition, operation, business or prospects. It has filed all tax returns
required to be filed and has paid all taxes due in respect of the ownership of
its assets or the conduct of its operations except (a) to the extent that the
payment of such taxes is being
20
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.
4.6. 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 Borrower of this
Agreement and the Promissory Note and by Guarantor of this Agreement and the
Guarantee have been obtained and are in effect, except as could not reasonably
be expected to have a material adverse effect on its financial condition,
operations, business or prospects or on its ability to perform the Obligations.
4.7. LITIGATION. Except for those actions, suits or proceedings, if any, listed
on Exhibit F hereto, 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 best of its knowledge, threatened against or affecting it
which, if determined adversely, may reasonably be expected to have a material
adverse effect on its business, operations or financial condition.
4.8. FINANCIAL STATEMENTS. The unaudited balance sheets of Guarantor as at March
31, 2000 and the related statements of income for the fiscal periods ended on
such date, heretofore furnished to Lender, are complete and correct in all
material respects and fairly present the financial condition of Guarantor as at
said date (subject to normal year-end audit adjustments), all in accordance with
U.S. generally accepted accounting principles applied on a consistent basis. On
said dates, Guarantor 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 sheets as at said dates. Since March
31, 2000 there has been no material adverse change in the operations, condition
(financial or otherwise), business or prospects of Guarantor from that set forth
in said financial statements as at said date.
4.9. OTHER OBLIGATIONS. It is not in default in the performance, observance or
fulfillment of any obligation, covenant or condition in any of the Basic
Documents or in any agreement or instrument to which it is a party or by which
it is bound the result of which could reasonably be expected to have a material
adverse effect on its business, operations or financial condition.
4.10. REGULATION G. No proceeds of any Loan will be used, directly or
indirectly, by Borrower for the purpose of purchasing or carrying any Margin
Stock (as defined in Regulation G of the Board of Governors of the Federal
Reserve System) or for the purpose of reducing or retiring any indebtedness
which was originally incurred to purchase or carry Margin Stock or for any other
purpose which might cause any Loan to be a "purpose credit" within the meaning
of Regulation G.
4.11. 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.
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4.12. CHIEF EXECUTIVE OFFICE. The chief executive office of Borrower is located
at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇.
4.13. COLLATERAL SECURITY. (a) Except for the Liens granted to Lender pursuant
to this Agreement and Liens referred to in Section 3.11, Borrower owns and will
own each item which it pledges on the date hereof or may hereinafter pledge as
Collateral, free and clear of any and all Liens. No security agreement,
financing statement or other public notice similar in effect with respect to all
or any part of the Collateral is or will be on file or of record in any public
office, except such as have been or may hereinafter be filed in favor of Lender
pursuant to this Agreement, and except in connection with the security interest
referred to in Section 3.11.
(b) This Agreement is effective to create, as collateral security for
the Obligations, the Other RF Obligations and the Warehouse Obligations valid
and enforceable Liens on the Collateral in favor of Lender.
(c) Upon filing of the financing statement(s) delivered to Lender by
Borrower on the Closing Date with the Secretary of State of the State of New
Jersey (which financing statement(s) is in proper form for filing in such
jurisdiction) and the delivery to, and continuing possession by, Lender or its
nominee of the Pledged Securities, the Liens created pursuant to this Agreement
will constitute a first priority perfected security interest in the Collateral
in favor of Lender (except to the extent the Collateral may be deemed to
represent funds on deposit in the Spread Account as referred to in Section
3.11), which Liens will be prior to all other Liens of all other Persons and
which Liens are enforceable as such as against all other Persons.
4.14. OWNERSHIP OF PROPERTIES. Borrower has good and marketable title to any and
all of its properties and assets free and clear of Liens, except as contemplated
by this Agreement and the Basic Documents, and except for Liens as may have been
or may be created on property other than the Collateral in connection with past
or future securitizations of receivables.
4.15. FULL DISCLOSURE. No representation or warranty made by or on behalf of
Borrower or Guarantor contained in this Agreement or the Guarantee and no
written information or information in any certificate, financial statement or
report furnished or to be furnished by or on behalf of Borrower or Guarantor
(including without limitation the information to be furnished pursuant to
Section 2.2(a) hereof) hereunder or thereunder or in connection with the
transactions contemplated hereby or thereby contains or will contain an untrue
statement of a material fact, or omits or will omit to state any material fact
necessary to make the statements herein or therein contained, in light of the
circumstances in which made, not misleading.
4.16. ERISA. Set forth on Schedule 4.16 hereto is a list of all Plans, if any,
maintained by Borrower or Guarantor or any of their respective subsidiaries (as
applicable). Except as may be set forth on such schedule, neither Borrower nor
Guarantor nor any of their respective subsidiaries (as applicable) maintains any
Plans, and each of Borrower and Guarantor agrees to notify Lender in advance of
forming any Plans. Neither Borrower nor Guarantor nor any Commonly Controlled
Entity 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. Each of
Borrower and Guarantor will give notice if at
22
any time it or any Commonly Controlled Entity has any obligations or liabilities
with respect to any employee pension benefit plan or Multiemployer Plan. All
Plans maintained by Borrower or Guarantor or any Commonly Controlled Entity are
in substantial compliance with all applicable laws (including ERISA). Neither
Borrower nor Guarantor is an employer under any Multiemployer Plan.
4.17. BASIC DOCUMENTS. Each of the representations and warranties made by it in
the Basic Documents to which it is a party is true and correct; PROVIDED that
this representation shall not be deemed to have been breached if (i) Borrower or
Guarantor, as the case may be, shall have breached a representation or warranty
contained in any Basic Document but such party shall have cured such breach
within the applicable cure period, if any, set forth in the applicable Basic
Document or (ii) Guarantor shall have breached any representation set forth in
Section 3.2(b) of the Purchase Agreement, so long as (x) Guarantor complies with
its obligations under Section 6.2 of the Purchase Agreement with respect to such
breach or (y) AMC complies with its obligations under the AMC Guarantee in
connection with Guarantor's obligations under Section 6.2 of the Purchase
Agreement with respect to such breach.
5. Affirmative Covenants.
Each of Borrower and Guarantor (where indicated) hereby covenants to
Lender that, until the payment in full and final performance of all of
Borrower's and Guarantor's obligations to Lender under this Agreement, the
Promissory Note and the Guarantee, it shall perform the following obligations:
5.1. NOTICE. (a) Each of Borrower and Guarantor shall promptly give notice to
Lender and the Certificate Insurer of the occurrence of (i) any Default, Event
of Default or Other RF Event of Default, specifying the event and the action
which Borrower proposes to take with respect thereto, (ii) any event or
occurrence which will or could reasonably be expected to adversely affect the
collectibility of any of the Receivables or the ability of Guarantor to service
such Receivables or the ability of Borrower or Guarantor to perform its
respective obligations under any related documents or (iii) any other event or
occurrence which individually or in the aggregate could reasonably be expected
to materially and adversely affect Borrower's or Guarantor's financial
condition, operations, business or prospects. Each of Borrower and Guarantor
agrees to provide contemporaneously to AMC a copy of any notice provided to
Lender pursuant to the preceding sentence; PROVIDED that failure of Borrower or
Guarantor to deliver such notice to AMC shall not in any way affect (i) the
obligations or liabilities of AMC under the AMC Guarantee, (ii) any rights of
Lender with respect to AMC or (iii) any other provisions or any interpretation
of this Agreement, the Guarantee, the AMC Guarantee or any document related
thereto.
(b) Borrower shall provide Lender promptly with copies of all notices
which it is required to deliver to the Trust Collateral Agent, the Owner Trustee
and/or the Indenture Trustee pursuant to the terms of the Sale and Servicing
Agreement, the Trust Agreement and/or the Indenture, as applicable.
5.2. TAXES. Each of Borrower and Guarantor shall pay and discharge all taxes and
governmental charges upon it or against any of its properties or assets or its
income prior to the
23
date after which penalties attach for failure to pay, except (a) to the extent
that Borrower or Guarantor shall be contesting in good faith in appropriate
proceedings its obligation to pay such taxes or charges, adequate reserves
having been set aside for the payment thereof, or (b) with respect to such taxes
and charges which are not material in either nature or amount such that any
failure to pay or discharge them, and any resulting penalties, either in any one
instance or in the aggregate, would not materially and adversely affect the
financial condition, operations, business or prospects of Borrower or Guarantor,
respectively.
5.3. SEPARATE EXISTENCE: NO COMMINGLING. Borrower shall maintain separate books
and records and accounts in order to maintain a separate and distinct corporate
identity from any other entity, including Guarantor and AMC and any of
Borrower's other affiliates. Borrower shall not commingle any of its funds with
the funds of any other such entity.
5.4. FINANCING STATEMENTS. At the request of Lender, each of Borrower and
Guarantor shall execute such financing statements as Lender determines may be
required by law to perfect, maintain and protect the interest of Lender in the
Collateral and in the Proceeds thereof.
5.5. BOOKS AND RECORDS; OTHER INFORMATION. (a) Borrower shall maintain accurate
and complete books and records with respect to the Collateral and Borrower's
business. All accounting books and records shall be maintained in accordance
with generally accepted accounting principles consistently applied.
(b) Only to the extent reasonably necessary to protect Lender's
interest hereunder, each of Borrower and Guarantor shall, and shall (as
applicable) cause each of its respective subsidiaries to, permit any
representative of Lender to visit and inspect any of the properties of Borrower
or Guarantor to examine the books and records of Borrower or Guarantor and to
make copies and take extracts therefrom, and to discuss the business,
operations, properties, condition (financial or otherwise) or prospects of
Borrower or Guarantor and each such subsidiary or any of the Collateral with the
officers and independent public accountants thereof and as often as Lender may
reasonably request, and so long as no Default or Event of Default shall have
occurred and be continuing, all at such reasonable times during normal business
hours upon reasonable notice. In connection with the matters described in this
Section 5.5(b), Lender shall not at any time use or disclose to any Person,
except to any professional adviser who needs to know such information in
connection with the transactions contemplated hereby, or except in connection
with any litigation or arbitral proceedings commenced by or against Lender or
any of its affiliates, any information that may be within or may come to its or
their knowledge if such information is of a type that would generally be
expected to be held as confidential; PROVIDED that the foregoing shall not apply
to the extent that such information was (i) previously known by Lender from
sources other than Borrower or Guarantor or their respective directors, officers
or agents, (ii) in the public domain through no fault of Lender, (iii) lawfully
acquired by Lender on a non-confidential basis from other sources who are not
known by Lender to be bound by a confidentiality agreement with Borrower or
Guarantor or (iv) required to be disclosed by judicial or administrative process
or by any other Requirement of Law.
(c) Each of Borrower and Guarantor shall provide to Lender all
information regarding their respective operations and practices as Lender shall
reasonably request in writing.
24
5.6. PAYMENT OF FEES AND EXPENSES. Each of Borrower and Guarantor shall pay to
Lender, on demand, any and all fees, costs or expenses which Lender pays to a
bank or other similar institution arising out of or in connection with the
return of payments deposited from Borrower or Guarantor, as applicable, for
collection by Lender.
5.7. CONTINUITY OF BUSINESS AND COMPLIANCE WITH AGREEMENT. Each of Borrower and
Guarantor shall continue in business in a prudent, reasonable and lawful manner
with all licenses, permits, and qualifications necessary to perform its
respective obligations under this Agreement and the Guarantee, except where
failure to do so could not reasonably be expected to materially and adversely
affect such performance or the enforceability of Lender's security interest in
the Collateral.
5.8. FINANCIAL STATEMENTS AND ACCESS TO RECORDS. Each of Borrower and Guarantor
shall provide Lender with quarterly unaudited financial statements within sixty
(60) days of the end of each of Guarantor's and Borrower's first three fiscal
quarters, and Guarantor will provide Lender with audited annual financial
statements within one hundred twenty (120) days of each of Guarantor's and
Borrower's fiscal year-end audited by a nationally recognized independent
certified public accounting firm. Upon request of Lender, each of Borrower and
Guarantor shall provide Lender with unaudited monthly financial statements. Each
of Borrower and Guarantor shall deliver to Lender with each financial statement
a certificate by each of Borrower's and Guarantor's chief financial officer,
certifying that (i) such financial statements are complete and correct in all
material respects, (ii) Borrower is in compliance with the covenants set forth
in Sections 5 and 6 of this Agreement and (iii) that, except as noted in such
certificate, such chief financial officer has no knowledge of any Default or
Event of Default or of any event that has occurred and is continuing which with
notice or lapse of time or both would become a Default or Event of Default.
5.9. FINANCIAL CONDITION. Guarantor shall maintain on a consolidated basis a net
worth calculated in accordance with GAAP (including advances and loans from AMC
or its affiliates (other than subsidiaries of Guarantor) to Guarantor and
subordinated debt with maturities exceeding three years) of at least $5 million.
5.10. LITIGATION MATTERS. Borrower and/or Guarantor shall notify Lender in
writing, promptly upon its learning thereof, of any litigation, arbitration or
administrative proceeding which may reasonably be expected to materially and
adversely affect the operations, financial condition or business of Borrower or
Guarantor or Borrower's or Guarantor's ability to perform under this Agreement
or involve Lender's security interest in the Collateral or other rights under
this Agreement, the Promissory Note or the Guarantee.
5.11. FULFILLMENT OF OBLIGATIONS. Each of Borrower and Guarantor shall pay and
perform, as and when due, all of its obligations of whatever nature, except
where the amount or validity thereof is currently being contested in good faith
by appropriate proceedings and reserves in conformity with generally accepted
accounting principles with respect thereto have been provided on the books of
Borrower or Guarantor, as the case may be, and except to the extent that the
failure to do so could not individually or in the aggregate reasonably be
expected to materially and adversely affect the financial condition, operations,
business or prospects of Borrower or Guarantor, as the case may be.
25
5.12. NOTICE OF CHANGE OF CHIEF EXECUTIVE OFFICE. Borrower will provide Lender
with not less than 30 days prior written notice of any change in the chief
executive office of Borrower to permit Lender to make any additional filings
necessary to continue Lender's perfected security interest in the Collateral.
5.13. COMPLIANCE WITH LAWS, ETC. Each of Borrower and Guarantor shall, and shall
cause each of its respective subsidiaries (as applicable) to, comply (i) in all
material respects with all Requirements of Law and any change therein or in the
application, administration or interpretation thereof (including, without
limitation any request, directive, guideline or policy, whether or not having
the force of law) by any Governmental Authority charged with the administration
or interpretation thereof; and (ii) with all indentures, mortgages, deeds of
trust, agreements, or other instruments or contractual obligations to which it
is a party, including without limitation, each Basic Document to which it is a
party, or by which it or any of its properties may be bound or affected, or
which may affect the Receivables, if the failure to comply therewith could,
individually or in the aggregate, reasonably be expected to materially and
adversely affect the financial condition, operations, business or prospects of
Borrower or Guarantor, as the case may be.
5.14. INFORMATION SHEET. By 1:00 p.m. (New York City time), on each Payment
Date, Guarantor shall deliver to Lender an information sheet indicating the
Average Constant Default Rate for the related Collection Periods.
5.15. YEAR 2000 COMPLIANCE. Guarantor's computer systems and the computer
systems of Guarantor's suppliers and vendors shall be (as determined by Lender
in its sole discretion) Year 2000 Compliant, except to the extent that such
failure would not be expected to have a material adverse effect on the business,
financial condition or operations of Guarantor or AMC (as determined by Lender
in its reasonable discretion). "Year 2000 Compliant" means generally that
neither performance nor functionality of any computer hardware or software is
affected by dates prior to, during, or after the Year 2000. In particular: (a)
no value for current date will cause any interruption in operation; (b)
date-based functionality must behave consistently for dates prior to, during and
after the Year 2000; (c) in all interfaces and data storage, the century in any
date must be specified either explicitly or by unambiguous algorithms or
interferencing rules; and (d) Year 2000 must be recognized as a leap year.
5.16. MATERIAL ADVERSE CHANGE. Each of Borrower and Guarantor shall promptly
give written notice to Lender of Borrower or Guarantor, as applicable, obtaining
knowledge of or its discovery of a material adverse change in the business,
operations, prospects or condition (financial or otherwise) of Borrower,
Guarantor or AMC, which in Borrower's or Guarantor's, as applicable, good faith,
reasonable judgment gives Borrower or Guarantor, as applicable, reasonable cause
to believe that as a result of such event (x) Borrower may be unable to fulfill
its obligations hereunder, (y) Guarantor may be unable to fulfill its
obligations under the Guarantee or (z) AMC may be unable to fulfill its
obligations under the AMC Guarantee.
6. Negative Covenants.
Each of Borrower and Guarantor (where indicated) hereby covenants to
Lender that, until the payment in full and final performance of all of
Borrower's and Guarantor's respective
26
obligations to Lender under this Agreement, the Promissory Note and the
Guarantee, without Lender's prior written consent (which shall not be
unreasonably withheld), it shall be subject to the following restrictions:
6.1. ADVERSE TRANSACTIONS. Neither Borrower nor Guarantor shall enter into any
transaction (including without limitation any Series Supplement (as such term is
defined in the Spread Account Agreement)) which adversely affects the Collateral
or Lender's rights under this Agreement, the Promissory Note or the Guarantee.
6.2. GUARANTIES. Neither Borrower nor Guarantor shall guarantee or otherwise in
any way become liable with respect to the obligations or liabilities, of any
other Person if any such action would constitute a breach of the covenant
contained in Section 5.9 hereof, except (a) for the obligations of affiliates of
Borrower or Guarantor to Lender and (b) by customary endorsement of instruments
or items of payment for deposit to the general account of Borrower or Guarantor
or for delivery to Lender.
6.3. CORPORATE DOCUMENTS. Borrower will not amend or modify any provision of its
Certificate of Incorporation or by-laws without Lender's prior written consent.
6.4. INVESTMENTS; DIVIDENDS. The covenants set forth in this Section 6.4 shall
be effective unless (i) the Advance Rate shall be less than 50% (provided that
until the first Calculation Date on which the Advance Rate exceeds the
Maintenance Advance Rate, the Present Value of the Collateral used to calculate
such Advance Rate shall be the Present Value of the Collateral as of the close
of business on the Closing Date) or (ii) the net worth of AMC calculated in
accordance with generally accepted accounting principles shall be greater than
$75 million (and such covenants shall be reinstated if neither of the foregoing
conditions remains satisfied):
(a) INVESTMENTS. Neither Borrower nor Guarantor shall make any
investment in any Person through the direct or indirect holding of securities or
otherwise, other than in the ordinary course of business or in connection with
the future securitization of receivables.
(b) DIVIDENDS. Guarantor shall not declare or pay any dividends.
6.5. LOANS; CAPITAL STRUCTURE; AFFILIATES. The covenants set forth in this
Section 6.5 shall become effective (i) upon written notice from Lender to
Borrower and Guarantor that Lender has determined a material adverse change as
described in Section 8.1(n) hereof has occurred or (ii) in the event that AMC
shall have breached the net worth covenant set forth in Section 10(g) of the AMC
Guarantee:
(a) LOANS. Except for routine and customary salary advances or loans to
employees in connection with relocation expenses consistent with past practice
of AMC and its affiliates, neither Borrower nor Guarantor shall make any
unsecured loans or other advances of money to officers, directors, employees,
stockholders, or affiliates in excess of $50,000 in the aggregate. Other than
the indebtedness under this Agreement and the Promissory Note, neither Borrower
nor Guarantor shall incur any long term or working capital debt (i) if such
action would constitute a breach of the covenant contained in Section 5.9 hereof
or (ii) secured by Collateral.
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(b) CHANGES IN CAPITAL STRUCTURE OR BUSINESS OBJECTIVES. Neither
Borrower nor Guarantor shall do any of the following if it will adversely affect
the payment or performance of, or Borrower's and Guarantor's ability to pay
and/or perform, its obligations to Lender with respect to this Agreement, the
Promissory Note and the Guarantee: (i) redeem, retire, purchase or otherwise
acquire, directly or indirectly, any of Borrower's or Guarantor's stock, except
in connection with employment or similar agreements with officers and directors
of Borrower or Guarantor consistent with past practice, or (ii) make any change
in Borrower's or Guarantor's capital structure, or (iii) make any material
change in any of its business objectives, purposes or operations which could
reasonably be expected to adversely affect the payment or performance of, or
Borrower's and Guarantor's ability to pay and/or perform, its obligations to
Lender with respect to this Agreement, the Promissory Note or the Guarantee.
(c) TRANSACTIONS WITH AFFILIATES. Neither Borrower nor Guarantor shall
enter into, or be a party to, any transaction with any affiliate or stockholder
of Borrower or Guarantor, except, consistent with Borrower's or Guarantor's
practice before entering into this Agreement, in the ordinary course of, and
pursuant to the reasonable requirements of, Borrower's and Guarantor's business
and upon fair and reasonable terms (which Borrower agrees to discuss with Lender
from time to time upon Lender's request) which are not materially less favorable
than would be obtained in a comparable arm's length transaction with a person or
entity not an affiliate or stockholder of Borrower or Guarantor.
6.6. LIENS. (a) Borrower shall not grant or otherwise create any Lien on any of
its properties except to Lender hereunder and to Lender under any Other Residual
Financing Agreement.
(b) Neither Borrower nor Guarantor shall grant or otherwise permit any
Liens on the capital stock of Borrower, except to Financial Security Assurance
Inc. under the Stock Pledge and Collateral Agency Agreement dated as of March 1,
1997 among Guarantor, as pledgor, Financial Security Assurance Inc., as pledgee,
and Chase Bank of Texas, National Association , as collateral agent, as such
agreement may be amended, supplemented or otherwise modified from time to time.
6.7. VSI POLICIES. Borrower has obtained each VSI Policy and as of the Cutoff
Date, one or more of such policies is in full force and effect with respect to
each Receivable. Borrower shall not (a) replace any such VSI Policy with a
substitute insurance policy unless (i) the insurer issuing such replacement
policy has a rating by A.M. Best of "A-" or higher and (ii) such replacement
shall not adversely affect the Collateral or Lender's rights under this
Agreement, the Promissory Note or the Guaranty, and (b) except as provided in
clause (a) above, Borrower will not cancel or otherwise terminate any VSI Policy
(or any replacement insurance policy) unless Lender has given its prior written
consent to such cancellation or termination.
6.8. CUSTODIAN. Guarantor shall not, pursuant to Section 10.8(e) of the Sale and
Servicing Agreement, assume the duties of Custodian without having obtained the
prior written consent of Lender.
6.9. CHANGE OF CONTROL. No Change of Control shall occur.
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7. Conditions Precedent.
7.1. CONDITIONS PRECEDENT TO AGREEMENT. The obligations of Lender to extend to
Borrower any Loan as described in this Agreement are subject to satisfaction of
the following conditions on or prior to the Closing Date:
(a) The receipt by Lender, concurrently with the signing of this
Agreement and, with respect to paragraph (v) only, together with the financial
statements to be delivered pursuant to this Agreement, in form and substance
satisfactory to Lender, of the following:
(i) Evidence of the authority of the persons executing this
Agreement, the Promissory Note, the Guarantee and the AMC Guarantee and
any other documents contemplated herein and therein, together with
specimen signatures of such persons; and
(ii) A certified copy of each of Borrower's, Guarantor's and
AMC's Certificate of Incorporation and By-Laws and a good standing
certificate from the State of Delaware and/or of California, as
applicable for each of Borrower, Guarantor and AMC; and
(iii) Certified copies of all necessary resolutions of each of
the Boards of Directors of Borrower, Guarantor and AMC authorizing the
execution and delivery and performance under this Agreement, the
Promissory Note, the Guarantee and the AMC Guarantee, as applicable;
and
(iv) The duly executed, original Promissory Note; and
(v) A certificate, as of the date of signing of the Agreement,
by the President, a Vice President, the Chief Financial Officer or the
Treasurer of each of Borrower, Guarantor and AMC certifying that the
representations and warranties contained in Section 4 hereof or in
Section 9 of the AMC Guarantee, as the case may be, are true and
correct, that each of Borrower, Guarantor and AMC, as the case may be,
is in compliance with the covenants set forth in Sections 5 and 6
hereof or in Section 10 of the AMC Guarantee, as the case may be, and
that no Default, Event of Default or Other RF Event of Default has
occurred and is continuing; and
(vi) The duly executed, original of the Guarantee and the AMC
Guarantee; and
(vii) The following opinions of counsel in form and substance
satisfactory to Lender's counsel:
(A) Standard corporate opinions of Borrower,
Guarantor and AMC regarding due authorization, execution,
consents, material litigation and noncontravention,
substantially in the form attached hereto as EXHIBIT E;
(B) Enforceability of this Agreement, the Promissory
Note, Guarantee and the AMC Guarantee;
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(C) Lien, priority and perfection opinions relating
to the pledge of Collateral pledged on the date hereof by
Borrower to Lender;
(D) Non-consolidation opinions as between Borrower,
Guarantor and AMC; and
(E) Such other opinions as Lender's counsel shall
reasonably request; and
(viii) A notice to the Trust Collateral Agent signed by
Borrower to the effect set forth in Section 2.7(b); and
(ix) Such other documents, certificates or financial or other
information as Lender may reasonably request.
(b) The consummation of the Securitization Transaction.
(c) The Certificate shall have been delivered to Lender or its agent,
together with appropriate instruments of transfer duly endorsed in blank, and
together with a Medallion Guarantee with respect to the signature on the
transfer power accompanying the Certificate delivered to Lender or its agent on
the Closing Date.
(d) Financing statements on Form UCC-1 naming Borrower as "debtor" and
Lender as "secured party" and describing the Collateral as "collateral"
thereunder, shall have been delivered to Lender in proper form for filing in
each jurisdiction in which it is necessary to file to perfect a security
interest therein.
7.2. CONDITIONS PRECEDENT TO PRE-FUNDING LOANS. In addition to each of the
conditions precedent set forth in Section 7.1 being met, the obligation of
Lender to extend each of the Pre-Funding Loans hereunder shall be subject to the
following conditions:
(a) Each of the representations and warranties made by Borrower and
Guarantor in this Agreement and by AMC in the AMC Guarantee shall be true and
correct as of the date on which the relevant Pre-Funding Loan is extended;
(b) There shall not have occurred and be continuing any Default, Event
of Default or Other RF Event of Default and Borrower, Guarantor and AMC shall be
in full compliance with all of their respective covenants and obligations under
this Agreement, the Guarantee and the AMC Guarantee;
(c) Lender shall have received the Notice of Borrowing described in
Section 2.2(a) hereof; and
(d) The Pre-Funding Origination Condition shall have been satisfied as
determined by Lender in its sole discretion.
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8. Events of Default.
8.1. EVENTS OF DEFAULT. Each of the following events and occurrences shall
constitute an Event of Default under this Agreement if not cured within three
Business Days of their occurrence unless the context of the provision indicates
otherwise (provided that the events described in paragraphs (f), (g), (h), (i),
(j) and (m) shall have no cure period):
(a) Payment by or on behalf of Borrower shall fail to be made to Lender
when due of principal or interest on any Loan or of any other Obligation.
(b) Borrower fails to perform or observe any material provision of
Section 6 of this Agreement, or Guarantor fails to perform or observe any
material provision of the Guarantee or AMC fails to perform or observe any
material provision of the AMC Guarantee (such materiality in each case, as
determined by Lender) and such failure to perform or observe continues
unremedied for 30 days following the earlier to occur of (i) a Responsible
Officer having actual knowledge of such failure to perform or observe and (ii)
written notice of such failure to perform or observe from Lender to Borrower,
Guarantor or AMC, as the case may be.
(c) Borrower shall fail to perform or observe any other provision of
this Agreement (other than as referred to in Sections 8.1(a) or 8.1(b)) or the
Promissory Note, or Guarantor shall fail to perform or observe any provision of
this Agreement or the Guarantee (other than as referred to in Sections 8.1(a) or
8.1(b)), or AMC shall fail to perform or observe any material provision of the
AMC Guarantee (other than as referred to in Sections 8.1(a) or 8.1(b)) within 30
days (or, in the case of any failure to perform or observe the provisions of
Section 5.15, 5 days) following the earlier of (i) a Responsible Officer having
actual knowledge of such failure to perform or observe or (ii) written notice
thereof from Lender; PROVIDED that any such failure to perform or observe
Section 5.11 hereof caused solely by an event described in Section 8.1(d) shall
constitute an Event of Default only as provided in Section 8.1(d).
(d) Borrower, Guarantor or AMC shall fail to pay any money due under
any other agreement, note, indenture or instrument evidencing, securing,
guaranteeing or otherwise relating to indebtedness of Borrower, Guarantor or AMC
for borrowed money, which failure to pay constitutes an event of default under
any such agreement or instrument or constitutes a default thereunder and such
default shall continue beyond the grace period (not to exceed one Business Day),
if any, therein specified and, in connection with such failure, the maturity of
such indebtedness is accelerated; or Borrower, Guarantor or AMC shall default in
the observance or performance of any other covenant or condition in any such
agreement or instrument and such default shall continue beyond the grace period,
if any, therein specified and, in connection with such default, the maturity of
such indebtedness is accelerated; or any other event shall occur or condition
shall exist if the effect of such event or condition is to accelerate the
maturity of such indebtedness; or any such indebtedness shall be declared due
and payable prior to the stated maturity thereof; other than, in each case,
indebtedness with respect to which the failure to pay could not, individually or
in the aggregate, reasonably be expected to have a material adverse effect on
the financial condition, operations, business or prospects of Borrower,
Guarantor or AMC, as the case may be.
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(e) Borrower, Guarantor or AMC receives notice, or a Responsible
Officer has knowledge, of a breach by Borrower, Guarantor or AMC of any material
representation, warranty or obligation contained in this Agreement, the
Promissory Note, the Guarantee, the AMC Guarantee, the Basic Documents or in any
other agreement with Lender; PROVIDED that (i) a breach by Borrower, Guarantor
or AMC of a representation or warranty in a Basic Document shall not constitute
an Event of Default hereunder if such party shall have cured such breach within
the applicable cure period, if any, set forth in such Basic Document and (ii) a
breach by Guarantor of the representations and warranties set forth in Section
3.2(b) of the Purchase Agreement shall not constitute an Event of Default
hereunder so long as Guarantor complies with its obligations under Section 6.2
of the Purchase Agreement with respect to such breach; PROVIDED, FURTHER, that
any such breach of Section 5.11 hereof caused solely by an event described in
Section 8.1(d) shall constitute an Event of Default only as provided in Section
8.1(d).
(f) The Collateral or any other assets of Borrower, Guarantor or AMC
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 Borrower, Guarantor or AMC and the same is not dissolved or
dismissed within sixty (60) days thereafter except, in the case of Guarantor or
AMC, where any such actions or events would not either individually or in the
aggregate materially and adversely affect the financial condition, operations,
business or prospects of Guarantor or AMC, as the case may be; an application is
made by any Person other than Borrower, Guarantor or AMC for the appointment of
a receiver, trustee, or custodian for the Collateral or a material portion of
the assets of Borrower, Guarantor or AMC and the same is not dismissed within
sixty (60) days after the application thereof, or Borrower, Guarantor or AMC
shall have concealed, removed or permitted to be concealed or removed, in the
case of Borrower, any part, and in the case of Guarantor or AMC, any material
portion, of its property with intent to hinder, delay or defraud its creditors
or made or suffered a transfer of any of its property which is fraudulent under
any bankruptcy, fraudulent conveyance or other similar law.
(g) An application is made by Borrower, Guarantor or AMC for the
appointment of a receiver, trustee or custodian for the Collateral or any other
assets of Borrower, Guarantor or AMC; a petition under any section or chapter of
the Bankruptcy Code or federal or state law or regulation shall be filed by
Borrower, Guarantor or AMC, or Borrower, Guarantor or AMC shall make an
assignment for the benefit of its creditors, or any case or proceeding shall be
filed by Borrower, Guarantor or AMC for its dissolution, liquidation, or
termination, by Borrower, Guarantor or AMC, or Borrower, Guarantor or AMC ceases
to conduct its business.
(h) Borrower, Guarantor or AMC 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
Borrower, Guarantor or AMC, or any case or proceeding is filed against Borrower,
Guarantor or AMC, 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.
(i) A notice of lien, levy or assessment is filed of record with
respect to all or any assets of Borrower, Guarantor or AMC by the United States,
or any department, agency or instrumentality thereof, or by any state, county,
municipal or other governmental agency and it
32
is not released within sixty (60) days after the filing and is material to the
financial position of the respective entity, or if any taxes or debts become a
lien or encumbrance upon the Collateral or any other affiliate's assets, and the
same is not released within sixty (60) days after the same becomes a lien or
encumbrance, except to the extent that such taxes or debts are being contested
in good faith in appropriate proceedings, adequate reserves have been set aside
for the payment thereof and notice of such proceedings and of the actions being
taken in respect thereof have been provided to Lender.
(j) Borrower, Guarantor or AMC becomes insolvent or admits in writing
to its inability to pay its debts as they mature.
(k) LBAC shall at any time resign, or be terminated, as a servicer
under any securitization.
(l) Lender shall for any reason cease to have a first priority
perfected security interest in the Collateral free and clear of all Liens, other
than the Liens granted to Lender hereunder; PROVIDED that the Borrower shall
have five days after Borrower obtains actual knowledge of such condition to cure
such condition.
(m) The Guarantee or the AMC Guarantee shall cease to be in full force
and effect or the Guarantor or AMC or an officer or authorized representative
acting on its behalf shall so assert.
(n) Lender, in its good faith judgment, has reasonable cause to believe
that there has been a material adverse change in (i) the Collateral, (ii) in
Lender's rights under this Agreement, the Promissory Note, the Guarantee or the
AMC Guarantee, or (iii) in the business, operations, prospects or condition
(financial or otherwise) of Borrower, Guarantor or AMC (which, in the case of
this clause (iii), has not been cured within three Business Days following
written notice thereof from the Lender); PROVIDED that Lender, in its good faith
judgement, has reasonable cause to believe that as a result of such event (x)
Borrower may be unable to fulfill its obligations hereunder (y) Guarantor may be
unable to fulfill its obligations under the Guarantee or (z) AMC may be unable
to fulfill its obligations under the AMC Guarantee.
(o) Borrower shall enter into a Series Supplement pursuant to the
Spread Account Agreement relating to or otherwise affecting the collateral
securing this Agreement and/or any Other Residual Financing Agreement without
having obtained the prior written consent of Lender.
8.2. REMEDIES OF DEFAULT. (a) If not cured within the cure period, if any,
provided within the relevant provision, then upon the continuance of such Event
of Default Lender may, by notice to Borrower (which notice shall be deemed given
automatically upon occurrence of an Event of Default referred to in paragraph
(f), (g), (h), (i) or (j)), terminate its commitment to make any Loans hereunder
and/or declare immediately due and payable all principal, interest and other
Obligations payable hereunder and under the Promissory Note by Borrower then due
and payable 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
33
which are expressly waived by Borrower. If any Event of Default shall occur and
be continuing, Lender may exercise all rights and remedies of a secured party
under the Code, and, to the extent permitted by law, all other rights and
remedies granted to Lender in this Agreement, the Guarantee and the AMC
Guarantee and in any other instrument or agreement securing, evidencing or
relating to the Obligations. Without limiting the generality of the foregoing,
if an Event of Default or Other RF Event of Default shall occur and be
continuing Lender may sell the Collateral in a commercially reasonable manner as
determined by Lender (subject to the limitations set forth in the Trust
Agreement), instituting suit in equity or instituting 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 Lender opts to
sell or otherwise dispose of the Collateral as one of its remedies upon an Event
of Default or Other RF Event of Default, Borrower (subject to Section 2.10) and
Guarantor shall remain liable for any remaining deficiency upon applying the
proceeds of such sale or other disposition against any and all Obligations and
Other RF Obligations, including, without limitation, the reasonable fees and
disbursements of any attorneys employed by Lender to collect such deficiency.
(b) Without limitation to any of the provisions or remedies set forth
in Section 8.2(a), if any Event of Default shall have occurred and be
continuing, Borrower may, with the consent of Lender in Lender's sole
discretion, (i) make a principal payment on the Loans in such amount as Lender
shall specify or (ii) pledge additional Collateral having such value, as
determined by Lender in its sole discretion, as Lender shall specify. If Lender
consents to Borrower's taking such action as is described in this Section 8.2(b)
upon an Event of Default, Borrower (subject to Section 2.10) and Guarantor shall
remain liable for any remaining deficiency between the amount of the Obligations
and the amount of the principal payment or pledge of additional Collateral made
pursuant hereto, and under no circumstances shall Lender's consent to such
action be construed as a waiver of such deficiency or a modification of the
Obligations.
(c) In the event that Borrower shall hereinafter pledge any Collateral
in addition to the Collateral pledged to Lender on the date hereof, Borrower
shall, concurrently with such pledge, deliver to Lender an opinion of counsel in
form and substance reasonably satisfactory to Lender regarding priority,
perfection and the absence of Liens in respect of such Collateral.
(d) Notwithstanding anything in Section 6.5 to the contrary, it is
expressly understood and agreed that Lender shall have sole discretion in
determining whether to enforce the covenants set forth in Section 6.5 or
immediately to pursue the remedies set forth in this Section 8.2 upon the
occurrence of a material adverse change as described in Section 8.1(n). Under no
circumstances shall Lender's decision to enforce the covenants set forth in
Section 6.5 following such a material adverse change be construed as a waiver of
the Event of Default described in Section 8.1(n), or otherwise in any way
modify, limit, delay or impair any rights which Lender would otherwise have
pursuant to this Section 8.2.
(e) Lender shall use its reasonable efforts to notify Guarantor and AMC
upon the occurrence of an Event of Default; PROVIDED that the omission so to
notify shall not relieve Guarantor or AMC from any liability which it may have
to Lender (or extend the period of time within which performance is required by
Guarantor or AMC) in connection with such Event of
34
Default or from any of its respective obligations under the Guarantee or the AMC
Guarantee, as the case may be.
9. Miscellaneous.
9.1. PAYMENT OF EXPENSES, INDEMNITY, ETC. Each of Borrower and Guarantor jointly
and severally agree to:
(i) pay or reimburse Lender on demand for all its reasonable
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, modification or supplement to,
or any waiver under, this Agreement or the Guarantee and any other document
prepared in connection therewith, and the consummation and administration of the
transactions contemplated thereby, including without limitation the reasonable
fees and disbursements of counsel to Lender; PROVIDED that, neither the Borrower
nor Guarantor shall be obligated to reimburse Lender for the foregoing costs and
expenses of counsel unless such costs and expenses are incurred in connection
with:
(A) the advice of counsel with respect to (1) the performance
of Borrower or Guarantor and/or any of their respective Affiliates
under this Agreement, the Guarantee or any other document prepared in
connection therewith or (2) (x) the rights of Lender under this
Agreement, the Guarantee or any other document prepared in connection
therewith and (y) Lender's rights relating to the Collateral
(including, without limitation, its security interest therein), in each
case in this clause (2) in connection with any change in the condition
(financial or otherwise), operations, business or prospects of the
Borrower or any of its Affiliates;
(B) any waiver in respect of this Agreement, the Guarantee or
any other document prepared in connection therewith (whether or not
executed or otherwise granted as provided therein);
(C) any amendment, supplement or modification in respect of
this Agreement, the Guarantee or any other document prepared in
connection therewith that is executed by the parties thereto as
required by this Agreement or the Guarantee or any other document
prepared in connection therewith, as the case may be; or
(D) any proposed amendment, supplement or modification in
respect of this Agreement, the Guarantee or any other document prepared
in connection therewith that is not executed by the parties thereto as
required by such loan document if Borrower proposed or requested such
amendment, supplement or modification;
(ii) pay on demand all reasonable costs and expenses of Lender,
including without limitation the reasonable fees and disbursements of counsel to
Lender, in connection with the occurrence or continuance of a Default or Event
of Default and the enforcement, collection, protection or preservation (whether
through negotiations, legal proceedings or
35
otherwise) of this Agreement or the Guarantee, the Collateral, any Obligation or
any right, remedy, power or privilege of Lender hereunder or under the
Guarantee;
(iii) pay and hold Lender harmless from and against any and all present
and future stamp, excise, recording or other similar taxes or fees payable in
connection with the execution, delivery, recording and filing of this Agreement
or the Guarantee and hold Lender harmless from and against any and all
liabilities with respect to or resulting from any delay or omission to pay such
taxes or fees; and
(iv) indemnify Lender and its affiliates and each of their respective
directors, officers, employees and agents and hold each of them harmless from
and against, any and all liabilities, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements, including without
limitation the reasonable fees and disbursement of counsel to Lender and such
other parties, incurred by any of them in connection with, arising out of or in
any way relating to (i) Borrower's, Guarantor's, AMC's, the Trust's or Lender's
involvement (in the case of any such involvement of the Lender, provided such
involvement is limited to Lender in, or as a result of, its capacity as Lender
under this Agreement or under any Other Residual Financing Agreement) in, or the
effect on any Receivable or any retail installment sale contract relating to the
"Collateral" for any Other Residual Financing Agreement as a result of, any
action, suit or proceeding listed in Exhibit F hereto or (ii) any other
investigation, claim, litigation or other proceeding, pending or threatened
(whether or not any of them is designated a party thereto), in connection with,
arising out of or in any way related to this Agreement, the Guarantee, the
Receivables, any other retail installment sale contract relating to the
"Collateral" for any Other Residual Financing Agreement or any of the
transactions contemplated herein or therein or any use of the proceeds of any
Loan by Borrower; PROVIDED that Lender shall not be entitled to any
indemnification for any of the foregoing resulting from its gross negligence or
willful misconduct.
If and to the extent that the indemnity obligations of Borrower under this
Section 9.1 may be unenforceable for any reason, Borrower hereby agree to make
the maximum contribution to the payment and satisfaction of each of such
indemnity obligations which is permissible under applicable law.
9.2. 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 Lender is hereby authorized at any
time and from time to time, without notice to Borrower, Guarantor or to any
other person or entity, any such notice being hereby expressly waived, to
set-off against any obligation owing by Lender or any affiliate of Lender to
Borrower or Guarantor, or against any funds or other property of Borrower or
Guarantor held by or otherwise in the possession of Lender or any affiliate of
Lender, the obligations and liabilities of Borrower to Lender under this
Agreement or of Guarantor to Lender under its respective Guarantee, irrespective
of whether or not Lender shall have made any demand hereunder or under the
Guarantee.
9.3. AMENDMENTS. No provision of this Agreement may be amended, supplemented,
modified or waived unless the same shall be in writing signed by Lender,
Borrower and Guarantor and,
36
solely in the case of amendments, supplements, modifications or waivers to
Sections 2.10 and 9.5 hereof, without the prior written consent of the
Certificate Insurer thereto.
9.4. WAIVER; CUMULATIVE RIGHTS. No failure on the part of Lender 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 Promissory Note shall operate as
a waiver thereof, nor shall any single or partial exercise of any right, power
or privilege under this Agreement, the Promissory Note or the Guarantee 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.
9.5. NONPETITION COVENANT. Lender shall not, prior to the date which is one year
and one day after the termination of each of the Indenture, the Trust Agreement
and the Spread Account Agreement with respect to Borrower, petition or otherwise
invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against Borrower under any Federal or State
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of Borrower
or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of Borrower.
9.6. NON-AFFILIATION. Lender hereby agrees that, so long as it has any interest
in the Certificate hereunder, it shall not become an affiliate of Borrower.
9.7. BINDING EFFECT. This Agreement shall be binding upon and shall be
enforceable by Borrower, Guarantor and Lender and their respective successors
and permitted assigns.
9.8. SURVIVAL. The provisions of Sections 3.13(b), (c) and (d) and 9.1 shall
survive the execution and delivery of this Agreement and the payment in full of
the Obligations, and in the case of Section 9.1, the Other RF Obligations.
9.9. GOVERNING LAW, ETC.; WAIVER OF TRIAL BY JURY. (A) THIS AGREEMENT AND THE
PROMISSORY NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF
THE STATE OF NEW YORK. EACH PARTY HERETO 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,
THE PROMISSORY NOTE, THE GUARANTEE OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY PARTY HERETO IN ANY OTHER
JURISDICTION. EACH PARTY HERETO 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.
37
(B) EACH OF BORROWER, LENDER AND GUARANTOR 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 OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
(C) EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS
PERSONALLY DELIVERED OR TRANSMITTED BY REGISTERED MAIL TO THE ADDRESS SET FORTH
FOR NOTICES IN SECTION 9.10; PROVIDED THAT UPON ANY SUCH SERVICE BY REGISTERED
MAIL THE SENDING PARTY SHALL, SIMULTANEOUSLY THEREWITH, SEND NOTICE OF SUCH
SERVICE TO THE OTHER PARTY VIA FACSIMILE TRANSMISSION. NOTHING IN THIS AGREEMENT
WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW.
9.10. NOTICE. (a) Any notice hereunder shall be in writing and shall be
personally delivered, transmitted by postage prepaid registered airmail, by
facsimile, telegram or cable to the parties as follows:
To Lender: Greenwich Capital Financial Products, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Asset-Backed Finance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
WITH A COPY TO:
Greenwich Capital Financial Products, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
To Borrower: Long Beach Acceptance Receivables Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to Guarantor and AMC as per
clause (b) below.
38
To Guarantor: Long Beach Acceptance Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
To AMC: Ameriquest Mortgage Company
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
To the Certificate
Insurer: Financial Security Assurance Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Surveillance Department;
Re: Long Beach Auto Receivables Trust
2000-1
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇; (▇▇▇) ▇▇▇-▇▇▇▇
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 may change its address for
purposes hereof by notice to the other.
(b) Lender hereby agrees that it will provide to Guarantor and AMC
copies of all notices it provides to Borrower hereunder.
9.11. 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.
9.12. COUNTERPARTS. This Agreement may be signed in any number of counterparts
which, taken together, shall constitute a full and original agreement for all
purposes.
9.13. MERGER OR CONSOLIDATION. Any Person (i) into which Borrower or Guarantor
may be merged or consolidated, (ii) resulting from any merger or consolidation
to which Borrower or Guarantor is a party or (iii) succeeding to all or
substantially all of the business of Borrower or Guarantor, PROVIDED that in any
of the foregoing cases such Person shall execute an agreement of assumption to
perform every obligation of Borrower or Guarantor, as the case may be, under
this Agreement, and whether or not such assumption agreement is executed, shall
be the successor to Borrower or Guarantor hereunder (without relieving Borrower
or Guarantor of its responsibilities
39
hereunder, if it survives such merger or consolidation) without the execution or
filing of any document or any further act by any of the parties to this
Agreement.
9.14. SUBSEQUENT ACTIONS. Each party shall, upon the written request of the
other party from time to time after execution of this Agreement and without
further consideration, execute such documents or take such action as may be
reasonably necessary to carry out the purpose or intention of this Agreement.
9.15. ASSIGNABILITY. The rights and obligations of the parties under this
Agreement shall not be assigned or otherwise transferred, by sale of
participation interests or otherwise, by any party without the prior written
consent of the other party, which consent shall not be unreasonably withheld,
except that this Agreement may be assigned without such prior written consent to
any Person who succeeds Borrower or Guarantor, as the case may be, as provided
in Section 9.13.
9.16. CERTAIN REIMBURSEMENTS. (a) Notwithstanding Section 8 of the Guarantee or
anything herein to the contrary, Borrower may on any Remittance Date reimburse
Guarantor for any payments made under the Guarantee, so long as (i) all amounts
owing to Lender on such Remittance Date have been paid, (ii) no Default or Event
of Default shall have occurred and be continuing and (iii) the Advance Rate
shall be less than the then applicable Target Advance Rate (provided that until
the first Calculation Date on which the Advance Rate exceeds the Maintenance
Advance Rate, (x) the Present Value of the Collateral used to calculate such
Advance Rate shall be the Present Value of the Collateral as of the close of
business on the Closing Date and (y) the Advance Rate used in the calculation of
the Target Advance Rate shall be based on the Present Value of the Collateral as
of the close of business on the Closing Date).
(b) Notwithstanding Section 8 of the AMC Guarantee or anything herein
to the contrary, Borrower and/or Guarantor may on any Remittance Date reimburse
AMC for any payments made under the Guarantee, so long as (i) all amounts owing
to Lender on such Remittance Date have been paid, (ii) no Default or Event of
Default shall have occurred and be continuing and (iii) the Advance Rate shall
be less than the then applicable Target Advance Rate (provided that until the
first Calculation Date on which the Advance Rate exceeds the Maintenance Advance
Rate, (x) the Present Value of the Collateral used to calculate such Advance
Rate shall be the Present Value of the Collateral as of the close of business on
the Closing Date and (y) the Advance Rate used in the calculation of the Target
Advance Rate shall be based on the Present Value of the Collateral as of the
close of business on the Closing Date).
[Signature Page Follows]
40
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., Lender
By: ________________________________________
Name:
Title:
LONG BEACH ACCEPTANCE RECEIVABLES CORP., Borrower
By: ________________________________________
Name:
Title:
LONG BEACH ACCEPTANCE CORP., Guarantor
By: ________________________________________
Name:
Title:
41
SCHEDULE 4.16
PLANS
Borrower: None
Guarantor: None
EXHIBIT A
FORM OF PROMISSORY NOTE
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
PROMISSORY NOTE
June 15, 2000
Amount: U.S. $5,738,341.80
FOR VALUE RECEIVED, LONG BEACH ACCEPTANCE RECEIVABLES CORP. (the
"BORROWER") unconditionally promises to pay on the Maturity Date (as defined in
the Agreement referred to below) to the order of Greenwich Capital Financial
Products, Inc. (the "LENDER") in Federal or other immediately available funds in
lawful money of the United States the principal sum of five million, seven
hundred thirty-eight thousand, three hundred forty-one dollars and eighty cents
(U.S. $5,738,341.80) or, if less, the aggregate unpaid principal amount of the
Loans made by Lender to Borrower pursuant to the Agreement, and to pay interest
thereon from the date hereof until this Promissory Note is repaid in like money
at the rates per annum and in the manner set forth in the Agreement.
The principal of and interest on this Promissory Note shall be payable
in immediately available funds without set-off or counterclaim, in the manner
set forth in the Agreement.
This Promissory Note is issued pursuant to the terms of a Credit and
Security Agreement dated as of June 15, 2000 among Borrower, Lender and Long
Beach Acceptance Corp., as Guarantor (as amended from time to time, the
"AGREEMENT"), and is subject to the terms thereof and is entitled to the
benefits therein provided.
Upon the occurrence of an Event of Default (as defined in the
Agreement), the principal of and accrued interest on this Promissory Note may be
declared due and payable in the manner and with the effect provided in the
Agreement, without presentment, demand, protest or notice of any kind, each of
which is hereby expressly waived by Borrower.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK.
LONG BEACH ACCEPTANCE RECEIVABLES CORP.
By: __________________________________
Name:
Title:
A-1
EXHIBIT B
FORM OF LBAC GUARANTEE
June 15, 2000
Greenwich Capital Financial Products, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Guarantee by Long Beach Acceptance Corp. of Credit
and Security Agreement Dated as of June 15, 2000
---------------------------------------------------
Ladies and Gentlemen:
1. For value received and in accordance with the terms of the Credit
and Security Agreement, dated as of JUNE 15, 2000 (the "AGREEMENT"), among
Greenwich Capital Financial Products, Inc., as Lender ("LENDER"), Long Beach
Acceptance Receivables Corp., as Borrower ("BORROWER"), and Long Beach
Acceptance Corp., as Guarantor (the "GUARANTOR"), Guarantor hereby
unconditionally and irrevocably guarantees to Lender, or any successor in
interest of Lender, the due, punctual and complete payment and performance by
Borrower when and as due, whether at the stated maturity, by acceleration, upon
one or more dates set for repayment or prepayment or otherwise of the
Obligations. Lender may make demands under this Guarantee for such amounts and
performance from time to time. Guarantor hereby represents that its obligations
hereunder do and shall rank PARI PASSU with all unsecured and unsubordinated
indebtedness of Guarantor, as applicable. Terms used and not defined herein
shall have the meanings assigned in the Agreement.
2. Payments and performance required under this Guarantee shall be
payable and performed whenever any amount or performance guaranteed hereunder
has not been promptly made to Lender in accordance with the Agreement. When
pursuing its rights and remedies hereunder against Guarantor, Lender may, but
shall be under no obligation to, pursue the rights, remedies, powers and
privileges as it may have against Borrower or any other Person or against any
collateral security or guarantee for the Obligations or any right of offset with
respect thereto. Any failure by Lender to pursue the other rights, remedies,
powers or privileges or to collect any payments from Borrower or any other
Person or to realize upon any collateral security or guarantee or to exercise
any right of offset, or any release of Borrower or any other Person or of any
the collateral security, guarantee or right of offset, shall not relieve
Guarantor of any liability hereunder, and shall not impair or affect the rights,
remedies, powers or privileges, whether express, implied or available as a
matter of law, of Lender against Guarantor.
3. Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against Guarantor, and without notice to or
further assent by Guarantor, any demand for payment of any of the Obligations
made by Lender may be rescinded by Lender, and any of the Obligations continued,
and the Obligations, or the liability of any other Person upon or
B-1
for any part thereof, or any collateral security or guarantee therefor or right
of offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by Lender, and the Guarantee or the Agreement and any
other documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated in accordance with the terms thereof, in
whole or in part, as Lender may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held by Lender for
the payment of the Obligations may be sold, exchanged, waived, surrendered or
released. Lender shall have no obligation to protect, secure, perfect or insure
any Lien at any time held by it as security for the Obligations or for the
guarantee set forth herein or any property subject thereto. When making any
demand hereunder against Guarantor, Lender may, but shall be under no obligation
to, make a similar demand on Borrower or any other guarantor (including, without
limitation, any other Guarantor), and any release of Borrower or the other
guarantor (including, without limitation, any other Guarantor), shall not
relieve any of its obligations or liabilities hereunder, and shall not impair or
affect the rights, remedies, powers and privileges, express or implied, or as a
matter of law, of Lender against Guarantor.
4. Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Obligations and notice of or proof of
reliance by Lender upon the guarantee of Guarantor set forth herein or
acceptance of the guarantee of Guarantor set forth herein; the Obligations, and
any of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon the
guarantee of Guarantor set forth herein; and all dealings between Borrower or
Guarantor, on the one hand, and Lender, on the other, shall likewise be
conclusively presumed to have been had or consummated in reliance upon the
guarantee of Guarantor set forth herein. Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment and
all other notices of any kind to or upon Borrower or Guarantor with respect to
the Obligations. The guarantee of Guarantor set forth herein shall be construed
as a guarantee of payment, and not of collection.
5. The guarantee set forth herein shall remain in full force and effect
and be binding in accordance with and to the extent of its terms upon Guarantor
and its successors and permitted assigns, and shall inure to the benefit of
Lender, and its respective successors, endorsees, transferees and assigns, until
all the Obligations and the obligations of Guarantor under the guarantee shall
have been satisfied by payment in full and the commitment of Lender under the
Agreement shall have been terminated.
6. The guarantee set forth herein shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Obligations is rescinded or must otherwise be restored or returned by
Lender for any reason whatsoever, including, without limitation, upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of Guarantor
or Borrower or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, Borrower or Guarantor or
any substantial part of its property, or otherwise, all as though the payments
had not been made.
7. All payments due hereunder shall be paid in immediately available
funds after demand no later than 1:00 P.M. on the second Business Day following
the date of such demand.
B-2
Demand shall be made in writing to Guarantor's office located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, or such other address in the United States
which may be designated by Guarantor by written notice delivered to Lender.
8. To the full extent permitted by law, Guarantor hereby waives all
rights of subrogation, contribution, reimbursement, indemnity or otherwise,
whether arising by contract or operation of law (including, without limitation,
any such right arising under the Bankruptcy Code) or otherwise by reason of any
payment or performance by Guarantor pursuant to the provisions of this
Guarantee. Without limitation to the foregoing, notwithstanding any payment or
payments made by Guarantor hereunder or any setoff or application of funds of
Guarantor by Lender, Guarantor shall not be entitled to be subrogated to any of
the rights of Lender against Borrower or any collateral security or guarantee or
right of offset held by Lender for the payment of the Obligations, nor shall
Guarantor seek or be entitled to seek any contribution or reimbursement from
Borrower in respect of payments made by Guarantor hereunder, until all amounts
owing to Lender by Borrower and Guarantor on account of the Obligations are paid
in full and the commitment of Lender under the Agreement shall have been
terminated. If any amount shall be paid to Guarantor on account of the
subrogation rights at any time when all of the Obligations shall not have been
paid in full and the commitment of Lender under the Agreement shall not have
been terminated, the amount shall be held by Guarantor in trust for Lender,
segregated from other funds of Guarantor, and shall forthwith upon receipt by
Guarantor, be turned over to Lender in the exact form received by Guarantor
(duly endorsed by Guarantor to Lender, if required), to be applied against the
Obligations, whether matured or unmatured, at the time and in the order as
Lender may determine. Notwithstanding the foregoing, Guarantor may request
reimbursement from Borrower to the extent permitted pursuant to Section 9.16(a)
of the Agreement.
9. As further security for this Guarantee, Guarantor hereby grants a
first priority security interest in and transfers and assigns to Lender (a) any
and all interest, if any, it may now or hereafter have in the Collateral until
it has been sold or otherwise disposed of by Lender, and (b) all claims and
demands, presently existing or hereafter accrued thereon, and any and all
collateral or security Guarantor now has or may hereafter have or acquire
against Borrower with respect to the Collateral or any of them with full right
on the part of Lender in its own name or in the name of Guarantor to collect and
enforce such claims by legal action, proof of debt in bankruptcy or other
liquidation proceedings, and to vote in any proceedings for the arrangement of
debts at any time proposed, and Guarantor hereby irrevocably appoints Lender as
attorney-in-fact for Guarantor for the purpose of such enforcement and for the
purpose of endorsing in the name of Guarantor any Collateral for the payment of
money.
10. In the event that any representation or warranty made by Borrower
or by Guarantor in the Agreement or any Basic Document to which it is a party
shall be false or misleading in any material respect, there shall be immediately
due from Guarantor to Lender the loss, out-of-pocket cost, damage or
out-of-pocket expense incurred by Lender by reason of such representation or
warranty being false or misleading in any material respect.
11. In the event that Lender for any reason whatsoever shall deem it
necessary to enforce this Guarantee or any rights hereunder or otherwise, there
shall be immediately due from Guarantor to Lender, all losses, out-of-pocket
costs, damages, out-of-pocket expenses, claims
B-3
and liabilities associated with such enforcement, including but not limited to,
reasonable outside attorneys' fees and out-of-pocket disbursements, together
with all reasonable out-of-pocket costs and out-of-pocket expenses of any
related action.
12. Guarantor hereby covenants that it shall not assign this Guarantee
except with the prior written consent of Lender, which consent shall not be
unreasonably withheld.
13. Guarantor represents and warrants to Lender that each of the
representations and warranties made by it in the Agreement is true and correct.
14. The obligations of Guarantor under this Guarantee are irrevocable,
primary, absolute and unconditional and shall be paid or performed strictly in
accordance with this Guarantee under all circumstances irrespective of:
(a) any lack of validity or enforceability of the Agreement, the AMC
Guarantee or any of the Collateral, or any amendment, other modification or
waiver in respect thereof;
(b) any exchange or release of any other obligations hereunder;
(c) the existence of any claim, set-off, defense, reduction, abatement
or other right that Lender or Borrower may have at any time against Borrower,
Guarantor or any other person;
(d) any document presented in connection with this Guarantee proving to
be forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
(e) any payment by Guarantor under this Guarantee against presentation
of a certificate or other document that does not strictly comply with terms of
this Guarantee; and
(f) any other circumstances, other than payment in full, that might
otherwise constitute a defense available to, or discharge of, Borrower in
respect of the Agreement.
15. Neither the failure of Borrower or Lender to perform any covenant
or obligation in favor of Guarantor nor the failure or omission to make a demand
permitted hereunder shall in any way affect or limit Guarantor's obligations
under this Guarantee. If an action or proceeding to enforce this Guarantee is
brought, the beneficiary shall be entitled to recover from Guarantor costs and
expenses reasonably incurred, including without limitation reasonable fees and
expenses of counsel and out-of-pocket costs.
16. THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK. Communications with respect to this
Guarantee other than requests for payment pursuant to a notice referred to in
the preceding paragraph shall also be addressed to Guarantor at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, specifically referring to this Guarantee.
17. EACH PARTY HERETO HEREBY WAIVES THE RIGHT OF TRIAL BY JURY IN ANY
LITIGATION ARISING HEREUNDER AND ALSO WAIVES THE RIGHT IN ANY SUCH LITIGATION,
TO IMPOSE COUNTERCLAIMS OR SET-OFFS OF ANY
B-4
KIND OR DESCRIPTION UNLESS SUCH COUNTERCLAIM OR SET-OFF IS COMPULSORY OR
MANDATORY IN NATURE UNDER THE NEW YORK CIVIL PRACTICE LAW AND RULES. EACH PARTY
HERETO FURTHER 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 GUARANTEE OR THE TRANSACTIONS CONTEMPLATED HEREBY.
EACH PARTY HERETO 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.
EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN ANY SUCH
PROCEEDING PERSONALLY DELIVERED OR TRANSMITTED BY REGISTERED MAIL TO THE ADDRESS
SET FORTH ABOVE; PROVIDED THAT UPON ANY SUCH SERVICE BY REGISTERED MAIL THE
SENDING PARTY SHALL, SIMULTANEOUSLY THEREWITH, SEND NOTICE OF SUCH SERVICE TO
THE OTHER PARTY VIA FACSIMILE TRANSMISSION. NOTHING IN THIS AGREEMENT WILL
AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW.
18. Any notice hereunder shall be in writing and shall be personally
delivered, transmitted by postage prepaid registered mail, by facsimile,
telegram or cable to the parties at the address for notices set forth in the
Agreement. 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. Either party may change its
address for purposes hereof by notice to the other.
19. Capitalized terms used but not otherwise defined herein shall have
the respective meanings assigned to them in the Agreement.
LONG BEACH ACCEPTANCE CORP., Guarantor
By: _________________________________
Name:
Title:
AGREED AND ACCEPTED:
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., Lender
By: ____________________________
Name:
Title:
B-5
EXHIBIT C
FORM OF AMC GUARANTEE
June 15, 2000
Greenwich Capital Financial Products, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Guarantee by Ameriquest Mortgage Company of Long Beach
Acceptance Corp. Guarantee Dated as of June 15, 2000
------------------------------------------------------------
Ladies and Gentlemen:
1. For value received and in accordance with the terms of (i) the
Credit and Security Agreement, dated as of June 15, 2000 (the "AGREEMENT"),
among Greenwich Capital Financial Products, Inc., as Lender ("Lender"), Long
Beach Acceptance Receivables Corp., as Borrower ("BORROWER") and Long Beach
Acceptance Corp., as Guarantor ("LBAC"), and (ii) the Guarantee dated June 15,
2000 made by LBAC in favor of Lender (the "LBAC GUARANTEE"), Ameriquest Mortgage
Company, a Delaware corporation ("AMC"), hereby unconditionally and irrevocably
guarantees to Lender, or any successor in interest of Lender, the due, punctual
and complete payment and performance by LBAC when and as due, whether at the
stated maturity, by acceleration, upon one or more dates set for repayment or
prepayment or otherwise, of the LBAC Obligations. For purposes of this
guarantee, "LBAC OBLIGATIONS" shall mean any and all Obligations of LBAC to
Lender under the Agreement and the LBAC Guarantee. Lender may make demands under
this guarantee for such amounts and performance from time to time. AMC hereby
represents that its obligations hereunder do and shall rank PARI PASSU with all
unsecured and unsubordinated indebtedness of AMC, as applicable. Terms used and
not defined herein shall have the meanings assigned in the Agreement.
2. Payments and performance required under this guarantee shall be
payable and performed whenever any amount or performance guaranteed hereunder
has not been promptly made to Lender in accordance with the Agreement and the
LBAC Guarantee. When pursuing its rights and remedies hereunder against AMC,
Lender may, but shall be under no obligation to, pursue the rights, remedies,
powers and privileges as it may have against Borrower, LBAC or any other Person
or against any collateral security or guarantee for the LBAC Obligations or any
right of offset with respect thereto. Any failure by Lender to pursue the other
rights, remedies, powers or privileges or to collect any payments from Borrower,
LBAC or any other Person or to realize upon any collateral security or guarantee
or to exercise any right of offset, or any release of Borrower, LBAC or any
other Person or of any of the collateral security, guarantee or right of offset,
shall not relieve AMC of any liability hereunder, and shall not impair or affect
the rights, remedies, powers or privileges, whether express, implied or
available as a matter of law, of Lender against AMC.
C-1
3. AMC shall remain obligated hereunder notwithstanding that, without
any reservation of rights against AMC, and without notice to or further assent
by AMC, any demand for payment of any of the LBAC Obligations made by Lender may
be rescinded by Lender, and any of the LBAC Obligations continued, and the LBAC
Obligations, or the liability of any other Person upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
Lender, and the LBAC Guarantee or the Agreement and any other documents executed
and delivered in connection therewith may be amended, modified, supplemented or
terminated in accordance with the terms thereof, in whole or in part, as Lender
may deem advisable from time to time, and any collateral security, guarantee or
right of offset at any time held by Lender for the payment of the LBAC
Obligations may be sold, exchanged, waived, surrendered or released. Lender
shall have no obligation to protect, secure, perfect or insure any Lien at any
time held by it as security for the LBAC Obligations or for the guarantee set
forth herein or any property subject thereto. When making any demand hereunder
against AMC, Lender may, but shall be under no obligation to, make a similar
demand on Borrower, LBAC or any other guarantor and any release of Borrower,
LBAC or any other guarantor shall not relieve any of its obligations or
liabilities hereunder, and shall not impair or affect the rights, remedies,
powers and privileges, express or implied, or as a matter of law, of Lender
against AMC.
4. AMC waives any and all notice of the creation, renewal, extension or
accrual of any of the LBAC Obligations and notice of or proof of reliance by
Lender upon the guarantee of AMC set forth herein or acceptance of the guarantee
of AMC set forth herein; the LBAC Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the guarantee of AMC set forth
herein; and all dealings between LBAC or AMC, on the one hand, and Lender, on
the other, shall likewise be conclusively presumed to have been had or
consummated in reliance upon the guarantee of AMC set forth herein. AMC waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment and all other notices of any kind to or upon LBAC or AMC with respect
to the LBAC Obligations. The guarantee of AMC set forth herein shall be
construed as a guarantee of payment, and not of collection.
5. The guarantee set forth herein shall remain in full force and effect
and be binding in accordance with and to the extent of its terms upon AMC and
its successors and permitted assigns, and shall inure to the benefit of Lender,
and its respective successors, endorsees, transferees and assigns, until all the
LBAC Obligations and the obligations of AMC under this guarantee shall have been
satisfied by payment in full and the commitment of Lender under the Agreement
shall have been terminated. Notwithstanding Section 2.10 of the Agreement, the
obligations of AMC under this guarantee shall be fully recourse to AMC and all
property and assets of AMC whether now owned or hereinafter acquired, and AMC
shall remain liable for all of the LBAC Obligations pursuant to the terms of
this guarantee.
6. The guarantee set forth herein shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the LBAC Obligations is rescinded or must otherwise be restored or
returned by Lender for any reason whatsoever, including, without limitation,
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
LBAC or AMC or upon or as a result of the appointment of a receiver,
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intervenor or conservator of, or trustee or similar officer for, LBAC or AMC or
any substantial party of its property, or otherwise, all as though the payments
had not been made.
7. All payments due hereunder shall be paid in immediately available
funds after demand no later than 1:00 P.M. on the second Business Day following
the date of such demand. Demand shall be made in writing to AMC's office located
at ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: General Counsel or
such other address in the United States which may be designated by AMC by
written notice delivered to Lender.
8. To the full extent permitted by law, AMC hereby waives all rights of
subrogation, contribution, reimbursement, indemnity or otherwise, whether
arising by contract or operation of law (including, without limitation, any such
right arising under the Bankruptcy Code) or otherwise by reason of any payment
or performance by AMC pursuant to the provisions of this guarantee. Without
limitation to the foregoing, notwithstanding any payment or payments made by AMC
hereunder or any setoff or application of funds of AMC by Lender, AMC shall not
be entitled to be subrogated to any of the rights of Lender against or any
collateral security or guarantee or right of offset held by Lender for the
payment of the LBAC Obligations, nor shall AMC seek or be entitled to seek any
contribution or reimbursement from LBAC in respect of payments made by AMC
hereunder, until all amounts owing to Lender by LBAC on account of the LBAC
Obligations are paid in full and the commitment to Lender under the Agreement
shall have been terminated. If any amount shall be paid to AMC on account of the
subrogation rights at any time when all of the LBAC Obligations shall not have
been paid in full and the commitment to Lender under the Agreement shall not
have been terminated, the amount shall be held by AMC in trust for Lender,
segregated from other funds of AMC, and shall forthwith upon receipt by AMC, be
turned over to Lender in the exact form received by AMC (duly endorsed by AMC to
Lender, if required), to be applied against the LBAC Obligations, whether
matured or unmatured, at the time and in the order as Lender may determine.
Notwithstanding the foregoing, AMC may request reimbursement from Borrower or
Guarantor to the extent permitted pursuant to Section 9.16(b) of the Agreement.
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, AMC
EXPRESSLY WAIVES ANY AND ALL BENEFITS UNDER CALIFORNIA CIVIL CODE SECTIONS 2809,
2810, 2819, 2845, 2849, 2850, AND 2855, CALIFORNIA CODE OF CIVIL PROCEDURE
SECTIONS 580a, 580b, 580d, AND 726, AND ANY OTHER SURETYSHIP OR SIMILAR LAW OR
DEFENSE NOW OR HEREAFTER IN EFFECT.
9. AMC hereby represents and warrants to Lender as of the date of this
guarantee and on an ongoing basis on each date that the LBAC Obligations are
outstanding as follows:
(a) ORGANIZATION. It is a corporation duly incorporated and
validly existing in good standing under the laws of the State of Delaware and is
duly qualified to do business in each jurisdiction in which the failure to be so
qualified could reasonably be expected to have a material adverse effect on its
financial condition, operations, business or prospects.
(b) POWER AND AUTHORITY. It has all requisite corporate power
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
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its obligations under this guarantee, except as could not reasonably be expected
to have a material adverse effect on its financial condition, operations,
business or prospects.
(c) AUTHORIZATION OF GUARANTEE. All appropriate and necessary
action has been taken by it to authorize the execution and delivery of this
guarantee and the performance and observance of the terms hereof.
(d) GUARANTEE BINDING. This guarantee has been duly executed
and delivered and constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms, except as enforceability may be
limited by laws governing insolvency or creditors' rights generally and general
equity principles. The execution, delivery and performance of this guarantee
does not and 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 it is a party or by which it is
bound.
(e) COMPLIANCE WITH LAW. It is conducting its business and
operations in compliance with all applicable laws, regulations, ordinances and
directives of governmental authorities, except to the extent that any
noncompliance could not reasonably be expected to have a material adverse effect
on its financial condition, operation, business or prospects. It has filed all
tax returns required to be filed and has paid all taxes due in respect of the
ownership of its assets or the conduct of its operations 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.
(f) 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 it of this
guarantee have been obtained and are in effect, except as could not reasonably
be expected to have a material adverse effect on its financial condition,
operations, business or prospects or on its ability to perform the obligations
hereunder.
(g) 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 best of its knowledge, threatened
against or affecting it which, if determined adversely, may reasonably be
expected to have a material adverse effect on its business, operations or
financial condition.
(h) FINANCIAL STATEMENTS. The unaudited balance sheets of AMC
as at March 31, 2000, and the related statements of income for the fiscal
periods ended on such date, heretofore furnished to Lender, are complete and
correct in all material respects and fairly present the financial condition of
AMC as at said date (subject to normal year-end audit adjustments and tax
planning adjustments), all in accordance with U.S. generally accepted accounting
principles applied on a consistent basis. On said date, AMC had no material
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contingent liabilities, liabilities for taxes, unusual or anticipated losses
from any unfavorable commitments, except as referred to or reflected in said
balance sheets as at said date. Since March 31, 2000, there has been no material
adverse change in the operations, condition (financial or otherwise), business
or prospects of AMC from that set forth in said financial statements as at said
date.
(i) OTHER OBLIGATIONS. It is not in default in the
performance, observance or fulfillment of any obligation, covenant or condition
in any of the Basic Documents or in any agreement or instrument to which it is a
party or by which it is bound the result of which could reasonably be expected
to have a material adverse effect on its business, operations or financial
condition.
(j) 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.
(k) FULL DISCLOSURE. No representation or warranty made by or
on behalf of AMC contained in this guarantee and no written information or
information in any certificate, financial statement or report furnished or to be
furnished by or on behalf of AMC hereunder or in connection with the
transactions contemplated hereby contains or will contain an untrue statement of
a material fact, or, omits or will omit to state any material fact necessary to
make the statements herein or therein contained, in light of the circumstances
in which made, not misleading.
(l) ERISA. Set forth on Schedule 9(l) hereto is a list of all
Plans, if any, maintained by AMC or any of its subsidiaries. Except as may be
set forth on such schedule, neither AMC nor any of its subsidiaries maintains
any Plans, and AMC agrees to notify Lender in advance of forming any Plans.
Neither AMC nor any Commonly Controlled Entity 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. AMC will give notice if at any time it or
any Commonly Controlled Entity has any obligations or liabilities with respect
to any employee pension benefit plan or Multiemployer Plan. All Plans maintained
by AMC or any Commonly Controlled Entity are in substantial compliance with all
applicable laws (including ERISA). AMC is not an employer under any
Multiemployer Plan.
(m) BASIC DOCUMENTS. Each of the representations and
warranties made by it in (i) the AMC Guarantee, dated as of June 1, 2000, made
by AMC in favor of Financial Security Assurance Inc. and The Chase Manhattan
Bank and (ii) the Guarantee, dated as of June 1, 2000, made by AMC in favor of
Greenwich Capital Markets, Inc., relating to the Note Purchase Agreement, dated
June 15, 2000, among Borrower, Guarantor and Lender, is true and correct;
PROVIDED that this representation shall not be deemed to have been breached if
AMC shall have breached a representation or warranty in either such document but
shall have cured such breach within the applicable cure period, if any, set
forth therein.
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10. AMC hereby covenants as follows:
(a) NOTICE. It shall promptly give notice to Lender of the
occurrence of (i) any Event of Default relating to it under the Agreement or
event which with the giving of notice or the passing of time or both would
constitute such an Event of Default relating to it, specifying the event and the
action which it proposes to take with respect thereto, (ii) any event or
occurrence known to it which will or could reasonably be expected to adversely
affect the collectibility of the Receivables or the ability of LBAC to service
such Receivables or the ability of AMC to perform its obligations under any
related documents or (iii) any other event or occurrence which individually or
in the aggregate could reasonably be expected to materially and adversely affect
AMC's financial condition, operations, business or prospects.
(b) TAXES. AMC shall pay and discharge all taxes and
governmental charges upon it or against any of its properties or assets or its
income prior to the date after which penalties attach for failure to pay, except
(i) to the extent that AMC shall be contesting in good faith in appropriate
proceedings its obligation to pay such taxes or charges, adequate reserves
having been set aside for the payment thereof, or (ii) with respect to such
taxes and charges which are not material in either nature or amount such that
any failure to pay or discharge them, and any resulting penalties, either in any
one instance or in the aggregate, would not materially and adversely affect the
financial condition, operations, business or prospects of AMC.
(c) BOOKS AND RECORDS; OTHER INFORMATION. (i) AMC shall
maintain accurate and complete books and records with respect to its business.
All accounting books and records shall be maintained in accordance with
generally accepted accounting principles consistently applied.
(ii) Only to the extent reasonably necessary to protect
Lender's interest hereunder, AMC shall, and shall cause each of its respective
subsidiaries to, permit any representative of Lender to visit and inspect any of
the properties of AMC to examine the books and records of AMC and to make copies
and take extracts therefrom, and to discuss the business, operations,
properties, condition (financial or otherwise) or prospects of AMC and each such
subsidiary with the officers and independent public accountants thereof and as
often as Lender may reasonably request, and so long as no default hereunder
shall have occurred and be continuing, all at such reasonable times during
normal business hours upon reasonable notice. AMC shall provide to Lender all
information regarding its respective operations and practices as Lender shall
reasonably request in writing. In connection with the matters described in this
Section 10(c), Lender shall not at any time use or disclose to any Person,
except to any professional adviser who needs to know such information in
connection with the transactions contemplated hereby, or except in connection
with any litigation or arbitral proceedings commenced by or against Lender or
any of its affiliates, any information that may be within or may come to its or
their knowledge if such information is of a type that would generally be
expected to be held as confidential; PROVIDED that the foregoing shall not apply
to the extent that such information was (i) previously known by Lender from
sources other than AMC or its directors, officers or agents, (ii) in the public
domain through no fault of Lender, (iii) lawfully acquired by Lender on a
non-confidential basis from other sources who are not known by Lender to be
bound by a confidentiality agreement with AMC or (iv) required to be disclosed
by judicial or administrative process or by any other Requirement of Law.
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(d) PAYMENT OF FEES AND EXPENSES. AMC shall pay to Lender, on
demand, any and all fees, costs or expenses which Lender pays to a bank or other
similar institution arising out of or in connection with the return of payments
by AMC deposited for collection by Lender.
(e) CONTINUITY OF BUSINESS AND COMPLIANCE WITH AGREEMENT. AMC
shall continue in business in a prudent, reasonable and lawful manner with all
licenses, permits, and qualifications necessary to perform its obligations under
this guarantee, except where failure to do so could not reasonably be expected
to materially and adversely affect such performance.
(f) FINANCIAL STATEMENTS AND ACCESS TO RECORDS. AMC shall
provide Lender with quarterly unaudited financial statements within sixty (60)
days of the end of AMC's first three fiscal quarters, and will provide Lender
with audited annual financial statements within one hundred twenty (120) days of
AMC's fiscal year-end audited by a nationally recognized independent certified
public accounting firm. Upon request of Lender, AMC shall provide Lender with
unaudited monthly financial statements. AMC shall deliver to Lender with each
financial statement a certificate by AMC's chief financial officer, certifying
that such financial statements are complete and correct in all material respects
and that, except as noted in such certificate, such chief financial officer has
no knowledge of any default by it hereunder or any event which with the giving
of notice or the passing of time or both would constitute such a default.
(g) FINANCIAL CONDITION. AMC shall maintain a net worth of at
least 100% of the net worth AMC is required to maintain pursuant to the credit
documents AMC has entered into with its primary warehouse lender (which on the
date hereof is Chase Bank of Texas, National Association) (net worth, in each
case, being calculated in accordance with such credit documents); PROVIDED that,
if such credit documents are terminated and AMC does not have a primary
warehouse lender, the reference to such credit documents will be deemed to be to
such credit documents as in effect immediately prior to such termination. AMC
shall maintain a debt-to-equity ratio of no more than 100% of the debt-to-equity
ratio AMC is required to maintain pursuant to the credit documents AMC has
entered into with its primary warehouse lender (which on the date hereof is
Chase Bank of Texas, National Association) (debt-to-equity, in each case, being
calculated in accordance with such credit documents); PROVIDED that, if such
credit documents are terminated and AMC does not have a primary warehouse
lender, the reference to credit documents AMC has entered into with its primary
warehouse lender will be deemed to be to such credit documents as in effect
immediately prior to such termination.
(h) LITIGATION MATTERS. AMC shall notify Lender in writing,
promptly upon its learning thereof, of any litigation, arbitration or
administrative proceeding which may reasonably be expected to materially and
adversely affect the operations, financial condition or business of AMC or AMC's
ability to perform under this guarantee or other rights under this guarantee.
(i) FULFILLMENT OF OBLIGATIONS. AMC shall pay and perform, as
and when due, all of its obligations of whatever nature, except where the amount
or validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with generally accepted accounting
principles with respect thereto have been provided on the books of AMC, and
except to the extent that the failure to do so could not individually or in the
aggregate
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reasonably be expected to materially and adversely affect the financial
condition, operations, business or prospects of AMC.
(j) COMPLIANCE WITH LAWS, ETC. AMC shall, and shall cause each
of its respective subsidiaries to, comply (i) in all material respects with all
Requirements of Law and any change therein or in the application, administration
or interpretation thereof (including, without limitation any request, directive,
guideline or policy, whether or not having the force of law) by any Governmental
Authority charged with the administration or interpretation thereof; and (ii)
with all indentures, mortgages, deeds of trust, agreements, or other instruments
or contractual obligations to which it is a party, including without limitation,
each Basic Document to which it is a party, or by which it or any of its
properties may be bound or affected, or which may affect the Receivables, if the
failure to comply therewith could, individually or in the aggregate, reasonably
be expected to materially and adversely affect the financial condition,
operations, business or prospects of AMC.
(k) NO ASSIGNMENT. Except in connection with an assignment to
any successor that complies with Section 15 hereof, AMC shall not assign this
guarantee, except with the prior written consent of Lender, which consent shall
not be unreasonably withheld.
(l) VALUATION MODEL. AMC expressly accepts and acknowledges,
and agrees to comply with and be bound by, the provisions of Section 3.13 of the
Agreement.
11. The obligations of AMC under this guarantee are irrevocable,
primary, absolute and unconditional and shall be paid or performed strictly in
accordance with this guarantee under all circumstances irrespective of:
(a) any lack of validity or enforceability of the Agreement,
the LBAC Guarantee or of any of the Collateral, or any amendment, other
modification or waiver in respect thereof;
(b) any exchange or release of any other obligations
hereunder;
(c) the existence of any claim, set-off, defense, reduction,
abatement or other right that Lender, Borrower or LBAC may have at any time
against any of Borrower, LBAC, AMC or any other person;
(d) any document presented in connection with the Agreement,
the LBAC Guarantee or this guarantee proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(e) any payment by AMC under this guarantee against
presentation of a certificate or other document that does not strictly comply
with terms of this guarantee; and
(f) any other circumstances, other than payment in full, that
might otherwise constitute a defense available to, or discharge of, Lender,
Borrower or LBAC in respect of the Agreement or the LBAC Guarantee.
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12. Neither the failure of Borrower, Lender or LBAC to perform any
covenant or obligation in favor of AMC nor the failure or omission to make a
demand permitted hereunder shall in any way affect or limit AMC's obligations
under this guarantee.
13. AMC agrees to:
(i) pay or reimburse Lender on demand for all its reasonable
out-of-pocket costs and expenses incurred in connection with
the development, preparation and execution of, and any
amendment, modification or supplement to, or any waiver under,
this guarantee, the LBAC Guarantee and any other document
prepared in connection therewith, and the consummation and
administration of the transactions contemplated thereby,
including without limitation the reasonable fees and
disbursements of counsel to Lender;
(ii) pay on demand all reasonable costs and expenses of
Lender, including without limitation the reasonable fees and
disbursements of counsel to Lender, in connection with the
occurrence or continuance of a default under this guarantee
and the LBAC Guarantee and the enforcement, collection,
protection or preservation (whether through negotiations,
legal proceedings or otherwise) of this guarantee, any LBAC
Obligation or any right, remedy, power or privilege of Lender
hereunder or under the LBAC Guarantee;
(iii) pay and hold Lender harmless from and against any and
all present and future stamp, excise, recording or other
similar taxes or fees payable in connection with the
execution, delivery, recording and filing of this guarantee or
the LBAC Guarantee and hold Lender harmless from and against
any and all liabilities with respect to or resulting from any
delay or omission to pay such taxes or fees; and
(iv) indemnify Lender and its affiliates and each of their
respective directors, officers, employees and agents and hold
each of them harmless from and against, any and all
liabilities, losses, damages, penalties, actions, judgments,
suits, claims, costs, expenses and disbursements, including
without limitation the reasonable fees and disbursements of
counsel to Lender and such other parties, incurred by any of
them in connection with, arising out of or in any way relating
to any investigation, claim, litigation or other proceeding,
pending or threatened (whether or not any of them is
designated a party thereto), in connection with, arising out
of or in any way related to this guarantee or the LBAC
Guarantee or any of the transactions contemplated herein or
therein; PROVIDED that Lender shall not be entitled to any
indemnification for any of the foregoing resulting from its
gross negligence or willful misconduct.
If and to the extent that the indemnity obligations of AMC under this Section 13
may be unenforceable for any reason, AMC hereby agrees to make the maximum
contribution to the payment and satisfaction of each of such indemnity
obligations which is permissible under applicable law.
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14. 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 default under this guarantee or the LBAC Guarantee Lender is hereby
authorized at any time and from time to time, without notice to AMC or to any
other person or entity, any such notice being hereby expressly waived, to
set-off against any obligation owing by Lender or any affiliate of Lender to
LBAC or AMC, or against any funds or other property of LBAC or AMC held by or
otherwise in the possession of Lender or any affiliate of Lender, the LBAC
Obligations and the obligations and liabilities of AMC to Lender hereunder,
irrespective of whether or not Lender shall have made any demand hereunder or
under the LBAC Guarantee.
15. Any Person (i) into which AMC may be merged or consolidated, (ii)
resulting from any merger or consolidation to which AMC is a party or (iii)
succeeding to all or substantially all of the business of AMC shall execute an
agreement of assumption to perform every obligation of AMC under this guarantee,
and whether or not such assumption agreement is executed, shall be the successor
to AMC hereunder (without relieving AMC of its responsibilities hereunder, if it
survives such merger or consolidation) without the execution or filing of any
document or any further act by any of the parties to this guarantee.
16. Each party shall, from time to time after execution of this
guarantee and without further consideration, execute such documents or take such
action as may be reasonably necessary to carry out the purpose or intention of
this guarantee.
17. THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK. Communications with respect to this
guarantee other than requests for payment pursuant to a notice referred to in
the preceding paragraph shall also be addressed to AMC at ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: General Counsel, specifically referring to
this guarantee.
18. EACH PARTY HERETO HEREBY WAIVES THE RIGHT OF TRIAL BY JURY IN ANY
LITIGATION ARISING HEREUNDER AND 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. EACH PARTY HERETO FURTHER 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
GUARANTEE OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO 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. EACH PARTY HERETO IRREVOCABLY CONSENTS TO
SERVICE OF PROCESS IN ANY SUCH PROCEEDING PERSONALLY DELIVERED OR TRANSMITTED BY
REGISTERED MAIL TO THE ADDRESS SET FORTH ABOVE; PROVIDED THAT UPON ANY SUCH
SERVICE BY REGISTERED MAIL THE SENDING
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PARTY SHALL, SIMULTANEOUSLY THEREWITH, SEND NOTICE OF SUCH SERVICE TO THE OTHER
PARTY VIA FACSIMILE TRANSMISSION. NOTHING IN THIS AGREEMENT WILL AFFECT THE
RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
19. Any notice hereunder shall be in writing and shall be personally
delivered, transmitted by postage prepaid registered airmail, by facsimile,
telegram or cable to the parties at the address for notices set forth in the
Agreement. 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. Either party may change its
address for purposes hereof by notice to the other.
20. Capitalized terms used but not otherwise defined herein shall have
the respective meanings assigned to them in the Agreement.
AMERIQUEST MORTGAGE COMPANY
By: ________________________________________
Name:
Title:
AGREED AND ACCEPTED:
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., Lender
By: ________________________________________
Name:
Title:
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SCHEDULE 9(l)
PLANS
Ameriquest Mortgage Company 401(k) Plan
PPO/HMO Health Plan
Dental Plan Vision Service Plan
Short and Long Term Disability Plan
Company Paid Life & AD&D
Dependent Care Reimbursement Plan
Health Care Spending Account
EXHIBIT D
FORM OF NOTICE OF BORROWING
[Date]
Greenwich Capital Financial Products, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
In accordance with Section 2.2(a) of that certain Credit and Security
Agreement, dated as of June 15, 2000 (as amended, modified or otherwise
supplemented from time to time, the "AGREEMENT", the terms defined therein being
used herein as defined therein), by and among Greenwich Capital Financial
Products, Inc., as Lender, the undersigned, as Borrower, and Long Beach
Acceptance Corp., as Guarantor, the undersigned hereby requests a Loan in an
aggregate principal amount equal to $___________, to be disbursed in the manner
provided below. We are sending to you herewith or have heretofore sent to you
the Initial Data File specified in Section 2.2(a) of the Agreement.
The undersigned hereby certifies that the following statements are true
on the date hereof:
A. the representations and warranties contained in Section 4 of the
Agreement are true and correct; and
B. no Default, Event of Default or Other RF Event of Default has
occurred and is continuing.
Capitalized terms used but not defined herein shall have the respective
meanings assigned to them in the Agreement.
DISBURSEMENT INSTRUCTIONS:
Very truly yours,
Long Beach Acceptance Receivables Corp.,
as Borrower
By:
------------------------------------
Name:
Title:
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EXHIBIT E
FORM OF OPINION OF COUNSEL TO THE
BORROWER AND EACH GUARANTOR*
June 15, 2000
Greenwich Capital Financial Products, Inc.
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Credit and Security Agreement, dated as of June 15, 2000, by
and among Greenwich Capital Financial Products, Inc., as
Lender, Long Beach Acceptance Receivables Corp., as Borrower
and Long Beach ACCEPTANCE CORP., AS GUARANTOR
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Ladies and Gentlemen:
We have acted as special counsel to Long Beach Acceptance Receivables
Corp., a Delaware corporation (the "BORROWER"), Long Beach Acceptance Corp., a
Delaware corporation ("LBAC") and Ameriquest Mortgage Company, a Delaware
corporation ("AMC") in connection with the preparation, execution and delivery
of:
(a) the Credit and Security Agreement, dated as of June 15, 2000 (the
"CREDIT AND SECURITY AGREEMENT"), by and among Greenwich Capital
Financial Products, Inc. (the "LENDER"), Borrower and LBAC, as
Guarantor;
(b) the Promissory Note (as defined in the Credit and Security
Agreement);
(c) the Guarantee, dated June 15, 2000 (the "LBAC GUARANTEE"), made by
LBAC in favor of Lender; and
(d) the Guarantee, dated June 15, 2000 (the "AMC GUARANTEE"), made by
AMC in favor of Lender.
(the documents referred to in clauses (a) through (d), collectively, the
"DELIVERED DOCUMENTS").
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* May be incorporated into such other opinions delivered by counsel to Borrower
and each Guarantor in connection with the Securitization Transaction.
This opinion is being furnished to Lender at the request of Borrower,
LBAC and AMC.
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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 Borrower, LBAC and AMC, each as in effect on the date
hereof, (iii) resolutions of the boards of directors of each of Borrower, LBAC
and AMC 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 Borrower, LBAC and AMC 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, (i) the representations and warranties contained in
the Delivered Documents, and (ii) 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 Borrower, LBAC
and AMC), 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 and the
authenticity of the originals of such copies. We have also assumed the due
execution and delivery, pursuant to due authorization, by Lender of the Credit
and Security Agreement.
We are admitted to the bar in the State of New York and we express no
opinion as to the laws of any jurisdiction other than the laws of the State of
New York, the State of Delaware 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 Borrower, LBAC and AMC (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 to have a material adverse effect
on the business, operations, property or condition (financial or otherwise) or
prospects of Borrower, LBAC or AMC (a "MATERIAL ADVERSE EFFECT").
2. Borrower has the corporate power and authority to execute, deliver
and perform each of the Credit and Security Agreement and the Promissory Note,
to borrow under the Credit and Security Agreement and the Promissory Note, and
to grant liens pursuant to the Credit and Security Agreement, and has taken all
necessary corporate action to authorize such borrowing, the granting of such
liens on the terms and subject to the conditions of the Credit and Security
Agreement, and the execution, delivery and performance of each of the Credit and
Security Agreement and the Promissory Note. LBAC has the corporate power and
authority to execute, deliver and perform each of the Credit and Security
Agreement and the LBAC Guarantee, and has taken all necessary corporate action
to authorize the execution, delivery and performance of the Credit and Security
Agreement and the LBAC Guarantee. AMC has the corporate power and
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authority to execute, deliver and perform the AMC Guarantee, and has taken all
necessary corporate action to authorize the execution, delivery and performance
of the AMC Guarantee.
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 New York, the
State of California or the State of Delaware is required in connection with the
borrowing under the Credit and Security Agreement and the Promissory 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 Credit and Security Agreement and the Promissory Note
has been duly executed and delivered on behalf of Borrower and constitutes a
legal, valid and binding obligation of Borrower, enforceable against Borrower in
accordance with its terms, subject to the effect of (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer or other similar
laws relating to or affecting the rights of creditors and (ii) the application
of general principles of equity (regardless of whether enforceability is
considered in proceedings at law or in equity). Each of the Credit and Security
Agreement and the LBAC Guarantee has been duly executed and delivered on behalf
of LBAC and constitutes a legal, valid and binding obligation of LBAC,
enforceable against each LBAC in accordance with its terms, subject to the
effect of (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or transfer or other similar laws relating to or affecting the rights
of creditors and (ii) the application of general principles of equity
(regardless of whether enforceability is considered in proceedings at law or in
equity). The AMC Guarantee has been duly executed and delivered on behalf of AMC
and constitutes a legal, valid and binding obligation of AMC, enforceable
against AMC in accordance with its terms, subject to the effect of (i)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
transfer or other similar laws relating to or affecting the rights of creditors
and (ii) the application of general principles of equity (regardless of whether
enforceability is considered in proceedings at law or in equity).
5. The execution, delivery and performance by each of Borrower, LBAC
and AMC of the Delivered Documents to which it is a party, the borrowing by
Borrower under the Credit and Security Agreement and the use of the proceeds
thereof, and the granting of liens by Borrower pursuant to the Credit and
Security Agreement, will not violate any Requirement of Law of the State of New
York, the State of California or in respect of the General Corporation Law of
the State of Delaware or Regulation G of the Board of Governors of the Federal
Reserve System, 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
Borrower, LBAC or AMC is a party or by which Borrower, LBAC or AMC 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 Credit and Security Agreement in
favor of Lender). As used herein "REQUIREMENT OF LAW" means the governing
documents of Borrower, LBAC or AMC, 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, Borrower, LBAC or AMC or any of their
respective properties or to which Borrower, LBAC or AMC or any of their
respective properties is subject.
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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 Borrower, LBAC, AMC or any of their respective subsidiaries or
against any of 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. Borrower is not (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 Credit and Security Agreement are effective to
create, in favor of Lender, a legal, valid and enforceable security interest in
all right, title and interest of Borrower in the "Collateral" described therein.
9. Upon (i) delivery to Lender of the Pledged Securities, together with
a bond power for each Pledged Security endorsed in blank by a duly authorized
officer of 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 Credit and Security Agreement will
constitute fully perfected first priority security interests in all right, title
and interest of 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 New York.
10. The issuance of the Promissory Note, the LBAC Guarantee and the AMC
Guarantee to Lender pursuant to the Credit and Security Agreement are not
transactions requiring the registration of the Promissory Note, the LBAC
Guarantee or the AMC Guarantee under the Securities Act of 1933, as amended.
This opinion is rendered only to Lender is solely for its
benefit in connection with the above transactions and may not be relied upon by
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,
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EXHIBIT F
LITIGATION MATTERS
1. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ FORD, Case No. BC229917, filed May 12, 2000 in
California Superior Court, Los Angeles County.
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EXHIBIT G
OTHER RESIDUAL FINANCING AGREEMENTS
Credit and Security Agreement dated as of March 31, 1997 by and among Greenwich
Capital Financial Products, Inc., as lender, Long Beach Acceptance Receivables
Corp., as borrower, and Long Beach Acceptance Corp., as guarantor, as amended by
Amendment No. 1 thereto dated as of January 30, 1998, as further amended by the
Omnibus Amendment Agreement dated as of March 31, 1999 and Omnibus Amendment
Agreement No. 3 dated as of April 14, 2000, and as otherwise amended,
supplemented or modified from time to time pursuant to the terms thereof.
Credit and Security Agreement dated as of August 29, 1997 by and among Greenwich
Capital Financial Products, Inc., as lender, Long Beach Acceptance Receivables
Corp., as borrower, and Long Beach Acceptance Corp., as guarantor, as amended by
Amendment No. 1 thereto dated as of January 30, 1998, as further amended by the
Omnibus Amendment Agreement dated as of March 31, 1999, Omnibus Amendment
Agreement No. 2 dated as of August 12, 1999 and Omnibus Amendment Agreement No.
3 dated as of April 14, 2000, and as otherwise amended, supplemented or modified
from time to time pursuant to the terms thereof.
Credit and Security Agreement dated as of January 30, 1998 by and among
Greenwich Capital Financial Products, Inc., as lender, Long Beach Acceptance
Receivables Corp., as borrower, and Long Beach Acceptance Corp., as guarantor,
as amended by the Omnibus Amendment Agreement dated as of March 31, 1999 and
Omnibus Amendment Agreement No. 3 dated as of April 14, 2000, and as otherwise
amended, supplemented or modified from time to time pursuant to the terms
thereof.
Credit and Security Agreement dated as of November 25, 1998 by and among
Greenwich Capital Financial Products, Inc., as lender, Long Beach Acceptance
Receivables Corp., as borrower, and Long Beach Acceptance Corp., as guarantor,
as amended by the Omnibus Amendment Agreement dated as of March 31, 1999,
Omnibus Amendment Agreement No. 2 dated as of August 12, 1999 and Omnibus
Amendment Agreement No. 3 dated as of April 14, 2000, and as otherwise amended,
supplemented or modified from time to time pursuant to the terms thereof.
Credit and Security Agreement dated as of August 12, 1999 by and among Greenwich
Capital Financial Products, Inc., as lender, Long Beach Acceptance Receivables
Corp., as borrower, and Long Beach Acceptance Corp., as guarantor, as amended by
Omnibus Amendment Agreement No. 3 dated as of April 14, 2000, and as otherwise
amended, supplemented or modified from time to time pursuant to the terms
thereof.
Credit and Security Agreement dated as of December 9, 1999 by and among
Greenwich Capital Financial Products, Inc., as lender, Long Beach Acceptance
Receivables Corp., as borrower, and Long Beach Acceptance Corp., as guarantor,
as amended by Omnibus Amendment Agreement No. 3 dated as of April 14, 2000 and
as otherwise amended, supplemented or modified from time to time pursuant to the
terms thereof.
Warehouse Lending Agreement dated as of January 30, 1998 between Long Beach
Acceptance Corp., as Borrower, and Greenwich Capital Financial Products, Inc.,
as Lender, as renewed and
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amended by the Renewal and Amendment Agreement dated as of January 29, 1999, and
as otherwise amended, supplemented or modified from time to time pursuant to the
terms thereof.
Security Agreement dated as of January 30, 1998 made by Long Beach Acceptance
Corp., as Pledgor, in favor of Greenwich Capital Financial Products, Inc., as
Pledgee, as amended, supplemented or modified from time to time in accordance
with the terms thereof.
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