EXECUTION COPY
AMENDED AND RESTATED MASTER
LOAN AGREEMENT
This Amended and Restated Master Loan
Agreement ("Agreement") is made as of this 30th
day
of
April, 1997
among AEGIS CONSUMER
FINANCE, INC. ("ACF"), a Delaware corporation,
AEGIS
AUTO FINANCE, INC., a Delaware
corporation
("AAF") (AAF and ACF are sometimes
referred to hereinafter individually as a "Borrower"
and collectively as the "Borrowers") and III
FINANCE LTD., a Cayman Islands company
("Lender").
PRELIMINARY STATEMENT:
WHEREAS, Borrowers and Lender
are party to certain "Existing Loan Agreements" (as
defined herein);
WHEREAS, Borrowers and Lender
have agreed, on the terms and conditions set forth
herein, to modify certain terms of the Loan
Agreements and to amend and restate all of the
terms and provisions of the Loan Agreements in this
Agreement;
NOW, THEREFORE, in
consideration of the terms and conditions contained
herein, and of the loans or extension of credit
previously or hereafter made to or for the benefit of
Borrowers by Lender hereunder, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 General Terms. When
used herein, the following terms shall have the
following meanings:
"AAC" shall mean Aegis Acceptance
Corp., a Delaware corporation.
"AAF I" shall mean Aegis Auto
Funding Corp., a Delaware corporation.
"AAF II" shall mean Aegis Auto
Funding Corp. II, a Delaware corporation.
"AAF IV" shall mean Aegis Auto
Funding Corp. IV, a Delaware corporation.
"ACM" shall mean Aegis Capital
Markets, Inc., a Delaware corporation.
"Additional Loan" shall have the
meaning set forth in Section 2.1.
"Affiliate" shall mean, as to any
Person, any other Person that, directly or
indirectly, controls, is controlled by or is
under common control with such Person or
is a director or officer of such Person.
"Backup Servicer" shall have, with
respect to any Trust, the meaning set forth in
the applicable Pooling and Servicing
Agreement. The term includes, without
limitation, each "Backup Servicer" under and
as defined in any Existing Loan Agreement.
"Business Day" shall mean any day
other than a Saturday, Sunday, legal holiday
or other day under the laws of Bermuda, the
United States, or the State of New York, on
which commercial banking institutions are
obligated by law or executive order to be
closed.
"Change in Control" shall mean any
of the following: (i) the Parent ceases to be
the owner, directly or indirectly, of 100% of
the equity interest in, and capital stock of
either Borrower; or (ii) any of Xxxxxx
Xxxxxxxx, Xxxxxx Xxxxxxxx or Xxxx Xxxxxxx
shall cease to hold their current positions or
cease to be otherwise actively involved in
the management of either Borrower,
provided, however, that should any one of
the foregoing individuals (and only one)
cease to hold his current office or cease to
be actively involved in management of either
Borrower and the Parent as a result of death,
disability or discharge for cause, then no
"Change of Control" shall be deemed to have
occurred under this definition unless and
until another of the foregoing individuals
ceases to hold his current office or ceases to
be actively involved in management as
described above.
"Collateral" shall mean all
"Collateral" as defined in any of the Existing
Loan Agreements and all other property and
interests of property in which a security
interest has been granted to Lender to secure
the Obligations and shall include all
Warehouse Collateral and all Pledged Stock,
LP Units and related property pledged under
any Pledge Agreement.
"Default" shall mean any event
which, with the passage of time or the giving
of notice, or both, would constitute an Event
of Default.
"Distribution Date" shall have, with
respect to any Trust, the meaning set forth in
the applicable Pooling and Servicing
Agreement.
"Effective Date" shall mean the date
on which this Agreement shall have become
effective in accordance with the terms of
Section 3.1.
"ERISA" shall mean the Employee
Retirement Income Security Act of 1974, as
amended from time to time, together with
any regulations promulgated and rulings
issued thereunder from time to time.
"Event of Default" shall mean any
one or more of the events specified in
Section 7.1.
"Excess Receipts" shall have, with
respect to any Trust, the meaning set forth in
the applicable Pooling and Servicing
Agreement. The term includes, without
limitation, all of the "Excess Receipts" under
and as defined in any Existing Loan
Agreement.
"Existing AAF Loan
Agreements" shall mean (i) those
certain Loan and Security
Agreements between AAF and
Lender, dated as of June 20, 1995,
September 25, 1995, December 20,
1995, March 22, 1996, May 20,
1996, June 25, 1996 and September
12, 1996, respectively, as the same
have been amended, restated or
otherwise modified from time to time
and (ii) the Old Warehouse Loan
Agreement.
"Existing ACF Loan
Agreements" shall mean those certain
Loan and Security Agreements
between Aegis Consumer Finance,
Inc. and Lender, dated as of August
11, 1994, September 28, 1994,
December 22, 1994 and March 22,
1995, respectively, as the same have
been amended, restated or otherwise
modified from time to time.
"Existing Loan Agreements"
shall mean the Existing ACF Loan
Agreements and the Existing AAF
Loan Agreements.
"Existing Loans" shall mean the
"Loans" outstanding
as of the date hereof
under
the Existing Loan
Agreements,
including all "Loans" evidenced by that
certain Amended and Restated Promissory
Note dated March 19, 1997 in the principal
amount of $23,357,834.12.
"Financing Agreements" shall mean
all agreements, instruments and documents,
including, without limitation, this
Agreement, the Guaranty, the Note, the
Pledge Agreements, the SPC
Acknowledgments, the Partnership
Acknowledgments, and all other assignments,
security agreements, pledge instructions, loan
agreements, notes, guarantees, certificates of
title, subordination agreements, pledges,
powers of attorney, consents, assignments,
contracts, notices, leases, financing
statements, instruments, documents and all
other written matter whether heretofore, now
or hereafter executed by or on behalf of
Borrowers in connection with the
transactions contemplated by this Agreement.
"Funding Date" shall mean any date
on which an Additional Loan is made
hereunder.
"Global" shall mean III Global Ltd.,
a Cayman islands company.
"Governmental Authority" shall mean
any nation or government, any federal, state,
local or other political subdivision thereof
and any entity exercising executive,
legislative, judicial, regulatory or
administrative functions of or pertaining to
government.
"Guaranty" shall mean that certain
Guaranty executed by Parent pursuant to
which Parent guaranties all of the
Obligations of Borrowers to Lender under
this Agreement.
"Indebtedness" of any Person shall
mean (i) indebtedness of such Person for
borrowed money, (ii) obligations of such
Person evidenced by bonds, debentures,
notes or other similar instruments, (iii)
obligations of such Person to pay the
deferred purchase price of property or
services (excluding trade payables payable
within 30 days of delivery of goods or
services), (iv) obligations of such Person as
lessee under leases which shall have been or
should be, in accordance with generally
accepted accounting principles, recorded as
a capital lease, (v) obligations secured by
any Lien upon property or assets owned by
such Person, even though such Person has
not assumed or become liable for the
payment of such obligations, and (vi)
obligations of such Person under direct or
indirect guaranties in respect of, and
obligations (contingent or otherwise) to
purchase or otherwise acquire, or otherwise
to assure a creditor against loss in respect of,
indebtedness or obligations of others of the
kinds referred to in clause (i) through (v)
above.
"Indenture" shall mean that certain
Indenture as of even date herewith relating
to the Subordinated Debentures.
"Indenture Trustee" shall mean
Norwest Bank Minnesota, N.A., as trustee
for the holders of the Subordinated
Debentures, or any successor trustee.
"Intercreditor Agreement" shall mean
that certain Intercreditor dated August 13,
1996 by and among Lender, Borrowers and
Greenwich Capital Financial Products, Inc.,
as such agreement may be superseded and
restated by a new Intercreditor Agreement
among such parties and the Indenture
Trustee to be executed after the effective
date hereof.
"IRC" shall mean the Internal
Revenue Code of 1986, as amended.
"Lease Warehouse Facility" shall
mean the outstanding credit facility made by
Lender to AAC and Aegis Consumer
Finance, Inc., a Delaware corporation,
pursuant to the Loan and Security
Agreement, dated February 28, 1994, as
amended from time to time.
"Loan Warehouse Facility" shall
mean the outstanding credit facility made by
Lender to AAF pursuant to the Loan and
Security Agreement, dated as of March 14,
1997 among Lender, AAF and Global.
"Lien" shall mean any security
interest, charge, pledge, option or lien or
other encumbrance of any nature, whether
arising under contract or by operation of
law.
"Loans" shall mean the Existing
Loans and the Additional Loans.
"LP Unit" shall mean each unit
representing a limited partnership interest in
any of the Partnerships.
"Master Certificate Purchase
Agreement" shall mean that certain Master
Certificate Purchase Agreement, dated as of
March 14, 1997 from AAF IV and the
Parent to Finance and Global.
0
"Master Trust Agreement" shall mean
that certain Master Trust Agreement, dated
as of March 1, 1997 between AAF IV and
Norwest Bank Minnesota, National
Association, as Trustee.
"Note" shall mean (i) the amended
and restated promissory note of Borrowers in
favor of Lender substantially in the form of
Exhibit A and (ii) any other note which
Lender may request from Borrowers in order
to evidence an Additional Loan.
"Obligations" shall mean all of the
payment and performance obligations and
liabilities of Borrowers to Lender under this
Agreement, the Existing Loan Agreements,
the other Financing Agreements, and the
other "Financing Agreements" (as such term
is defined in each Existing Loan Agreement.
"Old Warehouse Loan Agreement"
shall mean that certain Loan and Security
Agreement among AAF, ACM, AAC and
Lender, dated as of November 8, 1993, as
the same has been amended, restated or
otherwise modified from time to time,
including that certain Master Amendment to
Loan and Security Agreements dated as of
March 19, 1997 by and among Borrowers
and Lender whereby ACF agreed to assume
certain obligations of AAF thereunder and
whereby each of the Borrowers agreed to
certain amendments to such old agreement.
"Parent" shall mean The Aegis
Consumer Funding Group, Inc., a Delaware
corporation formerly known as Aegis
Holdings Corporation.
"Partnership Acknowledgments" shall
mean those certain Acknowledgments
executed by each of the Partnerships as of
the date hereof whereby such Partnership
acknowledges the terms of this Agreement
and the Pledge Agreements and agrees to
comply with certain provisions hereof
pertaining to such Partnership and agrees to
pay directly to the Lender any and all
amounts owed by such Partnership to either
Borrower.
"Partnership Agreement" shall mean,
with respect to any Partnership, the
Agreement of Limited Partnership or
equivalent agreement for such Partnership.
"Partnerships" shall mean the
following partnerships, each a Delaware
limited partnership, owned directly or
indirectly by ACF: Aegis Auto Receivables
0000-X, Xxxxx Auto Receivables 0000-0,
Xxxxx Auto Receivables 0000-0, Xxxxx Auto
Receivables 1995-1.
"Person" shall mean any individual,
sole proprietorship, partnership, joint
venture, trust, unincorporated organization,
association, corporation, institution, entity,
party or government (whether national,
federal, state, provincial, county, city,
municipal or otherwise, including without
limitation, any instrumentality, division,
agency, body or department thereof).
"Pledge Agreements" shall mean each
of those certain Pledge Agreements dated as
of even date herewith whereby the
Borrowers reaffirm and restate the pledges of
the Pledged SPC Stock and the LP Units
previously made under or in connection with
the Existing Loan Agreements.
"Pledged SPC Stock" shall mean all
of the issued and outstanding stock of AAF
I, AAF II and AAF IV.
"Pooling and Servicing Agreement"
shall mean, with respect to any Trust, the
Pooling and Servicing Agreement executed
in connection with the formation of such
Trust. The term includes, without limitation,
each "Pooling and Servicing Agreement"
under and as defined in any Existing Loan
Agreement.
"Purchase Agreement"
shall
mean,
with respect to any Trust, the Purchase
Agreement
whereby AAF sold the
"Receivables" to an SPC or Partnership, as
applicable, for re-sale to the applicable Trust.
The term includes, without limitation, each
"Purchase Agreement" under and as defined
in any Existing Loan Agreement.
"RDI Policy" shall mean one of the
risk default policies maintained with respect
to the Receivables.
"Receivables" shall mean all
indebtedness of an obligor evidenced by a
retail installment sales contract and security
agreement or similar contract, whether such
contract is originated by either Borrower or
purchased from a dealer by either Borrower,
which indebtedness either (i) is included in
the "Warehouse Collateral" under the Loan
Warehouse Facility or (ii) has been sold by
a Borrower to an SPC or Partnership and re-
sold by such SPC or Partnership to a Trust.
"Registry" shall have the meaning set
forth in Section 8.8.
"Report Date" shall mean the 20th
day of each calendar month or, if such day
is not a Business Day, then the next
succeeding Business Day.
"Residual Interest" shall have, with
respect to any Trust, the meaning set forth in
the applicable Pooling and Servicing
Agreement. The term includes, without
limitation, each "Residual Interest" under and
as defined in any Existing Loan Agreement.
"Servicer" shall
have, with respect to
any Trust, the
meaning set forth in the
applicable Pooling
and Servicing Agreement.
"SPC" shall mean
any of AAF I,
AAF II and AAF IV, each a Delaware
corporation and
a wholly-owned subsidiary
of
AAF.
"SPC Acknowledgments"
shall mean
those certain
Acknowledgments
executed by
each of the
SPCs
as of the
date hereof
whereby
such SPC
acknowledges
the terms
of this Agreement
and the Pledge
Agreements and
agrees
to comply with
certain provisions hereof pertaining to the
SPCs
and
agrees to pay directly to the
Lender any and all amounts owed by such
SPC to either Borrower.
"Subordinated Debentures" shall
mean AAF's $21,333,333 12% Exchangeable
Subordinated Debentures guaranteed by the
Parent.
"Termination Date" shall mean the
earlier of (i) the fourth anniversary of the
date hereof and (ii) the date on which
Lender terminates this Agreement pursuant
to Section 7.1(A).
"Trust" shall mean any of the grantor
trusts established by an SPC or a Partnership
pursuant to a Pooling and Servicing
Agreement. The term includes, without
limitation, each "Trust" under and as defined
in any Existing Loan Agreement and each
Trust created under the Master Trust
Agreement.
"Trust Certificates" shall mean, with
respect to any Trusts, the pass-through
certificates issued pursuant to the applicable
Pooling and Servicing Agreement. The term
includes all such certificates purchased
pursuant to the Master Certificate Purchase
Agreement.
"Trustee" shall mean, with respect to
any Trust, the trustee named in the
applicable Pooling and Servicing Agreement.
"VSI Policy" shall mean the vendors'
single interest physical damage insurance
policy maintained with respect to the
Receivables.
"Warehouse Collateral" shall mean all
of the "Collateral" pledged by AAF to the
Lender under the Old Warehouse Loan
Agreement.
Section 1.2 Terms Defined in
Uniform Commercial Code. All other terms
contained in this Agreement (and which are not
otherwise specifically defined herein) shall have the
meanings provided by the Uniform Commercial
Code as in effect from time to time in the State of
New York (the "Code") to the extent the same are
used or defined therein.
Section 1.3 Accounting Terms. All
accounting terms not specifically defined herein
shall be construed in accordance with generally
accepted accounting principles, consistently applied.
Section 1.4 Other Terms. Any
references herein to exhibits, sections, articles or
schedules, unless otherwise specified, are references
to exhibits, sections, articles or schedules of this
Agreement. The words "hereof", "herein", and
"hereunder" and words of similar import when used
in this Agreement shall refer to this Agreement as a
whole and not to any particular provisions of this
Agreement. Wherever appropriate in context, terms
used herein in the singular also include the plural,
and vice-versa, and each masculine, feminine or
neuter pronoun shall also include the other gender.
Section 1.5 Preliminary Statement.
The Preliminary Statement is incorporated herein by
this reference thereto.
ARTICLE II
LOANS AND INTEREST
Section 2.1 Loans. (a) Subject to
the terms and conditions contained in the Existing
Loan Agreements, Lender has previously extended
to Borrowers the Existing Loans, for which
Borrowers are liable on a joint and several basis,
and Lender may, in its sole discretion from time to
time, hereafter extend further loans ("Additional
Loans") to Borrowers on a joint and several basis.
Borrowers hereby acknowledge that Lender has no
commitment to make any Additional Loans and that
the provisions contained herein are for
administrative convenience in the event that any
such Additional Loans are made the repayment
terms of which are to be governed hereby.
(b) The aggregate principal amount
of the Existing Loans shall be evidenced by a Note
(as described in clause (i) of the definition thereof),
dated the date hereof (or, if later, as of the Effective
Date) and in the aggregate outstanding principal
amount of the Existing Loans; in the event that
Lender so requests, any Additional Loans may be
evidenced either by a new Note or by an amendment
of the existing Note to reflect the increased principal
amount resulting from such Additional Loans;
provided, however, that failure to obtain any such
Note or amendment shall not affect the obligations
of Borrowers hereunder or under any other Note to
repay any Additional Loan or any other Loan.
(c) Borrowers may prepay any
portion of the Loans in whole or in part; provided,
however, that simultaneously with such prepayment,
Borrowers shall pay all interest accrued and unpaid
on the amount so prepaid through the date of
prepayment.
Section 2.2 Making the Additional
Loans. (a) No Additional Loan shall be in an
aggregate amount of less than $100,000.
(b) If Borrowers have so requested
and Lender has so agreed to make any Additional
Loan, then, Borrowers shall deliver a written notice
of borrowing to Lender in the form of Exhibit B
hereto setting forth the requested amount of such
Additional Loan and acknowledging that any loan
advanced by Lender pursuant to such request
constitutes an Additional Loan within the meaning
of this Agreement.
Section 2.3 Note. Concurrently with
the execution hereof, Borrowers shall execute and
deliver to Lender a Note to evidence the aggregate
amount of all Existing Loans outstanding at this
time. Such Note shall be dated the date hereof (or,
if later, as of the Effective Date) and shall mature
on the Termination Date. Lender is hereby
authorized to endorse the amount of each Additional
Loan, each repayment or prepayment of principal of
any Loan on the schedule attached to and
constituting a part of such Note, which endorsement
shall constitute prima facie evidence of the accuracy
of the information so endorsed; provided, that
failure by Lender to make such endorsement shall
not affect the obligations of Borrowers hereunder or
under any Note. In lieu of endorsing such schedule,
Lender is hereby authorized, at its option, to record
such Loans (including Additional Loans),
repayments or prepayments in its books and records,
such books and records constituting prima facie
evidence of the accuracy of the information
contained therein.
Section 2.4 Interest. (a) Borrowers
hereby promise, jointly and severally, to pay to
Lender interest on the unpaid principal amount of
each Loan for the period commencing on the date
such Loan was made until, but not including, the
date such Loan shall be paid in full. All Loans shall
bear interest at a rate equal to twelve percent (12%)
per annum. Each interest payment shall be
computed on the basis of a 360-day year for the
actual number of days elapsed. Interest shall be
paid, monthly in arrears on each Distribution Date
for all accrued and unpaid interest on the unpaid
principal of the Loans through such date. In
addition, on any date of any principal prepayment
hereunder pursuant to Sections 2.5 and 7.1, the
Borrowers shall pay accrued and unpaid interest on
the amount of such prepayment to the extent such
interest is not otherwise paid pursuant to the
immediately preceding sentence.
(b) After the occurrence and during
the continuance of an Event of Default, the Loans
shall bear interest at a rate equal to the rate set forth
in Section 2.4(a) plus two percent (2.00%).
(c) Notwithstanding the foregoing,
nothing in this Agreement shall require Borrowers
to pay interest at a rate exceeding the maximum rate
(the "Maximum Rate") permitted by applicable law.
If the interest rate provided for hereunder on any
date would exceed the Maximum Rate, then the
interest rate shall be automatically reduced to the
Maximum Rate and the interest rate for any
subsequent period, to the extent less than the
Maximum Rate, shall be increased to equal the
Maximum Rate until such time as the interest paid
hereunder equals the amount which would have been
paid if the interest otherwise payable hereunder had
at all times been permitted under applicable law.
Section 2.5 Repayments;
Prepayments. (a) The Loans shall be payable as
follows:
(i) Whenever either Borrower
receives, whether directly or indirectly, (x) a
payment or distribution from or on account
of any LP Units or Pledged Stock or any
Excess Receipts or any other payment or
other distribution from an SPC or a
Partnership, then such Borrower shall
immediately prepay the Loans by the amount
of the payment or distribution so received.
Such prepayments shall be applied to the
Obligations as set forth in Section 2.5(b) and
shall be accompanied by a payment of all
interest accrued and unpaid through the date
of such mandatory prepayment and allocable
to the amount so prepaid.
(ii) Whenever either Borrower,
directly or indirectly, receives a payment or
other distribution which constitutes proceeds
of any Warehouse Collateral, whether upon
a sale of Receivables included therein to an
SPC or otherwise, then such Borrower shall
immediately prepay the Loans by the amount
of the payment or other distribution so
received. Such prepayments shall be applied
to the Obligations as set forth in Section
2.5(b) and shall be accompanied by a
payment of all interest accrued and unpaid
through the date of such mandatory
prepayment and allocable to the amount so
prepaid.
(iii) Within 15 days after unaudited
financial statements are issued by the Parent
during each of the first three quarters of its
fiscal year and within 15 days after its
audited year-end financial statements are
issued, the Borrower shall prepay the
outstanding principal balance of the Loan by
the amount of "Accumulated Cash Flow" (as
defined in the Indenture) less any amounts of
such "Accumulated Cash Flow" which are
required to be paid to Greenwich Capital
Financial Products, Inc. or its assigns under
the Intercreditor Agreement.
(iv) The entire remaining outstanding
principal balance of the Loans, together with
any accrued and unpaid interest and any
other Obligations hereunder, shall be due and
payable on the Termination Date.
(v) In addition to the foregoing, if the
Lender ceases trading activities, dissolves or
commences distribution of a material portion
of its assets, then the Lender may demand
payment of all Loans then outstanding, in
which event the entire remaining outstanding
principal balance of the Loans, together with
any accrued and unpaid interest and any
other Obligations hereunder, shall be due and
payable on the ninetieth day following such
written notice.
(b) Subject to Section 7.2(d), all
payments of any amounts due under any provision
of this Agreement or any other Financing
Agreement, shall be applied in the following order:
first to payment of interest due and owing; second
to the then outstanding principal balance of the
Loans; and third to the remaining balance of the
Obligations. If any payment becomes due on a
Saturday, Sunday or any day on which Lender is
legally closed for business, such payment shall be
made on the next succeeding Business Day, and, in
the case of a principal payment, interest on such
principal payment shall be payable for such
extension of time and shall be included with such
payment.
(c) Borrowers shall make each
payment hereunder and under the Note on the day
when due in lawful money of the United States of
America to Lender at The First National Bank of
Chicago, Chicago, Illinois, account number 52-
61333, or at such other account which Lender may
hereafter designate to Borrowers in writing.
(d) The obligation of each Borrower
to pay the Loans and other Obligations shall be a
general obligation of such Borrower, absolute and
unconditional, and all such obligations shall be joint
and several.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions Precedent to
this Agreement. This Agreement is subject to the
satisfaction of all of the following conditions
precedent:
(a) Documents. Lender shall have
received, on or before the Effective Date, this
Agreement, the initial Note, the SPC
Acknowledgments, the Partnership
Acknowledgments, the Guaranty, and all other
agreements, documents, financing statements and
instruments described in the List of Closing
Documents
attached hereto as Exhibit
C
and made
a part hereof, each duly executed where appropriate,
dated the
Effective Date
where appropriate and in
form and substance reasonably satisfactory to
Lender.
(b) Governmental and Other
Consents and Approvals. All notices to and filings
with all regulatory bodies and other Persons required
to be given or made, and all consents or other
approvals therefrom shall have been obtained in
connection with the transactions contemplated by
this Agreement and the other Financing Agreements.
(c)
Issuance of Subordinated
Debentures. AAF shall have issued the
Subordinated Debentures and the proceeds thereof
shall have been used to reduce the Existing Loans to
a principal amount not greater than $34,753,667.00.
(d) Restructuring of Other Debt.
Greenwich Capital Financial Products, Inc., shall
have consented to the issuance of the Subordinated
Debentures and the proposed terms of the new
Intercreditor Agreement.
Section 3.2 Conditions Precedent to
Additional Loans. In the event that Lender agrees
to make any Additional Loans hereunder, the
obligation of Lender to make such Additional Loans
shall be subject to the conditions precedent that on
the Funding Date therefor (a) the following
statements shall be true (and the request for any
Additional Loans and the acceptance by Borrowers
of the proceeds of such Additional Loan, shall
constitute a representation and warranty by
Borrowers that on the date of making of such
Additional Loan such statements are true):
(i) The representations and
warranties contained in Article IV are true
and correct in all respects on and as of the
date of such Additional Loan, before and
after giving effect to such Additional Loan,
as though made on and as of such date;
(ii) No event has occurred and is
continuing, or would result from such
Additional Loan, which constitutes a Default
or an Event of Default;
(iii) There has been no material
adverse change in the business operations or
financial condition of Parent or Borrower
since April 30, 1997;
(iv) No law, regulation, order,
judgment or decree of any Governmental
Authority shall enjoin, prohibit or restrain, or
impose or result in the imposition of any
material adverse condition upon, Lender's
making of the requested Additional Loan;
(v) After giving effect to the
requested Additional Loan, the aggregate
outstanding principal amount of all Loans,
loans under the Lease Warehouse Facility,
Loan Warehouse Facility, principal
investments in any of the Trust Certificates
and any other loans, advances and other
extensions of credit made or held by Lender
to either Borrower and/or any of their
respective Affiliates, would not exceed 25%
of Lender's "net assets" as such term is
defined in such Lender's Articles of
Association; and
(vi) the Lender shall have received
such other approvals, opinions or documents
as Lender may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce Lender to enter into this
Agreement, each Borrower hereby makes the
following representations and warranties to Lender,
each of which shall survive the execution and
delivery of this Agreement or any other Financing
Agreement and shall be deemed remade as of the
date of each Additional Loan:
Section 4.1 Corporate Existence.
Each of the Borrowers, the Parent, each SPC and
each Partnership is duly organized, validly existing
and in good standing under the laws of the State of
Delaware, and has authority to conduct business and
is in good standing in all other states where the
nature and extent of the business transacted by it or
the ownership of its assets makes such authorization
necessary.
Section 4.2 Corporate Authority; No
Conflicts. The borrowings hereunder and the
execution, delivery and performance by each
Borrower of this Agreement, the Note and the other
Financing Agreements (i) are within such
Borrower's corporate powers, (ii) have been duly
authorized by all necessary corporate and
stockholder action, (iii) do not contravene such
Borrower's Certificate of Incorporation or by-laws,
and (iv) do not contravene nor result in a default
under, nor result in the creation of a Lien (other
than the Liens in favor of Lender created pursuant
to the terms of this Agreement) under, any law or
any contractual restriction binding on or affecting
such Borrower. No consent or approval of any
holder of any indebtedness or obligation of either
Borrower, and no consent, permission, authorization,
order or license of any Governmental Authority, is
necessary in connection with the execution, delivery
and performance of the Financing Agreements,
including, without limitation, this Agreement and the
Note, or any transaction contemplated hereby or
thereby. The execution, delivery and performance
by the Parent of the Guaranty (i) are within the
Parent's corporate powers, (ii) have been duly
authorized by all necessary corporate and
stockholder action, (iii) do not contravene the
Parent's Certificate of Incorporation or by-laws, and
(iv) do not contravene nor result in a default under,
nor result in the creation of a Lien under, any law
or any contractual restriction binding on or affecting
the Parent. The execution, delivery and
performance by each SPC of the SPC
Acknowledgements to which it is a party and the
execution, delivery and performance by each
Partnership of the Partnership Acknowledgments to
which it is a party (i) are within such SPC's or
Partnership's corporate or partnership powers, as
applicable, (ii) have been duly authorized by all
necessary corporate, stockholder and/or partnership
or partner action, as applicable, (iii) do not
contravene such SPC's Certificate of Incorporation
or by-laws or such Partnership's Partnership
Agreement, and (iv) do not contravene nor result in
a default under, nor result in the creation of a Lien
under, any law or contractual restriction binding on
or affecting such SPC or such Partnership. This
Agreement, the Note and the other Financing
Agreements to which the Borrower is a party
constitute valid, binding and legal obligations of the
Borrower enforceable in accordance with their
terms, the Guaranty constitutes the valid, binding
and legal obligation of the Parent enforceable in
accordance with its terms, the SPC
Acknowledgements constitute the valid, binding and
legal obligations of each SPC party thereto
enforceable in accordance with their terms, and the
Partnership Acknowledgements constitute the valid,
binding and legal obligations of each Partnership
party thereto enforceable in accordance with their
terms.
Section 4.3 Financial Condition. The
audited consolidated and consolidating financial
statements of the Parent and the Borrowers dated as
of June 30, 1996, and all interim financial
statements previously delivered to the Lender are
complete and correct in all material respects and
such financial statements have been prepared in
conformity with generally accepted accounting
principles and practices consistently applied and
fairly present the financial condition and results of
operations of the Parent and the Borrowers as of the
date thereof (and for the period then ended) in
conformity with such accounting principles and
practices (subject, in the case of interim statements,
to normal year-end adjustments). Since December
31, 1996, there has been no material adverse change
in such financial condition or results of operation for
the Parent or the Borrowers.
Section 4.4 Litigation. Except as
described on Schedule 4.4, there is no litigation, tax
claim, proceeding or dispute pending or, to either
Borrower's knowledge, threatened against either
Borrower, the Parent, any SPC or any Partnership,
or affecting their respective properties or assets,
which, if determined adversely to such Borrower,
the Parent, such SPC or such Partnership as the case
may be, (a) could reasonably be expected to
adversely affect (i) the execution, delivery or
enforceability of this Agreement or the other
Financing Agreements, or (ii) the ability of either
Borrower to perform its obligations under this
Agreement or any of the other Financing
Agreements, or (b) could reasonably be expected to
have a material adverse effect on the financial
condition of the Borrowers, any SPC or any
Partnership.
Section 4.5 Compliance with Laws
and Regulations. Borrowers, the Parent, each SPC
and each Partnership are in compliance with all
laws, orders, regulations and ordinances of all
Governmental Authorities relating to their business
operations and assets.
Section 4.6 Title to Pledged Stock,
LP Units and Excess Receipts. The Borrowers have
previously delivered to the Lender true, complete
and accurate copies of each SPC's Certificate of
Incorporation and of each Partnership's Partnership
Agreement. AAF is the legal and beneficial owner
of 100% of the Pledged Stock and ACF is the legal
and beneficial owner of 100% of the LP Units, in
each case free and clear of any Lien except for
Liens in favor of Lender securing the Obligations,
Liens securing the Subordinated Debentures and any
other Liens described in the Intercreditor
Agreement. Each SPC and each Partnership is the
legal and beneficial holder of the Residual Interest
created under any Pooling and Servicing Agreement
to which it is a party, in each case free and clear of
any Lien, and each SPC and/or Partnership has the
unencumbered right to receive the Excess Receipts
relating to such Residual Interest. Except as
otherwise provided in the Pooling and Servicing
Agreements, the Partnership Agreements or in any
SPC's Certificate of Incorporation, there are no
restrictions upon any of the rights associated with,
or the transfer of, any of the Pledged Stock or LP
Units which would interfere with the Lender's
ability to exercise the Lender's rights and remedies
hereunder. Neither Borrower has any obligation to
make capital contributions or make any other
payments to any SPC or Partnership with respect to
such Borrower's interests, the non-payment of which
would in any way create a right of offset from that
SPC or Partnership as against distributions otherwise
payable to such Borrower. The SPCs and the
Partnerships (i) have conducted no business other
than the transactions evidenced by and contemplated
(x) under their respective Purchase Agreements
and
Pooling
and Servicing
Agreements,
(ii)
have
no
properties other than the Residual
Interests
and (iii)
have
no Indebtedness to any third-parties (including
Affiliates) except for any Indebtedness expressly
created under the above-referenced agreements.
Section 4.7 No Defaults. No event
has occurred and is continuing
as of the date hereof,
or
would result from the making of
an Additional
Loan,
which constitutes a Default or an Event of
Default.
None of the Borrowers,
Parent, SPCs
or
Partnerships is
in default under any loan or credit
agreement or any other material agreement, lease or
instrument to which they are parties or by which it
or any of their properties are
bound other than the
defaults set forth on Schedule 4.7 attached hereto.
Section 4.8 Taxes. Each of
the
Borrowers
and the Parent have filed all required
federal and local tax returns and paid all material
taxes due pursuant to said returns or any assessments
against
such Borrower
or Parent, as the case may be,
except for those taxes being contested in good faith
and for which adequate reserves have been provided
on the books and records of
such Borrower
or
Parent, as the case may be.
Section 4.9 Margin Stock. None of
the proceeds of
the Loans
have been or will
be used,
directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of purchasing or
carrying any "margin stock" within the meaning of
Regulation G and Regulation X of the Board of
Governors of the Federal Reserve System.
Neither
Borrower
is
engaged
in the business of extending
credit for the purpose of purchasing or carrying any
such margin stock and no part of the proceeds of
any Loans
have been or will
be used to purchase or
carry any such margin stock of for any other
purpose that violates or is inconsistent with such
Regulation G or Regulation X.
Section 4.10 Investment Company
Act.
Neither of the Borrowers
is
an
"investment
company" or a company "controlled" by an
"investment company," within the meaning of the
Investment Company Act of 1940, as amended.
Section 4.11 Disclosure. No
representation or warranty of
either Borrower
contained in this Agreement or any certificate or
similar instrument required to be furnished to
Lender by or on behalf of
such Borrower
in
connection with the transactions contemplated by
this Agreement contains or will contain any untrue
statement of a material fact or omits to state a
material fact (known to
such Borrower,
in the case
of any document not furnished by it) necessary in
order to make the statements contained herein or
therein not misleading.
Section 4.12 Chief Executive Office.
Each Borrower's
chief executive office and principal
place of business are located at 000 Xxxxxxxxxx
Xxxxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000, or, from and
after the date hereof, at such other location with
respect to which all necessary actions under Section
5.11 hereof have been performed.
Section 4.13 Pooling and Servicing
Agreement.
Borrowers have previously delivered to
Lender true, complete and accurate copies of each
Pooling and Servicing Agreement. There are no
agreements written or otherwise, which would
modify or otherwise affect the rights of the SPCs
and/or the Partnerships under the Pooling and
Servicing Agreements. All of the representations
and warranties made by either Borrower, any
Partnership, any SPC or any Affiliates thereof in the
aforementioned agreements are true and correct in
all material respects and are hereby confirmed.
Section 4.14 ERISA. The Borrowers
and their Affiliates are in material compliance with
all provisions of ERISA, no contribution failure has
occurred with respect to any "benefit plan" under
ERISA, nor does any such plan have any
accumulated or waived funding deficiency.
ARTICLE V
COVENANTS
Each Borrower jointly and severally
covenants and agrees that, so long as any
Obligations remain outstanding, and (even if there
shall be no Obligations outstanding) so long as this
Agreement remains in effect:
Section 5.1 Reports/Financial
Information. Borrowers shall deliver to Lender:
(a) As soon as practicable, and in
any event within forty-five (45) days after the end
of each calendar month, the consolidated balance
sheet and income statement of Parent and its
subsidiaries as at the end of such month, which for
each month coinciding with the end of a calendar
quarter shall set forth comparative figures for the
related periods in the prior fiscal year, all of which
shall be certified by the chief financial officer, chief
accounting officer or chief executive officer of
Borrower, subject to changes resulting from audit
and normal year-end adjustments;
(b) As soon as practicable, and in any
event within one-hundred-twenty (120) days after
the end of each fiscal year of Parent, the
consolidated balance sheet and income statement of
Parent and its subsidiaries as at the end of such
year, certified by independent certified public
accountants of recognized national standing whose
certification shall be without qualification as to the
scope of audit, together with a certificate of such
accounting firm stating that in the course of its
regular audit of the business of the Parent and
Borrower, which audit was conducted in accordance
with generally accepted auditing standards, such
accounting firm has obtained no knowledge of any
Default or Event of Default under Sections 5.1(a),
(b), (f), 5.2(a), 5.6(a), 5.10 or 5.12 hereof which has
occurred or is continuing or, if in the opinion of
such accounting firm such a Default or Event of
Default under the above-referenced Sections has
occurred and is continuing, a statement as to the
nature thereof;
(c) On or before the Report Date of
each calendar month, a schedule of activity for the
preceding calendar month, which sets forth (i) the
aggregate outstanding principal amount of
receivables held in any Trust and of the Trust
Certificates relating thereto, (ii) copies of the
monthly reports distributed to holders of Trust
Certificates pursuant to the applicable Pooling and
Servicing Agreement and (iii) any other pertinent
information reasonably requested by Lender.
(d) Promptly upon receipt thereof,
copies of (i) any financial reports or other
information required to be delivered by either
Borrower, any SPC or any Partnership pursuant to
the terms of any Pooling and Servicing Agreement
and (ii) any written reports, certifications or other
material notices given to either Borrower, any SPC
or any Partnership by the Trustee, Servicer or
Backup
Servicer.
(e) Promptly, such other financial or
portfolio information related to this Agreement or
the Financing Agreements that Lender may
reasonably request from time to time.
(f)
Promptly after the sending or
filing thereof, copies of all reports that the Parent or
the Borrower sends to any of its security holders,
and copies of all reports and registration statements
that the Parent or any subsidiary files with the
Securities and Exchange Commission or any
national securities exchange.
Section 5.2 Notices.
Each Borrower
shall give prompt written notice to Lender of:
(a) Any litigation, including, without
limitation, adversary proceedings or contested
matters brought by Parent,
either Borrower
or by
any other Person against Parent or
either Borrower
(or any material change in such litigation), where
the amount in controversy is $100,000 or more and
all litigation when the aggregate amounts in con-
troversy equal or exceed $500,000, or any other liti-
gation or proceeding which
such Borrower
deems
material or which could materially and adversely
affect the operations, financial condition or prospects
of Parent and/or
such Borrower,
and, if requested by
Lender, deliver to Lender copies of all pleadings
with respect to any such matters served on or filed
by Parent or
such Borrower;
(b) Any Event of Default or Default
and
Borrowers'
proposed cure therefor; any such
notice shall refer to this Agreement, describe such
Event of Default or Default and state that such
notice is a "Notice of Default"; and
Section 5.3 Corporate Existence.
Each Borrower
shall maintain and preserve its
corporate existence and all rights, privileges and
franchises now enjoyed, and conduct its business in
accordance with the terms of, and otherwise comply
with, its formation documents.
Each Borrower
shall
cause
each SPC
and each Partnership to
maintain
and preserve its corporate
or partnership existence
as
applicable and
all rights, privileges and franchises
now enjoyed by
such SPC or Partnership.
Section 5.4 Compliance with
Law
and Financing Agreements.
Each Borrower
shall,
and shall cause
each SPC
or Partnership to,
comply
in all material respects with all applicable laws,
rules, regulations and
orders. Each Borrower
shall
comply promptly with any and all covenants and
provisions of this Agreement,
each Note
and the
other Financing Agreements, and shall cause
each
SPC and Partnership to
comply promptly with any
and all covenants and provisions to be performed by
such parties under the Pooling and Servicing
Agreements.
Section 5.5 Indebtedness; Liens;
Sales of Assets. Neither Borrower shall create, incur,
assume or suffer to exist any Indebtedness, nor
allow any of its Subsidiaries to create, incur, assume
or suffer to exist any Indebtedness, except for (i)
Indebtedness incurred under this Agreement, (ii)
Indebtedness evidenced by the Subordinated
Debentures, (iii) Indebtedness incurred under the
Loan Warehouse Facility or the Lease Warehouse
Facility, (iv) Indebtedness incurred under the Master
Certificate Purchase Agreement, the Master Trust
Agreement, any Purchase Agreement or any Pooling
and Servicing Agreement and (v) Indebtedness
described on Schedule 5.5 hereto. Neither Borrower
shall not sell, assign (by operation of law or
otherwise) or otherwise dispose of, or create or
suffer to exist, any Lien upon or with respect to, any
of its properties or assets, except for (x) Liens to
secure the Indebtedness described in clauses (ii)
through (iv) above, (y) Permitted Existing Liens and
(z) Liens incurred to evidence the sales of
Receivables pursuant to any Purchase Agreement or
Pooling and Servicing Agreement.
Section 5.6 Books and Records;
Right of Inspection. (a)
Each Borrower
shall, and
shall cause
each SPC
and Partnership to,
maintain
adequate books, accounts and records, and prepare
all financial statements required hereunder in
accordance with generally accepted accounting
principles and, once per calendar year after
reasonable notice, and at any time after the
occurrence and during the continuance of an Event
of Default, permit employees or agents of Lender at
any reasonable time to inspect the properties of
Borrowers, the
SPCs
and the Partnerships and to
examine or audit each of their books, accounts and
records and make copies and memoranda thereof.
(b)
Each Borrower
shall maintain all
records necessary for compliance with the exception
to withholding for portfolio interest under Section
871(h) of the Internal Revenue Code.
Section 5.7 Further Assurances. (a)
Borrowers
shall furnish to Lender such periodic,
special, or other reports and information as
reasonably requested by Lender.
(b) From time to time,
each at
its
own expense,
each Borrower
will take whatever
action is reasonably requested by Lender or its legal
counsel to preserve, protect or perfect the security
interest in the Collateral granted pursuant to Article
VI, including, without limitation, executing UCC
financing statements, endorsing notes, executing
additional security documents or delivering
possession of Collateral, and shall perform such acts
as Lender shall reasonably deem necessary or
appropriate to effectuate the purposes of this
Agreement.
Each Borrower
will appear in and
defend at
its own
expense any action or proceeding
which may affect
such Borrower's
title to the
Collateral, the security interest granted hereunder or
any SPC's
or Partnership's title
to
any Excess
Receipts
and/or Residual
Interests.
Section 5.8 Maintenance of
Insurance. (a)
Borrowers
shall
maintain and keep in
force in adequate amounts insurance with
responsible and reputable companies or implement
and maintain a reasonable program of self-insurance,
and accept no self-insurance risks which are
substantially greater than those historically carried
by
Borrowers.
(b)
Borrowers
shall pay or cause to
be paid all insurance premiums with respect to the
RDI Policies and the VSI Policies and all charges
and fees relating thereto.
Section 5.9 Pooling and Servicing
Agreement. Without the prior written consent of
Lender, Borrower shall not, and shall not permit any
of its affiliates to (i) amend, modify, restate,
supplement, cancel or terminate any Pooling and
Servicing Agreement, (ii) waive any of its rights
under any provision thereof, (iii) consent to any
deviation from the terms thereof or (iv) otherwise
grant any consents provided for thereunder, or
default in its obligations thereunder.
Section 5.10 Merger; Consolidation,
Etc. Neither Borrower shall, nor permit any SPC or
Partnership to, liquidate, dissolve, merge into or
consolidate with another entity; or sell, lease or
otherwise dispose of all or a substantial portion of
its business or assets, except for sales of Receivables
to various Trusts as contemplated under the Master
Trust Agreement. Neither Borrower shall permit
any SPC or Partnership to engage in any business
other than the holding of the Residual Interests, nor
to acquire any other assets nor incur any
Indebtedness not expressly permitted under Section
4.6 hereof.
Section 5.11 Change of Principal
Office. Neither Borrower shall (a) change the
location of its chief executive office and principal
place of business from Newport Tower, 000
Xxxxxxxxxx Xxxxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000
or (b) change its name, identity or corporate
structure to such an extent that any financing
statement filed in connection with this Agreement
would become seriously misleading, unless such
Borrower shall have given Lender at least 30 days
prior written notice thereof and prior to effecting
any such change, taken such steps as Lender may
deem necessary or desirable to continue the
perfection and priority of the Liens in favor of
Lender granted in connection herewith.
Section 5.12 Net Worth. The sum of
the Parent's consolidated total assets minus the
Parent's consolidated total liabilities (each
determined in conformity with generally accepted
accounting principles, consistently applied and
without duplication) shall not be less than the
greater of (i)$10,000,000 and (ii) ten percent (10%)
of the Parent's consolidated assets (without
duplication) on any subsequent date; provided,
however that for purposes of this Section, any
Collateral shall constitute an asset of its applicable
owner, and any assets which have been sold by any
Person in a non-recourse sale to an unaffiliated third
party in a securitization transaction shall not
constitute assets of any such Person.
Section 5.13 Actions with Respect to
Receivables. Neither Borrower shall, without the
prior written consent of each Lender:
(a) Compromise, extend, release or
adjust payments on any Receivables included in the
Collateral and not otherwise pledged under the Loan
Warehouse Facility or sold under a Purchase
Agreement, accept a conveyance of an automobile
in full or partial satisfaction of any such Receivable,
or release the lien noted on any title to any
automobile securing any Receivable except upon full
payment thereof; provided, that the Borrowers may,
consistent with AAF's present business practices and
subject to the rights of the Lender from and after an
Event of Default, compromise, extend, release or
adjust payments on, or otherwise accept a
conveyance of an automobile in respect of a past-
due Receivable in an effort to maximize the
collectibility thereof;
(b) Transfer, sell or assign any
Receivable to any Person except to a Dealer as
permitted pursuant to a Dealer Agreement or to an
SPC under a Purchase Agreement, or deliver or
permit delivery of any original contract or title to
any Person other than a Lender or the servicer for
such Receivable prior to the repayment in full of the
Receivable which is secured by the lien noted on the
relevant title except that the Borrower shall be
allowed to effect such delivery as may be necessary
to consummate a sale of Receivables under any
Purchase Agreement.
ARTICLE VI
COLLATERAL
Section 6.1 Security Interest. To
secure the prompt and complete payment,
observance and performance of all of the
Obligations,
each Borrower
hereby (1) reaffirms the
grant of a security interest in the Collateral made
under the Existing Loan
Agreements, (2)
hereby
pledges
and grants to Lender a security interest in
and assignment of all of Borrower's rights, title and
interest in and to
the Collateral so described,
whether now owned or existing or hereafter arising
or acquired and wheresoever located and whether
the same comprise accounts, instruments, securities,
chattel paper or general intangibles. Without
limiting the foregoing, the Borrowers hereby
reaffirm the grant of security contained in the Old
Warehouse Loan Agreement and agree to comply
with all covenants contained in Sections 6.4 and 6.5
thereof with respect to such Collateral to the extent
the same were incorporated into the Existing Loan
Agreements by virtue of the Master Amendment to
Loan and Security Agreements dated as of March
19, 1997.
Section 6.2 Release of Security
Interest. Notwithstanding the foregoing Section 6.1,
upon the sale of any Receivables to AAF IV
pursuant to or in connection with a Purchase
Agreement and upon prepayment of the Loans in
accordance with Section 2.5 hereof, the Lender's
lien on the Receivables so sold shall be
automatically released from the security interest
granted to the Lender under Section 6.1 hereof.
ARTICLE VII
DEFAULT; REMEDIES
Section 7.1 Events of Default. Upon
the occurrence of any of the following events (each
an "Event of Default"):
(a) Either Borrower fails to make
any payment of principal of or interest on any Note,
or payment of any other Obligation due hereunder,
under each Note or under any other Financing
Agreement on or before the date such payment is
due;
(b) Any breach by either Borrower in
the due observance or performance of any covenant
set forth in Sections 5.1 to 5.3, 5.5, 5.6, 5.8 to 5.13,
and such breach continues unremedied for ten (10)
Business Days after any officer of such Borrower
obtains knowledge thereof;
(c) Any breach by either Borrower of
any covenant, other than those covenants
enumerated in Section 7.1 (a) or (b) of this
Agreement, which remains unremedied for thirty
(30) days after the earlier of (i) an officer of such
Borrower obtaining knowledge thereof or (ii) notice
thereof having been made to such Borrower;
(d) Any representation or warranty
made by either Borrower under this Agreement or
by either Borrower or Parent under any other
Financing Agreement or in any certificate, report,
financial statement or other agreement, instrument or
document furnished in connection with this
Agreement or any other Financing Agreement shall
prove to have been false or misleading in any
material respect when made;
(e) Default in, or breach of, any
provision of the SPC Acknowledgments or the
Partnership Acknowledgments by any SPC or
Partnership;
(f) Any representation or warranty
made by either Borrower, any SPC, any Partnership
or any Affiliates in any Purchase Agreement or
Pooling and Servicing Agreement or in any
certificate or report a copy of which is delivered to
Lender pursuant to this Agreement shall prove to
have been false or misleading in any material
respect when made;
(g) The occurrence of a default,
breach or failure of condition by either Borrower,
any guarantor of the Obligations or Parent under any
other Financing Agreement which (unless such
default otherwise constitutes an Event of Default
pursuant to the other provisions of this Section 7.1)
is not remedied within the applicable cure period
contained therein, if any;
(h) Any default by either Borrower,
any guarantor of the Obligations or the Parent after
any applicable notice and cure period, shall occur
under any Indebtedness with respect to which such
Borrower or Parent, as applicable, is a party as
borrower or guarantor, provided, that any such
default by Parent described in this subsection
7.01(h) shall not constitute an Event of Default
unless the aggregate Indebtedness owed under such
agreement is greater than or equal to $100,000;
(i) Any of the Borrowers, the Parent,
the SPCs, the Partnerships and any guarantor of the
Obligations shall generally not pay its debts as they
become due or shall admit in writing its inability to
pay its debts, or shall make a general assignment for
the benefit of creditors;
(j) Either Borrower, the Parent, any
SPC, any Partnership or any guarantor of the
Obligations shall (i) apply for or consent to the
appointment of a receiver, trustee, custodian,
intervenor or liquidator of it, or of all or a
substantial part of its assets, (ii) file a voluntary
petition in bankruptcy, (iii) file a petition or answer
seeking reorganization or an arrangement with
creditors, or to take advantage of any applicable
liquidation, conservatorship bankruptcy, moratorium,
arrangement, receivership, insolvency, reorganization
or similar laws affecting the rights of creditors
generally, (iv) file an answer admitting the material
allegations of, or consent to, or default in answering,
a petition filed against it in any bankruptcy,
reorganization or insolvency proceeding, or (v) take
corporate action for the purpose of effecting any of
the foregoing;
(k) An involuntary petition or
complaint shall be filed against either Borrower, the
Parent, any SPC, any Partnership or any guarantor
of the Obligations seeking bankruptcy or
reorganization of such Person or the appointment of
a receiver, custodian, trustee, intervenor or liquidator
of such Person, or all or substantially all of its
assets, and such petition or complaint shall not have
been dismissed within sixty (60) days of the filing
thereof; or an order, order for relief, judgment or
decree shall be entered by any court of competent
jurisdiction or other competent authority approving
a petition or complaint seeking reorganization of
such Person or appointing a receiver, custodian,
trustee, intervenor or liquidator of such Person, or of
all or substantially all of its assets;
(l) Any final judgment or order for
the payment of money in excess of $100,000 shall
be rendered against either Borrower, the Parent, any
SPC or any Partnership, and either (i) enforcement
proceedings shall have been commenced by any
creditor upon such judgment or order or (ii) the
same remains undischarged or unpaid for a period of
sixty (60) days, during which period the execution
of such judgment is not effectively stayed;
(m) (i) Any of the Financing
Agreements, or any Lien or priority claim granted
thereunder shall terminate, cease to be effective or
cease to be the legal, valid, binding and enforceable
obligation of the Borrowers, the Parent, the SPCs,
the Partnerships or any guarantor of the Obligations;
(ii) either Borrower or any of their respective
Affiliates, shall, directly or indirectly, contest in any
manner such effectiveness, validity, binding nature
or enforceability (it being understood that Borrowers
may, in good faith, question the accuracy of any
mathematical calculation of an amount owed
hereunder); or (iii) any Lien or priority claim
securing the Obligations
shall cease to be
effective
and, except as otherwise permitted under the
applicable Financing Agreements, of first priority;
(n) Any Person shall levy on, seize
or attach all or any material portion of the assets of
either Borrower, the Parent, any SPC or any
Partnership or any guarantor of the Obligations and
within thirty (30) days thereafter such person shall
not have dissolved such levy or attachment, as the
case may be, and, if applicable, regained possession
of such seized assets;
(o) the occurrence of a Change in
Control;
(p) any RDI Policy or VSI Policy
shall cease to be in full force and effect, unless
replaced by a substitute RDI Policy or VSI Policy
acceptable to the Lenders;
(r) an "Event of Backup Servicing
Default" shall have occurred and been continuing
under any Pooling and Servicing Agreement; or
(s) this Agreement, any Note or any
other Financing Agreement shall for any reason
cease to be in full force and effect, or be declared
null and void or unenforceable in whole or in part
as the result of any action initiated by any Person
other than Lender;
then, and in every such event and at any time
thereafter during the continuance of such event,
Lender may, at the same or different times, take one
or more of the following actions:
(A) By notice to Borrowers (which
may be telephonic notice confirmed in
writing) declare Lender's obligation to make
any future Loans hereunder terminated
and/or declare the occurrence of the
Termination Date, whereupon, in each case,
such obligations shall be terminated and/or
the Termination Date shall have occurred;
and
(B) By notice to Borrowers,
declare the unpaid principal amount
and interest of the Loans and all
other amounts payable by Borrowers
hereunder to be forthwith due and
payable, whereupon such amounts
shall become forthwith due and
payable, both as to principal and
interest, without presentment,
demand, protest or any other notice
of any kind, all of which are hereby
expressly waived, anything contained
herein or in the Financing
Agreements to the contrary
notwithstanding.
Notwithstanding the foregoing, upon
the occurrence of an Event of Default described in
paragraph (j) or (k) of this Section 7.1, with respect
to either Borrower, the Parent, any SPC or any
Partnership, the actions described in paragraphs (A)
and (B) above shall occur automatically without the
requirement of giving of any notice to Borrowers.
Section 7.2 Remedies. (a) Lender
shall have all rights and remedies provided to
Lender at law, in equity, under the Financing
Agreements and under the Uniform Commercial
Code as in effect in the State of New York (the
"Code"), all of which rights and remedies shall be
cumulative, and, in addition, upon the occurrence of
any Event of Default, Lender may exercise any one
or more of the following rights and remedies:
(i) Exercise all the rights and
remedies available to secured parties
under the provisions of the Code.
(ii) Institute legal
proceedings to foreclose upon and
against the Lien granted by the
Financing Agreements to recover
judgment for the Obligations and to
collect the same out of any of the
Collateral or the proceeds of any sale
thereof.
(iii) Without being
responsible for loss or damage to
such Collateral beyond the
responsibility to use reasonable care
with respect to the Collateral, require
delivery to Lender of any Collateral
then being held by either Borrower,
sell and dispose of, or cause to be
sold and disposed of, all or any part
of the Collateral at one or more
public or private sales, or other
dispositions, at such places and times
and on such terms and conditions and
in such order as Lender may deem
fit, without any previous demand or
advertisement but with reasonable
notification to Borrowers of any such
sale or other disposal. Reasonable
notification pursuant to this
Section 7.2(a)(iii) shall be deemed to
be written or telephonic notice at
least ten (10) days prior to such
public or private sale.
(b) Any notice of sale or other
disposition, advertisement and other notice or
demand, any right or equity of redemption and any
obligation of a prospective purchaser to inquire as to
the power and authority of Lender to sell or
otherwise dispose of the Collateral or as to the
application of the proceeds of sale or otherwise,
which would otherwise be required by, or available
to Borrowers under, applicable law are hereby
expressly waived by Borrowers to the fullest extent
permitted by such law.
(c) All moneys received or collected
by Lender pursuant to this Agreement from and
after an Event of Default shall be applied, at
Lender's discretion, first to the payment of all costs
incurred in the collection of such moneys (including
reasonable attorneys' fees and legal expenses). All
remaining amounts shall be applied pursuant to
Section 2.5(b). The balance, if any, of such moneys
remaining after payment in full of the Obligations
shall be remitted to
Borrowers
or as otherwise
directed by a court of competent jurisdiction.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Amendments, etc. No
amendment or waiver of any provision of this
Agreement or the Note, nor consent to any departure
by
either Borrower
therefrom, shall be effective
unless the same shall be in writing and signed by
Lender, and then such waiver or consent shall be
effective only in the specific instance and for the
specific purpose for which given.
Section 8.2 Notices. All notices and
other communications provided for hereunder shall
be in writing (including telegraphic or facsimile
transmission) and mailed by registered mail, return
receipt requested, or telexed, telecopied or hand
delivered, (a) as to Lender:
III Finance Ltd.
c/o Admiral Administration, Ltd.
Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxx Xxxxxx, Xxxxxx Xxxxxxx,
B.W.I.
Telecopy: (000) 000-0000
Confirmation: (000) 000-0000
Attention: Xxxxx Bree
with a copy, in either case to:
III Offshore Advisors
000 Xxxxx Xxxxxxxxxx Xxxxxx, Xxxxx
000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
Confirmation: (000) 000-0000
Attention: Xxxxxx Xxxxxx
and
Xxxxx River Capital
000 Xxxxx Xxxx
Xxxxxxx-Xxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Confirmation: (000) 000-0000
Attention: Xxxxx Xxxxxx
(b) as to Borrower:
Aegis Auto Finance, Inc.
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx Xxxx, Xxx Xxxxxx, 00000
Telecopy: (000) 000-0000
Confirmation: (000) 000-0000
Attention: Xxxxxx Xxxxxxxx
or (c) at such other address as shall be designated by
such party in a written notice to the other party. All
such notices and communications shall be effective
and deemed delivered only when received by the
party to which it is sent; provided, however, that a
telecopy transmission shall be deemed to be received
when transmitted so long as the transmitting
machine has provided an electronic confirmation of
such transmission.
Section 8.3 Survival of
Representations and Warranties. All representations
and warranties made herein shall survive the
execution, delivery and acceptance of this
Agreement, each Note and the other Financing
Agreements.
Section 8.4 No Waiver; Remedies.
No failure on the part of Lender to exercise, and no
delay in exercising any right hereunder or under any
Note or any other Financing Agreement shall
operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder or under any
Note preclude any other or further exercise thereof
or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of
any remedies provided by law.
Section 8.5 Costs and Expenses.
Except as otherwise provided in the immediately
subsequent sentence, each party hereto agrees to pay
its own costs and expenses (including attorneys' and
paralegals' fees and expenses) in connection with
the execution and delivery of this Agreement, any
Note and the other Financing Agreements.
Borrowers jointly and severally agree to pay (a) all
costs and expenses incurred by Lender in
maintaining, preserving or insuring any Collateral
and (b) all costs and expenses of Lender (including
reasonable attorneys' and paralegals' fees and
expenses) in connection with the enforcement of this
Agreement, each Note, the other Financing
Agreements and/or the Lien on any of the Collateral.
All of the costs, fees and expenses enumerated in
the immediately preceding sentence shall constitute
Obligations and shall be secured by the Collateral.
Section 8.6 Relationship; Indemnity.
(a) The relationship of each Borrower to the Lender
under the Financing Agreements is, and shall at all
times remain, solely that of borrower and lender;
other than as set forth in Section 7.2(a)(iii), Lender
does not undertake or assume any responsibility or
duty to either Borrower or to any third party with
respect to the Collateral.
(b) Each Borrower hereby, jointly
and severally, indemnifies and agrees to hold
harmless Lender and its officers, directors,
employees, attorneys and agents (collectively, the
"Indemnified Parties") from any and all losses,
damages (whether general, punitive or otherwise),
liabilities, claims, causes of action and other costs
and expenses, including reasonable attorneys' fees,
which any Indemnified Party may suffer or incur by
or as a result of claims by third parties in any
manner relating to or arising out of this Agreement
or the other Financing Agreements, or any act, event
or transaction related thereto, the making of Loans,
the use or intended use of the proceeds of the
Loans, or any of the other transactions contemplated
by the Financing Agreements.
(c) Promptly after any Indemnified
Party is served with process in connection with the
commencement of any action, such Indemnified
Party shall, if a claim against a Borrower in respect
thereof is to be made pursuant to this
indemnification, notify such Borrower of the
commencement thereof. Each Borrower shall pay
any Obligations arising under this indemnity to such
Indemnified Party immediately upon demand. The
duty of each Borrower to indemnify Lender shall
survive the release and cancellation of this
Agreement or any of the other Financing
Agreements.
Section 8.7 Successors and Assigns;
Assignment. This Agreement shall be binding upon
and inure to the benefit of Borrower and Lender and
their respective successors and assigns, except that
no Borrower shall have the right to assign its rights
hereunder or any interest herein without the prior
written consent of Lender. Lender, at its sole
option, shall have the right to assign this Agreement,
the Note and any of its rights and interest hereunder
and thereunder.
Section 8.8 Registered Obligations.
The Loans (including each Note evidencing the
Loans) are registered obligations and the right, title
and interest of Lender and its assigns (and of a
Person who takes a participation in a Loan directly
from Lender) in and to such Loan shall be
transferrable only upon notation of such transfer in
a registry (the "Registry") maintained to record the
interest of Lender and its assigns (and such direct
participants). A Note shall only evidence Lender's,
or its assigns', right, title and interest in and to the
related Loans, and in no event is any such Note to
be considered a bearer instrument or obligation.
This Section 8.8 shall be construed so that the Loans
are at all times maintained in "registered form"
within the meaning of Section 163(f), 871(h)(2) and
881(c)(2) of the IRC and any related regulations (or
any successor provisions of the IRC or such
regulations). Borrower shall maintain the Registry
in which Borrowers will register the Loans. No
transfer by Lender or any of its assigns of (or direct
participant with respect to) any of the Loans shall be
permitted or effective unless and until recorded on
the Registry. Any such transfer shall be made only
by written application by the transferring Lender, its
assigns, or participants to Borrowers stating the
name of the proposed transferee. Borrowers agree
that within five (5) Business Days after its receipt of
such written notice, Borrowers shall, at their own
expense, record such transfer on the Registry and
shall, if requested by Lender or the transferee,
execute new Notes to the order of Lender and/or the
transferee, as applicable, in exchange for the
surrendered Note or Notes. Such new Note or
Notes shall be in an aggregate principal amount
equal to the unpaid aggregate principal amount of
such surrendered Note or Notes, shall be dated the
effective date of the assignment and shall otherwise
be in substantially the form of Exhibit B.
Section 8.9 Binding Effect;
Governing Law. This Agreement constitutes the
complete and final expression of the parties'
agreement with respect to the matters set forth
herein and supersedes all oral negotiations and prior
writings in respect of such matters. This Agreement
and the Note shall be governed by, and construed in
accordance with, the laws and decisions of the State
of New York. Whenever possible, each provision of
this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law,
but if any provision of this Agreement shall be
prohibited or invalid under applicable law, such
provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating
the remainder of such provision or the remaining
provisions of this Agreement.
Section 8.10 WAIVER OF TRIAL
BY JURY; SUBMISSION TO JURISDICTION.
BORROWERS AND LENDER EACH HEREBY
AGREE TO WAIVE ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR
ANY FINANCING AGREEMENT, WHETHER
SOUNDING IN TORT, CONTRACT OR
OTHERWISE. EACH BORROWER HEREBY
CONSENTS TO THE JURISDICTION OF ANY
LOCAL OR FEDERAL COURT LOCATED
WITHIN THE STATE OF NEW YORK AND
WAIVES ANY OBJECTION WHICH SUCH
BORROWER MAY HAVE BASED ON
IMPROPER VENUE OR FORUM NON
CONVENIENS TO THE CONDUCT OF ANY
PROCEEDING IN ANY SUCH COURT;
NOTHING IN THIS SECTION 8.10 SHALL
AFFECT LENDER'S RIGHT TO BRING ANY
ACTION OR PROCEEDING AGAINST EITHER
BORROWER OR ITS PROPERTY IN THE
COURTS OF ANY OTHER JURISDICTION.
Section 8.11 Term. This Agreement
shall become effective when executed and delivered
by the parties hereto and shall expire upon that date
occurring on or after the Termination Date when
Lender has received indefeasible payment in full in
cash of the Obligations. Notwithstanding the
foregoing, Borrowers' agreement to indemnify
Lender under Section 8.6 shall survive the
termination of this Agreement.
Section 8.12 Headings. Article and
Section headings in this Agreement are included for
convenience of reference only and shall not affect
any construction or interpretation of this Agreement.
Section 8.13 Counterparts. This
Agreement may be executed by the parties hereto in
separate counterparts, each of which when so
executed shall be deemed to be an original and both
of which taken together shall constitute one and the
same agreement.
Section 8.14 Joint and Several
Obligations. (a) All of the obligations of
Borrowers under this Agreement and the other
Financing Agreements shall be joint and several.
Each Borrower hereby waives promptness, diligence
and notice of acceptance of this Amendment, of any
action taken or omitted in reliance hereon or of any
default by the other Borrower or any Affiliates in
the payment of any Obligations or in the
performance of any covenants, agreements, terms,
conditions under this Agreement or any other
Financing Agreement. Each Borrower expressly
waives the right to require the Lender to protect,
secure, perfect, insure, proceed against or exhaust
any security granted by the other Borrower or any
other Affiliate as security for the payment of any
Obligations or to exhaust any right or take any
action against such other Borrower or Affiliate or
their respective properties before pursuing its
remedies against the Collateral owned by such
Borrower.
(b) The obligations of each Borrower under
this Section 8.14 shall be absolute and
unconditional, shall not be subject to any
counterclaim, set-off, deduction or defense based
upon any claim any other Borrower or Affiliate may
have against each other or against the Lender and
shall remain in full force and effect without regard
to and shall not be released, discharged or in any
way affected or impaired by, any thing, event,
happening, matter, circumstance or condition
whatsoever (whether or not the Borrowers shall have
any knowledge or notice thereof or consent thereto),
including, without limitation: (i) any lack of en-
forceability of any Obligation, (ii) any change of the
time, manner or place of payment, or any other
term, of any Obligation (including, without
limitation, any renewal or extension of time for
payment), (iii) any exchange, release, or non-
perfection of any Collateral, (iv) any law, regulation
or order of any jurisdiction affecting any term of
any Obligation or Borrowers' or any Affiliates'
rights with respect thereto, (v) any bankruptcy,
insolvency, reorganization, arrangement,
readjustment, composition, liquidation or similar
proceedings with respect to the other Borrower or
any Affiliate or any other obligor or guarantor of
any Obligation and (vi) any other circumstance
which might otherwise constitute a defense available
to, or a discharge of, Borrower or a guarantor.
(c) Any rights of subrogation of either
Borrower to the rights of Lender as against the other
Borrower or any Affiliates and any claims arising
therefrom shall at all times be, in all respects
subordinate and junior to all Obligations until such
time that all such Obligations shall have been paid
in full in cash.
Section 8.15 Reference to and Effect
Upon Existing Loan Agreements; No Novation.
This Agreement, together with the Pledge
Agreements, amends and restates the Existing Loan
Agreements. The Borrowers and the Lender all
hereby agree that, upon the effectiveness of this
Agreement, the Existing Loan Agreements shall no
longer be of any force or effect except to evidence
the terms under which the Loans outstanding prior
to the effectiveness of this Agreement were made
and to the extent that any of the covenants contained
therein are expressly ratified herein or in the Pledge
Agreements. To the extent that the indebtedness
evidenced by any Note and this Agreement includes
indebtedness previously outstanding under the
Existing Loan Agreements, this Agreement and such
Note merely restate the terms of such indebtedness,
are given in substitution for and not in payment of
the Existing Loan Agreements or the promissory
notes issued thereunder, and are not intended to
cause a novation of any such indebtedness.
[Rest of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be executed
by their respective officers thereunto duly
authorized, as of the date first written above.
III FINANCE LTD.
By______________________________
Name:
Title:
AEGIS AUTO FINANCE, INC.
By______________________________
Name:
Title:
AEGIS CONSUMER FINANCE, INC.
By______________________________
Name:
Title:
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
Section 1.1 General Terms.. . . . . . . . .1
Section 1.2 Terms Defined in Uniform Commercial
Code.. . . . . . . . . . . . . . . . . . . .8
Section 1.3 Accounting Terms. . . . . . . .8
Section 1.4 Other Terms.. . . . . . . . . .8
Section 1.5 Preliminary Statement.. . . . .8
ARTICLE II
LOANS AND INTEREST
Section 2.1 Loans.. . . . . . . . . . . . .9
Section 2.2 Making the Additional Loans.. .9
Section 2.3 Note. . . . . . . . . . . . . .9
Section 2.4 Interest. . . . . . . . . . . 10
Section 2.5 Repayments; Prepayments.. . . 10
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions Precedent to this
Agreement. . . . . . . . . . . . . . . . . 12
Section 3.2 Conditions Precedent to Additional
Loans. . . . . . . . . . . . . . . . . . . 12
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Corporate Existence.. . . . . 13
Section 4.2 Corporate Authority; No Conflicts.14
Section 4.3 Financial Condition.. . . . . 14
Section 4.4 Litigation. . . . . . . . . . 15
Section 4.5 Compliance with Laws and
Regulations.15 . . . . . . . . . . . . . . .
Section 4.6 Title to Pledged Stock, LP Units and
Excess
Receipts. . . . . . . . . . . 15
Section 4.7 No Defaults.. . . . . . . . . 16
Section 4.8 Taxes.. . . . . . . . . . . . 16
Section 4.9 Margin Stock. . . . . . . . . 16
Section 4.10 Investment Company Act. . . . 16
Section 4.11 Disclosure. . . . . . . . . . 16
Section 4.12 Chief Executive Office. . . . 17
Section 4.13 Pooling and Servicing Agreement17
Section 4.14 ERISA . . . . . . . . . . . . 17
ARTICLE V
COVENANTS
Section 5.1 Reports/Financial Information.17
Section 5.2 Notices.. . . . . . . . . . . 18
Section 5.3 Corporate Existence.. . . . . 19
Section 5.4 Compliance with Law and Financing
Agreements.. . . . . . . . . . . . . . . . 19
Section 5.5 Indebtedness; Liens; Sales of Assets19
Section 5.6 Books and Records; Right of
Inspection.. . . . . . . . . . . . . . . . 20
Section 5.7 Further Assurances. . . . . . 20
Section 5.8 Maintenance of Insurance. . . 20
Section 5.9 Pooling and Servicing Agreement.20
Section 5.10 Merger; Consolidation, Etc. . 21
Section 5.11 Change of Principal Office. . 21
Section 5.12 Net Worth.. . . . . . . . . . 21
Section 5.13 Actions with Respect to Receivables21
ARTICLE VI
COLLATERAL
Section 6.1 Security Interest.. . . . . . 22
Section 6.2 Release of Security Interest. 22
ARTICLE VII
DEFAULT; REMEDIES
Section 7.1 Events of Default.. . . . . . 23
Section 7.2 Remedies. . . . . . . . . . . 26
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Amendments, etc.. . . . . . . 27
Section 8.2 Notices.. . . . . . . . . . . 27
Section 8.3 Survival of Representations and
Warranties.. . . . . . . . . . . . . . . . 28
Section 8.4 No Waiver; Remedies.. . . . . 28
Section 8.5 Costs and Expenses. . . . . . 28
Section 8.6 Relationship; Indemnity . . . 28
Section 8.7 Successors and Assigns; Assignment29
Section 8.8 Registered Obligations. . . . 29
Section 8.9 Binding Effect; Governing Law.30
Section 8.10 WAIVER OF TRIAL BY JURY;
SUBMISSION TO
JURISDICTION. . . . . . . . . 30
Section 8.11 Term. . . . . . . . . . . . . 30
Section 8.12 Headings. . . . . . . . . . . 31
Section 8.13 Counterparts. . . . . . . . . 31
Section 8.14 Joint and Several Obligations.31
Section 8.15 Reference to and Effect Upon Existing
Loan
Agreements; No Novation . . . 32
