Unassociated Document



EXHIBIT
10.2

 

LIMITED
GUARANTY

 

This
Limited Guaranty (this “Guaranty”) is entered into as of March 30,
2005, by E-Loan, Inc. (the “Guarantor”), in favor of Merrill Lynch Bank USA
(“Merrill Lynch”).

 

WHEREAS,
E-Loan Auto Fund One, LLC (“E-Loan LLC”), as Seller and Merrill Lynch, as
Purchaser, are parties to that certain Purchase and Sale Agreement dated as of
March 30, 2005 (as subsequently amended from time to time, the “Purchase and
Sale Agreement”); 

 

WHEREAS,
it is a condition precedent to Merrill Lynch’s obligation to purchase
Receivables from the Seller under the Purchase and Sale Agreement that the
Guarantor enter into this Guaranty; and

 

WHEREAS,
the Guarantor will receive substantial direct and indirect benefits from the
consummation of the transactions contemplated by the Purchase and Sale
Agreement.

 

NOW,
THEREFORE, in consideration of the premises and the mutual covenants set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the Guarantor, the parties
hereto agree as follows:

 

Section
1.   Definitions. Unless
otherwise defined in this Guaranty, capitalized terms used herein but not
otherwise defined shall have the meanings ascribed to such terms in the Purchase
and Sale Agreement.

 

Section
2.   Guaranty
of Obligations.

 

(a)  The
Guarantor hereby absolutely, irrevocably and unconditionally guarantees to
Merrill Lynch the full and timely payment and performance of all obligations of
E-Loan LLC under Sections 3.02, 3.03, 3.04 and 4.02 of the Purchase and Sale
Agreement. 

 

The
obligations of E-Loan referred to in this Section 2(a) shall be referred to
herein as the “Guaranteed Obligations”, and shall include, in each case, such
obligations when the same shall become due, whether at stated maturity, by
required prepayment, declaration, acceleration, demand or otherwise (including
amounts that would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. (the Bankruptcy Code”)
§362(a)).

 

(b)  The
Guarantor is not guaranteeing, and shall have no obligation to guarantee, any
obligations of the Obligors under the Contracts.

 

Section
3.   Unconditionality;
Irrevocability.
(a) This is
an absolute, unconditional and continuing guaranty of payment (when due and not
of collectability) and performance of all Guaranteed Obligations, and the
Guarantor agrees that its obligations under this Guaranty shall be irrevocable.
The dissolution, insolvency or adjudication of bankruptcy of the Guarantor shall
not revoke this Guaranty.

 

 




Limited
Guaranty

















 

(b)  No act or
thing, except payment and performance of the Guaranteed Obligations, shall in
any way reduce or release the liability of the Guarantor hereunder. The
Guarantor waives all presentments, demands for performance, notices of dishonor
and notices of acceptance of this Guaranty. Upon the failure of E-Loan LLC to
pay or perform its obligations when due, Merrill Lynch may proceed directly and
at once, without notice, against Guarantor to obtain performance of and to
collect and recover the full amount, or any portion, of the Guaranteed
Obligations owing to such Persons, without first proceeding the Guarantor or any
other Person, or their properties. 

 

(c)  The
Guarantor further agrees that, if any payment applied hereunder to the
Guaranteed Obligations is thereafter set aside, recovered, rescinded or required
to be returned for any reason (including, without limitation, the bankruptcy,
insolvency or reorganization of E-Loan or any other obligor) or declared to be
fraudulent or preferential, the Guaranteed Obligations to which such payment was
applied shall for the purpose of this Guaranty be deemed to have continued in
existence, notwithstanding such payment, and this Guaranty shall be enforceable
as to such Guaranteed Obligations as fully as if such payment had never been
made.

 

Section
4.   Continuation
and Validity of Guaranteed Obligations. The
liability of the Guarantor shall not be affected or impaired by any of the
following events: (a) the invalidity, unenforceability, discharge or
disaffirmance (by any Person, including any trustee in bankruptcy or other
similar official) of the Guaranteed Obligations or of the Basic Documents,
(b) the absence of any attempt to collect the Guaranteed Obligations from
E-Loan LLC or any other guarantor or other Person, (c) the waiver or
consent by Merrill Lynch or any other Person with respect to any provision of
any instrument or agreement evidencing the Guaranteed Obligations, any delay or
lack of diligence in the enforcement of the Guaranteed Obligations, or any
failure to institute proceedings, file a claim, give any required notices or
otherwise protect the Guaranteed Obligations, (d) any change of the time,
manner or place of payment or performance, or any other term, of any of the
Guaranteed Obligations, (e) any law, regulation or order of any
jurisdiction affecting any term of any of the Guaranteed Obligations or rights
of Merrill Lynch with respect thereto, (f) the failure by Merrill Lynch to
take any steps to perfect and maintain perfected its interest in the Contracts,
Financed Vehicles or other property acquired from the Seller or any security or
collateral related to the Guaranteed Obligations, (g) the commencement of any
bankruptcy, insolvency or similar proceeding with respect to E-Loan, (h) 
any acceptance of collateral security, guarantors, accommodation parties or
sureties for any or all Guaranteed Obligations, or (i) any legal or
equitable discharge or defense of the Guarantor (other than payment of the
Guaranteed Obligations). The Guarantor waives any and all defenses and
discharges available to a surety, guarantor or accommodation
co-obligor.

 

Section
5.   Representations
and Warranties. The
Guarantor hereby represents and warrants to Merrill Lynch as
follows:

 

(a)  Existence
and Power. The
Guarantor is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all power and authority required
to carry on its business as it is now conducted. The Guarantor has obtained all
necessary licenses and approvals to enter into this Guaranty and to perform its
obligations hereunder where the failure to do so would materially and adversely
affect its ability to enter into this Guaranty or to perform its obligations
hereunder.

 




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(b)  Authorization
and No Contravention. The
execution, delivery and performance by the Guarantor of this Guaranty (i) have
been duly authorized by all necessary corporate action, (ii) do not violate or
constitute a default under (A) any applicable law, rule or regulation applicable
to the Guarantor of any governmental authority having jurisdiction over the
Guarantor or its properties, or (B) any material provision of the Certificate of
Incorporation or the bylaws of the Guarantor, (iii) do not violate or result in
a breach that would constitute a material default under any agreement for
borrowed money binding upon or applicable to the Guarantor or the Guarantor’s
property that is material to it and (iv) will not result in the acceleration of
any indebtedness of the Guarantor.

 

(c)  Binding
Effect. This
Guaranty constitutes the legal, valid and binding obligation of the Guarantor
enforceable against the Guarantor in accordance with its terms, except as
limited by bankruptcy, insolvency, or other similar laws of general application
relating to or affecting the enforcement of creditors’ rights generally and
subject to general principles of equity.

 

(d)  No
Proceedings. There
is no action, suit or proceeding pending or, to the Guarantor’s knowledge,
threatened against the Guarantor, which, either in any one instance or in the
aggregate, would render invalid this Guaranty, or which would materially impair
the ability of the Guarantor to perform under the terms of this
Guaranty.

 

(e)  No
Consents. No
consent, approval, authorization or order of or declaration, filing or
registration with any governmental authority or other Person is required in
connection with the execution, delivery or performance of this Guaranty, except
such as have been duly made or obtained.

 

(f)  Benefits. The
Guarantor has a direct and substantial economic interest in E-Loan LLC and
expects to derive substantial benefits therefrom and from the transactions
contemplated by the Basic Documents, and this Guaranty shall be effective and
enforceable by Merrill Lynch without regard to the receipt, nature or value of
any such benefits.

 

(g)  Solvency. The
Guarantor is not insolvent nor will it be rendered insolvent by virtue of
entering into or carrying out this Guaranty.

 

Section
6.   Independent
Guaranteed Obligations. The
obligations of the Guarantor hereunder are undertaken as primary obligor and
independently of the obligations of E-Loan LLC, or any other obligor, guarantor
or Person, and action or actions may be brought or prosecuted directly against
the Guarantor whether or not action is brought first or at all against E-Loan
LLC or any other obligor, guarantor or Person, or against any collateral
security or any other source of recovery whatsoever, and whether or not E-Loan
LLC or any other obligor, guarantor or Person is joined in any such action or
actions, or any claims or demands are made or are not made on, or any action is
taken against, E-Loan LLC, any other obligor, guarantor or Person or any
collateral security or otherwise.

 

Section
7.   Waivers. (a)
Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of receivership or bankruptcy of E-Loan LLC or
any other Person (other than Guarantor to the extent required by the Bankruptcy
Code), protest or notice with respect to the Guaranteed Obligations, all setoffs
and counterclaims and all presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor and notices of
acceptance of this Guaranty, the benefits of all statutes of limitation, and all
other demands whatsoever (and shall not require that the same be made on E-Loan
LLC as a condition precedent to Guarantor’s obligations hereunder), and
covenants that this Guaranty will not be discharged, except by payment in full
of the Guaranteed Obligations.

 




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Guaranty




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(b)
Merrill Lynch is hereby authorized, without notice or demand and without
affecting the liability of Guarantor hereunder, from time to time, (i) to
otherwise renew, extend, accelerate or otherwise change the time for payment of,
or other terms relating to, all or any part of the Guaranteed Obligations, or to
otherwise modify, amend or change the terms of any of the Purchase and Sale
Agreement in accordance with its terms; (ii) to accept partial payments on all
or any part of the Guaranteed Obligations; (iii) to take and hold security or
collateral for the payment of all or any part of the Guaranteed Obligations,
this Guaranty, or any other guaranties of all or any part of the Guaranteed
Obligations or other liabilities of E-Loan LLC, or any of them; (iv) to
exchange, enforce, waive and release any such security or collateral; (v) to
apply such security or collateral and direct the order or manner of sale thereof
as in its discretion it may determine; and (vi) to settle, release, exchange,
enforce, waive, compromise or collect or otherwise liquidate all or any part of
the Guaranteed Obligations, this Guaranty, any other guaranty of all or any part
of the Guaranteed Obligations, and any security or collateral for the Guaranteed
Obligations or for any such guaranty, irrespective of the effect on the
contribution or subrogation rights of Guarantor. Any of the foregoing may be
done in any manner, without affecting or impairing the obligations of Guarantor
hereunder.




(c)
Without limiting the generality of the foregoing, to the fullest extent
permitted by applicable law, the Guarantor specifically waives all defenses the
Guarantor may have based upon any election of remedies by Merrill Lynch which
destroys the Guarantor’s rights to proceed against E-Loan LLC or any other
obligor, guarantor or Person for reimbursement, contribution or otherwise,
including any loss of rights that it may suffer by reason of any rights, powers,
remedies or defenses of E-Loan LLC in connection with any laws limiting,
qualifying or discharging indebtedness of or remedies against E-Loan LLC, and
the Guarantor hereby agrees not to exercise or pursue, so long as any of the
Guaranteed Obligations remain unsatisfied, any right to reimbursement,
subrogation, or contribution from E-Loan LLC in respect of payments
hereunder.

 

Section
8.   Setoff. At any
time after all or any part of the Guaranteed Obligations have become due and
payable, Merrill Lynch may, without notice to Guarantor and regardless of the
acceptance of any security or collateral for the payment hereof, appropriate and
apply toward the payment of all or any part of the Guaranteed Obligations owing
to such Persons (i) any debt due or to become due from Merrill Lynch to the
Guarantor, and (ii) any moneys, credits or other property belonging to the
Guarantor, at any time held by or coming into the possession of Merrill Lynch or
their respective affiliates.

 




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Section
9.   Subordination.
Guarantor agrees that any and all claims of Guarantor against E-Loan LLC or any
endorser or other guarantor of all or any part of the Guaranteed Obligations, or
against any of their respective properties, shall be subordinated to all of the
Guaranteed Obligations. Notwithstanding any right of Guarantor to ask for,
demand, sue for, take or receive any payment from E-Loan LLC, all rights and
liens of Guarantor, whether now or hereafter arising and howsoever existing, in
any assets of E-Loan LLC shall be and hereby are subordinated to the rights of
Merrill Lynch in those assets. Unless and until all of the Guaranteed
Obligations shall have been paid in full, (i) Guarantor shall have no right to
possession of any such asset, and (ii) Guarantor shall have no right to
foreclose upon any such asset, whether by judicial action or otherwise. If all
or any part of the assets of E-Loan LLC, or the proceeds thereof, are subject to
any distribution, division or application to the creditors of E-Loan LLC,
whether partial or complete, voluntary or involuntary, and whether by reason of
liquidation, bankruptcy, arrangement, receivership, assignment for the benefit
of creditors or any other action or proceeding, or if the business of E-Loan LLC
is dissolved or if substantially all of the assets of E-Loan LLC are sold, then,
and in any such event, any payment or distribution of any kind or character,
either in cash, securities or other property, which shall be payable or
deliverable upon or with respect to any indebtedness of E-Loan LLC to Guarantor
(“Company Indebtedness”) shall be paid or delivered directly to Merrill Lynch
for application on the Guaranteed Obligations, due or to become due, until such
Guaranteed Obligations shall have first been paid in full. Guarantor irrevocably
authorizes and empowers Merrill Lynch to, after the Guaranteed Obligations have
become payable to, demand, sue for, collect and receive every such payment or
distribution and give acquittance therefor and to make and present for and on
behalf of Guarantor such proofs of claim and take such other action, in Merrill
Lynch’s own name or in the name of Guarantor or otherwise, as Merrill Lynch may
deem reasonably necessary or reasonably advisable for the enforcement of this
Guaranty. Upon the Guaranteed Obligations becoming payable, Merrill Lynch may
vote, with respect to the Guaranteed Obligations owed to Merrill Lynch, such
proofs of claim in any such proceeding, receive and collect any and all
dividends or other payments or disbursements made thereon in whatever form the
same may be paid or issued and apply the same on account of any of the
Guaranteed Obligations. Should any payment, distribution, security or instrument
or proceeds thereof be received by Guarantor upon or with respect to the Company
Indebtedness prior to the payment in full of all of the Guaranteed Obligations,
Guarantor shall receive and hold the same in trust, as trustee, for the benefit
of Merrill Lynch and shall forthwith deliver the same to Merrill Lynch in
precisely the form received (accompanied by the endorsement or assignment of
Guarantor where necessary), for application to the Guaranteed Obligations, due
or not due, and, until so delivered, the same shall be held in trust by
Guarantor as the property of Merrill Lynch. Upon the Guaranteed Obligations
becoming payable, if Guarantor fails to make any such endorsement or assignment
to Merrill Lynch (or any of their respective officers or employees), Merrill
Lynch is hereby irrevocably authorized to make the same. Guarantor agrees that
until the Guaranteed Obligations have been paid in full, Guarantor will not
assign or transfer to any Person any claim Guarantor has or may have against
E-Loan LLC.

 

Section
10.   Significance
of Waivers. The
Guarantor represents, warrants and agrees that each of the waivers set forth
herein are made with the Guarantor’s full knowledge of its significance and
consequences, with the understanding that events giving rise to any defense
waived may diminish, destroy or otherwise adversely affect rights which the
Guarantor otherwise may have against E-Loan LLC or any other obligor, guarantor
or Person, or against collateral, and that under the circumstances the waivers
are reasonable.

 




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Section
11.   Cumulative
Liability. The
liability of the Guarantor under this Guaranty is in addition to and shall be
cumulative with all other liabilities of the Guarantor, if any, as guarantor,
surety, endorser, accommodation co-obligor or otherwise of any Guaranteed
Obligations or other obligations of E-Loan LLC, without any limitation as to
amount.

 

Section
12.   Amendments. This
Guaranty may not be waived, modified, amended, terminated, released or otherwise
changed except by a writing signed by the Guarantor and by Merrill Lynch.


 

Section
13.   Assignment. This
Guaranty shall be binding upon Guarantor and upon the successors and permitted
assigns of Guarantor and shall inure to the benefit of Merrill Lynch and their
respective successors and permitted assigns; all references herein to E-Loan LLC
and to Guarantor shall be deemed to include their respective successors and
permitted assigns. The successors and permitted assigns of Guarantor and E-Loan
LLC shall include, without limitation, their respective receivers, trustees or
debtors-in-possession. All references to the singular shall be deemed to include
the plural where the context so requires. 

 

Section
14.   Governing
Law. THIS
GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO THE RULES
THEREOF RELATING TO CONFLICTS OF LAW THAT WOULD RESULT IN THE APPLICATION OF THE
LAW OF ANY OTHER JURISDICTION, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

Section
15.   Consent
to Jurisdiction; Waiver of Trial by Jury.

 

(a)  THE
GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES FOR
THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY LITIGATION BASED ON
THIS GUARANTY OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS GUARANTY OR
ANY MATTER ARISING HEREUNDER. THE GUARANTOR FURTHER IRREVOCABLY CONSENTS, TO THE
FULLEST EXTENT PERMITTED BY LAW, TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK,
IN CONNECTION WITH ANY SUCH LITIGATION. THE GUARANTOR HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE
GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
BEFORE JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, THE GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY TO
THE FULLEST EXTENT PERMITTED BY LAW IN RESPECT OF ITS OBLIGATIONS UNDER THIS
GUARANTY.

 




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(b)  TO THE
EXTENT PERMITTED BY APPLICABLE LAW, THE GUARANTOR IRREVOCABLY WAIVES ALL RIGHT
OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF, UNDER
OR IN CONNECTION WITH, THIS GUARANTY OR ANY MATTER ARISING
HEREUNDER.

 

Section
16.   Counterparts. This
Guaranty may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts together shall constitute but
one and the same instrument.

 

Section
17.   Severability. Any
invalidity or unenforceability of any provision or application of this Guaranty
shall not affect other lawful provisions and application hereof, and to this end
the provisions of this Guaranty are declared to be severable.

 

Section
18.   Benefits;
Third-party Beneficiary. This
Guaranty shall be effective as of the date hereof, without further act,
condition or acceptance by Merrill Lynch or E-Loan LLC, shall be binding upon
the Guarantor and the successors and assigns of the Guarantor and shall inure to
the benefit of Merrill Lynch and its successors and permitted
assigns.

 

Section
19.   Termination. This
Guaranty shall become effective against Guarantor upon its execution by
Guarantor and shall continue in full force and effect and may not be terminated
or otherwise revoked until the Guaranteed Obligations shall have been paid in
full.

 










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IN
WITNESS WHEREOF, this Guaranty has been duly executed by the parties hereto as
of the date and year first above written.

 


	 	 	 
	 	E-LOAN, INC., as
      Guarantor
	 
 	 
 	 
 
		By:  	/s/ Scott D.
    McKinlay
	 	
      

    
	 	Name: Scott D. McKinlay
Title:
      Vice President & Chief Legal Officer




 

 


	 	ACKNOWLEDGED:
	 	 	 
	 	MERRILL LYNCH BANK USA,
      
as Purchaser 
	 
 	 
 	 
 
		By:  	/s/ Joseph
Magnus
	 	
      

    
	 	Name: Joseph Magnus
Title:
      Director



 

 

 


Limited
Guaranty