INCLUDING, WITHOUT LIMITATION, ANY MS INDEBTEDNESS,
WHICH HAS AN AGGREGATE FACE OR PRINCIPAL AMOUNT OF $1,000,000 OR MORE, WHICH
DEFAULT (I) INVOLVES THE FAILURE TO PAY A MATURED OBLIGATION, OR (II) PERMITS
THE ACCELERATION OF THE MATURITY OF OBLIGATIONS BY ANY OTHER PARTY TO OR
BENEFICIARY OF SUCH NOTE, INDENTURE, LOAN AGREEMENT, GUARANTY, SWAP AGREEMENT OR
OTHER CONTRACT; OR
(M)
ANY MATERIALLY ADVERSE CHANGE IN THE PROPERTY, BUSINESS, FINANCIAL
CONDITION OR PROSPECTS OF ANY SELLER OR ANY OF ITS AFFILIATES SHALL OCCUR, IN
EACH CASE AS DETERMINED BY THE BUYER IN ITS SOLE DISCRETION, OR ANY OTHER
CONDITION SHALL EXIST WHICH, IN THE BUYER'S SOLE DISCRETION, CONSTITUTES A
MATERIAL IMPAIRMENT OF ANY SELLER'S ABILITY TO PERFORM ITS OBLIGATIONS UNDER
THIS REPURCHASE AGREEMENT OR ANY OTHER REPURCHASE DOCUMENT; OR
(N)
THE DISCOVERY BY THE BUYER OF A CONDITION OR EVENT WHICH EXISTED AT OR
PRIOR TO THE EXECUTION HEREOF AND WHICH THE BUYER, IN ITS SOLE DISCRETION,
DETERMINES MATERIALLY AND ADVERSELY AFFECTS: (I) THE CONDITION (FINANCIAL OR
OTHERWISE) OF ANY SELLER, ITS SUBSIDIARIES OR AFFILIATES; OR (II) THE ABILITY OF
ANY SELLER TO FULFILL ITS RESPECTIVE OBLIGATIONS UNDER THIS REPURCHASE
AGREEMENT; OR
(O)
(I)
TANGIBLE NET WORTH ON A CONSOLIDATED BASIS ON ANY GIVEN DAY SHALL BE
LESS THAN AN AMOUNT EQUAL TO THE SUM OF $250,000,000 PLUS FIFTY PERCENT (50%) OF
ANY ADDITIONAL EQUITY RAISED IN A PUBLIC OFFERING BY AAMES INVESTMENT FROM AND
AFTER THE EFFECTIVE DATE;
(II)
THE LEVERAGE RATIO SHALL AT ANY TIME BE
GREATER THAN 15.0 TO 1.0;
(III)
THE RATIO OF ADJUSTED INDEBTEDNESS TO
TANGIBLE NET WORTH SHALL AT ANY TIME BE GREATER THAN 5.0 TO 1.0;
(IV)
NET INCOME BEFORE TAX, GENERATED OVER ANY TWO
CONSECUTIVE FISCAL QUARTERS, MEASURED ON THE LAST DAY OF EACH FISCAL QUARTER,
SHALL BE LESS THAN $1.00, COMMENCING WITH RESPECT TO THE TWO CONSECUTIVE FISCAL
QUARTERS ENDING ON DECEMBER 31, 2005; OR
(V)
AAMES INVESTMENT SHALL, AS OF THE END OF ANY
CALENDAR MONTH, HAVE UNENCUMBERED CASH EQUIVALENTS, CASH AND AVAILABLE BORROWING
CAPACITY ON UNENCUMBERED ASSETS THAT COULD BE DRAWN AGAINST (TAKING INTO ACCOUNT
REQUIRED HAIRCUTS)
45
UNDER COMMITTED WAREHOUSE OR WORKING CAPITAL FACILITIES, ON A CONSOLIDATED BASIS
IN AN AMOUNT LESS THAN $65,000,000; OR
(P)
MS & CO.'S CORPORATE BOND RATING HAS BEEN LOWERED OR DOWNGRADED TO A RATING
BELOW A- BY S&P OR A3 BY MOODY'S AND ANY SELLER SHALL HAVE FAILED TO REPAY ALL
AMOUNTS OWING TO THE BUYER UNDER THIS REPURCHASE AGREEMENT AND THE OTHER
REPURCHASE DOCUMENTS WITHIN NINETY (90) CALENDAR DAYS FOLLOWING SUCH DOWNGRADE.
Section 9. Remedies Upon Default.
(A)
AN EVENT OF DEFAULT SHALL BE DEEMED TO BE CONTINUING UNLESS EXPRESSLY
WAIVED BY THE BUYER IN WRITING. UPON THE OCCURRENCE OF ONE OR MORE EVENTS OF
DEFAULT HEREUNDER, THE BUYER'S OBLIGATION TO ENTER INTO ADDITIONAL TRANSACTIONS
HEREUNDER SHALL AUTOMATICALLY TERMINATE WITHOUT FURTHER ACTION BY ANY PERSON.
UPON THE OCCURRENCE OF ONE OR MORE EVENTS OF DEFAULT OTHER THAN THOSE REFERRED
TO IN SECTION 8(G) OR 8(H), THE BUYER MAY IMMEDIATELY DECLARE THE