CASH EQUIVALENTS
OF (1) CASH AND LOANS HELD FOR SALE AND INVESTMENT (EXCLUDING SECURITIZED
MORTGAGE LOANS) REDUCED BY (2) THE SUM OF AMOUNTS OUTSTANDING ON REVOLVING
WAREHOUSE AND REPURCHASE FACILITIES, MARGIN ON LOANS HELD FOR SALE AND
INVESTMENT (EXCLUDING SECURITIZED MORTGAGE LOANS) AND LOANS HELD FOR SALE AND
INVESTMENT WHICH ARE INELIGIBLE TO BE PLEDGED BY AAMES INVESTMENT UNDER ANY OF
ITS REVOLVING WAREHOUSE AND REPURCHASE FACILITIES IN AN AMOUNT EQUAL TO NOT LESS
THAN $38,000,000.
AAMES INVESTMENTS'S RATIO OF TOTAL INDEBTEDNESS TO TANGIBLE
NET WORTH IS NOT GREATER THAN 20:1.
AAMES INVESTMENT'S RATIO OF ADJUSTED
INDEBTEDNESS TO TANGIBLE NET WORTH IS NOT GREATER THAN 7:1.
AS OF THE
IMMEDIATELY PRECEDING FISCAL QUARTER, AAMES INVESTMENT'S NET INCOME BEFORE TAX,
GENERATED OVER THE PREVIOUS TWO CONSECUTIVE FISCAL QUARTERS, MEASURED ON THE
LAST DAY OF EACH SUCH FISCAL QUARTER, WAS EQUAL TO OR GREATER THAN $1.00.
(P)
ERISA. EACH PLAN TO WHICH ANY SELLER OR ITS SUBSIDIARIES MAKE
DIRECT CONTRIBUTIONS, AND, TO THE KNOWLEDGE OF THE SELLER, EACH OTHER PLAN AND
EACH MULTIEMPLOYER PLAN, IS IN COMPLIANCE IN ALL MATERIAL RESPECTS WITH, AND HAS
BEEN ADMINISTERED IN ALL MATERIAL RESPECTS IN COMPLIANCE WITH, THE APPLICABLE
PROVISIONS OF ERISA, THE CODE AND ANY OTHER FEDERAL OR STATE LAW. NO EVENT OR
CONDITION HAS OCCURRED AND IS CONTINUING AS TO WHICH THE SELLER WOULD BE UNDER
AN OBLIGATION TO FURNISH A REPORT TO THE BUYER UNDER SECTION 13(A)(V) HEREOF.
(Q)
LICENSES.
THE BUYER WILL NOT BE REQUIRED AS A RESULT OF
PURCHASING THE LOANS TO BE LICENSED, REGISTERED OR APPROVED OR TO OBTAIN PERMITS
OR OTHERWISE QUALIFY (I) TO DO BUSINESS IN ANY STATE IN WHICH IT CURRENTLY SO
REQUIRED OR (II) UNDER ANY STATE OR OTHER JURISDICTION'S CONSUMER LENDING, FAIR
DEBT COLLECTION OR OTHER APPLICABLE STATE OR OTHER JURISDICTION'S STATUTE OR
REGULATION.
(R)
FILING JURISDICTIONS; RELEVANT STATES.
SCHEDULE 2 SETS FORTH ALL
OF THE JURISDICTIONS AND FILING OFFICES IN WHICH A FINANCING STATEMENT SHOULD BE
FILED IN ORDER FOR BUYER TO PERFECT ITS SECURITY INTEREST IN THE PURCHASED
ITEMS. SCHEDULE 3 SETS FORTH ALL OF THE STATES OR OTHER JURISDICTIONS IN WHICH
THE SELLER ORIGINATES LOANS IN ITS OWN NAME OR THROUGH BROKERS ON THE DATE OF
THIS AGREEMENT.
(S)
TRUE SALES.
ANY AND ALL INTEREST OF A QUALIFIED ORIGINATOR IN, TO
AND UNDER ANY MORTGAGE FUNDED IN THE NAME OF OR ACQUIRED BY SUCH QUALIFIED
ORIGINATOR OR SELLER WHICH IS AN AFFILIATE OF THE SELLER HAS BEEN SOLD,
TRANSFERRED, CONVEYED AND ASSIGNED TO THE SELLER PURSUANT TO A LEGAL SALE AND
SUCH QUALIFIED ORIGINATOR RETAINS NO INTEREST IN SUCH LOAN, AND IF SO REQUESTED
BY THE BUYER, SUCH SALE IS COVERED BY AN OPINION OF COUNSEL TO THAT EFFECT IN
FORM AND SUBSTANCE ACCEPTABLE TO THE BUYER.
(T)
NO BURDENSOME RESTRICTIONS.
NO REQUIREMENT OF LAW OR CONTRACTUAL
OBLIGATION OF THE SELLER OR ANY OF ITS SUBSIDIARIES HAS A MATERIAL ADVERSE
EFFECT.
(U)
SUBSIDIARIES.
ALL OF THE SUBSIDIARIES OF THE SELLER AT THE DATE
HEREOF ARE LISTED ON SCHEDULE 4 TO THIS AGREEMENT.