EXHIBIT 10.16
CONTITRADE SERVICES L.L.C.
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FUNDING COMMITMENT
dated as of May 17, 1996
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FIRSTCITY FINANCIAL CORPORATION
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS.................................................... 1
1.1 Defined Terms................................................ 1
SECTION 2. REPRESENTATIONS AND WARRANTIES OF FIRST CITY................... 2
2.1 Representations and Warranties of FirstCity.................. 2
SECTION 3. FUNDING COMMITMENT OF FIRSTCITY................................ 5
3.1 Commitments Re Credit Agreement.............................. 5
3.2 FirstCity to Provide Subordinate Financing................... 6
3.3 Indemnification.............................................. 6
SECTION 4. ADDITIONAL AFFIRMATIVE COVENANTS............................... 6
4.1 Certain Information.......................................... 6
4.2 Conduct of Business and Maintenance of Existence............. 6
4.3 Notices...................................................... 7
4.4 Maintenance of Control....................................... 7
4.5 Further Assurances........................................... 7
SECTION 5. MISCELLANEOUS.................................................. 8
5.1 Miscellaneous Provisions Related to the Financial Commitments 8
5.2 Amendments and Waivers....................................... 9
5.3 Notices...................................................... 10
5.4 No Waiver; Cumulative Remedies............................... 10
5.5 Survival of Representations, Warranties and Indemnities...... 11
5.6 Payment of Expenses and Taxes................................ 11
5.7 Successors and Assigns; Participations....................... 11
5.8 Termination.................................................. 12
5.9 Counterparts................................................. 12
5.10 Severability................................................. 13
5.11 Integration; Construction.................................... 13
5.12 Limited Liability............................................ 13
5.13 GOVERNING LAW................................................ 13
5.14 SUBMISSION TO JURISDICTION; WAIVERS.......................... 13
5.15 Acknowledgements............................................. 14
5.16 WAIVER OF JURY TRIAL......................................... 14
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FUNDING COMMITMENT
FUNDING COMMITMENT, dated as of May 17, 1996 (the "Commitment"), by
and among CONTITRADE SERVICES L.L.C., a Delaware limited liability company
("Lender") and FirstCity Financial Corporation, a Delaware corporation
("FirstCity").
W I T N E S S E T H:
WHEREAS, the NAF Auto Loan Trust (the "Borrower") has entered into
a Credit Agreement dated as of May 17, 1996 (as may from time to time, be
amended, supplemented, or modified, the "Credit Agreement") with the Lender and
National Auto Funding Corporation ("NAF Corp."), pursuant to which the Borrower
will receive the proceeds of Advances from time to time thereunder;
WHEREAS, the Borrower intends to enter into from time to time
Non-Standard Auto Loan Origination Agreements (each, as from time to time
amended, supplemented or modified, a "Loan Origination Agreement" and,
collectively, the "Loan Origination Agreements") with certain financial
institutions and agencies (the "FIs"), pursuant to which the Borrower will agree
to purchase Eligible Auto Loans;
WHEREAS, the Borrower and NAF Corp. have, in connection with the
transactions contemplated hereby, also entered into an Investment Banking
Services Agreement dated as of May 17, 1996 (the "IBSA") with the Lender and the
Lender's Affiliate, ContiFinancial Services Corporation;
WHEREAS, FirstCity is the parent corporation of NAF Corp.; and
WHEREAS, it is a condition to the obligations of the Lender to make
the Advances under the Credit Agreement that FirstCity shall have executed and
delivered to the Lender this Commitment.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. (a) As used in this Commitment, the capitalized
terms used herein and therein shall, unless otherwise defined herein or therein,
have the meanings assigned to them in the Definitions List dated as of the date
hereof that refers to this Commitment, which is incorporated herein by reference
and attached as Exhibit A to the Credit Agreement (the "Definitions List").
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(b) As used herein or in any other Facility Agreement, accounting
terms not defined in the Definitions List and accounting terms partly defined in
the Definitions List to the extent not defined shall have the respective
meanings given to them under GAAP.
(c) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Commitment shall refer to this Commitment as a
whole and not to any particular provision of this Commitment and Section,
subsection, Schedule and Exhibit references are to this Commitment unless
otherwise specified.
(d) Capitalized terms used herein or in any other Facility
Agreement shall be equally applicable to both the singular and plural forms of
such terms.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF FIRST CITY
2.1 Representations and Warranties of FirstCity. To induce Lender
to enter into the Credit Agreement and to make the Advances, FirstCity hereby
represents and warrants to Lender that:
(a) Corporate Existence Compliance with Law. FirstCity (i) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) has the power and authority, and
the legal right, as a Delaware corporation, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (iii) is duly qualified as a
foreign corporation and is in good standing and has all licenses (in full
force and effect) under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires
such qualification and/or licensing and (iv) is in compliance with all
Requirements of Law.
(b) Corporate Power; Authorization; Enforceable Obligations.
FirstCity has the power and authority, and the legal right, as a Delaware
corporation, to make, deliver and perform this Commitment and the other
Facility Agreements to which it is a party and has taken all necessary
action to authorize its obligations hereunder on the terms and conditions
hereof and the other Facility Agreements to which it is a party and to
authorize the execution, delivery and performance of this Commitment and
the other Facility Agreements to which it is a party. All consents or
authorizations of, filing with or other act by or in respect of, any
Governmental Authority or any other Person required to be obtained, made
or given by it in connection with its obligations hereunder or with the
execution, delivery, performance, validity or enforceability of this
Commitment or the other Facility Agreements to which it is a party have
been so obtained, made or received. This Commitment and each other
Facility Agreement to which it is a party has been duly executed and
delivered on behalf of FirstCity. This Commitment and each other Facility
Agreement to which it is a party constitutes a legal, valid and binding
obligation of FirstCity enforceable against FirstCity in accordance with
its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in
equity or at law).
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(c) No Legal Bar. The execution, delivery and performance by
FirstCity of this Commitment and the other Facility Agreements and its
obligations hereunder will not violate any Requirement of Law or
Contractual Obligation of FirstCity and will not result in, or require,
the creation or imposition of any Lien on any of its properties or
revenues pursuant to any such Requirement of Law or Contractual
Obligation.
(d) No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator, court or Governmental Authority is
pending or threatened, by or against FirstCity or against any of its
properties or revenues (i) with respect to this Commitment or the other
Facility Agreements or any of the transactions contemplated hereby or
thereby, or (ii) which could have a material adverse effect on the
business, prospects, properties, assets, operations or condition,
financial or otherwise, of FirstCity or the ability of FirstCity to
perform its obligations hereunder or under the other Facility Agreements.
(e) No Default; No Event of Default. FirstCity is not in default
under or with respect to any of its Contractual Obligations in any respect
which could have a material adverse effect on the business, operations,
properties, assets, condition or prospects, financial or otherwise, of
FirstCity or on the ability of FirstCity to perform its obligations
hereunder or under the other Facility Agreements.
(f) No Burdensome Restrictions. FirstCity is not a party to or
subject to any Contractual Obligation which could have a material adverse
effect on the business, properties, assets, operations, condition or
prospects, financial or otherwise, of FirstCity, or on the ability of
FirstCity to carry out its obligations hereunder or under the other
Facility Agreements.
(g) Taxes. FirstCity has filed or caused to be filed all federal,
state and other tax returns which are required to be filed by it, or has
filed extensions with respect thereto (which extensions have not expired)
and has paid all taxes shown to be due and payable on said returns or on
any federal, state and other tax assessments made against it or any of its
property and all other taxes, fees or other charges imposed on it or any
of its property by any Governmental Authority having taxing power; no tax
Lien has been filed against it, and no claim is being asserted by any
Governmental Authority with respect to any such tax, fee or other charge
except, in each case, for filings which, if not made, taxes which, if not
paid, and tax Liens which, if imposed, would not, in the aggregate, have a
material adverse effect on the business, properties, assets, operations,
condition or prospects, financial or otherwise, of FirstCity, or on the
ability of FirstCity to carry out its obligations hereunder or under the
other Facility Agreements.
(h) Investment Company Act; Other Regulations. FirstCity is not an
"investment company," or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as
amended. Borrower is not subject to regulation under any federal or state
statute or regulation which limits its ability to incur Debt.
(i) No Deduction. FirstCity is not required to make any deduction
or withholding from payments to be made by it to Lender under this
Commitment and the execution and
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performance of this Commitment and any of the other Facility Agreements
does not make FirstCity liable for any registration tax, stamp duty or
similar tax or duty imposed by any authority of or within its jurisdiction
of creation, which tax or duty has not been, or will not be, paid when
due.
(j) No Petition. There is no intent to file a voluntary petition
under the federal bankruptcy laws with respect to FirstCity and FirstCity
is not insolvent or generally unable to pay its debts as they become due.
(k) Principal Place of Business. FirstCity's principal place of
business is located at 6400 Imperial Drive, Waco, Texas 76712.
(l) Financial Condition. (i) The audited, consolidated balance
sheet of FirstCity as of December 31, 1995 and the related, consolidated
statements of income and of cash flows for the periods ended on such date,
are complete and correct and present fairly the financial condition of
FirstCity as at such date, and the results of its operations and its
consolidated cash flows for the period then ended. The financial
statements referred to in clause (i) above have been audited by KPMG Peat
Marwick, FirstCity's independent certified public accountants. FirstCity
does not have, and at the date of the December 31, 1995 balance sheet
referred to above, did not have any material Debt, material contingent
liability or material liability for taxes, or any long-term lease or
unusual forward or long-term commitments, including, without limitation,
any interest rate or foreign currency swap or exchange transaction except
(i) to the extent reflected as a liability on the balance sheet referred
to above or (ii) liabilities incurred in the ordinary course of business
since the date of such balance sheet and fully reflected on FirstCity's
books of account. Since the date of the December 31, 1995 balance sheet
referred to above, there has been no material change in the condition or
prospects, financial or otherwise, of FirstCity except changes in the
ordinary course of business, none of which individually or in the
aggregate has been materially adverse. All such financial statements,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the period covered
thereby.
SECTION 3. FUNDING COMMITMENT OF FIRSTCITY
3.1 Commitments Re Credit Agreement.
(a)(i) FirstCity hereby agrees to indemnify and hold the Lender
harmless with respect to any loss suffered by the Lender as of a default
and resulting credit loss on any WAMCO Contract listed on Exhibit A
hereto, provided that such default and resulting credit loss occurs prior
to the date on which the servicing arrangements for the Contracts are
acceptable to the Lender. As used in this Section 3, the phrase "the
servicing arrangements for the Contracts are acceptable to the Lender"
means the satisfaction of each of the following conditions:
(x) the Backup Servicer Effective Date (as defined in the
Credit Agreement) shall have occurred;
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(y) the Lender shall be reasonably satisfied with the results
of Baker & Associates' review of Milco Loan Servicing
Corporation's servicing abilities and procedures; and
(z) the three-month, rolling average Delinquency Ratio
calculated with respect to the WAMCO Contracts listed on
Exhibit A hereto does not exceed 15% as of the end of the
most recent Collection Period.
At such time, if any, as the servicing arrangements for the
Contracts are acceptable to the Lender, the Lender shall give written
notice thereof to FirstCity and NAF Corp.
(ii) FirstCity shall purchase from the Borrower, at a purchase
price not less than 85% of the Outstanding Contract Balance thereof, each
Pipeline Contract to the extent that the Lender shall not have received
the Collateral Agent's approving Certification by the close of business on
the third Business Day following the Lender's Advance against such
Pipeline Contract, such purchase price shall be deposited to the
Collection Account at the opening of business on the fourth Business Day
following such Advance.
(b) FirstCity may, at any time after the execution and delivery of
this Commitment, deliver to the Lender FirstCity's additional funding
commitment in the form of Exhibit B hereto, and, upon such delivery, the
Lender shall inform TCB, NAF Corp. and the Borrower that the "Borrowing
Base Adjustment amount", as defined in the Credit Agreement, shall
thereafter be zero. Notwithstanding the foregoing, if FirstCity proposes
to deliver such additional funding commitment after the date on which this
commitment is originally executed and delivered, such delivery shall only
be effective if the Lender determines in its reasonable business judgment
that no material adverse change has occurred in financial condition or
prospects of FirstCity, or in the ability of FirstCity to carry out its
financial obligations hereunder, in each case since the date of initial
execution of this Commitment.
3.2 FirstCity to Provide Subordinate Financing. FirstCity hereby
agrees and covenants with Lender that FirstCity shall provide sufficient
Subordinate Financing in connection with each securitization transaction with
respect to the Contracts as may be required by independent third parties (such
as the Rating Agencies and/or Credit Enhancer(s)), it being acknowledged that
such level of Subordinate Financing so determined by such independent third
parties shall constitute a "market" level. As used in this Section 3.2,
"Subordinate Financing" means any combination of the following: cash, purchase
of a "B piece" or "residual" certificate, funding of an initial reserve account
deposit, issuance of a guaranty, serving as account party on a letter of credit,
or other form of subordinate financing in the related securitization. Such
subordinate financing shall be acceptable to the Rating Agencies and the Credit
Enhancer.
3.3 Indemnification. FirstCity will indemnify the Lender and its
Affiliates (collectively, "Conti") against any losses, claims, damages or
liabilities to which Conti may become subject in connection with any matter
related to or arising out of a default by FirstCity under this Commitment;
provided, however, there shall be excluded from such indemnification any such
loss, claim, damage or liability which results from the gross negligence or
willful misconduct of Conti in
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performing the services which it is to render pursuant to this Commitment or the
other Facility Agreements.
SECTION 4. ADDITIONAL AFFIRMATIVE COVENANTS
4.1 Certain Information. FirstCity shall furnish to Lender copies
of all financial statements, reports and other communications that FirstCity may
make to, or file or have with, the SEC (contemporaneously with the filing
thereof with the SEC) pursuant to the Securities Exchange Act of 1934, as
amended, together with, promptly, such additional financial and other
information as Lender may from time to time reasonably request.
4.2 Conduct of Business and Maintenance of Existence. FirstCity
shall continue to engage in business of the same type as now conducted by it and
preserve, renew and keep in full force and effect its existence and take all
action to maintain all rights, privileges and franchises necessary or desirable
in the normal conduct of its business; and comply in all material respects with
all Contractual Obligations and Requirements of Law.
4.3 Notices. FirstCity shall promptly give notice to Lender of:
(a) the occurrence of (i) any Event of Default or Unmatured Event
of Default, in either case, under the Credit Agreement or (ii) a default
by FirstCity hereunder;
(b) any (i) default or event of default by FirstCity under any
Contractual Obligation of FirstCity or (ii) litigation, investigation or
proceeding which may exist at any time affecting FirstCity, which, in
either case, is likely to have a material adverse effect on the financial
condition or prospects of FirstCity or the ability of FirstCity to perform
its obligations hereunder;
(c) a material adverse change in the business, properties, assets,
operations, prospects or condition (financial or otherwise) of FirstCity.
(d) any change in its principal place of business or chief
executive office from the address set forth in paragraph (v) of subsection
3.1.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action FirstCity proposes to take with respect thereto.
4.4 Maintenance of Control. FirstCity hereby covenants and agrees
to maintain direct or indirect ownership of (i) at least 80% of the issued and
outstanding shares of capital stock of NAF Corp. and (ii) 100% of the issued and
outstanding shares of capital stock of J-Hawk Servicing Corporation. Not more
than 15% of the issued and outstanding shares of capital stock of NAF Corp., and
not more than one board seat of NAF Corp., may be controlled by Cargill
Financial Services Corporation or any Affiliate thereof.
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4.5 Further Assurances. FirstCity shall do such further acts and
things and execute and deliver to Lender such assignments, agreements, financing
statements, powers and instruments as are required by Conti to carry into effect
the purposes of this Commitment or to better assure and confirm unto Conti its
rights, powers and remedies hereunder, including, without limitation, to obtain
such consents and give such notices, and to file and record all such documents,
financing statements and instruments, and renew each such consent, notice,
filing and recordation, at such time or times, in such manner and at such
places, as may be necessary or desirable to preserve and protect the position of
Conti hereunder. This covenant shall survive the termination of this Commitment.
SECTION 5. MISCELLANEOUS
5.1 Miscellaneous Provisions Related to the Financial Commitments.
(a) The liabilities and obligations of FirstCity under Section 3.1
hereof (including any additional commitment delivered by FirstCity
pursuant to Section 3.1(b) hereof) shall be absolute and unconditional
under all circumstances and shall be performed by FirstCity regardless of
(i) the validity, legality or enforceability of the Obligations or the
Credit Agreement or the avoidance, subordination, discharge or
disaffirmance of any of the foregoing by any Person (including a trustee
in bankruptcy), (ii) any law, regulation, order or decree now or hereafter
in effect which might in any manner affect any of the terms or provisions
of the Credit Agreement, (iii) the merger or consolidation of any of the
Lender or FirstCity into or with any corporation or any sale or transfer
by the Lender or FirstCity of all or any part of its property, (iv) the
waiver, amendment, consent, extension, forbearance or granting of any
indulgence with respect to the Credit Agreement; IT BEING UNDERSTOOD,
HOWEVER, that any such waiver, amendment, consent, extension, forbearance
or indulgence with respect to the Credit Agreement shall be equally
applicable to FirstCity's obligations and liabilities hereunder with
respect to the subject matter thereof, (v) the failure by TCB to take any
steps to perfect and maintain perfected its interests in the Collateral or
in any other security or collateral related to the Credit Agreement, or
(vi) any other circumstances whatsoever (with or without notice to or
knowledge of FirstCity) which may in any manner or to any extent vary the
risk of FirstCity, or might otherwise constitute a legal or equitable
discharge of a surety or guarantor; it being the purpose and intent of
FirstCity that the liabilities and obligations of FirstCity under Section
3.1 hereof (including any additional commitment delivered by FirstCity
pursuant to Section 3.1(b) hereof) shall be absolute and unconditional
under any and all circumstances, and shall not be discharged except by
performance of the Credit Agreement and Section 3.1 hereof (including any
additional commitment delivered by FirstCity pursuant to Section 3.1(b)
hereof).
(b) The provisions of Section 3.1 hereof (including any additional
commitment delivered by FirstCity pursuant to Section 3.1(b) hereof) shall
continue to be effective or be reinstated, as the case may be, if at any
time payment of any of the Obligations payable to the Lender under the
Credit Agreement or by FirstCity hereunder is rescinded, declared to be
fraudulent or preferential, subsequently invalidated or set aside.
FirstCity hereby waives (i) notice of the occurrence of any default under
any of the Facility Agreements, (ii) any
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requirement of diligence or promptness on the part of the Lender in making
demand, commencing suit or exercising any other right or remedy under the
Credit Agreement.
(c) FirstCity hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of receivership or
bankruptcy of the Lender, protest or notice with respect to the Credit
Agreement and all demands whatsoever, and covenants that Section 3.1
hereof (including any additional commitment delivered by FirstCity
pursuant to Section 3.1(b) hereof) will not be discharged, except by
complete performance of the obligations contained herein. FirstCity hereby
waives all set-offs and counterclaims and all presentments, demands for
performance, notices of nonperformance, protests, notices of protest,
notices of dishonor and notices of acceptance of Section 3.1 hereof
(including any additional commitment delivered by FirstCity pursuant to
Section 3.1(b) hereof). FirstCity's obligations under Section 3.1 hereof
(including any additional commitment delivered by FirstCity pursuant to
Section 3.1(b) hereof) shall not be limited if the Lender is precluded for
any reason (including, without limitation, the application of the
automatic stay under Section 362 of the Federal Bankruptcy Code (11 U.S.C.
Section 101 et seq., the "BANKRUPTCY CODE") from enforcing or exercising
any right or remedy with respect to the Credit Agreement.
(d) FirstCity hereby agrees that its obligations hereunder shall
continue in full force and effect and may not be terminated or otherwise
revoked until the amounts due to Lender under the Credit Agreement shall
have been fully discharged and the Facility Agreements have been
terminated. In the event that FirstCity shall have any right under
applicable law to otherwise terminate or revoke its obligations hereunder,
which right cannot be waived, FirstCity agrees that such termination or
revocation shall not be effective until a written notice of such
revocation or termination, specifically referring hereto, signed by
FirstCity, is actually received by the Lender. Such notice shall not
affect the right and power of the Lender to enforce rights arising prior
to the Lender's receipt thereof. If, in reliance on FirstCity's
obligations, the Lender makes any financial accommodation, incurs any cost
or expense or takes any action after the termination or revocation by
FirstCity of its obligations hereunder but prior to the receipt by the
Lender of said written notice from FirstCity, the rights of the Lender,
with respect to such financial accommodation, cost, expense or action
shall be the same as if such termination or revocation had not occurred.
(e) FirstCity hereby assumes responsibility for keeping itself
informed of the financial condition of the Borrower, and of all other
circumstances bearing upon the risk of nonpayment of the amounts due to
Lender under the Credit Agreement, and FirstCity hereby agrees that the
Lender shall not have any duty to advise FirstCity of any information
known to it regarding such condition or any such circumstances.
5.2 Amendments and Waivers. This Commitment may be amended,
supplemented or modified by the parties hereto, in writing. Any waiver of any of
the provisions hereof by the Lender and any such amendment, supplement or
modification shall be binding upon Lender and all future holders of the
Promissory Note. In the case of any waiver, the parties hereto shall be restored
to their former position and rights hereunder; but no such waiver shall extend
to any subsequent event, or impair any right consequent thereon.
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5.3 Notices. Except where telephonic instructions or notices are
authorized herein to be given, all notices, demands, instructions and other
communications required or permitted to be given to or made upon any party
hereto shall be in writing and shall be personally delivered or sent by
overnight courier service, or by registered, certified or express mail, postage
prepaid, return receipt requested, or by facsimile copy (accompanied by a
telephonic confirmation or receipt thereof), or telegram (with messenger
delivery specified in the case of a telegram) and shall be deemed to be
delivered for purposes of this Commitment on: (a) the second Business Day
following the day on which such notice was placed in the custody of the U.S.
Postal Service, (b) the next Business Day following the day on which such notice
was placed in the custody of any overnight courier service, including express
mail service or (c) the same Business Day on which such notice is sent by
telegram, messenger or facsimile. Unless otherwise specified in a notice sent or
delivered in accordance with the foregoing provisions of this subsection,
notices, demands, instructions and other communications in writing shall be
given to or made upon the respective parties hereto at their respective
addresses (or to their respective facsimile numbers) indicated below, and, in
the case of telephonic instructions or notices, by calling the telephone number
or numbers indicated for such party below:
If to FirstCity: FirstCity Financial Corporation
6400 Imperial Drive
Waco, Texas 76718
Attention: James T. Sartain, President
Tel. No.: 817-751-1750
Telecopier No.: 817-751-1208
If to Lender: ContiTrade Services L.L.C.
277 Park Avenue, 38th Floor
New York, New York 10172
Attention: Chief Counsel
Tel. No.: 212-207-2822
Telecopier No.: 212-207-2935
5.4 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of Lender; any right, remedy, power or
privilege hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
5.5 Survival of Representations, Warranties and Indemnities. All
representations, warranties and indemnities made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Commitment and the other
Facility Agreements.
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5.6 Payment of Expenses and Taxes. FirstCity agrees, on demand, to
(a) pay or reimburse Conti for all out-of-pocket costs and expenses incurred in
connection with the preparation, execution and enforcement of this Commitment,
as well as the preparation of any amendments hereto, and (b) pay, indemnify, and
hold Conti, its directors, members, officers, employees and agents, harmless
from and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Commitment (all the foregoing,
collectively, the "indemnified liabilities"); provided that FirstCity has no
obligation hereunder to Conti with respect to indemnified liabilities arising
from the gross negligence or willful misconduct of Conti.
5.7 Successors and Assigns; Participations. (a) This Commitment
shall be binding upon and inure to the benefit of FirstCity, Lender,
ContiFinancial Services Corporation and all future holders of the Promissory
Note and their respective successors and assigns, except that FirstCity may not
assign or transfer any of its obligations under this Commitment, and, except as
set forth in paragraph (b) below, Lender may not assign or transfer any of its
obligations under this Commitment without the prior consent of the other party,
which consent shall not unreasonably be withheld.
(b) Any hypothecation or participation granted by Lender pursuant
to Section 9.6 of the Credit Agreement shall constitute a grant of a
hypothecation or participation in FirstCity's obligations under Section 3.1
hereof (including any additional commitment delivered by FirstCity pursuant to
Section 3.1(b) hereof); FirstCity hereby acknowledges and consents to any such
grant of a hypothecation or participation. In the event of any such grant by
Lender of a hypothecating or participating interest, Lender's obligations under
this Commitment to FirstCity shall remain unchanged, Lender shall remain solely
responsible for the performance thereof, Lender shall remain the holder of the
Promissory Note for all purposes under this Commitment and the other Facility
Agreements, and FirstCity shall continue to deal solely and directly with Lender
in connection with Lender's rights and obligations under this and the other
Facility Agreements. FirstCity agrees that if amounts outstanding under this
Commitment are due and unpaid, or shall have been declared or shall have become
due and payable, each person acquiring such a hypothecation or participation
interest (a "Participant") shall be deemed to have the right of setoff in
respect of its hypothecating or participating interest in amounts owing under
this Commitment to the same extent as if the amount of its hypothecating or
participating interest were owing directly to it under this Commitment.
(c) FirstCity authorizes Lender to disclose to any Participant and
any prospective Participant any and all financial information in its possession
concerning FirstCity and its Affiliates which has been delivered to it by or on
behalf of such Person pursuant to this Commitment or which has been delivered to
it by or on behalf of such Person in connection with its credit evaluation of
FirstCity and its Affiliates prior to becoming a party to this Commitment;
provided such Participant agrees to keep such financial information confidential
unless required to be disclosed by applicable Requirements of Law.
(d) If, pursuant to this subsection 5.6, any interest in this
Commitment is transferred or assigned to any Participant or assignee which is
organized under the laws of any jurisdiction other than the United States or any
state thereof, Lender shall cause such Participant or assignee, as a condition
to the effectiveness of such transfer, (i) to represent to Lender and FirstCity
that under
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applicable law and treaties then in effect no taxes will be required to be
withheld by FirstCity or Lender with respect to any payments to be made to such
Participant or assignee, in respect of terms of this Commitment, (ii) to furnish
to FirstCity either U.S. Internal Revenue Service Form 4224 (or any successor
form) or U.S. Internal Revenue Service Form 1001 (or any successor form)
(wherein such Participant or assignee claims entitlement to complete exemption
from U.S. federal withholding tax on all interest payments hereunder) and (iii)
to agree (for the benefit of Lender and FirstCity) timely to provide Lender and
FirstCity a new Form 4224 (or any successor form) or Form 1001 (or any successor
form) upon the expiration or obsolescence of any previously delivered form and
comparable statements in accordance with and if permitted under applicable U.S.
laws and regulations and amendments then in effect duly executed and completed
by such Participant or assignee, and to comply from time to time with all
applicable U.S. laws and regulations with regard to such withholding tax
exemption.
(e) Lender shall not grant to any Participant the right to consent
to any amendment or waiver entered into in accordance with subsection 5.1 except
for any such amendment or waiver which would increase the Lender Commitment
under the Credit Agreement, or reduce the amount or extend the due date of any
principal of or interest on the Promissory Note.
5.8 Termination. The obligations of FirstCity under Section 3.1(a)
hereof shall terminate upon the receipt by Lender of all amounts owed to it
under the Credit Agreement and the termination of the Credit Agreement; the
obligations of FirstCity under Section 3.1(b) hereof shall terminate upon the
termination of the Investment Banking Services Agreement; all other obligations
of FirstCity hereunder shall terminate on the later of the dates described in
the two foregoing clauses.
5.9 Counterparts. This Commitment may be executed by one or more of
the parties to this Commitment on any number of separate counterparts, and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument.
5.10 Severability. Any provision of this Commitment which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
5.11 Integration; Construction. This Commitment represents the
agreement of the parties hereto with respect to the subject matter hereof, and
there are no promises, undertakings, representations or warranties by the
parties hereto relative to the subject matter hereof not expressly set forth or
referred to herein or in the other Facility Agreements.
5.12 Limited Liability. No recourse hereunder or under any other
Facility Agreement shall be had against, and no personal liability shall attach
to, any officer, employee, director, member, affiliate, beneficial owner,
trustee or shareholder of any party hereto, as such, by the enforcement of any
assessment or by any legal or equitable proceeding, by virtue of any statute or
otherwise in respect of any of the Facility Agreements, it being expressly
agreed and understood that each Facility Agreement is solely a corporate or
trust obligation of each party hereto, and that any and all personal liability,
either at common law or in equity, or by statute or constitution, of every such
officer, employee, director,
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member, affiliate, beneficial owner, trustee or shareholder for breaches by any
party hereto of any obligations under any Facility Agreement is hereby expressly
waived as a condition of and in consideration for the execution and delivery of
this Commitment.
5.13 GOVERNING LAW. THIS COMMITMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS COMMITMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAW OF THE
STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES
THEREOF.
5.14 SUBMISSION TO JURISDICTION; WAIVERS. EACH PARTY HERETO
HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS FUNDING COMMITMENT AND THE OTHER FACILITY AGREEMENTS
TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT OF
THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA
FOR THE SOUTHERN DISTRICT
OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR
PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM
THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET
FORTH IN SUBSECTION 5.5 OR AT SUCH OTHER ADDRESS OF WHICH ALL OF THE OTHER
PARTIES HERETO SHALL HAVE BEEN NOTIFIED PURSUANT THERETO;
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND
(E) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT
IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN
THIS SUBSECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.
5.15 Acknowledgements. FirstCity hereby acknowledges that:
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(a) it has been advised by counsel in the negotiation, execution
and delivery of this Commitment and the other Facility Agreements;
(b) the Lender has no fiduciary relationship to FirstCity; and
(c) no joint venture exists between FirstCity and Lender.
5.16 WAIVER OF JURY TRIAL. EACH PARTY HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS COMMITMENT OR ANY OTHER FACILITY
AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
IN WITNESS WHEREOF, the parties hereto have caused this Commitment
to be duly executed and delivered in New York, New York by their proper and duly
authorized officers, members or trustees as of the day and year first above
written.
FIRSTCITY FINANCIAL CORPORATION
By /s/ Matt A. Landry, Jr.
Name: Matt A. Landry, Jr.
Title: Executive Vice President
CONTITRADE SERVICES L.L.C.
By /s/ Jerome M. Perelson
Name: Jerome M. Perelson
Authorized Signatory
/s/ Susan E. O'Donovan
Name: Susan E. O'Donovan
Authorized Signatory
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