EXHIBIT 10.16
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AMENDED AND RESTATED LOAN AGREEMENT
among
FIRSTCITY FINANCIAL CORPORATION
as Borrower
and
THE FINANCIAL INSTITUTIONS LISTED
ON THE SIGNATURE PAGES HEREOF
as Lenders,
with
BANK OF SCOTLAND,
acting through its New York Branch,
as Agent
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Dated as of December 12, 2002
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AMENDED AND RESTATED LOAN AGREEMENT
AMENDED AND RESTATED LOAN AGREEMENT, dated as of December 12, 2002 among
FIRSTCITY FINANCIAL CORPORATION, a Delaware corporation (the "Borrower"), the
financial institutions from time to time party hereto (each a "Lender" and
collectively, the "Lenders") and BANK OF SCOTLAND, acting through its New York
branch, as agent for the Lenders (in such capacity, the "Agent").
W I T N E S S E T H :
WHEREAS, the Borrower, the Lenders and the Agent are party to an Amended
and Restated Loan Agreement dated as of December 20, 1999, as modified by that
certain consent dated as of January 22, 2000 (the "January 2000 Consent"), as
amended by that certain First Amendment to Amended and Restated Loan Agreement,
dated for reference purposes only as of April 5, 2000 (the "First Amendment"),
as further amended by that certain Second Amendment to Amended and Restated Loan
Agreement dated for reference purposes only as of August 18, 2000 (the "Second
Amendment"), as further modified by that certain Waiver and Consent dated August
31, 2000 (the "August 2000 Consent"), as further amended by that certain Third
Amendment to Amended and Restated Loan Agreement dated as of December 27, 2000
(the "Third Amendment"), as modified by a Consent and Partial Release dated for
reference purposed only as of March 30, 2001, (the "March 30, 2001 Consent"), as
modified by an Agreement and Consent dated for reference purposes only as of
March 31, 2001 (the "March 31, 2001 Consent"), as amended by Fourth Amendment to
Amended and Restated Loan Agreement dated as of May 24, 2001 (the "Fourth
Amendment;"), as further amended by Fifth Amendment to Amended and Restated Loan
Agreement dated as of July 3, 2001 (the "Fifth Amendment;"), as further amended
by Sixth Amendment to Amended and Restated Loan Agreement dated as of July 27,
2001, (the "Sixth Amendment"); as modified by Waiver and Consent dated October
31, 2001 (the "October 31, 2001 Consent"), as further amended by Seventh
Amendment to Amended and Restated Loan Agreement dated as of December 28, 2001
(the "Seventh Amendment") as amended by Eighth Amendment and Consent to Amended
and Restated Loan Agreement dated as of December 31, 2001 (the "Eighth
Amendment"), as modified by Waiver dated for reference purposes only as of March
31, 2002 (the "March 31, 2002 Waiver"), as further amended by Ninth Amendment to
Amended and Restated Loan Agreement dated as of April 29, 2002 (the "Ninth
Amendment"), as modified by Waiver dated for reference purposes only as of June
5, 2002 (the "June 5, 2002 Waiver") , as further modified by Waiver dated for
reference purposes only as of June 27, 2002 (the "June 27, 2002 Waiver"), and as
further amended by Tenth Amendment to Amended and Restated Loan Agreement (the
"Tenth Amendment") dated as of July 1, 2002 (said Amended and Restated Credit
Agreement as so amended and modified, the "Existing Agreement");
WHEREAS the Borrower has requested that the "Maturity Date" for certain
loans outstanding under the Existing Agreement (the loans outstanding under the
Existing Agreement being herein collectively referred to as "Existing Loans") be
extended and, on and subject to the
terms hereof, the Agent and the Lenders are willing to extend the Maturity Date
for certain Existing Loans;
WHEREAS, in connection with the foregoing, the Borrower, the Lenders and
the Agent desire that the Existing Agreement be amended and restated as set
forth herein;
NOW, THEREFORE, the parties hereto hereby agree that from and after the
Amendment Effective Date, the Existing Agreement is hereby amended and restated
to read in its entirety as set forth herein:
Section 1. DEFINITIONS.
(a) Terms used in this Agreement which are defined in Annex I hereto
shall have the meanings specified in such Annex I hereto (unless otherwise
defined herein) and shall include in the singular number the plural and in the
plural number the singular.
(b) Unless otherwise specified, each reference in this Agreement or
in any other Loan Document to a Loan Document shall mean such Loan Document as
the same may from time to time be amended, extended, restated, supplemented or
otherwise modified.
(c) All references to Sections in this Agreement or in Annex I
hereto shall be deemed references to Sections in this Agreement unless otherwise
specified.
(d) As used in this Agreement and the other Loan Documents, the
terms "including" and "such as" are illustrative and not limitative.
Section 2. THE LOANS.
2.1 Conversion of Existing Loans to Loans Hereunder; No Commitment for New
Loans; Assignment of Loans by BOS-Edinburgh to BOS USA
(a) On the Amendment Effective Date (after repayments described in
Section 12.14 (c) are made), (i) Existing Loans in an aggregate principal amount
of $50,400,000 will be outstanding and (ii) such outstanding Existing Loans will
automatically become Loans hereunder as follows: $38,400,000 in principal amount
of said Existing Loans will automatically become Tranche I Loans hereunder
outstanding on the terms applicable thereto set forth herein and in the other
Loan Documents, and $12,000,000 in principal amount of said Existing Loans will
automatically become Tranche II Loans hereunder outstanding on the terms
applicable thereto set forth herein and in the other Loan Documents. On the
Amendment Effective Date, the Tranche I Loans and Tranche II Loans will be
outstanding to the Lenders in the amounts set forth on Schedule 2.1 hereto.
(b) Effective immediately prior to the occurrence of the Amendment
Effective Date, (i) The Governor & Company of the Bank of Scotland ("BOS
- -Edinburgh") assigns to BoS (USA), Inc.("BOS-USA") all of BOS -Edinburgh's
Existing Loans pursuant to arrangements separately agreed between BOS -
Edinburgh and BOS-USA and (ii) BOS-USA thereby becomes a lender under the
Existing Agreement with all rights accruing to it in such capacity. By execution
or acknowledgement of this Agreement, the Borrower, the Agent, BOS
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Edinburgh and BOS-USA acknowledge and consent to the foregoing without the
necessity of any further documentation relating to such transfer.
(c) Except for the Tranche I Bosque Loans made pursuant to Section
2.5, upon and following the Amendment Effective Date, neither any Lender nor the
Agent shall have any obligation to make any new Loan or otherwise extend credit
under this Agreement. In furtherance and not in limitation of the foregoing, on
the Amendment Effective Date all "Commitments" under the Existing Agreement and
all obligations (if any) of the Lenders to extend credit thereunder shall
automatically terminate.
2.2 The Notes.
(a) The Borrower's obligation to pay (x) the principal of, and
interest on, the Tranche I Loans of each Lender shall be evidenced by a Tranche
I Note payable to the order of such Lender and (y) the principal amount of, and
interest on, the Tranche II Loans of each Lender shall be evidenced by a Tranche
II Note payable to the order of such Lender.
(b) The Tranche I Note and Tranche II Note of each Lender shall: (i)
be dated the Amendment Effective Date; (ii) be in an original principal amount,
with respect to each Lender, as set forth on Schedule 2.1 hereto; (iii) be
payable in full (x) in the case of the Tranche I Notes, on the Maturity Date
(Tranche I) (subject to mandatory prepayment as herein provided); and (y) in the
case of the Tranche II Notes, on the Maturity Date (Tranche II) (subject to
mandatory prepayment as herein provided).
(c) The Tranche I Notes and Tranche II Notes shall be, and hereby
are, secured by the Collateral and the Security Documents.
2.3 Prepayments and Repayments of Tranche I Loans.
(a) On each date set forth below or, in the case of any such date
which is not a CFCCA Business Day, on the CFCCA Business Day preceding such date
(each such date set forth below or (as the case may be) preceding CFCCA Business
Day, a "Payment Installment Date"), the Borrower shall make a repayment of the
principal amount of the Tranche I Loans in the amount set forth opposite said
Payment Installment Date:
Payment Installment Date Repayment Amount
- ------------------------ ----------------
December 31, 2003 $4,000,000
March 31, 2004 the Bosque Amount
December 31, 2004 $10,000,000
December 31, 2005 $12,000,000
November 30, 2006 $10,000,000
(b) In addition, on the last CFCCA Business Day of each month (each
such last CFCCA Business Day, a "Payment Date") commencing with December 31,
2002, the Borrower shall make a prepayment of the Tranche I Loans in an amount
equal to the Tranche I Prepayment Amount (if any) in respect of such Payment
Date. Each such amount repaid pursuant to this Section 2.3(b) shall be applied
first to the principal amount due on the next Payment
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Installment Date and then to the principal amounts due on succeeding Payment
Installment Dates in direct order of maturity.
(c) Borrower shall repay the outstanding amount of the Tranche I
Loans in full on the Maturity Date (Tranche I).
(d) Borrower may, upon not less than three CFCCA Business Days prior
written notice to the Agent (specifying the principal amount thereof to be
prepaid (which shall be in an amount equal to $1,000,000 (and, if greater, in
integral multiples of $500,000) and the prepayment date (which notice the Agent
shall promptly transmit to the Lenders in writing or by telephone, confirmed as
soon as possible thereafter in writing) prepay the Tranche I Loans in whole at
any time, or from time to time in part on the date and in the amount so
specified, without premium (subject to Section 3.9) or penalty; provided that at
the time of any such prepayment of the Tranche I Loans, Borrower shall pay all
interest accrued on the principal amount of such prepayment. Amounts repaid
pursuant to this Section 2.3(d) shall be applied first to the principal amount
due on the next Payment Installment Date and then to the principal amounts due
on the succeeding Payment Installment Dates in direct order of maturity. All
notices pursuant to this Section 2.3(d) shall be irrevocable and result in the
principal amount of Loans specified therein becoming due and payable on the
prepayment date specified therein.
(e) Borrower shall pay or cause to be paid to the Agent the full
amount of Extraordinary Transaction Proceeds (or, in the case where such
proceeds are received by FC Holdings, the amount thereof to which FC Holdings is
entitled after payment of any portion thereof required to be remitted to CFSC
pursuant to the Holdings CFSC Loan Agreement) on each date when such Proceeds
(or any portion thereof) are received by the Borrower or any Primary Obligor or,
in the case of the receipt of any such Proceeds by any Secondary Obligor, on the
earlier of the day on which such Proceeds or any portion thereof are paid to
Borrower or a Primary Obligor or the sixtieth day after receipt thereof by such
Secondary Obligor, for application to the unpaid principal amount of the Tranche
I Notes and accrued interest on such principal amount being prepaid. Amounts
prepaid with Extraordinary Transaction Proceeds shall be applied first to the
outstanding principal amount of the Tranche I Loans payable at final maturity of
the Tranche I Loans and thereafter to installments due on the Tranche I Loans in
inverse order of maturity.
(f) In the event that on any Payment Date all term loans theretofore
made under the Portfolio Acquisition Loan Agreement have been repaid and there
are remaining amounts or new amounts constituting or which would (if any term
loans thereunder remained outstanding) constitute Asset Pool Prepayment Amounts
(as defined in the Portfolio Acquisition Loan Agreement-Existing), Borrower
shall repay the Tranche I Loans on such date in an amount equal to the amount
that would have been applied to the repayment of term loans under the Portfolio
Acquisition Loan Agreement-Existing had an unlimited amount of term loans been
outstanding. Amounts prepaid pursuant to this Section 2.3(f) shall be applied
first to the outstanding principal amount of the Tranche I Loans payable at
final maturity of the Tranche I Loans and thereafter to installments due on the
Tranche I Loans in inverse order of maturity.
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(g) If more than one Tranche I Note is outstanding, amounts applied
to the repayment or prepayment of any installment of the Tranche I Loans shall
be applied ratably as among such outstanding Tranche I Notes.
(h) Amounts prepaid or repaid pursuant to this Section 2.3 may not
be reborrowed.
2.4 Prepayments and Repayments of Tranche II Loans.
(a) Borrower shall make a prepayment of the principal amount of the
Tranche II Loans on each Payment Date in the amount (if any) equal to the
Tranche II Prepayment Amount in respect of such Payment Date.
(b) After all Tranche I Loans have been repaid in full, Borrower
may, upon not less than three CFCCA Business Days prior written notice to the
Agent (which notice the Agent specifying the principal amount thereof to be
prepaid (which shall be in an amount equal to $1,000,000 (and, if greater, in
integral multiples of $500,000) and the prepayment date (which notice the Agent
shall promptly transmit to the Lenders in writing or by telephone, confirmed as
soon as possible thereafter in writing) prepay the Tranche II Loans in whole at
any time, or from time to time in part on the date and in the amount so
specified, without premium (subject to Section 3.9) or penalty; provided that at
the time of any such prepayment of the Tranche II Loans, Borrower shall pay all
interest accrued on the principal amount of such prepayment. All notices
pursuant to this Section 2.4(b) shall be irrevocable and result in the principal
amount of Loans specified therein becoming due and payable on the prepayment
date specified therein.
(c) Borrower shall repay the outstanding amount of the Tranche II
Loans in full on the Maturity Date (Tranche II).
(d) Borrower shall pay or cause to be paid to the Agent the full
amount of Extraordinary Transaction Proceeds (or, in the case when such proceeds
are received by FC Holdings, the amount thereof to which FC Holdings is entitled
after payment of any portion thereof required to be remitted to CFSC pursuant to
the Holdings CFSC Loan Agreement) on each date when such Proceeds are received
by the Borrower or any Primary Obligor or, in the case of any Secondary Obligor,
on the earlier of the day on which such Proceeds are paid to Borrower or a
Primary Obligor or the sixtieth day after receipt thereof by such Secondary
Obligor, for application to the unpaid principal amount of the Tranche II Notes
and accrued interest on such principal amount being prepaid.
(e) In the event that on any Payment Date all term loans theretofore
made under the Portfolio Acquisition Loan Agreement have been repaid and there
are remaining amounts or new amounts constituting or which would (if any term
loans thereunder remained outstanding) constitute Asset Pool Prepayment Amounts
(as defined in the Portfolio Acquisition Loan Agreement-Existing), Borrower
shall repay the Tranche II Loans on such date in an amount equal to the amount
that would have been applied to the repayment of term loans under the Portfolio
Acquisition Loan Agreement-Existing had an unlimited amount of term loans been
outstanding minus , if any Tranche I Loans are outstanding on such date, the
amount of Asset
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Pool Prepayment Amounts required to be applied to the Tranche I Loans on such
day (calculated on the basis that such amounts were the last amounts required to
be so applied on such date).
(f) If more than one Tranche II Note is outstanding, amounts applied
to the Tranche II Loans pursuant to this Section 2.4 shall be applied ratably as
among the outstanding Tranche II Notes
(g) Amounts prepaid or repaid pursuant to this Section 2.4 may not
be reborrowed.
2.5 Tranche I Bosque Loans
(a) Subject to the terms and conditions set forth herein, each
Lender severally agrees, at any time and from time to time during the Bosque
Commitment Period, to make one or more loans to the Borrower (each a "Tranche I
Bosque Loan" and collectively, the "Tranche I Bosque Loans") in an aggregate
principal amount for all such Tranche I Bosque Loans not exceeding the amount of
its Bosque Loan Commitment. The borrowings from the Lenders pursuant to this
Section 2.5(a) shall be (1) in an aggregate principal amount which (x) is not
less than $100,000 and (y) does not exceed the Total Bosque Loan Commitment then
in effect and (2) made from each Lender pro rata on the basis of the Bosque Loan
Commitment of such Lender. The Tranche I Bosque Loans shall constitute Tranche I
Loans for all purposes.
(b) Whenever the Borrower desires to utilize the Bosque Loan
Commitments, it shall deliver to the Agent, not later than 11:00 a.m., Closing
Office Time, on the third Business Day preceding the date of the proposed
borrowing of the Tranche I Bosque Loans, a request (a "Bosque Loan Request") for
Tranche I Bosque Loans in the form of Exhibit B hereto, executed by an Executive
Officer. Without the written consent of the Agent, Borrower shall not be
entitled to make borrowings under the Tranche I Bosque Loan Commitments more
than once during any period of five Business Days.
(c) The Agent shall promptly notify (in writing or by telephone,
confirmed as soon as possible thereafter in writing) each of the Lenders of the
date of the proposed Loans, and the amount of the Loan or Loans such Lender is
being requested to make. Each Lender will make the amount of its Loan or Loans
available to the Agent, at the Closing Office, before 1:00 p.m. Closing Office
Time on the date specified in the notice for the proposed borrowing in same day
funds. Such proceeds shall be made available to the Borrower (subject to Section
2.5(d)) by the Agent making such funds available to the Bosque Trustee, or to
such other Person to which the Agent may consent, as contemplated by the Bosque
Loan Request, in the same type of funds received by the Agent, at the Closing
Office against delivery to the Agent for the account of each Lender of such
instruments, documents and papers as are provided for herein. The Agent shall
deliver the instruments, documents and papers received by it for the account of
each Lender to such Lender or upon its order.
(d) Unless the Agent shall have received notice from a Lender prior
to 11:00 a.m., Closing Office Time, on the date of any borrowing of Tranche I
Bosque Loans that such Lender will not make available to the Agent such Lender's
ratable portion of such borrowing, the Agent may assume that such Lender has
made such portion available to the Agent on the date of
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such borrowing in accordance with subsection (c) of this Section 2.5 and the
Agent may, in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent such Lender shall not
have so made such ratable portion available to the Agent, such Lender and the
Borrower severally agree to repay to the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Agent, at the rate from time to time prevailing on the Tranche I
Note; provided that to the extent such interest is paid by a Lender, interest
shall be at the rate specified in Section 11.10 hereof. If such Lender shall pay
to the Agent such corresponding amount, such amount so paid shall constitute
such Lender's Loan as part of such borrowing for purposes of this Agreement.
(e) The failure of any Lender to make the Loan to be made by it as
part of any borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Loan on the date of such borrowing. No Lender shall
be responsible for the failure of any other Lender to make the Loan to be made
by such other Lender on the date of any borrowing.
(f) The Borrower's obligation to pay the principal of, and interest
on, the Tranche I Bosque Loans of each Lender shall be evidenced by the Tranche
I Note payable to the order of such Lender delivered to Lender pursuant to
Section 2.3.
(g) The Borrower shall have the right at any time and from time to
time upon at least three Business Days' prior written notice to the Agent (which
notice the Agent shall promptly transmit to the Lenders in writing or by
telephone, confirmed as soon as possible thereafter in writing) to reduce
permanently in amounts equal to $1,000,000 (and if greater, in integral
multiples of $500,000) or terminate the unutilized (after giving effect to all
pending requests for Loans) Total Bosque Loan Commitment. Any reduction pursuant
to this Section 2.5(g) shall apply proportionately to the Bosque Loan Commitment
of each Lender.
Section 3. INTEREST.
3.1 Rate of Interest. Subject to the provisions of Section 3.3 hereof, the
Borrower agrees to pay interest in respect of the unpaid principal amount of the
Loans from the Amendment Effective Date until maturity (whether by acceleration
or otherwise) at the following rates of interest: (i) Tranche I Loans, at a rate
per annum equal to 2.50% in excess of the Base Rate, such rate to change as and
when the Base Rate shall change; and (ii) Tranche II Loans, at 8.7675% per
annum.
3.2 Interest Payment Dates. Interest on and prior to maturity in respect
of each Loan shall be payable in arrears (i) on each Payment Date, (ii) upon any
repayment or prepayment (to the extent accrued on the principal amount so
repaid) and (iii) at maturity (whether by acceleration or otherwise) and, after
maturity, on demand.
3.3 Past Due Rate. Each Loan (and any overdue interest in respect of each
Loan) shall bear interest for each day on which an Event of Default exists
(after as well as before judgment), payable on demand, at a rate per annum (the
"Past-Due Rate") equal to the greater of 5% in excess of the interest rate
otherwise applicable to such Loan on such day or 4.5% in excess of the Base Rate
in effect on such day.
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3.4 Capital Adequacy. If any Lender shall have determined that the
applicability of any law, rule, regulation or guideline adopted after the date
hereof (it being agreed that "adopted after the date hereof" shall include
compliance by a Lender or any lending office or holding company of a Lender with
any Basle Law whether or not such Basle Law was in effect, applicable or phased
in on or prior to or after the date hereof) pursuant to or arising out of the
July 1988 report of the Basle Committee on Banking Regulations and Supervisory
Practices entitled "International Convergence of Capital Measurement and Capital
Standards" or pursuant to or arising out of any report, agreement or convention
of any international banking group adopted subsequent to such 1988 report (said
laws, rules, regulations and guidelines pursuant to or arising out of such 1988
report or any such subsequently adopted report, agreement or convention being
sometimes collectively herein referred to as "Basle Laws"), or the adoption
after the date hereof of any other law, rule, regulation or guideline regarding
capital adequacy (any such other law, rule, regulation or guideline being
sometimes herein referred to as "Other Laws"), or any change in any of the
foregoing (after the date hereof in respect of Other Laws; before or after the
date hereof in respect of Basle Laws) or in the enforcement or interpretation or
administration of any of the foregoing (after the date hereof in respect of
Other Laws; before or after the date hereof in respect of Basle Laws) by any
Government Authority, central bank or comparable agency charged with the
enforcement or interpretation or administration thereof, or compliance by any
Lender (or any lending office of any Lender) or any holding company of any
Lender with any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company, if any, as
a consequence of its Bosque Loan Commitment, Loans, Existing Loans, its
commitments or other obligations under the Existing Agreement or any of its
obligations hereunder to a level below that which such Lender or such Lender's
holding company could have achieved but for such applicability, adoption, change
or compliance (taking into consideration such Lender's policies and the policies
of such Lender's holding company with respect to capital adequacy) by an amount
deemed by such Lender to be material, then, upon demand by such Lender (or by
the Agent on such Lender's behalf), the Borrower shall pay to such Lender from
time to time such additional amount or amounts as will compensate such Lender or
such Lender's holding company for any such reduction suffered, together with
interest on each such amount from the date demanded until payment in full (after
as well as before judgment) thereof at the Base Rate. Each Lender shall endeavor
to give the Borrower notice of its intention to require compensation under this
Section 3.4 within a reasonable time after the loan officer of such Lender with
responsibility for this Agreement becomes aware of its entitlement to such
compensation under this Section 3.4, but no failure to give any such notice
shall affect or relieve the Borrower of any of Borrower's obligations under this
Section 3.4 or under any other provision of this Agreement or any other Loan
Document or result in any obligation or liability of the Agent or any Lender to
the Borrower or any other Person. A certificate of a Lender as to the amount
required to be paid by Borrower under this Section 3.4 and showing in reasonable
detail the basis for the calculation thereof shall, absent manifest error, be
final and conclusive (it being understood that in no event shall any Lender be
required to disclose in such certificate or otherwise any non-public
information). In determining such amount or amounts, a Lender may use any method
of averaging and attribution as it (in its sole and absolute discretion) shall
deem applicable.
3.5 [Intentionally omitted].
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3.6 [Intentionally omitted].
3.7 [Intentionally omitted].
3.8 [Intentionally omitted].
3.9 Compensation. Borrower shall compensate each Lender, upon written
request by such Lender (which request shall be made through the Agent and shall
set forth the basis for requesting such amounts), for all losses, expenses and
liabilities (including, without limitation, any interest paid by such Lender to
lenders of funds borrowed by it to make or carry its Tranche II Loans to the
Borrower, losses sustained by such Lender in connection with the liquidation or
re-employment of such funds and all other funding losses) which such Lender may
sustain (x) if for any reason any Tranche II Loan or any portion thereof is
prepaid (whether such prepayment is a mandatory prepayment, a voluntary
prepayment or otherwise and whether or not such prepayment has been specified in
any notice given by Borrower or is contemplated or required by any Waterfall
Certificate); (y) if any prepayment or repayment of any of its Tranche II Loans
is not made on any date specified in a notice thereof given by the Borrower or
if any prepayment or repayment contemplated or required by a Waterfall
Certificate is not made on the Payment Date following the date such Waterfall
Certificate is delivered or (z) as a consequence of any default under this
Agreement or the delivery of any Certified Error Certificate.
Section 4. FEES.
4.1 Facility Fee. The Borrower shall pay to the Agent, for the ratable
account (based on outstanding Loans hereunder) of each Lender party to this
Agreement on the Amendment Effective Date the fee set forth in the Fee Letter on
the dates set forth therein (such fee, the "Facility Fee").
4.2 Repayment Fee. The Borrower shall pay to Agent, for the ratable
account of Lenders (based on the Tranche II Loans outstanding immediately prior
to such payment in full or, in the case of clause (y) below, based on
outstanding Tranche II Loans on the Maturity Date (Tranche II), if sooner than
the date of repayment in full), a fee in respect of the Tranche II Loans (such
fee, the "Repayment Fee") in the following amount: (x) in the event that Tranche
II Loans are repaid in full (whether as a result of a refinancing or otherwise)
on or prior to the day which is third anniversary of the Amendment Effective
Date, $1,000,000, such fee to be payable on the date such Loans are repaid in
full; or (y) if the Tranche II Loans are not repaid in full by the date
specified in clause (x), $1,500,000, such fee to be payable upon the date such
Loans are repaid in full (whether upon maturity, pursuant to a refinancing or
otherwise) or, if earlier, on the date on which the Tranche II Loans mature
(whether upon scheduled maturity, or earlier acceleration, or otherwise).
4.3 Loan Consolidation Fee. Borrower shall pay to Agent, for the ratable
account (based on the outstanding Loans hereunder) of each Lender party to this
Agreement on the Amendment Effective Date, a fee (the "Consolidation Fee") in
the amount of $200,000 payable in equal installments of $50,000 on each of the
following days: the Amendment Effective Date; March 31, 2003; September 30,
2003; and March 31, 2004.
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4.4 Application of 20% Amount. Unless the CFCCA Remedies Time shall have
occurred, each 20% Amount received on any Payment Date shall be applied to the
payment or prepayment of the Facility Fee, whether or not then due, until the
amounts so applied plus any additional amounts paid by Borrower in respect
thereof equal the full amount of the Facility Fee.
Section 5. PAYMENTS, ETC.
5.1 Payments on Non-Business Days; Calculations. Whenever any payment to
be made hereunder or under any Note shall be stated to be due on a day which is
not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day and interest shall be payable at the applicable rate
during such extension. Interest on Loans hereunder and under the Notes shall be
calculated on the basis of a 365-day year and the actual number of days elapsed.
If for any reason a Loan is repaid on the same day on which it is made, one
day's interest (subject to the other provisions of this Agreement) shall be paid
on that Loan. The Borrower hereby authorizes and directs the Agent and each
Lender to charge any account of the Borrower maintained at any office of the
Agent or such Lender with the amount of any principal, interest or fee when the
same becomes due and payable under the terms hereof or of the Notes; provided,
however, that neither the Agent nor any Lender shall be under any obligation to
charge any such account.
5.2 Net Payments; Application.
(a) All payments hereunder and under the Loan Documents (including,
without limitation, repayments and prepayments pursuant to Section 2) shall be
made by the Borrower to the Agent in freely transferable U.S. dollars and in
same day funds at the Closing Office without setoff or counterclaim and in such
amounts as may be necessary in order that all such payments (after (i)
withholding for or on account of any present or future taxes, levies, imposts,
duties or other similar charges of whatsoever nature imposed on the amounts
described above by any government or any political subdivision or taxing
authority thereof, other than any tax (other than such taxes referred to in
clause (ii) below) imposed on a Lender pursuant to the income tax laws of the
jurisdiction where such Lender's principal or lending office or offices are
located (collectively, the "Taxes") and (ii) deduction of an amount equal to any
taxes on or measured by the net income payable to such Lender with respect to
the amount by which the payments required to be made by this Section 5.2 exceed
the amount otherwise specified to be paid under this Agreement and the Notes)
shall not be less than the amounts otherwise specified to be paid under this
Agreement and the Notes. With respect to each such deduction or withholding
imposed in respect of any payment by or on behalf of the Borrower, the Borrower
shall promptly (and in no event later than 30 days thereafter) furnish to the
Agent such certificates, receipts and other documents as may be required to
establish any tax credit, exemption or reduction in rate to which any Lender or
holder of a Note may be entitled. Each Lender, other than a Lender organized and
existing under the laws of the United States of America or any political
subdivision thereof, agrees to furnish the Borrower, as soon as practicable
after any written request of the Borrower to such effect, any executed form
reasonably requested by the Borrower such as IRS Form W-8BEN or W-8ECI, and any
other applicable form as to such Lender's entitlement, if any, to exemption
from, or a reduced rate of, or its subjection to, United States withholding tax
on amounts payable to it hereunder by the Borrower or under the Notes of the
Borrower and each such Lender undertakes to use its best
10
efforts promptly to notify the Borrower of any material change in any
information, statement or form so furnished to the Borrower; provided, however,
that any failure on the part of any Lender to furnish any such information,
statements or forms shall in no way affect the obligations of the Borrower or
the rights of any Lender under the terms of this Agreement or of the Notes.
(b)
(i) Unless the CFCCA Remedies Time has occurred, amounts transferred
to the Agent from the CFCCA on or in respect of a Payment Date will be
applied in the following order of priority: (i) to any fees (including any
portion of the Facility Fee, Consolidation Fee or Repayment Fee) which
have become due or will become due prior to such Payment Date, interest on
overdue amounts, costs, expenses, reimbursement obligations,
indemnification obligations, or other compensation obligations to the
Agent or the Lenders (or any Lender); (ii) to the unpaid amount of
interest on the Loans or unpaid interest on other obligations under this
Agreement or any other Loan Document and to the unpaid amount of principal
of any Loan which has become due or will become due prior to such Payment
Date; (iii) to the amount of interest due on such Payment Date; (iv) to
the amount of principal of any Loan (other than the Tranche I Prepayment
Amount or the Tranche II Prepayment Amount) due on such Payment Date
(first to the Tranche I Notes and then to the Tranche II Notes); (v) to
the aggregate amount of the Facility Fee, Repayment Fee and Consolidation
Fee due on such Payment Date; (vi) to the amount of the Facility Fee which
will become due after such Payment Date equal to the 20% Amount in respect
of such Payment Date; (vii) to the Tranche I Prepayment Amount in respect
of such Payment Date and (viii) to the Tranche II Prepayment Amount in
respect of such Payment Date, each amount applied to principal of any
Loan, unless otherwise provided herein, to be applied first to amounts due
at final maturity thereof and thereafter to the installments due thereon
in inverse order of maturity.
(ii) Unless otherwise specifically provided herein, all payments
under or pursuant to, or in satisfaction of any of the Borrower's
obligations under this Agreement or under the Notes (including any
received in connection with the foreclosure upon or other realization on
any Collateral and amounts received or applied from the CFCCA upon and
following the CFCCA Remedies Time) will be applied in the following order
of priority: (i) to any amounts not otherwise listed in this Section
5.2(b)(ii) then due and payable by the Borrower under this Agreement, the
Notes or the Security Documents, (ii) to any fees then due and payable
pursuant to Section 4 of this Agreement, pro rata according to the
aggregate amount of fees then due and payable, (iv) to any interest on the
Notes (unless otherwise specified by the Borrower, pro rata according to
the aggregate amount of interest then due and payable on the Notes) then
due and payable, (v) to any principal amount then due under the Notes
(first to the Tranche I Notes and then to the Tranche II Notes), (vi) to
any amounts not then due on the Tranche I Notes, unless otherwise provided
herein, to be applied first to amounts due at final maturity thereof and
thereafter to the installments due thereon in inverse order of maturity,
and (vii) to any amounts not then due on the Tranche II Notes, unless
otherwise provided herein, to be applied first to amounts due at final
maturity thereof, and thereafter to the installments due thereon in
inverse order of maturity.
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5.3 Distribution by Agent. All payments received by the Agent on behalf of
the Lenders on account of principal and interest under this Agreement or the
Notes or on account of any fees payable for the account of the Lenders shall be
promptly distributed by the Agent to the Lenders (in the type of funds received
by the Agent) as follows: (a) if in respect of principal of any Loans made to
the Borrower then on a pro rata basis to each of the Lenders holding the Loans
in respect of which such payment is being made (payments of principal being
allocated to Tranche I Loans until all Tranche I Loans have been repaid, and
then to Tranche II Loans), (b) if in respect of interest paid on the Loans
pursuant to Section 3 and the Borrower has designated (in accordance with
applicable provisions (if any) of this Agreement relating thereto) that the
payments are being made in respect of the Tranche I Loans or Tranche II Loans,
then on a pro rata basis to each of the Lenders having Tranche I Loans or
Tranche II Loans, as the case may be, outstanding; (d) if in respect of interest
on the Notes and the Borrower has not designated and this Agreement does not
otherwise specify whether such payments are being made in respect of Tranche I
Loans or Tranche II Loans, then to each Lender in the proportion that the
aggregate amount of such unpaid interest due on the Loans of each such Lender
bears to the aggregate amount of such unpaid interest due on all such Loans; (e)
if in respect of fees pursuant to Section 4, then to the Lenders in accordance
with their entitlement thereto; and (f) if in respect of a payment under Section
5.2(a) hereof, to each Lender in accordance with its entitlement thereto.
Section 6. CONDITIONS PRECEDENT TO TRANCHE I BOSQUE LOANS.
6.1 Conditions to Tranche I Bosque Loans. The Lenders shall not be
obligated to make any Tranche I Bosque Loan unless the Amendment Effective Date
shall have occurred and on or prior to the date of such Tranche I Bosque Loan
the following conditions shall have been fulfilled to the satisfaction of the
Agent (or waived by the Agent):
(a) No Default; Representations and Warranties. On the date of such
Tranche I Bosque Loan (and after giving effect to all Tranche I Bosque Loans
being made on such date) (i) there shall exist no Default or Event of Default
and all representations and warranties made by the Borrower and the other Loan
Parties herein or in the other Loan Documents or otherwise made by the Borrower
or the other Loan Parties in writing in connection herewith or therewith shall
be true and correct in all material respects with the same effect as though such
representations and warranties have been made at and as of such time and (ii)
each of the Notes, Guaranties and Security Documents shall be in full force and
effect and no party thereto shall have failed to perform in any material respect
any of its obligations thereunder.
(b) Certification. The Borrower shall have delivered to Lender a
certificate, dated the date of such Tranche I Bosque Loans executed by an
Executive Officer to the effect set forth in Section 6.1(a), (d), (f) and
(g)(ii). The making of each Tranche I Bosque Loan shall constitute a
representation and warranty by the Borrower to the Agent that each condition set
forth in Section 6.1(a), (d), (f) and (g)(ii) are satisfied on the date of such
Loan and after giving effect to all Tranche I Bosque Loans being made on such
day.
(c) Borrowing Request. The Borrower shall have delivered to the
Agent a borrowing request in the form required by Section 2.5 on or prior to the
date required by Section 2.5.
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(d) Approvals and Consents. All orders, permissions, consents,
approvals, licenses, authorizations and validations of, and filings, recordings
and registrations with and exemptions by, any Government Authority, or any other
Person, required to authorize or required in connection with the Tranche I
Bosque Loans shall have been obtained (and if so requested, delivered to the
Agent, with sufficient copies for each Lender).
(e) Other Supporting Documents. There shall have been delivered to
the Agent such information and copies of documents, approvals (of any) and
records (certified where appropriate) of corporate and legal proceedings as the
Agent or any Lender may have reasonably requested relating to the Tranche I
Bosque Loans.
(f) No Material Adverse Change. Since December 31, 2001, there shall
have occurred , in the Agent's opinion, no change in the condition or
operations, financial or otherwise, of Borrower, Bosque or any Loan Party and no
other event shall have occurred, which, in the Agent's opinion, has caused or
may cause a Material Adverse Change with respect to Borrower, Bosque or any Loan
Party.
(g) Change in Law; No Opposition. On the date of such Loan,(i) no
change shall have occurred in applicable law or in applicable regulations
thereunder or in the interpretations thereof by any Governmental Authority
which, in the opinion of any Lender, would make it illegal for such Lender to
make the Loan required to be made on such date; and (ii) no suit, action or
proceeding shall be pending or threatened before or by any Governmental
Authority seeking to restrain or prohibit the consummation of the making of such
Loan or the consummation of the transactions relating thereto.
(h) Bosque Note Documents. The Borrower shall have delivered to the
Agent:
(i) an executed copy of each note purchase agreement between
Borrower and the registered holder of each Bosque Note to be acquired with
the proceeds of such Tranche I Bosque Loans (each such Bosque Note, a
"Subject Bosque Note").
(ii) an original, executed allonge or other endorsement of each
Subject Bosque Note in the form of Exhibit C to this Agreement;
(iii) evidence that the closing of the purchase of the Subject
Bosque Notes shall be effected through (I) an escrow arrangement providing
for the simultaneous (x) payment of the purchase price to the Bosque
Trustee (y) presentment to the Bosque Trustee of each Subject Bosque Note
for registration and transfer (along with such other documents as may be
required pursuant to applicable provisions of the Bosque Note Agreement)
and (z) transfer of each such note to the Borrower or (II) other
arrangements satisfactory to the Agent;
(iv) an estoppel certificate executed by Bosque in form and
substance satisfactory to the Agent with respect to each Subject Bosque
Note;
(v) written acknowledgement of notice from the Bosque Trustee of
pledge to the Agent of the Subject Bosque Notes;
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(vi) letter of direction executed by Borrower directing the Bosque
Trustee to deliver to the Agent the Bosque Notes issued in exchange for
the purchased Subject Bosque Notes and the proceeds thereof and
acknowledgement thereof by the Bosque Trustee; and
(vii) such other information, documents and agreements as the Agent
may require in connection with the Borrower's purchase of the Subject
Bosque Notes.
All of the foregoing agreements, documents, instruments and certificates
shall be in form and substance satisfactory to the Agent.
Section 7. AFFIRMATIVE COVENANTS.
Borrower warrants and represents to and covenants to the Lenders and the
Agent that, so long as this Agreement is in effect and until the Bosque Loan
Commitments are terminated and all of the Loans, together with interest and all
other obligations incurred hereunder are paid in full, Borrower will perform the
obligations set forth in this Section 7 (unless it shall have first procured the
written consent of the Majority Lenders to do otherwise), and will cause each
Primary Obligor, Secondary Obligor and other Loan Party to perform the
obligations set forth in this Section 7 which are applicable to such Person
(unless it shall have first procured the written consent of the Majority Lenders
to do otherwise).
7.1 Financial Statements. The Borrower will furnish to the Agent and each
Lender:
(a) As soon as available and in any event within 30 days after the
close of each calendar month, as at the end of such month and for the period
commencing at the end of the previous Fiscal Year and ending with the end of
such month, a consolidated and consolidating balance sheet of Borrower and the
other members of the Consolidated Group, and the related statement of operations
for such period, all certified by the chief financial officer of the Borrower
and each other member of the Consolidated Group as being prepared in accordance
with GAAP and to present fairly the financial position and results of operation
of such Person for such period;
(b) As soon as available but not later than one hundred five (105)
days after the close of each Fiscal Year of the Borrower, as at the end of and
for the Fiscal Year just closed, an audited consolidated balance sheet of
Borrower and the other members of the Consolidated Group, the related statement
of operations (including income statement) and a reconciliation of capital for
such year, all certified on an unqualified basis by a firm of independent
certified public accountants selected by the Borrower and acceptable to Agent in
Agent's sole and absolute discretion;
(c) As soon as available but not later than one hundred five (105)
days after the close of each Fiscal Year of the Borrower, as at the end of and
for the Fiscal Year just closed, an unaudited consolidating balance sheet of
Borrower and the other members of the Consolidated Group, the related statements
of operations (including income statement) and a reconciliation of capital for
such year, prepared by the chief financial officer of Borrower;
14
(d) Concurrently with the delivery of the financial statements
described in subsection (b) above: (A) a certificate of the aforesaid
independent certified public accountants certifying to Agent that based upon
their examination of the affairs of Borrower and the other members of the
Consolidated Group, performed in connection with the preparation of said
financial statements, they are not aware of the occurrence or existence of any
condition or event which constitutes an Event of Default or Default, or, if they
are aware thereof, the nature thereof, and (B) a reliance letter executed by an
authorized partner of the aforesaid independent certified public accountants, in
form and substance reasonably acceptable to Agent, and acknowledging that Agent
and Lenders may rely on such financial statements in connection with this
Agreement notwithstanding that Agent and Lenders are not in privity with such
independent certified public accountants in connection with such financial
statements .
(e)
(i) Concurrently with delivery to its stockholders copies of all
financial and other information delivered by Borrower to such Persons,
including without limitation, its proxy statements and annual reports to
stockholders. Within two (2) Business Days after delivery to the SEC by
Borrower, which in all cases shall be on a timely basis in accordance with
the applicable document and the Securities Laws, copies of all reports and
other filings filed by Borrower with the SEC, including without
limitation, all reports on Forms 10K, 10Q or 8K promulgated under the
Securities Exchange Act of 1934, as amended, and all registration
statements filed under the Securities Act of 1933, as amended.
(ii) Concurrently with delivery of the financial statements required
pursuant to Sections 7.1(a) and (b) hereof, a certificate executed by the
President, Treasurer or Chief Financial Officer of Borrower that (A) no
Event of Default or Default has occurred and is continuing under this
Agreement, (B) that Borrower is in compliance with the covenants set forth
in Section 8.20 and 8.34 hereof, setting forth the Borrower's calculations
with respect to such compliance; and that (C) no event of default and no
event or condition which, with the passage of time or the giving of notice
or both, would constitute an event of default has occurred and is
continuing under any other Indebtedness Instrument ("Other Indebtedness
Instrument Unmatured Default") or, if an Event of Default or Default has
occurred under this Agreement or an event of default or Other Indebtedness
Instrument Unmatured Default has occurred under any other Indebtedness
Instrument, setting forth the details of such event and the action which
Borrower proposes to take with respect thereto.
(f) [Intentionally omitted].
(g) Promptly upon receipt thereof, copies of all detailed financial
reports and Management Letters, if any, submitted to any member of the
Consolidated Group by the Auditors, in connection with each annual or interim
audit of their respective books by such Auditors;
(h) As soon as possible and in any event (A) within 30 days after a
Loan Party, or any of its ERISA Affiliates knows that any Termination Event
described in clause (i) of
15
the definition of Termination Event with respect to any Pension Plan has
occurred or is expected to occur and (B) within 10 days after a Loan Party or
any of its ERISA Affiliates knows that any other Termination Event with respect
to any Pension Plan has occurred or is expected to occur, a statement of the CFO
of the Borrower describing such Termination Event and the action, if any, which
the affected Loan Party or ERISA Affiliate proposes to take with respect
thereto;
(i) Promptly and in any event within five Business Days after
receipt thereof by a Loan Party or any of its ERISA Affiliates from the PBGC,
copies of each notice received by such Person of the PBGC's intention to
terminate any Pension Plan or to have a trustee appointed to administer any
Pension Plan, any notice of noncompliance issued by the PBGC with respect to a
proposed standard termination of a Pension Plan, and any notice issued by the
PBGC with respect to a proposed distress termination of a Pension Plan;
(j) Promptly and in any event within 30 days after the filing
thereof with the IRS, copies of each Schedule B (Actuarial Information) to the
annual report (Form 5500 Series) with respect to each Pension Plan;
(k) Promptly and in any event within five Business Days after
receipt thereof by a Loan Party or any of its ERISA Affiliates from a
Multiemployer Plan sponsor, a copy of each notice received by such Person
concerning (x) the imposition or amount of withdrawal liability under Subtitle E
of Title IV of ERISA or (y) any determination by a Multiemployer Plan sponsor
that such Multiemployer Plan is, or is expected to be, in "reorganization"
(within the meaning of Section 4241 of ERISA) or "insolvent" (within the meaning
of Section 4245 of ERISA), or has incurred or is expected to incur an
"accumulated funding deficiency" (within the meaning of Section 302 of ERISA or
Section 412 of the Code);
(l) Upon request of the Agent made from time to time, deliver to the
Agent a copy of any Pension Plan sponsored, contributed to, participated in or
maintained by Borrower or any ERISA Affiliate; and
(m) With reasonable promptness, such other information respecting
the business, properties, operations, prospects or condition (financial or
otherwise) of any member of the Consolidated Group and any other Primary
Obligor, Mid-Tier Company, Secondary Obligor-Existing or Secondary Obligor-R
and, to the extent reasonably available, any other Secondary Obligor as the
Agent or any Lender may from time to time in writing reasonably request
provided, that Borrower shall not be required to furnish to the Agent or any
Lender any such information relating to a Portfolio Entity-Post AE if (i) the
Charter Documents of, or Shareholder Agreement relating to, such Person, in each
case as in effect on the date of formation of such Person, prohibit such
disclosure and (ii) notice of such prohibition on disclosure is provided to the
Agent within five days of formation of such Person.
7.2 Other Required Notices.
(a) [Intentionally omitted].
(b) Borrower shall notify Agent promptly after obtaining knowledge
of:
16
(i) except as otherwise previously disclosed, any event or
occurrence which Borrower has determined has caused a material loss or
decline in value of the Assets of Borrower, any Primary Obligor, any
Mid-Tier Company, or any Secondary Obligor other than an REO Affiliate, in
any such case due to casualty or any other adverse occurrence and the
estimated (or actual, if available) amount of such loss or decline;
(ii) the institution of (x) any suit or administrative proceeding
which, if determined adversely to Borrower, any Primary Obligor, any
Mid-Tier Company, any Wholly-Owned Subsidiary or any other Secondary
Obligor is reasonably likely to or could reasonably be expected to
materially adversely affect the operations, financial condition or
business of any obligor of a Pledged Note or have a Material Adverse
Effect on the Borrower, any Primary Obligor, any Wholly-Owned Subsidiary
other than an REO Affiliate, or any Mid-Tier Company, and (y) any other
suit or administrative proceeding against Borrower, any Primary Obligor or
any Mid-Tier Company in which the uninsured amount involved is $750,000 or
more, such notice to be given on or prior to the end of the calendar month
in which the applicable event occurs;
(iii) Borrower, any Primary Obligor or any Mid-Tier Company becoming
subject to any Charge, restriction, judgment, decree or order which could
reasonably be expected to have a Material Adverse Effect or any Secondary
Obligor becoming subject to any Charge, restriction, judgment, decree or
order if the same could reasonably be expected to have a Material Adverse
Effect on Borrower, any Primary Obligor, any Mid-Tier Company or any
Wholly-Owned Subsidiary other than an REO Affiliate;
(iv) the commencement of any lockout, strike or walkout relating to
any labor contract to which Borrower, any Primary Obligor or any Mid-Tier
Company is a party or, if the same could reasonably be expected to have a
Material Adverse Effect on Borrower, any Primary Obligor, any Mid-Tier
Company or any Wholly-Owned Subsidiary other than an REO Affiliate, the
commencement of any lockout, strike or walkout relating to any labor
contract to which any other Secondary Obligor is a party;
(v) except as otherwise previously disclosed, any event or
occurrence (x) in respect of Borrower, any Primary Obligor, any Mid-Tier
Company or any Wholly-Owned Subsidiary which could reasonably be expected
to have a Material Adverse Effect, (y) in respect of any other Secondary
Obligor which could reasonably be expected to have a Material Adverse
Effect on the Borrower, any Primary Obligor, any Mid-Tier Company or any
Wholly-Owned Subsidiary other than an REO Affiliate or (z) in respect of
Borrower, any Primary Obligor or any Secondary Obligor if the same could
reasonably be expected to have a material adverse effect on the ability of
any obligor of a Pledged Note to repay such Pledged Note;
(vi) (x) the occurrence of a default by Borrower, any Primary
Obligor or any Mid-Tier Company under any agreement, document or
instrument to which such Person is a party which could reasonably be
expected to have a Material Adverse Effect, (y) the occurrence of a
default by any other Secondary Obligor under any agreement, document or
instrument to which it is a party which could reasonably be expected to
have a Material Adverse Effect on the Borrower, any Primary Obligor, any
Mid-Tier Company
17
or any Wholly-Owned Subsidiary other than an REO Affiliate or (z) the
occurrence of any default by Borrower, any Primary Obligor or any
Secondary Obligor which could reasonably be expected to materially and
adversely affect any such Person's ability to perform its respective
obligations under the Loan Documents;
(vii) the filing of a petition by or against Borrower, any Primary
Obligor, Secondary Obligor, any other Pledged Entity or any other Loan
Party under any section or chapter of the United States Bankruptcy Code or
any similar law or regulation or any such Person shall make an assignment
for the benefit of its creditors or if any case or proceeding is filed by
or against any such Person for its dissolution or liquidation;
(viii) the making of an application for the appointment of a
receiver, trustee or custodian for any of the assets of Borrower, any
Primary Obligor or any Secondary Obligor or any other Loan Party;
(ix) the exercise by any holder of any option, warrant or right to
purchase any Equity Interest in Borrower, any Primary Obligor or any
Secondary Obligor ;
(x) any breach of the covenant set forth in Section 8.11; and
(xi) the issuance or sale of any Securities by Borrower, any Primary
Obligor or any Secondary Obligor, whether or not permitted pursuant to the
terms hereof.
(c) On the 25th day of each month or, if sooner, on the fourth to
last CFCCA Business Day of each month, Borrower shall deliver to the Agent (x) a
Waterfall Certificate (which, as set forth in the form of such certificate
attached as Exhibit E hereto, shall detail all receipts of Net Cash Flow, other
receipts by Primary Obligors and Secondary Obligors, the amount of such receipts
not paid to a Primary Obligor or Borrower and Borrower's proposed distribution
of funds from the CFCCA) certified by an Executive Officer of Borrower; (y) a
copy of each waterfall certificate being delivered pursuant to the Portfolio
Acquisition Loan Agreement; and (z) notice of the amount of funds from the Cash
Collateral Account-Servicing which will be excluded from transfer to the CFCCA
on or prior to the next Payment Date pursuant to Section 8.29(e) with respect to
the Holdings Buy Out Amount.
(d) Borrower shall notify the Agent of the occurrence of any
Extraordinary Transaction on or prior to the occurrence of such event and of the
receipt by Borrower, any Primary Obligor or any Secondary Obligor of
Extraordinary Transaction Proceeds on or prior to such receipt (or, in either
case, at such earlier time (if any) as may be specified with respect thereto
elsewhere in this Agreement).
(e)
(i) The Borrower shall give the Agent notice that a Secondary
Obligor has become a Mid-Tier Company (due to the amount of assets
contributed to it on the date of its formation or an increase in assets
thereafter) within 30 days of such Person becoming a Mid-Tier Company.
18
(ii) The Borrower shall give the Agent notice that a Tier IV Company
has ceased to constitute a Tier IV Company (due to an increase in the fair
market value of its assets or such company engaging in any business)
within 30 days of such Person ceasing to constitute a Tier IV Company and
shall promptly deliver to Lender a revised Schedule 10.43 to reflect such
change.
(iii) The Borrower shall give the Agent notice that a Tier V Company
has ceased to constitute a Tier V Company within 30 days of such Person
ceasing to constitute a Tier V Company
(f) The Borrower shall give the Agent notice that it or any Primary
Obligor, Mid-Tier Company, Wholly-Owned Subsidiary or Loan Party intends to
acquire Equity Interests in any Person or to form a Subsidiary prior to the
making of any such acquisition or any such formation and, if requested in
writing by the Agent, forthwith upon the making of such acquisition or any such
formation, shall deliver to the Agent (x) an addendum to Schedule 10.23A
reflecting the same and,(y) if such acquisition or formation is of an REO
Affiliate, a new Schedule 10.46 reflecting the same.
(g) On or before the fourth to last CFCCA Business Day of each
month, Borrower shall deliver to Agent an Existing Portfolio NPV Percentage
Certificate in the form of Exhibit F hereto (which, as indicated in the form of
such certificate shall detail for each Secondary Obligor the Net Present Value
of the assets of such Secondary Obligor and the amount of Indebtedness of or
secured by such Secondary Obligor and the amount of Guaranty Equivalents issued
by such Secondary Obligor), certified by an Executive Officer.
(h) On or before the fourth to last CFCCA Business Day of each
month, Borrower shall deliver to Agent a Portfolio Protection Expense Report in
form and detail satisfactory to the Agent showing as of the close of business on
the last Business Day of the preceding calendar month the aggregate amount
retained by Secondary Obligors as Portfolio Protection Expenses to pay Portfolio
Protection Expenses not theretofore paid (the "Aggregate PPE Amount"), the
aggregate amount of Portfolio Protection Expenses theretofore paid and the
aggregate amount of Portfolio Protection Expenses withheld (in the aggregate) by
such Persons during the immediately preceding calendar month. In addition, such
Report shall itemize each item of the Aggregate PPE Amount in excess of $50,000
(each such item, an "Itemized PPE Amount"), and Borrower shall provide to the
Agent such other information with respect thereto as the Agent may request. If
the Agent gives the Borrower notice that it disputes the inclusion of any
Itemized PPE Amount as a Portfolio Protection Expense (whether due to the
reasonableness thereof, the time such amount has been or is expected to be
retained in advance of payment of the related expense or otherwise), such
challenged item shall constitute a "Challenged Portfolio Protection Expense."
7.3 Payment of Charges. Other than Charges payable by First X or First B,
Borrower, each Primary Obligor, each Mid-Tier Company and each Wholly-Owned
Subsidiary other than any REO Affiliate shall pay promptly, when due, all
Charges and Borrower, each Primary Obligor and each Mid-Tier Company and
Wholly-Owned Subsidiary other than an REO Affiliate shall not permit the Charges
to arise or to remain unpaid, and will promptly discharge the same. In the event
Borrower, any Primary Obligor or Secondary Obligor other than an REO Affiliate
19
at any time or times hereafter, shall fail to pay the Charges or to obtain such
discharges as required herein, Borrower shall so advise Agent thereof in
writing. Agent may, without waiving or releasing any obligation, covenant or
agreement of Borrower or any Event of Default or Default, in its sole and
absolute discretion, at any time or times thereafter, make such payment, or any
part thereof, or obtain such discharge and take any other action with respect
thereto which Agent deems advisable. All sums so paid by Agent and any expenses
relating thereto, including reasonable attorneys' fees, court costs, expenses
and other charges, shall be part of the Obligations, payable by Borrower to
Agent on demand. Notwithstanding the foregoing, Borrower, any Primary Obligor,
any Mid-Tier Company or Wholly-Owned Subsidiary may permit or suffer the Charges
to attach to its Assets and may dispute, without prior payment thereof, the
Charges, on the conditions that: (i) Borrower or the applicable Primary Obligor,
Mid-Tier Company or Wholly-Owned Subsidiary, in good faith, shall be contesting
the same in an appropriate proceeding diligently pursued; (ii) enforcement
thereof against any Assets of Borrower or the applicable Primary Obligor or
Mid-Tier Company or Wholly-Owned Subsidiary shall be stayed; and (iii)
appropriate reserves therefor shall have been established on the Records of
Borrower or the applicable Primary Obligor or Mid-Tier Company or Wholly-Owned
Subsidiary in accordance with GAAP.
7.4 Insurance. Borrower and each Primary Obligor, Mid-Tier Company,
Wholly-Owned Subsidiary and each REO Affiliate at each of such respective
Person's sole cost and expense, shall keep and maintain: (i) policies of
insurance against all hazards and risks ordinarily insured against by other
owners or users of properties in similar business or as reasonably requested in
writing by Agent; and (ii) public liability insurance relating to such Person's
ownership and use of its Assets. All such policies of insurance shall be in
form, with insurers and in such amounts as may be satisfactory to Agent.
Borrower shall deliver to Agent the original (or certified) copy of each policy
of insurance, and evidence of payment of all premiums for each such policy. Such
policies of insurance of the Borrower, Primary Obligors and Wholly-Owned
Subsidiaries (except those of public liability) shall contain an endorsement, in
form and substance acceptable to Agent, showing losses payable to Agent for the
ratable benefit of Lenders. Such endorsement or an independent instrument
furnished to Agent, shall provide that all insurance companies will give Agent
at least thirty (30) days prior written notice before any such policy or
policies of insurance shall be altered or canceled and that no act or default of
Borrower or any other Person shall affect the right of Agent for the ratable
benefit of Lenders, to recover under such policy or policies of insurance in
case of loss or damage. Upon request by Agent and, whether or not such request
is made, upon the occurrence of an Event of Default or Default, Borrower hereby
directs all insurers under such policies of insurance (except those of public
liability) to pay all proceeds payable thereunder directly to Agent. Upon
request by Agent and upon the occurrence of an Event of Default or Default,
Borrower, irrevocably, appoints Agent (and all officers, employees or agents
designated by Agent) as Borrower's true and lawful agent and attorney-in-fact
for the purpose of making, settling and adjusting claims under such policies of
insurance, endorsing the name of Borrower on any check, draft, instrument or
other item of payment for the proceeds of such policies of insurance and for
making all determinations and decisions with respect to such policies of
insurance. In the event Borrower, any Primary Obligor or any Mid-Tier Company or
Wholly-Owned Subsidiary at any time or times hereafter shall fail to obtain or
maintain any of the policies of insurance required above or to pay any premium
in whole or in part relating thereto, then Agent, without waiving or releasing
any obligation, covenant or agreement of Borrower or any Event of Default or
Default, may at any
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time or times thereafter (but shall be under no obligation to do so) obtain and
maintain such policies of insurance and pay such premium and take any other
action with respect thereto which Agent deems advisable. All sums so disbursed
by Agent, including reasonable attorneys' fees, court costs, expenses and other
charges relating thereto, shall be part of the Obligations, payable by Borrower
to Agent on demand. Agent shall also be named as an additional insured with
respect to Borrower's, each Primary Obligor's and each Wholly-Owned Subsidiary's
liability insurance.
7.5 Maintenance of Records. Borrower will keep, and will cause each
Primary Obligor and each Wholly-Owned Subsidiary other than any REO Affiliate to
keep, at all times books of record and account in which full, true and correct
entries will be made of all dealings or transactions in relation to its business
and affairs, and each such Person will provide, and will cause each such other
Person to provide, adequate protection against loss or damage to such books of
record and account.
7.6 Preservation of Existence. Each of Borrower, each Primary Obligor,
each Mid-Tier Company, each Secondary Obligor-Existing and each other Subsidiary
of Borrower other than a Tier IV Company or an REO Affiliate or a Harbor Debtor,
will maintain and preserve its respective corporate, limited liability company
or partnership existence, rights, privileges and franchises in its jurisdiction
of organization, and qualify and remain qualified to do business in, and
maintain its rights, privileges and franchises in each other jurisdiction which
in the opinion of the respective board of directors, manager, general partner or
other governing Person of Borrower, such Primary Obligor, Mid-Tier Company ,
Secondary Obligor- Existing, or other Subsidiary of Borrower continue to be
advantageous to it and each such Person (including each Tier IV Company and REO
Affiliate which is a Subsidiary of Borrower) shall comply in all material
respects with all applicable Legal Requirements. Without limiting the generality
of the foregoing, the Borrower agrees to (and to cause each such other Person
to) qualify to do business as a foreign corporation in each jurisdiction where
the nature of its business and the operations conducted by it therein require it
to be so qualified.
7.7 Preservation of Assets. Each of Borrower and each Primary Obligor will
keep its property material to the conduct of its business in good repair,
working order and condition and from time to time make all needful and proper
repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto, so that the business carried on by it may be conducted at
all times in accordance with prudent business management.
7.8 Inspection of Books and Assets. Borrower shall permit Agent, Lenders
and each of their respective representatives reasonable access during normal
business hours to its properties and personnel, and shall disclose and make
available to Agent and Lenders all books, papers and records relating to the
assets, stock ownership, properties, operations, obligations, and liabilities of
Borrower, its Subsidiaries, each Mid-Tier Company, each Secondary
Obligor-Existing and each other Secondary Obligor-R (and shall use its best
efforts to cause each other Existing S Co. and Portfolio Entity-Post AE to do
the same), including, but not limited to, all books of account (including the
general ledger), tax records, minute books of meetings of boards of directors
(and any committees thereof) and shareholders, organizational documents, bylaws,
material contracts and agreements, filings with any regulatory authority,
accountants' work papers (other than those that are the property of its
independent outside auditors), litigation files,
21
loan files, plans affecting employees, and any other business or prospects in
which the Lenders may have a reasonable interest in connection with the Loans,
provided that such access shall be reasonably related to the transactions
contemplated hereby and not unduly interfere with normal operations, and
provided further that in the event that any of the foregoing are in the control
of any third party, Borrower shall use its reasonable best efforts to cause such
third party to provide access to such materials to the Agent and Lenders who
shall request the same. In the event that Borrower is prohibited by law from
providing any of the access referred to in the preceding sentence to the Agent
and Lenders, it shall use its reasonable best efforts to obtain promptly waivers
thereof so as to permit such access. Borrower shall make the directors,
officers, employees and agents and authorized representatives (including counsel
and independent public accountants) of Borrower, its Subsidiaries, each Mid-Tier
Company and each Secondary Obligor-Existing and each other Secondary Obligor-R
available (and shall use its best efforts to cause each other Existing S Co. and
Portfolio Entity-Post AE to do the same) to confer with Agent and Lenders and
their respective representatives, provided that (i) such access shall be
reasonably related to the transactions contemplated hereby and not unduly
interfere with normal operations and (ii) unless a Default or Event of Default
exists, counsel to Borrower shall be permitted to be present at any meeting
between Borrower's independent public accountants and the Agent or the Lenders).
7.9 Payment of Indebtedness. Each of Borrower, each Primary Obligor and,
subject to the final sentence of this Section 7.9, each Wholly-Owned Subsidiary
will duly and punctually pay, or cause to be paid, the principal of and the
interest on all Indebtedness heretofore or hereafter incurred or assumed by such
Person, when and as the same shall become due and payable, provided that neither
Borrower, any Primary Obligor or any such Wholly-Owned Subsidiary shall be
required to pay any Indebtedness (other than Indebtedness incurred under this
Agreement or any other Loan Document) while the same is being contested by it in
good faith and by appropriate proceedings so long as Borrower or such Primary
Obligor or Wholly-Owned Subsidiary shall have set aside on its books appropriate
reserves in accordance with GAAP with respect thereto and title to any property
of Borrower or the applicable Primary Obligor or Wholly-Owned Subsidiary is not
jeopardized. The provisions of this Section 7.9 do not relate to Indebtedness of
FC Capital, Bosque Asset Corp. or other Wholly-Owned Subsidiaries which are REO
Affiliates or Harbor Debtors.
7.10 Further Assurances. Each of Borrower, each Primary Obligor, each
Subsidiary and each other Loan Party will, and will cause each of its respective
Subsidiaries to, make, execute or endorse, and acknowledge and deliver or file,
all such vouchers, invoices, notices, and certifications and additional
agreements, undertakings, conveyances, transfers, assignments, or further
assurances, and take any and all such other action, as the Agent or any Lender
may, from time to time, deem necessary or proper in connection with this
Agreement, the obligations of such Person hereunder or under the Notes or any of
the other Loan Documents to which such Person is a party, or for the better
assuring and confirming unto the Agent on behalf of the Lenders, with the
Requisite Priority, all or any part of the security for the Obligations.
7.11 Notice of Default. Forthwith and in any event within five days after
Borrower shall have obtained knowledge of the existence of a Default or Event of
Default, Borrower will deliver to the Agent a certificate signed by an Executive
Officer of Borrower setting forth the
22
details of such event, the period of existence thereof, and what action the
Borrower proposes to take with respect thereto.
7.12 Reserves. Each of Borrower, each Primary Obligor and, subject to the
last sentence of this Section 7.12, each Wholly-Owned Subsidiary and each
Secondary Obligor-R will set up on its books from its earnings, reserves for bad
debt in accordance with GAAP and in an aggregate amount deemed adequate in the
judgment of such Person and accepted by the outside auditors in their annual
audits and Borrower shall use its best efforts to cause each other Mid-Tier
Company to do the same. The provisions of this Section 7.12 shall not apply to
any Wholly-Owned Subsidiary or Secondary Obligor-R which is an REO Affiliate, a
Harbor Debtor, a Tier IV Company or Tier V Company.
7.13 Representation and Warranties; Covenants as to Other Persons;
Amendment of Schedules.
(a) To the extent any representation or warranty contained herein
refers to an event or state of facts which exists on or after the date hereof,
on or after the Amendment Execution Date or on or after the Amendment Effective
Date or on or after the date of any Loan, and shall exist during the term hereof
or at the time of any or each Loan hereunder, to the extent not already a
covenant, said representation or warranty shall be deemed to be an affirmative
covenant by Borrower to take all actions, omit to take such actions or cause
such actions to be taken which shall be necessary or desirable to cause such
representation or warranty to be true and accurate at all times during the term
hereof. To the extent any representation, warranty or covenant herein (including
the covenants set forth in Section 8 and in this Section 7) relates to any other
Person (including but not limited to a Primary Obligor, a Secondary Obligor, any
Pledged Entity or any other Loan Party) other than Borrower, it shall be deemed
to be a covenant of Borrower to cause such Person to comply with or otherwise
perform such representation, warranty or covenant, whether or not Borrower has
the legal, corporate or other ability to cause such compliance or performance.
(b) No delivery of any new or supplemented Schedule to this
Agreement (whether or not such delivery is required by this Agreement or any
other Loan Document) shall waive or cure any Default or Event of Default which
would occur absent such delivery (other than a Default or Event of Default
arising solely from the breach of an obligation to deliver such Schedule and
other than as may be set forth in writing in a consent or amendment (if any)
pursuant to which any such new or supplemented Schedule is delivered).
7.14 Perform Obligations. Borrower and each Primary Obligor, Secondary
Obligor and other Loan Party shall duly and punctually pay and perform each of
its obligations under this Agreement and the other Loan Documents in accordance
with the terms hereof and thereof.
7.15 New Debt and Equity Interests.
(a) Borrower shall ensure that at the time that Borrower, any
Primary Obligor, any other Loan Party or any Wholly-Owned Subsidiary other than
a Wholly-Owned Subsidiary which is not a US Person, acquires an Equity Interest
in any Person other than, in the case of a Secondary Obligor, an REO Affiliate
of such Secondary Obligor, such new Equity Interest is
23
subject to a perfected security interest of the Requisite Priority in favor of
the Agent and the Lenders and, in connection therewith, shall take such action
and execute and deliver such pledge agreements or amendments to pledge agreement
and such other instruments and agreements, including, without limitation,
delivery of notices of lien to the Pledged Entity, acknowledgement of such
notice from the Pledged Entity, delivery of the original certificates of
certificated securities to Collateral Agent, together with an assignment
separate from certificate therefor, in each case in form and substance
satisfactory to the Collateral Agent, as the Collateral Agent may require. If
requested in writing by Agent, Borrower shall also deliver to the Agent a
supplement to Schedule 10.5(b) hereto to reflect the acquisition of such new
Equity Interest. The provisions of this Section 7.15(a) are in addition to, and
not in limitation of, other provisions of this Agreement limiting the
investments, the acquisition of Equity Interests and the acquisition of other
assets by Borrower, Primary Obligors, Secondary Obligors or other Persons.
Notwithstanding the foregoing, no Primary Obligor or Wholly-Owned Subsidiary
shall be required to pledge to the Agent (x) shares of stock, partnership
interests, membership interests or other similar equity interests consisting of
more than 66.66% of the shares of stock, partnership interests, membership
interests or other similar equity interests in any Person which is not a US
Person or (y) any Equity Interest issued by an REO Affiliate.
(b) Borrower shall ensure that at the time that Borrower or any
Primary Obligor makes any loan or acquires any rights to any other indebtedness
or acquires any note, bond or other indebtedness instrument (any such note, bond
or other instrument, a "Subject Debt Instrument"), all rights of the Borrower or
such Primary Obligor with respect to such loan, other indebtedness and Subject
Debt Instrument are subject to a perfected security interest of the Requisite
Priority in favor of the Agent and the Lenders and, in connection therewith,
shall take such action and execute and deliver such pledge agreements or
amendments to pledge agreement and such other instruments and agreements,
including, without limitation, delivery of notices of pledge to the issuer of
such indebtedness, acknowledgement of such notice from such issuer, delivery of
the Subject Debt Instruments and each other original note evidencing such
indebtedness to Collateral Agent, together with an assignment separate from
certificate such note or Subject Debt Instrument or allonge thereto, and
estoppel certificates from the issuer thereof, in each case in form and
substance satisfactory to the Collateral Agent, as the Collateral Agent may
require. The provisions of this Section 7.15(b) are in addition to, and not in
limitation of, other provisions of this Agreement limiting the investments, the
acquisition of Equity Interests and the acquisition of other assets by Borrower,
Primary Obligors, Secondary Obligors or other Persons.
7.16 Cooperation. At the Agent's request, Borrower will meet from time to
time with (and provide then available financial information to) other financial
institutions to which any Lender may wish to grant participations in the Loans,
including potential Lender Assignees and potential Purchasing Lenders.
7.17 Approvals and Consents. In the event that any approval, consent or
non-objection need be obtained by Borrower, any Primary Obligor and/or any
Secondary Obligor or other Loan Party from, or a notice or other filing need be
filed by Borrower or any such other Person, with, any Governmental Authority in
connection with the execution, delivery and performance of this Agreement or any
Loan Document by Borrower or any such other Person, the Borrower shall take and
cause such other Person (as applicable) to take, all actions reasonably
necessary to
24
obtain any such approval, consent or non-objection or file such notice or other
filing as promptly as practicable, and the Lenders agree to cooperate with
Borrower in obtaining or filing the same.
7.18 Obligations Under Amendments to Existing Agreement.
(a) Borrower shall cause FC Mexico to continue to own not less than
90% of the equity interests of each Mexican Investment Entity and to maintain
all power and authority to manage the affairs of each Mexican Investment Entity
which it manages on the Amendment Effective Date (including but not limited to
the right to sell assets and borrow money, provided that the right to sell
assets, right to acquire additional assets and the obligation to make additional
capital contributions may be subject to the approval of all partners of such
Entity).
(b) Borrower shall cause FC Holdings to continue to own not less
than 90% of the equity interests of each Mexican Investment Entity and to
maintain all power and authority to manage the affairs of each Mexican Lending
Entity that it manages on the Amendment Effective Date (including but not
limited to the right to sell assets and borrow money, provided that the right to
sell assets, right to acquire additional assets and the obligation to make
additional capital contributions may be subject to the approval of all partners
of such Entity).
(c) Not less than ten (10) days prior to forming any additional
entity to make investments in Mexico or to make loans to any such entity making
investments in Mexico, Borrower shall deliver, or cause to be delivered to
Agent, notice of the formation of such entity, which notice shall include
information relating to the assets to be acquired by the Mexican Acquisition
Entity, the purchase price to be paid for such assets, the structure and
ownership of the entity which will make such investments and the entity (if any)
that will make loans to such investing entity and, if such assets are to be
acquired other than by a PFAL Portfolio Entity and by an entity which
necessitates a consent thereunder, a copy of the CFSC's consent to such
transactions, if required pursuant to the Holdings/CFSC Loan Agreement.
7.19 Payment of Dividends from Primary Obligors and Subsidiaries. In
furtherance and not in limitation of other provisions hereof (including Section
8.29) regarding required distributions, to the extent necessary to enable it to
make payments of the Obligations in accordance with the terms hereof, unless
prohibited by applicable law Borrower shall cause dividends to be paid to it by
each Primary Obligor and each other Subsidiary of the Borrower (whether in
existence as of the date hereof or hereafter formed or acquired) in amounts
which are sufficient to enable Borrower to satisfy its payment obligations under
the terms hereof.
7.20 Stay, Extension and Usury Laws. Borrower covenants (to the extent
that it may lawfully do so) that it shall not at any time insist upon, plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law or other law which would prohibit or forgive it from
paying all or any portion of the principal of, premium, if any, or interest on
the Notes, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of its obligations under the Notes, and
Borrower (to the extent it may lawfully do so) hereby expressly waives all
benefits or advantages of any such law.
7.21 Compliance with Laws. Borrower shall comply with, and shall cause
each Primary Obligor, each Secondary Obligor and each other Loan Party to comply
with, all laws,
25
rules, regulations and governmental orders (federal, state and local), including
all Environmental Laws, having applicability to it or to the business or
businesses at any time conducted by it, where the failure to so comply would
have, or could reasonably be expected to have, a Material Adverse Effect on
Borrower, any Primary Obligor or any Mid-Tier Company, or on any Wholly-Owned
Subsidiary other than an REO Affiliate.
Section 8. NEGATIVE COVENANTS.
Borrower warrants and represents to and covenants to the Lenders and the
Agent that, so long as this Agreement is in effect and until the Bosque Loan
Commitments are terminated and all of the Loans, together with interest and all
other obligations incurred hereunder are paid in full, Borrower will perform the
obligations set forth in this Section 8 (unless it shall have first procured the
written consent of the Majority Lenders to do otherwise), and will cause each
Primary Obligor, Secondary Obligor and other Loan Party to perform the
obligations set forth in this Section 8 which are applicable to such Person
(unless it shall have first procured the written consent of the Majority Lenders
to do otherwise).
8.1 Amend Charter Documents; Engage in Same Type of Business.
(a) None of Borrower, any Primary Obligor, any Mid-Tier Company or
any Secondary Obligor-R or other Loan Party shall (i) make or consent to any
change in its Charter Documents, in any Shareholder Agreement or in its capital
structure; or (ii) make any change in any of its business objectives, purposes
and operations, including by undertaking additional business activities or (iii)
waive any material right under its Charter Documents or any Shareholder
Agreement. None of Borrower, any Primary Obligor, any Mid-Tier Company or any
Secondary Obligor-R shall engage in any business not of the same general type as
those conducted by it on the Amendment Execution Date or, in the case of a newly
formed entity, any business not of the same general type as those conducted by
the Primary Obligors or the Secondary Obligors (as the case may be) on the
Amendment Execution Date.
(b) None of Borrower, any Primary Obligor, any Mid-Tier Company or
any Secondary Obligor-R shall enter into any Shareholder Agreement after the
Amendment Execution Date other than, in the case of a Primary Obligor, a
Permitted Shareholder Agreement.
8.2 Liens. None of Borrower, any Primary Obligor, any Mid-Tier Company,
any Wholly-Owned Subsidiary, any Existing S Co. (other than MCS, any Mexican
Acquisition Entity or any French Acquisition Entity), any REO Affiliate of an
Existing S Co. or of a Mid-Tier Company, or any other Loan Party will grant,
contract, create, incur, assume or suffer or permit to exist any Lien upon or
with respect to, or by transfer or otherwise subject to the prior payment of any
indebtedness (other than the Loans), any of its Assets, whether now owned or
hereafter acquired, except Permitted Liens or, in the case of an REO Affiliate
of an Existing S Co. or of a Mid-Tier Company, Liens in favor of such Existing S
Co. or such Mid-Tier Company and non-consensual Liens.
8.3 Other Indebtedness. None of Borrower, any Primary Obligor, any
Mid-Tier Company, any Wholly-Owned Subsidiary or any Existing S Co. (other than
MCS, any Mexican Acquisition Entity or any French Acquisition Entity, or any REO
Affiliate which is not any REO
26
Affiliate of an Existing S Co. or of a Mid-Tier Company), any REO Affiliate of
an Existing S. Co. or of a Mid-Tier Company, or any other Loan Party will
contract, create, incur, assume or suffer to exist any Indebtedness; except
(i) the Loans;
(ii) Indebtedness of the Borrower under the Portfolio Acquisition
Loan Agreement not in excess of the PA Indebtedness Limit and Permitted
Liens relating thereto and Indebtedness of FC Commercial under the PFAL FC
Commercial Pledged Note;
(iii) other Indebtedness existing on the Amendment Effective Date
listed on Schedule 10.19 to this Agreement;
(iv) Indebtedness of any PFAL Portfolio Entity under Approved
Portfolio Leverage Arrangements pursuant to Section 8.3(iv) of the
Portfolio Acquisition Loan Agreement-Existing;
(v) Indebtedness of any Mid-Tier Company-Post AE which is not a PFAL
Portfolio Entity;
(vi) Indebtedness of FC Holdings under the FC Holdings Line of
Credit;
(vii) Indebtedness of FC Consumer Lending under the FC Consumer Note
and Permitted Liens relating thereto;
(viii) unsecured trade payables incurred in the ordinary course of
business;
(ix) Indebtedness described on Schedule 8.3 to this Agreement, not
to exceed the amounts set forth under "Cargill Senior Debt Leverage" on
such Schedule, provided that such Indebtedness is incurred on or prior to
June 1, 2003 under and pursuant to the Wamco XXX Loan Agreement and solely
for the purposes described on said Schedule 8.3;
(x) Indebtedness of Borrower to FC Consumer Lending under the
Borrower-FCL Note;
(xi) in the case of an REO Affiliate of an Existing S Co. or of a
Mid-Tier Company, Indebtedness owed to such Existing S Co. or such
Mid-Tier Company and trade payables incurred in the ordinary course of
business and, to the extent constituting Indebtedness, Charges incurred by
such REO Affiliate;
(xii) Indebtedness under Pledged Notes to the extent permitted by
Section 8.13 (a) (i)-(iv).
(xiii) Indebtedness of Secondary Obligors in respect of loans
permitted to be made by FC Servicing pursuant to Section 8.13(a)(vii);
27
(xiv) Indebtedness of Secondary Obligors in respect of loans
permitted to be made by ASDM pursuant to Section 8.13(a)(viii);
(xv) Indebtedness of Secondary Obligors in respect of loans
permitted to be made by MCS pursuant to Section 8.13 up to an aggregate
principal amount of such Indebtedness at any one time outstanding not
exceeding $1,000,000; and
(xvi) up to $1,000,000 in aggregate principal amount of Indebtedness
incurred by FC Properties, Ltd., FCS Creamer, Ltd., FCS Wood Ltd., and FCS
Wildhorse Ltd. or other REO Affiliates to finance developmental expenses
of with respect to real property owned by such entities. and
(xvii) Indebtedness of Mexican Acquisition Entities-Post AE in
respect of loans permitted to be made by FC Holdings or Mexican Lending
Entities-Post AE pursuant to Section 8.13(a)(x);
8.4 Sell Assets. None of Borrower, any Primary Obligor, any Mid-Tier
Company. any Existing S Co. or any Wholly-Owned Subsidiary shall assign, sell or
transfer any of its Assets to any Person other than in the ordinary course of
business (and, in the case of Assets constituting Equity Interests only to the
extent permitted by Section 8.8(a))(it being acknowledged by Borrower that no
assignment, sale or transfer of assets by Borrower, any Primary Obligor, any
Mid-Tier Company, any Subsidiary of Borrower or any Existing S Co. to any
Affiliate or Associate or Subsidiary of Borrower (whether or not wholly owned)
or of any Mid-Tier Company or Existing S Co. or to any other Secondary Obligor
or any Affiliate or Associate thereof shall be deemed to constitute a
transaction in the ordinary course of business); provided that the foregoing
shall not restrict (i) an REO Affiliate from transferring its assets to the
Person which owns all of its equity interests or to any other Person which is
not a Subsidiary or Affiliate of the Borrower or such REO Affiliate or (ii) any
Person which owns all of the equity interests in an REO Affiliate from
transferring distressed notes secured by real estate (and such real estate
security) to such REO Affiliate.
8.5 Attachment. None of Borrower, any Primary Obligor, any Mid-Tier
Company or any Wholly-Owned Subsidiary, other than an REO Affiliate, or, if the
same would have a Material Adverse Effect on the Borrower, any Primary Obligor
or any Mid-Tier Company, no other Secondary Obligor or REO Affiliate, shall
permit or suffer any levy, attachment, seizure, or restraint to be made of, upon
or affecting any of its Assets or permit any of its Assets to be subject to a
writ of distress.
8.6 Receiver. None of Borrower, any Primary Obligor, any Mid-Tier Company
or any Wholly-Owned Subsidiary, other than an REO Affiliate, or, if the same
would have a Material Adverse Effect on the Borrower, any Primary Obligor or any
Mid-Tier Company, no other Secondary Obligor or Affiliate, shall permit or
suffer any receiver, trustee or assignee for the benefit of creditors, or any
other custodian to be appointed to take possession of all or any of its Assets,
or for all or any of its Assets to come within the possession of any receiver,
trustee, assignee for the benefit of creditors or custodian, other than a
custodian pursuant to a Non-Default Voluntary Custodial Arrangement.
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8.7 Mergers and Acquisitions. None of Borrower, any Primary Obligor, any
other Loan Party, or any Mid-Tier Company or Wholly-Owned Subsidiary other than
an REO Affiliate shall wind up, liquidate or dissolve its affairs or merge or
consolidate with any Person (or agree to do any of the foregoing at any future
time) or fail to maintain its corporate, partnership or limited liability
company or other formal existence.
8.8 Stock Transfers.
(a) Except as permitted pursuant to Section 8.8(b), none of
Borrower, any Primary Obligor, any Mid-Tier Company, any Wholly-Owned Subsidiary
or any other Pledged Entity shall (i) except for options, warrants or other
rights to purchase Equity Interests in the Borrower pursuant to plans or
instruments described in Schedule 10.5(c) as amended from time to time with
Majority Lenders' written consent and for Equity Interests in the Borrower
issued upon exercise thereof, (x) grant any option, warrant or other right to
purchase any Equity Interest in Borrower, any Primary Obligor, any Mid-Tier
Company, any Wholly-Owned Subsidiary or any other Pledged Entity or (y) issue
any other Equity Interests other than, in the case of a Secondary Obligor,
(subject to Section 7.15) upon its formation, or (ii) transfer any Equity
Interests (whether its own or Equity Interests issued by any Person other than
itself) without, in each case, the prior written consent of Majority Lenders.
(b) Notwithstanding anything to the contrary contained herein,
Borrower shall have the right to register on Form S-3, and publicly offer and
sell equity Securities of Borrower under the following terms and conditions: (w)
Borrower shall deliver notice to Agent, within twenty-four (24) hours of the
filing with the SEC; (x) Borrower shall fully and timely comply with all
Securities Laws and with all terms and provisions of the underwriting agreement
pursuant to which such Securities are offered for sale; (y) the prospectus and
all other selling materials used by Borrower in such offering shall not contain
any misstatement of material fact or omit to state any fact which would render
the statements contained therein false or misleading, and (z) Borrower shall pay
the proceeds of such offering to Agent, in accordance with the terms hereof.
8.9 Adverse Transactions. None of Borrower, any Primary Obligor, any
Mid-Tier Company, any Wholly-Owned Subsidiary or other Loan Party shall enter
into any transaction which materially and adversely affects its ability to
perform its obligations under the Loan Documents or to pay any other
Indebtedness.
8.10 Investments.
(a) Subject to the further limitations set forth in Sections
8.10(b), (c) and (d), after the date hereof, neither Borrower, any Primary
Obligor, any Mid-Tier Company nor any Secondary Obligor other than a PFAL
Portfolio Entity shall make any investment in Equity Interests of any Person or
any note, bond, other debt instruments or obligations of or issued by any Person
or any other assets, except (subject to the succeeding sentence and subject to
compliance in each case with Section 7.15 and, in the case of any investment
consisting of the making of a loan, only if the making of such loan is permitted
by Section 8.13) for investments by any such Person, other than an Existing S
Co. (other than MCS, any Mexican Acquisition Entity, any French Acquisition
Entity or an REO Affiliate), in the ordinary course of business (it
29
being agreed that no Existing S Co. (other than MCS, any Mexican Acquisition
Entity or any French Acquisition Entity, or an REO Affiliate) shall make any
investment or acquire any assets whatsoever; provided that (i) Wamco XXX shall
be permitted to make the investments described on Schedule 8.3 and (ii) an
Existing S Co. shall be permitted to restructure the terms of distressed loans
owned by such Existing S Co. if such restructuring is in the ordinary course of
business and is reasonably deemed necessary by the servicer of such loans in
order to maximize collections on such distressed loans). In furtherance and not
in limitation of the foregoing, under no circumstances shall Borrower, any
Primary Obligor, MCS, any Mexican Acquisition Entity or any French Acquisition
Entity acquire any assets other than, in the case of the Borrower and any
Primary Obligor, loan advance receivables evidenced by Pledged Notes (to the
extent otherwise permitted by this Agreement) and assets acquired with Capital
Expenditures made pursuant to Section 8.32 and, (v) in the case of Borrower,
Equity Interests in Primary Obligors, (w) in the case of Primary Obligors,
Equity Interests in Subsidiaries of such Primary Obligors and in other Secondary
Obligors engaged in the business engaged in by the Consolidated Group on the
date hereof, (x) in the case of FC Servicing, assets acquired in the ordinary
course of its servicing business, (y) in the case of any Mexican Acquisition
Entity, Equity Interests in other Mexican entities engaged in the business
engaged in by the Consolidated Group on the date hereof and in the case of MCS
or any French Acquisition Entity, Equity Interests in French entities engaged in
the business engaged in by the Consolidated Group on the date hereof, in each
case, to the extent the same arises in the ordinary course of business and (z)
in the case of MCS, French Acquisition Entities or Mexican Acquisition Entities,
assets acquired in the ordinary course of business.
(b) As used in Sections 8.10 (a),(c) and (d) "invest" shall include,
but not be limited to (x) contributions to the capital of a Person, (y) the
acquisition of Securities or other assets and (z) making loans or other
financial accommodations (including without limitation, payment of a Person's
debts or other obligations and any other expenditure of funds or credit for the
benefit or on behalf of a Person) to a Person.
(c) In furtherance and not in limitation of the other restrictions
herein and in the other Loan Documents under no circumstances shall any of
Borrower, any Primary Obligor, any Secondary Obligor or other Affiliate of the
Borrower at any time invest in any of the Harbor Debtors.
(d) In furtherance and not in limitation of other restrictions
herein and in the other Loan Documents on such contributions, loans, gifts,
investments and Guaranty Equivalents set forth, none of Borrower, any Primary
Obligor, any Secondary Obligor or any other Loan Party shall make capital
contributions, loans or gifts to, investments in or enter into or issue any
Guaranty Equivalent with respect to the obligations of any entity identified on
Schedule 10.43 or any other Tier IV Company at any time during the term hereof.
8.11 Dividends; Payment of Fees, etc.
(a) Borrower will not and will not permit any Primary Obligor,
Secondary Obligor or other Subsidiary to authorize, declare, or pay any
dividends or return any capital to its stockholders as such or authorize or make
any other distribution, payments or delivery of property or cash to its
stockholders as such, or redeem, retire, purchase or otherwise acquire, directly
or indirectly, for a consideration any shares of any class of its capital stock
now or
30
hereafter outstanding or any options, warrants or other securities (now or
hereafter outstanding) convertible into or exercisable for any equity or other
securities of the Borrower, any Primary Obligor, any Secondary Obligor or any
other Subsidiary or set aside funds for any of the foregoing and Borrower will
not permit any Primary Obligor, Secondary Obligor or other Subsidiary to
purchase any Equity Interests of Borrower or any other Primary Obligor,
Secondary Obligor or other Subsidiary or set aside funds for any of the
foregoing (any such authorization, declaration, payment, dividend, return of
capital, distribution, delivery, redemption, retirement, purchase, acquisition
or setting aside of funds, a "Dividend"), provided, that (i) any Subsidiary,
Primary Obligor or Secondary Obligor may declare or pay Dividends to the
Borrower or any Wholly-Owned Subsidiary and (ii) any Subsidiary, Primary Obligor
or Secondary Obligor may pay cash Dividends to holders of its shares of stock,
partnership interests, limited liability company interests or similar equity
interests generally so long as the Borrower or its respective Subsidiaries which
own such equity interests in the Person paying such Dividends receives at least
its proportionate share thereof (based on its relative holdings of such equity
interests in the Person paying such Dividends). Notwithstanding the foregoing,
Borrower shall be permitted to consummate the Exchange Offer as described in
Section 12.14(b) and FC Commercial shall be permitted to consummate the purchase
of 20% of Holdings as described in Section 12.14(u).
(b) Neither Borrower, any Primary Obligor, any Mid-Tier Company, any
Secondary Obligor-R or any Wholly-Owned Subsidiary shall pay any director's fees
or, unless such shareholder or director is directly and actively employed by
Borrower or such Primary Obligor, Mid-Tier Subsidiary, or Secondary Obligor-R,
any salaries to any director or shareholder; provided that Borrower may pay
outside directors of Borrower, Primary Obligors, and other Subsidiaries director
fees in an amount not to exceed $25,000 per director per calendar year minus the
aggregate amount of director fees paid to such director by any Primary Obligors
and/or Secondary Obligors, and provided further that Primary Obligors and
Secondary Obligors may pay outside directors fees in an aggregate amount not to
exceed $10,000 per director per annum.
8.12 [Intentionally omitted]
8.13 Loan; Guaranty Debt.
(a) None of Borrower, any Primary Obligor, Mid-Tier Company,
Wholly-Owned Subsidiary or Existing S Co. shall make any loan to any Person,
except (subject to compliance with Section 7.15), (i) for loans made by Borrower
to FC Commercial pursuant to the Portfolio Acquisition Loan Agreement (and not
in excess of the aggregate amount thereof contemplated by the Portfolio
Acquisition Loan Agreement -Existing) which are evidenced by the PFAL FC
Commercial Pledged Note; (ii) for loans made by Borrower to FC Commercial with
cash from the Operating Account which are on loaned by FC Commercial to FC
Servicing for use by FC Servicing to pay operating expenses, which loans to FC
Commercial are evidenced by the FC Commercial Pledged Note-Existing and which
loans by FC Commercial to FC Servicing are evidenced by the FC Servicing Pledged
Note; (iii) for loans made by Borrower to FC Capital to fund the litigation
expenses and servicing expenses to the extent permitted by Section 8.26(b) (in
amounts not exceeding the amounts permitted by such Section), which loans are
evidenced by the FC Capital Pledged Note; (iv) for loans which are permitted by
Section
31
8.10 made by FC Commercial to PFAL Portfolio Entities with the proceeds of the
loans referred to in clause (i) above, to the extent permitted by Portfolio
Acquisition Loan Agreement, which loans are evidenced by Pledged Notes; (v) the
accepting by a Secondary Obligor of a note from its 100% owned REO Affiliate
evidencing the deferred purchase price of a mortgage note sold to such REO
Affiliate by such Secondary Obligor; (vi) the accepting by an REO Affiliate,
MCS, a Mexican Acquisition Entity or a French Acquisition Entity of a note from
the transferee of real property sold by such REO Affiliate, MCS, such Mexican
Acquisition Entity or such French Acquisition Entity (as the case may be) in the
ordinary course of business evidencing a portion of the deferred purchase price
of such property; (vii) in the case of FC Servicing, short term servicer
advances in the ordinary course of business with respect to portfolios which it
is servicing in aggregate principal amount at any one time outstanding not in
excess of $1,000,000; (viii) in the case of ASDM, short term servicer advances
in the ordinary course of business with respect to portfolios which it is
servicing in aggregate principal amount at any one time outstanding not in
excess of $1,000,000; (ix) in the case of MCS short term servicer advances in
the ordinary course of business with respect to portfolios which it is
servicing; (x) for loans made by FC Holdings or a Mexican Lending Entity- Post
AE to a Mexican Acquisition Entity-Post AE for the acquisition by such Mexican
Acquisition Entity-Post AE of assets from a Mexican financial institution or a
Mexican governmental entity acting as a receiver of a Mexican financial
institution; or (xi) for loans required to be made by Wamco XXX or by any
Portfolio Entity-Post AE (other than, except to the extent permitted by the
Portfolio Acquisition Agreement-Existing, any PFAL Portfolio Entity) pursuant to
Obligor Funding Obligations acquired by such Person as part of the purchase by
such Person of a portfolio of loans which were made by Persons, none of whom are
Affiliates or Associates of the Borrower or WAMCO XXX or such Portfolio
Entity-Post AE, which portfolio was acquired in a transaction of the sort which
is in the ordinary course of business for Secondary Obligors which constitutes
an investment permitted to be made by such Person pursuant to Section 8.10
hereof; provided that the aggregate principal amount of Obligor Funding
Obligations of all Secondary Obligors at any one time shall not exceed
$5,000,000. Without limiting the foregoing, under no circumstances shall
Borrower, any Primary Obligor, Mid-Tier Company, Wholly Owned Subsidiary, other
Subsidiary, Existing S Co. or other Secondary Obligor make any loan to FC
Holdings. The foregoing provisions of this Section 8.13 shall not prohibit Wamco
XXX or a Portfolio Entity-Post AE from acquiring assets consisting of loans made
by Persons who are not Affiliates or Associates of the Borrower or of WAMCO XXX
or such Portfolio Entity-Post AE which are included in a portfolio of assets
purchased by such Secondary Obligor to the extent that such acquisition of such
assets is permitted to be made by such Person pursuant to Section 8.10 hereof
and is of the sort which is in the ordinary course of business for Secondary
Obligors.
(b) Except as set forth on Schedule 8.13B, none of Borrower, any
Primary Obligor, any Mid-Tier Company, any Wholly-Owned Subsidiary or any
Existing S Co. shall enter into or issue any Guaranty Equivalents; provided that
FC Holdings and/or FC Commercial shall be permitted to guaranty Indebtedness of
FC Properties, Ltd., FCS Creamer, Ltd., FCS Wood Ltd., FCS Wildhorse Ltd. and/or
any other REO Affiliate incurred to finance developmental expenses with respect
to real property owned by such entities provided that the sum of the principal
amount of Indebtedness guaranteed pursuant to such guaranties does not exceed
$1,000,000.
32
8.14 Pay Indebtedness. None of Borrower, any Primary Obligor, any Mid-Tier
Company, or any Secondary Obligor-R other than an REO Affiliate, shall defease,
prepay, purchase, redeem or otherwise acquire or repay any of its Indebtedness
for borrowed money, except for prepayments and repayments thereof when due.
8.15 Issue Power of Attorney. Except pursuant to the other provisions of
this Agreement or the Security Documents to which the Agent is a party, none of
Borrower, any Primary Obligor, any Wholly-Owned Subsidiary or any Mid-Tier
Company shall issue any power of attorney or other contract or agreement giving
any Person power or control over the day-to-day operations of any such Person's
business ; provided that, FC International, FC Holdings, FC Commercial, FC
Mexico, Asset Servicing de Mexico and Servicios Efectivos de Recuperacion, S.A.
de C.V. shall have the right to grant powers of attorney necessary to consummate
asset acquisitions outside the United States which are undertaken in the
ordinary course of such respective company's business.
8.16 Amendment of Credit Agreements. None of Borrower, any Primary
Obligor, any Mid-Tier Company. any Secondary Obligor-Existing or any
Wholly-Owned Subsidiary shall amend, modify or extend (or agree to amend, modify
or extend or give any notice of any sort the result of which would amend, modify
or extend (whether or not, without limitation, any such extension would occur
pursuant to a renewal or extension option contained therein or any other term
thereof)) any note, credit agreement, security agreement or other document,
instrument or agreement evidencing or securing Indebtedness of such entity;
provided that (i) Borrower, any Primary Obligor, any Mid-Tier Company, any
Secondary Obligor-Existing or any Wholly-Owned Subsidiary may extend the term of
existing credit facilities (other than (x) this Agreement or (y) the
Holdings/CFSC Loan Agreement or any other Holdings CFSC Loan Document) under
financial terms no more onerous than those provided for in the applicable
existing credit facility, including interest rate, costs, and fees payable to
the provider of such facility and (ii) the foregoing shall not restrict the
Borrower from entering into any agreement (with the other applicable parties
thereto) which amends, modifies or extends the term of the Portfolio Acquisition
Loan Agreement or any PFAL Loan Document or of the FC Consumer Note or any FC
Consumer Loan Document; provided that the same does not increase the principal
amount of any loan or of the loans available under either said credit facilities
or increase the rate of interest or any fee or other financial obligation
thereunder.
8.17 Use of Proceeds. The proceeds of Existing Loans were and shall be
used only for the purposes set forth in the Existing Agreement (including in the
amendments and consents thereto listed in the introductory paragraph of this
Agreement). The proceeds of the Tranche I Bosque Loans shall be used solely to
acquire Bosque Notes identified in the related Bosque Loan Request.
8.18 Payments for Consent. None of the Borrower or any Primary Obligor or
Secondary Obligor shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest fee or otherwise, to any Lender as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of any Loan Document unless such consideration is paid to all Lenders.
33
8.19 Limitations on Dividends and Other Payment Restrictions Affecting
Subsidiaries. Borrower shall not, and shall not permit any Primary Obligor, any
of its other Subsidiaries, any Mid-Tier Company (in each case, whether in
existence as of the date of initial issuance of the Notes or thereafter formed
or acquired), or any Existing S Co. to, create, assume or otherwise cause or
suffer to exist or to become effective any consensual encumbrance or restriction
on the ability of any such Person to:
(i) pay any dividends or make any other distribution on its Stock or
other Equity Interests to Borrower, any of its Subsidiaries or any
Secondary Obligor;
(ii) make payments on or in respect to any Indebtedness owed to
Borrower or any other Subsidiary of Borrower or any Secondary Obligor; or
(iii) make loans or advances to Borrower or any of its Subsidiaries
or to guarantee Indebtedness of Borrower or any other Subsidiary of
Borrower;
other than, in the case of (i), (ii) and (iii),
(1) Permitted Restrictions on payment of dividends by FC
Holdings existing under agreements listed on Schedule
8.19 ;
(2) restrictions with respect to a Subsidiary or
Secondary Obligor imposed pursuant to an agreement which
has been entered into for the sale or disposition of all
or substantially all the assets (which term may include
the capital stock) of such Subsidiary or Secondary
Obligor provided that such restrictions terminate upon
the closing of such sale or disposition or termination
of such agreement ;
(3) to the extent the same result in restrictions of
non-cash in-kind distributions of such assets,
restrictions on the transfer by any Secondary Obligor of
non-cash assets which are subject to Permitted Liens;
(4) restrictions existing under any agreement which
refinances or replaces any of the agreements containing
the restrictions in clauses (1) or (5), provided that
the terms and conditions of any such restrictions are
not materially less favorable to the Lenders or
materially more burdensome to the applicable Person
bound thereby than those under the agreement evidencing
or relating to the Indebtedness refinanced;
(5) Permitted Restrictions on payment of dividends by an
Existing S Co. under a loan agreement listed on Schedule
10.19 to which such Existing S Co. is a party;
34
(6) in the case of any PFAL Portfolio Entity,
restrictions thereon on the payment of dividends
permitted by the Portfolio Acquisition Loan
Agreement-Existing;
(7) Permitted Restrictions on the payment of dividends
by a Portfolio Entity Post- AE other than a PFAL
Portfolio Entity under credit agreements under which
such Portfolio Entity Post-AE is a borrower; and
(8) restrictions under this Agreement.
8.20 Financial Covenants.
(a) Borrower and all other members of the Consolidated Group, on a
consolidated basis, shall, at all times during the term hereof, measured
quarterly:
(i) maintain a ratio of Indebtedness to Tangible Net Worth equal to
or less than the ratio set forth below as at the end of each quarter
ending during the applicable period set forth below:
12/31/02 through 9/30/03: 5.5: 1;
12/31/03 through 9/30/04: 4.5:1;
12/31/04 and each quarter
ending thereafter: 3.0:1;
(ii) maintain a Tangible Net Worth equal to or greater than the
amount set forth below as at the end of each quarter ending during the
applicable period set forth below:
12/31/02 through 9/30/03: $18,000,000
12/31/03 through 9/30/04: $24,000,000
12/31/04 through 9/30/05: $45,000,000
12/31/05 and each quarter
ending thereafter: $75,000,000
(iii) maintain a ratio of EBITDA to Interest Coverage no less than:
(i) 1.75 to 1 for as at the quarter ending December 31, 2002; (ii) 1.20 to
1 for the quarter ending March 31, 2003, (iii) 1.40 to one for the
quarters ending June 30 and September 30, 2003; and (iv) 2.5 to one for
the quarter ending December 31, 2003 and each quarter ending thereafter.
The foregoing ratios shall be measured on a trailing three month basis.
(b) All covenants set forth herein shall be measured quarterly, upon
receipt of the Financial Statements delivered to Agent pursuant to Section
7.1(a), and also upon receipt of the annual consolidated Financial Statements
delivered in accordance with Section 7.1(b).
(c) In the event that any Financial Statement required to be
delivered pursuant to Section 7.1(a) or (b) or any certificate required to be
delivered pursuant to Section 7.1(e)(ii) hereof (in the case of any such
certificate required in connection with monthly financial
35
statements, at the end of any month which is also a fiscal quarter end date) is
not delivered within 10 days after the date required therefor pursuant to said
clause, the Borrower shall be deemed to be in default of this Section 8.20 for
purposes of Section 9.3 hereof.
8.21 Payment of Bosque Notes and Extraordinary Proceeds; Form of Proceeds,
Payments and Distributions
(a) The Borrower shall cause 100% of all amounts collected (net of
fees payable to Borrower or an Affiliate of Borrower in accordance with its
servicing agreement with Bosque dated June 6, 1997) from the Bosque Notes to be
paid directly to the Cash Flow Cash Collateral Account by the Bosque Trustee as
and when received.
(b) Except as set forth in Section 2.3(e) and 2.4(d), all
Extraordinary Transaction Proceeds shall be paid on the date of the closing of
the applicable transaction or, if earlier, on the date when received or payable,
directly to the Agent. Borrower shall cause the applicable purchaser and/or
lender and/or other payor of Extraordinary Transaction Proceeds to make payment
thereof by wire transfer of immediately available funds directly to Agent.
(c) Borrower shall not permit any portion of the consideration paid
in respect of an Extraordinary Transaction or constituting Extraordinary
Transaction Proceeds to be in any form other than immediately available cash
funds.
(d) Borrower shall not permit any Primary Obligor or Secondary
Obligor to consent to (and shall not itself consent to) any payment, dividend or
distribution being made to such Primary Obligor, Secondary Obligor or the
Borrower in any form other than immediately available cash.
8.22 Accounting Changes. None of the Borrower, any Primary Obligor or any
other Subsidiary of Borrower will make any significant change in (x) accounting
treatment and reporting practices except as permitted or required by GAAP or
Legal Requirements or (y) unless Agent consents thereto in writing (which
consent shall not be unreasonably withheld), its Fiscal Year; provided that in
any such case, if any such change would affect any computation required by
Section 8.20 hereof or any amount required to be paid by Section 2.3 or 2.4
hereof, appropriate amendment shall have been made to this Agreement with
respect thereto (or, in the case of change required at such time by a Legal
Requirement, appropriate amendment is made to this Agreement contemporaneous
with such change and, and if such amendment is not made, Borrower shall be
deemed in default under Section 8.20).
8.23 Related Transactions. Borrower has not and shall not and shall not
permit any Primary Obligor, Mid-Tier Company or any Subsidiary of Borrower to
enter into any transactions with any Affiliate or Associate, including, without
limitation, agreements for the purchase, sale or exchange of property or the
rendering of any services to or by any Affiliate or Associate of Borrower or any
Parent, or enter into, assume or suffer to exist any employment, management,
administration, advisory or consulting contract with any Affiliate or Associate
of Borrower or any Parent or, in each of the foregoing cases, with any officer,
director or partner of any Affiliate or Associate of Borrower or any Parent or
modify any Fee Agreement unless, in any such case, such transaction (a) is
otherwise not in violation of this Agreement or any other
36
Loan Document and (b) is in the ordinary course of its business and is upon fair
and reasonable terms no less favorable to Borrower, such Primary Obligor,
Mid-Tier Company or Subsidiary (as the case may be) than Borrower, such Primary
Obligor, Mid-Tier Company or Subsidiary (as the case may be) would obtain in a
comparable arm's-length transaction with a Person not an Affiliate or Associate;
provided. that the foregoing shall not restrict a Subsidiary which is a
Secondary Obligor from entering into a transaction contemplated by the
definition of "REO Affiliate" to sell real estate (or distressed notes secured
by real estate) to its wholly owned REO Affiliate.
8.24 Leasebacks. None of Borrower, any Primary Obligor or any Secondary
Obligor will enter into any arrangement with any bank, insurance company or
other lender or investor providing for the leasing to any of the foregoing
Persons of real property (i) which at the time has been or is to be sold or
transferred by any of the foregoing Persons to such lender or investor, or (ii)
which has been or is being acquired from another Person by such lender or
investor or on which one or more buildings or facilities have been or are to be
constructed by such lender or investor for the purpose of leasing such property
to Borrower, any Primary Obligor or Secondary Obligor.
8.25 Compliance with ERISA. None of Borrower, any Primary Obligor, any Mid
Tier Company or Subsidiary of Borrower or any other Loan Party (each, an
"Applicable Person") will (i) terminate, or permit any of its Subsidiaries to
terminate, any Pension Plan so as to result in any material (in the opinion of
the Agent or the Majority Lenders) liability of any such Person or Subsidiary to
the PBGC, (ii) permit to exist the occurrence of any Reportable Event (as
defined in Section 4043 of ERISA), or any other event or condition, which
presents a material (in the opinion of the Agent or the Majority Lenders) risk
of such a termination by the PBGC of any Pension Plan, (iii) allow, or permit
any of its Subsidiaries to allow, the aggregate amount of "benefit liabilities"
(within the meaning of Section 4001(a)(16) of ERISA) under all Pension Plans of
which any Applicable Person or any ERISA Affiliate is a "contributing sponsor"
(within the meaning of Section 4001(a)(13) of ERISA) to exceed $100,000, (iv)
allow, or permit any of its Subsidiaries to allow, any Plan to incur an
"accumulated funding deficiency" (within the meaning of Section 302 of ERISA or
Section 412 of the Code), whether or not waived, (v) engage, or permit any of
its Subsidiaries or any Plan to engage, in any "prohibited transaction" (within
the meaning of Section 406 of ERISA or Section 4975 of the Code) resulting in
any material (in the opinion of the Agent or the Majority Lenders and considered
by itself or together with all other such liabilities of the Borrower and all
ERISA Affiliates) liability to any Applicable Person or any ERISA Affiliate,
(vi) allow, or permit any of its Subsidiary to allow, any Plan to fail to comply
with the applicable provisions of ERISA and the Code in any material respect,
(vii) fail, or permit any of its Subsidiaries to fail, to make any required
contribution to any Multiemployer Plan, or (viii) completely or partially
withdraw, or permit any of its Subsidiaries to completely or partially withdraw,
from a Multiemployer Plan, if such complete or partial withdrawal will result in
any material (in the opinion of the Agent or the Majority Lenders) withdrawal
liability under Title IV of ERISA.
8.26 Liquidation of FC Capital
(a) Borrower shall not permit FC Capital to engage in any new
transaction or business or to invest in any new assets;
37
(b) Borrower shall not use, or permit any Primary Obligor, Secondary
Obligor or any Affiliate to use, any loan proceeds, funds, distributions,
dividends, contributions or any other monies obtained, earned or acquired from
any other source whatsoever to make any loans, capital contributions, gifts or
other payments to or for the benefit of FC Capital provided that subject to the
further proviso set forth below (i) the Borrower shall be permitted to pay (or
transfer funds to FC Capital for the payment of) litigation expenses not in
excess of $250,000 in 2003; and, $200,000 per calendar year thereafter, and (ii)
the Borrower shall be permitted to advance to FC Capital up to $200,000 per
year, not exceeding $400,000 in aggregate principal amount, for FC Capital to
use (and only if FC Capital so uses such advances) to pay expenses incurred by
it as servicer under the Sale and Servicing Agreements under the Sale and
Servicing Agreements under the FirstCity Capital Home Equity Loan Trust 1998-1
and the FirstCity Capital Home Equity Loan Trust 1998-2 securitizations and to
make the compensating interest payments required to be made by it in such
capacity thereunder; provided that the payments and transfers referred to in
clause (i) and the advances referred to in clause (ii) constitute advances
under, and are evidenced by, the FC Capital Pledged Note.
8.27 FC Holdings Line of Credit.
(a) Borrower shall not permit the outstanding principal balance
under the Holdings/CFSC Loan Agreement to exceed $35,000,000.
(b) Borrower shall not permit the amendment, modification,
supplement, waiver, forbearance, restatement or replacement of any Holdings/CFSC
Loan Document (including without limitation, any waiver or modification of the
borrowing base, advance rate, or purpose for which funds are being disbursed).
(c) Borrower shall not permit FC Holdings, any Primary Obligor or
any Secondary Obligor or any other Person to grant a Lien on any property to
secure payment and performance of any obligation or liability under the
Holdings/CFSC Loan Documents, except as expressly set forth on Schedule
10.37(c).
(d) From time to time after the date hereof, if any additional
collateral is pledged to CFCS in accordance with the Holdings/CFCS Loan
Documents, Borrower shall not fail to execute and deliver, or cause the
applicable affiliated entity to execute and deliver, to Agent, for the ratable
benefit of Lenders, such documents, instruments and agreements as shall be
necessary or desirable to create and perfect a security interest with the
Requisite Priority in any such collateral in favor of Agent for the ratable
benefit of the Lenders.
(e) From time to time after the date hereof, Borrower shall not fail
to deliver to Agent, upon request, such information as Agent shall request
relating to the Holdings/CFSC Loan Agreement or the Holdings/CFSC Loan
Documents, the amounts outstanding thereunder, the use of the proceeds thereof,
or the collateral pledged therefor.
8.28 PFAL Cash Collateral. Borrower shall not and shall not permit any
Primary Obligor or PFAL Portfolio Entity or other Secondary Obligor to enter
into any cash collateral agreement for the benefit of any lenders party to the
Portfolio Acquisition Loan Agreement
38
unless such agreement also secures the obligations hereunder and is in form and
substance satisfactory to the Agent.
8.29 Distributions to Primary Obligors and the Borrower.
(a) Subject to Section 8.21(b) in the case of Extraordinary
Transaction Proceeds, the Borrower shall (i) cause each Secondary Obligor which
is a Wholly-Owned Subsidiary to distribute, on or prior to the 25th day of each
calendar month (or, if earlier, on the fourth to last CFCCA Business Day of such
month), all Net Receipts (other than (x) Net Receipts received by a PFAL
Portfolio Entity when obligations in respect of term loans under the Portfolio
Acquisition Loan Agreement are outstanding and would remain outstanding after
giving effect to the ultimate disposition of such Net Receipts pursuant to the
Portfolio Acquisition Loan Agreement-Existing, (y) to the extent that such the
receipt of such Net Receipts causes a prepayment obligation to arise under the
FC Consumer Note as in effect on the Amendment Effective Date and only if the
same are applied to satisfy such prepayment obligation, such Net Receipts in an
amount not exceeding the prepayment obligation so arising and (z) Net Receipts
described in clause (ii) below) received by such Secondary Obligor during the
preceding calendar month by paying or prepaying any Pledged Note(s) of which it
is the maker and distributing any remaining Net Receipts as a Dividend to owners
of its equity interests in accordance with Section 8.11(a) and (ii) cause each
direct and indirect recipient of any such payment or Dividend (if other than the
Borrower) to distribute or pay, upon receipt, each portion of each such payment
or Dividend directly or indirectly received by it by paying or prepaying any
Pledged Note(s) of which such Person is maker and distributing any remaining
direct or indirect portion of such Net Receipts as a Dividend to owners of its
equity interests in accordance with Section 8.11(a) until all such amounts have
been remitted to the Borrower in accordance with Section 8.29(d).
(b) Subject to Section 8.21(b) in the case of Extraordinary
Transaction Proceeds, the Borrower shall (i) use its best efforts to cause, and
shall cause each Primary Obligor and each other Subsidiary (whether a direct or
indirect Subsidiary) to use its best efforts to cause, each Secondary Obligor
which is not a Wholly-Owned Subsidiary to distribute on or prior to the 25th day
of each calendar month (or, if earlier, on the fourth to last CFCCA Business Day
of such month), all Net Receipts (other than (x) Net Receipts received by a PFAL
Portfolio Entity when obligations in respect of term loans under the Portfolio
Acquisition Loan Agreement are outstanding and would remain outstanding after
giving effect to the ultimate disposition of such Net Receipts pursuant to the
Portfolio Acquisition Loan Agreement-Existing, (y) to the extent that such the
receipt of such Net Receipts causes a prepayment obligation to arise under the
FC Consumer Note as in effect on the Amendment Effective Date and only if the
same are applied to satisfy such prepayment obligation, such Net Receipts in an
amount not exceeding the prepayment obligation so arising and (z) Net Receipts
described in clause (ii) below) received by such Secondary Obligor during the
preceding calendar month by paying or prepaying any Pledged Note(s) of which it
is the maker and distributing the remaining Net Receipts as a Dividend to owners
of its equity interests in accordance with Section 8.11(a) and (ii) cause each
direct and indirect recipient of any such payment or Dividend (if other than the
Borrower) to distribute or pay, upon receipt, each portion of each such payment
or Dividend directly or indirectly received by it by paying or prepaying any
Pledged Note(s) of which such Person is maker and distributing any remaining
direct or indirect portion of such Net Receipts as a
39
Dividend to owners of its equity interests in accordance with Section 8.11(a)
until all such amounts have been remitted to the Borrower in accordance with
Section 8.29(d).
(c) Subject to Section 8.21(b) in the case of amounts constituting
Extraordinary Transaction Proceeds and to Section 8.29(e) in the case of amounts
constituting the Holdings Buy Out Portion, to the extent that any Primary
Obligor receives any amount, other than amounts received pursuant to Section
8.29(a) or (b) above (which Borrower shall cause to be distributed in accordance
with such Sections) and other than an amount not constituting an Applicable Cash
Flow Payment (provided that such amount is applied in accordance with the
Portfolio Acquisition Loan Agreement-Existing or the FC Consumer Note as in
effect on the Amendment Effective Date, as the case may be), the Borrower shall
cause such Primary Obligor to distribute to Borrower all such amounts (other
than, in the case of FC Servicing, (x) subject to Section 8.29(e), funds
deposited to the Cash Collateral Account-Servicing pursuant to Section 8.33 and
(y) Servicing Restricted Funds) upon receipt thereof, by paying or prepaying any
Pledged Note of which it is maker and distributing all remaining amounts to the
owner of its equity interests as a Dividend pursuant to Section 8.11(a) and by
causing each direct and indirect recipient of any such payment or Dividend (if
other than Borrower) to distribute or pay, upon receipt, each portion of each
such payment or Dividend directly or indirectly received by it by paying or
prepaying any Pledged Note(s) of which such Person is maker and distributing any
remaining direct or indirect portion of such Net Receipts as a Dividend to the
owners of its equity interests in accordance with Section 8.11(a) until all such
amounts have been remitted to the Borrower in accordance with Section 8.29(d).
(d) The Borrower shall cause each amount required to be distributed
or paid to Borrower pursuant to this Section 8.29 which constitutes (or which,
if distributed or paid would constitute) an Applicable Cash Flow Payment and all
other amounts received by Borrower (other than amounts arising from PFAL
Portfolio Entities which (x) are required to be deposited to the CFCCA-P or (y)
are not required to be applied to any Obligations hereunder) to be distributed
or paid to Borrower by deposit or wire transfer directly to the Cash Flow Cash
Collateral Account. In furtherance (and not in limitation) of the foregoing,
each Primary Obligor and each Secondary Obligor which is a payee (or when such
payment is made, would be a payee) of any Applicable Cash Flow Payment shall,
and as to any other amount payable to Borrower, Borrower shall, direct the payor
thereof to pay to such payee the amount payable to such payee by remitting such
amount directly to the Cash Flow Cash Collateral Account; provided. that the
foregoing shall not (x) require any Secondary Obligor to remit to the CFCCA more
than the FC Percentage in respect of such Secondary Obligor of any amount
received by such Secondary Obligor which is distributed by such Secondary
Obligor as a Dividend or (y) require the Borrower to remit to the CFCCA any
amounts released to Borrower pursuant to a Waterfall Certificate (provided that
Borrower shall be required to remit or cause to be remitted to the CFCCA any
amount or portion thereof so released to Borrower to the extent that such amount
or portion is not used for the purpose for which released or is returned in any
manner to the Borrower or any Primary Obligor after being used for the purpose
for which it was released).
(e) Unless the Agent has exercised its remedies under the Cash
Collateral Agreement-Servicing to prevent such transfer or the CFCCA Remedies
Time has otherwise occurred, Borrower shall cause to be transferred to the CFCCA
on the 25th day of each month (or if earlier, the fourth to last CFCCA Business
Day of each month, each such 25th day or earlier
40
CFCCA Business Day, a "Transfer Date") all amounts credited to the Cash
Collateral Account - Servicing, excluding, prior to the time the Agent exercises
its remedies with respect to such Account or, if earlier, the occurrence of the
CFCCA Remedies Time thereunder or under the Cash Collateral Agreement-Existing,
the amount equal to the amount of Holdings Buy Out Portion on the Transfer Date;
provided that the aggregate of the amounts so excluded from transfer to the
CFCCA shall not exceed $2,775,000.
8.30 Use of CFCCA Proceeds.
(a) Borrower shall use the full amount of funds released to Borrower
from the CFCCA for the making of Capital Expenditures to make Capital
Expenditures within 30 days of such release and, if such funds are not so used
within 30 days of such release, shall return such funds to the CFCCA.
(b) Borrower shall (i) subject to Section 3.9, submit a revised
Waterfall Certificate to Lender prior to any Payment Date if for any reason any
application of funds specified in such instruction has changed or if any
statement set forth therein is untrue and (ii) give immediate notice to the
Agent after any Payment Date if any funds released from the CFCCA have for any
reason not been used as set forth in the related Waterfall Certificate (it being
understood that any such notice shall not cure any Default or Event of Default
arising on account of an such change in application of funds, untrue statement
having been made or use of funds for reasons other than as set forth).
8.31 Operating Account. Borrower shall disburse funds from the Operating
Account only for selling, general and administrative expenses of the Borrower
and the Primary Obligors incurred in the ordinary course of business.
8.32 Capital Expenditures. Borrower will not make any Capital Expenditures
and will not permit any of its Subsidiaries to make any Capital Expenditures,
except that the Borrower and its Subsidiaries may make Capital Expenditures in
an aggregate amount (excluding the capitalization of insurance premiums) not
exceeding (x) $150,000 during the one- year period ending December 31, 2003 or
(y) $50,000 during the one year periods ending on December 31, 2004, December
31, 2005, December 31, 2006 and December 31, 2007.
8.33 Servicing
(a) Borrower shall ensure that FC Servicing or Minn Servicing is the
servicer for each Secondary Obligor which is a US Person.
(b) Borrower shall (i) cause FC Servicing to deposit all fee income
and all other funds received by it not constituting Servicing Restricted Funds
to the Cash Collateral Account- Servicing upon receipt of each such amount and
(ii) cause Minn Servicing to distribute to FC Servicing all fee income and all
other funds received by it not constituting Servicing Restricted Funds by wiring
all such amounts directly to the Cash Collateral Account-Servicing upon receipt
of each such amount.
8.34 Maximum Existing Portfolio NPV Percentage. The Borrower will not
permit the Existing Portfolio NPV Percentage to exceed 80% as at the end of any
calendar month.
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Section 9. EVENTS OF DEFAULT.
Upon the occurrence of any of the following specified events (each an
"Event of Default"):
9.1 Principal and Interest. The Borrower shall default in the due and
punctual payment of any principal, interest or other amount due hereunder or
under any Note or any other Loan Document; provided, that the failure to make
any interest payment when due shall not constitute an Event of Default if such
interest payment is made within three days of the date when due and the Borrower
has not been late in making any other interest payment on any Note more than
once in the preceding 12 months; or
9.2 Representations and Warranties. Any representation, warranty,
statement, report or certificate made or delivered by Borrower, any Primary
Obligor, any Secondary Obligor or any other Loan Party or any officer, director,
manager or authorized employee or agent thereof herein or in any other Loan
Document or otherwise in writing by such Person in connection with any of the
foregoing or the Existing Loans or in any certificate, report or other statement
furnished pursuant to or in connection with any of the foregoing, shall be
breached or shall prove to be untrue in any material respect; or
9.3 Negative and Certain Other Covenants. Borrower shall fail to perform
or observe, or shall fail to cause any Primary Obligor, Secondary Obligor or any
other Loan Party or other Person covered thereby to perform or observe, any
term, covenant or agreement to be performed or observed by Borrower or such
Primary Obligor, Secondary Obligor, Loan Party or other Person, as the case may
be, pursuant to Section 7.2, 7.4, 7.11, 7.19, Section 8 or Section 14; or
9.4 Other Covenants. Borrower shall fail to perform or observe, or shall
fail to cause Primary Obligor, Secondary Obligor, other Loan Party or other
Person covered thereby to perform or observe, any term, covenant or agreement to
be performed or observed by Borrower or such Primary Obligor, Secondary Obligor,
other Loan Party or other Person, as the case may be, pursuant to any of the
provisions of this Agreement (other than those referred to in Sections 9.1, 9.2
or 9.3) or any other Loan Document and such default (which shall be capable of
cure) shall continue unremedied for a period of fifteen days, after the earlier
of the date on which (x) the Agent or any Lender gives the Borrower notice
thereof, or (y) Borrower obtains knowledge of such default; or
9.5 Other Indebtedness of Borrower . Any Applicable Indebtedness of
Borrower (i) shall be declared to be or shall become due and payable prior to
the stated maturity thereof or (ii) shall not be paid as and when the same
becomes due and payable; or any other event of default (however denominated)
shall occur under the Portfolio Acquisition Loan Agreement or any other
Indebtedness Instrument (other than a Loan Document) relating to any
Indebtedness of Borrower; or any other event the effect of which is to permit
the holder or holders of the Indebtedness evidenced thereby (or any trustee,
agent or other representative on behalf of such holder or holders) to cause such
Indebtedness to become due prior to its stated maturity, shall occur under any
other Indebtedness Instrument (other than a Loan Document) relating to any
Indebtedness of Borrower; or
42
9.6 Other Indebtedness of other Loan Parties.
(a) Any Applicable Indebtedness of any Primary Obligor, Mid-Tier
Company or other Subsidiary of Borrower (other than (x) any Indebtedness under
the Bosque Notes; (y) any Indebtedness of any one or more of the Harbor Debtors;
or (x) any Indebtedness of an REO Affiliate), or any other Loan Party (i) shall
be declared to be or shall become due and payable prior to the stated maturity
thereof or (ii) shall not be paid as and when the same becomes due and payable;
or any other default or event of default (however denominated) shall occur under
any Indebtedness Instrument relating to any Indebtedness of any such Person
(other than any Loan Document) and such default or event of default is not cured
within 10 days after the occurrence thereof (or such shorter period applicable
thereto under any other Section of this Article 9); provided that such cure
period shall not apply if: (i) a default occurs by such Primary Obligor,
Mid-Tier Company, other Subsidiary or other Loan Party under the terms of any
other Indebtedness Instrument securing or evidencing a different borrowing, or
(ii) if any other Primary Obligor, Mid-Tier Company, other Subsidiary or other
Loan Party defaults under the terms of any Indebtedness Instrument during such
ten (10) day cure period or (iii) if the Indebtedness evidenced by any such
Indebtedness instrument is accelerated or has otherwise become due or (iv) such
event is described in Section 9.16. (Notwithstanding the foregoing, if any two
or more such Persons are obligated for the same Indebtedness and a default
occurs thereunder, it shall be deemed to be a default by a single Person for the
purposes of this Section 9.6); or
(b) Any default shall occur under any Holdings /CFSC Loan Document
and, if under the Holdings/CFSC Loan Agreement a cure period is applicable to
such default, such default is not cured before the earlier of (x) 15 days after
such default occurs and (y) the cure period applicable thereto under the
Holdings/CFSC Loan Agreement; or
9.7 Trigger Events, etc. If any servicer default, servicing termination
event, amortization event or similar event or condition occurs under any
agreement relating to any securitization of assets of any Primary Obligor,
Secondary Obligor or securitization entity established by any Primary Obligor or
Secondary Obligor relating to a securitization transaction entered into after
the Amendment Execution Date; or
9.8 Undistributed Amounts. The amount of Aggregate Undistributed Secondary
Obligor Funds at any time exceeds $2,000,000; or
9.9 Insolvency. (i) Borrower, any Primary Obligor, any Secondary Obligor
(other than any REO Affiliate) or any other Pledged Entity or Loan Party
(Borrower and each of the other foregoing Persons being a "Section 9.9 Entity")
shall make an assignment for the benefit of creditors or a composition with
creditors; or (ii) any Section 9.9 Entity shall admit in writing its inability
to pay its debts as they mature, shall file a petition in bankruptcy, shall be
adjudicated insolvent or bankrupt, shall petition or apply to any tribunal for
the appointment of any receiver, liquidator, trustee or custodian of or for it
or any of its assets; or (iii) any application is made by any other Person for
the appointment of any receiver, liquidator, trustee or custodian for any
Section 9.9 Entity or for any of the assets of any Section 9.9 Entity; or (iv)
any Section 9.9 Entity shall commence any proceedings relating to it under any
bankruptcy, reorganization, arrangement, readjustment of debt, receivership,
dissolution or liquidation law or statute of any
43
jurisdiction, whether now or hereafter in effect; or (v) there shall be
commenced against any Section 9.9 Entity any such proceeding which shall remain
undismissed for a period of 60 days or more, or any order, judgment or decree
approving the petition in any such proceeding shall be entered; or (vi) any
Section 9.9 Entity shall by any act or failure to act indicate its consent to,
approval of or acquiescence in, any such proceeding or in the appointment of any
receiver, liquidator, trustee or custodian (other than a custodian under
Non-Default Voluntary Custodial Arrangements) of or for it or any of its assets,
or shall suffer any such appointment to exist; or (vii) any Section 9.9 Entity
shall take any action for the purpose of effecting any of the foregoing; or any
court of competent jurisdiction shall assume jurisdiction with respect to any
such proceeding or a receiver or trustee or other officer or representative of a
court or of creditors, or any court, governmental officer or agency, shall under
color of legal authority, take and hold possession of any substantial part of
the property or assets of any Section 9.9 Entity; or (viii) any Section 9.9
Entity shall become insolvent (howsoever such insolvency may be evidenced) or
shall be unable to pay its debts as they mature (except that the occurrence of
any condition set forth in this clause (viii) with respect to FC Capital, Bosque
Asset Corp. or, so long as such companies are paying their debts as they mature,
FC Mexico or any Mexican Acquisition Entity which is an Existing S Co., shall
not constitute an Event of Default under this Section 9.9 unless the occurrence
of any such condition with respect to any such Person is an Event of Default
under any other clause of this Section 9.9); or
9.10 Security Documents. The breach by Borrower or any other Loan Party of
any term or provision of, or the occurrence of any default under, any Security
Document or other Loan Document (other than this Agreement) or other agreement,
instrument or document delivered in connection therewith to which such Person is
a party, which breach or default is in the opinion of the Agent, material, or
any other such breach or default (other than such a material breach or default)
occurs and is not cured within the time, if any, specified therefor therein or
fifteen days thereafter, if no such time is specified or such time is less than
15 days; or if any such Security Document or Loan Document is at any time not in
full force and effect; or any of the Security Documents shall fail to grant to
the Agent on behalf of the Lenders the Liens (if any) intended to be created
thereby; or if any Loan Party shall assert that it is not liable with respect to
any Security Document to which it is a party; or any Guarantor shall assert that
it is not liable as a guarantor the Guaranty to which it is party; or
9.11 Notice of Charge. Except as expressly permitted pursuant to Section
7.3, if a notice of any Charge is filed of record with respect to all or any of
the Assets of Borrower, any Primary Obligor, any Mid-Tier Company or any
Wholly-Owned Subsidiary; or
9.12 Judgments.
(a) Any final non-appealable judgment for the payment of money in
excess of $300,000 (after giving effect to any amount covered by insurance as to
which the insurer shall not have denied or questioned its obligation to pay)
shall be rendered against Borrower, any Primary Obligor or any Secondary Obligor
other than an REO Affiliate; or
(b) Final judgment for the payment of money in excess of $300,000
shall be rendered against Borrower, any Primary Obligor or any Secondary Obligor
other than an REO
44
Affiliate, and the same shall remain undischarged for a period of 30 days during
which execution shall not be effectively stayed or diligently contested in good
faith by appropriate proceedings; or
9.13 Stock Issuance or Transfer. Except as expressly permitted pursuant to
the terms hereof, if Borrower, any Primary Obligor or any Secondary Obligor or
any other Pledged Entity issues to (except upon formation of a Person permitted
by this Agreement) or transfers to any Person any Stock or other Equity Interest
issued by Borrower, any Primary Obligor, any Secondary Obligor or any other
Pledged Entity; or
9.14 ERISA. Any ERISA Affiliate of Borrower or of any other Applicable
Person under Section 8.25 which is not a Subsidiary of Borrower or such
Applicable Person shall fail in the performance or observance of any term,
provision or agreement with respect to a Plan or Multiemployer Plan set forth in
Section 8.25 as if such ERISA Affiliate were a Subsidiary of Borrower or an
Applicable Person; or
9.15 Material Effect Defaults. To the extent that the same does not
constitute an Event of Default under any other provision of this Section 9, a
default by Borrower, any Primary Obligor or any Secondary Obligor shall occur
under any agreement, document or instrument (other than this Agreement or any of
the other Loan Documents) now or hereafter existing, to which Borrower, any
Primary Obligor or any Secondary Obligor is a party and the effect of such
default could reasonably be expected to have a material adverse effect on the
financial conditions or business operations of Borrower, any Primary Obligor or
any Mid-Tier Company; or
9.16 Other Acceleration. To the extent not otherwise constituting an Event
of Default, if any lender to Borrower, any Primary Obligor, any Secondary
Obligor or any Subsidiary thereof terminates any agreement to forbear or waive
any default by a Harbor Debtor or any other event of default arising under the
terms of any Indebtedness Instrument (other than any Bosque Note constituting an
Indebtedness Instrument) of Borrower, any Primary Obligor any Mid-Tier Company,
or any other Subsidiary of Borrower other than any such other Subsidiary which
is a Harbor Debtor or REO Affiliate; or
9.17 Asserted Claims. If any proceeding is commenced against Borrower in
which the amount claimed is greater than $1,000,000 and such proceeding is not
dismissed with prejudice with no judgment having been entered against or other
relief granted against Borrower within thirty (30) days after the filing date
thereof; or
9.18 Change in Control. A Change in Control shall occur (for purposes
hereof, a Change in Control shall mean the occurrence of any of the following
events after the date hereof: (i) any "person" or "group" (as such terms are
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT")), is or becomes the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act), directly, or indirectly, of
more than fifty percent (50%) of the aggregate voting power of all classes of
Capital Stock of Borrower entitled to vote generally in an election of
directors; (ii) Borrower is merged with or into another corporation or another
corporation is merged with or into Borrower with the effect that immediately
after such transaction the stockholders of Borrower immediately prior to such
transaction hold less than a majority in interest of the total voting power
entitled to vote in the election of directors, managers or trustees of the
entity surviving the transaction; (iii) to the
45
extent not otherwise then constituting an Event of Default, all or substantially
all of the assets of Borrower or a Primary Obligor, or any other Wholly Owned
Subsidiary other than a Wholly-Owned Subsidiary described on Schedule 9.18, are
sold to any person or persons (as an entirety in one transaction or a series of
related transactions); or (iv) the voluntary or involuntary dissolution,
liquidation or winding up of Borrower. For purposes of this Section 9.18,
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents in the equity (however designated) of such
Person and any rights (other than debt securities convertible into an equity
interest), warrants or options to acquire an equity interest in such Person); or
9.19 Management. If James Sartain ceases to be employed full-time with
Borrower and responsible for the day to day management of Borrower. Such
occurrence shall be an Event of Default without notice or cure period, unless
Borrower employs a replacement officer of the Borrower having the duties of Mr.
Sartain acceptable to Lenders in their reasonable discretion within ninety (90)
days after Mr. Sartain ceases to be employed; or
9.20 Court Orders. To the extent not otherwise constituting an Event of
Default, if Borrower, any other Loan Party, any Primary Obligor, any Mid-Tier
Company, any Secondary Obligor-Existing or any Wholly-Owned Subsidiary other
than a Tier IV Company, or any other Loan Party is enjoined, restrained or in
any way prevented by court order from conducting all or any material part of its
business or affairs and such Person consents (by action, inaction or otherwise)
to such order or such order remains in effect for a period of 30 days; or
9.21 Dissolution. Borrower, any Primary Obligor, any Mid-Tier Company or
any Loan Party shall dissolve, liquidate or suspend or discontinue its business,
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Agent may (and shall, if instructed in writing by
the Majority Lenders) by written notice to the Borrower: (i) declare the
principal of and accrued interest on the Loans of the Borrower to be, whereupon
the same shall forthwith become, due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower; and/or (ii) declare the Bosque Loan Commitments of the Lenders
terminated, whereupon such Commitments shall forthwith terminate immediately;
provided that if any Event of Default described in Section 9.9 shall occur with
respect to the Borrower, the result which would otherwise occur only upon the
giving of written notice by the Agent to the Borrower as herein described shall
occur automatically, without the giving of any such notice.
Section 10. GENERAL REPRESENTATIONS AND WARRANTIES AND RELATED COVENANTS.
In order to induce the Lenders to enter into this Agreement and to
maintain the Loans provided for herein, each Loan Party party hereto makes the
following representations, covenants and warranties, both as of the Amendment
Execution Date and (after giving effect to the transactions contemplated hereby
to occur on the Amendment Effective Date) as of the Amendment Effective Date
(unless otherwise specified), which representations, covenants and warranties
shall survive the execution and delivery of this Agreement and the other
documents and instruments referred to herein:
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10.1 Organization.
(a) Borrower is and at all times hereafter shall be a corporation,
duly organized and validly existing and in good standing under the laws of the
State of Delaware and qualified or licensed to do business and in good standing
in all states in which the laws thereof require Borrower to be so qualified
and/or licensed and in which the failure to so qualify could have a Material
Adverse Effect, including, without limitation, the State of Texas. Schedule
10.1(a) identifies each jurisdiction in which Borrower has qualified or been
licensed to do business and describes the nature and current status of any such
qualification or license.
(b) Each Primary Obligor and each Secondary Obligor and each other
Loan Party is a corporation or limited liability company or a limited
partnership, duly organized and validly existing and in good standing under the
laws of the state of its organization and each Primary Obligor, Mid-Tier
Company, Secondary Obligor-Existing and other Loan Party and, if the failure to
do so could reasonably be expected to have Material Adverse Effect on Borrower,
any Primary Obligor, any Mid-Tier Company, Secondary Obligor-Existing or other
Loan Party, each other Secondary Obligor, is and at all times hereafter shall be
qualified or licensed to do business and in good standing in all states in which
the laws thereof require such Primary Obligor, Secondary Obligor and other Loan
Party to be so qualified and/or licensed and in which the failure to so qualify
could have a Material Adverse Effect on the Borrower, any Primary Obligor or any
Mid-Tier Company. Schedule 10.1(b) identifies each jurisdiction in which each
Primary Obligor, Mid-Tier Company, Secondary Obligor-Existing and each other
Loan Party has qualified or been licensed to do business and describes the
nature and current status of any such qualification or license.
(c) Schedule 10.1(c) lists all Shareholder Agreements to which
Borrower, any other holder of any Equity Interest in any Primary Obligor or any
holder of any Equity Interest in any Mid-Tier Company, Secondary
Obligor-Existing or Secondary Obligor-R or other Pledged Entity is a party.
10.2 Entity Power.
(a) Borrower has the right, power and capacity and is duly
authorized and empowered to enter into, execute, deliver and perform this
Agreement and the other Loan Documents to which it is a party.
(b) Each Primary Obligor and each Secondary Obligor and each other
Loan Party has the right, power and capacity and is duly authorized and
empowered to enter into, execute, deliver and perform those Loan Documents to
which it is a party.
10.3 Violation of Charter Documents.
(a) The execution, delivery and/or performance by Borrower of this
Agreement and the other Loan Documents to which it is a party and the
consummation of the transactions contemplated hereunder have been duly
authorized by all necessary corporate and shareholder action and none of such
execution, delivery, performance or consummation shall, by the lapse of time,
the giving of notice or otherwise, constitute a violation of any Legal
Requirement or a breach of any provision contained in the Charter Documents of
Borrower, or
47
contained in any agreement, instrument or document to which Borrower is now or
hereafter a party or by which it or any of its Assets is or may become bound,
other than agreements, instruments or documents that are immaterial to Borrower
the breach of which could not have a Material Adverse Effect on Borrower.
(b) The execution, delivery and/or performance by each Primary
Obligor, Secondary Obligor and other Loan Party of each Loan Document to which
it is a party and the consummation of each such Person of the transactions
contemplated hereunder have been duly authorized by all necessary corporate,
partnership or limited liability company action (as the case may be) and other
action by the holders of the Equity Interests thereof and none of such
execution, delivery, performance or consummation shall, by the lapse of time,
the giving of notice or otherwise, constitute a violation of any Legal
Requirement or a breach of any provision contained in the Charter Documents of
such Primary Obligor or such Secondary Obligor or other Loan Party, or contained
in any agreement, instrument or document to which such Primary Obligor or such
Secondary Obligor or other Loan Party is now or hereafter a party or by which it
or any of its Assets is or may become bound, other than agreements, instruments
or documents that are immaterial to such Primary Obligor, Secondary Obligor and
other Loan Party the breach of which could not have a Material Adverse Effect on
Borrower or any such Primary Obligor, or any Mid-Tier Company , Secondary
Obligor-Existing or other Loan Party.
10.4 Enforceability.
(a) This Agreement and the other Loan Documents to which the
Borrower is a party are and will be the legal, valid and binding agreements of
Borrower, enforceable in accordance with their respective terms, except as
enforcement thereof may be subject to the effect of applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally, and to general principles of equity (regardless of whether
such enforcement is sought in a proceeding in equity or at law); and
(b) Those other Loan Documents to which each other Loan Party is a
party are and will be the legal, valid and binding agreements of such Loan
Party, enforceable in accordance with their respective terms, except as
enforcement thereof may be subject to the effect of applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally, and to general principles of equity (regardless of whether
such enforcement is sought in a proceeding in equity or at law).
10.5 Ownership.
(a) Schedule 10.5(a) sets forth all classes of stock of Borrower,
the shareholders thereof (other than members of the general public), addresses
of each shareholder, number of shares owned and how the shares are held;
(b) Schedule 10.5(b) sets forth all classes of stock and/or other
Equity Interests (other than options, warrants and rights to acquire Stock or
other Equity Interests) issued by each Primary Obligor and each Secondary
Obligor, the shareholders and other equity holders thereof, and the addresses,
number of shares and/or partnership interests owned and how the shares are held.
48
(c) Schedule 10.5(c) sets forth all options, warrants and other
rights to acquire Stock or other Equity Interests of Borrower, any Primary
Obligor, Mid-Tier Company, Secondary Obligor-Existing, Secondary Obligor-R and
any other Pledged Entity, the nature of such option, warrant or right and the
conditions for the exercise thereof. Lenders hereby expressly consent to the
transfer, issuance or conveyance of Stock and/or other Equity Interests of
Borrower in accordance with such options, warrants and rights, provided that the
same does not result in a Change of Control.
(d) All Equity Interests of Borrower, each Primary Obligor, each
Secondary Obligor and each other Loan Party have been duly and validly issued,
are fully paid and are non-assessable.
10.6 Fictitious Names.
(a) Each of the fictitious names, if any, used by Borrower during
the five (5) year period preceding the Amendment Execution Date is set forth on
Schedule 10.6 attached hereto (as amended from time to time) and none of such
fictitious names are registered trademarks or tradenames with the U.S. Patent
and Trademark Office, except as set forth in Schedule 10.6;
(b) Each of the fictitious names, if any, used by each Primary
Obligor, Mid-Tier Company, Secondary Obligor-Existing and any other Loan Party,
during the five (5) year period preceding the Amendment Execution Date is set
forth on Schedule 10.6 attached hereto (as amended from time to time), and none
of such fictitious names are registered trademarks or tradenames with the U.S.
Patent and Trademark Office; provided that, variations on the corporate name of
any Primary Obligor, Mid-Tier Company, Secondary Obligor-Existing and Secondary
Obligor-R in states where used solely for qualifying to do business therein
shall and have been excluded from such schedule, with Lender's consent and
approval.
10.7 Title.
(a) Schedule 10.7 is a true, accurate and complete list of all Liens
relating to the Pledged Property on the Amendment Execution Date and on the
Amendment Effective Date.
(b) First X and First B shall at all times own fee title to its real
estate subject to no liens other than the Permitted Liens.
(c) Borrower and each Primary Obligor, Mid-Tier Company, Secondary
Obligor-Existing and other Loan Party shall at all times have good, indefeasible
and merchantable title to and ownership of all of its Assets.
10.8 Financial Warranty. Except as set forth on Schedule 10.8, on the
Amendment Effective Date Borrower and at all times thereafter (including,
without limitation, at the time of and after giving effect to each Tranche I
Bosque Loan) (i) is and shall be paying its debts as they mature, (ii) owns and
shall own, property which, at a fair valuation, is greater than the sum of its
debt, and (iii) has and shall have, capital sufficient to carry on its business
and transactions and all businesses and transactions in which it is about to
engage. Except as set forth on Schedule 10.8, on the Amendment Effective Date
and at all times thereafter (including, without limitation,
49
at the time of and after giving effect to each Tranche I Bosque Loan) each
Primary Obligor, Mid-Tier Company and Secondary Obligor-Existing : (i) is and
shall be paying its respective debts as they mature, (ii) owns and shall own,
property which, at a fair valuation, is greater than the sum of its debt and
(iii) has and shall have capital sufficient to carry on its business and
transactions and all businesses and transactions in which it is about to engage.
10.9 Proceedings. Except as set forth on Schedule 10.9, there are no
actions or proceedings which are pending or threatened against Borrower, any
Primary Obligor, any Secondary Obligor or any other Loan Party which could
reasonably be expected to have a Material Adverse Effect on Borrower, any
Primary Obligor, Mid-Tier Company or Secondary Obligor-Existing. None of the
actions or proceedings referred to on Schedule 10.9 could have a Material
Adverse Effect on Borrower, any Primary Obligor other than FC Capital or any
Secondary Obligor.
10.10 Government Contracts. Except as set forth on Schedule 10.10, neither
Borrower, nor any Primary Obligor, Mid-Tier Company, Secondary Obligor-Existing
or other Loan Party has any government contracts.
10.11 Adequate Licenses. Borrower, and each Primary Obligor, Secondary
Obligor and other Loan Party possesses adequate Assets, licenses, patents,
copyrights, trademarks and tradenames to continue to conduct its business as
previously conducted by it and as contemplated in the foreseeable future except
such licenses, patents, copyrights, trademarks and trade names the failure of
which to obtain could not be reasonably expected to have a Material Adverse
Effect on Borrower, any Primary Obligor, Mid-Tier Company or Secondary
Obligor-Existing.
10.12 Government Permits; Approvals and Consents.
(a) Except for matters which could not result in a Material Adverse
Change with respect to Borrower, any Primary Obligor, Mid-Tier Company,
Secondary Obligor-Existing or any other Loan Party, Borrower and each Primary
Obligor, each Secondary Obligor and each other Loan Party has been and is in
good standing with respect to all governmental permits, certificates, consents
and franchises necessary to continue to conduct its business as previously
conducted prior to the date hereof and prior to the Amendment Execution Date and
to own or lease and operate its properties as now owned or leased by it. None of
said permits, certificates, consents or franchises contain any term, provision,
condition or limitation more burdensome than such as are generally applicable to
Persons engaged in the same or similar business as the applicable Person.
(b) Except for those consents and other items set forth on Schedule
10.12, neither Borrower, nor any Primary Obligor, Secondary Obligor or other
Loan Party requires the approval, consent, waiver, order, permission, license,
authorization, registration or validation of, or filing with or exemption by,
any Government Authority or any other Person (including but not limited to
shareholders, partners, members, equity owners, holders of Indebtedness
Instruments, or any owner of any lien upon the Assets of any one or more of them
or their Affiliates) for the execution and delivery of, and the consummation of
the transactions contemplated by, this Agreement and the other Loan Documents,
including but not limited to the borrowing of the Tranche I Bosque Loans, the
pledge of the Pledged Property, and the payment and performance
50
of all Obligations. Borrower and each other Primary Obligor, Secondary Obligor
and other Loan Party have received the consents and other items described on
Schedule 10.12 and has delivered a copy thereof to Agent, which consents are in
full force and effect, unmodified and unamended on the date hereof and on the
Amendment Execution Date.
10.13 Charge; Restrictions.
(a) On the Amendment Execution Date and on the Amendment Effective
Date, neither Borrower, nor any Primary Obligor nor any Secondary Obligor or any
other Loan Party is a party to (nor are any of such Person's Assets otherwise
subject to) any contract or agreement or restriction, judgment, decree or order
that could have a Material Adverse Effect on Borrower, any Primary Obligor,
Mid-Tier Company or Secondary Obligor-Existing or that materially and adversely
affects the business, property, assets, operations or condition, financial or
otherwise of Borrower, any Primary Obligor, Mid-Tier Company or Secondary
Obligor-Existing . At no time after the Amendment Effective Date will the
Borrower, any Primary Obligor, any Mid-Tier Company, Secondary Obligor-Existing
or any Wholly-Owned Subsidiary be a party to (or permit any of its Assets to be
subject to) any contract or agreement or restriction, judgment, decree or order
materially and adversely affecting its business, property, assets, operations or
condition, financial or otherwise.
(b) On the Amendment Execution Date and on the Amendment Effective
Date, none of Borrower, any Primary Obligor, Mid-Tier Company, Secondary
Obligor-Existing, any Secondary Obligor-R other than an REO Affiliate, or any
other Loan Party is subject to (nor are any such Person's Assets otherwise
subject to) any Charge (other than Charges owed by First B or First X). At no
time after the Amendment Effective Date will the Borrower, any Primary Obligor,
Mid-Tier Company, Secondary Obligor-Existing, Secondary Obligor-R other than an
REO Affiliate, or any other Loan Party or any Wholly-Owned Subsidiary (other
than an REO Affiliate) be a party to (or permit any of its Assets to be subject
to) any Charge.
10.14 Compliance with Laws. Except for matters which could not result in a
Material Adverse Change with respect to Borrower, any Primary Obligor, Mid-Tier
Company, Secondary Obligor-Existing or any other Loan Party, neither Borrower,
nor any Primary Obligor nor any Secondary Obligor nor any other Loan Party is,
or will be during the term hereof, in violation of any applicable statute,
regulation, order or ordinance of the United States of America, of any state,
city, town, municipality, county or of any other jurisdiction, or of any agency
thereof, including the Federal Reserve Board, in any respect.
10.15 Compliance with Indebtedness Instruments. Other than those defaults
set forth on Schedule 10.15 , Borrower is not and at no time during the term
hereof shall be in default under any Indebtedness Instrument or any other
material agreement to which it is a party. Other than those defaults set forth
on Schedule 10.15, no Primary Obligor, Mid-Tier Company, Secondary
Obligor-Existing, Secondary Obligor-R or any other Loan Party is, on the date
hereof or will be on the Amendment Execution Date or Amendment Effective Date,
in default under any Indebtedness Instrument.
10.16 Financials. The Financial Statements delivered by Borrower, any
Primary Obligor, any Secondary Obligor or any other Loan Party to Agent, fairly
and accurately present
51
the Assets, liabilities and financial conditions and results of operations of
Borrower, and such other Persons described therein as of and for the periods
ending on such dates and have been prepared in accordance with GAAP and such
principles have been applied on a basis consistently followed in all material
respects throughout the periods involved.
10.17 Tax Returns. Borrower and each other member of the Consolidated
Group has filed or caused to be filed all tax returns which are required to be
filed, and has paid all Charges shown to be due and payable on said returns or
on any assessments made against it or any of its property and all other Charges
imposed on it or any of its properties by any Governmental Authority except, for
Charges arising at any time after the Amendment Effective Date which Borrower is
disputing in accordance with the final sentence of Section 7.3.
10.18 No Material Adverse Change. Except as set forth in Schedule 10.18,
since December 31, 2001, no event or circumstance has occurred that had, has or
could reasonably be expected to have a Material Adverse Effect.
10.19 No Indebtedness. None of Borrower, any Primary Obligor, Mid-Tier
Company, Wholly-Owned Subsidiary or Secondary Obligor or other Loan Party (i)
has any Indebtedness except for Indebtedness described in Schedule 10.19,
Schedule 10.21 and Schedule 8.13B and except for Indebtedness permitted by this
Agreement which (other than in the case of MCS, any Mexican Acquisition Entity
or any French Acquisition Entity) is reflected in the most recent Financial
Statements delivered pursuant to Section 7.1(a) or (b) (except for any such
Indebtedness permitted by this Agreement (x) incurred since such most recent
Financial Statements were delivered or (y) constituting unsecured trade payables
arising in the ordinary course of business since the dates reflected in the
September 30, 2002 Financial Statements that is not Indebtedness for borrowed
money or Indebtedness of any REO Affiliate to its REO Owner evidenced by a note
payable to such REO Owner, in each case, to the extent, if any, not required by
GAAP to be reflected in Financial Statements) or (ii) has guaranteed any
indebtedness or entered into or issued any Guaranty Equivalent (other than as a
result of the endorsement of any instrument of items of payment for deposit or
collection in the ordinary course of business or as otherwise expressly
permitted pursuant to the terms hereof) in respect of the obligations of any
Person.
10.20 Compliance with Existing Agreement.
(a) Except as to matters consented to in writing by the Lenders
under the Existing Agreement and those matters set forth on Schedule 10.20
hereof, at all times prior to the Amendment Execution Date, on the Amendment
Execution Date and immediately prior to the Amendment Effective Date, (i)
Borrower is and was in full compliance with each of its covenants and other
agreements set forth in the Existing Agreement,(ii) Borrower and each other
party thereto is and was in full compliance with each of their respective
covenants and other agreements under each of the other Existing Loan Documents
and (iii) each representation and warranty made by Borrower and each other Loan
Party (as defined in the Existing Agreement) is and will be true and correct in
all respects with the same effect as though such representation and warranty
were made as of the Amendment Execution Date and immediately prior to the
Amendment Effective Date .
52
(b) Without limiting the foregoing, as of the Amendment Execution
Date and immediately prior to the Amendment Effective Date, except as set forth
on Schedule 10.20 hereto no "Unmatured Default" or "Event of Default" under the
Existing Agreement has occurred and is continuing on the Amendment Execution
Date or will have occurred and be continuing on the Amendment Effective Date.
10.21 Affiliate Notes. Attached hereto as Schedule 10.21 is a true,
accurate and complete schedule of all promissory notes made by any Affiliate
payable to the order of a Borrower, a Primary Obligor or a Secondary Obligor,
other than the Pledged Notes and the Excluded Notes. In furtherance and not in
limitation of any restriction thereon set forth herein or in the other Loan
Documents, if at any time after the Amendment Effective Date, any Affiliate
borrows money or otherwise incurs Indebtedness from Borrower or a Primary
Obligor or a Secondary Obligor, (i) unless such borrowing is under and pursuant
to the terms of a Pledged Note, Borrower shall give Agent notice thereof and
deliver a copy of the note evidencing such Indebtedness to Agent, (ii) if such
Indebtedness is permitted pursuant to the terms hereof or consented to by the
Majority Lenders and if requested in writing by the Agent, Borrower shall
prepare a Schedule 10.21A setting forth the maker and holder of such note, the
principal amount thereof and the payment terms thereof, and (iii) Borrower shall
take the action required by Section 7.15(b).
10.22 No Liability on Lenders or Agent. None of the execution, delivery
and performance by Borrower or any other Loan Party of this Agreement and/or the
other Loan Documents will impose on or subject any of the Lenders or the Agent
to any liability, whether fixed or contingent, in respect of any Environmental
Law, whether relating to the operation of Borrower's business or otherwise. None
of the Lenders' or the Agent's exercise of any of the rights or remedies
described in this Agreement or in any of the other Loan Documents shall
constitute a breach of any provision contained in any agreement, instrument or
document concerning the assignment or license of, or the payment of royalties
for, any patents, patent rights, tradenames, trademarks, trade secrets,
know-how, copyrights or any other form of intellectual property now or at any
time or times hereafter protected as such by any applicable law.
10.23 Affiliates. Schedule 10.23 attached hereto is a true, accurate and
complete schedule of Borrower's Affiliates (including each Secondary Obligor) as
of the Amendment Effective Date, together with a description of Borrower's
relationship to each such Affiliate. Attached as Schedule 10.23(B) is a true,
accurate and complete schedule of each Secondary Obligor - Existing . Attached
as Schedule 10.23(C) is a true, accurate and complete schedule of each Existing
S Co.
10.24 Real Property; Environmental Issues. Except as set forth on Schedule
10.24, neither Borrower, any Primary Obligor or any Secondary Obligor other than
First X, First B, FCS Creamer, Ltd., FCS Wood Ltd., and FCS Wildhorse Ltd, FCS
Fischer Ltd. , any REO Affiliate, any Mexican Acquisition Entity or French
Acquisition Entity now owns or, in the case of US Persons, leases or at any time
in the five (5) years preceding the Amendment Execution Date has owned or leased
any real property. Neither Borrower, any Primary Obligor, any Secondary Obligor,
any Tier IV Company, any Tier V Company, any Harbor Debtor or any other Loan
Party has received a summons, citation, notice, or directive from the
Environmental
53
Protection Agency or any other Governmental Authority concerning any action or
omission resulting in the releasing, or otherwise disposing of hazardous waste
or hazardous substances into the environment with respect to any real property.
10.25 Investment Company Act and Public Utility Holding Company Act.
Neither Borrower nor any Primary Obligor nor any other Loan Party or the
entering into of any Loan Documents, nor the issuance of the Notes is subject to
any of the provisions of the Investment Company Act of 1940, as amended. Neither
Borrower, nor any Primary Obligor or any Secondary Obligor or any other Loan
Party is a "holding company" as defined in the Public Utility Holding Company
Act of 1935, as amended, or subject to any other federal or state statute or
regulation limiting its ability to incur Indebtedness for money borrowed.
10.26 Disclosure. Neither this Agreement nor any other Loan Document nor
any statement, list, certificate or other document or information, nor any
schedules to this Agreement or any other Loan Document, delivered or to be
delivered to Lenders or Agent, contains or will contain any untrue statement of
a material fact or omits or will omit to state a material fact necessary to make
statements contained herein or therein, in light of the circumstances in which
they are made, not misleading. Copies of all documents delivered to Lenders
and/or Agent pursuant to this Section 10 or any other provision of this
Agreement are true, correct and complete copies thereof and include all
amendments, restatements, supplements and other modifications thereto and
thereof.
10.27 Qualification.
(a) Solely by reason of (and without regard to any other activities
of Lenders and/or Agent in any state in which Assets of the Borrower, any
Primary Obligor, Secondary Obligor or other Loan Party are located) the entering
into, performance and enforcement of this Agreement, the Notes, the other Loan
Documents and the documents, instruments and agreements delivered in connection
therewith by Lenders and/or Agent will not constitute doing business by Lenders
and/or Agent in any of such states or result in any liability of Lenders and/or
Agent for taxes or other governmental charges; and qualification by Lenders
and/or Agent to do business in such jurisdiction is not necessary in connection
with, and the failure to so qualify will not affect, the enforcement of, or
exercise of any rights or remedies under, any of such documents.
(b) No "business activity," "doing business" or similar report or
notice is required to be filed by the Lenders and/or Agent in any such
jurisdiction in connection with the Loans or the transactions contemplated by
this Agreement or any other Loan Document, and the failure to file any such
report or notice will not affect the enforcement of, or the exercise of any
rights or remedies under, this Agreement or any of the other Loan Documents.
10.28 SEC Filings. The Borrower has filed and made available to the Agent
and Lenders each form, registration statement, schedule, report, proxy statement
and document required to be filed by Borrower with the SEC since January 1, 1995
(collectively, the "SEC REPORTS"). Except as set forth on Schedule 10.28, the
SEC Reports (i) at the time filed, complied in all material respects with the
applicable requirements of the Securities Laws and (ii) did not at the time they
were filed (or if amended or superseded by a filing prior to the date of
54
this Agreement, then on the date of such filing) contain any untrue statement of
a material fact or omit to state a material fact required to be stated in the
SEC Reports or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading. Borrower is the
only Loan Party required to file pursuant to the Exchange Act. Since January 1,
1995, Borrower has made all filings with the SEC in a timely manner (except as
set forth on Schedule 10.28, each of which filing deficiencies was subsequently
cured in a manner that brought Borrower into full compliance with law) as
required by law and no event has occurred that requires an additional filing or
any amendment to a prior filing, which has not been made or filed.
10.29 [Intentionally Omitted].
10.30 Federal Reserve Margin Regulations; Use of Proceeds
(a) Neither Borrower, any Primary Obligor, any Secondary Obligor or
any other Loan Party or member of the Consolidated Group or Subsidiary of any of
the foregoing is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying any
margin stock (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System). No part of the proceeds of any Loan will be used to
purchase or carry any such margin stock or to extend credit to others for the
purpose of purchasing or carrying any such margin stock.
(b) Neither the Loans nor the use of proceeds therefrom will result
in a violation of any of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B. Chapter V, as amended), or any
ruling issued thereunder or any enabling legislation or Presidential Executive
Order in connection therewith.
(c) The proceeds of the Tranche I Bosque Loans shall be used solely
to acquire Bosque Notes identified in the related Bosque Loan Request.
10.31 Intellectual Property. All patents, trademarks, registered
copyrights and trade names of Borrower, each Primary Obligor, each Mid-Tier
Company, each Secondary Obligor-Existing, and each other Loan Party are listed
in Schedule 10.31A to this Agreement; all of those so listed are in full force
and effect. If any member of the Consolidated Group at any time acquires,
establishes, invents or develops any patent, trademark, copyright or trade name
that is or becomes material to such Person's business or operations, it will
promptly notify the Agent of same and take such action as the Agent shall
request to grant to the Agent on behalf of the Lenders a perfected, first
priority security interest in same.
10.32 Compliance with ERISA. Schedule 10.32 describes the Pension Plans to
which Borrower or any ERISA Affiliates may have obligations. Each Loan Party and
each ERISA Affiliate and each Plan and the trusts maintained pursuant to such
plans are in compliance in all material respects with the presently applicable
provisions of Sections 401 through and including 417 of the Code, and of ERISA
and (i) no event which constitutes a Reportable Event as defined in Section 4043
of ERISA has occurred and is continuing with respect to any Plan which is or was
covered by Title IV of ERISA, (ii) no Plan which is subject to Part 3 of
Subtitle B of Title 1 of ERISA has incurred any "accumulated funding deficiency"
(within the meaning of Section
55
302 of ERISA or Section 412 of the Code) whether or not waived, and (iii) no
written notice of liability has been received with respect to any Loan Party or
any Subsidiary for any "prohibited transaction" (within the meaning of Section
4975 of the Code or Section 406 of ERISA), nor has any such prohibited
transaction resulting in liability to any Loan Party or ERISA Affiliate
occurred.
Neither any Loan Party nor any ERISA Affiliate (i) has incurred any
liability to the PBGC (or any successor thereto under ERISA), or to any trustee
of a trust established under Section 4049 of ERISA, in connection with any Plan
(other than liability for premiums under Section 4007 or ERISA), (ii) has
incurred any withdrawal liability under Subtitle E of Title IV of ERISA in
connection with any Plan which is a Multiemployer Plan, nor (iii) has
contributed or has been obligated to contribute on or after September 26, 1980,
to any "multiemployer plan" (within the meaning of Section 3(37) of ERISA) which
is subject to Title IV of ERISA.
The consummation of the transactions contemplated by this Agreement
(i) will not give rise to any liability on behalf of any Loan Party or any ERISA
Affiliate under Title IV of ERISA to the PBGC (other than ordinary and usual
PBGC premium liability), to the trustee of a trust established pursuant to
Section 4049 of ERISA, or to any Multiemployer Plan, and (ii) will not
constitute a "prohibited transaction" under Section 406 of ERISA or Section 4975
of the Code.
10.33 The Security Documents.
(a) Each Security Document heretofore delivered grants, and each
Security Document hereafter delivered when delivered will grant a Lien in the
properties or rights intended to be covered thereby (the "Collateral") which (i)
will constitute a valid and enforceable security interest under the Uniform
Commercial Code of the State (x) in which the Collateral is located and (y) by
which any Security Document is governed (as applicable, the "UCC"), (ii) will be
entitled to all of the rights, benefits and priorities provided by the UCC, and
(iii) when such Security Documents or financing statements with respect thereto
are filed and recorded as required by the UCC, will be superior and prior to the
rights of all third Persons now existing or hereafter arising whether by way of
mortgage, pledge, lien, security interest, encumbrance or otherwise, except for
Permitted Liens, and will provide the Agent and Lenders the Requisite Priority.
All such action as is necessary in law has been taken, or prior to the Amendment
Effective Date will have been taken, to establish and perfect the security
interest of the Agent and the Lenders in the Collateral and to entitle the
Lenders or the Agent on behalf of the Lenders to exercise the rights and
remedies provided in each of the Security Documents and the UCC, as applicable,
and no filing, recording, registration or giving of notice or other action is
required in connection therewith except such as has been made or given or will
have been made or given prior to such dates. All filing and other fees and all
recording or other tax payable with respect to the recording of any of the
Security Documents and UCC financing statements have been paid or provided for.
(b) Schedule 10.33(b) sets forth all guaranties, note pledge
agreements, stock (and other equity interest) pledge agreements and security
agreements delivered under or in respect of the obligations under the Existing
Agreement.
56
(c) In furtherance (and not in limitation) of Section 10.33(a),
after giving effect to the Pledge Agreements and Security Agreements listed on
Schedule 10.33(c), (i) each of Borrower and each Primary Obligor will have
granted the Agent a Lien on (x) each Pledged Note and on each other note,
instrument or other evidence of indebtedness, other than any Excluded Note, in
which it has any right, title or interest; and (y) each Equity Interest, other
than Equity Interests in Excluded Entities, in which it has any right, title or
interest.
10.34 Other Loan Documents. All representations and warranties contained
in the other Loan Documents are true and correct.
10.35 Exclusion of Harbor Debtors. No representation, warranty or covenant
set forth in this Section 10 shall be deemed to be a representation, warranty or
covenant with respect to or by a Harbor Debtor.
10.36 FC Capital Liquidation . It is Borrower's intent to cause FC Capital
to cease doing business and liquidate the assets of FC Capital.
10.37 FC Holdings Line of Credit.
(a) FC Holdings has entered into that certain Loan Agreement dated
as of April 6, 2000 by and between FC Holdings and CFSC (said agreement as in
effect on such date and as amended with the written consent of the Majority
Lenders, the "Holdings/CFSC Loan Agreement") pursuant to which FC Holdings
obtained the FC Holdings Line of Credit. In addition, Agent (on behalf of
Lenders), certain subordinated lenders (whose indebtedness was subsequently
repaid) and CFSC have entered into two separate subordination agreements dated
as of April 6, 2000 (as from time to time amended, restated, supplemented or
otherwise modified), one relating to their respective rights to the Shared
Collateral and one (as from time to time amended, restated, supplemented or
otherwise modified, the "CFSC Guaranty Subordination Agreement") relating to
their respective rights relating to payments which may be made by FC Commercial
pursuant to guarantees to CFSC or the Lenders (collectively, the "CFSC
Intercreditor Agreement").
(b) Attached hereto as Schedule 10.37(b) is a true, complete and
accurate schedule of all material documents, instruments and agreements
executed, delivered or caused to be delivered by FC Holdings or any other Person
to CFSC to evidence, guaranty or secure the FC Holdings Line of Credit (the
"Holdings/CFSC Loan Documents").
(c) Attached hereto as Schedule 10.37(c) is a true, accurate and
complete schedule of all property (including but not limited to all equipment,
partnership interests, stock, membership interests, general intangibles,
instruments, bank accounts, accounts, accounts receivable, contract rights) (the
"Shared Collateral") in which a Lien has been or will be granted to secure
payment or performance of any obligation or liability of Borrower, FC Holdings,
any Primary Obligor, any Secondary Obligor, any Pledged Entity or any other
Person to CFSC under the Holdings/CFSC Loan Documents.
(d) Borrower has caused FC Holdings to deliver to Agent a true,
accurate and complete copy of the Holdings/CFSC Loan Agreement and all
Holdings/CFSC Loan Documents.
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(e) Neither the Holdings/CFSC Loan Agreement nor any other
Holdings/CFSC Loan Document has been amended, extended, restated, supplemented
or otherwise modified, nor have any of the provisions thereof been waived.
(f) The Holdings/CFSC Loan Agreement has been duly executed and
delivered by FC Holdings and is in full force and effect.
(g) [Intentionally omitted.]
(h) All representations, warranties and covenants in the
Holdings/CFSC Loan Documents of FC Holdings, the other Primary Obligors party
thereto and the Secondary Obligors party thereto, are legal, valid and binding
obligations of such Persons, enforceable in accordance with the terms thereof.
All obligations of CFSC under the CFSC Guaranty Subordination Agreement are the
legal, valid and binding obligations of CFSC, enforceable against CFSC in
accordance with its terms.
(i) With respect to that FC Commercial Guaranty in favor of CFSC (as
identified on Schedule 10.37(i)) Borrower acknowledges that said guaranty is
subordinate in right of payment to the obligations of FC Commercial under that
certain Amended and Restated Guaranty Agreement executed by FC Commercial in
favor of Lenders and Agent and that certain Guaranty Agreement executed by FC
Commercial in favor of the lenders and the agent under the Portfolio Acquisition
Loan Agreement and Borrower shall not permit any payment to be made by FC
Commercial with respect to such guaranty in favor of CFSC at any time prior to
indefeasible payment in full of all Obligations and the termination of this
Agreement and all obligations of Lenders hereunder.
(j) Borrower hereby represents and warrants that it has pledged or
caused to be pledged to Agent, for the benefit of Lenders, a subordinated
security interest in all Shared Collateral, except a security interest in a
promissory note in the amount of $268,345.11 payable by Cartera en
Administration Y Cobranza, SA de CV to FC Holdings, in which promissory note
Lenders have elected not to take a security interest.
10.38 FCS Fisher, Ltd. Transactions.
(a) FC Holdings borrowed approximately $1,000,000 under the FC
Holdings Line of Credit which it used to make a capital contribution to FCS
Fisher, Ltd. in the amount of $24,666.67 and a loan to FCS Fisher, Ltd. in the
amount of $898,012, secured by a deed of trust dated March 31, 2000, as amended
which is a lien against a 183 acre tract of land located in Bexar County, Texas
(the "Fischer Property").
(b) Borrower has (i) caused FC Holdings to pledge to Lender the note
by FCS Fisher, Ltd. to FC Holdings and all collateral pledged to secure payment
thereof (ii) delivered said note, together with an endorsement thereof to Agent,
for the benefit of Lenders; and (iii) pledged to Agent, for the benefit of
Lenders, all of its right, title and interest in FCS Fisher, Ltd. and FCS
Fischer, G.P., Corp.
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(c) FCS Fischer, Ltd. is the fee title holder of the Fischer
Property, subject to no liens or encumbrances other than that certain Deed of
Trust in favor of CFSC, as agent dated March 31, 2000.
(d) FC Holdings owns an aggregate 25% interest in equity of FCS
Fischer Ltd. and its general partner, free and clear of all liens and
encumbrances, except those in favor of Agent (on behalf of Lenders).
10.39 Bosque Notes.
(a) Bosque is a wholly owned subsidiary of Borrower. Bosque has
issued $93,900,000 in 7.66% Asset Backed Notes (the "Bosque Notes") due June 5,
2002 pursuant to a Note Agreement dated as of June 6, 1997 (as amended from time
to time, the "Bosque Note Agreement") by and among Bosque, Realty Companies
(identified therein) and Bankers Trust Company of California, N.A., as Trustee;
(ii) Deutsche Bank is the successor in interest to the trustee under the Bosque
Note Agreement ("Bosque Trustee"); (iii) the unpaid principal balance of the
Bosque Notes as of December 5, 2002 is $4,573,603.49 and as of such date there
was no accrued but unpaid interest thereon.
(b) UCC financing statements in favor of Lenders have been filed
against Borrower and Bosque with respect to the Bosque Notes, along with an
acknowledgement of notice by Trustee of the security interest described in the
UCC financing statements.
10.40 Fee Agreements. Attached hereto as Schedule 10.40 is a true,
accurate and complete schedule, as of the Amendment Effective Date, of all Fee
Agreements to which Borrower or any Primary Obligor, Mid-Tier Company or
Secondary Obligor-Existing is a party.
10.41 Securitization Agreements. Attached hereto as Schedule 10.41 is a
true, accurate and complete schedule as of the Amendment Execution Date of all
sales and servicing agreements and similar agreements relating to
securitizations to which Borrower, any Primary Obligor or any other Subsidiary
of Borrower is a party.
10.42 Incorporation by Reference. The provisions of Sections 4.7 and 4.9
of the FC Consumer Note, in each case as in effect on the Amendment Execution
Date and as amended with the consent of the Majority Lenders from time to time,
are incorporated herein by reference as fully as if set forth herein in their
entirety, except that references therein (or in any related definition) to: (i)
"Guarantor" or "Borrower" shall be deemed references to Borrower hereunder; (ii)
"Lender" shall be deemed references to Majority Lenders; (iii) references to
"Agreement" or "this Agreement" shall be deemed references to this Agreement;
(iv) "Loan Documents" shall be deemed references to the Loan Documents hereunder
; (v)delivery of any material to the "Lender" thereunder pursuant to any of the
foregoing provisions of such agreement shall be deemed delivery also to the
Lenders for purposes of this Section.
10.43 Tier IV Companies. Schedule 10.43 lists each Subsidiary of Borrower
and each other Secondary Obligor with Assets with a fair market value of less
than $100,000. The aggregate fair market value of Assets of all entities listed
on Schedule 10.43 does not exceed $1,500,000. No Person listed on Schedule 10.43
engages in any business.
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10.44 Wildhorse Transaction. FCS Wildhorse Ltd used the proceeds of the
$962,000 loan made to it in 2001 by International Bank of Commerce to pay
expenses or reimburse funds expended in connection with construction of a water
line to property it owned and obtained an $850,000 refund from the City of San
Antonio, Texas in connection therewith which it used to repay (in part) said
loan.
10.45 Wholly Owned Subsidiary Interests. Attached as Schedule 10.45 hereto
is a true and complete list, as of the Amendment Effective Date, of each
Wholly-Owned Subsidiary which owns Equity Interests issued by any other Person
other than an REO Affiliate of such Wholly-Owned Subsidiary,
10.46 REO Affiliates. Attached as Schedule 10.46 hereto is a true and
complete list, as of the Amendment Effective Date, of each REO Affiliate.
10.47 Large Net Asset Value. Attached hereto as Schedule 10.47 is a true
and complete list, as of the Amendment Effective Date, of each Secondary Obligor
with a Net Asset Value in excess of $2,000,000.
Section 11. AGENT.
11.1 Appointment. The Lenders hereby irrevocably appoint Bank of Scotland,
acting through its New York branch, to act as Agent hereunder and as Agent or
Collateral Agent or "Assignee" or "Secured Party" (or in any other similar
representative capacity designated in any Security Document) under the Security
Documents (in such capacity, the "Agent"). Each Lender hereby irrevocably
authorizes, and each holder of any Note by the acceptance of such Note shall be
deemed irrevocably to authorize, the Agent to take such action on its behalf
under the provisions of this Agreement, the Notes, the Security Documents, the
other Loan Documents and any other instruments and agreements referred to
therein and to exercise such powers thereunder as are specifically delegated to
or required of it by the terms thereof and such other powers as are reasonably
incidental thereto; provided that the Agent shall not take any action to realize
upon any security interest in any of the Collateral, or release any substantial
portion of the Collateral, without the consent of the Majority Lenders. The
Agent may perform any of its duties under any of the Loan Documents by or
through its agents or employees.
11.2 Nature of Duties. The Agent shall have no duties or responsibilities
except those expressly set forth in the Loan Documents. Neither the Agent nor
any of its officers, directors, employees or agents shall be liable to any
Lender for any action taken or omitted by it under any of the Loan Documents, or
in connection therewith unless caused by its or their gross negligence or
willful misconduct. Nothing in the Loan Documents, expressed or implied, is
intended to or shall be so construed as to impose upon the Agent any obligations
in respect of the Loan Documents except as expressly set forth therein. The
duties of the Agent under the Loan Documents shall be mechanical and
administrative in nature and the Agent shall not have by reason of its duties
under the Loan Documents a fiduciary relationship in respect of any Lender. The
Agent agrees to deliver promptly to each Lender (i) copies of notices received
by it pursuant to Sections 7.1, 7.2 and 7.11 of this Agreement, and (ii) copies
of all documents required to be delivered hereunder by the Borrower to the
Lenders directly but that are not so delivered to any
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Lender (but were delivered to the Agent) if such Lender notifies the Agent that
it has not received such document or documents, specifying same.
11.3 Lack of Reliance. Independently and without reliance on the Agent,
each Lender to the extent it deems appropriate has made and shall continue to
make (i) its own independent investigation of the financial condition and
affairs of the Loan Parties in connection with the making and the continuance of
the Loans and its commitments hereunder and the taking or not taking of any
action in connection herewith, (ii) its own appraisal of the creditworthiness of
the Loan Parties and (iii) its own independent investigation and appraisal of
the Collateral; and, except as expressly provided in the Loan Documents, the
Agent shall have no duty or responsibility, either initially or on a continuing
basis, to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the date hereof or at any
time or times thereafter. The Agent shall not be responsible to any Lender for
any recitals, statements, representations or warranties herein or in any
certificate or other document delivered in connection herewith or for the
authorization, execution, effectiveness, genuineness, validity, enforceability,
perfection, collectibility, or sufficiency of any of the Loan Documents, the
financial condition of the Loan Parties or the condition of any of the
Collateral, or be required to make any inquiry concerning either the performance
or observance of any of the terms, provisions or conditions of any of the Loan
Documents, the financial condition of the Loan Parties or the existence or
possible existence of any Event of Default or Default.
11.4 Certain Rights. If the Agent requests instructions from the Lenders
or Majority Lenders with respect to any interpretation, act or action (including
failure to act in connection with this Agreement or any of the other Loan
Documents) the Agent shall be entitled to refrain from such act or taking such
actions unless and until it shall have received instructions from the Lenders or
the Majority Lenders, as the case may be; and the Agent shall not incur
liability to any Person by so refraining. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against the Agent as a result
of the Agent acting or refraining from acting hereunder or under any of the
other Loan Documents in accordance with the instructions of the Majority Lenders
(as to matters requiring the consent of the Majority Lenders) or all the Lenders
(as to matters requiring the consent of all the Lenders). The Agent shall be
fully justified in failing or refusing to take any action under any Loan
Document unless, if it requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking, continuing to take or not taking any such
action.
11.5 Reliance. The Agent shall be entitled to rely upon any written notice
or any telephone message believed by it to be genuine or correct and to have
been signed, sent or made by the proper Person, and, with respect to all legal
matters pertaining to the Loan Documents and its duties thereunder, upon advice
of counsel selected by it.
11.6 Indemnification. TO THE EXTENT THE AGENT IS NOT REIMBURSED OR
INDEMNIFIED BY THE BORROWER, THE LENDERS WILL REIMBURSE AND/OR INDEMNIFY THE
AGENT, IN PROPORTION TO THE AGGREGATE AMOUNT OF THEIR RESPECTIVE LOANS AND
BOSQUE LOAN COMMITMENTS (TO THE EXTENT NOT FUNDED) UNDER THIS AGREEMENT, FOR AND
AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND OR
NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED OR SUSTAINED BY OR ASSERTED
AGAINST THE AGENT, ACTING PURSUANT HERETO OR ANY OF THE OTHER LOAN DOCUMENTS IN
ITS
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CAPACITY PROVIDED FOR IN THIS SECTION 11, IN ANY WAY RELATING TO OR ARISING OUT
OF THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS, THE EXISTING AGREEMENT OR
ANY EXISTING LOAN DOCUMENT; PROVIDED, HOWEVER, THAT NO LENDER SHALL BE LIABLE
FOR ANY PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS RESULTING FROM THE
AGENT'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. THE OBLIGATIONS OF THE LENDERS
UNDER THIS SECTION 11.6 SHALL SURVIVE THE REPAYMENT OF THE NOTES AND THE LOANS
AND THE TERMINATION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
11.7 Agent, Individually. With respect to its Bosque Loan Commitment, the
Loans made by it and any Note issued to or held by it, the Agent shall have and
may exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender or holder of a Note. The terms "Lender", "holders of Notes" or any
similar terms shall, unless the context clearly otherwise indicates, not exclude
the Agent in its individual capacity as a Lender or holder of a Note. The Agent
may accept deposits from, lend money to, and generally engage in any kind of
banking, trust or other business with the Loan Parties and their Subsidiaries as
if it were not acting pursuant hereto, and may accept fees and other
consideration from the Loan Parties and their Subsidiaries for services as the
Agent in connection with this Agreement and the other Loan Documents and for
services otherwise than as the Agent without having to account for the same to
the Lenders.
11.8 Holders of Notes. The Agent may deem and treat the payee of any Note
as the owner thereof for all purposes hereof unless and until a written notice
of the assignment or transfer thereof shall have been received by the Agent. Any
request, authority or consent of any Person, who at the time of making such
request or of giving such authority or consent is the payee of any Note, shall
be conclusive and binding on any subsequent holder, transferee, assignee or
payee of such Note or of any Note or Notes issued in exchange therefor.
11.9 Resignation. The Agent may resign at any time from the performance of
all its functions and duties hereunder and under the other Loan Documents by
giving 30 days prior written notice to the Borrower and each Lender. Such
resignation shall take effect upon the expiration of such 30-day period or upon
the earlier appointment of a successor. Notwithstanding any such resignation,
the provisions of Sections 11.6 and 12.3 shall inure also to the benefit of each
Agent who has so resigned with respect to the period it served as Agent. In case
of the resignation of the Agent, the Majority Lenders, with the prior consent of
the Borrower, which consent may not be unreasonably withheld, may appoint a
successor by a written instrument signed by the Majority Lenders. Any successor
shall execute and deliver to the Agent an instrument accepting such appointment,
and thereupon such successor, without further act, shall become vested with all
the estates, properties, rights, powers, duties and trusts of the Agent
hereunder and with like effect as if originally named as "Agent" herein and
therein, and upon request, the predecessor Agent shall take all actions and
execute all documents necessary to give effect to the foregoing. In the event
the Agent's resignation becomes effective at a time when no successor has been
named, all notices, other communications and payments hereunder required to be
given by or to the Agent shall be sufficiently given if given by the Majority
Lenders (or all Lenders, if the consent of all Lenders is required therefor
hereunder) or to each Lender, as the case may be. In such event, all powers
specifically delegated to the Agent may be exercised by the Majority Lenders and
the Majority Lenders shall be entitled to all rights of the Agent hereunder.
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11.10 Reimbursement. Without limiting the provisions of Section 11.6, the
Lenders and the Agent hereby agree that the Agent shall not be obligated to make
available to any Person any sum which the Agent is expecting to receive for the
account of that Person until the Agent has determined that it has received that
sum. The Agent may, however, disburse funds prior to determining that the sums
which the Agent expects to receive have been finally and unconditionally paid to
the Agent, if the Agent wishes to do so. If and to the extent that the Agent
does disburse funds and it later becomes apparent that the Agent did not then
receive a payment in an amount equal to the sum paid out, then any Person to
whom the Agent made the funds available shall, on demand from the Agent:
(a) refund the Agent the sum paid to that Person; and
(b) reimburse the Agent for the additional amount certified by the
Agent as being necessary to indemnify the Agent against any funding or other
cost, loss, expense or liability sustained or incurred by the Agent as a result
of paying out the sums before receiving it; provided, however, that if such
funds were made available to any Lender, such additional amount shall be limited
to interest on the sum to be repaid, for each day from the date such amount was
disbursed until the date repaid to the Agent, at (for the first three days) the
customary rate set by the Agent for correction of errors among banks, and
thereafter at the Base Rate (or, if greater and in respect of a Loan, the rate
from time to time prevailing on such Loan).
Section 12. MISCELLANEOUS.
12.1 Calculations and Financial Data. Calculations hereunder (including,
without limitation, calculations used in determining, or in any certificate of
any Loan Party delivered reflecting compliance by any Loan Party with the
provisions of this Agreement) shall be made and financial data required hereby
shall be prepared both as to classification of items and as to amount in
accordance with GAAP, consistent with the audited Financial Statements described
in Section 10.16; provided that for purposes of Section 8.20 no effect shall be
given to any change in GAAP from those in effect on December 31, 2001.
12.2 Amendment and Waiver. Except as otherwise provided, no provision of
any of the Loan Documents may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the Majority Lenders (or
the Agent on their behalf) and, if the Borrower is a party thereto, the
Borrower, except that waivers of provisions relating to a Loan Party's
performance or non-performance of its obligations hereunder or thereunder need
not be signed by such Loan Party or any other Loan Party; provided however that
the written consent of the Agent shall also be required to change, waive,
discharge or terminate provisions of Section 11; and provided further that
without the consent of all of the Lenders (or the Agent on their behalf) no
change, waiver, discharge or termination may be made that would increase the
amount of any Lender's Bosque Loan Commitment, decrease the principal of any
Loan; decrease the interest rate payable on any Loan; decrease the amount of any
fee; extend the final maturity date of any Loan; change the definition of
"Majority Lenders" or modify this Section 12.2. Any such change, waiver,
discharge or termination shall be effective only in the specific instance and
for the specific purposes for which made or given.
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12.3 Expenses; Indemnification.
(a) Whether or not the transactions hereby contemplated shall be
consummated, the Borrower shall pay all out-of-pocket costs and expenses of (x)
the Agent incurred in connection with the preparation, execution, delivery,
administration, filing and recording of, and (y) the Agent and the Lenders
incurred in connection with the amendment (including any waiver or consent) or
modification of (including any amendment, waiver, consent or modification at any
time requested by the Borrower, whether or not same is finalized or executed),
any failure of Borrower to perform or observe any provision of, and enforcement
of or preservation of any rights under, this Agreement, the other Loan
Documents, the making and repayment of the Loans, and the payment of all
interest and fees, including, without limitation, (A) the fees and expenses of
Sullivan & Worcester LLP, counsel for the Agent, and any special or local
counsel retained by the Agent or the Lenders, and with respect to enforcement,
the reasonable fees and expenses of counsel for the Agent or any Lender, (B) the
reasonable fees and expenses of accountants, other consultants, appraisers and
other professionals retained by the Agent in connection with the transactions
contemplated hereunder, and (C) printing, travel, title insurance, mortgage
recording, filing, communication and signing taxes and costs.
(b) THE BORROWER AGREES TO PAY, AND TO SAVE THE AGENT AND THE
LENDERS HARMLESS FROM (x) ALL PRESENT AND FUTURE STAMP, FILING AND OTHER SIMILAR
TAXES, FEES OR CHARGES (INCLUDING INTEREST AND PENALTIES, IF ANY), WHICH MAY BE
PAYABLE IN CONNECTION WITH THE LOAN DOCUMENTS OR THE ISSUANCE OF THE NOTES OR
ANY MODIFICATION OF ANY OF THE FOREGOING OR ANY EXISTING LOAN DOCUMENT, AND (y)
ALL FINDER'S AND BROKER'S FEES IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE EXISTING LOAN DOCUMENTS.
(c) THE BORROWER AGREES TO INDEMNIFY, PAY AND HOLD HARMLESS THE
AGENT, EACH LENDER, ANY LENDER ASSIGNEE AND EACH HOLDER OF A NOTE AND THEIR
RESPECTIVE PRESENT AND FUTURE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS
(COLLECTIVELY, THE "INDEMNIFIED PARTIES") FROM AND AGAINST ALL LIABILITY,
LOSSES, DAMAGES AND EXPENSES (INCLUDING, WITHOUT LIMITATION, LEGAL FEES AND
EXPENSES) ARISING OUT OF, OR IN ANY WAY CONNECTED WITH, OR AS A RESULT OF (I)
THE EXECUTION AND DELIVERY OF THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, THE
EXISTING AGREEMENT, EXISTING LOAN DOCUMENTS OR THE DOCUMENTS OR TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY OR THE PERFORMANCE BY THE PARTIES HERETO OR
THERETO OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER AND THEREUNDER OR RELATING
THERETO; OR (II) ANY CLAIM, ACTION, SUIT, INVESTIGATION OR PROCEEDING (IN EACH
CASE, REGARDLESS OF WHETHER OR NOT THE INDEMNIFIED PARTY IS A PARTY THERETO OR
TARGET THEREOF) IN ANY WAY RELATING TO THE BORROWER, ANY PRIMARY OBLIGOR, ANY
SECONDARY OBLIGOR OR SUBSIDIARY OF ANY THEREOF OR ANY COLLATERAL OR ANY
AFFILIATE OF THE BORROWER OR ANY SUBSIDIARY OF ANY SUCH AFFILIATE OR IN ANY WAY
RELATING TO ANY OF THE FOREGOING PERSONS OR ANY OTHER LOAN PARTY OR ANY
AFFILIATE OF ANY OF THE FOREGOING IN RESPECT OF THIS AGREEMENT, ANY OTHER LOAN
DOCUMENTS, ANY EXISTING LOAN DOCUMENTS OR ANY OTHER DOCUMENT OR TRANSACTION IN
CONNECTION HEREWITH OR THEREWITH OR RELATING HERETO OR THERETO; OR (III) ANY
ACTUAL OR ALLEGED VIOLATION BY THE BORROWER, ANY PRIMARY OBLIGOR, SECONDARY
OBLIGOR, ANY LOAN PARTY, ANY AFFILIATE OF ANY OF THE FOREGOING PERSONS OR ANY
SUBSIDIARY OF ANY OF THE FOREGOING PERSONS (OR ANY PREDECESSOR IN INTEREST OF
ANY OF THEM) OF ANY ENVIRONMENTAL LAW; PROVIDED THAT THE BORROWER SHALL NOT BE
LIABLE TO AN INDEMNIFIED PARTY FOR ANY PORTION OF SUCH LIABILITIES,
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LOSSES, DAMAGES AND EXPENSES SUSTAINED OR INCURRED AS A DIRECT RESULT OF THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE AGENT, ANY LENDER OR SUCH
INDEMNIFIED PARTY IF SUCH GROSS NEGLIGENCE OR WILLFUL MISCONDUCT IS DETERMINED
TO HAVE OCCURRED BY A FINAL AND NON-APPEALABLE DECISION OF A COURT OF COMPETENT
JURISDICTION. EACH LENDER SHALL ENDEAVOR TO GIVE THE BORROWER NOTICE OF ANY
MATERIAL CLAIM, ACTION, SUIT OR PROCEEDING (IF NOT RESTRICTED BY APPLICABLE LAW,
REGULATION OR GOVERNMENT AUTHORITY FROM SO DOING OR UNLESS THE SAME WOULD BE
INCONSISTENT WITH A REQUEST FROM A GOVERNMENT AUTHORITY) REFERRED TO IN CLAUSE
(II) WHICH HAS BEEN FILED AGAINST SUCH LENDER WITHIN A REASONABLE TIME AFTER THE
LOAN OFFICER OF SUCH LENDER WITH RESPONSIBILITY FOR THIS AGREEMENT BECOMES AWARE
OF THE SAME, BUT NO FAILURE TO GIVE ANY SUCH NOTICE SHALL AFFECT, OR RELIEVE THE
BORROWER OF, ANY OF BORROWER'S OBLIGATIONS UNDER THIS SECTION 12.3 OR UNDER ANY
OTHER PROVISION OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR RESULT IN ANY
OBLIGATION OR LIABILITY OF THE AGENT OR ANY LENDER TO THE BORROWER OR ANY OTHER
PERSON
(d) All obligations provided for in this Section 12.3 and Sections
3.4, 3.9, 4.1, 4.2, 4.3, 5.2 and 11.6 shall survive any termination of this
Agreement and the Bosque Loan Commitments and the payment in full of the
Obligations.
12.4 Benefits of Agreement; Descriptive Headings.
(a) This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their respective successors and
assigns, and, in particular, shall inure to the benefit of the holders from time
to time of the Notes; provided, however, that no Loan Party party hereto may
assign or transfer any of its rights or obligations hereunder without the prior
written consent of the Agent and the Lenders and any such purported assignment
or transfer shall be void. In furtherance of the foregoing, each Lender shall be
entitled at any time to grant participations in the whole or any part of its
rights and/or obligations under this Agreement, the Loan Documents or any Loan
or Note to any Person; provided, however, that no Lender Assignee shall be
permitted by the terms of its participation agreement with the relevant Lender
to require such Lender to take or omit to take any action hereunder except to
the extent that if the Lender Assignee were a Lender hereunder, its consent to
taking or omitting to take such action would be required by the terms of the
second proviso of Section 12.2 hereto. No such participation pursuant to this
Section 12.4(a) shall relieve any Lender from its obligations hereunder and the
Borrower need deal solely with the Agent and the Lenders with respect to
waivers, modifications and consents to this Agreement, the Loan Documents or the
Notes. Any such participant is referred to in this Agreement as a "Lender
Assignee". The Borrower agrees that the provisions of Sections 3.4, 3.7, 3.9,
5.2 and 12.3 shall run to the benefit of each Lender Assignee and its
participations or interests herein, and any Lender may enforce such provisions
on behalf of any such Lender Assignee; provided, however, that if any Lender
grants a participation in the whole or any part of its rights and/or obligations
pursuant to this Section 12.4(a), then the amounts that the Borrower is required
to pay pursuant to this Agreement (including, without limitation, additional
amounts made pursuant to Section 5.2) shall not exceed the amounts that the
Borrower would have been required to pay to such Lender pursuant to this
Agreement had such Lender not granted such participation. The Borrower hereby
further agrees that any such Lender Assignee may, to the fullest extent
permitted by applicable law, exercise the right of setoff with respect to such
participation (and in an amount up to the amount of such participation) as fully
as if such Lender Assignee were the direct
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creditor of the Borrower. Upon a participation in accordance with the foregoing,
the Borrower shall execute such documents and do such acts as any Lender may
reasonably request to effect such assignment. Any Lender may furnish any
information concerning the Loan Parties in its possession from time to time to
Lender Assignees (including prospective Lender Assignees) and prospective
Purchasing Lenders. Each Lender shall notify Borrower of any participation
granted by it pursuant to this Section 12.4(a) but neither the approval of the
Borrower nor that of any other Loan Party shall be required for any such
participation. The Borrower shall not be responsible for any due diligence costs
or legal expenses of such Lender Assignees in connection with their entering
into such participation.
(b) The descriptive headings of the various provisions of this
Agreement and the other Loan Documents are inserted for convenience of reference
only and shall not be deemed to affect the meaning or construction of any of the
provisions hereof.
(c) Any Lender may at any time assign to any other Lender or any
affiliate of any Lender, or (subject to obtaining the prior written consent of
the Borrower (but no other Loan Party), such consent not to be unreasonably
withheld) to one or more additional banks or financial institutions ("Purchasing
Lenders"), all or any part of its Bosque Loan Commitment (and corresponding
Tranche I Note), or all or any part of its other Loans and any Note pursuant to
a Transfer Supplement ("Transfer Supplement"), in form and substance
satisfactory to the Agent; provided, however, that each such assignment shall be
for an amount not less than the lesser of a minimum amount of $1,000,000 (or, if
less, the then-outstanding principal amount of such Lender's Loans or, in the
case of a transfer of the Bosque Loan Commitment its then remaining unfunded
Bosque Loan Commitment, as the case may be) and integral multiples of $500,000
above such amount. Upon (i) such execution of such Transfer Supplement, (ii)
delivery of an executed copy thereof to the Borrower and the Agent, (iii)
payment by such Purchasing Lender to such transferor Lender of an amount equal
to the purchase price agreed between such transferor Lender and such Purchasing
Lender, (iv) payment by the Purchasing Lender to the Agent of a $3,000
processing fee, and (v) any consent of the Borrower required by the first
sentence of this Section 12.4(c), such Purchasing Lender shall for all purposes
be a Lender party to this Agreement and shall have all the rights and
obligations of a Lender under this Agreement to the same extent as if it were an
original party hereto and thereto with the percentage share of the Bosque Loan
Commitment set forth in Schedule I to such Transfer Supplement, and no further
consent or action by the Borrower, any other Loan Party, the Lenders or the
Agent shall be required. Such Transfer Supplement shall be deemed to amend this
Agreement to the extent, and only to the extent, necessary to reflect the
addition of such Purchasing Lender and the resulting adjustment of the
percentage of the Bosque Loan Commitment, Notes and Loans (and related rights
and obligations) held by the transferor Lender and the Purchasing Lender arising
from the purchase by such Purchasing Lender of all or a portion of the rights
and obligations of such transferor Lender pursuant to the Transfer Supplement.
Upon the consummation of any transfer to a Purchasing Lender pursuant to this
Section 12.4(c), the transferor Lender, the Agent and the Borrower shall make
appropriate arrangements so that, if required, a replacement Note or Notes
(dated the same date as the Note or Notes being replaced) is issued to such
transferor Lender and a new Note or Notes (dated the same date as the Note or
Notes being replaced) or, as appropriate, a replacement Note or Notes (dated the
same date as the Note or Notes being replaced) is issued to such Purchasing
Lender, in each case in principal amounts reflecting their
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outstanding Loans and (if applicable) Bosque Loan Commitment, as adjusted
pursuant to such Transfer Supplement.
(d) Notwithstanding anything to the contrary contained herein or in
any of the Loan Documents, unless the Agent, the Borrower or a Lender otherwise
request with respect to any specific exhibit, exhibits to this Agreement shall
not be required to be attached to the execution or any other copy of this
Agreement, and any references in this Agreement or the other Loan Documents to
such exhibits as "Exhibits hereto," "Exhibits to this Agreement" or words of
similar effect shall be deemed to refer to such document as executed by the
parties thereto and delivered on the Amendment Effective Date.
12.5 Notices, Requests, Demands, etc. Except as otherwise expressly
provided herein, all notices, requests, demands or other communications to or
upon the respective parties hereto shall be deemed to have been duly given or
made when delivered if sent by Federal Express or other similar overnight
delivery service, or three Business Days after mailing (when mailed, postage
prepaid, by registered or certified mail, return receipt requested) or (in the
case of telex, telegraphic, telecopier or cable notice) when delivered to the
telex, telegraph, telecopier or cable company, or (in the case of telex or
telecopier notice sent over a telex or telecopier owned or operated by a party
hereto) when sent; in each case addressed as follows, except that notices and
communications to the Agent pursuant to Sections 2 and 9 shall not be effective
until received by the Agent: (i) if to the Agent, at the Closing Office, (ii) if
to a Lender, at the address specified with its signature below or (if a
Purchasing Lender) on the applicable Transfer Supplement, and (iii) if to a Loan
Party, at its address specified with its signature below (Attention: President),
or to such other addresses as any of the parties hereto may hereafter specify to
the others in writing, provided that communications with respect to a change of
address shall be deemed to be effective when actually received.
12.6 Governing Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE THAT WOULD RESULT IN THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION, except (as to any other Loan Document) to
the extent specifically set forth otherwise in that Loan Document.
12.7 Counterparts; Telecopies. This Agreement and the other Loan Documents
may be executed in any number of counterparts, and by the different parties
hereto and thereto on the same or separate counterparts, each of which when so
executed and delivered shall be deemed to be an original; all the counterparts
for each such Loan Document shall together constitute one and the same
agreement. Telecopied signatures hereto and to the other Loan Documents shall be
of the same force and effect as an original of a manually signed copy.
12.8 Waiver; Remedies Cumulative; Payment of Claims; Full Recourse.
(a) No failure or delay on the part of the Agent or any Lender in
exercising any right, power or privilege under this Agreement or any other Loan
Document, and no course of dealing between Borrower, any Primary Obligor, any
Secondary Obligor or any other Loan Party or any Subsidiary thereof and the
Agent or any Lender shall operate as a waiver thereof;
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nor shall any single or partial exercise of any right, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.. No notice to or demand on Borrower, any
Primary Obligor, any Secondary Obligor or any other Loan Party in any case shall
entitle such Loan Party to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the right of the Agent or any
Lender to any other or further action in any circumstances without notice or
demand.
(b) The rights and remedies herein expressly provided are cumulative
and not exclusive of any rights or remedies which the Agent or any Lender would
otherwise have pursuant to such documents or at law or equity.
(c) In furtherance and not in limitation of the other rights and
remedies of the Agent and the Lenders, upon the occurrence of an Event of
Default or Default, Agent, in its sole and absolute discretion, without waiving
or releasing any covenant, agreement or other obligation of Borrower or any
Default or Event of Default, may at any time or times hereafter, but shall be
under no obligation to, pay, acquire and/or accept an assignment of any security
interest, lien, encumbrance or claim asserted by any Person against the Assets
of Borrower, or any Primary Obligor, any Mid-Tier Company, any Secondary
Obligor-Existing or any Wholly-Owned Subsidiary. All sums paid by Agent in
respect thereof and all reasonable costs and expenses (including, without
limitation, fees and expenses of counsel to the Agent) relating thereto incurred
by Agent or for which Agent becomes obligated on account thereof shall be part
of the Obligations payable by a Borrower to Agent on demand and any amount not
paid on demand shall bear interest at the Past Due Rate.
(d) The Borrower's obligations to pay principal, interest, fees and
other amounts when due under this Agreement and the other Loan Documents is
absolute and unconditional and a full recourse obligation of Borrower,
notwithstanding any fact or circumstance and, without limiting the generality of
the foregoing, whether or not there are funds available in the Cash Flow Cash
Collateral Account for application to any such obligation.
12.9 Recoveries; Pro Rata Sharing.
(a) Any Recoveries (after deduction and payment of all expenses and
costs permitted by this Agreement, the Security Documents or applicable law)
shall be applied against the Loans held by the Lenders until satisfaction in
full of all amounts due thereunder.
(b) The Lenders agree among themselves that, with respect to all
sums received by the Lenders applicable to the payment of the principal of or
interest on the Notes (except as otherwise provided in Section 3.4, 5.2 or 5.3),
equitable adjustment will be made between the Lenders so that, in effect, all
such sums shall be shared ratably by each of the Lenders (in accordance with the
outstanding principal amount of their respective applicable Loans) whether
received by voluntary payment, by realization upon security, by the exercise of
the right of set-off or banker's lien, by counterclaim or cross-action or by the
enforcement of any or all of the Notes or otherwise. If any Lender receives any
payment on its Notes of a sum or sums in excess of its pro rata portion (except
as otherwise provided in Section 3.4, 5.2 or 5.3), then such Lender receiving
such excess payment shall purchase for cash from the other Lenders with
outstanding Loans to the Borrower an interest in their Note or Notes in such
amount as shall
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result in a ratable participation by all of the Lenders in the aggregate unpaid
amount of applicable Notes then outstanding; provided, however, that if all or
any portion of such excess payment is thereafter recovered by such Lender, the
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest. The Borrower hereby agree that any Lender
so purchasing a participation from another Lender pursuant to this Section
12.9(b) may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of setoff) with respect to such participation as
fully as if such Lender were the direct creditor of the Borrower in the amount
of such participation.
12.10 Jurisdiction. THE BORROWER HEREBY AGREES THAT ANY LEGAL ACTION OR
PROCEEDING AGAINST IT WITH RESPECT TO THIS AGREEMENT, THE NOTES OR ANY OF THE
OTHER LOAN DOCUMENTS OR THE DOCUMENTS DELIVERED IN CONNECTION HEREWITH OR
THEREWITH MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED
STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AS THE AGENT OR ANY
LENDER MAY ELECT, AND, BY EXECUTION AND DELIVERY HEREOF, THE BORROWER ACCEPTS
AND CONSENTS FOR ITSELF AND IN RESPECT TO ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS AND AGREES THAT SUCH
JURISDICTION SHALL BE EXCLUSIVE, UNLESS WAIVED BY THE AGENT AND THE MAJORITY
LENDERS IN WRITING, WITH RESPECT TO ANY ACTION OR PROCEEDING BROUGHT BY IT
AGAINST THE AGENT OR ANY LENDER AND ANY QUESTIONS RELATING TO USURY. THE
BORROWER AGREES THAT SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK SHALL APPLY TO THE LOAN DOCUMENTS AND WAIVES ANY RIGHT
TO STAY OR TO DISMISS ANY ACTION OR PROCEEDING BROUGHT BEFORE SAID COURTS ON THE
BASIS OF FORUM NON CONVENIENS. BORROWER HEREBY IRREVOCABLY CONSENTS THAT ALL
PROCESS SERVED OR BROUGHT AGAINST BORROWER WITH RESPECT TO ANY SUCH PROCEEDING
IN ANY SUCH COURT IN NEW YORK SHALL BE EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT IF SENT BY REGISTERED MAIL, OR (IF PERMITTED BY LAW) BY FEDERAL EXPRESS
OR OTHER SIMILAR OVERNIGHT COURIER SERVICE, TO SUCH LOAN PARTY AT ITS ADDRESS
SET FORTH ALONGSIDE ITS SIGNATURE BELOW (OR SUCH OTHER ADDRESS AS THE AGENT IS
NOTIFIED OF IN ACCORDANCE WITH THE PROVISIONS OF SECTION 12.5). NOTHING HEREIN
SHALL AFFECT THE RIGHT OF THE AGENT OR THE LENDERS TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF AGENT OR ANY LENDER TO BRING
PROCEEDINGS AGAINST ANY LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
12.11 Severability. If any provision of this agreement shall be held or
deemed to be or shall, in fact, be illegal, inoperative or unenforceable, the
same shall not affect any other provision or provisions herein contained or
render the same invalid, inoperative or unenforceable to any extent whatever.
12.12 Right of Set-off. In addition to any rights now or hereafter granted
under applicable law or otherwise and not by way of limitation of any such
rights, upon the occurrence of an Event of Default each of the Lenders is hereby
authorized at any time or from time to time,
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without notice to any Loan Party or to any other Person, any such notice being
hereby expressly waived, to set-off and to appropriate and apply any and all
deposits (general or special, time or demand, provisional or final) and any
other indebtedness at any time held or owing by such Lender to or for the credit
or the account of such Loan Party against and on account of the obligations and
liabilities of such Loan Party now or hereafter existing under any of the Loan
Documents irrespective of whether or not any demand shall have been made
thereunder and although said obligations, liabilities or claims, or any of them,
shall be contingent or unmatured. The Lender or Lenders exercising any rights
granted under this Section 12.12 shall thereafter notify the affected Loan Party
and the Agent of such action; provided that the failure to give such notice
shall not affect the validity of such set-off and application.
12.13 No Third Party Beneficiaries. This Agreement is solely for the
benefit of the Agent and the Lenders and the Borrower and the respective
successors and assigns of the Agent and the Lenders and nothing contained herein
shall be deemed to confer upon anyone other than the Borrower any right to
insist on or to enforce the performance or observance of any of the obligations
of the Agent or the Lenders contained herein. All conditions to the obligations
of the Lenders to make Loans hereunder are imposed solely and exclusively for
the benefit of the Lenders and their respective successors and assigns and no
other Person shall have standing to require satisfaction of such conditions in
accordance with their terms and no other Person shall under any circumstances be
deemed to be beneficiary of such conditions.
12.14 Effectiveness. This Agreement shall become effective when and as of
the date (the "Amendment Effective Date") that each of the following conditions
have been satisfied to the satisfaction of the Agent (or waived by the Agent)..
If the Amendment Effective Date shall not have occurred by the close of business
(New York time) on December 31, 2002 (or such later date as is agreed to by the
Agent in writing), the amendment and restatement of the Existing Agreement to be
effectuated by this Agreement shall be deemed rescinded, null and void.
(a) Signed Copies. The Borrower and the Lenders and each other
signatory hereto shall have executed a copy hereof (whether the same or
different counterparts) and delivered the same to the Agent at 565 Fifth Avenue,
New York, New York 10017. Telecopied signatures hereto shall be of the same
force and effect as an original of a manually signed copy.
(b) Exchange Offer.
(i) Holders of no fewer than 80% of the outstanding shares of New
Preferred Stock (this, and other capitalized terms used in this Section
14.2(b) but not defined herein, having the meaning ascribed thereto in the
FC Consumer Note) shall have accepted the Exchange Offer, irrevocably
tendered their shares to the Exchange Agent for exchange in accordance
with the terms thereof and not withdrawn their shares. The Agent shall
have received a certificate from the Exchange Agent, in form and substance
satisfactory to Agent, on the Amendment Effective Date to that effect.
(ii) The Registration Statement shall have become effective and not
be the subject of any "stop order." No Legal Action shall be pending or
threatened before or by any Government Authority seeking to withdraw any
shares tendered pursuant to the Exchange Offer if the result of such Legal
Action (if adversely determined) would cause
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the aggregate number of outstanding shares tendered and not withdrawn or
sought to be withdrawn to be fewer than 80% of the outstanding shares of
New Preferred Stock.
(iii) The opinions of counsel delivered to any Loan Party by counsel
for such Loan Party in connection with the Exchange Offer or any matter
related to the Exchange Offer, shall have been delivered to Lender,
together with a letter from each such counsel stating that Lender may rely
upon such opinions with the same effect as if said opinions were addressed
to them.
(c) Repayment of Loans. Borrower shall have repaid such amount of
principal of the Existing Loans so that not more than $50,400,000 principal
amount of Existing Loans remains outstanding.
(d) Notes. Each of the Lenders shall have returned to the Borrower
the promissory notes that were issued to the them pursuant to the Existing
Agreement and received in exchange therefor an appropriately completed,
substitute Tranche I Note (substantially in the form of Exhibit A-1 hereto) and
an appropriately completed Tranche II Note substantially in the form of Exhibit
A-2 hereto), each dated the Closing Date (or such other date agreed to by the
Agent and the Borrower) and duly executed by the Borrower.
(e) [Intentionally Omitted]
(f) Interest; LIBOR Breakage Fee Borrower shall have paid to the
Agent an amount equal to all accrued interest on Existing Loans as of the
Amendment Effective Date plus the amount which the Agent specifies in writing to
the Borrower as the amount that would be payable as the LIBOR Breakage Fee under
the Existing Agreement in if all Eurodollar Advances under the Existing
Agreement then outstanding were repaid on the Amendment Effective Date.
(g) Legal Opinions. The Agent shall have received legal opinions (in
sufficient counterparts for each of the Lenders) dated the Amendment Effective
Date from Haynes & Boone, LLP, counsel to Borrower and each other Loan Party, in
form and substance satisfactory to the Agent.
(h) All Proceedings to be Satisfactory. All corporate, partnership,
limited liability company and legal proceedings and all instruments, documents
and papers in connection with the transactions contemplated by this Agreement
and the other Loan Documents and the other documents referred to herein to occur
on or prior to the Amendment Effective Date and the other documents referred to
in this Section 12.14 shall be satisfactory in form and substance to the Agent,
and the Agent and any Lender shall have received all such information and copies
of all documents which the Agent or such Lender may reasonably have requested in
connection herewith, such documents where appropriate to be certified by proper
corporate officials or governmental authorities.
(i) Fees and Expenses. The legal fees and expenses of the Agent's
counsel in connection with the Existing Agreement and this Agreement shall have
been paid in full by the Borrower.
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(j) Accrued Fees. Borrower shall have paid to the Agent the full
amount of all fees under the Existing Agreement accrued through the Amendment
Effective Date (whether or not otherwise then due and payable), including,
without limitation, all accrued commitment fees.
(k) New Fees.
(i) Borrower shall have paid to Agent the Consolidation Fee payable
on the Amendment Effective Date pursuant to Section 4.3.
(ii) Borrower shall have paid to the Agent the amount (if any) of
any interest payable on the Amendment Effective Date pursuant to the Rate
Fix Letter.
(l) Default, etc. There shall exist no Default or Event of Default
and all representations and warranties made by the Loan Parties herein or in the
other Loan Documents otherwise by the Loan Parties in writing in connection
herewith or therewith shall be true and correct in all material respects with
the same effect as though such representations and warranties have been made at
and as of such time.
(m) Officer's Certificate. The Agent shall have received a
certificate of an authorized officer of the Borrower certifying, as of the
Amendment Effective Date and as to compliance with the provisions of Section
12.14 (b),(l), (n),(o), (r), (q) and (u)
(n) Representations. On the Amendment Effective Date (both before
and after giving effect to the amendment and restatement of the Existing
Agreement),all representations and warranties contained herein or in the other
Loan Documents or otherwise made by Borrower, any Primary Obligor, any Secondary
Obligor or any other Loan Party in connection herewith or therewith are true and
correct in all material respects with the same effect as though such
representations and warranties were being made at and as of such time.
(o) Approvals and Consents. All orders, permissions, consents,
approvals, licenses, authorizations and validations of, and filings, recordings
and registrations with, and exemptions by, any Government Authority, or any
other Person, required to authorize or required in connection with the
execution, delivery and performance of this Agreement or the other Loan
Documents and the transactions contemplated hereby and thereby by an Loan Party
shall have been obtained (and, if so requested, furnished to the Agent, with
sufficient copies for the Lenders).
(p) Other Supporting Documents. There shall have been delivered to
the Agent such information and copies of documents, approvals (if any) and
records (certified, where appropriate) of corporate and legal proceedings as the
Agent or any Lender may have reasonably requested relating to this Agreement.
(q) Adverse Change. There shall have been, in the Agent's opinion,
no Material Adverse Change with respect to Borrower, any Primary Obligor, any
Secondary Obligor or any other Loan Party since December 31, 2001. None of the
Agent nor any Loan Party shall have become aware of any previously undisclosed
information with respect to any Loan Party which, in the Agent's opinion, would
have a Material Adverse Effect.
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(r) Change in Law; No Opposition.
(i) No change shall have occurred in applicable law, or in
applicable regulations thereunder or in interpretations thereof by any
Government Authority which, in the opinion of any Lender, would make it
illegal for such Lender to convert the Existing Loans into the Loans
hereunder.
(ii) No suit, action or proceeding shall be pending or threatened
before or by any Government Authority seeking to restrain or prohibit the
consummation of the transactions contemplated by this Agreement.
(s) UCC Statements. Evidence satisfactory to the Agent of all
filings of financing statements (and assignments thereof) under the applicable
Uniform Commercial Code, satisfactory Lien search requests on Form UCC-11 and
analogous forms confirming the absence of any perfected Liens prior to the
Lenders' and of any other Liens other than Liens permitted hereunder shall have
been delivered to the Agent and all other actions with respect to the Liens
created by the Security Documents as are necessary or appropriate to perfect
such Liens shall have been taken.
(t) Checklist Documents. The documentation set forth on the Closing
Checklist (Schedule 12.14(t)), including, without limitation, the Guaranties,
Pledge Agreements and Security Agreements, satisfactory to the Agent in form and
substance, shall have been delivered to the Agent , and such other actions
referred to on such Schedule and in such documentation shall have been taken.
(u) FC Holdings Purchase. Agent shall have received evidence
satisfactory to it that FC Commercial shall have purchased the 20% ownership in
FC Holdings held by management on terms satisfactory to all parties thereto and
to the Agent.
(v) FC Consumer Loan . FC Consumer Lending shall have borrowed $16
million in accordance with the FC Consumer Loan Documents.
(w) PFAL The Effective Date shall have occurred under the Portfolio
Acquisition Loan Agreement.
All documents, agreements, certificates, financial statements, legal opinions,
analyses, reports and other papers required to be delivered by this Section and
papers required by the foregoing provisions of this Section 12.14 shall be in
form and substance satisfactory to the Agent and shall be delivered to the Agent
at its Closing Office or as the Agent may otherwise direct.
12.15 Survival; Integration.
(a) Each of the representations, warranties, terms, covenants,
agreements and conditions contained in this Agreement shall specifically survive
the execution and delivery of this Agreement and the other Loan Documents and
the making of the Loans and shall, unless otherwise expressly provided, continue
in full force and effect until the Bosque Loan Commitments have been terminated
and the Loans together with interest thereon, the fees and
73
compensation of the Agent, and all other sums payable hereunder or thereunder
have been indefeasibly paid in full.
(b) This Agreement, together with the other Loan Documents,
comprises the complete and integrated agreement of the parties on the subject
matter hereof and thereof and supersedes all prior agreements, written or oral,
on the subject matter hereof and thereof. In the event of any direct conflict
between the provisions of this Agreement and those of any other Loan Document,
the provisions of this Agreement shall control and govern; provided that the
inclusion of supplemental rights or remedies in favor of the Agent or the
Lenders in any other Loan Document shall not be deemed a conflict with this
Agreement. Each Loan Document was drafted with the joint participation of the
respective parties thereto and shall be construed neither against nor in favor
of any party, but rather in accordance with the fair meaning thereof.
12.16 Domicile of Loans. Any Lender may make, maintain or transfer any of
its Loans hereunder to, or for the account of, any branch office, subsidiary or
affiliate of such Lender.
12.17 No Usury. It is expressly stipulated and agreed to be the intent of
the Agent, the Lenders and the Borrower to comply at all times with applicable
usury laws. If at any time such laws would ever render usurious any amount
called for under any of the Loan Documents, then it is the express intention of
the parties hereto that such excess amount be immediately credited on the
applicable Notes, or if the applicable Notes have been fully paid, refunded by
the Lenders (pro rata in accordance with their respective principal amount of
the affected Loans), to the Borrower (and the Borrower shall accept such refund)
and the provisions hereof and thereof be immediately deemed to be reformed to
comply with the then applicable laws, without the necessity of the execution of
any further documents, but so as to permit the recovery to the fullest amount
otherwise called for hereunder and thereunder. Any such crediting or refunding
shall not cure or waive any default by the Borrower under the Loan Documents. If
at any time following any such reduction to the interest rate payable by the
Borrower there remains unpaid any principal amounts under the Notes and the
maximum interest rate permitted by applicable law is increased or eliminated,
then the interest rate payable to the Lenders shall be readjusted, to the full
extent permitted by applicable law, so that the total amount of interest
thereunder payable by the Borrower to the Lenders shall be equal to the amount
of interest which would have been paid by the Borrower without giving effect to
applicable usury laws. The Borrower agree, however, that in determining whether
or not any interest payable under the Notes or any of the other Loan Documents
exceeds the highest rate permitted by law, any non-principal payment (except
payments specifically stated in the Notes or such other Loan Documents to be
"interest"), including fees and commissions and all other sums payable hereunder
or thereunder or in connection herewith or therewith, shall be deemed, to the
full extent permitted by law, to be an expense, fee, premium or penalty rather
than interest.
12.18 Waiver of Jury Trial. THE BORROWER, THE AGENT AND EACH LENDER HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR
ACTIONS OF THE BORROWER, ANY PARTNER THEREOF, ANY OTHER LOAN
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PARTY, THE AGENT OR THE LENDERS. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
AGENT AND THE LENDERS ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
12.19 Waiver by Borrower. EXCEPT AS OTHERWISE PROVIDED FOR IN THIS
AGREEMENT OR REQUIRED BY LAW, BORROWER WAIVES (A) PRESENTMENT, DEMAND AND
PROTEST, NOTICE OF PROTEST, NOTICE OF PRESENTMENT, DEFAULT, NON-PAYMENT,
MATURITY, RELEASE, COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF ANY OR ALL
COMMERCIAL PAPER, ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS, CHATTEL
PAPER AND GUARANTIES AT ANY TIME HELD BY ANY OF THE LENDERS AND/OR THE AGENT ON
WHICH BORROWER MAY IN ANY WAY BE LIABLE; (B) ALL RIGHTS TO NOTICE AND A HEARING
PRIOR TO AGENT'S TAKING POSSESSION OR CONTROL OF, OR TO REPLEVY, ATTACHMENT OR
LEVY UPON THE COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED BY ANY
COURT PRIOR TO ALLOWING ANY OF THE LENDERS AND/OR THE AGENT TO EXERCISE ANY OF
ITS RESPECTIVE REMEDIES; AND (C) THE BENEFIT OF ALL VALUATION, APPRAISEMENT,
EXTENSION AND EXEMPTION LAWS.
12.20 Waiver of Marshaling. All rights of marshaling of assets of
Borrower, including any such right with respect to the Pledged Property, are
hereby waived by Borrower.
12.21 Waiver of Claims.
(a) Borrower releases Lenders and the Agent from any and all causes
of action or claims which Borrower may now or hereafter have for any asserted
loss or damage to Borrower claimed to be caused by or arising from any act or
omission to act on the part of any Lenders and/or the Agent, their respective
officers, agents or employees, except, in the case of any Lender or the Agent,
willful misconduct or gross negligence of such Lender or the Agent (as the case
may be).
(b) Borrower hereby acknowledges, agrees and affirms, as of the
Amendment Effective Date, that it possesses no claims, defenses, offsets,
recoupment or counterclaims of any kind or nature against or with respect to the
enforcement of the Existing Agreement, this Agreement or any other Loan Document
or any amendments thereto (collectively, the "Claims"), nor does Borrower now
have knowledge of any facts that would or might give rise to any Claims. If
facts now exist which would or could give rise to any Claim against or with
respect to the enforcement of the Existing Agreement, this Agreement or any
other Loan Document, as may have been amended by the amendments thereto,
Borrower hereby unconditionally, irrevocably and unequivocally waives and fully
releases any and all such Claims as if such Claims were the subject of a
lawsuit, adjudicated to final judgment from which no appeal could be taken and
therein dismissed with prejudice.
12.22 Confidentiality. The Agent and each Lender, severally and with
respect to itself only, covenants and agrees that any information obtained by
the Agent or such Lender pursuant to this Agreement shall be held in confidence
(it being understood that documents provided to the Agent hereunder may in all
cases be distributed by the Agent to the Lenders) except that the
75
Agent or such Lender may disclose such information (i) to its officers,
directors, employees, agents, counsel, accountants, auditors, advisors or
representatives, (ii) to the extent such information has become available to the
public other than as a result of a disclosure by or through the Agent or such
Lender, (iii) to the extent such information was available to the Agent or such
Lender in a capacity other than Agent or Lender hereunder or on a
nonconfidential basis prior to its disclosure to the Agent or such Lender
hereunder, (iv) with the consent of Borrower, (v) to actual or prospective
Lender Assignees or Purchasing Lenders or (vi) to the extent the Agent or such
Lender should be (A) required in connection with any legal or regulatory
proceeding or (B) requested by any Government Authority to disclose such
information.
Section 13. TEXAS LANGUAGE.
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT AMONG THE PARTIES HERETO WITH RESPECT TO THE MATTERS COVERED HEREBY
AND THEREBY AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 14. CONDITIONS SUBSEQUENT
14.1 Foreign Perfection. On or before June 1, 2003 (or such later date (if
any) specified in writing by the Agent), the Borrower will and will cause each
applicable Primary Obligor and Secondary Obligor to take such action as is
reasonably requested by the Agent to ensure that the perfection and priority of
its Liens on Equity Interests issued by Non-US Entities is recognized in the
jurisdiction of organization of such issuers and, if requested by the Agent,
will deliver to the Agent an opinion of counsel from foreign counsel acceptable
to the Agent in form and substance satisfactory to the Agent, with respect to
such perfection.
14.2 Intercompany Security Agreements. On or before April 10, 2003 (or
such later date (if any) specified in writing by the Agent), or, if earlier, the
first Borrowing Date hereunder, the Borrower will (i) cause each Primary Obligor
to deliver intercompany security agreements in form and substance satisfactory
to the Agent securing each such Person's obligations under its Pledged Note
together with such other documents and instruments relating thereto and records
of company proceedings and (if requested by Agent), legal opinions, as Agent may
reasonably request and (ii) cause each maker of a Pledged Note to deliver to the
Agent an amended and restated Pledged Note in form and substance satisfactory to
the Agent.
14.3 Other Post Closing Items. The Borrower shall deliver to the Agent
(unless any of the same is waived in writing by the Agent) such documents,
instruments, search results and other items as are set forth in the agreement
entitled "Post-Closing-A&R" between the Borrower and the Agent dated on or about
the Amendment Effective Date, at the applicable time for such item set forth in
such letter (as any such time may be extended in writing by the Agent).
[remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective duly authorized officers as of
the date first above written.
FIRSTCITY FINANCIAL CORPORATION
a Delaware corporation
By:
---------------------------------
Title:
------------------------------
BANK OF SCOTLAND, acting through its New
York branch, as Agent
By:
---------------------------------
Title:
------------------------------
BOS (USA) INC., as a Lender
By:
---------------------------------
Title:
------------------------------
ACKNOWLEDGED (as to Section 2.1(b)):
THE GOVERNOR & COMPANY OF
THE BANK OF SCOTLAND
By:
---------------------------------
Title:
------------------------------
TABLE OF CONTENTS
EXHIBITS(1)
Annex I Definitions
Exhibit
- --------
(1) Certain exhibits may not be attached to this Agreement. See Section
12.4(d).
LIST OF SCHEDULES
ANNEX I
DEFINITIONS
As used in the Amended and Restated Loan Agreement to which this Annex I
is annexed, the following terms shall have the meanings herein specified or as
specified in the Section of such Loan Agreement or in such other document herein
referenced:
"Affiliate" shall mean any Person (i) in which Borrower and/or any Parent,
individually, jointly and/or severally, now or at any time or times hereafter,
has or have an equity or other ownership interest equal to or in excess of
twenty-five percent (25%) of the total equity of or other ownership interest in
such Person; and/or (ii) which directly or indirectly through one or more
intermediaries controls or is controlled by, or is under common control with
Borrower; and/or (iii) any officer or director of Borrower or any Primary
Obligor. For purposes of this definition, "control" shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of Stock, by
contract or otherwise, and in any case shall include direct or indirect
ownership (beneficially or of record) of, or direct or indirect power to vote,
25% or more of the outstanding shares of any class of capital stock of such
Person (or in the case of a Person that is not a corporation, 25% or more of any
class of equity interest). Notwithstanding the foregoing, none of the Harbor
Debtors shall be deemed to be an Affiliate for the purposes of this Agreement
other than Section 8.23.
"Agent" - introductory paragraph.
"Aggregate Net FC Equity Value" at any time shall mean (A) the sum of the
FC Equity Value of each Existing S Co. plus the sum of the FC Equity Value of
each Mid-Tier Company Post AE which is not a PFAL Portfolio Entity (each
Mid-Tier Company-Post AE which is not a PFAL Portfolio Entity being referred to
as an "Applicable Mid-Tier Company") minus (B) the sum of (i) for each Primary
Obligor having a direct or indirect interest in any such Existing S Co. or
Applicable Mid-Tier Company, the outstanding principal amount of Indebtedness of
such Primary Obligor plus the outstanding principal amount of obligations in
respect of which such Primary Obligor has issued any Guaranty Equivalent plus
(ii) the FC Percentage of the outstanding principal amount of Indebtedness of
each other Secondary Obligor (if any) having any direct or indirect interest in
any Existing S Co. or Applicable Mid-Tier Company included in Clause (A) plus
the outstanding principal amount of obligations in respect of which such other
Secondary Obligor has issued any Guaranty Equivalent (up to the amount of the FC
Equity Value of any such Existing S Co. if less than the full amount of such
Indebtedness and amounts covered by Guaranty Equivalents issued by any such
other Secondary Obligor) plus (iii) the outstanding principal amount of all
Indebtedness of Borrower other than Indebtedness hereunder or under the
Portfolio Acquisition Loan Agreement plus the outstanding principal amount of
obligations in respect of which Borrower has issued any Guaranty Equivalent.
(Notwithstanding the foregoing, (x) if an amount of Indebtedness deducted
pursuant to the foregoing provisions of this definition is guaranteed, no
deduction will be taken for a Guaranty Equivalent in respect of the amount of
Indebtedness for which a deduction was separately taken pursuant to the
foregoing provisions and (y) if any Indebtedness of an Existing S Co. or
Applicable Mid-Tier Company which is deducted pursuant to clause (B) (y) of the
definition of FC Equity Value is guaranteed pursuant to a Guaranty Equivalent
described above, no deduction will be taken for such Guaranty Equivalent to the
extent of the amount of the FC Percentage of such Indebtedness for which a
deduction was taken under said clause (B)(y)).
"Aggregate Undistributed Secondary Obligor Funds" at any time shall mean
the aggregate amount of (x) the FC Percentage with respect to each Secondary
Obligor which is not a PFAL Portfolio Entity of the aggregate amount of the
funds held by each such Secondary Obligor, which funds are (i) not held for
payment by such Secondary Obligor, within the next 30 days, of indebtedness to a
Permitted Portfolio Company Creditor of such Secondary Obligor which is
permitted by the terms of this Agreement to be so repaid or (ii) not retained by
such Secondary Obligor to satisfy a leverage covenant (a "Usage Leverage
Covenant") imposed on such Secondary Obligor by the Permitted Portfolio Company
Creditor of such Secondary Obligor pursuant to a covenant under a loan agreement
between such creditor and such Secondary Obligor as in effect on the Amendment
Execution Date of which the Agent has been given written notice or (iii) do not
constitute Portfolio Protection Expenses plus (y) the Excess Portfolio
Protection Expense Amount plus (z) all amounts constituting Challenged Portfolio
Protection Expenses. Without limiting the foregoing, funds held by a Secondary
Obligor (other than a PFAL Portfolio Entity) for the payment of operating
expenses shall be included in the computation of "Aggregate Undistributed
Secondary Obligor Funds" regardless of whether (without limitation) such funds
are excluded from the computation of "Net Receipts".
"Agreement" or "Loan Agreement" shall mean this Amended and Restated Loan
Agreement, as amended and restated on and as of the Amendment Effective Date and
as it may from time to time be amended, extended, restated, supplemented or
otherwise modified.
"Amendment Effective Date" - Section 12.14.
"Amendment Execution Date" shall mean the date on which all parties to
this Agreement shall have signed a copy this Agreement (whether the same or
different copies) and shall have delivered the same to the Agent.
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"Applicable Cash Flow Payment" shall mean (x) each payment or distribution
which is made by a Primary Obligor other than (i) the portion (if any) thereof
made with the proceeds of a distribution or payment by a PFAL Portfolio Entity
at any time (any such time, the "PFAL Only Time") when there are outstanding
obligations in respect of term loans under the Portfolio Acquisition Loan
Agreement if after giving effect to the ultimate disposition of such payment or
distribution pursuant to the Portfolio Acquisition Loan Agreement-Existing,
obligations thereunder in respect of term loans would remain outstanding, or
(ii) the portion, if any thereof, which is required by the FC Consumer Note as
in effect on the Amendment Effective Date to be applied to prepay such note (and
is so applied), (y) each payment or distribution which is made by an Existing S
Co. or a Portfolio Entity Post-AE which is not a PFAL Portfolio Entity or by a
PFAL Entity other than at a PFAL Only Time and (z) each payment or distribution
which is made by any Secondary Obligor or Primary Obligor (regardless of the
source of such payment) after the PFAL Termination Date has occurred; provided
that no amount constituting Extraordinary Transaction Proceeds shall constitute
an Applicable Cash Flow Payment.
"Applicable Indebtedness" of any Person shall mean all Indebtedness of
such Person other than trade payables incurred in the ordinary course of
business which are not evidenced by an Indebtedness Instrument.
"Approved Portfolio Leverage Arrangement" shall mean any arrangement
permitted by the Portfolio Acquisition Loan Agreement-Existing or otherwise
consented to in writing by the Majority Lenders hereunder pursuant to which a
Secondary Obligor is permitted to incur indebtedness from a third party and pay
to such third party all or a portion of payments other distributions received by
such Secondary Obligor in repayment of such indebtedness.
"ASDM" shall mean Asset Servicing de Mexico S.A. de C.V.
"Assets" shall mean any and all real, personal and intangible property of
a Person, including, without limitation, accounts, chattel paper, contract
rights, letters of credit, instruments and documents, equipment , general
intangibles, inventory, leases, options, licenses, real property, and Equity
Interests issued by any other Person whether now existing or hereafter acquired
or arising.
"Associate", when used to indicate a relationship with a Person, shall
mean (i) another Person (other than a Loan Party or a Subsidiary thereof) of
which such Person is an officer or partner or is, directly or indirectly, the
beneficial owner of 10 percent or more of any class of equity securities, (ii)
any trust or other estate in which such Person has a substantial beneficial
interest or as to which such Person or an immediate member of his family serves
as trustee or in a similar capacity, and (iii) any relative or spouse of such
Person or any relative of such spouse.
"Auditors" shall mean KPMG LLP or other independent certified public
accountants of recognized standing selected by Borrower and satisfactory to the
Agent.
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"Available Waterfall Capital Expenditure Amount" with respect to any
Payment Date shall mean the amount determined by subtracting (x) all Capital
Expenditures made by the Borrower and its Subsidiaries during the one year
period ending on December 31 of the year in which such Payment Date occurs (the
"Capex Cut Off Date") from (y) the maximum amount of Capital Expenditures
permitted to be made during the one year period ending on the Capex Cut Off
Date.
"Base Rate" shall mean, for any day, the higher of (x) the fluctuating
interest rate per annum, in effect from time to time, established by Bank of
Scotland in New York as its base, prime or reference rate for U.S. domestic
commercial loans in Dollars, or (y) the Federal Funds Rate in effect on such day
plus 0.5%. Any change in the interest rate resulting from a change in the Base
Rate shall be effective as of the opening of business on the day on which such
change becomes effective; it is understood and agreed that the aforesaid rates
and the Base Rate are reference rates only and do not necessarily represent the
lowest or best rate actually charged to any customer.
"Base Rate Loan" shall mean any Loan during any period that it bears
interest determined by reference to the Base Rate.
"Basle Laws" - Section 3.4.
"Borrower" - introductory paragraph.
"Borrower-FCL Note " shall mean the Promissory Note dated December 16,
2002 in the stated principal amount of $16,000,000 payable by Borrower to FC
Consumer Lending.
"Borrower Pledge Agreement" shall mean the Amended and Restated Pledge
Agreement (Stock and Debt) made by Borrower in favor of the Collateral Agent
dated as of the date hereof delivered pursuant to Section 12.14 and each other
pledge agreement with respect to shares of stock or affiliate indebtedness from
time to time hereafter delivered by Borrower in respect of the Obligations., as
each such agreement may be from time to time amended, extended, restated,
supplemented or otherwise modified.
"Borrower Security Agreement" shall mean the Amended and Restated Security
Agreement made by the Borrower in favor of the Collateral Agent dated as of the
date hereof delivered pursuant to Section 12.14 and each other security
agreement from time to time hereafter delivered by Borrower in respect of the
Obligations., as each such agreement may be from time to time amended, extended,
restated, supplemented or otherwise modified (including, without limitation, by
the addition of additional parties thereto).
"Bosque" shall mean Bosque Asset Corp., a Texas corporation.
-4-
"Bosque Amount" at any time shall mean $2,400,000 plus the aggregate
amount of Tranche I Bosque Loans (and Tranche E Loans under the Existing
Agreement if prior to the Amendment Effective Date) which have been made during
the period commencing December 10, 2002 and ending at such time.
"Bosque Commitment Period" shall mean the period from the Amendment
Effective Date until the Bosque Commitment Maturity Date.
"Bosque Loan Commitment" shall mean, as to each Lender, the amount set
forth opposite its name on Schedule 2.1 under the heading "Bosque Loan
Commitment" as such amount may be modified by the provisions of any Transfer
Supplement from time to time entered into and as the same may from time to time
be reduced or terminated pursuant to Section 2.5, Section 9 or any other Section
of the Agreement.
"Bosque Commitment Maturity Date" shall mean the earlier of (x) March 31,
2003 and (y) such earlier date as the Bosque Loan Commitments shall terminate in
full as provided in the Agreement.
"Bosque Loan Request" - Section 2.5(b).
"Bosque Note Agreement" - Section 10.39(a).
"Bosque Notes" - Section 10.39(a).
"Bosque Trustee" - Section 10.39(a).
"Business Day" shall mean any day that is not a Saturday, Sunday or legal
holiday in the State of New York or the State of Texas or a day on which banking
institutions chartered by the State of New York, the State of Texas or the
United States are legally required or authorized to close.
"Calculation Date" shall mean the 25th day of each calendar month or, if
sooner, the fourth to last CFCCA Business Day of any such month.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be capitalized in accordance with GAAP,
including all such expenditures with respect to fixed or capital assets
(including, without limitation, expenditures for maintenance and repairs which
should be capitalized in accordance with GAAP) and the amount of obligations
under Capitalized Leases incurred by such Person.
-5-
"Capitalized Lease" shall mean any lease which is, or is required under
GAAP to be, capitalized on the balance sheet of the lessee at such time, and
"Capitalized Lease Obligation" of any Person at any time shall mean the
aggregate amount of rental expenses which is, or is required under GAAP to be,
capitalized on the books of such Person under Capitalized Leases.
"Cash Collateral Account-PFAL" shall mean each account specified in the
Cash Collateral Agreement-PFAL as subject to that Agreement.
"Cash Collateral Account - Servicing" shall mean shall mean the account at
the Depositary specified in the Cash Collateral Agreement-Servicing and in the
letter agreement between the Collateral Agent and the Depositary relating
thereto or such other account, if any, which is specified in a cash collateral
agreement (in form and substance satisfactory to Agent) between FC Servicing and
Collateral Agent and letter agreement (in form and substance satisfactory to the
Collateral Agent) between the Collateral Agent and the depositary bank with
respect to such other account.
"Cash Collateral Agreement-Existing" shall mean the Collateral Assignment
of Account (Cash Flow Cash Collateral Account) dated as of the date hereof made
by Borrower in favor of the Collateral Agent as such agreement may be from time
to time amended, extended, restated, supplemented or otherwise modified.
"Cash Collateral Agreement-PFAL" shall mean the Collateral Assignment of
Account (Cash Flow Cash Collateral Account- PFAL) made by Borrower in favor of
the Collateral Agent pursuant to the Portfolio Acquisition Loan Agreement, as
such agreement may be from time to time amended, extended, restated,
supplemented or otherwise modified
"Cash Collateral Agreement- Servicing "shall mean the Collateral
Assignment of Account (FC Servicing) dated as of the date hereof made by
Borrower in favor of the Collateral Agent as such agreement may be from time to
time amended, extended, restated, supplemented or otherwise modified
"Cash Flow Cash Collateral Account" and "CFCCA" shall mean the account at
the Depositary specified by account number in the Cash Collateral
Agreement-Existing and in the letter agreement between the Collateral Agent and
the Depositary relating thereto or such other account, if any, which is
specified by account number in a cash collateral agreement (in form and
substance satisfactory to Agent) between Borrower and Collateral Agent and
letter agreement (in form and substance satisfactory to the Collateral Agent)
between the Collateral Agent and the depositary bank with respect to such other
account.
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"Certified Error Certificate" shall have the meaning set forth in the form
of Waterfall Certificate attached as Exhibit E (as the same may be from time to
time amended, supplemented, restated or otherwise modified).
"CFCCA Business Day" shall mean any Business Day that is not a day on
which banking institutions in the state ( which is Connecticut and, for these
purposes will remain such state until 30 days after written notice of a change
of such location is delivered by Borrower to the Agent) where the CFCCA is
maintained are legally required or authorized to close which is also a day on
which deposits in Dollars may be dealt in on the London interbank market.
"CFCCA-P" shall have the meaning ascribed to such term in the Portfolio
Acquisition Loan Agreement.
"CFCCA Remedies Time" shall have the meaning ascribed thereto in the Cash
Collateral Agreement- Existing.
"CFO", as to any Loan Party shall mean such Loan Party's chief financial
officer.
"CFSC" shall mean CFSC Capital Corp. XXX, a Delaware corporation.
"CFSC Guaranty Subordination Agreement" - Section 10.37(a).
"CFSC Intercreditor Agreement" - Section 10.37(a).
"Challenged Portfolio Protection Expense" - Section 7.2(h)
"Charges" shall mean all national, Federal, state, county, city,
municipal and/or other governmental (or any instrumentality, division, agency,
body or department thereof, including without limitation the PBGC) taxes,
levies, assessments, charges, liens, claims or encumbrances upon and/or relating
to the Obligations, a Person's Assets, a Person's business, a Person's ownership
and/or use of any of its Assets, a Person's income and/or gross receipts and/or
a Person's ownership and/or use of any of its Assets.
"Charter Document" shall mean (i) with respect to a corporation: its
certificate or articles of incorporation or association and its by-laws or
comparable documents under non-US laws; (ii) with respect to a partnership: its
partnership agreement, certificate of partnership (if a limited partnership) and
its certificate of doing business under an assumed name (if a general
partnership); (iii) with respect to a trust, its trust agreement or declaration
of trust; and (iv) with respect to a limited liability company, its certificate
of formation and operating agreement or
-7-
analogous documents; in each case, with such other similar documents as the
Agent shall request or specify.
"Closing Office" shall mean the office of the Agent at 565 Fifth Avenue,
New York, New York 10017 or such other office as may be designated in writing to
the Borrowers by the Agent.
"Closing Office Time" shall mean the local time in effect at the Closing
Office.
"Code" shall mean the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"Collateral" - Section 10.33. Without limiting the generality of the
foregoing, the term "Collateral" also includes all other real and personal
property and interests therein granted or purported to be granted as security to
the Agent on behalf of the Lenders pursuant to any Security Document, whether
before, on or after the Amendment Effective Date.
"Collateral Agent" shall mean the Agent in its capacity as agent under one
or more of the Security Documents and its successor and assigns (the Agent, in
such capacity, being sometimes referred to herein and in other Loan Documents as
the "Collateral Agent" and sometimes as the "Agent").
"Consolidated Group" shall mean the Borrower and its consolidated
Subsidiaries, other than the Harbor Debtors.
"Consolidation Fee" - Section 4.3.
"Default" shall mean any event which with notice or lapse of time, or
both, would become an Event of Default.
"Depositary" shall mean Fleet National Bank.
"Dividend"- Section 8.11(a).
"Dollars", "U.S. $", "$" and "U.S. dollars" shall mean the lawful currency
of the United States of America.
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"Drive Collateral Assignment" shall mean the Collateral Assignment of
Partnership and LLC Interests made by FC Consumer Lending and FirstCity Funding,
L.P. dated as of the date hereof and each other collateral assignment from time
to time hereafter delivered by FC Consumer Lending and FirstCity Funding, L.P.
in respect of the Obligations, as such agreements may be from time to time
amended, extended, restated, supplemented or otherwise modified.
"Drive LP" shall mean Drive Financial Services LP.
"EBITDA" for any period, shall mean net income (excluding extraordinary
and non-recurring items, including those which are non-cash in nature) for such
period plus (i) all interest expense, plus (ii) income tax expenses, plus (iii)
depreciation and amortization (including amortization of any goodwill or other
intangibles), minus or plus (iv) without duplication, gains and losses
attributable to any sale of assets not in the ordinary course of business, plus
or minus (v) any other non-cash charges or gains which have been subtracted or
added in calculating such net income other than gains on asset-securitizations
and loan loss provision charges.
"Environmental Laws" shall mean all laws, common law, statutes, rules and
regulations, and all judgments, decrees, franchises, orders or permits, issued,
promulgated, approved or entered thereunder by any Government Authority relating
to pollution or protection of the environment or occupational health and safety,
including, without limitation, those relating to emissions, discharges, releases
or threatened releases of any waste, pollutant, chemical, hazardous material,
hazardous substance, toxic substance, hazardous waste, special waste, petroleum
or petroleum-derived substance or waste, or any constituent of any such
pollutant material, substance or waste, into the environment (including, without
limitation, ambient air, surface water, ground water, land surface or subsurface
strata) or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of any waste, pollutant,
chemical, hazardous material, hazardous substance, toxic substance, hazardous
waste, special waste, petroleum or petroleum-derived substance or waste.
"Equity Interests" shall mean any equity interests issued by any Person,
including, without limitation, Stock (including, without limitation, common
stock and preferred stock), partnership interests or limited liability company
interests, any other securities convertible into, or exercisable for, any of the
foregoing or other securities of such Person, and options and warrants or other
rights to acquire any of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" shall mean any Person which is from time to time a
member of a controlled group or a group under common control with any Loan Party
within the meaning of Sections 414(b), 414(c), 414(m) or 414(o) of the Code or
Section 4001(a)(14) of ERISA.
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"Event of Default" shall mean each of the Events of Default defined in
Section 9.
"Excess Portfolio Protection Expense Amount" at any time shall mean the
amount (if any) by which (A) the aggregate amount (for all Secondary Obligors)
of Portfolio Protection Expenses (which term, for purposes of this definition,
shall include (in addition to all amounts included as "Portfolio Protection
Expenses" in the definition of such term) (x) all amounts that would constitute
Portfolio Protection Expenses except that prior written notice thereof was not
given to the Agent and (y) all other amounts expended by Secondary Obligors in
respect of their assets (other than (for purposes of this clause (y)), amounts
expended to acquire portfolios of loan receivables) and/or retained by Secondary
Obligors) at such time exceeds (B) $20,000,000.
"Excluded Notes" shall mean those notes listed on Schedule I-(EN).
"Excluded Entity" shall mean each Person listed on Schedule I-(EE).
"Excluded Initial Foreign MT" shall mean each of the following companies,
but only for the period of time when the respective Net Asset Value of such
company is less than $3,000,000: Adminstracion de Carteras Empresariales, S. de
R. L. de C.V.; Cobranza Nacional de Carteras, S. de R.L. de C.V.; and
Recuperacion de Carteras Mexican, S. de R. L. de C.V.
"Executive Officer" shall mean the President of Borrower, the CFO of
Borrower or any Senior Vice President of Borrower.
"Existing Agreement" - first recital paragraph
"Existing Loan Documents" shall mean the all agreements(other than the
Existing Agreement), documents, and other instruments constituting "Loan
Documents" under the Existing Agreement, other than any agreement, document or
other instrument constituting a "Loan Document" hereunder.
"Existing Loans"- second recital paragraph.
"Existing Portfolio NPV Percentage", at any time, shall mean the decimal
(expressed as a percentage) obtained by dividing (x) the aggregate outstanding
principal amount of the Loans by (y) the Aggregate Net FC Equity Value.
"Existing S Co." shall mean each Secondary Obligor in existence
immediately prior to the Amendment Effective Date (whether or not such Person
also constitutes a Secondary Obligor under the Existing Agreement).
-10-
"Extraordinary Transaction": shall mean (i) a sale, conveyance, lease, or
other transfer by Borrower, any Primary Obligor or any Secondary Obligor of any
of its Assets, not in the ordinary course of its business; (ii) a sale,
conveyance, or other transfer of any previously issued Equity Interests in any
Affiliate (x) by any Primary Obligor or any Secondary Obligor unless such sale,
conveyance or other transfer is the functional equivalent of a sale, conveyance,
lease or other transfer by such Affiliate of Assets in the ordinary course of
business or (y) by Borrower; (iii) any sale, conveyance or other transfer of any
Indebtedness by a Secondary Obligor unless such Indebtedness is owed to such
Secondary Obligor by a Person which is not Borrower, a Primary Obligor or any
Affiliate of such Secondary Obligor, and any sale, conveyance or other transfer
of Indebtedness (regardless of by whom owed) by Borrower or any Primary Obligor;
(iv) the issuance of any Equity Interests by Borrower, any Primary Obligor or
any Secondary Obligor other than the issuance of Equity Interests by a Secondary
Obligor upon formation thereof where the capital raised by such issuance is used
for the acquisition of portfolio assets; (v) any transaction identified on
Schedule I -(ET), (vi) receipt of any proceeds by Borrower or any Subsidiary of
Borrower in respect of any sale of any Equity Interests in Drive LP or its
general partner or any Subsidiary of either thereof excluding any portion of
such proceeds paid to the payee of the FC Consumer Note pursuant to the FC
Consumer Loan Documents, pursuant to the terms thereof as in effect on the
Amendment Execution Date as amended by Permitted FC Consumer Amendments; (vii)
receipt of proceeds by a Secondary Obligor of settlement or payments received
from litigation other than from a collection proceeding of such Secondary
Obligor in the ordinary course of business and receipt of proceeds by Borrower
or any Primary Obligor of settlement or payments received from litigation ,
excluding (x) any such proceeds or payments payable to FC Servicing and/or its
Subsidiaries in its capacity as servicer and collector of debt portfolios and
(y) receipt of proceeds by FC Capital of settlement or payments received from
any litigation listed on Schedule I-(LIT); or (viii) the incurrence by Borrower,
any Primary Obligor, any Mid-Tier Company, any Secondary Obligor-Existing or any
Wholly-Owned Subsidiary of any Indebtedness (other than Indebtedness of an REO
Affiliate to its REO Owner evidencing the purchase price of property purchased
by such REO Affiliate from such REO Owner) or the receipt by any such Person of
the proceeds thereof (it being understood that the inclusion for purposes of
this definition of any item or transaction which is restricted or prohibited by
this Agreement or any other Loan Document shall not be construed to modify or
eliminate such restriction or prohibition, but is in furtherance (and not in
limitation) of such restriction or prohibition) except for:
(A) indebtedness incurred by any Portfolio Entity-Post AE
other than a PFAL Portfolio Entity (provided that
recourse for any such indebtedness is limited to such
borrowing Portfolio Entity- Post AE) in connection with
purchase money financing extended to such borrowing
entity for the acquisition of portfolio assets in the
ordinary course of business (whether secured or
unsecured),
(B) Indebtedness incurred under existing facilities
identified on Schedule 10.20, incurred in the ordinary
course of business;
(C) the FC Holdings Line of Credit;
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(D) indebtedness of the Borrower under the Portfolio
Acquisition Loan Agreement up to the PA Indebtedness
Limit, indebtedness of FC Commercial under the PFAL FC
Commercial Pledged Note, permitted indebtedness of other
Primary Obligors evidenced by Pledged Notes and
indebtedness of a PFAL Portfolio Entity under Approved
Portfolio Leverage Arrangements;
(E) up to $16 million in indebtedness under the FC Consumer
Note; or
(F) Tranche I Bosque Loans.
"Extraordinary Transaction Proceeds" shall mean the consideration paid
with respect to any Extraordinary Transaction or the proceeds of any loan
received from any Extraordinary Transaction, minus (without duplication) (w)
such portion of such consideration or proceeds which, pursuant to the
Intercreditor Agreement, is to be applied to obligations under a different
credit arrangement, (x) such portion of such consideration required to be paid
by an Existing S Co. to a Permitted Portfolio Company Creditor of an Existing S
Co.; (y) if such consideration is payable to any Secondary Obligor, such portion
of such consideration which exceeds the percentage thereof equal to the FC
Percentage in such Secondary Obligor and (z) such other amounts for necessary
and commercially reasonable expenses incurred with respect to such Extraordinary
Transaction and approved by Lenders, which approval shall not be unreasonably
withheld, which may include attorney's fees and payment of any indebtedness
secured to by assets being conveyed payable to any independent third party
lender to secure a release of a lien or security interest on such assets being
conveyed.
"Facility Fee" - Section 4.1.
"FC Capital" shall mean FC Capital Corp., a New York corporation.
"FC Capital Pledged Note" shall mean the Pledged Note dated December 12,
2002 in the stated principal amount of $2,000,000 payable by FC Capital to
Borrower, as the same may be amended, restated, supplemented or otherwise
modified with the consent of the Agent.
"FC Commercial" shall mean FirstCity Commercial Corporation, a Texas
corporation.
"FC Commercial Holdings Buy Out Notes" shall mean, collectively, the
promissory note dated as of December 12, 2002 made by FC Commercial to G.
Stephen Fillip, , the promissory note dated as of December 12, 2002 made by FC
Commercial to Terry R. DeWitt; and , the promissory note dated as of December
12, 2002 made by FC Commercial to James C. Holmes each of which notes refers to
the other such notes as "Cash Collection Notes" in each case, in the
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form of the certified copies thereof delivered to the Agent on December 16,
2002, without giving effect to any amendment, supplement or other modification
thereto.
"FC Commercial Pledged Note-Existing" shall mean the Pledged Note dated
May 31, 2002 in the stated principal amount of $60,000,000 payable by FC
Commercial to Borrower, as the same may be amended, restated, supplemented or
otherwise modified with the consent of the Agent.
"FC Consumer Collateral" shall mean the collateral securing the
obligations under the FC Consumer Note pledged pursuant to the Security
Documents (as defined in the FC Consumer Note) as in effect on the Amendment
Execution Date.
"FC Consumer Lending" shall mean FirstCity Consumer Lending Corporation, a
Texas corporation.
"FC Consumer Loan Documents" shall mean the "Loan Documents" as defined in
the FC Consumer Note.
"FC Consumer Note" shall mean that certain Promissory Note in the
principal amount of $16,000,000 dated December 16, 2002 made by FC Consumer
Lending to the order of The Governor & Company of the Bank of Scotland.
"FC Equity Value" of any Existing S Co. or Mid Tier Company Post-AE which
is not a PFAL Portfolio Entity (any such Mid-Tier Company, an "Applicable
Mid-Tier Company") shall mean the amount determined by multiplying (A) the FC
Percentage in such Existing S Co. or Applicable Mid-Tier Company by (B) the
amount by which (x) the Net Present Value of the assets of such Existing S Co.
or Applicable Mid-Tier Company (other than assets consisting of Equity Interests
issued by any other Secondary Obligor) exceeds (y) the sum of outstanding
principal amount of Indebtedness of such Existing S Co. or Applicable Mid-Tier
Company (as the case may be) plus (without duplication) the outstanding
principal amount of all obligations in respect of which such Existing S Co. or
Applicable Mid-Tier Company (as the case may be) has issued any Guaranty
Equivalent.
"FCHM Collateral Assignments" shall mean the Partnership Interest and
Limited Liability Company Interest Collateral Assignment Agreement made by
FirstCity Holdings Corporation of Minnesota ("FCHM") dated as of the date hereof
and each other collateral assignment from time to time hereafter delivered by
FCHM in respect of the Obligations, as such agreements may be from time to time
amended, extended, restated, supplemented or otherwise modified.
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"FCHM Pledge Amount" shall mean the Pledge Agreement (Stock and Debt) made
by FCHM dated as of the date hereof and each other pledge agreement from time to
time delivered hereafter by FCHM in respect of the Obligations, as such
agreements may be from time to time amended, extended, restated, supplemented or
otherwise modified
"FC Holdings" shall mean FirstCity Holdings Corporation, a Texas
corporation.
"FC Holdings Line of Credit" shall mean, subject to Section 8.27, the
loans made by CFSC to FC Holdings pursuant to the Holdings/CFSC Loan Agreement.
"FC International" shall mean FirstCity International Corporation, a Texas
corporation.
"FC Mexico" shall mean FirstCity Mexico, Inc., a Texas corporation.
"FC Percentage" with respect to any Secondary Obligor shall mean the
percentage of outstanding shares of stock, limited liability company interests
or partnership interests (or, in the case of a non-US entity, similar equity
interests) of such Secondary Obligor owned directly or indirectly by the
Borrower.
"FC Servicing" shall mean FirstCity Servicing, Inc., a Texas corporation.
"FC Servicing Pledged Note" shall mean the Pledged Note dated December
12, 2002 in the stated principal amount of $2,000,000 payable by FC Servicing to
FC Commercial, as the same may be amended, restated, supplemented or otherwise
modified with the consent of the Agent.
"Federal Funds Rate" shall mean the rate of interest charged by banks with
excess reserves at a Federal Reserve district bank to banks needing overnight
loans to meet reserve requirements.
"Fee Agreements" shall mean any partnership agreement, management
agreement, consulting agreement, or other agreement pursuant to which Borrower,
any Primary Obligor or any Secondary Obligor is to be paid fees, distributions,
allocations, expense reimbursements, consideration, salary or other compensation
in consideration for providing management, personnel or services, in any form
whatsoever, from any Affiliate or from any other Person. Services to be rendered
under Fee Agreements may include, but not be limited to consulting, collecting
revenues, paying operating expenses not paid directly by others, and providing
clerical and bookkeeping services.
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"Fee Agreement-Existing" shall mean each Fee Agreement in existence on the
Amendment Effective Date, each agreement in full or partial substitution or
replacement thereof, and each other Fee Agreement relating to any Existing S Co.
or any assets thereof.
"Fee Letter" shall mean the letter dated December 16, 2002 from Borrower
to the Agent regarding the facility fee in respect of this Agreement.
"Financial Statements" shall mean, with respect to any Person, the
statement of financial position (balance sheet) and the statement of earnings,
cash flow, and stockholders' (or partners' or members) equity of such Person.
"First B" shall mean First B Realty L.P., a Texas limited partnership.
"First X" shall mean First X Realty L.P., a Texas limited partnership.
"Fiscal Year" shall mean each January 1 to December 31 period. "Fiscal
Year" followed by a year means the Fiscal Year with its Fiscal Year-End in such
calendar year.
"French Acquisition Entity" shall mean a European entity formed for the
purpose of acquiring, owning and managing assets acquired from one or more
French financial institutions.
"GAAP" shall mean generally accepted accounting principles (as
promulgated by the Financial Accounting Standards Board or any successor entity)
in the United States provided, that when with respect to a Person which is not a
US Person, GAAP shall mean the equivalent in such Person's jurisdiction of
organization.
"Government Authority" shall mean any nation or government, any state or
political subdivision thereof, any agency, authority, regulatory body, bureau,
central bank, commission, department or instrumentality of any of the foregoing
or any other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Guarantor" shall mean any Person which is a guarantor under any Guaranty.
"Guaranty" shall mean any one or more of the guaranties or amended and
restated guaranties delivered pursuant to Section 12.14 and each other guaranty
agreement delivered in respect of the Obligations., as each such agreement may
be from time to time amended, extended, restated, supplemented or otherwise
modified.
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"Guaranty Equivalent" shall mean any agreement, document or instrument
pursuant to which a Person directly or indirectly guarantees, becomes surety
for, endorses, assumes, agrees to indemnify the obligee of any other Person
against, or otherwise agrees, becomes or remains liable (contingently or
otherwise) for, such obligation, other than by endorsements of instruments in
the ordinary course of business. Without limitation, a Guaranty Equivalent shall
be deemed to exist if a Person agrees, becomes or remains liable (contingently
or otherwise), directly or indirectly: (i) to purchase or assume, or to supply
funds for the payment, purchase or satisfaction of, an obligation; (ii) to make
any loan, advance, capital contribution or other investment in, or a purchase or
lease of any property or services from, a Person; (iii) to maintain the solvency
of such Person; (iv) to enable such Person to meet any other financial
condition; (v) to enable such Person to satisfy any obligation or to make any
payment; (vi) to assure the holder of an obligation against loss; (vii) to
purchase or lease property or services from such Person regardless of the
non-delivery of or failure to furnish of such property or services; or (viii) in
respect of any other transaction the effect of which is to assure the payment or
performance (or payment of damages or other remedy in the event of nonpayment or
nonperformance) of any obligation.
"Harbor Debtors" shall mean, collectively, (i) Harbor Financial Mortgage
Corp., (ii) NAF, Inc. (f/k/a New America Financial, Inc.), (iii) Hamilton
Financial Services Corp., (iv) Community National Mortgage Corp., (v) CalCap,
Inc., and (vi) Harbor Financial Group, Inc., and any Subsidiary of such Person.
"Harbor Proceedings" shall mean the jointly administered Chapter 11
bankruptcy cases, bearing Case No. 99-37255-SAF-11, styled as In Re Harbor
Financial Group, Inc., et al., pending in the United States Bankruptcy Court for
the Northern District of Texas, Dallas Division, as converted to a Chapter 7
proceeding on December 14, 1999, under which the Harbor Debtors are operating as
debtors-in-possession.
"Holdings Buy Out Portion" shall mean, (x) on any Transfer Date on which
the full amount required under Section 8.29(e) to be transferred from the Cash
Collateral Account- Servicing to the CFCCA is so transferred, (i) 20% (or such
lesser percentage thereof as may then be required to be paid under the FC
Commercial Holdings Buy Out Notes) of the total amount of incentive servicing
fees or consulting fees under any consulting agreement entered into by FC
Servicing in connection with its Mexican operations which have been received by
FC Servicing and deposited in the Cash Collateral Account-Servicing during the
period from and excluding the Transfer Date immediately preceding the Transfer
Date (the "Current Transfer Date") in respect of which the Holdings Buy-Out
Portion is being calculated (or, in the case of the Transfer Date occurring in
December, 2002, from and excluding December 16, 2002) to and including the
Current Transfer Date (excluding any amounts received on the Current Transfer
Date after any transfer is made from the Cash Collateral Account-Servicing to
the CFCCA on such day) or, if less (ii) the aggregate amount required to be paid
on such Transfer Date under the FC Commercial Holdings Buy Out Notes and (y) on
any other Transfer Date, zero.
"Holdings/CFSC Loan Agreement":- Section 10.37(a).
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"Holdings/CFSC Loan Documents": Section 10.37(b).
"Incidental Equity Interests" shall mean Equity Interests in a Person
acquired by a Secondary Obligor in settlement of collection of an asset in the
portfolio of such Secondary Obligor if such Equity Interests so acquired (i)
constitute Equity Interests in a Person engaged in a business unrelated to the
business of the Consolidated Group and such Person is not Borrower or an
Affiliate of Borrower or a Person in which or in an Affiliate of which any other
Equity Interest is owned by Borrower, any Primary Obligor or any Secondary
Obligor at the time such Equity Interest is so acquired; (ii) which Equity
Interests have a value of less than $500,000; and (iii) which Equity Interests
constitute less than 50.1% of the class of Equity Interests in the issuer
thereof of which such Equity Interests are a part or such lower percentage of
any such class of equity interests which results in control of such Person.
"Indebtedness" shall mean, with respect to any Person (without
duplication): (i) all obligations on account of money borrowed by, or credit
extended to or on behalf of, or for or on account of deposits with or advances
to, such Person; (ii) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments; (iii) all obligations of such Person
for the deferred purchase price of property or services other than trade
payables incurred in the ordinary course of business and on terms customary in
the trade and not more than sixty (60) days past due; (iv) all obligations
secured by a Lien on property owned by such Person (whether or not assumed); and
all obligations of such Person under Capitalized Leases (without regard to any
limitation of the rights and remedies of the holder of such Lien or the lessor
under such Capitalized Lease to repossession or sale of such property); (v) the
face amount of all letters of credit issued for the account of such Person and,
without duplication, the unreimbursed amount of all drafts drawn thereunder, and
all other obligations of such Person associated with such letters of credit or
draws thereon; (vi) all obligations of such Person in respect of acceptances or
similar obligations issued for the account of such Person; (vii) all obligations
of such Person under a project financing or similar arrangement; (viii) all
obligations of such Person under any interest rate or currency protection
agreement, interest rate or currency future, interest rate or currency option,
interest rate or currency swap or cap or other interest rate or currency hedge
agreement; and (ix) all obligations and liabilities with respect to unfunded
vested benefits under any "employee benefit plan" or with respect to withdrawal
liabilities incurred under ERISA by Borrower or any ERISA Affiliate to a
"multiemployer plan", as such terms are defined under the Employee Retirement
Income Security Act of 1974.
"Indebtedness Instrument" shall mean any note, mortgage, indenture,
chattel mortgage, deed of trust, loan agreement, hypothecation agreement,
Guaranty Equivalent, pledge agreement, security agreement, financing statement
or other document, instrument or agreement evidencing or securing the payment of
or otherwise relating to the borrowing of monies. Indebtedness Instruments shall
include, but not be limited to the Loan Documents.
"Indemnified Party" - Section 12.3.
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"Intercreditor Agreement" shall mean the Intercreditor Agreement dated as
of December 16, 2002 among the Agent, the PFAL Agent and the initial payee of
the FC Consumer Note, as such agreement may be from time to time amended,
extended, restated, supplemented or otherwise modified.
"Interest Coverage" shall mean, for any period, total interest expense
(including that attributable to Capital Leases under GAAP) of the Consolidated
Group on a consolidated basis determined in accordance with GAAP.
"IRS" shall mean the Internal Revenue Service of the United States.
"Itemized PPE Amount" - Section 7.2(h).
"Legal Requirements" shall mean, with respect to any Person, all laws,
common law, statutes, rules and regulations of any Government Authority to which
such Person or any of its assets is subject or any judgment, decree, franchise,
order or permit of any Government Authority applicable to such Person or any of
its assets.
"Lender Assignee" - Section 12.4(a).
"Lenders" - introductory paragraph.
"Lien" shall mean any mortgage, deed of trust, security deed, pledge,
security interest, encumbrance, lien or other charge of any kind or any other
agreement or arrangement having the effect of conferring security (including any
agreement to give any of the foregoing, any assignment or lease in the nature
thereof, and any conditional sale or other title retention agreement), any lien
arising by operation of law, and the filing of or agreement to give any
financing statement under the Uniform Commercial Code of any jurisdiction (or
any similar or comparable law of any jurisdiction that has not enacted the
Uniform Commercial Code).
"Loan(s)" shall mean, individually and collectively, each or all, as the
context may indicate, of the Tranche I Loans and the Tranche II Loans.
"Loan Agreement" shall mean this Amended and Restated Loan Agreement, as
amended and restated on and as of the Amendment Effective Date and as it may
from time to time be amended, extended, restated, supplemented or otherwise
modified.
"Loan Documents" shall mean, individually and collectively, this
Agreement, the Notes, the Fee Letter, the Rate Fix Letter, the Guaranties, the
Pledge Agreements, the Security
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Agreements, the other Security Documents and all other instruments and
agreements heretofore or from time to time hereafter executed by or on behalf of
Borrower, any Primary Obligor, any Secondary Obligor or any other Loan Party in
connection herewith or therewith, in each case as amended, extended, restated,
supplemented or otherwise modified from time to time. Without limiting the
generality of the foregoing, each amendment to (or constituting part of) this
Agreement or any other Loan Document and each instrument and agreement
(including, without limitation, consents or waivers, but excluding any
amendment, consent or waiver executed prior to the Amendment Effective Date)
executed in connection with any Loan Document shall be deemed to be a Loan
Document for all purposes of the Agreement and the other Loan Documents.
"Loan Party" shall mean, individually and collectively, the Borrower, each
Primary Obligor and each other party to any Loan Document (other than the Agent,
any Lender or any Harbor Debtor and other than (x) a Person which has executed a
Loan Document solely to consent to or acknowledge the same (and not as a party
thereto) and has not executed that or any other Loan Document in any other
capacity or for any other purpose) or (y) a Person which has delivered a
certificate certifying as to the accuracy and completeness of a Charter Document
and has not executed any other Loan Document). For avoidance of doubt, in
addition to the Borrower and each Primary Obligor, each Person which has
executed any Security Document as a pledgor or grantor of collateral thereunder
and each person executing any guaranty of all or any part of the Obligations
shall constitute a Loan Party.
"Majority Lenders" as of a particular date shall mean the holders of at
least 51% of the aggregate unpaid principal amount of all Loans at the
particular time outstanding or, if no Loans are then outstanding, Banks whose
Bosque Loan Commitments aggregate at least 51% of the Total Bosque Loan
Commitment.
"Management Letter" shall mean any correspondence or report submitted by
the Auditors to a Loan Party's chief executive officer, its Board of Directors
or any committee thereof containing comments and suggestions concerning a Loan
Party's accounting procedures and systems based upon the work done by the
Auditors during their annual or other audit.
"Material Adverse Change" shall mean a material adverse change in (i) the
business, properties, operations, prospects or condition (financial or
otherwise) of the Borrower and/or any of its Subsidiaries, any Primary Obligor
or any Secondary Obligor or (ii) the ability of the Borrower or any other Loan
Party to perform, or of the Agent to enforce, any of the Obligations.
"Material Adverse Effect" shall mean an effect that would result in a
Material Adverse Change.
"Maturity Date (Tranche I )" shall mean November 30, 2006.
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"Maturity Date (Tranche II)" shall mean December 17, 2007.
"MCS" shall mean MCS et Associes S.A.
"Mexican Investment Entity" shall mean one or more corporations or limited
partnerships existing on the Amendment Effective Date organized under the laws
of the State of Texas formed for the sole purpose of investing in one or more
limited liability companies formed by FC Holdings or such Mexican Investment
Entity and one or more of Cargill Financial Services International, Inc.,
Cerberus Capital Management Inc., Promecap S.C. and Ficen S.A. de C.V.
"Mexican Acquisition Entity" shall mean a Mexican entity formed for the
purpose of acquiring, owning and managing assets acquired from one or more
Mexican financial institutions.
"Mexican Acquisition Entity-Post AE" shall mean a Mexican entity, other
than a PFAL Portfolio Entity, which is formed after the Amendment Effective Date
for the purpose of acquiring, owning and managing assets acquired from one or
more Mexican financial institutions.
"Mexican Lending Entity" shall mean one or more corporations or limited
partnerships existing on the Amendment Effective Date organized under the laws
of the State of Texas for the sole purpose of making loans to a Mexican
Acquisition Entity.
"Mexican Lending Entity-Post AE" shall mean a corporation or limited
partnership, other than a PFAL Portfolio Entity, organized under the laws of the
State of Texas after the Amendment Effective Date for the sole purpose of making
loans to a Mexican Acquisition Entity.
"Mid-Tier Company" shall mean each Person listed on Schedule I-(MT) (each
such Person, a "Listed MT") and each other Secondary Obligor (other than an
Excluded Initial Foreign MT and any other Person (if any) specified by the Agent
in writing as not constituting a Mid-Tier Company ) with a Net Asset Value of
$2,000,000 or more and each general partner or manager or member (or foreign
equivalent) of any of the foregoing Persons (other than any such partner,
manager, member or equivalent which is the Borrower or a Primary Obligor) and
each other Secondary Obligor directly or indirectly owning any Equity Interests
in any of the foregoing Persons (each such general partner, manager, member or
other owner of Equity
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Interests, an "MT Owner"), each Listed MT and MT Owner thereof to continue at
all times to constitute a Mid-Tier Company (regardless of such Listed MT's Net
Asset Value or the Net Asset Value of any MT Owner thereof). Any Person, other
than a Listed MT or any MT Owner thereof, which at any time so constitutes a
Mid-Tier Company shall continue to constitute a Mid-Tier Company until the time
(if any) when the Borrower sends to the Agent written notice (a "Redesignation
Notice") executed by an Executive Officer of Borrower certifying, as to such
Person that the Net Asset Value of such Person (the "Subject MT") and its MT
Owners is below $2,000,000 and has been below $2,000,000 for the preceding
period of 90 consecutive day or more, and requesting that such Subject MT and,
if specified, its MT Owners no longer constitute Mid-Tier Companies. Provided
that the Borrower provides such additional information, if any, that the Agent
may request with respect to such Subject MT and its MT Owners and that the Agent
has not given the Borrower notice that it disputes such redesignation of such
Subject MT and, if so specified by Borrower, MT Owners, within 30 days after
receiving such Redesignation Notice or, if later, within 30 days after the Agent
received additional information (if any) requested by it with respect to such
requested redesignation, the Subject MT and such specified MT Owners (in each
case, provided that no such Subject MT or MT Owner is a Listed MT or MT Owner
thereof or MT Owner of any other Mid-Tier Company) shall cease to constitute a
Mid-Tier Company (until, the time, if any, that such Subject MT (and/or any MT
Owner thereof) again satisfies the criteria applicable to Mid-Tier Companies).
For avoidance of doubt, the foregoing redesignation procedures shall not apply
to any Listed MT or to any Secondary Obligor directly or indirectly owning any
Equity Interests in any Listed MT
"Mid-Tier Company Post AE" shall mean a Mid-Tier Company formed after the
Amendment Effective Date.
"Minn Servicing" shall mean FirstCity Serving of Minnesota, Inc.
"Multiemployer Plan" shall mean any employee benefit plan which is a
"multiemployer plan" within the meaning of Section 3(37) of ERISA and to which
any Loan Party or any ERISA Affiliate of either Borrower contributes or has been
obligated to contribute.
"Net Asset Value" shall mean, with respect to any Person, the amount
determined by multiplying (x) the FC Percentage in respect of such Person and
(y) the Net Present Value of the assets of such Person.
"NCF Extra" shall mean each amount constituting Collections of an Asset
Pool under the Portfolio Acquisition Loan Agreement received at a time when no
term loans are outstanding under such agreement or when any portion of 75% of
the FC Percentage of such Collections would not be required to be used to repay
term loans thereunder.
"Net Cash Flow" shall mean all of the following (without duplication):
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(i) all payments received by the Borrower and all payments received
by any Primary Obligor on any Pledged Note or any other note or indebtedness
other than, if such payment is received during a PFAL Only Time, a payment the
source of which is a PFAL Portfolio Entity;
(ii) each dividend or other distribution received by Borrower or any
Primary Obligor from any Existing S Co. or, unless the same is specifically
excluded from the definition of Applicable Cash Flow, any other Secondary
Obligor;
(iii) all funds released or otherwise paid to FC Holdings pursuant
to the Holdings/CFSC Loan Agreement;
(iv) all payments received by Borrower or any Primary Obligor from
any Fee Agreement; and
(v) all other amounts received by Borrower, any Primary Obligor
(other than FC Servicing, to the extent constituting Servicing Restricted
Funds), each other direct Subsidiary of Borrower and any Wholly-Owned Subsidiary
with no Permitted Portfolio Company Creditor other than (i) any such amount
constituting Extraordinary Transaction Proceeds; (ii) any such amount
constituting Collections of an Asset Pool under the Portfolio Acquisition Loan
Agreement -Existing (other than any such amount constituting NCF-Extra
hereunder); (iii) any distribution made by Drive LP required by the Agreement
Among Members (Drive General Partner) dated as August 18, 2000, as amended,
among IFA Drive GP Holdings LLC, FC Consumer Lending and Drive Management LP to
be reloaned to Drive LP; and (iv) any payments received by FC Capital used to
repay outstanding accounts payable of FC Capital which are listed on Schedule
I-FC hereto.
"Net Present Value" of any property shall mean the value thereof as
discounted pursuant to the criteria set forth in Exhibit 1-D to the Portfolio
Acquisition Loan Agreement-Existing.
"Net Receipts" shall mean (x) the gross amount (the "Gross Amount") of all
payments, dividends and other amounts received by a Secondary Obligor minus (y)
the sum of (i) any portion of the Gross Amount required to be paid to a
Permitted Portfolio Company Creditor of such Secondary Obligor within 30 days of
receipt thereof, (ii) any portion of the Gross Amount required to be held by
such Secondary Obligor pursuant to a Usage Leverage Covenant; (iii) a reasonable
amount for operating expenses of such Secondary Obligor; (iv) any portion of the
Gross Amount constituting Extraordinary Transaction Proceeds; (v) Portfolio
Protection Expenses which are not included in the computation of Aggregate
Undistributed Secondary Obligor Funds under clause (x) of the definition thereof
as a result of clause (x) (iii) thereof and (vi) in the case of Minn Servicing,
any portion of the Gross Amount constituting Servicing Restricted Income plus
(z) any portion of any amount previously subtracted from the Gross Amount (1) to
pay a Permitted Portfolio Company Creditor which was not so paid to such
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Person; (2) to satisfy a Usage Leverage Covenant which is no longer required to
satisfy such covenant; (3) to pay operating expenses which have not been paid
and are no longer reasonably necessary or (4) to fund any obligation which had
constituted but no longer constitutes an Obligor Funding Obligation.
"Non-Default Voluntary Custodial Arrangement" shall mean an arrangement to
perfect a lien in favor of the Agent or the holder of a different Permitted
Lien, in each case, on certain specified Assets of a Person entered into
voluntarily by a Secondary Obligor at a time when no Default or Event of Default
has occurred and is continuing.
"Notes" shall mean the Tranche I and Tranche II Notes.
"Obligations" shall mean (x) with respect to each Loan Party other than
the Borrower, all obligations of such Loan Party with respect to the repayment
or performance of any obligations (monetary or otherwise) of the Borrower
arising under or in connection with this Agreement, the
Notes or any other Loan Document, and (y) with respect to the Borrower,
all obligations of Borrower with respect to the repayment or performance of
obligations (monetary or otherwise) arising under or in connection with this
Agreement, the Notes or any other Loan Document.
"Obligor Funding Obligations" shall mean obligations (whether pending,
contingent or otherwise) of a Secondary Obligor to make one or more advances to
a Person which is the obligor of one or more outstanding loans the rights to
which were acquired by such Secondary Obligor pursuant to a purchase by such
Secondary Obligor of a portfolio of loans made by one or more Persons who are
not Affiliates or Associates of the Borrower or of such Secondary Obligor;
provided that such obligation to make an advance was not at any prior time an
obligation of an Affiliate or Associate of the Borrower or such Secondary
Obligor.
"Operating Account" shall mean account no. 7300044156 at Bank of America
(which Borrower represents and warrants is its operating account on the
Amendment Execution Date) and such other accounts that Borrower may from time to
time maintain as operating accounts of which the Borrower shall give the Agent
written notice (which shall include the account number and depositary
institution and location of such account).
"Original Closing Date" shall mean December 20, 1999.
"Other Laws" - Section 3.4.
"PA Indebtedness Limit" shall mean $54 million of term loans and $5
million of revolving loans incurred by Borrower under the Portfolio Acquisition
Loan Agreement.
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"PA Lenders" shall mean the financial institutions from time to time
party, as lenders, to the Portfolio Acquisition Loan Agreement.
"Parent" shall mean any Person now or at any time hereafter owning or
controlling (alone or with Borrower, any Subsidiary and/or any other Person) at
least a majority of the issued and outstanding Stock or other ownership interest
of Borrower or any Subsidiary. For purposes of this definition, "control" shall
have the same meaning ascribed to such term in the definition of "Affiliate".
Notwithstanding the forgoing, no Person shall be a Parent which is not a Parent
of Borrower or a 51% or more owned subsidiary, directly or indirectly, of
Borrower.
"Past-Due Rate" - Section 3.3.
"Payment Date" - Section 2.3(b).
"Payment Installment Date" - Section 2.3(a).
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA.
"Pension Plan" shall mean any employee pension benefit plan subject to
Title IV of ERISA and maintained by any Loan Party or any ERISA Affiliate of any
Loan Party or any such plan to which any Loan Party or any ERISA Affiliate is or
has been required to contribute on behalf of any of its employees, other than a
Multiemployer Plan.
"Permitted FC Consumer Amendments" shall mean any amendment, supplement or
other modification to the FC Consumer Note which (i) is consented to in writing
by the Majority Lenders or (ii) does not increase the principal amount of loans
under the FC Consumer Loan Documents or increase the interest rate or increase
or impose any fee or other payment obligation on the FC Consumer Lending.
"Permitted Liens" shall mean (i) any liens created pursuant to the Loan
Documents in favor of Agent for the benefit of Lenders and Agent to secure the
Obligations; (ii) liens for Charges which are not yet due and payable, or claims
and unfunded liabilities under ERISA not yet due and payable or which are being
contested in good faith by appropriate proceedings diligently pursued; (iii)
liens arising in connection with worker's compensation, unemployment insurance,
old age pensions and social security benefits which are not overdue or are being
contested in good faith by appropriate proceedings diligently pursued, provided
that in the case of any such contest any proceedings commenced for the
enforcement of such lien shall have been duly suspended and such provision for
the payment of such lien has been made on the books of the Borrower (or the
applicable Affiliate) as may be required by GAAP; (iv) liens incurred in the
ordinary course of business to secure the performance of statutory obligations
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arising in connection with progress payments or advance payments due under
contracts with the United States Government or any agency thereof entered into
in the ordinary course of business; (v) any liens securing Indebtedness of
Borrower (or any Affiliate) to any Persons in an aggregate amount less than
$200,000; (vi) Charges relating to Assets of First B and First X; (vii) as to
any Affiliate, other than Borrower, a Primary Obligor or Existing S Co, purchase
money liens securing permitted indebtedness incurred in connection with the
acquisition of Assets and other indebtedness incurred under the credit agreement
under which such permitted indebtedness to acquire such assets was incurred so
long as such liens encumber only the Assets acquired, (viii) as to any
Affiliate, other than Borrower or a Primary Obligor or an Existing S Co, liens
relating to permitted Indebtedness incurred in connection with the warehousing
of assets or the securitization of Assets, so long as such liens encumber only
the Assets warehoused or securitized; (ix) those liens disclosed on Schedule
I-(PL) (x) those liens granted to CFSC in the Shared Collateral pursuant to the
Holdings/CFSC Loan Documents (as in effect on the date of the execution and
delivery of the Holdings/CFSC Loan Documents); (xi) liens on assets of a PFAL
Portfolio Entity in favor of the Person providing financing under an Approved
Portfolio Leverage Arrangement in respect of the acquisition of assets acquired
pursuant to such Approved Portfolio Leverage Arrangement to the extent such
liens are required by, and secure only obligations under, such Approved
Portfolio Leverage Arrangement; and (xii) liens on the FC Consumer Collateral
securing the obligations under the FC Consumer Note as in effect on the
Amendment Effective Date and as amended, supplemented or otherwise modified by
Permitted FC Consumer Amendments.
"Permitted Portfolio Company Creditor" shall mean (i) with respect to an
Existing S Co., those creditors listed on Schedule I-(PFC) alongside the details
of the related credit arrangement, (ii) with respect to a PFAL Portfolio Entity,
those creditors of such entity which are permitted by the Portfolio Acquisition
Loan Agreement-Existing in respect of permitted credit arrangements thereunder
and (iii) with respect to any other Portfolio Entity-Post AE, any other creditor
of such entity which has provided permitted indebtedness to such entity but only
in respect of and to the extent of such permitted indebtedness.
"Permitted Restrictions" on the payment of dividends by a Person shall
mean provisions of a loan agreement, as in effect when first entered into, to
which such Person is a party as borrower which prohibit such Person from paying
dividends for either of the following reasons:
(x) the funds restricted from being distributed are required to satisfy a
leverage or required reserve amount covenant (but only if such covenant would
not reasonably be expected to significantly impair such Person's ability to pay
dividends if anticipated cash flows are received as and when anticipated and in
approximately the amounts anticipated); and
(y) such dividends are restricted when there exists an event of default of a
customary type to be found in such agreements and that also permits the relevant
lender to accelerate the maturity of indebtedness outstanding under such
agreement.
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"Permitted Shareholder Agreement" shall mean a Shareholder Agreement
entered into after the Amendment Execution Date with terms permitted by Exhibit
1-C of the Portfolio Acquisition Loan Agreement-Existing (with any reference
therein to FC Commercial being deemed, for purposes of this definition, to refer
to the applicable Primary Obligor).
"Person" shall mean and include an individual, a partnership, a
corporation (including a business trust), a joint stock company, a limited
liability company, a trust, an unincorporated association, a joint venture or
other entity or a government or an agency or political subdivision thereof.
"PFAL Agent" shall mean the "Agent" under the Portfolio Acquisition Loan
Agreement.
"PFAL FC Commercial Pledged Note" shall mean each "Pledged Note" (as
defined in the Portfolio Acquisition Loan Agreement-Existing) delivered to the
Collateral Agent to evidence advances made by Borrower to FC Commercial pursuant
to the Portfolio Acquisition Loan Agreement, as the same may be amended,
restated, supplemented or otherwise modified with the consent of the Agent.
"PFAL Lenders" shall mean the financial institutions from time to time
party to the Portfolio Acquisition Loan Agreement as "Lenders" thereunder.
"PFAL Only Time" shall have the meaning ascribed to such term in the
definition of "Applicable Cash Flow".
"PFAL Portfolio Entity" shall mean any Portfolio Entity-Post AE in respect
of the acquisition by which of any assets loans were requested and made to
Borrower under the Portfolio Acquisition Loan Agreement.
"PFAL Loan Document" shall mean a "Loan Document" as defined in the
Portfolio Acquisition Loan Agreement.
"PFAL Note" shall mean a "Note" as defined in the Portfolio Acquisition
Loan Agreement.
"PFAL Revolver" shall mean the revolving credit facility included in the
Portfolio Acquisition Loan Agreement.
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"PFAL Termination Date" shall mean the date on which all obligations to
the lenders under the Portfolio Acquisition Loan Agreement have been paid and
all commitments of the lenders thereunder terminated.
"Plan" shall mean any "employee benefit plan" (within the meaning of
Section 3(3) of ERISA) maintained by any Loan Party or any ERISA Affiliate or
any such plan to which any Loan Party or any ERISA Affiliate is or has been
required to contribute on behalf of any of its employees, other than a
Multiemployer Plan.
"Pledge Agreement" means each of (or, as the context requires, any of) the
Borrower Pledge Agreement, Subsidiary Pledge Agreement, Subsidiary Collateral
Assignment, the FCHM Pledge Agreement, FCHM Collateral Assignment and the Drive
Collateral Assignment and any other pledge agreement made for the benefit of the
Lenders (and, if therein specified, the PFAL Lenders). "Pledged Entities" shall
mean those entities any Equity Interest in which has been pledged to the Agent
to secure the Obligations.
"Pledged Notes" shall mean those certain promissory notes listed on
Schedule I-PN which have been delivered to the Agent and in which the Collateral
Agent holds a perfected security interest of the Requisite Priority pursuant to
a Pledge Agreement to which the Collateral Agent is a party.
"Pledged Note-Existing" shall mean a Pledged Note (other than a Bosque
Note) which was executed prior to the Amendment Effective Date and each note
(other than a Bosque Note) which is delivered with the consent of the Agent in
full or partial substitution for or replacement of any other Pledged
Note-Existing, as the any of the same may be amended, restated, supplemented or
otherwise modified with the consent of the Agent.
"Pledged Property" shall mean any and all property (real, personal or
intangible) pledged by Borrower, any Primary Obligor, any Secondary Obligor or
any other Loan Party to secure payment and performance of the Obligations,
including but not limited to: (i) any and all Collateral under any Security
Agreement; and (ii) any and all property pledged under any Pledge Agreement.
"Portfolio Acquisition Loan Agreement" shall mean the Term Loan and
Revolving Credit Agreement dated as of the date hereof among the Borrower, Bank
of Scotland, acting through its New York branch, as agent and the lenders from
time to time party thereto, as from time to time amended, extended, restated,
supplemented or otherwise modified.
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"Portfolio Acquisition Loan Agreement - Existing" shall mean the Portfolio
Acquisition Loan Agreement as in effect on the Amendment Effective Date as
amended, supplemented, or otherwise modified with the written consent of the
Majority Lenders, without giving effect to any amendment, supplement or other
modification thereto not consented to in writing by the Agent or the Majority
Lenders (references herein to actions and conditions permitted by the Portfolio
Acquisition Loan Agreement- Existing being construed to mean, unless the same
has been approved in writing by the Majority Lenders, permitted thereby without
the obtaining of, or the requirement to obtain, any consent or waiver of the
PFAL Agent, any lenders party to that Agreement or any other Person).
"Portfolio Entity-Post AE" shall mean any Secondary Obligor, other than an
REO Affiliate, formed or in which Borrower first acquired a direct or indirect
interest on or after the Amendment Effective Date.
"Portfolio Protection Expenses" with respect to a Secondary Obligor shall
mean expenses or other amounts of which the Agent has been given prior written
notice which (w) such Secondary Obligor has reasonably determined are necessary
to advance to one of its REO Affiliates for reasonable and necessary expenses to
preserve or protect real property owned by such REO Affiliate or (x) constitute
reasonable and customary, necessary leasing commissions, reasonable and
necessary tenant improvement costs paid by such Secondary Obligor or REO
Affiliate pursuant to a written lease or capital improvements to such property
required in order for the property to be so leased or (y) such Secondary Obligor
has reasonably determined are necessary to protect other assets securing
indebtedness owed to such Secondary Obligor, or (z) constitute Obligor Funding
Obligations, such expenses or other amounts to constitute Portfolio Protection
Expenses when amounts therefor are retained by such Secondary Obligor or REO
Affiliate or, if earlier, when such expenses or other amounts are paid, but
shall cease to constitute Portfolio Protection Expenses other than for purposes
of the Portfolio Protection Expense Report if such expenses or other amounts
remain unexpended but the purpose for which the same were originally retained is
no longer applicable and such expenses or other amounts are not being retained
for a different purpose set forth above of which the Agent has been given prior
written notice.
"Portfolio Protection Expense Report"- Section 7.2(h).
"Primary Obligors" shall mean, collectively, (i) FC Commercial; (ii) FC
Capital; (iii) FC Consumer Lending; (iv) FC Servicing: (v) FC Holdings; (vi) FC
International; and (vii) FC Mexico.
"Purchasing Lenders" - Section 12.4(c).
"Rate Fix Letter" shall mean the letter dated December 15, 2002 from
Borrower to the Agent regarding the fixing of the interest rate for the Tranche
II Loans
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"Rate of Borrowing" - Section 3.6.
"Records" shall mean all books, records, computer records, computer
software, ledger cards, programs and other computer materials, customer and
supplier lists, invoices, orders and other property and general intangibles at
any time evidencing or relating to Assets.
"Recoveries" shall mean any funds, or substitution of receipts or
collateral, received by the Lenders or the Agent (a) from the sale, collection
or other disposition of Collateral pursuant to the Security Documents, or (b)
from any distribution to any of the Lenders or the Agent, or abandonment to any
of them, or substitute Liens or payment given to any of them pursuant to events
or proceedings of the nature referred to in Section 9.9 of the Agreement, or
otherwise, which distribution or abandonment pertains to the Collateral.
"Regulatory Change" means, relative to any Lender or the Agent, any change
after January 1, 2002 in any (or the adoption after January 1, 2000 of any new):
(a) United States Federal, state or local law or foreign law
applicable to the Agent or such Lender; or
(b) regulation, interpretation, directive, or request (whether
or not having the force of law) applying to the Agent or any Lender
of any Government Authority charged with the interpretation or
administration of any law referred to in clause (a) or of any
fiscal, monetary, central bank or other authority having
jurisdiction over the Agent or such Lender.
"REO Affiliate" shall mean a Person, other than Borrower, a Primary
Obligor or a Mid-Tier Company, which is a corporation, limited liability company
or partnership 100% of the Equity Interests in which are owned by a Secondary
Obligor (the "REO Owner") (or, in the case of such an entity which is a limited
partnership, 100% of the limited partnership interest of which is owned by the
REO Owner and 100% of the interest in the general partner is owned by the REO
Owner), which Person has been established solely to acquire from the REO Owner
title to (and owns no assets other than) parcels of real property (or distressed
notes secured by real property for purposes of obtaining title to real property
securing such loans) in exchange for, with respect to each such parcel, a
promissory note in a principal amount no less than 96% of the value (as
reasonably determined by the REO Owner and the REO Affiliate) of the property
provided that no Person shall constitute or continue to constitute an REO
Affiliate if (A) such Person acquires property from any Person other than (x)
the REO Owner, (y) in the case where it has acquired a note from the REO Owner
solely for purposes of acquiring title to the real property securing such note,
the obligor of such note; or (z) except in the case of an REO Affiliate which is
an Existing S Co. or an REO Affiliate of an Existing S Co., any other seller of
real property securing distressed notes or (B) engages in any business other
than business incidental to owning and selling the parcels of real property so
acquired by such REO Affiliate.
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"Repayment Fee" - Section 4.2.
"Reportable Event" shall mean a Reportable Event described in Section 4043
of ERISA and the regulations issued thereunder.
"Requisite Priority" shall mean (x) except with respect to the Shared
Collateral and except as set forth in the Intercreditor Agreement, first
priority and (y) with respect to Shared Collateral second priority, subject only
to the liens of CFSC to which the Agent and the Lenders are subordinate pursuant
to the CFSC Intercreditor Agreement.
"SEC" shall mean the Securities and Exchange Commission.
"Secondary Obligor" shall mean each entity identified on Schedule I-(SO),
as well as, subject to the final sentence of this definition, any other entity,
other than a Primary Obligor, any Equity Interest (other than Equity Interests
constituting Incidental Equity Interests) of or in which is owned by Borrower,
any Primary Obligor or any other Secondary Obligor. Notwithstanding the
foregoing, no Tier IV Company or Tier V Company or any Harbor Debtor shall
constitute a Secondary Obligor.
"Secondary Obligor-R" shall mean any Secondary Obligor 50% or more of the
voting interests or any class of other Equity Interests of which are owned
directly or indirectly by Borrower.
"Secondary Obligor-Existing" means each entity identified on Schedule
I-(SOX) and each successor thereof.
"Securities" shall have the meaning ascribed to that term in the
Securities Act of 1934.
"Securities Laws" shall mean all applicable Federal and state securities
laws and regulations promulgated pursuant thereto.
"Security Agreements" shall mean any one or more of the security
agreements or amended and restated security agreements delivered pursuant to
Section 12.14 and each other security agreement or amended and restated security
agreement heretofore or from time to time hereafter delivered in respect of the
Obligations, as each such agreement may be from time to time amended, extended,
restated, supplemented or otherwise modified.
"Security Documents" shall be the collective reference to (x) each of the
agreements referred to in Section 12.14 (or on the document checklist referred
to therein) pursuant to which
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Collateral is or was granted or is or was intended to be granted, directly or
indirectly, to the Agent on behalf of the Lenders, (y) each agreement entered
into after the Amendment Execution Date pursuant to which any collateral is or
was granted or is or was intended to be granted, directly or indirectly, to the
Agent on behalf of the Lenders and any other Person (if any) sharing an interest
in such collateral, and (z) all amendments, supplements or other modifications
to such agreements or replacements thereof. Without limiting the generality of
the foregoing, each Security Agreement, each Pledge Agreement, each cash
collateral agreement securing any Obligation, each depositary bank
acknowledgement relating to any bank account of any Loan Party, the CFSC
Guaranty Subordination Agreement, each other agreement pursuant to which any
obligations are subordinated to any of the Obligations (whether pursuant to a
subordination agreement, subordination provisions in any other agreement or
instrument or otherwise), each Pledged Note, and each security agreement
securing the obligations under any Pledged Note shall constitute Security
Documents . However, as to a Loan Party, the term "Security Document" shall not
include any such document as to which such Loan Party is released from all its
obligations thereunder by the Agent or the Lenders in accordance with the terms
hereof or thereof.
"Servicing Restricted Funds" means funds received by FC Servicing or Minn
Servicing in the ordinary course of such company's servicing business for the
account of Persons other than FC Servicing, Minn Servicing, the Borrower or any
other Subsidiary of the Borrower.
"Shared Collateral" - Section 10.37(c).
"Shareholder Agreement" shall mean any agreement (other than a certificate
of incorporation, customary by-laws, a limited liability company formation
certificate or a partnership formation certificate) among any holders of Equity
Interests issued by Borrower, any Primary Obligor or any Secondary Obligor and
any resolutions of any such holders of Equity Interests relating to the
management of any such Person or any of the rights or privileges of any holders
of Equity Interests of any such Person.
"Stock" shall mean all shares and other Equity Interests issued by a
corporation, whether voting or non-voting, including but not limited to, common
stock, warrants, preferred stock, convertible debentures, and all agreements,
instruments and documents convertible, in whole or in part, into any one or more
or all of the foregoing.
"Subject Bosque Note" - Section 6.1(h).
"Subsidiary" of any Person (the "First Person") shall mean any other
Person more than 50% of the indicia of equity rights (whether capital stock or
otherwise) of which is at the time owned, directly or indirectly by the First
Person and/or by one or more of such First Person's Subsidiaries. Unless
otherwise indicated, references to Subsidiaries shall refer to Subsidiaries of
the Borrower.
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"Subsidiary Collateral Assignment" shall mean the Amended and Restated
Partnership Interest and Limited Liability Company Interest Collateral
Assignment Agreement made by certain Primary Obligors in favor of the Collateral
Agent dated as of the date hereof delivered pursuant to Section 12.14 and each
other collateral assignment from time to time hereafter delivered by one or more
Primary Obligors or Secondary Obligors in respect of the Obligations., as each
such agreement may be from time to time amended, extended, restated,
supplemented or otherwise modified
"Subsidiary Pledge Agreement" shall mean the Amended and Restated Pledge
Agreement (Stock and Debt) made by certain Primary Obligors in favor of the
Collateral Agent dated as of the date hereof delivered pursuant to Section 12.14
and each other pledge agreement from time to time hereafter delivered by one or
more Primary Obligors or Secondary Obligors in respect of the Obligations, as
each such agreement may be from time to time amended, extended, restated,
supplemented or otherwise modified (including, without limitation, by the
addition of additional parties thereto).
"Subsidiary Security Agreement" shall mean the Amended and Restated
Security Agreement made by the Primary Obligors in favor of the Collateral Agent
dated as of the date hereof delivered pursuant to Section 12.14 and each other
security agreement from time to time hereafter delivered by one or more Primary
Obligors or Secondary Obligors in respect of the Obligations., as each such
agreement may be from time to time amended, extended, restated, supplemented or
otherwise modified (including, without limitation, by the addition of additional
parties thereto).
"Tangible Net Worth", at any time, shall mean the total of shareholders'
equity (including capital (both common and preferred) stock, additional paid-in
capital and retained earnings after deducting treasury stock of a Person, less
the sum of the total amount of any intangible assets, which, for purposes of
this definition, shall include, without limitation, general intangibles and, if
applicable, all accounts receivable not incurred in the ordinary course of
business from any Affiliate of such Person or any loans to directors or officers
of any Affiliate of such Person, unamortized deferred charges and good will, all
as determined in accordance with GAAP.
"Taxes" - Section 5.2.
"Termination Event" shall mean (i) a Reportable Event described in Section
4043 of ERISA and the regulations issued thereunder (other than a Reportable
Event not subject to the provision for 30-day notice to the PBGC under such
regulations), or (ii) the withdrawal of any Loan Party or any of its ERISA
Affiliates from a Pension Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA, or (iii) the issuance of a
notice of intent to terminate a Pension Plan or the treatment of a Pension Plan
amendment as a termination under Section 4041 of ERISA, or (iv) receipt by any
Loan Party or any ERISA Affiliate of notice of the PBGC's intention to terminate
any Pension Plan or to have a trustee or the PBGC appointed to administer any
Pension Plan or (v) any other event or condition which
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might constitute grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan.
"Tier IV Company" shall mean each Person listed on Schedule 10.43;
provided, that if any such Person engages in business or has assets with an
aggregate fair market value of $100,000 or more, such Person shall cease to
constitute a Tier IV Company.
"Tier V Company" shall mean each Person listed on Schedule I-TV; provided
that if any such Person engages in a business other than a business engaged in
by it on the Amendment Execution Date, such Person shall cease to constitute a
Tier V Company.
"Total Bosque Loan Commitment" shall mean the sum of the Bosque Loan
Commitments of all of the Lenders.
"Tranche I Bosque Loans"-Section 2.5.
"Tranche I Loans" shall mean, collectively, the Loans which are Tranche I
Loans as set forth in Section 2.1(a) and the Tranche I Bosque Loans (if any).
"Tranche I Note" shall mean a promissory note of Borrower substantially in
the form of Exhibit A-1 to this Agreement or otherwise identified on the
Amendment Effective Date as the Tranche I Note, as such note may from time to
time be amended, extended, restated, supplemented or otherwise modified.
"Tranche I Prepayment Amount" in respect of any Payment Date shall mean
the amount on deposit in the CFCCA on the immediately preceding Calculation Date
after giving effect to the transfer thereto required to be made thereto on such
date from the Cash Collateral Account- Servicing pursuant to Section 8.29(e)
minus, unless on or prior to the Payment Date the Agent has given the Borrower
telephonic or written notice that it disputes any amount specified on Exhibit A
to the Waterfall Certificate with respect to disbursements on such Payment Date,
all amounts specified on such Exhibit A other than the Principal Prepayment
Amount set forth thereon.
"Tranche II Loans" - Section 2.1.
"Tranche II Note" shall mean a promissory note of Borrower substantially
in the form of Exhibit A-2 to this Agreement or otherwise identified on the
Amendment Effective Date as the Tranche II Note, as such note may from time to
time be amended, extended, restated, supplemented or otherwise modified.
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Tranche II Prepayment Amount in respect of any Payment Date shall mean (w)
until the Payment Date on which Tranche I Loans are paid in full, zero, (x) on
the date on which the Tranche I Loans are paid in full, the Tranche I Prepayment
Amount as determined for such day minus the amount of such Tranche I Prepayment
Amount applied to repay the remaining principal amount of the Tranche I Loans
and (y) on each Payment Date after the Tranche I Loans have been paid in full,
the amount on deposit in the CFCCA on the immediately preceding Calculation Date
after giving effect to the transfer thereto required to be made thereto on such
date from the Cash Collateral Account- Servicing pursuant to Section 8.29(e)
minus unless on or prior to the Payment Date the Agent has given the Borrower
telephonic or written notice that it disputes any amount specified on Exhibit A
to the Waterfall Certificate with respect to disbursements on such Payment Date,
all amounts specified on such Exhibit A other than the Principal Prepayment
Amount set forth thereon.
"Transfer" shall mean any sale, conveyance, lease or other disposition
(and "Transferred", "Transferring" and other variations thereof shall have
correlative meanings).
"Transfer Date"- Section 8.29(e).
"Transfer Supplement" - Section 12.4(c).
"20% Amount" with respect to any Payment Date, shall mean the amount
identified as such in the Waterfall Certificate relating to such Payment Date.
"UCC" - Section 10.33.
"United States," "US" or "U.S." shall mean the United States of America.
"US Person" shall mean a Person formed under the laws of the United
States, any of the 50 states or the District of Columbia [or any territory of
the United States].
"Usage Leverage Covenant" shall have the meaning ascribed to such term in
the definition of "Aggregate Undistributed Secondary Obligor Funds".
"Wamco XXX" shall mean Wamco XXX Ltd., a Texas limited partnership.
"Wamco XXX Loan Agreement" shall mean the Loan Agreement between Wamco XXX
and CFSC Capital Corp. XXX dated as of June 5, 2002, in the form delivered by
Borrower to Lender.
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"Waterfall Certificate" in respect of any Payment Date shall mean a
completed certificate substantially in the form of Exhibit E delivered in
respect of such Payment Date, to which completed exhibits thereto are attached
(and, in the case of required exhibits thereto the form of which is not attached
to Exhibit E hereto, such other exhibits provide information in form and detail
satisfactory to the Agent).
"Wholly-Owned Subsidiary" shall mean any Subsidiary of Borrower of which
all of the outstanding shares of stock, limited liability company interests or
partnership interests (as the case may be) are owned by the Borrower and/or one
or more wholly owned direct or indirect Subsidiaries of the Borrower.
"Written," "in writing" and other variations thereof shall mean any form
of written communication or a communication by means of telex, telecopier,
telegraph or cable.
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