EXHIBIT 99(d)(9)
draft 11/26/02
COLLATERAL ASSIGNMENT OF PARTNERSHIP AND LLC INTERESTS (this
"Agreement") dated as of November 29, 2002 between the assignors named below
(each, the "Assignor") and The Governor and Company of the Bank of Scotland
("Secured Party"). Capitalized terms used herein and not otherwise defined shall
have the meanings provided for such terms in that certain promissory note dated
November [--], 2002 executed by FirstCity Consumer Lending Corporation, a Texas
corporation ("Borrower"), in favor of Secured Party, as the same may from time
to time be amended, supplemented or otherwise modified (as so amended,
supplemented or otherwise modified from time to time, the "Note").
W I T N E S S E T H:
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WHEREAS, Secured Party has lent or will shortly lend $16,000,000 (the
"Loan") to Borrower, which Loan will be evidenced by the Note; and
WHEREAS, the obligation of the Secured Party to make the Loan to
Borrower is subject to the condition, among others, that the Assignor execute
and deliver this Agreement and grant to the Secured Party, as collateral for the
Secured Obligations (as hereinafter defined), an assignment of and a security
interest in (among other things) various equity interests owned by Assignor;
NOW, THEREFORE, in consideration of the willingness of the Secured
Party, subject to the terms and conditions set forth in the Funding Letter, to
make the Loan to Borrower, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Assignor and the Secured
Party, intending to be bound, do hereby agree with each other as follows:
1. Grant of Security Interest. The Assignor hereby grants to the
Secured Party, to secure the payment and performance in full of all of the
Secured Obligations, a lien upon, and security interest in, and assigns as
collateral to the Secured Party, all of Assignor's right, title and interest in
and to the property, assets and rights listed opposite its name on Annex 1
hereto, wherever located, whether now owned or hereafter acquired or arising,
and all Proceeds and products thereof (all of the same being hereinafter called
the "Collateral," said term also to include the property, assets and rights
described in the remainder of this Section 1); including without limitation, in
each case, and whether now owned or hereafter acquired or arising: all of the
Assignor's interest as a partner or member (as the case may be) of the Relevant
Entity; all of the Assignor's interest in the capital of the Relevant Entity;
all of the Assignor's right to receive Distributions from the Relevant Entity,
whether in cash or in property and whenever occurring; and all other of the
Assignor's right, title and interest as a partner or member (as the case may
be), whether contained in a Relevant Charter Document or otherwise (such rights,
title and interests of the Assignor in the Relevant Entity being hereafter
sometimes referred to as the Assignor's "Relevant Entity Interest" therein), but
none of the Assignor's obligations, and all Proceeds and products of the
foregoing.
2. Distributions. Assignor hereby irrevocably authorizes and directs
each Relevant Entity to pay directly to the Secured Party, for application to
the Secured Obligations as set forth in Section 8 hereof, all Distributions
payable to Assignor that are directly attributable to the Specified Percentage
of Distributable Dividends.
3. Representations, Warranties and Covenants.
(a) The Assignor represents and warrants to, and covenants with, the
Secured Party that:
(i) The Assignor's exact legal name is that indicated on the
signature page hereof. The Assignor's jurisdiction of organization is set
forth opposite its name on Annex 1 hereto.
(ii) None of the Initial Collateral is represented by any form of
certificate or other document which is an instrument (as defined in the
Uniform Commercial Code).
(iii) The Assignor is the sole record and (except for other members
of the FC Group) beneficial owner of the Collateral. None of the
Collateral is or shall be subject to any Lien except the lien created
pursuant to this Agreement, Permitted Collateral Liens and any
restrictions on Transfer of Drive Interests that may be imposed by the
Shareholders Agreement. No Financing Statement covering any of the
Collateral is on file in any public office, other than Financing
Statements filed pursuant to this Agreement or Financing Statements in
favor of members of the BOS Group (and their transferees or assigns, if
any) as lenders under the Loan Agreements.
(iv) The Assignor shall not Transfer any of the Collateral (except
as permitted by Section 3(b) hereof). The Assignor shall not pledge,
mortgage or create, or suffer to exist, a Lien in any of the Collateral in
favor of any Person other than the Secured Party except for the Liens
referenced in the [second] sentence of clause (iii) above.
(v) The Assignor will not assent to or enter into any amendment or
modification, directly or indirectly, of any Charter Document of any
Relevant Entity except with the prior written consent of the Secured
Party, which consent shall not be unreasonably withheld. The Assignor will
promptly give the Secured Party copies of any notices it receives from
other partners or members pursuant to the Charter Document of any Relevant
Entity. The foregoing provisions of this clause (v) shall not apply with
respect to any Relevant Entity where a member of the BOS Group is also a
partner or member of such Relevant Entity.
(vi) The Assignor will not change its jurisdiction of organization,
or change its name, mailing address, form of doing business or
organizational number without giving the Secured Party 60 days prior
written notice thereof.
(b) Nothing contained in this Agreement shall prohibit the sale of any
Drive Interests pursuant to Section 3.3 or 3.4 of the Shareholders Agreement or
pursuant to an IPO (as defined in the Shareholders Agreement) if the Net
Proceeds from the sale of the Specified Percentage of all Drive Interests owned
of record or beneficially by members of the FC Group and so sold are
contemporaneously with such sale paid to Secured Party for application to the
Secured Obligations as set forth in Section 8 hereof.
4. Management. To the extent that any Collateral granted by Assignor is
a general partnership interest in a partnership, the Secured Party, or its
assignees or nominees, shall have the right, whenever an Event of Default
exists, to direct the Assignor to manage the partnership and otherwise exercise
its rights, powers and duties as general partner of the partnership in
accordance with the directions of the Secured Party (or of such assignee or
nominee) and shall also have the right to take possession of and to receive any
amount distributed by the partnership to the Assignor on account of its services
(if any) as general partner (in addition to Secured Party's other rights
hereunder).
5. Definitions.
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(a) Certain Phrases. All references to Sections in this Agreement or in
any schedule, exhibit or annex hereto shall be deemed references to Sections in
this Agreement unless otherwise specified. As used in this Agreement, the terms
"including," "including without limitation" and "such as" (and like terms) are
illustrative and not limitative. No difference shall be imputed to the use in
some places herein of "including" and in others of "including without
limitation." Phrases such as "hereof" and "herein" refer to the entire Agreement
and not just the section or other portion in which said reference appears.
(b) Defined Terms. Terms used in this Agreement which are defined below
shall have the meanings specified below (unless otherwise defined or the context
shall otherwise indicate) and shall include in the singular number the plural
and in the plural number the singular. References to any gender shall include
all genders.
"Aggregate Collateral" shall mean, collectively, the Collateral (as
defined herein) and the Collateral (as defined in the Pledge Agreement).
"Agreement" shall mean this Collateral Assignment of Partnership and
LLC Interests, as the same may from time to time be amended, supplemented or
otherwise modified.
"Assignor" - introductory paragraph
"Borrower" - introductory paragraph
"CLC Revenue Rights" shall mean (i) CLC's right (if any) or ability
to receive (directly or indirectly, and whether paid as a Distribution or
otherwise) the Net Proceeds from any Transfer of Drive Collateral (regardless of
by whom such Transfer is made), (ii) such Net Proceeds, (iii) the Specified
Percentage of any Distributions (other than Tax Distributions and Distributions
with respect to Pledged Drive Debt) to which CLC is entitled from Drive and any
Distributions (other than Tax Distributions and Distributions with respect to
Pledged Drive Debt) paid or payable by Drive to CLC, and (iv) Distributions with
respect to Pledged Drive Debt.
"Collateral" shall have the meaning provided for such term in
Section 1 hereof.
"Debt Instruments" shall have the meaning provided for such term in
Section 6 hereof.
"Distribution" shall have the meaning provided for such term in the
Note and shall also mean all payments of principal, interest, premiums,
penalties and the like made in respect of any Pledged Drive Debt (by redemption
or otherwise).
"dividends" shall include distributions on account of partnership,
limited liability company and other equity interests to the extent that the
Pledged Securities include partnership interests, limited liability company
interests or equity securities other than shares of stock.
"Drive Collateral" shall mean the Pledged Drive-GP Membership
Interests and the Pledged Drive Partnership Interests.
"Drive-GP Membership Interests" shall mean membership and other
equity interests in Drive-GP.
"Drive Partnership Interests" shall mean the aggregate of all
partnership and other equity interests in Drive and all rights and interests
relating thereto, including all related capital accounts and
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rights to receive distributions, dividends, allocations and other amounts from
time to time payable in connection therewith.
"Financing Statement" shall have the meaning provided for such term
in Article 9 of the NYUCC.
"Funding Partnership Interests" shall mean the aggregate of all
partnership and other equity interests in Funding and all rights and interests
relating thereto, including all related capital accounts and rights to receive
distributions, dividends, allocations and other amounts from time to time
payable in connection therewith.
"Initial Collateral" shall mean the Collateral listed in Annex 1
hereto.
"IPO" shall have the meaning provided for such term in Section 3(b)
hereof.
"LLC" shall have the meaning provided for such term in Section 11(c)
hereof.
"Note" - introductory paragraph
"NYUCC" means the Uniform Commercial Code of the State of New York
(as currently in effect and as the same may from time to time hereafter be
amended).
"Partnership" shall have the meaning provided for such term in
Section 11(c) hereof.
"Pledged Collateral" shall mean all of the Pledged Securities (as
defined in this Agreement) and all of the Pledged Shares (as defined in the
Pledge Agreement).
"Pledged Drive Debt" shall mean the Specified Percentage of any
indebtedness of Drive incurred after the date hereof and payable to Funding or
CLC, whether or not evidenced by notes or other instruments or otherwise.
"Pledged Drive-GP Membership Interests" shall mean Drive-GP
Membership Interests at any time held by CLC equal to 20% of all Drive Drive-GP
Membership Interests at the time outstanding.
"Pledged Drive Partnership Interests" shall mean Limited Partnership
Interests at any time held by Funding and beneficially owned by CLC equal to 20%
of all Limited Partnership Interests at the time outstanding.
"Pledged Funding Partnership Interests (CLC)" shall mean Funding
Partnership Interests at any time held by CLC equal to 79.2% of all Funding
Partnership Interests at the time outstanding (or such greater or lesser amount
as shall represent, by itself or when combined with the Pledged Drive-GP
Membership Interests, at all times a beneficial interest in 20% of all Drive
Partnership Interests at any time outstanding).
"Pledged Funding Partnership Interests (GP)" shall mean Funding
Partnership Interests at any time held by Funding-GP.
"Pledged Securities" shall have the meaning provided for such term
in Section 7 hereof.
"Proceeds" shall have the meaning provided for such term in Article
9 of the NYUCC.
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"Relevant Charter Document" shall mean, as to any Relevant Entity,
the Charter Documents of such Person, as the same may from time to time be
amended, supplemented or otherwise modified.
"Relevant Entity" shall mean (i) Drive with respect to Pledged Drive
Partnership Interests and Pledged Drive Debt, (ii) Drive-GP with respect to
Pledged Drive-GP Membership Interests, and (iii) Funding with respect to Pledged
Funding Partnership Interests (CLC) and Pledged Funding Partnership Interests
(GP).
"Relevant Entity Interest" shall have the meaning provided for such
term in Section 1 hereof.
"Secured Obligations" shall mean (i) all obligations of the Assignor
under this Agreement and the other Loan Documents to which it is a party; (ii)
all obligations of the Borrower, for principal, interest or otherwise, incurred
under or in connection with the Note and the other Loan Documents; (iii) all
obligations of the Guarantor, for principal, interest or otherwise, incurred
under or in connection with the Guarantee Agreement and the other Loan
Documents; and (iv) all obligations of Borrower and Guarantor under the Fee
Letter; in each of the foregoing cases (i.e., clauses (i)-(iv) preceding)
whether such obligations are direct or indirect, joint or several, absolute or
contingent, due or to become due, now existing or hereafter arising.
"Secured Party" - introductory paragraph
"State" means the State of New York.
"UCC" (unless explicitly stated to refer to the Uniform Commercial
Code of a state other than the State) means the NYUCC.
"written," "writing" and variations thereof shall refer to any form
of written communication or a communication by means of telecopier.
6. Voting Rights.
(a) Prior to Event of Default. So long as an Event of Default shall not
have occurred and be continuing, the Assignor shall be entitled, to the extent
not inconsistent with this Agreement, the Note or any other Loan Document:
(i) To exercise the voting power with respect to the Collateral;
provided that such voting power shall not, without the Secured Party's
prior written consent, be exercised by the Assignor to (A) adversely
affect the maturity, interest rate, principal amount or any subordination
provisions of any of the Pledged Drive Debt, (B) subordinate or terminate
any of the Collateral that are promissory notes or other debt instruments
(collectively, "Debt Instruments"), (C) if any of the Debt Instruments are
secured, commence any foreclosure action or exercise any other remedy
under or in connection with any of the Debt Instruments; (D) otherwise
adversely affect the interests of the Secured Party in connection with any
of the Collateral; or (E) in any manner that is inconsistent with the
terms of this Agreement, the Note or any other Loan Document;
(ii) To exercise any conversion, option or similar right permitted
by the terms of any of the Collateral (subject, however, to Section (b)
hereof), but only with the prior written consent of the Secured Party.
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(b) After Event of Default. If any Event of Default shall have occurred
and be continuing, the Secured Party shall thereafter be entitled (i) to
exercise the voting power (if any) with respect to the Pledged Securities, and
(ii) to exercise any conversion, option or similar right permitted by the terms
of any of the Pledged Securities.
7. Dissolution of Issuer; Stock Dividends. If, upon the dissolution or
liquidation (in whole or in part) of a Relevant Entity, any sum shall be paid
upon or with respect to any of the equity interests of such Relevant Entity that
constitute Collateral (said equity interests, "Pledged Securities") such sum
shall be promptly paid over to the Secured Party, to be applied as set forth in
Section 8 hereof. In case any stock or similar dividend or Distribution shall be
declared on any of the Pledged Securities, or any debt or equity securities
shall be issued upon conversion of any of the Pledged Securities (or the
exercise of any option or similar right), or any equity securities or fractions
thereof shall be issued pursuant to any "stock split" or merger involving any of
the Pledged Securities, or any distribution of capital shall be made on any of
the Pledged Securities, or any property shall be distributed upon or with
respect to the Pledged Securities pursuant to the recapitalization or
reclassification of the outstanding equity of the Relevant Entity or the merger
or reorganization thereof or otherwise, the securities or other property so
distributed shall be delivered promptly to the Secured Party (accompanied, where
applicable, by proper instruments of assignment and/or stock powers or the like
executed by Assignor in accordance with the Secured Party's instructions) to be
held by it as collateral security for the Secured Obligations (or, with respect
to distributions of capital or other monies, to be applied as set forth in
Section 8 hereof). No monies shall be required to be paid to Secured Party under
this Section 7 to the extent they do not represent, directly or indirectly,
payments in respect of Drive Collateral.
8. Distribution of Proceeds.
(a) Except as otherwise provided herein, all money that the Secured
Party shall receive, in accordance with the provisions hereof, whether by sale
of the Pledged Securities or otherwise (but not any amounts representing monies
on property not Collateral hereunder), shall be applied in the following manner:
First, to the payment of all costs and expenses incurred in connection with the
administration and enforcement of, or the preservation of any rights under, this
Agreement or any of the reasonable expenses and disbursements of the Secured
Party (including without limitation the fees and disbursements of its counsel
and agents); Second, to the payment of the Secured Obligations in such order as
the Secured Party may determine; and Third, as provided under clause (b) below.
Any surplus monies held by Secured Party when the Fee Letter is no longer in
effect and all the Secured Obligations have been indefeasibly paid in full shall
be paid over to Assignor or to whomsoever may be lawfully entitled to receive
such surplus.
(b) If any monies are paid hereunder to Secured Party at any time when
the Fee Letter is in effect but no Secured Obligations are outstanding, 20% of
all monies that can be traced to (or otherwise represent beneficial interests
in) the Pledged Drive Partnership Interests or Pledged Drive-GP Membership
Interests or Pledged Debt shall be paid to Pledgee pursuant to and in accordance
with the Fee Letter (and the 80% balance shall be delivered to Assignor,
Borrower or whomsoever may then be lawfully entitled to receive same).
(c) Any Distributions paid to the Assignor that are required by the
terms hereof to be paid to Secured Party shall, until so paid to Secured Party,
be received by the Assignor on behalf of and in trust for the Secured Party.
9. Authorization to File Financing Statements. The Assignor hereby
irrevocably authorizes the Secured Party at any time and from time to time to
file in any Uniform Commercial Code jurisdiction any initial Financing
Statements and amendments thereto that (a) indicate the Collateral as being of
an
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equal or lesser scope or with greater detail, and (b) contain any other
information required by part 5 of Article 9 of the NYUCC for the sufficiency or
filing office acceptance of any Financing Statement or amendment, including
whether the Assignor is an organization, the type of organization and any
organization identification number issued to the Assignor. The Assignor agrees
to furnish any such information to the Secured Party promptly upon request. To
the extent Secured Party has previously filed any Financing Statement with
respect to any Collateral, the Assignor ratifies, confirms and approves the
filing of same by the Secured Party. Assignor further agrees that any existing
Financing Statement (or any Financing Statement being filed in connection with
either or both of the Loan Agreements that names the Assignor as debtor and
Secured Party as secured party and which indicates the collateral in respect
thereof as all assets of the Assignor or words of similar effect, shall be
sufficient to describe the Collateral hereunder.
10. Further Assurances.
(a) Additional Acts. The Assignor shall, upon request of the Secured
Party, promptly make, execute and deliver to the Secured Party such other and
further Financing Statements, instruments, documents and certificates, and
perform such other and further acts and assurances, as the Secured Party may
request to perfect, to maintain the priority of, or from time to time to renew,
such security interests, to confirm or more fully perfect the rights granted
hereby, or in any way to assure to the Secured Party all its rights hereunder.
The Assignor shall pay the costs of all filings and recordings in public offices
or records, and shall, upon request of the Secured Party, make, execute and
deliver such other and further instruments, and take such other and further
actions, as the Secured Party may deem necessary or appropriate to enable it to
realize upon the Collateral, to exercise fully its rights hereunder and to
ratify and confirm any sale hereunder.
(b) Certificates. Without limiting the generality of the foregoing, the
Assignor agrees that if at any time any Collateral shall be represented by one
or more partnership certificates, stock certificates, or other certificates of
ownership or beneficial interest, notes, or any other documents which are
instruments (as defined in the UCC), then the Assignor shall promptly deliver
the same to the Secured Party, accompanied by transfer powers endorsed in blank
respecting such certificates, notes or documents, duly executed, with signatures
guaranteed (to the extent required by any relevant transfer agent or otherwise
requested by the Secured Party) and proper evidence of due authority to deliver
such instruments and endorse such powers.
11. Collateral Protection Expenses; Preservation of Collateral.
(a) Expenses Incurred by Secured Party. In its discretion, the Secured
Party may discharge taxes and other encumbrances at any time levied or placed on
any of the Collateral, make repairs thereto and pay any necessary filing fees
or, if the Assignor fails to do so, insurance premiums. The Assignor agrees to
reimburse the Secured Party on demand for any and all expenditures so made. The
Secured Party shall have no obligation to the Assignor to make any such
expenditures, nor shall the making thereof relieve the Assignor of any default.
(b) Secured Party's Obligations and Duties. Anything herein to the
contrary notwithstanding, the Assignor shall remain liable for its obligations
under each contract or agreement included in the Collateral. The Secured Party
shall not have any obligation or liability under any such contract or agreement
by reason of or arising out of this Agreement or the receipt by the Secured
Party of any payment relating to any of the Collateral, nor shall the Secured
Party be obligated in any manner to perform any of the obligations of the
Assignor under or pursuant to any such contract or agreement, to make inquiry as
to the nature or sufficiency of any payment received by the Secured Party in
respect of the Collateral or as to the sufficiency of any performance by any
party under any such contract or
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agreement, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to the Secured Party or to which the Secured Party may be entitled at
any time or times. The Secured Party's sole duty with respect to the custody,
safe keeping and physical preservation of the Collateral in its possession,
under Section 9-207 of the NYUCC or otherwise, shall be to deal with such
Collateral in the same manner as the Secured Party deals with similar property
for its own account.
(c) No Liability. Without limiting the generality of clause (b)
preceding, the Secured Party shall not, either by virtue hereof or by its
receipt of Distributions or by virtue of the exercise of any of its rights
hereunder, be deemed to be (unless it shall otherwise elect) a partner of any
partnership ("Partnership") or a member of any limited liability company ("LLC")
or to have any liability for the debts, obligations or liabilities of any
Partnership or LLC or of the Assignor or any other participant in a Partnership
or LLC or to have any obligation to make capital contributions to, perform any
services for, grant any equity or other participation interests in future
ventures or discharge any duties of a partner of a Partnership or a member of an
LLC.
12. Power of Attorney.
(a) Appointment and Powers of Secured Party. The Assignor hereby
irrevocably constitutes and appoints the Secured Party and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorneys-in-fact with full irrevocable power and authority in the place and
stead of the Assignor or in the Secured Party's own name, to take any and all
appropriate action and to execute any and all documents and instruments that may
be necessary or desirable to accomplish the purposes of this Agreement and,
without limiting the generality of the foregoing, hereby gives said attorneys
the power and right, on behalf of the Assignor, without notice to or assent by
the Assignor, to do the following:
(i) whenever an Event of Default exists, generally to sell,
transfer, pledge, make any agreement with respect to or otherwise deal
with any of the Collateral in such manner as is consistent with the UCC of
the State and as fully and completely as though the Secured Party were the
absolute owner thereof for all purposes, and to do at the Assignor's
expense, at any time, or from time to time, all acts and things which the
Secured Party deems necessary to protect, preserve or realize upon the
Collateral and the Secured Party's security interest therein, in order to
effect the intent of this Agreement, all as fully and effectively as the
Assignor might do, including, without limitation, the execution, delivery
and recording, in connection with any sale or other disposition of any
Collateral, of the endorsements, assignments or other instruments of
conveyance or transfer with respect to such Collateral; and
(ii) to the extent that the Assignor's authorization given in
Section 9 is not sufficient, to file such Financing Statements with
respect hereto, with or without the Assignor's signature, or a photocopy
of this Agreement in substitution for a Financing Statement, as the
Secured Party may deem appropriate and to execute in the Assignor's name
such Financing Statements and amendments thereto and continuation
statements which may require the Assignor's signature.
(b) Ratification by Assignor. To the extent permitted by law, the
Assignor hereby ratifies all that said attorneys shall lawfully do or cause to
be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable.
(c) No Duty on Secured Party. The powers conferred on the Secured Party
hereunder are solely to protect its interests in the Collateral and shall not
impose any duty upon it to exercise any such powers. The Secured Party shall be
accountable only for the amounts that it actually receives as a result of the
exercise of such powers and neither it nor any of its officers, directors,
employees or agents shall be
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responsible to the Assignor for any act or failure to act, except for (i) the
Secured Party's own gross negligence or willful misconduct, and (ii) Secured
Party's failure to comply with non-waivable requirements of the NYUCC applicable
to Secured Party with respect to the Collateral in question.
(d) No Cure. An agreement by Secured Party to sell any or all of the
Collateral, which agreement was made during the existence of an Event of Default
and after the expiration of any applicable notice period, shall (assuming such
transaction is thereafter consummated) be treated as a sale thereof, and the
Secured Party shall be entitled to carry out such sale pursuant to such
agreement and the Assignor shall not be entitled to the return of any of the
Collateral subject thereto notwithstanding the fact that, after the Secured
Party shall have entered into any such agreement, the Assignor or another Loan
Party shall have tendered payment in full of the Secured Obligations.
(e) Transfer of Title. Without limiting the generality of clause (c) of
this Section 12, at any time when a Default or Event of Default exists, the
Secured Party may cause all or any of the Collateral to be transferred into
Secured Party's name or that of a nominee or nominees.
13. Remedies.
(a) Whenever an Event of Default exists, the Secured Party may, without
notice to or demand upon the Assignor, declare this Agreement to be in default,
and the Secured Party shall thereafter have in any jurisdiction in which
enforcement hereof is sought, in addition to all other rights and remedies, the
rights and remedies of a secured party under the Uniform Commercial Code of the
State or of any other jurisdiction in which Collateral is located, including,
without limitation, the right to take possession of the Collateral, and for that
purpose the Secured Party may, so far as the Assignor can give authority
therefor, enter upon any premises on which the Collateral may be situated and
remove the same therefrom. The Secured Party may in its discretion require the
Assignor to assemble all or any part of the Collateral at such location or
locations within the jurisdiction(s) of the Assignor's principal office(s) or at
such other locations as the Secured Party may reasonably designate. Unless the
Collateral is perishable or threatens to decline speedily in value or is of a
type customarily sold on a recognized market, the Secured Party shall give to
the Assignor at least thirty days prior written notice of the time and place of
any public sale of Collateral or of the time after which any private sale or any
other intended disposition is to be made. The Assignor hereby acknowledges that
thirty days prior written notice of such sale or sales shall be reasonable
notice. In addition, the Assignor waives any and all rights that it may have to
a judicial hearing in advance of the enforcement of any of the Secured Party's
rights hereunder, including, without limitation, Secured Party's right following
an Event of Default to take immediate possession of the Collateral and to
exercise its rights with respect thereto.
(b) The Assignor agrees that its obligations and the rights of the
Secured Party hereunder and under the Secured Obligations may be enforced by
specific performance hereof and thereof and temporary, preliminary and/or final
injunctive relief relating hereto and thereto, without necessity for proof by
such Secured Party that the Secured Party would otherwise suffer irreparable
harm, and the Assignor hereby consents to the issuance of such specific
injunctive relief.
(c) All rights, remedies and powers provided by this Agreement may be
exercised only to the extent that the exercise thereof does not violate any
applicable provision of law, and the provisions hereof are intended to be
subject to all applicable mandatory provisions of law that may be controlling
and to be limited to the extent necessary so that they will not render this
Agreement invalid, unenforceable in whole or in part or not entitled to be
recorded, registered or filed under the provisions of any applicable law.
14. Standards for Exercising Remedies. To the extent that applicable law
imposes duties on the Secured Party to exercise remedies in a commercially
reasonable manner, the Assignor acknowledges
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and agrees that it is not commercially unreasonable for the Secured Party (a) to
incur or fail to incur expenses reasonably deemed significant by the Secured
Party to prepare Collateral for disposition or otherwise to complete raw
material or work in process into finished goods or other finished products for
disposition, (b) to fail to obtain third party consents for access to Collateral
to be disposed of, or to obtain or (if not required by other law) to fail to
obtain governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of, (c) to fail to exercise collection
remedies against account debtors or other persons obligated on Collateral or to
fail to remove liens or encumbrances on or any adverse claims against
Collateral, (d) to exercise collection remedies against account debtors and
other persons obligated on Collateral directly or through the use of collection
agencies and other collection specialists, (e) to advertise dispositions of
Collateral through publications or media of general circulation, whether or not
the Collateral is of a specialized nature, (f) to contact other persons, whether
or not in the same business as the Assignor, for expressions of interest in
acquiring all or any portion of the Collateral, (g) to hire or fail to hire one
or more professional auctioneers to assist in the disposition of Collateral,
whether or not the collateral is of a specialized nature, (h) to dispose of
Collateral by utilizing Internet sites that provide for the auction of assets of
the types included in the Collateral or that have the reasonable capability of
doing so, or that match buyers and sellers of assets, (i) to dispose of assets
in wholesale rather than retail markets, (j) to disclaim disposition warranties,
(k) to purchase insurance or credit enhancements to insure the Secured Party
against risks of loss, collection or disposition of Collateral or to provide to
the Secured Party a guaranteed return from the collection or disposition of
Collateral, or (l) to the extent deemed appropriate by the Secured Party, to
obtain the services of other brokers, investment bankers, consultants and other
professionals to assist the Secured Party in the collection or disposition of
any of the Collateral. The Assignor acknowledges that the purpose of this
Section 14 is to provide non-exhaustive indications of what actions or omissions
by the Secured Party would not be commercially unreasonable in the Secured
Party's exercise of remedies against the Collateral and that other actions or
omissions by the Secured Party shall not be deemed commercially unreasonable
solely on account of not being indicated in this Section 14. Without limitation
upon the foregoing, nothing contained in this Section 14 shall be construed to
grant any rights to the Assignor or to impose any duties on the Secured Party
that would not have been granted or imposed by this Agreement or by applicable
law in the absence of this Section 14.
15. Securities Laws. Assignor recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933 and applicable state
securities laws, the Secured Party may be compelled, with respect to any sale of
all or any part of the Collateral, to limit purchasers to those who will agree,
among other things, to acquire the Collateral for their own account, for
investment and not with a view to the distribution or resale thereof. Assignor
acknowledges that any such private sale may be at prices and on terms less
favorable to the Secured Party than those obtainable through a public sale
without such restrictions, and, notwithstanding such circumstances, agrees that
any such private sale shall be deemed to have been made in a commercially
reasonable manner and that the Secured Party shall have no obligation to engage
in public sales and no obligation to delay the sale of any Collateral for the
period of time necessary to permit the respective issuer thereof to register it
for public sale.
16. No Waiver by Secured Party, etc. The Secured Party shall not be
deemed to have waived any of its rights, powers or privileges under or upon the
Secured Obligations or the Collateral (by course of dealing or otherwise) unless
such waiver shall be in writing and signed by the Secured Party and any other
Person required by the Note to sign such waiver. No delay or omission on the
part of the Secured Party in exercising any right, power or privilege hereunder
or under any of the Secured Obligations (or partial or single exercise thereof)
shall operate as a waiver thereof or of any other right, power or privilege. A
waiver on any one occasion shall not be construed as a bar to or waiver of any
right, power or privilege on any future occasion. All rights and remedies of the
Secured Party with respect to the Secured Obligations or the Collateral, whether
evidenced hereby or by any other instrument or papers (including without
limitation other Loan Documents), shall be cumulative and may be exercised
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singularly, alternatively, successively or concurrently at such time or at such
times as the Secured Party deems expedient. No notice to or demand on the
Assignor in any case shall entitle the Assignor to any other or further notice
or demand in similar or other circumstances or constitute a waiver of any of the
rights of the Secured Party to any other or further action in any circumstances
without notice or demand.
17. Suretyship Waivers by Assignor. The Assignor waives demand, notice,
protest, notice of acceptance of this Agreement, notice of loans made, credit
extended, Collateral received or delivered or other action taken in reliance
hereon and all other demands and notices of any description. With respect to
both the Secured Obligations and the Collateral, the Assignor assents to any
extension or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of or failure to perfect any security interest
in any Collateral, to the addition or release of any party or person primarily
or secondarily liable, to the acceptance of partial payment thereon and the
settlement, compromising or adjusting of any thereof, all in such manner and at
such time or times as the Secured Party may deem advisable. The Secured Party
shall have no duty as to the collection or protection of the Collateral or any
income thereon, nor as to the preservation of rights against prior parties, nor
as to the preservation of any rights pertaining thereto beyond the safe custody
thereof as set forth in Section 11(b). The Assignor further waives any and all
other suretyship defenses.
18. Marshalling.
(a) Secured Party shall not be required to marshal any present or future
collateral security (including but not limited to any of the Aggregate
Collateral) for, or other assurances of payment of, the Secured Obligations or
any of them or to resort to such collateral security or other assurances of
payment in any particular order, and all of its rights hereunder and under the
other Loan Documents and in respect of the collateral security hereunder and
thereunder and other assurances of payment shall be cumulative and in addition
to all other rights, however existing or arising. To the extent that it lawfully
may, each of Borrower and Assignor hereby agrees that it will not invoke any law
relating to the marshalling of collateral which might cause delay in or impede
the enforcement of Secured Party's rights under this Agreement, the Pledge
Agreement or under any other instrument creating or evidencing any of the
Secured Obligations or under which any of the Secured Obligations is outstanding
or by which any of the Secured Obligations is secured or payment thereof is
otherwise assured, and, to the extent that it lawfully may, each of Borrower and
Assignor hereby irrevocably waives the benefits of all such laws.
(b) Without limiting the generality of clause (a) of this Section 18
hereof, the Assignor acknowledges that Secured Party shall not be required to
elect which of the Pledged Collateral to foreclose or otherwise realize upon but
shall be entitled (subject to applicable law) to foreclose or otherwise realize
upon such of the Pledged Collateral as it chooses.
19. Excess from Foreclosure. Notwithstanding anything to the contrary
contained herein, if Secured Party forecloses or otherwise realizes upon Pledged
Collateral that represent a beneficial interest in more than 20% of all
outstanding Drive Partnership Interests (by itself or in combination with
Drive-GP Membership Interests), Secured Party will make equitable arrangements
with FC or CLC to grant it a record or beneficial interest in such excess
(although Secured Party may retain voting rights in such excess with respect to
matters directly or indirectly relating to the Drive Collateral) or to otherwise
provide that the net proceeds of such excess, when monetized, will be paid to FC
or CLC (as the case may be). Secured Party acknowledges that on the date this
Agreement was originally executed, the percentage of Drive Partnership Interests
owned beneficially by CLC and of record by Funding (and the percentage of
Drive-GP Membership Interests owned beneficially and of record by CLC) exceeds
the amount of Pledged Drive Partnership Interests and Pledged Drive-GP
Memberships.
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20. Binding Effect. The obligations of the Secured Party hereunder shall
remain in full force and effect without regard to, and shall not be impaired by,
(i) any bankruptcy, insolvency, reorganization, arrangement, readjustment,
composition, liquidation or the like of the Assignor or any Relevant Entity;
(ii) any exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of the Secured Obligations or any of the other
Loan Documents or any security for any of the Secured Obligations; or (iii) any
amendment to or modification of the Note or any of the other Loan Documents
(other than this Agreement), whether or not the Secured Party shall have notice
or knowledge of any of the foregoing.
21. Termination. Subject to the provisions of Section 18(b), this
Agreement and the security interest in and lien on the Collateral shall
terminate when the Fee Letter is no longer in effect and all of the Secured
Obligations have been indefeasibly paid in full as provided herein, in the Note
and the other Loan Documents. In the event of a sale or assignment by the
Secured Party of all or any of the Secured Obligations held by it, the Secured
Party may assign or transfer its rights and interests under this Agreement in
whole or in part to the purchaser or purchasers (or assignee or assignees) of
such Secured Obligations. If such sale or assignment relates to all of the
Secured Obligations, such purchaser or purchasers (or assignee or assignees)
shall become vested with all the power and rights of the Secured Party hereunder
and the Secured Party shall thereafter (provided such sale or assignment is not
to an Affiliate of Secured Party) be forever fully released and discharged from
any liability or responsibility hereunder with respect to the rights and
interests so assigned (other than lawful claims previously accrued in connection
with actions taken with respect to the Collateral prior to such sale or
assignment). If and to the extent that the Secured Party retains any portion of
the Secured Obligations or interest in the Collateral, the Secured Party will
continue to have the rights and powers set forth herein with respect to the
portion so retained and the purchaser or purchasers (or assignee or assignees)
of the portion transferred or assigned will have the rights and powers set forth
herein with respect to the portion so transferred or assigned and not retained.
22. Separate Agreements; Amendment.
(a) This Agreement is intended to be a separate agreement between each
Assignor and the Secured Party; as such, the consent of no other Person
(including other Assignors) is required for any waiver, amendment, supplement or
other modification of the Secured Party's agreement hereunder with any
particular Assignor.
(b) No provision of this Agreement shall (as to any Assignor) be waived,
amended, supplemented or otherwise modified except by a written instrument
executed by such Assignor and the Secured Party. Without limiting the generality
of the foregoing, no amendment of Annex 1 hereto to reflect a change of
ownership of any Pledged Securities or other Collateral shall require the
signature of any Assignor other than that whose Collateral is being transferred
or acquired and no amendment of this Agreement or Annex 1 hereto to add any
Person as a grantor of security interests hereunder shall require the signature
of any Assignor other than the Person so granting such Lien.
(c) THIS AGREEMENT (AND THE OTHER LOAN DOCUMENTS) REPRESENTS THE FINAL
AGREEMENT BETWEEN AND 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.
(d) THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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23. Assignment. This Agreement is binding upon the Assignor, the Secured
Party and their respective executors, administrators, successors and assigns and
shall inure to the benefit of the Secured Party and its successors and assigns.
The Assignor may not assign its rights or obligations hereunder without the
prior written consent of the Secured Party, and any such purported assignment
shall be void. All agreements, representations and warranties made herein shall
survive the execution, delivery and performance of this Agreement.
24. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY 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 to
the extent that matters of title or procedural issues of foreclosure are
required to be governed by the laws of the state in which the Collateral, or
part thereof, is located.
25. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provisions in any
other jurisdiction.
26. Indemnification.
(a) The Assignor agrees to indemnify and hold harmless the Secured Party
from and against any and all claims, damages, losses, liabilities and expenses
which it may suffer or incur and which arise out of or are in connection with or
result from:
(i) the Charter Document of a Relevant Entity;
(ii) this Agreement (including without limitation, the enforcement
hereof), or the receipt of Distributions or exercise of any rights
hereunder; or
(iii) any claim or any alleged obligation, liability or duty on the
part of the Secured Party to perform or discharge any of the terms,
covenants or provisions of a Relevant Charter Document or other agreement
or document obligating or binding, or purporting to obligate or bind,
Assignor or a Relevant Entity or any partner or member thereof, or any
other obligation, liability or duty of the Assignor or any Relevant Entity
or any partner or member thereof,
together with (in each of the foregoing cases) all costs and expenses
(including, without limitation, court costs and reasonable attorneys' fees) paid
or incurred in connection therewith, (in each case) unless and to the extent
that such claims, damages, losses, liabilities or expenses (A) are attributable
to the Secured Party's gross negligence or wilful misconduct as determined by a
final, non-appealable judgment of a court of competent jurisdiction, or (B)
result directly from Secured Party's failure to comply with non-waivable
requirements of the NYUCC applicable to Secured Party with respect to the
Collateral in question.
(b) The Assignor will upon demand promptly pay to the Secured Party the
amount of any and all costs and expenses incurred in connection with the
preparation, administration and enforcement of, or the preservation of any
rights under, this Agreement and the reasonable expenses and disbursements of
the Secured Party (including without limitation the fees and disbursements of
its counsel and agents).
-13-
(c) To the extent an Assignor is also a party to the Note or the
Guarantee Agreement or another Loan Document, the foregoing provisions of this
Section 26 are (with respect to such Assignor) in furtherance and not in
limitation of Assignor's obligations under such other Loan Document(s).
(d) The provisions of this Agreement are subject to those of Section 1.9
of the Note.
27. Waiver of Jury Trial. EACH OF THE SECURED PARTY AND THE ASSIGNOR
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY AND ALL RIGHTS EITHER
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, THE NOTE OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN), OR ACTIONS OF THE SECURED PARTY, THE ASSIGNOR, ANY OTHER
ASSIGNOR, THE BORROWER OR ANY OTHER LOAN PARTY. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE SECURED PARTY MAKING THE LOAN TO BORROWER THAT IS SECURED BY
THIS AGREEMENT AND THE COLLATERAL.
28. Notices. Any notice or demand upon the Assignor under this Agreement
shall be deemed to have been sufficiently given or served for all purposes
hereof when mailed, postage prepaid, by registered or certified mail, return
receipt requested, or when telegraphed, telecopied or telexed or delivered by
hand (such term to include delivery by Federal Express or similar courier
service), to the Assignor at its address set forth below or at such other
address as the Assignor may designate in a writing mailed, delivered,
telegraphed, telecopied or telexed to the Secured Party, provided that in the
case where the Secured Party is required to give only three days' notice of a
proposed sale of the Collateral such notice if delivered by mail shall not be
deemed given until delivered. All notices to the Secured Party provided for
herein shall be deemed to have been given when delivered by mail or by hand, or
telegraphed, telecopied or telexed, to the Secured Party at its address set
forth below or at such other address as the Secured Party may designate in a
writing mailed, delivered, telegraphed, telecopied or telexed to the Assignor.
29. Headings. The descriptive headings of the various provisions of this
Agreement are inserted for convenience of reference only and shall not affect
the meaning or construction of any of the provisions of this Agreement.
30. Jurisdiction. The Assignor hereby agrees that ANY LEGAL ACTION OR
PROCEEDING AGAINST THE ASSIGNOR WITH RESPECT TO THIS AGREEMENT OR THE OTHER
DOCUMENTS CONTEMPLATED HEREBY OR REFERRED TO HEREIN MAY BE BROUGHT IN ANY COURT
IN THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, AS THE SECURED PARTY MAY ELECT, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT THE ASSIGNOR GENERALLY AND UNCONDITIONALLY ACCEPTS
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 Secured Party in writing, with respect to any action
or proceeding brought by it against Secured Party and any questions relating to
usury, and further consents (to the extent permitted by applicable law) to the
service of process in any such action or proceeding being made upon Assignor by
registered or certified mail or by Federal Express (or other similar overnight
courier service) at the address stated alongside its name on the signature page
hereof or at such other address as Assignor is notified of in accordance with
Section 28 hereof), such service being hereby acknowledged by Assignor as being
effective and binding service in every respect. The Assignor waives any right to
stay or to dismiss any action or proceeding brought before any of said courts on
the basis of forum non conveniens.
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Nothing herein shall affect the right of the Secured Party to serve process in
any other manner permitted by applicable law or shall limit the right of the
Secured Party to bring actions and proceedings against the Assignor in the
courts of any other jurisdiction.
31. Counterparts. This Agreement may be executed in any number of
counterparts, and by the different parties hereto on the same or separate
counterparts, each of which shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Telecopied
signatures hereto shall be of the same force and effect as an original of a
manually signed copy.
IN WITNESS WHEREOF, the Assignor and Secured Party have duly
executed and delivered this Agreement as of the date first above written.
Address
-------
FirstCity Consumer Lending Corporation, Assignor For Deliveries (including, e.g., FedEx)
0000 Xxxxxxxx Xxxxx
Xxxx, Xxxxx 00000
By_____________________________ Attn: Legal Dept.
Name: Xxxxx X. Xxxxxxx
Title: Chairman of the Board For Mail
XX Xxx 0000
Xxxx, Xxxxx 00000-0000
Attn: Legal Dept.
fax: 254/000-0000
FirstCity Funding L.P., Assignor For Deliveries (including, e.g., FedEx)
By FirstCity Funding GP Corp., general partner 0000 Xxxxxxxx Xxxxx
Xxxx, Xxxxx 00000
By_____________________________ Attn: Legal Dept.
Name: Xxxxx X. Xxxxxxx
Title: Chairman of the Board For Mail
XX Xxx 0000
Xxxx, Xxxxx 00000-0000
Attn: Legal Dept.
fax: 254/000-0000
For Deliveries (including, e.g., FedEx)
FirstCity Funding GP Corp., Assignor 0000 Xxxxxxxx Xxxxx
Xxxx, Xxxxx 00000
Attn: Legal Dept.
By_____________________________
Name: Xxxxx X. Xxxxxxx For Mail
Title: Chairman of the Board XX Xxx 0000
Xxxx, Xxxxx 00000-0000
Attn: Legal Dept.
fax: 254/000-0000
The Governor and Company of the Bank of
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Scotland, Secured Party
c/o Bank of Scotland
000 Xxxxx Xxxxxx
Xx Xxx Xxxx, XX 00000
------------------------------------- fax: 212/000-0000
Name: Xxxx X Xxxxx
Title: Executive Vice President
-00-
Xxxxx 0
Xxxxxxxx Xxxxx of Organization Asset
-------- --------------------- -----
CLC Texas Pledged Drive-GP Membership Interests
CLC Texas Pledged Funding Partnership Interests (CLC)
CLC Texas CLC Revenue Rights
CLC Texas Pledged Drive Debt
Funding Texas Pledged Drive Partnership Interests
Funding Texas Pledged Drive Debt
Funding-GP Texas Pledged Funding Partnership Interests (GP)
Key to definitions used above
-----------------------------
CLC= FirstCity Consumer Lending Corporation, a Texas corporation
Funding = FirstCity Funding L.P., a Texas limited partnership
Funding-GP=FirstCity GP Corp., a Texas corporation
-17-
