1
EXHIBIT 99.1
FUNDING AGREEMENT DATED NOVEMBER 30, 1995
AMONG SEARCH CAPITAL GROUP, INC., SEARCH
FUNDING CORP, AUTOMOBILE CREDIT ACCEPTANCE
CORP., AUTOMOBILE CREDIT HOLDINGS, INC.,
NEWSEARCH, INC. AND HALL FINANCIAL GROUP, INC.
2
FUNDING
AGREEMENT
Dated November 30, 1995
among
SEARCH CAPITAL GROUP, INC.
SEARCH FUNDING CORP.
AUTOMOBILE CREDIT ACCEPTANCE CORP.
AUTOMOBILE CREDIT HOLDINGS, INC.
and
NEWSEARCH, INC.
referred to collectively as
THE SEARCH PARTIES
and
HALL FINANCIAL GROUP, INC.
3
TABLE OF CONTENTS
1.0 DATE AND PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.0 RECITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 Search, Subsidiaries, Corporate
Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Bankruptcy Proceeding . . . . . . . . . . . . . . . . . . . . . . . 2
2.3 Funding Requirements . . . . . . . . . . . . . . . . . . . . . . . . 2
2.4 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.4 Interim Funding . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.0 DEFINITIONS AND USAGE . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.1 Primary Defined Terms . . . . . . . . . . . . . . . . . . . . . . . 2
Bankruptcy Proceeding . . . . . . . . . . . . . . . . . . . . . . . 2
Bankruptcy Code . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Chapter Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . 2
Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Collateral Coverage Ratio . . . . . . . . . . . . . . . . . . . . . 3
Disclosure Statement . . . . . . . . . . . . . . . . . . . . . . . . 3
Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Financing Statements . . . . . . . . . . . . . . . . . . . . . . . . 3
$500,000 Note. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
GECC Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
GECC Loan Agreement . . . . . . . . . . . . . . . . . . . . . . . . 4
GECC Pledged Collateral . . . . . . . . . . . . . . . . . . . . . . 4
Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Non-Chapter Subsidiaries . . . . . . . . . . . . . . . . . . . . . . 4
Note I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Note II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Note III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Table of Contents i
FUNDING AGREEMENT
4
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Plan Funding Commitment . . . . . . . . . . . . . . . . . . . . . . 5
Pledge Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Search Collateral . . . . . . . . . . . . . . . . . . . . . . . . . 5
Search Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Security Agreements . . . . . . . . . . . . . . . . . . . . . . . . 5
SFC Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Share Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . 5
UCC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Other Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Usages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.0 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . 6
4.1 The Search Parties . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.2 HFG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.0 COMMITMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.1 HFG Funding Commitment . . . . . . . . . . . . . . . . . . . . . . . 9
5.2 Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.0 LOAN CLOSING CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . 10
6.1 Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7.0 LOAN CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.2 Obligations at Closing . . . . . . . . . . . . . . . . . . . . . . . 12
A. Search . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
B. SFC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
C. Newsearch . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
D. ACAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
E. ACHI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
F. Search Parties . . . . . . . . . . . . . . . . . . . . . . . . . . 13
G. HFG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.3 Conditions for Funding under Note II . . . . . . . . . . . . . . . . 13
7.4 Conditions for Funding under Note III . . . . . . . . . . . . . . . 14
Table of Contents ii
FUNDING AGREEMENT
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7.5 Post-Closing Extensions of Maturities of Notes I and II . . . . . . 14
8.0 PLAN FUNDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
8.1 Plan Funding Commitment . . . . . . . . . . . . . . . . . . . . . . 14
8.2 Funding Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . 14
8.3 Conditions to Plan Funding . . . . . . . . . . . . . . . . . . . . . 14
8.4 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.5 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.6 Board Representation . . . . . . . . . . . . . . . . . . . . . . . . 16
8.7 Funding Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9.0 NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9.1 Limitations on Changes in Search's Capital Structure . . . . . . . . 16
9.2 Limitations on Changes in GECC Loan Agreement . . . . . . . . . . . 16
9.3 Limitations on Transfers Among Entities . . . . . . . . . . . . . . 16
9.4 Limitations on Change of Principal Place of Business
of Search and SFC . . . . . . . . . . . . . . . . . . . . . . . . . 16
9.5 Limitations on Sale or Transfer of Search and SFC Receivables . . . 17
9.6 Limitations on Junior Security Interests in Search
and SFC Receivables . . . . . . . . . . . . . . . . . . . . . . . . 17
9.7 Limitations on Filing Voluntary Petitions under Bankruptcy Code . . 17
10.0 AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . 17
10.1 Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . 17
10.2 Periodic Reports . . . . . . . . . . . . . . . . . . . . . . . . . 17
10.3 Subsequent Pledge of GECC Pledged Collateral . . . . . . . . . . . 17
10.4 Board Representation . . . . . . . . . . . . . . . . . . . . . . . 17
10.5 Collateral Coverage . . . . . . . . . . . . . . . . . . . . . . . . 17
11.0 DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
11.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . 18
11.2 HFG Rights upon Occurrence of an Event of Default . . . . . . . . . 19
12.0 GUARANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
12.1 Search's Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . 19
12.2 SFC's Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . 20
12.3 ACAC's, ACHI's and Newsearch's Guaranty . . . . . . . . . . . . . . 20
12.4 General Provisions of All Guaranties . . . . . . . . . . . . . . . 20
12.5 Term of Guaranties . . . . . . . . . . . . . . . . . . . . . . . . 21
Table of Contents iii
FUNDING AGREEMENT
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12.6 Guarantors' Waivers . . . . . . . . . . . . . . . . . . . . . . . . 21
13.0 EXPENSE REIMBURSEMENT AND INDEMNITY . . . . . . . . . . . . . . . . . 21
13.1 Reimbursement of Expenses . . . . . . . . . . . . . . . . . . . . . 21
13.2 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
14.0 USURY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
14.1 Non-Usurious Intent . . . . . . . . . . . . . . . . . . . . . . . . 22
14.2 Construction to Avoid Usury . . . . . . . . . . . . . . . . . . . . 22
15.0 GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 23
15.1 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . 23
15.2 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
15.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
15.4 HFG Reliance on Disclosure Statement . . . . . . . . . . . . . . . 23
15.5 Duty of HFG's Professionals . . . . . . . . . . . . . . . . . . . . 23
15.6 No Fiduciary Relationship . . . . . . . . . . . . . . . . . . . . . 24
15.7 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
A. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 24
B. Binding Agreement . . . . . . . . . . . . . . . . . . . . . . . . 24
C. Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
D. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
E. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
F. Resolution of Ambiguities . . . . . . . . . . . . . . . . . . . . 24
G. Limitation and Waiver of Remedies . . . . . . . . . . . . . . . . 24
H. Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
I. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . 25
J. Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
15.8 Binding Agreement to Arbitrate Disputes . . . . . . . . . . . . . . 25
15.9 Limitation of Actions . . . . . . . . . . . . . . . . . . . . . . . 25
Table of Contents iv
FUNDING AGREEMENT
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FUNDING
AGREEMENT
1.0 DATE AND PARTIES
1.1 DATE. This funding agreement is dated and effective November
28, 1995.
1.2 PARTIES. The parties to this agreement are:
X. Xxxx Financial Group, Inc. ("HFG")
000 X. Xx. Xxxx
Xxxxx 000
Xxxxxx, XX 00000-0000
B. Search Capital Group, Inc. ("Search")
000 X. Xxxxx
Xxxxx 000, X.X. 000
Xxxxxx, XX 00000-0000
C. Search Funding Corp. ("SFC")
000 X. Xxxxx
Xxxxx 000, X.X. 000
Xxxxxx, XX 00000-0000
D. Automobile Credit Acceptance Corp. ("ACAC")
000 X. Xxxxx
Xxxxx 000, X.X. 000
Xxxxxx, XX 00000-0000
E. Newsearch, Inc. ("Newsearch")
000 X. Xxxxx
Xxxxx 000, X.X. 000
Xxxxxx, XX 00000-0000
F. Automobile Credit Holdings, Inc. ("ACHI")
000 X. Xxxxx
Xxxxx 000, X.X. 000
Xxxxxx, XX 00000-0000
FUNDING AGREEMENT 1
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2.0 RECITATIONS
2.1 SEARCH, SUBSIDIARIES, CORPORATE STRUCTURE. Search is the
corporate parent of SFC, ACHI, and Newsearch, and of other incorporated
entities, which are the Chapter Subsidiaries and the Non-Chapter Subsidiaries
identified in 3.1. ACHI is ACAC's corporate parent. Search and its
subsidiaries comprise an industry-specific financial services company
specializing in the purchase, management, and securitization of used motor
vehicle receivables, which are secured by medium-priced, used automobiles and
light trucks which typically have been purchased by consumers with substandard
credit histories.
2.2 BANKRUPTCY PROCEEDING. Each of the Chapter Subsidiaries on
August 14, 1995, filed a petition for reorganization under chapter 11 of the
Bankruptcy Code. All of them are now debtors in an
administratively-consolidated Bankruptcy Proceeding. Search and the Chapter
Subsidiaries have proposed the Plan in the Bankruptcy Proceeding.
2.3 FUNDING REQUIREMENTS. The Search Parties require funds for
general corporate purposes, and for the purpose of assisting in the
implementation of the Plan, all under the terms of this agreement.
2.4 OBJECTIVES. HFG has agreed to supply to the Search Parties
the funding provided for under and in accordance with the conditions of this
agreement.
2.5 INTERIM FUNDING. Previously the parties executed an Interim
Funding Agreement dated November 21, 1995, pursuant to which a $500,000 Note
was executed by Search and SFC payable to HFG. The $500,000 Note represented a
partial funding of Note I and was secured by the Search Collateral and the SFC
Collateral. Principal and interest accrued and unpaid on the $500,000 Note
will be paid at Closing through delivery of Note I.
3.0 DEFINITIONS AND USAGE
3.1 PRIMARY DEFINED TERMS. When used in this agreement and
capitalized, unless the context clearly indicates otherwise, these terms shall
have these special meanings:
BANKRUPTCY PROCEEDING: the consolidated bankruptcy proceedings of the
Chapter Subsidiaries, begun on August 14, 1995, when each of the
Chapter Subsidiaries filed a petition for reorganization under chapter
11 of the Bankruptcy Code, and pending in the U.S. Bankruptcy Court
for the Northern District of Texas, Dallas Division, as In re
Automobile Credit Fund 1991-III, Inc., et al, case nos.
395-34981-RCM-11 through 395-34988-SAF-11, jointly administered under
case no. 395-34981-RCM-11.
BANKRUPTCY CODE: the United States Bankruptcy Code, as amended from
time to time.
CHAPTER SUBSIDIARIES : these corporate subsidiaries of Search, each
of which is a debtor in the Bankruptcy Proceeding:
1. Automobile Credit Fund 1991-III, Inc., a Texas
corporation;
FUNDING AGREEMENT 2
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2. Automobile Credit Finance, Inc., a Texas corporation;
3. Automobile Credit Partners, Inc. ., a Delaware
corporation;
4. Automobile Credit Finance 1992-II, Inc., a Texas
corporation;
5. Automobile Credit Finance III, Inc., a Texas
corporation;
6. Automobile Credit Finance IV, Inc., a Texas
corporation;
7. Automobile Credit Finance V, Inc. ., a Texas
corporation; and
8. Automobile Credit Finance VI, Inc., a Texas
corporation.
COLLATERAL: The Search Collateral, the SFC Collateral, the Share
Collateral, and all other collateral subjected to security interests
under the Security Agreements and the Pledge Agreement.
COLLATERAL COVERAGE RATIO: the ratio of the automobile receivables
pledged under the Security Agreements and the GECC Loan Agreement
having a delinquency not exceeding 60 days as compared to the sum of
the outstanding balances owed to HFG on Notes I and II and GECC at the
time such ratio is determined with such ratio being not less than 1.5
to 1.0.
DISCLOSURE STATEMENT: the Disclosure Statement proposed to be filed
in the Bankruptcy Proceeding by all of the Chapter Subsidiaries and
Search, as co-proponents of the Plan.
EFFECTIVE DATE: the Effective Date as defined in the Plan.
FINANCING STATEMENTS: UCC financing statements evidencing the
security interests in the Collateral granted by the Security
Agreements and the Pledge Agreements.
$500,000 NOTE: The promissory note executed by Search and SFC on
November 21, 1995, payable to HFG in the principal amount of $500,000,
which note will be satisfied in full at closing upon the execution of
Note I.
GAAP: generally accepted accounting principles, applied on a
consistent basis, as set forth in Opinions of the Accounting
Principles Board of the American Institute of Certified Public
Accountants or in statements of the Financial Accounting Standards
Board, or their respective successors, and which are applicable in the
circumstances as of the relevant date. Accounting principles are
applied on a consistent basis when the accounting principles applied
in a current period are comparable in all material respects to those
accounting principles applied in a preceding period.
GECC LOAN: the loan made by General Electric Capital Corporation
("GECC") to SFC under the GECC Loan Agreement.
FUNDING AGREEMENT 3
10
GECC LOAN AGREEMENT: the Motor Vehicle Installment Contract Loan and
Security Agreement dated June 17, 1994, among GECC, SFC and Search, as
amended and modified by the parties to such agreement.
GECC PLEDGED COLLATERAL: the pledged chattel paper held at closing
under this agreement by GECC in pledge under the GECC Loan Agreement,
identified in Exhibit A.
LOAN DOCUMENTS: Notes I, II and III, the Security Agreements, the
Pledge Agreements, and all Financing Statements and other instruments,
documents and agreements that may be executed and delivered by any of
the Search Parties to HFG under or in connection with this agreement,
as they may be amended renewed, extended or supplemented from time to
time.
NON-CHAPTER SUBSIDIARIES: these corporate subsidiaries of Search:
1. Automobile Credit Wholesaling, Inc., a Delaware
corporation;
2. Consumer-Dealer Autocredit Corporation, a Texas
corporation; and
3. Search Automobile Leasing Corporation, a Texas
corporation.
NOTE I: the convertible promissory note in the original principal
amount by which (i) $2,000,000.00 exceeds (ii) the principal amount
owing on the GECC Loan on the date of closing; in the form of Exhibit
B, and with the option of the holder to convert up to $1,000,000.00 of
the debt represented by Note I into common stock of Search on the
terms and conditions contained in Exhibit B,to be executed and
delivered to HFG by Search and SFC at closing; and all renewals,
extensions, restructurings, modifications and substitutions for Note
I.
NOTE II: the promissory note in the original principal amount
actually advanced, if any, not to exceed the lesser of (i) the
principal amount owing on the GECC Loan on the date of closing, and
(ii) the principal amount owing on the GECC Loan on the date, if any,
of advancing of principal under Note II; in the form of Exhibit C, to
be executed and delivered to HFG by Search and SFC at closing, with
funds to be advanced on the conditions in 7.3; and all renewals,
extensions, restructurings, modifications and substitutions for Note
II.
NOTE III: the convertible promissory note in the original principal
amount of $1,000,000.00, or so much thereof actually advanced, under
which $500,000.00 will be advanced at closing, and an additional
$500,000.00 will be advanced as soon as practicable after (but not
more than 10 days after) approval by the bankruptcy court in the
Bankruptcy Proceeding of the Disclosure Statement; in the form of
Exhibit D, and with the option in the holder to convert the debt
represented by Note III into common stock of Search on the terms and
conditions contained in Exhibit D, to be executed and delivered to HFG
by Search and SFC at closing, with funds to be advanced on the
conditions in 7.4; and all renewals, extensions, restructurings,
modifications and substitutions for Note III.
NOTES: Note I, Note II, and Note III.
FUNDING AGREEMENT 4
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OBLIGATIONS: all obligations, indebtedness and liabilities of the
Search Parties and other Non-Chapter Subsidiaries to HFG, now existing
or hereafter arising, whether direct, indirect, related, unrelated,
fixed, contingent, liquidated, unliquidated, joint, several, or joint
and several, including without limitation, all obligations,
indebtedness and liabilities of the Search Parties to HFG under the
Notes, the Security Agreements, the Pledge Agreements, and the other
Loan Documents.
PLAN: the Joint Plan of Reorganization proposed to be filed in the
Bankruptcy Proceeding by all of the Chapter Subsidiaries and Search,
as co-proponents.
PLAN FUNDING COMMITMENT: HFG's commitment to provide funding under
the Plan, under the terms and conditions of Section 8.0.
PLEDGE AGREEMENTS: the pledge agreements to be executed and delivered
to HFG at closing by Newsearch, in the form of Exhibit E, by Search,
in the form of Exhibit F, and by ACHI in the form of Exhibit G, as
amended, supplemented or modified from time to time, granting a
security interest in the Share Collateral, to secure payment of the
Notes and all other Obligations of the Search Parties hereunder.
SEARCH COLLATERAL: the chattel paper held by Search, identified by
schedule in Exhibit A, in which Search is at closing to grant a
security interest, by executing and delivering the Search Security
Agreement to HFG, and by pledging the chattel paper through delivery
of the chattel paper to HFG, and the GECC Pledged Collateral owned by
Search, identified in Exhibit A, which will at closing be subjected to
a junior security interest under the Search Security Agreement, to
secure the Notes and all other Obligations of the Search Parties
hereunder.
SEARCH PARTIES: Search, SFC, ACHI, ACAC, and Newsearch.
SECURITY AGREEMENTS: the security agreements to be executed and
delivered to HFG at closing by Search, SFC and ACAC, in the forms of
Exhibits H (the "Search Security Agreement"), I (the "SFC Security
Agreement") and J (the "ACAC Security Agreement"), as they may be
amended, supplemented or modified from time to time, each granting a
security interest in chattel paper held by the grantor of the security
interest, to secure payment of the Notes and all other Obligations of
the Search Parties hereunder.
SFC COLLATERAL: the chattel paper held by SFC, identified by schedule
in Exhibit A, in which SFC is at closing to grant a security interest,
by executing and delivering the SFC Security Agreement to HFG, and by
pledging the chattel paper through delivery of the chattel paper to
HFG, and the GECC Pledged Collateral owned by SFC, identified in
Exhibit A, which will at closing be subjected to a junior security
interest under the SFC Security Agreement, to secure the Notes and all
other Obligations of the Search Parties hereunder.
SHARE COLLATERAL: (i) 2,250,000 common shares of Search held by
Newsearch, (ii) 100% of the common stock of SFC, ACHI, and Newsearch
held by Search, and (iii) 100% of the common stock of ACAC held by
ACHI in which Newsearch, Search, and ACHI
FUNDING AGREEMENT 5
12
respectively, will at closing grant and perfect a security interest to
secure the Notes and all other Obligations of the Search Parties
hereunder, by executing and delivering the Pledge Agreements to HFG,
and by delivering the Share Collateral to HFG in pledge under the
Pledge Agreements.
UCC: The Texas Uniform Commercial Code, as amended from time to time.
3.2 OTHER DEFINED TERMS. Other terms are defined elsewhere in the
agreement, with the defined term appearing in quotation marks within
parentheses immediately following the defining term or phrase. When used in
this agreement, unless the context clearly indicates otherwise, those defined
terms shall have those limited meanings. When terms defined in the UCC are
used in this agreement, those terms have their UCC meanings unless the context
clearly indicates otherwise. Any accounting terms used in this agreement have
the meanings given them in accordance with GAAP.
3.3 USAGES. Defined terms may be used in the singular or plural.
When used in this agreement, the words "hereof," "herein," and "hereunder"
always refer to this agreement as a whole, and never to a particular provision.
Unless otherwise clearly indicate, section ("Section ") and paragraph ("Par.")
references are to sections and paragraphs of this agreement.
4.0 REPRESENTATIONS AND WARRANTIES
4.1 THE SEARCH PARTIES. The Search Parties jointly and severally
represent and warrant to HFG that:
A. Search, ACHI, and Newsearch are duly incorporated, validly
existing, and in good standing under the laws of Delaware.
SFC and ACAC are duly incorporated, validly existing, and in
good standing under the laws of Texas.
B. Each Search Party has full power and authority to carry on its
business as now conducted and as proposed to be conducted, and
to execute and perform its Obligations under this agreement
and the Loan Documents to which it will be a signatory
hereunder.
C. The execution, delivery and performance of this agreement by
each Search Party, and the execution, delivery and performance
of the Notes, the Security Agreements, the Pledge Agreements,
and the other Loan Documents by each Search Party that will be
a signatory to each such instrument hereunder, have been duly
authorized by all requisite corporate action, will not violate
the articles of incorporation or bylaws of any Search Party,
and do not require any approval of its stockholders.
D. Search's only subsidiaries are SFC, ACHI, Newsearch, the
Chapter Subsidiaries, and the Non-Chapter Subsidiaries.
Search owns and holds all of the issued and outstanding
capital stock of all of its subsidiaries. ACHI owns and holds
all of the issued and outstanding capital stock of ACAC.
Search owns no direct or indirect interest in any other
entity.
FUNDING AGREEMENT 6
13
E. Search owns and holds the receivables scheduled in Exhibit A,
subject to no encumbrances or adverse claims, except for the
portion of the receivables owned and held by Search that is
subject to a security interest in favor of GECC under the GECC
Loan Agreement, as identified in Exhibit A. The receivables
are chattel paper held by Search at its principal place of
business in Dallas, Texas.
F. SFC owns and holds the receivables shown in Exhibit A, subject
to no encumbrances or adverse claims, except for the portion
of the receivables owned and held by SFC that is subject to a
security interest in favor of GECC under the GECC Loan
Agreement, as identified in Exhibit A. The receivables are
chattel paper held by SFC at its principal place of business
in Dallas, Texas.
G. The GECC Loan Agreement has not been amended, and there is no
uncured or unwaived default by Search or SFC under the GECC
Loan Agreement, or any condition that but for the giving of
notice or the passage of time would be a default under the
GECC Loan Agreement, except as has been certified in writing
to HFG by the Search Parties before execution of this
agreement.
H. Each of the Non-Chapter Subsidiaries is a duly organized and
validly existing corporation in good standing under the laws
of the state of its incorporation, which is correctly
identified in Par. 3.1, with requisite corporate power and
authority to own its properties and to transact the businesses
in which it is engaged.
I. Each of the Chapter Subsidiaries is a duly organized and
validly existing corporation in good standing under the laws
of the state of its incorporation, which is correctly
identified in Par. 3.1, with requisite corporate power and
authority to own its properties and to transact the businesses
in which it is engaged, subject to the authority of the
bankruptcy court in the Bankruptcy Proceeding; and each of the
Chapter Subsidiaries is now a debtor in the Bankruptcy
Proceeding.
J. As of the date of its filing, the Second Amended Disclosure
Statement filed in the Bankruptcy Proceeding was true in all
material respects, and fairly disclosed all material matters
required to make its statements not misleading and to enable a
creditor or potential investor in the Chapter Subsidiaries
through the plan to make a reasonably informed decision in
voting upon the plan.
K. The execution and delivery of this agreement by each Search
Party is for good and sufficient consideration.
L. Performance by the Search Parties under this agreement and
under any Loan Documents to which any of them will be a
signatory will not violate the articles of incorporation or
bylaws of any of them, or require any approval of
stockholders.
N. The person executing this agreement on behalf of each of the
Search Parties is duly authorized so to act.
FUNDING AGREEMENT 7
14
O. The execution and delivery of this agreement by the Search
Parties and the performance by each Search Party of this
agreement or the Loan Documents to which it will be a party
will not (i) violate (a) any provision of law applicable to
any of them, or any order, judgment or decree of any court or
other agency of government binding either of them or (b) any
material contractual obligation of any of them (except the
GECC Loan Agreement, to the extent certified in writing to HFG
by the Search Parties before execution of this agreement),
(ii) conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any
material contractual obligation of any of them, (iii) result
in or require the creation or imposition of any encumbrance of
any nature whatsoever upon any of the properties or assets of
any Search Party, other than the security interests granted to
HFG under the Loan Documents, or (iv) require any approval or
consent under any material contractual obligation of any of
them, other than approvals or consents which have been
obtained.
P. There are no actions, suits or proceedings pending or, to
their knowledge, threatened against any Search Party wherein
an adverse ruling or decision is reasonably likely to affect
materially and adversely the ability of any Search Party to
perform its Obligations under this agreement or the Loan
Documents; and there are no unsatisfied judgments outstanding
against any Search Party.
Q. Except for the filing of the Financing Statements, and the
continuations of such filings as required by the UCC, no
consent, approval, authorization or other action of or by, or
registration, designation, declaration, filing or
qualification with, any court, administrative agency or other
governmental entity which has not been obtained is necessary
as a condition to, or in connection with, the execution,
delivery or performance by, or the enforceability against, any
Search Party, or the validity of this agreement or the Loan
Documents to which any of them is a party, or the consummation
of the transactions contemplated by this agreement or the Loan
Documents.
R. No order, consent, approval, license, authorization or
validation of, or recording, registration, declaration or
filing with, or exemption by, any governmental or public body
or authority (including, without limitation, any bankruptcy
court, trustee or receiver), or any other third party is
required to be made or obtained by Search or any of its
subsidiaries or affiliates in connection with the execution,
delivery and performance by Search of this agreement or of any
of Loan Documents to which it will be a party, or in
connection with the legality, validity, binding effect or
enforceability of the this agreement or any of the Loan
Documents, except those which have been made or obtained prior
to the date of this agreement and are effective.
S. Each financial statement of Search, SFC, ACHI, ACAC and
Newsearch supplied to HFG by the Search Parties fairly present
in accordance with GAAP the assets, liabilities, financial
condition and income of the relevant entity as of the date of
the statement, and there has been no material adverse change
in the assets, liabilities or
FUNDING AGREEMENT 8
15
financial condition of any of Search, SFC, Newsearch, ACHI, or
ACAC since the date of the most recent financial statement of
that entity supplied to HFG.
T. There is no fact known to the Search Parties that they have
not disclosed to HFG in writing that would or might likely
have a material adverse effect upon the Collateral or the
ability of any of the Search Parties to perform its respective
Obligations hereunder. To the best of the knowledge of the
Search Parties, all other information, documents, financial
data and reports supplied to HFG in connection with the
negotiation and preparation of this agreement, including
without limitation copies of articles of incorporation,
bylaws, certificates and warrants, were when supplied and
remain in all material respects true and accurate.
U. All required federal, state and local tax returns of the
Search Parties have been accurately prepared and duly and
timely filed within the initial or extended time allowed.
There is no delinquency in the payment of any governmental
charge , tax or assessment that could adversely affect in any
way the Collateral. There is no audit or dispute expected or
ongoing with respect to any federal, state or local tax return
of any of the Search Parties.
V. This agreement and the Loan Documents constitute legal, valid
and binding agreements of the Search Parties who are
signatories to them, enforceable against them in accordance
with their terms.
4.2 HFG. HFG represents and warrants to the Search Parties that
HFG is a corporation incorporated and in good standing under the laws of
Delaware, and that HFG's execution and delivery of this agreement has been duly
authorized by all requisite corporate action.
5.0 COMMITMENT
5.1 HFG FUNDING COMMITMENT. HFG shall advance the funds required
under the Notes and shall fulfill the Plan Funding Commitment under Section
8.0, upon the terms and subject to the conditions of this agreement.
5.2 COMMITMENT FEE. The Search Companies have paid to HFG upon
execution of this agreement a commitment fee of $20,000 with respect to Notes I
and II (the "Note Commitment Fee"). The parties intend that the Note
Commitment Fee is an earned fee paid in consideration for HFG's commitments
hereunder, and for HFG's evaluation, inspection and efforts expended in
connection with the execution of this agreement. However, in the event HFG
should not be required to fund an aggregate of $2,000,000 under Notes I and II,
HFG shall refund to the Search Parties 1% of the amount of the difference
between $2,000,000 and the amount actually loaned under Notes I and II.
FUNDING AGREEMENT 9
16
6.0 LOAN CLOSING CONDITIONS
6.1 LEGAL OPINION. The Search Parties shall deliver to HFG at or
before closing, as a condition of HFG's obligations to advance any funds under
this agreement, an opinion of counsel in form and substance reasonably
satisfactory to HFG and by counsel reasonably satisfactory to HFG, expressing
the opinions that:
A. Search, ACHI, and Newsearch are duly incorporated, validly
existing, and in good standing under the laws of Delaware.
SFC and ACAC are duly incorporated, validly existing, and in
good standing under the laws of Texas
B. Each Search Party has full power and authority to carry on its
business as now conducted and as proposed to be conducted, and
to execute and perform its Obligations under this agreement
and the Loan Documents to which it will be a signatory
hereunder.
C. The execution, delivery and performance of this agreement by
each Search Party, and the execution, delivery and performance
of the Notes, the Security Agreements, the Pledge Agreements,
and the other Loan Documents by each Search Party that will be
a signatory to each such instrument hereunder, have been duly
authorized by all requisite corporate action.
D. Performance by the Search Parties under this agreement and
under any Loan Documents to which any of them will be a
signatory will not violate the articles of incorporation or
bylaws of any of them, or require any approval of
stockholders.
E. The person executing this agreement on behalf of each Search
Party is duly authorized so to act.
F. The opinion giver has no current actual knowledge that the
execution and delivery of this agreement by any Search Party,
or the performance by any Search Party of this agreement or
the Loan Documents to which it will be a party will (i)
violate (a) any provision of law applicable to the any of
them, or any order, judgment or decree of any court or other
agency of government binding any of them or (b) any material
contractual obligation of any of them, (ii) conflict with,
result in a breach of or constitute (with due notice or lapse
of time or both) a default under any material contractual
obligation of any of them, (iii) result in or require the
creation or imposition of any encumbrance of any nature
whatsoever upon any of the properties or assets of any of
them, other than the security interests granted to HFG under
the Loan Documents, or (iv) require any approval or consent
under any material contractual obligation of either of them,
other than approvals or consents which have been obtained.
G. When the Financing Statements have been duly filed in the
office of the Texas Secretary of State, Uniform Commercial
Code Division, the security interests created by the Security
agreements in and to the Collateral will constitute valid,
FUNDING AGREEMENT 10
17
enforceable and perfected security interests under the UCC to
the extent that perfection of security interests in the
Collateral is governed by Article 9 of the UCC.
H. To the extent that Collateral consists of instruments, and
assuming HFG's continued possession of such Collateral, the
security interests granted under the Security Agreement will
constitute valid and perfected security interests in such
Collateral, prior to all other liens against such Collateral
or interests therein now existing or hereafter existing.
I. Except for the filing of the Financing Statements referred to
in Par. 6.1(G) above, and the continuations of such filings as
required by the UCC, no consent, approval, authorization or
other action of or by, or registration, designation,
declaration, filing or qualification with, any court,
administrative agency or other governmental entity which has
not been obtained is necessary as a condition to, or in
connection with, the execution, delivery or performance by, or
the enforceability against, Search or SFC, or the validity of
this agreement or the Loan Documents to which either is a
party, or the consummation of the transactions contemplated by
this agreement or the Loan Documents.
J. The opinion giver has no current actual knowledge of any
proceeding, investigation or litigation pending or threatened
against or affecting any Search Party or any of the other
assets or properties of any Search Party in any court or
before any administrative agency or arbitration board wherein
an adverse ruling or decision is reasonably likely to affect
materially and adversely the ability of any Search Party to
perform its Obligations under the Loan Documents; and there
are no unsatisfied judgments outstanding against any Search
Party.
K. No Search Party is an "investment company" or a company
"controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended.
L. This agreement and the Loan Documents constitute legal, valid
and binding agreements of the Search Parties who are
signatories to them, enforceable against them in accordance
with their terms, subject to:
1. rights of the United States under the Federal Tax
Lien Act of 1966, as amended; the application of the
standard of good faith, such as that defined in
section 1.203 of the Texas UCC; principles of equity
which may limit the availability of certain equitable
remedies; and bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium and other laws
applicable to creditors' rights or the collection of
debtors' obligations generally; and
2. the qualification that certain of the remedial,
waiver and other provisions of this agreement and the
Loan Documents may be further limited or rendered
unenforceable by other provisions of applicable law,
but those
FUNDING AGREEMENT 11
18
provisions are unlikely substantially to interfere
with the practical realization of the benefits to HFG
purported to be provided by this agreement and the
Loan Documents, except for the economic consequences
of any procedural delay that may result.
7.0 LOAN CLOSING
7.1 CLOSING. Closing shall be in the offices of Xxxxx & Xxxxxx,
P.C., 2900 Renaissance Tower, 0000 Xxx Xxxxxx, Xxxxxx, Xxxxx on November 30,
1995.
7.2 OBLIGATIONS AT CLOSING.
A. SEARCH. At closing, Search shall:
1. execute and deliver to HFG Notes I, II and III;
2. execute and deliver to HFG the Search Security
Agreement upon the Search Collateral and the GECC
Pledged Collateral that is owned by Search; and
execute and deliver to HFG a related Financing
Statement, for recording in the office of the Texas
Secretary of State;
3. deliver to HFG in pledge under the Search Security
Agreement all Search Collateral identified in Exhibit
A, that is not subject to a security interest under
the GECC Loan Agreement, identified in Exhibit A;
4. issue to HFG 3,000,000 warrants to purchase Search
common shares, having an exercise price of $2.00 per
share, and upon the warrant terms set forth in
Exhibit K;
5. execute and deliver to HFG the Search Pledge
Agreement;
6. deliver to HFG one or more share certificates in
appropriate form and with executed transfer powers
complying with the Search Pledge Agreement,
representing the Share Collateral being pledged by
Search;
B. SFC . At closing SFC shall:
1. execute and deliver to HFG Notes I, II and III;
2. execute and deliver the SFC Security Agreement upon
the SFC Collateral and the GECC Pledged Collateral
that is owned by SFC; and execute and deliver the
related Financing Statement, for recording in office
of Texas Secretary of State; and
FUNDING AGREEMENT 12
19
3. deliver to HFG in pledge under the SFC Security
Agreement all SFC Collateral identified in Exhibit A,
that is not subject to a security interest under the
GECC Loan Agreement, identified in Exhibit A.
C. NEWSEARCH. At closing Newsearch shall:
1. execute and deliver to HFG the Newsearch Pledge
Agreement and execute and deliver to HFG a related
Financing Statement, for recording in the office of
the Texas Secretary of State; and
2. deliver to HFG one or more share certificates in
appropriate form and with executed transfer powers
complying with the Newsearch Pledge Agreement,
representing the Share Collateral being pledged by
Newsearch.
D. ACAC. At closing ACAC shall execute and deliver to HFG the
ACAC Security Agreement and execute and deliver to HFG a
related Financing Statement, for recording in the office of
the Texas Secretary of State;
E. ACHI. At closing, ACHI shall:
1. execute and deliver to HFG the ACHI Pledge Agreement
and execute and deliver to HFG a related Financing
Statement, for recording in the office of the Texas
Secretary of State; and
2. deliver to HFG one or more share certificates in
appropriate form and with executed transfer powers
complying with the ACHI Pledge Agreement,
representing the Share Collateral being pledged by
ACHI.
F. SEARCH PARTIES. At closing the Search Parties shall reimburse
to HFG all of HFG's attorney's fees and other out-of-pocket
costs and expenses incurred by HFG to the date of closing in
investigation and documentation of the transactions evidenced
by this agreement.
G. HFG. At closing HFG shall:
1. deliver to the Search Parties the required advances
under Notes I (less the amounts previously advanced
on the $500,000 Note plus accrued interest), II (if
any), and III;
2. execute the Security Agreements and the Pledge
Agreements and accept pledge of the Search Collateral
identified in Exhibit A, the SFC Collateral
identified in Exhibit A, and the Share Collateral;
and
3. return to the Search Parties the $500,000 Note.
7.3 CONDITIONS FOR FUNDING UNDER NOTE II. HFG shall at closing or
thereafter advance the principal of Note II in the amount, if any, not
exceeding the lesser of (i) the principal amount
FUNDING AGREEMENT 13
20
owing on the GECC Loan on the date of closing, and (ii) the principal amount
owing on the GECC Loan on the later date, if any, at which the advance to pay
the balance of the GECC Loan is required after notice by GECC of a default
other than the defaults disclosed to HFG prior to closing and an intention to
resort to the collateral of the GECC loan, or at such earlier time as HFG shall
elect; on the condition that (i) the proceeds of Note II are delivered to GECC
to release all security interest held by GECC under the GECC Loan Agreement,
and (ii) all Search Parties deliver to HFG in pledge under the Search and SFC
Security Agreements all GECC Pledged Collateral at the time of the funding.
Subject to the consent of GECC to the extent required by the GECC Loan
Documents, HFG at its option may either payoff the GECC Loan or acquire the
GECC Loan by assignment. HFG shall not be required to fund Note II if: (i) the
GECC Loan is in monetary default other than as a result of acceleration of
maturity from a nonmonetary default or (ii) the Search Parties cannot meet the
Collateral Coverage Ratio.
7.4 CONDITIONS FOR FUNDING UNDER NOTE III. $500,000.00 of the
principal of Note III will be funded at closing. The remaining $500,000.00
shall be advanced as soon as practicable after (but not more than 10 days
after) approval by the bankruptcy court in the Bankruptcy Proceeding of the
Disclosure Statement, or such approval of an amended version of the Disclosure
Statement that is approved by HFG, which approval HFG shall not unreasonably
withhold if any amendment does not materially modify the debt-to-equity
conversion alternative contained in the Plan.
7.5 POST-CLOSING EXTENSIONS OF MATURITIES OF NOTES I AND II. The
Search Parties shall have the option to extend the maturities of Notes I and II
one time for 60 days, if the Plan is not confirmed in 90 days or less, under
the terms of Notes I and II.
8.0 PLAN FUNDING
8.1 PLAN FUNDING COMMITMENT. HFG will loan to the Chapter
Subsidiaries in connection with the Plan an amount as necessary to enable the
Chapter Subsidiaries to cash-out up to 10% of the outstanding notes, as
defined in the Plan, in each of the Chapter Subsidiaries, at an amount equal to
80% of the net present value (net present value being determined by the
application of a discount rate of 15% to net cash flow, as defined in the Plan)
of such notes. If more than 10% of the noteholders in any particular Chapter
Subsidiary seek to have their notes cashed-out under the Plan, HFG may, in
HFG's sole discretion, loan additional amounts to the Chapter Subsidiaries to
fund the cash-out of all or such lesser amount of Noteholders electing the
cash-out option as HFG, in HFG's sole discretion, may determine. Noteholders
electing the cash-out must have cast a ballot accepting the Plan, and must have
selected the cash-out option on their ballot.
8.2 FUNDING COMMITMENT FEE. In addition to the other
consideration provided in this agreement for the Plan Funding Commitment,
Search shall at closing pay to HFG a plan-funding commitment fee of $15,000 in
consideration of HFG's commitment under this Section 8.0.
8.3 CONDITIONS TO PLAN FUNDING. HFG shall not be required to fund
the commitment under Paragraph 8.1 until the Disclosure Statement, containing
the following provisions, has been approved by the bankruptcy court in the
Bankruptcy Proceeding, the Plan, containing the following provisions, has
FUNDING AGREEMENT 14
21
been confirmed by the bankruptcy court in the Bankruptcy Proceeding, and the
order of confirmation, containing the following provisions, has become final
and nonappealable:
a. The Plan shall include a description of the Plan Funding
Commitment similar in content to the description in Par. 8.1
above.
b. The Plan shall disclose the conditions to funding contained in
this Par. 8.3.
c. The Plan shall provide for the surrender by the noteholders
electing the cash-out option of their notes to the Chapter
Subsidiaries in full satisfaction of their secured and
unsecured claims.
d. The Plan shall provide for noteholders electing the cash-out
option to so indicate on their ballot.
e. The Plan shall provide for the repayment of the administrative
claim of HFG as a result of the amounts loaned by HFG under
the Plan Funding Commitment with an equal amount of common
stock, convertible preferred stock, warrants, dividends, and
cash payments that would have been paid to the noteholders
that were cashed-out with such funds with respect to both
their secured and unsecured claims on the Effective Date under
the Search Equity Option.
f. The Plan shall not impose any restrictions with respect to
the shares HFG receives under the Plan.
g. The Plan shall provide that HFG shall not be an issuer or
underwriter for purposes of Section 1145 of the Bankruptcy
Code.
h. The Disclosure Statement shall fully and completely disclose
the foregoing provisions of the Plan.
i. The Plan and Disclosure Statement containing the foregoing
provisions shall be sent to all creditors and
parties-in-interest along with a ballot containing the
cash-out option at least 25 days prior to the hearing on
confirmation of the Plan.
j. At the Confirmation hearing, evidence shall be introduced by
Search establishing that HFG is neither an issuer nor an
underwriter.
k. The Order confirming the Plan shall contain findings that HFG
is not an issuer, is purchasing claims of noteholders with a
view to investment and not distribution of any security to be
received, and is not an underwriter.
l. The Plan, Disclosure Statement, Order confirming Plan, Ballot,
and any other documents sent to creditors in connection with
the Plan shall be subject to the final approval of HFG and
shall not be amended or withdrawn without the consent of HFG.
FUNDING AGREEMENT 15
22
Further, HFG shall not be required to fund the commitment under Paragraph 8.1 if
noteholders who elect the Collateral/Sale Service Option under the Plan hold
notes having in the aggregate a net present value exceeding 40% of the total
net present value of all of the notes of all of the Chapter Subsidiaries.
8.4 TERM. The term of the commitment in Paragraph 8.1 shall be
for 90 days, beginning on the effective date of this agreement. Search shall
have the option to extend the term for an additional 60 days, if there is then
no default under this agreement by any Search Party, by paying HFG a
$100,000.00 funding extension fee before the end of the original 90- day term.
8.5 DISCLOSURE. HFG and the Search Parties agree that the terms
of HFG's Plan Funding Commitment under this Section 8.0 shall be included in
the Plan and Disclosure Statement subject to the approval of HFG.
8.6 BOARD REPRESENTATION. HFG shall have the right to appoint one
representative to the Search board of directors upon purchasing an aggregate
amount of notes equal to $1,000,000.00 of net present value in all of the
Chapter Subsidiaries (i.e., upon paying $800,000.00 for notes having a net
present value of $1,000,000.00).
8.7 FUNDING CLOSING. HFG shall fund its payments under the Plan
Funding Commitment on the Effective Date.
9.0 NEGATIVE COVENANTS
9.1 LIMITATIONS ON CHANGES IN SEARCH'S CAPITAL STRUCTURE. Without
the prior express written consent of HFG, which HFG may withhold in its sole
discretion, no Search Party may amend its articles of incorporation or issue
authorized common stock (except to comply with the Plan, issue approximately
180,000 shares to Search's ESOP, settle the shareholders suit on the terms
disclosed in the Disclosure Statement, or exercise or terminate outstanding
stock options disclosed in the Disclosure Statement) or issue additional
warrants or rights to acquire shares of any class, so long as any Obligation
remains unpaid.
9.2 LIMITATIONS ON CHANGES IN GECC LOAN AGREEMENT. Without the
prior express written consent of HFG, which HFG shall not unreasonably
withhold, no Search Party may modify the GECC Loan Agreement.
9.3 LIMITATIONS ON TRANSFERS AMONG ENTITIES. Without the prior
express written consent of HFG, which HFG may withhold in its sole discretion,
no Search Party may make or permit any transfer of property between or among
any Search Party or Non-Chapter Subsidiary that is not for fair value and
contemporaneously evidenced by duly executed and delivered documents of
transfer and debt or consideration.
9.4 LIMITATIONS ON CHANGE OF PRINCIPAL PLACE OF BUSINESS OF SEARCH
AND SFC. Without the prior express written consent of HFG, which HFG may
withhold in its sole discretion, no Search Party may change its principal place
of business to a location outside Texas so long as any Obligation remains
unpaid.
FUNDING AGREEMENT 16
23
9.5 LIMITATIONS ON SALE OR TRANSFER OF SEARCH AND SFC RECEIVABLES.
Without the prior express written consent of HFG, which HFG may withhold in its
sole discretion, no Search Party may sell or transfer any Collateral that
secures any Obligation, whether or not such sale or transfer is in the ordinary
course of the business of the Search Party.
9.6 LIMITATIONS ON JUNIOR SECURITY INTERESTS IN SEARCH AND SFC
RECEIVABLES. Without the prior express written consent of HFG, which HFG may
withhold in its sole discretion, no Search Party may grant any junior or
conflicting security interest in any Collateral that secures any Obligation.
9.7 LIMITATIONS ON FILING VOLUNTARY PETITIONS UNDER BANKRUPTCY
CODE. Without the prior express written consent of HFG, which HFG may withhold
in its sole discretion, and the unanimous vote of the board of directors of the
Search Party, no Search Party shall file a voluntary petition under any chapter
of the Bankruptcy Code. All Search Parties acknowledge that the board of
directors and officers of all Search Parties owe a fiduciary duty to the
creditors of each Search Party under the current circumstances of the Search
Parties, and that the limitations of this Paragraph 9.7 are reasonably intended
to assure compliance with that fiduciary duty.
10.0 AFFIRMATIVE COVENANTS
10.1 NOTICE OF DEFAULTS. The Search Parties shall give prompt
notice to HFG of any default or claim of default by any party under the GECC
Loan Agreement in addition to those certified to HFG in writing before
execution of this agreement, and shall extend to HFG the opportunity to cure
any such default and be subrogated to GECC's position to the extent of such
cure. The Search Parties shall also give prompt written notice to HFG of any
default under any other agreement upon which any of the Search Parties or any
Non-Chapter Subsidiary is obligated.
10.2 PERIODIC REPORTS. All Search Parties shall frequently, at
intervals selected by HFG, deliver to HFG reports of operations, cash flows,
debt repayments, GECC Loan status, and other matters as HFG may request; and
shall without request give to HFG immediate notice and copies of any
correspondence with or reports to GECC about the GECC Loan.
10.3 SUBSEQUENT PLEDGE OF GECC PLEDGED COLLATERAL. All Search
Parties shall immediately deliver to HFG in pledge under the Search and SFC
Security Agreements all GECC Pledged Collateral as to which at any time, and
from time to time, GECC's security interest under the GECC Loan Agreement
terminates.
10.4 BOARD REPRESENTATION. Search shall give timely notice to HFG
of all meetings of Search's board of directors, and shall permit HFG to have
one representative in attendance at all such meetings as an observer and guest.
If HFG exercises its option under Note III to convert debt to Search stock,
Search shall cause its articles of incorporation to be amended, if necessary,
to assure that HFG shall have the right as holder of such stock thereafter to
elect one representative to the Search board of directors in lieu of HFG's
observer representative.
10.5 COLLATERAL COVERAGE. The Search Parties shall at all times
remain in compliance with the Collateral Coverage Ratio.
FUNDING AGREEMENT 17
24
11.0 DEFAULT
11.1 EVENTS OF DEFAULT. An "Event of Default" shall occur under
this agreement if:
A. any of the representations and warranties under Paragraphs
4.1, or under any of the Loan Documents, is untrue in any
material respect;
B. any of the Search Parties fails timely to pay an amount
payable to HFG under this agreement or under any of the Loan
Documents; or
C. any of the Search Parties breaches any other obligation under
this agreement or under any of the Loan Documents, and fails
to cure the breach within 10 days of HFG's giving a notice of
such default to all Search Parties.
D. Any of the following events occurs in the Bankruptcy
Proceedings of the Chapter Subsidiaries: (1) confirmation of a
Plan of reorganization for any of the Chapter Subsidiaries
other than a Plan proposed by Search and the Chapter
Subsidiary; (2) conversion of any of the Bankruptcy
Proceedings to a case under chapter 7 of the Bankruptcy Code;
(3) appointment of a trustee in any of the Bankruptcy
Proceedings; or (4) the granting of relief from the automatic
stay with respect to the claim of any pre-petition creditor.
E. Any guarantor revokes, terminates or fails to perform any of
the terms of any guaranty, endorsement or other agreement of
such party in favor of HFG or any affiliate of HFG;
F. Any judgment or judgments aggregating in excess of $100,000 in
excess of applicable insurance coverage, or any injunction or
attachment is obtained against a Search Party which remains
unstayed for a period of thirty (30) days or is enforced;
G. A Search Party is dissolved, or a Search Party which is a
corporation fails to maintain its corporate existence in good
standing, or the usual business of a Search Party ceases or is
suspended;
H. Without the express written consent of HFG, there will not be
any change in the chief executive officer, chief operating
officer, or chief financial officer of Search;
I. A Search Party becomes insolvent, makes an assignment for the
benefit of creditors, makes or sends notice of a bulk transfer
or calls a general meeting of its creditors or principal
creditors;
J. Any petition or application for any relief under the
bankruptcy laws of the United States now or hereafter in
effect or under any insolvency, reorganization, receivership,
readjustment of debt, dissolution or liquidation law or
statute of any jurisdiction now or hereafter in effect
(whether at law or in equity) is filed by or
FUNDING AGREEMENT 18
25
against a Search Party. Provided, however, that in the event
of the filing of an involuntary petition, the Search Party
shall have a period of sixty days from the date of filing of
such petition to obtain a dismissal of the petition before
there shall be a default;
K. The indictment or threatened indictment of a Search Party
under any criminal statute, or the commencement or threatened
commencement of criminal or civil proceedings against a Search
Party, pursuant to which statute or proceedings the penalties
or remedies sought or available include forfeiture of any of
the property having an aggregate value in excess of $100,000
of a Search Party;
L. Any event of default under any financing, security or other
agreement, document or instrument at any time executed and/or
delivered to, with or in favor of HFG or any of its affiliates
by any affiliate of a Search Party;
M. Failure of the Search Parties to maintain the Collateral
Coverage Ratio;
N. A Search Party is in default of any of the provisions of the
GECC Loan Agreement other than the defaults disclosed in
writing to HFG prior to closing;
O. Search and the Chapter Subsidiaries fail to obtain approval of
the Disclosure Statement containing the provisions required by
Paragraph 8.3 within 60 days of the execution of this
Agreement.
P. Search and the Chapter Subsidiaries fail to obtain
confirmation of the Plan containing the provisions required by
Paragraph 8.3 within 150 days of the execution of this
Agreement.
Q. Search fails to comply with the provisions of Paragraph 8.3
regarding the filing of a Plan and Disclosure Statement
containing the provisions required by Paragraph 8.3 within 14
days of a written request by HFG.
11.2 HFG RIGHTS UPON OCCURRENCE OF AN EVENT OF DEFAULT. If an
event of default occurs, HFG shall have the option to terminate its further
obligations under this agreement by notice to the Search Parties, and shall be
entitled to all of its remedies for such breach and all of the remedies
provided for in the Loan Documents.
12.0 GUARANTIES
12.1 SEARCH'S GUARANTY. Search unconditionally and irrevocably
guarantees the due and punctual payment and performance of the Obligations,
including without limitation all of SFC's Obligations under the Notes and SFC's
Security Agreement, all of ACAC's Obligations under the ACAC Security
Agreement, all of Newsearch's Obligations under the Pledge Agreement, all of
ACHI's Obligations under the ACHI Pledge Agreement as well as all Obligations
of SFC, ACAC, ACHI and Newsearch under this agreement and the other Loan
Documents. Upon any failure of SFC to pay or perform any of the Obligations
under Notes I, II and III and the SFC Security Agreement, or any other failure
by SFC in payment or performance of an Obligation, Search shall
FUNDING AGREEMENT 19
26
forthwith on demand pay or perform the Obligations not so paid or performed at
the place and in the manner specified in this agreement and the other Loan
Documents. Search acknowledges that its guarantee is a guarantee of payment
and performance, and not merely of collection.
12.2 SFC'S GUARANTY. SFC unconditionally and irrevocably
guarantees the due and punctual payment and performance of the Obligations,
including without limitation all of Search's Obligations under the Notes,
Search Pledge Agreement and Search Security Agreement, all of ACAC's
Obligations under the ACAC Security Agreement, all of Newsearch's Obligations
under the Pledge Agreement, all of ACHI's Obligations under the ACHI Pledge
Agreement as well as all Obligations of Search, ACAC, ACHI and Newsearch under
this agreement and the other Loan Documents. Upon any failure of Search to pay
or perform any of the Obligations under the Notes, the Search Pledge Agreement
and the Search Security Agreement, or any other failure in payment or
performance of an Obligation, SFC shall forthwith on demand pay or perform the
Obligations not so paid or performed at the place and in the manner specified
in this agreement and the other Loan Documents. SFC acknowledges that its
guarantee is a guarantee of payment and performance, and not merely of
collection.
12.3 ACAC'S, ACHI'S, AND NEWSEARCH'S GUARANTY. ACAC, ACHI, and
Newsearch jointly and severally, unconditionally and irrevocably guarantee the
due and punctual payment and performance of the Obligations, including without
limitation all of Search's and SFC's Obligations under the Notes, the Pledge
Agreements, and the Security Agreements, as well as all other Obligations of
the Search Parties under this agreement and the Loan Documents. Upon any
failure of Search or SFC to pay or perform any of the Obligations under the
Notes, the Pledge Agreements, and the Security Agreements, and any other
failure in payment or performance of an Obligation, ACAC, ACHI, and Newsearch
shall forthwith on demand pay or perform the Obligations not so paid or
performed at the place and in the manner specified in this agreement and the
other Loan Documents. Each of ACAC, ACHI, and Newsearch acknowledge that its
guarantee is a guarantee of payment and performance, and not merely of
collection.
12.4 GENERAL PROVISIONS OF ALL GUARANTIES All guaranty Obligations
under Paragraphs 12.1, 12.2 and 12.3 are continuing, unconditional, and
absolute, and without limiting the generality of the foregoing, shall not be
released, discharged, impaired, or otherwise affected by:
A. any extension, renewal, settlement, compromise, waiver, or
release in respect of any Obligation of the Search Parties or
any other Non-Chapter Subsidiary under this agreement or any
Loan Documents, whether by operation of law or otherwise;
B. any modification or amendment of or supplement to any of the
Loan Documents;
C. the taking of any Collateral, or any release, exchange,
non-perfection or invalidity of any security interest in any
Collateral, or any action taken or not taken by the Search
Parties with respect to any Collateral, or any damage to or
destruction of any Collateral;
D. any change in the corporate existence, structure or ownership
of any Search Party or any Non-Chapter Subsidiary, or any
insolvency, bankruptcy, reorganization or other similar
proceeding affecting any Search Party or any Non-Chapter
Subsidiary,
FUNDING AGREEMENT 20
27
or any of their respective assets, or any resulting release or
discharge of any Obligation of any Search Party or any
Non-Chapter Subsidiary;
E. the existence of any claim, setoff or other right which any
Search Party or any Non-Chapter Subsidiary may have at any
time against HFG, whether in connection with this agreement,
with any Loan Document, or with the transactions contemplated
by this agreement, or any unrelated transaction, except that
nothing in this subsection shall prevent the assertion of such
claim by separate suit or compulsory counterclaim;
F. any invalidity, irregularity, or unenforceability of any
provision of this agreement or any Loan Document;
G. the incapacity, lack of authority, death or disability of any
person;
H. the revocation or repudiation by a Search Party or any
Non-Chapter Subsidiary of any Obligation under this agreement
or the Loan Documents; or
I. any other act or failure to act, or delay of any kind, by any
Search Party, any Non-Chapter Subsidiary, or HFG, or any other
circumstance whatsoever which might, but for the provisions of
this Paragraph 12.4 constitute legal or equitable discharge of
the Obligations of any Search Party hereunder.
12.5 TERM OF GUARANTIES. All guaranty Obligations under Paragraphs
12.1, 12.2 and 12.3 shall remain in full force and effect until all Obligations
have been paid and performed in full. If at any time any payment or
performance of an Obligation is rescinded, or must otherwise be restored or
returned upon the insolvency, bankruptcy or reorganization of any Search Party
or any Non-Chapter Subsidiary, all guaranty Obligations under Paragraphs 12.1,
12.2 and 12.3 with respect to such payment or performance shall be reinstated
as though such payment or performance had been due but not paid or performed at
such time.
12.6 GUARANTORS' WAIVERS. Each Search Party irrevocably and
unconditionally waives acceptance of its guaranty under this section, and
irrevocably and unconditionally waives presentment, demand, protest, and all
notices, including without limitation notice of acceleration, notice of intent
to accelerate, and notice of borrowings by any Search Party, as well as any
requirement that at any time any action be taken by any person or entity
against any Search Party, any Non-Chapter Subsidiary, or any Collateral.
13.0 EXPENSE REIMBURSEMENT AND INDEMNITY
13.1 REIMBURSEMENT OF EXPENSES. The Search Parties shall from time
to time pay on demand to HFG all reasonable costs and expenses (including
attorney's fees) incurred by HFG in preparing, negotiating, executing and
delivering this agreement and the Loan Documents, in filing, registering
recording and perfecting any security interest granted to secure any amount
advanced under this agreement, in auditing, inspecting, or appraising any of
the Collateral, and in appearing and participating in the Bankruptcy Proceeding
in connection with the Plan Funding Commitment.
FUNDING AGREEMENT 21
28
13.2 INDEMNITY. THE SEARCH PARTIES SHALL JOINTLY AND SEVERALLY
INDEMNIFY HFG AND ITS OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, ATTORNEYS
AND AGENTS, AND HOLD THEM HARMLESS, FROM AND AGAINST LIABILITY, LOSS AND COST
OF DEFENSE UPON ALL CLAIMS THAT DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO
(I) THE NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION OR
ENFORCEMENT OF THIS AGREEMENT, ANY LOAN DOCUMENT, AND ANY OTHER DOCUMENT OR
INSTRUMENT EXECUTED BY ANY SEARCH PARTY UNDER OR IN CONNECTION WITH THIS
AGREEMENT, (II) ANY TRANSACTION CONTEMPLATED UNDER THIS AGREEMENT, AND (III)
ANY BREACH BY ANY SEARCH PARTY OF ANY REPRESENTATION, WARRANTY OR COVENANT IN
THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY ANY SEARCH PARTY UNDER THIS
AGREEMENT; EXCLUDING ANY CLAIM ATTRIBUTABLE TO GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE INDEMNIFIED PERSON. IT IS THE INTENTION OF ALL PARTIES THAT
THE INDEMNITY OF THE PRECEDING SENTENCE SHALL EXTEND TO THE INDEMNIFIED PARTY
EVEN IF THE INDEMNIFIED CLAIM IS ATTRIBUTABLE TO THE SOLE OR CONTRIBUTORY
NEGLIGENCE OF THE INDEMNIFIED PARTY.
14.0 USURY
14.1 NON-USURIOUS INTENT. All parties intend to comply fully with
the applicable Texas usury laws, and no party considers that this agreement
calls for the receiving, charging, collecting or contracting for payment of
interest in excess of the maximum amount permitted by applicable law.
14.2 CONSTRUCTION TO AVOID USURY. All parties recognize that
ambiguities in legal rules and uncertainties in characterization of complex
facts, particularly where, as in this case, funding is being provided in a
context of high risk and financial distress, create risk of unintentional
violations of usury prohibitions. All parties intend that in determining
whether any provision of this agreement or any performance under it results in
receiving, charging, collecting or contracting for interest in excess of the
maximum amount permitted by applicable law, (i) all consideration given, paid
or payable in connection with this agreement that is not designated as
principal or interest shall to the fullest extent permitted by applicable law
be characterized as non-interest expense, (ii) voluntary prepayments and their
effects shall to the fullest extent permitted by applicable law be excluded,
and (iii) all interest shall to be fullest extent permitted by applicable law
be spread throughout the maximum contemplated term. IF ANY PROVISION OF THIS
AGREEMENT OR ANY PERFORMANCE UNDER IT NEVERTHELESS IS DEEMED IN THE ABSENCE OF
THIS SENTENCE TO RESULT IN RECEIVING, CHARGING, COLLECTING OR CONTRACTING FOR
PAYMENT OF INTEREST IN EXCESS OF THE MAXIMUM AMOUNT PERMITTED BY APPLICABLE
LAW, THEN THIS SENTENCE SHALL PREVAIL OVER ALL OTHER INCONSISTENT PROVISIONS OF
THIS AGREEMENT AND OF NOTES I, II AND III, THE SECURITY AGREEMENTS, THE PLEDGE
AGREEMENTS, AND OR OTHER LOAN DOCUMENT DELIVERED UNDER THIS AGREEMENT; AND (I)
ALL REMAINING AMOUNTS PAYABLE BY ANY SEARCH PARTY SHALL FIRST BE REDUCED BY THE
AMOUNT OF SUCH EXCESS, APPLIED FIRST TO UNPAID PRINCIPAL AND THEN TO UNPAID
FUNDING AGREEMENT 22
29
INTEREST, AND (II) ANY REMAINING EXCESS SHALL PROMPTLY BE REIMBURSED BY HFG TO
THE SEARCH PARTIES.
15.0 GENERAL PROVISIONS
15.1 AMENDMENTS AND WAIVERS. To amend this agreement or waive any
provision of this agreement , all parties must sign a written amendment or
waiver that identifies by section or paragraph number the provision that it
purports to amend or waive. No delay in exercising any right, or noncomplying
course of dealing, shall be construed to amend or waive any provisions of this
agreement.
15.2 ASSIGNMENT. No Search Party may assign any of its rights
under this agreement without HFG's prior express written consent. No
assignment, if permitted, shall relieve any Search Party of any obligation
under this agreement unless such relief is expressly provided for in HFG's
consent to the assignment. The term "Search Parties" shall include any
permitted assignee of any Search Party. HFG may at any time and from time to
time wholly or partly assign or grant participations in any debt Obligations of
any Search Party to HFG incurred under this agreement; and HFG may disclose to
any potential assignee or participant any information obtained by HFG in
connection with this agreement about any Search Party, any Search affiliate,
and any aspect of the business of any Search Party and any Search affiliate.
15.3 NOTICES. All notices must be in writing. Notices may be
given by U.S. Certified Mail, postage prepaid, addressed to the intended
recipient at its address in Par. 1.2, or to such other notice address as that
party designates by notice to the other party, and any notice so given shall be
deemed given one business day after its deposit with the U.S. Postal Service. A
business day is any day other than a Saturday, Sunday, or legal holiday in
Texas. A notice given by other means shall be effective only when actually
received by the addressee.
15.4 HFG RELIANCE ON DISCLOSURE STATEMENT. Notwithstanding the
limitations in the Disclosure Statement, HFG may rely upon the Disclosure
Statement, without independent investigation and irrespective of its subsequent
approval or disapproval by the bankruptcy court in the Consolidated Proceeding,
as being in all material respects a true and adequate disclosure as of the date
of this agreement of the matters it expresses; and HFG shall have a claim
against all Search Parties for breach of this agreement, without election of
remedies and independently of HFG's rights, if any, under the Bankruptcy Code
and in the Consolidated Proceeding, if HFG suffers any liability, loss, cost or
expense attributable in any way to the representations and warranties of any
Search Party hereunder being untrue, or to the Disclosure Statement's being in
any material way untrue, misleading or inadequate. Approval of the Disclosure
Statement or the Plan by the bankruptcy court in the Consolidated Proceeding,
whether or not HFG appears and takes any action in the Consolidated Proceeding,
shall not be deemed or construed for purposes of this agreement to be res
judicata as to the truth, sufficiency or adequacy of the Disclosure Statement,
or to estop HFG from raising such issues in connection with a claim under this
agreement.
15.5 DUTY OF HFG'S PROFESSIONALS. All attorneys, accountants,
appraisers and other professional persons retained by HFG in connection with
this agreement shall have the right to act
FUNDING AGREEMENT 23
30
exclusively in the interest of HFG, and shall have no duty of disclosure, duty
of loyalty, duty of care, or any other duty or obligation of any kind to
Search, SFC or any of their subsidiaries or affiliates.
15.6 NO FIDUCIARY RELATIONSHIP. The relationship between the
Search Parties, on the one hand, and HFG on the other, is solely that of debtor
and creditor, and HFG is not intended or to be construed to have any fiduciary
or other special relationship with any Search Party or any of their
subsidiaries or affiliates.
15.7 CONSTRUCTION.
A. GOVERNING LAW. Texas law governs the effect and construction
of this agreement. With respect to arbitration matters, the
Federal Arbitration Act shall govern. Delaware corporate law
governs corporate matters with respect to all parties
incorporated in Delaware.
B. BINDING AGREEMENT. This agreement binds and benefits all
parties and their respective successors and permitted assigns.
C. MERGER. This is the entire agreement among the parties
concerning the subject matter. It merges and supersedes all
former agreements, promises or representations, whether oral
or written, express or implied, between any one or more of the
Search Parties, on the one hand, and HFG or any of its
affiliates, on the other, concerning the subject matter. No
oral agreements modify or contradict any provision of this
agreement.
D. SURVIVAL. All representations and warranties by any Search
Party in this agreement, and by any Search Party in any
document, statement or certificate furnished or to be
furnished in connection with this agreement, shall survive the
execution and delivery of this agreement and closing. No
investigation by HFG shall affect the rights of HFG to rely on
such representations and warranties. Without prejudice to the
survival of any other obligation of any Search Party
hereunder, the Search Parties' Obligations under Section 13.0
shall survive termination of this agreement with or without
full performance of all other provisions of this agreement.
E. WAIVER. No waiver of a claim or default under this agreement
shall be construed to be a waiver of any other claim or
default.
F. RESOLUTION OF AMBIGUITIES. All parties have been represented
by legal counsel of their own choice in negotiation, drafting
and review of this agreement. No rule of construction
resolving any ambiguity against a drafting party shall apply.
G. LIMITATION AND WAIVER OF REMEDIES. If any Search Party
breaches this agreement, HFG shall cumulatively have all
remedies available at law or in equity, and if HFG breaches
this agreement, the Search Parties shall cumulatively have all
remedies available at law or in equity; except that NO PARTY
SHALL BE LIABLE FOR SPECIAL, PUNITIVE OR CONSEQUENTIAL
DAMAGES, AND ALL SEARCH PARTIES EXPRESSLY WAIVE AND AGREE
NEVER TO SEEK ANY PUNITIVE
FUNDING AGREEMENT 24
31
DAMAGES FROM HFG, OR ANY OF ITS OFFICERS, DIRECTORS,
SHAREHOLDERS, EMPLOYEES, ATTORNEYS OR AGENTS ATTRIBUTABLE TO
ANY CLAIM ARISING OUT OF THIS AGREEMENT, ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, OR ANY OF THE
LOAN DOCUMENTS.
H. CAPTIONS. Captions, titles and headings are only for
convenient reference and are not to be construed in
interpretation.
I. SEVERABILITY. If any provision of this agreement is held to
be invalid or unenforceable, that invalidity or enforceability
shall not impair or invalidate the remainder of the agreement,
which shall continue to be effective and enforceable as if the
invalid or unenforceable provision had not been included.
J. EXHIBITS. Exhibits X, X, X, X, X, X, X, X, X, X, and K are
attached to this agreement and incorporated as part of this
agreement.
15.8 BINDING AGREEMENT TO ARBITRATE DISPUTES. All disputes under
or relating to this agreement must exclusively be resolved by binding
arbitration under the Commercial Arbitration Rules of the American Arbitration
Association (the "AAA") in effect at the time the arbitration proceeding
commences; except that (i) Paragraph 15.7 shall govern applicable law and
construction, there shall be a panel of three arbitrators, the locale of the
arbitration shall be Dallas, Texas, and the arbitrators shall provide written
findings of fact and conclusions of law; and (ii) any party may seek from a
court of competent jurisdiction any provisional remedy that may be necessary to
protect its rights or property pending the establishment of the arbitration
panel or its determination of the merits of the controversy. The arbitration
award shall be final and binding on all parties, and judgment upon such
arbitration award may be entered in any court having jurisdiction. A
prevailing party in arbitration or litigation about this agreement shall be
entitled to recover its reasonable attorneys' fees and costs.
15.9 LIMITATION OF ACTIONS. Any action upon a claim arising out of
this agreement must be commenced by filing of an arbitration claim with the AAA
within two years after the cause of action accrues.
HALL FINANCIAL GROUP, INC.
By:/s/ XXXXX X. XXXXX
--------------------------
Xxxxx X. Xxxxx
Senior Vice President
FUNDING AGREEMENT 25
32
SEARCH CAPITAL GROUP, INC.
By:/s/ XXXXXX X. XXXX
--------------------------------
Xxxxxx X. Xxxx,
Senior Vice President
SEARCH FUNDING CORP.
By:/s/ XXXXXX X. XXXX
--------------------------------
Xxxxxx X. Xxxx,
Senior Vice President
AUTOMOBILE CREDIT ACCEPTANCE CORP.
By:/s/ XXXXXX X. XXXX
--------------------------------
Xxxxxx X. Xxxx,
Senior Vice President
NEWSEARCH, INC.
By:/s/ XXXXXX X. XXXX
--------------------------------
Xxxxxx X. Xxxx,
Senior Vice President
AUTOMOBILE CREDIT HOLDINGS, INC.
By:/s/ XXXXXX X. XXXX
--------------------------------
Xxxxxx X. Xxxx,
Senior Vice President
FUNDING AGREEMENT 26
33
State of Texas
County of Dallas
This instrument was acknowledged before me on this 30th day of
November, 1995, by Xxxxx X. Xxxxx, Senior Vice President of Hall Financial
Group, Inc., a Delaware corporation, on behalf of said corporation.
/s/ XXXXX X. XXXXXXX
------------------------------------------
Notary Public in an for the State of Texas
Name printed:
NOTARY SEAL
XXXXX X. XXXXXXX
------------------------------------------
My commission expires:
2-17-97
-----------------------------
State of Texas
County of Dallas
This instrument was acknowledged before me on this 30th day of
November, 1995, by Xxxxxx X. Xxxx, Senior Vice President of Search Capital
Group, Inc., a Delaware corporation, on behalf of said corporation.
/s/ XXXXX X. XXXXXXX
------------------------------------------
Notary Public in an for the State of Texas
Name printed:
NOTARY SEAL XXXXX X. XXXXXXX
------------------------------------------
My commission expires:
2-17-97
-----------------------------
FUNDING AGREEMENT 27
34
STATE OF TEXAS
COUNTY OF DALLAS
This instrument was acknowledged before me on this 30th day of
November, 1995, by Xxxxxx X. Xxxx, Senior Vice President of Search Funding
Corp., a Texas corporation, on behalf of said corporation.
/s/ XXXXX X. XXXXXXX
------------------------------------------
Notary Public in an for the State of Texas
Name printed:
NOTARY SEAL
XXXXX X. XXXXXXX
------------------------------------------
My commission expires:
2-17-97
-----------------------------
STATE OF TEXAS
COUNTY OF DALLAS
This instrument was acknowledged before me on this 30th day of
November, 1995, by Xxxxxx X. Xxxx, Senior Vice President of Automobile Credit
Acceptance Corp., a Texas corporation, on behalf of said corporation.
/s/ XXXXX X. XXXXXXX
------------------------------------------
Notary Public in an for the State of Texas
Name printed:
NOTARY SEAL XXXXX X. XXXXXXX
------------------------------------------
My commission expires:
2-17-97
-----------------------------
FUNDING AGREEMENT 28
35
STATE OF TEXAS
COUNTY OF DALLAS
This instrument was acknowledged before me on this 30th day of
November, 1995, by Xxxxxx X. Xxxx, Senior Vice President of Newsearch, Inc., a
Delaware corporation, on behalf of said corporation.
/s/ XXXXX X. XXXXXXX
------------------------------------------
Notary Public in an for the State of Texas
Name printed:
NOTARY SEAL XXXXX X. XXXXXXX
------------------------------------------
My commission expires:
2-17-97
-----------------------------
STATE OF TEXAS
COUNTY OF DALLAS
This instrument was acknowledged before me on this 30th day of
November, 1995, by Xxxxxx X. Xxxx, Senior Vice President of Automobile Credit
Holdings, Inc., a Delaware corporation, on behalf of said corporation.
/s/ XXXXX X. XXXXXXX
------------------------------------------
Notary Public in an for the State of Texas
Name printed:
NOTARY SEAL XXXXX X. XXXXXXX
------------------------------------------
My commission expires:
2-17-97
-----------------------------
FUNDING AGREEMENT 29
36
FUNDING AGREEMENT
LIST OF EXHIBITS
Exhibit A - Collateral Schedule
Exhibit B - Note I
Exhibit C - Note II
Exhibit D - Note III
Exhibit E - NewSearch Pledge
Exhibit F - Search Pledge
Exhibit G - ACHI Pledge
Exhibit H - Search Security Agreement
Exhibit I - SFC Security Agreement
Exhibit J - ACAC Security Agreement
Exhibit K - Warrant
FUNDING AGREEMENT 30
