EXHIBIT 10.1
SECURITIES PURCHASE AGREEMENT
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DRIVE FINANCIAL SERVICES LP
DRIVE GP LLC
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2004
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Purchase of
Partnership Interests
by
IFA Drive LP Holdings LLC and Drive Management LP
and
Membership Interests
by
IFA Drive GP Holdings LLC and Drive Management LP
SECURITIES PURCHASE AGREEMENT ("Agreement") dated as of September ___,
2004 by and among FirstCity Financial Corporation, a Delaware corporation
("FCFC" or "FC"); FirstCity Consumer Lending Corporation, a Texas corporation
("CLC"); FirstCity Funding L.P., a Texas limited partnership ("Auto" or
"Funding"); FirstCity Funding GP Corp., a Texas corporation ("Auto-GP"); IFA
Drive GP Holdings LLC, a Delaware limited liability company ("IFA-GP"); IFA
Drive LP Holdings LLC, a Delaware limited liability company ("IFA-LP"); Drive
Management LP, a Texas limited partnership ("MG-LP"); Drive Management GP LLC, a
Texas limited liability company ("MG-LLC"); Drive Holdings LP, a Delaware
limited partnership ("Drive Holdings"); Drive GP LLC, a Delaware limited
liability company ("Drive-GP"); and Drive Financial Services LP, a Delaware
limited partnership ("Drive" or "Drive-LP").
W I T N E S S E T H:
WHEREAS, Drive has three limited partners, IFA-LP, Funding and MG-LP, and
its sole general partner is Drive-GP;
WHEREAS, the partnership interests of Drive-LP are owned of record as
follows: IFA-LP 45.4301636%, Funding 35.9269125%, MG-LP 18.5429239% and Drive-GP
0.1%;
WHEREAS, IFA-LP's interest in Drive-LP, when combined with its beneficial
interest in Drive-LP through its indirect equity interest in Funding, and
IFA-GP's beneficial interest in Drive-LP by virtue of IFA-GP's equity interest
in Drive-GP constitutes an aggregate of 49% of Drive's partnership interests;
WHEREAS, MG-LP's ownership of Drive-LP, when combined with its indirect
equity interest in Funding and its equity interest in Drive-GP, constitutes 20%
of Drive's partnership interests;
WHEREAS, CLC, a wholly-owned subsidiary of FCFC, owns 31% of Drive's
partnership interests (beneficially through CLC's limited and general
partnership interest in Funding (the general partnership interest being held
indirectly through Auto-GP) and directly through its equity interest in
Drive-GP);
WHEREAS, the partnership interests of Funding are owned of record as
follows: 79.2% by CLC, a limited partner; 19.8% by Drive Holdings, a limited
partner; and 1% by Funding's sole general partner, Auto-GP, 80% of the capital
stock of which is owned by CLC and 20% by Drive Holdings;
WHEREAS, the membership interests in Drive-GP are owned of record as
follows: IFA-GP, 49%; CLC, 31%; and MG-LP, 20%;
WHEREAS, the parties hereto desire that IFA-GP and MG-LP acquire the
membership interests of CLC in Drive-GP so that IFA-GP and MG-LP will own 64.5%
and 35.5%, respectively, of the membership interests in Drive-GP after such
acquisition; and
WHEREAS, the parties hereto desire that IFA-LP and MG-LP acquire the
partnership interests of Funding in Drive so that IFA-LP and MG-LP will own
limited partnership interests of 64.4355% and 35.4645%, respectively, in Drive
after such acquisition;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
1. Sale of Securities.
1.1 Membership Interests. On the terms and conditions hereinafter
provided, CLC shall assign and sell to (i) IFA-GP (and IFA-GP shall purchase) a
15.5% Membership Interest in Drive-GP owned by CLC (equivalent to 50.0% of CLC's
Membership Interest in Drive) (the "Transferred Membership Interest (IFA)") for
$43,400 (the "IFA Purchase Price (MI)"), and (ii) MG-LP (and MG-LP shall
purchase) a 15.5% Membership Interest in Drive-GP owned by CLC (equivalent to
50.0% of CLC's Membership Interest in Drive) ) (the "Transferred Membership
Interest (MG-LP)") for $43,400 (the "MG-LP Purchase Price (MI)" and, together
with the IFA Purchase Price (MI), the "Purchase Price (MI)") so that,
immediately after giving effect to such sale, IFA-GP will own 64.5% of
Drive-GP's Membership Interests and MG-LP will own 35.5% of Drive-GP's
Membership Interests. In connection with the assignment and sale of the
Membership Interests in Drive-GP owned by CLC, each Buying Entity shall assume
all of the duties, obligations and liabilities of CLC derived from the ownership
of such Membership Interests arising after the Closing Date under the Owners
Agreement and the Operating Agreement.
1.2 Partnership Interests. On the terms and conditions hereinafter
provided, Funding shall assign and sell to (i) IFA-LP (and IFA-LP shall acquire
and purchase) a 19.0053364% Limited Partnership Interest in Drive (equivalent to
52.8999991% of Funding's 35.9269125% Limited Partnership Interest in Drive)
(together with Funding's capital account in Drive associated with such Limited
Partnership Interest) (the "Transferred LP Interest (IFA)") for $57,339,103 (the
"IFA Purchase Price (LPI)") and (ii) MG-LP (and MG-LP shall purchase) a
16.9215761% Limited Partnership Interest in Drive (equivalent to 47.1000009% of
Funding's 35.9269125% Limited Partnership Interest in Drive (together with
Funding's capital account in Drive associated with such Limited Partnership
Interest) (the "Transferred LP Interest (MG-LP)") for $51,052,397 (the "MG-LP
Purchase Price (LPI)" and, together with the IFA Purchase Price (LPI), the
"Purchase Price (LPI)") so that, immediately after giving effect thereto, IFA-LP
shall directly own 64.4355% of Limited Partnership Interest in Drive and MG-LP
shall directly own 35.4645% of Limited Partnership Interest in Drive. In
connection with the assignment and sale of the Limited Partnership Interests in
Drive owned by Funding, each Buying Entity shall assume all of the duties,
obligations and liabilities of Funding derived from the ownership of such
Limited Partnership Interests arising after the Closing Date under the
Shareholders Agreement and the Partnership Agreement.
1.3 Purchase and Sale. Notwithstanding the provisions of Sections 1.1 and
1.2 above, if any of the conditions to the Acquisition set forth in Sections 5,
6 and 7 shall not have been met to the satisfaction of the all parties to this
Agreement (or waived by them) on or before October 31, 2004 (or such later date
as all parties to this Agreement may agree to in a writing signed by them which
specifically refers to this Section 1.3) then the obligations of the parties to
this Agreement to sell and to purchase such securities and acquire such
interests shall (at the option of any party to this Agreement, exercised by
giving written notice to the other parties) expire on such date. The obligations
of the IFA Entities, on the one hand, and MG-LP, on the other hand, are several,
and not joint and several; provided, however, that neither the Selling Entities
nor any Buying Entity may proceed with the transaction unless all the Subject
Securities are to be purchased.
1.4 Closing. The closing ("Closing") of the Acquisition shall be held at
the Closing Location at such time and on such date (but in any event within
three business days after the satisfaction, or waiver by the appropriate party,
of the applicable conditions set forth in Sections 5, 6 and 7 hereof) as the
Selling Entities and the Buying Entities shall agree (the date on which the
Closing occurs, the "Closing Date"). At the Closing, each relevant IFA Entity
and MG-LP shall purchase the relevant Subject Securities to be purchased by such
Persons and pay the Purchase Price therefor (to Funding in the case of the
Purchase
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Price (LPI) and to CLC in the case of the Purchase Price (MI)) by wire transfer
or as otherwise agreed between the relevant seller and the relevant purchaser.
1.5 Certain Consents. Each party hereto that is a party to the
Shareholders Agreement hereby consents to the Acquisition for all purposes of
the Shareholders Agreement. Each of the partners of Drive by its execution of
this Agreement consents to the Acquisition for all purposes of the Partnership
Agreement. Each member of Drive-GP hereby consents to the Acquisition for all
purposes of the Operating Agreement. Without limitation, each of the foregoing
hereby waives all rights it or he might otherwise have under the Shareholders
Agreement to acquire any of the Subject Securities or prevent or restrict the
transfer of the Subject Securities or the Acquisition.
1.6 Funding Distributions. On the Closing Date following the receipt of
the Purchase Price (LPI), Funding will distribute the Purchase Price (LPI) as
follows: (i) $85,846,068 to CLC; (ii) $21,461,517 to Drive Holdings; and (iii)
$1,083,915 to Auto-GP. At the election of the Buying Entities, which shall be
delivered to Funding no later than ten (10) days before Closing, Funding will
agree to cause the Funding Distribution to be considered a liquidating
distribution and, in connection therewith, will (i) will adopt a "plan of
liquidation" for purposes of Sections 331, 332 and 346(a) of the Code, (ii) will
completely liquidate for purposes of Section 331, 332 and 346(a) of the Code and
under applicable Texas law, by distributing any remaining assets (after
accounting for, and satisfying, any Funding liabilities within the earlier of
(a) 30 days or (b) the close of Drive's Taxable year in which the Closing Date
occurs, and (iii) will file, within 30 days of the Closing Date, Internal
Revenue Service Form 966 (and any applicable state or local equivalent)
reporting the adoption of the "plan of liquidation". Upon receipt of its portion
of the distribution of the Purchase Price (LPI) from Funding, Auto-GP will
immediately distribute that amount as follows: (i) $867,132 to CLC; and (ii)
$216,783 to Drive Holdings. Each party to this Agreement consents to the Funding
Distributions and, assuming that the Buying Entities make the election called
for in the second sentence of this section, to the adoption of the "plan of
liquidation" of Funding and the complete liquidation of Funding.
2. Representations and Warranties by FC Parties. FC and CLC hereby jointly
and severally represent and warrant to IFA Parent, each IFA Entity and MG-LP
(which representations and warranties shall survive the execution and delivery
of this Agreement to the extent set forth in Section 10.5 below) as of the date
hereof and as of the Closing Date that:
2.1 Organization and Business; Power and Authority.
(a) Each of the FC Parties and each of the Auto Entities (i) is an
organization of the type specified opposite its name on Schedule 2.1(a) hereto,
(ii) is duly organized, validly existing and in good standing under the laws of
the jurisdiction under which it is organized (as specified in such schedule),
and (iii) has all requisite power and authority (corporate or other) to conduct
its business. Auto-GP is the sole general partner of Funding. CLC owns, of
record and beneficially, 80% of the capital stock of Auto-GP. CLC owns 79.2% of
record, and 80% beneficially, of the equity interests in Funding. Funding
conducts no business or activities other than being a limited partner of Drive;
Auto-GP conducts no business or activities other than being the sole general
partner of Funding.
(b) Each Relevant FC Entity has the necessary power and authority
(corporate or otherwise, as applicable), and all necessary franchises, permits,
licenses and other rights and privileges, to enter into and perform its
obligations under this Agreement and each other Related Document to which it is
a party, and (in the case of the Selling Entities) to sell or otherwise transfer
the Subject Securities contemplated to
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be sold or otherwise transferred in accordance herewith. The execution, delivery
and performance of this Agreement and each of the other Related Documents to
which a Relevant FC Entity is a party have, as to such Relevant FC Entity, been
duly authorized by all necessary corporate or other applicable action by such
Relevant FC Entity. No Government Authorization or Private Authorization that
has not been obtained is required for the execution, delivery and performance of
this Agreement and the other Related Documents by any Relevant FC Entity, except
for (x) those listed in Schedule 2.1(c) hereto to be obtained after the date
hereof and before the Closing Date, all of which will be obtained by the Closing
Date, and (y) Private Authorizations and Government Authorizations, the failure
to obtain which would not, individually or in the aggregate, adversely affect
any of the transactions contemplated hereby or by any of the Related Documents
or any of the parties hereto. No Relevant FC Entity has any knowledge of any
Private Authorization or Government Authorization required for the execution,
delivery and performance of this Agreement and the other Related Documents by
any Relevant FC Entity that has not been obtained which is not listed on
Schedule 2.1(c) hereto. This Agreement has been duly and validly executed and
delivered by each of the Relevant FC Entities party hereto and constitutes, and
each other Related Document to which a Relevant FC Entity is a party when
executed and delivered by such Person will have been duly and validly executed
and delivered by such Person and will constitute, legal, valid and binding
obligations of the Relevant FC Entities party hereto and thereto (as the case
may be), enforceable in accordance with their respective terms, except as the
enforceability thereof may be limited by applicable bankruptcy, insolvency
reorganization and similar laws affecting creditors' rights generally (the
"Enforceability Exceptions").
(c) Neither the execution and delivery of this Agreement or any of the
other Related Documents to which any Relevant FC Entity is a party, nor the
sale, other transfer or delivery by any Selling Entity of any or all of the
Subject Securities, nor the consummation of the transactions contemplated by any
of the foregoing, nor compliance with the terms, conditions and provisions of
any of the foregoing by any Relevant FC Entity:
(i) will conflict with, or result in a breach or violation of or
constitute a default in the performance, observance or fulfillment of, any
obligation, covenant or condition contained in, or permit the acceleration
of any obligation or liability in, or constitute, or but for any
requirement of giving of notice or passage of time or both would
constitute, a default or an event of default by any of the Relevant FC
Entities under, any Applicable Law, Charter Document, Private
Authorization, Governmental Authorization or Contractual Obligation,
except to the extent (x) such conflicts, breaches, violations or defaults
would not, individually or in the aggregate, have a Material Adverse
Effect on such Relevant FC Entity or (y) where the Contractual Obligation
in connection with which such default or event of default would occur is,
or where the requirement for a Private Authorization exists is from the
lenders under, the Current Loan Agreements in respect of which FC expects
to obtain appropriate consents or waivers or (z) listed, and as listed, on
Schedule 2.1(c) hereto as to Governmental Authorizations and Private
Authorizations, all of which will be obtained on or prior to the Closing
Date.
(ii) will result in the creation or imposition of any Lien upon any
of the properties of any Relevant FC Entity or any of their respective
Subsidiaries (except liens in favor of BOS, BOS-UK or IFA Parent pursuant
to one or more of the Loan Agreements); or
(iii) will require any approval or action of, or filing with or
notification to, any Authority, except (x) as set forth in Schedule
2.1(c), and (y) approvals, actions, filings and notifications, the failure
to obtain or do which would not, individually or in the aggregate,
adversely affect any of the transactions contemplated hereby or by any of
the Related Documents or any of the parties hereto. No Relevant FC Entity
has any knowledge of any approval, action,
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filing or notification required for the execution, delivery and
performance of this Agreement and the other Related Documents to which any
Relevant FC Entity is a party (or for the sale, other transfer or delivery
by any Selling Entity of any Subject Security or for consummation of the
transactions contemplated by any of the foregoing or for compliance with
the terms, conditions or provisions of any of the foregoing by any
Relevant FC Entity) that that has not been obtained or made which is not
listed on Schedule 2.1(c) hereto. Part One of Schedule 2.1(c) lists all
Governmental Authorizations required to be obtained by or granted to any
of the Relevant FC Entities in connection with the transactions
contemplated by this Agreement. Part Two of Schedule 2.1(c) lists all
Private Authorizations required to be obtained by or granted to any of the
Relevant FC Entities in connection with the transactions contemplated by
this Agreement, other than Private Authorizations required from BOS,
BOS-UK or IFA Parent under the Current Loan Agreements.
(d) No approval by the stockholders of FC is required for the execution,
delivery or performance of this Agreement or any of the Related Documents or any
of the transactions contemplated by this Agreement or any of the Related
Documents, whether pursuant to (i) any of the Charter Documents of FC, (ii) any
agreements to which FC or any of its Affiliates is a party or otherwise bound or
by which any of their respective assets are subject, (iii) any rule or
regulation of a stock exchange or NASDAQ, (iv) any provision of US, Texas or
Delaware law or (v) otherwise.
2.2 Compliance with Governmental Authorizations and Applicable Law. Except
as set forth on Schedule 2.1(c) hereto, no notification to, filing with or
consent from the Department of Justice or the Federal Trade Commission or any
other Authority is required by any Relevant FC Entity in connection with the
sale, issuance, other transfer or redemption of any Subject Securities or any of
the other transactions contemplated by this Agreement or the other Related
Documents (other than a filing with the SEC on Form 10-Q, Form 8-K or a similar
form). Without limitation, no filings or notifications with respect to the
transactions contemplated hereby need to be made by any Relevant FC Entity under
HSR.
2.3 Ownership Interests.
(a) Funding owns 35.9269125% of the partnership interests of Drive and CLC
owns 31.0% of the membership interests in Drive-GP. In giving the representation
and warranty in this clause (a), FC and CLC have assumed (with the consent of
the other parties hereto) that neither Drive nor Drive-GP has sold, issued,
transferred, redeemed, purchased or acquired any of its partnership interests or
membership interests, as the case may be, since the Original Closing Date.
(b) CLC, Drive Holdings and Auto-GP own, and have owned since the Original
Closing Date, 79.2%, 19.8% and 1%, respectively, of the partnership interests of
Funding, and the capital accounts of Funding's partners have been allocated
among its partners in accordance with such percentages since the Original
Closing Date. In giving the representation and warranty contained in the
immediately preceding sentence, FC and CLC have assumed (with the consent of the
other parties hereto) that Drive Holdings has not transferred any of its
partnership interest in Funding without Funding's prior consent. Even though
Funding is a limited partnership, it is taxed as a C corporation under
applicable federal income tax laws as a result of a "check-the-box" election.
Funding will not be obligated to pay any Taxes (other than as contemplated by
Section 10.2 hereof) as a result of the consummation of the Acquisition.
(c) The Subject Securities represent all of the direct and indirect record
and beneficial equity and debt interests in Drive-GP and Drive owned, or held
by, the FC Entities and their Affiliates.
2.4 Intentionally Omitted.
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2.5 Ordinary Course of Business. Prior to the Closing Date, neither
Funding nor Auto-GP shall issue or sell, or agree to issue or sell, any equity
interests (whether capital stock, membership interests, partnership interests,
Convertible Securities, Option Securities or otherwise) or admit or agree to
admit any new members or partners or increase the interests of any existing
members or partners except for the issuance and sales of Subject Securities
contemplated by this Agreement.
2.6 Intentionally Omitted.
2.7 Disclosure. Neither this Agreement nor any certificate, document or
schedule furnished by or on behalf of any Relevant FC Entity in connection
herewith, taken as a whole, contains any untrue statement of a material fact or
omits to state a material fact required to be stated herein or therein or
necessary in order to make the statements contained herein or therein, in light
of the circumstances in which they are made, not misleading.
2.8 Purchase Price. CLC will use the Purchase Price payable to it by the
Buying Entities and its portion of the Funding Distributions, and FCFC will use
balance of the Purchase Price and the Funding Distributions distributed by CLC
to FCFC, solely as agreed to among CLC, FCFC and the IFA Parent.
2.9 Intentionally Omitted.
2.10 Capital Structure.
(a) There has been no change in the ownership of Funding or Auto-GP, or
any amendment to the partnership agreement of Funding or the certificate of
incorporation of Auto-GP, since the day following the Original Closing Date (it
being understood that the Second Amended and Restated Partnership Agreement is
effective as of the Original Closing Date). 80% of the capital stock of Auto-GP
is owned by CLC and 20% is owned by Drive Holdings. In giving the representation
and warranty contained in this clause (a), FC and CLC have assumed (with the
consent of the other parties hereto) that Drive Holdings has not transferred any
of its partnership interest in Funding without Funding's prior consent and has
not transferred any stock of Auto-GP without CLC and Auto-GP's consent. None of
the equity interests held by CLC in Funding, Auto-GP or Drive-GP is subject to
any preemptive or similar rights (except as may be set forth in the Shareholders
Agreement). All of the issued and outstanding Membership Interests and
partnership interests in the Drive Parties held by any of the FC Parties
(including without limitation the Subject Securities) were issued in compliance
with Applicable Laws and not in violation of any preemptive or similar rights.
(b) Other than restrictions on transfer imposed by the Shareholders
Agreement, (i) none of the Subject Securities is subject to any Lien (other than
Liens in favor of BOS, BOS-UK and IFA Parent pursuant to the Current Loan
Agreements and any other liens or security interests granted to BOS or the IFA
Entities to secure obligations of Drive to such persons) and (ii) the Subject
Securities to be transferred to the Buying Entities and pursuant hereto will be
transferred free and clear of any Liens.
2.11 Intentionally Omitted.
2.12 Broker or Finder. No Person assisted in or brought about the
negotiation of this Agreement or the purchase and sale of any of the Subject
Securities in the capacity of broker, agent or finder or in any similar capacity
on behalf of any Relevant FC Entity or Affiliate thereof or any of the officers,
directors or equity holders of any of the foregoing.
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The Buying Entities acknowledge and agree that, except for the representations
and warranties made by FC and CLC in this Section 2, neither FC nor CLC has made
any representations or warranties of any kind (including any representation or
warranty with respect to any projections, forecasts or forward looking
statements) in connection with the transactions contemplated by this Agreement
to induce the Buying Entities to enter into this Agreement and purchase the
Subject Securities to be purchased by them in accordance herewith.
3. Representations and Warranties of IFA Entities.
3.1 Of IFA-GP. IFA-GP represents and warrants (which representations and
warranties shall survive the execution and delivery of this Agreement to the
extent set forth in Section 10.5 below) to each Selling Entity and to FC as of
the date hereof and as of the Closing Date that:
(a) Organization; Authority.
(i) IFA-GP (i) is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of
Delaware, and (ii) has all requisite power and authority to conduct its
business.
(ii) IFA-GP has the necessary limited liability company power and
authority, and all necessary franchises, permits, licenses and other
rights and privileges, to enter into and perform its obligations under
this Agreement and each other Related Document to which it is a party. The
execution, delivery and performance of this Agreement and each other
Related Document to which it is a party have been duly authorized, as to
IFA-GP, by all requisite action by IFA-GP. No Government Authorization or
Private Authorization that has not been obtained is required for the
execution, delivery and performance by IFA-GP of this Agreement and the
other Related Documents, except for notification to and approval by bank
regulatory authorities to the extent required by applicable banking law.
This Agreement has been duly and validly executed and delivered by IFA-GP
and constitutes, and each other Related Document to which it is a party
when executed and delivered by IFA-GP will have been duly and validly
executed and delivered by IFA-GP and will constitute, legal, valid and
binding obligations of IFA-GP, enforceable in accordance with their
respective terms except as the enforceability thereof may be limited by
the Enforceability Exceptions.
(iii) Neither the execution and delivery of this Agreement or any
Related Document to which it is a party, nor the consummation of the
transactions herein or therein contemplated, nor compliance with the
terms, conditions and provisions hereof or thereof by IFA-GP will require
any approval or action of, or filing with or notification to, any
Authority, except for notification to bank regulatory authorities after
the Closing Date. No filings or notifications with respect to the
transactions contemplated hereby need to be made by IFA Parent or any IFA
Entity under HSR.
(b) Securities Act.
(i) IFA-GP acknowledges that (x) the Membership Interests to be
purchased by it hereunder have not been registered under the Securities
Act or any state securities laws and therefore cannot be resold or
transferred unless they are subsequently registered under the Securities
Act and applicable state securities or "blue sky" laws or exemptions from
such registration are available, and (y) neither Drive-LP nor anyone else
is under any obligation to cause any of such Membership Interests to be so
registered.
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(ii) IFA-GP is acquiring the Membership Interests to be purchased by
it for its own account for investment with no present intention of
distributing or reselling the same.
(iii) IFA-GP is an "accredited investor" within the meaning of Rule
501 of the Securities Act, as presently in effect.
3.2 Of IFA-LP. IFA-LP represents and warrants (which representations and
warranties shall survive the execution and delivery of this Agreement to the
extent set forth in Section 10.5 below) to each Selling Entity and to FC as of
the date hereof and as of the Closing Date that:
(a) Organization; Authority.
(i) IFA-LP (i) is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of
Delaware, and (ii) has all requisite power and authority to conduct its
business.
(ii) IFA-LP has the necessary limited liability company power and
authority, and all necessary franchises, permits, licenses and other
rights and privileges, to enter into and perform its obligations under
this Agreement and each other Related Document to which it is a party. The
execution, delivery and performance of this Agreement and each other
Related Document to which it is a party have been duly authorized, as to
IFA-LP, by all requisite action by IFA-LP. No Government Authorization or
Private Authorization that has not been obtained is required for the
execution, delivery and performance by IFA-LP of this Agreement and the
other Related Documents, except for notification to and approval by bank
regulatory authorities to the extent required by applicable banking law.
This Agreement has been duly and validly executed and delivered by IFA-LP
and constitutes, and each other Related Document to which it is a party
when executed and delivered by IFA-LP will have been duly and validly
executed and delivered by IFA-LP and will constitute legal, valid and
binding obligations of IFA-LP, enforceable in accordance with their
respective terms except as the enforceability thereof may be limited by
the Enforceability Exceptions.
(iii) Neither the execution and delivery of this Agreement nor any
Related Document to which it is a party, nor the consummation of the
transactions herein or therein contemplated, nor compliance with the
terms, conditions and provisions hereof or thereof by IFA-LP will require
any approval or action of, or filing with or notification to, any
Authority, except for notification to bank regulatory authorities after
the Closing Date. No filings or notifications with respect to the
transactions contemplated hereby need to be made by IFA Parent or any IFA
Entity under HSR.
(b) Securities Act.
(i) IFA-LP acknowledges that (x) the Limited Partnership Interests
to be purchased by it hereunder have not been registered under the
Securities Act or any state securities laws and therefore cannot be resold
or transferred unless they are subsequently registered under the
Securities Act and applicable state securities or "blue sky" laws or
exemptions from such registration are available, and (y) neither Drive-GP
nor anyone else is under any obligation to cause any of such Limited
Partnership Interests to be so registered.
(ii) IFA-LP is acquiring the Limited Partnership Interests to be
purchased by it for its own account for investment with no present
intention of distributing or reselling the same.
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(iii) IFA-LP is an "accredited investor" within the meaning of Rule
501 of the Securities Act, as presently in effect.
3.3 Broker or Finder. IFA-GP and IFA-LP represent and warrant (which
representations and warranties shall survive the execution and delivery of this
Agreement to the extent set forth in Section 10.5 below) to each Selling Entity
and to FC as of the date hereof and as of the Closing Date that no Person
assisted in or brought about the negotiation of this Agreement or the purchase
and sale of any of the Subject Securities in the capacity of broker, agent or
finder or in any similar capacity on behalf of any IFA Entity or Affiliate
thereof or any of the officers, directors or equity holders of any of the
foregoing.
4. Representations and Warranties of MG-LP. MG-LP represents and warrants
(which representations and warranties shall survive the execution and delivery
of this Agreement to the extent set forth in Section 10.5 below) to each Selling
Entity and to FC as of the date hereof and as of the Closing Date that:
4.1 Organization; Authority.
(a) MG-LP (x) is a limited partnership duly organized, validly existing
and in good standing under the laws of the State of Texas, and (y) has all
requisite power and authority to conduct its business.
(b) MG-LP has the necessary limited partnership power and authority, and
all necessary franchises, permits, licenses and other rights and privileges, to
enter into and perform its obligations under this Agreement and each other
Related Document to which it is a party. The execution, delivery and performance
of this Agreement and each other Related Document to which it is a party have
been duly authorized, as to MG-LP, by all requisite action by MG-LP. No
Government Authorization or Private Authorization that has not been obtained is
required for the execution, delivery and performance by MG-LP of this Agreement
and the other Related Documents. This Agreement has been duly and validly
executed and delivered by MG-LP and constitutes, and each other Related Document
to which it is a party when executed and delivered by MG-LP will have been duly
and validly executed and delivered by MG-LP and will constitute legal, valid and
binding obligations of MG-LP, enforceable in accordance with their respective
terms except as the enforceability thereof may be limited by the Enforceability
Exceptions.
(c) Neither the execution and delivery of this Agreement nor any Related
Document to which it is a party, nor the consummation of the transactions herein
or therein contemplated, nor compliance with the terms, conditions and
provisions hereof or thereof by MG-LP will require any approval or action of, or
filing with or notification to, any Authority. No filings or notifications with
respect to the transactions contemplated hereby need to be made by any MG Entity
under HSR.
4.2 Securities Act.
(a) MG-LP acknowledges that (x) the Subject Securities to be purchased by
it hereunder have not been registered under the Securities Act or any state
securities laws and therefore cannot be resold or transferred unless they are
subsequently registered under the Securities Act and applicable state securities
or "blue sky" laws or exemptions from such registration are available, and (y)
neither Drive-GP nor Drive-LP nor anyone else is under any obligation to cause
any of such Subject Securities to be so registered.
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(b) MG-LP is acquiring the Subject Securities to be purchased by it for
its own account for investment with no present intention of distributing or
reselling the same.
(c) MG-LP is an "accredited investor" within the meaning of Rule 501 of
the Securities Act, as presently in effect.
4.3 Broker or Finder. No Person assisted in or brought about the
negotiation of this Agreement or the purchase and sale of any of the Subject
Securities in the capacity of broker, agent or finder or in any similar capacity
on behalf of any MG Entity or Affiliate thereof or any of the officers,
directors or equity holders of any of the foregoing.
5. Conditions of Closing by the Buying Entities. The obligation of each
Buying Entity to acquire the Subject Securities to be acquired by it pursuant to
this Agreement are subject to (a) compliance by the Relevant Entities with its
agreements herein contained, (b) the truth and accuracy of the certificates to
be furnished by them pursuant to this Section, and (c) each of the following
conditions being fulfilled to the satisfaction of such Buying Entity (or waived
by it) on the Closing Date (unless otherwise specifically indicated below):
5.1 No Default, etc. On the Closing Date (both before and after giving
effect to the transactions to occur on that date under this Agreement, the
Related Documents and the Loan Agreements), there shall exist no Potential
Default or Event of Default and all representations and warranties made by the
FC Parties and Selling Entities herein or in the other Related Documents or by
such Persons from and after the date hereof in writing in connection herewith or
therewith shall be true and correct in all material respects with the same
effect as though such representations and warranties have been made at and as of
such time.
5.2 Officers' Certificates; Supporting Documents. There shall have been
delivered to such Buying Entity such information and copies of documents,
approvals (if any) and records (certified where appropriate) of such corporate,
partnership, limited liability company and legal proceedings as any Buying
Entity may have reasonably requested relating to the Relevant Entities'
organization and the entering into and performance of the Related Documents and
(to the extent requested by a Buying Entity) the Original Related Documents to
which each is a party. Such documents shall, in any event, include:
(a) certified copies of the Charter Documents of the FC Parties and the
Relevant Entities (in each case, to the extent changed from copies previously
given to the IFA Entities), and long form good standing certificates of a date
not earlier than 10 days prior to the Closing Date for each of the Relevant
Entities;
(b) certificates of authorized officers of each of the Relevant Entities
(except as otherwise agreed to by the Buying Entities), certifying the
resolutions of each such Person relating to the entering into and performance of
the Related Documents to which each such Person is a party and the transactions
contemplated thereby, and further certifying that such resolutions have not been
amended, modified, superseded or revoked and remain in full force and effect;
(c) certificates of authorized officers of each of the Relevant Entities
(except as otherwise agreed to by the Buying Entities), with respect to the
incumbency and specimen signatures of its officers or representatives authorized
to execute such documents and any other documents and papers, and to take any
other action, in connection herewith or therewith;
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(d) certificates of an authorized officer of each of FC and CLC (and of
Funding, to the extent requested by a Buying Entity) certifying, as of the
Closing Date, compliance with the conditions of Sections 5.1, 5.3, 5.4 and 5.5
(to the extent such Sections apply to the Relevant FC Entities); provided, that,
the certificate to be delivered to the IFA Entities shall include the following
Sections: 6.4 (as to the Relevant FC Entity) and also the absence of any
Material Adverse Change of the type referred to in the first sentence of Section
6.3 and the absence of any event of the type referred to in the first sentence
of Section 6.2 (as to any Relevant FC Entity); and
(e) certificates of an authorized officer of Drive (to the extent
requested by a Buying Entity) certifying, as of the Closing Date, compliance
with the conditions of Sections 5.1, 5.4, 5.7 and 5.9(b) and (c) (as to the
Drive Entities) and also the absence of any Material Adverse Change of the type
referred to in Section 5.7; provided, that, the certificate to be delivered to
the IFA Entities shall include the following Sections: 6.1, and the absence of
any event of the type referred to in Section 6.2 (first sentence as to any Drive
Entity).
5.3 Approvals and Consents; HSR.
(a) All orders, permissions, consents, approvals, licenses, authorizations
and validations of, and filings, recordings and registrations with, and
exemptions by (all of the foregoing, "Requisite Consents"), any Authority, or
any other Person, required to authorize or required in connection with the
execution, delivery and performance of this Agreement and the other Related
Documents and the transactions contemplated hereby and thereby by any party
hereto or thereto shall have been obtained. If so requested, copies of any of
the foregoing received by any Relevant Entity shall be furnished to each Buying
Entity certified (if so requested) by an officer of FC, CLC or Drive (as
appropriate) as a true and correct copy and being in full force and effect and
final and not subject to modification or appeal.
(b) Any required waiting period applicable to this Agreement and the
transactions contemplated by this Agreement under HSR shall have expired or been
terminated without there being in effect a governmental regulation enjoining or
restraining consummation of such transactions; provided that upon the reversal,
lifting or other successful appeal or resolution of such governmental
regulation, the condition set forth in this Section 5.3(b) will be deemed
fulfilled.
5.4 Charter Documents. All legal opinions and other documents required by
the Charter Documents of Drive, Drive-GP and the Selling Entities to be
delivered in order for equity interests in such Persons to be transferred, and
all other conditions precedent to such transfers set forth therein (including
without limitation in Section 3 of the limited liability company agreement of
Drive-GP) shall have been delivered in accordance with the terms thereof and
each Buying Entity shall have received certificates from each such Person to the
effect that such requirements have been complied with.
5.5 Absence of Liens. Evidence satisfactory to each Buying Entity as to
absence of any Lien on the Subject Securities (other than for restrictions on
transfer imposed by the Shareholders Agreement, liens or security interests
granted in connection with the Current Loan Agreements and any liens or security
interests granted to BOS or the IFA Entities to secure obligations of Drive to
such persons).
5.6 Assignment and Assumption; Certificates. CLC shall have delivered an
Assignment Agreement, executed by CLC to each of IFA-GP and MG-LP for the
Membership Interests being acquired by such Buying Entity hereunder. Funding
shall have delivered an Assignment Agreement, executed by Funding to each of
IFA-LP and MG-LP for the Partnership Interests being acquired by such Buying
Entity.
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5.7 Adverse Change. There shall have been, in the opinion of each Buying
Entity, no Material Adverse Change since June 30, 2004 with respect to the Drive
Group taken as a whole or any member thereof.
5.8 Legal Opinions. Each Buying Entity shall have received legal opinions
in form and substance reasonably satisfactory to them, addressed to each of the
Buying Entities and IFA Parent and dated the Closing Date, from:
(a) Xxxxxx and Xxxxx, LLP, counsel to FC, CLC and the Auto Entities; and
(b) Xxxxxx & Xxxxxxxx, P.C., counsel to the Drive Entities.
5.9 Change in Law; Litigation.
(a) No provision of Applicable Law or the interpretation thereof by any
Authority, in the opinion of any Buying Entity, shall make it illegal for a
Buying Entity (or any Person of which either IFA Entity is a Subsidiary) to
effect the transactions contemplated hereby or by any other Related Document.
(b) No Legal Action shall be pending or threatened before or by any
Authority seeking to restrain, prohibit, make illegal or delay materially, or
seeking damages from any MG Entity or Drive Entity or Drive Holdings in
connection with, or to impose any materially adverse conditions on any such
Entity in connection with, the consummation of the transactions contemplated by
this Agreement, any of the Transfer Agreements or any other Related Document.
(c) No Legal Action shall be pending or threatened before or by any
Authority against any MG Entity or Drive Entity or any Management Member or any
executive officer of any of the foregoing which, in the opinion of a Buying
Entity, could (if adversely determined) have a Material Adverse Effect on any of
the foregoing Entities or which challenges the legality or propriety of any past
or present business practice of any Drive Entity or Auto Entity or would
adversely affect the reputation of any FC Party, any Drive Entity, any Auto
Entity.
5.10 Acquisition and Distributions.
(a) Each of the Transfer Agreements shall have been executed and delivered
by the respective parties thereto. No amendment or other modification shall have
been made to any thereof, directly or indirectly, without the consent of each
Buying Entities.
(b) Each of the following shall have occurred:
(i) Funding shall have sold to the Buying Entities 35.9269125% of
the Partnership Interests in Drive (together with all of Funding's capital
accounts in Drive) in accordance with Section 1.2 hereof so that,
immediately after giving effect thereto, the Buying Entities shall own the
Partnership Interests as set forth in Section 1.2;
(ii) CLC shall have sold to the Buying Entities 31% of the
Membership Interests in Drive in accordance with Section 1.1 so that,
immediately after giving effect thereto, the Buying Entities shall own the
Membership Interests as set forth in Section 1.1; and
(iii) Funding and Auto-GP shall have authorized the making of the
Funding Distributions;
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in each case upon satisfaction by the relevant parties to the relevant Transfer
Agreement of all conditions precedent set forth in this Agreement, and (in each
case), if any, all filings and governmental approvals with respect thereto shall
have been completed. Without the written consent of the Buying Entities, there
shall have been no waivers by any of the parties to any of the Transfer
Agreements of any of the conditions precedent set forth in this Agreement.
5.11 Amendments to Agreements.
(a) Shareholders Agreement. The IFA Entities and the MG Entities shall
have agreed upon a form of amendment and restatement of the Shareholders
Agreement, which shall be in form and substance satisfactory to the parties
thereto, and such parties shall have executed such amended and restated
Shareholders Agreement to be held in escrow pending the Closing. No party shall
be in breach of the Shareholders Agreement, except that a Buying Entity cannot
refuse to close due to failure of this condition to be satisfied if it or one of
its Affiliates is the party who has breached the Shareholders Agreement. All of
the foregoing shall have waived all rights they might have under the
Shareholders Agreement to acquire any of the Subject Securities or prevent or
restrict the transfer of the Subject Securities or the Acquisition.
(b) Employment Agreement. The parties to the Employment Agreement shall
have agreed upon a form of amendment and restatement of the Employment
Agreement, which shall be in form and substance satisfactory to the parties
thereto, and the parties to the Employment Agreement shall have executed such
amended and restated Employment Agreement to be held in escrow pending the
Closing.
(c) Operating Agreement and Partnership Agreement. The IFA Entities and
the MG Entities shall have agreed upon a form of amendment and restatement of
the Operating Agreement of Drive-GP and the Partnership Agreement of Drive-LP,
each of which shall be in form and substance satisfactory to the IFA Entities
and MG-LP, and the parties to such agreements shall have executed such amended
and restated agreements to be held in escrow pending Closing. There shall have
been no change in the capital structure or ownership of Auto-GP.
(d) Owners Agreement. The IFA Entities and the MG Entities shall have
agreed upon a form of amendment and restatement of the Owners Agreement, which
shall be in form and substance satisfactory to the IFA Entities and the MG
Entities, and the parties to the Owners Agreement shall have executed such
amended and restated Owners Agreement to be held in escrow pending Closing.
5.12 Drive Facilities. Each Drive Facility shall have been amended and/or
restructured in a manner satisfactory to BOS-UK, IFA Parent and MG-LP pursuant
to amendments to such agreement satisfactory to BOS-UK, IFA Parent and MG-LP in
form and substance.
5.13 New Drive Management Facilities. The MG Entities and BOS-UK shall
have entered into a new credit facility, which facility shall be in an amount
and structured in a manner satisfactory to BOS-UK and the MG Entities pursuant
to agreements satisfactory to BOS-UK and the MG Entities in form and substance.
5.14 Management Services Agreement. The Services Agreement (Xxxxx) dated
August 18, 2000, between CLC and Drive (the "Management Services Agreement")
shall be terminated as of the Acquisition Effectiveness Date with no continuing
obligations of any party thereunder and FC and CLC shall cease to employ Xxx
Xxxxx as of the Acquisition Effectiveness Date.
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5.15 All Proceedings to be Satisfactory. All corporate, partnership,
limited liability company and other legal matters and all instruments in
connection with the transactions contemplated by this Agreement and the other
documents referred to herein shall be reasonably satisfactory in form and
substance to each Buying Entity, and each Buying Entity shall have received all
information and copies of all documents which either may reasonably have
requested in connection herewith or therewith, such documents where requested or
appropriate to be certified by proper company officials or Authorities.
All documents, agreements, certificates, Financial Statements, legal opinions,
analyses, reports and other papers required to be delivered by this Section 5
shall be in form and substance satisfactory to each Buying Entity and shall be
delivered to them at the Closing Location or as such Persons may otherwise
direct.
6. Additional Conditions of Closing by IFA Entities. The obligation of
IFA-GP and IFA-LP to acquire the Subject Securities to be acquired by them
pursuant to this Agreement are subject to each of the following additional
conditions being fulfilled to the satisfaction of the IFA Entities (or waived by
them) on the Closing Date (unless otherwise specifically indicated below):
6.1 Employees. No Current Management Member shall have resigned as an
officer or employee of Drive or advised any of the parties of his intention to
do so.
6.2 Certain Actions. No FC Party, Drive Entity, member of the BOS Group or
Funding shall have been (in the opinion of IFA Parent or an IFA Entity) the
subject of ridicule, contempt or disgrace, or had its business, operations or
reputation adversely affected, by virtue of any act (or omission to act) by any
FC Party, any Management Member, any Drive Entity or any Auto Entity. Neither
IFA Parent nor any IFA Entity shall have become aware of any previously
undisclosed information with respect to any FC Party, any Management Member, any
Drive Entity or any Auto Entity which, in the opinion of IFA Parent or such IFA
Entity, would (if publicly disclosed) subject any FC Party, any Drive Entity, or
any member of the BOS Group to ridicule, contempt or disgrace or adversely
affect the business, operations or reputation of any FC Party, any Drive Entity,
or any member of the BOS Group.
6.3 Adverse Change. There shall have been, in the opinion of each IFA
Entity, no Material Adverse Change since June 30, 2004 with respect to the FC
Group taken as a whole or any of the Selling Entities. Neither IFA Parent nor
any IFA Entity shall have become aware of any previously undisclosed information
with respect to any member of the FC Group, any Management Member, any Drive
Entity or any Auto Entity which, in the opinion of IFA Parent or such IFA
Entity, would have such a Material Adverse Effect.
6.4 Litigation.
(a) No Legal Action shall be pending or threatened before or by any
Authority seeking to restrain, prohibit, make illegal or delay materially, or
seeking damages from any Relevant Entity or any member of the BOS Group in
connection with, or to impose any materially adverse conditions on any Relevant
Entity or any member of the BOS Group in connection with, the consummation of
the transactions contemplated by this Agreement, any of the Transfer Agreements
or any other Related Document.
(b) No Legal Action shall be pending or threatened before or by any
Authority against any Relevant Entity which, in the opinion of IFA-GP or IFA-LP,
could (if adversely determined) have a Material Adverse Effect on any Relevant
Entity, would adversely affect the reputation of any FC Party, any Drive Entity,
any Auto Entity or any member of the BOS Group.
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6.5 Fairness Letter. Drive, the IFA Entities and IFA Parent shall have
received a letter from an investment banking firm satisfactory to the IFA
Entities, in form and substance satisfactory to the IFA Entities and IFA Parent
and addressed to the IFA Entities and IFA Parent, as to the fairness of the
terms of the Acquisition to the IFA Entities and IFA Parent.
All documents, agreements, certificates, Financial Statements, legal opinions,
analyses, reports and other papers required to be delivered by this Section 6
shall be in form and substance satisfactory to each Buying Entity and shall be
delivered to them at the Closing Location or as such Persons may otherwise
direct.
7. Conditions of Closing by Relevant FC Entities. The obligations of the
Relevant FC Entities to transfer and sell the Subject Securities to be
transferred and sold by them pursuant to this Agreement are subject to each of
the following conditions being fulfilled to the satisfaction of FC and CLC (or
waived by it) on the Closing Date (unless otherwise specifically indicated
below):
7.1 No Default, etc. On the Closing Date (both before and after giving
effect to the transactions to occur on that date under this Agreement, the
Related Documents and the Loan Agreements), all representations and warranties
made by the Buying Entities and Drive herein or in the other Related Documents
or by such Persons from and after the date hereof in writing in connection
herewith or therewith shall be true and correct in all material respects with
the same effect as though such representations and warranties have been made at
and as of such time.
7.2 Officers' Certificates; Supporting Documents. There shall have been
delivered to FC and CLC such information and copies of documents, approvals (if
any) and records (certified where appropriate) of such limited liability company
and legal proceedings as FC or CLC may have reasonably requested relating to the
Drive Entities and Buying Entities' organization and the entering into and
performance of the Related Documents.
7.3 Approvals and Consents; HSR.
(a) All Requisite Consents required to authorize or required in connection
with the execution, delivery and performance of this Agreement and the other
Related Documents and the transactions contemplated hereby and thereby by any
party hereto or thereto shall have been obtained. If so requested, copies of any
of the foregoing received by any Relevant Entity shall be furnished to each
Selling Entity certified (if so requested) by an officer of the requested Buying
Entity, IFA Parent or Drive (as appropriate) as a true and correct copy and
being in full force and effect and final and not subject to modification or
appeal.
(b) All required waiting periods applicable to this Agreement and the
transactions contemplated by this Agreement under HSR shall have expired or been
terminated without there being in effect a governmental regulation enjoining or
restraining consummation of such transactions; provided that upon the reversal,
lifting or other successful appeal or resolution of such governmental
regulation, the condition set forth in this Section 7.3(b) will be deemed
fulfilled.
7.4 Acquisition and Distributions.
(a) Funding shall have sold to the Buying Entities 35.9269125% of the
Partnership Interests in Drive (together with all of Funding's capital accounts
in Drive) for $108,391,500;
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(b) CLC shall have sold to the Buying Entities 31% of the Membership
Interests in Drive GP for $86,800; and
(c) Funding and Auto-GP shall have authorized the making of the Funding
Distributions.
7.5 Fairness Letter. FC shall have received a letter from Howard, Frazier,
Barker, Elliott, Inc. of Houston, Texas ("HFBE"), in form and substance
satisfactory to FC and addressed to FC, as to the fairness of the terms of the
Acquisition to FC and its shareholders.
7.6 Release of Guaranties; Management Services Agreement.
(a) BOS and IFA Parent and their Affiliates shall have released FC and CLC
and all of their Affiliates from any and all Guaranty Equivalents, security
interests and liens provided or granted to BOS and IFA Parent and their
Affiliates by FC or CLC and their Affiliates in connection with the operations
of, securitizations by or loans made to Drive and its Affiliates.
(b) The Management Services Agreement shall be terminated as of the
Acquisition Effectiveness Date with no continuing obligations of any party
thereunder and Drive shall have employed Xx. Xxxxx as of the Acquisition
Effectiveness Date.
7.7 Assignment and Assumption. Each Buying Entity shall have executed and
delivered to CLC an Assignment Agreement in respect of the Membership Interests
being acquired by such Buying Entity hereunder. Each Buying Entity shall have
executed and delivered to Funding an Assignment Agreement in respect of the
Partnership Interests being acquired by such Buying Entity.
7.8 Legal Opinions. Each Selling Entity shall have received legal opinions
in form and substance reasonably satisfactory to them, addressed to each of the
Selling Entities and FC and dated the Closing Date, from:
(a) Xxxxxxxx & Worcester LLP, solely in its capacity as counsel to the IFA
Entities;
(b) Xxxx, Xxxxxxxx & Xxxxxx LLP, counsel to the MG Entities; and
(c) Xxxxxx & Xxxxxxxx, P.C., counsel to the Drive Entities.
7.9 All Proceedings to be Satisfactory. All corporate, partnership,
limited liability company and other legal matters and all instruments in
connection with the transactions contemplated by this Agreement and the other
documents referred to herein shall be reasonably satisfactory in form and
substance to each Selling Entity, and each Selling Entity shall have received
all information and copies of all documents which either may reasonably have
requested in connection herewith or therewith, such documents where requested or
appropriate to be certified by proper company officials or Authorities.
8. Certain Additional Provisions.
8.1 Distributions. Until Acquisition Effectiveness, neither Funding nor
Drive will, nor will the FC Parties permit Funding to, declare, order, pay or
make, directly or indirectly, any Distribution or set apart any sum or property
therefor, or agree to do so, in each case except for (i) Distributions required
by Section 2.7 of the Shareholders Agreement, (ii) the Funding Distributions on
the Closing Date, and (iii) those consented to by IFA Parent and MG-LP in
writing.
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8.2 Tax Allocations. The parties hereto agree that Drive will allocate its
items of partnership income, gain, loss, deduction or credit for its taxable
year in which the Closing Date occurs with respect to Funding and Drive's
remaining partners either under the "proration method" as set forth in Treasury
Regulation Section 1.706-1(c)(2)(ii) and each party hereto agrees to such
allocation. Each party agrees that at any time, and from time to time, after the
Closing Date, it will do all such things and execute and deliver all such
additional agreements, instruments and documents, and other assurances, as any
other party or its counsel reasonably deems necessary or desirable in order to
carry out the intent of the preceding sentence.
9. Definitions.
(a) 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.
(b) Phrases such as "hereof" and "herein" refer to the entire Agreement
and not just the section or other portion in which said reference appears.
(c) As used in this Agreement, the terms "including," "including without
limitation" and "such as" (and like terms) are illustrative and not limitative.
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.
"Acquisition" shall mean the acquisition pursuant to this Agreement (i) by
the Buying Entities from CLC of 31% of the Membership Interests of Drive-GP and
(ii) by the Buying Entities from Funding of 35.9269125% of the Partnership
Interests of Drive-LP and the consummation of the other transactions
contemplated hereby and by the Related Documents.
"Acquisition Effectiveness" and "Acquisition Effective Date" shall mean
the time as of which the Acquisition is effected pursuant to this Agreement.
"Affiliate" shall mean, with respect to any Person, any other Person which
directly or indirectly controls, or is under common control with, or is
controlled by, such first Person and, if such first Person is an individual, any
member of the immediate family (including parents, spouse, children, siblings
and in-laws) of such individual and any trust whose principal beneficiary is
such individual or one or more members of such immediate family and any Person
who is controlled by any such member or trust. Unless otherwise specified (and
notwithstanding the preceding sentence), when used with respect to (x) IFA-GP,
IFA-LP, MG-LLC, MG-LP, the FC Parties, Funding, Auto-GP and the Management
Members or (y) any Person with respect to which any Person in clause (x) is a
Subsidiary, "Affiliate" shall not include any Drive Entity.
"Agreement" shall mean this Securities Purchase Agreement, together with
the Exhibits, Annexes and Schedules (if any) attached hereto, as it and they may
be amended, supplemented or otherwise modified from time to time as herein
provided.
"Amendments" shall mean, with respect to each of the following documents
as in effect on the date hereof, an amendment or amendments to such document
satisfactory to each Buying Entity in form and substance: the Shareholders
Agreement, the Drive Facilities, the Employment Agreement and the
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Charter Documents of Drive-GP, Drive-LP and (if any, and if such amendment is
requested by either IFA Entity) each other Selling Entity.
"Applicable Law" shall mean any Law of any Authority, whether domestic or
foreign, to which the Person in question is subject or by which it or any of its
property is bound.
"Assignment Agreements" shall mean the assignment agreements (other than
this Agreement) pursuant to which interests in any of the Subject Securities are
transferred by any Relevant Entity as part of, or in connection with, the
Acquisition, in the form attached hereto as Exhibit A.
"Authority" shall mean any nation or government, any state or political
subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
"Auto" - introductory paragraph.
"Auto Entities" shall mean Funding and Auto-GP.
"Auto-GP" - Recitals.
"BOS" shall mean Bank of Scotland, BOS-UK's federal branch located in New
York City.
"BOS-UK" shall mean The Governor and Company of the Bank of Scotland.
"BOS Group" shall mean HBOS and its consolidated Subsidiaries.
"Business Day" shall mean any day excluding Saturday, Sunday and any day
on which banks in New York City or Texas are authorized by law or other
governmental action to close.
"Buying Entities" shall mean IFA-LP, IFA-GP and MG-LP.
"CEO" shall mean, with respect to a Person, that Person's chief executive
officer.
"Charter Document" shall mean (i) with respect to a corporation, its
certificate or articles of incorporation or association and its by-laws (or
comparable documents under non-US laws); (ii) with respect to a partnership, its
partnership agreement, certificate of partnership (if a limited partnership) and
its certificate of doing business under an assumed name (if a general
partnership); (iii) with respect to a trust, its trust agreement or declaration
of trust; (iv) with respect to a limited liability company, its certificate of
formation and limited liability company agreement or operating agreement or
analogous documents; and (v) with respect to any other type of Person (other
than an individual), such documents as are analogous to the foregoing.
"CLC" - introductory paragraph.
"Closing" - Section 1.4.
"Closing Date" - Section 1.4.
"Closing Location" shall mean the offices of counsel for the IFA Entities,
Xxxxxxxx & Worcester LLP, in New York, New York or such other location as
parties hereto shall agree to.
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"Code" shall mean the Internal Revenue Code of 1986, and the rules and
regulations thereunder, all as from time to time in effect, or any successor
Law, rules or regulations, and any reference to any statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
"Contract" and "Contractual Obligation" shall mean any agreement,
arrangement, commitment, contract, covenant, indemnity, undertaking or other
obligation or liability to which a Relevant Entity is a party or to which it or
any of its assets or property is subject (whether or not written).
"Control" (including the terms "controlling," "controlled by" and "under
common control with") shall mean the possession, direct or indirect, of power to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities or partnership or other ownership
interests, by contract, or otherwise.
"Convertible Securities" shall mean any evidences of indebtedness, equity
stock (other than Membership Interests, Limited Partnership Interests or common
stock) or other securities directly or indirectly convertible into or
exchangeable for Membership Interests, Limited Partnership Interests or common
stock, whether or not the right to convert or exchange thereunder is immediately
exercisable or is conditioned upon the passage of time, the occurrence or
non-occurrence or existence or non-existence of some other Event, or both.
"Current Loan Agreements" shall mean the Restated Agreement, the
Non-Recourse Loan and the PFAL Loan Agreement.
"Current Management Members" shall mean the Management Members employed by
any member of the Drive Group on the date of this Agreement.
"Damages" - Section 10.4.
"Distribution" shall mean a dividend, distribution, redemption, return of
capital to one's equity holders as such, or any like payment or payment which
has the effect of any of the foregoing.
"Drive" - Recitals.
"Drive-GP" - Recitals.
"Drive-LP" shall mean Drive.
"Drive Entities" shall mean Drive, Drive-GP and each of their respective
Subsidiaries.
"Drive Facilities" shall mean the Drive Letter of Credit Facility, the
Drive Subordinate Capital Loan Agreement and the Drive Warehouse Facility.
"Drive Group" shall mean the Drive Entities, considered as a whole.
"Drive Holdings" - introductory paragraph.
"Drive Holdings GP" shall mean Drive Holdings GP LLC, a Delaware limited
liability company.
"Drive Letter of Credit Facility Agreement" means the Letter of Credit
Facility Agreement, dated as of December 20, 2000, among Drive BOS LP and Drive,
as borrowers, the Lenders party thereto, BoS
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(USA), as agent for the Lenders and Bank of Scotland, as issuer of the letters
of credit thereunder, as amended, supplemented or otherwise modified from time
to time.
"Drive Parties" shall mean Drive, Drive-GP and Drive Holdings.
"Drive Subordinate Capital Loan Agreement" means the Subordinate Capital
Loan Agreement, dated as of February 16, 2001, among Drive BOS LP, Drive, as
borrower, the Lenders party thereto, and BoS (USA), as agent for the Lenders, as
amended, supplemented or otherwise modified from time to time.
"Drive Warehouse Facility" means Receivables Financing Agreement, dated as
of August 18, 2000, among Drive BOS LP, as borrower, Drive, in its individual
capacity and as Initial Servicer, the Lenders party thereto, BoS (USA), as agent
for the Lenders and as collateral agent, and Xxxxx Fargo Bank, National
Association, successor by merger to Xxxxx Fargo Bank Minnesota, National
Association, a national banking association, as custodian, as amended,
supplemented or otherwise modified from time to time.
"Employment Agreement" shall mean the employment agreement dated as of
August 18, 2000 between Drive-GP and Xxxxxx X. Xxxxxx, as amended, supplemented
or otherwise modified from time to time in accordance with its terms.
"Enforceability Exceptions" - Section 2.1(b).
"Entities" shall mean Persons other than individuals.
"Event" shall mean the existence or occurrence of any act, action,
activity, circumstance, condition, event, fact, failure to act, omission,
incident or practice, or any set or combination of any of the foregoing.
"Event of Default" shall mean each of the following:
(a) any Relevant Entity shall fail to observe or perform any of the
covenants, agreements or provisions contained in Sections 2, 3, 4 or 8
hereof; or
(b) one or more final judgments for the payment of money in excess
of $1,000,000 shall be rendered against one or more of the Drive Entities
subsequent to September 1, 2004 and on or prior to the Closing Date; or
(c) an Insolvency Event shall exist with respect to any Relevant FC
Entity or any Drive Entity.
"Existing Drive Credit Facilities" means the Drive Letter of Credit
Facility Agreement, the Drive Receivables Financing Agreement and the Drive
Subordinate Capital Loan Agreement.
"FC" shall mean FCFC.
"FC Group" shall mean FCFC and its Subsidiaries.
"FC Holdings" shall mean FirstCity Holdings Corporation, a Texas
corporation.
"FC Party" shall mean, individually and collectively, FC and CLC.
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"FCFC" - introductory paragraph.
"Financial Statements" shall mean, with respect to any Person, the
statement of financial position (balance sheet) and the statement of earnings,
cash flow, and stockholders' (or partners') equity of such Person.
"Fiscal Year" shall mean each January 1-December 31 period.
"Funding" - introductory paragraph.
"Funding Distributions" shall mean the distributions of the Purchase Price
(LPI) as set forth in Section 1.6.
"Governmental Authorizations" shall mean all approvals, concessions,
consents, franchises, licenses, permits, plans, registrations and other
authorizations of all Authorities in connection with the ownership or operation
of the assets and property of the Relevant Entity or the conduct or operations
of the business of such Person.
"Guaranty Equivalent" shall mean any agreement, document or instrument
pursuant to which a Person directly or indirectly guarantees, becomes surety
for, endorses, assumes, agrees to indemnify the obligee of any other Person
against, or otherwise agrees, becomes or remains liable (contingently or
otherwise) for, such obligation, other than by endorsements of instruments in
the ordinary course of business. Without limitation, a Guaranty Equivalent shall
be deemed to exist if a Person agrees, becomes or remains liable (contingently
or otherwise), directly or indirectly: (i) to purchase or assume, or to supply
funds for the payment, purchase or satisfaction of, an obligation; (ii) to make
any loan, advance, capital contribution or other investment in, or a purchase or
lease of any property or services from, a Person; (iii) to maintain the solvency
of such Person; (iv) to enable such Person to meet any other financial
condition; (v) to enable such Person to satisfy any obligation or to make any
payment; (vi) to assure the holder of an obligation against loss; (vii) to
purchase or lease property or services from such Person regardless of the
non-delivery of or failure to furnish of such property or services; or (viii) in
respect of any other transaction the effect of which is to assure the payment or
performance (or payment of damages or other remedy in the event of nonpayment or
nonperformance) of any obligation.
"HBOS" shall mean HBOS plc, a Scottish registered company.
"HSR" shall mean the Law commonly known as "Xxxx-Xxxxx-Xxxxxx" (or any
successor statute in effect from time to time), and the rules and regulations of
the Federal Trade Commission promulgated thereunder.
"IFA" shall mean IFA Parent.
"IFA Entities" shall mean IFA-GP and IFA-LP.
"IFA-GP" - introductory paragraph.
"IFA-LP" - introductory paragraph.
"IFA Parent" shall mean BoS (USA) Inc. (formerly IFA Incorporated), an
Illinois corporation.
"IFA Purchase Price (LPI)" - Section 1.2.
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"IFA Purchase Price (MI)" - Section 1.1.
"Immediate Family" shall mean, with respect to any individual, his or her
spouses, past or present, children, parents and siblings, and any of the spouses
of the foregoing, past or present, in all cases whether related by blood, by
adoption or by marriage.
"Indemnified Parties" - Section 10.4
"Insolvency Event" shall mean the occurrence of any of the following with
respect to a Person: such Person shall make an assignment for the benefit of, or
composition with, creditors or shall become insolvent or be unable, or generally
fail, to pay its debts when due; or any bankruptcy, insolvency or other
proceeding for the relief of financially distressed debtors shall be commenced
with respect to such Person, or a receiver, liquidator, custodian or trustee
shall be appointed for such Person or a substantial part of its assets, and, if
any of the same shall occur involuntarily as to such Person, it shall not be
dismissed, stayed or discharged within 60 days; or if any order for relief shall
be entered against such Person under Title 11 of the United States Code entitled
"Bankruptcy" (or any analogous statute); or such Person shall take any action to
effect, or which indicates its acquiescence in, any of the foregoing.
"Law" shall mean (a) any administrative, judicial, legislative or other
action, code, consent decree, constitution, decree, directive, enactment,
finding, Law, injunction, judgment, order, ordinance, proclamation, regulation,
requirement, rule, statute, or writ of any Authority; (b) the common law; or (c)
any arbitrator's or referee's award or decision.
"Legal Action" shall mean, with respect to any Person, any and all
litigation or legal or other actions, arbitrations, counterclaims,
investigations, proceedings, requests for material information by or pursuant to
the order of any Authority or suits, at law or in arbitration, equity or
admiralty, whether or not purported to be brought on behalf of such Person,
affecting such Person or any of such Person's business, property or assets.
"Lien" shall mean any of the following: mortgage; lien (statutory or
other); or other security agreement, arrangement or interest; hypothecation,
pledge or other deposit arrangement; assignment; charge; claim; liability; levy;
executory seizure; attachment; garnishment; encumbrance (including any easement,
exception, reservation or limitation, right of way, and the like); conditional
sale, title retention or other similar agreement, arrangement, device or
restriction; any financing lease involving substantially the same economic
effect as any of the foregoing; or any restriction on sale, transfer,
assignment, disposition or other alienation; or any claim, assertion,
assessment, obligation or liability (in each case actual or potential) relating
to Taxes.
"Limited Partnership Interests" shall mean Partnership Interests held by
limited partners of Drive in their capacity as limited partners.
"Management Group" shall mean, collectively, the Management Members.
"Management Members" shall mean the following individuals: Xxxxx Xxxxxx,
Xxxxxx Xxxxxx, Xxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxxxx Xxxxxx and R. Xxxxx Xxxxx.
"Material Adverse Change" in respect of a Person shall mean a material
adverse change in the business, properties, operations or condition (financial
or otherwise) of such Person.
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"Material Adverse Effect" in respect of a Person shall mean an effect that
would result in a Material Adverse Change.
"material adverse" when used in uncapitalized form (alone or in
conjunction with other terms) shall mean, with respect to the Person(s)
indicated, any Event or set of Events which could reasonably be expected to (a)
have any material adverse effect upon or result in any material adverse change
in the validity or enforceability of this Agreement or any Related Document, (b)
materially and adversely affect the business, properties, operations or
condition (financial or otherwise) of such Person, (c) materially impair the
Relevant Entity's ability to fulfill its obligations under the terms of any
material agreement, instrument or other document executed or required to be
executed by such Person, (d) materially and adversely affect the rights and
remedies of any party (other than the Relevant Entities) under this Agreement or
any Related Document, or (e) materially and adversely affect any Relevant
Entity's ability to perform this Agreement or any of the other Related
Documents.
"Membership Interests" shall mean the membership interests in Drive-GP
described in Drive-GP's Operating Agreement.
"MG-LLC" - Recitals.
"MG-LP" - Recitals.
"MG-LP Purchase Price (LPI)" - Section 1.2.
"MG-LP Purchase Price (MI)" - Section 1.1.
"MG Entities" shall mean MG-LP and MG-LLC.
"Non-Recourse Loan" shall mean the $16,000,000 non-recourse loan made by
BOS-UK to CLC evidenced by a promissory note dated December 16, 2002 (as such
note has been and may from time to time be amended, extended, restated,
supplemented or otherwise modified).
"Operating Agreement" shall mean the Third Amended and Restated Limited
Liability Company Agreement of Drive-GP dated as of August 18, 2000, as the same
may from time to time be amended, supplemented or otherwise modified in
accordance with its terms and with IFA-GP's prior written consent.
"Option Securities" shall mean all rights, options, warrants and the like,
and calls or commitments evidencing the right, to subscribe for, purchase or
otherwise acquire shares of capital stock, Convertible Securities, Membership
Interests or partnership interests whether or not the right to subscribe for,
purchase or otherwise acquire is immediately exercisable or is conditioned upon
the passage of time, the occurrence or non-occurrence or the existence or
non-existence of some other Event.
"Original Closing Date" shall mean August 24, 2000.
"Original Related Documents" shall have the meaning provided for the term
"Related Documents" in the Original SPA.
"Original SPA" shall mean that certain Securities Purchase Agreement dated
as of August 18, 2000 among FC, CLC, Funding, Auto-GP, IFA-GP and IFA-LP, as
amended by Section 10.4(e) of this Agreement, and as the same may from time to
time thereafter be further amended, supplemented or otherwise modified in
accordance with its terms.
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"Owners Agreement" shall mean the agreement dated as of August 18, 2000
entitled "Agreement Among the Owners" among Drive, Drive-GP, MG-LLC, MG-LP,
IFA-GP, IFA-LP, IFA Parent, CLC, Funding and Auto-GP, as in effect on the date
hereof.
"Partnership Agreement" shall mean the Second Amended and Restated
Agreement of Limited Partnership of Drive dated as of August 18, 2000, as the
same may from time to time be amended, supplemented or otherwise modified in
accordance with its terms and with IFA-LP's prior written consent.
"Partnership Interests" shall mean the partnership interests in Drive
described in Drive's Partnership Agreement.
"Person" shall mean and include an individual, a partnership, a
corporation (including a business trust), a joint stock company, the BOS Group,
the CLC Group, the Drive Group, the Management Group, a limited liability
company, a not-for-profit corporation or other not-for-profit entity, a trust,
an unincorporated association, a joint venture or other entity or an Authority.
"PFAL Loan Agreement" shall mean the Term Loan and Revolving Credit
Agreement dated as of December 12, 2002 among FCFC, the financial institutions
from time to time party thereto and BOS, as agent and lenders (as such agreement
has been and may from time to time be amended, extended, restated, supplemented
or otherwise modified).
"Potential Default" shall mean any Event which after notice, passage of
time, or both, would constitute an Event of Default.
"Private Authorizations" shall mean all approvals, concessions, consents,
franchises, licenses, permits, and other authorizations of all Persons (other
than Authorities).
"Purchase Price" shall mean, unless the context shall otherwise indicate,
the aggregate amount of the Purchase Price (LPI) and the Purchase Price (MI).
"Purchase Price (LPI)" - Section 1.2.
"Purchase Price (MI)" - Section 1.1.
"Related Documents" shall mean this Agreement, the Transfer Agreements,
the Amendments, the Employment Agreement, the Shareholders Agreement, the
Charter Documents of Funding and of the Drive Parties and the other Selling
Entities (other than CLC), and each other agreement, instrument and other
document (other than the Loan Agreements and the guarantees, security
agreements, pledge agreements and the like executed in connection therewith)
executed or required to be executed by any of the Relevant Entities on or prior
to the Closing Date (or, if pursuant to Section 10.14 hereof, at any time
thereafter) in connection with the transactions contemplated by this Agreement
and the other Related Documents, in each case as amended, supplemented or
otherwise modified from time to time in accordance with their respective terms.
"Relevant Entity" shall mean, collectively, the FC Parties, Drive-GP,
Drive-LP, Drive Holdings and the Auto Entities, or such one or more of them as
the context shall indicate.
"Relevant FC Entity" shall mean, collectively, the FC Parties and the Auto
Entities, or such one or more of them as the context shall indicate.
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"Requisite Consents" - Section 5.3(a).
"Restated Agreement" shall mean the Amended and Restated Loan Agreement
dated as of December 12, 2002 among FCFC, the lenders party thereto and BOS, as
agent thereunder (as such agreement has been and may from time to time be
amended, extended, restated, supplemented or otherwise modified).
"Securities Act" shall mean the Securities Act of 1933, and the rules and
regulations promulgated thereunder, all as from time to time in effect, or any
successor law, rules or regulations, and any reference to any statutory or
regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
"SEC" shall mean the U.S. Securities and Exchange Commission.
"Selling Entities" shall mean CLC and Funding.
"Shareholders Agreement" means the Amended and Restated Agreement Among
Members dated as of August 18, 2000 and executed as of December 20, 2002, as
such agreement may from time to time be amended, supplemented or otherwise
modified in accordance with its terms.
"Subject Securities" shall mean, collectively, (i) the Membership
Interests in Drive-GP to be sold by CLC to the Buying Entities, and (ii) the
capital accounts of, and Limited Partnership Interests in, Drive-LP to be sold
by Funding to the Buying Entities, in each case pursuant to Sections 1.1 and 1.2
and the other applicable provisions hereof.
"Subsidiary" of any Person shall mean any other firm, corporation, limited
liability company, partnership, trust or other unincorporated organization or
association or other enterprise, 50% or more of the indicia of equity rights
(whether capital stock or otherwise) of which is at the time owned, directly or
indirectly, by such Person and/or by one or more of such Person's Subsidiaries.
"Tax" (and "Taxable", which shall mean subject to Tax), shall mean, with
respect to any Person, (a) all taxes (domestic or foreign), including without
limitation any income (net, gross or other including recapture of any Tax items
such as investment Tax credits), alternative or add-on minimum Tax, gross
income, gross receipts, gains, sales, use, leasing, lease, user, ad valorem,
transfer, recording, franchise, profits, property (real or personal, tangible or
intangible), fuel, license, withholding on amounts paid to or by such Person,
payroll, employment, unemployment, social security, excise, severance, stamp,
occupation, premium, environmental or windfall profit Tax, custom, duty or other
Tax, or other like assessment or charge of any kind whatsoever, together with
any interest, levies, assessments, charges, penalties, additions to Tax or
additional amount imposed by any Taxing Authority, (b) any joint or several
liability of such Person with any other Person for the payment of any amounts of
the type described in (a), and (c) any liability of such Person for the payment
of any amounts of the type described in (a) as a result of any express or
implied obligation to indemnify any other Person.
"Taxing Authority" shall mean any Authority responsible for the imposition
of any Tax.
"Transfer Agreements" shall mean the Assignment Agreements.
"Transferred LP Interest (IFA)" - Section 1.2.
"Transferred LP Interest (MG-LP)" - Section 1.2.
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"Transferred Membership Interest (IFA)" - Section 1.1.
"Transferred Membership Interest (MG-LP)" - Section 1.1.
"written," "in writing" and other variations thereof shall mean any form
of written communication or a communication by means of telecopier.
10. Miscellaneous Provisions.
10.1 Termination. This Agreement may be terminated at any time prior to
the Closing Date by the mutual written consent of FC and the Buying Entities.
This Agreement may be terminated after October 31, 2004, by any party if the
Closing Date has not occurred.
10.2 Stamp and Other Taxes. The FC Parties jointly and severally covenant
and agree that they will pay all documentary stamp or similar excise taxes,
including any interest or penalties thereon, which may be legally payable in
connection with or arising out of the issue, redemption or transfer of any of
the Subject Securities and will indemnify each holder of any thereof against,
and save it harmless from, any liability, cost or expense in respect of any such
stamp taxes or other taxes and any interest or penalties thereon. The foregoing
agreement in this connection shall survive termination of this Agreement.
10.3 Expenses. Whether or not the transactions hereby contemplated shall
be consummated, each party to this Agreement shall pay its own fees and expenses
(including, without limitation, the fees and expenses payable to its legal
counsel, accountants, investment advisors and other representatives) incurred in
connection with this Agreement and the other Related Documents, whether rendered
before, on or after the Closing Date; except to the extent set forth in any
Related Document, the Current Loan Agreements (with respect to any amendment or
restatement of any such Agreement), or the Drive Facilities (with respect to any
amendment thereto).
10.4 Indemnification.
(a) Each of the FC Parties hereby jointly and severally agrees to
indemnify, pay and hold harmless IFA Parent and each Buying Entity and each of
them (collectively, the "Indemnified Parties") from and against all liability,
losses, damages and expenses, including without limitation legal fees and
expenses (collectively, "Damages"), incurred by any one or more of them as a
result of any representation or warranty contained in Section 2 of this
Agreement or otherwise made by any FC Party or Auto Entity in any certificate or
instrument to be delivered in connection with the Closing being incorrect,
incomplete or misleading (or facts alleged by any third party that, if true,
would mean any such representation or warranty, would be incorrect or
misleading). The obligations provided for in this Section 10.4(a) shall survive
(1) for five years from the Closing Date for the representations and warranties
in Sections 2.3 and 2.10 and (2) for 30 months from the Closing Date with
respect to all other representations and warranties; provided, however, if at
the expiration of the five-year or 30-month period (as applicable) any claim for
indemnification hereunder has been asserted in writing by an Indemnified Party
to an FC Party but not fully determined, such five-year or 30-month period (as
applicable) will be extended as to such claim until it is finally determined or
concluded.
(b) Each of the IFA Parties hereby jointly and severally agrees to
indemnify, pay and hold harmless the FC Parties from and against all Damages
incurred by any one or more of them as a result of any representation or
warranty contained in Section 3 of this Agreement or otherwise made by any IFA
Party in any certificate or instrument to be delivered in connection with the
Closing being incorrect, incomplete or misleading (or facts alleged by any third
party that, if true, would mean any such
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representation or warranty, would be incorrect or misleading). The obligations
provided for in this Section 10.4(b) shall survive for 30 months from the
Closing Date with respect to all representations and warranties; provided,
however, that if at the expiration of the 30-month period (as applicable), any
claim for indemnification hereunder has been asserted in writing by an FC Party
to an IFA Party but not fully determined, such 30-month period (as applicable)
will be extended as to such claim until it is finally determined or concluded.
(c) Each of the MG Parties hereby jointly and severally agrees to
indemnify, pay and hold harmless the FC Parties from and against all Damages
incurred by any one or more of them as a result of any representation or
warranty contained in Section 4 of this Agreement or otherwise made by any MG in
any certificate or instrument to be delivered in connection with the Closing
being incorrect, incomplete or misleading (or facts alleged by any third party
that, if true, would mean any such representation or warranty, would be
incorrect or misleading). The obligations provided for in this Section 10.4(c)
shall survive for 30 months from the Closing Date with respect to all
representations and warranties; provided, however, that if at the expiration of
the 30-month period (as applicable), any claim for indemnification hereunder has
been asserted in writing by an FC Party to an MG Party but not fully determined,
such 30-month period (as applicable) will be extended as to such claim until it
is finally determined or concluded.
(d) Neither of (i) the FC Parties or Funding, (ii) the IFA Parties or
(iii) the MG Parties, as the case may be, shall be required to make any payments
under Section 10.4 until the aggregate amount payable thereunder by each such
group shall exceed $250,000, and then only for the amount in excess of said
$250,000 in the aggregate; provided, however, that the foregoing provisions of
this Section 10.4(d) shall not apply to matters arising in respect of Sections
2.3, 2.10, 2.12, 3.3 or 4.3 or to any breach of a representation or warranty
made by any Party of which such Party or its Affiliates had knowledge prior to
the Closing Date or to any intentional breach of any representation, warranty or
obligation of any Party.
(e) The last sentence of Section 7.4(a) of the Original SPA is hereby
amended by adding the following at the end thereof:
"provided, however, that if at the expiration of the seven-year period for
Tax-related representations, any claim for indemnification hereunder has
been asserted in writing by an Indemnified Party to an FC Party but not
fully determined or an audit by the Internal Revenue Service has been
initiated but not completed, such seven-year period will be extended as to
such claim or audit until it is finally determined or concluded."
The provisions of this clause (e) shall be deemed signed only by those parties
hereto that are also parties to the Original SPA and hence no consent of any
party hereto that was not also a signatory to the Original SPA is required for
any amendment of this clause (e), notwithstanding anything to the contrary in
Section 10.7(a) hereof. Capitalized terms used in the foregoing amendment have
the definitions provided therefor in the Original SPA.
10.5 Investigation. NO INVESTIGATION PERFORMED BY OR ON BEHALF OF ANY OF
THE BUYING ENTITIES, SELLING ENTITIES OR DRIVE OR ANY OF THEIR RESPECTIVE
AFFILIATES (OR BY ANY OFFICER, DIRECTOR, EMPLOYEE OR AGENT OF ANY OF THE
FOREGOING), NOR ANY INFORMATION POSSESSED BY ANY SUCH PERSON, SHALL AFFECT ANY
REPRESENTATION OR WARRANTY MADE IN THIS AGREEMENT (UNLESS EXPRESSLY ADDRESSED IN
SUCH REPRESENTATION OR WARRANTY) BY ANY OF THE OTHER PARTIES HERETO, OR ANY
CONDITION TO THE OBLIGATIONS OF THE PARTIES HERETO, OR LIMIT THE SCOPE OF ANY
SUCH REPRESENTATIONS, WARRANTIES OR CONDITIONS, OR IN ANY WAY LIMIT ANY
LIABILITY OF ANY PERSON UNDER SECTION 10.4.
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10.6 Notices. Except as otherwise expressly provided herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be deemed to have been duly given or made when delivered if sent by
Federal Express or other similar overnight delivery service or by telecopier, or
five Business Days after mailing (when mailed, postage prepaid, by registered or
certified mail, return receipt requested); in each case addressed as follows:
If to IFA Parent, IFA-GP or IFA-LP:
11th floor
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
If to FC, CLC, Funding or Auto-GP:
0000 Xxxxxxxx Xxxxx
X.X. Xxx 0000
Xxxx, XX 00000-0000
Attention: Xxx Xxxxxxx, CEO
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
If to MG-LP or MG-LLC:
c/o Xxxxxx X. Xxxxxx
0000 Xxxxx Xxxxxxxx Xxxxxxx
Xxxxx 0000-X
Xxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
If to Drive-GP or Drive:
0000 Xxxxx Xxxxxxxx Xxxxxxx
Xxxxx 0000-X
Xxxxxx, Xxxxx 00000
Attention: Xxx Xxxxx, CFO
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
or to such other person(s), facsimile number(s) or address(es) as the party to
receive any such notice or other communication may have designated by written
notice to the other parties.
10.7 Amendment; Waiver.
(a) Except as may otherwise be specifically provided herein, no provision
of this Agreement may be changed, waived, discharged or terminated orally, but
only by an instrument in writing signed by all
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the parties hereto. Any such change, waiver, discharge or termination shall be
effective only in the specific instance and for the specific purposes for which
made or given.
(b) No failure or delay on the part of any of the parties hereto in
exercising any right, power or privilege under this Agreement, and no course of
dealing between or among any one or more of them shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
10.8 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
EXECUTED WHOLLY WITHIN THE STATE OF NEW YORK (REGARDLESS OF THE PLACE WHERE THIS
AGREEMENT IS EXECUTED) AND WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAWS
PROVISIONS.
10.9 Entire Agreement. (a) Integration. This Agreement, together with the
other Related Documents and the Loan Agreements (and the documents referred to
therein), comprises the complete and integrated agreement of the parties on the
subject matter of the Acquisition and the Drive Holdings Distributions and
supersedes all prior agreements, written or oral, between or among the parties
hereto on such subject matter, it being understood and acknowledged that nothing
contained in this Agreement or in any of the other Related Documents supersedes
the Original SPA or (except to the extent any of the other Original Related
Documents are amended in connection herewith) such other Original Related
Documents.
(a) Notwithstanding anything to the contrary contained herein, unless a
party hereto otherwise requests with respect to any specific exhibit, exhibits
to this Agreement shall not be required to be attached to the execution or any
other copy of this Agreement, and any references in this Agreement or any
Related Document to such exhibits as "Exhibits hereto," "Exhibits to this
Agreement" or words of similar effect shall be deemed to refer to such document
as executed by the relevant parties thereto and delivered on the Closing Date.
10.10 Jurisdiction. Each party hereto hereby agrees that any legal action
or proceeding against it or any of its Affiliates or any Drive Entity or any of
its Affiliates with respect to this Agreement or any of the agreements or other
documents delivered pursuant hereto or in connection herewith may (and shall
exclusively) be brought in the courts of the State of New York located in New
York City or of the United States of America for the Southern District of New
York as the party bringing such action or proceeding may elect, and, by
execution and delivery hereof, each of the parties hereto hereby accepts and
consents for itself and in respect to its property, generally and
unconditionally, with respect to any such action or proceeding, the exclusive
jurisdiction of the aforesaid courts and waives any right to stay or to dismiss
any such action or proceeding brought before said courts on the basis of forum
non conveniens; provided that nothing contained herein shall limit the right of
IFA-GP or IFA-LP or any member of the BOS Group to bring any such action or
proceeding in the courts of Texas or any other jurisdiction where IFA-GP or
IFA-LP or such member may obtain proper jurisdiction over such party. The
parties hereto further agree that the provisions of Sections 5-1401 and 5-1402
of the General Obligations Law of the State of New York shall apply to this
Agreement and such other agreements and documents. Each party hereto hereby
irrevocably consents that all process served or brought against it with respect
to any such action or proceeding in any such court shall be effective and
binding service in every respect if sent by registered mail, or (if permitted by
law) by Federal Express or other similar overnight courier service, to such
party at its address set forth in Section 10.6 (or such other address as the
other parties hereto are notified of in
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accordance with the provisions of said Section); nothing in this Section 10.10
shall affect the right of any party hereto to serve process in any other manner
permitted by law.
10.11 Business Days. Whenever a specified time period is provided for
herein and such period ends on a day which is not a Business Day, the last day
of such period shall be deemed extended to the next succeeding day which is a
Business Day.
10.12 Headings; Counterparts. The headings contained in this Agreement are
for reference purposes only and shall not limit or otherwise affect the meaning
of any provision of this Agreement. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which together
shall constitute one instrument, binding upon all of the parties hereto. In
pleading or proving any provision of this Agreement, it shall not be necessary
to produce more than one of such counterparts. Telecopied signatures hereto
shall be of the same force and effect as an original of a manually signed copy.
10.13 Severability. If any term or provision of this Agreement shall be
held or deemed to be, or shall in fact be, invalid, inoperative, illegal or
unenforceable as applied to any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions or in all cases, because of the
conflicting of any provision with any constitution or statute or rule of public
policy or for any other reason, such circumstance shall not have the effect of
rendering the provision or provisions in question invalid, inoperative, illegal
or unenforceable in any other jurisdiction or in any other case or circumstance
or of rendering any other provision or provisions herein contained invalid,
inoperative, illegal or unenforceable to the extent that such other provisions
are not themselves actually in conflict with such constitution, statute or rule
of public policy, but this Agreement shall be reformed and construed in any such
jurisdiction or case as if such invalid, inoperative, illegal or unenforceable
provision had never been contained herein and such provision reformed so that it
would be valid, operative and enforceable to the maximum extent permitted in
such jurisdiction or in such case. Notwithstanding the foregoing, in the event
of any such determination the effect of which is to affect materially and
adversely any party, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by Applicable Law in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled and
consummated to the maximum extent possible.
10.14 Further Acts. Each party agrees that at any time, and from time to
time, after the Closing Date, it will do all such things and execute and deliver
all such additional agreements, instruments and documents, and other assurances,
as any other party or its counsel reasonably deems necessary or desirable in
order to carry out the terms and conditions of this Agreement and the
transactions contemplated hereby or to facilitate the enjoyment of any of the
rights created hereby.
10.15 Mutual Drafting. This Agreement and the other Related Documents are
the result of the joint efforts of the parties hereto and thereto, respectively,
and each provision hereof and thereof has been subject to the mutual
consultation, negotiation and agreement of the parties to each and there shall
be no construction against any party based on any presumption of that party's
involvement in the drafting hereof or thereof.
10.16 No Third-Party Beneficiaries. This Agreement is solely for the
benefit of the parties hereto and their respective successors and permitted
assigns. Nothing contained herein shall be deemed to confer upon anyone other
than the relevant parties hereto and their respective successors and permitted
assigns any right to insist on or to enforce the performance or observance of
any of the obligations contained herein.
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10.17 Jury Waiver. EACH PARTY HERETO HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY AND ALL RIGHTS IT OR HE MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS AGREEMENT OR IN CONNECTION WITH ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF OR BY ANY PARTY
HERETO OR ANY AFFILIATE THEREOF.
[balance of page intentionally blank]
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IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
FIRSTCITY FINANCIAL CORPORATION FIRSTCITY CONSUMER LENDING
CORPORATION
By__________________________________ By________________________________
Name: Xxxxx X. Xxxxxxx Name: Xxxxx X. Xxxxxxx
Title: President Title: Chairman of the Board
FIRSTCITY FUNDING GP CORP. FIRSTCITY FUNDING L.P.
By FirstCity Funding GP Corp.,
its general partner
By__________________________________ By________________________________
Name: Xxxxx X. Xxxxxxx Name: Xxxxx X. Xxxxxxx
Title: Chairman of the Board Title: Chairman of the Board
IFA DRIVE GP HOLDINGS LLC IFA DRIVE LP HOLDINGS LLC
By__________________________________ By________________________________
Name: Xxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Manager Title: Manager
DRIVE FINANCIAL SERVICES LP DRIVE HOLDINGS LP
By Drive GP LLC, its sole general By Drive Holdings GP LLC, its sole
partner general partner
By__________________________________ By________________________________
Name: Xxx Xxxxx Name: Xxx Xxxxx
Title: Chief Financial Officer Title: Vice President
CONSENTED TO: DRIVE MANAGEMENT LP
DRIVE GP LLC By Drive Management GP LLC, its
sole general partner
By__________________________________ By________________________________
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxx
Title: President Title: President
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CONSENTED TO:
DRIVE MANAGEMENT GP LLC
By__________________________________
Name: Xxxxxx X. Xxxxxx
Title: President
-33-
SCHEDULES AND ANNEXES
Schedule 2.1(a).................. Jurisdictions of Organization
Schedule 2.1(c).................. Governmental and Private Authorizations (FC)
Schedule 2.1(a)
Jurisdictions of Organization
Name of Entity Type of Entity State of Organization
-------------- -------------- ---------------------
FirstCity Financial Corporation corporation Delaware
FirstCity Consumer Lending Corporation corporation Texas
FirstCity Funding, L.P. limited partnership Texas
FirstCity Funding GP Corp. corporation Texas
Table of Contents
(continued)
Page
Schedule 2.1(c)
Governmental and Private Authorizations
(FC ENTITIES)
PART ONE
Governmental Authorizations
FirstCity Securities and Filing of documents listed in the
Financial Exchange parenthetical contained in the first
Corporation Commission sentence of Section 2.2 of Agreement to
which this Schedule is attached (the "SPA")
PART TWO
Private Authorizations
Entity Requiring Description of Relevant Document Date
Authorization Granting Entity Action Required Requiring Same Received Date Expected
---------------- --------------- --------------- ----------------- -------- -------------
FirstCity CFSC Capital Consent Loan Agreement dated 3 business
Holdings Corp. XXX April 6, 2000, as days prior
Corporation amended to Closing
Date
2
Table of Contents
(continued)
Page
EXHIBIT A
ASSIGNMENT AGREEMENT
This Assignment Agreement is one of the Assignment Agreements contemplated
to be executed in connection with that certain Securities Purchase Agreement
(the "Securities Purchase Agreement") dated as of September ___, 2004 by and
among FirstCity Financial Corporation, FirstCity Consumer Lending Corporation,
FirstCity Funding L.P., FirstCity Funding GP Corp., IFA Drive GP Holdings LLC,
IFA Drive LP Holdings LLC, Drive Management LP, Drive Management GP LLC, Drive
Holdings LP, Drive GP LLC, and Drive Financial Services LP.. All capitalized
terms used in this Assignment Agreement shall have the meaning set forth in the
Securities Purchase Agreement.
[FirstCity Consumer Lending Corporation/FirstCity Funding L.P.]
("Assignor") hereby absolutely sells, transfers, assigns, delivers, sets over
and conveys to [IFA Drive GP Holdings LLC/IFA Drive LP Holdings LLC/Drive
Management LP] (the "Assignee"), without recourse and without representation or
warranty, express or implied, except as set forth in the Securities Purchase
Agreement, all of Assignor's right, title and interest in the [Transferred
Membership Interest (IFA)/Transferred Membership Interest (MG-LP)/Transferred LP
Interest (IFA)/Transferred LP Interest (MG-LP)] in consideration of the payment
of the [IFA Purchase Price (MI)/MG Purchase Price (MI)/IFA Purchase Price
(LPI)/MG Purchase Price (LPI)].
The effective date of this Assignment Agreement (the "Effective Date") for
all purposes is and shall be October __, 2004.
Assignee hereby absolutely assumes all of the duties, obligations and
liabilities of Assignor derived from the ownership of the [Transferred
Membership Interest (IFA)/Transferred Membership Interest (MG-LP)/Transferred LP
Interest (IFA)/Transferred LP Interest (MG-LP)] arising after date hereof under
the [Owners Agreement and the Operating Agreement/ Shareholders Agreement and
the Partners Agreement].
Each of the parties identified below agrees that it will, without further
consideration and at its own expense, execute and deliver such other documents
and take such other action as may reasonably be requested in order to more
effectively consummate the transaction contemplated by this Assignment.
This Assignment may be executed simultaneously in several counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
EXECUTED on the __ day of October, 2004.
ASSIGNOR:
ASSIGNEE:
3
