Form of Purchase and Sale Agreement] PURCHASE AND SALE AGREEMENT
Exhibit
k.4
[Form of
Purchase and Sale Agreement]
THIS
PURCHASE AND SALE AGREEMENT (this “Agreement”) is
entered into by and among FULL CIRCLE PARTNERS, LP, a Delaware limited
partnership (“FC
Partners”), FULL CIRCLE FUND, LTD., a Cayman Islands exempted company
(“FC Fund”),
FULL CIRCLE OFFSHORE, LLC, a Delaware limited liability company and wholly-owned
subsidiary of FC Fund (“FC Offshore” and
together with FC Partners and FC Fund, the “Sellers” and each
individually, a “Seller”), FULL CIRCLE
CAPITAL CORPORATION, a Maryland corporation (“Purchaser”) and FCC,
LLC, D/B/A FIRST CAPITAL (“Lender”), this [ ]th
day of August, 2010 (the “Closing
Date”).
RECITALS:
WHEREAS,
FC Fund owns all of the issued and outstanding capital stock (the “FC ICB Shares”) of
Full Circle ICB Inc., a Delaware corporation (“FC ICB”) and all of
the issued and outstanding capital stock (the “FC West Shares”) of
Full Circle West, Inc., a Delaware corporation (“FC West”);
and
WHEREAS,
FC Partners and FC Fund made or participated in certain revolving and term loans
(including such participations, the “Loans”) to various
borrowers (the “Borrowers”), as set
forth on Exhibit
A attached hereto; and
WHEREAS,
the agreements with the Borrowers and other lenders and agents under the Loans,
together with all other documents and instruments securing or otherwise
evidencing the Loans, as set forth on Exhibit B attached
hereto, are collectively referred to as the “Loan Documents”;
and
WHEREAS,
in connection with the Loans, FC Partners, FC Fund, FC ICB and FC West hold
ownership interests or rights to acquire ownership interests (the “Equity”) in certain
of the Borrowers or affiliates of such Borrowers (the “Equity Entities”), as
set forth on Exhibit
C attached hereto; and
WHEREAS,
the agreements with the Equity Entities governing the Equity, together with all
other documents and instruments otherwise evidencing or governing the Equity, as
set forth on Exhibit
D attached hereto, are collectively referred to as the “Equity Documents”;
and
WHEREAS,
Sellers now desire to sell, assign and transfer to Purchaser, and Purchaser now
desires to purchase, accept and acquire from Sellers, all of Sellers’ right,
title and interest in and to the Loans, the Loan Documents, the Equity, the
Equity Documents, the FC ICB Shares and the FC West Shares, including all
security interests and other liens of Sellers in the assets of the Borrowers,
and all other assets of each Seller other than the Retained Assets (as defined
below) (collectively, the “Transferred
Interests”), subject to the terms and conditions set forth herein;
and
WHEREAS,
the loans and equity interests of FC Partners and FC Fund that are not being
transferred to Purchaser are set forth on Exhibit E attached
hereto (the “Retained
Assets”); and
WHEREAS,
Sellers now desire to assign and transfer to Purchaser, and Purchaser now
desires to assume from Sellers, all of Sellers’ liabilities, responsibilities
and obligations relating to and arising under the Transferred Interests (other
than the FC ICB Shares and FC West Shares) attributable to the period from and
after the Closing Date (the “Assumed
Liabilities”), subject to the terms and conditions set forth herein;
and
WHEREAS,
in full consideration of the Transferred Interests, Purchaser shall deliver to
each of FC Partners’ and FC Fund’s designees, based upon election forms received
from such designees, the purchase price payable as set forth in Article 2 herein
(the “Purchase
Price”), which shall consist of (i) shares of Purchaser’s common stock,
$0.01 par value per share (the “Common Stock”),
evidenced by stock certificates containing the restrictive legends set forth on
Exhibit F
attached hereto, (ii) senior notes (the “Senior Notes”) issued
by Purchaser pursuant to that certain Note Agreement dated as of the date hereof
by and among Purchaser and certain of the designees of Sellers, attached as
Exhibit G
hereto (the “Note
Agreement”) and/or (iii) a cash payment in connection with the exercise
of the Over-Allotment Option (as defined below); and
WHEREAS,
the Transferred Interests owned by FC Partners are encumbered by security
interests granted by FC Partners to Lender to secure FC Partners’ obligations
under loans made by Lender to FC Partners, pursuant to the Amended and Restated
Loan and Security Agreement dated as of January 1, 2010 (the “FC Partners Loan
Agreement”), and the Transferred Interests owned by FC Fund, FC ICB and
FC West are encumbered by security interests granted by FC Offshore and FC Fund
to Lender to secure FC Offshore’s obligations under loans made by Lender to FC
Offshore, pursuant to the Amended and Restated Loan and Security Agreement dated
as of January 1, 2010 (the “FC Offshore Loan
Agreement” and together with the FC Partners Loan Agreement and any loan
documents related to either, the “Seller Loan
Agreements”); and
WHEREAS,
the Transferred Interests are being sold to Purchaser subject to all security
interests, liens and other interests of Lender; and
WHEREAS,
Sellers now desire to sell, assign and transfer to Purchaser, and Purchaser now
desires to purchase, accept and acquire from Sellers, all of Sellers’ right,
title and interest in and to, and to assume all of Sellers’ liabilities,
responsibilities and obligations relating to and arising under, the Seller Loan
Agreements (the “Seller Loan Agreements
Assignment and Assumption”), subject to the terms and conditions set
forth herein; and
WHEREAS,
Lender now desires to accept, agree and consent to this Agreement and the
Portfolio Transfer (as defined below) and the Seller Loan Agreements Assignment
and Assumption contemplated herein, subject to the terms and conditions set
forth herein.
AGREEMENT:
NOW,
THEREFORE, in consideration of the foregoing, the terms hereinafter set forth in
this Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
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1.
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Purchase and
Sale
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1.1. Purchase of Transferred
Interests; Assumption of Obligations
Subject
to the terms and conditions set forth herein, effective as of the Closing Date,
(i) each Seller hereby sells, assigns, transfers and delivers to Purchaser, and
Purchaser hereby purchases, accepts and acquires, all of such Seller’s right,
title and interest in and to the Transferred Interests and (ii) each Seller
hereby assigns and transfers to Purchaser, and Purchaser hereby assumes and
agrees to perform all of the rights and obligations of Sellers related to, the
Assumed Liabilities; provided, that the
assignment and transfer of the Equity and Equity Documents held by FC ICB and FC
West shall be effected by the assignment and transfer of the FC ICB Shares and
FC West Shares by FC Fund to Purchaser, respectively (collectively, the “Portfolio
Transfer”). In the event that a Seller receives any payment,
penalty, credit or any other amount in connection with the Transferred Interests
after the Closing Date, except for the receipt by such Seller of the Purchase
Price from Purchaser, such Seller shall promptly remit to Lender, for the
benefit of Purchaser, the dollar amount of such payment, penalty, credit or
other amount.
1.2. Assignment and Assumption of
Seller Loan Agreements to Purchaser
(a) Assignment. Subject
to the terms and conditions set forth herein, effective as of the Closing Date,
(i) each Seller hereby sells, assigns and transfers to Purchaser, and Purchaser
hereby purchases, accepts and acquires from each Seller, all of such Seller’s
right, title and interest in and to, each of the Seller Loan Agreements, and
(ii) Purchaser agrees to assume, honor, perform and comply with, and agrees to
be bound by, in all respects, all of the terms and provisions of each of Seller
Loan Agreements, including the obligation to pay the unpaid balance due and
owing on the loans under the Seller Loan Agreements and all interest thereon
(the “Seller
Loans”).
(b) Amendment
and Restatement. Purchaser, Sellers and Lender agree that,
simultaneously with the execution of this Agreement, the Seller Loan Agreements
shall be amended, restated and consolidated, as substantially set forth in the
Second Amended and Restated Loan and Security Agreement attached as Exhibit H hereto (the
“Purchaser Loan
Agreement”). Purchaser and Sellers hereby acknowledge and
agree that (i) Lender shall have no further obligation to make any loan, advance
or other credit accommodation to any Seller, (ii) Lender’s sole obligation to
make loans and other credit accommodations to Purchaser is set forth in the
Purchaser Loan Agreement, (iii) the outstanding principal balance of the
Obligations under and as defined in the FC Partners Loan Agreement is
$____________ as of the date hereof, and the accrued interest and fees under the
FC Partners Loan Agreement is $______________ as of the date hereof; (iv) the
outstanding principal balance of the Obligations under and as defined in the FC
Offshore Loan Agreement is $____________ as of the date hereof, and the accrued
interest and fees under the FC Offshore Loan Agreement is $______________ as of
the date hereof; and (v) from and after the date hereof, (A) such amounts
specified in clauses (iii) and (iv) shall constitute Obligations under and as
defined in the Purchaser Loan Agreement, (B) such Obligations are owing by
Purchaser to Lender subject to no right of offset, claim or counterclaim,
regardless of any breach of any representation, warranty, covenant or agreement
of any Seller in favor of Purchaser, and (C) Lender shall have no obligation to
pursue any Seller for any such Obligations.
(c) No
Impairment of Lien; No Satisfaction. Nothing set forth herein shall
affect the
priority or extent of any security interest or other lien created by the Seller
Loan Agreements or any related agreement, nor, except as expressly set forth
herein, release or change the liability of any party who may now be, or after
the Closing Date may become, liable, primarily or secondarily, under the Seller
Loan Agreements. Without limiting the generality of the foregoing,
Purchaser hereby acknowledges to Lender that Purchaser is purchasing the
Transferred Interests subject to the security interests of Lender, and that such
security interests remains in full force and effect. This Agreement
does not, and shall not be construed to, constitute the creation of new
indebtedness or the satisfaction, discharge or extinguishment of the debt
secured by the Seller Loan Agreements.
(d) Lender’s
Consent to Portfolio Transfer and Seller Loan Agreements Assignment and
Assumption. Subject to the terms and conditions set forth herein,
including the execution and delivery of the Purchaser Loan Agreement, Lender
hereby accepts, agrees and consents to this Agreement and the Portfolio Transfer
and the Seller Loan Agreements Assignment and Assumption contemplated herein,
and waives (i) any breach, default or event of default under the Seller Loan
Agreements arising as a result of the Portfolio Transfer or the Seller Loan
Agreements Assignment and Assumption, and (ii) its right to accelerate the
Seller Loans pursuant to any provision of the Seller Loan Agreements which might
otherwise provide such right to Lender on account of the Portfolio Transfer or
the Seller Loan Agreements Assignment and Assumption.
(e) Lender’s
Limited Release of Sellers. Subject to the terms and conditions set
forth herein, including the execution and delivery of the Purchaser Loan
Agreement, but effective only upon the IPO Payment (as defined below), Lender
hereby releases Sellers from any liability for repayment of the principal and
interest under the terms of the Seller Loan Agreements, and any other
obligations under the Seller Loan Agreements, to the extent such obligations
arise from matters not caused by them first occurring from and after the Closing
Date. Lender hereby reserves all rights it may have against Sellers
for acts, omissions or events occurring on or prior to the Closing
Date. Sellers and Purchaser hereby acknowledge and agree that (i)
Lender has a security interest in all assets of Purchaser, including any rights
of Purchaser arising from any breach of any representation, warranty, covenant
or agreement of any Seller in favor of Purchaser, (ii) while any Default exists
under and as defined in the Purchaser Loan Agreement, Lender may (but shall not
be obligated to) enforce any such rights directly, in its own name or in the
name of Purchaser, and (iii) Purchaser shall not waive or release any such
rights without the prior written consent of Lender. As used herein,
“IPO Payment”
means Lender’s receipt, in immediately available funds, of the cash proceeds
received by Purchaser in connection with Purchaser’s initial public offering of
its common stock (the “Initial Public
Offering”), net of all fees, commissions, costs and expenses, including
the legal, audit and actuarial fees and expenses, roadshow, travel and printing
costs, filing, listing and Blue Sky fees and costs, transfer agent and registrar
costs and all related meeting and travel expenses (“Expenses”) incurred
(in each case, whether paid, billed or accrued) in connection with the Initial
Public Offering (the “IPO Expenses”), which
net proceeds must be at least $15,000,000.00 (the “IPO Proceeds”), for
application to the Obligations under and as defined in the Purchaser Loan
Agreement. For the avoidance of doubt, the IPO Proceeds and IPO Expenses shall
exclude any proceeds received by Purchaser and any Over-Allotment Option
Expenses (as defined below) incurred by Purchaser, respectively, in connection
with the exercise by the underwriters in the Initial Public Offering of the
Over-Allotment Option (as defined below). The IPO Expenses and the IPO Proceeds
shall be determined by Purchaser in its reasonable discretion.
(f) Sellers’
Release of Lender. To induce Lender to consent to the Portfolio
Transfer, each Seller (i) acknowledges and agrees that it has no right of
offset, defense, counterclaim, claim or objection against Lender arising out of
or with respect to the Seller Loan Agreements, and (ii) releases, acquits,
remises and forever discharges Lender and its affiliates and all of their past,
present and future officers, directors, employees, agents, attorneys,
representatives, successors and assigns from any and all claims, demands,
actions and causes of action, whether at law or in equity, whether now accrued
or hereafter maturing, and whether known or unknown to such Seller, and which
such Seller now or may hereafter have by reason of any matter, cause or thing
occurring or arising on or prior to the date of this Agreement with respect to
matters arising out of or with respect to the Seller Loan
Agreements.
1.3 Release of Lender’s Security
Interests in Retained Assets; Collateral Release Fee.
(a) Release. Subject
to the terms and conditions set forth herein, effective as of the date of the
IPO Payment and after the satisfaction of all conditions precedent set forth in
the Purchaser Loan Agreement to the sole satisfaction of Lender, Lender hereby
releases its security interest in the Retained Assets and all other assets of
Sellers with respect to which Sellers have granted Lender a security interest
pursuant to Section 1.4(c) of this Agreement.
(b) Release
Fee. In
consideration of the release described in Section 1.3(a) above, and as one of
the conditions precedent thereto, each Seller hereby jointly and severally
agrees to pay to Lender a collateral release fee (the “Release Fee”) in the
amount of $260,343.00 in immediately available funds on the date of the IPO
Payment.
(c) Release
Documentation. Upon receipt of the IPO Payment and Release Fee,
Lender shall execute and deliver to Sellers such documents and
instruments as Sellers may reasonably request evidencing the release
of Lender's security interests on the Retained Assets and all other assets
of Sellers with respect to which Sellers have granted Lender a security interest
pursuant to Section 1.4(c) of this Agreement.
1.4. Guaranty by Sellers of the
Obligations under the Purchaser Loan Agreement.
(a) Guaranty. In
order to induce Lender to enter into this Agreement and to grant the consent set
forth in Section 1.2(d) above, each Seller hereby jointly and severally
guarantees all Obligations under and as defined in the Purchaser Loan Agreement
(the “Guaranteed
Obligations”). The obligations of each Seller under this
section are primary and unconditional and shall be enforceable before,
concurrently or after any claim or demand is made or suit is filed against
Purchaser or any other Seller or any other guarantor or surety, and before,
concurrently or after any proceeding by Lender against any collateral, and shall
be effective regardless of the solvency or insolvency of Purchaser or any other
Seller at any time, the extension or modification of the Guaranteed Obligations
by operation of law, or the subsequent reorganization, merger or consolidation
of Purchaser, or any other change in its composition, nature, personnel or
location. The obligation hereunder may be considered by Lender either as a
guaranty or agreement of surety. Payment of any sum or sums due to Lender
hereunder will be made by Sellers promptly upon demand by Lender. If claim
is ever made upon Lender for repayment or recovery of any amount or amounts
received by Lender in payment of any of the Guaranteed Obligations and Lender
repays all or part of said amount by reason of (i) any judgment, decree or
order of any court or administrative body having jurisdiction over Lender or any
of its property, or (ii) any settlement or compromise of any such claim
effected by Lender with any such claimant (including Purchaser), then in such
event each Seller agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon Sellers, notwithstanding any revocation or
cancellation of the guaranty contemplated hereby, and Sellers shall be and
remain obligated to Lender hereunder for the amount so repaid or recovered to
the same extent as if such amount had never originally been received by
Lender. Sellers agree that the books and records of Lender showing the
account between Lender and Purchaser shall be admissible in evidence in any
action or proceeding, shall be binding upon Sellers for the purpose of
establishing the items therein set forth (absent manifest error), and shall
constitute prima facie proof thereof, except that the monthly statements
rendered to Purchaser by Lender shall, to the extent to which no objection is
made within thirty (30) days after date thereof, constitute an account stated
between Lender and Purchaser binding upon Sellers. Sellers jointly and
severally agree to pay all costs of Lender of collection of any sum or sums due
hereunder, and, if collected by or through an attorney, reasonable attorneys’
fees together with all other legal and court expenses. Each Seller
agrees that its obligation hereunder shall not be discharged or impaired in any
respect by reason of any failure by Lender to perfect, or continue perfection
of, any lien or security interest in any security or any delay by Lender in
perfecting any such lien or security interest.
(b) Waivers of
Sellers. Each Seller waives notice of acceptance hereof, creation of
any of the Guaranteed Obligations, or nonpayment or default by Purchaser under
any of the Guaranteed Obligations or any agreement now or hereafter existing
between Purchaser and Lender, presentment, demand, notice of dishonor, protest
and any other notices whatsoever. Each Seller, without affecting its
liability hereunder, consents to and waives notice of all changes of terms of
the Guaranteed Obligations, the withdrawal or extension of credit or time to
pay, the release of the whole or any part of the Guaranteed Obligations,
renewal, indulgence, settlement, compromise or failure to exercise due diligence
in collection, the acceptance or release of security, extension of the time to
pay for any period or periods whether or not longer than the original period, or
any surrender, substitution or release of any other person or entity directly or
indirectly liable for any of the Guaranteed Obligations or any collateral
security given by Purchaser. Each Seller agrees that it shall not exercise
any right of subrogation, reimbursement or indemnity whatsoever and that it
shall not exercise any rights with respect to any “claim” against Purchaser in
any proceeding under Title 11 of the United States Code, as amended, and that,
except as otherwise provided in this Agreement, it shall not exercise any right
of recourse to or with respect to any assets or property of Purchaser or to any
collateral for the Guaranteed Obligations, in each case unless and until all of
the Guaranteed Obligations have been paid in full in cash and all financing
arrangements between Lender and Purchaser have been
terminated. Lender may, without notice of any kind, sell, assign or
transfer any or all of the Guaranteed Obligations and in such event each and
every immediate and successive assignee, transferee or holder of any of the
Guaranteed Obligations shall have the right to enforce this Guaranty, by suit or
otherwise for the benefit of such assignee, transferee or holder, as fully as if
such assignee, transferee or holder were herein by name specifically given such
rights, powers and benefits.
(c) Security
Agreement. In order to secure its obligations to Lender hereunder,
each Seller hereby grants to Lender a security interest in all of the Retained
Assets and all of its accounts, chattel paper, commercial tort claims, deposit
accounts, documents, equipment, general intangibles, instruments, inventory, and
investment property (as such terms are defined in the Uniform Commercial Code as
in effect in the State of New York), together with all books and records with
respect to the foregoing and all proceeds of the foregoing, in each case
wherever located and whether now owned or existing or hereafter acquired or
arising. Each Seller hereby acknowledges that any financing statement
or similar document or agreement previously filed or recorded by Lender in
connection with any Seller Loan Agreement or any other agreement between Lender
and one or more Sellers is hereby ratified and reauthorized in order to perfect
the security interest contemplated hereby, and each Seller agrees to take such
further action as Lender may reasonably request in order to perfect, and
evidence the perfection of, the security interest contemplated
hereby. Upon any Default under and as defined in the Purchaser Loan
Agreement, Lender shall have all of the rights and remedies of a secured party
under the Uniform Commercial Code of the State of New York and any other
applicable jurisdiction.
(d) Release of
Guaranty. Lender hereby acknowledges and agrees that the guaranties
of Sellers contemplated by this Section 1.4 shall be automatically released on
the date of the IPO Payment.
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2.
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Purchase
Price
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2.1. Closing Date Common Stock
Issuance
Subject
to the terms and conditions set forth herein, on the Closing Date, Purchaser
shall issue and deliver to each of FC Partners’ and FC Fund’s designees the
number of shares of Common Stock set forth opposite its name on Schedule 1 attached
hereto, which Schedule
1 is based upon election forms received from such designees.
2.2. Closing Date Senior Note
Issuance
Subject
to the terms and conditions set forth herein, on the Closing
Date, Purchaser shall make, issue and deliver to each of FC Partners’
and FC Fund’s designees Senior Notes, upon the terms and subject to the
conditions of the Note Agreement, in the original principal amount set forth
opposite its name on Schedule 2 attached
hereto, which Schedule
2 is based upon election forms received from such designees.
2.3. Over-Allotment
Option
(a) Over-Allotment
Option Shares. Subject to the terms and
conditions set forth herein, within thirty (30) days following the Closing Date,
Purchaser shall issue and deliver to each each of FC Partners’ and FC Fund’s
designees (i) the number of shares of Common Stock (the “Over-Allotment Option
Shares”) set forth opposite its name on Schedule 3 attached
hereto, which Schedule
3 is based upon election forms received from such designees, or, in the
event that the underwriters in the Initial Public Offering exercise the
over-allotment option granted to them in connection therewith (the “Over-Allotment
Option”), (ii) the Over-Allotment Option Payment (as defined
below).
(b) Over-Allotment
Option Payment. In
the event that the underwriters in the Initial Public Offering exercise the
Over-Allotment Option, then Purchaser shall pay to each of FC Partners’ and FC
Fund’s designees as identified on Schedule 3 attached
hereto, a cash payment (the “Over-Allotment Option
Payment”) equal to the product of (i) the purchase price per
share payable by the underwriters in connection with the exercise of the
Over-Allotment Option minus such designee’s pro rata share of the Expenses (the
“Over-Allotment Option
Expenses”) incurred (in each case, whether paid, billed or accrued) by
Purchaser in connection with the Over-Allotment Option exercise (the “Over-Allotment Option
Purchase Price”) multiplied by (ii) the number of such designee’s
Over-Allotment Option Shares; provided, that
Purchaser shall not make an aggregate Over-Allotment Option Payment in excess of
the net proceeds it receives from the exercise of the Over-Allotment Option,
after deducting the Over-Allotment Option Expenses (the “Over-Allotment Option
Proceeds”). The Over-Allotment Option Expenses, the Over-Allotment Option
Purchase Price, the Over-Allotment Option Proceeds and the Over-Allotment Option
Payment to be received by each of FC Partners’ and FC Fund’s designees shall be
determined by Purchaser in its sole and absolute discretion.
(c) Excess
Election. In the
event that the underwriters in the Initial Public Offering exercise the
Over-Allotment Option, and the aggregate Over-Allotment Option Payment as
calculated pursuant to Section 2.3(b) above exceeds the Over-Allotment Option
Proceeds, then, within thirty (30) days following the Closing
Date, Purchaser shall pay, issue and deliver to each of FC Partners’ and FC
Fund’s designees as identified on Schedule 3 attached
hereto, in lieu of the Over-Allotment Option Payment, (i) a cash payment equal
to (a) its pro rata share of the Over-Allotment Option Proceeds, based on the
relative equity interests of all of the equity holders in each of FC Partners
and FC Fund plus (b) its pro rata share of any remaining Over-Allotment Option
Proceeds, based on the relative number of its unfulfilled Over-Allotment Option
Shares (the “Excess
Election Payment”) and (ii) a number of shares of Common Stock (the
“Balance
Shares”) equal to the quotient of such designee’s (y) Over-Allotment
Option Payment it would have received without taking into account the proviso in
Section 2.3(b) minus its Excess Election Payment divided by (z) the
Over-Allotment Option Purchase Price; provided, that no
fractional shares of Common Stock and no certificates or scrip therefor or other
evidence of ownership thereof will be issued; instead the Balance Shares shall
be rounded up or down to the nearest whole share amount. The Excess Election
Payment and Balance Shares to be received by each of FC Partners’ and FC Fund’s
designees shall be determined by Purchaser in its sole and absolute
discretion.
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3.
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Representations and
Warranties.
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3.1. By Sellers to
Purchaser.
Each Seller hereby represents and
warrants to Purchaser, severally and not jointly, as follows:
(a) Attached
hereto as Exhibit
B is a true, correct and complete listing of all of the Loan Documents as
of the Closing Date. Except as set forth in the Loan Documents listed
on Exhibit B,
no Loan Document has been modified, amended, altered, satisfied, canceled,
terminated, subordinated or rescinded. To the best of Seller’s
knowledge, as of the date hereof, each Borrower is in compliance with the terms
and provisions of the Loan Documents, except as set forth on Exhibit
B.
(b) Attached
hereto as Exhibit
D is a true, correct and complete listing of all of the Equity Documents
as of the Closing Date. Except as set forth in the Equity Documents
listed on Exhibit
D, no Equity Document has been modified, amended, altered, canceled,
terminated or rescinded.
(c) Seller (or
its subsidiaries, as applicable) is, and as of the Closing Date will be, the
holder of the Transferred Interests owned by such Seller (or its subsidiaries,
as applicable), free and clear of any lien, pledge, security interest, option or
other charge or encumbrance (other than security interests in favor of Lender
pursuant to the Seller Loan Documents), and is transferring the Transferred
Interests to Purchaser free and clear of any lien, pledge, security interest,
option or other charge or encumbrance (other than security interests and other
rights in favor of Lender pursuant to the Seller Loan Documents and except as
set forth in the Loan Documents or Equity Documents), or any right of setoff or
recoupment to which Sellers or Borrowers may otherwise be
entitled. Other than security interests in favor of Lender, Seller
(or its subsidiaries, as applicable) has not transferred, and as of the Closing
Date will not have transferred, any rights under or claims relating to the
Transferred Interests to any other party, except as set forth in the Loan
Documents or Equity Documents.
(d) Seller (or
its subsidiaries, as applicable) is not in default of its obligations under the
Seller Loan Documents, the Loan Documents or the Equity Documents.
(e) As of the
Closing Date, the outstanding principal balance and outstanding accrued interest
and fees of each of the Loans is as set forth on Exhibit A hereto, and
the Loans bear interest as described in the Loan Documents.
(f) FC Partners
is a Delaware limited partnership, FC Fund is a Cayman Islands exempted company
and FC Offshore is a Delaware limited liability company, and each Seller (i) is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (ii) has all requisite authority to own, lease
and operate its properties and to carry on its business as now being conducted
and (iii) is duly qualified or licensed and otherwise authorized to transact
business in each jurisdiction in which the properties owned, leased or operated
by it or the nature of the business conducted by it makes such qualification or
license necessary.
(g) Seller has
the requisite power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereunder. The execution and delivery of this Agreement
by such Seller, the performance by it of its obligations hereunder and the
consummation by it of the transactions contemplated hereunder have been duly and
validly authorized. This Agreement has been duly and validly executed
and delivered by such Seller and constitutes the valid and binding agreement of
it, enforceable against it in accordance with its terms except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of
general application affecting enforcement of creditors’ rights generally and
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies.
(h) Neither the
negotiation, execution or delivery of this Agreement by Seller nor the
performance by such Seller of its obligations hereunder nor the consummation by
such Seller of the transactions contemplated hereunder has or will (i)
constitute a breach or violation under such Seller’s constituent documents, (ii)
constitute a breach, violation or default (or be an event which, with notice or
lapse of time or both, would constitute a default) under, or result in the
termination of, or result in the creation of any lien upon any of such Seller’s
properties or assets (except in favor of Lender) under, any material note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other
instrument to which such Seller is a party or by which any of its properties or
assets are bound or (iii) constitute a violation of any law applicable to it or
any of its properties or assets, in each case except for such breaches,
violations, defaults, terminations or liens that could not reasonably be
expected to have a material adverse effect on the ability of such Seller to
perform its obligations hereunder.
(i) No
authorization, consent or approval of, or filing with, any governmental
authority and no consent or approval of any other third party or parties which
has not been obtained is necessary for the consummation by Seller of the
transactions contemplated by this Agreement. Without limiting the
generality of the foregoing, no consent of, or notice to, any Borrower is
required in connection with the transactions contemplated hereby which has not
been duly obtained or delivered, and the transactions contemplated hereby do not
give any Borrower any additional rights under any of the Loan Documents (such as
the right to terminate the applicable loan agreement without paying any
otherwise applicable prepayment penalty).
(j) There are
no actions or proceedings against, or investigations of, any Seller pending, or,
to the knowledge of such Seller, threatened, before any governmental authority
(i) asserting the invalidity of this Agreement or (ii) seeking to
prevent the sale of the Transferred Interests or the consummation of the
transactions contemplated by this Agreement by such Seller.
(k) Seller
performed its own valuation with respect to the fair market value of the
Transferred Interests to determine the adequacy of the Purchase
Price.
3.2. By Sellers to
Lender.
Each Seller hereby represents and
warrants to Lender, severally and not jointly, as follows:
(a) Contemporaneously
with the execution and delivery hereof, Seller has conveyed and transferred all
of the Transferred Interests owned by such Seller to Purchaser;
(b) Seller has
not received a security instrument or security agreement from Purchaser
encumbering the Transferred Interests to secure the payment of any sums due such
Seller or obligations to be performed by Purchaser;
(c) There is no
bankruptcy, receivership or insolvency proceeding pending or threatened against
Seller; and
(d) Seller has
full power and authority to enter into, execute, deliver and perform this
Agreement and such execution, delivery and performance (i) has been duly and
validly authorized by all necessary actions on the part of such Seller, (ii)
does not conflict with or result in a violation of such Seller’s organizational
documents or any judgment, order or decree of any court or arbiter in any
proceeding to which such Seller is a party and (iii) does not conflict with, or
constitute a material breach of, or constitute a material default under, any
contract, agreement or other instrument by which such Seller is bound or to
which such Seller is a party. Without limiting the generality of the
foregoing, no consent of, or notice to, any Borrower is required in connection
with the transactions contemplated hereby which has not been duly obtained or
delivered, and the transactions contemplated hereby do not give any Borrower any
additional rights under any of the Loan Documents (such as the right to
terminate the applicable loan agreement without paying any otherwise applicable
prepayment penalty).
3.3. By Purchaser to
Sellers.
Purchaser hereby represents and
warrants to each Seller as follows:
(a) Purchaser
(i) is a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (ii) has all requisite
authority to own, lease and operate its properties and to carry on its business
as now being conducted and (iii) is duly qualified or licensed and otherwise
authorized to transact business in each jurisdiction in which the properties
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification or license necessary.
(b) Purchaser
has the requisite power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereunder. The execution and delivery of this Agreement
by Purchaser, the performance by it of its obligations hereunder and the
consummation by it of the transactions contemplated hereunder have been duly and
validly authorized. This Agreement has been duly and validly executed
and delivered by it and constitutes the valid and binding agreement of it,
enforceable against it in accordance with its terms except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of
general application affecting enforcement of creditors’ rights generally and
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies.
(c) Neither the
negotiation, execution or delivery of this Agreement by Purchaser nor the
performance by Purchaser of its obligations hereunder nor the consummation by
Purchaser of the transactions contemplated hereunder has or will (i) constitute
a breach or violation under Purchaser’s constituent documents, (ii) constitute a
breach, violation or default (or be an event which, with notice or lapse of time
or both, would constitute a default) under, or result in the termination of, or
result in the creation of any lien upon any of Purchaser’s properties or assets
(except in favor of Lender) under, any material note, bond, mortgage, indenture,
deed of trust, license, lease, agreement or other instrument to which Purchaser
is a party or by which any of its properties or assets are bound or (iii)
constitute a violation of any law applicable to it or any of its properties or
assets, in each case except for such breaches, violations, defaults,
terminations or liens that could not reasonably be expected to have a material
adverse effect on the ability of Purchaser to perform its obligations
hereunder.
(d) No
authorization, consent or approval of, or filing with, any governmental
authority and no consent or approval of any other third party or parties which
has not been obtained is necessary for the consummation by Purchaser of the
transactions contemplated by this Agreement.
(e) There are
no actions or proceedings against, or investigations of, Purchaser pending, or,
to the knowledge of Purchaser, threatened, before any governmental authority
(i) asserting the invalidity of this Agreement or (ii) seeking to prevent
the purchase of the Transferred Interests or the consummation of the
transactions contemplated by this Agreement by Purchaser.
(f) Purchaser
has received and reviewed the Loan Documents and the Equity Documents and such
other documents and information deemed appropriate by it to make its own credit
analysis and decision to purchase the Transferred
Interests. Purchaser further confirms that it will, independently and
without reliance upon either Seller, continue to make its own credit decisions
pursuant to and in accordance with its rights and remedies under the Loan
Documents. From and after the date hereof, Purchaser expressly
assumes and undertakes to perform all of the obligations of Sellers under the
Loan Documents and the Equity Documents.
(g) Purchaser
performed its own valuation with respect to the fair market value of the
Transferred Interests to determine the adequacy of the Purchase
Price.
All
representations and warranties made by the parties in this Article 3 shall
survive the closing of the transactions contemplated by this Agreement and any
termination of this Agreement.
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4.
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Closing; Execution of
Documents of Transfer.
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On the
Closing Date:
4.1.
FC Partners and FC Fund shall deliver the original executed
Loan Documents and Equity Documents to Lender, to hold on behalf of Purchaser as
required by the Purchaser Loan Agreement; provided, however, that Loan Documents
for Loans on which Lender is the lead lender and one or more Sellers is a
participant shall remain in the custody of Lender.
4.2.
FC Fund shall deliver stock certificates for the
FC ICB Shares and FC West Shares together with duly executed stock transfer
powers along with the minute books, corporate seals and stock records of FC ICB
and FC West to Purchaser.
4.3.
FC Partners and FC Fund shall
deliver to Purchaser UCC financing statements (or similar instruments) assigning
the UCC financing statements related to the Loans to Purchaser as secured
party.
4.4.
FC Partners and FC Fund shall deliver
to Purchaser originals (or copies, if originals are not available) of all
material written notices given by Borrowers, Equity Entities or Sellers (or
their subsidiaries, as applicable) in connection with the Loans and the
Equity.
4.5. FC
Partners and FC Fund shall deliver to Purchaser the appropriate assignment
notices to the Loan Documents and the Equity Documents, fully assigning,
transferring and endorsing their respective rights in and interests to the Loans
to Purchaser.
4.6.
FC Partners and FC Fund shall deliver to Purchaser
originals (or copies, if originals are not available) of all written consents
of, or notices to, any Borrower or Equity Entity required pursuant to the Loan
Documents or Equity Documents in connection with the transactions contemplated
hereby.
4.7.
Each of FC Partners’ and FC Fund’s designees shall
deliver to Purchaser duly executed documents in form and substance reasonably
acceptable to Purchaser evidencing the investment intent of such designees and
making representations and warranties to cause compliance with U.S. federal and
applicable state and foreign securities laws with respect to the shares of
Common Stock and Notes issued by Purchaser and delivered to such designees
pursuant to this Agreement.
Each of
the foregoing deliveries shall be made pursuant to the notice provisions set
forth below, but Purchaser agrees that Sellers shall not be required to deliver
copies of the items set forth in this Article 4 to Purchaser’s counsel due to
the voluminous nature thereof.
5.
Indemnification.
Purchaser shall indemnify each Seller and, solely in their capacity as such,
Seller’s attorneys, successors, assigns, servicers and sub-servicers, parent,
subsidiary and/or affiliated companies and the shareholders, trustees, officers,
directors, partners, members, employees, agents, representatives and attorneys
of all of the foregoing and their respective heirs, executors, administrators,
attorneys, successors, legal representatives and assigns (collectively, the
“Seller
Parties” and individually, a “Seller Party”)
against, and hold them harmless from, any loss, liability, claim, damage or
expense (including reasonable legal fees and expenses) suffered or incurred by
any such Seller Party to the extent arising out of any Loan or Equity or the
duties, responsibilities, or obligations relating to or arising under the Loan
Documents or Equity Documents (“Seller Claims”), in
each case solely to the extent such Seller Claims arise or accrue after the
Closing Date. All such indemnification obligations of Purchaser to
Seller Parties are hereby made subject and subordinate to the prior repayment in
full in cash of all obligations of Purchaser to Lender. Each Seller
shall, severally and not jointly, indemnify Purchaser and, solely in their
capacity as such, Purchaser's attorneys, successors, assigns, servicers and
sub-servicers, parent, subsidiary and/or affiliated companies and the
shareholders, trustees, officers, directors, partners, members, employees,
agents, representatives and attorneys of all of the foregoing and their
respective heirs, executors, administrators, attorneys, successors, legal
representatives and assigns (collectively, the “Purchaser Parties”
and individually, a “Purchaser Party”)
against, and hold them harmless from, any loss, liability, claim, damage or
expense (including reasonable legal fees and expenses) suffered or incurred by
any Purchaser Party to the extent arising out of any Loan or Equity or the
duties, responsibilities, or obligations relating to or arising under the Loan
Documents or Equity Documents (the “Purchaser Claims”),
in each case solely to the extent the Purchaser Claims arose or accrued on or
prior to the Closing Date. Each of Purchaser's and each Seller’s
obligations under this Article 5 shall survive the closing of the transactions
contemplated by this Agreement and any termination of this
Agreement.
6.
Further
Assurances. Purchaser and each Seller shall execute and
deliver, both at and after the Closing Date, such instruments and take such
further actions as another party hereto may, from time to time, reasonably
request in order to effectuate the purposes and to carry out the terms of this
Agreement. Without limiting the generality of the foregoing,
following the Closing Date, such Seller shall execute any notice or instrument
of transfer, assignment or conveyance reasonably requested by Purchaser or
Lender (which request is accompanied by the form of instrument sufficient to
satisfy Purchaser’s or Lender’s request) to more fully confirm or effect the
transfer of the Transferred Interests.
7.
Returned
Items. Purchaser acknowledges that all of each of FC Partners’
and FC Fund’s rights are reserved (a) in and to any checks or similar
instruments for the payment of money received on or prior to the Closing Date by
each such Seller in connection with its Loans with any Borrower or otherwise
received by such Seller from any Borrower and its account debtors (such checks
or instruments collectively referred to as the “Instruments”), (b) in
and to any money due or to become due under or by any reason with respect to the
Instruments, and (c) in and to any right to claim that such moneys are
due. Purchaser shall pay to each such Seller, upon such Seller’s
demand (if made within 90 days of the Closing Date), the amount of any
Instrument for which any Borrower was given credit in computing the balance of
its indebtedness to such Seller if such Instrument is hereafter returned unpaid
for any reason whatsoever, together with all expenses incident to the processing
and return of any such Instrument. Notwithstanding the foregoing, no
payment shall be made by Purchaser to either such Seller under this Section 7 if
a Default exists under and as defined in the Purchaser Loan
Agreement.
8.
Notices. Any
notice required or permitted by or in connection with this Agreement, without
implying the obligation to provide any such notice, shall be in writing at the
appropriate addresses set forth below or to such other addresses as may be
hereafter specified by written notice by any party hereto. Any such
notice shall be deemed to be effective one (1) business day after dispatch if
sent by overnight delivery, express mail or Federal Express or three (3)
business days after mailing if sent by first class mail with postage
prepaid. All notices shall be considered to be effective upon receipt
if accomplished by hand delivery or by facsimile (with answer back
confirmation).
If
to Purchaser:
FULL CIRCLE CAPITAL CORPORATION
C/O Vastardis Fund Services LLC
▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Chief Financial Officer
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
FULL CIRCLE SERVICE COMPANY, LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇-▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: [To Be Determined]
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
If
to FC Offshore:
FULL CIRCLE OFFSHORE, LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇-▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Spectrum Global Fund Administration (Cayman)
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇, P. O. Box 10243
Grand Cayman KY1 – 1003
Cayman Islands
[Facsimile
No. ]
If
to FC Partners:
FULL CIRCLE PARTNERS, LP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇-▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
FULL CIRCLE FUNDING, LP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇-▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
If
to FC Fund:
FULL CIRCLE FUND, LTD.
Spectrum Global Fund Administration (Cayman)
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇, P. O. Box 10243
Grand Cayman KY1 – 1003
Cayman Islands
[Facsimile
No. ]
With a copy to:
FULL CIRCLE FUNDING, LP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇-▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
If
to Lender:
FCC, LLC, d/b/a First Capital
▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
FCC, LLC, d/b/a First Capital
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esquire
Senior Vice President – Legal Counsel
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
9.
Choice of Law; Jurisdiction;
Waiver of Jury Trial. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
formed and to be performed entirely within the State of New York, without regard
to the conflicts of law principles or rules thereof, to the extent such
principles or rules would require or permit the application of the laws of
another jurisdiction. Any litigation based hereon, or arising out of, under, or
in connection with this Agreement shall be brought and maintained exclusively in
the courts of the State of New York or in the United States District Court for
the Southern District of New York. The parties hereto hereby
expressly and irrevocably submit to the jurisdiction of the courts of the State
of New York or the United States District Court for the Southern District of New
York for the purpose of any such litigation as set forth above. The
parties hereto further irrevocably consent to the service of process by
registered mail, postage prepaid, or by personal service within or without the
State of New York. Each of the parties hereto hereby expressly and
irrevocably waives, to the fullest extent permitted by applicable law, any
objection which it may now or hereafter have to the laying of venue of any such
litigation brought in any such court referred to above and any claim that any
such litigation has been brought in an inconvenient forum. The parties hereto
waive any right to a trial by jury in any action or proceeding to enforce or
defend any rights under this Agreement and agree that any such action or
proceeding shall be tried before a court and not before a jury.
10. This Agreement is a Loan
Document under Purchaser Loan Agreement. This Agreement
constitutes a “Loan Document” under and as defined in the Purchaser Loan
Agreement. Purchaser acknowledges and agrees that any default by, or
any breach of any representation, warranty, covenant and agreement of, Purchaser
or any Seller hereunder shall constitute a Default under and as defined in the
Purchaser Loan Agreement.
11. Final
Agreement. This Agreement (including the Exhibits and
Schedules hereto), the Note Agreement and the Purchaser Loan Agreement
constitute the final and entire agreement and understanding of the parties with
respect to the subject matter of this Agreement, and any terms and conditions
not set forth in this Agreement are not a part of this Agreement and the
understanding of the parties hereto may not be contradicted by evidence of
prior, contemporaneous or subsequent oral agreements of the
parties. No amendment, variation, modification, or change hereof
shall be binding on any party hereto unless set forth in a document executed by
each of the parties; provided, that Lender shall not be required to be a party
to any amendment, variation, modification, or change hereof unless such
amendment, variation, modification, or change would impact Lender in a material
and adverse way.
12. Severability. If
any paragraph, section, sentence, clause or phrase contained in this Agreement
shall become illegal, null or void or against public policy, for any reason, or
shall be held by any court of competent jurisdiction to be illegal, null or void
or against public policy, the remaining paragraphs, sections, sentences, clauses
or phrases contained in this Agreement shall not be affected thereby to the
extent that the fundamental intent of the parties hereto can be carried out
absent such provision.
13. Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original, and all of which together shall be deemed to be one
and the same instrument. Any party may deliver an executed copy of
this Agreement and of any documents contemplated hereby by facsimile or other
electronic transmission to another party and such delivery shall have the same
force and effect as any other delivery of a manually signed copy of this
Agreement or of such other documents.
14. Benefit of
Agreement. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and
assigns. Neither any Seller nor Purchaser shall assign any of its
rights or obligations hereunder without the prior written consent of Lender,
which consent shall not unreasonably be withheld, conditioned or
delayed.
15. Time of the
Essence. Time is of the essence in the execution and
performance of this Agreement.
16. Rule of
Construction. The parties acknowledge that each party and its
counsel have reviewed this Agreement and the parties hereby agree that the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of this Agreement or any amendments, Exhibits or Schedules hereto.
17. Certain Definitions;
Etc. Whenever the context so requires, the singular number
shall include the plural, the plural shall include the singular, and the gender
of any pronoun shall include the other genders. Titles and captions
of or in this Agreement are inserted only as a matter of convenience and for
reference and in no way affect the scope or intent of this Asset Purchase
Agreement. Also, (i) “applicable law” means
all provisions of any constitution, statute, law, rule, regulation, decision,
order, writ, decree, judgment, injunction, release, license, permit, stipulation
or other official pronouncement enacted, promulgated or issued by any
governmental authority, (ii) “governmental
authority” means any legislative, executive, judicial, quasi-judicial or
other public authority, agency, department, bureau, division, unit, court,
arbitrator, tribunal or other public body, person or entity, and (iii) “including” means
“including without limitation.”
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