EXHIBIT 99(d)(6)
draft 11/26/02
FEE LETTER
Agreement dated as of November 29, 2002 between FirstCity Financial
Corporation, a Delaware corporation ("FC") and FirstCity Consumer Lending
Corporation, a Texas corporation ("CLC"), on the one hand, and The Governor and
Company of the Bank of Scotland ("Lender"), on the other.
Capitalized terms used herein and not otherwise defined have the
meanings provided for such terms in (i) that certain Collateral Assignment of
Partnership and LLC Interests dated as of November 29, 2002 executed by (among
others) CLC and Lender, as such agreement may be amended, supplemented or
otherwise modified from time to time (said agreement, as so amended,
supplemented or otherwise modified from time to time, the "Security Agreement"),
if defined therein, and (ii) if not defined in the Security Agreement, as
defined in the Note (as defined in the Security Agreement).
W I T N E S S E T H
WHEREAS, Lender has made or is expected to soon make a non-recourse
$16,000,000 loan (the "Loan") to CLC to enable FC, which owns all of the
outstanding capital stock of CLC, to consummate an exchange offer (the "Exchange
Offer") for up to 1,222,901 shares of FC's New Preferred Stock, par value $0.01
per share, as part of a recapitalization of FC;
WHEREAS, FC and CLC consider the recapitalization and the success of
the Exchange Offer essential to the financial well-being of both companies and
have requested that Lender make the Loan to CLC on the terms and conditions set
forth in the Funding Letter;
WHEREAS, the execution and delivery of this Agreement by FC and CLC
is one of the conditions to Lender making the Loan to CLC;
NOW, THEREFORE, to induce Lender to make the Loan to CLC and for
other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, CLC and FC jointly and severally agree with Lender as
follows:
1. Payment. Whenever (x) a Disposition or Distributable Dividend
occurs and (y) the aggregate amount of Proceeds from such Disposition or
Distributable Dividend, when combined with the aggregate amount of Proceeds from
(i) all previous Dispositions and Distributable Dividends occurring after the
date hereof and (ii) all other Dispositions and Distributable Dividends
occurring at the same time as the Disposition or Distributable Dividend in
question, exceeds $16,000,000, then FC and CLC shall pay to Lender,
contemporaneously with each such Disposition or Distributable Dividend, the
amount determined by the following formula:
A= .2(P) - Y
where:
A= the amount to be paid to Lender from the Proceeds of the relevant
Disposition or Distributable Dividend;
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P= the amount by which (i) the aggregate Proceeds received by
Funding and other members of the FC Group from Dispositions and
Distributable Dividends since December 1, 2002 (after giving effect
to the Disposition or Distributable Dividend then occurring or
having just occurred) exceeds (ii) $16,000,000; and
Y= the aggregate amount of Proceeds from Dispositions and
Distributable Dividends previously paid to Lender pursuant to this
Agreement.
2. Definitions. As used herein, the following terms have the
following meanings:
"Disposition" shall mean any sale, conveyance, lease, assignment,
pledge or other disposition of, or grant of a security interest in, any of the
Drive Collateral or any of the Pledged Drive Debt or any portion of any of the
foregoing by (x) Funding or another member of the FC Group (other than to
another member of the FC Group), or (y) any member of the BOS Group which has a
Lien in such collateral or debt; and "Disposed" shall have a correlative
meaning. Pledges of, or grants of a security interest in, any of the Drive
Collateral to a member of the BOS Group shall not constitute a Disposition.
Dispositions pursuant to any of the Executed Documents or pursuant to the Loan
Agreements or (as defined in the respective Loan Agreements) Security Documents
shall not be considered Dispositions for purposes of the preceding sentence.
"Distributable Dividend" shall mean any Distribution by a Drive
Entity with respect to Drive Collateral (other than a Tax Distribution).
"Distribution" shall mean (i) 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, and (ii) all payments of
principal, interest, premiums, penalties and the like made in respect of any
Pledged Drive Debt. As used herein, "dividends" shall include, without
limitation, distributions on account of partnership, limited liability company
and other equity interests as well as distributions on account of shares of
stock.
"Drive Collateral" shall mean the Pledged Drive-GP Membership
Interests and the Pledged Drive Partnership Interests.
"Drive Entity" shall mean Drive Financial Services LP, a Delaware
limited partnership, or Drive GP LLC, a Delaware limited liability company.
"Pledged Drive Debt" shall mean the Specified Percentage of any
indebtedness of Drive incurred after the date hereof and payable to Funding or
CLC, whether or not evidenced by notes or other instruments or otherwise.
"Proceeds" shall mean all consideration received by or on behalf of
members of the FC Group in connection with a Disposition (after deduction of an
amount equal to the Specified Percentage of the fees and expenses paid and
payable for such Disposition) or a Distributable Dividend.
"Specified Percentage" shall mean (x) a fraction (i) the numerator
of which is 20% and (ii) the denominator of which is the percentage of all
outstanding Drive-GP Membership Interests at the time of computation owned of
record by members of the FC Group, multiplied by (y) 100.
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"Tax Distribution" shall mean a Distribution made pursuant to
Section 2.7 of the Shareholders Agreement to the extent that it is reinvested in
Drive pursuant to Section 4.7 of the Shareholders Agreement.
3. Past-Due Payments. All amounts payable to Lender hereunder shall
be paid to Lender at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ City, or to such other address
as Lender from time to time notifies FC or CLC of. Amounts not paid when due
hereunder shall accrue interest at the lesser of (x) the highest rate then
permitted under applicable law or (y)18% per annum (based on a year of 365/366
days).
4. Expenses. FC and CLC shall pay to Lender, on demand, all costs
and expenses (including legal fees) incurred in connection with the enforcement
of the provisions of this Agreement in the event that either FC or CLC shall not
pay amounts payable to Lender under this Agreement when due.
5. Liability. The obligations of FC and CLC hereunder are joint and
several.
6. Arbitration. Any controversy or claim arising out of or relating
to this Agreement, or the breach thereof, shall be settled by arbitration in New
York City in accordance with the commercial arbitration rules of the American
Arbitration Association, and judgment upon the award rendered by the arbitrators
may be entered in any court having jurisdiction thereof.
7. Assignment. This Agreement is binding upon the parties hereto and
their respective executors, administrators, successors and assigns and shall
inure to the benefit of Lender and its successors and assigns. Neither FC nor
CLC may assign its rights or obligations hereunder without the prior written
consent of Lender, and any such purported assignment shall be void.
8. Amendment. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
all 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.
9. Waiver. 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. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE
THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
11. Headings;. 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.
12. Jurisdiction; Jury Waiver. Each party hereto hereby agrees that
ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY to enforce any award rendered pursuant to Section 6 (or, if
any, any other such action or proceeding that is permitted to be brought under
this Agreement pursuant
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to the terms hereof) MAY BE BROUGHT IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
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. 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 certified or registered mail to the address set forth on the signature page
hereof (or such other address as a party has notified the other hereof in
accordance with the terms hereof, or (if permitted by law) by Federal Express or
other similar overnight courier service; nothing in this Section 12 shall affect
the right of any party hereto to serve process in any other manner permitted by
law. TO THE EXTENT THAT ANY PARTY TO ANY SUCH ACTION OR PROCEEDING WOULD
OTHERWISE BE ENTITLED TO A TRIAL BY JURY IN SUCH MATTER, EACH PARTY HERETO
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY AND ALL RIGHTS IT OR
HE MAY HAVE TO A TRIAL BY JURY. In the event of any conflict between the
provisions of this Section and those of Section 6, those of Sections 6 shall
prevail.
13. Counterparts 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.
Telecopied signatures hereto shall be of the same force and effect as an
original of a manually signed copy.
FirstCity Financial Corporation For Deliveries (including, e.g., FedEx)
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇_____________________________ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Attn: Legal Dept.
Title: President
For Mail
▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Legal Dept.
fax: 254/▇▇▇-▇▇▇▇
FirstCity Consumer Lending Corporation For Deliveries (including, e.g., FedEx)
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇_____________________________ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Attn: Legal Dept.
Title: Chairman of the Board
For Mail
▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Legal Dept.
fax: 254/▇▇▇-▇▇▇▇
The Governor and Company ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
of the Bank of Scotland ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
fax: 212/▇▇▇-▇▇▇▇
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By ______________________________________
▇▇▇▇ ▇ ▇▇▇▇▇, Executive Vice President
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